“Not only has the work load increased. Even the submission of taxes has become difficult due to congestion, glitches and server disruption issues at the GSTN portal” says Gurjit Singh. The Government says that 49.68 lakh returns in GSTR-3B were filed for July as against 87 lakh registered tax payers. That was the data for July the roll out month. That still leaves out 4 million tax payers or 40% of those registered. Though August returns is expected to be better, and glitches are supposed to be lesser, the toll on the costs on the business class is mounting.
“It is very easy for finance minister Mr. Arun Jaitley to say that we should not wait for the last day to deposit the taxes. But where is the money? Most business men deposit tax on the last day not out of choice, but because they do not have the liquidity.” says Gurjit Singh. Mr. Singh is right. If Flipkart and Amazon can manage a billion customers buying from their website on a single day during the Big Billion days, why should the GSTN Portal or the SBI or the ICICI or PNB or HDFC not be able to meet a fifth of the concurrent customer load?
The license and registers were tools to ensure compliance in the eighties.
Being a manufacturer for over two decades, before I entered the field of journalism, it brought back some of the horrific memories of inspector raj. It was the licenses and registers that had been choking Indian manufacturing since the days of Indira Gandhi. There was the much feared ‘factories act’ for industries and the ‘shopping and establishment act’ for shops and offices and the ‘labour act’ for employees. That made it impossible to do business, close business or fire anyone without appeasing the inspector.
There used to be a rule number 3 for construction of factory, a rule number 4 for registration of a factory and a rule number 5 for a license to work in the factory. They all had a myriad of subsections and if you thought there were just a half a dozen you were mistaken. Hold your breath. Those days there were nearly 150 of them.
Probably they would not be any lesser today because trade unions of BJP or the Congress would never permit that – and after all we were a liberal socialist democracy. I remember as we stepped past rule number 100 began the rules to take attendance, maintain the registers and the muster rolls. Here was the catch. Every activity that was done had to be recorded and kept ready for inspection.
Have these register entries changed into digital entries?
The registers had to be all up to date as per the law. If not the inspector could fine you or even take action to close down your unit. However if you paid him his monthly cut he could overlook few omissions and commissions. The cuts would increase proportion to the omissions in your registrations. But still you had to comply and keep up the registers because one day the inspectors boss would ask for it. That was the dreaded inspector raj.
It would be really fearful if all these register entries still exist and have changed into digital entries. Today there is no inspector. Still compliance is elaborate and to say the least complicated. That instead of an inspector visiting your office, you could get an e mail notice that raps you for non compliance is even more dangerous. That would make the business for the modern day entrepreneur even more tougher. And surely while ensuring better compliance it would destroy the low cost small and medium scale manufacturing unit that is already under deep distress. So what is the solution? How can both Make in India and tax compliance co-exist?