21 June 2017
Indian Rupees

India’s GST (Goods and Services Tax) reform

Mukul Asher, Anwar Ali and Rohini Aggarawal discuss Select Intitatives by Tax Authorities and Professional Organizations in Imparting GST Training and Awareness in India.

India’s GST (Goods and Services Tax) reform represents a fundamental break in tax arrangements for goods and services, requiring a Constitutional change (122nd Amendment to the Constitution). This has enabled states to levy tax on supply of services, and the Union Government to levy tax on supply of goods.

Among the complexities of India’s GST are its dual nature (GST by the Union government, and by the States); its multiple rate structure, a shift from origin (where production takes place) to destination (where consumption or supply takes place); establishment of GST council to which both the Central Government and 29 State Governments have ceded some tax authority; and an establishment of a centralized IT platform for some components of administration, called GSTN,or GST Network in a Public Private Partnership (PPP)mode.

The stakeholders recognize that the potential benefits of GST in creating unified internal market, and lowering supply chain logistics and compliance costs crucially depend on smoother GST implementation.

This in turn is dependent on appropriate training of tax administrators at Union, State, and Local levels,of the taxpayers, and of those advising the taxpayers; and on creating awareness about the GST among the stakeholders, including the general public.

Given the enormous complexity of the GST reform, change in ‘business as usual’ mind-set and attitude of all the stakeholders, including policymakers, tax officials, and those liable to GST will be essental. Only then can the “learning curve” (becoming more proficient in GST implementation with passage of time) effect can assist in realizing lower logistics and supply chain costs, reduce comliance costs, and help increase the share of recorded transactions in total transactions.

In the public outreach programme, training, and awareness campaign, the States need to play their part in bringing similar awareness to their ULBs (Urban Local Bodies) and RLBs (Rural Local Bodies). This is because as explained by Asher and Aggarawal, the ULBs and the RLBs will also be impacted by GST(https://www.myind.net/Home/viewArticle/indias-landmark-gst-reform-implications-for-the-states-ulbs-and-the-pris).

The importance of commercially sensible transition provisions should be recognized, and clarity regarding them need to be imparted to all the stakeholders, including the tax officials.

This article provides an overview of select initiatives by the Indian tax

Authorities, by the Institute of Chartered Accountants of India (ICAI), and by Confederation of All India Traders (CAIT) in imparting training on GST, and in creating awareness among the stakeholders about India’s GST reform.

This reform has been on the public policy agenda for many years, but it is only in recent months that the sense of urgency about finding a political consensus to implement it has been exhibited. As a consequence, the GST is expected to be implemented from July 2017, or due to the Constitutional requirements, latest by September 2017. This is a short time to prepare the stakeholders who have widely varying capacities to be prepared for complying with the GST. The fact that even in mid-june 2017 there is uncertainty whether the GST will begin from July 2017 highlights the challenges in preparing the stakeholders for its implementation.

The challenge of preparing for the GST is made more acute because the relevant law has not been completely finalized as yet. The rules, procedures and regulations of the GST law in public domain have not covering all the related aspects of the law, e.g. rules relating e-way Bills are not in place as yet. Also the available text of other rules is not in the final shape of notification(s) leaving a possibility of any last minute deviation from the existing version thereof. This has created lot of uncertainty in the minds of trade and professionals. A complete version of law at least 30 days before its implementation would have been a much better idea.

Implementing a law like GST to all business transactions in a country like India is a difficult and demanding task, and a need would always be felt for supplementing the awareness and training efforts being made in this direction, however, a clear draft of rules and procedure seems to be an essential pre-requisite for smooth implementation of the law.

The MANTHAN Initiative of the Tax Authorities

The Union government has launched an outreach programme called ‘Manthan’ for creating awareness of the GST laws and implementing regulations. The outreach programme is aimed at explaining the new system, its benefits, registration and compliance, and transition provisions. Many programmes have already been conducted for educating taxpayers on legal and procedural aspects, and the compliance expected under GST. The program is also aimed at educating and training the tax officials at the Union and the State level tax officials.

As on 2nd June 2017, 4015 workshops have already been conducted throughout the country. It should however be emphasized that merely holding workshops is not necessarily an indicator of whether requisite training is being imparted. The Central Board of Excise & Customs (CBEC) is therefore strongly urged to analyse the extent to which the objectives of the workshops are being realized. In such workshops, inclusion of the ways to alter the attitude of the tax officials would be more conducive to facilitating attaining.

The objectives of the GST also need to be included. The soft-skills component, often given less than requisite focus, is particularly essential in the case of GST.

Apart from conducting workshops for educating and training people and officials, the awareness efforts of the Union Government have included the following:

As part of the publicity campaign, print advertisements have been taken out in almost 200 different newspapers both national media and in regional languages creating awareness about GST in major cities by use of hoardings, rail train panels, bus queue shelters, bridge panels, billboards, and others has also been initiated. This has been termed GST Outdoor Campaign.

There is also special GST awareness campaign displayed through 12 Air India aircrafts. Advertisements on GST are being run on major TV and radio channels. The You-Tube channel named 'GST INDIA' contains major interviews and parliamentary discussions on GST. The social media campaign through Facebook and Twitter focus on dissemination of information on GST and clarifying queries on GST procedures and law.

The twitter handle of Revenue Secretary, Dr. Hasmukh Adhia @adhia03 and CBEC twitter accounts, namely @CBEC_tweet, and @askGST_GoI are contributing to GST awareness campaign and addressing the concerns and queries of public.

As on May 31st 2017, more than fifty thousand State and Central government officials have been trained on the relevant laws and procedures pertaining to GST.

The Central Board of Excise & Customs is being renamed as the Central Board of Indirect Taxes & Customs (CBIC) to supervise the work of all its field teams implementing the GST, and to provide policy relevant inputs to the Government in policymaking in relation to GST.

Initiatives of the Institute of Chartered Accountants of India (ICAI)

The Institute of Chartered Accountants of India (ICAI) has been extensively supporting the government in creating awareness and undertaking the knowledge update exercises pertaining to GST.

ICAI has been doing research on GST and has published several useful reports and studies to disseminate knowledge about GST practices and implications.

When the First Draft of GST law became public, ICAI came out with Background Material on GST Acts(s) within one month, and after that with every Revised Draft and Final version of the Law, ICAI has come out with publications of Background Material on GST Acts(s) and Draft Rule(s) and FAQs & MCQs on GST for the benefit of Government, trade and industry, and professionals. Further, to support the government with smooth implementation of GST, ICAI has regularly submitted its suggestions on draft GST Rules as well as GST Act(s) to the government, many of which have been considered in revising the law and the implementing regulations.

In addition to the above, more than 1500 workshops, seminars and conferences on GST covering more than 50,000 professionals and over 20 Interactive Programmes on GST for trade associations have been organised by the ICAI across the country since January 2017.

ICAI has also launched a Certificate Course on GST at more than 36 locations all over India for its members. To meet the massive demand, ICAI has also launched Virtual Classes for Certificate Course on GST through Live Telecasts Sessions at more than 40 locations across the country. They have set up GST Sahayata desks at its various branches across the country to help resolve the GST related issues relating to traders, industry and public at large.

Initiatives of the Confederation of All India Traders (CAIT)

The CAIT has also launched national campaign — “Mission GST” — under which 5,000 officials of trade and commerce bodies from across the country are being trained in GST to empower and educate the trading community about GST across the country.

In addition, the trade associations such as FICCI, CII, and even regional and sectoral trade organisations like organisations of Textile manufacturers, Jewellery trade, Builders and Developers etc. are conducting seminars, workshops and awareness and training program for trade and industry.

Many trade bodies have made representations also to the Central and the State Governments expressing their specific concerns related to their industry which is being considered by the respective governments while finalising rules, regulations and procedures.

Concluding Observations

The above suggests wide ranging efforts by y various national and regional bodies for bringing awareness about GST and to enable the trade and industry and also the government officials to become GST ready are being made. Nevertheless,, much more is still required to implement GST successfully in a federal country with multi-speed economy across the States and regions; and varying levels of technological capacity to get accustomed to technology-intensive GST design and administration.

There is also an urgent need to bring about a shift in the mind-set of the government tax officials towards facilitation and taxpayer service rather than narrowly construed compliance is also a challenge which should be addressed. Reorganization of tax administration, with stress on building needed skills rather than continuing with traditional approach to human resources will also be needed.


The authors are: Mukul Asher, Professorial Fellow,LKY School of Public policy, National University of Singapore; Anwar Ali IRS(Indian Revenue Service), Joint Commissioner, Central Board of Excise Customs (CBEC), India; and Rohini Aggarawal, Chartered Accountant, Principal Consultant with ARX Bizness Advisors.
Tags: india, gst

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