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:
- 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.
- 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.
- 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.)
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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 Lakkadsha
05th September ,2017
Also Read- My Experience with GSTN- An Open letter by a CA to PM of India- Part II