Ministry of Finance intents to roll out pre-filled GST return form ahead of next fiscal year

The ministry of finance is aiming to roll out pre-filled goods and services tax (GST) return forms before the next fiscal year, which is expected to resolve the issue of huge data mismatches leading to tax notices, a senior government official said.

The department is currently analysing the additional cost of augmenting the digital infrastructure to prevent the system from slowing down or crashing due to culling data from different databases.

“The pre-filled consolidated GST return form is a work in progress. It can be done before the next fiscal. We have a huge problem of data mismatches, which leads to an increasing number of unnecessary demand notices, etc. The pre-filled GST returns will prevent mismatches apart from providing ease of doing business. We are using multiple templates for it,” the official told Moneycontrol.

The automated scrutiny module for GST returns sends notices to assessees where the data mismatch is over 20 percent using data analytics and risks identified by the system.

The Central Board of Direct Taxes (CBDT) has used a similar pre-filled template for income tax return forms for a couple of years.

The Central Board of Indirect Taxes and Customs (CBIC) is currently analysing the technological requirement and upgrade needed and is debating the additional cost impact vis-a-vis the slowdown of processes.

“The finance ministry needs to define what the ask will be technologically for digital infrastructure and processes, how much it will slow down the system and response time as we automate more. If we are pulling out data from different databases and populating, there is a process, which will consume time and processing space. How much will it impact? If we don’t want it to slow down, additional infrastructure needs to be put in place for design and internal processes. What is acceptable as additional cost versus the benefit is a commercial question being debated,” he said.

Initially, a pilot will test how the pre-filled GST return form will work and how much time it will take.

“It’s a matter of taxpayers’ convenience, so GST Council approval is not needed to go ahead with it,” the official said.