Lack of preparedness has cast a shadow on the rollout of the country’s largest reform in taxation — Goods and Services Tax (GST). While the Centre has fixed July 1 as the deadline for the system’s implementation, officials say it is likely to get delayed.
Karnataka fares the best in terms of preparedness, with 92% of the traders having registered for GST. Even Andhra Pradesh, Tamil Nadu and Gujarat have shown remarkable progress with more than 85% of the traders having enroled. The scenario in the rest of India, however, is grim — the national average for enrolment is 37%.
While July 1 is the Centre’s self-imposed deadline, the final date for the launch according the constitutional amendment is September 16. “The scope of discussion on a delay is there since the actual deadline is September 16, while the Centre is chasing the July 1 target,” said a senior official at the Central Board of Excise and Customs (CBES).
The first step towards implementation is to get traders registered under different tax systems like value added tax (VAT), central excise duty and service tax to migrate to the GST system.
While there has been considerable progress in the enrolment of VAT assesses, with 60 lakh of 92 lakh traders getting registered across the country, the enrolment of service tax and central excise duty assesses is not up to mark. Only 37.02% of the traders registered under service tax have signed up for GST; the figure for central excise duty is much lower at 18.9% (as on April 28).
What’s worse, the portal for online registration has been closed due to technical glitches. The portal run by Goods and Services Tax Network (GSTN) says: “The enrolment process has closed with effect from May 1, 2017. The enrolment window will reopen at a later date for taxpayers who could not enrol themselves as well as those who enroled but did not sign the form. Keep watching this space for further announcement.”
But traders rue the website wasn’t working even before May 1. They were unable to upload data and generate the Application for Registration Number (ARN). Even the e-signature failed. “We have asked the Centre to postpone the GST rollout to September. Hasty implementation of a system which is touted to be a game changer will not help,” said Praveen Khandelwal, secretary general, Confederation of All India Traders.
The Centre’s move to link the Aadhaar number to the Personal Account Number (PAN) is also being blamed for the delay.
Prakash Kumar, chief executive officer of GSTN, said the enrolment process was closed since software testing was taken up. It will be resumed soon. “July 1 is not just an expected date; we are going to implement GST on that day,” said Kumar.
Software not ready
While developers are busy testing the software required for enrolment on the GSTN portal, the software for filing of tax returns is still not ready. GST has three categories of tax — SGST levied by the state and CGST and IGST levied by the Centre. States need to have their own software for SGST and Karnataka has entrusted National Informatics Centre (NIC) with the task.
Apart from this, the Centre has formed a GST Suvidha Provider to develop software for individual traders. However, with the Centre yet to form rules and states yet to pass the GST Bill, the provider hasn’t been able to develop the software.
The GST Council is scheduled to meet on May 18 and 19 and the classification of commodities under tax slabs of 0%, 5%, 12%, 18% and 28% is likely to be finalized, which is the final step required for the launch. “Meeting the July deadline is tough but not impossible,” said Baswaraj Nalegave, additional commissioner, customs, central excise and service tax.