Migration...

“The availability of input tax credit under the GST should have prompted many taxpayers to come under the GST net. The low numbers are intriguing,” added Roy.

Unlike the service tax regime, the GST allows service taxpayers to avail of input tax refund for business expenses on goods such as computers and stationery. Another reason could be that these taxpayers may be either ‘nil taxpayers’ or ‘non-filers’.

“These may be people that have stopped doing businessmanufacturing or providing services ,” said MS Mani of Delhi. He added that that these may be escaping the arduous and painful surrendering of registration under the two Acts —Central Excise and Service Tax.

“Surrendering registration under central excise and service tax is quite a painful process. So instead, these people may have been filing nil returns or may have stopped filing returns altogether” Mani added.

Besides, existing taxpayers are not mandated under the GST law to migrate, leaving them with an option of automatically giving up their registration. Bipin Sapra of EY said the significant gap in the case of both central excise and service tax migrations could be on account of problems with respect to registration with the GSTN.

“A lot of people are facing problems with registration. There is no reason why so many people should have been left out. There is a problem with the software. There are 10-15 per cent people trying to register but unable to,” he said.