31 July 2017 08:02:11 IST

GST regime: Filing returns is the next challenge

Taxpayers have to file their GSTR 1by September 5

About 80 lakh taxpayers, over a dozen clarifications from the government, nearly 500 official workshops and six MasterClasses, and just one rate correction amid calls for more revisions... Despite some initial hiccups, the government and India Inc are quite satisfied with the first month of the country’s new indirect tax regime — the Goods and Services Tax (GST).

The next major challenge that everyone is gearing up for, however, is the uploading of invoices and filing of returns, which will begin from August-end and culminate in September.

While the Finance Ministry as well as industry leaders believe the initial transition since the GST rollout on July 1 has been quite smooth, both concede it would still take another couple of months for businesses to get completely used to the new levy and its nuances.

A silver lining for both has been that end customers have not been impacted much, unlike in the past when new levies were introduced.

Ministry gearing up

“The phones have stopped ringing. We expect the next rush and call for clarifications to start towards the end of August, when taxpayers will begin filing returns,” said a Finance Ministry official.

While the GST Network has started the facility of uploading of invoices, taxpayers have to file their GSTR 1 for July by September 5.

Over 71 lakh existing taxpayers have already registered for GST. Revenue Secretary Hasmukh Adhia said on Saturday that over 10 lakh new registrations have been approved. “Another two lakh applications are pending and in process,” he said.

Each of them will upload three returns and many assessees could face problems in uploading and filing.

According to Tejas Goenka, Executive Director, Tally Solutions: “Clients have been quite happy and we have had a large number of registrations and many unregistered dealers are also registering to ensure input tax credit.” But sounding a note of caution, he pointed out that the actual testing of the IT infrastructure and GSTN is yet to be done.

“The government has been very prompt in issuing clarifications on certain issues, which has helped ensure a smooth rollout of GST,” said MS Mani, Senior Director, Deloitte. “But the technological preparedness will be tested when the input tax credit matching begins and returns are filed in September.”

Meanwhile, the Central Board of Excise and Customs is now working on a new IT project for mapping of GST taxpayers. This will allow officers to know the details about each taxpayer in their jurisdiction with a click on their computer.

Other pending issues remain the setting up of the Anti-Profiteering Authority and the finalisation of the E-way Rules and system.

These are expected to be taken up in the next meeting of the GST Council, in August.

Clamour for review

It could also take up some more proposals for a review of tax rates under GST, as many sections of the industry — ranging from religious institutions to textile manufacturers, solar equipment providers and sanitary napkin makers, have been calling for a review of the rate due to a higher incidence.

“The GST Council will also look into a number of issues that were referred to the sectoral industry groups so that specific issues are addressed. These include input tax credit to the leasing industry, multiple value-addition levels in the textile sector making compliance challenging, and inverted duty structures,” said Mani.