New GST Return Filing Process – A Quick Guide

Pramit Pratim Ghosh |Updated on: January 18, 2022

After the introduction of GST on 1st July, ’17, the GST Council has repeatedly taken measures to simplify the GST return filing process for taxpayers. As part of this exercise, the GST Council is working to bring in the second phase of GST, with greater simplification in multiple areas of compliance. In our article ‘Highlights of new GST returns’, we learnt that the new GST return filing process can be summarised as ‘Upload-Lock-Pay’. Let us understand this process in detail.

New GST return filing process - Upload

Upload refers to the upload of invoices by suppliers. In the new GST return filing process, suppliers will have the facility to continuously upload invoices anytime during the month and the invoices uploaded will be instantly visible to the buyers.

New GST return filing process - Lock

Once a supplier uploads an invoice, the next step is for the buyer to lock the invoice. In this respect, the buyer has the following options:

Lock

Locking of an invoice by a buyer indicates that the buyer is accepting the transaction reported by the supplier. Only an invoice uploaded by the supplier and locked by the buyer will be eligible for claim of input tax credit by the buyer. Once a supplier uploads an invoice, buyers can lock the invoice any time before filing of the GST return for the period. Buyers who have a huge number of invoices to lock can make use of the facility of deemed locking. Under deemed locking, all invoices which are not marked as rejected or pending will be automatically locked when the buyer files the GST return for the period.

Here, an important point to note is that once an invoice is locked by a buyer, the supplier cannot make any amendments to the invoice. The supplier will need to issue a credit note or debit note to amend such invoices. However, in case a buyer has wrongly locked an invoice, the invoice can be unlocked by the recipient, provided input tax credit claimed on the invoice is reversed.

Reject

In case the supplier has entered the GSTIN of the buyer wrongly, the invoice would appear for a taxpayer who is not the actual recipient of the supply. In such a case, the taxpayer can reject the invoice.

Pending

A buyer can mark an invoice uploaded by the supplier as pending in the following scenarios:
a. The supply has not been received by the buyer
b. The buyer believes that the invoice needs to be amended
c. The buyer is not able to decide whether to take input tax credit on the invoice for the time being

A buyer cannot avail input tax credit on invoices marked as pending. An important point to note is that the facility to mark an invoice as pending is only available to persons filing monthly returns, and not for persons filing quarterly returns. We will discuss more about this in our blog on key features of the new GST quarterly returns.

New GST return filing process - Pay

The new GST return filing process is complete with the filing of return and payment of GST liability by both suppliers and buyers, after considering their respective input tax credit. As discussed earlier, every taxpayer’s eligible input tax credit will be automatically arrived at based on the invoices uploaded by their suppliers and locked by them. Similarly, their GST liability will be arrived at based on the invoices uploaded by them. Hence, majority of their new GST return will be auto-populated, thus ensuring that manual effort required to file the GST return is reduced significantly.

Hence, the new GST return filing process seeks to simplify compliance for taxpayers with the new feature of continuous locking of invoices by buyers. Buyers will not need to wait for the supplier to file their return to know whether the supplier has uploaded their invoice. Also, the facility of deemed locking will make buyers’ life easier by reducing the time required to lock invoices. In our next article, we will understand the key features of the new GST monthly returns.