GST implementation in India - Status check and Future roadmap

Introduction

W.e.f July 1, 2017, India's new Indirect tax regime in the form of GST laws on the track of "One Nation - One Tax". The new regime is going to complete its 700 days or 24 months of implementation, no dispute that GST is a game changer as far as Indian economy concerned. As an evident, India has jumped to 77th rank in the World Bank's Index of Ease of Doing Business after implementation of GST. However, it is appropriate to admit that the country's economy has seen chaos all over such as reduction in domestic industrial output, fall in employment and exports during the transitional period GSTN, a common portal provides return filing utility and online platform to comply due compliances under GST Laws by filing regular 'Returns'.

In its pre-mature days, the compliance levels were very low due to confusion; lack of knowledge coupled with technical glitches, the said online platform crashed many times resulted in waiving of late fee. Non-availability of 'Edit' function made issues even worsen. Later a facility to view and reset values has been provided. As a positive note and by end of the December, 2018, the compliance rate increased gradually on account of various anti-evasion measures undertaken by the Central and State Governments. The E-way bill mechanism had been introduced pan-India w.e.f 1st April, 2018 and 3rd June 2018 for inter-State and intra-State movement of goods respectively. Initially, the E-way Bill mechanism also fared badly with system unable to take the bill generation load on pan-Indian base. The Central Government quickly deferred it for few months and return well prepared now it is successfully rolled out nationwide without any technical glitches. According to GSTN portal, total 29,53,19,969 e- Way Bills have been generated till October 25th, 2018. Like any other major disruption, the economy is slowly stabilized itself by end of December 2018.

Scope and Salient Features of the GST Laws

There are four major Acts, besides GST Acts for each States, namely -

a. The Central Goods and Services Tax Act, 2017
b. The Integrated Goods and Services Tax Act, 2017
c. The Union Territory Goods and Services Tax Act, 2017
d. The Goods and Services Tax (Compensation to States) Act, 2017

The Central Goods and Services Tax Act, 2017 confers power upon the Central Government to levy a tax on supply of goods and/or services which takes place within the States. Likewise, the Integrated Goods and Services Tax Act, 2017 confers power upon the Central Government to levy a tax on supplying of goods and /or services which takes place between two states. The Union Territory GST Act, 2017 confer powers upon all Union Territories for levy a tax on supply of goods or services or both which takes place within the Union Territory. The Goods and Services Tax (Compensation to States) Act, 2017 confers power on the Central Government to levy compensation cess on certain items such as pan masala, coal, aerated drinks etc. subject to certain caps. The amount received by the said Cess is to be used for compensating the States for any loss in revenue following the implementation of GST for a period of five years.

Major salient features of GST laws are as follows:

1.		The Central & State GST shall be imposed concurrently on all transactions of goods or services or both.
2.		No cross utilisation of the credits of Central GST or State GST shall be permitted against each other. The credit of the State GST shall not be confined to the boundaries of a State if the goods or services or both sold in the course of interstate trade.
3.		Integrated GST is a novel idea and leviable on all on inter-State transactions of goods or services or both. With this concept, distinction between goods and services is set to be reduced and helps in reducing protracted litigation due to reduced ambiguities.
4.		The Integrated GST shall be equal to Central GST and State GST and all available input tax credits shall be adjustable towards the liability of IGST. The rates of Central GST and State GST shall be decided on the basis of revenue neutrality.
5.		There shall be a taxable limit or threshold limit which shall be a common for both Central GST as well as State GST.
6.		Dispensing with the concept of 'declared goods of special importance' under the Constitution, Earlier, There were restrictions on imposition of sales tax on declared goods. Article 286(3)(a) of Constitution of India authorizes Parliament to declare some goods as of 'special importance' and to impose restrictions and conditions in regard to power of States in regard to levy, rates and other incidence of tax on such goods. But now under same concept has been withdrawn.
7.		Job worker - Section 143 of the Central GST Act, 2017 deals with job work. The principal may under intimation send any inputs, semi-finished goods or capital goods, without payment of tax, to a job worker for job work and from there subsequently send to another job worker and likewise. According to Rule 45 of the Central GST Rules, 2017 the Principal can send goods for job work purpose without payment of GST under the cover of delivery challan and it shall contain the specified details provided therein.
8.		Both Central GST and State GST will have to provide for a compounding scheme for small and medium enterprises.
9.		Section 7 deals with the term 'Supply' which includes all forms of supply of goods and or services and includes agreeing to supply when the supply is for a consideration and in the course or furtherance of business. Section 8 defines the term 'intra-State supply of goods' as supply of goods where the location of the supplier and the place of supply of goods.
		Schedules to the Central GST Law: Central GST Law provides three schedules to describe one of the most important terms 'supply. They are - Schedule I: Activities to be treated as supply even if made without consideration such as permanent disposal of business, supplies between related or taxable persons having the same PAN, supply of goods by a principal to his agent and vice versa, import of services for business purpose, by a taxable person from a related person, etc.
		Schedule II speaks about activities to be treated as supply of goods or supply of services such as transfer of title in goods upon payment of full consideration, supply of goods by any unincorporated association of persons to a member for cash, deferred payment or other valuable consideration, etc. On services point of view, Transfer of right or undivided share in goods without transfer of title, renting of immovable property, temporary permitting the use or enjoyment of Intellectual Property rights, development, design, programming, works contract, etc.
		Schedule III speaks about certain activities or transactions which shall not be treated as a supply of goods or a of services such as services by employee to employer in the course/ relation to employment, Services of funeral, burial, crematorium or mortuary, sale of land, sale of completed buildings, actionable claims etc.
10.		Exclusion of certain products or items from the purview of GST levy such as alcoholic liquor for human consumption. Petroleum and petroleum products, electricity, real estate, employee benefits etc.

Significant Authorities Under GST and Their Roles

A. GST Council

While framing the Constitutional Amendment Bill, the concept of an independent constitutional body, named as GST Council (GSTC), brought in. The Council consists of Union Finance Minister (as Chairman) and Finance Ministers of all the States (as its Members). The key role of the GSTC is to make due recommendation on various provisions of GST laws to the Centre and the States. According to Article 279A of the Constitution, the GSTC shall make recommendations to the Union and the States with respect to -

a.		Taxes, cesses and surcharges levied by the Union, the States which may be subsumed in the GST.
b.		Goods and services that may be subjected to, or exempted from the GST.
c.		Model GST Laws, principles of levy, apportionment of IGST.
d.		Threshold limit of turnover below which goods and services may be exempted from GST.
e.		The rates including floor rates with bands of GST.
f.		Special rate or rates to raise additional resources during any natural calamity.
g.		Special provision with respect to the North Eastern States.
h.		Any other matter relating to the GST, as the Council may deem to be fit.

Quorum

For a valid meeting of the GSTC, at least 50 per cent of the total number of the member should be present at the meeting. Every Decision made during the meeting should be supported by at least 75 per cent majority of the weighted votes of the members who are present and voting at the meeting. The vote of Central Government shall have the weighted of one-third of the total votes. Similarly, the votes of State Government shall have the weighted of two third of the total votes, cast in the meeting.

Till 1st February, 2019, the GST Council has met thirty – two (32) times i.e. till January, 2019. The GSTC has taken more than 1,000 decisions related to GST laws, rules, rates, compensation and taxation threshold including retrospective amendments with respect to availability of Krishi Kalyan Cess, Kerala State Specified Cess to meet its flood disaster, extension of due dates of Annual and other monthly Returns to sail through the transitory phase.

B. National Anti-Profiteering Authority (NAA)

Adequate anti-profiteering measures have been enshrined in the GST laws. Section 171 of the Central GST Act, 2017, provides that any reduction in the rate of tax on any supply of goods or services or the benefit of Input Tax Credit (ITC) shall be passed on to the recipient by way of commensurate reduction in prices. For this purpose, the Central Government, may, on the recommendation of the GST Council, constitute an Authority to examine whether ITC availed by any registered tax payer or the reduction in the tax rate have actually resulted in a reduction in the price of the goods or services or both supplied by him.

Rule 122 to Rule 137 under Chapter-XV of Central GST Rules, 2017 deals with the NAA, its constitution, powers, duties and its Orders. On 16th November 2017, the Union Cabinet has approved the establishment of the Authority, currently, its nodal office is situated at New Delhi and State level Screening Committees in 29 States and 3 Union Territories.

The NAA comprises a Standing Committee, Screening Committees in every State and the Directorate General of Safeguards. (DGS) A five-member standing committee has been duly constituted to receive the complaints of undue profiteering made by entities under the GST regime. The Standing Committee on anti-profiteering will act as a complaint processing machinery and will refer any cases it finds fit for an investigation to the DGS.

The NAA will take up cases for scrutiny that have a mass impact and where the undue profit of more than Rs. 1 crore has been earned. According to Rajya Sabha Records, the NAA has received more than 360 complaints during April – November 2018. The complaints are in its final stages of conclusion and decisions on penalty taken by the NAA will be final. However, current anti-profiteering provisions are lacking in providing specific mechanism and guidelines to determine actual profit accruing from the constant rate cuts and thereafter its benefits to the end users. Post all- powerful GST Council's 28th Meeting held on 21st July, 2018, 31st Meeting held on 22nd December, 2018 and last Meeting held on 10th January, 2019, efficiency of the anti-profiteering mechanism is under test where the GST Council has reduced the tax rates on number of goods and services.

Prior to India, Australia was the very first country to introduce antiprofiteering provisions during 2010, thereafter by Malaysia while replacing its Sales and Service Tax (SST) regime during 2015. Indian Government may take a cue from those countries to make anti-profiteering measures even more effective.

Certain Issues

As on date, the NAA has issued total 25 Orders have been issued. However, the mechanism is yet to come out from the technical flaws and other practical glitches, such as –

1.		Computation of margin - Even after 25 Orders, absence of scientific method for computation of margin such as net-profit margin or dollar margin method and also basis for price calculations continues.
2.		Whether Anti-profiteering Measures bringing down prices? It is reported that post implementation of GST, tax rates on 40 – 50 per cent of items in the Consumer Price Index (CPI) basket remains unchanged. 22 per cent of items came down. 13 per cent of items gone up. However, so far, CPI did not show any adverse impact due to GST.
3.		Its Constitutional validity questioned - Whether 'the Authority' enjoys Constituonal validity? M/s Pyramid Infratech has filed a Writ Petition in Delhi High Court challenging its methodology, the lack of clarity on anti-profiteering had led to violation of basic rights such as freedom of speech and equality.
4.		Where to appeal against Orders of the Authority - Due to the absence of 'Appellate Mechanism', aggrieved party M/s. Pyramid Infratech Pvt. Ltd has approached the Hon'ble Delhi Court and also raised the issue of specific methodology in Anti-Profiteering Rules.
5.		Whether its tenure to be extended - As per Rule 137 of the Central GST Rules, 2017, the Authority would cease to exist after two years of its constitution. However, due to constant changes in the tax rates, GST Council may extend its term beyond two years.

Whether prices can be fixed or regulated or controlled? In 2012 the Hon'ble Delhi Court in Indraprastha Gas Ltd. v. Petroleum & Natural Gas Regulatory, (W.P. (C) No. 2034/2012 and CM Nos. 4370/2012 & 5617/2012) rightly held that prices are generally governed or regulated by market forces. Current anti-profiteering provisions are lack in providing specific mechanism and guidelines to determine actual profit accruing from the constant rate cuts and thereafter its reach to the end consumers. Thus, clear guidelines are the need of the hour.

C. Goods and Services Tax Network (GSTN)

Goods and Services Tax Network (hereinafter 'GSTN') is a not for profit, non-government company and private limited incorporated under the Section 8 of the Companies Act, 2013. It is a special purpose vehicle incorporated on March 28, 2013. GSTN is under strategic control of government. The Central Government holds 24.5% equity and all States, Union Territories together hold another 24.5%. Remaining 51% of equity is held by financial institutions like HDFC, ICICI, LIC etc. The GSTN has been set up to provide Information Technology infrastructure to the Central and the State Governments, taxpayers and other stakeholders for the implementation of the GST. It is reported that the GSTN is supporting in raising 3.5 billion invoices per month and the subsequent return filing for 65 to 70 lakh taxpayers

GSTN and Its Role

a.		To create common and shared IT infrastructure for GST functions
b.		To facilitate registrations, returns, tax payment, settlement of IGST payment, generation of business intelligence and analytics, etc.

Considering the nature of "State" functions performed by GSTN, the all-powerful GST Council in its 27th Meeting held on May 4, 2018 through video conference has decided to acquire remaining 51% stake held by non-governmental institutions equally by the Centre and the State governments and allowed GSTN Board to initiate the process to convert as a fully Government owned company.

D. Authority For Advance Ruling

Advance Ruling means the determination of a question of law or question of fact with respect to duty or tax payable in relation to an activity which is proposed to be undertaken, by the applicant. In other words, it is a 'Ruling' to determine the possible tax liability in 'Advance on application' by the taxpayer. Post globalization and in its first attempt, the Central Government vide Finance Act 1999, a scheme of Advance Rulings (Central Excise, Customs & Service Tax) has been incorporated in the Customs Act, 1962, the Central Excise Act, 1944 and in the Finance Act, 1994 by the Finance Acts of 1999 has been introduced in Customs Law, erstwhile Central Excise and by the Finance Act 2003, same concept was introduced in Service Tax. Advance Ruling scheme is intended to provide certainty or clarity to prospective domestic and also for foreign investors. However, the Authority for Advance Rulings became functional only during 2002-03.

The similar concept has been brought in under the new Indirect Tax Regime. Chapter XVII of the Central Goods and Services Tax Act, 2017 (equivalent provisions also provided in the State Goods & Services Tax Acts) deals with the Advance Ruling issues. Relevant provisions spread over 12 sections i.e. Section 95 to 106. Relevant Rules has been provided in Chapter XII of Central Goods and Services Tax Rules, 2017. Rule 103 to 107A deals with procedural aspects such as Appointment of Members, Application to the Authority for Ruling, manner to move Appellate Authority and other issues connected therewith. Section 95(a) of the Central GST Act, defined the term 'Advance Ruling' as a decision provided by 'the Authority' or 'the Appellate Authority' to an applicant on matters or on questions specified in sub-section (2) of Section 97 or sub-Section (1) of Section 100, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant.

States and Its Appellate Authority

According to State GST laws, all States are required to set up at least one Authority for Advance Ruing (hereinafter 'AAR') for seeking ruling over prevailing GST levies and one Appellate Authority for Advance Ruling (hereinafter 'AAAR) to hear appeals against the Advance Ruling in the interest of equity and justice.

As on date, about 13 states, including Karnataka, Tamil Nadu, West Bengal, Gujarat, Madhya Pradesh, Rajasthan and Uttar Pradesh, have setup their 'AAAR'. State GST laws mandates that the Appellate Authority shall have 'two members' such as the Chief Commissioner of Central Tax as designated by Central Board of Indirect Taxes & Customs (hereinafter 'CBIC') and the Commissioner of the concerned State Tax. For instance, Karnataka – Appellate Authority will be headed by,

1.		The Principal Chief Commissioner, Bengaluru, GST & CX Zone, and
2.		The Commissioner of Commercial Taxes (Karnataka), Bengaluru.

From the above, it is apparent that both AAR and AAAR is heading by two Members, say, the Chief Commissioner of Central Tax as designated by Central Board of Indirect Taxes & Customs (CBIC) and the Commissioner of State Tax, which is contrary to pre-GST regime where the Authority was headed by a 'Judicial Member' who was a retired Supreme Court Judge. Surprisingly, the total questions raised with the AARs in the last 15 years were less than 300, whereas the number of questions rose under GST has exceeded.

Issues may be raised with the Authority

Sub-section (2) of Section 97 & Sub-Section (1) of Section 100 of the Central GST Act, 2017 deals with certain definite questions which are eligible to raise with the Authority. They are -

1.		Whether an applicant is required to be registered or not.
2.		Classification of any goods or services or both.
3.		Applicability of a notification issued under the Central GST Act, 2017.
4.		Determination of time and value of supply of goods or services or both.
5.		Admissibility of Input Tax Credit (ITC).
6.		Determination of the tax liability on any goods or services or both, etc.

Procedural aspects

Rule 104 of Central GST Rules prescribed a FORM GST ARA-01 and shall be accompanied by a fee of Rs. 5,000 rupees, to be deposited in a specified manner. Due to the absence of an online mechanism, for the time being, an application for advance ruling can be made manually, in quadruplicate.

Rectification of Mistakes

The Central GST Act provides due powers to both Authority for Advance Ruling (AAR) and Appellate Authority (AAAR) to amend their own order to rectify any mistake within a period of six months from the date of the order. A mistake may be noticed by the authority suo motu, by the applicant or the jurisdictional officer. If a rectification has the effect of enhancing the tax liability or reducing the quantum of Input Tax Credit (ITC), the applicant must be heard before the order is passed.

Advance Rulings and Its Binding

An advance ruling pronounced by the AAR shall be binding on the applicant who raised the question, the jurisdictional Officer and the authorities subordinate to him, in respect of the applicant subject to change in law or facts as the case may be. The Hon'ble High Court of Delhi High in UAE Exchange Ltd. v. UOI 236 ELT 223 affirmed the above-stated position. However, an applicant or interested person may challenge an advance ruling by filing a writ petition under Articles 226 with the jurisdictional High Court or under Article 32 with the Supreme Court of India.

Appeals against the Order of AAR

Any aggrieved party can file an appeal with the AAAR. An appeal must be filed within thirty days from the date of the receipt of the advance ruling. The appeal has to be in prescribed form and has to be verified in a prescribed manner. The AAAR must pass an order after hearing the parties to the appeal within a period of ninety days of the filing of an appeal. In case of difference of opinion among members of AAAR, it is presumed that no such advance ruling is issued in respect of the question under appeal.

Status of Advance Rulings by each State as on February 1, 2018

Rulings by AAR

Sl. No.	State		Rulings issued
1.	Andhra Pradesh		26
2.	Bihar		02
3.	Chhattisgarh		07
4.	Daman & Diu		03
5.	Delhi		07
6.	Goa		05
7.	Gujarat		30
8.	Haryana		12
9.	Karnataka		33
10.	Kerala		07
11.	Madhya Pradesh		18
12.	Maharashtra		94
13.	Odisha		05
14.	Punjab		03
15.	Rajasthan		26
16.	Tamil Nadu		25
17.	Telangana		12
18.	Uttarakhand		15
19.	West Bengal		27
Total		357

Orders by Appellate Authorities by each State as on February 1, 2018

Orders by AAAR

Sl. No.	State	Orders issued
1.	Karnataka	05
2.	Maharashtra	14
3.	Telangana	03
4.	Uttarakhand	01
5.	West Bengal	04
Total		27

Constitutional Validity of AAR and AAAR

1.		The Hon'ble Gujarat High Court, in last February, admitted a Public Interest Litigation challenging the constitutional validity of the provisions relating to AAR and the AAAR under the Central GST Act, 2017 and the Gujarat GST Act, 2017. W. P. - Nipun Praveen Singhvi v. UoI and
2.		In one more instance, the Hon'ble Rajasthan High Court, in last April, admitted a Public Interest Litigation challenging the constitutional validity of the provisions relating to the AAR and the AAAR under the Central GST Ac, 2017 and the Rajasthan GST Act, 2017. D. B. Civil W. P. – Abhishek Chopra v.UoI
		Hon'ble High Courts outcome is awaited.

E. GST Appellate Tribunal

Prior to GST regime, the legal sanction for filing appeals before the Customs, Excise and Service Tax Appellate Tribunal (in short CESTAT) are provided in Section 129A of the Customs Act, 1962, Section 35B of the Central Excise Act, 1944 and Section 86 of the Finance Act, 1994.

On introduction of GST, similar concept has been brought in under the Chapter XVIII of the Central Goods and Services Tax Act, 2017 which deals with the Appellate Mechanism. Relevant provisions spread over 15 sections, i.e., Sections 107 to 121. Applicable Rules on Appellate Authority have been provided in XIII of Central Goods and Services Tax (CGST) Rules, 2017. Rules 108 to 116 deal with procedural aspects such as Application to the Appellate Tribunal, Appointment of Appellate Authority, Appeals, Production of Evidence, Order of Appellate Authority, etc. Section 107 of the Central GST Act, provides that any person aggrieved by any decision or order passed under the Central GST Act or State GST Acts or Union Territory GST Act by an adjudicating authority may appeal to GST Appellate Tribunal within three months from the date of such decision or order.

Accordingly, Section 109 of the Central GST Act, 2017 deals with the constitution of Appellate Tribunals and their Benches. The said Section provides that the Central Government, on recommendations of the GST Council, by Notification, constitute an Appellate Tribunal known as GST Appellate Tribunal to hear appeals against the orders passed by the Appellate Authority or the Revisionary Authority. The National Bench of the Appellate Tribunal shall be situated at New Delhi which shall have a President and one Technical Member from the Centre and one from the State. In addition to National Bench at Capital, on the recommendations of the GST Council, shall constitute such number of Regional Benches with a Judicial Member, one Technical Member from the Centre and one from the concerned State. Sub-section (6) of Section 109 provides that the Central Government may specify each State or Union Territory to constitute 'State Bench to exercise Appellate Tribunal powers within the jurisdiction of the State.

Constitutional validity of GST Appellate Tribunal

Like AAR the constitutional validity of the GST Appellate Tribunal has also been challenged in the Court of Law. They are –

1.		The Hon'ble High Court of Madras in last June admitted a Writ Petition challenging the constitutional validity of the provisions relating to Constitution of GST Appellate Tribunal under the Central GST Act, 2017 and Tamil Nadu GST Act, 2017. W.P. V. Vasanthakumar v. UoI [2018] 97 taxmann.com 82/69 GST 686
2.		The Hon'ble High Court of Delhi in last July admitted a Writ Petition challenging the constitutional validity of the provisions of Central GST Act 2017 and corresponding Delhi GSTAct, 2017. W.P. Bhartiya Vitta Salahkar Samiti v. UOI Hon'ble High Courts outcome is awaited.
3.		Non-Establishment of GST Appellate Tribunal : Notice to State Government

In contradiction, the Hon'ble High Court of Allahabad in last August first week, while hearing a Writ Petition pertaining to provisional seizure of goods under GST Laws, a Notice has been issuedto Principal Secretary (Tax and Institution Registration) Civil Secretariat, Lucknow by insisting to submit reasons delay for non-establishment of GST Appellate Tribunal even after completion of one year of implementation of GST Laws. W.P. Jai Baba Amaranth Industries v. State of U.P. [2018] 96 taxmann.com 325/15 GSTL 484

National Bench of the GST Appellate Tribunal

The Union Cabinet on 23rd January, 2019 has approved the creation of National Bench of the GST Appellate Tribunal (GSTAT). The National Bench shall be situated at New Delhi. GSTAT shall be presided over by its President and shall consist of one Technical Member (Centre) and one Technical Member (State). GSTAT is the forum of second appeal and the first common forum of dispute resolution between Centre and States under GST Laws. It is said that GSTAT will ensure that there is uniformity in redressal of disputes arising under GST Laws, and therefore, in implementation of GST across the country. However, clarity on 'Regional Benches' is awaited.

6. GST - A Statistical Snapshot as on January 1st 2019

Sl. No.	Total Number of	Details
1		Migrated tax payers	66,24,439
2		New registrations approved	59,45,816
3		Applications still pending	66,724
4		Applications rejected	9,54,735
5		Taxpayers ( new as well as migrated)	1,25,70,255
6		Taxpayers who have opted for composition scheme	17,74,379

7. India's BENEFITS FROM GST - A Journey of 700 days & beyond..!!

a. Subsummation of various Indirect taxes

Various Central, State and local levies were subsumed into GST framework as integrated tax regime. Subsumed taxes or levies will be a part of the entire transaction chain either on the supply of goods or on the supply of services. This allows for an easy availment of input tax credit in intra as well as inter-State transactions. The all-powerful GST Council is empowered to take an appropriate call and recommend the taxes, cesses and surcharges leviable by the Centre, the States and the Union Territories which may be subsumed into GST in near future also. Central taxes, levies or duties currently subsumed into GST are – Central Excise Duty, Duties of Excise levied on medicinal preparations, Additional Duties of Excise levied on goods of special importance, Additional Duties of Excise levied on textiles and textile products, Additional Duties of Customs or Countervailing Duty Special Additional Duty of Customs or SAD, Service Tax. State taxes, levies or duties currently subsumed with GST are – Value Added Tax, local Sales Tax, Luxury Tax, Entry Tax, Entertainment and Amusement Tax with exceptions, advertisement taxes, purchase tax, taxes on lotteries, gambling, etc. In addition to enabling input tax credit, GST is a much-improved version of erstwhile Service Tax and Value Added Tax which extends the possibility of collective gain for all i.e. industry, trade and end users or consumers.

b. Borderless Economy

GST is transforming the transportation or logistics industry in the country where moving goods around was extremely difficult earlier. W.e.f July 1, 2017, inter-state check posts have been disbanded across the country which in turn reduced travel time of long-haul trucks, cargo vehicles by at least one-fifth. Data from the Ministry of Road Transport and Highways reveals that a typical truck in India spends 20 per cent of its time in inter-state checkpoints. This varies from 20-30 minutes per Checkpost in some States such as Rajasthan and Maharashtra but goes up to two hours per day per Checkpost in Bihar or Jharkhand. E-way Bill mechanism will do away of separate transit passes for moving goods from one State to another State.

c. Revenue Buoyancy

Since its inception, the collections under GST have been steady or more or less stable on each passing month. The Central Government has budgeted about Rs 7.44 trillion from GST in the 2018-19 financial year beginning April 1. It is expected that once tax evasion measures like the matching of tax data with income tax returns and stringent compliance measures such as hefty penalty for wilful defaults are put in place. The revenue collection so far as follows -

Sl. No.	Month	Revenue in Rs. (Cr.)
1.	July, 2017	21,572
2.	August, 2017	95,633
3.	September, 2017	94,064
4.	October, 2017	93,333
5.	November, 2017	83,780
6.	December, 2017	84,314
7.	January, 2018	89,825
8.	February, 2018	85,962
9.	March, 2018	92,167
10.	April, 2018	1,03,459
11.	May 2018	94,016
12.	June, 2018	95,610
13.	July, 2018	96,483
14.	August, 2018	93,960
15.	September, 2018	94,442
16.	October, 2018	1,00,710
17.	November, 2018	97,637
18.	December, 2018	94,725
19.	January. 2019	1,02,503
Total in Rs. (Cr.)		17,14,195

From the above table, it is clear that the revenue under the new Regime is seeing buoyancy especially during the month of April – 2018, October, 2018 and January, 2019, say, the total revenue has crossed Rs. 1 Trillion mark thrice.

d. E-Administration or Paperless Compliance

The physical interface between the tax authorities and taxpayers or registered dealers is minimal extent possible.

i.		Registration under GST regime including migration of old registrants under erstwhile regime will be granted online.
ii.		Registered dealers shall be allowed to assess the due taxes payable by them and credit it to the account of the Government.
iii.		Payment of tax shall be made electronically through internet banking. However, smaller registered dealers shall be allowed to use the systems generated challan and pay tax over the bank counter.
iv.		Registered dealers shall furnish the details of outward supplies electronically without any physical interface with the Department.
v.		Inward supply details would be auto-drafted from the supply details filed by the corresponding suppliers.
vi.		Registered dealers are required to file monthly returns of outward/inward supplies, ITC availed, tax payable, tax paid and other prescribed particulars, electronically.
vii.		Matching, reversal and reclaim of ITC are done electronically on the common portal or GSTN portal.
viii.		Registered dealers are allowed to keep and maintain accounts and other records in electronic form.

e. Ease of doing business

Implementation of GST, undoubtedly, leads Indian economy into a simpler tax regime with due exemptions for MSMEs and SMEs. The reduced multiplicity of taxes of erstwhile indirect tax regime which assists further our economy to become a simple and unified the whole nation as one market one nation.

i.	A gradual reduction in compliance costs – Since e-Administration or Paperless compliance, implementation of GST reduces the compliance costs of any industry.
ii.	Less Interface - Since total e-Administration, the less public interface between the registered dealers and the tax department, this ultimately saves precious time, energy etc. for both taxpayers as well as the Department.
iii.	Green environment - will improve the environment of compliance as all e-Returns to be filed online, input credits to be verified online, encourages more paper trail of transactions.
iv.	Simplified Procedures – Very simple procedure has been introduced for all types issues say registration of dealers, refund of taxes, unified formats of tax returns, common tax base, common simplified system of classification of goods and services, etc.
v.	Time-bound services by the Department – Unlike earlier regime, for all key transactions, a definite time frame has been provided, say, for registration, refunds, etc.
vi.	Benefits for end users or Consumers
		(a)	It is expected that over a period of time, the final price of goods will be lower due to the seamless flow of input tax credit between the manufacturer, retailer and supplier of services.
		(b)	It is expected that a relatively large segment of small retailers will be exempted from tax in near future.
		(c)	It is expected that average tax burden on companies will come down in near future and in turn helps businesses to reduce their costs and lower prices for end users or consumers.

Challenges and Future Roadmap:

Certain key issues faced due to its hurried implementation, they may be summed up as –

a.		Implemented in the middle of the financial year – The GST has been introduced w.e.f July 1, 2017 i.e. after three (3) months of commencement of the financial year 2017-18. In other words, the first three months, erstwhile Indirect tax regime and for remaining nine months, new indirect tax regime. It was very difficult for many industries, sectors to migrate to a totally new regime, which increased their immediate cost of compliance, probable loss caused due to confusion, non-compliance issues.
b.		Lack of connectivity – Due to technical glitches in GSTN server and lack of connectivity and other issues, it is really difficult to file any given return within the due dates. For instance, The GST Council extends the due date returns beyond reasonable dates and reduced the late fee for many times.
c.		Due to technological issues, the Central Government has suspended filing of GSTR 2, postponed implementation of TDS or TCS provisions till September, 2018 and 'Reverse Charge Mechanism till 1st Feburary, 2019, all these deferment were resulting in a huge loss to the exchequer in the form of tax evasion, late fee in default cases, etc.
d.		The sudden increase in operating costs of SMEs and MSMEs caused due avail professional services, implementation of requisite systems, training cost of their accounting staff etc.
e.		Transitional Issues - It is disappointing to see that GST regime continues to trouble both the Government as well as taxpayers even after one year of its implementation. Since GST is a progressive tax regime it is unrealistic to expect the entire system to settle down in short term. However, by end of August, 2018 most of the issues such technical glitches on filing monthly returns etc,
		Major transitional issues may be summed up as -

i.		Submission of monthly returns on common portal or GSTN - Since inception, the GSTN portal is giving nightmare to the businesses and tax professionals. The technical glitches with poor connectivity and slow processing of the portal are making submission of monthly returns even more difficult. In one hand, the Central Government is stressing business community to abide by due dates but in another hand, it has failed miserably to put a perfect system in place even after eleven months. The GST Council might have taken those issues seriously and extended the due dates many times coupled with the reduction in late fee for non-compliance. It is expected that the Council may finalise a new module where instead of uploading invoices itself, allowing taxpayers to submit their invoice details and based on the details, the system may auto-generate the requisite return.
ii.		Exporters and blockage of their Input Tax Credits - Exporters are continuing to struggle to get their due refunds for the IGST paid for their exporters. The Central Board of Excise and Customs (hereinafter the Board) data reveals that due to the absence of documentation and coupled with other issues, hardly 30 per cent of the claims for refunds have been met. Recently, the Board has allowed applications, documents and forms to claim refunds on account of inverted duty structure, deemed exports and excess balance in electronic cash ledger manually. But manual filing is adding more effort and costs on each application. To ease exporters' woes and speed up refunds, the Central Government has set up camps across the country for a fortnight from March, 15, 2018 to March. 29, 2018, in which the Government had cleared refunds totalling Rs 17,616 crore. After successful in first phase, the second phase of fast track "Special Refund Fortnight" has been organized from May 31, 2018 to June 14, 2018. In its second drive, an amount of Rs. 1,548 crores was sanctioned by the Centre and Rs. 2,290 crores by the States. In all, Rs 21,142 crore (IGST refunds), Rs. 9,923 crore (RFD-01A refund by CBIC) and Rs 6,997 crore (RFD-01A refund by States) all totaling Rs 38,062 crore has been sanctioned.
		After successful of two special refund drives, the Central Government held its third round between July 16th 2018 to July 31, 2018 and it is stated that total of Rs 54,378 Crore GST refunds have been processed by both the Central Government and the State Governments. It is further reported that by the end of July 31st, 2018, the total amount of IGST refund claims disposed was around Rs 29,829 crore taking the disposal rate to 93%. The remaining GST refunds will be processed expeditiously.
iii.		Transitional credit - GST law allows traders and retailers to claim a credit of 60 per cent of taxes paid earlier against the CGST or SGST dues where the tax rate exceeds 18 per cent. In cases where the GST rate is below 18 per cent, only 40 per cent deemed credit will be available against CGST and SGST dues. Further, the government would also refund 100 per cent excise duty for goods costing above Rs 25,000 and bearing a brand name of the manufacturer and are serially numbered. To avail the credit, a manufacturer must issue a credit transfer document as evidence for excise payment have made before the introduction of GST to the dealer. The dealer availing credit using credit transfer document would also have to maintain copies of all invoices relating to buying and selling from the manufacturer which was not easy as said so. The Hon'ble Bombay High Court in Evergreen Seamless Pipes and Tubes (P.) Ltd. v. Union of India, [2018] 92 taxmann.com 382/67 GST 235 upheld the Constitutional validity of One Year Limitation for Transitional Credit under Central GST Act, 2017.

Expansion of Indirect Tax base - According to latest Economic Survey for 2017-18 released on January 29, 2018, the indirect taxpayer base has increased 50 per cent to 34 lakh i.e. businesses came into new indirect tax bracket. The Survey also finds that surge in registrations especially smaller entities, earlier out of the VAT regime and already registered companies preferred to contracting with GST registered dealers to avail input tax credits (ITC). The next big issue is bringing Real estate and Petroleum products under GST regime. Upon the insistence of States, certain goods and services are kept out of the purview of the GST regime. They are –

1.		Alcoholic liquor for human consumption.
2.		Petroleum and its products such as crude, Petrol, ATF etc.
3.		Electricity.
4.		Employees and their services.
5.		Actionable claims other than lottery, betting and gambling.

		The Central Government with the consensus of all the States shall bring atleast petroleum products and real estate within the ambit of the GST to widen the tax base further.
g.		Reduction in Tax Slabs - Currently, there are five GST slabs – 0 or Nil rate, 5%, 12%, 18% and 28%. The standard rate of the majority of goods and services falls under 18%. While a number of items reduced from 28% slab substantially, the Government is considering slashing the number of GST rate slabs from the present five to two in the near future.

	GST Rate at	Items and Goods
	0 or Nil	No GST will be levied on goods like milk, curd, fruits, vegetables, bread, few exempted services, etc.
	5%,	Few goods or services, to name few, skimmed milk powder, frozen vegetables, coffee, coal, etc and services like small restaurants along with transport services, etc.
	12%,	Few goods or services, to name few, frozen meat products, butter, cheese, ghee, pickles, sausage, fruit juices and services for e.g. business class air tickets, etc
	18%,	Few goods or services, to name few, pasta, pastries, detergents, cleaning preparations, etc. and services like In-house restaurants.
	28% + cess	Around 25 luxury and sin products will be taxed under this slab, to name, Bidis, pan masala, aerated water, paint, etc. and services like private-run lotteries, race club, etc.

		According to World Bank's latest biannual 'India Development Update Report – Mar., 2018, most countries have a single rate of GST rates. The Indian GST rates are among the highest in the world, while only applying to a subset of goods and services traded, is 28 per cent, which is the second highest among 115 countries which have a GST system.
h.		Simplified compliance regime - According to GST Rules on Returns, all registered dealers have required submission of invoice level details of its supplies and purchases. In addition, details of input taxes paid during the month also to be provided in a separate Return. The appended table gives a real picture that how many returns are required to be filed by every registered dealer, say monthly, quarterly and annually. In other words, service Providers would require filing 37 returns for each State where they have a branch office in.

Concluding Remarks

Implementation of GST is truly a remarkable achievement for any Government. Even though, an equal amount of windfall and agony, one must appreciate the Government for its bold and immediate actions to address initial technical glitches. There were hardly any disruptions during last eleven months except compliance related issues. Like India, Malaysian Government has replaced its Sales & Service Tax (STT) with GST w.e.f April 1, 2015. Malaysia was the last country before India that introduced GST. Except "anti-profiteering rules" laws of both the countries are quite different. Unlike India, they have only one standard rate of GST on all goods and services. In other words, the Malaysian government has adopted single GST levy mechanism. On May 16, 2018, its newly elected Prime Minister has decided to abolish the GST w.e.f June 1, 2018. The strong reason to abolish is "Single Rate of Levy" on all goods and services including luxurious items. Indian GST and Malaysian GST are two different laws which have implemented on their prevailing economic conditions. Hence, India is unlikely to take such an extreme step. Geographically, India is a vast country and GST law is evolving slowly but steadily and may need few more months or quarters to settle down fully. Since it is more than a year of implementation and having a a handful of experience, all concerned should move forward to achieve 'One Nation – One Tax – One Market' by taking few more concrete steps.