At midnight on Friday, India see an unprecedented tax reform, but there is no guarantee of a smooth transition. Although the government has planned a stark deployment to Parliament for the goods and services tax as expected, it is worrisome for the technological preparation of the software for the new system before its launch. This means companies could face a bumpy race, at least for the first few months.
Although the government insists that the GST, which combines various indirect taxes in a single sample, change the face of the country, those responsible for its implementation apprehend the challenges of the future. GST Network, the company that provides the backbone infrastructure for the new tax system, said in an interview that he did not carry out the final test because of the shortage of time software.
In an interview with Business Standard, GSTN president Navin Kumar said the software has been updated after last-minute changes were made to the GST rules, but there was no more time to beta-test this version. This means that problems are possible, although Kumar said he was “pretty sure” of the system. Technology experts, however, said that it was a big risk to take a comprehensive reform of the GST.
In the new system, companies will be tax returns online, at regular intervals. Among the various GST return forms (WATCM 1, 2 and 3), only the first has been coded and the process for the rest is still ongoing. This means that even if the tax system is formally launched on Friday at midnight, its content will be made available in a displaced manner.
Tax experts say it means that entrepreneurs must manage their accounts themselves according to GST rules until the GST portal can be used to file returns – this should only occur in late August or September. The government granted companies a deadline until September to submit the GSTN bills for July and August, but even if they wanted to before this, it is unlikely that the system is ready.
Under the new tax system, while companies that Rs 20 lakh will be exempt from GST registration, most companies will have to file returns for three months. The first is for external supplies, WATCM 2 is for on-site delivery and GST 3 is a combination of the first and second.
“If you look from the compliance perspective, people have to load themselves and, on August 20 [before submitting statements], only the summary of billing should be filed,” said Archit Gupta, founder of ClearTax a company The online tax filing provided by GST services and applied for a license to become a GST provider Suvidhaa, a third for which a taxpayer can submit GST statements on the server, instead of just using the government website Of the company.
There may be up to three billion invoices generated every month by all companies under GST and I do not know if the GST network is strong enough to handle the cumulative charge two months after the deposit started in September, Gupta said.