India’s $2.2 trillion economy may be elephantine, but it made a sharp turn on 1 July through a massive reform of its complex taxation system. A new and unified tax, GST (Goods and Service Tax) replaced hundreds of overlapping and cascading ones at the central and state level. It is expected to bring 25% more businesses under the tax net and provide a 4.2% boost to the country’s GDP. Of the 8 million businesses that already paid taxes, about 5 million have migrated to the new GST and are bracing themselves now for the most important GST event— filing returns.
But like the launch of GST that happened even before the laws to back it was fully in place, its technology platform too is rolling out in a half-ready state.
On Sunday, 20 August, Indian businesses were expected to have their first brush with the GST infrastructure, through the filing of their summary returns. But just on the eve of the deadline, the GST implementation committee extended the date to 25 August, citing multiple reasons. It said taxpayers wanted more time. That flood-hit states also asked for an extension and finally that, “last minute return filers experienced technical glitches.”
But it didn’t say technical glitches on whose side. Or who exactly was guilty of waiting until the last minute.
Tempting as it may be to think GST was too complex and sudden a development to nail the implementation, the fact remains that the GST law was more than 10 years in the making. And a rarity for Indian polity, it was something both the major political parties—the BJP and the Congress—wanted. Unfortunately and characteristically, everything about its implementation is down to the wire.
“Inconvenience is regretted. Thank you for your patience”
The decision to extend the deadline isn’t surprising because, for most of 19 August, the GST portal was unavailable preventing users from even logging in.
“Traders want to comply but many have not been able to submit returns on the portal,” says Praveen Khandelwal, secretary general of Confederation of All India Traders, which represents 60 million traders. Many of whom had basic issues like being unable to log in, or exceedingly long times to download the return forms especially from smaller town and cities, he added.
Glitches happen all the time, especially when the government is involved. So what’s new about this, you ask?
For one, the GST portal isn’t just another government website. It’s a platform that can impact businesses. Because under GST business need to capture, reconcile and claim taxes paid by its suppliers—input taxes—in order to ensure its own cash flows.
And unlike previous taxes, technology and Internet connectivity are right at the centre of GST.
