Form GSTR-3B is a summary return inserted by Government in lieu of Form – GSTR-3. This Form was introduced as stop-gap arrangement to collect tax from the taxpayer. As all the periodical monthly returns were delayed and taxpayers were not able to understand and file the returns on time, Government came out with this temporary solution to introduce Form-3B and started collecting the tax. This return was not drafted at the time of making the GST Act but it came as by-product of intricacies found in other GST Returns such as GSTR-1, GSTR-2 and GSTR-3 .
I wouldn’t say that GSTR-3B is a poorly drafted return and it is full of deficiency because the intention of the government was to smoothly implement GST with minimum disturbance given to taxpayers. With a country which is highly populated like ours, it’s common sense that any new reform would give some bitterness at the beginning. But people forget to for see the ripened fruits which GST would give in the long run. Yes, not everything with GST is right, but flaws are known only when it is put to field for test. Here alone the Government missed out to score complete marks in GST for me.
When I started interacting with GSTN and returns, I found one particular thing with GSTR 3B to be somewhat disturbing – once the “submit” button in the return is clicked, one cannot make any changes thereafter and also the “Payment of tax” section of the return is made visible only after the submission of the return. It means that on submission you agree for the amount of GST liability to be paid by you and no further changes could be made from here on. Or we could also say that revision of the return is no more possible in GST regime. But in earlier taxation laws we were able to revise the returns. Let us take a tour of changes made in provisions related to GSTR-3B return.
Tour of Changes in Form GSTR-3B return
|Notification No.||Scheduled Changes|
|Notification No. 21 dated 08.08.2017|
|Notification no. 23 dated 17.08.2017|
|Notification no. 24 dated 21.08.2017|
|Notification no. 35 dated 15.09.2017|
|GST council meeting dated 10.11.2017|
Plain reading of the above changes clears the anomaly of the Government that this temporary return was adopted as a tool for collecting the payment because normal return GSTR-1,2,and 3 could not have been filed because of the deferment of due dates. So where did the government go wrong?
We could tell that it is has something to do with the planning. But one cannot say that because of lack of planning alone we faced these difficulties in GST implementation as there were other factors as well which were not perceived by the law makers and GST Network team like Heavy load on GST network, absence of awareness or knowledge camp on GST, absence of free GST Seva Kendra’s which could assist and file return of taxpayers at least in the initial stages, and so on.
Time to clear the rumor that GSTR-3B Form not just came out from nowhere and it was not meant to be as revenge mechanism to burden honest tax payers as haters of GST say. Instead while drafting the law the government already calculated the risk and confusions which taxpayers will experience with the detailed returns in Form of GSTR-1, GSTR-2 and GSTR-3 at the beginning stages of GST.
Want to know how GSTR 3B was made part of the GST law from the inception of GST itself? Then read the following line: “that where the time limit for furnishing the return GSTR-1 and GSTR-2 mentioned in section 37 and Section -38 respectively is extended and the circumstances so warrant, the commissioner may by notification specify the manner and condition subject to which Form GSTR-3B can be filed.” This is there in CGST rules 2017. Why would government choose to punish taxpayers by burdening them? Instead it is at the receiving end where the risk load is high. Would any one who does business mistreat his client when he would have to receive trade receivables from him on a later date? Likewise, why would the government mistreat its taxpayers as it has to collect taxes from them at a later point.
Hence GSTR-3B was a lifesaver introduced by Government by making appropriate adjustments in GST rules just to comfort the taxpayers and to give them time to understand the new taxation law. It has to be also understood here from reading the above CGST rules (quoted in inverted commas) along with Notification no. 35 dated 15.09.2017 and from the outcome of GST Council Meeting dated 10.11.2017 clause that where the time limit for furnishing the return GSTR-1 and GSTR-2 is extended and circumstances so warrant, it is needless to mention that none of the above said returns will be filed on due dates as drafted in GST law till 31.3.2018.
Difficulties which Taxpayers at large associate face with GSTR3B return and what they are missing to see :
|Areas of Difficulties||Reasons taxpayers give||What they miss to see and misunderstand often|
Provision of Quarterly Return to be filed by small and medium businesses and the strings it has got associated with GSTR-3B Form :
Reading out the Contents from GST council Meeting held on 06.10.2017 To facilitate the ease of payment and return filing for small and medium businesses with annual aggregate turnover up to Rs. 1.5 crore, it has been decided that such taxpayers shall be required to file quarterly returns in FORM GSTR-1,2 & 3 and pay taxes only on a quarterly basis, starting from the Third Quarter of this Financial Year i.e. October-December 2017. The registered buyers from such small taxpayers would be eligible to avail ITC on a monthly basis. The due dates for filing the quarterly returns for such taxpayers shall be announced in due course. But for time being, all taxpayers will be required to file FORM GSTR-3B on a monthly basis till December 2017. All taxpayers are also required to file FORM GSTR-1, 2 & 3 for the months of July, August and September 2017. We knew that the due dates for filing the returns for the month of July, 2017 have already been announced. The due dates for the months of August and September 2017 will be announced in due course.
But again a notification came which showed that Government was not ready with its think-tank working on it. In the GST council meeting held on 10.11.2017, Form-3B stood to be extended till March 2018. When the due dates of GSTR-1, 2 and 3 for small & medium business have been made on quarterly basis from third quarter i.e. October to December, 2017, and due dates for the above three return shall be 10.01.2018, 15.01.2018 and 20.1.2018, this clearly hints that GSTR-3B Form in these cases cannot be filed as due date is yet to be approached and it cannot be presumed to be extended as on date which has not fallen due. As per Rule 61 of the CGST Rules 2017, it clearly state that when due dates of GSTR -1 and 2 extends, only Form-3B need to be filed.
Moreover, payment in case of quarterly return shall be on quarterly basis, meaning for the quarter ‘October to December 2017’, the payment shall be due on 20.1.2018. If GSTR-3B Form is to be filed by all taxpayers including the quarterly taxpayer, this means that one needs to pay the taxes on monthly basis. This is totally contradictory to provision of GST Act and rules thereof.
The fangs of fire which arose from the GST Council meeting held on 10 November 2017 has the potential to destroy the basic pillar stone of GST – “Matching Concept under GST” Once small and medium business start filing returns on quarterly basis, how can GSTR-2 be auto-drafter? Registered person buying from a small dealer cannot match returns as a small dealer will file their return on quarterly basis. One registered person files return on monthly basis and other files on quarterly basis. In such situation, where does the matching concept stand and how will GSTR-2A be created? The basic stupa on which GST concept was drafted will be in loop and basic fundamental concept behind the GST will collapse.
Conclusion : Seeing the ambiguity in the decisions which could be gauged from the frequent changes that has taken place in a month’s time, the efforts put in by Government in presenting the clear picture of GST is fading away from the minds of public and taxpayers. People are now in confusion about their stand on GST which was welcomed by majority of them. Soon, Government has to come up with major overhauling activities and protect its pillars on which GST is constructed and to clearly make a statement to taxpayers and public at large about its firmness. They also need to assure them that they would walk with them in times of turbulence such as this. Activity of gaining knowledge never stops once it builds within you, and the accounting softwares in India helps you polish that knowledge further.