A large section of GST registrants fails to pay tax by not filing returns
Even as the Goods and Services Tax (GST) taxpayer base soared 32% between the tax’s launch in July 2017 and November 2018, a sizeable section of the registered assessees continue to fail to file the monthly returns by the designated deadline. Official data tabled in the Parliament on Friday showed that of the 98.5 lakh regular taxpayers in November last year, about 29% hadn’t filed the summary return (GSTR-3B) for the month. The corresponding numbers for July 2017 were 74.6 lakh and 14.2%. Of course, the number of non-filers for the relatively recent periods will reduce more than for earlier months.
If a taxpayer doesn’t file the summary return, it also means she hasn’t paid the taxes. The deadline for filing returns for a particular month is on the 20th of the subsequent month. In fact, more than 15% eligible taxpayers hadn’t filed returns for any month since April this year. Between July 2017 and March 2018, the number of non-filers is lesser, as many taxpayers showing nil liability tend to file returns months after the deadline.
Tax officials say while this trend is not ideal for compliance, many of these taxpayers usually have no liability and hence their failure to file returns doesn’t impact revenue collection. Similarly, the firms opting for the benign composition scheme within the GST ambit have increased by 55% to 17.7 lakh in November 2018, compared with 11.4 lakh in July 2017. The non-filers constitute at least 15% in this category in all quarters since July 2017.
The composition scheme assessees are only required to file returns quarterly and pay a fraction of their top-line as taxes. In the July-September 2018 quarter, the data shows that over a quarter of registered assessees haven’t filed returns. Separately, in the same reply in Lok Sabha, the finance ministry said the tax department detected 499 cases in the current fiscal where fake invoices were being used to claim input tax credit to the tune of Rs 3,900 crore. In the last fiscal, only four such cases were detected involving an amount of Rs 10 crore.