Goods and Services Tax Network (GSTN) or the technology backbone of the biggest indirect reform that kicked in on Friday midnight has been working tirelessly since November 2013 to provide a massive data support for the new regime.
It was not an easy task to migrate some 8 million tax payers to GSTN in the absence of a GST law. Now, of course, the law is in place and things have become easier.
Traders and small businesses are still apprehensive about the new technology which according to them is making GST a complex thing to deal with. GSTN, however, says it is fear of the unknown that has gripped them. In an exclusive interaction with Annapurna Singh of DH, GSTN Chairman Navin Kumar explains how a large-scale outreach programme undertaken by the government will make them understand the system. Edited excerpts:
What kind of pressure GSTN foresees and what are people's expectations in the first few days after the GST rollout?
For us the rollout started six months back. In November 2016, we started the GST portal. There were two essential requirements before the roll out. First was to migrate the existing taxpayers, and second was registering new ones.
The number of existing tax payers was about 8 million. Despite no GST law in place at that time (November 2016), we did it with the help of state governments and the tax department.
We have also been able to bring new taxpayers, who had never paid taxes, into the system. So, we have added more than 1,60,000 new people who are registered.
Lot of traders are complaining it would have been better if they had been given some more time?
I don't know how much more time.... I think the problem basically is fear of the unknown. They think this is something very new, something very different and how to comply with it. But if you really look at the system, it is much simpler.
Traders are apprehensive that they have to file some 37 returns in a year?
Even under the VAT regime one had to give details of four things. How much is the purchase, what is your sales turnover, how much tax collected and how much deposited.
Earlier, a trader had to fill four forms, Part A – you give sales figures, Part B- purchases, another two parts for taxes collected and deposited. In GST, you have to give information only regarding your sales and not purchases. When that comes to our system, it puts the purchase data of buyer itself.
The buyer is relieved from this duty unlike earlier. Sales data is the only thing he has to file, the rest is system generated. Actually, instead of saying GSTR-1, GSTR-2, GSTR-3, we can just say return part A B C and D. So three returns in a month are actually only one broken into three parts.
If it is so, exactly opposite to what people believe then somewhere we have failed to communicate properly?
The law has been passed only recently. The outreach is not very wide. But it is happening slowly.
There are more than 1,000 camps going on in the country where tax officials are talking to the trade associations who in turn are setting up education camps for tax payers.
Some 60% of the small traders do not even have computers?
The figure is absolutely wrong. There are 8 million existing tax payers who have been filing returns. How are they doing it if there are no computers? It is possible that they cannot do it by themselves. But then there is somebody doing it for them. In places like Jharkhand, which is not considered technologically very advanced, payment of taxes is 100% online.
The other advantage of GST is input tax credit. How is it different from VAT regime?
Input tax credit is an important aspect of indirect taxation. In the current system, you yourself counted your input tax credit and told the tax officials.
The tax officials called you for many types of queries. Sometimes they did not allow your credit for whatever reason. Then they would issue notices and ultimately many would get tired and not even claim tax credit.
In GST, sales and purchase data is already fed into the computer and on the basis of that the system generates the amount of input tax a trader is allowed to avail.
There is no interface between tax officials and traders. There is nothing to verify. The input credit comes automatically to the bank account of the trader concerned. For 95% of indirect tax payers, our portal is a one stop shop. They do not have to go to the tax department at all.
But why only 8 million sales returns in such a vast country?
Those below Rs 20 lakh turnover have been exempted, and up to Rs 75 lakh, there is relaxation.
