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New GST return forms released; compliance process simplified from April 1

New GST return forms released; compliance process simplified from April 1

The goods and services tax (GST) network released the revised return forms which businesses would need to comply with from this year. The new forms would be operated on a pilot basis from April 1, 2019, and would be mandated across the country from July, according to the decisions of the GST Council.

The new and revised return format would obviate the need to furnish returns under the family of GSTR-1, GSTR-2 and GSTR-3, but the annual return GSTR-9 might continue, experts said.

The GST Council had suspended GSTR-2, a purchase return, and GSTR-3, input-output return, because of the complex form structure. On the other hand, GSTR-1, a sale return, and GSTR-3B, summary input-output return, remain. The new forms are uploaded following an exercise to simplify the returns under GST.

The new return formats — named “normal”, “sahaj” and “sugam” — would make the compliance process simpler for the smallest of businesses wherein taxpayers up to a turnover of Rs 5 crore would have an option to file any of the three forms.

For the revenue department, the new format would help in matching the invoices of the seller and the purchaser, and would help the department check evasion to a great extent. But at the same time, it is likely to increase clerical and administrative work for businesses.

The HSN-wise details need to be provided at the invoice level rather than the summary level. In addition, while details at 4-digit HSN codes are required in the current format, the new format would need those details at the 6-digit HSN level.

Under the new format, invoices can be reported on a continuous basis.

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Source: Business-Standard
Not just lower taxes, evasion too a factor in the GST shortfall

Not just lower taxes, evasion too a factor in the GST shortfall

It’s fairly clear by now that goods and services tax (GST) collections are falling way short of the government’s initial expectations. The monthly run rate of collections until November was less than ₹90,000 crore, far lower than the monthly average of ₹1.05 trillion required to meet the annual target.

Graphic: Paras Jain/Mint

One reason, of course, is the downward revision of tax rates on various products. But another, and more worrying cause is widespread tax evasion despite measures such as e-way bills.

Shiv Pratap Shukla, minister of state for finance, provided data in Parliament on Friday that showed the percentage of eligible taxpayers who are not filing returns has risen sharply. A year ago, 84.4 million hadn’t filed returns; this has risen to a whopping 283.1 million.

“Our understanding is that people are still gaming the system and this has to do with input credit,” said an expert in indirect taxation, who did not want to be named.

“Basically these companies are claiming input credit by showing estimates of their sales in the GSTR-1 form, as you just have to give details of your sales in this form and not show the actual invoices based on which the input credit is being availed. Later, they avoid paying GST, as payment of taxes happens when you file the GSTR-3B form. So, in many cases, registrations are made, and initial GST payments are missed. By the time the tax authorities figure it out, many of them have deregistered or shut shop,” he added.

The data presented by Shukla showed that until December, 499 cases of fake invoices, which were used for claiming input tax credit worth ₹3,895 crore, were detected. In contrast, in the July 2017-March 2018 period, only four such cases had been detected, cumulatively worth ₹9.75 crore.

“Many companies, which have not been paying income tax, continue to remain outside the GST net as well. They have simply decided to not get registered,” said another tax expert requesting anonymity. “Frankly, the government doesn’t have the bandwidth to detect all such cases, ” added the tax expert.

The dice seems loaded against the government, which also may not want to be seen as being too tough on small businesses ahead of the general elections.

Leakages are especially high in industries where the market share of unorganized companies is high.

Analysts at JM Financial Institutional Equities recently visited Haryana’s Yamunanagar, a region where 550-600 plywood manufacturing units are located. According to their interactions, while invoicing levels have increased, e-way bill implementation is still not strict at most places and companies are able to get away with under-invoicing, it said in a report on 12 December.

“Reconciliation of GSTR-1 and e-way bills generated by taxpayers need to be implemented at the earliest for e-way bills to be a more effective anti-evasion measure,” says Abhishek Jain, tax partner, EY.

After the implementation of e-way bills in April 2018, revenues were expected to rise. It was expected that lower effective taxes, along with increased compliance, would accelerate formalization, and organized businesses would gain share and tax collections would surge. But it seems the mechanism has failed to yield the desired results so far.

“The government is committed to increase the percentage of compliance by taxpayers under GST,” Shukla told Parliament. “In this regard, an extensive outreach programme has been carried out across the country to create awareness among traders, industry bodies and other stakeholders. Further, effective enforcement measures are being undertaken to check cases of tax evasion and fake invoices.” It’s another matter that the numbers he provided don’t hint at any reduction in evasion.

In fact, the way things stand, shoring up GST revenue collections meaningfully could be a long row to hoe.

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Source: Live Mint


GST Council waives Late Fee for Some Returns

GST Council waives Late Fee for Some Returns

The 31st GST Council meeting has waived the late fee for some returns such as FORM GSTR-1, FORM GSTR-3B & FORM GSTR-4 for the periods July 2017 to September 2018.

According to the recommendation of the GST Council, the late fee shall be completely waived for all taxpayers in case FORM GSTR-1, FORM GSTR-3B &FORM GSTR-4 for the months/quarters July 2017 to September 2018, are furnished after 22.12.2018 but on or before 31.03.2019.

The council also recommended that the taxpayers who have not filed the returns for two consecutive tax periods shall be restricted from generating e-way bills. This provision shall be made effective once GSTN/NIC make available the required functionality.

It was further recommended that one more window for completion of the migration process is being allowed. The due date for the taxpayers who did not file the complete FORM GST REG-26 but received only a Provisional ID (PID) till 31.12.2017 for furnishing the requisite details to the jurisdictional nodal officer shall be extended till 31.01.2019. Also, the due date for furnishing FORM GSTR-3B and FORM GSTR-1 for the period July 2017 to February, 2019/quarters July 2017 to December 2018 by such taxpayers shall be extended till 31.03.2019.

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Source: Tax Scan
Companies rush to match input tax credit with vendor returns

Companies rush to match input tax credit with vendor returns

Indian companies are scrambling to retain hundreds of crores of input tax credit for last financial year under the Goods and Services Tax (GST) regime that it could lose if it fails to substantiate the claim with vendor returns.

The deadline to file this claim is October 20, while vendors can file their sales return till October 31. This has created a situation where vendor returns are not available for reconciliation.

Industry associations have represented to the government seeking an extension of the deadline.


“In the event the tax authorities insist on disallowing input tax credit based on a cut-off date referenced to filing of GSTR-3B, taxpayers will be denied the opportunity of availing input tax credit to which they are rightly entitled to as per the provisions of the Act,” industry body Assocham said in its representation to the finance ministry.

Other industry bodies such as CII have also petitioned the government on the issue.

The GST, which was rolled out in July 2017, replacing multiple state and central taxes, introduced a concept of matching for claiming input tax credit.

A buyer had to reconcile input tax credit claimed with tax paid by the supplier in returns filed on the GSTN portal to claim credit.

However, due to IT-related glitches, online matching was put on hold and taxpayers were allowed to claim a provisional credit on the basis of self-declaration in monthly summary return or GSTR-3B.

Most businesses did not carry out reconciliation of input tax credit provisionally claimed.

There are many instances of a supplier not filing the return for months but the buyer claiming input credit for tax paid to them.

The GST law, however, clearly spells out that the buyer is not entitled to claim input tax credit if the supplier does not pay tax to the government.

The law also provides that any adjustment on account of input tax credit pertaining to invoices of the financial year 2017-18 cannot be claimed, whether additional or reversal, beyond the filing of GST, return for the month of September 2018, for which due date is October 20, 2018.

With barely days to go, businesses are rushing to match credit claimed with vendor returns. Buyers will need to communicate any mismatch to his supplier, who will then need to undertake corrective action in their upcoming GST returns that is the GSTR-1. The government, last month, extended the due date of filing GSTR-1 to October 31.

So, while a vendor can file corrected GSTR-1by October 31, the buyer needs to make an adjustment in his input tax credits by October 20. This, therefore, requires completion of reconciliation exercise on assumption that vendor would correctly report the transaction or amend the previous return transactions on or before October 31.

Experts say there could be significant error in vendor returns. “Matching is to be done on an all-India basis and not state-wise. There are numerous cases where vendors have reported the invoices in a wrong state and if a state-level matching is done, there are numerous mismatches, leading to credit loss,” said Rajeev Dimri, partner, Deloitte Touche Tohmatsu India LLP.

XaTTaX GST e-filing software – Simple, Secure, Reliable

Sources: The Economic Times
Deadline for filing GST returns extended

Deadline for filing GST returns extended

The due date for filing GSTR-1 for the months from July 2017 to September 2018 has been further extended up October 31 on the advice of the GST Council, the Commercial Taxes Department said.

Migration woes

This follows several registered dealers under the Goods and Service Tax Act, 2017, experiencing difficulties with the migration.

For filing GSTR-1 from October 2018 to March 2019, the due date is set as 11th of the succeeding month of filing the return.

Previously, dealers were supposed to furnish electronically the details of outward supplies of Goods & Services in Form GSTR-1 on or before the tenth day of the succeeding month.

However, the due dates for filing GSTR-1 were extended periodically considering the difficulties faced by dealers.

For dealers having an aggregate turnover in the preceding financial year or current financial year up to ₹ 1.5 crore and those having opted for filing of quarterly GSTR-1, the due dates for filing GSTR-1 from July 2017 through September 2018 are October 31, while for October-December 2018 it is January 31, 2019 and January-March 2019 is April 30, 2019.

Also, for registered persons whose principal place of business is in Mahe region of the U.T. of Puducherry and have opted for quarterly filing, the due date for filing GSTR-1 for the quarter from July, 2018 to September, 2018 is extended up to November 15.

Further, for those dealers who have migrated to GST through special procedure vide G.O. Ms. No. 39 dt. 10.08.2018, GSTR-1 for the months from July 2017 to November 2018 and for those who have opted for quarterly filing, GSTR-1 for the quarters from July 2017 to September 2018, shall be filed on or before December 31.

Dealers are requested to file GSTR-1 before the due dates as mentioned above to avoid penal action, G. Srinivas, Commissioner (ST) said.

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Source: TheHindu
GST returns: New system unlikely before next elections

GST returns: New system unlikely before next elections

The roll-out of the new simplified return-filing system for the goods and services tax (GST), GST returns: New system unlikely before next electionswhich was to kick in from January 2019, may get delayed further and, most probably, beyond the tenure of the current government. According to sources, even though the Narendra Modi government wants to implement the system before the general election, that may not happen given the time needed to complete the elaborate testing procedures to make the system foolproof.

Officials have been asked not to precipitate a repeat of the glitches faced by the originally conceived triplicate returns system that has never been fully implemented. Since the January deadline for the new system — which will automatically produce monthly returns based on supply data uploaded and inward supplies accepted — is difficult to be met and the announcement of the election is expected by March, the government might have to reconcile with the need to defer it further rather than risk a problematic system close to elections, sources said.

Since the GST returns filing continues to be confined to the summary returns GSTR 3B (with which taxes are paid) and outward supply (GSTR-1), the crucial anti-evasion requirement of invoices matching is not being met. It is assumed this is one of the reasons for the continuing shortfall in GST collections.

“The fear is that even if a handful of people complain of the system’s potential shortcomings, it could be amplified disproportionately on the eve of impending elections,” a government official said on condition of anonymity.

According to the implementation plan, a prototype of the software would be first deployed. This would be followed by release of the beta version of the final software, open for a few taxpayers to use in the real-world environment. However, sources said, the entire cycle could take six to eight months from now.

“We are planning to first release a prototype of the software, which would be connected to a small server. This would then be taken to various industry bodies and tax practitioners for them to use, an essential element to find bugs in the system that can be rectified,” an official said.

He added that it was essential that the new system is exposed to real taxpayers and tax practitioners to make it robust. This is a learning from the (failed) earlier system, which was tested in-house robustly but wasn’t tried by real taxpayers. This had resulted in constant firefighting to resolve glitches after the system went live.

“After the format for the new system was approved by the GST Council, the GST Network has started working on its implementation,” a tax official involved closely with drafting the new system said.

The GST Council in August had approved the format of the new design which promises to be lot less cumbersome for assessees than the original system that required filing three returns every month. In the new system, there will be a facility for sellers to continuously add invoices and for buyers to view them. The system could allow the buyer to lock the invoice after which the seller can’t edit/delete it, making it a confirmed liability of the seller.

Source : Financial Express
Tax Professionals to discuss GST glitches at two-day National conclave in Ahmedabad

Tax Professionals to discuss GST glitches at two-day National conclave in Ahmedabad

Close to 200 tax practitioners from about 26 states will GST practitionersdeliberate on the burning issues of Goods and Services Tax (GST) during a two-day conclave to begin in Ahmedabad on Saturday, July 14. Issues related to simplification of GST will be discussed and findings will be submitted to GST Council which is meeting on July 21 to simplify things.

This is the first ever, and the most widely represented meet of stakeholders at the grass-root to be held to review GST, which recently marked its first anniversary. “Returns, refunds, and recommendations are the main things on our agenda. Participants from almost all the states in the country will share the issues they are facing. This will be a win-win proposition for the government, country’s economy, businessmen and tax practitioners,” said Axat Vyas, an organizer.

Nigam Shah, former president of Gujarat Sales Tax Bar Association said even after one year of the roll-out of what is considered as the biggest ever indirect tax reforms in the country since independence, said there are issues like lack of registration, dual registration, not getting refunds and difficulties in filing returns among others.

“We want to highlight these bottlenecks. For example, GSTR-1 needs to be filed within 10 days, which is mostly impracticable. In Punjab, there are issues of traders getting multiple registrations… Refunds are being issued without verification – a dangerous thing as there could be a mismatch in actual refunds and refunds sought,” he said

Source :  DNA
GST trouble: Assessees told to explain mismatch of ITC claimed in GSTR-3B, GSTR-2A

GST trouble: Assessees told to explain mismatch of ITC claimed in GSTR-3B, GSTR-2A

A large number of assessees under the GST have received notices from the tax department asking them to explain the mismatch of input tax credit (ITC) claimed in the self-declared summary return GSTR-3B GST trouble: Assessees told to explain mismatch of ITC claimed in GSTR-3B, GSTR-2Aand the auto-generated, but currently suspended, GSTR-2A. The notices have granted a period of 10 days to explain the discrepancy, failing which proceeding would be initiated against the taxpayers. Although the department has intensified its enforcement effort in the last month which is reflected in the spurt of notices received by taxpayers, it is the first time they have used a return form, which is not being used by taxpayers since it was suspended in November last year.

Also Read: What is Input Tax Credit under GST? And how to claim it?

GSTR-2A is generated by the system on the basis of information received from GSTR-3B and GSTR-1 (sales details). When the sellers of assessees file GSTR-1 in any particular month, its details are captured by GSTR-2A thus providing the details of purchases of the assessee concerned. Since ITC claimed in GSTR-3B should ideally match ITC available on all the purchases made by an assessee, a mismatch can be detected by comparing the details in these two forms.

However, experts say that a mismatch doesn’t necessarily implicate a taxpayer and several other factors could be responsible for the same. “Numerous reasons could be attributed to these discrepancies which include, contradicting circulars over a period of time, frequent changes in law, suspension of GSTR-2, technical incompetence at GSTN.

Policymakers need to assure that tax officer pursue such notices in a non-coercive manner and appreciate the practical difficulties faced by taxpayers in the filing of tax returns,” Rajat Mohan, partner, AMRG & Associates, said. In the past month, taxpayers have received notices for non-filing of GSTR-3B, and mismatch in details between GSTR-3B and GSTR-1. The latest batch of notices suggests that tax department is using all possible tools at its disposal to detect evasion, a tax official said.

Read More: Companies get scrutiny notices for the mismatch in GST returns

The tax department’s move of using GSTR-2 was expected among assessees and tax practitioners as reported by FE earlier. These assessees had also started using GSTR-2 and GSTR-2A to ensure that the ITC claimed in GSTR-3B was being reconciled. GSTR-2 helps them provide evidence of tax contents in the goods and services they consumed, and thereby validate the credits claimed.

The GSTR-2 form provides business details on the status of suppliers’ tax filing and gives the entity greater control over choosing a vendor. This also allows a firm to ensure that its suppliers are paying taxes on time so that it can claim ITC without any hurdle.

Taxpayers are now mandated to file only the outward-supply return GSTR-1 and a simple summary interim return GSTR-3B, with which they pay tax and claim input tax credits. Filing of comprehensive returns with the attendant invoice-matching facility was suspended following complaints. Taxpayers had complained of huge compliance burden and also the GST Network’s inability to handle the traffic. The widespread use of GSTR-2 is despite the GST Network not providing the facility of filing it right now.

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Source: Financial Express


Tax department sends notices to GST non-filers

Tax department sends notices to GST non-filers

After months of large scale non-compliance in filing of the summary return (GSTR-3B) by taxpayers under Goods and Services Tax (GST), the tax department has started sending reminder notices toTax department sends notices to GST non-filers such assessees. Some of the notices issued for the first three months of this year has given taxpayers three days to comply, or else the department would assess the liability based on information available with them.

The notices are in line with government’s stated approach of employing enforcement actions gradually as the system stabilizes. The tax department has also asked assessees to explain the mismatch of details filed in GSTR-3B and GSTR-1 (outward supply). Besides, central board of indirect taxes and customs (CBIC) has launched a year-long exercise to verify transitional credit claims made by top 50,000 assessees.

“You are requested to furnish the said return with three days, failing which the tax liability will be assessed under GST Act, 2017, based on the relevant material available with this office,” one of the electronically generated notices reviewed by FE said. It added that no further communication will be issued for assessing the liability and an assessee will be liable to pay interest and penalty along with the applicable tax. “If returns aren’t filed even after notices, the department can undertake tax liability assessment on the basis of sales made to a particular assessee. We could also use the past tax record and other data points to arrive at the liability,” a tax official said. While the GSTR-3B compliance has steadily improved since July last year, it’s still not satisfactory to the tax department. Only around 55% eligible taxpayers were filing monthly returns by the deadline during July-October.

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Source: Financial Express
Be Ready! Only Two Days Left For Filing Three GSTR Forms

Be Ready! Only Two Days Left For Filing Three GSTR Forms

There are only 2 days left for the taxpayers who have to file Three different return filings GSTRGSTR Forms forms before the upcoming due date i.e. 20th May 2018. The business units have to file GSTR 3B while the NRIs have to file GSTR-5 and GSTR- 5A and for this, they have only 2 days left at the time of writing this piece of information.

It is warned that if in case taxpayers have not filed the return of GSTR 3B of the may month they are suggested to file it as soon as possible. In the recent 27th GST council meeting, it was decided that the GSTR 3B will be continued till a single return form is not finalized for the taxpayers.

Due Date of GSTR 3B April 2018

All the traders and business units are required to file GSTR 3B for the month of April till 20th May 2018 in which they have to include all the details of sale and purchase. Also, the transactions done with the traders having a turnover less than 20 lakhs is to be included in the reverse charge for.

Also, the taxpayers will have to include details of input tax credit, interstate dealings and transactions with unregistered dealers. Also, they have to include the details of business done with the composition scheme dealers and the sales of tax-free products.

20th May – Due Date of GSTR 5 For NRI

All the non-resident Indian (NRI) dealers are required to file the GSTR 5. All the NRIs who comes to India for trade purpose and earns by trading and business dealing in India have to file GSTR 5. The NRI dealers have to provide all the details of sale and purchase in the GSTR 5 form.

20th May – Due Date of GSTR 5A For NRI Service Provider

Apart from NRI dealers, all the NRI service providers will have to file GSTR 5A in which they have to include all the details of sale and purchase.

31st May – Due Date of GSTR 1

All those traders having turnover more than 1.5 crores are required to file April month GSTR 1 by 31st May. GSTR 1 is a monthly return filed by taxpayers having turnover more than 1.5 crores in which they have to give all the details of sale and purchase.