Union Finance Minister, Arun Jaitley, announced a number of Goods and Services Tax (GST) related relaxations last week with some of them aimed specifically at small industries but, there is a lacuna in them, which, if not addressed, will make things very difficult for tax payers.
PANAJI
Last week, GST Council decided that businesses with annual turnover upto Rs 1.5 crore will pay GST once in a quarter and will also file GST return once in a quarter. On paper, this is a fantastic move because it assuages the concerns of tax payers, who were tired of filing GST return every month. But, in reality, it will only complicate the matter.
Vinesh Pikale, a chartered accountant (CA) from Panaji, said, "What happens when a business with annual turnover more than Rs 1.5 crore buys inputs from another business with annual turnover less than Rs 1.5 crore? In this case, the buyer (because his annual turnover is more than Rs 1.5 crore) will have to file GST return once in a month. But, the supplier (because his annual turnover is less than Rs 1.5 crore) will have to file GST return once in a quarter."
This problem occurs because GST is based on input-tax-credit. This means a business's GST liability can be reduced to the extent that GST is already paid on inputs by his suppliers. How will a buyer take input-tax-credit if his supplier has not even filed the GST return?
Sandip Bhandare, a CA from Panaji, said, "In the present scheme of things, we have to file three forms for comprehensive GST return. The second form pertains to purchases. Now, one business sales are another business purchases. The idea is to match what one business is filing as purchases with his supplier's sales. But, what will happen if the supplier has not filed his GST return because his annual turnover is less than Rs 1.5 crore? Should the buyer then wait for two more months to get credit?"
Unless this issue is addressed, it is clearly going to confuse tax-payers at the time of filing GST return.
