ALSO READReturn timelines extended: India Inc gets GST filing breather for 2 months Tax return filing extension on GST may not be enough Top 5 common mistakes to avoid while filing your income tax returns Dread filing tax returns? Forms you need to file to claim I-T refund The many benefits of filing your income tax returns on time
It would take some time before assessees get used to filing returns under the goods and services tax (GST) regime, even as the government has sought to allay their concerns over this matter.
Busting the myth that assessees would have to file three returns a month, the finance ministry had on Sunday stated there is only one return with three parts. The dealer would have to file one and the remaining two would be automatically populated by the computer.
While this gives some relief to assessees, experts said it would only be partial.
Explaining the process, M S Mani of Deloitte said assessees over a threshold would have to file sales returns, called GSTR 1, by the tenth of the subsequent month of a transaction. The threshold is Rs 20 lakh annual turnover in case an assessee wants input tax credit and Rs 75 lakh in case he does not want input tax credit and opt for a composition scheme.
While those up to Rs 1.5 crore of annual turnover will have to file date-wise returns, those over that threshold will have to submit invoice-wise returns. As a majority of the players will be with a turnover of more than Rs 1.5 crore, they will have to file invoice-wise returns.
The other two parts of the returns will be generated by the computer on the basis of a sale return — GSTR 2A (of all purchases) and GSTR 3 (of tax liability and input tax credit).
Now, if corrections are to be done in GSTR 2A, these will have to be amended by the assessees in a form called GSTR 2 by the 15th of the subsequent month. GSTR 2 will need to be reconciled with the purchase record, and may need to be reworked after following up with the vendor. If there is no change, then assessees will file GSTR 2 identical to the GSTR 2A generated by the automated system.
Mani said these processes would require the help of consultants or chartered accountants. "Filing of these returns mean going through GST Acts, 200-page frequently asked questions, nine set of rules and clarifications coming through Twitter," Mani said.
Pratik Jain, leader indirect tax, PwC India, said, "The thing is when you get a vendors’ return that you have to reconcile with a purchase record, that will need to be done after a follow-up with the vendor and necessary correction."
After that, one annual return will be auto generated by the computer by the end of December of the next financial year. However, those with more than Rs 2 crore of annual turnover may have to file reconciled returns by this date, if asked to.
Mani said at least for a year, filing of returns would be a tough exercise. However, the system would stabilise after that. There will be a high level of mismatches initially that entities might have to struggle with. But in three-six months, people would learn and things would settle down, said Bipin Sapra, partner, indirect tax, EY.