CA Satish Sarda
At every nook and corner of India GST has become the most hot topic for discussion. And the key issues in the discussion are : Will it come from 1st July? Will the things become costly or cheaper ? What about stock on 30th June ? Should I keep stock or sell out ? What about Input Tax Credit as on 30th June ? Can I get credit of GST paid in one state in another state ? What is the rate applicable on my products / services ? What infrastructure setup is required for compliance with GST ? Do I have to take registration under GST ? What is this E-way Bill ? What if some states do not pass the GST bill ? When will registration procedure for new registration will start ? etc.etc..!!! to put simply Confusions Galore !!!Even Twitter handle specially done for GST (@askGST_GoI) gives wrong, confusing answers to some of the questions put before it.
Why these question when we are already complying with so many indirect taxes such as Excise, Service Tax ,VAT etc . ? The reason being GST is the Mix-veg , it has taken different vegetables ( specially the non tastier one ) from all types of taxes , even from Income tax also. Secondly provisions are such complicated that even legal eagles are having different opinions , then you can understand the position of common man.
This is the tax reform everyone is waiting for. Government is also doing its best to roll out the biggest indirect tax reform. It is taking up huge awareness campaigns to educate the masses. But it is going to take time and it has to . GST is not just any other tax which can just be imposed and implemented. It is too big, too vast , too complicated to be implemented in a hurry. Its going to be a very healthy Mix-veg dish lest it is served well cooked . Half cooked GST will be a disastrous for the Government, Indian economy and taxpayers.
Why I anticipate that GST can not be cooked fully by 30th June,2017 ? The reason are following :
- Law still incomplete : Seven States yet to pass their GST bills. In case even if a single state fails to pass the bill by 30 June 2017 GST cannot be implemented PAN India in true sense. States like West Bengal , Kerala, TN have shown their reservations about many provisions in the GST and few of them are vocal about it too. Various Rules such as Advance Ruling , Appeals and Revision , Assessment Audit , E-Way Bill , Anti profiteering etc. are yet to be finalised.
- Administration issue is still pending
- Rates , exemptions are yet to be fully finalised
- Migration of existing assesses still pending , Migration sites not working smoothly , errors are coming , site gets stopped for maintenance or various other reasons.
- GST Suvidha Providers (GSPs ) are not ready with their software
- The Indian Banking Association a body that represents 237 banks has informed a parliamentary panel that their members were unprepared to implement the new indirect tax regime by 1st July,2017.
- A huge chunk of small traders , manufacturers, service providers who were hitherto not required to register will become liable for registration under GST for the first time. These persons will require proper hand handling and training.
If government really wants successful implementation of GST it should ensure following before declaring the rollout date :
- Once Complete Law ( Act,Rules,Formats,Guidelines ) and the supporting software is finalised , it should be kept in public domain for at least 3 months . So that all the stakeholders can understand the law properly , can take effective steps needed to comply with the law , strategise their business operations according to the law .
- The success of GST depends upon comprehensive , robust IT system and infrastructure.Nobody knows whether the system developed by government , GST Suvidha providers are working properly or not. It should have trial run before the appointed date. There is going to be massive transactions on the system ( may be in billions daily ) . Whether the system can handle it ? Otherwise whole business structure will collapse. The GSTN system ought to be complimented by accounting systems which are or will be used by taxpayers. At present there is not a single accounting software which can claim to be GST compliant.
Government can not expect that eighty lacs tax payers will learn it in last fifteen days so that they can comply with the fully electronic system. - Some provisions such as Reverse Charge Mechanism , TDS,TCS , Place of Supply , GST on Advance payments needs to be revisited. Government in their over enthusiasm has complicated a simple law .
- Transition provisions needs to be explained properly and correctly. It should be free of ambiguities and the provisions should be practical and compliable.
- E-Way bill provisions need a complete overhaul or may be deferred for time being. It has put unnecessary fears in the mind of taxpayers . Also it is going to block the smooth flow of business and may install the inspector raj again.
- Government should carefully and seriously consider the representations received from various trade and professional bodies.
From various sources it has been informed that Government is also thinking of Changing the financial year from April – March to Calendar year. This is also a welcome move. But roll out of GST in July and again changing of financial year from January will entail huge administrative burden on taxpayers. Change in financial year will have many complication in accounting, taxation provisions etc . Tax payers will not be able to handle two huge challenges in a span of 6 months. So it will be better if both the big and welcome reforms are rolled out from 1st January 2018. All the stakeholders will get sufficient time to mould themselves in the new environment. We are sure government can take appropriate care of constitutional aspect.
Tax payers who are still to come out of the demonetisation shock , will not be able to handle the two more shocks in quick succession. Let the Government follow its own slogan “Sab ka Saath ,Sab Ka Vikas “..!!!
Author Bio
All the provision of The Constitution (One Hundred and First Amendment) Act, 2016 have come into effect w.e.f. 16-9-2016. There is a period of 1 year from 16-9-16 i.e. 15-09-17 by which date the GST Act will have to be operational because from this date all the provisions of excise duty, service tax, VAT etc. will cease to operate. If GST is not in operation by that date the collection of excise, ST, VAT etc will be unconstitutional. So thinking of putting the date of GST from 01-01-18 is an absolute impossibility. At the most it can be postponed upto 15-09-17 only and not beyond that date
sarda ji we are completely agree with you . govt must take seriously, in my opinion economy is already has slow in India, economy may more crush due to haste implements of GST.
Sir strongly agreed with you.
Let the financial year and the Calendar year be the same. It’s being followed in North America very smoothly. No confusion.
I am also agree with you, because businessmen
should get time to know how the details of GST.
The applicability is too tough to impliment the procedure from the 0 point that is from invoicing,
input credit, accounting procedure etc.etc….
Acoounting software also not yet ready in the market.
Also in my opinion the small businessmen will
too much sufer because they have no knowledge
how to use the NETWORKING site.
so please start the new GST Rule from 1st January,2018 so that all can be prepare himself
to tackle the such HARD AND FAST Rule
सुझाव बढिया है। आम जनता व्यापारी वर्ग सबको आसानी रहेगी
even today most of the officers are not clear or ready to solve the customers issues while uploading the final DSC or Aadhaar OTP in system.
Who is going to hear the sufferings of the Traders. FM must be an economist and concérned about the public however our bad luck is only tough Advocate is occupying the post of FM every time.
I hope this will work, as no impact of making any fiscal year for less than 12 months.
In the interest of the Country Government may approve to do so.
This government won’t listen now but will bear the burnt later on which happend at the time of demonitisation
Sir
I am agree with u. It the GST implication should postpone to 1st January 2018 as all the stakeholders are not yet fully prepared. Also if GST will applicable in the new calendar year cum financial year then it will be memorable day for both.
Perfect Articles.
I’m an industrialist. I also feel that the Govt. should postpone GST till 31/12/17. The GST website is still not able to work properly. Every now and then, the site is ‘UNDER MAINTENANCE’.
It should implement GST and new Financial year from 01/01/18.
The entire business community is in a confused state. Whether they would get any time to do business? Statutory compliances are too many and too complicated. Instead of simplification the entire system of taxation is complicated to the core. In addition to the business community the professionals are also going to suffer. It is better to postpone so that all stake holders understand the law!
ITS A VERY GOOD SUGGESTION & IT WOULD BE BETTER IF GOVT. IMPLEMENT FIN.YEAR & GST REGIME W.E.F IST JAN-2018.
Even Government postpones GST Implementation for another 1 year also, when due date for Implementation approach, again business people raise several concerns and again seek time to adopt GST. This is endless.
i completely agree with the article. The government should give proper time to all concerned,. Still migration problem is there and there is no information when new assessees who were not liable in previous laws and are now under tax net due to GSt when their registration will start.
Based on news reports GST has to be rolled out on or before 30the September 2017. Government of the day should roll our GST as planned without further delay. Electronic/ software glitches are common and it can be rectified from time to time. Hope government should relax rules not to punish delayed returns filings.We learn by mistakes.
absolutely correct since any change in between the year is very difficult, confusing need lot of accounting adjustment apart from it there is hardly any time left to understand the law fully even by expert.
We are hearing GST is coming since years now, ….unless GST is made effective no one will take it seriously and we Indians will always keep on preparing and our preprations will never be 100% complete and will never end, so its better to make it effective, slowely things will fall in its place.
Great Suggestion in the present situation regarding the GST implementation. Everyone is comfortable with this. It is also must to roll-out of GST without any doubts or lacuna for the smooth implementation.
India is not a small country so one should be extra careful about this huge change in taxation policy. Govt. is going in right direction so it is more important to be safe in any kind of situation, once any leakage will take place then no one can control it in future.
completely Agreed but what about the constitutional provisional regarding it. as per the constitutional amendment New act Shall be applicable on or before 1 oct.
Kindly elaborate…
Thank you CA Satish Sarda for your thought provoking article. Every one agrees with the suggestions you made but somehow I do not understand why the govt is so adamant and not willing to consider any opinion expressed by various stakeholders. Even Tally solutions have commented that their system is not fully ready. The system was taking a lot of time even to register the data that one has to spend a lot of time by logging in again & again. Govt should simplify filing returns with one return per month as most of the businessmen has to depend on consultants and the fees have already gone up. The election promise of ease in doing business in India must be followed in practice.too.
welcome this suggestion….
There is a complete change in Taxation. The self employed/businessmen have to be Computer friendly to a very large level. There are hundreds of questions arising out of the change of the law. Therefore GST experts have to gather people in a group of 10/15, explain all the features, how to put things on Computers, how to submit the returns , advantage of GST over the present system by way of reduction of taxes etc. These people must be thoroughly educated. Likewise, all people have to be educated, before GST is implimented. Also suggest implimentation next fiscal only.
Satish ji, Very nicely written with practical aspects
Well said Sir, when Govt.will realize the practical situation in right perspective God only knows.
Yes, absolutely right about the Article. Need time to understand the concept of impact under GST regime.
Yes, it is a very good suggestion.
Do not agree….
Perfectly right in saying so. Let us hope Government and its officials consider this situation. Thank you very much for sharing.
Nation was promised one tax one country & simplification in filing of returns. Now, we have plethora of GST, in the form of IGST, CGST, SGST, Cess etc. It is major deviation from promises. As if it wasn’t sufficient they are complicating by introducing 3 returns every month, one annual return, no provisions for corrections/revision, E-way bill linked with transport time.
The department too is not ready with back end processes. Even their website is too slow and crashes at times when there is a load.
I agree with Sardaji, that Government seriously looks into his suggestions….God save my fellow beings from hardship of GST
Its well written and to the point. Suggestion to formulate the law, rules, rates & exemptions completely and put it in public domain for 3 months for a complete understanding by one and all so ensure healthy compliance is hitting the nail on the head. Hope all knowing PM & FM take note and act not in haste but more matured.
बहुत शानदार सुझाव…
We all agree views given in above articles. When ever any new IT system is to be introduced it takes year to test & then implement. IT experts should give their opinion transparently without prejudice or any pressure.
If government is really interested in using IT which will really fruitful for India should rethink of GST date 1.7.17.If implemented hurriedly, they will have to give so many concession again due to practical problems . this will again lead to license raj , depending on individual assumptions etc. take a example of VAT program when launched it was 3 to 4 months system got hanged up & every time state Govt has to extend the dates for fully implementation.
We as Indian are not afraid of GST launch , but proper way is must.
Hope Jaitely understand all this to give chance to opposition for laughing at immature way of handling
it will loose credibility of BJP govt.
if it gets delayed beyond sept 2017, then government cannot collect any taxes from september 17 onwards. people should think about this, instead of wasting time in discussing the issue of postponment, it is beeter if people spend their valuable precious time in trying to understand and implement it in time.
Flawless article. Modiji man ki baat karte hai. Aapne Desh ke man ki baat Kah di. Hope Government will understand it.
Dear Sir,
Agree with this article. There are many confusions are still in minds of people. Lack of clarity in HSN & SAC codes. Request you to kindly send your article through e-mail to cbecmitra.helpdesk@icegate.gov.in
sufficient time span should be given or some penalty,punishment,interest levy on delayed returns and many more ..some relief allowed for tasting application of gst law should be given,, that time will get utilized for preparing for or understand rules and provision of act ..i also appeal/request modiji to give some taste time like practice exam in which any mistake have some time to rectify…before final exam.
Dear Satish sarda ji
100 % true. Every burden is dumped on Companies to comply within unreasonable time. In case of Unregistered Dealers their burden is passed on to Registered Companies without Govt. straining itself, thru Reverse Charge. Sudden host of Compliances like PF UAN & aadhar Compliance, IND AS, ICDS, IFC, New Labour Laws Compliance etc,., all at the same time is choking the Finance Team in every Company more so in MSMEs and we are also bound to complete Statutory audit also within the time lines.Local CBEC officials also have no thorough knowledge and add to the confusion.
Let the Govt. have mercy on us and understand that we are for all these changes but give sufficient time as we have to do business and it cannot come to a standstill for the sake of diverting our attention fully to hasty Compliances
yes 100% agree.govt should consider this sincere advice.thanks to alert government before any miss-happening.
In agreement with author, Any thing which is being done, should be with 100% readiness and complete ability to handle all situations / issues. instead managing. Else, we will have bad name globally
Very well explained & objectively presented to the powers that be. Unfortunately, in their haste to implement the GST on July 01, 2017 the government is overlooking many critical factors which we, the common people, have to deal with. I’ve been struggling to migrate since February and kept encountering “error” “site under maintenance” messages. Finally managed only yesterday. And this is only the tip of the iceberg for tiny business establishments like mine who are struggling to make both ends meet.
The proposal is totally justifiable….hope the Law Makers understands & implement.
It is well measured words of thought provoking based on experience and practical problems in ground level.The rules as he said are not free from ambiguity and not understood by officers themselves.
No need of hastiness. And let the completed process of everything be on public domain and trial run for three months and even if there are difficulties it will not be much
K.Palaniswamy DC(CT)Rtd Coimbatore
Beautiful suggestions given in a logical form comprehensively. .Jan.1st would be ideal to start as by that it is hoped that all preparatory work would be completed and as it would coincide with the proposed new FY Jan -Dec.
Thank you for such organised view about GST implementation. I feel many will agree with thisview and our respected Government too has these churning in their mind. Yet to further “sab Ka Saath Sab ka Vikaas” is a virtue.
The existing taxes can be continued upto 31-12-2017 and the Red Carpet can be rolled out of 01-01-2018. But in the meantime let the Government start testing its platforms for forms and formats from 01-08-2017 requesting the dealers to upload the data as per GST for testing purposes. This will help to address many many relevant queries encountered practically. A lot of this churning upto 30-11-2017 will help the Government to address them as well give the final drafts of everything under GST by 15-12-2017.
There will be many many minor confusions which will get cleared and the business community will get confidence to go ahead with GST.
Thanking you in advance.
I am afraid that learned author’s view on rolling out GST from 1.1.2018 is not a feasible proposal in my view as the Section 19 of the Constitution(101st Amendment) Act, a transitional provision is notified on 16.9.2016. The said Section provides for the applicability of the existing laws like VAT and Central Excise Act with maximum period of one year time from the date of Notification. The Section reads as under:
19. Notwithstanding anything in this Act, any provision of any law relating to tax on goods or services or on both in force in any State immediately before the commencement of this Act, which is inconsistent with the provisions of the Constitution as amended by this Act shall continue to be in force until amended or repealed by a competent Legislature or other competent authority or until expiration of one year from such commencement, whichever is earlier.
Have you tried the Finance Ministers remedy? take one small peg and GST will become clear. It did not help me. Rightly said there is a total lack of clarity on many issues. I am confident even the FM would himself be ignorant on many Issues.
Hope your message reaches Mr Modi.
Completely agree. GST from 1st January is the best solution.
Dear Satish sarda ji
Namskar
Having go through the Article I am Completely agree with the Containts. Let us hope for betterment on the Part of the Government