Ebbs and Flows of 365 days implementation of GST: Celebrating a year of learning!!
By: – Bimal jain
Goods and Services Tax – GST
Dated:- 30-6-2018<\/p>\n
Reeling from the messy implementation of demonetisation in November 2016, rolling out of half- baked Goods and Services Tax (“GST”) came as a tide in the lives of Indian businesses and taxpayers. Rightly learned from the natural law theory that being flawless is not something which happens at once, it's a process of crawling, falling and then learning to walk, but being awake to the ebbs and flows of this process, is what that marks success in long run. Learnings of GST in its past one year is no different…..
\n“Any change, even a change for the better, is always accompanied by drawbacks and discomforts.”
\n~ Arnold Bennett
\nWith seeds initially sown by the then Prime Minister Shri. Atal Bihari Vajpayee in the year 2000, GST is definitely not an overnight thought. On July 1, 2017, history was created when the country wit<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n l on businesses in initial months, but it might not be fair to judge its success on that basis. Nonetheless, with optimistic view of brighter and stable future, let us look back on the journey of GST so far to identify key hits and misses along with still needed improvements under 'work-in-progress' GST. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ise duty, non-cenvatable taxes and cesses like CST etc. With seamless flow of input tax credit throughout the supply chain, GST has provided benefit of enhanced input tax credit pool for businesses with minimal cascading. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n of E-Way Bill system results smooth movement of goods and thereby significant reduction of turnaround time for transportation: = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n filing system and matching of credits: = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n : = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n th GST Law part; = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n deed, it is heartening to see receptive approach of the Government in easing out practical challenges of the Trade through either FAQs, E-fliers, twitter account, notifications\/circulars etc., but, with the quantum of rulings coming from respective states' Hon'ble Authority for Advance Ruling at high pace, it is also clear that still GST is a work in progress with lots of issues still unexplained and unearthed. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" Ebbs and Flows of 365 days implementation of GST: Celebrating a year of learning!!By: – Bimal jainGoods and Services Tax – GSTDated:- 30-6-2018 Reeling from the messy implementation of demonetisation in November 2016, rolling out of half- baked Goods and Services Tax (“GST”) came as a tide in the lives of Indian businesses and taxpayers. … Continue reading “Ebbs and Flows of 365 days implementation of GST: Celebrating a year of learning!!”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-12421","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/12421","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12421"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/12421\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12421"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12421"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12421"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\nKudos to GST…….
\nSimplified tax structure bringing ease of doing business in India:
\nSeparate Taxes by Central Government, State Governments and the local governments had resulted in difficulties and harassment to the tax payers in complying with different types of taxes and their compliances. GST has certainly consolidated the multiplicity of taxes in India and has thus created a simplified tax regime. It has replaced around 17 federal and state levies to unify a country of 1.3 billion people into one of the world's biggest common markets to promote ease of doing business.
\nNo more hit of double taxation on pockets of consumers:
\nOwing to Indian government's federal str<\/p>\n
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\nContinuous rationalisation of tax structure making commodities affordable for consumers:
\nMultiple tax rate structure in GST was long debated to cause unease of business when GST was envisaged as a powerful mechanism to bring system of uniform taxation. More particularly, highest tax rate slab of 28% was the centre of pain for taxpayers with even the commodities of general consumption falling in highest slab. Understanding concerns of the trade, the GST council has made wholesale shift of numerous items from the peak 28% tax slab to the more reasonable rate of 18% in last one year which has benefitted the trade a lot in terms of price hike control as well as international competitiveness. Consumers too can now afford various such commodities at affordable prices.
\nCo<\/p>\n
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\nAfter failing to face brunt of high volume of E- Way bills generated on very first day of launch in February 2018, due to which the provision got deferred till April 1, 2018, the government has managed to ensure smooth roll out of the E-Way Bill system since then. For intra-state movement of goods, the provision was implemented in a staggered manner by June, 2018. With removal of inter-state check posts, E-Way Bill system has led to quicker and smoother movement of goods, reducing the resultant turnaround time for vehicles. As per rating agency ICRA, in states such as Kerala, West Bengal, Maharashtra, Madhya Pradesh and Bihar, which were one time known for notoriously high waiting time spent at their borders, the impact has been much more pronounced.
\nMore changes loom……
\nRobust GSTN network to handle compliances with least technical glitches:
\nA<\/p>\n
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\nDue to technical challenges, the matching concept as was initially envisaged could not take off at all. Consequently, interim procedure of filing summarised return in Form GSTR-3B with outward supplies details in Form GSTR-1 is in place. The GST council in its 27th meeting held on May 4, 2018, had approved the revised design of GST Returns that would require a taxpayer to file only one return every month and it sets a period of six months for the transition to take place. The process is designed in 3 stages, wherein stage 2 return will have facility for invoice-wise data uploads by the supplier and also facility for claiming credit on self-declaration basis by recipient, as in case of GSTR 3B now. After six months of this stage, the facility of provisional credit will be withdrawn and credit will only be limited to the invoices uploaded by the sellers from whom the dealer has purchased goods.
\nIt is utmost required that the system of return fil<\/p>\n
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\nNegative list of GST ITC as prescribed under Section 17(5) of the CGST Act, 2017, blocks credit on specified items like motor vehicles, free samples, construction of office\/ factory, etc. There is a strong need to prune down this list to allow credits in those cases where appropriate GST has been paid on its disposal. Further, expenses pertaining to sales promotional activities must be allowed and should not be barred in the name of personal consumption, free samples, gifts etc.
\nChallenges in inclusion of petroleum products in GST:
\nAt the time when diesel and petrol prices were touching multi-year highs, Union Petroleum Minister, Shri. Dharmendra Pradhan had said that petroleum products should be included under GST to help consumers pay a rational price. While the centre wants liquor and petroleum products should come under GST, states are keen to retain their power to tax these items as they are major sources of revenue for them. The blocked road towards inclusion of liquor and p<\/p>\n
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\n * Developing alternate ways rather than denying eligible credit to recipients in the guise of non-payment of taxes by supplier;
\n * Smooth and Fast disbursal of refunds on exports, though lots of efforts are being taken regularly to ease the process;
\n * Dispute Resolution mechanism in case of contrary judgments by two Authorities for Advance Ruling by formation Centralised Appellate Authority;
\n * Minimising state-wise differential provisions as to threshold or specified goods requirement for E-Way Bill in case of intra-state movement of goods as recently seen in Tamil Nadu, Delhi, Mizoram etc.
\n * Providing suitable link to determine jurisdiction of taxable authority of a taxpayer.
\nOur Comments:
\nDespite of being mocked as Gabbar Singh Tax by opposition, GST – the India's new unified nationwide value-added system of taxation has come a long way in simplifying the complex tax structure of the Country. The initial implementation issues which took a toll on businesse<\/p>\n
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\nAs GST's first anniversary passes, the Government is expected to tweak the tax regime through amendments during the monsoon session of Parliament in July. The objective would be to make it more simpler and friendlier with easy return filing process and credit matching system. Formats of annual return are still awaited which may also see practical challenges in understanding. Additionally, strengthening tax administration must also be on the cards. According to Ms Sarna, Chairperson, CBIC, it might take another couple of years or more for GST to completely stabilise and settle d<\/p>\n
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