Congress leader Digvijaya Singh on Monday wrote a letter to Finance Minister Arun Jaitley to reconsider and amend Clauses 37, 38, 39 and 44 of Chapter IX of 'The Central Goods and Service Tax Bill' so that the registered person has to submit only quarterly return.
"First sales return on 10th of every month declaring sales made in the period, along with details to whom made. Second purchase return on 15th of every month. Third consolidated return on 20th of every month. On top of these, every registered person would have to file an annual return under Clause 44. When I raised this issue after your reply in Rajya Sabha you told the House that Tax payer has to submit his returns only quarterly," the letter read.
Singh in the letter said that instead of reducing the number of returns, Jaitley have now increased it by nine tires.
"Would it improve our Global ranking in "Ease of doing business" which your Government has been promising? A mistake in one return filed would lead to mismatch because of which the Tax payer won't get the benefit of input credit. It would defeat the very purpose of GST and on each transaction, tax would be levied. This would have cascading effect resulting in inflation," he asserted.
In reply to Singh's letter, Jaitley said he has raised the given issues.
"In the proposed Cost Insurance and Freight (CIF) design, the registered person is required to file only his initial return on the 10th of the next month (return for outward supplies), while the other returns on invoice matching and availments of ITC credit are auto-populated. These auto-populated returns will be communicated between the supplier and the recipient through the common portal (GSTN). Therefore, there is only one GST return with internally auto-populated returns for invoice matching and availing of input tax credit," Jaitley added.
He further said that in order to simplify the process and ease compliance for smaller taxpayers who are below Rs. 50 lakh turn over per annum under the composition scheme, a scheme or quarterly returns has been proposed.
"For all tax payers it is not workable to have quarterly return because input tax credit has to be given every month. The model of invoice matching for eligibility of input tax credit of the recipient has been adopted in the GST design after much deliberation," he said.
Jaitley added that one of the most important advantages of adopting this model is for curbing the possible tax evasion on account of fake invoice frauds.
"Lastly, the GST model was adopted to ensure that input tax credit is transferred from the originating state to the destination state. It is through the invoice matching and automated return mechanism that the Government can ensure that eligible input tax credit is accurately transferred between the states," he concluded.
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