GST gets more friendly: Only one return per month, tax rebates, easy interface

GST Council has announced that it would simplify the return-filing experience of taxpayers, in addition to making the GST network a government-owned entity.


In a major step towards simplifying GST returns, the GST Council has announced stopping the three-stage return filing process and move to one monthly return. The transition will take six months from now. The step is to reduce some of the difficulties faced by taxpayers and reduce the IT load on the GSTN platform. 

SMBs and small traders have faced inconvenience in the past in filing multi-stage returns, which is both complex for taxpayers and IT systems. The new single-page return lays down that all taxpayers shall file one simplified monthly return which will include the self-declared input tax credit in the return itself. 

Simplified IT interface to file returns

By filling in the invoice details of the outward supply, the system will calculate tax liabilities and input tax credit for businesses. The user interface is announced to be made easy to use with an offline IT tool to upload the invoices. There shall not be any need to upload the purchase invoices also. Invoices for B2B transactions shall need to use HSN at four digit level or more to achieve uniformity in the reporting system.

Uploading of invoices by the sellers who have defaulted in payment of tax above a threshold amount shall be blocked to control misuse of input tax credit facility. Similar safeguards would be built with regard to newly registered dealers also. Analytical tools would be used to identify such transactions at the earliest and prevent loss of revenue. 

GST rebate for digital transactions 
In order to incentivize digital transactions and discourage high volume cash payments, a two percent rebate has been proposed for B2C digital payments up to Rs 2,000 across the board. The rebate is expected to be in the form of cashback or immediate reduction from the bill.

"Lots of positive from the GST Council meeting- simplified return process approved, paving the way for reduction in compliances, possible imposition of 2 percent incentive for digital transactions to promote digital India. Overall a good day for India GST," said Harpreet Singh, Partner, Indirect tax, KPMG India.

GSTN planned to be 100 per cent government entity
The GST Council has also decided on making the GSTN, the IT backbone of the unified indirect tax system, a government entity by acquiring the majority stake currently held by private entities. GST Council chairman, finance minister Arun Jaitley stated central government will take over the 51% stake owned by private entities, subsequently leading to the central and the state governments holding a 50% stake each in GSTN. Presently, the Centre and State Governments own 24.5 percent stake each in GSTN; whereas HDFC Ltd, HDFC Bank, ICICI Bank Ltd, NSE Strategic Investment Co and LIC Housing Finance Ltd. hold the remaining 51 per cent.

"Converting GSTN into a 100 percent government company is welcome. I hope it will not affect its functional efficiency and the ability to take quick and proactive decisions to address the tax payers concerns," says Sachin Menon, Partner and Head, Indirect Tax, KPMG India.