Top 10 GST Problems Seen Across The India Till Now

The GST tax regime was introduced in 2017 with an aspiration to revolutionize India's indirect tax system.  At present GST tax regime has become an inevitable fact for the Indian economy.  But it is also being seen that some problems are also arising with the GST tax system, due to which the business class and other beneficiaries associated with GST are being affected.  The increasing complexity of procedures related to the GST system seems to be breaking the hope of a simplified procedure.  

A need is emerging that anomalies in the GST system are identified and removed at the earliest so that the GST system can be in sync with the growth of the Indian economy.  Apprehension is also being raised that the GST system introduced for the simplification of indirect tax may not get entangled in legal complications and may not remain entangled in the complexity of procedures.  

Because this can prove to be harmful for the common taxpayers and the country.  So let's know those 10 major problems related to GST, which are being felt all over India.

1. Problem related to GST network:

The biggest problem in the GST system is the capacity of the GST network.  GST system is completely based on strong information technology infrastructure.  But it is seen that ever since the GST system came into existence, the concerned parties are facing the problem regarding the GST network.  Sometimes the shard of responsibility is shattered by waiting for the last date to File GST return .  But the level of GST network should be there for a huge country like India.  Maybe that's still not enough.  Along with this, considering the speed with which the scope of GST system is increasing, there is an urgent need to take care of the capacity requirement of GST network for future as well.

 2. Complexity of GST Processes:

The GST system came into existence for the simplification of the indirect tax system in India.  But the reality is that there is so much procedural complexity in the GST system that even tax consultants and CAs are finding it difficult to provide services.  The Small and Medium Enterprises sector is facing huge challenges due to the GST regime.  Notices are being received continuously in this sector.  Many notices are also being issued on the basis of technical errors.  Many legal provisions related to GST are unclear due to which procedural complexity is also increasing.  If most of the cases related to the process of GST start going to the courts, then it can be easily estimated the negative effect it will have on the economy.  At this time, this need is being felt very strongly that the procedures related to the GST system should be made simple, clear and practical.

3. Annual GST returns are also not being filed:

Right now the situation is that the most important fact of the GST system network is that even the annual returns are not being filled properly.  Many important parts of the GST system are not working, for example, the data coming from GSTR-2A is not being included in this form.  The annual return period is being fixed but the network is not supporting.  Many times it is also seen that the form is posted on the site but it is not fully active.  It is difficult to fill.  The date has been extended 5 times for the annual return for 2017-18.  Every time this date had to be extended due to technical errors.  The way the returns have been prepared, in most of the cases, the problem arises in the assessment itself.  Due to which a situation is created for issuing a large number of notices.  The more notices are issued, the more the nature of GST system can be distorted.

4. Input credit issue:

A mechanism has also been created for availing GST input credit under the GST law.  But the problem on mismatch of purchase was in VAT also and same is the case in GST system.  It is necessary that sufficient time period of three or six months is given to remove the mismatch relating to input credit of GST purchases.  Apart from this, instead of this type of punishment to the buyer, the selling dealer should be punished who is not collecting the tax from the buyer.  The dealers who sold the goods

 He has also been given registration by the Government of India and now it cannot be justified to hold the buyer responsible for not depositing the tax or depositing it late, for which there can be many reasons.  Hasty blocking of input credit of the buyer creates working capital problems for the trade and industry.  That's why this problem should also be solved.

5. Impractical provision of RCM:

The GST system was introduced for the simplification of India's indirect tax regime.  But the provision of RCM imposed on purchase from unregistered dealer in GST proved to be impractical over time.  However, the RCM installed on 1 July 2017 was withdrawn from 13 October 2017.  The fact is also that in most of the cases, the government did not get anything in the form of revenue due to the provision of RCM imposed on the business class, only the business class had to follow the additional procedure.

6. Problems related to compliance with the basic principles of tax laws:

Generally, it is seen in the Income Tax Law that whatever amount is deposited in the bank in the form of a challan, it is considered as deposited from the same date.  The same used to happen in VAT and service tax.  But in the GST system, the amount received by the government in the form of tax is charged interest only because it has not been set off.  It may just be a technical flaw which is neither appropriate nor practical.  The basic principles relating to tax laws must be followed in GST.

7. Late fee concept problem:

The GST system was introduced with the objective of radical reform in the indirect tax system.  But it is seen that late filing of returns available in GST has to be paid with heavy late fee.  The capacity and speed of GST network is also responsible for this delay at times.  It may take time to adjust to the provisions of the new tax law.  Mistakes and delays in the new law can be committed by all the parties so it may not be justifiable to impose penalty on any one party.

8. Levying interest on gross tax is also impractical:

The issue of payment of interest on gross tax liability in the GST system is also creating problems for trade and industry.  Interest on late filing of return should be applicable only on the outstanding tax deposited in cash and not on the gross tax.  Although the government has proposed an amendment on this, it is still pending.  There is neither any justification nor any practical and economic rationale for charging interest on the amount which has reached the government treasury.  Thus it is an undue burden on the business class.

9. Technical errors become heavy:

GST system is also being criticized on the fact that the payer has to bear the brunt of technical errors in this system.  There is no effective mechanism for rectification of technical errors in the GST system.  The GST system has been designed in such a strict pattern that it is assumed that there are robots like dealers and professionals who cannot make any mistake.  The small possibility of improving any technical error has become a big problem for the business and industry.  GST is a new tax. Industry and business of India have contributed a lot in the smooth functioning of this new tax system.  But it is natural to have some technical errors in the implementation of the new tax regime.  That's why arrangements must be created for immediate resolution of these errors.  Income tax return may also be revised.  VAT and Central Excise were also amended, then there must be an adequate arrangement for amendment of errors in GST

10. The Trust Problem of Small Businesses:

As per the GST system, small businesses whose turnover is small are not required to pay GST.  But buyers demand bills from sellers who are exempted from GST.  Without a GST exemption certificate, small businesses find themselves stranded and stagnant.

GST system came into existence for revolutionary reform in the context of indirect tax in India.  While the GST system has proved its usefulness over time, some errors and impractical provisions are also coming to the fore.  It is necessary that all the provisions of GST should be taken care of in a rational way and the errors should be removed.  So that this GST system can become a strong pillar of our fast growing economy.

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