One year of GST: One of the immediate goals for the Narendra Modi government should be to not scare away small businesses for erring in payments and declarations, noted economist Madan Sabnavis told FE Online. In the past few months, there have been several media reports saying that some GST-registered businesses were given just 10 days to respond to the discrepancies, while in one case, an Ahmedabad-based engineering company was slapped with a notice for a difference of Rs 0.77 in the GSTR-1 and GSTR-3B tax amount.
In an interview with FE Online, Chief Economist of CARE Ratings, Madan Sabnavis, said, “Handholding is still required for them (small businesses).” Ease of compliance should also be one of the immediate goals for the government as the Goods and Services Tax (GST) enters the second year.
The GST Council in its last meeting gave a blueprint of the new simplified single returns filing system, which would take six-twelve months to become fully operational. The plan was finalized after months of deliberations on different formats.
India’s made a switch to the new indirect tax era on the midnight of June 30 and July 1. While the implementation of the GST, though, has been lauded for its potential long-term benefits, its transition from the previous regime was criticised for not being smooth. “The switch was absolutely essential and hence it is commendable that it was done. However, the implementation has not kept pace with several difficulties being faced by the smaller players,” Madan Sabnavis said, adding that he would give 7 on 10 for the overall effort.
Going forward, he said, the government should actively consider getting the “petrol bill under the GST as this has made inflation concept quite volatile notwithstanding the indirect tax.” The Narendra Modi government has indicated that sooner or later petrol and diesel will be brought under the ambit of the GST.