Around 80 percent of all businesses have already registered on the GST Network, taking the number to 64.13 lakh. There is no need to panic yet as the respective tax departments are obligated to issue provisional certificates to existing excise, service tax and VAT assessees with valid PAN.
For existing excise, service tax and VAT assesses, there is another window of opportunity if they have failed to register on the Goods and Services Tax Network (GSTN) after the deadline lapsed on June 15.
The GSTN window will reopen on June 28 and, in any case, it is obligatory on these tax authorities to issue provisional certificates to such assessees possessing a valid Permanent Account Number (PAN).
As the rush is on to register, the GST Council has realised that apart from a bulk of assessees who used the opportunity to register much earlier, only around 4.35 lakh tax payers registered in the June 1-15 window that was kept open. This took the total to about 80 percent of the database.
Naveen Kumar, GSTN Chairman, has sought to allay concerns of businesses who have not registered so far saying that the respective tax departments that scrutinise returns under excise, service tax and VAT categories are obligated to provide them with an opportunity for a smooth migration into the GST regime.
Across India, there are 80 lakh excise, service tax and VAT assessees at present, of which 64.13 lakh have successfully made the transition using the GSTN. The GSTN is the tech backbone for the GST’s ‘One Nation, One Tax’ regime, which is most likely to come into effect from July 1.
Kumar expects the remaining 20 percent of the existing assesses use the extended opportunity to register themselves on the GSTN.
There is no need to panic. Apart from getting another chance from June 28, it is obligatory on the part of the tax assessors to provide a provisional GST certificate for those filing returns with a valid PAN.
The total number of assessees could even swell as more business entities come under the tax ambit even as the GST Council revises rates. Filing returns, even if there are no credits due from the department, has now become mandatory for businesses. The Council is hoping that traders too come forward and complete the registration process by filling up the online process, as once the GST regime kicks in, even small businesses will have to upload monthly sales data as well as file returns on this portal.
That GST online paperwork is tiresome is something businesses dread. In one sector only, such as the Small and Medium Enterprises (SMEs) one, the effect can cause many shifts.
As Sampad Swain, CEO and Co-founder of Instamojo explains, the impact on SMEs after GST means that it is more online paperwork in terms of registration and filing multiple returns.
Every SME carrying out a taxable supply of goods or services under the GST regime whose turnover exceeds Rs 20 lakh will have to register in their respective region or point of goods or services supply. The number of registrations under GST increases with the increase in the number of business locations. This results in more number of returns to file, thus increasing the cost of compliance.
Since the demonetisation and the impending GST, Instamojo has been adding a large number of SMEs to its platform, which has seen a 15x jump than the daily average last year.
This is another reason that several tax firms and accounting firms are ramping up their services to include end-to-end GST solutions in their portfolio as well as hundreds of new firms mushrooming everyday offering such services to the average Indian trader who is still not computer or online-savvy. And, as GST rolls in, the glitches in the system are only expected to increase even as there is a clamour for simplification of the regime.