New Delhi: With the countdown to the goods and services tax (GST) roll-out underway, the government on Thursday promised leniency in enforcing penal laws for violations during the initial period of implementation of the new national sales tax regime.
Revenue secretary Hashmukh Adhia said a distinction would be made between genuine mistakes in filing of returns and deliberate attempts to evade taxes. “Our intention is to have a smooth landing of GST. Intention is not to harass everyone in the first month," he said. The GST, to be launched from 1 July, will unify about a dozen central and state levies like excise duty, service tax and VAT. Indirect tax payers will have to file returns in the new system from next month. The government, Adhia said, will be “very, very kind" to genuine mistakes.
Asked if the government may relax penalty and fine provisions for mismatches in return filing during the initial months, he said, “There would be leniency, but I cannot announce now. The rules provide that the GST council can waive certain requirements for certain time." He replied in the affirmative when asked if the council can consider waiver of interest and penalty for six months. Seeking to dispel the notion that the GST was complicated, he said only one form a month needs to be filed by most taxpayers. Of the 65 lakh taxpayers who have registered with the GST, 70-80% are business-to-consumer (b2c) dealers who have to file just total turnover return, he said, adding that only business-to-business (b2b) dealers have to give invoice-wise details.
Even for b2b assesses, the GST Network (GSTN) has provided a software that automatically converts all the invoices. The revenue secretary, who spearheaded the move to the efficient tax system, said the GSTN—the IT backbone provider—is fully prepared for 1 July roll-out. The software has been developed by India’s best IT companies and security checking has happened. However, in the short term, there can be glitches like in any new technology but attempts would be to bridge them at the earliest, he said.
“Any technology system can witness short-term breaks. Short-term breaks were there (in the pre-launch period) but we have fixed it," he said, adding that the problem was the interface between GSTN and Aadhaar e-verification as also the system rejecting applications for registration by people with changed mobile numbers. For registration, e-verification will not be necessary, he said, adding that all operating units have 30 days to register and the window to migrate to the new system will open for the third time within a week.
On the anti-profiteering clause in the GST, Adhia said the measure will be used as a last resort and will not apply on retailers. Its is meant only for big manufacturers who do not pass on the benefit of input tax credit to customers in form of lower tax incidence, Adhia said.