Ease of Doing Business in the GST Regime
July 17, 2015
New Delhi
Rajeev Dimri, Co-Chairman of Taxation Committee, and
Partner, BMR & Associates LLP
Federation of Indian Chambers of Commerce and Industry

New concepts
New set of compliance
State level taxation of services
GST –
New tax system
Common for goods and services
New tax legislations
Re-define taxable event
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G
S
T
Consistency in key provisions across legislations
Taxpayer oriented approach of the authorities
Dedicated cell providing overall guidance
Robust dispute resolution mechanism
Greater emphasis on simplified refund process
Smooth transitioning to GST
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1 Consistency in tax provisions
 Key definitions e.g. supply, taxable event, charging provision
 Threshold limit – common under CGST and SGST
 HSN based classification of goods
 Common list of exemptions
 Valuation methodology – inclusion and exclusions to be clearly defined
 Input credits
2 Record maintenance
 One invoice format for billing across India – no State specific requirements
 Synchronized record maintenance requirement
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3 Compliances
 Centralised portal for all compliances
 Standardize format for statutory filings viz. periodic return across all States
 One common return for CGST and SGST
 Consistent timelines for tax payment and return filings
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Common centralized pool for CGST and IGST
Common criteria for credit eligibility across all States
Wider ambit of credit eligibility – credit on business related expenses should be allowed
Restrictions to be carved out on selective basis and clearly defined
No differentiation between inputs and capital goods
Unutilized credit as at year end – option to taxpayer to carry forward credit or to claim refund
Key objective of free flow of credit should be achieved
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Taxability – Taxability of petroleum products should be clearly defined
While the output business transaction may not fall under GST, all inputs are likely to attract GST
Credit eligibility and treatment of such credit should be clearly defined viz,
− Whether credit be available or not
− Whether such credit can be utilised against the GST liability of other business transactions
− Whether refund of such credits shall be available
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Key requirements
 One Central GST cell to address queries of taxpayer
 Handholding assistance
 Clarifications on interpretative issues with statutory guidance
 Proactive review of clarifications
 Compilation of queries and responses on website
 Time bound response to taxpayers representations
 Circulation of key tax position to taxpayers and field formation
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Two step consultation to be followed
− Draft amendment should be issued for public comments
− Review of the suggestions made by the industry before final amendment in law
Lead time – 3 months lead time should be allowed for introduction of any amendment
Explanatory note – Clear explanation explaining rationale behind the amendment
Will help the taxpayer in proper implementation of the amendment
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 Common adjudication and appellate proceeding under CGST and SGST
− Taxpayer should be allowed to deal with one tax authority for adjudication
− CG and SG should not take different views on common matter
− For tax litigation, one common appeal for CGST and SGST should be filed
 Limitation
− Inherent right of the taxpayer
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 Time bound adjudication provisions
− Clear timelines for issuance of SCN
− Non-passing of order within prescribed time line should result in dropping of proceedings
 Restrictive disputes
Guidance Cell
 Review panel
 Settlement Commission – to be made available to the taxpayer at any stage
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− Increase in number of Advance Ruling forums
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Sufficient time to taxpayer for preparation
Streamline information requirements – information available with Authorities not to be asked again viz. returns
Avoidance of repetitive request for information
Information request for records/ documents prescribed under law or standard business reports
Mandatory issuance of Audit report upon completion
Clear provisions to prevent multiple audits by different agencies
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Deferral of penalty provisions for a period of 5 years
Penalties should initially be restricted to mala fide tax evasion cases
Refund and duty drawback Key device for claiming exemptions
Automated refund process – All filings should be done online and acknowledgement should be displayed on website
Fast tracking and expeditious disbursement of refund claims
Parity in rate of interest payable in case of delay in refund claims
Frequent updating of details of pendency of refund claims across all jurisdictions
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1 Taxability of ongoing services – where part performance takes place before
GST
2 Treatment of advance invoices (work to be performed under GST), unpaid invoices etc
3 Credit transitioning
− Clarity on tracking of input credits allowed to be transitioned
− Central taxes to be transitioned to GGST/ IGST pool
− State credits to be transitioned to SGST credit pool
4 Status of pending litigations , litigation initiated under GST for the issues arising under current regime
5 Common date for transitioning to CGST, SGST and IGST
Sufficient lead time to switch over to new regime
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