GST Gains and Pains on Rates, Registration, Compliance, TRAN

GST Gains and Pains on Rates, Registration, Compliance, TRAN. However, indirect taxation in India has witnessed a paradigm shift on July 01, 2017 with usherance into a unified indirect tax regime wherein a large number of Central and State indirect taxes have been amalgamated into a single tax – Goods and Services Tax (GST). The introduction of GST is a very significant step in the field of indirect tax reforms in India. Customs duty will continue in post-GST regime. Check out GST Pro & Cons from below…

GST Gains & Pains on Rates

Gains

Goods and Services of basic necessity are either exempted or charged to lower rates Standardized GST rates across all States Government open to consider representations from industry.

Pains

Multiple tax rates (12 including cess) as against the expectation and vision for a simple tax regime Classification issues due to multiple tax rates.

GST Gains & Pains : Registration

Gains

Majority of the taxpayers under various Indirect tax regime were successfully migrated to GST and the process of obtaining new GST registrations was also fairly smooth

Pains

  • No centralized registration option for service providers
  • No composition scheme for service providers
  • Functionality for registration by non-resident OIDAR service providers still awaited

Gains & Pains : Transitional Credit

Gains

  • The GST law allows transfer of entire eligible credit from previous law to GST
  • The law also enable certain taxpayers to claim credit of goods in stock procured in past one year
  • For ease of taxpayers, the due date for filing of TRAN-1 is extended up to 30 November 2017 and the taxpayers are also allowed to revise the transitional form once

Pains

  • Taxpayers faced cash flow issue during the first month of GST implementation due to delay in release of transitional forms
  • The facility for filing of TRAN-2 to claim deemed credit is not available yet
  • From law perspective, there is ambiguity over carry forward of credit pertaining to various cess discharged under previous regime
  • Similarly, taxpayers are not allowed to claim transitional credit of stock older than one year. This has been challenged and the writ petition is pending with Gujarat High Court
  • The most upsetting aspect has been the letters issued by the tax department for verification of transitional credits

Gains & Pains : Compliance

Gains

  • Extension of due dates for return filing
  • Option to file a simpler GSTR 3B (which will be followed by detailed return) in initial period of GST implementation
  • Validations on GSTN portal to ensure sanitization of data to be filed prior to filing of return. This would help reduce lot of rectification and corrections
  • Auto population of data in GSTR 2A based on GSTR 1 of supplier; GSTR 3 based on GSTR 1 and GSTR 2 of the registered person
  • No late fee or penalty in case of delay in filing of first quarter GSTR 3B return
  • Single interface and portal for all GST related activities
  • Facility to upload data through various sources i.e. the offline utility, GST Suvidha Providers or manually
  • Real time matching of inward and outward details for input tax credit

Pains

  • Significant increase in monthly compliances especially for service providers
  • Requirement to upload invoice wise data in the return
  • Limit in file size and number of invoices that can be uploaded at a time (offline utility only works with maximum of 14 to 15k invoice entries even though the prescribed limit is 19k)
  • If a return for a particular month is not filed, then taxpayers cannot file returns for all subsequent months
  • Limited access to the GST Suvidha Providers (GSP)
  • Site crash / downtime and automatic and unexpected log-off
  • Functionality for certain registrations (OIDAR etc.), advance ruling applications etc. still not available

Note – 

  • Compliance has been time consuming and a major worry for the industry during the initial months 
  • GST Network is the IT backbone of Government and hence, the success of GST is entirely dependent on preparedness and functioning of GST Network

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