Pune: In light of the unpreparedness of many traders and businesses in filing of returns under the Goods and Services Tax (GST) regime, the extension announced by the GST Council during the 21st council meet was much needed. The GST Council has pushed forward the deadline for the filing of all three returns - forms GSTR-1, GSTR-2 and GSTR-3 for the month of July to October-November.
This is the third extension provided by the GST Council as people remained unprepared. GST expert from GST Suvidha Provider (GSP) Vayana Network, Sanjay Phadke said, “The extension was required as a lot of tax payers are not ready to file the returns. Even the mechanisms to file returns under the GST Network (GSTN) were not fully ready.
The decision to extend the filing date along with enabling amendments to the errors during filing has allowed the smaller tax payers to adapt. We hope that people will be ready and file the returns within this additional time provided to them,” he explained.
The deadline for filing of Form GSTR-1 has been extended to October 10 from September 10, the returns under Form GSTR-2 can be filed until October 31 while GSTR-3 can be filed till November 10. The deadline for filing of summary returns under form GSTR-3B has also been extended for four months, till December 2017.
Phadke said that once the returns are filed, many companies will have to take up the laborious task of making reconciliations as it is generally noticed that there are 20 per cent discrepancies between invoices of buyers and sellers.
“In all situations it has been noticed that there are about 20 per cent mismatches in invoices generated by buyers and sellers which engage in multiple transactions. These discrepancies will come out when the GSTR-2 returns are filed,” he explained.
According to Phadke, people will have to engage in reconciliations and they will have to resolve the mismatches. “It is going to be a laborious task and companies will need a system in place for the same.”
“For example, if a company generates one lakh invoices, with 20 per cent discrepancies, they will have 20,000 mis-matched invoices. Manually making all these reconciliations will be difficult and having a system in place will be a necessity,” Phadke explained.
Sources stated that the extension provided for the filing of returns is also an opportunity to file accurate returns which will lead to minimum discrepancies when the GSTR-3 returns are auto-populated by GSTN.