Businesses having zero tax liability for the six continuous months under GST may soon get relief once the proposal to allow such entities to file returns only twice a year after the GST Council’s final decision. When this will be passed, Business with nil tax liability may get to file GST returns bi-annually.
As per the latest data, about 40% of returns filed by members under the Goods and Service Tax (GST) regime have nil tax liability and will not have to file monthly returns once as soon as the new simplified return filing procedure is put into action.
The GST council, which is currently directed by the Finance Minister, Arun Jaitley and comprising his state counterparts will modify GST rules in the upcoming meeting.
“Taxpayers whose liability is nil for six consecutive months will be required to file six-monthly return,” one of the officials told PTI.
According to the proposal formed by the revenue authorities, the return filing date would be announced. Businesses who have annual turnover up to Rs 1.5 Crore will have to file a return by 10th of next month, while others can file a return by 20th, the official added.
The total number of returns filed by both small and large taxpayers would be 12 in a year. As per the GST rules which were implemented on July 1, 2017, businesses have to compulsory file three returns in a month and one annual return, which takes the total number of returns to 37.
But various businesses complex nature of the GST filing process, and also faxed various difficulties in GST Network system. Due to this, GST council will set a committee to modify the current GST rules.
“The idea is to make return filing process simple and implement it in a phased manner,” the official said, adding that initially would be simple and on the basis of experience gained, more features would be added over time.
The official also said that after the last date of filing the return, businesses will still get three extra months to correct their returns by adding, modifying or correcting the missing invoices. Hence, the input tax credit would be reconciled with the supplier’s tax paid invoice.
The officials further added taxpayers who have annual turnover below Rs 1.5 Crore doesn’t require to quote harmonised system of nomenclature (HSN) in their return form.
AMRG & Associates Partner Rajat Mohan said decrease in the number of returns and specifying the date of filing returns for businesses will solve most of the 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,” Mohan said.
In November 2017, GST Council has made a Committee for the Modification of return design under GST Network Chairman and also asked to provide simplified return form for taxpayers with nil liability. The council has also stopped the invoice and filing of GSTR-2 and GSTR-3.
Last year, in December 2017, GST network, the company responsible for the new indirect tax regime has launched “one-click-filing” for those taxpayers who have zero liability. Presently, businesses file summary return GSTR-3B and final sales return GSTR-1.
Thus, Business with nil tax liability may get to file GST returns bi-annually. By modification, all the small companies will be benefited.