The return filing process has been amended many times since the launch of the GST Act and rules. The originally stated return filing mechanism of GSTR-1, 2, and 3 was never implemented in reality, and this led to tax leakages by unscrupulous persons. The council has recommended some measures to increase reporting, reduce the burden of interest, and give taxpayers the option to rectify the GSTR-1 to narrow the gap between GSTR-1 and GSTR-3B in genuine cases. Let us now read these changes in detail:
1. Amendment of Rule 88B of the CGST Rules, 2017 in respect of interest under Section 50 of the CGST Act on delayed filing of returns, in cases where the credit is available in the Electronic Cash Ledger (ECL) on the due date of filing the said return
The GST Council recommended an amendment to Rule 88B of the CGST Rules to provide that an amount that is available in the Electronic Cash Ledger on the due date of filing the return in FORM GSTR-3B and is debited while filing the said return shall not be included while calculating interest under Section 50 of the CGST Act in respect of delayed filing of the said return.
To explain this, let us take an example:
Liability under GSTR-3B of June'24: Rs. 150,000 Cash Balance on 20-7-24: Rs. 100,000
Credit Balance on 20-7-24: Rs. 0 Return filed on 24-7-24
Interest Computation: 18%*50,000*4/365
This welcome recommendation reduces the interest liabilities on taxpayers if tax has been deposited by the taxpayer but a return cannot be filed within the due date. It is to be noted that the cash balance at the due date of filing the return is to be compared with the cash liabilities. i.e., any deposit of tax after the due date of filing the return will not provide relief to the taxpayer.
2. The Council recommended providing a new optional facility by way of FORM GSTR-1A to facilitate the taxpayers to amend the details in FORM GSTR-1 for a tax period and/or to declare additional details, if any, before filing their return in FORM GSTR-3B for the said tax period
GSTR-1A will enable the following:
a. Add any particulars of supply for the current tax period that were missed out on in Form GSTR-1. Finer details remain to be seen as to how the effect of this will be shown in
receiver's GSTR-2B, and what will be the last date of filing of FORM GSTR-1A by the supplier? Currently, GSTR-1 and IFF are filed until the 11th and 13th of the subsequent month, respectively, and GSTR-2B, which is in static form and notifies the recipient of the recipient of these supplies, is available on the 14th of the subsequent month. For instance, GSTR-2B for October 2023 can be accessed on November 14, 2023, by the recipient. The full implementation process will be discussed only after a notification is issued by the government in this respect.
b. Amend any particulars already declared in FORM GSTR-1. The actual implementation will be communicated through notification, and only then will the tax consultants be able to analyze the last date up to which this amendment will be allowed and how the recipient of services will be able to incorporate the changes so communicated in this return. The amendment may be in the form of
- decrease in the value of the tax invoice and corresponding decrease in ITC
- Amendment of particulars of GSTIN
- B2C sales are to be amended to B2B sales.
3. The Council recommended that filing the annual return in Form GSTR-9/9A for FY 2023–24 may be exempted for taxpayers with an aggregate annual turnover of up to 2 crore rupees
GSTR-9 was made optional for taxpayers for FY 2017-18, 18-19, and 19-20, having turnover up to Rs. 2 crore. With the word optional, confusion was prevailing with the taxpayers on whether to file the return or not and about the consequences when the return was not filed. To avoid this confusion, the government then issued an exemption notification for FY 2020–21, 21–22, and 22–23 for taxpayers with an annual turnover of up to Rs. 2 crore. This exemption has been recommended to be extended to FY 2023–24 as well.
4. Change in due date for filing of return in FORM GSTR-4 for composition taxpayers from 30th April to 30th June
The GST Council recommended an amendment in clause (ii) of sub-rule (1) of Rule 62 of the CGST Rules, 2017 and FORM GSTR-4 to extend the due date for filing of returns in FORM GSTR-4 for composition taxpayers from 30th April to 30th June following the end of the financial year. This will apply for returns for the financial year 2024–25 onwards.
This recommendation grants more time to file Form GSTR-4 with the composition taxpayers.
5. The threshold for reporting B2C inter-state supplies invoice-wise in Table 5 of FORM GSTR-1 was recommended to be reduced from Rs 2.5 lakh to Rs 1 lakh
This recommendation increases the amount of information available with the department about B2C inter-state supplies as more invoices will be required to be reported, keeping in view the reduced threshold limit.
6. The Council recommended that a return in Form GSTR-7, to be filed by the registered persons who are required to deduct tax at source under Section 51 of the CGST Act, be filed every month, irrespective of whether any tax has been deducted during the said month or not
It has also been recommended that no late fee may be payable for delayed filing of the Nil Form GSTR-7 return. Further, it has been recommended that invoice-wise details be furnished in the said Form GSTR-7 return.
This recommendation increases the amount of information to be disclosed to the department and creates more responsibility on the organization (primarily governmental organizations), which are required to deduct TDS, to report the details of the invoices on which TDS is deducted, and that too on a regular basis.
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