Why GST needs to be deferred

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Dear Editor,

The government has reiterated its firm intention to unveil the new goods and services tax (GST) regime from 1 July. The business community has called for a later implementation date, citing their lack of preparedness for the new tax. In response, the government has announced certain concessions including relaxing the initial compliance calendar to file returns and suggesting that taxpayers will not face penalties or fees for delayed filing in the early months of the new regime. This news is certainly welcome, but it does not take away from the fact that unpreparedness still persists. There is no plausible or coherent justification as to why the government does not have the “luxury of time” to slightly defer the implementation of GST.

It is widely believed that the IT-enabled platform designed for the GST rollout is far from efficient in terms of its response time and usability. The need of the hour is to ensure no technological glitches considering IT is the backbone of this extremely tech-incentive new system. The Indian tax regime is a highly complex structure and, therefore, it is most apt that this mega reform is implemented in a tax-friendly manner, especially since indirect tax is a horizontal levy affecting the entire consumer population of India.

Deferring the rollout is a reasonable solution. It is difficult to fathom the government’s rigidity in sticking to the 1 July deadline.

Aseem Chawla
Partner, Phoenix Legal
New Delhi