The Goods and Services Tax Network (GSTN) — which handles a mammoth taxpayer base (over 1 core at last count) and over 50 crore invoices every month — was bound to have some “teething problems”, but the system has “stabilised” and has been working without any major glitches since December, its chairman Ajay Bhushan Pandey said on Wednesday. The e-way bill mechanism to track movement of goods in the GST regime — which has lately seen a near-pan-India roll-out — was running smoothly too, he added.
The GSTN chairman’s comments at the Express Group’s Idea Exchange programme come at a time when it is faced with the task of rolling out a new return-filing system, approved by the GST Council earlier this month. As an original system of comprehensive, triplicate returns was found cumbersome by taxpayers, it has practically never been implemented in full, and taxes are being paid with a summary return GSTR-3B. The proposed new return-filing system is said to be simpler than the original one with only one return per taxpayer a month. The taxpayer doesn’t have to even file the returns; in fact, she just uploads the invoices and the return is auto-generated.
Replying to a question on whether GSTN’s service provider Infosys could be blamed for shortcomings, Pandey said: “In any large project, if you are dealing with a service provider, there will always be some problems. This is to be bilaterally resolved between GSTN and the service provider.”
Pandey added: “But to say that a service provider hasn’t been up to the mark, I don’t see any reason to hold that opinion in the present situation.” According to the official, GSTN glitches were due to two reasons. “First, many people were not familiar with the system so if a taxpayer did something wrong, there was no clarity on how to reverse it. Although it is not a fault of the system per se, the system itself could have handled these problems in a different manner.”
The new return-filing system is proposed to be rolled out in two phases. The first phase would begin at the end of the year and would allow taxpayers to upload invoices and claim input tax credit (ITC) on self-declaration basis, as in case of GSTR-3B now. This means that a buyer can claim credit for a purchase even if the seller hasn’t readily uploaded the relevant invoices. During this phase, dealers will be constantly fed with information on the gap between credit available to them as per invoices uploaded by their sellers and the provisional credit claimed by them.
In the second phase, which will commence after the six-months transition period, the facility of provisional credit would be withdrawn and ITC will only be limited to the invoices uploaded by the sellers from whom the dealer has purchased goods.
The new system, however, will be semi-automatic in case of default from a supplier. In the original structure, it was envisaged that if a supplier didn’t pay taxes, the credit availed by the buyer would be automatically reversed. However, in the new system, recovery would be made from the seller in case of default. But the tax department would retain the option to reverse the credit from a buyer in exceptional situations like missing dealer, closure of business by supplier or supplier not having adequate assets, etc.