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IT Channel Stumped by GST Returns

Amit Singh

The tall claims of the government on a robust GSTN infrastructure have fallen flat with the nightmare faced by businesses across the country in filling GST returns. In an acknowledgement of the trouble faced by traders, the government has extended the deadline of GSTR-1 filling two times – from September 5 to September 10 and then to October 10.


From GST portal crashing under load, to a very complicated process of filing returns, IT traders across the country are facing major issues while filing GST returns. Many doubt the preparedness of the system and allege that the government launched the GST portal in haste without adequate testing of the portal. In fact, GST compliance and returns have taken majority of the time and mindshare of the traders’ community over the last two months.

“Most of our members raised concerns over the tedious process of return filling and issues with the portal. Many were unable to login to the portal and others who logged in were unable to upload data. Further, many got stuck with automatic checks on the portal as GSTR-1 requires many additional data and columns, which were not notified,” informed Swarn Singh, Secretary, ADCTA.

He added that a large part of traders’ time is devoted on tax filling and issues around GST. What they are worried about is that if this situation continues even after upcoming deadline, it would have adverse effect on sales during festive season.

While issues with portal may be due to excess and abrupt surge in traffic, the fact is that traders are navigating through a complex web of auto checks, which many a time rejects a valid transaction. “Discrepancies during auto-checks imply that a proper testing of the system has not been done. On the other hand, most CAs and consultants are conversant with the pen and paper mode of tax filling. Hence, moving to the online mode with auto-check mechanism will be tough for them,” explained Shashi Srivastava, Director, Glotech Vidya Solutions, a Noida-based GST solutions and services provider.

She added that the company has been sand-boxing and training resources on its ERP and GST pre-integrated solution for the last 3 months. This enabled them to file all the returns on time without major glitches.

However, the woes of traders don’t end just with filing return. There are many operational challenges including confusion on HSN codes and blocked working capital.

“Confusion on HSN codes is a major concern as various vendors and distributors are providing different HSN codes for similar products. In fact, reconciliation during GSTR-2 and GSTR-3 will bring even more terrible experience than filling GSTR-1. Despite several representations to various competent authorities, we haven’t got any resolution on this issue,” rued Sugreev Singh Ranavat, President, RCTA.

Moreover, if companies are stuck with their July returns, many wonder when they would file returns for August and September. In fact, the whole cycle will be disrupted.

Further, small traders, having limited working capital, are facing a double whammy. “The GST-registered small traders, specifically in the IT business, are finding it hard to block 18-28 percent of their working capital till refund, which may take up to 3-4 months to process under current circumstances. On the other hand, traders not registered under GST have become untouchables. Organizations aren’t doing any business with those traders in order to claim input tax credit. The time is really tough for small traders,” detailed Dhruv Dua, a Delhi-based practising Chartered Accountant, who is consulting many IT traders.

Not just the smaller ones, even mid-sized organizations have similar troubles. “Maintaining our cash flow has become a challenge under GST regime. Leave aside various challenges with GST compliance, doing business even with SEZ have become tough as despite tax exemptions we have to anyway deposit value equivalent to GST. We are in a limbo and just trying to survive in this scenario,” shared Vipul Datta, CEO, Futuresoft Solutions.

While the government has formed a 3-member inter-ministerial team to look at the technical issues and the problems in uploading returns on the portal, the real testimony will be on October 10, 2017.

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