CBIC: MSMEs can soon file nil GST returns via SMS

The Chairman of the Central Board of Indirect Taxes and Customs (CBIC), Mr Ajit Kumar has stated that soon, all the Micro, Small and Medium Enterprises (MSME) taxpayers can file their return with a nil liability through an SMS. 

The Chairman announced this at a session of the Bharat Chamber of Commerce in the first week of December 2020. He further claimed that the move is aimed to reduce their compliance costs and to allow ease of doing business, specifically during difficult times such as COVID-19. It will mean that the MSMEs may not have to log on to the GST portal to file their nil returns.

Earlier in November 2020, the GST Network (GSTN) had facilitated the taxpayers falling under the composition scheme to file a nil CMP-08 statement via SMS. It was allowed in all those cases where businesses did not have any tax liability for the quarter. According to the GSTN’s statement dated 2nd November 2020, this facility has benefitted every 5th of the total 1.7 million taxpayers registered under the composition scheme and filing a nil tax dues statement.

Since June 2020, larger firms are already making use of the facility who are filing a nil GSTR-1 and GSTR-3B every month. The process via text messages involves just two text messages. The first message is sent for initiating the filing of nil returns or statements. The second message is sent to give a confirmation or to authenticate the filing. The taxpayers can also send separate messages for seeking help in submission.

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Taxpayers, mainly in the MSME market, have requested the authorities to allow them to pay GST on the receipt of payment instead of the tax liability, earned on the earlier of the invoice issue date or payment receipt. Otherwise, it leads to the working capital getting blocked, placing a great deal of pressure on liquidity.

The Chairman remained uncommitted to the proposal. However, he justified that as of 31st October 2020, the customs department had rolled out the nationwide faceless assessment system for shipping clearances at each port. It was providing the MSME industry with the maximum benefit by saving its compliance costs.

Small businesses find SMS facilities easy to comply with, as the authorities initially faced adverse reactions when the technologically intensive tax system was rolled out in 2017. That led to the reversal of some of the new tax system’s security features to ease their pain.

The authorities have closely lent their support to businesses during the initial three years of GST. It is only recently that they have started to step up compliance measures with the help of data analytics.

For any clarifications/feedback on the topic, please contact the writer at annapoorna.m@cleartax.in