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Ease of doing business: Small firms likely to be exempted from GST return filing

The Financial Express logo The Financial Express 12-09-2019 Sandeep Soni

In a possible major step towards ease in compliance burden, GST Council will be discussing measures to exempt small businesses having turnover below Rs 2 crore from filing annual GST returns even as the number return filings has remained unsatisfactory despite extending the deadline three times, IANS reported citing senior officials.

a close up of a logo: Currently, every GST taxpayer or assessee has to file an annual return in GSTR 9 forms. © Provided by IE Online Media Services Pvt Ltd Currently, every GST taxpayer or assessee has to file an annual return in GSTR 9 forms.

Close to 85 per cent of around 1.39 crore total assessees as per official data have a turnover of Rs 2 crore or less. This would reduce compliance burden and help tax bodies focus on large assessees, according to tax experts.

"This is a welcome step and will benefit crores of traders in the country. Up to 50 lakh traders in India have an annual turnover of Rs 2 crore and for them, it will be a major relief. If the limit can be increased to Rs 5 crore then 70 per cent of the traders will be reprieved from return filing," traders' body CAIT secretary general Praveen Khandelwal told Financial Express Online. CAIT represents around 7 crore small traders in India.

Despite deadline extensions, the filings so far are ranging "from 25-27 per cent. The GST Council will discuss the issue in its meeting on September 20," said an official. The council will decide if the need for compulsory filing will be suspended for FY18 only or for subsequent financial years too, the official said. On the other hand, there is also a view of waiting till November 30 to check if the number of filings increases, according to the official adding that though there would be a lot of procedural issues to be considered by the council this time. 

"Lesser compliance via cancellation of GSTR-9 should not lead to heightened scrutiny by the tax officials. Tax officials already have information in the form of GSTR-1, and the auto-populated GSTR-2A. With falling revenues, the pressure will be on the govt to improve collections and their response may be adverse when GSTR-9 is cancelled. A better thing to do would be to reduce compliance efforts through simplification of GSTR-9," said Archit Gupta, Founder and CEO, ClearTax.

Currently, every GST taxpayer or assessee has to file an annual return in GSTR 9 forms. Filing GST return form, according to traders body CAIT, is extremely complicated with requirements that current GST filing softwares are not updated with. "For example, the cost price of each commodity, the sale price of each commodity, and HSN code of each item are now asked by the government. These weren't required when GST was introduced. Hence, GST filing softwares don't have provision to fill these details," Khandelwal had earlier told Financial Express Online.

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