One Year of GST
By CA Alok Krishan
History was written one year back when the biggest tax reform was ushered in on the midnight of 30th June 2017. The reform which changed the way we do our business. The reform which made “One Nation One Tax” a reality. The reform replaced a plethora of tax laws into one single law across the nation and the reform which changed the way the State and Central Revenue departments have been accustomed to work since independence.
Yes, today we celebrate the 1st Anniversary of Goods and Service Tax (GST), nick named as Good and Simple Tax by the Hon’ble Prime Minister of India. As was expected, the first year has been full of confusions, solutions, clarifications and notifications.
It not only merged certain laws into one, but it also created a new terminology in business where in manufacturing, sale and service has been replaced with supply. A web of legislations which is beautifully woven and held together by the mechanism of co-operative federalism where all decisions for modification or change are taken by reaching upon a consensus in the biggest decision making authority under GST, The GST Council.
The open arms with which the business community embraced the change was equally reciprocated by the Government by being open to criticism, suggestions and modifications. Twenty Seven meetings of the GST Council were held during the year resulting into more than 325 Notifications and more than 65 circulars and orders. This is in addition to many clarifications on Tweeter Handle, numerous press releases, advertisements, FAQ’s etc. Reduction in rates was also made for many ki
This major change not only was a change in law but also a change in the manner of compliance. With a major trust on digitalisation and computerisation in not only compliances but also in other aspects, it helped a lot in minimisation of human intervention in implementation.
It is now time to look back on the one year gone by and revaluate what we achieved, what we left out on and what we missed out both for the government and stake holders. If we look back, most of the problems were due to IT hiccups at all levels. At the top, the GSTN was not completely ready for the launch, at the middle the software companies were not fully with their software aids for accounting and compliances and at the other end, the stake holders were ready with updated hardware and software. The hurdles of this major issue was however handled by accepting this and being lenient in reducing returns and some times waiving and at other times reducing penalties on non compliance. Assurances by the people in authority for taking a lenient view of lapses, other than the intentional once, in compliances restored comfort in stake holders and is expected that the assurances will be honoured.
A lot of our experience in the first year was a result of how prepaired we were to adopt this change and the teething troubles associated with the change. Large corporate houses have by and large welcomed the decision.
It was indeed a bold, historic and revolutionary tax reform aimed at making India a truly unified single market by eliminating double taxation. However the backbone of the success of GST lies in digitalisation and technology. However, we should look into the possibilities of reducing the number of returns required for compliance and simplifying the compliance requirements.
CA Alok Krishan is a practicing Chartered Accountant with a professional degree in law at Chandigarh. He has a strong 23 years post qualification experience out of which around 10 years has been with corporate sector and the balance as a practicing Chartered Accountant with specialisation in Indirect Taxes. The views expressed are his personal views and source of law should be referred to before relying on the same.