GST compliance would be important for any tax compliant entity. In this year of a changing law (260 Notifications, 1000s FAQS, Twitter, numerous circular)one needs to understand the errors and omissions which need to be corrected and systems put in place for preventing recurrence.
The reasons for issued along with the possible suggestions to resolve have also been provided as under:
1. Lack of awareness of the GST law of the tax payer, professionals and revenue officers at this point of time.
Continued Updation and training across India is the way out. Training of present employee, vendors in the finer aspects of law. Updating on the changes and their impact on the business in an ongoing basis.
2. The financial or operating systems not having been integrated to the compliance requirement of GST could result in a major issue of systems not in line with returns.
A quick review of the information systems and returns by way of reconciliation of tax paid and credit availed. If amounts are significant, then need to do manual reconciliation to identify correction in the system..
3. GST has been in place for 10 months now. The filing done till now including the GSTR3B, GSTR1, Trans 1 etc filed may have been done in hurry due to shifting time lines and IT not being ready. Errors can lead to loss of credit due to time limit and future demands due to short payment.
A one time review by experts on the extent of compliance and whether optimum credit has been availed.
4. The present uncertainty in the fairly complex law which the common man may not be able to comprehend, especially with many open issues being unaddressed and frequent amending notifications/ changes. This trend is expected to continue for the next year or so.
All the pending issues can be collated by a special task force set up by the Government and action of amending act, rules and issue of clarification taken up in a time bound manner.
5. Confusing clarification and guidance by the revenue officers. The 1000s of FAQs indicate the number of issues needing clarity.
A consolidated FAQ be issued considering the latest changes.
6. Since it is a new law there are many departures for the erstwhile service tax or Local VAT.
A note on what are the departures can be hosted on the CBIT website.
7. The objective of an ideal value added taxation being diluted to such an extent that GST looks like a mixture of many laws allowing for limited credit adjustment.
Slowly move the law to a user friendly law including the objectives of GST in mind and suggestions not made for the law evader.
8. The persons in the parallel economy actively seeking to continue their off record transactions using the loop holes available.
The simultaneous online information seeking system to work and such identified person who do not respond be acted against.
9. The revenue officers being overactive in interpretation and hoisting frivolous demands though instruction on where they need to drop cases have been made clear.
A national responsive email if and toll free number for such instances be set up and advertised in all GST offices.
There maybe many more but suffice that those who feel the above is valid share with the stakeholders for smoother GST transition and continuing business.
The author can also be reached at madhukar@hiregange.com
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