Three months after roll­out of Goods and Ser­vices Tax, tech­ni­cal glitches and com­plex com­pli­ance norms take a toll on busi­nesses and econ­omy.

India Business Journal - - CONTENTS - IBJ RE­SEARCH BU­REAU

Three months after roll­out of Goods and Ser­vices Tax, tech­ni­cal glitches and com­plex com­pli­ance norms take a toll on busi­nesses and econ­omy.

As ex­pected, the GSTN (Goods and Ser­vices Tax Net­work) por­tal crashed yet again on Septem­ber 20. This time, how­ever, the web­site, on which GST re­turns are filed, fared much worse than it had on Au­gust 20. The por­tal could ac­com­mo­date only over 22 lakh GSTR-3B re­turns (a sim­pli­fied GST re­turn sum­maris­ing sale and pur­chase of goods and ser­vices for a month) for Au­gust on that day as against more than 47 lakh GSTR-3B re­turns for July filed on Au­gust 20.

A spate of tech­ni­cal glitches on the por­tal of GSTN - a non-gov­ern­ment com­pany pro­moted by Cen­tral and State gov­ern­ments to cater to the IT re­quire­ments of the new in­di­rect tax regime - caused wide­spread out­rage among tax­pay­ers as they rushed to meet the monthly dead­line for fil­ing re­turns. Three months since the roll­out of the GST regime, nearly 95 lakh tax­pay­ers - in­clud­ing about 60 lakh as­sesses of the erst­while Ex­cise Duty, Ser­vice Tax and VAT regime and around 24 lakh new deal­ers as well as an­other 11 lakh deal­ers un­der the Com­po­si­tion Scheme (a sim­pli­fied scheme un­der the GST for en­ti­ties with an­nual turnover be­low Rs 75 lakh) have had a har­row­ing time cop­ing with the big­gest tax re­form in in­de­pen­dent In­dia.

The GST regime, which uni­fied over a dozen Cen­tral and State levies into a sin­gle tax and was sup­posed to sim­plify the in­di­rect tax sys­tem, has wreaked havoc among busi­nesses and in­dus­tries, es­pe­cially small and medium en­ter­prises (SMEs), since its July 1 launch. The new tax regime, which is to­tally con­ducted on­line, was any­way set to im­pact small busi­nesses, who are gen­er­ally not com­fort­able us­ing com­put­ers.

No won­der, on­line mi­gra­tion of around 80 lakh as­sessees of the ear­lier Ex­cise Duty and VAT regime in June pro­vided a taste of the en­su­ing chaos. How­ever, the tran­si­tion was rather smooth as about 60 lakh as­seessees mi­grated to the new regime (the re­main­ing tax­pay­ers were not ex­pected to join the GST sys­tem as the thresh­old limit for the new tax is set at Rs 20 lakh an­nual turnover Rs 10 lakh for en­ti­ties in Jammu and Kash­mir, the North-East and hill States of Ut­tarak­hand and Hi­machal Pradesh).

The first real test of the new tax regime was on Au­gust 10, when busi­nesses had to file their first re­turn, GSTR-1, for July, pro­vid­ing details of their sales. The GSTN por­tal could not take on the rush of re­turns and crashed fre­quently. The fact that only 17 lakh GSTR-1 re­turns for July have been filed so far ex­plains the ex­tent of teething trou­bles in the sys­tem. Re­peated tech­ni­cal glitches on the GSTN por­tal in Au­gust and Septem­ber prompted the gov­ern­ment to post­pone the time­line for fil­ing the July re­turns twice.

Ac­cord­ing to the gov­ern­ment, the GSTN por­tal is ca­pa­ble of han­dling 300 crore in­voices up­loaded by 1 crore traders ev­ery month. How­ever, the ground re­al­ity tells a dif­fer­ent story. Over the three months of the GST regime, less than 30 crore in­voices have

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