Playing safe, govt may defer rollout of new GST returns system
In what could well turn into a pre-poll relief for traders and businesses, the Centre may opt to delay the rollout of the new format of simplified monthly returns for the Goods and Services Tax (GST).
“This will have to be a decision by the GST Council. But given that businesses have struggled significantly with GST returns in the past, it may not be right to upset them, with State elections and more importantly, general elections just around the corner,” said two persons familiar with the development.
Current system to continue
This could potentially mean that taxpayers under GST are likely to be allowed to continue with the current system of filing GSTR-3B returns until May or June next year. A final decision on the issue will be taken by the GST Council.
Finance Ministry and GST Network officials, however, said that work on the IT architecture and business processes for the new monthly returns is proceeding on track. “Everything is going as per schedule. We are making all preparations and have not been informed of any decision to postpone the rollout of the new returns,” said a person familiar with the development. The GST Council had, at its 28th meeting on July 21, approved the new simplified returns formats and business processes. All taxpayers, excluding small taxpayers and a few exceptions, will be required to file one monthly return with two main tables of details of outward supplies and input tax credits availed.
Further, taxpayers with a turnover of less than ?5 crore can opt for filing quarterly returns. The decision to introduce a new simplified returns format for GST was taken after the original system, which required filing of three returns a month, was seen as too cumbersome; on the other hand, the current returns have raised concerns about revenue leakage.
Experts said the government is working to facilitate small and medium enterprises; introducing a new returns system could disrupt this plan.
“Even now, many businesses don’t understand the basic concept of GST. Any new provision in the tax system takes time to grasp,” said Praveen Khandelwal, Secretary General, CAIT. “Traders are confused,” he noted.
“The new system of monthly returns will be much simpler, and the government hopes it will increase compliance and bring down misuse in availing of input tax credit. However, it remains to be seen if it will be rolled out from April 1, 2019, the start of the next financial year,” said Pratik Jain, Partner and Leader-Indirect Tax, PwC India.
Source :- Thehindubusinessline.com