prpri 16 Issues and Suggestions relating to GST Returns 16 Issues and Suggestions relating to GST Returns

Representation by CA Raginee Goyal to before Sh. Dheeraj Rastogi ji, Commissioner – GST Council, Member – High Powered Committee on Return filing:

Respected Sir,

I humbly thank the government for this empathetic initiative to form this esteemed committee to consider genuine problems in relation to compliance of filing of Goods and Services Tax (“GST”) Returns. The GST Network (“GSTN”) is a huge initiative which has a mission to capture billions of transactions with large amount of information on a monthly basis. It has been toiling time even during festive times this year for professionals and tax payers because the very restrictive system of filing returns itself was facing teething times. Nevertheless, I trust that with this esteemed Committee in place, we shall all find respite from the current problems and GST as believed shall actually establish itself as a “Good and Simple Tax”.

After information of constitution of this esteemed Committee, I have received various comments/ suggestions from my clients as well as bodies/ associations to whom I am attached for reaching to the Committee in a compiled manner. After eliminating redundancy, certain major problems and our humble suggestions for resolution of the same are placed hereunder for your kind consideration:

Sl.No. Issue Suggestion
A. Information and Reporting related issues in returns :
1. Invoice wise reporting in GSTR 1:

The bulk need of information in the form of invoice wise reporting under GSTR 1 on monthly has caused immense problems in data submissions and filing. Invoice wise reporting of B2B transactions intends matching of data. But the same has increased the work manifold without being of much use to any government.

Invoice wise data submission caused repeated failure in uploading large size filed and kept limiting the capacity of GSTN to handle more data. The process of checking and editing is also impractical and cumbersome.

a. GSTR 1 be merged with GSTR 3B for all taxpayers. One return, one due date for output liability seems better option. Frequency of the return may be:

i. Monthly for taxpayers having aggregate turnover in preceding year above 1.5 crores

ii. Quarterly for taxpayers having aggregate turnover in preceding year below 1.5 crores

b. In case of B2B transactions, the concept of invoice wise details under GSTR 1 may be replaced with supplier wise details of supply and tax along with place of supply. Thereafter, option may be given to recipient to either accept, reject, modify the amounts after reconciliation between themselves. To restrict misuse / change of invoices, number of invoices issued to other supplier may also be included as a total count against values reported. Further, recipient may also be allowed to accept in part (as in some cases all supplies might not have been received or for other causes) and balance may automatically be carried forward in subsequent months for accepting/ rejecting/ modifying.

2. Requirement of mentioning inward supply of exempted/ nil rated and non gst goods or services

This requirement is impractical, far fetched and unwarranted at this stage.

As a positive administrative measure, it may be done away with at least until compliance needs under Direct tax laws are reduced/ revamped.
3. Submission of HSN summary

HSN summary submission for both sales and purchases is a very dynamic and far fetched compliance at this stage. If it needs to be complied, it first needs time to penetrate fully in invoicing. Even if it is not mandatory in the return filing process and can be bypassed due to genuine constraints, even a compliant taxpayer shall be considered as defaulter as he failed to file details as required in return.

HSN summary requirements may be deferred for a period of a least two years to help the taxpayers and the system to stabilise. HSN summary on inward supply should be done away with.
4. Requirement of mentioning number of multiple documents in GSTR 1

At present, reporting of first and last document number for all documents each month is required under GSTR 1, without being made mandatory. This has resulted in omitting/ bypassing the same in most cases and shall become one kind of non compliance resulting in wasteful administrative time and effort of officers in course of scrutiny or audit.

Document number reporting only for invoices may be enforced and kept and made mandatory. All other document reporting may be done away with.
5. Information relating to reverse charge liability transactions cannot be filled due to absence of reasonable fields in the returns, in cases where the recipient is not having a GSTIN

There are situations where a recipient who was required to register in GST as he is liable to pay tax under reverse charge fails to obtain GSTIN, it becomes impossible for the supplier to report such transaction in his return as the column requires GSTIN of person responsible to pay tax. Such supply can also not be called an exempt supply, else the declaration of the supplier will be found incorrect.

Only PAN details of such persons be given and in absence of PAN, name and address on record of such persons may be considered as proper compliance.
6. Information relating to taxpayer’s Input Tax Credit (“ITC”) and revamp of GSTR 2

Section 16 allows credit of ITC to recipient only when the same is paid by the supplier. However, in case where GSTR 2 is not being filed, the reconciliation system is not available to the recipient to verify his ITC. By the time such system is in place, there are chances that such ingenuine taxpayers might elope with taxes paid to them by genuine taxpayers.

Replacement of supplier-wise GSTR-1 in place of invoice wise GSTR-1 has already been proposed above. The deferment of filing of GSTR 2 is a wise decision of the Government, which has given much relief especially with flooded monthly timelines.

However, GSTR 2 is a very powerful concept, and it may not be given up fully, even for now. Alternatively, it may not be made mandatory to file it until March 2018, but matching supplier wise details online on quarterly basis may be promoted as a trade facilitation tool to validate ITC between parties. This shall serve as a trade

7. Return filing for Goods Transport Agency (GTA) need thorough practical review

Goods Transport Agency are subject to reverse charge in almost all cases, barring a few. Some are registered, some are not registered. But, if a GTA gets registered, it has to file a return. Once a mandate to file a normal return is thrust upon, the purpose of reverse charge is lost. Moreover, option of forward charge in transportation has added to a lot of confusion. Taxpayers mostly pay transportation under reverse charge. Some transporters are using both forward and reverse charge options simultaneously, which is not lawful, but there is lack of clarity. Small Businesses forcing transporters to pay under forward charge to remain outside reverse charge hassle. There has been a lot of chaos, errors and immaterial non compliance especially during the period when reverse charge under Section 9(4) was also applicable.

A summary return for transporters may be separately provided.

Mandate for matching transportation related information (transporter wise) may be filled by the taxpayer under reverse charge under GSTR 1 itself (with tick for supplier liable to reverse charge) which may be accepted/ rejected/ modified by the transporter quarterly/ half yearly/ annually.

B. Filing and compliance mandate related issues:
8. Multi Stage submission and filing requirements: A return is not considered to be filed/ valid until it is filed with EVC/ DSC at final stage, Locking of data without being editable by the filer is futile, considering the amount of pains and problems it has caused. Saving data may be considered enough to proceed further in the filing process. Multi stage submission and locking of data before filing of data may be done away with.

The taxpayer may be allowed to amend/reset all details until he has finally filed the return after due payment of tax with desired authentication.

9. Multiple due dates for various returns on monthly basis

The spread over on different due dates for filing of multiple returns – GSTR 1, 2 and 3 is cumbersome, tedious and impractical compliance.

Simpler form allowing filing of all details together shall bring respite to the current situation. Network traffic shall also improve with multiple filing relaxation.

Matching should be made quarterly or half yearly instead of monthly.


10. Payment of tax in Cash ledger

GSTN has two ledgers – Cash ledger, Credit Ledger. There is no bar in law to pay part of tax with Cash ledger before using Credit, but, GSTN does not allow such payment by Cash when Input tax Credit (“ITC”) is available.

Payment of tax by Cash or Credit may be left to choice of taxpayer. Instead, a mechanism of preferred set off under GSTN may be proposed to taxpayers, who may be allowed to edit subject to controls relating to utilisation of Credit ledger as provided in the law.
11. Mistakes in amount paid into Cash Ledger unresolvable

GST payment challan format is simple but new. An ordinary taxpayer or his personnel may, by mistake, fill the amount of tax under a wrong head, say, CGST in place of IGST or SGST Interest in place of SGST Cess, when there are too many heads in one challan.

Money of the taxpayer gets blocked in the Government treasury. Taxpayers have to deposit tax again under correct head, while amount paid under wrong is lying blocked.

Automatic refund of money lying in cash account of the taxpayer may be allowed, so that balance lying in cash ledger be credited back to taxpayer without any scrutiny latest by next working day, if he opts for it. Taxpayer should be able to withdraw/ transfer and if he opts, amount may be credited in his registered bank account on GSTN.
12. Differences in decimals in invoice and tax

There are instances where detail of invoice value and tax as per GSTR 1 by the taxpayer is in decimals while recipient reflects it in nearest rupee. This also causes mismatch.

Normal rounding mechanism in all returns of GSTN may be made available. Problem of blocking due to rounding, after submission of preliminary data which is not editable is disturbing.
13. No revision / rectification of return allowed

Possibility of requirement of correction and revision cannot be ruled out. GSTN does not allow any revision/ rectification in return.

A controlled mechanism of revision/ rectification in returns is running well with Direct tax administration. Such mechanism is inevitable. A time bound revision/ rectification mechanism deserves to be provided until matching is completed and annual return is filed.
14. Mandatory Late fees without any discretion or clarification even in genuine cases

There are instances of unavailability or gaps in GSTN and still GSTN automatically levied late fee on taxpayer.

Late filing fee has been recently reduced. It appears better rationale to defer it at least until March 2018 or until GSTN becomes robust enough
15. Return forms filed are not printable

An online paperless compliance is again far fetched.

A facility of downloading printable forms for all returns and compliances for reference and record be provided.

But, earlier practice of submission of hard copies to department should be strictly barred.

16. Technical filing and display glitches and redressal system

At present there are many technical glitches in filing and display process. Such glitches are beyond control and without fault of taxpayer.

The present system of helpdesk has caused enough frustration and fetched enough resentment of stakeholders

Proper redressal method may be provided for return filing glitches, as helpdesk is over-burdened to provide proper support.

Time based redressal of support calls/ mails with ticket number and effective resolution tracking may be put in place.

I and the contributors to this memorandum before this esteemed committee, are grateful for allowing us to represent and we are immensely hopeful that overall compliance mechanism shall be benevolently simplified without material compromise on revenue by this Committee.

Thanking you,

Yours faithfully,

(CA Raginee Goyal)
Chartered Accountant,
4B, Oasis Commercial,
Dr B Baruah Road, Ulubari,
Guwahati – 781007, Assam

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  1. CA.Prabhakar says:

    All the 16 issues discussed are very true and practical encountered by majority of the stakeholders and the suggestions given also perfectly suitable for resolving the crisis. The council should implement all the suggestions without any hesitation or reservation and it will improve their credibility also along with resolving the present crisis. In my opinion to put and end to matching problems why can’t a provision be made in the GST website itself to raise an invoice like e way bill so that the buyer, seller and even dept. or
    any stakeholders can download same invoice which will not give room for un matching concept. One can think on this line if it can improve the situation.

  2. Sameer Satija says:

    Daer madam,
    we have filed the GSTR 3B return for July, August, September and october with Zero figure by mistake. But Actually Sales purchase is there. We think that later on we will file the detail in GSTR 1(For Sales) and GSTR 2 (For Purchse).
    But w.e.f.10th November 2017, GSTR 2 has been deferred upto March 2018.
    We will give the sales figure in GSTR 1 but how we may claim the GST Received on our purchases.

    Pls advice us and point out the same issues to GST Council aslacs of person facing this type of problem.
    Sameer Satija
    Chartered Accountants
    Mob 9891275960

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July 2021