A Law graduate, Atul has addressed more than 1000 Seminars, workshops & conferences, organized by various professional bodies, Institutions and Trade Associations & Chambers across India. He is also a representative of the Advisory committee for GST in GSTN Board (Government of India IT Initiative for implementation of GST in India).

The much anticipated GST regime seems to be a real pocket burner as it seems that considerable cost would be incurred by the asses see to effect a transition and to adapt to the compliances to the new regime. As the GST has touted as more of rule less of principle base legislature, which in fact would going to put a lot of check and balances on an assessee in comparison to current regime. Resultantly, due to the incremental compliances under the GST, the compliance cost is going to be increased undoubtedly (Specifically for SME).

Compliance cost can be majorly categorized in following:

Cost related to Information Technology

Cost related to legal compliance of GST law & related rules such as Registration, Filing of Returns, Tax Audit, and Due diligence review by expert.

It can be understand by an example of an assessees working in more than one state, the facility of centralized registration, currently available to service tax assesses will be discontinued under GST, thus making it cumbersome for the assessee with the offices/branches situated in different states to comply with the following:

Obtain separate registration in different states

Maintain separate books of accounts for the said premises

In case an asses see is registered in six states, then he needs to have six separate registrations, which is horrible for a small and medium enterprise on prospect of the human resource and overhead for such compliance.

Further if we assume that a Consultant/TRP is charging Rs. 2000 to file

each of the GST return, then for this particular assesse with having a s registered office,total cost to file return only will be Rs. 4,44,000, which is drastically higher than the current regime. The service sector would be worse hit as the benefit of centralized registration would be taken away.

Introducing facility of GST Suvidha Provider (GSP) by GST council will play a crucial role in GST to make filing returns more user friendly and customer focused

On contrary, manufacturing sector who are already filing monthly returns of excise and VAT will feel less pinch of increased compliance.The compliance for traders will be increase as they are currently filing VAT returns on quarterly basis.

For the first time, service sector asses see will face the heat of state authorities and trading sector will face the central authorities, duplication of proceedings would surely add to costs. Government should act as a Knowledge partner as all the businesses entities would not be able to afford high end consultation fees. Availing the facility of GSP and ASP will be heavy on pockets as they will charge hefty fees for the infrastructure facility provided by them.

Huge compliance burden has been imposed upon the e-Commerce sector where Tax collected at source provisions would apply. Further there will be reduction of the compliance cost for the small businessmen, who are making supply under Rs.20 lac. Because registration and the tax filing requirement will be only be there, in the situation where aggregate turnover exceeds the threshold limit of Rs.20 lac.

Introducing facility of GST Suvidha Provider (GSP) by GST council will play a crucial role in GST to make filing returns more user friendly and customer focused. Also, developers of tax solutions are providing value added services of Application Service Provider (ASP) and they will focus on taking taxpayers raw data on sales and purchases and converting it into GST returns. These GST returns will then be filed on behalf of the filer with GSTN via the GSP.

GST is going to force every business to work in electronic platform as it promotes paper less environment. To make information technology infrastructure GST enabled, every company registered under GST will have to make key changes in their IT to work after GST implementation.

The proposed Credit Mechanism in GST would require investment in IT infrastructure. The IT infrastructure will have to be compatible with the software and the computer system proposed to be used by the government for disbursing credit. Cost of IT infrastructure will go up to comply with the credit mechanism.

Another cost centre would be replacement of stationery, letter heads, bill books/invoices etc. by the businesses. New stationery will have to be got printed to conform to the requirements of the GST legislation.

So, we can say that GST implementation will be the costly affair for business enterprises. Over all,the huge investment in the IT infrastructure and human resources shall become the necessary call for the GST regime; therefore it would be a challenge before the businesses and the lawmakers as well,to make the GST compliance cheaper & efficient.