GSTing till 2019 and ahead!!

Authored by Hammurabi & Solomon Partners

With the implementation of GST two years back, India has seen one of the biggest tax reformsfor the growth and revival of its economy. Post the journey of peaks & troughs, the GST regime is finally settling in to the needs of business cycle.

The Government, with the theme of promoting ‘Ease of Doing Business’, is trying hard to make this reform simpler, business friendly and transparent in its functioning. Such measures can also be seen during this year’s budget speech of our Hon’ble Finance Minister, wherein announcements were made towards the simplification of GST.

GSTing till 2019 and ahead!!

Pravesh Khandelwal

With the implementation of GST two years back, India has seen one of the biggest tax reforms for the growth and revival of its economy. Post the journey of peaks & troughs, the GST regime is finally settling in to the needs of business cycle. The Government, with the theme of promoting ‘Ease of Doing Business’, is trying hard to make this reform simpler, business friendly and transparent in its functioning. Such measures can also be seen during this year’s budget speech of our Hon’ble Finance Minister, wherein announcements were made towards the simplification of GST.

Hits under GST

·  Roll out of a single simplified GST monthly return. Such simplified compliance driven measure is the need of the hour during current times where the industry is struggling to do compliances under GST, and is a welcome step;

·  Another big announcement made from compliance perspective is the proposed electronic invoice system wherein invoice details will be captured in a central system at the time of issuance. This will in-turn be used to pre-fill GST returns & will eventually eliminate the need for issuance of a separate E-Way Bill. The expected roll out date for such electronic invoicing system is January, 2020. The industry needs to gear itself for such a change;

· The Budget announcement also included other such measures like availability of free accounting software for return preparation to small businesses. Further, a fully automated GST refund mechanism is also on the offering & has been very well appreciated by the industry;

· Another welcome measure is the roll-out of Sabka Vishwas (Legacy Dispute Resolution Scheme), 2019, wherein the Government has provided a one-time window to the industry to settle their disputes pertaining to (erstwhile) indirect tax laws. The assessee after complying with certain conditions of the scheme & post depositing certain  prescribed percentage of the tax dues, can get a relief available under the scheme and can put an end to its long- drawn litigation of (erstwhile) indirect tax laws. This measure was very much needed, anticipated and is likely to get a favourable response from the industry as more than Rs. 3.75 lakh crore is blocked in legacy litigations of service tax and excise.

Challenges under GST

·  GST collections have been the cause of concern for the Government. However, the trends are encouraging as the average monthly collection for April-June’ 2019 quarter stood at Rs. 1.04 trillion, up by 7% from corresponding period last year. Further, the Government by introducing a State Level Cess – “Kerala Flood Cess” @ 1% on intra-state supplies to end customers, effective 1^st August, 2019, seem to be diluting the basic theme of GST – One Nation One Tax;

· Yet another area of concern for the industry is the provision of Anti-Profiteering in GST. Though the Anti-Profiteering Authority has been granted an extended tenure of 2 years, till November 2021, but the Government has not yet released any guidelines as to how the pricing of the product needs to be arrived at by the industry, in order to be compliant with the anti-profiteering provisions in GST.

·    Processing of GST refunds to exporters of goods and services is another area of challenge. While the Government has taken several measures for speedy processing of refunds, but the real benefit has not been transitioned to the exporters at the ground level;

However, with the series of above-mentioned steps aimed at widening the GST base, plugging tax evasion, countering the menace of fake invoices through E-invoicing etc, the road ahead for GST looks bright. Some of the measures which can be expected in GST in near future are:

· Revamp and simplification of GST returns compliance perspective;

· Rationalisation of GST rates on certain commodities & a mean rate by merging the current GST rate of 12% and 18%;

· Expansion of Tax base by bringing non-GST products within the ambit of GST. To start with, the Government may consider bringing petroleum products within the GST ambit.

We offer end to end services to its Clients under various legal domains, including Indirect Tax/GST. Our service offerings under Indirect Tax/GST inter-alia includes:

Ø  Compliance related services like preparation and filing of GST
returns;

Ø  Assistance in GST Audits and reconciliations;

Ø  Study on Anti-Profiteering;

Ø  Assistance in filing GST refunds with tax authorities;

Ø  Drafting of Writs/Advance Rulings/replies to SCNs and assistance in
representation before various tax authorities/tribunals/Courts;

Ø  Formulating a strategy for litigation prevention and litigation
management for GST & (erstwhile) Indirect Tax laws;

Ø  Advisory to Clients on complex issues in GST;

Ø   Providing services under Customs (including SVB);

Ø  Drafting of representations on various industry issues and liaising
with tax authorities and CBIC for the same

(the author is a tax partner with Hammurabi & Solomon Partners and can be reached at pravesh.khandelwal@hammurabisolomon.com)