GST Blues – What can the government do to stem the issue…?

The government did make a great start by sticking to its deadline of July 01st for GST launch. While the launch and its implementation have been fairly smooth, the real problems have arisen after that. To be fair, some teething problems were expected in the process but what has transpired in the last few weeks is a sense of chaotic frustration among businesses. Here are 4 things the government can do to mitigate the situation on a priority basis…

Put the tech devils to rest… 

There is too much time and energy spent on handling small IT issues. The government needs to immediately take a ground-zero look at its IT backbone as well as the delivery by its tech vendors and look to diversify its risk if the need arises. In the larger interest of control, the government should look at in-housing its entire IT activity to the extent possible.

What about my credit? 

That is the big practical problem that people are facing. The much talked about seamless input tax credit is not exactly working; putting people through a lot of pain. The pain becomes more acute for exporters as they need to claim their tax paid on imported inputs as credit against exports. Currently, they are finding it hard to do the same and that is leading to a serious liquidity crunch for these exporters.

How about online plus offline?

This is perhaps the biggest challenge faced by the GST implementation. When the online Income Tax filing system was introduced, it was launched with 2 major differences. Firstly, the online filing was launched in a phased manner with all categories of filers being gradually brought into the online filing fold. Secondly, for quite a few years, the IT department offered the dual facility of filing your returns online or through the off-line route. This kind of a dual approach would have worked fine as most traders are not exactly familiar with too much of IT usage and this will give them time to fully shift towards online filing. It will also give the GST Council enough time to tweak its hardware and software accordingly.

How about auto-registrations?

The big reason GST adoption is lagging is that people are still finding it hard to register for GST. There are system-related and technical issues. To begin with, the government can automatically port all businesses with a valid PAN number to automatically port into GST since the GST number is based on the business PAN anyway. The service tax registration process was a lot simpler and the GSTN need not have duplicated the process all over again. That is the starting point and if that is simplified, a lot of comfort and simplicity will follow down the GST value chain! ©

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