INSUBCONTINENT EXCLUSIVE:
By Sachin MenonThe Goods and Services Tax (GST) regime is scheduled to complete a year on July 1, 2018
reason to celebrate the occasion
The reform, which was expected to create utter chaos and uncertainty for at least the next 2 to 3 years, now shows some sign of settling
The credit for this goes to government officers, GST council and to the resilient tax payers of India
It is not that it was a smooth run from day one as it had or still has its share of uncertainties and confusion
But the positivity and speed with which the administrators responded was indeed commendable
The biggest problem the tax payers faced during the transition phase was that the GST Network (GSTN) could not keep up with the speed at
With the world watching, the Indian industry once again proved its resilience to change, by successfully adopting such a complicated tax
regime in a short period of time.
The single most important achievement of the GST was the abolition of multiple taxes and bringing in a
uniform indirect tax law across India
This considerably reduced corruption and closed avenues for generating black money, thereby resulting in an assured and seamless credit
flow, with check posts disappearing and the tax payer base crossing 1 crore
The industry too responded positively with revenues crossing Rs 1 lakh crore in April 2018
The GST also ensured a seamless credit and contributed immensely to the ease of doing business though at the cost of a relatively
complicated compliance requirement
That said, maybe that is the cost we have to pay to usher in a paperless, digital compliance regime
Additionally, the government made sure that the communication was quick and thanks to social media platforms and timely notifications via
press releases along with FAQs, the process was smooth and transparent.
Moving on, the initial response to the compliance platform designed
by GSTN was that it was too complicated
Also the initial hiccups in the GSTN portal added fuel to the fire
The hue and cry generated knee-jerk reactions from the government and in an effort to assuage tax payers, GSTR 2 and GSTR 3 was suspended
and replaced by GSTR 3B, with the government promising further simplification of returns and eliminating the invoice matching requirement in
Meanwhile, the industry too developed a comfort with the present system and has gradually started realising that the matching concept of
purchase and sales invoices would be beneficial and protect them from future disputes and penalties
Later, as demanded by the industry, the GST council sought to work on alternative compliance models
But now, many tax payers have a change of heart and now feel that instead of changing the compliance model immediately, it would be prudent
to wait and watch till annual returns are filed and wait to introduce the alternative model later, if required.
Talking of other challenges,
some of them are yet to be fully addressed, which include transitional credit, job work arrangements, GST export refunds, reverse charge on
An the onset, it seems the lack of anti-profiteering methodology or guidelines are not deterring the anti-profiteering authorities from
deciding the complaints filed before them
One of the burning issues requiring attention is the threat of multiple advance ruling authorities issuing advance rulings on the same issue
which are contrary to each other
The need is a credible mechanism which ideally shall be a centralised advance ruling authority with regional benches, where no interested
party shall be nominated as jury.
Apart from the above, there are several points in the unfinished agenda, which the GST Council need to
performance based place of supply
Also, there are anomalies in rate structure
Petroleum products are yet to be brought under the GST
The industry cannot change their accounting software frequently and the council needs to give certainty regarding the GST return
formats.
Everyone appreciates that it is not a mean achievement to successfully introduce unified GST in a large federal country like India
Even more challenging is to introduce a paperless digital compliance and tracking system through e-returns and e-way bills successfully
Despite all odds, the Indian GST administration and the tax payers have proved that we can do it!
