Background:
On 1st of July 2017, the Goods and Services Tax legislation (‘GST’)
was ushered in with pomp and fanfare. Enamoured by the hue created around the
switchover, businesses and tax consultants eagerly welcomed the ‘Good and
Simple Tax’.
In the run up to the
switchover, the Government maintained, confirmed and reiterated that the
Government and the GSTN was ready. That life (compliance) under GST will be
simple and that the GSTN is well equipped and ready to handle the loads of data
that was sought to be uploaded by taxpayers every month through the GSTR-1, 2
and 3 return forms.
Unfairness@Groundzero: Within
weeks from the switchover, grim reality of the preparedness of the Government
and the GSTN began to emerge and the simplicity of the ‘Good and Simple tax’
started to unfold. The Government announced
that the date for filing GSTR-1 (return for outward supplies made) for
the months of July and August 2017 was being extended and in the interim tax
payers would be expected to file a ‘summary’ return in form GSTR-3B. In effect,
the assessee was required to file a return for the aforesaid period twice i.e.
first in summary Form3B and subsequently in Form GSTR1/2/3 giving full details.
Assurances were given that this was a one-time measure and will not extend
beyond August 2017.
When the assessee started
uploading the GSTR 3Bs for the month of July, the Government and the GSTN had
to face harsh reality that: they had underestimated the issue, but the assessee
had to bear the brunt of outages and the snags in data upload, even for
uploading summary data. In a knee jerk reaction, the Government extended the
time limit for filing the return by a ‘few days’. History was repeated while
filing the GSTR-3B for the month of August and the GSTR-1 for the month of
July.
By mid-September, the
Government realised that the patchy solutions approach was adding to the
assessees woes. Faced with the possibility of non-compliance en masse,
the Government announced that a Committee would be formed to address the issues
and in the meanwhile, filing of GSTR-3B would be extended upto the month of
December.
Is it fair?
Is it Fair to thrust upon
Taxpayers a huge new compliance regime? In spite of being aware of the lack of
preparedness, can the Government throw caution to wind in implementation of
GST? Is it fair to be unrelenting on the issue of extending the due dates for a
reasonable period or waiving the fee for filing returns late and hold the tax
payer at a gun point, threatening to penalise for defaults which were not
entirely due to their inaction?
Ergo, desperate tax payers
and tax professionals (who help to facilitate compliance) have had to
thanklessly and fruitlessly expend time and resources to ensure that the
returns are uploaded. In doing so, they have had to forsake personal life not
to mention peace of mind, among other things.
Is it fair for our
Government to adopt such an unrelenting approach, completely belying its own
assurances that in the initial period the Government will adopt a soft approach
and give time to the taxpayers! In addition, is it fair to drain the taxpayers
with a half-baked and untested compliance system?
Last but not the least, is it
fair of the Government to fix the due dates of an untested new law, without
pondering about clash of other due dates where there is no time for the
assessee /tax consultants to effectively comply with anything but a simple tax
law?
Way forward
The Government needs to look at the whole
process with open eyes. To ensure that the system and processes on the GSTN are
truly ready and functional for various types of taxpayers / filings for
which thorough testing of the modules has to be done. Post this, announce due
dates to ensure that compliances can be done realistically.
Also, the Government should build an
interface between the GSTN and the tax payers, which is systematic and time
bound. This will ensure that small and recurring issues are dealt with
efficiently and in early stages, the larger, and more burning issues get
escalated to the relevant persons for early resolution.
The Government needs to understand that the
GST implementation will be effective only if all the stakeholders, instead of
adopting the current ‘silo’ approach, adopt an ‘eco-system’ approach and they
appreciate that their relationship inter se is symbiotic. _
