The Council also decided to form a Group of Ministers (GoM) under Bihar's deputy chief minister Sushil Modi to consider a 2 per cent incentive on digital payments.
The Goods and Services Tax Council on Friday approved a new easier system of tax return filing which will require taxpayers to file only one return in a month. Currently, the businesses have to file two forms – GSTR1 and 3B – monthly returns.
The Council also decided to form a Group of Ministers (GoM) under Bihar's deputy chief minister Sushil Modi to consider a 2 per cent incentive on digital payments. "A committee of five members that is five state ministers would expeditiously consider all the viewpoints," Arun Jaitley said after the meeting. The Council also deferred a decision on levying a cess on sugar and formed another GoM. Both the panels have to give suggestions in two weeks.
"The new return filing system will come into effect in one year," Finance and Revenue Secretary Hasmukh Adhia told reporters. "All the taxpayers will file only one monthly return except composition dealers and those with nil transaction," he said, adding that return filing dates will be staggered based on the turnover to manage the load on the IT system.
Meanwhile, the existing tax filing system will continue for about six months till the new software is put in place.
The transition to the new return system will be in three stages. The roll out of the software will be followed by second stage which will have taxpayers claim input tax credit on self declaration basis. The taxpayers will be allowed to claim provisional credit for next six months.
The third and the final stage will do away with the provisional credit facility. It will allow input tax credit claims only if the seller has uploaded an invoice. The software will calculate the tax. For B2B businesses, taxpayer will have to mention the total turnover, while in case of B2C, taxpayers will have to show the all invoice details.
The buyer will be able to lock the invoices uploaded by the seller. However, the payment should be made by the buyer to the seller only after the latter uploads the invoices, Adhia said.
If the seller doesn't pay or runs away, the government will have powers to recover it from the buyer by giving notice as per the law, he said.
"Such model of filing single monthly return would reduce the compliance burden significantly from the multiple filings currently required in a month," said Saloni Roy, a senior director at Deloitte. "Simplicity of the new returns would be a key to its successful adoption by businesses as past experience with complicated forms and processes indicates that complexity reduces compliance," said another senior director at Deloitte, MS Mani.
'WILL CUT BURDEN'
Such model of return filing would reduce the compliance burden significantly from the multiple filings currently required in a month, said Saloni Roy, a senior director at Deloitte
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