New Delhi, September 10, 2017

The GST registrations for entities mandated to collect and deduct tax at source will start from 18 September; the date from which TDS or TCS is to be done will be notified later

The goods and services tax (GST) registrations for entities mandated to collect and deduct tax at source will start from 18 September. However, the date from which tax deducted at source (TDS) or tax collected at source (TCS) is to be done will be notified later.

The GST Council, at its 21st meeting in Hyderabad, decided to open registration of persons liable to deduct TDS and TCS from 18 September. As per the Central GST (CGST) Act, the notified entities are required to collect TDS at 1% on payments to suppliers of goods or services in excess of Rs2.5 lakh.

Also, e-commerce companies are required to collect 1% TCS while making payment to suppliers under GST, which kicked in on 1 July. Following industry demands, the government in June had decided to defer the TDS and TCS provision for the smooth rollout of GST.

GST subsumed a host of levies including excise and service tax and transformed India into a single market for seamless movement of goods and services. Also, accommodating industry demands, the GST Council, chaired by Union finance minister Arun Jaitley and comprising state counterparts, Saturday decided to extend the deadline for filing the TRAN-1 form by a month to 31 October.

TRAN-1 is to be filed by those businesses that want to claim credit for taxes paid before the launch of GST. This form can now be revised once by businesses in the case of any discrepancy. According to states, the transitional credit claimed by businesses is huge running up to Rs60,000 crore.

In the maiden returns for July, as much as Rs95,000 crore taxes have been earned from about 45 lakh assessees. With regard to people opting for the composition scheme, the GST Council has decided to give businesses time until 30 September to avail of it.

“Such registered person shall be permitted to avail of the benefit of the composition scheme with effect from 1 October,” an official statement said. Besides, the over 10 lakh registered businesses who have already opted for the composition scheme will be required to file their returns for the July-September quarter by 18 October and pay their taxes.

Under GST, as many as 72 lakh businesses have migrated from excise, service tax and VAT registration. The composition scheme is an alternative to the levy of tax designed for small taxpayers whose turnover is up to Rs75 lakh—Rs50 lakh in the case of eight north-eastern states and the hilly state of Himachal Pradesh.

The objective is to bring simplicity and reduce the compliance cost for small taxpayers. The scheme is optional under which manufacturers other than those of ice cream, pan masala and tobacco products have to pay a 2% tax on their annual turnover. The tax rate is 5% for the rest.

Besides, input service distributors will have to file their returns for July by 13 October. For easier compliance, the GST Council has already allowed businesses to file simplified GSTR-3B for four more months until December. It also relaxed the deadline for businesses to file sales return in GSTR-1 by a month to 10 October.

Revenue secretary Hasmukh Adhia said that for companies with a turnover of over Rs100 crore, the last date for filing GSTR-1 will be 3 October. For the rest, it will be 10 October. Also, the filing of GSTR-2 or purchase return for July will have to be done by 31 October, and GSTR-3 by 10 November.

Till 8 September, over 45 lakh GSTR-3B, 17 lakh GSTR-1 and over 13 crore invoices have been filed on the GSTN portal. Due to a huge rush of July GSTR-3B return filing, the GSTN software had witnessed some glitches and the last date of filing had to be extended.

Last week, the date of final return filing for GSTR-1 was first extended to 10 September in view of rush in invoice uploading, instead of 5 September earlier. GSTR-2 was required to be filed by 25 September instead of 10 September earlier. GSTR-3, which is the match of GSTR-1 and GSTR-2, was needed to be filed by September 30, in place of September 15. These dates have been further extended by the GST Council at its meeting on September 9. Also, a group of ministers has been constituted to monitor and resolve technological challenges faced during GST return filing.