Port Wings News Network:
The Madras Chamber of Commerce & Industry (MCCI) organized a seminar on 27 July 2018 at Hotel Savera to study the journey of Goods & Services Tax for past one year since introduction in July 2017, the challenges /difficulties faced by Trade & the future development.
The program was attended by Shri.C.P.Rao IRS, Principal Chief Commissioner for GST & Central Excise, Tamilnadu & Puducherry, Dr.T.V.Somanathan IAS, Addl. Chief Secretary, Commissioner for Sales Tax, Govt of Tamilnadu , Mr.K.Vaitheeswaran, Advocate & Tax Consultant & Chairman MMCI GST Committee, and members of MCCI and many other Trade dignitaries members participated in panel discussion after the meeting.
Mr.Ramkumar Ramamoorthy, Executive Director, Cognizant Technology Solutions India Pvt Ltd & Member MCCI General Committee, delivered the welcome address. He explained the role of MCCI for promoting Industrial relationship with the Union as well as state Governments & the efforts taken to settle many issues faced by trade members.
The MCCI was the first among other trade bodies to recommended VAT and instrumental in bringing VAT to the state. He said many workshop/seminars conducted by MCCI on Indirect Taxes for the benefit of members.
The Chamber continues its services on GST by organizing work shops/seminars regularly for the benefit of members. He further explained the role of MCCI on familiarizing and adopting GST by members and it was the wish of MCCI members to have single tax regime all over India.
The Chamber was instrumental in representing Governments to ease out complex system in GST by representing various Government department and this was instrumental in abolishing Check posts across India in GST regime. Now we have completed a year of GST regime and has come a long way from a complicated tax system. It was not easy cake walk for the Trade to adopt new system of GST and we congratulate ourselves for achievements in this historical tax reform and it has given a sigh of relief from multiple tax system to ONE TAX SYSTEM all over India which is transparent and self regulatory system of Tax System. However, there are some teething problems in GST due to multiplicity of tax rates/ slabs , technical glitches and refund mechanism. Now , we could see some procedures are getting simplified.
Mr.K.Vaitheeswaran, Advocate & Tax Consultant & Chairman , MCCI GST Committee while addressing the forum, explained the role of GST in promoting trade across India. Earlier there were Central Excise, Sales Tax, Value added Tax etc., due to multiplicity of taxes one who is doing business had to comply with procedures of different departments in state & central Government. After introduction of GST, the trade has got a sigh of relief from multiplicity of taxes & reporting system. In the Pre- GST era, there was no concept understanding and the Trade did not have the facility of Letter of Undertaking to get tax exemption on export products. In the present GST system, an exporter can execute Letter of Undertaking and get exemption from paying GST for export commodities or Pay taxes and get refund from department. But the SGST portion is not getting refunded on time is the issue faced by Trade. He further mentioned some of issues like representing multiple states, IGST vs CGST+ SGST variations, User friendly of Portal, sec 12 verses sec 13 of IGST Act 2017 and some more.
Further, Mr.Vaitheeswaran highlighted some of the bottlenecks of GST like Pro-Active amendments, frequent changes in procedures, Input tax credit, detailed statement requirement, reconciliation with Form 26AS, tax format and tax audit report.
He further said inspite of all above, India successfully implemented GST & with various changes in system are being adopted by the Trade unlike Singapore, Malaysia, Australia who faced difficulties in implementing & maintaining GST. In fact our GDP has grown after GST and countries like Australia saw negative growth in GDP after introducing GST. In that way India succeeded in implementing GST in a complex situation of our federal nature of our country.
Shri.C.P.Rao the Principal Commissioner of GST in his special address said though Mr.Vaitheeswaran saw success in GST, still we are battling for smooth system. Department introduced FAQ in system, 260 Seva Kendras to assist members to get doubts clarified, conducted more than 200 programs, 800 more awareness programs, 34000 queries handled, 6000 officers trained by NACEN.
He further said department has taken lot of efforts to make GST a success but still there are some issues to settle. He mentioned some of the objectives of GST as 1) Increasing Tax Base,2) Higher Tax Base , 3) Develop states , 4) more GDP and due to this the GST has become successful in our Country. Earlier in Central Excise there were only 1 lacs assesses and in GST regime in 10.20 Lac assesses registered and there are 3 lac new registrations. Growth of revenue increases for central as well as states. After introduction of GST , VAT is withdrawn, credit gone up, tax is based on the manufacturing value. Lot of interstate movements happening. Tax payer less than Rs.1 lac gone up contribute to 15% as against 5% earlier. More and more people are joining as assesses , smaller tax payer base increased. Above all are the credit for GST system. He further said Sec 94, implementation of Non-registered person is not implemented. GST laws implemented smoothly, constituted local body to resolve complaints and not much complaints registered. Constituted local body for complaints and not many received. Genuine efforts made by trade to comply with law.
He further said for exports, in C.E regime, procurement of duty free goods was price advantage, in GST regime credit scheme is established but end in consequences. Cash flow problem increased. The Govt allowed exports without tax. They conducted around 4 credit camps through which 800 crores refunds have been settled, received 760 applications for 340 crores refund, 100 application are pending and refunds are under full control. The department settled 2518 crores in Chennai 90% of claims settled already. He said government is keenly monitoring the impact of GST , if the tax base increases revenue will increase, there is likely chances of reduction in GST rates. Dispute resolution introduced. Settlement commission, Advance ruling authority, Tribunal are yet to introduce.
In his speech Shri. T.V.Somanathan, I.A.S, said the GST is federal in its character. Collaboration of Centre & State is critical. Sate could see better revenue in first year. Better growth in revenue made. But there is still shortfall in revenue. Collected 11% as against promised 14%. VAT transaction not compensated well earlier now under GST compensation is well. Still T.N is second lowest in compensation of revenue. There are advantages in GST. Earlier, there was Central Excise, C.Sales Tax, Service Tax, C.Sales Tax etc., now come under GST. Credits can be taken under service /Manufacturer in GST not in VAT. some of other advantages of GST are uniformity in GST system, single rate for a commodity for whole of India, More number of items are under smaller rates, Neutral rates arrived between states and centre, encourages efficient suppliers, Manufacturing in efficient locations, Input Tax credit facility, simplification of billing, Manufacturers/Traders dealing with one department, Reduction in Logistics cost due to introduction of ‘e’ way bill and removal of check post reduces time of transit & cost, disputes reduced, Tax coverage increased and indirect benefit to direct tax.
In European Union different VAT for different countries no uniformity, Japan, UK failed in GST implementation, but In India tax is shared equally by centre and states, issue of core committee, issue of exemptions prevail. There are more benefits than disadvantages. Advance ruling introduced for industrial issues.
During question hours one member asked why the refund of SGST delayed, can the department settle in one stroke and adjust by Central/State? For which Mr.Rao, Principal Commissioner replied that one authority for refund will be a complicated one because they have different accounting and dispersal system. Mr.Somanathan said this may happen in future.
Another member asked whether any refund possible for unutilized CESS for which Mr.Rao replied it was not possible.
A member from L& T said his company has a problem of excess input tax than output example cement attracts 28% whereas GST on service only 18%.
Another member said there is mismatch between input Invoice and actual by supplier mismatch with 2A
Mr.Rao said Section 2A is under suspension Mr.Vaidyanathan said still there are some matching problem between inputs actual and entered.
There was a PANEL DISCUSSION after the meeting by Moderator by Mr.Vaidyanathan, Panel members Mr.R.Venkatesh, Vice President & Head –Indirect taxes, L& Construction, Chennai,, Mr.G.Sivakumar, Sr.Vice President(Finanace), Financial Software &Sysyem P Ltd., Mr.R.Gopakuymar, Associate Director, Cognizant Technology Solutions Pvt.Ltd, Mr.K.K.Sekar, Head Indirect taxes, Ashok Leyland Ltd & Mr.G.Raghusankar, ED, International Clearing &Shipping Agency.
Many said there is GST refund issue, In Software Companies, Supplying manpower by transfer of person from one state to other involves GST along with electronic items like Laptop etc., & service included in cost for calculation. Further in Construction sector supplying equipment from one place to other needs to cover GST. Different tax for different items for one service contract increases work. All wish for a single return system for all branches to reduce paper work & time. Mr.Raghushankar on Logistics sector wish for withdrawal of GST for Logistics service providers.