Goods and Services Tax (GST) return filings have risen from 60 percent almost two years back to over 85 percent now, said V Rama Mathew, Member- Tax policy at the Central Board of Indirect Taxes and Customs (CBIC).

“Two years back, we would be happy if we got 60 percent filings, but now they have risen to over 85 percent GSTR (GST Return) filings,” Mathew said at a post-budget conference, analysing tax-related proposals, organised by the Associated Chambers of Commerce.

Two days ago, the Ministry of Finance, in a statement, said GST collections in January surged to over Rs 1.55 lakh crore, the second highest ever.

“Over the last year, various efforts have been made to increase the tax base and improve compliance. The percentage of filing of GST returns (GSTR-3B) and of the statement of invoices (GSTR-1), till the end of the month, has improved significantly over years,” the ministry said in a statement.

Ease of doing business 

Finance Minister Nirmala Sitharaman, in Budget 2023 presented on February 1, said that to enhance the ease-of-doing-business, more than 39,000 compliances have been reduced, and more than 3,400 legal provisions, which had criminal implications, decriminalised.

Expanding on what the department has tried to attempt via this year’s budget in relation to the indirect tax scheme, Mathew added, “While on the GST side, tax rates are not part of the budget discussion, workflow changes very much are. We have looked at the budget from the perspective of ease of doing business, we have simplified our processes without loss of information and put processes in place; without it being intrusive, we can ensure compliance.”

“Over the last 3 years, we have shifted from enforcement-based activity. We discovered exactly where we were going wrong. We put processes in place so outright fraud is not easy. Our idea is to move towards better compliance,” she added.

The processes to file GST returns have now been simplified and several provisions decriminalised.

“Unless and until something is an actual crime and not a fraud, we have taken away the criminal element of it. So for non-compliance of processes or for people just being difficult, we do not prosecute. We have parallel provisions in IPC (Indian Penal Code) and if someone is being very difficult we will choose that path,” she added.

This has been done in an attempt to ensure that a businessman is not threatened or bullied by anyone, Mathew said.

Offences including obstruction or preventing any officer from discharging his or her duties, tampering with or destruction of material evidence or documents, and failure to supply information required under the law or supplying false information have been decriminalised under the GST law.

Compounding made simpler 

In Budget 2023, Finance Minister Nirmala Sitharaman announced that the compounding amount range is reduced from the present range of 50 percent to 150 percent of tax amount to the range of 25 percent to 100 percent.

Compounding is a monetary compensation or fine that is levied on an individual for committing an offence that may otherwise warrant prosecution.

“The quantum of compounding levies which was prohibitive earlier has been made much easier. This has been done to enable people, who have had tax violations, easily settle the matter,” said Mathew.