Finance secretary Hasmukh Adhia said the monthly return filing system will come into force in six months and the present system of filing of return through GSTR 3B and GSTR 1 forms would continue for not more than six months. Photo: Indranil Bhoumik/Mint
Finance secretary Hasmukh Adhia said the monthly return filing system will come into force in six months and the present system of filing of return through GSTR 3B and GSTR 1 forms would continue for not more than six months. Photo: Indranil Bhoumik/Mint

GST return filing process to become simple

Arun Jaitley says all taxpayers excluding a few exceptions shall file one monthly GST return in place of multiple filings currently required in a month

New Delhi: The Goods and Services Tax Council (GST Council) on Friday approved a simpler tax return filing system under the new indirect tax regime and also approved the conversion of the GST Network into a government holding, finance minister Arun Jaitley said after the council met through a video conference.

The new return filing form will reduce the compliance burden for taxpayers as they would have to file only one monthly return and invoices have to be uploaded only by sellers. It will be put in place within six months and the transition will be done in a phased manner.

As per the transition plan decided by the Council, the existing GSTR 1 and GSTR 3B forms will continue for the next six months. After this period, all taxpayers will need to file one monthly return with composition dealers, while dealers filing no tax returns will need to file only quarterly returns.

For six months under the new tax filing regime, taxpayers will be able to avail provisional input tax credit, even if the seller has not uploaded the invoices. However, after this, input tax credit will be available to the buyer only for invoices uploaded by the supplier.

In case of non-payment of tax by the seller, the government has retained the right to recover dues from both the buyer and the seller. “In case of default in payment of tax by the seller, recovery shall be made from the seller. However, reversal of credit from buyer shall also be an option available with the revenue authorities to address exceptional situations like missing dealer, closure of business by supplier or supplier not having adequate assets etc," said a finance ministry statement.

The GST Council also decided to covert GSTN into a government-owned company, with the centre and states holding a 50% stake each.

At present, 51% stake is held by private entities, valued at Rs5.1 crore, with the centre and the states holding 24.5% each.

To be sure, to protect existing employees and their salaries, the GSTN board has been allowed to continue with the staffing terms for a period of up to five years. They will also have the freedom to hire new employees at similar terms.

However, there was no consensus on the issues of levying a 3% GST cess on sugar as well as providing a 2% incentive on digital payments, subject to a cap of Rs100. The matter has been referred to two separate groups of ministers—one headed by Assam finance minister Himanta Biswa Sarma and the other by Bihar deputy chief minister Sushil Modi.

Raising his concerns, Kerala finance minister Thomas Isaac wrote on Twitter, “The 3% GST cess will fetch only Rs7,000 crore. Why can’t it be met from central budgets rather than through distorting GST. I shall agree to a cess only if a similar treatment is offered to rubber." He further said that states such as Kerala, West Bengal and Telangana oppose the 2% incentive for digital payments.

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