Bengaluru: Nandan Nilekani seems to have dazzled the Goods and Services Tax (GST) Council members across ideologies.
After his presentation on a simpler way to file tax returns in the Council meeting on Thursday, even Kerala finance minister Thomas Isaac, who is usually at loggerheads with the center in the Council, was all praises for Nilekani.
“Honestly, I like Nandan Nilekani. Clear and simple presentation. My only doubt is, why couldn’t the government talk and bring in this chap since the beginning?” Isaac posted on Facebook, in Malayalam, later in the night after the meeting.
Mint reported on Thursday that Nilekani proposed to simplify the current process of complex return filing operations. Though a final decision is yet to be taken on the revamp of the return filing process, the GST Council is thinking of doing away with forms such as GSTR-2, dealing with purchases, and GSTR-3, a comprehensive return, the report said.
Instead, the existing simpler summary return form GSTR-3B will continue, which will be supplemented with details from invoices to be uploaded by suppliers on the GST Network (GSTN). This will enable invoice matching and check tax evasion.
“Nilekani’s solution is a remarkably simple,” Isaac wrote, “Nobody has to file returns (as they are doing now). Instead every trader can send his sales invoice daily or weekly. Only if he upload and show the sales the one who bought from him will get the input credit. If he doesn’t upload, nobody will buy from him, since they won’t be getting any input credit from the purchase. In this manner, the computer itself will generate the return looking at the sales and purchase figures.”
“I support Nilekani’s idea, but have asked for a week’s time to think since this will involve everything we have been saying and doing so far,” he said.
“Only traders with more than Rs1.5 crore turnover has to file detailed returns currently. Kerala would have such 40,000 people. Almost half of them are using computer bills. For the rest, the government could give interest-free loans for computerization. It’ll make tax collection easier and curb leakage significantly,” added Isaac.
However, Isaac didn’t hide his displeasure with the center for coming up with the idea to make simpler the returns filing process, the foundation behind tax collection at states, only seven months after the GST rollout. “The returns are shrinking (affecting the state finance)... last month not even 60% filed returns,” he said.