As expected Goods and Services Tax (GST) Act, 2017 has changed the Indian tax system fundamentally and is the biggest tax reform since Independence. It automates and simplifies the process of indirect taxation and has replaced the complicated taxes like Value-Added Tax (VAT), Central Sales Tax, Central Excise, Service Tax, or Entry Tax and other indirect taxes.
It brought integrity across the country by merging all the duties into one tax and allowed full input tax credit from inputs and capital goods on procurement which is set against GST output liability. For such cases, credit assesses have to fill Form GST Trans-1 before 31st October.
After Everything, There Are Still Some Issues With The New Indirect Tax System:
- GST compliance procedure is to be carried out through the online portal only. Small and medium businessmen find it harder as the compliance cost has increased and many of them are not aware of the latest technology
- The burden of the lower threshold was an issue in previous law, manufacturers were not required to comply with excise rule if the turnover is 1.5 crore or less. With merging into GST, they have to register in case of turnover crosses the limit of 20 lakhs under GST. This has created the problem for Small Business Holders
- Monthly every assessee has to file 3 returns and 1 annual return which makes total 37 return to be filed annually. This process has increased the workload
- In GST, three types of taxes are levied i.e. CGST, SGST, and IGST. CGST and SGST are levied on intrastate sale and IGST is levied on the inter-state sale. This is creating a problem related to confusion between types of category to be mention under which head
- The effective rate of Service Tax was 15% which has increased to 18- 28% in GST. Therefore, Service Industry is now bearing the higher taxes
- Sixthly, Excess Working Capital Requirement. Tax on the stock transfer impacted the working capital requirement. The increased Interest cost has resulted in higher cost of goods
- There is no huge difference between the tax rate for luxury goods and normal goods compared to earlier laws, makes it hard for SMEs to compete with Non-SMEs
- There are many more problems, the businessmen are facing due to the type and nature of businesses and various industries
Latest Update: GSTN System Is Accepting Wrong Details And Creating Hurdles
The prediction of government that taxpayers would be able to file GST return from home after GST implementation has just slashed. Moreover, the GST portal is not so much user-friendly that it is accepting the wrong details from taxpayers. After accepting the wrong details successfully, the GST portal is not showing any indication of completion and even not allowing any changes to wrong filings. Even though after a single mistake in a filing, the taxpayer is not able to file the return for next month as the system is not letting it do.
An Example Of Issues With GSTR-3B Filing:
As in GSTR-3B filing, after furnishing the details in challan the next step is to feed the money related data in GSTR-3B fields. The challan consists the data of tax under CGST and IGST heads. If wrongly the entries in respective fields of CGST and IGST made wrong, still system accepts the details without any pop-up message and notification. But, when taxpayer proceeds to next step to file the return, the system doesn’t respond to the proceedings. After that, even if a taxpayer wants to amend the entries or to file another return with new tax amount, it is not possible to modify the previously done mistakes.
The mistake in a form is not allowing the taxpayer to file the GSTR-3B return of next month and taxpayers are burdened with the interest and penalty fees for the late filing of the GST returns. Tax consultants and chartered accountants are favouring the complaints regarding GSTR-3B filing and agreeing upon the issue people are facing nowadays.
GST Software Is The Only Solution
The ASP software available in the market is the only solution with taxpayers who are facing the problems in GST filing. The ASP company is resolving the doubts of taxpayers and selling the GST software. The software costs 15,000 to 20,000 per annum which is not a good choice for small and medium businesses.
Recommended: Download Free Gen GST Software for Easy Filing and Billing Work
However, GST is a long-term plan. It is burdensome in short run but positive impact shall be seen in the long run and will be beneficial not only to the common man but to the country as a whole.
