GST and Taxation for MSMEs: The Goods and Services Tax (GST), was introduced as a single, straightforward tax system to replace multiple indirect taxes. The GST has served as an efficient tax system by bringing in more transparency and streamlining the tax filing process for both the government and the taxpayers. In order to simplify the compliance procedure further for GST-registered businesses, the 31st GST Council meeting proposed a new return system. This system is likely to be introduced on October 1st, 2020. Here, we will discuss the forms under the new system, the key differences between the old and new returns, and how small business owners can use a cloud accounting solution to stay compliant at all times.
Under the new system, there will be three main return forms – Normal (RET-1), Sahaj (RET-2) and Sugam (RET-3). The type of return to be filed and the filing frequency is determined based on the turnover of a business.
More than Rs 5 crore annual turnover: Businesses fulfilling this criterion must compulsorily file the Normal return on a monthly basis.
Less than Rs 5 crore annual turnover: Businesses that fall under this threshold and carry out B2C transactions must file Sahaj on a quarterly basis. Those businesses that carry out both B2B and B2C transactions must file Sugam on a quarterly basis. If a business has a turnover of less than Rs.5 crore but is not eligible to file Sahaj or Sugam return, then they can file the normal return on a quarterly basis.