Filing of returns to become cumbersome under GST regime

With the advent of the Goods and Services Tax (GST), the filing of returns by businesses will become more cumbersome.

There are three monthly returns that every taxpayer, other than compounding taxpayer and Input Service Distributor (ISD) — outward supplies made by taxpayer (GSTR1) on 10th of every subsequent month, inward supplies received by a taxpayer (GSTR2) on 15th of every subsequent month, and monthly returns (GSTR3) on 20th subsequent month along with a GST Annual Return (GSTR9) on December 31, of the next fiscal year — has to file.

Currently, service tax return is to be filed once every six months in a financial year — furnishing half yearly return i.e. April 1 to September 30 and October 1 to March 31 of the financial year in Form-ST-3 within 25 days of the end of the half year.

In case of VAT, excluding the annual return, if the turnover of the trader is less than Rs 25 lakh per annum, he is expected to furnish his return every quarter, while if the turnover of business is more than Rs 25 lakh per annum, assessor is supposed to file the return every month.

“The compliance cost is expected to increase with GST law, making it more cumbersome process. It is also because you have to file three returns monthly, upload outward and inward supplies invoice-wise along with following the matching concept. Each and every credit that you take should match with your vendor invoices and ensure that vendor has remitted the taxes,” Naveen Rajpurohit, Parrner — Indirect Tax, BDO India said.

The picture doesn’t seem to be too rosy in case of claiming input credits as well. Under the VAT regime, a trader can claim input credit by providing an invoice, while under GST, a person can’t claim credit till his supplier has been taxed, he said.