An employee displays a receipt book showing a store’s goods and services tax identification number (GSTIN) in an arranged photograph in New Delhi, India. (Photographer: Anindito Mukherjee/Bloomberg)

GST: Government Targets Rollout Of New GST Return Forms By Jan. 1, Hasmukh Adhia Says

The new Goods and Services Tax return forms would be introduced from Jan. 1 after successful beta-testing of the software, Finance Secretary Hasmukh Adhia said today.

He said that wrong input tax credit claims are a potential area of evasion in the GST regime and one-to-one invoice matching is the key to checking evasion.

Also read: GST Rates Cut Will Have To Factor In Revenue Loss, Says CBIC Chairman

On the scope for rationalisation in the highest tax bracket of 28 percent, Adhia, at ‘GST Decoded’, an event organised jointly by CNBC-TV18 and Pricewaterhouse Coopers India, said that reducing the number of items in the tax slab would depend on revenue position of the government.

Adhia added that the target is to roll out the new return filing system within six months.

I would like it to go through a trial run. So we will sort of put it in a pilot in a beta-version and we will ask some people to test. We will do it sometime between October and December. By Jan. 1 it should be implemented.
Hasmukh Adhia, Finance Secretary

He said invoice matching has to happen in the GST system. “The only thing is the way we collect details about invoices is what matters. So in the new system of filing return we will have all the sales invoice being uploaded along with returns only for B2B. For B2C you don't need to give invoice wise details at all,” Adhia said.

The secretary said that while the GST collection every month is between Rs 94,000 crore to Rs 1 lakh crore, the total tax liability discharged by businesses every month is Rs 5 lakh crore. “But Rs 4 lakh crore of this liability is being discharged by way of input tax credit claims. Now you can understand what a scope (is) for improving our revenue if we streamline and if we have a check on input tax credit,” Adhia said.

The GST Council had in its last meeting on May 4 approved the design of new return forms. It was decided that the current system of filing summary returns (GSTR-3B) and final sales return (GSTR-1) would continue for six months.

He said the only place where there is a scope for tax evasion is in the area of claiming wrong input tax credt and that's an area which can be plugged by using technology.

“Even if we make a 10 percent difference in Rs 4 lakh crore by keeping an eye on the wrong input tax credit claims, by having one-to-one invoice matching, what an improvement in revenue collection can happen,” Adhia said.

Also read: No Need To Reduce The Number Of Tax Slabs Under GST, Says Adi Godrej

On rationalisation of the 28 percent bracket, he said there are 50 items left in the highest tax slab and most of these items attract a cess as these are either demerited or luxury goods. Besides there are some construction and automobile items., too.

“We have still not reached the magic number of Rs 1 lakh crore (revenue) every month consistently. We will have to keep watching our revenue and whenever there is a scope created for giving more concessions, then we can one-by-one or in batches, start looking at those items.

“Immediately, I think rationalisation is not going to be so feasible because we have to watch our revenue first,” Adhia said.