GST Council meet: States raise GSTN issues, difficulty in filing returns

Suggest setting up of GoM to identify and help address the issues within 2-3 months

At the ongoing goods and services tax (GST) Council meeting in Hyderabad on Saturday, states strongly raised the issue of difficulties faced by traders in registering and filing GST returns.

Jammu & Kashmir Finance Minister Haseeb Drabu recommended the setting up of a small group of ministers to examine in detail the issues with respect to the GST Network and work out a way forward in the next couple of months.

“There are issues with GSTN; there is no doubt about it. But these are transitional and some are operational. We will discuss it with the Council,” said Drabu. He added: “I would recommend that we set up a small group of ministers to examine and work out a way forward in 2-3 months.”

West Bengal Finance Minister Amit Mitra said that glitches indicated a gap in GST preparedness. “The GST Council would examine issues related to filing of GST returns. Breakdown and technical glitches on the GSTN portal show that GST was implemented in a haste.”

GSTN CEO Prakash Kumar is also part of the Council meeting to address concerns raised by states.

The deadline for filing GSTR 1, the form for detailed outward supplies, was extended by five days to September 10. However, traders continue to report issues related to invoice matching, claiming transition credits via the Tran1 form, errors in making final submission, uploading of returns and invoices, among other things.

Although the industry has demanded an extension of the deadline by another two weeks, Revenue Secretary Hasmukh Adhia had indicated at his address at the Business Standard GST Roundtable on Thursday that there might be no further extensions.

The issues being faced by the companies include a slow response of the GSTN portal, intermittent accessibility of the portal and errors popping up.

The companies argue that  in some cases, after uploading files, the portal is taking a few hours for processing them. Besides,  in case of uploading invoices containing multiple tax rates, the system considers only the item in the last line in offline tool. There are error messages in case of sales made to Special Economic Zones (SEZ). 

Of the 5.95 million who registered for GST in July (excluding those under the composition scheme), only 4.4 million have filed summarised returns or GSTR 3B so far.

However, the Council will consider reopening the composition scheme window for smaller players. The scheme, which allows a flat rate of tax and easier compliance, specific to small businesses with annual turnover below Rs 75 lakh, had been closed on August 16. This was after about a million tax assessees had opted for it.

"Smaller players reportedly faced challenges with respect to registration. Some wanted more time to evaluate their business models to comply with the requirements of the composition scheme. So, we want to give them another chance,” said a senior government official.