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GST Return Filing – Sub-optimal

AUGUST 14, 2019

By Vijay Kumar

THOSE who believe that nothing is impossible should try uploading the annual GSTR return. The Chairman, CBIC was all concern when he wrote to his Chief Commissioners on 6th August that:

– The last date for filing the annual return and the reconciliation statements in FORM GSTR-9 , FORM GSTR-9A and FORM GSTR-9C is 31.08.2019. However, the available data shows that till 3rd August 2019 only 14,85,863 GSTR-9 returns have been ?led while all non-composition taxpayers are required to ?le the said annual return. The status of ?ling of GSTR-9A at 4,33,148 and GSTR-9C at 11,334 is also sub-optimal.

– Several representations were received by the Board seeking clari?cations on various aspects of ?ling the annual return/reconciliation statement. In order to provide clari?cations on various issues, two exhaustive press releases, dated 04.06.2019 and 03.07.2019 have already been issued.

– Considering that the last date is approaching fast, there is a need to reach out to the taxpayers to ask and help them to ?le the annual returns/reconciliation statement before the due date.

– Wherever required, they should he guided through the various steps of the return ?ling process. Towards this end, I request you to organize outreach initiatives in your zones to help the taxpayers ?le their returns in time. Such outreach programmes may be organised both at Commissionerate level as well as Division level.

– The overarching objective of the exercise is to ensure that the best help and assistance is available to taxpayers in ?ling their annual returns/reconciliation statement well before the due date.

– Any systemic/policy issues faced by the taxpayers in ?ling the annual returns/reconciliation statement should be brought to the attention of the Board urgently.

Assessees and consultants together are not able to file the returns. Will the departmental officers be able to assist in filing them?

The concerned Chairman repeated his concern in his D.O. letter dated 9th August 2019, when he urged:

– The last date for filing the annual return and the reconciliation statements in FORM GSTR-9, FORM GSTR-9A and FORM GSTR-9C is 31.08.2019. However, the latest available data shows that status of filing is sub-optimal. I have already requested all Principal Chief Commissioners/Chief Commissioners of Central tax, vide my D.O. dated 06.08.2019, to organize outreach initiatives to help the taxpayers file their returns in time. I would again urge you all to put in your best to make the outreach program successful and bring any difficulties to the notice of the Board immediately.

It appears that several representations have been made to the Government to extend the last date for filing the returns from August 31 2019 to February 28 2020. Some of the reasons cited are:

– While preparing the Annual Return in Form GSTR-9 and Reconciliation Statement in GSTR-9C, ‘Input Tax Credit’ could not be availed due to inadvertent omissions and mistakes on the part of the suppliers of Goods & Services.

– Being a totally new regime, the registered taxable persons faced operational problems at the initial stage of GST implementation while adapting themselves to the new Indirect Tax Regime which included among others filing of GSTR Return online and matching the ‘Input Tax Credit’ by accessing to GSTR-2 from the suppliers/vendors.

– The GSTIN network was also behaving weirdly forcing the GST Council to suspend the regular/prescribed returns GSTR-2 and GSTR-3 which is not implemented till date.

– It is in the knowledge of the Government that during the 1st year of GST regime there were many instances of gaps which has deprived the Trade & Industry from the substantive benefit of ‘Input Tax Credit’ under the GST Act, CGST Act and IGST Act which they ultimately would have availed normally in their business operations.

– No clarity on what if tax is not paid at all incase of RCM; how to show and how to avail credit.

– Errors cannot be rectified.

– Floods in many parts of the country with crocodiles on the roads.

But what is required is not a postponement, what is urgently needed is an overhaul of the system, so that you don’t need rocket scientists to file your returns. In 1985, Rajiv Gandhi said about Income Tax – “We would like to clean it up. Don’t have too many boxes, make the whole thing simpler so that people can do it themselves, instead of having to get chartered accountants.” Today, Chartered Accountants are struggling to files these returns.

I think we should have a law that a GST return can be prescribed only if a live real-time return is test filed by the Finance Minister, the CBIC Chairman, the Revenue Secretary and a few Chief Commissioners. If any of them fails to file it successfully, the return should be rejected and modified so that it can be filed by each of these dignitaries.

The Return Confusion:

The Gujarat High Court recently noted in – 2019-TIOL-1422-HC-AHM-GST:

– It would be apposite to state that initially it was decided to have three returns in a month, i.e. return for outward supplies i.e. GSTR-1 in terms of Section 37, return for inward supplies in terms of Section 38, i.e. GSTR-2 and a combined return in Form GSTR-3. However, considering technical glitches in the GSTN portal as well as difficulty faced by the tax payers it was decided to keep filing of GSTR-2 and GSTR-3 in abeyance. Therefore, in order to ease the burden of the taxpayer for some time, it was decided in the 18th GST Council meeting to allow filing of a shorter return in Form GSTR-3B for initial period. It was not introduced as a return in lieu of return required to be filed in Form GSTR-3. The return in Form GSTR-3B is only a temporary stop gap arrangement till due date of filing the return in Form GSTR-3 is notified. Notifications are being issued from time to time extending the due date of filing of the return in Form GST- 3, i.e. return required to be filed under Section 39 of the CGST Act/GGST Act. It was notified vide Notification No.44/2018 Central Tax dated 10th September 2018 that the due date of filing the return under Section 39 of the Act, for the months of July 2017 to March 2019 shall be subsequently notified in the Official Gazette.

– It would also be apposite to point out that the Notification No. 10/2017-Central Tax  dated 28th June 2017 which introduced mandatory filing of the return in Form GSTR-3B stated that it is a return in lieu of Form GSTR-3. However, the Government, on realising its mistake that the return in Form GSTR-3B is not intended to be in lieu of Form GSTR-3, rectified its mistake retrospectively vide Notification No. 17/2017-Central Tax  dated 27th July 2017 and omitted the reference to return in Form GSTR-3B being return in lieu of Form GSTR-3.

And every taxpayer is required to understand these simple steps in filing returns. What took 70 years for Central Excise and 20 years for Service Tax has been achieved in two years for GST. Remarkable indeed!

A taxpayer cited an ancient proverb and observed,

It is possible

to extract oil from sand with your hands;

to sip water from a mirage;

to find a hare with horns;

but it is not that easy to file that GST return.

The Hare Fable:

The Lion had been badly hurt by the horns of a Goat, which he was eating. He was very angry to think that any animal that he chose for a meal, should be so brazen as to wear such dangerous things as horns to scratch him while he ate. So he commanded that all animals with horns should leave his domains within twenty-four hours.

The command struck terror among the beasts. All those who were so unfortunate as to have horns, began to pack up and move out. Even the Hare, who, as you know, has no horns and so had nothing to fear, passed a very restless night, dreaming awful dreams about the fearful Lion.

And when he came out of the warren in the early morning sunshine, and there saw the shadow cast by his long and pointed ears, a terrible fright seized him. “Goodby, neighbor Cricket,” he called. “I’m off. He will certainly make out that my ears are horns, no matter what I say.”

This is Not The way:

The Gujarat High Court in a judgement last week while ordering refund with interest of about Rs. 1.5 Crore attached by the Revenue from the bank account of an assessee observed, “This is not the way and the manner to recover tax. The department should not get so much desperate for the revenue. The revenue is to be collected in accordance with law. The action at the end of the authorities in the present case is nothing short of extortion.”

The Revenue lawyer requested that interest may not be awarded and the Officers concerned tender their apology for what has been done in the present matter. The High Court did not agree.

Voluntary Confusion:

I found the following sentence in a recent Tribunal order.

“……. even if it is a retracted confusion, it must first be tested whether confusion is voluntary and trivial inculpating the accused in the Commission of the crime, if affirmative findings, even retracted confusioncan be recorded.”

Of course, this is only a typing error and what is meant is confession.

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