GST returns filing set to get easier

Life will be easier for businesses and professionals under the goods and services tax (GST) regime if the proposed simplified returns are put in place six months down the line.

The number of returns to be filed will be much less compared to that in the existing scheme.

However, assessees will have to upload invoices and keep track of matching purchase receipts with those of sales to claim input tax credit. This, many say, will be burdensome for taxpayers because they now self-certify credit claims.

In the original scheme of things under the GST, assessees were supposed to file three returns in a month and one annual return, totalling 37 a year. After much hue and cry, the GST Council suspended one input return. Also, the detailed input-output return was also suspended and in its place the summary input-output return continued.

So, big businesses are filing two returns in a month and one annual return, or 25 returns a year. Small businesses file one return — the summary input-output return — a month and one supply return in a quarter. So they file 17 returns in a year.

Now the draft of simple returns the government has put in the public domain proposes that big businesses file one return monthly and one annual return. That makes it 13 returns a year, down from 25 currently.

Small businesses, a category which will be widened considerably once simple returns come, will have the option to file just quarterly returns. But

these assessees will have to exercise this option at the beginning of the year.

Currently, those with an annual turnover of ~15 million are categorised as small businesses. Once the simplified return process comes, those with an annual turnover of ~50 million will be called small businesses.

There will be three kinds of quarterly returns: One for

manufacturers or service providers and two other for traders. Traders with business-to-consumer (B2C) supplies will file Sahaj and those with both B2C and business-to-business (B2B) supplies will submit Sugam.

However, buyers will have to keep uploading invoices and keep track of sellers’ invoices as well. This is so because only taxes paid on invoices uploaded till the 10th of the subsequent month by suppliers will be available for input tax credit for buyers.

Also, every business will have to pay the month’s taxes by the 20th of the subsequent month.

“So far as reporting transactions is concerned, there will be relief for tax assessees. However, they have to continuously upload invoices and keep checking invoices uploaded by buyers,” says Archit Gupta, chief executive officer, Clear Tax.

Another expert says if the seller does not pay tax to the government, why should the buyer be taken to task? It should be the authorities which should check with sellers, he says.

Abhishek Jain, partner, EY India, one has to wait for operational issues when returns are made effective.

According to Parag Mehta, partner, NA Shah Associates, large taxpayers will not be affected much by these changes.

For small taxpayers, also there will not be a substantial relief because there has to be compliance every month.

There is also a new concept of “locking” in the new scheme. Invoices filed by supplier can be locked in by recipient to claim input tax credit.

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