27th GST Council meeting updates |Single Return to implement

27th GST Council meeting updates pic

The 27th meeting of the GST Council was held on 04th May 2018.  The main focus of the meeting was on the GST returns.  Here are the 27th GST Council meeting updates.  These details are based on the official GST council meeting press release published by the CBEC.

At its 27th meeting, GST Council (4 May 2018) has approved the principles of approval for recruitment of new returns design based on the recommendation of the Cabinet Group for IT simplification.  The main components of the new return design are:

(i) GST single return updates on monthly filing

All taxpayers, except for a few exceptions like the composition, should submit a monthly return. At the same time, the return filing dates will be shown on the basis of the turnover of the registered person to handle the burden on the GST server. Also, there will be a facility to provide quarterly returns for composition dealers and NIL transactions.

(ii) Unique Flow of Invoices

The invoices will be uploaded on one side basis i.e only by the supplier during the month to give the buyer a valid document to take advantage of an input tax credit. On the other hand, the buyer will also be able to continually view the uploaded invoices during the month. No need to upload purchase invoices by the recipient of goods. In order to achieve uniformity in the reporting system, the HSN needs to use a four-digit level or more for the B2B transaction.

(iii) Simple Returns Design and Easy IT Interface

B2B dealers will have to upload invoice-wise details of outward supplies made by them. Based on this, the system will automatically calculate its tax payment. Also, the input tax credit will be automatically counted on the basis of the invoice uploaded by its vendor. The taxpayer will also be provided with a convenient IT interface and offline return upload tool for uploading Invoices.

(iv) There is no automatic reversal of credit

The buyer will not be affected by any input tax credit passed on by the supplier for non-payment of tax on such supplies. In relation to the payment of tax by the seller in case of his default, the recovery will be made from the seller but there will also be an option available to collect the dues from the buyer to the Revenue Officer, in order to face exceptional situations such as missing dealer, closure of business by supplier or Not having enough assets to make recovery.

(v) Process for Recovery and Reversal

The recovery of tax or reversal of input tax credit will be done through notice and orders. The procedure will be automated and online to reduce the human interface.

(vi) Supplier side control on Input Tax credit

Removing the invoice from the seller for the sale of tax which will pay more than the threshold amount will be blocked in order to control the misuse of input tax credit facility. In this regard, newly registered dealers will get more security. Also, Analytical tools will be used to identify such transactions as early as possible to avoid revenue loss.

(vii) Transition of GST Returns

There will be three-phase changes in the new system. Stage 1 is the current system of return filing ie. GSTR 3B and GST 1. GSTR 2 and GSTR 3 will remain suspended for an unknown period.  On the other hand, Stage 1 will not continue for more than 6 months, because the new return software will be ready till that time. In Stage 2, there will also be a facility for the upload of invoice data in a new return, and in the case of GST 3B, there will also be a facility to claim the input tax credit on the basis of self-declaration.

During this phase 2, the dealer will continuously feed the information provided by its vendors and the temporary credits will be available. After 6 months of this phase, provisional credit will be removed and input tax credit will be limited to invoices uploaded by the seller from whom the material has been purchased by the buyer.

(Viii) Monthly return contents and its implementation – GST return simplification updates

Return will get simplify further by reducing the contents to be filled by the supplier to facilitate the trade. Based on these principles, the Law Committee will work out an easy GST return filing process by considering business processes and legal changes. In other words, Government is eager to introduce a simplified return design to reduce compliance with the business in keeping the philosophy of business easy.

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