Page 10 - Banking Fiannce March 2018

GST UPDATE

Hindustan Unilever's ad- Many registered firms are not filing GST returns
The number of returns filed each month has not crossed 70 lakh though the
mits retaining Rs 1.19 bn
number of tax payers registered with the GSTN has
GST, which was not crossed one crore (64 lakh earlier indirect taxpayers who
passed to customer migrated to GST and 38 lakh new registrants). Out of
over one crore registered taxpayers, around 18 lakh are
The government is amused by the of-
under composition scheme, who have to file quarterly
fer of
returns.
Hindustan
According to figures quoted by GST Network's CEO Prakash Kumar, 63 lakh
Unilever's
(HUL) to returns were filed in July, 67 lakh in August and 69 lakh in September. From
pay Rs 1.19 there ownwards, the number of returns filed has started coming down - 65
billion in lakh in October, 64 lakh in November and 63 lakh in December. Final numbers
two tranches for not having passed for January are awaited.
on goods and services tax (GST) cut "Many taxpayers who migrated from the older systems to the GST regime may
benefits to customers. HUL is actu- not have any business at all (even earlier), and hence they do not file returns,"
ally in the process of offering another says Prateek Jain, Leader, Indirect tax, PwC. However, he admits that the num-
tranche as well but is still awaiting ber of non-filers is too big to be accounted for by this reason, and he says that
instructions on how to deposit the the government would have to see the real reasons for this.
allegedly profiteered sum in the con-
sumer welfare fund. According to GST Council to further trim list of items in 28% tax slab
officials, the current guidelines allow GST Council will continue to prune the list of items in the highest tax slab of
the government to accept penalties 28%, but merging of the 12% and 18% slabs will have to
in the said fund after an investigation wait till tax compliance increases, finance minister Arun
by Directorate General of Safeguards Jaitley said. Addressing business leaders at the India-Ko-
(DGS) and then an order from the rea Summit organized by the Department of Industrial
anti-profiteering authority. Policy and Promotion and Confederation of Indian Indus-
try (CII), Jaitley said India has been significantly tax non-
However, HUL waited for neither; it
did the calculation on its own and, in compliant, a situation which needs to change.The minis-
ter said that when goods and services were initially placed
effect, told the government it was
in different tax slabs at the time of GST's roll out, it was a mathematical exer-
penalising itself."What do we do in cise based on the prevailing tax burden on those items.
case of suo motu action?" asked a
government officer. What the DGS Jaitley said that in the first instance of tax rate rationalization after GST intro-
has done is to officially launch an in- duction, the list of items in the 28% slab were pruned."It is now a substantially
vestigation. Which has asked HUL to thinner list than the original one. That exercise will continue," he assured. "After
give it the details of the method used we are able to improve the compliance levels, the other stage of reform will
begin... For example, we have two standard rates and in the long run I do see
to calculate the amount.
them merging into one. For that to happen, it will take some reasonable time,
Thereafter, the anti-profiteering au- that is when the compliance levels start moving up," Jaitley said.
thority will apparently have to issue
Jaitley's reference to the need for higher tax compliance comes at a time when
an order to accept the payment as tax authorities at the union and state levels are contemplating taking steps to
penalty."In the absence of clear legal combat tax evasion, after having adopted a lenient approach so far under the
provisions on this subject, officials had
new tax regime to allow taxpayers to get accustomed to GST.
forwarded our request to DGS. We
In February, total GST receipts stood at Rs86,318 crore, nearly the same as the
are awaiting advice from the officials,
so that we can deposit the cheques amount collected in January-Rs86,703 crore. Punjab recorded the highest com-
pliance in February with over 83% of those required to file monthly returns doing
at the earliest," HUL told Business
so. North-eastern states barring Tripura and Sikkim reported less than 50%
Standard in response to a query.
compliance during the month.
10 | 2018 | MARCH | BANKING FINANCE