As the GST Council is slated to meet on Friday, one issue where some quarters of taxpayers are asking for urgent hearing is the simplification of the GST annual return form GSTR-9. While the Council is likely to exempt taxpayers with up to Rs 2 crore turnover from filing annual returns for 2017-18 and 2018-19, businesses have been instead asking for simplification of the GSTR-9 form.
Businesses have been facing problems in filing annual return on account of many reasons. Although the Council has extended the date for filing the annual return for 2017-18 several times, it doesn't help much as the return form itself seems to have flaws.
Just recently the last date for filling the annual return form GSTR-9 for the year 2017-18 had been extended from 31 August to 30 November 2019.
National General Secretary of Federation of All India Vyapar Mandal VK Bansal says: "Even after a delay of 20 months from due date, only 20 per cent of traders have been able to file their GSTR-9 form. Such low compliance shows that there is definitely some flaw in the process of filling GSTR-9, which the GST Council and its members are not acknowledging.
The biggest problem with GST9, according to Bansal, is that it does not allow fixing errors in previously filed returns such as GSTR01 and GSTR3B. These errors would then create problems with reconciliation in GSTR-9.
Some taxpayers are demanding that a one-time window must be allowed for revision of GSTR-3B and GSTR-1.
Businesses are also complaining about the complex nature of the GSTR-9. Archit Gupta, Founder and CEO - ClearTax, says, the GST Council meeting must discuss the GST annual return form GSTR-9 and consider its simplification.
"It has several sections which can be done away with. This will improve compliance for this annual return form. Preparedness and launch of new simplified return filing must be reviewed and further details made available," says Archit Gupta.
Gupta echoes Bansal's views. He says that in several cases taxes have been paid correctly, but information reported in GSTR-3B and GSTR-1 is incorrect. These forms could not be revised, businesses who have incorrectly reported information are facing a challenge with reconciliation in GSTR-9.
Reconciliation is not the only problem. Some sections of the form are auto-populated and there is little room for providing an explanation.
Tax experts say that an opportunity for reporting 'adjustment made' should be allowed. These adjustments may be related to information earlier reported incorrectly by the taxpayer. Taxpayers now fear adverse consequences, unless they are able to explain errors made in the form itself.
Archit Gupta points out another issue. "HSN-wise information is required to be reported for inward supplies. However, businesses with a turnover of less than Rs 1.5 crore were not required to mention HSN code while making supplies. Those who have bought from such suppliers do not have the relevant information," he says.
Then there are unnecessary details that need to be filled. For example input tax credit (ITC) is required to be split between input goods and input services. Experts say this bifurcation is of no impact and needs to be done away with.
Small taxpayers who run their business from multiple registrations but do not maintain separate books of accounts and do not have information split according to GSTIN registrations are facing a huge challenge in preparing GSTR-9. Experts are of the opinion that taxpayers with turnover of less than Rs 5 crore must be allowed to report GSTR-9 on an aggregate basis (instead of GSTIN wise).