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2-min read

Small Businesses May be Exempted from Filing Annual GST Returns for at Least a Year

According to a report in BusinessLine, the GST Council on September 20 will consider a proposal to exempt small businesses from filing annual return for not just 2017-18, but 2018-19 as well.

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Updated:September 13, 2019, 10:32 AM IST
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Small Businesses May be Exempted from Filing Annual GST Returns for at Least a Year
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Small businesses have a reason to cheer. According to various media reports doing the rounds, the government looks set to give small goods and services tax (GST) assesses exemption from filing annual GST returns for at least a year.

According to a report in BusinessLine, the GST Council on September 20 will consider a proposal to exempt small businesses from filing annual return for not just 2017-18, but 2018-19 as well. As per the report, small assesses here could be categorised into two groups — those with annual turnover up to Rs 2 crore, and those with annual turnover of up to Rs 5 crore.

As on June 30, there are nearly 13.9 million assessees in India. Of these, nearly 86% have a turnover of up to Rs 2 crore, while the Rs 5 crore threshold covers 92% of the assessees.

The report says that the Law Committee associated with the GST Council has already cleared a proposal regarding the same, but this can be implemented only after the Council clears it and issues a notification.

Meanwhile, a report by Mint said that the GST Council is expected to extend the due date to file GST annual returns for FY19 from the current 31 December 2019 as companies are currently busy meeting the deadline for FY18, for which they have time till 30 November 2019. This will leave them with just one month to finalize annual returns and audit reports for full fiscal FY19.

The report, however, said that the extension of the due date for FY19 may be announced only closer to the current deadline of 31 December, and not at the forthcoming GST Council meeting on 20 September as the government wants businesses to continue with their preparations to meet the FY19 due date.

Experts called the government’s consideration a move in the right direction. Abhishek Jain, Tax Partner at EY, told CNBC-TV18: “This may be quite an aid from the ease of compliance perspective for small businesses. To recall, an annual return requirement historically under the VAT regime as well was exempt for businesses with a specified threshold and hence this proposal may be aligned to the pre-GST regime. Also, smaller businesses are looking for this relief because they had not maintained quite a lot of details which were required to be reported in the annual return; essentially owing to the suspension of GSTR-2.”

Pratik Jain, Partner and Leader, Indirect Tax, PwC India, said: “Doing away with the requirement of annual return will help the small businesses as the return is quite detailed and time-consuming. In any case, the government has all data of their GST filings (monthly) which can be used for data analytics and specific questions can be asked if there are any discrepancies noticed. It would also help the tax administration to focus on bigger businesses. It remains to be seen how the annual returns already filed by these businesses (which would perhaps be exempt henceforth) would be used.”

GST assessees are required to file an annual return through the GSTR 9 form. Businesses whose annual turnover exceeds Rs 2 crore during a financial year are also required to get their accounts audited by a chartered accountant and then submit a reconciliation statement in GSTR 9C along with GSTR 9. Assessees under the composition scheme, i.e. businesses with turnover up to Rs 1.5 crore, are required to file the GSTR 9A form. The last date for filing these returns for financial year 2017-18 has been extended to 30 November from 31 August.

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