India’s GST return framework has undergone significant evolution in how outward supplies and tax liabilities are reported. The existing system uses GSTR-1 for detailed outward supply information and GSTR-3B for summary tax liability declaration. The proposed new system introduced ANX-1 for continuous supply reporting and RET-1 for consolidated tax computation. While the full replacement was deferred, key features have been integrated into the current framework through IMS and GSTR-2B.
Outward Supply Reporting Under GSTR-1 (Old System)
Under the current system, all registered taxpayers file GSTR-1 to declare outward supply details. The return captures invoice-level data for B2B transactions, consolidated data for B2C transactions, export and SEZ supply details, and credit and debit notes. Taxpayers with turnover above Rs. 1.5 crore files monthly by the 11th, while smaller taxpayers file quarterly by the 13th under the QRMP scheme.
GSTR-1 is organised into multiple tables, each capturing a specific supply type with defined reporting thresholds.
| GSTR-1 Table | Supply Type | Reporting Level | Threshold |
| Table 4A | B2B supplies (non-RCM) | Invoice-level | All values |
| Table 4B | B2B supplies under reverse charge | Invoice-level | All values |
| Table 5 | B2C inter-state supplies | Invoice-level | Above Rs. 2.5 lakh |
| Table 6 | Exports and SEZ supplies | Invoice-level | All values |
| Table 7 | B2C intra-state and small inter-state | Consolidated (rate-wise) | Below Rs. 2.5 lakh |
| Table 9 | Amendments to previous period data | Invoice or summary level | All values |
| Table 12 | HSN-wise summary | HSN code level | Per turnover threshold |
The data from GSTR-1 flows into the recipient’s GSTR-2B for ITC purposes. Errors in GSTR-1 directly affect the buyer’s available credit.
Tax Liability Declaration Under GSTR-3B (Old System)
GSTR-3B is the monthly summary return where taxpayers self-declare output tax liability, claim ITC, and pay the net tax. Unlike GSTR-1’s granular data, GSTR-3B captures aggregated figures in Tables 3.1 (outward supplies and tax payable), 4 (eligible ITC), 5 (exempt supplies), and 6 (payment computation).
A critical weakness was the separation between GSTR-1 and GSTR-3B. Since both were filed independently, discrepancies could arise. Taxpayers could declare lower liabilities in GSTR-3B than their GSTR-1 data indicated, resulting in revenue leakage.
The Proposed New System: ANX-1 and RET-1
ANX-1: Continuous Supply Reporting
ANX-1 introduced real-time invoice upload, replacing batch filing. Each invoice uploaded immediately appeared in the recipient’s ANX-2, providing instant ITC visibility.
| Feature | GSTR-1 (Old) | ANX-1 (Proposed) |
| Upload timing | Batch at filing deadline | Continuous real-time |
| B2B reporting | Invoice-level at month-end | Invoice-level with immediate recipient visibility |
| B2C reporting | Consolidated in Table 7 | Consolidated at return filing time |
| Amendment process | Next period’s Tables 9/10/11 | Amendment annexure within the same or next period |
| Import ITC | Claimed in GSTR-3B only | Reported in ANX-1, claimed in RET-1 |
| Recipient visibility | After the supplier files GSTR-1 | Immediately upon upload |
RET-1: Auto-Computed Tax Liability
RET-1 auto-computed tax liability from ANX-1 supply data and ANX-2 verified ITC, eliminating the GSTR-1 vs GSTR-3B mismatch problem. The return consolidated outward supply liability from ANX-1, ITC from accepted ANX-2 invoices, net tax payable (auto-calculated), and payment through electronic ledgers.
Current Operational Status: Hybrid Approach
The government integrated key features into the existing framework rather than replacing it in its entirety.
| Proposed Feature | Current Implementation | Status |
| ANX-1 continuous upload | IFF for QRMP quarterly filers | Operational |
| ANX-2 accept/reject | Invoice Management System (IMS) | Operational (Oct 2024) |
| Auto-populated ITC | GSTR-2B monthly statement | Operational |
| Auto-computed liability | GSTR-3B Table 3 from GSTR-1 (hard-locked July 2025) | Phased |
| Single return | GSTR-1 + GSTR-3B continue as two filings | Not implemented |
| Pre-filing amendments | GSTR-1A | Operational (July 2024) |
The GSTR-3B hard-locking from July 2025 is the most significant change, effectively bridging the old and new approaches by ensuring that tax liability is derived from GSTR-1 data rather than manual self-declaration.
Key Terms
• GSTR-1: Current outward supply return capturing invoice-level B2B and consolidated B2C data
• GSTR-3B: Current summary return for self-declaring output tax, claiming ITC, and paying net liability
• ANX-1: Proposed continuous real-time invoice upload annexure replacing GSTR-1
• RET-1: Proposed consolidated return auto-computing tax liability from ANX-1 and ANX-2 data
• IMS: Invoice Management System providing ANX-2’s accept/reject functionality within the current framework
| Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Consult a qualified tax professional for advice specific to your situation. |
Managing Your GST Return Filing?
Prepare for GSTR-3B hard-locking from July 2025 by ensuring GSTR-1 accuracy. Use WFYI tools to reconcile supply data, verify ITC through IMS, and file accurate returns. Explore GST Tools on WFYI
Frequently Asked Questions
Q1: Is the new GST return system (ANX-1/RET-1) operational?
No. The proposed system was trialled but not fully implemented. The current system uses GSTR-1 and GSTR-3B enhanced with IMS, GSTR-2B, GSTR-1A, and upcoming GSTR-3B hard-locking.
Q2: What was the main improvement in the proposed system?
Continuous real-time invoice upload through ANX-1, providing immediate ITC visibility, and auto-computed tax liability in RET-1, eliminating the GSTR-1 vs GSTR-3B mismatch problem.
Q3: What does GSTR-3B hard-locking mean from July 2025?
Auto-populated sales liability values in GSTR-3B Table 3 (from GSTR-1) will be locked. Taxpayers cannot manually adjust them, making GSTR-1 accuracy critical.
Q4: Can GSTR-1 and GSTR-3B figures differ currently?
Yes. Taxpayers manually enter GSTR-3B figures, which may differ from GSTR-1. This mismatch will be eliminated when hard-locking takes effect in July 2025.
Q5: How does IMS relate to the proposed ANX-2?
IMS provides the accept/reject functionality originally planned for ANX-2. Recipients verify invoices before they are reflected in GSTR-2B for ITC claims.
Q6: What is the QRMP scheme?
Quarterly Return Monthly Payment lets small taxpayers (up to Rs. 5 crore turnover) file GSTR-1 and GSTR-3B quarterly and pay tax monthly, implementing the proposed system’s quarterly filing concept.
