Coming soon: GST technological overhaul to ease compliance, plug leaks

Around 70 per cent of the taxpayers are likely to be covered under the quarterly return filing system
Filing goods and services tax (GST) returns will be easier with technological changes set to be introduced over the next few months, while putting on hold the simplified return-filing system, which had been proposed earlier.

Instead of completely changing the return forms, the effort is now to introduce, within the existing framework, changes in a staggered manner, so that taxpayers are not put out.

Plugging tax evasion and preventing frauds in claiming input tax credit will come with the territory. A taxpayer with a turnover of less than Rs 5 crore will be allowed to file summary returns (GSTR 3B) every quarter, likely from November (now it has to be done every month).

Around 70 per cent of the taxpayers are likely to be covered under the quarterly return filing system.


The returns will also be auto-populated to minimise errors, ease reconciliation, and simplify compliance.  Enhancing and advancing the return-filing, the GST Network (GSTN) is an alternative to the proposed ‘simplified GST return’ forms, which is kept in abeyance since March by the GST Council in view of the lack of information technology (IT) preparedness.

The changes will cover e-invoicing, quarterly return filing, linking return forms, the auto-population (giving data) of forms, input tax credit determination, and buyer-supplier communication.

Five teams of 60 tech professionals are working on the Returns Enhancement and Advancement Project. A communication channel between buyers and suppliers is being worked out to facilitate compliance. The buyer will be able to nudge the seller in case the invoice has not been uploaded for claiming input tax credit. “A buyer-supplier communication system will be put in place to help the purchaser ascertain the input tax credit that it can claim, based on the tax paid by its supplier and remind his vendor in case the invoice has not been uploaded,” said a government official.

Besides, a new form, GSTR 2B, will be introduced for availing of input tax credit, and it will plug leaks and frauds.

Under the new system, GSTR 2B will be generated on the basis of GSTR 1 (sales return), filed between two due dates by counterparty suppliers, for availing of credit in GSTR 3B (summary return) in a month. The functionality will be ready by September and rolled out after approval by the GST Council. The forms — GSTR 1 (sales return) and GSTR 3B (summary return) — will be linked, which will help taxpayers ascertain their tax liability. This will be systems-generated. A functionality is being developed to auto-populate values from GSTR 1 and GSTR 3B, reducing the compliance load on assessees. “The new return filing mechanism will help buyers identify suppliers that are non-compliant and follow up with them to file returns,” Bihar Deputy CM Sushil Modi, who heads the GoM on IT under GST, said.

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