GST Extension – Implementation of GST

Narendra Kumar

17 Oct, 2020

The 35th GST council meeting made rules regarding the simplifications of GST Rules. These rules will simplify the GST return system for consumers.

GST Extension

There has been a rumour going around various social media sites for a long time regarding the extension of the date for the implementation of GST in India to the 1^st September 2017 from a decision taken in GST Council meeting. However, in real-time, there has been no such announcement from any official authority or government department.

GST is promoted as this huge change in existing indirect tax regimes in India. Until now, it was to be implemented from 1^st July 2017 and there has been no such change on this date.

There have been a few other changes in the schedule of other procedures or demand for such changes by interested parties in the past too. One such example is when the GST enrollment^[1] was temporarily closed on 30^th April 2017, but it further reopened from 1^st June 2017 for a period of 15 days to give an additional opportunity for eligible taxpayers to register.

The Goods and Services Tax Network (GSTN), which was assigned with the task of data collection of existing taxpayers, held a review meeting on last Friday, 9^th June 2017, where 34 Goods and Services Tax Suvidha Providers (GSPs) were in attendance. Here, GSPs made a request to GSTN and the Department of Revenue for a one-month extension of date of filing of the first returns under the GST. Currently, the date of the first filing is fixed on 10^th August 2017, but they want it to be extended to 10^th September 2017.

What Should We Expect?

Though there has been no such announcement for change in the implementation date of GST, we should be prepared for it as there might be such an announcement made by the authorities any time soon. Our reason for such a conclusion is that there is still a lot of confusion and ambiguity regarding enrollment and registration procedures under GST. Various changes and updates in relation to GST have been issued, which adds to further confusion.

In our opinion, we should expect more than one such extension, as the authorities and taxpayers are in a state of confusion and chaos regarding GST and need some more time and clarification in procedures for the smooth implementation of GST.

Reasons for such Expected Extensions

• The government is not ready as there is still some ambiguity about the set procedures, and new updates are coming in every few days like a change in the tax rates and changes in the threshold limits and other conditions in the composition scheme. These are adding to the confusion of the general taxpayers.
• It is not just the general public which is in a fix about this new tax regime. The lack of preparation on the part of state governments is a point of distress and public officials who should be on their toes with the fast-approaching implementation date are also clueless about it.
• Taxpayers already registered under any of the previous laws to be replaced by GST are required to migrate to GST. However, the ground reality is many of them are not aware of the migration procedure under GST. As many of the taxpayers don’t clearly understand the point that GST enrollment and GST registration are two very distinct procedures. Enrollment on the GST portal does not construct a valid registration under GST. For completing the registration procedure, GST laws provide for submission of certain documents and information by the taxpayer. Many people are not clear about the fact that the purpose of enrollment is only to update and validate the credentials of existing registered taxpayer under GST.
• The migration procedure is slow, and in many cases, a lot of issues arise in the procedure itself.
•  Tax rate confusion. The earlier GST council had issued a tax rates list for goods and services, specifying four tax slabs for 5%, 12%, 18% and 28%.

However, Finance Minister Mr. Arun Jaitley announced on Sunday, 11^th June 2017 a further reduction in tax rates of 66 items. He said the reason for such reduction was done after getting feedback from key industry players.

Conclusion

However such major change just a few days before the actual rollout date of GST clearly signifies the confusion and uncertainty associated with this new reform.

Read our article:Applicability and Impact of GST on Healthcare Services Sector in India