Readying for GST – some suggestions


By R Manimohan

FROM the signals emanating from the system, it appears that the CBEC has to start preparing for the GST regime, to be more specific, might be the CGST (Central GST) regime.

Many suggestions have been aired regarding the steps to be adopted for the said launch. However, the necessity to overhaul the tax administration and its delivery machinery requires some attention at this momentous juncture.

Tax administration constitutes of four major elements, viz., data collection, analysis of data and intelligence gathering, investigations and adjudication and appeals.

As on date the work force deployment for the above four types of distinctively separate activities have been all jumbled up and done as if for a single unit. As a result all fields are dominated only by Executive officers. Let us examine them separately:


For collection of data, it is required that personnel with knowledge of using the computer accessories for data collection, collation and creation of data base are more in requirement. Instead the department as on date has been deploying Executive officers for extracting and verifying data from the sources provided by the assesses, which on one hand cannot produce the desired results in terms of data management and the complaints of executive over reach could be heard repeatedly. The Executive officers who are primarily revenue officials need not be deployed for these activities. It is also a more costly affair because of the higher salary of the Executive Officers when compared to the personnel whose basic work is to collect and collate data using electronic methods.

Unlike the present ACES, a proper system has to be put in place for the above purpose. Further, it will be better to do away with the necessity to scrutinize the returns of the assesses by Revenue Officials, in the light of the avowed policy to grant the assessee freedom to declare and face the consequences if the declarations are wrong.

It also requires to be set as a pre-condition for such a freedom for the assessee community that, invoice based e-filing should be made mandatory and thus misuse of CENVAT Credit could be curbed by electronic methods.

The department can conduct periodical audits on the assessees as is mandated for which Executive officials could be used. Thus, the question of harassment at the cutting edge level would be avoided.

The above methods will see that lesser of Executive officials are deployed and the salary outgo would be reduced and data management would be more effective.


The machinery for intelligence gathering should be lean and electronically assisted. They should be engaged only to collect data, study them, collect intelligence and file them to the appropriate agencies for further investigations. A proper combination of officials with knowledge of computer applications in order to analyse the data and Executive Officials who can derive intelligence from the same as well as from other sources would be required in these formations.

The practice of the intelligence agencies themselves conducting investigations could be avoided because the necessity to conduct investigations on all intelligence that is filed will put a cap on the flow of intelligence.


The investigation agencies are as on date functioning at multiple layers and therefore very many times at cross purposes. As on date, cases could be booked by a Range Officer, the Divisional Preventive Unit, the Head quarters Preventive Unit in matters of Central Excise and Service Tax and by the Directorate of Central Excise Intelligence in the matter of Central Excise and Service Tax cases or by the Directorate of Revenue Intelligence in the case of Customs cases. This multi-layer mechanism of intelligence gathering and investigations obviously creates irritation in the trade. Hence all investigations could be entrusted to a separate directorate namely Directorate of GST Investigations. Here, more of the Executive Officers should be deployed.


The quasi-judicial functions like adjudication and disposal of departmental appeals is another area where currently a lot of Executive officials are deployed with high salaries, for what could be done by stenographers. Other than the revenue wastage on that count, it also leads to pro-revenue orders being prepared at these stages due to which the assesses become disenchanted with the judiciousness of the mechanism to deliver justice. Neutrality could be brought into these proceedings if more number of higher level officials are posted in these areas, with proper ministerial and secretarial assistance. Executive Officers are required in these areas only to project the side of the Revenue during the proceedings, as is currently done in the CESTAT and nothing more.

Instead of requiring the entire machinery to be assessee friendly, instead of citizen friendly, if the above steps are taken, justice would have been done not only to the assessees but also to revenue and the citizens of the country.

(The author is a serving officer & the opinion expressed above is purely personal.)


8 Replies to “Readying for GST – some suggestions”

  1. Ashish jain says:

    Gst rates for toy and games will not make the trade easy for toys dealers .this isna simple thing the toy is just toy why make different category for single toys is not just belong to any particular rich or poor person . Before the vat on toys is just 5% and many states it was tax free gst council deside it to put in 3 slabs.
    12 and 18 and 28 percent which is totally disappointed for this trade persons.
    I m very small toy trader my request is to honourable council member to plzzz think abt this again and make it in single slab of 5 or 12 percent. Because toy is not just a play item for a baby . It is his dream to have it of his choice. We dont have to make a burden on his age of play with his dream toy.
    Sir atleast once plzzzz think on this matter
    Whatever the decision again but plzzz take this matter again to council members .
    Every person who is elder or younger played with toy and games in his child age and have a dream to have more and more different types of toys.
    Plzzzz sir plzzzzzzzzzzzzzz

  2. Madhav Kelkar says:

    1) Direct payment of C GST
    2) Direct payment of State GST
    3) Direct payment of octroi / entry tax to districts
    4) No road permit or any form required.
    5) No more hassle of passing on excise duty credit from party to party
    6) No more “C” forms
    7) Free movements of goods all over india.
    8) No more waiting or octroi payments
    9) Easy e-payments & return of central GST & State GST
    10) “E” GST returns to be monitor by Govt. People very strictly

    It has been discussed in parliament that why there should be different taxation for same products in different states where by smuggling of products within states was going on for years together. This creates revenue loss where tax in more.

    GST was introduce or discussed in parliament 8-10 years back by then Prime Minister Manmohan singh and was criticized by opposition party BJP they were trying to pinpoint loopholes or bad points but not solutions. Now BJP is in power and the same bill is being discussed without any solution. Problem still persists and the burocrate are making this GST more complicated. All the states of india were crying for their revenue loss which they were getting by way of CST. Even today there is no solution to this problem which is creating unrest in state governments.

    Few years’ back postal authority has introduce pin code system as per their wish and convenience which I believe to be changed and should be made as per state and not as per zone.

    Postal pin code change to state code
    Zone 1 01 Delhi
    2 02 Maharashtra
    3 03 Gujarat
    4 04 so any

    Present pin code is of six digit needs to be rearranged as shown below
         
    For state For Districts

    You can accommodate as many as 99 states and 99 districts 999 words

    01– Delhi, 02–Maharashtra, ————, 30—Assam, 31—Orissa.

    Now who so ever it may be manufacturer or trader he should invoice party with proper new pincode.

    Example – S. K. Enteprises.
    L.T. Road,
    Shop No. ?????
    Indore – 30 00 100

    First two digits stands for that state, middle two digits stands for district. And last three digit for words or local area.

    Govt. had already categorized goods for GST such as agri food no tax

    1} XYZ item 5 %
    2} ABC item 10%
    3} EFG item 15%

    For Example

    While invoicing party should charges GST as per Govt. notification once the invoice is made.

    80 % will be credited to Central Govt.
    15 % will be credited to State Govt.
    5 % will be credited to Dist. authority.

    This will give direct fund to local authority to make developments in that state or district.

    Cosignee_________with pin code 14 00 091

    Product Rate Qty Value GST% GST Invoice Total
    A 50 100 5000 5% 250
    B 105 25 2625 12% 315
    C 240 10 2400 20% 480
    _____ _____ _____
    GST payable 10025.00 1045.00 11070.00

    80 % Central Govt. 836.00
    15 % State Govt. 156.75
    5 % Dist.(octroi) 52.25
    Invoice total 11070.00

    Any party who is making invoice should file their return within 1st week of next month that is Jan Sale should be file before 7th of Feb we must prepare programs (computer) where this segregation will be done automatically. When saler makes on line payment immediately that state & district will get their credit in their account.

    Sales whether he is a manufacturer or Trader will take full credit of central GST tax from where he has purchased his input. While preparing invoice he will tax his customer on his selling price which is naturally more than his purchase price (as in happening in VAT)

    If we adopt this system all states will get revenue and most important is all the districts will get revenue in place of octroi or entry tax. This will eliminate corruption at octroi / entry tax points. This will also make transporters happy because they will save time at octori point and also save fuel, this will give free flow of goods.

    Central Govt. & postal department in association with state govt. can decide

    pin code – first two digit for state
    pin code – second two digits for district or Taluka
    pin code – last three digits for words

    all cash transactions at octroi / entry tax point will be eliminated. At present sale tax or excise returns are filed with sale figure and tax there on with this procedure seller can make one invoice with different commodities with different GST.


    Stage I – First two digits of pin code
    Code no for state of india. Can accommodate as many as 99 states

    01 – Delhi
    02 – Punjab
    03 – Harayana
    04 – Rajasthan
    05 – Himachal Pradesh

    Every state mush have Nationalized bank account for collection of GST linked with above first two digits of pin code like income tax / sales tax / C. excise this GST will be credited to this account when payments are made online.

    Stage II -Middle two digits of pin code

    Code no for Dist. or Taluka for every state eligible for octroi / entry tax can accommodate as many as 99 districts.

    Maharashtra – 14

    01 – Mumbai
    02 – Thane
    03 – Pune
    04 – Chichwad
    05 – Kolhapur

    Example – address of Mumbai will have pincode – 14 01 091

    Stage III Last 3 digit of pin code no are for local area of the district or ward. This can accommodate as many as 999

    Say Mumbai will have pin code 14 01 091

    14 is state Maharashtra
    01 is for Mumbai
    091 is for local ward

    State GST and District octroi/entry tax credit is not allowed only central GST credit can be taken Payment may be made within 1st week of next month for earlier month sale. Second return for state GST & District (octroi/entry tax) GST also should be made with in 1st week of next month.

    Summery of GST Credit amount ————————-

    Summery of GST Payable amount————————

    Balance payable / balance credit

    Old excise credit may be taken as opening balance in Central GST.

    Old VAT credit may be taken as opening balance in State GST. (Only for that state and not for other state)

    Say party who is selling material is in Maharashtra & has got vat credit balance can take credit for Maharashtra state sale GST and not for other state once this credit is used further credit is not allowed but has to charges customer on every invoice made.

    Inv. No Date Party Name (Pincode) Party GST No. Basic Inv. Value Total GST Payable Total Inv. Value Central GST 80% State Code State GST Dist. Code Dist. GST

    Sr. No Party Name (Pincode) Party GST Basic Inv. Value “C” GST State GST Dist. GST Total Invoice Value

    Central GST – E-Payment

    Party Name (consignor) & Address – ??????????????????
    GST No – ??????????????????
    Bank Details – ??????????????????
    Payment period – ??????????????????
    Amount – ??????????????????
    Challan No. – ??????????????????

    Supporting Documents Summery.

    Opening balance or old Excise credit – ??????????????????
    New purchase bill credit – ??????????????????
    New E-Payment made – ??????????????????
    Last months sale –C GST payable – ??????????????????
    Balance of credit – ??????????????????
    Carried forward for the next month.


    Party Name (consignor) & Address – ??????????????????
    GST No – ??????????????????
    Bank Details – ??????????????????
    Payment period – ??????????????????
    Amount – ??????????????????
    Challan No. – ??????????????????

    Inv. No
    Date Consignee Party Name Pincode Basic Inv. Value Total GST Payable State Pin code 15% Amount Dist Pin code 5% Amount Challan No.
    1 01.07.17 ?????????????-14 01 091 20000 3600 14 540 01 180 16614565
    2 02.07.17 ?????????????-20 05 060 28000 4200 20 630 05 210 16626636
    3 03.07.17 ?????????????-01 04 010 100000 18000 01 2700 04 900 14636633

    Thanks & Regards,
    Madhav Gajanan Kelkar

  3. Subhash Jain says:

    Dear Sir,
    1. I am manufacture and purchase raw material from market and sales after process in market. but we are purchased good @5% gst slab tax and sell good after processing tax free slab goods. so in case we take refund or not?
    2. We are purchase Mustured seed @5% and after process sell oil 5% and balance Oil Cake under which rate taxable?


  4. Hitesh porwal says:

    Respect sir, I just request to place single rate of RCM. Because it is not possible to classification each and every items. So I request to you set one rate for icm irrespective value of those good fall under different e.i 5%, 12%, 18%, 28%

  5. Samik makwana says:

    Respeced Sir, Please on computer IT Security releted products & technology releted Items make it Gst 5%. Narendra Modi also say about digital india. Then please reduce tax to 5%.if you support people then people will support you & they will pay else in mumbai everying is avalable in black without tax still but we dont want to buy without tax or under billing

  6. Mahendra Gandhi says:

    Credit of already paid GST to be made available to only those who are using the goids/material or services for Trading or Production directly and value is added on it. And not to those who are end users of the services or goods.
    The very purpose of any Tax is that the same is to be finally imposed on the end user .
    We are providing credit to the Companies/ Firms/ Institute also who are end user of product. For example:
    AC and other machines/equipments/ goods etc.Purchased by a Co. /firm/ Show Room/Industry/ Bank insurance co or other institutes where they are end user but they are adjusting the GST paid on Goods and services with what ever they have recovered from their business operations.
    Banking / Insurance/ Telephone services
    etc. availed by the cos. / institutes where they are end users, the GST paid by them on these services are adjusted with the GST they have recovered from their business operations/ sales.
    Like that in so many cases the GST is not paid by any body and the same is adjusted .
    This system to be changed and to be ensured that some body is paying GST on all the products and services.

  7. KAMLESH PATEL says:


  8. S Sagar Mourya says:

    I have a suggestion for implementation of online billing through govt. Portal for reducing risk of unrelated buyers and supplier transaction and smoothing GST collection. Waiting for your reply

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