GST 2020, How it will change the way you carry your business - (Keshav R Garg) B.com, FCA, CS, ISA(ICAI), AMP-IIM-A, LLB
GST
2020, How it will change the way you carry your business
(Keshav
R Garg)
B.com,
FCA, CS, ISA(ICAI), AMP-IIM-A, LLB
We are all set to
welcome 2020 with a hope that business would witness growth in the next decade.
Unlike 2019 when the graph has moved up and down, businesses would be expecting
2020 to bring stability and also brighten the future head. But is it going to
be that easy, doesn’t seem so. 2020 will bring another set of challenges for
business and would change the way businesses had been working in India since
GST came in.
2020 version of GST
will have everything in its kitty, be it increasing compliance burden,
overhauling ERP systems, stern audits by tax departments, assessments including
search/seizures and top of it complete overhauling of the invoicing and return
filing system under GST. The experience businesses have had with GST Network
since 2017, surely greys the sky as to how GSTN will the meet the plethora of
changes government is likely to make.
Check out how 2020
will change the manner you have been doing your business:
1.
Three
annual returns to be filed in year 2020:
I can’t remember a year since I have come into
practice as a Chartered Accountant, where three annual compliances were to be met
in a span of 12 months. In calendar year 2020, businesses would be required to
file GSTR 9 (Annual Return) and GSTR 9C (Annual Audit by CA) for three
financial years i.e. 2017-18, 2018-19, and 2019-20 with due dates likely be
31.01.2020, 31.03.2020 and 31.12.2020 respectively. Thanks to six extension of
dates made for annual returns for FY 2017-18 which was originally supposed to
be filed by 31.12.2018. I wont be surprised if these dates get further extended
looking at the half-cooked return filing utility served by the government after
a prolonged wait of two and half years since July 2017.
2.
New Return
formats to be introduced from April 2020:
The government is planning to introduce new return formats
i.e. RET-1, Sehaj and Sugam from 01.04.2020. Though the department is making
huge efforts in educating taxpayers about the new return forms, but it seems
that everything has gone in vain. While I myself attended various such outreach
programs, the situation with new return forms was quite miserable. Even the
higher rank officers were unable to file a single new return form, while they were
pushing the industry to test the trial version of new returns. Instead of
simplifying the return filing procedures, new return formats shall pose another
set of complications for the businesses. As far as mid and large size GST
taxpayers are concerned, integrating the new return formats in their ERP system
would become a daunting task. Forget about the small taxpayers who had and will
always remain clueless about implementing the behind the doors decisions taken
by GST Council.
3.
Changes in
invoicing methods:
Looking at how the fake invoice industry has
mushroomed, government seems to be in worry state. This has resulted into complete
overhauling of the invoicing system. For B2C taxpayers it has been made
mandatory that the invoice should have QR code embedded on them. I fail to
understand that how a micro shopkeeper who is struggling to meet his daily
needs would introduce IT in his business. Forget about the shopkeepers, does
the department itself has suitable infrastructure to scan these QR codes is
also questionable. Even if industry starts implementing QR codes, how will
government or consumer judge its authenticity is something for which we have no
idea at all. For the business having turnover more than Rs. 100 crores, issuing
e-invoice shall be made mandatory from April 2020. The government must invite
the software companies on board, issue them APIs at least a quarter before. Again
forget about APIs, the ten e-invoicing portals which government has notified
are not functioning. I wont be surprised if the dates for e-invoicing are
further extended due to lack of IT infrastructure.
4.
New GST
Rates to be enforced:
Department may issue bold statements, but with huge
amount of refunds being stuck, difficulties in releasing budgetary support and
eagerness of government to plug tax leakages are all indications that there are
some serious issues with Exchequer. This has forced the GST council to rethink and
ponder over rate of taxes. If rumours are to be believed the government is
planning two rates 10% and 20% for GST. Further levy of GST on luxury healthcare
treatment and other exempted goods/services are on the cards. If the new rates
are imposed, it will certainly unsettle the settled business. Most of industry
especially pharma which had been vouching on inverted duty structure refunds
would have to rethink their business strategy. Not only pharma but even the service
industry which is presently charging 18% would also be forced to either charge
more from the consumers or pay from their own pocket. The rejigging of rates is
totally uncalled for as it will pull down GDP further due to bad business
sentiments.
5.
Stern
Audits to be carried out by department:
As government is propagating that honeymoon with GST
has ended. The business must pull up their socks for the audits which
department are going to carry during 2020. As a consultant myself, I feel that
department is silently preparing behind the doors to bombard the taxpayers once
their boss shows the green signal. Loss of revenue, pending compensation from
central government has increased the urge of state gst authorities to suck the nectar
to last drop. Since 2017, taxpayers were on cakewalk with no interference by
the department, but things will certainly change in 2020. Time is not far when
the taxpayers indulging in malpractices would have to compensate for wrongdoings.
6.
Assessments
by the departments:
Once the taxpayer files his annual return, hopefully
in 2020 only, the department would carry out assessment proceedings on them. This
will bring another plethora of litigations including classification issues,
eligibility of Input Tax Credit, non-payment of interest etc. for the
taxpayers. 2020 will not be an easy year for both department and taxpayers. But
work for Lawyers, Chartered Accountants and other professionals is certainly
going to increase manifolds. I really hope that at least in GST regime, cases
would be decided on merit basis and business will understand and value the job
carried out by their consultants.
7.
New
reconciliation to be made in 2020:
Government has restricted the Availment of ITC in
respect of invoices not reflected in GSTR 2A up to 10% of the eligible credit reflected
in GSTR 2A. The businesses would be expected to make a monthly reconciliation and
also satisfy the department about the Availment of input tax credit. This additional compliance will commence from 2020
itself, as the new provision comes into force from January 2020. The claim of
input tax credit shall become another point of difference between department
and taxpayers. With substantial powers given to tax officers vide Rule 86A of
CGST Rules 2017, taxpayers will have difficult time in proving the genuinity of
their claim of Input Tax Credit.
8.
Levy of
late fees for delayed filing of GSTR 1 from 2020:
Though the late fees on delayed filing of GSTR 1 was part
of the Act since 2017, but GSTN had never charged it on taxpayer. It has now
been cleared that from January 2020 onwards, a late fees of Rs. 50 per day
shall be charged on delayed filing of GSTR 1. The taxpayers who had remained
under the impression that there is no late fees on GSTR 1 must wake up and
ensure that they not only file their return in time but also with correct
details. New set of penalties would force the wilful defaulters to mend their habits.
9.
Ease of
Business for Start-ups:
The government is all set to introduce new set of reliefs
for start-ups. There had been substantial relaxation on income tax front but no
specific relief was given in GST. There are discussions that Government would further
relax the compliance burden on the new businesses. Simpler registration form,
simple returns, tax exemptions from GST is likely to be announced in Budget
2020. The way start-ups has dealt with GST since 2017 would certainly change.
10. Single window for refund to exporters:
A prolonged demand of the exporters to form single window
for clearing their refunds might get fulfilled in the year 2020. Government had
been under tremendous pressure due to delays in GST refund for the exporters.
The dual GST regime was the main cause for the delay in refunds. There is huge possibility
that single window i.e. the assessment and payment of refund by same authority
can get introduced. This shall come as a huge relief for the industry. But on
the other hand they would expect the government to clarify the burning issues
such as intermediaries etc. which has stalked the foreign subsidiaries since
GST has been implemented.
Though 2020 will a
beginning towards a new decade, the journey for business especially in 2020
does not seem to be smooth. Another set of confusions, anxiety, debates and litigations
are waiting for them.
Never the less, what
might happen, one should strive to meet all odds and thrive towards victory. Wishing
you a very happy and prosperous new year ahead.
Hiii..I really appriciate you for posting this kind of blog. Visit our website for GST Compliances
ReplyDeleteWow..Amazing blog.. This blog is very helpful for me. Thanks for sharing this information with us.If you want to know more about Auditors in delhi | leading audit firms delhi please click on it.
ReplyDeleteGreat!! and knowledgeable blog ever I read about. I learnt something new today that GST Registration and GST Return filing is good for brands which are likely to stay in the market and we provide the best CA services for your brand requirements.
ReplyDeleteThank you for this helpful blog , i found this very helpful.
ReplyDeleteLearn Web desidning and digital marketing for free from the professionals by just visiting the links. This offer is valid for a limited period so hurry up now visit the link to know more about the digital marketing, SEO , Web designing etc
Affordabe SEO Company in India
Top SEO Company in Delhi.
Affordabe SEO Company in India
Top SEO Company in Delhi.
Affordabe SEO Company in India
Top SEO Company in Delhi.
Affordabe SEO Company in India
Tax Consulting Get your taxes in order with these consulting services I can help take the burden off you so you can concentrate on the growth of your business.
ReplyDelete