The proposed GST changes will do away with filing returns under GSTR2 and GSTR3, modify the composition scheme, and eliminate ambiguities in the laws
The government is set to table amendments to goods and service tax laws in the monsoon session of Parliament to simplify GST returns filings, modify the composition scheme under which small traders can pay tax based on their revenue, and eliminate ambiguities in the laws.
The proposed GST changes will do away with the need for filing tax returns on purchases made by businesses, called GSTR2, and comprehensive returns called GSTR3. At the moment, these returns have been kept in abeyance and businesses only file sales returns, called GSTR1, and GSTR3B summary returns.
The GST Council had in May approved a new system where all taxpayers need to file a single return and small businesses need to file quarterly returns, after a six-month transition period, under the composition scheme.
The focus has now shifted from tax rate changes, an official familiar with discussions in the GST Council said on condition of anonymity.
“Now the focus is on ensuring timely disbursal of tax refunds and encouraging compliance,” the official said. Another official said changes to tax laws on composition scheme, which has seen many instances of tax evasion, may depend on a decision on the reverse charge mechanism—wherein large registered buyers pay tax on behalf of small unregistered sellers, which has been kept in abeyance.
“Several amendments including those that will simplify GST compliance and improve ease of doing business in GST, are expected to be taken up in the monsoon session,” said M.S. Mani, partner at Deloitte India.
At Investelite, We simply act as an Investment Adviser after understanding the desired financial goal of our clients by taking appropriate risk as per the risk assessment procedural guidelines under SEBI IA Act 2013.