GST : Implementation Issues

Anomalies in the GST management are increasing the anxiety among Indian businesses

The GST Network (online backbone), is struggling to keep pace with the millions of invoices and returns being filed electronically by businesses across the country.

A ministerial group formed by the GST Council to resolve the GSTN’s glitches gave an assurance that 80% of the problems would be fixed by the end of October.

Critically, for an economy that is slowing down for multiple reasons, even more troublesome is the implication of these implementation stumbles for 85 lakh taxpayers now registered for GST.

Exporters have already alerted the Centre that the delayed timelines for filing GST returns will mean that no refunds can be expected before mid-November on input taxes paid in advance and the integrated GST levied on goods they imported.

This will result in working capital getting blocked, cramping their ability to ramp up capacity and raw material procurement in time for festive season orders from around the world.

Government has asserted that many exporters’ funds were blocked for five-six months even before the GST, even as it said a solution to speed up refunds is being worked out.

Moreover, in contrast to the ₹95,000-crore GST collections recorded so far for July, about ₹65,000 crore has been claimed as transitional credit (that is, taxes paid on stock purchased before the GST).

Several revisions in deadlines, tax and cess rates, rules, clarifications and tweaks later, the GST regime is turning out to be neither simple nor friendly for taxpayers.