GST return filing remains less than desired, GSTR-3B compliance around 60 pc

Two years after the landmark goods and services tax (GST) amalgamated 17 different central and state levies, returns filing under the new indirect tax regime continues to be wobbly with filings showing spikes every three months but continue to be less than desired, data analysis showed.

Also, compliance in filing summary sales return GSTR-3B has not improved much since July 2017, as businesses continue to file it after the monthly due date, with compliance averaging at around 60 per cent.

Analysis of data released by Goods and Services Tax Network (GSTN) showed that while on an average, 50 per cent of the registered taxpayers filed GSTR-3B within due date in July 2017, the number increased to around 85 per cent as on June 23, 2019.

Similarly, 65 per cent of taxpayers filed within due date in July 2018, a total of 85 per cent of the eligible taxpayers have filed it as on June 23, 2019.

Similar trend continued in April, with less than 60 per cent of eligible taxpayers filing returns within due date, and the total number of GSTR-3B filed increased to nearly 80 per cent as on June 23, 2019.

While businesses have to file GSTR-3B by the 20th day of the succeeding month, GSTR-1 has to be filed by the 10th day.

According to GST laws, the fee for late filing of the returns is Rs 25 per day for Central GST (CGST) and an equal amount under State GST (SGST).

However, those businesses who have to file returns but have 'nil' tax liability would have to pay a fine of Rs 10 under CGST law, and an equal amount under SGST law.

An analysis of GSTR-1 filing trend showed that final sales return filed by businesses spiked every quarter, reflecting that composition scheme dealers and small businesses file their returns. However, there is still a huge divergence in the number of businesses who are eligible to file GSTR-1 and those who actually file it.

The data showed that while a little over 1 crore businesses were eligible to file GSTR-1 as of March 2019, only a little over 65 lakh have actually filed it. Similarly for December 2018, while about 1 crore businesses were required to file GSTR-1, about 75 lakh have filed it till June 23, 2019.

In the current financial year, while around 55 lakh businesses were eligible to file GSTR-1, about 25 lakh and 20 lakh businesses have filed the return in April and May, respectively.

The new indirect tax regime was rolled out on July 1, 2017. From just 38.51 lakh businesses registered under GST then, the number has gone up to a whopping over 1.22 crore.