GST regime not user-friendly, says Bombay
High Court
The Bombay High Court said the goods and services tax (GST) regime wasn’t easy to use, questioning the celebratory
midnight session of Parliament that was held to mark its launch. It called on
those responsible for GST implementation to resolve glitches in the system that
have led to frustration on the part of companies trying to file returns.

“The regime is not tax friendly,” the court
observed during the hearing of a case on February 6. “We hope and trust
that those in charge of implementation and administration of this law will at
least now wake up and put in place the requisite mechanism.”

The GST Network has been prone to disruption as
administrators iron out bugs in the system that’s central to the tax that was
put in place on July 1.

This prompted the GST Council to set up a panel under Bihar deputy chief minister
Sushil Modi to look into the IT issues and led to several extensions for the
filing of forms and a delay in the rollout of the e-way bill related to
transport of goods.

The judges of the high court suggested that the
focus needed to be on sorting out problems in a reform that had been heralded
with much fanfare.

“We do not think that these are satisfactory state of
affairs,” they said. “A tax like goods and services tax was highly
publicised and termed as popular. We had yet not seen a celebration of new tax
regime, but that has followed with great hue and cry. These celebrations mean

The special sessions of Parliament or special or
extraordinary meetings of (the GST) council would mean nothing to the assessees
unless they obtain easy access to the website and portals.”

The court was hearing a petition filed by Abicor and Binzel
Technoweld. The court asked the government to file its reply by February 20,
the next date of the hearing. It also asked the government to inform the court
of the steps to be taken to alleviate taxpayer grievances related to the GST

“We hope and trust that such petitions are rarity and
the court will not be called upon to administer the implementation of the law,
leave alone monitoring and supervising the working of individual officials,
howsoever high ranking he may be,” it said.

The petitioner, a manufacturer of robotics and automation
equipment, had approached the court after it was unable to access its online
profile despite being granted a provisional registration number under the
central and Maharashtra GST Acts. The petitioner said this meant it couldn’t
get the final registration number and that this would expose it to interest
liabilities and penal consequences.

The court observed that similar grievances had been raised
before the Allahabad High Court, which had directed the respondents (revenue
authorities) to reopen the portal. If that was not done, “there is further
direction to entertain the application of the petitioner before the Allahabad
High Court manually and pass orders on it after due verification of the credits
as claimed by the petitioner before the Allahabad High Court,” the Bombay
High court said. “We would also be constrained to pass such order and that
would not be restricted to the petitioner before us alone.”

The system needs to be tested fully to make sure it can
handle the next steps in GST. “It is essential that all future taxpayer
interfaces such as e-way bill, credit matching, annual return filing, etc, are
adequately tested and launched in a phased manner,” said MS Mani, partner,
Deloitte India.

The order assumes significance as GST administration is based
on the technology backbone and these issues have been coming up repeatedly,
said Pratik Jain, indirect tax leader, PwC.

“However, there is no doubt that we have created a
world-class IT infrastructure and given the volume of transactions, it is
taking time to stabilise,” he said. “While in the long term,
technical glitches are likely to be addressed, as an interim relief, government
should come up with some mechanism to deal with these grievances.”

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