GST - staggered returns

Ministry of Finance press release dated 22nd January, 2020

Considering the difficulties faced by trade and industry in filing of returns, the government has decided to introduce several measures to ease the process. The Finance Ministry today said that now GST taxpayers can file their GSTR-3B returns in a staggered manner.

Presently the last date of filing GSTR-3B returns for every taxpayer is 20th of every month. From now on, the last date for filing of GSTR-3B for the taxpayers having annual turnover of Rs 5 crore and above in the previous financial year would be 20th of the month. Thus, around 8 lakh regular taxpayers would have the last date of GSTR-3B filing as 20th of every month without late fees.

The taxpayers having annual turnover below Rs 5 crore in previous financial year will be divided further in two categories. The tax filers from 15 States/ UTs, i.e., Chhattisgarh, Madhya Pradesh, Gujarat, Daman and Diu, Dadra and Nagar Haveli, Maharashtra, Karnataka, Goa, Lakshadweep, Kerala, Tamil Nadu, Puducherry, Andaman and Nicobar Islands, Telangana and Andhra Pradesh will now be having the last date of filing GSTR-3B returns as 22nd of the month without late fees. This category would have around 49 lakh GSTR-3B filers who would now have 22nd of every month as their last date for filing GSTR-3B returns.

For the remaining 46 lakh taxpayers from the 22 States/UTs of Jammu and Kashmir, Laddakh, Himachal Pradesh, Punjab, Chandigarh, Uttarakhand, Haryana, Delhi, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand and Odisha having annual turnover below Rs 5 crore in previous financial year will now be having last date of filing the GSTR-3B as 24th of the month without late fees.

The Finance Ministry said that the necessary notification in this regard would be issued later by the competent authority.

In a statement issues, the Ministry further said that it has also taken a note of difficulties and concerns expressed by the taxpayers regarding filing of GSTR-3B and other returns. The matter has been discussed by the GSTN with Infosys, the Managed Service Provider, which has come out with above solution to de-stress the process as a temporary but immediate measure. For further improving the performance of GSTN filing portal on permanent basis, several technological measures are being worked out with Infosys and will be in place by April 2020.

GST - Housing sector

PIB press release dated 24th February, 2019

Real estate sector is one of the largest contributors to the national GDP and provides employment opportunity to large numbers of people. “Housing for All by 2022” envisions that every citizen would have a house and the urban areas would be free of slums. There are reports of slowdown in the sector and low off-take of under-construction houses which needs to be addressed. To boost the residential segment of the real estate sector, following recommendations were made by the GST Council in its 33^rd meeting held today:

2. GST rate:
   1. GST shall be levied at effective GST rate of 5% without ITC on residential properties outside affordable segment;
   2. GST shall be levied at effective GST of 1% without ITC on affordable housing properties.

3. Effective date: The new rate shall become applicable from 1^st of April, 2019.

4. Definition of affordable housing shall be:-

A residential house/flat of carpet area of upto 90 sqm in non-metropolitan cities/towns and 60 sqm in metropolitan cities having value upto Rs. 45 lacs (both for metropolitan and non-metropolitan cities).

Metropolitan Cities are Bengaluru, Chennai, Delhi NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (whole of MMR).

5. GST exemption on TDR/ JDA, long term lease (premium), FSI:

Intermediate tax on development right, such as TDR, JDA, lease (premium), FSI shall be exempted only for such residential property on which GST is payable.

6. Details of the scheme shall be worked out by an officers committee and shall be approved by the GST Council in a meeting to be called specifically for this purpose.

7. Advantages of the recommendations made:

The new tax rate in principle was approved by the Council taking into consideration the following advantages:-

1. The buyer of house gets a fair price and affordable housing gets very attractive with GST @ 1%.
2. Interest of the buyer/consumer gets protected; ITC benefits not being passed to them shall become a non-issue.
3. Cash flow problem for the sector is addressed by exemption of GST on development rights, long term lease (premium), FSI etc.
4. Unutilized ITC, which used to become cost at the end of the project gets removed and should lead to better pricing.
5. Tax structure and tax compliance becomes simpler for builders.

8. GST Council decided that the issue of tax rate on lottery needs further discussion in the GoM constituted in this regard.

The decisions of the GST Council have been presented in this note in simple language for easy understanding.  The same would be given effect to through Gazette notifications/ circulars which alone shall have force of law.

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GSTR-7

Central Board of Indirect Taxes and Customs has vide its notification dated 8th February, 2019 extended the last date for filing of form GSTR-7 for the month of January, 2019 upto 28th February, 2019. This form GSTR-7 is a return by a registered person required to deduct tax at source under section 51 of CGST Act, 2017.

Section 51 mandates tax deduction at source at the rate of 1% from the payment made to supplier of taxable goods or services where total value of such supply, under a contract, exceeds Rs.250,000/-.

The copy of the notification can be found here

GSTR3B -waiver of late fee

The Central Government has vide a notification click here waived the late fee on delayed filing of form GSTR3B. Any amount of late fee which is in excess of Rs.25/- per day is waived. Similarly where the tax payable is NIL and still the registered person has to file the return, any excess late fee over Rs.10 per day is waived off. This is applicable for all GSTR3B returns from July, 2017 onwards i.e. from the inception of GST system.

So here it is only a partial waiver. But where the registered person has failed to furnish the return for the periods July 2017 to September, 2018 but has subsequently filed the same between 22nd December, 2018 and 31st March, 2019, the entire late fee is waived off.

This sounds ridiculous unless I am missing some thing here. That means if you have not filed at all but are filing now between those above dates, then you get full waiver, otherwise only partial waiver.

This begs a major question - why the hell did the government deem it so bloody important to levy a late fee and penalty in the first place if they have to go back and waive it from retrospective effect. Sounds like poor governance from the government.

GST annual return

The Ministry of Finance vide its notification dated 11th December, 2018 has extended the last date for filing of the annual return of GST for the period from 1st July, 2017 to 31st March, 2018 to 31st March, 2019. The annual return is required to be filed online, but the system is not yet ready at their end, so the extension.

Every registered person,  a casual taxable person and a non resident taxable person is required to file this annual return electronically.

The form for the annual return is not ready, so one does not know the contours of this return. Already taxpayers are burdened with two returns GSTR3B and GSTR1. The latter could be quarterly for taxpayers who have less than Rs.1.5 crore turnover and they have to opt for quarterly method of filing.

One does not know what is the reason for one more return under the GST regime. It does not help in "ease of doing business" 

GSTR extension

GST press release dated 7th December, 2018

FORM GSTR-9 and FORM GSTR-9A have been notified vide notification No. 39/2018-Central Tax, dated 04.09.2018 while FORM GSTR-9C has been notified vide notification no. 49/2018-Central Tax, dated 13.09.2018 as part of the CGST Rules. 2.

The competent authority has decided to extend the due date for filing FORM GSTR-9, FORM GSTR-9A and FORM GSTR-9C till 31st March, 2019. The requisite FORMs shall be made available on the GST common portal shortly. Relevant order is being issued.

GST Council Decisions - 6th October, 2017

PIB release dated 6th October, 2017

Recommendations made by the GST Council in its 22nd Meeting held today under Chairmanship of the Union Minister of Finance and Corporate Affairs, Shri Arun Jaitley in the national capital.

 Composition Scheme
1.      The composition scheme shall be made available to taxpayers having annual aggregate turnover of up to Rs. 1 crore as compared to the current turnover threshold of Rs. 75 lacs. This threshold of turnover for special category States, except Jammu & Kashmir and Uttarakhand, shall be increased to Rs. 75 lacs from Rs. 50 lacs. The turnover threshold for Jammu & Kashmir and Uttarakhand shall be Rs. 1 crore. The facility of availing composition under the increased threshold shall be available to both migrated and new taxpayers up to 31.03.2018. The option once exercised shall become operational from the first day of the month immediately succeeding the month in which the option to avail the composition scheme is exercised. New entrants to this scheme shall have to file the return in FORM GSTR-4 only for that portion of the quarter from when the scheme becomes operational and shall file returns as a normal taxpayer for the preceding tax period. The increase in the turnover threshold will make it possible for greater number of taxpayers to avail the benefit of easier compliance under the composition scheme and is expected to greatly benefit the MSME sector.

2.      Persons who are otherwise eligible for composition scheme but are providing any exempt service (such as extending deposits to banks for which interest is being received) were being considered ineligible for the said scheme. It has been decided that such persons who are otherwise eligible for availing the composition scheme and are providing any exempt service, shall be eligible for the composition scheme. 

3.      A Group of Ministers (GoM) shall be constituted to examine measures to make the composition scheme more attractive.

Relief for Small and Medium Enterprises

4.      Presently, anyone making inter-state taxable supplies, except inter-State job worker, is compulsorily required to register, irrespective of turnover.  It has now been decided to exempt those service providers whose annual aggregate turnover is less than Rs. 20 lacs (Rs. 10 lacs in special category states except J & K) from obtaining registration even if they are making inter-State taxable supplies of services. This measure is expected to significantly reduce the compliance cost of small service providers.

5.      To facilitate the ease of payment and return filing for small and medium businesses with annual aggregate turnover up to Rs. 1.5 crores, it has been decided that such taxpayers shall be required to file quarterly returns in FORM GSTR1,2 & 3 and pay taxes only on a quarterly basis, starting from the Third Quarter of this Financial Year i.e. October December, 2017. The registered buyers from such small taxpayers would be eligible to avail ITC on a monthly basis.

The due dates for filing the quarterly returns for such taxpayers shall be announced in due course. Meanwhile, all taxpayers will be required to file FORM GSTR-3B on a monthly basis till December, 2017. All taxpayers are also required to file FORM GSTR-1, 2 & 3 for the months of July, August and September, 2017. Due dates for filing the returns for the month of July, 2017 have already been announced. The due dates for the months of August and September, 2017 will be announced in due course.

6.      The reverse charge mechanism under sub-section (4) of section 9 of the CGST Act, 2017 and under sub-section (4) of section 5 of the IGST Act, 2017 shall be suspended till 31.03.2018 and will be reviewed by a committee of experts.

This will benefit small businesses and substantially reduce compliance costs.

7.      The requirement to pay GST on advances received is also proving to be burdensome for small dealers and manufacturers. In order to mitigate their inconvenience on this account, it has been decided that taxpayers having annual aggregate turnover up to Rs. 1.5 crores shall not be required to pay GST at the time of receipt of advances on account of supply of goods. The GST on such supplies shall be payable only when the supply of goods is made.

8.      It has come to light that Goods Transport Agencies (GTAs) are not willing to provide services to unregistered persons. In order to remove the hardship being faced by small unregistered businesses on this account, the services provided by a GTA to an unregistered person shall be exempted from GST.

Other Facilitation Measures

9.      After assessing the readiness of the trade, industry and Government departments, it has been decided that registration and operationalization of TDS/TCS provisions shall be postponed till 31.03.2018.

10.  The e-way bill system shall be introduced in a staggered manner with effect from 01.01.2018 and shall be rolled out nationwide with effect from 01.04.2018. This is in order to give trade and industry more time to acclimatize itself with the GST regime.

11.  The last date for filing the return in FORM GSTR-4 by a taxpayer under composition scheme for the quarter July September, 2017 shall be extended to 15.11.2017. Also, the last date for filing the return in FORM GSTR-6 by an input service distributor for the months of July, August and September, 2017 shall be extended to 15.11.2017.

12.  Invoice Rules are being modified to provide relief to certain classes of registered persons.

These are welcome reliefs especially for the small & medium sector. This sector has had its liquidity completely squeezed with having to deposit the monthly GST and also on reverse charge basis. It had become a double whammy for them.  

In fact there should be only one quarterly GSTR3B form required to be filed with the Government. All other forms i.e. GSTR 1, 2, 3 should be abolished. Too much of information is sought in these forms which had hitherto never happened in the history of tax administration in India. This had become a kind of micro management of the tax payers, which is not at all beneficial for any tax regime.