GST taxpayers look forward to simplified filing forms – 36 returns to 12
In the 27th GST council meeting, one of the most notable announcement was that the government was considering a simplified return filing system, where input credit would be system driven. This system will be implemented gradually after trial, allowing sufficient time for businesses to prepare and for the systems to get ready. In the intervening period GSTR 1 and GTR 3B will continue.
The past one year of GST has seen a lot of changes for the better with respect to GST returns. From 36 returns a year to 12 returns in a year has been a great move. Nil return filers, which are those with no GST transactions and composition dealers now file GST returns quarterly. This has made compliance easy for businesses, reduced tedious efforts of filing multiple returns and adhering to multiple due dates. Simplification has brought in much-needed relief.
It is believed that, when the single return process rolls out, return filing dates will continue being different based on turnover. This will surely reduce the burden on IT infrastructure and benefit the government as well as the users by avoiding any reasons that can cause delays in filling. Automatic tax computation and calculation of input tax credit available will be soon possible in the new system ensuring accuracy in calculations.
Three phases of return filing have been envisioned, each lasting around 6 months. In the first phase, GSTR-3B and GSTR-1 will
continue, until the IT infrastructure is ready. In the second phase, sellers will upload invoices on the GSTN portal, while the buyer will continue to claim a credit on a self-declaration basis. However, the new system will notify the buyer, if there are any gaps according to invoice upload by the sellers. In the third and final phase, provisional credit will be done away with, and the buyer will claim credit according to invoices uploaded by sellers.
While a phased transition is important, it will be extremely beneficial if this is implemented seamlessly. The department is likely to
continue oversight, such that the system will allow credit which is eligible, at the same time, buyers are not penalized or suffer for errors made by sellers. It remains to be seen how this can be taken care of in the new process.
To this effect, the Government is planning to make this entire process user-friendly by letting the buyers see the invoices uploaded by the seller at any time and without having to upload the purchase invoices. This will help the buyer check the gap between the credit claimed by him and actually allowed to him.
By using technology to allow a claim of input credit, the government will fairly reduce manual intervention, unnecessary form filing. Need for reconciliation between various forms will be totally done away with, befitting both the government and businesses and saving precious man-hours. Sellers may upload invoices according to their convenience, reducing a load on the system. Such a mechanism will also help ensure compliance from within the participants.
A simplified system of GST returns will find favor amongst both big and small businesses. However, the two pillars of success of GST are widespread compliance and favorable revenue growth. It is hoped that a simplified system based on technology, will reduce unnecessary notices and not heighten oversight. It will be easier for officers to review filings and collections. All of this will positively impact the ease of doing business in India.