Worldwide India is known for Information Technology Supremacy. Large Multinational organisations like Google, Microsoft, Amazon, etc. trust on technical brains from India.
GSTN i.e. Goods and Service Tax Network is one of the most significant achievements of Indian tech brains in history of Indian Indirect taxation. It’s one of the most important data base and software of tax compliance in the world. Since July 2017, implementation of GST in India is successful due to GSTN. But still there are many issues and scope of improvement in functioning and technical performance of GSTN.
The Sales Tax Bar Association (STBA) has moved the writ petition in Delhi High Court raising several issues of GSTN. The Delhi High court had issued notices to Infosys & Tech Mahindra (both are technical companies looking after GSTN) to be present before the 39th GST council meeting Dt. 14th March 2020 and in the court technical flaws, glitches, and limitations of the GSTN were challenged. The government found it inevitable to invite the project manager of GSTN of Infosys- The backbone of GST network, as dysfunctional or inept system leads to unhealthy tax compliance, especially if disruptions cause some taxpayers to pay late fee or interest.
Officials in the 39th GST council meeting admitted that the IT platform has not stabilised even after two and a half years of manifestation of GST. Infosys Chairman, Mr Nandan Nilekani sought time till January 2021 to fix the system related issues being faced by taxpayers in the GSTN, but was allowed time only till July 2020 to iron out the issues. Mr. Nilekani demanded more skilled manpower and better hardware to enhance the capacity, to which the council agreed.
A question arises, why Mr.Nilekani was called in 39th GST Council Meeting? As in GST Council only Finance Ministers of State and Centre are the members. It’s a statutory body functioning as per the Constitution of India for smooth enactment of GST in India.
In this article I have tried to compile some major technical glitches, errors, issues in GSTN. Hope few of them may be the reason why Mr. Nielkani was called for and to resolve them in time.
Biggest Failures of the GSTN:
1. Deferment of E-invoicing & QR code : E-invoicing was promoted by GST Department as a technological breakthrough and a game-changer for Indian taxation system. There were a lot of hopes from it to curb tax evasion and ease But the technology issues like limit of file size, HSN code issues, real-time generation of E-invoice, etc.; in generation of E-invoice since January 2020 on optional basis led to failure of it. As a result, The dates for implementation of E-invoicing and QR code has been extended a few times till now, and further till 1st October 2020.
2. Deferment of e-wallet scheme: When GST was implemented in July 2017, such scheme of E- wallet e. electronic wallet for exporters was proposed. Since then, it has not seen the day of light due to no further technical progress on it. Now, the time to finalize e-wallet scheme and the present exemptions from IGST and Cess on the imports made under the AA/EPCG/EOU schemes is extended upto 31st March 2021.
3. Deferment of new returns: The implementation of new returns sounds like a hitch in the website, as it has been extended for a few times, and further till 1st October 2020. Implementation of new returns is a big technical task, as it would require frequent matching of invoices, Invoice tracking and vendor communication.
Migration & Transition Issues:
4. TRANS-1, 2 & 3 forms due dates were extended a few times due to Technical glitches. Many taxpayers pleaded before the courts for their inability to file the requisite TRANS-1 & TRANS- 2 due to technical glitches. The inabilities to file TRANS-1 & TRANS-2 resulted in disallowance of ITC.
The Punjab and Haryana High Court in case of Adfert Technologies Pvt. Ltd. directed Goods and Services (GST) department to enable filing/revising of TRANS-1/2 either electronically or manually, if not filed earlier, or incorrectly filed on or before 30th November 2019.
The GST department in specified cases is extending the due date to file TRANS-1 & TRANS-2 till date for certain taxpayers who could not complete filing due to technical glitch, even after 3 years of implementation of GST.
The Rajasthan High court in case of M/s Shree Motors has decided that Trans Credit will not be allowed, if there was No evidence of error in submission of TRANS-1. Such cases of having no evidence of error of GSTN by taxpayer will create hardship to genuine taxpayers, who are legally not bound to maintain any proof of technical error by GSTN.
Failure to implement Initial Return System of GSTR-1,2&3 since July 17:
5. Initially when GST was brought into implementation, taxpayers were required to file 3 returns/details; GSTR-1: details of output supply, GSTR-2: details of inward supply, & GSTR-3: summary of inward & outward supply along with which payment of net liability was to be made. But, due to the Technical difficulties, it could not be implemented smoothly and GSTR- 2 & GSTR-3 were done away Thereafter the summary return GSTR-3B came into picture. This was the biggest hurdle for good & simple GST. Further, Gujarat High Court has given a blow by declaring that GSTR-3B is not a “return” which is still pending for final judgement by Supreme Court. Though required amendments are made in law, retrospectively.
GSTR-2A related issues:
6. GSTR-2A is auto-populated, system-generated inward supplies-related ITC register. The technical setback here is, when a seller files his GSTR-1, the information is not properly captured in GSTR 2A many times and is not updated on real time basis. Also, if a supplier uploads invoices relating to previous months, then such invoice does not get reflected in month to which it pertains, but rather in month in which it is uploaded.
7. In most of cases GSTR-2A available on the portal itself does not match with the 2A Excel sheet that is downloaded from the Hence, the taxpayers are not able to decide which data is correct, which gives rise to question on reliability of GSTR-2A downloaded from the portal.
8. Continuing the technical lacuna of database and pitfalls, GSTR 2A report does not give option to generate quarterly, half-yearly, or yearly report; GSTR-2A can only be downloaded on monthly basis.
9. The same technical snag has been followed with GSTR-3B where the amount of ITC would be auto-populated from GSTR-2A, but implementation of the same failed. In 39th GST Council meeting this integration is also discussed.
ITC related Technical bugs:
10. Rule 36(4) of the CGST Rules, 2017 allows only 10% ITC to the taxpayer over and above of that reflected in GSTR-2A w.e.f 01.01.2020. ITC of the taxpayers shall get blocked for invoices or debit notes which are not reflected in GSTR-2A, due to Technical errors even if a valid invoice is available with them.
11. Not only has this, but the portal does not auto-calculated ITC as per rule 36(4) mentioned in the above point. If the same made available, it would reduce the burden and confusion also related to ITC issues among the taxpayers. It seems it’s a technical blockage of data and software algorithms of GSTN. Taxpayer is burden to maintain such complex data calculation of ITC.
12. In GSTR-2A, there is no reconciliation or marking of ITC availed already and specially in respect of invoices those are uploaded by the supplier later on after filing of GSTR-3B. Currently, the process is to self-assess by the taxpayer which should have been technically controlled by GSTN.
13. Cases have been found where Bogus ITC has been claimed by the taxpayers. The system should be made proficient enough to capture such Fake invoices & ITC, so that such scenario would not arise. The Income tax department has come up with new penalty section 271AAD for penalizing fraudulent ITC, but its implementation is still a technical task to link with E-way bill portal and other databases of Income tax and GST.
GSTR-9 & 9C issues:
14. There are many issues for uploading GSTR-9C.The most common error faced while uploading GSTR-9C is relating to signing with Digital Auto-populated data of GSTR 2A is many a times not properly reflected in GSTR-9.
15. After finalizing audit, uploading GSTR-9C is a bit Filing GSTR-9C involves various stages like creation& uploading of JSON file. Also there are certain prerequisites. The uploading of GST audits requires the Windows Operating System of Version 7 and above, Microsoft Excel 2007 and above only. Then, we have to download GST em-signer from www.gst.gov.in.Even the Internet Explorer 10+ is required and Java 1.6 or above. Taxpayers are not experts in computer systems, and thus are not assumed to know all the required settings.
16. Taxpayers even face errors of rounding off while uploading GSTR-9 & 9C. If there exists a slightest difference in values of GSTR-9 & data feed in offline tool of GSTR-9C, an error report arises. To avoid such errors, one needs to be precise while updating figures in offline This issue would not show up if the Form GSTR-9 & the offline tool itself rounds off the values.
17. Many tables in GSTR-9 & 9C were made optional at a very later stage when the due dates were fast approaching due to technical setbacks in filing the reconciliations. If these were taken care of or the option would have been considered earlier, many efforts of the taxpayers could have been saved.
18. GSTR-9 & 9C are inefficient to show the net liability amount. Even when the details regarding inputs and outputs are available.
19. The Rajasthan High court Judgement in case of Tax Bar Association v/s Union of India is evidence that technical hindrances of the GST portal have been troubling the taxpayers.
A petition had been filed by the Tax Bar Association raising the issue about non-functionality of the GST portal i.e. www.gst.gov.in, as a consequence of which, various assesses were unable to upload their GSTR9 and GSTR9C.
In spite of multiple attempts by the taxpayer to Login, the website of the Govt. stated:
“ Dear Tax Payer 1,50,000 tax payers are already submitting their returns at this moment… Please wait for your turn in a few minutes…Thank you for your patience.”
As a result of multiple and frequent tweets on the due date about malfunctioning of the GSTN, addressing CBIC & Honourable FM Nirmala Sitharaman, a Tweet was issued by the CBIC on 31.01.2020 at 10:30pm indicating extension of due date in a staggered manner ending on 3rd, 5th& 7th February 2020. For Rajasthan, the last date was 5th February. Although time has been extended up to 5th February, 2020 yet in the evening of 4th February, 2020 attempts were made to upload the return, but such return required mandatory deposit of “late fee”. The software portal had not been updated till that date, even though the notification dated 3rd February, 2020 was already issued by the Govt.
Refund & Exports Issues:
20. Issues arise in cases where the export details from the GST portal are matched with ICEGATE portal of Customs department. Even if a minor difference is found in the data, the departments send notices to the clients for mismatch in data.
21. Where a mismatch is found in the data of GST portal and ICEGATE portal, the refund application of taxpayer gets rejected on mismatch basis. Instead, if the GST portal catches data from the ICEGATE portal for returns purpose, such anomaly would not at all arise.
22. In cases, while tracking the application, the status of ARN is acknowledged, but no details of ARN & further process is available for the taxpayer.
23. While making LUT/bond compliances for exports before 31st March, the taxpayer estimates and files LUT/bond. But at the end of the financial year, the data for balance or excess exports made as compared with the LUT/bond is not available in the taxpayer’s profile, which continues to be a technical defect.
24. While filing RFD-01, many times technical issues in filing arise and the process is The reconciliation of invoices with GSTR1 and GSTR 2A takes painstaking efforts to resolve, where it should be automated.
E-way bill issues:
25. After an aborted attempt in February 2018, on 1 April 2018, the Government of India successfully rolled out an e-way bill portal for tracking the movement of goods under the Goods and Services Tax (GST) but maintenance of two different websites/database one for GST returns & other for E-way bills, leaves a knot in the implementation and data reconciliations.
26. The proposed implementation of E-way bill included linking with GSTR-1, which still remains a challenge for the websites. E-way bill, GSTR-1 & GSTR-3B mismatch notices have brought the taxpayers to Auto-population of data in GSTR-1 & GSTR-3B would have reduced the burden of reconciliation and mismatch.
27. Further, the E-way bill portal gives an option the taxpayer to export the E-way bill data for a particular month in frequency of 5 days. Instead option to export data for a particular month at a time should be made available.
28. Instances have been observed where users/businesses are not able to login through their registered Login ID’s because of technical This is a real trouble where the taxpayer faces difficulty as his E-way bill is not generated on time.
29. Minor mistakes/technical mistakes in E-way bill are clarified by the CBEC and further various courts have given judgements for non-levy of penalty/confiscation of goods etc. Such minor mistakes/errors should be allowed to rectify in the course of valid time limit of E-way Such Technical revision of E-way bill will give big relief to genuine taxpayers.
30. Minor mistakes/errors such as spelling mistakes in the name of consignor or the consignee, 4 & 6 digit level of HSN & SAC codes, would not happen if the system Auto-picked up the names of consignor/consignee on the basis of GSTIN and description of goods and tax rate from HSN & SAC codes entered.
31. Few judgements related to the minor mistakes in generating E-way bills are :
Case-1 : Sabitha Riyaz v/s Union of India.
Issue: Mistake in writing distance in E-way bill.
Case-2 : Diamond metal v/s State of U.P.
Issue: Mistake in writing vehicle number in E-way bill.
Case-3: V.V. Mohommed Rafi v/s State of Kerela.
Issue: Mistake in writing tax invoice number and vehicle number and E-way bill.
Issues in all the above cases are held to be minor mistakes. Revision of E-way bill is the solution to avoid litigation and avoid penalties on genuine tax payers.
Setbacks faced while applying for new registrations:
32. While applying for new registrations, the documents that are required to be attached have a prescribed limit for file size up to 100 kb only. Even in today’s HD world, it is a cumbersome task to fit the document, photographs in file size of only 100 The capacity of 100 kb should hence be increased further.
33. The Composition scheme for service providers had been announced in the 32nd GST Council meeting, mentioning that it would be made available on the portal from 1st April 2019. Until today a separate option for taking registration under composition scheme as a “Service Provider” is not made available for taxpayers. It shows that department is 2 steps ahead, just in announcing the schemes, but 2 steps back in implementation of the same.
Issues in GST Helpline and grievances redressal portal:
34. The GST telephone Helpline sometimes is helpless too, as it also contains some technical defects. No response is received at times when the taxpayer needs help form the Helpline, and where the helpline responds, no record of the telephonic conversation is available for further reference or evidences in case of disputes.
35. History of Grievances; Grievances can be filed for technical issues those arise on the website by generating tickets. The question here is, what should one do when the grievances are logged, but tickets are closed citing irrelevant explanations? No record for the grievances filed is available in the taxpayer’s login whereas the history for the grievances should be available in the Taxpayer’s login itself. Many courts want evidences and non-availability of it on GSTN creates hardships to genuine taxpayers.
Auto-calculations of Interest not provided:
36. The GST department seems much eager to send notices to the taxpayers for collection of the interest amount u/s 50, 16(4) and rule 36(4) of the CGST Act, 2017 for delayed payment of GST, or excess claim of ITC, but does not look upon its own flaw where it does not provide the calculation of interest while late filing the return. Interest Calculation on Net basis should be automatic and pop up must arise at the time of filing of 3B after due date.
Website overload at due dates:
37. The due dates for filing GST returns have been a headache, as the website supports only 1.5 lakh taxpayers at once, which now after 3 years of implementation of GST has been increased to just 3 lakhs which is a very small number in front of the total registered taxpayers of 5 Cr as on 1st April 2019.
38. Taxpayers have to keep waiting till the website traffic gets down so that they file their return, or else they have no option but to pay late fees for late filing of returns. It then becomes a point for the taxpayer to argue as the late filing was a Technical setback and no delay was on the part of taxpayer.
39. The GSTN website has been seen to crash down on the due dates. Visitors to the GST portal after due dates are greeted with a message that reads: “There seems to be an inadvertent problem while communicating with GST system… Inconvenience caused is deeply regretted and your patience is appreciated”
40. As a result of these technical glitches, the GST department had to divert the traffic of taxpayers by changing the due dates based on turnover. i.e. 20th of succeeding month for taxpayers having turnover above Rs.5 Cr & 22nd of succeeding month for taxpayers having turnover up to Rs. 5 Cr.
Unable to generate OTP:
41. At times difficulty in filing returns is faced by the taxpayers where the website sends the OTP for filing, but the same has not been received on the registered e-mail ID of the taxpayer in time.
Long haul for downloading and modifying data:
42. Even for downloading the data uploaded by the taxpayers in his own return, like GSTR1, 2A one has to wait for 20 long minutes for each month, whereas it should be made available immediately on annual basis.
43. Where the taxpayer has to delete or modify data from the portal, in that case also he has to wait for 20 minutes to make the required changes which are a subtle waste of time for the taxpayer.
Preview of invoices not available fully under different sections of GSTR-1.
44. If a taxpayer has to view the invoices uploaded in his GSTR-1, the technical glitch is that the invoices would show up there and then on the portal if total no. of invoices uploaded are below 500. If more than 500 invoices are to be viewed, the taxpayer can view invoices by downloading the return and opening and viewing in the offline This seems to be a lengthy task for viewing more than 500 invoices, whereas it would be simple if full preview is made available.
Other Shortcomings of GSTN data retrieval:
45. The electronic credit ledger cannot be downloaded for more than 6 consecutive months leaves a shortcoming in the GST Portal.
46. It has been 3 years since GST have been implemented; still the Appeal module is not ready for the taxpayers to use. Even in the era of digitalisation, taxpayers have to file Appeals manually.
47. The facility of One PAN having multiple GSTIN and their respective turnovers and cumulative turnover in a single report is not made available on the portal.
48. GSTN support software providers in market i.e., GST Suvidha Service providers, API, Accounting Software, GST Returns filing Software, are still struggling to cope up with GSTN requirements. They are also stuck-up with frequent changes in formats of JOSN files, Schema, etc. of GSTN. Inadequate technical support for GSTN is also a major issue to such Companies.
49. The “KYS-Know Your Supplier” facility was introduced in the 39th GST Council Meeting, which was planned to be brought up much earlier in the picture but could not be implemented due to technical glitches. The Grading facility based upon the KYS system is also a challenge to implement on the website.
50. The system is not yet made robust to handle the HSN & SAC summaries efficiently, as there are many loose ends till The system does not provide auto-filled data from the database of GSTN. The requirement to submit HSN & SAC summary was also made optional as there were technical issues in the same. Even linking of GSTR-1 and HSN & SAC codes should be made automatized for smooth functioning of the returns, as because of technicality issues, the SAC & HSN summaries have lost its importance.
51. Limited/No Rights to local officers: The Local jurisdictional officer has limited/ no rights in his desk/ dashboard to resolve many technical issues, instead he has to send the matters further to higher authority officers at times and wait for their reply. GSTN database access to jurisdictional officer is need of hour to resolve queries of taxpayers.
52. Form ITC-04 is scrapped earlier, as there were a lot of issues for a Job worker/principal manufacturer to file ITC-04 including many technical issues in the same.
53. For TDS & TCS compliances, the taxpayer has to go deep in the portal to accept the TDS/TCS deducted by the deductor, whereas it is the most basic thing which should be made available on the front for ease of the taxpayer. The TDS acceptance window should pop-up for acceptance.
No option for viewing communications for notices:
54. No history for notices issued and further written communications is available on the portal if the taxpayer wants to view the same in future. Such history should be made available for the reference of taxpayer.
No option to file revise returns:
55. It seems that it’s more of a Technical hardship to GSTN, that there is no option to revise the returns and make rectifications in the returns filed, in case any mistakes occur while filing the returns, whereas provision for rectifying errors is made in every law.
56. Many a times there arises a situation where sales return in a particular month is in excess of sale. In such scenario GSTR-3B does not accept negative values.
Technical errors of the GSTN Portal posted on social media:
57. The social media is a vast platform for taxpayers to address their issues. A large number of taxpayers used “Twitter” as a weapon against the Technical problems faced by them in the peak period of GST Audits, addressing CBIC, Honourable FM Nirmala Sitharaman and other officials about malfunctioning of GSTN, and no update of due date extension, as it was extended on the 11th hour of the due date. One can search on twitter to find list of other technical issues of GSTN.
Disclaimer: A small attempt is made to review technical issues of GSTN. No legal action should be taken on writer or publisher, as this article is for guidance only. Readers can send their feedback/ other technical issues left out on 9822079900 & [email protected]