GST rules: Smaller taxpayers may face problems, say experts

gst experts

Keeping pace with the July 1 roll-out for the goods and services tax (GST), the government on Wednesday unveiled three more draft rules related to account and records, advance ruling, and appeals & revision, respectively. Experts said that while taxpayers would maintain all account and records electronically, certain requirements in the rules could be cumbersome, especially for smaller taxpayers. The new draft rules for accounting and record-keeping require maintenance of trail of each deleted or edited entry in electronic records. While this is supported by major enterprise resource planning (ERP) software, complying with this may be a major challenge for desktop software, which allow removal of entries or details, Preeti Khurana, chief editor of, said. She added this may pose compliance challenge for small businesses which may be using a readily-available, basic accounting software.

“This log of deleted or edited entries could pose a serious challenge when it comes to explaining deleted or edited entries to tax officers,” Rakesh Nangia, managing partner, Nangia & Co, said. He also said that while manufacturers are understandably required to keep a record of quantitative details of raw materials or services used in the manufacture including details waste and byproducts, the same set of accounting rules will now apply to the service provider.

 Separately, according to advance ruling rules, a taxpayer applying for advance ruling will need to shell out Rs 5,000 as fees while the same for appeal against advance ruling will be Rs 10,000. This fee is fourfold when compared with the corresponding charge under the current service tax rules. “The fee for appeal against advance ruling for service tax was Rs 2,500, however the same fee has been increased to Rs 10,000 under appeal for advance ruling in GST,” Khurana said.

While all the applications for advance ruling can be made electronically, the rules suggest that petitioner will have to submit multiple copies of the same in hard copy as well. “An appeal to the Appellate Authority or Appellate tribunal can be filed either through electronic mode or in physical mode, but hard copies of the same are compulsory to be submitted. I hope in the final rules, the entire process of application filing would be made electronic,” Nangia said.



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