Only 15 days are left for the implementation of new GST Regime and the experts have raised issues that service sector are facing the problems in shifting to new Goods and Service Tax (GST) Regime.
The key issue is that GSTN is yet to start accepting fresh registration for the new GST Regime. Earlier GSTN system was open in the month of April, June for 15 days and will re-open for its third phase on 25th June. At that time, GSTN has only been accepting the application of migration from the current taxation structure into new GST Regime.
Under the current taxation regime, a service company who have multiple offices across the country is required to get one service registration number. Whereas under the new GST regime, a service company is required to register under all the states they are providing services.
Mahesh Jaising partner of indirect tax at BMR & Associates LLP said, “All service companies have been made to undergo a very cumbersome exercise of doing the registration process all over again, in relation to their branch registrations,” He further added that “The key problem in hand is that the IT system and the GSTN system are not accepting new registrations during the current window opened for registration — it is currently confined only to migration.”
The Government has pointed out that the GSTN portal might be open for fresh registrations before 1st July. Now, only 15 days are remaining for new GST Regime which may create a lot of confusion and rush towards the deadline.
Tax expert spoke to media on the base of anonymity that “Right now, the GSTN is allowing provisional registration only for companies with VAT and service tax registration,” “Hence, we have seen that the migration of VAT dealers has largely gone off well as compare to the service sector.”
According to tax experts, “Services, especially software companies, need to do business in several states,” the expert added “If they are not registered in those states, then how will they get the GST number for their invoices? Maybe the government will do some relaxation by saying the GST number is not needed on the invoice, but only needed by the date of filing returns.”
Applicants who want to migrate from the current taxation regime into new GST regime must have to be registered under the current regime as a dealer or as a service provider. Applicants will be allotted a username and password, through which they can log into GSTN website register for the new indirect taxation regime.
Bhavesh Chandra, the senior consultant at Taxman, one of the 34 registered GST Suvidha Providers, said it was not a big issue. “Even if fresh applications are accepted from July 1 onwards, it will create a problem only in that the invoices will be printed without the GST number… It’s a one-time pain.”
MS Mani, Senior Director, Deloitte Haskins & Sells said, “If the GSTN portal or software works properly then the registration process is not complicated, it can do quickly or easily”
