Major problems related to GST
After the implementation of GST in India, several traders, exporters have protested in different parts of the country at different times. Today, after more than 2 years of the implementation of GST, it is only fair to say that not everything went as planned.
The India GST is not just the highest tax rate, but it also has the largest GST slab rates. In Asia, India has the highest standard GST tax rate, and in the world, India is second only to Chile. Power, petroleum products, and real estate are still outside the ambit of GST.
Let’s look at various problems that surround the GST taxation system of India, along with the grievances of taxpayers.
The government, along with the GST council, still needs to make a lot of improvement in the return filing system along with the consequences related to form which needs to be faced by the taxpayer. Some of the issues in which finance ministry must work immediately are:
- Absent a proper guide for GSTR 9 annual return form, it has no options for Invoice Addition, modification, etc. Such aspects only make it harder for taxpayers to file returns.
- An important aspect is that, in case of excess tax paid by the taxpayer, there is no option of making any modification in the paid challan, and there are several problems when you go for claiming the refund.
- The credit claimed needs to be reversed in case the payment is not made within 180 days. For an organization keeping note of such things can be a burden.
- Under GSTR 3B, there is no option for making any modifications. If the changes are to be made, then the process is one month long, which ultimately attracts an interest penalty as well.
- Another important aspect is that the credit/debit note and B2C sales made and entered in GSTR 1 cannot be modified further, which again is a severe issue.
- In case the taxpayer received Trans 1 notice in Form 603, then he has to provide all the previous details as well, which is a tiresome process.
Apart from technical issues, there are some other issues too pertaining to GST. These are:
- E-commerce companies: They are required to collect TCS from the sellers during the time of payment. Making provisions for TCS will result in capital blockage, which can disrupt the everyday operational cost.
- Interstate trade and E-way Bill: The GST network became a part of public jokes and disappointment when immediately after the rollout of the E-way bill was withdrawn as it could not take the high number of bill requests. Also, the transport companies or the trucker have to generate an E-way bill on their own in case it expires during the transit.
- Adaption to It system: Most of the Indian economy is constituted by small traders and SMEs. Expecting them to make the transition to an online platform without making any errors is extremely unfair.
- Small Traders: Instead of making things easier, GST implies an extra operational cost for small businesses as they have to hire an accountant to implement GST. Also, the rate of 28% of products like plywood, automobile parts only forces buyers to opt for unregistered dealers.
- Fiscal Feature of GST: The shortfall of GST to meet its expected revenue. If it continues, the common man will be on the receiving end of it.
Along with the issues mentioned above, with the rollout of GST and its online system, Chartered Accountants are also facing issues of adapting to the new system and aligning their books with the continually changing provisions.