Given all those filing GST returns have to use up their unexpired tax credits by December, and the jump in collections for that month—these fell from Rs 92,283 crore in July to Rs 80,808 crore in November and then rose to Rs 86,703 crore in December—it is likely the worst of GST is behind us since the number of returns filed is up 46% since the process began, even though it will take a while for the benefits in terms of a sharp rise in compliance to kick in. For January to March, if past trends in indirect taxes are anything to go by, GST collections should average over Rs 110,000 crore per month at the least. What is more encouraging is the GST Council’s willingness to be flexible, though the anti-profiteering law sticks out like a sore thumb, and the jury is still out on the implementation of the e-way bill—it is being brought in to improve compliance and the government claims it will ensure harassment is kept to a minimum. Certainly, the GST is not the 2-3-rates structure many hoped for, but the GST Council reducing rates on many items in November suggests we are headed in the direction of lesser rates; and there is discussion on including items that have been, so far, left out of GST.
And while the blame game continues over who designed the complicated GST returns, there has been progress here too. While the GST Council regularly postponed the filing of detailed returns when industry said it was not ready, the biggest simplification is the suggestion made by Infosys chairman Nandan Nilekani—Infosys handles the GST Network (GSTN)—that, instead of filing detailed returns, businesses should just upload their invoices and handle the matching themselves. Every business, he says, prints an invoice while dispatching a good or a service and this is checked by the receiving party before making a payment—since this matching is being done anyway, why not tweak the system to allow the relevant details of these invoices to be uploaded directly on to the GST Network where the matching can be done by the businesses? While companies will no longer file detailed returns, the GST’s data analytics team will have to keep mining the data to ascertain useful trends —for instance, are firms underpaying GST or, once the information is shared with other departments, are people/firms understating their personal/corporate tax liabilities? Even more heartening is the effort made to simplify the process of filing these returns, especially for the lakhs of SMEs who are finding the process very cumbersome and taking up much of top management time. The GST Network has asked firms across the country to develop simple accounting/filing software to help these SMEs. The software will help them maintain simple accounts by keying in details of invoices made/received and then help generate a P&L statement, balance sheets, create various MIS reports including those on mismatches, generate alerts on payments due or taxes paid and so on.
Around 40 companies have already evinced interest in this and the plan is to take the best five accounting software and make them available for free to everyone. Developers will bid a sum of money for every return filed using their system and the GST Network will pay them accordingly—the system will keep track of how many returns have been prepared using each accounting software. With such an opportunity, there are other interesting developments as well. An app from Iris Business Services, for instance, allows you to take a picture of a bill and, using OCR, the app displays the relevant features of the bill immediately—the supplier’s GST code, the invoice number and amount, whether the supplier is even registered or not. Since the app is still in its beta stage, if needed, it can build in alerts on whether the supplier has, in fact, paid the tax; invoices can be aggregated by supplier names, etc. In other words, it is not necessary that all invoice details have to be keyed in manually by buyers or that invoice matching be done manually. Another company, WeP Digital, for instance, offers billing systems—both with touch-screens as well as physical keyboards—that generate all GST reports in the requisite format and, at the press of a button, these can be automatically uploaded to the GST Network.
While the machines cost in the Rs 30,000-40,000 range, there are also per-return options available and, for those who prefer working on traditional laptops/PCs, there are also cloud-based solutions—this is what the GST Network is trying to develop more versions of to ensure GST filing is no longer seen as a chore. The GST system is also in the process of developing various phone-based solutions to make the generation/acceptance of GSTN data even more convenient—once a vendor uploads data on goods supplied, the buyer has to accept this for the information to be considered authentic; the plan is also to allow users to generate e-way bills on the mobile and now, presumably, to upload the relevant invoice level details to the GST Network. None of this is to suggest GST filing is as simple as 1-2-3, but it has to be recognised that with the GST Council regularly monitoring/reducing rates and the GST Network trying to come up with software solutions—on computers and on mobile phones—what Rahul Gandhi called the Gabbar Singh Tax may just metamorphosise into a Good and Simple Tax sooner than you think.