Confusion still looms large on the eve of GST rollout
The Goods and Services Tax (GST) is set to rollout on 1st July, yet, this one-nation-one-tax regime might face hiccups along the way in both government and business quarters due to a lack of preparedness.
We take a look at some of issues which might need more clarity.
GST rollout: Issues which need clarification
GST tax slabs and associated complications
Different tax slabs remains the biggest concern for business owners offering multiple products and/or services.
Due to several cesses and exceptions under complex GST tax slabs, maintaining books could become a tricky affair.
For instance, tax rates for restaurants will depend on multiple variables like AC/non-AC, annual turnover, luxury/non-luxury etc. all of which interact with each other thereby bringing in multiple conditionalities.
An unclear anti-profiteering law
GST comes with an anti-profiteering clause which requires companies to pass on the benefits of lower taxes to consumers.
However, there are several blurry areas.
For instance, the law doesn't clarify how loss-making companies pass on benefits, neither does it say how costs incurred during transition from non-GST to GST era are to be factored in.
Clarification is required from the National Anti-Profiteering Authority.
Love Business news?
Stay updated with the latest happenings.
Input tax credit
Little clarity on input tax credit system
Under the GST regime, companies can claim refunds on taxes already paid in the value chain i.e. companies only have to pay taxes for the value it adds.
However, there is a lot of confusion regarding how this input tax credit system will work, particularly considering the fact that a large amount of trade in India happens in the informal sector.
Confusion surrounding filing of GST returns
Under the GST regimes, companies are required to file 37 forms a year - one at the year's end, and three each month for CGST, SGST, and IGST.
However, complications arise. For instance, under this framework, a company operating in 20 states might have to file 740 annual GST returns.
Despite assurances, there is still no clarity on number of returns to be filed.
Tax officials charged with implementing GST are in a fix
Businesses apart, tax officials also find themselves in a fix.
There is little to no clarity among tax officials regarding the kind of assignments and work they will be required to do to implement GST guidelines at the ground level.
While thousands of tax officers need to be assigned new roles, no such thing has transpired so far.
Even chartered accountants aren't fully clear.
Study: Mere presence of a smartphone can reduce brain power
Snapdeal files FIR against former GoJavas' promoters