V Bhatia
GST’s introduction heralded many changes to India’s MSME business. The government came up with various ways to help them transition to this taxation system, and a new set of return filing norms will be introduced from April 2020. Archit Gupta, Founder and CEO, ClearTax elaborates about the upcoming simplified GST return format and how it is likely to benefit MSMEs.
Q: What were some major pain points experienced by SMEs while filing GST audit report and reconciliation statement online?
A: The annual GST return forms were last simplified in December 2019, resulting in fewer issues around preparation of the forms. However, the facility to file annual returns was delayed, causing multiple extensions for annual returns of FY 2017-18 and 18-19.
Q: Was this due to technical glitches on the portal?
A: Yes, it ranged from errors on uploading JSON of the annual return form to the unavailability of the option to upload GSTR-9 while GSTR-9C is already filed. While some faced difficulties in receiving the verification OTP within the time limit while filing returns, others got late fee messages despite attempting to file within the deadline.
Q: How were SMEs affected by this filing issues?
A: The worst affected users were CAs, GST auditors and tax practitioners assisting SMEs. For a consultant, more the time spent than required for a particular task is equivalent to the fees foregone. The online filing utility of GSTR-9 and GSTR-9C for FY 2017-18 saw certain deficiencies that aggravated around the deadline.
Some taxpayers who managed filing the returns themselves faced similar challenges, especially with delay in receiving the OTP. As such, they paid off their excess liability arising on yearly reconciliation at the time of preparing GSTR-9 well in advance. But the problem pertained to the returns data not getting reflected on the GST portal.
Q: In Budget 2020, the FM has announced the introduction of a simplified return format for GST from April 2020. How will SMEs benefit from this?
A: These are profile-based returns in either RET-1 or 2 or 3 forms. A lot of supplies come under the ambit of GST, including the exports and supplies to SEZ. However, most dealers deal with few supplies. Thus, a profiling questionnaire will enable the GST return type relevant to the taxpayer’s profile.
Also, suppliers can upload invoices on a real-time basis, which will be available to recipients for action. This facility for assigning invoices to the input tax credit as done through ANX-1 flowing to ANX-2 provides transparency in the system, leaving lesser scope for return preparation errors.
Moreover, taxpayers can amend their returns twice for a tax period after filing. This is restricted to cases requiring summary details. The invoice-oriented information will continue to be amended as done in the current regime.
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