Forms Sahaj and Sugam- New Era in Annual GST Return Filing

While the whole world is watching India the 3rd largest economy, moving towards the destination based tax reporting structures, India is taking strong steps ahead in the way of creating new era of GST return filing and heading toward the biggest tax reforms ever. 

A new GST system was introduced in the 28th GST council meeting. The key agenda was to keep forth simplified GST return filing. The filing process had been quite tedious, therefore Sahaj is ITR-1 and Sugam is ITR-4, GST will have Sahaj and Sugam forms.

What is Sahaj and Sugam Form?

ITR Sahaj is ITR-1 and ITR Sugam is ITR-4 

With Sahaj or Sugam form One can file GST returns quarterly in case of turn-over up to 5 crores (Earlier limit 1.5 crores) along with monthly payment of taxes and a self-declaration form stating the same. 

Who is supposed to file Sahaj and Sugam forms?

Small taxpayers making only B2C (Business to consumer) supplies can file Sahaj returns.

Taxpayers making B2B (Business to business) supplies or making B2C and B2B supplies, but having turnover of Rs 5 crore or less, have been given an option to file ‘Sugam’ Returns on a quarterly basis.

Hence simplified GST returns like Sahaj for B2C outward supplies and Sugam for both B2B and B2C outward supplies was introduced. 

When should one file Sahaj or Sugam form?

One should File the Sahaj or Sugam form in the interval of every three months.

What is the new invoice upload system?

Although the return has to be filed quarterly, every taxpayer has to pay monthly taxes. The recipients from these small taxpayers can avail input tax credit based on the invoice uploaded by the supplier. For which the small taxpayers would be given online facility to continuously upload and view invoices on a daily basis. The invoices uploaded by 10th of the following month would be available as an input tax credit to the recipient in the relevant month similar to a large taxpayer who file monthly returns.

In cases of failing to file the Sahaj or Sugam forms after uploading of the invoices by the supplier, it shall be treated as the self-admitted liability by the supplier and recovery proceedings will be initiated against the supplier.

Benefits for a Small Taxpayer:

Here is how small taxpayers can benefit from Sahaj or Sugam forms:

• An option of filing a quarterly return:

Small taxpayers having turnover upto Rs. 5 Cr. would have the option to file one of three forms, namely – Quarterly return, Sahaj or Sugam.

• Uploading of invoices:

The recipients from these small taxpayers would need uploaded invoice for availing input tax credit and therefore the small taxpayers would be given facility to continuously upload invoices in the normal course.

• Payment declaration form for payment of monthly taxes:

These small taxpayers would continue to pay taxes on a monthly basis and in the first and second month of every quarter, they would use a payment declaration form to make the payment.

Benefits For The Larger Taxpayer- ‘UPLOAD – LOCK – PAY’ Return:

Large taxpayer means a payer having an annual turnover of over Rs.5cr in the last financial year.

All the large taxpayers are required to file monthly return within 20th of next month.

Continuous uploading and viewing:

There would be the facility for continuous uploading of invoices by the supplier anytime during the month and such uploaded invoice shall be continuously visible to the recipient.

Return format:

This return will consist of two main tables. One table for reporting outward supplies and other for availing the input tax credit. The supplier can upload the invoices on the continuous basis and it can be reviewed and locked by the recipient/buyer for availing the input tax credit.

It’s good to see that the Government of India is taking the right steps to simplify GST return filing process and reduce compliance burden from business owners. This move by the Council is aimed at increasing the ease of doing business for all taxpayers.