Against expectations, the 26th meeting of the GST Council held on March 10, turned out to be a very short one with the Council taking only one decision — to maintain status quo in GST procedures. GSTR-3B — the return form which has turned out to be a sort of saviour — will continue to be the monthly return form for another three months.
The GSTR-1 form will also be in place, though taxpayers continue to face innumerable technical glitches while filing the form. Nine months is an extremely long gestation period for any e-filing system; the fact that glitches still exist in areas that are new for taxpayers (such as the structure of the Json files) does not augur well for the future. The Council and the Group of Ministers need to act fast to resolve all technical issues, especially given that the first anniversary of the introduction of GST is only a few months away.
The e-way bill system has proved to be a nightmare for the GST Council. Its introduction was postponed, the site crashed on the date of its introduction, forcing a further postponement. At their latest meeting, the GST Council decided to attempt a reintroduction of the e-way bill system in two phases. From April 1, e-way will be implemented for inter-State transportation of goods. There would be phased rollout of e-way bill for intra-State movement of goods beginning April 15 and the States have been divided into four groups.
Not wanting an encore of their first experiences with e-way bills, it was decided that the first group of States to roll out of intra-State e-way bill from April 15 will be decided on April 7 and all the States will have the system in place by June 1. One of the members of the GST Council voiced a concern that though there is some improvement in GST revenues, the population of taxpayers is not increasing, which could be attributed to evasion.
The first few cases that have been filed in courts on GST have contested the unauthorised stopping of vehicles and demands for documents in the absence of a proper e-way bill system. If the rules are not clear and the website acts moodily, such litigation is only going to increase which would further reduce tax collections.
The GST Council did not waste much time postponing for another three months the provision to pay GST on reverse charge for supplies from unregistered dealers exceeding ₹5,000 per day. Clearly, the intention behind this provision is to encourage registered taxpayers to preferably deal with registered taxpayers — a simple solution to increase the population of taxpayers.
However, ₹5000 a day will pose a tremendous challenge in terms of both administration as well as accounting. The limit should be fixed on a monthly basis and should be generous —₹2,50,000 a month seems to meet this rule. The Council has also decided to continue the exemptions to exporters for another six months — a welcome development since the GST department should now focus exclusively on expediting the refunds to exporters.
The Council could not decide on the manner in which the matching of invoices would work and postponed its introduction. As the GST law takes baby steps towards normalcy, a question that crops up now — after nine months and 26 Council meetings — is “Did India rush into GST?”. As of now, the answer is “Yes”.
The writer is a chartered accountant
via More to fix – Business Line