Challenges before Government to Implement GST in India

Introduction

Implementation of GST is posing different hurdles every day before the government to surpass. However, one of the biggest hurdles was to pass the GST bill from Rajya Sabha which parliament did it after a long hold.

Currently, GST council is the supreme authority to take decisions over critical points under GST. The exemption and tax structure has already been approved by the council. The government is firing all cylinders to implement GST by 1st April, 2017 subject to the following implementation issues:

• A Stable GST bill: The GST bill is expected to be tabled in parliament in winter session. Government had already issued some the model GST law. The model law is not the ideal one and has many big glitches. Hence, it is expected that government should consider the genuine feedback of the industry, regulators and present the very stable GST bill.

“Subscribe to the monthly magazine on GST.”

• Ugly fight between centre and state: The cat fight on the control of taxpayers is getting worse and wasting the precious meetings of the councils. This issue of control on taxpayer has to be summed up in order to ensure the smooth implementation of GST in India.
   
• IT Infrastructure: IT infrastructure of the government departments are still being run on out dated technologies. The half hearted technologies often breaks down and involves maintenance every now and then.

Hence, it is very important to have a secure, stable and up to date IT infrastructure to handle the very large amount of traffic from the day one. The IT infrastructure is handled by GSTN.

Goods and Services Tax Network (GSTN) is a Section 8 (under new companies Act, not for profit companies are governed under section 8), non-Government, private limited company. It was incorporated on March 28, 2013. The Government of India holds 24.5% equity in GSTN and all States of the Indian Union, including NCT of Delhi and Pondicherry, and the Empowered Committee of State Finance Ministers (EC), together hold another 24.5%.

Under GST regime, everything will be online. Hence, it is very important to have a strong online foundation, so that the system does not break down during heavy load.

• Administration of GST: GST is very different from the existing VAT, service tax or excise. The present form of GST can be said to be a modified mixture of all the present indirect taxes. GST will be administered by the existing staff. Hence, it will be a very tough job for the government to train the existing employees with the GST law.

Further, any change is not easily accepted by the staff, hence this might one of the biggest challenges that government is now facing. Further, it will take years to fully train the existing staff.

The challenges are immense before the government while implementing the GST and even thereafter. The management with untrained staff will not be an easy job. We will discuss these issues in the chapters ahead.

Conclusion – It’s only a beginning

GST is a mixture of all the existing indirect tax levies and shall uniformly rule the Indian taxation system. It was a historic moment for the Indian taxation system, when President Pranab Mukherjee assented the Constitution amendment bill. We have already discussed diversified topics on GST in brief as it was only an introduction. In this book, we will discuss every topic in depth with the easiest language possible.

A road ahead from here on will be challenging or maybe a race against time. Central GST, IGST and 29 State GST bill including rules and regulations need to be passed. The whole IT structure needs to be in place for a smooth implementation. However, government is very keen to implement GST w.e.f 1st April, 2017. Looking at the recent development, it is well expected that GST will fall in place on time. 

The historic reform will have a far reaching impact on every individual, business etc of the country. Its impact can only be stipulated until and unless actual results are out. At last, we can say that we are fortunate enough to witness a moment where an old era is ending up giving its way for a new beginning. Hope we see a better India, a stronger India. 

In case you need more information on GST in India, subscribe to your GST online monthly magazine in India.