Leniency in GST laws for genuine mistakes initially: Adhia

He replied in affirmative when asked if the Council can waive interest and penalty for six months

With the countdown to GST rollout underway, government on Thursday promised leniency in enforcing penal laws for violations during the initial period of implementation of the new national sales tax regime.

Revenue Secretary Hashmukh Adhia said a distinction would be made between genuine mistakes in filing of returns and deliberate attempts to evade taxes.

"Our intention is to have a smooth landing of GST. Intention is not to harass everyone in the first month," he said at a GST Town Hall.

The Goods and Services Tax (GST), to be launched from July 1, will unify about a dozen central and state levies like excise duty, service tax and VAT. Indirect tax payers will have to file returns in the new system from next month.

The government, Adhia said, will be "very very kind" to genuine mistakes.

Asked if the government may relax penalty and fine provisions for mismatches in return filing during the initial months, he said: "There would be leniency, but I cannot announce now. The rules provide that the GST Council can waive certain requirements for certain time."

He replied in affirmative when asked if the Council can consider waiver of interest and penalty for six months.

Seeking to dispel the notion that GST was complicated, he said only one form a month needs to be filed by most tax payers.

Of the 65 lakh tax payers who have registered with GST, 70-80 per cent are business-to-consumer (b2c) dealers who have to file just total turnover return, he said, adding that only business-to-business (b2b) have to give invoice-wise details.

Even for B2B assesses, GST-Network has provided a software that automatically converts all the invoices.

The Revenue Secretary, who spearheaded the switchover to the efficient tax system, said GST-Network -- the IT backbone provider -- is fully prepared for July 1 rollout.

The software has been developed by India's best IT companies and security checking has happened.

However, in the short term, there can be glitches like in any new technology but attempt would be to bridge them at the earliest, he said.

"Any technology system can witness short term breaks. Short term breaks were there (in pre-launch period) but we have fixed it," he said, adding that the problem was interface between GSTN and Aadhaar e-verification as also system rejecting application for registration by people with changed mobile numbers.

For registration, e-verification will not be necessary, he said, adding that all operating units have 30 days to register and the window to migrate to the new system will open for the third time within a week.

On the anti-profiteering clause in GST, Adhia said the measure will be used as a last resort and will not apply on retailers.

Its is meant only for big manufacturers who do not pass on the benefit of input tax credit to customers in form of lower tax incidence, Adhia said.

The measure would be invoked only after screening committees of state and centre recommend and DG Safeguards has done a through investigation, he added.

"It is a rare weapon that will be used as last resort," he said.