25th May 2023, NEW DELHI: The recent introduction of Integrated Goods and Services Tax (IGST) and a seamless Input Tax Credit (ITC) chain has significantly simplified the lives of taxpayers and contributed to an expansion in the taxpayer base, stated, Shri Sanjay Kumar Aggarwal, Member, CBIC – Investigations/Compliance Management, at the National Conference on GST – “Ease of Business and Challenges” organised by the PHD Chamber of Commerce and Industry (PHDCCI), a leading industry body.

Shri Sanjay Kumar Aggarwal, who was the chief guest of the inaugural session, explained, GST has revolutionised the way indirect taxes are collected from businesses in India. It has made the movement of goods across state borders seamless, simplifying taxation for interstate trade. The introduction of IGST, a unique concept globally, has further streamlined the taxation process for integrated trading purposes. The filing of returns and registrations has been shifted to the online platform known as GSTN, ensuring convenience and efficient communication between taxpayers and the tax administration.

Addressing the conference, Shri Aggarwal highlighted the transformative impact of GST and the measures taken by the government to facilitate compliance for businesses. He emphasised the dynamic approach adopted by the GST Council, which has convened 49 times over the past six years to address GST-related issues. This cooperative federalism approach has enabled the government to address challenges promptly and effectively.

Shri Aggarwal also shared the positive impact of GST on the taxpayer base, with the number of taxpayers increasing from 64 lakh under the previous centralised service tax and VATregime to 1.4 crore as of last month.

When discussing the introduction of the new system, tax administrations faced difficulties in ensuring businesses’ compliance. Shri Aggarwal highlighted a particular challenge involving fraudulent activities conducted by unscrupulous entities who sought to take advantage of the system by creating fake input tax credit (ITC). To tackle this issue, the government has implemented validation measures and adopted risk-based approaches when granting registration.

Shri Aggarwal expressed his appreciation for the solidarity and compliance demonstrated by the trade community, which has contributed to the growth in GST revenue. He highlighted various simplification measures implemented to ease the compliance burden, including quarterly return filing for small taxpayers, filing of nil returns through SMS, and staggering of return filing dates to avoid last-minute crowding.

The Member, CBIC – Investigations/ Compliance Management also stressed that the government has also taken steps to streamline the return filing process, filing various returns on the common portal, and leveraging e-invoices to automate the process further. To expedite the refund claims on exports, provisions have been made for time-bound processing of deemed IGST refund claims, providing relief to exporters.

Shri. Bimal Jain, Chairman of the Indirect Taxes Committee, PHDCCI during his theme presentation, highlighted the benefits of GST, such as tax consolidation and the removal of cascading taxes and double taxation. He proposed rate rationalisation and the inclusion of petroleum products in GST. He acknowledged the challenges faced by small taxpayers and suggested reducing interest rates for delayed tax payments. Mr. Jain informed the importance of the GST Appeal Tribunal and discussed challenges regarding cross-charge and corporate guarantees. He stressed the need for consistent rulings and raised concerns about fake registrations and discrepancies in tax filings. He stated the significance of knowing suppliers for credit eligibility and mentioned upcoming provisions for tax compliance enhancement.

Shri Saket Dalmia, President, PHDCCI, highlighted India’s progress in implementing GST and the challenges faced. He emphasised the need for a balanced approach to legislation, considering India’s unique economic landscape and the role of cash transactions. While acknowledging the government’s recognition of grassroots transformation and compliance challenges, he called for addressing the issue of overreach. Shri Dalmia informed the importance of practical problem-solving approaches and collaboration among departments and businesses of all sizes.

Dr. Mahesh Gupta, Former President, PHDCCI praised the positive impact of GST on the industry, leading to increased revenues and improved ease of doing business. However, he highlighted two key challenges. Firstly, investigating authorities should respect the FAQs issued by the GST council and board, as they are considered law by the industry. Secondly, a solution is needed for utilising accumulated GST credits effectively, suggesting the exploration of a trading mechanism similar to customs’ tradable licences, along with an open ledger system for transparency.

Mr. Sanjay Agarwal, Former President, PHDCCI hailed GST as a game-changer in India. It has transformed taxation and infrastructure, eradicating border queues and tax evasion. He explained that the EDI for GST is unparalleled, facilitating countless transactions and traders. Yet, improvements are needed. Streamlining multiple agency proceedings is crucial. Decentralised assessments burden larger organisations, which can be resolved with pan-level assessments. Integrating or eliminating the E-way bill system with invoice generation reduces paperwork, except for smaller businesses. Rationalising GST slabs and providing leniency for non-fraudulent defaults during the initial years are recommended. India has achieved a remarkable feat with GST, effectively integrating the market.

The event was concluded by a vote of thanks by Shri Saurabh Sanyal, Secretary General, PHDCCI.