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Further extension the only solution for GST annual return & GST audit

The first due date of filing GST annual return & GST audit report for the first year (FY 2017-18) was December 31, 2018, which has already been extended three times further  – March 31, 2019, June 30, 2019 and finally August 31, 2019.

But when we look at the recent statistics released by the authorities it is observed that only 15 % of annual returns and less than 1 % of the audit reports have been furnished. 

Read More: Only about 15% of taxpayers have filed GST Returns

Recently, Chief Commissioner of Customs and CGST Visakhapatnam Zone, Naresh Penumaka said that the date would not be extended further and failure to do so will attract very severe consequences, including hefty penalty.

Read More:Chief Commissioner warning: Stern action if GST returns are not filed

It is expected that In the next 10 days, pending 99 % of the audit reports have to be furnished and balance 85 % of Annual Returns have to be furnished. The last dates normally see an increase in numbers, but are it really feasible to achieve such a drastic number? 

Problems faced by the taxpayers

A fact regarding filing of return should be accepted that delays are not only due to lethargy or non-compliance of the tax payers but due to various clarifications, interpretations and technical issues involved.

Many clarificatory circulars were issued on 04.06.2019 and 03.07.2019. The said circulars cannot be interpreted in such a short span. The taxpayers are required to take impact of each circular before proceeding for filing any return. Further there are interpretation issues in light of various Writ Petitions and Advance Rulings which need to be considered by the tax payers.

Technically the tax payers are facing issues of uploading the documents, json files, versions changing from time to time, digital signatures not being recognized, error reports not being generated. There has to be a proper technical cell to assist the taxpayers to resolve their technical issues. 

CAG has also reported deficiencies in the GST system indicating a “serious lack of coordination between the executive and the developers.”It also said in the recent report that “One significant area where the full potential of GST (Goods and Services tax) has not been achieved is the roll out of the simplified tax compliance regime.”

Also Read: GST system prone to input tax credit frauds: CAG

The authorities must appreciate the fact that GST annual returns 9, 9A and 9C for 2017-18 were available online in March, 2019 and offline in April, 2019. The very fact that the status of return filings is low should indicate that the trade and industry is facing genuine problems and hardships in the matter.

Most of the trade and consultants have been burning the midnight oil and spending weekends in the office to ensure compliance. 

Hence, while considering the problems in the system and hardships in the matter, it is requested to the authorities that adequate time needs to be given for compiling the details to ensure qualitative filing of information; otherwise It may also lead to penal consequences on the trade and consultants for submission of incorrect data.

Submission of improper reports, wrong reconciliations, wrong data etc will render the entire exercise of submission of annual return and GST audit report futile. It will not give the desired results and will also not be helpful to the authorities.

There will be unnecessary litigation as due to paucity of time the reports may be qualified and submission of wrong data will lead to required tax liabilities

Besides that the taxpayers were under burden of filing other returns also that is

  • Due date for filing of income tax returns is also August 31, which clashes with the due date for submission of GST audit reports.
  • The taxpayers are also tied up with uploading 2 monthly returns in GSTR 1 & GSTR 3B for the month of August.
  • The trade is also in the process of reconciliation of ITC claimed with GSTR 2A and following up with vendors for the differences for year ended March 2019.
  • Many taxpayers are also in the phase of upgrading their systems to bring it in line with the new return forms to be introduced from October 2019.
  • There have been floods in various parts of India in the months of July and August 2019. This has led to large scale destruction of documents and records.

In order to extend the due dates of various returns, various professional associations have already represented before the authorities The present government has always listened and reacted to the issues and problems of the trade immediately.

Hence, this time also considering the numerous problems and issues faced by the trade and professionals, there is a  need to postpone the due date for filing Annual Returns and GST Audit Reports for the fiscal year ended March 2018 to November 30, 2019 and for year ended March 2019 to March 31, 2020.

Further as most of the taxpayers have already discharged their GST liabilities for year ended March 2018 and 2019, postponing the due dates for annual return & GST audit will not impact the revenue of the government.

Author: Niranjan Reddy

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