GST is all about simplifying the complicated maze of the indirect tax structure, rates, administration and compliance requirements. Let us see how GST goes about simplifying the complicated structure which it replaces.
GST simplifies indirect taxes in India by subsuming multiple taxes (about 17) and Cesses levied by Centre and State into one single tax (GST) on goods and services across India. From now on, no tax other than GST will be levied on manufacture, sale, entry or purchase of the goods. The tax system will be simple and easy to comprehend for citizens, manufacturers, traders and service providers. For the taxpayer, GST will be a self-assessment tax. For the consumer, as the value and tax component of the supply will be shown separately in the tax invoice, it will be a totally transparent transaction, with full awareness of the amount of tax being charged for the goods or services being purchased.
Under the pre-GST system, inter-state movement of goods across state borders faced huge bottlenecks. Vehicles carrying goods needed to wait long hours at border check posts to comply with VAT laws of the entry State. Compliance required elaborate paperwork and other procedures. GST will remove these hurdles and ensure seamless and much faster movement of goods across State borders.
The general interface of the taxpayer with the tax authorities will be through the GST portal of GSTN (GST Network). Taxpayer need not go to any tax authority to deal with tax compliance issues under GST. Most of the compliance procedures will be done through online mode only. These include taxpayer registration, return submission, tax payment and refund claims. Timelines are prescribed for every function, be it registration, returns, refunds, assessment etc. Taxpayers need to register online and registration will be granted within 3 days if the proper documents are produced. If nothing is heard from the tax authorities within 3 days, registration will be deemed to have been given. Could it be any simpler?
GST will radically change the way taxpayer reports compliance to tax authorities. It will replace human interface with automated processes. There will be no manual filing of returns under GST. GST will simplify the return filing processes. Customised Apps provided by GSTN and GSPs (GST Suvidha Providers) will enable simple filing of returns which in turn will be auto-generated based on invoice level information provided by the taxpayer. Real time uploading of invoices on the GST portal will also be possible, thereby obviating the need for last minute rush. So the long queues on the last filing dates are now relics of the past.
GST will ensure a hassle-free experience for the taxpayer when it comes to refunds. The taxpayer will not have to face any tax authority for refund claims. Claims need to be filed online and no elaborate documentation is required. Self-declaration is the norm where the refund claim is less than 2 lakhs. Timelines are prescribed for processing of refund. An acknowledgement of the claim will be given within 15 days and admissible claims will be settled within 60 days. In case of delay beyond sixty days, interest will be paid automatically. Refund along with interest if any will be directly credited to the taxpayers’ bank account. In case of exports under IGST paid route, the refund of IGST amount would not even require any application for refund. The shipping bill filed for such export, upon completion of export (filing of EGM) will be treated as a refund claim and system processed by exchange of information between the Customs System and GSTN, for online credit of the refund amount to the account of the exporter. In respect of other exports, provisional refund of 90% of the eligible refund amount will be granted within 7 days from the date of acknowledgement of the claim.
In nutshell, GST will simplify the tax experience by providing the citizens:
1. One tax on supply in place of a complex tax system having multiple taxes
2. Seamless movement of goods across state borders unlike the existing barriers to movement of goods from one State to another.
3. Easy, simplified and online processes of registration, filing of returns, refunds etc. Minimal human interface leading to transparency and prompt decision making.
4. Fixed timelines for every taxpayer request. Authorities have made accountable to take decisions within given timelines. Interest will be paid in cases of delayed refunds (beyond 60days).
5. Zero rating of exports and refund of duty within a week.
We hope this article was useful for you in understanding the ways in which GST simplifies various aspects of tax administration.