3 Months with GST, Where does India Stand Today?
GST is not just a tax reform, it's a technological reform
It is now surely a non-debatable fact that GST is the largest tax reform in the country post Independence. The major benefits, which have been highlighted with GST time and again are the subsuming of multiple state and central-level taxes into one regime, easing of compliances, seamless flow of Input Tax credits, mitigation of cascading effect of taxation and possible reduction in tax rates for the majority of goods and services.
We consider GST as ‘not just a tax reform, but more as a technological reform’. GST through GSTN has welcomed a whole unlike perspective of working of governmental portals. GSTN introduced open-headed architecture to allow distributed flow of returns and also innovations from private sectors. GSTN chairman quoted that during the filing due dates for GSTR-3B, around 80,000 returns were being filed onto the GSTN portal. With such vast reform in implementation, the challenges in its roll-out and implementation is bound to be present. While GST was rolled out on the 1st of July, 2017 with all the enthusiasm and pomp, the coming days to the roll-out anticipated certain teething issues.
Awareness on GST
With the pre-fixed due dates nearing in July, GST faced some challenges with the infrastructure and awareness. To spread the awareness on GST in the industry, the government and the CBEC have proactively engaged for smoother transition into GST.
The issues of compliances for Indian businesses have been addressed through workshops, GST awareness programmes, CBEC Mitra Helpdesk, Seva Kendra and many other such initiatives. The interactive and user friendly website of the GST Portal also has provided detailed user manuals, FAQs to make tax payers familiar with all GST related compliances and returns. In addition to this, tax payers are informed about important announcements and activities and get their queries solved through the official social media channels.
These months also saw the overflow of queries from the traders and manufacturers on the stock lying with them from the pre-GST period and some other queries on the transitional credits. Amid all questions and confusions, the government came up with clear clarifications on such queries and also bequeathed the tax payers an option to carry forward tax or duty under any existing law or on goods held in stock as on 30th June, 2017, to the GST through the transitional forms. The due date to file TRAN 1 has been now extended to 31stOctober, 2017 and the tax payers have also been given an option of one time revision to such return in case of any errors or omissions.
Registration and Invoicing
GST strengthens tax compliance through reconciliation and authentication of invoices and would reduce the possibility of back-dating invoices and fraudulent tax credits.
The lower tax burden coupled with Input Tax Credit is purported to reduce cost of materials and logistics and boost the economy. The effective implementation of GST lies now in the accuracy of Invoices. While on one-hand we saw businesses modifying their Invoice formats to be compliant with GST, the registration under GST, which has been made fully digital and transparent, also was welcomed.
So far approximately 7 million businesses have migrated into GST with additional 2.5 million fresh Registrations. While GSTN has now enabled through its portal the amendment in core and non-core fields filled in by the registered companies, cancellation of registration for those units voluntarily registered under GST still remains an unanswered questions.
These months saw extensive support from the government in extension of due dates. However, these extension of due dates, over and again have also lead to confusion amongst the Tax payers of the due dates against the month for which the returns have to be filed. The due dates for the month of July have been extended till Oct 10, Oct 31 and Nov 10 respectively to enable tax payers to file their returns with ease.So far 50 lakh tax payers filed July GSTR 3B and 31 lakh filed July GSTR 1 and 24.33 Crore invoices got uploaded in the GSTN Portal. To cater such extensive filing mechanism, it is evident GSTN requires few more months to settle in. However, the major test for GSTN would be the filings for GSTR-2A wherein we see many challenges with the pull and push of data for the filings.
Completion of three months into GST, was welcomed with a recently held 22nd Council Meeting of GST, where we see numerous relaxations packed for the tax payers. Such relaxations shall surely be a welcome move of the Government and make the campaign of having GST as a Good and Simple tax stronger!