By Manali Joshi
On February 6, 2018, the Bombay High Court said the Goods and Services Tax (GST), though highly publicized by the Union government, was not tax-friendly. A bench made up of Justices SC Dharmadhikari and Bharati Dangre said, A tax like GST is not at all tax friendly and the authorities in charge of it must wake up now. The special sessions of Parliament or special or extraordinary meetings of the council would mean nothing to the assessees unless they obtain easy access to the website and portals.
The facts of the case
The court was hearing a plea filed on January 25 by Abicor and Benzel Technoweld Pvt Ltd, a company engaged in the manufacture of robotic and automation equipment. The petitioner claimed that it was unable to access its online profile on the Goods and Service Tax Network, without which it was unable to file its tax returns, move its goods, or comply with any other GST rules.
The petitioner argued that the Union government had decided to put in place an automated system for accepting tax returns based on oud-of-date government assessments, and that it still had not complied with its promise to fix the system. The bench also noted several other petitions in different courts with grievances against GST.
The Court said that it cannot be called upon to administer the implementation of the new tax law and that it was the concerned authorities that should take immediate steps to tackle the problems. The court also determined that a special Goods and Services Tax grievance redressal forum must be set up in order address GST related complaints as the court does not have the power to intervene in cases such as that brought by Abicor. Lastly, the court directed the Union government to file an affidavit responding to the petition by the 16th of February.
Technical glitches
Many businesses have reported difficulties in logging into the online portal and filing their returns. However, according to Rahul Mehta, president of the Clothing Manufacturers Association of India, there are many issues other than logging in, for instance the companies that have been given temporary numbers when filing their taxes have had their tax return process delayed by three to four hours.
Another problem reported by businesses is that the online system sometimes declines their returns despite them meeting all the specifications laid down in the Goods and Services Tax rules. Moreover, it is often impossible to file 3B returns as the portal frequently shows an error page saying invalid return type. The 3B return is a simplified return form introduced to allow businesses to file a summary of their sale and purchase invoices without having to upload each invoice separately as an invoice-level return, known as a GSTR 1.
Yet another problem is caused by design bugs in the GST software. According to the current system, the online GST system allows only one credit note per invoice and vice versa. However, businesses often issue multiple credit notes per customer per invoice. In addition to the existing issue, the portal automatically deletes data already fed into the forms if the user changes to another screen.
The Goods and Services Tax system is also unable to support the last-minute rush of returns which frequently occur, as a result of which the government is continually forced to extend filing deadlines. Mr Modi has acknowledged this problem, which is the first step, but the government must prioritise fixing these glitches if it still hopes to boost businesses with its new tax system.
How to resolve the problems
Infosys is clearly grateful to the government for giving it the opportunity to handle such a large scale system. In one of the companys letters, it said that it has been getting concerned feedback from its stakeholders and needs to take these into account when considered further investments to repair the system.
However, the company has been working hard to resolve the glitches quickly. Infosys said that they have appointed one of the finest engineers in their GSTN team to lead their attempt to resolve the issues. The IT service provider has assured the government that they will resolve the issues with GSTN; however, policymakers have said that they want to see results soon.
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