GST implementation: Dawn of a new era; government should ask for only GSTN level data–Financial Express–04.07.2017

Rahul Renavikar

1. The concessions and the structural adjustments made all along the path certainly has made the Indian GST less efficient. The biggest adjustment was to have a dual GST structure in the country where the Centre would levy a CGST and the States would levy a SGST on the same transaction involving goods and/or services.
2. The idea of having one national GST was thus put to rest and, along with it, the ease and efficiency of having a centralised registration was also shown the door.
3. The telecom, banking, insurance and other such service companies having pan-India operations, however, were hoping against hope to get some relief on the centralised registration, not perhaps realising that given the federal structure of the country, a state-wise registration was inevitable.
4. Once the dual levy structure was decided, there was a string of other concessions/adjustments which diluted the main concept of the GST.
5. Key amongst them were having multiple rates for goods and services, provision of band of rates for state GST, etc.
6. the biggest changeover though is the role of the IT systems and heavy dependence on upload and download of data for GST compliance.

• The government expects that every taxable transaction in this country is recorded and matched on the GSTN portal at the in-voice level, which is a very ambitious plan.
• All taxable persons (above a certain threshold) need to diligently and consistently upload in-voice level sales and purchases details onto the GSTN portal.
• Any mismatch would result in the buyer being denied the input tax credit which he/she would have earlier claimed, directly impacting his/her cash-flow.
• The government should reconsider the requirement of uploading in-voice-level data and ask only for the GSTIN-level data to be matched, at least in the initial years of implementation.
• As it is, the trade and industry is grappling to make every player in the value chain, GST ready. A cue can be taken from Form 26AS compiled for Income Tax purposes where the summary data is matched for verifying TDS claims.
• As regards the states, the state of Jammu & Kashmir is the only state which hasn’t joined the GST bandwagon yet and hence doing business in J&K has now become more expensive, so have the goods and services procured from outside of J&K. The IGST levied on all supplies made to a dealer in J&K would not be available as a credit to him when he resells the same to a consumer in J&K.