The government must re-look the requirement of filing of invoice-level data and continue with the filing of summary data for a couple of months till businesses get used to filing of summary returns.
Post the completion of the first month of the goods & services tax (GST) and the extension of the deadline for filing the first return, it seems the euphoria of the introduction of the major tax reform is slowly waning and that trade and businesses are now feeling the first pains of change. As expected, the due date for filing of sales-invoice-level information was deferred given that not everyone was ready to file the same. What was not expected, though, was the extension of the due date for filing of summary returns. In a short span of a week, the government had to push the due date twice—first from August 20 to August 28 for those wanting to claim input tax credit on opening stocks, and second from August 20 to August 25 for other businesses. These last-minute changes have given many anxious moments to all the GST stakeholders, and the trade and industry is finding it difficult to file the very simple summary return owing to various reasons. However, the more worrisome fact is that if the filing of summary data is taking so much time and effort, what would happen on September 5 when the invoice-level data for the month of July 2017 would be due for filing? The situation of service providers is more precarious, as they have migrated from an earlier service tax regime of filing only two biannual returns to a monthly filing regime. The government should seriously consider re-looking at the requirement of filing of invoice-level data and perhaps continue with the filing of summary data for a couple of months till the load is stabilised and businesses get used to filing of summary returns.
Moreover, post the filing of invoice-level sales data, the all-important process of matching of sales and purchase data may perhaps take further time, which may result in yet another round of delays. That a change of this magnitude is going to cause a lot of disruption is a forgone conclusion. However, the government should swiftly work towards resolving the teething issues that have cropped up, especially after a smooth sailing in the first month post the implementation. The deemed advancement of the submission of the statement for claiming input tax credit on the stock lying as on June 30 has also caused a lot of hardship for businesses. Even the Application Service Providers (ASPs) and GST Suvidha Providers (GSPs) are equally anxious, as there are last-minute changes made to the forms and formats, which leaves very little or practically no time to make system-related changes.
The other area where the government is expected to act faster is the issuance of notifications based on the decisions taken in the GST Council meetings. The speed at which the government issued the notifications pre-launch of the GST is not to be seen in the post-GST regime. Indeed, it is a humongous task for the GST Council to discuss and agree to the changes to be made to GST rates. However, the job is not fully done till such time the changes are notified by the Centre and then replicated by all the states and Union Territories. Trade and industry is still awaiting the notifications to be issued for all the decisions that were taken in the 20th GST Council meeting held on August 5. While some notifications have been issued, there is a complete confusion in case of rent-a-cab service providers and goods and transport agency service providers who want to opt for the 12% GST option. In the absence of these notifications, they are not able to move forward on this count, which is certainly avoidable.
There is a long list of unfinished agenda that needs to be finished such as finalising the mechanism for e-way bills, functioning of Advance Ruling Authorities, roll-out of the dispute resolution mechanism, etc. No doubt that there has been a great coordination till date between the Centre and the state GST authorities for introducing GST and that would continue perpetually, but for GST to deliver on the promise it had made, it is important that the overall experience is smooth. Any interruption in fulfilling the filing obligations, uncertainties concerning levy of taxes, etc, has a direct impact on the effectiveness of the tax function—the more the delay, the more the damage. If we have to increase our ranking on the ease of doing business index radically, then we have to overcome these issues at the earliest. While the government is indeed doing its best to address the situation and is being very accommodative, businesses are still not able to get into a stable mode. Till such time, the grind is on.
Managing director, Acuris Advisors Pvt Ltd. Views are personal