Thanks to the proactive steps taken by the Goods and Services Tax (GST) Council to remove the sundry glitches that used to trouble taxpayers in the initial months after the GST launch and also the progressive lowering of tax rates by the council over its last few meetings, compliance and tax collections have picked up of late. This has not only reduced the states’ revenue shortfall considerably over the period but boosted the government’s confidence that GST would eventually expand the tax base and yield revenue higher than the taxes that collapsed into it did in the previous regime. Filings of the summary returns GSTR-3B — with which the tax needs to be paid or nil liability claimed — have increased over the months since July. Till the August 20 deadline for filing GSTR-3B for the month of July without fine, 34 lakh returns were filed; the returns filed before the respective deadline for September was higher at 39.4 lakh and the number for October grew further to 43.7 lakh.
On November 20, the last date for filing the summary returns for October without interest, as many as 14.76 lakh assessees rushed in, in what indicated that the tendency to defer compliance to the last hour hasn’t gone away. GST collections too have shown commensurate increases over the period (see chart). Also, the overall GST registrations too have crossed 11crore from a level of 60 lakh in late August. Of course, a very large number of GSTR-3B filers (around 40%) continue to claim nil tax liability, a trend which vexes the government. “There is a steady rise in the number of taxpayers filing their GSTR-3B returns every month, which is encouraging to see. The trend of taxpayers postponing compliance to the last day continues, though. Taxpayers are urged to file their returns early enough to avoid last-minute rush and consequent hassles,” said Prakash Kumar, CEO, GST Network (GSTN). “There is an increase in filings month after month since July. This could be down to two reasons: One, taxpayers are becoming familiar with GSTR-3B, and two, the IT system as far as 3B is concerned has also stabilised. But the gap between eligible taxpayers and those filing returns by the deadline has continued to hover around 30 lakh, which would be a concern for the government,” said Abhishek Jain, tax partner, EY.
Meanwhile, the council is in the process of further simplifying the GST compliance process by relaxing the rules and procedures and addressing technical glitches at GSTN. A group of state finance ministers headed by Bihar deputy chief minister Sushil Kumar Modi is working with Infosys, the technology vendor, to resolve GSTN-related issues. On Tuesday, the government constituted a 10-member committee under GSTN chairman Ajay Bhushan Pandey to look into the requirements of filing returns in current financial year. “The committee, which has tax commissioners from the state of Gujarat, Karnataka, Punjab and Andhra Pradesh, will also suggest if modifications, including changes in rules, laws and format, are required in returns. It will submit its report by December 15,” PTI reported.
“The whole idea is that people who are nil filers, who have no sale/purchase transactions, have taken a registration for some future use, they should be able to file GSTR-1 and GSTR-3B by pressing just a few buttons. That is our ultimate aim,” Pandey was quoted by the agency as saying. The council had decided to allow filing of summary returns till March 31, 2018. Further, filing of GSTR-2 (inward supplies) and GSTR-3 — both required for smooth invoices-matching — was suspended till March 31. Taxpayers need to file GSTR-3B and GSTR-1 for the remaining part of the year.