While the government is working to boost GST revenues, steps to make the filing of returns easier for taxpayers are also needed
At the beginning of 2019, taxpayers were beginning to wonder how to file the GSTR annual returns (GSTR 9 and 9C). As we reach the end of the year, taxpayers are still wondering when the ordeal of GSTR 9 and 9C will end. These two will certainly go into the record books as the forms that have got the maximum extensions of due dates for filing — the 38th meeting of the GST Council pushed the due date by another month to January31, 2020.
While the persistence of the government in getting these returns filed is admirable, it should realise that with each extension, the utility of the forms is being lost. These forms are being filed for the nine-month period ended March 31, 2018 — when there was maximum turbulence in GST laws. It would probably be a better idea for the government to forget the forms for 2018 and focus instead on the forms for March 31, 2019, which is not only one full financial year ahead, but also a period with some stability in the laws.
In all other aspects, 2019 has been very routine and predictable as far as the GST is concerned. There have been 98 notifications, 46 circulars, two orders and 11 remove of difficulty orders issued, keeping taxpayers and their consultants on their toes. There have been eight meetings of the GST Council, that has tweaked the laws and changed tax rates a bit every time it met. GST revenues for the year have flattered to deceive and have crossed the magic threshold of ₹1,00,000 crore only on a couple of occasions.
Towards the end of the year, State governments are starting to become vocal in demanding their pound of flesh from GST revenues, which was not being paid in full by the Centre. Days prior to the recent GST Council meet, each State was given some amount of the compensation owed, thereby buying temporary peace.
The government will still have to think of a long-term solution to make up for the shortfall of the money being paid to the State governments.
Since the annual returns have not yet been filed, GST assessments did not commence during the year, and hence the GST Apppellate Tribunal did not have much to do. Only the Authority for Advance Rulings functioned full time during the year, giving numerous decisions — most of which were, unsurprisingly, pro-revenue.
The 38th meeting of the GST Council also decided to set up Grievance Redressal Committees (GRCs) at the Zonal/State level to address grievances of taxpayers. A GRC will comprise of CGST and SGST officers, representatives from trade and industry and other stakeholders, such as GST practitioners and the GSTN. The utility of such GRCs is to be questioned, since quite a few have been formed in the past but have not been able to solve the grievances of taxpayers. Pan-India, the only grievances that taxpayers have are related to the technology on the GST portal and the forms that don’t sync with the technology. If this is addressed and solved once and for all, taxpayers would have few complaints.
Circular 123/2019 restricted the credit that could be availed in case on non-reconciliation to 20 per cent of the available credit. The latest meeting of the GST Council has reduced this to 10 per cent. This confirms the fact that these percentages have been chosen randomly and are entirely arbitrary in nature. Whether the government can put a monetary limit on the amount of credit that a taxpayer can avail is soon going to be tested in the courts, and could go all the way to the Supreme Court. The GST Council could do well to refrain from inserting such artificial restrictions which is only going to increase litigation.
The GST Council also mentioned that various amendments to the law have been made which would be announced in Budget 2020. There is talk in some quarters about ‘GST 2.0’ — the GST law in a new avatar.
Irrespective of whatever name it is called, the government should ensure that a concerted effort is made to ensure that the law is not further complicated.
In 2020, we would hope to see a new system of invoicing and a fresh set of GST returns that take us back to the concept of matching of invoices, which was thought of during the early days of the GST but never saw its way into the legislation.
The writer is a chartered accountant