June 2019
It’s been almost two years since the introduction of GST in India. It has passed through many course corrections since it was introduced, with more changes likely in the coming days. Some of the most recent changes announced are aimed at loosening the leash and reducing compliance complexities. The government has decided to introduce a simplified, single, monthly tax return format. The government has also extended the due date for filing of annual GST return for Fiscal Year 2017-18.
A simplified monthly tax return format, which was approved by the GST Council last year, is slated to be rolled-out on a pilot basis from July 2019. The roll out is a three-stage plan that will run over six months. During this period taxpayers will be required to continue filing a declaration for outward supplies (sales) and a summary return. Ultimately, the ‘single return’ will involve furnishing details about outward supplies and inward supplies (purchases/procurements) and amendments thereto. The key objective of the proposed simplified return is to ensure seamless invoice and tax credit matching.
Taxpayers will be required to upload their outward supplies by 10th of the subsequent month, followed by acceptance/rejection of the inward invoices by the recipient between the 11th and 20th of the following month. The monthly summary return must be filed by the 20th of the following month. Options for quarterly returns will be available for small taxpayers. The basis for qualifying for quarterly returns will be determined based on the taxpayer’s preceding financial year’s turnover.
Though the simplified tax return is a welcome step that should aid in easing compliance burdens, the government has coupled it with the additional burden of timely tracking of inward supplies and tax credits. Recently there has been an increase in the numbers of tax frauds and the credit matching process would help curb these malpractices.
Considering the technical glitches and difficulties faced by taxpayers in complying with the complex annual return filing process, the Government issued a ‘Removal of difficulties order’ to extend the due date for filing of the annual return for fiscal year 2017-18. The extension allows taxpayers more time to benefit from left-over input supply credits, if they have any, and to rectify errors/omission. The revised due date is 30 June 2019, rather than 30 September 2018. Similarly, the due date for submission of audit reports that require additional disclosures and reconciliations has been extended to 30 June 2019.
Dinesh Kumar
dineshkumar@bdo.in