The introduction of destination-based consumption tax in the form of GST was one of the biggest reforms the current Government brought in. Although GST was been introduced with the intention of simplifying the system of Indirect Taxation and thereby increasing the ease of doing business in the country, the inadequate preparation, lack of clarity/ awareness and huge variation in procedures under the GST Laws, over erstwhile practices has seen the business fraternity, tax professionals and people at large facing a plethora of challenges. 

One such challenge amidst others was the lack of readiness of the GST Network. Since the inception of GST, businesses have faced a multitude of difficulties in coping with it right from, migration / registration, transition of the erstwhile tax credits or be it complying with the periodic returns. The system seemed a bit inadequate, both in terms of technology as well as transaction level matching GST compliance mechanism, which has been a challenge lately, with the Government having to defer the introduction of GSTR-2 Returns (Return to disclose purchase transactions and match with the suppliers GSTR-1) for further simplification. 

Even with the current functionalities in place, tax payers have been facing numerous complications viz. – overloading of the portal, delayed reflection of updated data as well as payments, more than expected time in generation of error reports / json files, incorrect data in error reports / json files generated, etc., 

That said, the government, without any second thoughts, has been working hard to figure out solutions to the difficulties faced by various stakeholders and offer a hassle free platform by providing more than a few extensions around the due dates for various compliances. 

However, the recent extension of the Annual Return and the Audit Report for FY 17-18 to November 30, 2019 (which has already been extended thrice earlier – once in March 2019, the next in June 2019 and later in August 2019) has added further trouble to the tax payers. While such extension may bring cheer to those who have been anticipating it, businesses sure do have an uphill task on their hands as the extension does come with the following statutory schedule in place: 

• Oct 2019 – Introduction of the New return filing system to be mandatorily effective for large tax payers
• Nov 2019 – Due date for submission of Income Tax Returns and Tax Audit Report for FY 18-19
• Dec 2019 – Due date for submission of GST Annual Return and Audit Report for FY 18-19 (expected to extend)
• Jan 2020 – Introduction of E-Invoicing System

Over the last two years, the focus of the tax payers has shifted from managing their business to tackling the compliance issues over the modest GST Portal. Due to frequent extensions in due dates, focus over compliance has gained momentum for tax payers over business. For SME’s, there has been an additional operational cost because of cost of computer systems / hiring of accountants (for filing returns) to cope up with the technological challenges which hitherto was managed in-house.

With the introduction of new e-invoicing and return system in the forthcoming months, businesses would require to re-align their internal systems for a smooth transition. Amidst such transformation involving huge cost and man hours, the current extension in due date of annual return, due to technical glitches is not going to ease the pressure, but would further add to the woes of the tax payers. This can end up causing genuine inconvenience to honest tax payers and those employees who have made sincere efforts in complying with the due dates. 

However, understanding the current mindset of the business community, the government could have either waived such compliance requirement (at least for the first year) considering the functionalities are still under development as opposed to extending deadlines. 

To sum up, the need of the hour is to have a stable GSTN System with no technical glitches and minimum validation criteria. Absence of this could lead to a certain amount of trust deficit creeping in. The idea should be to keep the portal user friendly and increase its bandwidth from time to time, so as to ensure that there are no downfalls and this will go a long way in making the Goods and Services Tax a success. 

Source : https://economictimes.indiatimes.com/small-biz/gst/why-the-government-should-waive-off-gst-return-as-opposed-to-extending-deadlines/printarticle/70869520.cms