GST returns: Businesses with nil tax liability may now be able to file returns bi-annually

GST returns: Businesses having zero tax liability for six consecutive months under GST may soon get relief once the proposal to allow such entities to file returns only twice a year gets the GST Council's nod. According to recent data, as much as 40 per cent of return filers under the Goods and Services Tax (GST) regime have nil tax liability and will not have to file monthly returns once the new simplified return filing procedure is finalised. The GST Council, headed by Finance Minister Arun Jaitley and comprising his state counterparts, will at its next meeting consider the proposal to simplify the GST return forms. "Taxpayers whose liability is nil for six consecutive months will be required to file six-monthly return," an official told PTI. As per the proposal prepared by the revenue authorities, the return filing date would be spread out. Businesses having annual turnover of up to Rs 1.5 crore will have to file return by 10th of next month, while others can file return by 20th, the official added.

The number of returns filed by both small and large taxpayers would be 12 in a year. When GST was implemented on July 1, businesses were mandated to file three returns a month, and one annual return, taking the total number of returns in a year to 37. However, businesses complained about the complex nature of the filing process and also faced glitches on GST Network system. Following this, the GST Council set up a committee to suggest a simplified return filing process. "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 said after last date of filing of the return, businesses will get three months to rectify their returns by adding, modifying details or correcting the missing invoices. Thereafter, the input tax credit would be reconciled with the suppliers' tax paid invoice. The official said taxpayers having annual turnover below Rs 1.5 crore would not be required to quote harmonised system of nomenclature (HSN) in their return form. AMRG & Associates Partner Rajat Mohan said reduction in the number of returns and spreading out return filing date for businesses should 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. The GST Council at its meeting in November last year had set up a Committee for Simplification of return design under GST Network Chairman, and tasked it to come up with a simplified return form for taxpayers with nil liability.

It had also kept in abeyance matching of invoice and filing of GSTR-2 and 3. In December, the GST Network -- the company handling the IT backbone for the new indirect tax regime -- came out with "one-click filing" of GSTR-3B for those taxpayers who have zero liability.

Currently, businesses file summary return GSTR-3B and final sales return GSTR-1.