The reason behind only a little more than half of the registered taxpayers filing their August returns by the deadline could be due to a combination of behavioural reasons, and the clashing of various deadlines, according to tax experts.
The government had last week announced that, though the last date for filing the GSTR-3B form for August was September 20, only 55% of those ‘required to file’ had done so by September 25.
“The alarming fact which emerges is with respect to the level of compliance for the month of August,” Abhishek A Rastogi, Partner at Khaitan & Co said. “It appears that 45% of the assessees have still not filed returns. The Government should go to the root cause and analyse whether these assessees are facing some genuine problems or they have been migrated automatically and are not required to comply.”
Many small vendors have had to register themselves on the GST Network in order to obtain a GST number, something their buyers need them to have for the purpose of availing input tax credits. However, once registered, these small businesses have to file their returns regularly.
‘Zero returns too’
“This means all the people who have taken up a GST registration have to file their returns, even if it is a zero return,” Ansh Bhargava, head of growth and strategy at Taxmann, told The Hindu .
Mr. Bhargava added that a major reason behind 45% people not filing their GST returns could be due to behavioural issues, since it was unlikely to be due to a lack of clarity about procedures or deadlines.
“There is nothing wrong with the system, as such,” Mr. Bhargava said. “The returns are being uploaded on the website..., and people already know the deadline. The government has been clear about that and the officials have been repeating it. This could be down to a behavioural phenomenon where people are not used to filing their returns regularly.”
Another reason for missing the deadline for GSTR-3B could be that taxpayers are waiting to first deal with the more complicated GSTR-1 form and then turn to the GSTR-3B.
“The biggest issue in July was: how does a business make a bill,” Tejus Goenka, ED, Tally Solutions said.
“In August it was how to file GSTR-3B, which turned out to be a non-issue. The biggest issue is the GSRT-1, which is the detailed return, and that’s a huge problem because of the amount of details needed and the format not being straightforward,” Mr. Goenka added.
