A little over 3.94 million assessees paid the goods and services tax (GST) and filed returns for the month of September, slightly more than the 3.76 million returns received for the previous month.
On Friday alone—the last date for filing summary tax returns for the month of September—a little less than a million tax payers filed their returns, an official from GST Network (GSTN), the company that processes returns, said on Saturday on the condition of anonymity. Data on the amount of tax collected is not available immediately.
The number of assessees who have filed returns is way below the level of compliance expected by the authorities. The finance ministry had said last month that more than 6.8 million assessees were required to file returns for August. A similar number of assessees were expected to file returns for September too.
This figure will come down for the month of October as the federal tax body, the GST Council, had on 6 October allowed more businesses to file returns on a quarterly basis. At the council’s last meeting, it was decided to raise the annual turnover for those filing on a quarterly basis to Rs1 crore from Rs75 lakh earlier.
Perturbed by the less than expected level of compliance, the union government has already asked states to find out the reasons.
Abhishek Rastogi, partner at law firm Khaitan & Co., said GST compliance level is still unexpectedly at about 50%. Rastogi said a large number of assessees may not be required to file the returns as they would either be making tax exempted supplies or may be covered under the reverse charge mechanism under which their customers have to report transactions.
It may also be possible that a section of the registered GST assessees, who were automatically migrated into the new indirect tax system from the earlier tax regime, may not have enough annual sales to file GST returns. Businesses with Rs20 lakh turnover are required to pay GST, a threshold higher than the Rs10 lakh that existed earlier for service tax and Rs5-10 lakh that existed for value added tax.