Migration from the earlier regime of VAT, Excise & Service Tax Laws to the new Goods and Services Tax Act since July 2017 was definitely very difficult. Assume a registered person has branches in 20 states. How many returns he had to file under GST? The answer is around 480 returns in a year i.e. 2 returns in a month for 12 months for 20 states. Don’t you think the compliances are much in a single tax regime. Don’t forget GSTR-2 is on its way.

During the period the Government made amendments to GST laws more than 30 times. In the first 9 months of compliance i.e. July-17 to March-18, we had seen a GST cash outflow of 21%, whereas the average gross margin or value addition was 9%.

The Government wanted a two-way response by registered person. On one way it wanted all compliances to be done by us in time and at the other end kept changing the law again and again.  It wanted us to keep afloat in this ever-changing & challenging environment, traders have to hire experts from renowned consulting firms and purchase specialized application software and had to incur a significant cost.

In addition to continuously mapping the amendments in GST law, we were also required to reconcile Input Tax Credit claimed by us vs returns filed by our vendors. It also included identifying non-filers and educating them the importance of timely and correct filing of returns, synchronizing the vendor and customer master records with correct GST details and discouraging business from un-registered and non-compliant vendors. Also, for proper filing, it required refining HSN classification of entire material master records for applying the correct rate of GST and avert future classification issues. E-waybill for all supplies was another hectic task to perform.

Seamless flow of credit under the GST mechanism required a set of genuine compliances by the supplier and recipient throughout the value chain of operations. In case of a single non-compliant supplier/vendor, the chain was ought to be disturbed and the recipient shall lose the credit. Hence, unlike the earlier indirect tax laws, now the recipient of credit was bestowed with the responsibility to ensure that the supplier is compliant to GST laws and safeguard the credit which he has paid as part of his purchase.

It is human nature to repulse from accepting the new or change as they have cushioned themselves with the warmth of their old practices, garnered through a span of time. And so was the reaction of the taxpayers to accept the dynamic nature of GST laws.

Of course, in all this, we can’t forget the period from 1^st July 2017 to 12^th October 2017 that required payment of RCM in case of purchase from an unregistered vendor.

But now everything is at a good pace. The very first GST audits are on its way with full efforts and timeline of 31^st August. Let us be with the Government for the best journey of GST ahead and make this “One Nation One Tax” regime successful.