State of Confusion: Filling GST Return Under New Rules

There have been problems ever since implementation of Goods and Service Taxes (GST) in India. To add on to the issue, new rules on GST filing for the month of October 2019 have added confusion amongst tax payers. On the contrary the government had initially promised simplification of GST.

Need for Alignment in Terms of GST

The GST regime after more than two years is still facing several issues. However, government promises that issues are being analysed to resolve and thereby, impose a smooth flowing GST service. For instance, issues on the rate of tax, the amendments necessary for law, simplify filing procedures are being discussed at GST council meetings. Further, the GST collection dropped to Rs. 91,916 in September mirroring trouble in the economy. After the initial issues, a new alignment has been proposed as the Central Goods and services tax (Sixth Amendment) Rules, 2019.

The New Input Tax Credit Rule

The rules state compulsory filling of respective invoices before the due date. Thus, facilitating eligibility for a refund. However, lack of clarity over Input Tax Credit (ITC) to 20% of the total claimed amount has worsened the situation. Additionally, incorrect uploading of the GSTR1 form on the GSTN portal would restrict the 20% refund. The GST return to be filed on or before November 20 is to be the first return after the introduction of the new rule.

Issues Raised due to the New Alterations

One of the major issues currently confronted is the clarity on filing of return. This created much confusion amongst GST payers. Besides, how the administration would calculate 20% for refund is unclear which is an add-on to the taxpayer’s concerns. Due to less lucidity on the applicability of the rule, businesses are also expected to take a toll.

As the whole process is planned to happen online, information regarding submission date and time and the rules must be crystal clear. Otherwise, the new rule might not be as fruitful as expected.

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