The government has covered a lot of ground to make GST a reality by mid-2016. (Photo: Raj Verma)
The centre has started shedding some light on the manner in which GST would be implemented on ground
In spite of the uncertainties regarding the enactment of a constitutional amendment bill to facilitate the rollout of GST, the Centre has started shedding some light on the manner in which it would be implemented on ground, where the anytime-anywhere mode of tax payment will be the underlining principle. The payment process will happen electronically and will include online payments, e-challans and electronic reconciliation of receipts.
The centre has started shedding some light on the manner in which GST would be implemented on ground
The finance ministry has put up the draft business process report for GST detailing the registration, tax payment and return filing procedures for companies and businesses. Registration will also be automated and will involve minimal interface with the taxman. Says Anita Rastogi, Partner, Indirect Tax, PricewaterhouseCoopers: “These are welcome measures and would facilitate compliance.” The draft also talks about increasing the number of times returns have to be filed. “The proposed process of filing a minimum of three returns in a month would significantly increase the compliance burden for service providers, who are presently filing only one return on a half-yearly basis,” says Rastogi.
However, there are a few things in the business process draft that still need to be ironed out. For instance, the proposed returns process, which is quite detailed in nature, emphasises on cross-matching of data submitted by various assesses. While this will put in place a far superior system to verify the contents of the returns filed and reduce possibilities of revenue leakages, its success would depend on the accuracy of the submission of data by all taxpayers in a specified format. “This may be a challenging proposition for tax-payers. Further, the return form does not seem to provide for a separate disclosure of intra-entity transactions,” says Rastogi.
One: After the Bill is passed in both Houses, it would be sent to state assemblies, where it has to be ratified by 50 per cent of state legislatures.
Two: It has to be then enacted both at the Centre and in states. While the central GST and integrated GST (iGST) laws have to be enacted by Parliament, the state GST law will have to be enacted by the state legislatures. The key aspects of GST, including tax rates, tax base, exemption limits and the appropriate iGST model, will also be finalised at this stage.