GOVT PUTS FORWARD MONTHLY GST RETURN FILING, DISCARDS CURRENT THREE-STAGE PROCESS
The GST Council on Friday sought to remove one of the biggest irritants in the new tax regime by junking the current three-stage return filing process and moving to one monthly return. And, unlike last year, when the return forms were rushed in at the last minute, the Centre and the states agreed to roll out the new mechanism in six months to ensure adequate preparation for the transition.
The council also decided to turn GST Network (GSTN), the agency that provides and manages tech platform for the indirect tax, into a wholly owned government company but agreed to provide flexibility by allowing hiring of professionals at market-linked salaries. Decision on two other issues — cess on sugar and incentives of up to Rs 100 for digital payments — were deferred. These will be discussed by two separate ministerial panels, which were constituted late Friday evening. While the incentives are meant to wean away consumers from cash, at least two states, including West Bengal raised concerns. The GST Council meeting, which was chaired by FM Arun Jaitley, who joined the deliberations through videoconference, opted for single monthly returns for all taxpayers other than composition scheme dealers and those with zero liability, who will file returns every quarter. Those in the quarterly filing segment account for around 30% of the GST returns filed, finance secretary Hasmukh Adhia said. To ensure that there is no pressure on the system, the return filing dates will be staggered, based on the turnover of the registered entity. Adhia said the present system of return filing through GSTR 3B and GSTR 1 forms will continue for up to six months.
Finally, a ministerial panel headed by Bihar deputy CM Sushil Modi opted for a “fusion model” that was cleared by the council on Friday. The decision on converting GSTN into a wholly owned government company, however, went ahead without much debate and it was decided to get HDFC, HDFC Bank, ICICI Bank, NSE Strategic Investment and LIC Housing Finance to give up their 51% stake.
Eventually, the Centre and states will hold 50% stake each. Each state’s shareholding will be linked to their shares in overall GST collections.