Concept of GST was proposed by Atal Bihari Vajpayee government in 2000, but it took nearly 17 years for GST to come into existence. Major task to bring constitutional amendment and put majority of states on one table was easy for the lawyer turned Finance Minister Arun Jaitely and team of his experienced bureaucrats. Further the indomitable desire of Modi government to bring all the Indian Indirect Taxes under one umbrella, brings GST into existence.  When government was keen to bring it in 2017 – everybody have its own prediction – somebody says it will come in July, some says it will come after September and some says it will not come in FY 2017-18 at all. But when there is a will – there is a way. Without failing and waiting for anything else – FM Arun Jaitely announced GST implementation in country from 01st July, 2017.

Ah…1st July, 2017 – Are we prepared? – this was on the mouth of every person connected to GST be it consultants i.e. CA/CS/CMA/Advocates, media, tax practitioners etc. Even in a muffled voice, GST department formerly known as Service Tax / Central Excise / VAT department etc. also show their concern towards preparedness towards GST by government of India.

But nobody can do anything – we must go with the flow. It is the order of the king and public must follow it. Then the era of transformation starts – GST begins. It started with change in mindset – it was time to perform and put ourselves into action. And the most awaited journey begins – well the tasks are to understand the GST law and GST Portal and making the clients, staff and all concerned people aware about it in the form of trainings, presentations, discussions etc.

3 Years of GST

Transition into GST starts – Changing in IT systems, accounting systems, documentation changes, mindset change and putting compliances into effect with most importantly put ourselves into shoes of GST. This mammoth task doesn’t stop there…because One Nation and One Tax is not a single tax it has three taxes in it and state level registrations along with multiple returns on month to month basis. It was not as easy as it was promised by the government and why it can be as it is the combination of 17 types of indirect taxes including cesses.

In the doldrums and hiccups – somehow adaptability for GST went into a great pace. Excitement and curiosity towards learning more and more about GST is never ending. Transition towards GST was very adventurous. It was like a ride on roll coaster ride. Mid-Night changes in GST law put strains on foreheads of consultants. There is no doubt to say that amendments and clarification in GST law through circulars, notifications and removal of difficulty orders are bigger than GST law itself in terms of volume. If we compile all in a book format – than amendment booklet is more voluminous than main GST law itself.

If I talk about initial days of GST – Transition to GST was not that much easy – In every aspect there were some issues – Be it Returns, Refunds, Export Compliances, Payments almost in every aspect of GST. But what is GST exactly – Great and Simple Tax  – yes it is but with some exceptions like multiple and complex returns with no option of amendment, complicated procedures like maintaining of so many kinds of vouchers, three tax heads in so called one nation one tax, most importantly refund procedures – game of Debit, Credit and Re-credit, Jurisdictional Issues, GST portal capacity, GST portal technical glitches, absurd and vague advance rulings , Reverse Charge Mechanism – Notified and Unregistered RCM, it would be injustice – if I will not write about late fees – sword of late fees is always there on the heads of taxpayer etc. If anything remains after these exceptions – that is great and simple in GST?

Indian GST missed the track of Great and Simplicity from very beginning but fortunately now it is coming on right track slowly and gradually. Spirit of government to bring GST into existence was awesome -with a good intention of bringing uniformity and removing cascading effect in Indirect Taxation in India. Government is committed to make it more practicable and truer in its spirits. If I talk about its positive aspects in terms of transition – Yes it removes the absurdity which were there in earlier Indirect Taxes which is evident from GST provisions related to E-Commerce sector, Digital Services, Logistics etc. In consultancy – We say – If you are in GST, keep evolving.  GST law is in true means to strengthen the backbone of Indian economy.

Strengths of GST

If I talk about strengths of GST, these are two Ts – Technology and Transparency

1. It is Technology based which makes taxpayers punctual and accurate in their approach. Technology has no mercy – even for a single day delay- late -taxpayer have to pay fine and that is too system generated. Through data analytics and data checks – it pin-point a nicety mistake. Its robust checks and balances are nightmare to tax evaders.

It is due to technology government was able to burst the racket of bogus billings in India and get the legitimate due of taxes.

Minimal human intervention is good for overall tax system – filing of online and paperless GST refunds sanctioning & disbursement on click of mouse by GST officer is an example of how technology is making life easier. Practitioners and Industries faced a lot of heat in getting Indirect Taxes refund in earlier regime which is much easier and perfect in GST. Most importantly the system is evolving and improving. New practices and methodology taking GST towards simplicity and ease.

Everything is paperless and system-driven in GST. If somebody doesn’t file its return for continuous six months – system automatically flash it and send notice to taxpayer directly. Everything is on click of mouse – starting from taking registration in GST to surrender / cancellation of registration and in between – appeals, refunds, show-cause notices, replies, return filings, other compliances – everything is online. No need to visit the department. Businessman and consultants can devote their time in productive things.

2. Transparency – That’s the beauty of GST. Everything you can track online on GST Portal be it supplies shown by your supplier or not through GSTR-2A and status of your registration application, refund application etc. Everything is transparent – Audit trail is present for everything.

One of the best examples of transparency in GST portal is that one can get basic information about a person by knowing its PAN or GSTIN – only by putting PAN or GSTIN number in the option –“Know the Taxpayer”  he know about its total number of registrations, basic profile and return filing details.

Absurd provisions of GST which are snatching rights of taxpayers

Some absurd provisions of GST which are snatching the rights of taxpayers needs to address urgently: –

1. How can refund of ITC be restricted to the supplies reflecting in GSTR-2A? Is ITC which is not reflecting in GSTR-2A is not the legitimate credit. There can be so many reasons for non-reflection in GSTR-2A?

2. On what logic ITC availment is restricted upto 110% of supplies reflecting in GSTR-2A? Why should a taxpayer be suffered because of its supplier default?

3. On what basis ITC is not available on the supplies listed in Section -17?

Is supplies of cab, outdoor catering, employee’s insurance, goods lost or stolen etc. not related to furtherance of business.

For an example if the call centres who are working 24X7 if not provide food, transportation and insurance to their employees – how they will work? But GST law says that credit on these supplies are not allowed.

4. What is the logic behind the time limits given in GST laws?

a. Like Credit / Debit notes can be raised within 6 months of end of financial year beyond that benefit of GST already paid cannot be allowed?

b. Suppliers payment to be made within 6 months otherwise credit is to be reversed?

5. Why Reverse Charge Mechanism? When Input Tax Credit is available on the tax paid under RCM – It seems to be useless exercise and only increases compliances – what is the benefit of this revenue neutral transaction – Same person first pay tax and avail ITC afterwards – What is the gain to the revenue from this transaction – “NIL”?

6. Why there is no refund of ITC paid on capital goods to persons applying refund of accumulated ITC?

7. Why there is no refund of supplies of service inputs in case of inverted duty structure?

8. To err is human. But Indian GST needs superhumans who are perfect in everything. This is sin in disguise. There is no revision of returns in GST? Neither GSTR-3B nor annual returns can be revised? Once done – Means done? No way-out? All doors closed for improvement.

9. For refunds – why every-time one must find fresh application to remove the defects pointed out by tax officer? What is the action on officers if they do not follow the due process of law?

10. Why the advance ruling is headed by two department officers? How can we expect it to be neutral where department is their own judge?

Expectations from GST

Only expectation from GST that it will bring happiness and comfort in life of tax-payers and consultants. But to meet this expectation, these things needs to do: –

1. Enhanced GST portal capacity and immediate solution to the issues.

2. Clarity on burning issues like Notice Pay Recovery, Cross Charge, Sales Incentive, Round Tripping etc.

3. Facility on transfer of balances in Cash / Credit Ledgers across multiple GSTINs of a single legal entity.

4. Simplified one form for annual return and reconciliation instead of two forms GSTR-9 and GSTR-9C

5. Simplification of GST Returns and lessor returns to be filled.

6. Robust grievance redressal mechanism for immediate solution of problems.

7. Revision and Rectifications of all GST Returns

8. GST must be people friendly instead of Pro-Revenue – There must not be impractical GST collection targets on officers

9. Advance rulings – Improve the quality of benches – members must be from judiciary and technical background – independent of department so that justice can be delivered in true form.

10. Do not punish honest taxpayers because of their suppliers’ default. Instead of questioning on taxpayers ITC due to non-filing of returns by supplier – catch the supplier not the taxpayer.

I am concluding this article with an optimistic approach towards a good future and committed to put die hard efforts to achieve the vision of legendry Swami Vivekananda of making India “Jagatguru”.

(Author can be contacted at [email protected])

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April 2021