The three changes announced in the GST return filing rules, per the recent notification, will help streamline the tax filing process for taxpayers, increase transparency and also better traceability for the government, said experts. The new rules include adjustments to the reporting of high-value transactions, validation of bank accounts in GST registration, and allowing the reporting of negative liability which will be carried forward to next month’s return.
Taxpayers will need to adjust to the GST return filing practices starting September. An expert said, “The recent GST return reforms are a positive development that can streamline the tax filing process. The revised thresholds, bank account validation, and negative liability reporting will improve accuracy and efficiency. However, businesses should carefully review the specific implications of these changes and take necessary actions, such as updating their bank account details before filing the August GST return, to ensure compliance and avoid any disruptions.”
Another expert said, “The new rules simplify reporting and automate certain processes, which will help provide smoother reporting for taxpayers and better traceability for the government.”
One of the advisories by the Government following the recent amendment under Notification No. 12/2024 – Central Tax, dated 10th July 2024, is the reduction in the threshold limit for reporting inter-state taxable outward supplies to unregistered dealers. The limit for reporting invoice-wise details of such supplies was reduced from Rs 2.5 lakh to Rs 1 lakh. An tax expert said, this means transactions will now need to be reported at a more granular level, increasing transparency in reporting. Further, he added, “Taxpayers are now required to update their bank account details before they can file Form GSTR-1, ensuring the accuracy of records and facilitating smoother processing of refunds and credits.”
Besides announcements on reporting of high-value transactions, validation of bank accounts, one of the key changes is negative liability reporting. In the new GSTR-3B form, taxpayers can now report negative liability under Table No 3, which will automatically be carried forward to the following month’s return. According to this announcement, if a taxpayer’s liability in a month is less than zero (negative), the value can be carried forward and adjusted against the liability in the following month, so that taxpayers do not have to manually maintain records of such adjustments.
Another tax expert said, “The format of return in form GSTR 3B has been changed to allow disclosure of the adjustment of negative values, which was not permitted earlier. The Government had previously clarified that in case of carry forward of negative values, the taxpayers can adjust it in the subsequent return and disclose only net values. However, the taxpayers had to maintain records about the adjustments. Such a disclosure of net values also led to the mismatches between the values disclosed in multiple returns of taxpayers, causing the tax authorities to send communications to taxpayers, asking to explain the differences. The amendment would help in reducing the recordkeeping and number of mismatch notices.”
Earlier, data released by the finance ministry showed that GST collections in August increased by 10 per cent on-year to Rs 1.75 lakh crore, indicating that consumption is robust and will only improve further in the coming festival months. The GST collections in July stood at Rs 1.82 lakh crore, up 10.3 per cent on-year. With Rs 24,460 crore refunds issued during August, the net collections for the month came in at Rs 1.5 lakh crore, up 6 per cent from the year-ago month.
