Industry favours staggered GST returns, seeks HSN code only up to 4 digits

Categories: GST Recent News, News
No Comments

Industry has pitched for staggered implementation of new tax returns under the goods and services tax (GST) system, which are scheduled to be introduced from the beginning of next financial year. In their feedback to the government, businesses have sought continuation of the use of harmonised system of nomenclature (HSN) code up to the four-digit level only. The GST Council had earlier decided to defer the implementation of these returns from the planned staggered implementation from October this year. New returns are simplified version after businesses complained about the current complicated forms.  In the new returns, there would be one main form GST RET-1, which will contain details of all supplies made, input tax credit availed, and payment of taxes. This return will have two annexures GST ANX-1 and GST ANX-2. Form GST ANX-1 will have details of all outward supplies and form GST ANX-2 will contain details of all inward supplies. Currently, taxpayers are filing two returns: GSTR-1, which contains details of all outward supplies made, and GSTR-3B, which is a monthly self-declaration of outward supplies, input tax credit availed, and taxes paid.

Initially, businesses had a fear that their cash flow would be blocked because there was a proposition of only allowing credits to those invoices that were uploaded by vendors and tax discharged. To address the issue, the government had proposed allowing businesses to avail input tax credit on the basis of self-declarations in GSTR3B for initial months even under the new mechanism. As such, industry demanded that initially only ANX-1 and ANX-2 forms be allowed to be filled along with the currently used GSTR-3B. Only when industry is used to these forms, filing of RET-1 be made mandatory after GSTR-3B is done away with. Businesses with annual turnover between Rs 1.5 crore and Rs 5 crore are currently required to report HSN code at two-digit level, while those above Rs 5 crore will have to report the code with four-digit level. The new return format, however, makes it mandatory for businesses to use HSN code at six-digit level.

Read More at: