India: Goods And Services Tax - A Report Card Of First Six Months Since Debut!!

Last Updated: 10 January 2018
Article by Aseem Chawla and Sarthak Garg

While the GST, ever since it was implemented, has remained a topic of debate in public and private forums, the article looks at how the tax has fared for the first six months of its existence.

The Goods and Services Tax (GST) was implemented in India with a premise to improve the ease of doing business, reduce overall cost of goods and services for the ultimate consumer, lessen tax compliance, enhance economic efficiency, and achieve growth and one uniform common market.

GST is India's most comprehensive indirect tax reform since independence. It has subsumed most of the erstwhile indirect taxes, barring a few. It has remained a topic of debate in public and private forums leading to animated discussions regarding challenges posed by the unique and diverse needs of the Indian market and solutions thereof.

GST implemented in India has been a path-breaking and admirable effort. The Indian Government undoubtedly deserves the credit for bringing multilayered and several geographically defined taxpayers under one umbrella.

However, the complicated tax structure has not been easy to comprehend; also, the implementation of GST has not received much fanfare, as was expected, and it does not completely conform to the features of an ideal GST owing to India's federal structure.

The implementation of GST has unfortunately seen apprehension about chaotic fillings of various returns and forms, high tax rates, delayed refunds, and payment of GST under the reverse charge mechanism on procurement from an unregistered dealer.

Frequent changes in the GST legislation witnessed that the new ecosystem is unsettled, and it has been widely felt by the tax community that the implementation of GST was a rushed decision, which did not achieve the various objectives for which it was introduced, and indeed, has cost the Indian economy.

Six-Month Report Card

GST is set to complete its first half year, as the calendar year 2018 sets in. The first half-year has been filled with all the vibrant promises made by the Government about GST being a 'Good and Simple Tax' on one hand and the taxpayers debating about the complexities and lack of clarity in the new indirect tax system.

Too many teething troubles and several technical issues have been faced by the industry, which at the same time is trying to understand the complicated tax structure.

The first and most avoidable hiccups were the glitches on the Goods and Services Tax Network online portal (GSTN), which is the IT backbone for the new indirect tax regime. Small businesses have been inundated on the GSTN in filing of returns, forms, uploading of documents, etc.

The technical glitches on the GSTN have forced the Government to extend the due date for various returns and forms on a number of occasions. This has raised concerns and questions on the functioning of the IT backbone of GST.

For instance, the due date for filing GSTR-1 (details of outward supplies of goods or services) for the month of July 2017 was originally August 10, which has been extended at various occasions. Lately, the due date for filing GSTR-1 for registered persons having an aggregate turnover of more than INR 1.5 crore for the months July - October 2017 has been extended to December 31, 2017.

The rates of goods and services and GST rules have been tinkered with time and again, which has hampered smooth transition and disrupted various sectors.

For exporters, GST has been a difficult transition. Delays in refund of input tax credit had led to working capital issues. Furnishing a bond or letter of undertaking has proved to be a huge burden for exporters, especially service providers exporting services.

Another step taken during these first six months has been the approval given by the Union Cabinet for constituting the National Anti-Profiteering Authority, which the industry has been generally skeptical about.

All these aspects pertaining to GST implementation are being brushed aside by optimists and criticized by skeptics.

However, one cannot deny that the Government's 'Good and Simple Tax' has become a nightmare for the taxpayers in the first half-year of its implementation.

Revamped Design and Structure

The Central Government responded to the criticism with a revamp in the design and structure of GST in the GST Council's meeting held on October 6, 2017 and November 10, 2017.

The 22nd meeting of the GST Council held on October 6, 2017 proved to be a relief for exporters and small businesses. In the said meeting, various decisions and changes pertaining to return filing, composition scheme, GST rates, etc. were agreed upon.

The major changes were reduction in tax rate for various items; reverse charge mechanism on procurement from an unregistered dealer suspended till March 31, 2018; registered taxable person having an annual aggregate turnover of less than INR 1.5 crores allowed to file quarterly GST returns and quarterly GST payments starting from the quarter October 2017 - December 2017; TDS/TCS provisions postponed till March 31, 2018; and e-way bill system to be introduced in a staggered manner with effect from January 1, 2018 and shall be rolled out nationwide with effect from April 1, 2018.

Pursuant to the said initiatives, major decisions were taken by the GST Council in its 23rd meeting on November 10, 2017. The most significant was the reduction of tax rate on 178 items from 28% to 18%, which, indeed, was a welcome move for the industry and also motivated consumers.

Another significant change was the deferment of filling of GSTR-2 (details of inward supplies of goods or services) and GSTR-3 (monthly return) for the period July 2017 to March 2018. In this regard, a registered taxable person is now only required to file GSTR-1 besides the monthly GSTR-3B return for the period July 2017 to March 2018. Late fee was also waived in the late filing of GSTR-3B for the months of July, August, and September 2017.

GST on restaurants (other than in hotels with tariff INR 7,500 and above) was brought down to a flat tax rate of 5% without the availability of input tax credit. However, it was felt that lower rates without input tax credit is undesirable and goes against the principle for which GST was implemented. Large chains of restaurants have been protesting on credit blockage since the amendment was made.

Taking into consideration the late availability or unavailability of some forms on the GSTN Portal, the due dates for furnishing various forms including TRAN-1 have been extended.

Way Forward

A move to ease out pain-points was initiated by the GST Council in its meeting held on October 6, 2017 and November 10, 2017. However, such time-to-time ad-hoc and patchy amendments/reliefs would not pave away for a sustainable tax regime with robust foundation but would serve as a catalyst for trust deficit amongst taxpayers.

Further, the National Anti-Profiteering Authority, which has been set up for a two-year period, is mandated to ensure that the benefits of input tax credit and the reduction in GST rates on specified goods or services are passed on to consumers by way of commensurate reduction in prices.

However, one is skeptical that the National Anti-Profiteering Authority should not end up becoming a tool for harassing the industry.

In conclusion, considering that GST has been implemented without any pilot-run and it is, therefore, imperative that each and every recommendation and amendment suggested by the GST Council should not be made as a quick fix, rather, the focus should be to bring in stability in the indirect tax structure so that the halted wheels start to move.

Originally published by Legal Era.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions