The members of District Tax Bar Association Moga highlight various issues/problems concerning GST after going through its provisions and after hearing views of many speakers on GST. The members of DTBA Moga have been approached by various trade organizations specially small and medium trades organizations and they have shown their concerns on various issues and have requested DTBA Moga to highlight the same in media so that Government must realize the ground realities. The various issues are as under:
1. The first biggest issue is that GSTN Portal is not functioning properly as against the claims of Finance Minister and Revenue Secretary. GSTN portal has again stated on 1st June for migration to GST from VAT. For hours OTP are not received by dealers. Even DSC are not working properly. In one day one professional office is not able to send more than 5 migrations. How the Government is expecting migration in 15 days of lakhs of dealers all over India. Moreover in Service Tax number of many assessee is showing as cancelled and therefore the Provisional ID also stands cancelled, hence you are not permitted to migrate under GST
Hon’ble Revenue Secretary Sh. Hasmukh Adhia must sit at professional seat and see working of GSTN Portal and only then he should issue the statement in public. He is misguiding the whole of India just for covering up the shortcomings of the Government on software issues. His statement that Government and dealers both are ready is far from truth.
2. The User ID of at least 20% to 30% of VAT dealers have not been received yet and the Government claim that it is ready for implementation of GST from 1st July. This is nothing but mockery of the system. Moreover in many cases many provisional ID’s are issued under wrong PAN as local VAT department has not updated change in constitution in its system.
3. States are sticking to local taxes such as Market fee. Then how can Government claim One Nation Uniform Tax. E.g. on wood market fee is being levied at 4% and if the same is going to be retained by State Government, how can dealer of one state who is suffering Market fee can compete with other state who is not levying Market Fee. Already GST rates are too high. Similarly all food grains are subject to market fee at 4% in Punjab. How Central Government claim it is One Nation Uniform Tax. They have already withdrawn from earlier statement One Nation One tax. It is going to be One Nation Multiple tax again after some time as there is no guarantee that State Government will not levy local taxes. At the very starting stage there is irrationality in tax structure and dealers are bound to suffer.
4. The time limit for applying to GST has been prescribed at 30 days. The Government is not looking at PAN issue. The PAN are not received for 2 to 3 months. How the person will be able to apply within 30 days in case of change in constitution and the PAN is not received within 30 days itself. He will be in problem as his ITC will lapse.
5. Transitional provisions on ITC on stock held on appointed day are too harsh as retailers and wholesalers dealing in excisable goods have bills inclusive of excise duty and the Government is giving only 40%/60% ITC if the excise duty has not been mentioned separately. Moreover the ITC will be given only after goods are sold. How is it possible for small traders who are selling goods at low margins. Small and medium dealers are bound to suffer.
6. Monthly returns are too hard and cumbersome procedure that small traders will not be able to bear the extra cost of professionals. This Government wants that dealers keep on indulging in compliance round the year. And it is surprising that government think that dealers making supply of 50 lakh is small dealer only. In present scenario even 2 crore turnover is small, keeping in view the margin of profit. The small dealers will find it dissicult to compete with big business man. Government must make the returns quarterly for sale up to 2 crores or come out with ONE single return per month.Online GST Certification Course by TaxGuru & MSME- Click here to Join
Moreover the TAX payment has been prescribed at monthly basis where as it should have been quarterly. Or give provision for late payment of tax and return.
7. GST provisions are such that the major chunk of the capital of the dealer will remain stuck in GST. Small dealers will feel the pinch of it only after the start of GST. The provisions of GST are too harsh for dealers. Refund provisions allow refund only in two situations and dealer cannot claim refund of excess ITC available in Electronic credit/cash ledger.
8. The GST rules are yet to come on various provisions. SGST Act of many states including that of Punjab has not been finalized yet. Government is forcing law on its citizen. Full law must be put in public domain for discussion for at least 6 months. Whereas Government is not allowing time to discuss law so that effective and healthy law comes into effect. Government is taking Full advantage of its majority and is not giving anybody right to speak against it a single word.
9. There is no provision in Act of relaxation in penal provision in the First year of implementation, as errors are bound to happen and provisions of GST are such that one has to pay heavily of his/her fault. But Government is forcefully levying GST without taking into confidence the ground level officers, professionals and dealers. There is no preparation at ground level.10.
10. That rate of some items have been prescribed at such high rate that in GST their price will be more than MRP or the margins will be lost. E.G. Leather Apparel taxed at 6.05% under VAT in Punjab and Excise duty at 12.5% makes total taxes at 18.55% whereas in GST regime the same has been put in 28/% rate list. Government should tell what to do in these types of numerous items.
11. Petrol Pumps have to follow dual Acts VAT as well as GST. One can imagine the apathy of these dealers as how many returns they are going to file.
12. One can see many anomalies in the Act like taxing Tooth powder and tooth paste at different rates. Taxing the same food served in Air conditioned and non air conditioned restaurants at different rates etc. Taxing same service at different rates based upon total revenue of the establishment.
Moreover this GST is not ONE Nation One TAX or One Nation Uniform Tax as there are 29 State GST Acts, 1 Central GST Act, 1 Integrated GST Act at 6 different rates at 0, 5, 12, 18 and 28%. + surcharge. Monthly filing of 3 returns is the biggest challenge and if TDS is applicable, there are monthly 4 returns. This Act is the most complex law as compared to GST Laws in other nations. Moreover our public is not computer savvy at all. It was expected to bring Simple but Effective law but the Government has failed to provide the both. This will Burdening the Nation with limited computer literacy, limited power supply and limited internet connectivity with draconian and onerous online tax return filing requirements.