Pre-filled GST returns to become norm from 1 Jan

Pre-filled GST returns to become norm from 1 Jan

Pre-filled tax forms and greater transparency requirements are coming to businesses in 2021, with the Goods and Services Tax (GST) Council clearing key changes to the return filing process on Monday.

Monthly GST returns of businesses giving summary of all transactions in the GSTR 3B form will be automatically populated from the details given in the sales returns of the company, as well as its suppliers filed earlier in the month in form GSTR 1. This will take effect on 1 January 2021. For small businesses, which file returns on a quarterly basis, it will take effect on 1 April.

To enable this shift, filing of monthly sales returns in GSTR 1 form will be mandatory by the 13th day of every month. GST laws will be amended to make the new return filing process a default system, an official statement said.

“While auto-population of GSTR 3B will help businesses to avoid clerical errors, it will assure the government that discrepancies in figures are minimized," said Abhishek Jain, tax partner, EY.

In another measure to ensure greater transparency and accuracy on the description of items sold, businesses with sales of over ?5 crore will have to identify the goods sold in invoices and in sales returns by a globally accepted six-digit code under the harmonized system of nomenclature (HSN) used in cross-border trade.

In the case of services, too, a services accounting code issued by the Centre has to be used. The government can notify eight-digit codes on select items, it said. Beginning 1 January, GST refunds will be transferred only to bank accounts which are validated by PAN and Aadhaar. To make a refund application, businesses can use a one-time password generated using Aadhaar. This is expected to bring in more transparency into who is claiming a tax refund.