Filing of returns under Goods and Services Tax (GST) may get much simpler, as a panel is considering a single-stage return filing process, instead of the current three-stage mechanism. According to a report in the Times Of India, the move is aimed at reducing the compliance burden for businesses.
“The committee is looking at 12 filings a year instead of many more at present,” a source told the newspaper, adding that staggered filing dates with bigger businesses having to adhere to earlier deadlines were also being examined. While basic principles such as invoice matching—to plug revenue leakage—will be retained, the move will ensure taxpayers are not hobbled by the filing mechanism.
Earlier, Arvind Datar and K Vaitheeswaran, two practicing advocates, had said that the current system which requires 36 filings in the year is too cumbersome, and should be dropped. “The proposed system of filing GSTR-1, GSTR-2 and GSTR-3 — three returns per month — proved to be unworkable and necessitated the GSTR-3B return which is a monthly summary. This monthly return should be continued for a year till the electronic infrastructure is improved. It is also worth reconsidering the need to file 36 monthly returns per year per state. These provisions are ill-advised and need to be dropped,” the advocates had written in an article published in the Indian Express.
The Times of India report says that other measures are also being contemplated to simplify the GST return process.Those with zero tax liability will be allowed to straightaway move to the last section of the return tool instead of navigating the form, sources told the newspaper. Further, a staggered filing system is being contemplated where the larger players, who account for a majority of the taxes, file first, while smaller businesses come next.
Interestingly, invoice matching will be retained, after the overhaul, as it is seen as integral to the system, with a source pointing out that this was essential to getting rid of inspector raj. “The choice is to let a system do it or tax inspectors. The online system is obviously better,” the source said told the newspaper.
Earlier, the experts advocates, Arvind Datar and K Vaitheeswaran had observed that the current system of matching of invoices places huge burden on the electronic infrastructure and entail huge compliance costs for the small and medium sectors. “This system does not exist anywhere in the world and there is not a single logical reason why this should be implemented in India,” Arvind Datar and K Vaitheeswaran had pointed out.