GST impact: What will happen if taxpayers are not heard on time

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Published: November 21, 2017 4:31:07 AM

There are a plethora of issues that have emerged in the journey of GST implementation. The government is doing a stupendous job of clarifying issues and is eager to meet the industry, associations and trade bodies.

The goods and services tax (GST) is a major indirect tax transformation and a complete overhaul of the way transactions are to be taxed.

The goods and services tax (GST) is a major indirect tax transformation and a complete overhaul of the way transactions are to be taxed. Additionally, compliances have become fully digitised. There are a plethora of issues that have emerged in the journey of GST implementation. The government is doing a stupendous job of clarifying issues and is eager to meet the industry, associations and trade bodies. However, considering the magnitude of points that need to be addressed, the government may consider streamlining the process further. “Misera est servitus ubi jus est vagum aut incertum.” It is a miserable slavery where the law is vague or uncertain. The vagueness and uncertainty is at the recipient’s (users’) end and not the creators’ (legislator’s). Anything that is not understood or understood in a different manner could be termed as vague, and anything that changes too frequently could be uncertain to human minds.

Generally speaking, our GST has both these characteristics for the time being. Either people are not understanding the scheme, for any reason, or developments are so rapid that learning and unlearning has become more difficult than an algorithm. The CBEC created 18 sectoral groups, for public convenience, to attend suggestions and grievances from taxpayers. Over last one quarter, there has been an unprecedented rush of people walking into the corridors of North Block and before these sectoral groups, to make themselves heard. So, how does it happen and can we make it better together in the greater interest of the nation? Why at all there could be a requirement to “represent” yourself? Will it make a difference if you do that before courts?

Limiting our discussion to tax laws, a representation is a written document put forth by an assessee before the policy-makers, regulators and administrators to either obtain clarifications or get a suggestion implemented. The government had opened its ear and gates both for everybody from small to sizeable businesses and taxpayers. As a result, multiple representations were received in the initial weeks of GST implementation. The issues were taken up before the GST Council, the nodal body responsible to advise the government on GST-related matters. It was revealed that over 40,000 people represented their interests to various central and state ministries in early days. Now, it could be obvious that there had been a duplicity of issues in a couple of these representations. At the same time, it could also be possible that a set of issues did not find place in any of the representations. While everybody assumed that somebody must be doing it for industry, and eventually nobody did under this presumption. Ranging from overlapping to finding no place is precisely the issue to be dealt in GST representations. Gathering the inputs from the trade, and our experience, we would like to suggest the following to be considered for implementation, to regularise the path of representation for a taxpayer (see table).

While we have understood the significance of making representation before the policy-makers and administrators, it is also important to understand what will happen if a taxpayer is not heard on time, in the initial months of a newly implemented legislation leading to structural changes in the economy? In the absence of being heard, or with difference of opinion, a taxpayer may find an infringement of his legal or fundamental rights, and as a measure of which he may approach his jurisdictional High Court or the Apex Court, with a writ petition. There are already over two dozen reported writ petitions filed in the first quarter, some of them arising from situations where the representation filed by taxpayers did not find a response from the stakeholders, and feeling aggrieved and injured of a legal right, they approached courts. The government has already done a commendable job in attending to representations and issuing clarifications and FAQs based on them. Time is of essence in all this, and implantation of small steps, giving timely results, can boost the confidence of taxpayers and save burgeoning of litigation.

(Supported by Preetam Singh, AM, PwC)

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