New Delhi: Businesses across the country are keeping a hopeful eye on what is in store on Friday for them in the Goods and Services Tax Council meeting. As chairman of the council, Finance Minister Arun Jaitley will push for relaxing the GST return filing timeline from one month to quarterly for small and medium businesses with annual turnover of less than Rs 1.5 crore, defer the reverse charge mechanism and reopen registration for the composite scheme for the third time till March 31, 2018. Almost 1.5 crore businesses, comprising 65% of the total taxpayers, will benefit from quarterly filing of returns.
Currently, all those registered under GST are bound to file three monthly returns, in addition to one annual return. They actually file two returns while the third is culled from the figures in these returns. The businesses are facing much hardship since they have to submit all data online instead of uploading ready data and there is no provision for one to keep a copy of the forms filled up, nor a provision to file corrections in the returns.
The finance ministry sources said Jaitley may also ask the council to defer at least for some time the reverse charge mechanism that has been especially bothering the small tax payers. Reverse charge is a mechanism under which the recipient of the good or service will have to pay GST, which is otherwise paid by the supplier. The charge is applicable on a registered dealer, if he buys goods from a dealer not registered under GST. However, the receiver of the goods is eligible for input tax credit, while the unregistered dealer is not.
The trade bodies are complaining that the burden on registered taxpayers to pay the tax is a retrograde step, while small or unregistered taxpayers are running out of business if registered dealers are not buying goods from them. Jaitley will also suggest continuation of the registration under the scheme till end of this fiscal (up to March 31) and also increase the annual turnover for this to Rs 1 crore.
A top source in the finance ministry said Jaitley would also press for a centralised mechanism under the GST to prevent wide conflicting interpretation of law by the separate authorities for advance rulings at the state level.