File GST returns on time and plan your vacation, says Adhia
The days of leniency may be numbered in the good and services tax (GST) regime. Cautioning industry against incomplete and late filing of the GST returns, Revenue Secretary Hasmukh Adhia on Wednesday said, “Right now, we are not touching you. But the tax authorities will find out, and then you will be subject to penalties.”
In his keynote address at the Business Standard GST Round Table, Adhia asked an estimated 1.1 million entities with incomplete registrations to finish the process on the GST Network without waiting for another extension in the date for filing returns, so that they don’t come under the tax scanner and face penalty.
Ruling out any further extension in the date for filing returns, the revenue secretary elaborated on the success of the biggest indirect tax reform. Around 74 per cent of the fully migrated, or 4.4 million entities, have filed the summary form GSTR 3B, a significant improvement from 64 per cent, or 3.8 million entities, who filed by August 25 — the last date of filing without late fees. “The revenue for July is trickling in. At least ~2,500-crore more has come in since August 25 for July, taking the revenue for the month to approximately ~95,000 crore,” he said.
On a witty note, Adhia narrated instances of late filings and subsequent complaints. “Does God tell you to finish work on the last day?” was his response to an unusual SMS he got.
An upset tax professional texted him that he was unable to spend time with Lord Ganesha on the festival day (August 25) as he was busy in office filing returns on the last day.
Again, someone messaged Adhia that frequent changes in timeline of return filing were spoiling his Diwali vacation. ‘’My answer is, why don’t you file on time and plan your vacation.” He was clearly sending across a message to the industry — don’t put off filing returns till the last day.
The 1.1-million people, Adhia referred to, have filled Part A of the GST Network registration form, but not Part B.
It is mandatory for those with an annual turnover of ~20 lakh to register with the GSTN.
On the industry demand for further extension of date to file returns, Adhia said that unfortunately there was a tendency to postpone work till the last day. “If the last day of filing is August 25, why don’t you file your returns by August 21?” he asked.
On September 4, a day before the earlier deadline for filing GSTR 1, the traffic on the GSTN website peaked to 80,000 users an hour, Adhia pointed out. Soon the portal erroneously sent out the message that it was not accepting returns, prompting the government to extend the deadline to September 10. “The problem is too many people try to file returns on the last date, despite an extension. You should be filing returns on time. My suggestion is, do not panic. Do not wait for the last day. There are still four days to go for GSTR 1 filing,” he said.
On the problems faced by people with registrations, the revenue secretary said that the government is willing to do a course correction for that.
Adhia reinforced that it is mandatory to file even nil returns if one is registered under the GSTN, but has no income to show. Otherwise, a late fee will be charged.
On the refunds claimed by entities for the pre-GST period for service tax and excise duty paid though the TRAN 1 form, the revenue secretary said, “We are still evaluating the number, but it seems to be too large.”
Adhia said that there’s been a 30 per cent expansion in the tax net through the GST, with textiles coming into the fold for the first time. “We brought a lot of new businesses into the tax net. Around 2.1 million new registered people are with us today. We have got 60 million private enterprises, below the ~20-lakh exemption threshold,” he said.
Adhia urged manufacturers to ask their respective state governments to lower the value-added tax (VAT) burden on petroleum products used for manufacturing, so that there’s minimum disruption in the price of goods which are out of the GST net. “In an earlier GST Council meeting, we had urged states to consider lowering VAT. The industry should also urge the respective state governments to do that. In fact, the Centre has always wanted to include petroleum in the GST net,” Adhia added.
In the pre-GST regime, as both petroleum products and final goods attracted VAT, the input tax credit of petroleum products was allowed by different states. However, after the rollout of the tax reform, the manufactured goods attract GST, while the inputs of petroleum products used in the manufacturing attract VAT, resulting in cascading of taxes.
Before GST, some states had a lower rate of 5 per cent VAT on compressed natural gas used for manufacturing of goods. Some states also had a lower rate of VAT on diesel being used for the manufacturing sector.