GST Council unveils new, simplified return filing process


The GST Council on Friday unveiled a new simplified return that would require a taxpayer to file only one return every month and set a period of six months for the transition to take place.

“It will take about six month for GSTN to prepare for it so for that period the current arrangement of GSTR3B and GSTR 1 will continue. This will be the first phase of transition where the current system will continue for the next six months,” said Finance Secretary Hasmukh Adhia.

Adhia added that in the next six months the new system of return will have a single system of return for every taxpayer. “Composition dealer and zero transaction dealers will continue to file on a quarterly basis. Today, we find that the returns which are filed, 30% are nil returns, which means there is no transaction on them,” Adhia said.

In the case of B2C, the new return will contain the details of total turnover and in case of B2B it will contain the details of all sales invoices with the dealers. “The taxpayer would have to put invoice-wise details along with HSN code,” says Adhia.

In the transition phase, which is after six months of the return being prepared, there will be a separate column for the dealer to claim provisional credit based on his own calculation. “This will continue for a period of six months and this will be the second phase of transition, which means during this period we will allow provisional credit to be carried by the dealer irrespective of whether the seller from who he has bought the goods has uploaded the invoice,” said Adhia.

The finance Secretary added that during this six months the GSTN will continuously feed the taxpayer with information about the gap between what he is claiming as credit and what he is supposed to get basis the invoice uploaded by the seller. “That gap percentage will be known to the taxpayer and he would get time of six month to bring it down,” said Adhia.

The third phase, which would start after the six months or around April 2019, would see invoice matching happening on a monthly basis.

According to KPMG India, Partner, Priyajit Ghosh, continuance of existing system of summary return (3B) and invoice level return (GSTR 1) for next six months is a good move as GSTN would need time to implement the new system.

“Decision on introduction of a single return after six months with provisional credit would allow sufficient window to GSTN and the buyers to reconcile the credit. After six months finally, credit would be allowed to the buyer only upon filing of return by the supplier and payment of tax. Implementation of the last phase would depend upon experience of the tax payers and GSTN which needs to be watched out for. The last phase would require an ecosystem of timely filing and payment of tax leading to redesign of the existing processes around supplier payment, indemnity, etc. at the buyers end,” says Ghosh.

More details on the return filing process are awaited.

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