Meeting with GSTN officials: Industry for quarterly returns, fungibility of cash balance
Committee on GST returns simplification to submit report by end of the month
The view about utilisation of cash balance was also echoed by CII
A push for monthly tax payment and quarterly returns filing for all taxpayers along with fungibility of cash balance to set off not only input tax credit, but also tax liability under Goods and Services Tax (GST) were some of the key suggestions made by trade and industry in their meeting with GSTN Chairman Ajay Bhushan Pandey and CEO Prakash Kumar on Thursday.
Pandey, who heads the committee on GST returns simplification, is expected to submit his report by the end of this month and is reaching out to industry for their inputs on revamping the returns filing procedure under the new indirect tax regime. The government proposes to bring back invoice matching, broadly facilitated by simultaneous upload of invoices by seller and purchaser, which will allow recipients to claim input tax credit immediately after the upload of invoice by the sellers.
“We were apprised of the proposed changes in returns filing. The government is keen on bringing back invoice matching but in a simpler form. The simultaneous upload of invoice will help taxpayers to claim input tax credit at a much faster pace as it would be dependent on uploading of invoices than waiting for filing returns and then verifying the information,” an industry chamber’s representative who attended the Thursday meeting said. The timely facilitation of input tax credit will help increase working capital for businesses, the representative added.
The two-hour meeting, chaired by Pandey, was attended by representatives from industry chambers including FICCI and CII. As part of its recommendations to GSTN, FICCI suggested fungibility of cash balance for setting off tax liability against Central GST (CGST), Integrated GST (IGST) and State GST (SGST). At present, the utilisation of cash balance is allowed against input tax credit claims against IGST, CGST and SGST, in that order, but not for tax liability. Ficci also suggested removal of restrictions on credit claim by recipients unless they have received goods and services.
The view about utilisation of cash balance was also echoed by CII, which said, “Only GSTR-1 offset liability system restricts of such utilisation thus making industry pay under CGST even if they have cash surplus in IGST or vice-versa.”
CII in its set of recommendations also suggested allowing revision in scenarios where invoices has been inadvertently shown in B2C instead of B2B. At present, industry records credit note against B2C transactions and adds B2B which is incorrect as concerned B2B has already availed ITC in earlier months, CII said. It also suggested re-opening of Tran-1 facility to claim transitional credit under GST for those taxpayers who could not file the claim or have discrepancies in their claim.
The industry chambers also suggested GST return format to be made simple and easy to understand for a common person, especially for the MSME sector.
The GST Council is expected to take up returns simplification in its next meeting, likely to be held early next month. The Council had last met on January 18, with a presentation on returns simplification given by former UIDAI Chairman Nandan Nilekani.
Finance Minister Arun Jaitley had said that the Council will finalise the return filing process in the next meeting. “Today it was discussed but not finally approved but it’s moving in that direction,” he had said.
When the GST was rolled out from July 1, taxpayers were mandated to file a simplified sales return 3B and also final sales returns (GSTR-1), purchase return (GSTR- 2) and finally two were required to be auto populated to generate GSTR-3.
As technical glitches arose and the industry complained of hardship in filing GSTR-2 on the GSTN portal, the Council in November decided to keep filing of GSTR-2 and 3 in abeyance till March. All businesses now file GSTR-3B every month. Businesses with turnover up to Rs1.5 crore have to file GSTR-1 every quarter, while those with turnover over Rs1.5 crore have to file the return on the 10th day of the succeeding month. The committee is looking at reducing the requirement of filing three returns a month.
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