GST Returns: ‘Tareekh pe Tareekh’ …… but no relief

 Anil Sharma

Though GST is good concept and booster to the economy, but we discussed it more politically than technically, resulting after two years of its introduction, we could not close our financial year 2017-18 under GST Act, 2017. Non-compliances and regular changes in GST clearly show that law was drafted without studding the nature and features of Indian Market. Consulting and studying the cases and experiences of other countries is not a bad practice but ignoring our own practices is also not good. Country like India with dominance of MSMEs can’t afford to comply with the provisions of reverse charge mechanisim (RCM) as drafted in Section 9(4) of CGST Act,

Since GST has been introduced in the country, only ‘tareekh pe tareekh’ has been permitted but no relief to assesses has been.  Every next ‘Tareekh’ has increased the cost of assesses professionals and the country at large.

Till now more than one hundred times “Tareekh” has been extended for different compliances under GST. You may talk about extension of ‘Tareekh’ for GSTR-1, GSTR-3B, GSTR-04, GSTR-07, ITC-04, GSTR-9, GSTR-9C and many more……

From 1^st July, 2017 onwards, around seven hundred notifications and/ or circulars and amendment bills in GST Acts have been issued. With a pace Acts or rules have been changed, GST Portal could not be. Resulting there is complete mismatch between GST portal and the Law. As of now, almost every section of GST Acts has got amended by this way or that.

Comptroller and Auditors General has raised very serious issues on the designing and operations of GST Portal and it has mentioned that the GST software has been put to use without its real time testing and failed at many ground. Experts of IT sector accept that portal is lacking with basic features. In one of the cases, a single assesse has availed 79% of the total ITC of the country. In many cases Trans-1 has credited the amount of CENVAT/VAT twice or more. Auto populated information regarding GSTR-2A and others at GST portal also have no authenticity and have no base. Reconciliation of ITC is such a tedious job that no one could reconcile it. Instead of helping the assesses, departments have issued notice for non-reconciliation of ITC as per GSTR-2A and ITC Claimed or availed.

In last nine months or so, to finalize the annual returns, each professional has spent almost four working months. Due to complexity of the data asked for in said returns, less than twenty percent assesses could have filed their annual returns till now. In industry also, due to frequent changes in GST laws, assesses could not update or amend their software as it has heavy cost. Getting any amendment in SAP systems has its cost and no business house can afford to get it amended time and again. Moreover, there is no clarity in the thought process of the policy makers what actually they want. Similarly, in tailor made software also, companies can’t afford to change their software every time in line with notifications, rules and amendments as issued under GST Acts. So we can say that there is no matching among the stakeholders and each one is forced to dig the data manually at voucher level and finally failed to complete the information as asked in annual returns.

There is no sense of asking HSN wise summary for inward supplies as it was never asked for in GSTR-1, GSTR-2, GSTR-3 or GSTR-3B. While migrating from CENVAT/VAT to GST in July, 2017 no such provisions were there and Industry could not think about it. Faulty GSTR-9 & GSTR-9C forms were released first time in Sept 2018, after a gap of fourteen months asking for such information. Neither any software in the market was having such features nor industry fetch such information in its software or books of accounts at the time of receipt of inputs. Similarly, industry never recorded ITC in three parts i.e ITC on Inputs, Capital Goods and Input Services. Asking such information in annual returns is totally out of the syllabus.

In para 16A, of GSTR-9 information regarding supplies from Composition taxpayers seems to be very simple and easily available. But no business house fetch said information unless has very sophisticated software or SAP. To compliance with it, the software need to be amended and records to be maintained accordingly. But said forms of GSTR-9 and 9C, as mentioned above, were released after fourteen months of introduction of GST. How one can compile said information unless refer all purchase/journal vouchers since inception.

Calculation of interest on account of delay in payments more than 180 days, Debit/Credit notes, Utilization of excess ITC, short and late payment of taxes, discounts etc. is another challenge. It is not possible to have such information except with the help of computer software and no software in market has such features to work out all these details. It needs to be worked out manually only.

Para-14 of GSTR-9C is another challenge for the professionals and assesses, as no business house has recorded such information in its books. Accounts heads as mentioned in column of para -14 are also not in line with generally accepted accounting heads in the industry and has created confusion in the minds of the assesses and the professionals. As mentioned earlier, GSTR-9 & GSTR-9C were release fourteen months after its introduction in the country, no industrial house or professional even think of it. So only solution to compliance it is to dig out the data manually, which is time consuming process and ultimately has no value addition.

Authorities were aware of that GST portal is not in line with GST Law and due to technical glitches at portal proper information could not be transmitted to Industry. At least for the first year of introduction of GST Act, GSTR-9 and GSTR-9C could have been designed in much simpler form containing information like GSTIN wise Turnover, ITC Claimed/availed, taxes paid (through ITC or Cash), Export, refunds and Interest/penalty paid or payable along with reconciliation statement and Auditors recommendations/observations.

On 26.08.2019, government has given another “Tareekh” through another notification to comply with annual returns for the F/Y 2017-18. But it will not solve the problem. It will further increase the cost of compliance for Industry as well as for the professionals/auditors. Professionals have already invested so much of time and money that they are running behind the schedule for other assignments which has adverse impact on their professional as well as family life. On an average each professional has worked for four months (eight hours a day) for GST annual returns of F/Y 2017-18. In country, we have approx two lakh professionals those are working on it. One can estimate the cost to the country for unproductive jobs.

Conclusion:

To resolve the issue, we are of the view what out of all columns of GSTR-9 and 9C, columns which are informative in nature must be made inactive or optional and assesses and auditors should be allowed to file rest of the columns as suggested above. We know that it has its own implications but the returns being filed in its existing formats are also not up to the mark. Filing or providing wrong or un-reconciled information leads to so many other unproductive issues which have adverse impacts. Also at the time of assessment, department must take lineate view unless has authentic information and reasons to belief that fraud has been committed and other wise has all legal rights to ask any information at that time.