Can Great Indian Jugaad System Plug The Gaps In GST Battle Readiness?

Raman Swamy

With time running out for the dawn of the GST era and countless loose ends yet to be tied up, there is a sense of heightened anticipation, anxiety and apprehension in trade and commerce circles throughout the country.   

The nagging questions uppermost on the minds of corporate enterprises and small businessmen alike are:  Are we ready for big change-over?  Is there any formality we have over-looked?  Should we go in for a stock clearance sale at throwaway prices?  Or is it more profitable to get the paper-work done and hope for the best? Is there any chance of the first of July deadline being deferred? Or will the government announce last-minute reliefs and relaxations for certain sectors and trades?

With just ten effective working days before the big launch, one question which over-stressed finance ministry officials find most irritating is the one that journalists keep asking them – “Will GST implementation be postponed?”

One man who bears the brunt of this infuriating query the most is Hasmukh Adhia, Revenue Secretary, Government of India.  He knows better than anyone else that the matter is out of his hands.  It all depends on the GST Council.  Everything is now in the court of the State Governments – it is they who have to fulfil all their commitments, pass the requisite legislations and get the system ready by July 1.     

In any case, the ball has already been set rolling. The deadline has been announced.  Many companies, big and small, have already geared up for the massive migration to the game-changing new tax regime.  Lakhs of individual tax-payers have also accepted the change-over, whether enthusiastically or reluctantly.  There can be no stopping the GST juggernaut -- barring an unforeseen natural calamity or a sudden political decision at the highest level.

Trying his best to keep his cool in the face of the barrage of misleading media speculations, the Revenue Secretary comes out with a stock response:  “Any delay in GST rollout ruled out.  Deadline of July 1 will be met.  Preparations are in full swing for smooth implementation”.

He also sent out a short, sharp but significant Twitter message:  “Rumours about GST implementation being delayed are false”.
It is, therefore, official.  GST rollout is on schedule.  No delay.  No further discussion.  
But on the ground, the situation is less clear.  Here is what Assocham, an apex chamber of commerce, has said to the chairman of the GST Council Arun Jaitley in a letter released to the press on Saturday: 

The key points are:

1.  Several sectors of industry require more time and assistance to get prepared for implementation of the biggest ever tax reform undertaken by the country.

2.   No doubt significant amount of work has been done on GST front, but there are various issues that need to be looked at before GST can be implemented successfully.

3.  Going by the statements of the CEO of the GST Network, the GSTN will not be operational on July 1.   The Return Module (which will facilitate filing of different returns before different prescribed dates) will be ready only by end-July, just before August, the month of filing returns. Hence there will be no time left for any dry run with the revised IT software on the Return Module, a necessary requirement from the point of view of taxpayers.

4.  Even the Excel sheet, based on which taxpayers will have to upload invoices in the GSTN on a daily basis right from day one July 1, will be ready only on June 25, going by GSTN Chairman's own statement. Thus here also the taxpayers will not have the time of opportunity to have dry run on uploading of invoices as a part of the payment process.

5.  Other concerns are -  a very large number of assessees have not been able to migrate to GST for technical reasons.  Numerous system glitches during migration process raises questions as to the ability of the system to withstand huge traffic in GST. Moreover, existing non-assessees who are liable to be registered under GST are prohibited from registering under GST.

6.  The Union government itself has hinted at postponement of the implementation of the e-way bill, which mandates movement of goods above Rs. 50,000 to be pre-registered online.

7.  However, many States are unwilling to defer the e-way bill provision. Therefore the GST Council has asked the National Informatics Centre (NIC) to work along with the GST-Network to see if an “all India e-way bill system” can be created in a short timeframe. 

This last-minute bypass surgery has caused more uncertainty. Many sections of commerce and industry and even some of the States have started pressing for a postponement of GST because they feel there is not enough preparation on the ground.

Even Dr. Amit Mitra, the West Bengal Finance Minister who was chairman of GST Council during the crucial early negotiations,  has begun to have doubts about the tight timeline. 

He has said: “July 1 looks extremely difficult. How can you do jugaad for the world’s largest fiscal reform?”

According to him many of the glitches can, hopefully, be ironed out if some more time is given.  If the GST rollout is pushed back by another one month to August 1,  proper streamlined systems can probably be put into place, rather than depending on the wonderful Indian culture of jugaad.

The Finance Ministry is not amused.  It is bad enough when media reporters ask about postponement.  But when Industry Chambers and even State Finance Minister with hands-on knowledge raise such issues, it is beyond tolerance limits. 

The bottom line is - Preparations are in full swing.  July 1 is and will be the Day of GST implementation.  The Central Board of Excise and Customs is in a state of full battle readiness.  In coordination with all State Governments, the CBEC has expanded the outreach programmes for GST to ensure that every last trader in the remotest part of the country is covered and nobody is left out.  End of argument.  No more discussion.

Jun 23, 2017

 Raman Swamy [email protected]

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