Goods and Services Tax (GST) has completed thirty months and continues to perform. The largest indirect tax law in India extends to all twenty-nine states, including the seven Union Territories. It primarily functions by two legislations -Integrated GST Act and Central GST Act together with the notified rules.
With close to 200 provisions in the CGST Act alone, an equal number of rules and forms are available for compliance. The mammoth as it sounds, most of the provisions have been implemented so far. Many of these provisions were notified during the inception of GST during June 2017.
Many others were brought into force or amended in the Union Budgets 2018 and 2019. The amendments have been centred around fixing the procedural shortcomings or towards augmenting GST revenue. But certain provisions are yet to see the light of the day, primarily the administrative and judicial appeals.
Further, the latest GST Council meeting held on 18 December 2019 clearly indicated that the GST Council approved various law amendments which will be introduced in the Budget 2020. Hence, we can expect specific other provisions to come into effect or to undergo changes at the upcoming Union Budget 2020. FM Nirmala Sitharaman shall present the Union Budget 2020 on Saturday, 1 February 2020.
The provisions governing GST returns for regular filers is highly expected to be amended. Sections 37 to 39 and the related rules will be amended to accommodate the new GST returns and its mechanism. The new GST returns system is slated to be made applicable on a PAN-India basis from 1 April 2020.
The GST returns such as the GSTR-1, GSTR-2 and GSTR-2A have to be replaced by annexures ANX-1 and ANX-2. GSTR-3 and GSTR-3B will be done away with as RET-1/2/3 takes over as the single main return. The process flow will change, and hence the rules must be amended to address the revised system.
Certain provisions need clarity about its implementation. The purchases made from unregistered persons involves the tax to be paid under the reverse charge basis. However, it was put on hold until late 2019. The provision was amended to make it applicable only to a certain class of persons and goods or services. Even though it was later notified for implementation, the scope and extent are still not defined, making it non-operative.
GSTR-1 have not been filed in many instances despite return deadline extensions and late fee waiver. It was only recently with the amnesty scheme that the government was able to receive most of the GSTR-1 submissions. Under the amnesty scheme, GSTR-1 for all the past tax periods up to November 2019 could be filed without late fees, before 17 January 2020.
It was observed from the previous months that taxpayers were reluctant to pay the late fees towards non-filing of GSTR-1. However, most of them were compliant with the filing of GSTR-3B regularly. Now, with the new GST returns involving ANX-1 replacing of GSTR-1, the legal gaps must be duly addressed by the GST law.
Also, stringent punitive rules must be in place to ensure compliance is met. Such measures must be enforced in GST law, and we can expect the announcements in the Union Budget 2020.
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Annapoorna, popularly known as Anna, is an aspiring Chartered Accountant with a flair for GST. She spends most of her day Singing hymns to the tune of jee-es-tee! Well, not most of her day, just now and then.