Govt must focus on alignment of provisions with GSTN processes

In this pandemic year, the government has moved with great alacrity to streamline many processes using information technology and thus making life easier for importers, exporters, and other taxpayers. The result is greater efficiency, quicker movement of goods, and less corruption.
 

From the time the bill of entry or shipping bill is filed till the time ‘out of charge’ or ‘let export order’ is given, every activity takes place electronically. Even the queries are raised and replied through email. All documents are required to be submitted electronically. The gate passes are generated online. Faceless assessment is done from different locations by officers whose appraisal is based on documents submitted. Personal hearing for adjudication and appeal matters are conducted through secure electronic networks. There is hardly any need for personal interface between the Customs officials and the importers, exporters or Customs brokers. The Customs transmit the export and import details electronically to the banks that monitor realisation of export proceeds and outward remittances for imports.
 

The Director General of Foreign Trade has rolled out a new digital platform, where all types of services, including these related to Imported Exporter Code Number, Advance Authorisation etc., can be provided electronically.
 

Starting from application for advance authorisation to filing redemption application all activities, including revalidation, extension of export obligation period, enhancement in quantity and value and so on, have to be performed through electronic medium.  The users are able to monitor the status of their applications and the pending obligations thereof.
 

The Goods and Services Tax Network (GSTN) has stabilised many processes. GSTR-1 returns get auto-populated from e-invoices. The GSTR-2A gives details of supplies reported in their returns by the suppliers. The GSTR-2B gives details of eligible input tax credit including those from imports. The auto-populated GSTR-3B return is made available to the taxpayer. The facility to add or amend the details in the returns is provided. The refunds are more or less automatic. From the beginning of next year, even the taxpayers with turnover of Rs 100 crore or more will get into e-invoice system and progressively, the other taxpayers will also get roped in. The trade has got used to working with the electronic processes.
 

The entire system works smoothly.
 

Now, the government must pay some attention to alignment of the legal provisions with how the system processes the data and how the field formations deal with the outputs from the GSTN. For example, the law allows the registered person to take input tax credit if he has received the goods or services and holds the invoice from the supplier but the refunds of unutilized credit against exports without tax payment under letter of undertaking are granted only on the basis of the supplies that show up in GSTR-2A statements. Such refunds are incorrectly restricted on the basis of FOB value of exports rather than the CIF (i.e. transaction) value of exports.
 

Of course, there may be some horror stories, some odd glitches, some delays in refunds, some unwarranted queries on say redemption of advance authorisations or grant of refunds, some unreasonable demands for documents, some unnecessary orders for examination of goods and so on. But, overall there is a conscious attempt from the top echelons of the government to promote digitalisation and substantially reduce physical interface between the administrators and the trade.

Email: tncrajagopalan@gmail.com