GST: Government's customer focus

It was a massive effort whose success depended on officers

As the first year of GST was completed, many articles appeared on the first year’s performance or lack of it. One matter that perhaps remains to be addressed is the government’s customer focus reflected in the 50 communications by the chairman, Central Board of Indirect Taxes & Customs (CBIC), to officers of the department between July 1, 2017, and June 15, 2018. This has not been an easy task given the complicated GST structure (which is not the issue here).

In order to make the transition to GST painless for both traders and the general public, officers were asked to get feedback from GST Sewa Kendras by interacting with the trade to understand pain points of taxpayers. Addressing grievances at the ground level, and attending to them on a real-time basis were imperative. And, in case of any issue requiring escalation, the same would be sent to the Feedback and Action Room (FAR) immediately for further necessary action, including through video conferencing.

Concern was expressed regarding depleting quality of the GST outreach programmes, seminars, workshops for the trade and consumers. Commissioners were asked to identify officers in need of training and ensure that they were equipped to handle queries from the trade. Updating the knowledge base through refresher training for officers and staff, and watching a recording of the GST Master Class were recommended. Commissioners and other officers were asked to file returns themselves in order to have actual experience of the process and be in a better position to understand and appreciate the difficulties faced by taxpayers.

A ‘GST Rates Finder’ mobile app featuring the rates for all goods and services, reflecting notifications, was made available on Android/IOS platform for download and use. The 23rd GST Council meeting recommended a reduction in GST rates for certain items. The chairman immediately indicated that stakeholders needed to be updated on any decision taken, wrote to industry leaders, and requested officers to ensure that the benefit of this reduction was passed on by suppliers to purchasers by way of commensurate reduction in prices.

There was a perception of the need to reduce the compliance burden for those below the threshold limit so that they opted for registrations voluntarily. The micro, small and medium enterprises (MSME) sector and cluster groups of trade would be given particular attention. Supportive clarifications in the form of press releases were issued.

Exporters were given some priority. A committee on exports was constituted consisting of members from both the central and state governments to look into difficulties in complying with the requirement of GST laws. Confusion among exporters was to be particularly addressed, for example, exports under bond/letter of undertaking (LUT) without payment of Integrated GST (IGST), whether manufacturers, merchants or service providers. Refund of IGST paid on export goods was to begin from October 10, 2017.

On the Customs side, an IGST refunds module on exports in the Indian Customs Electronic Data Interchange (EDI) System (ICES) was successfully operationalised. A simple mechanism was improvised for immediate interim relief to exporters. To facilitate exporters to file refund claims properly, they were advised to file relevant forms without delay. They would be processed and sanctioned by Customs officers at the port of export. A detailed Circular was issued. It was reported that in Mumbai Zone II, the pendency of more than 100,000 of drawback claims had been successfully liquidated; it had reached zero pendency within three weeks.

Efforts continued through late 2017 and into 2018. Member (GST) sent out a letter dated December 29, 2017, containing details of applications filed for a refund of unutilised input tax credit or unutilised balance in cash ledger to all the GST zones. Chief Commissioners (CCs) were asked to closely monitor the progress in sanctioning refund claims, including IGST refund on exports, and furnish a report within given timeframes. This was followed by a Circular dated February 23, 2018, for necessary action on IGST refunds that were stuck due to invoice mismatch or other mismatches, and an interface was developed in ICES that would facilitate Customs officers to process refund claims and sanction refunds.

The CBIC intensified its efforts to liquidate pending IGST/ITC refund claims further through a special drive — IGST/ITC Exports Refund Fortnight — between March 15 and 19, 2018, and then extended. Exclusive camps/refund cells would be set up across field formations to deal with cases of pending, export-related refund claims. Director General (DG) Systems initiated actions to report port-wise IGST refunds pending on account of mismatch of invoice (Gateway EGM) and a port-wise list of Import Export Codes (IECs) that were pending for the Public Financial Management System (PFMS) validation. By March, there were few claims of IGST refund pending with Customs due to invoice mismatch or EGM errors.

There remained certain refund claims pending due to non-receipt of data from GSTN. Of course, refunds could not be given without a review and correction in the Automation of Central Excise and Services Tax (ACES) portal. Zonal Members were instructed to monitor this on a daily basis and get the pendency of such returns reduced quickly to nil. As late as June 1, 2018, there was an announcement that a “Special Refund Fortnight” had been organised from May 31 to June 14, 2018, for clearing pending GST refund applications which had been submitted on or before April 30, 2018.

There were three additional matters to call attention. First, officers were asked to expedite the process of approval of GST Practitioners to assist taxpayers. That would further the cause of achieving a trade-friendly image for the department. Second, officers and staff of the department were encouraged to publish articles that would aid and assist assessees to better understand prevailing department positions, and changes in GST and Customs provisions, regulations and procedures. The outreach endeavours should be a continuous process encouraging greater participation and clarity on issues.

Third, and most important, the chairman asked that impeccable integrity be ensured while carrying out the assessment of taxpayers. Officers and staff across the country took an integrity pledge, with a continuation of assiduous reinforcing of the ideals of probity and integrity. 

The CBIC observed a Vigilance Awareness Week (against corruption) from October 30 to November 4, 2017. Thus, to conclude, customer focus has been a massive effort during GST’s first year. Of course, its success will depend on the extent to which they realistically influence field officers and their operations.