The GST annual return & GST audit report for the first year, which is 2017-18, had to be submitted before December 31, 2018, but saw three extensions – March 31, 2019, June 30, 2019 and finally August 31, 2019. However looking at the recent statistics released by the authorities it is observed that only 15 % of annual returns and less than 1 % of the audit reports have been furnished.
Further tax officials have warned of severe consequences and heavy penalty if same are not filed in time. In the next 10 days it is expected that pending 99 % of the audit reports have to be furnished and balance 85 % of Annual Returns have to be furnished. The last dates normally see an increase in numbers, but is it really feasible to achieve such a drastic number?
One must accept the fact that the said delays are not due to lethargy or non-compliance of the tax payers. There are various clarifications, interpretations and technical issues involved. The clarificatory circulars were issued on 04.06.2019 and 03.07.2019. The said circulars cannot be interpreted in such a short span. The tax payer needs some time to revisit the various stands taken by them before the circulars were issued and its impact on them. Further there are interpretational issues in light of various Writ Petitions and Advance Rulings which need to be considered by the tax payers. Technically the tax payers are facing issues of uploading the documents, json files, versions changing from time to time, digital signatures not being recognized, error reports not being generated. There has to be a proper technical cell to assist the taxpayers to resolve their technical issues.
Even the CAG in its recent report has categorically stated that “One significant area where the full potential of GST (Goods and Services tax) has not been achieved is the roll out of the simplified tax compliance regime.” CAG also said there were deficiencies in the GST system, indicating a “serious lack of coordination between the executive and the developers.”
The authorities must appreciate the fact that GST annual returns 9, 9A and 9C for 2017-18 were available online in March, 2019 and offline in April, 2019. The very fact that the status of return filings is low should indicate that the trade and industry is facing genuine problems and hardships in the matter. Most of the trade and consultants have been burning the midnight oil and spending weekends in the office to ensure compliance. Hence, adequate time needs to be given for compiling the detail to ensure qualitative filing of information. Submission of improper reports, wrong reconciliations, wrong data etc will render the entire exercise of submission of annual return and GST audit report futile. It will not give the desired results and will also not be helpful to the authorities. There will be unnecessary litigation as due to paucity of time the reports may be qualified and submission of wrong data will lead to unrequired tax liabilities. It may also lead to penal consequences on the trade and consultants for submission of incorrect data.
Besides the above there are various factors which have the taxpayers and professionals on toes for ensuring the said compliance. The due date for filing of income tax returns is also August 31, which clashes with the due date for submission of GST audit report futile. It will not give the desired results and will also not be helpful to the authorities. There will be unnecessary litigation as due to paucity of time the reports may be qualified and submission of wrong data will lead to unrequired tax liabilities. It may also lead to penal consequences on the trade and consultants for submission of incorrect data.
Besides the above there are various factors which have the taxpayers and professionals on toes for ensuring the said compliance. The due date for filing of income tax returns is also August 31, which clashes with the due date for submission of GST audit reports. The taxpayers are also tied up with uploading 2 monthly returns in GSTR 1 & GSTR 3B for the month of August. The trade is also in the process of reconciliation of ITC claimed with GSTR 2A and following up with vendors for the differences for year ended March 2019. Many taxpayers are also in the phase of upgrading their systems to bring it in line with the new return forms to be introduced from October 2019. Last but not the least there have been floods in various parts of India in the months of July and August 2019. This has led to large scale destruction of documents and records.
Various professional associations have already represented before the authorities to extend the due dates for the same. The present government has always listened and reacted to the issues and problems of the trade immediately. Considering the numerous problems and issues faced by the trade and professionals, it is the need of the hour to postpone the due date for filing Annual Returns and GST Audit Reports for the fiscal year ended March 2018 to November 30, 2019 and for year ended March 2019 to March 31, 2020. Further as most of the taxpayers have already discharged their GST liabilities for year ended March 2018 and 2019, postponing the due dates for annual return & GST audit will not impact the revenue of the government.
Source : Mint