Nine months after the Goods and Services Tax was ushered in, taxpayers are beginning to enter the comfort zone in filing their returns. But experts feel that a lot more can be done by the GST Council and the GSTN to bring within the GST fold those still outside it.
The number of taxpayers filing GSTR 3B returns, which are summary returns filed monthly by all regular taxpayers, is increasing, according to CBEC statistics. Around 60-70 lakh GSTR 3B returns were filed between July 2017 and February 2018, resulting is an average compliance ratio of 76 per cent in the first nine months.
The compliance ratio in filing GSTR 1 — the return that captures outward supplies and needs invoice details — is, however, not as good. More than half the eligible taxpayers have opted to file quarterly returns. But despite this leeway, the compliance ratio for GSTR 1 in December 2017 was only 63.7 per cent, down from 68.3 per cent in September 2017.
As on April 1, the number of taxpayers who had registered on the GSTN was 1,05,22,846. Of these, 17,86,735 were registered under the composition scheme; that still leaves 87,36,111 eligible taxpayers who have to file GSTR 3B returns monthly and GSTR 1 returns monthly or quarterly.
“We see no issues with the software. The number of complaints have also come down in recent days,” says GSTN CEO Prakash Kumar. While the returns filed may initially appear low, it can improve in subsequent months, given that many taxpayers prefer to pay late-filing fee and file returns in subsequent months, he added.
Archit Gupta, CEO of ClearTax, a GST Suvidha Provider, says that “there are fewer queries now, and everyone appears more conversant with filing GSTR 3B.”
However, GSTR 3B is a shortened summary version, and taxpayers are still struggling with filing GSTR 1, which needs more details.
Why the gap
“Given the constantly changing compliance landscape, small businesses have found it extremely difficult to keep up,” says Vivek Pachisia, Tax Partner, EY India.
Tanushree Roy, Director, Nangia & Co LLP, says, “Although the GSTN portal has substantially improved, assessees who use offline tools provided by the GSTN are experiencing quite a few IT errors and the generation of the error file takes about 20 minutes, causing unnecessary delay.”.
Under GST, all registered tax payers have to file their returns, even if it is a ‘nil’ return. Many might be unaware of this rule.
“It’s possible that assessees with multiple registrations in different States may not be filing all the returns, and that adds up to non-compliance,” says Pachisia.
What can be done
Experts reckon that there is a strong case to simplify the GST return filing process.
Pachisia says the Centre can consider creating dedicated facilitation centres within the GST department to support small businesses with compliance requirements.