The GST Council may soon pass on a proposal to allow businesses with zero (nil) tax liability for six continuous months to file GST returns bi-annually.
According to various reports, around 40 percent of total GST return filers have nil tax liability. If and when the revised return filing proposal is finalized by the council, such entities will only have to file bi-annual returns, instead of current monthly returns.
“Taxpayers whose liability is nil for six consecutive months will be required to file the six-monthly return,” said a GST official.
The GST Council is, as of now, considering the proposal to simplify tax returns under GST and may reveal its decision at the next GST meeting.
The proposal, which was made by the revenue authorities, discusses the new return filing dates. According to it, the new revised date for return filing for businesses with an annual turnover of less than or equal to 1.5 crores will be 10th of next month, while for others it will be 20th. Both small and large tax entities will have to file 12 returns in a year, instead of previous 37 returns (3 returns every month and one annual return).
The proposal also discusses steps to simplify the GST return filing process. “The idea is to make return filing process simple and implement it in a phased manner,” said the official. He further added that the initial process would be simpler than before and more features are to be added over time as people get experienced with the new tax system.
Many businesses reportedly complained about the complexity of return filing system as well as technical glitches on GST network. The GST Council, therefore, set up a committee to come up with a simplified return filing system.
The official also confirmed that businesses will be given three months after the date of a particular return to correct the information filed in their returns and provide missing invoices. The input tax credit would be availed only by matching details with the suppliers’ invoices.
It has also been notified that taxpayers with annual turnover less than Rs 1.5 crore may no longer be required to include HSN details on their return forms.
Rajat Mohan, AMRG & Associates Partner, said reducing the number of returns and extending the filing dates should solve the ongoing GST complications. “However, anxiousness around matching the tax credit with tax payments still exists, trade and industry need to witness the extent to which credit matching mechanics would be made seamless, effortless and automated with the collective wisdom of software experts at GSTN,” he added.
At its meeting held in November 2017, the GST Council had set up a Committee with the task of easing up the return system. The committee, headed by GST Network Chairman, was given the task to simplify the return form and process for nil liability taxpayers.
Read Also: Discrepancies Found Between GSTR 3B Liabilities and GSTR 1 Return
At present, businesses are filing GSTR-3B for summary return and GSTR-1 for final sales return, each month. The GST Network had earlier introduced the “one-click filing” system for GSTR-3B return filers with zero tax liability.