GST Council likely to defer simplified returns over glitches in system

With glitches in the goods and services tax (GST) portal still unresolved, the GST Council may discuss on Saturday deferring new simplified returns by one to three months from the scheduled date of April 1. In fact, e-invoicing, which was proposed to kick in from April 1 for large companies, will also likely to be postponed till July 1.

“With the server not having the capacity to handle peak load, it will be difficult to expect the new system to run smoothly. It may lead to compliance-related issues for taxpayers. Although not part of official agenda, the Council may discuss deferment of new returns, along with e-invoices,” said a government official.

Officials say that Finance Minister Nirmala Sitharaman in an outreach with taxpayers was disappointed to hear complaints about GST Network platform. Infosys Chairman Nandan Nilekani will give a presentation before the Council.

The Department of Revenue in a letter to Infosys on March 5 flagged a list of unresolved issues or ones resolved late. It pointed out how the policy wing of the Central Board of Indirect Taxes and Customs had sought an increase in server capacity. To this, Infosys said this was no issue, informed sources. 

The department also raised the issue that many taxpayers were charged late fee from January 31, 2019, for annual return for 2017-18, whereas late fee was to be charged from January 31, 2020. “Where taxpayers were to be charged Rs 200, they were charged up to Rs 72,000 in late fees. A writ in this regard was also filed in the Jodhpur High Court,” it said.

The Department of Revenue further said the facility for blocking and unblocking e-way bill generation for non-filing of GSTR-3B was decided by the GST Council in September 2018, but the system was made available only on December 3, 2019.

On Aadhaar verification of new and existing registrations, the Department of Revenue said the basic process was approved by the law committee on August 29, 2019, and approved by the Council on September 20, 2019, but the functionality has still not been made available.

The department also asked Infosys to come up with a resolution and road map in 15 days.