‘‘Good but Complicated Tax’’

GST was launched in July, 2017. The Prime Minister called it a "Good and Simple Tax".

But when the GST Council met in Bangalore recently to take stock of the many hitches and glitches in the implementation, many members were left scratching their heads on how to unravel the tangled web created by what has become a "Good but Complicated Tax".

Let's change the name from GST to GCT, joked one Council member. But nobody even smiled.

It had been anticipated that the transition to the new tax regime would be fraught with difficulties. But the sheer volume of complaints, credit claims and cries for help from trade associations across sectors has been mind-blowing.

Moreover, the government itself has been confronted by an unexpected problem—taxpayers are claiming back a whopping Rs 65,000 crore as Transitional Credit out of the total of Rs 95,000 crore collected as GST in the inaugural month of July. Similar Transitional Credit claims for August were predicted.

The tax authorities have responded to the rude shock by alleging malpractices and threatening stern action. A statement has been made that all such cases where the sum exceeds one crore rupees would be scrutinized closely and false claimants will be severely punished. Trade representatives are appalled at the tone of the response—they fear a return to harsher Inspector Raj.

At the Bangalore meeting, the Group of Ministers (GoM) set up by the GST Council to look into technical problems posed by implementation of the tax reform, were faced with a major dilemma.

Headed by Bihar Deputy Chief Minister Sushil Kumar Modi, the GoM was forced to issue a denial—"The computer systems hate not crashed. The IT infrastructure is facing some unavoidable stress due to scale of operations and last minute rush by tax payers".

A decision was taken not to blame Infosys—which has been entrusted with handling the bulk of the IT infrastructure for GST Network (GSTN).

Revenue Secretary Hasmukh Adhia told newsmen : "Infosys has not failed. They have been delivering very well. Hiccups are bound to be there and we will find ways to sort them out".

Sushil Modi was at pains to explain the online logjam. He said: "Please understand the large volume of transactions. In the last 75 days, 22 crore invoices have been filed. In addition 85 lakh new and old dealers have been registered under GST".

The GoM's view seemed to be that tax payers are to blame for delaying filing returns till the eleventh hour and thereby causing congestion in the online system.

Sushil Modi said: "I want to appeal to tax payers that they should not wait for the last day. Because of that there is a heavy rush and strain on the system. Even though there are only five days left for August filing, so far only 3 lakh have filed Form 3B compared to more than 45 lakh in July... So again there will be a burden on the infrastructure".

Some IT experts have also passed the buck to the tax payers, who they claim are trying to find "shortcuts'' to avoid paying the correct quantum of tax. Also, many users are not computer literate and are entering wrong data and then trying to make changes. They should take the help of professional computer operators and accountants instead of struggling to do the work themselves.

At the same time, off the record, the authorities are also admitting that some forms are not yet available online and this is adding to the delays and difficulties. Such problems are inevitable, they say, but these are just teething troubles and everything will be smoother after the hitches and glitches are ironed out over the next few months.

It has been decided to hold such meetings every fortnight from now on. The venue of the next meeting is likely to be Bangalore again, because the Infosys headquarters is situated in the city and it will be more convenient for their technical experts to participate in the discussions to find solutions
However, no such leniency will be shown to tax payers and authorised dealers. In truth the GoM flatly rejected a proposal to extend the deadline for filing the returns.


Vol. 50, No.26, Dec 31 - Jan 6, 2017