• Notification Date: 09.02.2022
• Notification No: N/A

GST Returns enhanced after Compliance got simplified

The tax authorities at the Central and State levels have taken measures to simplify the tax compliance. According to the Chairman of Central Board of Indirect Taxes and Customs (CBIC), Vivek Johri, the Goods and Service Tax (GST) Council has adopted several steps that have resulted in the doubling of the number of taxpayers who are filing their tax returns every month on time. Mr Johri has declared in a post-budget interaction with Mint, that the new measures instructed by the Centre for simplifying the budget goals in FY23 will bring more transparency in the tax compliances. The new moves taken up by the GST Council will result in bringing clarity in the GST application on cryptocurrency transactions.

The Council has declared that they are examining the matter internally. The law committee of the Council is looking into the issue and it will get resolved within two to three months.

Changes in the Customs Duty and GST as proposed in the Union Budget

Simplification of the tariff structure in the customs is one of the major concerns in the budget for FY23. Another main theme is to support the scheme of Atmanirbhar Bharat. Other concerns in the tax compliance structure are supporting exports and supporting the micro, small and medium businesses. To modify the GST structure, the law is aligned with the new tax return filing. The tax return system has been amended in the new GST law. Some measures have been taken for trade facilitation. Some enforcement measures have been adopted to combat bogus tax credits and fake invoices.

New GST Rules have been tightened

The GST rules attempt to establish a better balance between taxpayer facilitation and law enforcement. The new rules have been introduced based on the experience of 2020. In 2020, a large number of cases and dealers had been trying to misuse the input tax credit scheme by using fake invoices. The tax returning process in the Budget has been simplified to some extent by remodelling the strategy. The late payment that is charged from the taxpayers has been rationalized. This would facilitate the small taxpayers.

Several other measures have been taken for better tax compliance. These measures are persuading the taxpayers who have not filed their returns, along with some outreach programs. These measures have resulted in an evident improvement in tax compliance under GST.

The rate of return filers has risen massively. The number of tax filers is almost double after making the amendments. The rate was 45-50% a year and a half ago. But after the new steps have been adopted, the rate has gone up to 90%. There are about 12.8 million taxpayers in India. About 2 million taxpayers leave the system and almost the same join each year. 4.8 million of the total taxpayers have opted for the quarterly return filing and the monthly tax payment schemes. The remaining 7 million taxpayers pay the return filing on a monthly basis. Out of them, about 90% of the eligible taxpayers file their returns regularly each month.