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GST from July 1, extension for filing returns

The Goods and Services Tax (GST) Council on Sunday is likely to consider delaying the requirement for filing return under GST due to the lack of readiness of the IT infrastructure, sources privy to the development told FE. The proposal to grant some flexibility to the taxpayers is part of the agenda for the 17th meeting of the Council. Sources indicated that one of the proposals could be to allow taxpayers to file the first return at the end of quarter from the time GST is rolled-out. This means the assesses may get a three month window to be prepared for filing return at the beginning of October as opposed to August.

As of now, the taxpayers would be required to file their first return on August 10. However, as FE had reported earlier, the GSTN, which is entrusted with building the IT backbone for the new regime, has been struggling with timely idelivery of application programming interface (APIs) to the GST Suvidha Providers. APIs are software protocols that are used for building customised solution. Further, GSTN had written to GST suvidha providers (GSPs) late last month to begin testing their applications as 40% of them hadn’t started the process. Sources said that Infosyschief Vishal Sikka met the Council and apprised them of the unresolved issues in the IT structure. Infosys has been selected by GSTN to develop the backend operation for GST.

Besides, the Council will also take up controversial rules like anti-profiteering and e-way bills among others in its 17th meeting on Sunday. Additionally, the Council is also likely to consider some of the representation made by various industry bodies with regards to rates. Furthermore, the Council will also likely approve draft rules related to advance ruling, appeals and revision, and assessment and audit along with GST rate for lottery, the only item without a rate till now. The e-way bill rule has attracted criticism from various quarters which have been mainly directed at the apparent cumbersome compliance involved. Many experts have also questioned the ability of the state to get the technological infrastructure in place for implementation of e-way bill rule.

There are some major concerns relating to the e-way bill: the first is the issue of e-way bills to all kinds of goods, without a distinction between evasion-prone goods and others. The second is the technological requirements for e-way bills to become a reality. We need the government to establish a technological road map for the implementation of e-way bills and help the logistics industry understand how to transition to this new medium of operation,Archit Gupta, founder & ceo of ClearTax said. Moreover, the Council will likely discuss the contours of the anti-profiteering rule under the GST regime. Although the broad structure of the rule was discussed in a previous meeting, very little has been made public. As FE had reported earlier, the anti-profiteering rule could provide for businesses found guilty of profiteering to deposit a certain amount in the consumer welfare fund envisaged under GST.

As far as expectations regarding the anti-profiteering rules are concerned, we still need clarity on how the rules will be levied and the organizations that will have the power to levy them. Also, businesses expect some flexibility in terms of profitability. The GST regime will inflate the cost of compliance which businesses may cover/set-off with excess input credit/reduction in tax rate. All of these doubts need to be clarified, Gupta added. The industry expects that the Council would rationalise some more rates as well as rules for various sectors as was done in the previous meeting. The Council had reduced rates for 66 items out of 133 representations it had received from the industry bodies. Tax experts said that the case for review of rates was strong for car leasing companies, fertiliser industry and transition stock rule for imported products.

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