GST returns filing: After SMEs complain of complexity, Centre set to ease process

To encourage compliance in the face of most taxpayers, especially SMEs, complaining that filing GST returns is very complicated, GST Network has decided to provide free accounting/billing software to firms that also has the facility to auto-generate the necessary GST reports. The idea is to help SMEs not just file their GST returns but also manage their businesses better in terms of cash management, generating mismatch reports, process their payroll, do inventory management, etc. To do this, GSTN has invited developers to create this software, the best five of which will be uploaded on the GSTN portal, and users will be free to choose which one they wish to use. Developers will not be paid for the software but will bid for each GST return processed using their software—the concept was floated before Infosys Chairman Nandan Nilekani floated the idea of junking the detailed returns in favour of just uploading invoices, so the payment terms will probably need to be tweaked. These costs will be paid by GSTN for the initial two years for which the contract is valid for. In addition to the software, developers will have to provide tech support for users through call centres and email.

So far, nearly 40 companies have submitted proposal to GSTN, an industry source said. The software is required to digitise sales and purchase invoice, automate matching of inward and outward supplies and generate tax liability along with available input tax credit automatically. At the end of the cycle, the software would be able to generate and upload tax returns onto the GSTN portal thus minimizing manual intervention. “It is a step towards automating and digitising return filing processes for those who rely on manual book-keeping,” Prakash Kumar, ceo of GSTN said. He added that the selected developers, which will be the top five lowest bidders, will put their products on GSTN portal for taxpayers to choose among them. To maintain consistency, qualified developers will be asked to match the lowest bid so that all the service providers have the same price.

The government will pay the developers on every successful return filed. The basic software will be free of cost but a taxpayer can avail add-ons for a fee paid directly to the developer. “Once the final modalities of return process is decided, we will make changes in the software requirement but it is too early in the process as the selected developers would be required to put the software on trial for 90 days before its made available for assessees at large,” Kumar said.

Companies like Marg ERP and Tally Solutions already have very similar products which are being used by their clients. An executive at a software firm said that they would need to make only minor tweaks in their products to qualify for GSTN requirements. This could provide an opportunity to acquire new customers, he added. “The government seems to have taken an initiative to bear the cost of using software services on behalf of small taxpayers, which is a practice in many countries” Prakash Maheshwari, national sales manager at Marg ERP said. Several countries including Singapore use this model of providing assessees with free software tools.

GSTN’s effort to create an ecosystem of GST suvidha providers, who would use the application programming interface (API) to provide the link between taxpayers and the portal, hasn’t quite worked due to GSTN’s inability to provide APIs on time, a source said on condition of anonymity. He added that providing free software solutions to small taxpayers was an attempt to fill the void.


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