India not ready for GST rollout:

Small businesses need to file 37 returns including annual return a year instead of 13

• A small-scale manufacturing company and industries with operations in only one state will have to file a minimum of 37 returns  including annual return instead of the current 13 once the goods and services tax (GST)
• Roll out from 1 July, 2017, increasing work for industry, accountants and banks, according to an IndiaSpend analysis.
• With the deadline for GST less than a month away, finance professionals, banks and industry seem unprepared for the challenges of implementing the one nation-one tax idea, work towards which began 13 years ago.
• “The entire ecosystem needs to be changed to accept GST,” K Raghu, former president, Institute of Chartered Accountants of India, told India Spend. “An ideal date for implementation would be 1 September.
• “The Indian Banks Association, a body that represents 237 banks, has informed a parliamentary panel that their members were unprepared to implement the new indirect tax regime.
• “Everything will now be online and will need to be updated regularly. A business will have to file 37 returns in a year (three returns per month and one annual return) per state,” The Economic Times reported.
• “If it does business from offices in more than one state, the number of returns will go up accordingly. A business with offices in three states will have to file 111 tax returns in a year.”
• With the government announcing GST for four tax rates — 5 percent, 12 percent, 18 percent and 28 percent — industry will face implementation challenges that include system upgrades, manpower training and understanding new taxes.Every transaction, sale or purchase, will now have to be recorded online to benefit from the tax paid earlier.

Technical GST Issues for Indian Taxpayers

• The Goods and Services Tax is currently under intense pressure to address some of the burning issues and problem-solving issues that plagued the year-old indirect tax regime. The finance ministry, as well as the GST council, must address the GST return filing issues and form-related implications that all taxpayers must confront.
• Let us discuss and identify the top priority GST topics on which the GST council and the finance ministry must immediately begin working:

Reversal of Credit

• The credit claimed on purchases for which payment was not made to the suppliers within the 180-day period must be refunded. And keeping track of these details may add to the Business’s workload.

Availability of GSTR 2A

• Because annual GSTR 2A returns can’t be downloaded and must be seen monthly, it’s been tough to connect returns to books of accounts with 2A returns. Complying with Rule 36(4) on a regular basis has now become a challenge.

JD Agreement Issues & Agricultural Commission Agent

• Tax is due on the commission based on the taxable products, but when the commodities are classified NIL, the commission is not taxable, posing a problem for builders and landlords with regard to taxation.

GSTR 3B Issues

• There is no modification or amendment facility available with this return type, and if modifications are needed, they must be made within a one-month period, making it an interest liability issue.

GSTR  1 Issues

• It’s worth noting that the credit/debit note or B2C sales made in the GSTR 1 can’t be changed again, making filing a difficult operation.

Issues in TRAN 1 form

• There will be problems with the Trans 1 notice in Form 603 because it is now sent to everyone by the department, causing problems for the real taxpayers. Because the notification needs all previous records to be available, it is a time-consuming process for the taxpayer to furnish the information again.

Pertinent Issues for Small Traders

• Small firms will face higher operational costs as a result of the GST. Not all SMEs in a developing nation like ours will be able to afford the computers and accountants needed to apply GST (make bills and file tax returns). Some products, including as plywood, vehicle parts, and electronic devices, have a 28 percent GST rate, forcing potential purchasers to go to unregistered vendors.
• Handmade products, such as local shoes and Banarasi sarees, are far too tough to assign an MRP to. Because the majority of small craftspeople are illiterate, they are unable to write MRP on their products or complete paperwork. Dealers are perplexed as to how to value such items.
• Small businesses that have a small turnover and need not pay GST face trust issues. Even merchants who are exempt from GST must provide bills to buyers. Small business owners are stranded and immovable if they don’t have proof of a certificate of GST exemption.

E-commerce Companies Issues

• GST has had an impact on e-commerce giants like Flipkart and Amazon. TCS must be collected at the moment of payment by e-commerce companies from merchants.
• Because of TCS arrangements, the capital embargo will wreak havoc for day-to-day operations. The GST Council has set a TCS of 1% on the deductions made while paying sellers.

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