Two days into the goods and services tax (GST) regime, revenue secretary Hasmukh Adhia on Sunday took to Twitter to clarify myths doing the rounds about the new indirect tax regime. Adhia said that businesses can continue under GST with provisional ID number and they need not wait for the Goods and Services Taxpayer Identification Number (GSTIN).
“Provisional ID will be your final GSTIN number. Start business,” Adhia said. Adhia also clarified that businesses need not generate all invoices on computer/internet only. “Invoices can be generated manually also,” he said. Saying that it’s a myth that GST rates are higher than value-added tax (VAT), Adhia stated: “It appears higher because excise duty and other taxes which were invisible earlier are now subsumed in GST and so visible now.”
He said it’s a myth that businesses which were earlier exempt will immediately need new registration before starting business now. “You can continue doing business and get registered within 30 days,” he assured taxpayers. He also said that small retailers need not file invoice-wise details in their return forms and retailers will have to just file one return form as the two other forms will be auto-populated by the computer. “There is only one return with three parts, out of which first part filed by dealer and two other parts auto populated by computer,” he said.
Adhia said it’s a myth that internet is needed all the time to do business under GST. He said the reality is internet would be needed only while filing monthly return of GST. Reacting to doubts about the new indirect tax regime circulating on social media, the revenue secretary also denied that if a person makes payment of utility bills by credit cards, the he/she will be paying GST twice. “This is completely untrue. Please do not re-circulate such message without checking it with authority,” Adhia said.
The clarifications by government follow after reports of traders expressing concerns about enrolment with a provisional ID number and their wait for a final GSTIN number. A number of shops in major markets had remained shut, or didn’t carry on any business on the first day due to confusion about taxes. Also, since the roll-out of GST from July 1, many consumers had posted pictures of receipts issued in grocery stores or eateries showing tax deductions as GST, instead of VAT/Service tax earlier, indicating a higher tax incidence for some goods.
The finance ministry in a statement said that day two of GST passed without major problems being reported. “The state and central government officers are providing the required information to the trade and industry. We have got encouraging reports from roadside dhabas and big restaurants as well as from kirana shops to departmental stores that have started getting acclimatised to the new tax system,” it said.
Adhia also appealed to people not to circulate any unverified messages through social media. The government ushered in GST from midnight of July 1. The indirect tax regime, seen as the biggest since Independence, has a multi-tier tax rate structure — five, 12, 18 and 28 per cent — along with a zero rate for essential items such as salt, unpacked foodgrains, healthcare services, and cess for luxury goods.