The GST Council is set to consider a proposal to free small firms from filing their annual GST returns. This proposal will be meant for businesses that have an annual turn over of up to Rs 2 crore. Financial experts believe that with this initiative there will be lesser compliance burden for small taxpayers. Also, the tax authorities can pay more attention to large taxpayers.
Despite multiple extensions for GST annual return filing, the number of filings has not been at a satisfactory level. Even with three extensions, the filing percentage ranges only between 25% and 27%.
The Council will be taking up this issue in the next GST Council meeting which is scheduled to happen in Goa on 20 September. The Council will also decide if the suspension of GST annual return filing is needed only for 2017-18 or for the succeeding financial years too.
However, financial experts remain divided regarding the proposal. A senior official is of the opinion that the government needs to wait until 30 November to see if there will be an increase in the number of return filings.
Also, as per the official records, for around 1.39 crore number of assessees, about 85% have either Rs 2 crore or lesser as their yearly turn over. Scrapping annual return filing for small taxpayers because of technical issues may not be a good sign for a potential digital economy.
Another financial expert mentioned that most small businesses and traders had a tough time to switch to GST. Any kind of GST relief will prove to be helpful for small and medium-sized enterprises. Also, if a compliance relief is provided for one or two years, the MSME sector will be more open to accepting GST.
The Law Committee in association with the GST Council has agreed for an exemption, however, the Council is yet to give its approval.
Bhavana is a Senior Content Writer handling the GST vertical. She is committed, professional, and has a flair for writing. When away from work, she enjoys watching movies and playing with her son. One thing she can’t resist is SHOPPING! Her favourite quote is: “Luck is what happens when preparation meets opportunity”.