The Goods and Services Tax Act in India, since it came into effect, has been undergoing a lot of troublesome pitfalls that not only disturbed the entire taxation system but also created a hurdle in the way of the businesses in the entire nation. The council members have already chewed over a thousand words in assuring the fact that they are working days and nights to overcome all the malfunction of the GST portal and the entire system as well.
But the major concern is to address the core loophole in the process and then either remove or destroy it. With the majority of the businesses of the nation complying with the GST regime, the taxation, with an utmost importance, requires being made easier and efficient. Mere promises to stop tax evasion from the nation are not going to help the growing small and micro businesses in any way. Most of the issues related to GST are stuffed deep in the core of the compliance mechanism of the system. Problems like failed e-way bill system launch and every now and then fluctuating GST rates have been proved to be most impactful, but with no good results.
Then vs. now
The GST has seen an enormous rise in the participation of the taxpayers complying with the regime. Due to the strict rules of the council and endless notifications by the government about the same, more the taxpayer base increases by more than 50%. And this commendable participation was the result of the 34 lakh businesses that excellently came into the bounds of Goods and Services Tax. Even the revenue collection under GST regime experienced a rebound that made an impression that everything is going and will go well in the coming times.
But as it moved past few months, the GST applicability in India started fluctuating. Here are few things that became a big blow for the businesses in India:
- GST on SMEs– The effect of Goods and Services Tax was the worse on the small businesses that were trying to settle in the market. It hindered the overall performance of such businesses. For an instance, suppose that you own a small hotel. You are going through your daily business chores and all of a sudden you come to know that the whole taxation process has been revamped by the government. Well, you are no chartered accountant that you will just swallow everything in and become GST ready. In such cases, the business owners, with no clue to the solution, started crawling to comply with the new regime, hence hitting their business badly with money repelling rod.
- 37 returns in an FY– The return filing became another major chain of GST that pulled businesses backward making them slow. This troublesome process again took most of the time of the people, in preparing sale/purchase invoices and uploading it on the GSTN portal, who was involved in the small businesses. Filing a return under the GST act requires a lot of input unless you have big pockets filled with cash to hire an expensive accountant to do all the tasks for you. And if you are a taxpayer taking care of your business and yourself completely on your own, then you would understand the real meaning of the above-mentioned lines.
- Multiple registrations– The service providers are under serious concerns that come with the registration for every state in order to do the business. The destination-based nature of Goods and Services Tax restricts the liberty of the businesses of expanding businesses that they used to have at earlier times. The labor of registering every time before you make up your mind to operate from any other destination instead of your original business address brings the enthusiasm down.
- E-way bill- The e-way bill, due to unplanned roll-out and fragile structure of the operation, became one of the major factors that resulted in the hindrance of the movement of the goods and services recently. As per the 2018 GST applicability in India, an e-way bill is an electronic document that is required to be generated for the supply of goods worth more than INR 50,000. Moreover, as everyone is involved in the transportation of goods and services from one place to another, the government’s decision to update about such movement after every 10 km on GSTN seemed inappropriate to the users.
The times of hardship and dedications lead to success but the process should not be destructive for the one who gets indulged into it. Even though the government is considering the drawbacks of GST regime and trying to modify it, meanwhile the taxpayers can do nothing but wait. If the government and council together, would take the steps for the simplification of the new taxation regime, the common people would at least be at ease.