Allaying the fears of businesses over numerous returns to be filed under the proposed Goods and Services Tax (GST) regime, revenue secretary Hasmukh Adhia on Tuesday clarified that a business will need to file only one return every month in addition to an annual return. Some stakeholders had expressed fears that GST would require over 30 returns to be filed annually.
Adhia said a business that is dealing with another business (B2B) will have to file only sale invoices on the GST portal. This would ensure that the corresponding purchase invoices are auto-filled for the procurer that has bought supplies from the firm. The return filing procedure is even simpler for those small businesses that deal directly with consumers (B2C), Adhia added. He said businesses like mom-and-pop stores or local kirana stores would only need to file item-wise sales and not item-wise invoices.
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Additionally, Adhia dismissed fears that the GST implementation will lead to a spurt in prices. Unlike in other countries, the transition to the new tax regime would be smooth in India, he said. Several countries witnessed inflation following GST roll-out as they had single-point taxation system. In case of India, there are multiple points of taxation and hence, the possibility of a sudden spurt in inflation is remote, he said.
Explaining the importance of GST for promotion of manufacturing in the country, Adhia said cascading of taxes along with non-availability of input credit meant that domestically produced goods found it harder to compete with imported ones. GST is a multi-point tax on value addition with seamless input tax credit, he said.
A system of GST Compliance Rating will be put in place so that every trader or businessman is rated based on their track record, Adhia said. He added that once the rating is made public on the GSTN portal, a businessman can decide whether to deal with another trader or entity who does not deposit tax with the government and therefore, has a low compliance score.
With regard to the provision in the Act on refund of IGST paid by international tourists, he said it will not be implemented with effect from the July 1 GST roll-out date.
Asked whether VAT would be refunded at the airport to foreign tourists, Adhia said: “We have kept that provision in the Act, but implementation will take time. Immediately, it won’t be available to foreign tourists, but after some time we will see. We will have to develop a mechanism for it. We are not implementing this provision from July 1.”