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Only about 15% of taxpayers have filed GST Returns, low numbers worry CBIC chief

Only about 15% of taxpayers have filed GST Returns, low numbers worry CBIC chief

With the last date to file GST Annual Return and GST Audit report fast approaching, a complex filing process and numerous data requirement has meant very few taxpayers have been able to comply with the filing process

In a letter to all Principal Chief Commissioners and Chief Commissioners of Central Tax, CBIC Chairman Pranab K Das writes that data available till August 3 shows that only 14,85,863 GSTR-9 has been filed, while all non-composition taxpayers are supposed to file annual returns. This number of taxpayers needed to file GST annual return stands at over one crore. Similarly, the status of filing GSTR-9A stands at 4,33,148 and GSTR-9C at 11,334. About 12 lakh registered taxpayers are required to get their accounts audited and filed under GSTR-9C.

The last date to file GSTR 9, GSTR-9A and GSTR-9C is August 31, 2019, but the dismal figures has prompted Das to get the tax Commissioners to help out with the process and expedite the return filing process.

“Considering the last date is approaching fast, there is a need to reach out to the taxpayers to ask and help them to file the annual returns/reconciliation statement before the due date. Wherever required, they should be guided through the various steps of the return filing process. Towards this end, I request you to organize outreach initiatives in your ones to help the taxpayers file their returns in time. Such outreach programme may be organized at the Commissionerate level as well as Division level. The overarching objective of the exercise is to ensure that the best help and assistance is available to taxpayers in filing their annual returns/reconciliation statement well before the due date,” says the letter from Das.

According to KPMG India, Partner, Harpreet Singh, most dealers are busy in undertaking multiple reconciliations for their pan India operations and sorting the differences. “Also, re-visiting all tax positions and agreeing on them with GST auditors to reduce qualifications is taking time” said Singh.

According to Chartered Accountant, Pritam Mahure, the low numbers of GST Compliances are attributable due to the complex and numerous data requirements for preparing GST Annual Return as well as GST Audit. “Few details, such as eight-digit product codes (HSN) are requested, although legally only four-digit HSN is required. Similarly, HSN-wise purchase summary is another requirement which was not required at the time of monthly GST return, but is now required to be furnished. Given this, GST Council should immediately look into these valid concerns of the GST payers and make the GST Annual Return and Audit process, Good and Simple, in-reality,” says Mahure.

Das in his letter adds that any systemic/policy issue faced by the taxpayer in filing the retur/reconciliation statement should be brought to the attention in the Board urgently.

“Though the numbers look poor at the moment, like any other statutory deadline the compliance would increase significantly with passage of each day towards the deadline” adds Singh.

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Source: Economic-Times.
GST trouble: Businesses reporting 20 per cent revenue fall receive notices

GST trouble: Businesses reporting 20 per cent revenue fall receive notices

GST-registered businesses that have reported decline in annual revenue by 20% or more over the previous year have received a flurry of notices over the last few weeks from the tax department, sources in the know told FE. While notices related to mismatch in declaration between GSTR-3B (summary return) and GSTR-1 (outward supplies detail) were common earlier, the department is now comparing firms’ earning under GST with that of erstwhile service and excise regime.

The notices have asked businesses to produce relevant documents and explain the reasons for decline in sales. The department believes that many such cases could point to possible evasion under the new indirect tax regime. Sources said that the government is sitting on a pile of data that wasn’t available to them before GST. This is further aided by integration of information from Customs and direct tax department. The GST IT system is now throwing up many red flags when tax returns under different tax regimes are compared.

However, the spate of notices are also targeting businesses that have genuine reasons for declining revenue which includes a slowing economy. In one instance, a service provider for multinational companies received a notice but its revenue had slacked due to expiry of certain contracts. In another notice seen by FE, the taxpayer was asked to produce input tax credit documents as it had paid a substantial portion of tax liability through accumulated tax credit.

“While genuine businesses are not worried over these notices, it does raise the cost of doing businesses for them,” Rajat Mohan, partner at AMRG & Associates, said. He explained that replying to notice under GST requires professionals and could cost as much as `1 lakh while earlier, the tax laws had been around for some years and most replies followed a set pattern that didn’t require professional intervention.

Although the GST system generates a lot of data to track evasion, the absence of a full-fledged return system means that there are areas prone to exploitation through fake invoices for claiming additional credit and bringing down tax liability. The Comptroller and Auditor General’s (CAG) report tabled in Parliament recently pointed this out. The new return system is likely to come into force only from next year.

Meanwhile, tax department has estimated that evasion worth as much `1.2 lakh crore may have taken place under GST regime. An official said that while the government had detected evasion worth over `12,000 crore since GST came into force two years ago, rule of thumb suggested that such detection were only 10% of the actual evasion taking place. The GST collection for central government in FY19 fell short of target by over `60,000 crore.

This prompted the government to set relatively modest budget estimate for the current fiscal at `11.89 lakh crore. This translates into an average monthly collection of just below `1 lakh crore. In the first four months of FY 20, the collection have kept pace with the required rate.

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Source: Financial-Express.
Two New Functionalities available in GST Portal

Two New Functionalities available in GST Portal

The Goods and Services Tax ( GST ) portal has enabled two new facilities for filing Form GST ITC-04 in the official portal to furnish the details of the goods/ capital goods sent to the job worker and received back or supplied from the premises of the job worker. The existing form had been amended vide Notification No. 39/ 2018 – Central Tax, dated 4.09.2018.

Form GST ITC-04 is a quarterly form. It must be furnished on or before 25th day of the month succeeding the quarter.

Job work means processing or working on raw materials or semi-finished goods supplied by the principal manufacturer to the job worker. This is to complete a part or whole of the process which results in the manufacture or finishing of an article or any other essential operation. The principal manufacturer will be allowed to take credit of tax paid on purchase of goods send on job work subject to certain conditions.

Further, the portal has updated the facility to file application for the cancellation of registration and filing clarifications by GSTPs

With this, normal/Composition/ SEZ Developer/ SEZ Unit/ Casual Taxable Person/ ISD/ NRTP users can now select a GST Practitioner for Filing of Application for Cancellation of Registration.

Also, UN Body/Embassy/ONP users can now select a GST Practitioner for filing clarifications on issues raised by a tax official on their registration application.

The GSTP can save draft of the application. The taxpayer/ users and GSTP would be able to work on the drafts of the application, saved by either of them.


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Source: Taxscan
GST compliance regime not yet simple, says CAG

GST compliance regime not yet simple, says CAG

The government has failed to put in place a simplified tax compliance regime and non-intrusive e-tax system remains elusive even after two years of the Goods and Services Tax’s (GST) roll-out, according to official auditor, Comptroller and Auditor General of India (CAG).

“The complexity of return mechanism and the technical glitches resulted in roll back of invoice-matching, rendering the system prone to ITC frauds. Thus, on the whole, the envisaged GST tax compliance system is non-functional,” the CAG has said a report tabled in Parliament on Tuesday.

The new indirect tax regime had kicked in July 2017. The transformation tax structure is aimed at reducing tax cascading, ushering in a common market for goods and services and bringing in a simplified, self-regulating and non-intrusive tax compliance regime.

The CAG said that one significant area where the full potential of GST roll out has not been achieved is the roll out of the simplified tax compliance regime.

While it was expected, the auditor said, that compliance would improve as the system would stabilise, all returns being filed showed a declining trend of filing from April 2018 to December 2018.

According to the report, the filing percentage of GSTR-1 returns (monthly returns on outward supplies) were throughout less in comparison to the corresponding filing of GSTR-3B returns (summary self-assessed return). The introduction of GSTR-3B resulted in filing of returns with ITC claims which could not be verified and it appears to have disincentivised filing of even GSTR-1.

“Since filing of GSTR-1 is mandatory, short-filing is an area of concern and needs to be addressed,” the CAG noted.

GSTR-3B being only a summary return, short-filing of GSTR-1 implied that the tax departments did not have complete invoice level details as filed by the suppliers, which could be used to verify details given in GSTR-3B or to arrive at turnover.

During the audit, the CAG found that system validations were not aligned to the provisions of the GST Act and as a result, there were some crucial gaps in the registration module. Among various gaps, the system failed to validate and debar ineligible taxpayers from availing Composition Levy Scheme.

Source: Economic-Times

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GSTN releases offline tool of new GST return for trial run

GSTN releases offline tool of new GST return for trial run

Goods and Services Tax Network (GSTN) on July 30 released trial version of offline tools of GST forms related to supply of goods and services. The offline tools have been released for Annexure of supplies (GST ANX-1) and Annexure of Inward Supplies (GST ANX-2), GSTN, which is the IT backbone of the indirect tax regime, said in a statement.

These two forms would be part of the proposed GST Return filing system under which a taxpayer would have to file FORM GST RET-1 (Normal) or FORM GST RET-2 (Sahaj) or FORM GST RET-3 (Sugam) on either monthly or quarterly basis.

GSTN provides offline tools that can be downloaded for filing GST returns.

All the outward supplies will be detailed in GST ANX-1 while GST ANX-2 will contain details of inward supplies auto-populated mainly from the suppliers’ GST ANX-1.

It will also contain details auto-populated from Form GSTR-5 and Form GSTR-6.

“The taxpayer will be required to take action on details of inward supplies contained in Form GST ANX-2 by accepting or rejecting the entries. The taxpayer can also keep the invoice pending by marking the entry accordingly,” the release said.


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Source: Money-Control
GST: CBIC extends due date for filing FORM GST CMP-08

GST: CBIC extends due date for filing FORM GST CMP-08

The Central Board of Indirect Taxes and Customs ( CBIC ) has notified the extension for filing returns by the composition dealers in Form CMP-08.

According to the Notification, “Provided that the due date for furnishing the statement containing the details of payment of self-assessed tax in said FORM GST CMP-08, for the quarter April, 2019 to June, 2019, or part thereof, shall be the 31st day of July, 2019.”

The composition taxpayers shall furnish a statement, every quarter or, as the case may be, part thereof containing the details of payment of self-assessed tax in FORM GST CMP-08 of the Central Goods and Services Tax Rules, 2017, till the 18th day of the month succeeding such quarter.

“The said persons shall furnish a return for every financial year or, as the case may be, part thereof in FORM GSTR-4 of the Central Goods and Services Tax Rules, 2017, on or before the 30th day of April following the end of such financial year,”.

Under the GST regime rolled out from 1st July 2017, the composition scheme is an alternative method of tax levy under GST designed to simplify compliance and reduce compliance costs for small taxpayers. The main feature of this scheme is that the business or person who has opted to pay tax under this scheme can pay tax at a flat percentage of turnover every quarter, instead of paying tax at a normal rate every month.

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Source: Taxscan.
GST: Steady decline in number of return filers in last four months

GST: Steady decline in number of return filers in last four months

Total number of entities filing GST returns has seen steady declined in the last four months for which data is available. Between February and May this year, the number of entities filing GST return has declined by almost 8 lakh, which is nearly 10% of the total GST return filed in the country. According to latest official information, the number of entities that are required to file GSTR-3B form is around 1.03 crore while the number of entities that have filed return in May this year is little over 75 lakh. It means nearly one fourth of the businesses that are required to file return under the GST law have not done that.

The government admitted in the Rajya Sabha all the taxpayers admitted under GST were filing returns.

“The government is considering to put in place an extensive plan to hunt for these missing GST payers,” Anurag Thakur, minister of state for finance told the Rajya Sabha in response to a question adding that the measures will include tax officers visiting the concerned premises.

It’s bit ironical that during the same period the total number of businesses registered under the GST has gone up by 23 lakhs to 1.03 crore while the number of GST return filers (GSTR-3B) declined by over 10%.

While in February this year, almost 84 lakh of the total over 1 crore businesses registered under the GST had filed their returns, the number of filers declined to 82.5 lakh in March.

The same trend of decline in the number of GST filers further declined to 79 lakh business in April this year while in April it further declined to little over 75 lakh.

In February this year, the government’s gross GST collection was Rs 97,247 lakh crore, then it went up to Rs 1,06,577 crore in March and it an all-time high of Rs 1,13,865 crore in April this year before again declining to Rs 1,00,289 crore in May this year.

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Source: Financial Express
Important dates to remember for GST return filings

Important dates to remember for GST return filings

Filing of returns with the Government within stipulated dates is important for a taxpayer in order to avoid incurring any Interest and Penalty.

Forms GSTR-1 AND 3B are to be filled by a person registered under GST for each month other than the people who are registered under the composition scheme.

The important dates that should be remembered for filing GST returns are:

GSTR-3B is to be filed by all taxpayers and the last -date to file is 20th July 2019.

GSTR-1 is to be paid by taxpayers whose turnover is below Rs. 1.5 Crore and also not opted for Monthly Return. The last date to file is 31st July 2019.

GSTR-1 is to be paid by taxpayer s with turnover above Rs. 1.5 Crore or opted for Monthly returns. The last date to file is 11th July 2019.

GSTR-9 is an annual return and the last date to file is 31st August 2019.

For GSTR-9A, the annual return is to be filled by Composition Dealers and the last date of filing is 31st August.

GSTR-9C is a reconciliation statement to be filled by taxpayers with aggregate turnover exceeding Rs. 2 crore from July 2017 to March 2018. The last date to file it is 31st August 2019.

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Source: KNN-India
Nirmala Sitharaman Explains How GST Filing Will Be Simplified

Nirmala Sitharaman Explains How GST Filing Will Be Simplified

Finance Minister Nirmala Sitharaman on Friday said that the Goods and Services Tax (GST) processes were being further simplified while adding that businesses with less than Rs. 5 crore annual turnover will need to file quarterly GST return.
She also announced to increase special additional excise duty and road and infrastructure cess on petrol and diesel by one rupee each, hike in customs duty on gold and precious metals to 12.5 per cent and imposing nominal basic excise duty on tobacco products and crude.

The Union Budget 2019-20 also provides for exempting import of certain defence equipment from basic customs duty, reducing customs duty on certain raw materials and capital goods, and rationalisation of export duty on raw and semi-finished leather.

“The threshold exemption limit for a supplier of goods is proposed to be enhanced from Rs. 20 lakh to an amount exceeding Rs. 40 lakh. Taxpayers having an annual turnover of less than Rs. 5 crore shall file the quarterly return,” she said.

She said that a fully automated GST refund module shall be implemented. “Multiple tax ledgers for a taxpayer shall be replaced by one,” she said. The Budget proposes to move to an electronic invoice system wherein invoice details will be captured in a central system at the time of issuance.

“This will eventually be used to prefill the taxpayers’ returns. There will be no need for a separate e-way bill. To be rolled out from January 2020, the electronic invoice system will significantly reduce the compliance burden,” said Ms Sitharaman.

The Finance Minister said that the landscape of indirect tax has changed significantly with the implementation of GST.

Terming it as a “monumental reform”, Ms Sitharaman said the GST regime has brought together the centre and the states with the result 17 taxes and 13 cesses became one and a multitude of rates instantly became four.

“Almost all commodities saw rate reduction. Tens of returns were replaced by one. Taxpayers’ interface with tax departments got reduced. Border checks got eliminated. Goods started moving freely across states, which saved time and energy. The dream of ‘One Nation, One Tax, One Market’ was realised,” she said.

The Finance Minister said that GST rates have been reduced significantly where relief of about Rs. 92,000 crore per year has been given. “There is a need to unload the baggage and allow the business to move on, as more than Rs. 3.75 lakh crore is blocked in litigations in service tax and excise,” she said.

The budget proposes a dispute resolution-cum-amnesty scheme — Sabka Vishwas Legacy Dispute Resolution Scheme, 2019 — will allow quick closure of these litigations. The relief under the scheme varies from 40 per cent to 70 per cent of the tax dues for cases other than voluntary disclosure cases, depending on the amount of tax dues involved.

Describing ‘Make in India’ as a cherished goal, the Finance Minister proposed an increase in basic customs duty on certain items so as to provide domestic industry a level playing field. These items include PVC, cashew kernels, vinyl flooring, tiles, metal fittings, mountings for furniture, auto parts, certain kinds of synthetic rubbers, marble slabs, optical fibre cable, CCTV camera, IP camera, digital and network video recorders.

She also proposed to withdraw exemption from customs duty on certain electronic items which are now being manufactured in India.

To encourage domestic publishing and printing industry, 5 per cent customs duty will be imposed on imported books. To further promote domestic manufacturing, the budget proposes customs duty reductions on certain raw materials and capital goods.

These include certain inputs of CRGO sheets, amorphous alloy ribbon, ethylene dichloride, propylene oxide, cobalt matte, and naphtha, wool fibres, and input for manufacture of artificial kidney and disposable sterilised dialyzer, and fuels for nuclear power plants.

The Union Budget proposes to increase special additional excise duty and road and Infrastructure cess each by one rupee a litre on petrol and diesel.

“Crude prices have softened from their highs. This gives me a room to review excise duty and cess on petrol,” she said.

Nirmala Sitharaman also announced an increase in customs duty on gold and other precious metals from 10 per cent to 12.5 per cent. The Budget also proposes rationalisation of export duty on raw and semi-finished leather to provide relief to the sector.

Ms Sitharaman said that tobacco products and crude attract National Calamity and Contingent duty which in certain cases is being contested on the ground that there is no basic excise duty on these items. To address this issue, the Budget proposes to impose a nominal basic excise duty on tobacco products and crude.

The Finance Minister proposed a few amendments to the >Customs Act. She said: “Recent trends reveal that certain bogus entities are resorting to unfair practices to avail undue concessions and export incentives.”

She announced that misuse of duty-free scrip and drawback facility involving more than Rs. 50 lakh rupees will be a cognizable and non-bailable offence.

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Source: NDTV.
Businesses to declare mismatch in GST returns form, outward supplies in annual returns: Finance Ministry

Businesses to declare mismatch in GST returns form, outward supplies in annual returns: Finance Ministry

The Finance Ministry Wednesday said any mismatch in GST monthly sales return and outward supply details will have to be reported in the annual return form and due taxes should be paid.

In a clarification on annual returns and reconciliation statement, the ministry said it has received queries from businesses asking whether the primary source of data for the filing of the annual return and the reconciliation statement should be GSTR-1, GSTR-3B or books of accounts.

While form GSTR-1 is an account of details of outward supplies, GSTR-3B is where the summaries of all transactions are declared and payments are made.

The ministry said information in form GSTR-1, GSTR-3B and books of accounts should be synchronous and the values should match across different forms and the books of accounts.

If the same does not match, there can be broadly two scenarios, either tax was not paid to the government or tax was paid in excess.

“In the first case, the same shall be declared in the annual return and tax should be paid, and in the latter, all information may be declared in the annual return and refund (if eligible) may be applied through Form GST RFD-01A,” the ministry said.

Further, no input tax credit can be reversed or availed through the annual return. If taxpayers find themselves liable for reversing any ITC, they may do the same through Form GST DRC-03 separately, it added.

It also said if a taxpayer has not paid, short paid or has erroneously obtained/ been granted a refund or has wrongly availed or utilized ITC then before the service of a notice by any tax authority, the taxpayer may pay the amount of tax with interest. In such cases, no penalty will be levied on such taxpayer.

“Therefore, in cases where some information has not been furnished in the statement of outward supplies in Form GSTR-1 or in the regular returns in Form GSTR-3B, such taxpayers may pay the tax with interest through Form GST DRC-03 at any time. In fact, the annual return provides an additional opportunity for such taxpayers to declare the summary of supply against which payment of tax is made,” it added.

GSTR-9 is the annual return form for normal taxpayers, GSTR-9A is for composition taxpayers, while GSTR-9C is a reconciliation statement. The last date for filing an annual return in August-end.

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Source: Economic-Times