GST rates relaxed for petroleum sector
Deadline ends, after 2 extensions; govt to assess reasons for low rate of compliance
Two days after Prime Minister Narendra Modi held a meeting with heads in the petroleum industry, the government said it would soon issue notifications lowering the goods and services tax (GST) rates. According to the revised rates, transportation of natural gas through a pipeline would attract 5 per cent GST without input tax credit and 12 per cent with it.
About 70 per cent of the assessees under the goods and services tax (GST) had filed detailed sales returns for July as on Tuesday, the official deadline. Low compliance, said officials.
No further extension was given; the deadline had been extended twice earlier. About 4.59 million entities of the eligible 6.5 mn filed the GSTR-1 return, for the first month of GST.
“We will assess why many people have not filed. We have already sent reminders to those who filed GSTR-3B, the summarised return form, but not GSTR-1,” said a GST Network GSTN) official.
The deadline to file GSTR1 was extended by a month from September 10 at the GST Council meeting last month in Hyderabad. Earlier, the deadline was extended from September 5 on account of technical issues with GSTN.
If a taxpayer fails to file GSTR-1 by the deadline, the buyer of his products would face difficulty in availing of input tax credit. Which is why, noted Pratik Jain, partner at consultancy PwC, the number of GSTR-1 returns are much lower than what one would have expected.
It is possible many dealers with GST registration have nil turnover and, hence, did not file the return. “The government will have to investigate the reasons and take corrective steps,” he added.
Three million returns had been filed as of September 10, the day after announcement of the extension. About 1.5 mn more returns were filed after that.
GSTR-1 has 13 sections containing details of sales transactions of a registered dealer for a month. A little more than 330 mn invoices were filed and processed by the GST system along with the GSTR-1 of July. Of this, 73 per cent were uploaded using the Offline Tool developed by GSTN; 16 per cent of the invoices came through GST Suvidha Providers.
The inward supplies return or GSTR-2 for July has to be filed by October 31. And, GSTR-3 for the month by November 10. Once a taxpayer files GSTR-1, the government utilises the information to verify GSTR-3 for the dealer and GSTR-2A for dealers to whom supplies have been made.
For the transition period, the government has allowed assessees to file self-summary returns for input- output, called GSTR-3B.
The lower-than-expected GSTR-3B returns filed in the first two months of GST implementation had prompted revenue secretary Hasmukh Adhia to ask central and state commissioners to urgently conduct a survey to know why. Only about 64 per cent of those eligible filed GSTR-3B, for August; 84.2 per cent did so for July. Of the 7.3 mn eligible ones, 4.7 mn filed the summarised return for August.
The questions suggested in the survey on why GSTR-3B was not filed are: The site was not functioning, filing process was too complicated, system didn’t allow me to file nil return and ‘could not’ preview return details before filing returns. In addition, tax officers will take suggestions for improving the returns filing process.