Poor GST implementation hurting India’s image, warns HC

The Bombay High Court has pulled up the government for the trouble faced by assessees due to the poor execution of the country's biggest tax reform, the Goods and Services Tax (GST).

The court has asked the Centre and the Maharashtra government to ensure that proper grievance redress mechanism is formulated for proper / better implementation of GST.

In strong observations in response to a writ petition, a division bench of Justices S C Dharmadhikari and Bharati Dangre said the regime was ''not tax-friendly'' and was affecting the ''image, prestige and reputation of the country, ''particularly when we are inviting and welcoming foreign investment in the state and the country''.

The government is required to respond to the court by 16 February detailing steps it will take to address grievances.

In its writ petition, automation equipment company Abicor Binzel Technoweld highlighted difficulties related to registration and return filing on the GST Network, the information technology backbone of the new indirect tax. It also raised concerns over difficulties in claiming input tax credit.

''A tax like the GST was highly publicised and termed as popular … the special sessions of Parliament or special or extraordinary meetings of Council would mean nothing to assessees unless they obtain easy access to the website and portals,'' the court observed on Tuesday. ''The regime is not tax-friendly,'' it said.

Eight months after its roll-out, the GST is drawing complaints from industry regarding return filing, input tax credit, and transitional credit refund. Industry is still awaiting transitional credit and input tax credit refunds. Transitional credit on pre-GST stocks stands at Rs1.3 trillion.

"The special sessions of Parliament or special or extraordinary meeting of Council would mean nothing to the assessees unless they obtain easy access to the website and portals. The regime is not tax friendly," the court said.

Amid reports of technical glitches and consignment delays, the government had to indefinitely defer the e-way, or electronic-way, bill on the first day of its countrywide roll-out.

The court said it hoped those in charge of the implementation and administration of the tax would ''wake up''. It said they must work out a grievance redress mechanism and not leave it to the GST Council. The court also said it hoped it would ''not be called upon to administer the implementation of the law, leave alone monitoring and supervising the working of individual officials''.

The petitioner had complained that having been granted provisional registration number under the Act, it is not able to access its online profile on the GST network. Since the Electronic Way Bills rules have yet not come into force, without access to the online profile, company cannot generate E-way bills and thus cannot move the goods anywhere. Lack of access also means that it is unable to file returns or pay tax or undertake any other compliance.