GST update: Less than a fifth file returns as deadline looms

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Updated: August 12, 2019 12:03:23 PM

The deadline for filing the annual returns for FY18, the financial year in which the GST was launched (in July 2017), has already seen two extensions, the initial deadline being December last year.

Deadline Looms, GST, GST returns, annual returns, goods and services tax, GST, CBIC, economy newsCentral Board of Indirect Taxes and Customs (CBIC) chairman Pranab Kumar Das.

Less than a fifth of the businesses registered for the goods and services tax (GST) as regular taxpayers have so far filed their first annual returns (for FY18) under the new system, even as the deadline for the same is this month-end. This has raised concerns over the compliance readiness of the industry, and is threatening to undermine the ability of the tax administration to plug revenue leakages which are perceived to be large.

The deadline for filing the annual returns for FY18, the financial year in which the GST was launched (in July 2017), has already seen two extensions, the initial deadline being December last year.

Concerned over the situation, Central Board of Indirect Taxes and Customs (CBIC) chairman Pranab Kumar Das has recently written to chiefs of field formations, urging them to help taxpayers in filing returns/reconciliation statements before the due date. According to the note reviewed by FE, till August 3, only 14.9 lakh GSTR-9 and 9C returns had been filed of nearly 80 lakh businesses, other than composition-scheme dealers, registered under the GST in FY18.

The indirect tax department, sources said, was banking on the data from these returns to effectively detect and plug leakages. The returns and reconciliation forms – GSTR-9 and GSTR9C – require taxpayers to report additional details compared with monthly returns. Besides, data in annual returns must be matched and reconciled with what have been reported in monthly returns. Similarly, while 15 lakh businesses registered as composition taxpayers are eligible to complete the annual returns for FY18, only 4.3 lakh have submitted the forms so far. “The status of filing GSTR9C (reconciliation form) at 11,334 is also sub-optimal,” the chairman wrote.

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“Annual filings have an in-built mechanism of legally ascertaining, verifying and crystallising the tax liabilities and tax credit for every taxpayer. This would provide a wealth of data to the business analytics module of GSTN, helping it push anti-evasion drive. But a delay in filing would handicap the tax authorities in identifying and apprehending tax evaders,” Rajat Mohan, partner at AMRG & Associates, said.

Experts said while it was expected that more assessees will comply as the deadline nears, it is unlikely the government would provide any further extension. Given that it was the first time that taxpayers are filing annual returns, many assessees are grappling with meeting the requirements.

“It appears unlikely that there will be any further extension as these relate to FY18 and the annual returns for FY19 will become due in December 19. The low filing could see a jump as we move towards August 31,” MS Mani, partner at Deloitte India, said. He added that the data submitted as part of annual returns will need to be correlated with monthly data and other information available with the GST authorities. Since the information relates to a period where multiple and repeated changes were made in the GST, it is essential for taxpayers to be cautious in interpreting the information.

The comprehensive nature of annual returns is also hindering businesses that continue to maintain manual records. “These returns require more information, and details which were earlier not reported and may not have been captured by some businesses. Besides, data must be reconciled and matched. The best way to do this is to take the help of technology that can study large amounts of data and is smart enough to look for gaps. Manual efforts will be extremely time consuming,” Archit Gupta, founder & CEO at ClearTax, said.

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