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Glitches in GSTN portal, cumbersome procedures and documentation and cost of compliance major areas of concern

FICCI conducted a survey of enterprises post the implementation of GST in the months of November 2017 to January 2018 to have a reality check of various issues being faced by the industry with the transition to GST regime. Both MSME and large corporates have participated in the survey and shared their first-hand experiences with GST implementation in the first six months since its implementation. 59% respondents to the survey comprised of MSME firms whereas the rest 41% were large firms. Besides highlighting the key areas of concerns, the respondents have also made useful suggestions to make GST simpler and effective.

The survey findings indicate that GST had a positive impact on the businesses' logistics. More than 60% respondents stated that their experience with respect to inter-state transportation of goods has been good in terms of check-posts. More than 50% of respondents mentioned that goods vehicles are no longer stopped and checked at state borders, and 59% respondents have cited reduction in transportation time after GST has been implemented.

Amongst the key issues faced with respect to GST implementation, the industry has highlighted glitches in GSTN portal, cumbersome procedures and documentation and cost of compliance as the major areas of concern that need to be addressed.

Feedback on GSTN Portal

All respondents of the survey pointed out issues with the robustness and volume handling capacity of the GST Portal. Problems like delayed reflection of updated data as well as payments, delays in process of input credit set offs, inability to upload heavy files of certain formats and lack of provision to modify or revise errors posed major challenges to businesses. Respondents suggested that a major revamp of the portal was necessary to make it more efficient. There should be provisions for auto set off of the liability against available credit.

Feedback on Return Filing

The other pressing issue that all respondents of the survey raised was the cumbersome procedures and documentation for filing of returns. Monthly filing of GST return has been cited as a cumbersome procedure. Around 78% of the respondents suggested that the periodicity of return filings for those taxpayers having aggregate turnover above Rs. 1.5 crore should be changed from monthly to quarterly. For services providers, multiplicity of registrations was a concern as a separate registration is now required with every state where service is being provided. Respondents to the survey emphasised that filing of returns be made simpler. There should also be a centralised registration for inter-state services.

Feedback on e-way bill

All respondents have cited likely implementation issues upon the introduction of e-way bill. The respondents found the current limit of 10 kms for the purpose of updating details of goods on the portal to be inadequate. Respondents, especially small businesses, felt that e-way bill need not be introduced as it was only an additional compliance requirement as all details of sale and purchase were readily available on the portal. It was suggested that the minimum limit for requirement be increased to 50 kms and there be no requirement of e-way bill for movement of goods within the city limits.

Businesses, especially exporters faced difficulty to claim refunds. The mismatch between shipping bill date and tax invoice date does not allow initiating refund of IGST paid on exports. They have suggested that this condition of matching shipping bill date and tax invoice should be waived off. Firms which supply raw materials to its SEZs locations located in other states is liable to GST as such a transfer is considered sales and is not getting a zero-rating benefit. Such transfers for captive consumptions should not be charged under GST.

Most respondents also stated that there is a need for greater clarification from the Government on the anti-profiteering provisions to ensure that they do not lead to undue harassment. Respondents suggested that the government should release detailed guidelines and FAQs with examples to clear away ambiguities. 

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