Come September, it’s taxing times

Companies will have to file detailed returns for July by Sept 5 and for August by Sept 20

September looks like it is going to be a harrowing time for companies, what with the deadlines for the detailed Goods and Services Tax (GST) returns for July and August falling in that month, along with the deadline for filing the transitional input credit forms, not to mention the fact that many of these companies will also have to file their income tax returns for the quarter ended September.

The government’s decision to push back the deadlines for filing the GST returns was no doubt a good one. With the new indirect tax regime rolling out on July 1, there was no way companies were going to be ready to file returns as early as August 10. Especially not if the GST Network itself was not ready with the requisite infrastructure or paperwork.

Look at it this way. In the run-up to August 20, the deadline for filing the easier, truncated GSTR-3B form, the GST portal went down several times under the pressure of the traffic. Imagine the chaos if companies had to file the more detailed GSTR-1 form, with its requirement of itemised receipts for each transaction. Pushing back the deadline for filing GSTR-1, 2, and 3, to September was therefore a necessity.

Ripple effects

But as with every stop-gap arrangement, the resultant knock-on effects are significant. Just look at what the companies have to go through in September. Companies will now have to file their detailed returns for July by September 5 and for August by September 20.

Now, from the government’s point of view, it has given companies enough time to adjust to the new tax system. And the extra time would indeed have been welcome, but the problem is that the period since GST was introduced has been peppered with clarifications and doubts.

As recently as August 23, two days before the new deadline for filing GSTR-3B, the government clarified the tax rates on the ad space sold by print publications. Some time earlier, it clarified the stance on sweets — whether containing chocolate or not. It has issued several other procedural and rate clarifications.

Companies have not been able to catch their breath enough to become comfortable with the new system. Instead, they’ve been focussing all their energies on being agile enough to adapt to every new clarification and rule change the government has had to make.

Once they are done with filing the returns for August and September, companies then have to turn their attention to the forms for availing transitional input credits. According to the transition credit rules, companies have 90 days from the rollout of GST — that is, September — to file the transitional input tax credit (TRAN) forms.

These forms deal with the inputs companies had purchased prior to the rollout of GST. Filling the forms and availing these transitional credits is a one-time activity, unlike the more regular input tax credits under GST, and so filling the forms correctly is crucial.

On the direct tax side, the deadline for the corporate tax returns for the second quarter of this financial year falls at the end of September. Companies that qualify have to get these returns audited before they can file them, another task that must be completed during the month.

It’s difficult to pin blame here for the sheer load on companies in September, but companies can certainly make life easier for themselves by choosing to file early and not waiting till the last minute. Waiting till the deadline is upon you only increases the likelihood of the portal buckling under the traffic strain, and therefore increases the desperation of companies, come filing time.

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