Also, the government has attempted to relax the requirement for uploading invoice-level details for the first two months of the GST regime. This provides some breathing space for companies to fine-tune their IT systems for reporting requirements under Gst system hurdles to implementation.
Industry is expecting the government to issue the requisite notifications soon, including the effective date of GST levy, eligible exemptions and concessions, and negative list of services. Impact on Services Sector: Goods and Services Tax GST one of the most ambitious tax reforms, undertaken by the Government, is all set to be implemented from July 1, The multiplicity of rates, decentralized registration, generation of item-wise invoice with multiple copies, calculation of item-wise GST for multiple slab rates, and printing of such invoices containing numerous details, have increased the implementation challenge.
The generation of self-invoices and issuance of payment vouchers for purchase from unregistered dealers has added a layer of complexity to compliance under the GST regime.
Judicial decisions have thus far held goods to include intangible property such as off-the-shelf software, trademarks, and the sales tax levied on them. The process of creating a separate accounting system, billing system, assessments, returns and separate input credit for all locations will a taxing task.
While the government seems confident of being GST-ready, industry is preparing itself to meet several implementation challenges. A reform as landmark as GST needs greater attention to detail from lawmakers.
Conclusion Even if these challenges are overcome, there has to be a dynamic IT infrastructure, connecting all the state governments, industries, banks and other stakeholders on a real-time basis. IT teams across industries are burning the midnight oil to make changes in their IT systems.
As per a report by Crisil, GST implementation would be instrumental in reducing the fiscal deficit. Both Central as well as the State Government authorities have to manage the administration for tax payers.
If a service is consumed across multiple states Ex- Telecomthe tax revenue would be accrued to the state where the recipient or his office is registered.
EOUs are awaiting clarity on the continuation of basic customs duty for determining the duty payable on supply to the domestic tariff area. It will be a blessing for States who consume more than they produce Ex-Meghalaya, Arunachal Pradesh but a curse for the states who produce more than they consume Ex- Maharashtra, Tamil Nadu.
Similar issues arise on actionable claims. Tax on declared goods The fifth challenge can lead to significant surprise for the industry.
To adjudicate such disputes, the adjudicatory power already vests with the SC under Article Thu, Jun 29 But given the footprint of traders in the country, there is significant apprehension about the treatment of closing inventory—especially in sectors such as textile, pharma, fast-moving consumer goods, medical equipment, etc.
The absence of transition provisions relating to capital goods in transit on 1 July is also a big challenge for industries. Presently, goods and services are taxed at different rates in different states.
An inefficient tax administration will not be able to provide the necessary level of deterrence which may ultimately lead to non-compliance and under performance of the tax regime. Unfortunately, upon minute review of the amendments read with the provisions of the draft Model GST law, several constitutional issues emerge.Challenges in implementation of GST (Goods and Service Tax).
Goods and Services Tax (GST) one of the most ambitious tax reforms, undertaken by the Government, is all set to be implemented from July 1, The implementation of GST is going to put India on the central stage of world economy. This endeavor of the Indian Government to have a balanced & sustainable indirect tax law will decrease the litigation & uncertainty woes of the tax payers.
GST is charged on the consumption of goods and services at every stage of the supply chain while the current sales tax and service tax is levied at only one stage of the supply chain.
2. Goods and services subject to tax. Both GST and Sales Tax operate on a negative concept – all goods and services are subject to GST unless specifically. Amongst the several transition issues and implementation challenges being faced by the industry are: treatment of closing inventory, adherence to anti-profiteering provisions, modification of IT systems to make them GST-compliant, intra-branch supply of services, and determining place of supply and location of recipient.
Hurdles in Implementation of GST, Implementation Hurdles For GST Powers of Council for GST Legislation: The Council singularly is clothed with legislative, executive and judicial powers.
It will recommend GST legislation, oversee implementation of GST in Country and set up mechanism to adjudicate disputes between its members.
Sep 19, · 5 hurdles to implement the GST Last updated on: September 19, IST GST is a landmark reform considering the sweeping changes it brings about in the indirect tax regime in India but faces several changes.Download