Big bang changes in GST laws on anvil to ease rules and procedures

After reducing rates on about 300 items since the implementation of Goods and Services Tax (GST) from July 1, the government may now propose significant changes in the laws and rules, to simplify procedures and ease rules for the business.

The changes could include simplifying the tax return filing process and the composition scheme, apart from the decision on whether to continue with reverse charge mechanism (RCM), tax deducted at source (TDS) and tax collected at source (TCS), two government officials in know of the matter told Moneycontrol.

The Goods and Services Tax (GST) Council--the apex body for decision making headed by finance minister Arun Jaitley—is likely to consider the big bang recommendations of the law advisory group in its next meeting on the first week of January in New Delhi.

The law advisory committee will submit its report on January 1, with key recommendations pertaining to amendments in laws and rules to make the new tax system simple, one of the officials said.

However, certain changes could also require amendments in some of the five GST laws--Central GST (CGST), State GST (SGST), Integrated (IGST), Union Territory GST (UTGST) and GST (Compensation to states). The amendments will be done after the announcement of the Union Budget in February.

“The law review group will see what provisions need to be changed. Traders concerns will definitely be addressed. For example, how do we deal with TDS and TCS under GST? Do we need the concept of invoice-matching?,” the official said.

Since its implementation from July 1, the new indirect tax system has faced criticism owing to the teething troubles including lack of clarity on return filing, errors in invoice matching, and major technical snags on the information technology portal GST Network (GSTN), among others.

The government has also, time and again, extended return filing dates. In a bid to ease compliance and simplifying procedures, earlier this month, the Council allowed tax assessees to file only two sets of forms—GSTR1 (for outward supplies or goods that they sell) and GSTR 3B (summary form) — instead of four earlier.

While small taxpayers with an annual turnover of less than Rs 1.5 crore will file quarterly returns (once in three months), those with a higher turnover will file monthly returns.

The return filing process may be changed completely as the concept of invoice matching may not exist. “There are various possibilities such as bringing in fresh return forms and formats,” another official said.

Similarly, whether concepts such as RCM, TDS and TCS should be there under GST or not will be decided the advisory group. The Council has currently deferred the implementation of all these concepts to March 31, 2018.