The Simplified GST Returns. But is it?

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The Simplified GST Returns. But is it?

As implementing any Law or Rule in a Country of 1.3 billion people, GST has also had its fair share of ups and downs. However, over the 2 years since implementation, the country has slowly adapted to the new tax regime and the dust seems to be finally settling down. this process, for a while now the GST Council and Ministry of Finance have been talking about simplifying the framework of returns to help the industry better comply with the law and reduce compliance costs and burden.

While the objective and effort with this proposed change are to simplify the existing framework, I am not sure if it would actually end up achieving that objective. 

First and foremost, let’s understand what the criterion’s to choose GST RET – 1, 2, 3 are:
  • If your aggregate turnover is above Rs. 5 Crores, it is mandatory to file GST RET – 1.
  • Small businesses with turnover less than Rs. 5 Crores and with only end consumers as customers (B2C) can opt to file GST RET – 2 on a quarterly basis.
  • Small businesses with turnover less than Rs. 5 Crores but with both B2B and B2C Sales can opt to file GST RET – 3 on a quarterly basis.
It was mostly a foolproof plan. The supplies made by the taxpayer would be auto-populated to the receiver who would claim ITC based on such details.

  • The system was just not ready yet which caused endless chaos
  • Inconsistency and endless extensions of deadlines
The ideology hasn’t differed at all. We are circling back to the concept of real-time uploads and matching of invoices to complete the credit chain in the system in the name of “New and Simplified Returns”. 

  • Timing difference – Due to inherent time taken in processing transactions and the option of filing quarterly returns, there is a time lag in claiming ITC which leads to a need for reconciliation on a regular basis.

  • Availability of the system – As has always been a challenge, the robustness and readiness of the new system is a big challenge



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