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Around 3.94 million Indians filled the Goods and Services Tax (GST) returns for the month of September, a marginal increase from last month's 3.76 million, but the figures are less than what was expected by the officials.

However, the government has not revealed the amount of tax collected in September.

On the last day of filing returns for the month of September, a little less the a million GST returns were filed, an official from GST Network (GSTN) told Mint.

The point of concern is the number of returns filed. Last month, the Union Finance Ministry had said that an upward of 6.5 million assesses were expected to file GST returns for the month of September. Going by the expectations, the number of returns actually filed is almost half of the desired number.

Worried with the less than expected level of compliance, the central government has already asked states to find out possible reasons, reported the business daily.

"GST compliance level is still unexpectedly at about 50 percent. A large number of assesses may not be required to file the returns as they would either be making tax exempted supplies or may be covered under the reverse charge mechanism under which their customers have to report transactions," said Abhishek Rastogi, partner at law firm Khaitan & Co.

Another possible reason could be that a section of the registered GST assesses, who were automatically migrated into the new indirect tax system from the earlier tax regime, may not have enough annual sales to file GST returns.

As the country's retail sector is facing major headwinds with the GST implementation, as sales shrunk as much as 36 percent, ahead of Diwali festivities.

Moreover, the Reserve Bank of India's (RBI) Consumer Confidence Survey for September 2017, released in the first week of October revealed that "The Current Situation Index (CSI) slipped further into the pessimistic zone, reflecting deterioration in sentiments on the employment scenario, the price level and income."

Filing numbers in the following months will come down further, as the GST Council on October 6, eased tax rules for small and medium-sized companies. The council said that small businesses would be allowed to file tax returns once a quarter instead of every month.