The onus of matching invoices to claim input tax credit under the goods and services tax (GST) regime may soon fall on the taxpayers instead of the IT-backbone, the GST Network (GSTN), if Infosys Chairman Nandan Nilekani’s recommendations, made to the Council on Thursday, are implemented.”According to the presentation, the onus of matching invoices will fall on the supplier and buyer rather than on the GSTN. This will be a much simpler process. There will be no filing of returns, but only uploading of invoices,” said a senior government official. It will be a system where the seller will upload the invoice and the buyer will acknowledge it. The government is keen to bring back the suspended invoice-matching system after a fall in GST revenue raised concerns over tax evasion. The GST revenue collections fell to Rs 808.08 billion in November, the lowest since the roll-out of the indirect tax in July last year. Jammu and Kashmir Finance Minister (FM) Haseeb Drabu told Business Standard that recommendations made by Nilekani were logical and could be implemented. “The proposal seems to be very logical and doable. The IT committee headed by the GSTN chair will examine it,” he said. Nilekani returned last year to IT major Infosys, which is implementing the GSTN. A final decision would be taken at the next meeting of the Council that has FMs from all states. This meeting would be held through video conferencing. Also, GSTR 3B, the summarised return filing, may continue after March 31. “The direction was that return filing under the GSTR 3B will continue and the sellers and suppliers should load their invoices, after which details of supply can be furnished.
It is a given that the 3B return between buyer and supplier will reflect the supplies made. If there is any difference between the two, at a later stage they can be asked to explain, the finance minister said. The invoice matching was deferred by the Council till March in its November meeting to ease compliance burden of taxpayers. Under the earlier system, returns filed under forms such as GSTR-1(sales) and -2 (purchase) were automatically matched with the GSTR-3 to ensure that the claims made by taxpayers are correct. The committee headed by GSTN Chairman A B Pandey has recommended a merger of GSTR-1, -2 and -3, as one of the options to simplify return filing instead of asking taxpayers to file them independently. “The three returns will indeed be merged,” Finance Secretary Hasmukh Adhia said after the Council meeting. “Moving the onus of ensuring proper credits to businesses would be welcome if it is also accompanied by other procedural simplifications. It should be ensured that invoice matching, which is one of the key features of the GST is not sacrificed at the altar of expediency,” M S Mani, partner, Deloitte India. “It seems that GST council intends to continue with the concept of invoice matching, though it will done on the backend by GSTN and not necessarily as part of return process and work flow based mechanism envisaged earlier. This would effectively mean that there will be greater onus on businesses to ensure compliace of vendors and also more rigours at the time of assessment or audit. It will also entail substantial changes in systems & processes, both for GSTN as well as industry,” said Pratik Jain, partner, PwC India.