GST disputes to be less, but complicated, says L&S law firm

The number of legal disputes is expected to be less under the new GST regime than the earlier excise set-up, but would be more complicated -- mostly on goods classification, said a legal expert on indirect taxes.
The government has rolled out the new indirect tax regime -- the Goods and Services Tax (GST) -- from July 1.
"Early disputes are going to be related to procedures. The next round of disputes will be classification and I think that's going to be there for a long time," said L Badri Narayanan, partner, Lakshmikumaran and Sridharan, the country's leading law firm dealing in indirect taxes.

He said GST, which is being "branded" as an accounting job, will require a lot of legal brains once the issues relating to classification of goods start coming to the fore.
"We do not have enough lawyers looking at GST because it has been branded as if it is an accounting job rather than a legal job," said Narayanan.
Classification of goods is a key element, which is set to decide incidence of GST. There are four slabs for both goods and services -- 5 per cent, 12 per cent, 18 per cent and 28 per cent.

"I think primary role is that of a lawyer to help the industry understand what is GST and how it should be implemented," the tax expert said.

He further said that today accounting firms are saying they would help industry to comply with GST. "But according to me, it is a very small piece of GST," Narayanan said, adding that there are larger aspects that have a more significant bearing compared to an accounting aspect.
He felt that disputes would start surfacing in the next few months.
"But I do see the aspect of litigation in GST to be significantly lesser compared to the excise regime. But its going to be more complicated than what we had in excise," Narayanan added.
Pointing to the fact that GST has not been implemented smoothly everywhere, he said a number of notifications just before the date of implementation attest to this and the experts are still trying to understand their implications.

"Good thing is that the government is responsive in terms of giving you time and trying to clarify, bringing out some form of advisories. They are also listening to trade. They are happy to revise their stand based on what the trade is saying," Narayanan said.