Gujarat Tops in GST Filing Compliance at 95%, HP, Tamil Nadu, UP, Others Also Lead, While Arunachal, Manipur Lag Behind

By: Admin July 16, 2024 Categories: GST Recent News

More than 90% of registered businesses in states like Gujarat, Rajasthan, Punjab, Uttar Pradesh, and Himachal Pradesh have filed monthly tax returns, according to official data. This has positioned these states at the top of the list for GST compliance, while some northeastern states lag behind.

Key Highlights:

  • Top Performers: Gujarat leads the nation in GST return filing compliance, with 95% of businesses meeting the requirement of filing monthly tax returns through Form 3B by the end of May for the current fiscal year. Other high-compliance states include Himachal Pradesh, Tamil Nadu, Uttar Pradesh, Punjab, Haryana, Delhi, Rajasthan, and West Bengal, all reporting more than 90% compliance.
  • Form 3B: This form is a summary of all monthly transactions by a business or individual service provider.
  • Lagging States: In contrast, northeastern states such as Arunachal Pradesh and Manipur have reported lower compliance rates at 74% and nearly 77%, respectively. The Andaman and Nicobar Islands reported nearly 80% compliance.
  • Union Territories: Jammu and Kashmir, and Chandigarh have also shown over 90% compliance in return filing.
  • Late Filings: Data indicates that 8-18% of taxpayers in all states and union territories filed returns after the due date.

Significance of Compliance:

Tax return filing compliance is crucial as it reflects the efficiency of the tax collection system, impacting the total tax collected. The Finance Commissions consider states’ tax efforts when determining the formula for distributing the central government’s tax revenue, rewarding states with better tax performance and efficiency.

Challenges and Solutions:

Improving compliance in regions with lower rates, such as Arunachal Pradesh, Manipur, and the Andaman and Nicobar Islands, requires a multi-faceted approach. Experts suggest:

  • Incentives: Offering incentives for early filing, such as discounts on penalties or rebates on future filings, to motivate businesses.
  • Penalties: Implementing stricter penalties for late or non-filing to deter delays, ensuring they are substantial yet fair.
  • Audits and Inspections: Conducting regular audits and identifying habitual defaulters to enforce compliance.
  • Communication: Clearly communicating these measures to businesses to stress the importance of timely filings.

Enhancing Infrastructure:

To facilitate easier online filing, especially in remote areas, there is a need to improve digital literacy, connectivity, and infrastructure.

GST Taxpayer Statistics:

There are 14.6 million registered GST taxpayers, some of whom file quarterly returns designed for small businesses. However, many small businesses remain unregistered for GST, with over 60 million un-incorporated, non-agriculture micro, small, and medium enterprises forming a large informal sector in the country.

GSTCompliance #Gujarat #TaxFiling #Form3B #NorthEasternStates #DigitalIndia #FinanceCommission #TaxIncentives #BusinessCompliance

Share on Facebook Share on Twitter