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J150 GST LAW TIMES [ Vol. 34
However, the Committee observed that the monthly revenue collections
from the GST are yet to stabilise. States have been reporting losses in collection,
which will only increase the compensation burden of the Centre.
During the current fiscal, the total target for collection of GST Compen-
sation Cess is a little over ` 1.09 lakh crore, while the net collection during April-
December was over ` 70,000 crore. However, GST compensation, released as per
budget provision, and the actual requirement of States for the April-September
period has exceeded ` 81,000 crore.
Resolution of grievances
To keep the States in sound financial health, the Committee has called
for resolution of grievances by the GST Council.
The panel expects the Centre to sort out the festering issues pertaining to
GST at the earliest. The Committee would also urge the Finance Ministry to ex-
tend the due date for filing GST returns to 25th of every month.
Now, all eyes are on the next GST Council Meeting scheduled for March
14. States are likely to raise the issue of Compensation Cess and discuss ways to
resolve issues related to the inverted duty structure (when indirect taxes on raw
material are higher while on finished products lower), which results in outflow
as refund. The estimated refund on account of the inverted rate structure is about
` 20,000 crore a year.
[Source : Business Line, New Delhi, dated 13-3-2020]

GST dilemma
The reality of Goods and Services Tax (GST) in the field is that there is
tax evasion on one side and administrative hurdles on the other. First, the Tax
Administration has not been able to fulfil the promised objective of providing a
tight infrastructure to weed out evasion. Second, the administration and the tax-
payer have to contend with continuing changes in GST rates made by policy-
makers with a frequency not witnessed anywhere else. Third, new laws in other
sectors have conflicted with GST implementation. Fourth, large businesses are as
much prone to tax evasion as small, lending a touch of implausibility to the tax.
Fifth, examination of systemic deficiencies and correcting them promptly are
missing.
Possibly, the biggest challenge from the administration’s point of view
has been its inability to autopopulate linked information from one tax form to
another even though that is quintessential to success. Shorn of technical detail,
essentially there are three GST Forms - 1M, 2A and 3B. Let us call them 1, 2 and
3. The taxpayer has to report his sales in Form 1, each row showing one sale. The
columns in the form comprise GST number, detail of invoice issued, GST rate
applicable, Central GST value/amount, State GST value/amount. The total tax
revenue collected by this taxpayer for the Centre or States is obtained when the
CGST or SGST column is aggregated.
Form 2 shows the taxpayer’s purchases. Here, too, each row represents
one purchase and the columns show the GST number, detail of invoice received,
the rate of tax paid, and the value of CGST and SGST paid. Aggregating CGST or
SGST columns yields the value of CGST or SGST paid on purchases by the tax-
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