Analysis of four reports on GST process

Report on returns:

Every registered assessee need to file returns which includes nil returns. The persons who are dealing with the exempted or non-GST goods would neither obtain registration nor file returns. It is to be noted that there could be 8 GST returns. They are as follows

  • (outward supplies) – GSTR1.
  • (Inward supplies) – GSTR2.
  • Monthly return – GSTR3.
  • Returns for the compounding dealers – GSTR4.
  • Non-resident tax payers need to file returns – GSTR5.
  • Input Service Distributor Return – GSTR6.
  • Tax deducted at source – GSTR7.
  • Annual Return – GSTR8.

It is to be noted that GSTR3 would be entirely auto populated through GSTR1 of counterparty suppliers, owns GSTR2, TDS return (GSTR7) of counterparty deductor, ISD return (GSTR6) of input service distributor, own ITC ledger, own tax liability ledger, own cash ledger. The tax payers can file the missing details to begin with. Most of the organisation needs to file multiple returns in GST regime; compliances are expected to increase dramatically. For instance, the service tax assessee in the existing system files 2 returns on the annual basis whereas in GST, its required to file about 61 returns (5 returns on each month and 1 annual returns). Thus the human resource department and the chartered accountant need to anticipate the increase and decrease in the man power and the plan accordingly.

Reports on GST registration:

This report provides that the person, who is being taxable, required to do single registration for central GST, State GST and integrated GST. Multiple registrations in a state for business verticals also would be permitted. In GST regime, the registration number would be 15-digit alpha numeric.

Registration would be grant through common GST portal. Application need to be filed through online. Within three days, the central and the state either raise the queries or reject the application. The registration deemed to be approved by both the central and the state authorities. After that, GST portal will automatically generate the registration certificate. It seems to be like there will be a specific provision for migration from existing system to GST regime. This migration process starts in advance to get the smooth transition.

The report states that the date of registration will be the date of application if the registration is obtained within the time limit which is prescribed in the GST law. If suppose there is a delay in applying for registration, the same could reflect the result as deny the GST credits on the procurement which is prior to registration.

Reports also suggest that casual dealers and the voluntary permissible (for conducting a business for a limited duration of time) need to obtain registration and have to pay taxes. Furthermore, irrespective of the turnover the person who is in interstate supplies and liable to GST under reverse charge compulsorily required obtaining registration.

The input credit distributor in the current system are expected to distribute the GST credits on services which are proposed to be used at multiple locations and registered separately. The reports also recommends to GST drafting committee for considering the similar provisions for distributing credits on inputs.

The report provides copy of the GST registration form which holds 21 fields requiring various details from the applicant. In the form, there are about 15 premises/business activities been listed out such as manufacturing, works, leasing, contract, wholesale, retail, Special Economic Zone (SEZ), etc.

Reports on Payments

As per the reports, the taxable person needs to pay through internet banking for CGST, IGST and SGST and additional taxes also can be paid in the same way. Over the counter (OTC), the payments can be permissible up to the limit of 10,000 per challan. While making e-payment, tax payers have to access through GSTN (Goods and Service Tax Network) for generating the challan, the basic details such as name of the applicant, address, mobile number, email address, GST registration number) will be auto populated in the challan. Once the tax payer selects the bank for transaction, the GSTN will redirect them to make the payment in the selected bank by using the user name and password which has been given by the bank to make the secure e-payment.

The taxpayer will be provided the separate accounting code to make the payment for CGST, SGST, IGST and additional taxes. For interest, penalty, fees and other payments the separate accounting code will be provided.

Interestingly, the payment can be made either by the tax payer or the authorised representative on his behalf.

Report on Funds:

This report provides that there are ten situations such as excess payments, exports; refund on international tourists, refund of pre-deposit etc. can be claimed by the taxpayer to refund of GST paid.

For exporting the goods, the report suggest that the exporter can procure the goods on payment with the appropriate GST and the refund claim can be done from the respective governments. It recommends that the duty free inputs for the exported goods will not be available in the GST regime. The report strongly suggests the refund form should be in electronic format and the refund must be settled within the time frame. The taxpayer can also claim for refund delay.