GST network braces for biggest challenge

Technologically challenged:People who had not worked with technology are facing problems, said Sushil Kumar Modi.  

The Goods and Services Tax Network (GSTN) is bracing itself for a “big challenge” set to emerge in the coming weeks as a ministerial panel Wednesday ruled out any further extension for filing GSTR 1 returns by traders.

“There will be no extension,” said Sushil Kumar Modi, head of the five-member panel constituted to resolve the technology glitches being faced by traders on the network. “Already it has been extended three to four times and we are talking about July returns. Another big challenge that is facing us after October 10 deadline is when GTSTR 2 will be filed.”

“GSTR 1 is outward and sales and GSTR 2 is purchase. It is auto-populated. Then there will be a matching of invoices of GSTR 1 and 2. That will be a much bigger challenge. We are all prepared for that challenge. We will discuss any new issue when it crops up. It is a big work. We have 21 days. If we succeed, 90% of the GSTR can be resolved in the coming days. As challenges come we will deal with it,” Mr. Modi said.

The Goods and Services Tax (GST) came into effect on July 1. The indirect tax system has been plagued with technology problems, with traders and dealers struggling to file returns before the stipulated deadlines.

GSTR deadlines

The GST Council, in its September 16 meeting, had fixed October 10 as the deadline for GSTR 1 relating to supplies made, October 31 for GSTR 2 relating to purchases, and November 10 for GSTR 3, a comprehensive one for the month of July.

“On August 20, the summary tax return or 3B, only 15 lakh returns were filed. But in the next 24 hours, 13 lakh returns were filed,” Mr. Modi said. “The system which is developed by Infosys is so robust and is capable to handle a large number of returns. There was not a single complaint that the system had crashed or of major glitches when people were able to file 13 lakh of returns in a single day,” he said. On October 10, for GSTR 1, a detailed return in which all the outward supplies or sales are mentioned, there was a “big gap,” Mr. Modi, also the Deputy Chief Minister of Bihar, said.

“For the month of July, 52 lakh dealers have filed the returns. But the detailed GSTR 1 has been filed by only 33 lakh, 43,000 dealers. Only six days are left and I appeal to the dealers to file the detailed returns for the month of July. Infosys has the names and numbers of the dealers and SMS will be sent to all the dealers. Local tax administrators will also contact all the dealers who have not filed their detailed returns,” he said.

Infosys would send a team of qualified technicians to coordinate with the State tax administration to speed up and resolve technology issues, Mr. Modi said. “There are 27 States which constitute the Model 2 States. Model 1 States, like Karnataka, have developed their own backend. Model 2 States have had a problem creating the backend. Last meeting, we requested for developing a software for Model 2 States. There is a lot of progress here too,” he said. “Earlier, many of the things were done manually. Now everything is automated. So, there is a lot of difference as there will be no or minimum human intervention. So, initially, there will be some problems. People who had not earlier worked with technology are facing problems. We and Infosys are trying to solve these problems.”

The next meeting of the GST Council, slated for October 6, will decide on the refund of taxes to exporters and issues being faced by even small traders “90% of revenue is coming only from four lakh taxpayers. In GSTN, more than 90 lakh of taxpayers are registered.”