Govt unveils draft rules on GST returns1 min read . Updated: 28 Sep 2016, 01:57 AM IST
The draft rules mandate taxpayers to file monthly tax returns
New Delhi: The centre on Tuesday released draft rules that establishments have to follow for filing returns and claiming refunds under the goods and services tax (GST).
The draft rules mandate taxpayers to file monthly tax returns. Those opting for the compounding scheme (traders with an annual revenue of up to Rs50 lakh can pay a flat tax and escape the compliance requirements) need to file their tax returns quarterly.
Businesses will also have to furnish information on the profit or loss incurred in the GST return form, which could prove to be onerous.
The refund rules say that the tax officer will have to process the application for refund within 15 days of the claim being filed. Further, in cases where the taxpayer has an impeccable record—no prosecution for any tax evasion offences in the past five years and a good compliance rating—will be eligible for provisional refund within seven days. Businesses located in special economic zones will have to pay GST upfront and then claim refunds, in a move that could impact IT firms.
All this, along with the three draft rules on registration, tax payment and invoice released on Monday, will be finalized on 30 September in the GST council’s second meeting.
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“At the minimum, businesses need to file three monthly returns and one annual return for each state. Also, the accounts have to be audited for those having an annual turnover of over ₹ 1 crore," said Pratik Jain, leader indirect tax at PwC India, in a note. “Interestingly, the GST return needs to contain details of profit as per profit and loss account, gross profit, net profit, etc. This effectively means that industry would need to gear up to draw state-wise profit and loss accounts, which is typically not needed at present. This will require a major overhaul of the accounting systems for large corporates.