Users nationwide have been facing numerous concerns surrounding the GSTN, with some of them being non-validation of login credentials, non-acceptance of additional information for amendments in registration details, non-issuance of new registrations numbers, etc.
One of the critical areas where the Goods and Services Tax (GST) has a ‘disruptive’ impact is the Information Technology (IT) landscape. With the advent of the GST, using IT to be GST-compliant has become inevitable. In a nation where most of the indirect tax compliances were thus far being done using spreadsheets, this reform has ushered the need to adopt IT systems, as part of the new tax regime. The GST ecosystem has been designed to ensure automation of the compliance and filing processes covering inter alia maintenance of electronic records, issuance of documents such as invoices, credit/debit notes, vouchers, uploading of transaction details, payment of taxes, filing of returns, etc.
The monthly GST compliance cycle to be followed would be as follows:
i. On 10th of subsequent month—Details of outward supply would be filed in Form GSTR 1
ii. On 11th—Auto populated purchase details would need to be downloaded in Form GSTR 2A
iii. By 15th—GSTR 2A details would need to be validated and uploaded in Form GSTR 2
iv. By 17th—Validated details in Form GSTR 1A based on recipient’s filing in Form GSTR 2 would need to be checked and uploaded
v. On 18th—Auto populated Part A of GSTR 3 with all supply and purchase details would be generated and the same needs to be downloaded
vi. Between 18th and 20th—Tax payment needs to be made
vii. By 20th—Once the tax payment challan number is generated, post insertion of the said number in Part B of GSTR 3, the final return needs to be submitted.
And the aforesaid process needs to be undertaken for each registration with no respite for any Saturdays or Sundays in between. As it would be demanding and challenging to undertake the aforesaid compliance cycle each month for each state (registration number), adopting IT to issue GST compliant documents and undertaking the aforesaid compliances is the need of the hour.Whether all 8 million registered dealers would be ready to adopt IT, (in the form of IT hardware, software and connectivity) is the moot question. With over three weeks since GST implementation, the majority of taxpayers are facing challenges in terms of adopting IT. Further, the final set of GST rules released just before the implementation date did not help the cause.
While most taxpayers use third-party Enterprise Resource Planning (ERP) systems, others have their own in-house ERP system. Due to lack of clarity on the procedures surrounding GST, most of the taxpayers were not able to configure their ERP changes on time. Even large ERP vendors were struggling to release their GST patch for their clients. As a result, on July 1, dealers faced challenges in determining the tax type, mentioning the correct classification product and service code, raising invoices, etc. Even today, some of the ERP companies face challenges in configuring tax determination logic for the bill-to-ship-to arrangement, determining the place of supply for different scenarios, building in tax determination logics, etc.
Not only are there challenges in the IT systems for taxpayers, even the online GST Network (GSTN) portal maintained by the government has its own share of teething problems. Users nationwide have been facing numerous concerns surrounding the website, with some of them being non-validation of login credentials, non-acceptance of additional information for amendments in registration details, non-issuance of new registrations numbers, temporary black out of certain state GST sites, etc.
In my opinion, in order to help ensure smooth transition to GST, embracing the right technology at the right time is not a ‘good to have’ but a ‘must have’ or a ‘prerequisite.’ Thankfully, there are many companies or Application Service Providers (ASPs) that offer GST solutions that can extract the data from the dealer’s ERP system, run data validation checks, upload the same to the GSTN portal, compute the taxes, prepare and file the GST returns. Also, for micro, small and medium enterprises (MSMEs), there are laptops available in the market which are pre-loaded with the GST softwares which can assist in raising GST invoices and preparation and filing of GST returns.
All in all, to make GST a success, India needs a well-oiled robust IT ecosystem comprising the government’s GSTN portal, ERP vendors and hardware suppliers all joining hands with the dealers who are willing to embrace IT as part of the new tax regime.