With the implementation of GST, India took a step towards unified common national market. It aims to bring in increased efficiency and compliance and also boost government’s ‘ease of doing business’ initiative. However, being a new, evolving law, there are certain improvements required. Few areas that need consideration are as given below:
1. Processes must be reduced so that business can operate efficiently in the best interest of the people and for economic growth. Filing of 37 returns per GSTIN could be a very time consuming exercise, wherein everyone would not even have the bandwidth to comply with.
2. Relief must be given to small scale operators and particularly reduced processes should be applicable to them. They do not have finance or resource to comply. Much of India’s business is one or two man show. The facility to file quarterly returns should be extended to assessees with up to 10 crore turnover.
3. Rates should be rationalized and reduced to make India competitive and in interest of compliance and economic growth. The highest rate should be kept at 18% and there should be only few items that fall in 28% slab. Daily use items such as soaps, cremes, movie tickets, electrical goods should not be taxed at 28%.
4. Technological glitches of the GST network should be sorted out on a war footing basis.
5. Further, there is also no provision to amend GST Return once uploaded, in case some clerical error is found later. Provision should urgently be made to allow rectification of returns.
6. The matching concept of input credits requires large volume of data of the supplier to be matched with that of the receiver. This process should be simplified, wherein only broad main criteria may require matching like the invoice value and the tax amount and matching of specific, precise wide variety of data should not be required like invoice number and date.
7. Valuation Rules lack clarity and are debatable. This is likely to lead to litigation and transfer pricing issues / litigation. These rules need to be rationalized, simplified and be fair to one and all.
8. In case IGST is paid instead of CGST and SGST, and vice-versa, the recourse available is only refund. Assessees should be allowed to self-adjust in such cases.
9. In respect of capital goods received on or after 01.07.2017 (Capital goods in transit), transitional credit of tax paid in earlier regime should also be available. Transitional input credit should also be available on goods or services are delivered or received before the appointed date and the assessee received the invoices after appointed day.
10. Credit of Krishi Kalyan Cess should be allowed to be carried forward as eligible credit, as it was allowed as set off in the service tax regime.
11. Composition scheme should also be provided to small scale service providers.
12. Exempt supplies should be excluded from the term Aggregate Turnover (‘AT’) for the purposes of determination of registration requirements.
13. Advance Authority for Rulings should be active at the earliest as GST law is already in force since July 1st, 2017.
14. Anti-profiteering provisions need reconsideration as these may unnecessarily cause hardships to businesses. System should be made to ensure that this is not misused so as to cause difficulties
15. Single cash ledger concept should be used instead multiple cash ledgers i.e. separate cash ledger for CGST, SGST, IGST, interest, penalty etc. Further it is suggested to allow partial / period payment of offset of tax so that an assessee can bear interest only on the short payment.
16. Reverse charge payable by registered dealers in case of purchase from unregistered dealers (Section 9(4)) should be completely withdrawn, instead of keeping it in abeyance till 31.03.2018.
17. The issues being faced by the exporters should be dealt with and the refund procedure should be activated immediately.
The above issues need to addressed on an urgent basis and to bring in more clarity in the implementation of this biggest tax reform. Rationalizing GST rates, removing excess processes, creating efficiencies, removing debatable aspects, are amongst the urgent requirements for improvements in GST in the interest of the nation as a whole. Our rates should be competitive with global rates so that India becomes a preferred competitive destination which will give a boost to ‘Make in India’ initiative.