The Journey of GST in India is now completing one year and it is the time to analyse the impact of GST on all the stakeholders viz. The Law makers-Government of India, The Taxpaying Public- the dealers and the professionals managing the GST- The Tax Professional, Tax advocates and the CAs.
Goods and service tax was introduced in our Country on 1st. July 2017 and it is a very appreciable and bold step taken by the Govt for the benefit of India economy. The GST was first referred in India in 2006 hence it has to be introduced sooner or Later so the Date of 1st. July 2017 can be considered a proper date because it’s continuous postponement since 2010 were giving wrong signals to all the stakeholders. The procedural problems attached with the GST were inevitable since the reform is big and the country is also very big.
1. A very big and appreciable step by Govt.
2. Taxpayers have cooperated very well.
3. Professionals work very hard to make it viable.
4. Procedures specially return procedures are too hard to follow.
5. Refund procedures are not very smooth and at desired level.
6. Simplification should be the GST motto Now
Overall performance: If not fully successful but still it is satisfactory and it will stay in India for good and future of GST is very bright here.
The pre-GST preparation of our lawmakers was sufficient considering their capacity and the volume of change they introduced. One can no develop a mechanism to ascertain the future technical and practical problems attached to such a big reform before actually implementing it. The efforts of lawmakers were truly appreciable when after implementing the GST they tried very hard to remove the difficulties faced by the taxpayers though for this purpose they have to amend continuously the procedures introduced by them with the introduction of GST. This specific gesture of Lawmakers is the sign of hope for the future of Indian Indirect system GST.
One thing we should mention here that the Govt. Now should work very fast to simplify the return filing procedures because it is accepted by the lawmakers that this system needs simplification. The speed of work towards simplification of Return procedure is very slow which the main cause of concern is. The time taken to remove this hurdle should be curtailed down for ensuring the success of GST.
At this stage we cannot analyze the impact of GST on the revenue because of the effect of earlier credit of Central excise and VAT taken by the dealers and further scores of refunds are still pending but actually, this is the initial stage so ethe ffect of GST on revenue is not a big issue.
The Taxpayers especially the taxpaying dealers have played a big role in this first year of GST though most of them are not agree with the stringent procedures. This is the new tax but the taxpaying public’s determination to follow it was commendable even though the procedures are very hard to follow. This is also a good sign for the future of Indian economy.
Last but not the least the major role in the first year of GST was of Tax professionals, Tax advocates and Chartered accountants who not only understand this complex law but also help the taxpayers to follow it. The life this section of economic society was miserable during the initial stage of introduction of GST. The efforts of Tax professionals, Tax advocates and Chartered Accountants have controlled the initial chaos of the GST.
Now Should be Ahead
The procedures specially the GST Return procedures are very hard to follow and further eway bill and tax payment system also needs simplification. The Late fees provisions are also very harsh. The lawmakers should simplify the procedures because without simplification the desired will not be achieved and in long run the GST will become a burden. Let us study one by one what is now needed in GST:-
1. The GST Return
The lawmakers have accepted that there is a need for simplification of return procedure in GST but they need time for it. The number of dealers in GST is too much and most of them are from small and medium sector so back to back continuous return filing is not viable for them. The tax payment should be monthly and the return filling should be quarterly for all the dealers. The bill to bill details should be replaced by dealer to dealer details of sales and purchases.
There should be only one return in every 3 Months containing the details of sales, Purchases, Input, output credit, tax payable and Tax paid by the dealer. When both seller and Purchaser will file their dealer wise details of sale and Purchases then there will be an automatic system to generate a mismatch List instead of asking every dealer to check the automated purchases and prepare the mismatch List.
The present system of return filing is not working and it is evident from the fact that still GSTR-2 and GSTR-3 are pending for the first Month of GST i.e. July 2017.
Further, the revision and rectification system of GST returns is very confusing and badly structured and it should be replaced by the straightforward and practical revision and rectification system.
2. The Tax Paying System
The tax payment system has many pockets for payment of Tax and if tax is deposited in the wrong pocket then one has to deposit it again and then claim the refund of the wrongly deposited tax. There should be one cash wallet in the Taxpayers’ ledger and out of which tax liability can be settled and this will only require some software updating.
3. The Late Fees
There should not be stringent penal provisions at the initial stage of introduction of such type of tax reform but in GST the provisions of Late fees related to the return filing are too harsh and in some cases, the amount of late fees are much more than the tax liability of the dealer. It should be made reasonable and the maximum limit should not be more than the 10% of the tax liability of the assessee.
The lawmakers should feel obliged the way Taxpayers have accepted the GST then they should repay this with a fine gesture to return the late fees collected from them and further give one more chance to leftover dealers to update their GST returns.
4. The Eway Bill
The eway bill is introduced as a measure to check the tax evasion but the amount of Rs. 50000.00 is too low for it. The trade and Industry have already objected to this lower amount but now many states have shown disagreement to lower amount by giving substantial concessions to their dealers from intra-state Eway bills. The limit should be raised to Rs. 2.00 Lakhs for all and further provisions should be similar in all the states since GST has been publicized as One Nation One Tax”.
5. The Refunds
The refund procedure should be automatic and it should be without human intervention but since whole the scheme which was invented at the initial stage could not be implemented due to its impracticality hence refunds are very slow even though our lawmakers have tried hard by initiating the refund by so many means such as Refund fortnights etc but still the results are not up to the mark. Lots of funds of the exporters are blocked. Human intervention should be avoided and I should be made fully automated. For the success of GST lying in the fact when Refund will automatically be credited to the Bank account of the dealer just like Income tax refund without any human intervention.
6. Tax Rates
There are so many tax rates in GST and I think from in all we have 7 or more rates. This is not according to the basics of the GST and it should be reduced to 2 or 3 rates.
7. The procedural Hazards
Even after one year, the procedures for cancellation, amendment and rectification of Registration are not smooth and the working in this respect cannot be said satisfactory. Helpline in most of the time is helpless and twitter handle has given so many wrong and misleading answers to basic queries of the taxpayers.
The amendment, cancellation in RC should be automatic immediately after uploading the same and the executive officers can take revisionary actions, if required, at any time after that. At present all these procedures are being completed after personally contacting the concerned authority. The applications of amendment, cancellations etc are pending since months and are under process. Here it should be noted that this type of solution were not desired in GST. Corrective measures should be taken immediately in this respect.
GST implementation was the motto of Lawmakers in 2017 and Now GST simplification should be there in 2018.
The author can also be reached at sudhirhalakhandi@gmail.com
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