Give GST a fair go

The critics and the naysayers have been unfairly targeting the Goods and Services Tax (GST) by calling it “yet another shock” after demonetisation last year. The fact is GST has been part of public discourse for years now and therefore can’t be called a shock. A number of businessmen have complained that GST’s implementation could have been delayed by another three months giving them a chance to prepare. rAssuming GST implementation was delayed by three months, what would have happened? More awareness campaigns could have been organised. But, such campaigns have already been organised in plenty, right from May. So, why were business-people unprepared for GST? rThe point is that a vast number of small traders and businessmen have never filed tax returns on their own till now. Not filing returns is fine, but a lot of them aren’t even aware of the nuts and bolts of tax accounting. They rely mostly on chartered accountants (CAs) and tax practitioners to do tax filing for a plethora of taxes like value-added-tax (VAT), entertainment tax and luxury tax, while keeping themselves occupied with day to day business.rThe problem with GST implementation is that it requires a businessman to be far more involved in understanding the new tax regime, fine-tuning the existing accounting systems and filing the tax return than he has hitherto been accustomed to.rIt is this which has resulted in all sorts of confusion and chaos as GST was implemented on July 1. By law, tax returns will have to be filed every month under GST. This will do away with the last moment invoice finding practice when it is time to file one’s returns. The only way to deal with this is linking invoicing with the GST portal. As customers buy products, the GST system will get the information through invoicing.rGlitches in the availability of GST updated accounting software too has emerged as a major problem. It’s not as if accounting software isn’t available, but people aren’t sure where to get it from. All these issues put together have created an atmosphere of uncertainty. This should have been expected given that GST is the most significant indirect tax reform since independence in India. rComplaints were also raised about high rates of tax under GST. For most products, however, the existing tax structure is so complex that it is near impossible to find the tax burden. Compared to this the GST, based on input-tax-credit, is at least a lot simpler. In reality, GST is a forward looking move, which will bring a lot of people within the tax net while also educate the public about filing tax returns.