Open Letter to the Honourable Prime Minster of India

My Experience with GSTN:  

I am a small-time professional chartered accountant in field of Taxation practicing since 21 years. Have seen massive transformation of manual to fully automated system of filing the returns be it be Income Tax(CPC), Be it be TDS(TRACES), Be it be VAT (MAHAVAT), be it be Service Tax(ACES), be it ROC Filing (MCA) etc.

 All these systems took off gradually and day by day matured and were made user friendly day by day. E.g. Initially TDS System Traces was rigid about payment of the taxes and does not allow adjustment intra Codes, between the years etc. but as the administrators realised that When the tax paid belongs to the deductor why he shouldn’t be allowed to adjust as per his wishes, and subsequently the system was made more user friendly and rigidity was done away.

When the GST was implemented with big bang we thought Government have huge experience and best expertise (as claimed) of implementing such automated system, and GSTN will be best of system and a illustrative model (So that US Govt will inherit from us). The life of taxpayer will be more easier as far as filing is concerned (as termed by our Hon PM Goods & Simple Tax.) .The GSTN system was supposed to be front office of tax administration eliminating all chances of red tapisim, and all sort of corruption. Also, I heard that GSTN System is being developed and maintained by one of most reputed Software company of India.

But after passage of almost two months after launch of GST, it can be concluded that GSTN is massive failure and worst ever system implemented by supposed to be best government (as claimed).

With very little IT knowledge I can prove that system has all kinds of shortcoming and seems that there is no co-ordination between administrators and system developers. The Developers are not aware of the coded GST law. Just to quote a few Shortcomings:

  1. Being a new user there is every chance of error and omission, but the system is made so rigid with no room for revision or modification. Why not such facility provided to the users, when automated system can keep the trail of every addition and modification done by the user.
  2. The law allows and have provision to opt-out of Composition scheme by filing form CMP-04 ,if the conditions for opting composition u/s 10 of CGST Act does not fulfilled or breached. The GSTN does have such option till date. Needless to point out that option to opt for composition was provided very lately, by that time taxpayer had made lot of blunders by issuing Tax invoices. Also GSTN network has no facility of verifying dealer composition status by third party which can lead to huge evasion of taxes.
  3. The Enrolment application (migration / New registration) has provided option (compulsion for few Category) to submit the application online with Valid DSC but most of user system was found incompatible with signer software used by GSTN. Users have wasted lakhs of hours in struggling to make their system compatible for signing on GSTN. (Thanks to Chinse UC-browser which allowed some system to use GSTN signer utility.)
  4. The Enrolment process require Submission of Supporting Documents. The system displays 1 MB sizing requirement which is reduced down to 100 KB when uploaded. If GSTN feels that documents can be uploaded with all clarity with size of 100 Kb , the users earnestly request them to provide such utility.
  5. Existing Taxpayer which are not liable for registration under GST was legally entitled to cancel their registration. But again, system though allows to cancel but never accepts cancellation and those registration continue to be active making them liable for all sorts of compliances under GST Law.
  6. The GSTN system though an artificial brain which does not require any shutdown except in case of technical glitches or maintenance for a short period. But GSTN use to sleeps whole night, even if programmed to wake up to @ 6.00 Am, sometime sleeps up to 10.00 Am., Sometimes sleeps for days together. During the Day, the system is very busy to respond the users. As a results lakhs of skilled man hours were lost.
  7. The very basic concept of GST was seamless flow of credit and with that in mind Transition credit was to be allowed to the taxpayers by way of online return Trans1, Trans2 & Trans3. The return was to be submitted within 60 days , which was extended to 90 days after request made by various forum. But what happened facility to upload Trans1 was provided after 50 days that too when the administration was reminded by the Taxpayer that we need to adjust our credit of opening stock carried forward in GST regime. Shame on administration that Trans1 return was made online without any bulk filing utility knowing that thousands of entries has to be punched by the users. With a very little knowledge a small-time professional like me can design the Bulk filling utility. than how such a reputed developer cannot make it available till today. 
  8. The GSTN System supposed to be very intelligent, flexible should have adjusted the credits laying in cash ledger & credit ledger as per law. But contrary, the system was made rigid again with no scope of adjustment. The payment should have been allowed to be made on consolidated basis to be adjusted by taxpayer to various taxes head viz SGST; UTGST; CGST; IGST; CESS; FEES; INTREST;PENALTY ( 8 under forward charge & 2 under Reverse Charge or may be more than that). Many Taxpayer have lost valuable working capital due to this system. Only a big corporate like ACC Limited managed to bring to notice of MOS Finance such inconsistency in system. GSTN need to learn and inherit existing system from TRACES which seamlessly allows adjustment of Tax paid in Cash.
  9. The GSTN supposed to provide online application(RFD-11) for Export without payment of duty or against bond, but no such facility provided and exports were left on mercy of corrupt official for availing the facility without payment of the duty. In some case even after one month of time lag the Letter of undertaking was not accepted by the official. Why not systems were designed well in advance before the GST implementation to provide facility to exports to apply online for getting approvals without payment of duty.
  10. Technical Glitches like System errors; system failures; System not responding; down for maintenance; does not have enough bandwidth to support the users were daily and routine slogans on site.
  11. No effective system is in place for timely redressal of problems faced by the users. The helpdesk is inexperienced and have no solutions for most of the issued raised by the users. The Twitter handle and email respond rarely and that too incorrectly.

The above shortcomings are only illustrative and many more can be list down, but sheer waste precious time, as we know that deaf Government is busy in praising themselves (single way communication).

We Ask the government for fair treatment of tax paying citizens. Don’t treat them as dog but treat them as horses. Be accountable, responsive & assertive to the citizens. Don’t make mockery of Taxpayers by making contradicting statements on social media. Realise economy is suffering due to business closures, Loss of Skilled resources in understanding such systems. Forget Anti-profiteering, and pursue the real Loss to economy. Be responsive and design self-compliant and transparent system by way of wider referendum and involvement of Tax Professional who are real link between taxpaying citizens and Government.

People are using the social media peacefully to awake the government, and if government fails to react in right way, in no time taxpayers will be become tax evaders and will forced to be on road which will gain bring down the GDP (much higher than prediction of Silent but diligent Ex-PM).

Long live our Nation… Jai hind….

CA. Mohammed LakkadshaCA Mohammed Lakkadsha

05th September ,2017

mohdLak@gmail.com

Also Read- My Experience with GSTN- An Open letter by a CA to PM of India- Part II

More Under Goods and Services Tax

Posted Under

Category : Goods and Services Tax (7106)
Type : Articles (17294) Trending (574)
Tags : goods and services tax (5597) GST (5200)

126 responses to “My Experience with GSTN- An Open letter by a CA to PM of India- Part I”

  1. srinivas says:

    i am a fan and admirer of modi, but these 2 suicidal blunders like demoniterisation & GST introduction has made me rethink. this GST filing is very complicated , it does not allow u to rectify ur wrong filings and submissions, there is no scope for revised returns. most of the vat officers are not trained, no workshops conducted, technical snags are routine,
    these returns have to be made very very simple and bussiness friendly. jaitly is a man in too much hurry. he just jumped on to introduce GST without checking the ground realities as was done in case of demonetisation. i dont know where modi & jaitly are taking us. our bussiness is already dead

  2. rajiv mangrulkar says:

    sir,
    request following clarifications:-
    01. what is the relevance of threshold limit for registering under gst of Rs. 20Lacs since the person not required to register is treated as an unregistered dealer and incidence of tax from 5 to 28% is on receiver of the goods or services

    02. what is need for payment of gst liability along with the return, when it is not necessary that in construction industry the ra bill will get certified and remitted in same month and depends on govt approvals of budget etc for work contract bills.

    03. getting gst registered suppliers and subcontractors for construction industry working at remote areas is not practicable and also the hapazard rcm on receiver of goods and services for gst payment from 5 to 28% will be huge burden on cash flows since sources of funds are limited and do not follow monthly pattern but milestones
    it is desirable to remove rcm

    04. why the dealers should trust on gst portal for input and rcm payment input credits and matching and mis matching of inputs of suppliers and subcontractors and date deadlines of the gst system may result in destroying the entire infrastructure, agro based rural economy the root of financial system of bharat. this may not be the vision of atal bihari vajpayee for gst execution.

    05. will the govt. make part payments of ra bills for gst remittances or the govt takes the responsibility of remittance of gst on behalf of contractors in construction of roads, irrigation, power, mining projects which attract 12% gst. the onus of remittance of tds may be on the receiver of work contract services instead of provider of service, keeping in view huge volume of resources/funds.

    06.the rate of works contract although revised to 12% from earliar 18% the same is not updated in
    most of web sites including cbec.gov.in
    “Composite supply of Works contract as defined in clause 119 of section 2 of CGST Act 18%”

  3. MOHINER PAL GIRDHAR says:

    THERE SHOULD BE A PROVISION FOR REVISED RETURNS FOR AT LEAST TWO YEARS SO THAT THE TRADERS AND GST PROFESSIONALS CAN UNDERSTAND THE GST LAWS

  4. J R Holla says:

    I feel, The Govt should have carried the Vat model further with a little improvemant and modifications and then slowly should have evolved to full fledged GST model, could have neen more acceptable system it would have been.
    The RMC, Reverse Mechnism charging of GST will put almost all small enterprises and self working group out of Job. As any voucher payment for small jobs like gardner, Printer, Cleaners , Watchmen doing duties on contract job will be liability under GST RMC. This will increase the Unemployment of small people.

  5. D Khasnabis FCA says:

    All the negative inputs of practicing professionals are not tenable since Govt is aloowing extension of time from GSTR 3B onwards. If one does not adapt to changes he / she should leave profession, which now requires constant updation together with extensive computer applications by self. Dependence on others seems to be the root cause for all the problems.

  6. sumaiya Daruwala says:

    very rightly described the problems faces by various CA’s Tax professionals.
    All this things takes our lot of time and energy without involving in any productive work.
    In near future no CA wants to do his personal practice as its lost their daily ability to attached his soul with his body

  7. Ram says:

    Only because of comments like this by CA s, the govt is making an opposite comment that CA s are involved in money laundering through fake companies. In other words people who comment on the govt are called anti nationalists.

  8. Mukesh Parmar says:

    Hi Friends
    As an interim relief let the Government decide to collect the taxes on monthly basis by filing GSTR3B till the time the software is fully ready. Government has enough live data to test the software. In the meantime they can work on simplifying the forms and formats so that they are dealer friendly. And the returns from July can be uploaded then. A frame work of schedules to file return be made out. This will save lot of time of the Businessmen and professionals. September is Navratri and Dasera. And October is Deepvali. The staff will go on leave for their exams. Hence, completing the audits also is a question mark.
    So here is a request to Prime Minister, Finance Minister, Revenue Secretary, Chair Man of GST Council and all involved to act on practical ground. We are all with you in this journey of GST but let us walk peacefully and abide by our words n statements. Keep all fines, penalties and interest aside and let there be amicable situations and circumstances.
    It is a long way to go and only fruitful path is to walk together in co-operation.
    The Goods & Service Tax can really become Good & Simple Tax in the days to come. Let us all strive together and reach the goal.
    https://www.youtube.com/watch?v=HfYAdkKGOxs

  9. Prashant A Salunke says:

    Dear sir,
    Thanks a lot for writing a letter. You have covered almost all the issues. I have never seen online utility for filing returns. It will never work with such a huge no of entries. We are wasting our so many hours to upload a single GSTR return. Dates are extended without understanding holidays.

  10. Ram says:

    Our beloved PM/FM was in mad rush to implement such a huge Economical Reform – Post Independence, they never even thought that it was wasted 17 years on their (politicians) plate itself. But citizen and trade to take all nasty for no rhyme on reason. Their own so called bureaucratic set up is under dark. God has to save assessee.

  11. Vikas Gupte says:

    Absolutely agree with it.
    The concerned government authorities need to take some drastic measures.
    Otherwise a system which is being touted as a great success will be rejected by the business establishment, which is suffering the utmost in terms of man hours lost and stress due to failure to comply to the rigid system.

  12. SANJAY GUPTA says:

    yOU CANT PRAISE ANYONE UNTILL YOU GET COMPLETE FOOD IN YOUR THAALI. NOW JUDGE WHO IS WRONG. ALL ARE WRONG AND CARELESS IN SUCH SITUATION.

  13. Shubham Kumar says:

    Lot of Confusion under GST Regime.. Many Small Dealer/Taxpayer/Professional not understand this GST Regime till now like ITC Adj, Trans Form, RCM Treatment, Expenses ITC, Etc Etc. and Help Desk is also inexperienced person.

  14. SHARNABASWA HARWAL says:

    THANKS SIR , YOU ARE RIGHTLY REVIEIV ED ACTUAL PROBLEM FACING MANY PROFESSIONALS AND MANY PRACTICAL PROBLEMS

  15. Amit says:

    Well stated, This has become complicated, ill&sick system of taxation. Wasting lot of valuable time of professionals & creating space for lot of errors, which will be never solved. Govt. is standing totally irresponsible.

  16. venu gopal madishetty says:

    Very good representation

  17. SHYAM MAHESHWARI says:

    It is really horrible to see that the voice of millions of people with facts and figures are just being ignored by the govt. There seems to be no one in sight from the govt who can help us in the matter now. As the things stand today, the only way out for the professional fraternity involved in the job is “Satyagrah”, just to bycott GST altogether for the time being and witness whatever is going to happen. Any losses due to this is going to be much less than otherwise.

  18. Jose M.P says:

    These are genuine comments intended to support the government and the people of India.
    I fully share the same concerns.
    Let us request the government not to be anti national. It should not be people Vs the government, rather government of the people. Please incorporate this spirit into the Government, particularly when dealing with tax collection. It is the people who make the tax, you only collect them. Appreciate the hard efforts of the people.

Leave a Reply

Your email address will not be published. Required fields are marked *