Skip to main content

Happy Birthday GST and way forward




A year to remember, a year to cherish and a year which wrote history for India. India witnessed the major tax reform since its independence which replaced the traditional indirect tax law to modern GST. Government, System, Taxpayers are the three pillars of this modern tax law. Like a mother who goes under severe labour pain to give birth to her child, same way we all had similar pains to give birth to the child of the nation “GST”. Like a mother who faces what not while first year of her motherhood, we also had the same feeling grooming GST towards its first birthday – 1st July 2018.

We have seen a lot of ups and downs in past 52 weeks and every day was a new challenge for the taxpayer, be it technical glitches, change of tax rate, change of returns etc. etc. etc. But one thing is pretty sure that the way both taxpayers and government has responded to the problems, it was commendable. By the end of the year it seems that GST portal which is the backbone of the modern law is working properly. On our birthday we never see what has happened in past, but we make our plans and goals for the future.

GST Version 2.0 is expected to make major changes, of-course in favour of taxpayers.

Firstly we expect further rationalization of the tax rates. Only few items should remain in 28% tax slab. Doing this would help government to have better tax collection and more importantly administering the tax. There is a need of tax overhaul in terms of tax structures.

Secondly, refunds, be it for exporters or the budgetary support to area based exemption unit is souring the taste of the online based tax law. The government should come with concept of e-wallet for the exporters as soon as possible. The process needs to be ease down to ensure that the huge amount of working capital does not remain stuck for so long. Even in case of exports with payment of tax, a provisional refund should be granted in time bound manner. The transfers of data from GSTN to ICEGATE can be done at a later stage. This will help the exporters to continue their operation without the worry of blocked working capital.

Thirdly, there is a need to simplify the return form under GST. People have some how managed a full year round the clock compliance understanding to be 1st year of GST. But if the same continues, the day is not far when they shall start retaliating to the increasing compliance burden. If matching concept is to be kept, single page return form as proposed is beyond my imagination. The government should sit down and analyse the problems being faced rather than falling in the trap by making decisions in haste.  

Fourthly, although there were GST help desks, GST emails etc. but the fact remains that most of the grievances of the taxpayers had remained unresolved. There is a need to setup a help desk and area based help units to provide time bound resolutions to the taxpayers. Sharing the screenshots without proper resolution solves no purpose.

Lastly, there needs to be appropriate lower level forums for advance rulings. Its been only one year and already there are huge number of cases filed with the various authority for advance rulings. There is a need to encourage provisional assessments and work out lower level methodology to expeditiously resolve the problems faced by the taxpayers. 
Thanks and Regards

Keshav R Garg
(B.Com, FCA, CS, ISA(ICAI))
Author: Bharat's GST Ready Reckoner
            A Handbook on GST
Member: Indirect Tax Committee of CII, 
Founder: MyGst.MyTax Foundation
Adviser: Industries Association of Chandigarh
Adviser: Chambers of Chandigarh Industries

Address: 3328, First Floor, Sector 27 D, Chandigarh, India - 160 019
Phones: +91-172-461-3328, +91-98880-90008
Mail: keshavgarg@kdai.in


Comments

Post a Comment

Popular posts from this blog

GST Registration in case of Renting of Immovable properties:

GST Registration in case of Renting of Immovable properties: By CA. Keshav R Garg 1.      Let us first understand that the place of registration is decided by the term place of business as defined by section 2(85) of the CGST Act 2017. As per the definition of “Place of Business” it is a place from where the business is carried on and/or where a warehouse or any other place for storage of goods is located and/or books of accounts are maintained and/or the business through agent is carried on. It nowhere considers “place of supply” for determining the Place of business for the purpose of GST Registration. Hence, place of supply has no impact as far as GST Registration is concerned. 2.      As per section 22 of the CGST Act 2017, a person is liable to take registration from the place he makes a taxable supply. There is a distinction in place of supply and place from one makes taxable supplies. Place of supply is derived to conclud...
58 comments
Read more

Renting of Warehouse for Agriculture Produce – Taxable under GST

In the case of Rishi Shipping – Gujarat Authority for Advance Ruling has cleared the air that Storing/warehousing and renting of immovable property are two different type of services. Merely because the agricultural produce is stored in an immovable property it would not classify it as Storage and Warehousing Services. Therefore the same shall not be covered under S. No. 54 of Negative List (Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017), hence taxable under the purview of CGST and IGST Act. The Authority held that in order to classify a service as Storage and Warehousing, it should be coupled with loading/unloading/packing services etc. The authority was of the view that where mere building is let out, it shall be classified as renting of immovable property which is chargeable to tax. It is the composite supply, principal supply being renting of immovable property for storage of agricultural produce which is exempt from tax. It further held that once the...
19 comments
Read more

GST IMPACT ON DIWALI GIFTS

With Diwali round the corner and GST being implemented, the businesses are in a state of confusion as to what would happen to tax paid by them during the purchase of Diwali gifts. Various questions like whether such gifts are eligible for claiming input tax credit? Are these gifts used in the course or furtherance of business? How the invoices should be taken for these gifts. These questions are but obvious because Diwali is one occasion where business tries to fulfil all its obligations towards vendors, customers, government officials, consultants etc. As per section 16 a taxpayer is entitled to take credit of input tax charged on any supply of goods or services to him which are used in the course or furtherance of his business.  Therefore at the very first instance, we need to understand, what is in the course or furtherance of business. Course of business means usual business practice such as manufacturing, trading etc. It implies those transactions which are directly r...
19 comments
Read more