GST is a form of tax which in its ideal structure would have only one rate of tax across all products and services and in most countries, this mode of taxation exists there is only one rate of tax levied across all the products and services that are supplied across that country in India this ideal factor of GST has been compromised from its original version of having a single flat for all goods and services.
This was done mainly because of the last economic differences in the section of zumas we have in our country and also to accommodate underline these days and hard lobbying industries of the market. as a consequence GST now offers five different labs with a 28 percent rate of tax as the top rate.so what was meant to be a simple tax plan that could be easily communicated is now a somewhat complex maze that needs to be mastered by all of them who in the business today.
GST looks very good on paper as it is now. do ideal in a sense. but the real problem is its implementation. let give you a few of its constraints. first and for most everyone who fell under the purview of GST has to register and file into the giant government digital backbone called the GST network GST and in shock. getting everyone into the system is a big process.more so because this single system will now have to handle the taxpayers of the whole country.
It is not divided either by states or different laws. all of one now you can imagine the enormity of such a task. this amalgamation is being done now. and it’s also a must for the system to work smoothly. literally,
Every taxpayer has to register into the system. this is required because just in tally and link every in the supply chain of goods or services to the central as well as state tax databases. and that’s a few billion invoices every month.see from this you can imagine the enormity of the back and the process now even if the system works without hiccups even then there are a number of problems that can arise once the system starts rolling.
once GST gets into operation taxpayers most of them including millions of small businesses will be thrust into e-filing is a least three times a month and a lot of them have never seen or heard about any filing system before.many of them get out of the tax net and many of them are purely ignorant about such a thing .now the system demands to lock at least 37 filings a year that is three monthly returns and one and will get done and they are in more than one state then each jurisdiction needs a separate set all these 37 filings and the important issue is of filing accurately a single erroneous entry from a supplier the manufacture.
we look forward to all of whom are in the supply chain be a retailer or a customer. if there is an error in the amount or even invoice number then the said product will not be considered as part of the same goods or service which means that they can be a claim on any credit from any of those who are in the chain. now if you take an example of one invoice and invoice may have let us say a consecutive serial number in one of my CDs.it may have helped ABX or numerals or special characters hyphen or dash or slash or for that matter any combination of such numbers or characters not imagine a shopkeeper in a small town who suddenly has to come to grips with e-filing and to do so accurately with all these complex entries. and that too in large number without a single error on any of the parameters that I just explained this would turn out to be a big challenge and just by looking at the scale of the process you can see how intimidating it could be.
The GST filing process relies heavily on the coming together of many things.it should have no errors.they should be online access.
The technology should be glitch-free and the ability to understand how offsets work and it best to stick to deadlines.these are tall order.it can not be done easily and for its success, both central and state governments will have to massively the taxpayers so that they are able to use the filings effectively.
The other side of the problem will be attending to thousand of questions on everything from the classification of goods to interstate invoices and helplines may have to be set up with trained tax officers even in regional languages at least in the first six months of the rollout of GST.