Despite the GST Council giving a one-month extension in filing returns under the new indirect tax regime, businesses should start uploading invoices much earlier, says Goods and Services Tax Network (GSTN) Chairman Navin Kumar. He cautioned against delays on the portal near the deadline due to increased traffic.
According to the current taxpayer behavior on VAT payments, 80 percent of the taxpayers file returns on the last two days of the deadline — 50 percent are found to be filing on the last day and about 30 percent on a penultimate day, he said.
“We are emphasizing that the taxpayers should not wait till the last day to upload data on the website. If everyone comes on the last day, they will experience delays on our portal,” Kumar told IANS.
“Taxpayers will start issuing tax invoices in July. But they have to report it in the system by September 5. So what we are telling the taxpayers is that if they have large transactions and many invoices, they should upload the data even before September 5,” he said.
“We are providing the facility for them from July 15 to upload the invoice level data, so they will have time to put all the invoices on the system,” he added.
Goods and Services Tax (GST) will come into effect from July 1 and GSTN provides the IT infrastructure for the new tax regime. According to the original schedule, the returns were to be filed between August 1 and August 20. This date has now been deferred by a month.
The first return that was to be filed on August 10, now needs to be filed by September 5. The second return which was to be filed on August 15 will now be filed by September 10 and the third return which was to be filed on August 20 now needs to be filed by September 15. After September 15, those who do not file their returns would have to pay a penalty.
As anxious traders and businesses get ready for the new indirect tax regime, GST may push them into the firefighting mode to tackle issues like internet connectivity or a large number of invoices.
While small businesses which have only 100-300 invoices a month can upload it online, the bigger businesses will have to download the offline tool from the GSTN portal which has the maximum capacity of uploading 19,000 invoices. Further, bigger businesses will have to upload invoices multiple times, a process they should go for during the night hours or start doing weeks ahead, Kumar advised.
“The businesses can upload data on the excel sheet of the offline tool and whenever they have time and internet connectivity, connect and upload. If a business has around 100,000 invoices, they can use the offline utility five times or so at night, and then it will be done,” he said.
The offline tool is 5 MB in size and GSTN claims it would take less than 30 seconds to upload, depending on the internet speed.
Kumar said that in far-flung areas, traders can make use of the offline tool and then upload as soon as they are able to get 5-10 minutes of internet connectivity.
“We have looked at the data of registrations where 6.6 million taxpayers have activated their account. We have found that they are not only from Delhi, Hyderabad, Chennai, and Mumbai, but from smaller cities of North-East, Chhattisgarh, and rural areas of Uttar Pradesh and Bihar. Even if they are able to connect for 5-10 minutes they can upload invoices,” he said.
GSTN is also banking on the fact that a number of taxpayers will come under the composition scheme under which there is a fixed rate of taxation, up to five percent.
“Till Rs. 75 lakh turnover, businesses will come under the composition scheme. They don’t have to file invoices but have to give a two-line return. 50-60 percent of taxpayers on the system will be under Rs. 75 lakh annual turnover, so they are not going to load the system,” he said. Kumar said that the GSTN portal has been enabled to handle a large number of connections simultaneously.
“Our system will be able to handle 60,000 connections per second. We have styled our system to handle this kind of load, but it will be easier for everyone if they do it earlier,” he said. “There will be teething troubles, but troubles will be met with solutions. Taxpayers need to be exposed to the new system of filing returns. Forms are new. Taxpayers can come to our portal and can get used to the system,” he said.
Assuring taxpayers that there was nothing to worry about, Kumar said that people would get used to the new system in one to two months. However, GSTN, which has been working on preparing the IT backbone for the roll-out of GST since November 2015, has still not got security clearance from the home ministry about which Kumar said, “That is government’s business. If they think it is necessary they must be doing it. We have nothing to do with that. It’s a confidential test that they undertake.”