News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
« GST - Goods and Services Tax »
 GST return filing system not down, working fine: GSTN
 How to address the challenges expected from new GST returns
 GST portal crashes a day before monthly return deadline; taxpayers complain
 What the new GST should look like
 Govt ready to consider suggestions on tax filing GST simplification
 Businesses to get more time to file GST annual returns
 GST taxpayers alert! CBIC is going to use this unique number from Friday, here’s how it will benefit you
 GST only needs simplificationa
 GST: Evasion, returns and revenue boosting measures to feature at officers’ meet Monday
 Court allows taxpayers to avail disputed pre-GST tax credits
 Experts suggest Singapore GST model to ensure ease of compliance in India

GST is yet to become a good and simple tax
September, 11th 2019

The goods and services tax (GST) law has been in place for a little over two years. The returns and other operational aspects of the GST website are indicative of the shift to/dependence on technology. The availability of an electronic cash ledger and credit ledger in each entity’s GST account makes it simple for assessees to verify and reconcile figures.

One of the objectives of the government is to bring all entities and people who ‘qualify’ within the tax net. This has useful effects, such as reduction in ‘off the books’ transactions and the consequent financial discipline in businesses. Needless to say, the objective is not merely statistical in nature, but, importantly, seeks to maximise tax revenues.

The GST law prescribes a format of invoicing, which includes the GSTIN (GST Identification Number) of the person or entity on whom the invoice is being raised. The monthly or quarterly returns filed by each taxpayer give details of the persons on whom invoices have been raised.

The details of tax paid are mentioned in these returns. Tax is paid either in cash (bank) or by adjusting input credits. Input credits can be availed for the GST paid on all inputs in the furtherance of business. Technology used on the GST website is feeding in all the input credits in an assessee’s account, and it is possible for assessess to check which input credit has not been received by them because of action or inaction of their suppliers. This is akin to Statement 26AS on the income-tax website that gives the details of income tax deducted and deposited from payment to the assessees.

Goods and services are classified under codes of HSN (harmonised system of nomenclature). This is mentioned in each outward supply invoice as also the applicable rate of tax.

The annual return for the period July 2017 to March 2018 requires assessees to fill in annual summaries of HSN-wise supplies and input credits. The assessees may be geared up to give the former from the invoice software used by them. Even then it is a huge effort.

But it is impossible for an organisation to furnish HSN-wise summary of input credits unless they re-enter all input bills HSN-wise in their accounting software. This would be a mammoth exercise for even a small enterprise. One shudders to imagine the workload to accomplish this for a multi-product company with large-scale national and international operations. Many companies attempting this exercise have incurred expenses of millions of rupees without still being able to complete this effort. Figures need to be reconciled with financial ledgers, and monthly and quarterly return filed. It is a gargantuan effort that is maybe giving some professionals a new avenue of work and livelihood, but appears to be of little or no utility or value-add to the GST assessees or the government.

Finally, every exercise must have an endgame or an objective. One must think what possible benefit could HSN-wise summary of input credit tax from thousands of assessees across the country have for the finance ministry?

Financial year 2017-18 was the year of transition from VAT, excise duty and service tax to the GST. Many claims relate to the trans-credit of this year where assessees claim tax credit under erstwhile laws in GST payments. Many assessees may not have filed returns under these laws or paid due taxes. Therefore, the data in the forms relating to trans-credit availed may not match, leading to demands on other assessees for no fault of theirs. The time-limit for the filing of the annual return has been extended three times—the last being in August 2019. I would request the GST Council and all the concerned bodies to review and revise the format of information sought very objectively and as they deem fit in their collective wisdom, with the objective of making the GST a ‘good and simple tax’ instead of a ‘great stress tax’.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2019 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Team

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions