Is GST is becoming a headache for you.

Smt.Nirmala Sitaraman Ji,
Union Finance Minister & Chairperson, GST Council,
New Delhi

Subject: GST- Practical problems faced by the Taxpayers, the Tax Consultants and the Tax administrators

Respected Madam,
GST, Good and Simple Tax, as referred by the Prime Minister is going to celebrate its 4th Anniversary very soon.

1 Frequent amendments in the law:- When the entire GST was conceptualized and implemented, all the provisions were interlinked
and were supplementary and complimentary to each other. Gradually some of the provisions were deferred from time to time. Many other provisions were amended to suit the demand and political requirements.

Now, the position is that there so many amendments, clarifications, press notes, views on twitter that it is a herculean task to remember and interlink all such changes. Further, because of so many changes, the originality of the statute has vanished and the tax payers are at the receiving hand

2 Failure of the GSTN:- It was a good move to have GSTN as the interface between the taxpayers and the tax administrators, but practically it
back-fired. Frequent changes in the provisions could not be tuned immediately and automatically on the IT platform of the GSTN and it caused confusion, delay and trust deficit among the taxpayers.

Even if the delay was on account of the GSTN, taxpayers get penalized and the
tax consultants overburdened. Genuine exporters are still crying for their refunds due to lack of co-ordination between the different wings
of the tax administration and the GSTN.

3 Different mindset of the officers of Central GST and State GST- The officers working with Central Government and dealing with erstwhile Central Excise, Service Tax and Customs are having a broad approach of the tax administration, whereas the officers of State Governments are having exposure to only VAT laws and they are not having any idea of Services, Audit and the related Customs provisions. This is causing grave injustice to the entire tax administration and the ultimate sufferer
is the taxpayer.
It is also seen that for the Central Tax administration there is an apex body called Central Board of Indirect Tax and Customs
and as such there is uniformity in the functioning of the Central Tax officers across the country, whereas in case of State Tax officers, each state is functioning as an independent unit.

Further, in a particular state even the implementation of the provisions of GST is being done differently by the Central Tax officers and the State Tax officers. Proper training and better co-ordination is required.

4 Unnecessary reporting work in Central Tax department:-
The revenue share of GST is equally divided between Central and respective State Governments and so as the work.

However, due to old system of working, the field officers of Central Tax are overburdened with lot ofreports, which can be otherwise easily extracted from the GSTN.
Each and every supervisory level of Central Tax prescribes a new set of report and this is consuming quality time of the field officers, which could be otherwise utilized for assessment, audit and other verifications to plug the revenue leakage points.

It can be well compared with the state tax
administration that they are not having so much of irrelevant reports despite the fact that they are also having equal share of work.

5 Harassment due to arbitrary implementation of e-way verification
procedures:-
The concept of e-way bill was introduced to check the movement of goods without bill. Everyday reports of fake GST invoices defrauding crores of Government revenue had exposed this e-way bill
system. On the contrary, genuine taxpayers are being harassed on the pretext of minor breaches in the documents.

It is learnt that goods and the vehicles are detained even if there is minor mistakes in address or in writing jumbled vehicle numbers. In such cases, taxes are collected again and heavy penalties are being imposed despite instruction to be lenient in such cases.

6 Abuse of powers- Reprimand by the High Courts:-
These days High Courts of the respective States are flooded with ‘Writs’ on account of
arbitrary actions and abuse of powers by the Tax authorities. Presence of any penal or coercive provisions does not mean that they should be
used at first and at all instances.

Attachment of Bank accounts, search
and seizure, arrest provisions are being implemented so frequently and without following the prescribed procedures that now and then High Courts have to interfere and reprimand the officers involved.
Due to this the morale of the officers comes down and the tax evaders interpret it as a ‘relief’.

It is high time that a common SOP is issued for all the tax authorities for implementing such provisions and they should be cautioned against excess administrative overreach.

7 Non-functioning of appellate mechanism:-
The appellate mechanism is also quite different in State and Central Tax administration. It may
be due to different administrative hierarchy. Thousands of appeals at first stage appeals are pending throughout the country involving
hundreds of crores of revenue and also crores of refunds attributable to genuine exporters. Many states have even not started disposing appeals
even after 3 years of filing the appeals. The second stage of appeal is Appellate Tribunal, which has been notified but it has not been made
functional. The reasons are not clear for such inordinate delay.

8 Advance Ruling Authority:- Every state has a Advance Ruling Authority. It constitutes two members of Joint Commissioner Rank
official. Advance ruling is being applied for by a particular applicant for a particular doubt.

It appears that in absence of an effective appellate mechanism, it is being taken as an institution for all remedies, which is not very healthy.

Almost ninety percent of the rulings are in favour of revenue and the worst part is that these rulings are being used as ‘precedence’. Even the officers of the rank of Commissioners are using those rulings to support their views. When the Act, itself prescribes that the ruling applies only to the particular applicant then for what purpose, the rulings are made public. It should be confined to that applicant only.

9 Poor infrastructure for the field officers- Initially, when the GST was implemented, it was designed to be ‘face-less and with zero interface’.
Due to gross misuse of the lenient provisions, officers are now being forced to visit the tax-payers premises to verify their credentials.
However, they are not being provided with the required infrastructure such as vehicles, mobile phones, laptops etc. and they have to manage
on their own for carrying out such field inspections, which cannot be said to be effective and transparent.

10 Menace of fake GST invoices-
Last but not the least, the menace of
fake GST invoices is like a termite to the entire revenue collection. There appears a parallel supply of GST invoices and the loss is irreparable. When the entire country is facing the revenue crunch due to Covid-19, scrupulous elements are having field day making mockery of the tax
administration.

They are making full advantage of the flaw in the system and reportedly with connivance of some tax brains and officials which requires to be exposed immediately.

Madam, the list above is not exhaustive. There may be many such issues, which might have escaped your attention.

You must be aware that the trade associations and the tax consultant associations across the country are protesting against the mess created by GST.

It is earnestly requested to take corrective measures; otherwise the so trumpeted GST may move to the point of no return causing great embarrassment to the ruling coalition.

Yours sincerely
Dr. Ajay Kummar Pandey
Advocate, Supreme Court of India
Veteran Journalist
National Spokesperson Lok Janshakti Party