The Government of India has now introduced a one form Goods and Services Tax (GST) filling process for the business traders and could be launched by July 2019 after the newly elected government comes to the power. This action was delayed for a long time and finally, the union finance ministry has made ready the GST network (GSTN) and would proceed with the single monthly return system for the Goods and Services Tax (GST) which would simplify the process of filing returns as well as to get the input tax credit.
The single monthly return system would be a three-phase plan in order to deal with the grievances regarding the troubles in filling multiple returns along with the greater expense of compliance. As per this three-phase plan, for 6 months, in a transition period the business traders are required to file two returns, forms one is GSTR1 (for sales) and the other one is GSTR 3B. Following the 6 months, the business traders are requiring to proceed towards a single filing form that is to be- introduced. For the business, to customer commerce, the simplified form shall be about the complete sales while for the business to business commerce the firm would include the details of the invoice.
There is no need to any further clearance from the GST Council as it had already cleared a three-phase plan in last May. The third phase would include the invoice matching action.
The officials have stated that with the introduction of the new single filling return form, it would lessen the annual compliance tedious load for the business traders from 24 GST returns (GSTRs) towards only 12 GST returns, other than one return for the complete fiscal year. Usually the business traders had to file 36 returns; however, the second form of the GSTR 2 isn't filed by most of them. The officials stated that the government is looking to consider the month of July as a trial month to run this second phase.
The main criticisms of the GST tax regime, made by the opposition party Congress was about the compliance load of filing returns. The business traders also demand a decrease in the number of returns to be filed.
This new three-phase tax system must help the business as numerous filings can be avoided, with a single monthly return in place of that. But this implies that a more noteworthy control must be practiced on vendor’s compliances during the transition phase, and input credit would be also restricted to the degree of GST amount that is being reflected on the portal.
It has been said by the officials that the reconciliation between the businesses purchases records as well as that reported by the vendors also require to be exercised on a regular basis and can't be considered to be the year-end action. The Government, with this new three-phase plan, would be expecting a noteworthy decrease in tax leakage when the new system is completely implemented.
This single return will allow the business trader to verify prior filling the returns whether the vendor has uploaded the invoices or not. Thus Input Tax Credit (ITC) would be permitted depending on the same. It will likewise facilitate the compliance as different reporting tables of GSTR 1, 2 & 3 would consolidate in one single form. The number of returns would also descend from the initially proposed 36 to 12 every year and this would benefit to small and medium businesses to become a GST compliant.
Also, it could be expected that single GSTR would lessen the compliance trouble and there would be fewer instances of mismatch in the data that are reported to the authorities. Though, regardless of whether it would be useful or not shall rely upon the data required by the government in the new form from the taxpayers. However, if this takes place, the biggest concern of credit mismatch shall be settled as the data is getting auto-populated towards the supplier as well as to the recipient. This would inevitably lessen the time of a vendor to file his report of output supplies as well as returns for making payment of taxes.
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