The 'Baking' of GST

Author’s anguish as to whether we are able to overcome the reported drawbacks such as poor registration process, poor refund mechanism and poor audit, in the ensuing GST regime is understandable. In the existing system, it is true that we are not able to overcome the above hurdles. The remedial measures taken by the appropriate VAT/ED/ST authorities have not yielded satisfactory results and therefore they are not effective. The recent circulars and instructions by Excise and Service tax department regarding delay in issue of Registration Certificate have remedied the issue of registration to some extent. But the refund mechanism, especially in service tax, is far from satisfactory. The pendency in refund claims is on the increase and I am doubtful whether these could be disposed off before the advent of GST. Once the new regime comes into effect, the pending or disputed refunds will be haunting the taxpayer for long. Similarly, the Audit mechanism put in place is not effective as we have not yet started using audit module in the ACES even after over decade of start of ACES. The other module of ACES such as Dispute Settlement Resolution (DSR), Export Module for processing export related documents, Provisional Assessment (PRA), Refunds , Claims and Intimations have remained a non-starter and total automation of the business process has remained a dream. The pendency of litigations of VAT/ED/ST in various judicial /quasi judicial forums has reached alarming proportions and unless a revolutionary measure is taken, the existing problems cannot be resolved. Recovery of arrears is another area of concern as no timely and effective measures are initiated and monitored to safeguard the public exchequer. When the existing system itself is not set right, I am doubtful as to how we are able to perform better in the new era. It is the right time for all the VAT/ED/ST departments to take steps on war footing so that the backlogs in refunds, audit and arrears recovery are brought to manageable levels, so that it is possible to learn the new law and strategies required for implementation of GST.

MG Kodandaram
NACEN
Bengaluru

madihally kodandaram 23/07/2015