CA Digant Shah
The government proudly flaunts record-breaking GST collections month after month. But beneath this shiny figure lies a harsh reality- a silent exploitation of genuine taxpayers through complex laws, disallowed credits, and unfair compliance burdens.
As a tax professional witnessing ground realities daily, here's why the so-called "GST success story" may be less about growth and more about enforcing revenue through manipulation and fear.
1. Complicated Return Filing Structure
Instead of simplifying compliance, the government has introduced multiple overlapping forms- GSTR-1, GSTR-3B, GSTR-2B, GSTR-9, ITC-04, and more. Each form comes with its own set of deadlines, validations, and errors. Even educated professionals struggle- what about the average businessman?
2. Input Tax Credit (ITC) Disallowance via Technical Loopholes
- Miss a deadline? Lose ITC.
- Vendor defaults in filing? Lose ITC.
- ITC claimed but not reflected in GSTR-2B? Face notices and penalties.
Even after genuine purchases and full tax payment, ITC is denied, citing technical mismatches and procedural faults. This isn't tax administration, it's legalised extortion.
3. GSTR-2A, 2B & IMS Trap - Triple Compliance Headache
The creation of 2A (dynamic), 2B (static) and now Input Matching System (IMS) has only added chaos. Instead of allowing seamless input credit, the system punishes honest taxpayers for errors committed by others.
4. RCM - A Trap Disguised as Law
Reverse Charge Mechanism (RCM) was meant to be a tool for taxing unregistered purchases, but it has now become an endless liability:
- Frequent changes in applicability.
- No real-time clarity.
- Disallowed credits on technicalities.
- Heavy interest and penalties on delayed payments-even for genuine oversight.
5. GST Refunds - Promised Relief, Rarely Delivered
Even after valid ITC accumulation or export activity, refunds are routinely delayed or rejected on petty grounds. Businesses are made to beg for their own money.
6. Fake Invoice Hype - Targeting the Entire Supply Chain
Under the pretext of combating fake invoicing, the government is sending notices across the full hierarchy-from supplier to ultimate buyer. Even genuine businesses are forced to pay GST, interest, and penalty for the fault of someone in the chain. Is this law or intimidation?
7. Additional Harsh Realities (That few talk about)
- ITC blocked under Rule 86A without explanation.
- Frequent portal glitches lead to late fees and interest on the taxpayer's side.
- Rising litigation costs for defending basic credits.
- Constant fear and mental harassment from notices, audits, and summons.
Final Word: This Isn't Reform-It's Revenue by Force
True GST reform should encourage ease of business, reward honesty, and remove redundant compliance. Instead, the government has turned tax collection into a punishment system, where:
"If you're compliant, you still pay. If you make a mistake, you pay more."
Is the GST revenue high because the economy is booming-or because the system is designed to squeeze money out of every possible corner?
It's time to ask the hard questions
Let's stop glorifying revenue figures and start fixing the flawed GST framework that punishes those it should protect.
CAclubindia
