GST filing made simple, consultants helping companies file returns now witnessing drop in business

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GST filing made simple, consultants helping companies file returns now witnessing drop in business

Business entities now find it easier to file their own tax returns.

The government's decision to reduce the frequency of filing GST returns and simplify compliance for businesses has led to a sharp drop in the demand for GST suvidha providers (GSPs) and assisted suvidha providers (AGSPs).

While the move has brought cheer to the industry, a number of GSPs, many of whom are startups, say the policy changes have led to a sudden decline in business and earnings for them.

"With the government allowing quarterly filing of returns for small businesses instead of the monthly system earlier, our business has come down significantly. Further, the government has suspended GSTR-2 and GSTR-3," said Himanshu Jain, founder of startup LegalRaasta.

Most taxpayers used GSP and ASP solutions for these two forms because of their complexity and require software to do returns filing. Till March, it is unlikely anybody would use a GSP solution," he added.


In its meeting on November 10, the GST Council relaxed filing norms by suspending GSTR-2 and GSTR-3 forms till March 2018. It said all businesses have to file only the simplified GSTR-3B for the July-March 2018 period.

Additionally, companies with a turnover of up to Rs 1.5 crore a year have to file GSTR-1 forms once every quarter, whereas firms with over Rs 1.5 crore turnovers will have to file monthly returns.

"Most of the GSP systems are currently not functioning and it surely implies there will be no demand for ASPs. The businesses prefer to directly access the GST Network site for filing the returns," said GST Star cofounder and director Shailesh Kumar Agrawal.

GSPs and AGSPs are government-approved channels for taxpayers to file GST returns. They are alternatives to the government's GST Network site, which has crashed multiple times under the load of 80 lakh taxpayers.

"Since businesses can fill out GSTR-1 on their own using the government's GST Network site, a lot of the companies who have a contract with us are asking for a refund," said Jain.

"Of the 850 large clients the firm has, 150-200 are asking for returns. The larger ones have paid Rs 2-3 lakh each for a contract with us," he added.

Infosys-backed GST Star is also looking at retaining existing clients and not taking on any new ones for the time being.

"Currently, the system is too dynamic and the GSPs are unable to provide their services. In such a situation, it does become difficult for us to answer and manage our customers," said Agrawal. Taxpayers are taking a step back, he added, without quantifying the impact on business.

ClearTax is also focusing on GSTR-1 and GSTR-3B filing for all businesses. "We will prepare according to the needs for the next six months and take it from there," said CEO Archit Gupta.

The firms also expect the demand to remain muted till March, and maybe even beyond that depending on when GSTR-2 and GSTR-3 are reinstated.

The GST Council had said a government panel will look into the filing of the two forms.

"We had a forecast a turnover of Rs 20-25 crore from GST. It has hardly translated into Rs 5-6 crore," said LegalRaasta's Jain.

The company, which also provides accounting software, expects GST-related turnover to come down to 5 per cent compared to the estimated 15 per cent," said Gupta.