New Delhi, September 30, 2017
The government is looking to allow quarterly filing of goods and services tax (GST) returns by a vast majority of businesses, instead of monthly, as it seeks to ease the compliance burden on them and also unclog the system that has been facing glitches due to overload.
Sources told TOI that the move is being deliberated in the finance ministry but may take some time to implement as it has to be cleared by the law committee before it goes to the GST Council, comprising finance minister Arun Jaitley and state FMs. Traders have repeatedly complained about the compliance burden — which is a three-stage process — taking a toll on them as it has increased the compliance cost as well as resulted in massive work load.
The government believes that by easing the rules it does not stand to lose much. During a book release event on Thursday, Jaitley had said that less than four lakh registered entities paid 95% of the taxes, while payment by 60 lakh accounted for just 5%.
As reported by TOIon Monday, in a letter to Jaitley, West Bengal finance minister Amit Mitra had suggested that businesses with turnover under Rs 75 lakh should be allowed quarterly returns.
The sources, however, said that several gaps need to be filled, including how the tax credits will be dealt with. While a large company such as Maruti Suzuki or Hindustan Unilever will have to file returns on a monthly basis, the suppliers to their vendors will only have to upload their returns once a quarter, resulting in the system being unable to match the returns. But the government believes that staggering the filing of returns will also help address the concerns, especially politically.
Separately, the government is also toying with the idea of a Saral-type easier return for those with a turnover of under Rs 20 lakh, the threshold to be part of GST.
While the issue of returns may or may not make it to the GST Council meeting next week, sources indicated that the committee on exports is trying to finalise a new mechanism for refund of taxes paid by exporters on inputs, which was earlier duty-free. Under GST, these taxes are to be refunded and the commerce department has estimated that in July alone refunds of around Rs 2,300 crore are due.
On the other issues such as how to deal with the advance authorisation scheme as well as SEZs and export-oriented units, where no duty had to be paid for imports earlier, the committee is yet to take a final call, said sources.
They, however, added that the government leadership is clear about the need to work out a scheme for exporters so that they are not burdened with higher working capital requirement, which impacts their competitiveness in the global markets.
[The Economic Times]