As the Narendra Modi government on Monday released the draft new GST returns forms, formulated with an aim to simplify the processes for filers, tax expert Parag Mehta says that there is a provision in the proposed system that will be deterrent for honest taxpayers. The tax department has put up draft returns forms — Sahaj and Sugam — for feedback from stakeholders.
The new GST returns filing process proposes that the Input Tax Credit (ITC) will be allowed only if the vendor uploads the invoice. “The company may upload the invoice but if the vendor fails to upload it before or within a specified time, ITC availed will be recovered from the company. This provision in the act is a deterrent for honest taxpayers from inception,” Parag Mehta, Partner, NA Shah Associates LLP told FE Online.
However, there are many other provisions that are likely to help businesses, especially the small ones and nil filers. For nil filers, the tax authority has proposed an SMS system. Businesses, where there is no supply or purchase in a quarter, can file their quarterly returns through SMS.
Small taxpayers, with turnover up to Rs 5 crore in the last financial year, can file the quarterly return with monthly payment of taxes on the self-declaration basis. Experts have welcomed the decision to classify assesses between large taxpayers and small taxpayers. But even small taxpayers will have to upload their sales invoices on a monthly basis so that corresponding businesses could claim their ITCs.
The GST form Sahaj is for B2C businesses in which the taxpayers will provide details of outward supplies and inward supplies, attracting reverse charge along with the summary of inward supplies for claiming input tax credit (ITC).
The GST form Sugam is for both B2C and B2B businesses, where the summary of supplies made and tax liability, the summary of inward supplies for claiming ITC, along with details of interest due and tax payment will be required. The new GST filing system is expected to replace the existing system of GSTR-1 and GSTR-2 from January 1, 2019.