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No GST returns’ overhaul; input tax credit loopholes to be plugged

No GST returns’ overhaul; input tax credit loopholes to be plugged

The Goods and Services Tax (GST) Council is likely to shelve the plan announced last year to usher in a new format of tax returns and continue with the existing system, with some improvements and modifications to plug loopholes.
The GoM, headed by Bihar deputy chief minister Sushil Modi, met last week and agreed on linking GSTR-1 (outward sales return) and GSTR-3B (monthly summary return), and introducing GSTR-2B document which would provide exact input tax credit (ITC) details to the taxpayers, according to a source.

The group also decided to allow quarterly filing of GSTR-3B for taxpayers below Rs 5-crore turnover threshold, which could be introduced by November. The relaxation for filing GSTR-1 returns once in a quarter is already available to smaller taxpayers.
The linking of two returns –- GSTR-1 and GSTR-3B — will eventually lead to auto-population of GSTR-3B from GSTR-1. This would reduce the liability and ITC mismatch currently reported, and the functionality is expected to come online by the end of this month.

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