GST rollout: Tax litigation cases likely to soar after new tax regime

As the nation is gearing up for the biggest economic reform - Goods and Services Tax- scheduled to launch at the midnight of Jun 30, the professionals facilitating the new tax regime anticipate that the rollout of GST may throw litigation challenges for the tribunals  and judiciary. According to a report in Bloomberg, lawyers have predicted a steep rise in litigations pertaining to the uniform indirect tax regime in days to come.

GST, with its seven tax slabs, a complex system to avail input tax credits (ITC) and uncertainty over anti-profiteering provisions, is likely to lead to several litigations. Piles of unsolved cases are already a matter of concern for judiciary and tax tribunals in India, and the GST is likely to add a good deal of new cases to already burdened system.

Government has assured that it will be a smooth rollout for the new tax, but there are apprehensions. Confusion over provisions, lack and unfamiliarity with the IT infrastructure among other factors GST will have to surpass before it can be successful in its motive of simplifying tax structure in India.

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Legal and financial professionals believe that there will be tax litigations and tax payers looking for further clarifications in near further. As hard-pressed as they are right now, there is a lot to be done, stated Pratik Jain, leader, National Leader, Indirect Tax at PwC India.

"There will be issues regarding interpretation of law after GST rollout. There will be new notifications from the government. Compliance is another issue that will arise after GST rollout. There will be more disputes with authorities over GST in days to come. People will also be looking for advance tax ruling," Jain said.

This also calls for hiring more professionals to handle the increasing pressure facilitators are facing on account of GST, he added.

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As for things to return back to normal can take a few months, said Chartered Accountant Nidhi Shrivastwa. "Once rolled out, there will be a couple of months before GST is streamlined. There are a few hindrances to it as of now. First of all, it has to be seen how the software works. Errors have to be minimised while filing tax returns as there is no provision for revising once filled," she said.

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There still is a lot of clarification that tax payers as well as implementing authorities are seeking regarding GST owing to the times it has been changed structurally.

"Consumers are still apprehensive whether GST will actually be beneficial or not. They are apprehensive whether the benefits will be passed on to them by the corporate houses or not. There still is absolute clarity about GST in the department itself either, with something new coming up every day. Department also needs a lot of handholding from the professionals," said Shrivastwa.

The professionals will have to up their game too as the entire tax return filing process is going digital with GST.

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