The recent changes to GST return filing rules, as per Notification No. 12/2024 – Central Tax, dated July 10, 2024, are set to simplify the tax filing process for businesses and enhance transparency. Experts believe these reforms will help both taxpayers and the government by improving traceability and reducing errors. The key changes include the reporting of high-value transactions, mandatory validation of bank accounts for GST registration, and allowing the reporting of negative liability, which can be carried forward to the next month’s return.
Starting in September, taxpayers must adapt to these new filing practices. One tax expert commented, "The recent GST return reforms are a positive development. The revised thresholds, bank account validation, and negative liability reporting will enhance accuracy and efficiency. Businesses should ensure compliance by updating their bank account details before filing the August GST return to avoid disruptions."
The new rules not only simplify processes but also automate certain aspects of return filing. Another expert stated, “The reforms make reporting smoother for taxpayers and improve traceability for the government.”
One of the significant changes is the reduction in the threshold for reporting inter-state taxable outward supplies to unregistered dealers. The limit for invoice-wise reporting has been lowered from Rs 2.5 lakh to Rs 1 lakh, increasing the granularity of transactions. This, according to experts, will lead to greater transparency and improve tax compliance.
In addition to high-value transaction reporting, the new rules mandate bank account validation before filing Form GSTR-1. This will ensure that taxpayer records are accurate and help facilitate smoother processing of refunds and credits.
A key feature of the reforms is the introduction of negative liability reporting in the GSTR-3B form. Taxpayers can now report negative liability, which will be automatically carried forward to the next month’s return. This adjustment means taxpayers no longer need to manually track negative liability, reducing the chances of record-keeping errors.
An expert explained, "Previously, taxpayers had to maintain records of negative liability adjustments, which led to mismatches across returns. The new format eliminates these discrepancies, reducing the need for communication from tax authorities regarding inconsistencies."
The reforms come at a time when GST collections continue to rise. In August, GST collections reached Rs 1.75 lakh crore, marking a 10% increase year-on-year. With the festival season approaching, experts predict further growth in consumption, which could push collections even higher in the coming months.
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