SUMMER TRAINING PROJECT

ON
“EXAMINING THE FACTORS LEADING TO FILING
THE RETURNS UNDER THE GST”
AT
SANJAY SHALINDER & ASSOCIATES

In Partial Fulfillment of The Requirement for The Award of The Degree of

Master of Business Administration

MAHARASHI MARKANDESHWAR INSTITUTE OF MANAGEMENT

MAHARASHI MARKANDESHWAR (DEEMED TO BE UNIVNIVERSITY)

UNDER THE GUIDANCE OF SUBMITTED BY:

DR. KOMAL BHARDWAJ DAMANPREET KAUR
MBA (3th SEM)
 PREFACE

Master of Business Administration is the stepping stone to the Management Career. It

has great pleasure in presenting this research project which is essential in partial
fulfillment of MBA programmer. Research report is an integral part of curriculum and
its purpose is to provide the student with the practical exposure of today’s changing
scenario. It helps in the development of practical skills and analytical thinking process
about the investment methods of different people in the present environment. It provides
with the basic skills required to perform the survey and statistical tool needed to
analyses the data. Thus, it helps in molding the students according to the requirement of
actual world. Simple language has been used throughout the report. Report is illustrated
with figures, charts and diagrams as and when required.
 ACKNOWLEDGEMENT

This project was a golden opportunity for learning and self-development. I consider
myself very lucky and honored to have so many wonderful people that lead me through
in completion of this project. I extend my gratitude to Maharishi Markandeshwar
Institute of Management for giving me this opportunity. I am very grateful to Dr.
Komal Bhardwaj who was my guide during the development of this project and it was
her guidance and assistance which helped me in completing my project and I am
thankful for her support and friendly guidance. I would also like to express special
thanks to my supervisor CA. Sanjay Sharma for his guidance, support and supervision
in completion of this report. I would like to thank all my colleagues with whom I
worked together during the internship programmer.

Damanpreet Kaur
12237178
 DECLARATION

I Damanpreet Kaur a student of Maharishi Markandeshwar Institute of Management

here by declare to the of my knowledge the final project by the title ‘‘EXAMINING
THE FACTORS LEADING TO NON- FILING OF RETURN UNDER GST’’.
Reference and detail have been taken from authentic source and have been done on
proper kind of fabrication has been avoided. The project has been done in proper and
genuine way to best my knowledge and my beliefs.

SIGNATURE

DATE

.
 Index
S NO PARTICULAR PAGE NO

1
CHAPTER 1
 Introduction
 Industry profile
 Company profile

2
CHAPTER 2
 LITERATURE REVIEW

CHAPTER 2
 Research methodology
 Objective of study
 Limitation of study

CHAPTER 3
 Data analysis

CHAPTER 4
 Finding
 Suggestions
 Conclusion

CHAPTER 5
 Bibliography
 QUESTIONNAIRE
CHAPTER -1
INRODUCTION
2.1 Brief Overview on GST:
The Constitution (122nd Amendment) Bill, 2014, seeks to amend the Constitution of
India to facilitate the introduction of Goods and Service Act. It is the Indirect Tax
charged on local consumption and is borne by end consumers. It is collected at each
stage of the production and distribution chain by registered vendors, who have to
account for the tax on the value that they have added to goods and services. France is
the first country to introduce GST. Almost 160 countries have introduced GST in some
form. While countries such as Singapore and New Zealand tax virtually everything at a
single rate, Indonesia has five positive rates, a zero rate and over 30 categories of
exemptions. The authority to levy tax is derived from the Constitution of India which
allocates the power to levy various taxes between Centre and State.

2.1.2 Need for GST:

India’s recent progress towards economic growth stems from reforms undertaken after
the 1991 fiscal crisis, which lifted India from decades of slow growth under Socialist
rule and offered an opportunity to improve living conditions in the immense, poor
country. At the same time, much had changed in India after the balance of payments
crisis of 1991. Indian policies became more positive towards promoting export and
allowing foreign capital to participate in the process of India’s growth. Globalisation
and liberalisation have become the order of the day. The interdependence of economies
in their move for development compelled the Governments of all the countries to follow
the globalisation policies adopted by the major economies of the world. To survive and
grow in this economic order, rational and competitive tax policies are being adopted by
every country. India has also fallen in line with the requirement and has been initiating
modifications in indirect taxes. The recent proposals of Goods and Services Tax (GST)
are considered as path-breaking in the economic restructuring in general and in the
taxation area in particular. As the revenue to the government is increasing its figures
from indirect taxes year by year, this change will further boost the economy in a
positive way which is necessary for the international competence and globalising the
market and economy.
Various Studies on GST:
Chief Economic Advisor Committee: -
In December, 2015, Chief Economic Advisor (CEA)
Arvind Subramanian, released a comparative study of GST implementations in the
federal systems around the world. ‘Report on the Revenue Neutral Rate and Structure of
Rates for the Goods and Services Tax (GST)’. His report focused on the experiences of
European Union, Canada, Brazil, Indonesia, China and Australia. Subramanian found
that most of these countries were facing 'serious challenges' in working with the GST.

Reserve Bank of India: -

The Reserve Bank of India too studied the GST implementations in
various countries and incorporated its findings in the report titled: 'State Finances: A
Study of Budgets of 2016-17' and released in May 2017. The RBI took notes from the
GST experiences of Argentina Australia, Brazil, Canada, Malaysia, New Zealand and
Russia. It found flaws in all the GST models. On the basis of the global experience,
the RBI listed some of the risks that GST may bring to India in the new taxation regime.

GST to be major test of Digital India success:

On July 1, 2015, the Prime Minister launched the
Digital India programme with the objective of creating a participative, transparent and
responsive government. And on January 16,2016, the much-talked-about Start-Up India,
Stand up India initiative, aimed at encouraging new ventures and creating jobs, was
kicked off amidst much fanfare Without doubt, these are some of the most-important
initiatives of the government expected to transform the corporate sector. Along with
these initiatives, there is yet another gamechanger, the Goods and Services Tax (GST).
All three are linked. While Digital India and Start-Up India complement each other,
GST is crucial for the success of both these initiatives.
Impact of GST on Business

GST is widely seen as the most important and far-reaching indirect tax reform that
will , potentially, have an impact on almost all industries and businesses since it will
create a common Indian marketplace and reduce the cascading effect of taxes. It will
subsume all indirect taxes and create just one rate for the entire nation. GST will have a
profound effect on the way business is conducted in India and the way prices are
determined. The legislation will affect the pricing of goods and services, supply chain
optimization, accounting and tax compliance systems, as also the tax structure, tax
incidence,tax computation, tax payment, compliance, credit utilization and reporting. In
short, the present indirect tax system, with all its inefficiencies, will be completely
overhauled GST will create a wider tax base, which will lower tax rates. Not only will
the multiplicity of taxes be eliminated and the tax structure rationalized, compliance
procedures will also become easier. Additionally, the automation of compliance
procedures (which comes under the domain of the Digital India initiative) will reduce
errors and increase efficiency. GST will enable the digital industry business initiative to
take root by providing a uniform tax rate and standard regulations across the nation.
This will enhance ease of doing business, and will allow start-ups, online market places
and the retail sector to flourish. These sectors are also seen as major job creators. With
GST roll-out, industries in these domains can expect huge gains, which will, in due
course of time, lead to more jobs and a higher GDP. The roll-out of GST has already
been delayed, largely due to lack of political consensus. The smooth passage of the Bill
is deemed crucial for the success of mega economic and social projects, such as Digital
India and Start-Up India. The government is now hoping to kickstart the initiative on
April 1, 2017. That leaves very little time for companies to upgrade their accounting
systems and ERP software to comply with the new tax regime. Some companies have
already come out with GST-ready software offerings and suites that will help companies
migrate smoothly to the new tax regime, and enable them to integrate the older financial
structure with the new one seamlessly. All stakeholders are now waiting with bated
breath.
  Goods and Services Tax in India
Meaning of GST:
GST is defined as any tax on supply of goods and services, other than
on alcohol for human consumption. In brief, before GST came into existence tax was
levied at two-tax system, one is on sale value or about invoice amount, and second one
is on the value-added amount under value added taxation. Now Goods & Services Taxes
is destination-based and input tax credit system (ITC) paid at previous stage of
purchases and it can be set off right from the manufacturer to the end users. In the
supply chain of goods and services, value added will be taxed and ultimate burden tax to
be paid by the final consumer.

Features of GST Model:

The following are the some of the important features of GST:-

“The Government needs to be appreciated for its implementation of the GST, a complex
reform. There was hardly any business disruption in the first month and the Government
has been receptive to issues faced by industry. The performance of the GSTN was the
biggest challenge, which we expect will be streamlined soon. However, the GSTN, the
E-Way Bill and anti-profiteering are the areas the Government needs to simplify.”

Prashant Bhatnagar, Associate Director, Procter and Gamble India.

1. The GST shall have two components: one levied by the Centre (here in after referred
to as Central GST), and the other levied by the States (here in after referred to as State
GST).
2. The Central GST and the State GST are to be paid to the accounts of the Centre and
the States separately.
3. The Central GST and the State GST would be applicable to all transactions of goods
and services made for a consideration except exempted goods and services, goods
which are outside the purview of GST.
4. Since the Central GST and the State GST are to be treated separately; taxes paid
against the Central GST shall be allowed to be taken as input tax credit (ITC) for the
Central GST and could be utilised only against the payment of Central GST. The same
principle will be applicable for the State GST.
5. The administration of Central GST to the Centre and for State GST to the States
would be given.
6. To the extent feasible, uniform procedure for collection of both central GST and the
State GST would be prescribed in the respective legislation.
7. The taxpayer would need to submit periodical returns, in common format 42,
introducing GST and its impact on indian economy, as far as possible, to both the
Central GST authority and to the concerned State GST authorities.
8. Each taxpayer would be allotted a PAN-Linked taxpayer Identification Number with
a total of 13/15 digits. This would bring the GST PAN-Linked system in line with the
prevailing PAN-based system for Income Tax, facilitating exchange and taxpayer
compliance.

 Types of GST Charged in India

 State Goods and Services Tax (SGST)

The State Goods and Services Tax is one of the GST types which the government

of a particular state imposes. The state government taxes goods and services within

the state (intrastate, for example Mysore), and the state government is the sole

beneficiary of the collected revenue.

 The SGST replaces various state-level taxes such as lottery tax, luxury tax, VAT,
purchase tax and sales tax.
 However, if the transaction of the goods is interstate (outside the state), then both
SGST and CGST are applied. But, if the goods and services are transactions within the
state, only SGST is imposed.
 The rate of GST is equally divided among the two types of GSTs. For instance, when
the traders sell their commodities within their state, they must pay SGST and CGST.
 The revenue earned from SGST belongs to the state government and revenue from
CGST to the central government.
 The SGST of various goods and services depends on the government notification
published from time to time.

SGST Rates
Commodities SGST

Common Groceries such as Tea, 2.5%

Salt, Spices, Sugar, Etc.

Processed foods Electronic goods 6%

Capital Goods, toiletries, etc. 9%

Premium luxury commodities 14%

 Central goods and Services tax (CGST)

The Central goods and Services tax applies to the intrastate (within the state) supply of goods
and services. The central government taxes it. The CGST Act governs this type of GST. Here,
the revenue generated from the CGST is collected along with the SGST and is divided
between the central and state government.
For instance, when a trader makes a transaction within the state, the goods are taxed with
SGST and CGST. The GST rate is divided equally between SGST and CGST, while the
revenue collected under the CGST belongs to the central government.
 CGST Rates
Commodities CGST

Common Groceries such as Tea, Salt, Spices, 2.5%

Sugar, Etc.

Processed foods Electronic goods 6%

Capital Goods, toiletries, etc. 9%

Premium luxury commodities 14%

 Integrated Goods and Services tax (IGST)

The Integrated Goods and Services tax is a type of GST, where the tax applies on the
interstate supply of goods and services. This GST type is also imposed on the goods
and services that are imported as well as exported. The IGST Act governs it, and the
central government is responsible for the collection of IGST.
The collected IGST is equally divided into central and state government portions. The
State portion of the IGST is provided to the state where the goods and services are
received. The remaining IGST received goes to the central government.
For instance, when the trader makes a supply between two states, the type of tax in
this case would be IGST.

IGST Rates
Commodities IGST
 Common Groceries such as Tea, Salt, Spices, 5%

Sugar, Etc.

Processed foods Electronic goods 12%

Capital Goods, toiletries, etc. 18%

Premium luxury commodities 28%

 Union Territory Goods and Services Tax (UGST)

The Union Territory Goods and Services Tax is a type of GST imposed on the goods
and services in the union territories. This is similar to the SGST but applies only to
the union territories.
The UGST is applicable in Dadra, Nagar Haveli, Chandigarh,
Andaman and Nicobar along with Pondicherry and Delhi. Here the revenue collected
by the government belongs to the Union territory government. As the UGST is a
replacement for the SGST, they are collected along with the CGST.
 GST will eliminate the around 16 different types of taxes from regime which were
levied by central and state government before the GST Act has been implemented in
which central taxes (excise, surcharges, service tax, central sale tax etc..,) and state
levied tax (VAT, Octroi, luxury tax, entertainment tax, advertisement tax, cess and
surcharge etc.,).
Taxing Mechanism:

The GST in India is divided into three types CGST, SGST, IGST. If the transaction of
goods or services belongs to intra-state, then CGST and SGST are levied and equal
promotional rate and, if the transaction belongs to inter-state then IGST is attracted. The
consolidated rate of CGST and SGST will be equal to the rate of IGST
 Industry profile

About the Industry :-

Organization is working as Chartered Accountants firm under the rules and regulations
and code of ethics designed for CA firms by ICAI (The Institute of Chartered
Accountants of India).
The Institute of Chartered Accountants of India (ICAI or the Institute) was established
as statutory body on July 1, 1961 under Chartered Accountants Ordinance, 1961 to
regulate the profession of accountancy in the country. ICAI is governed by the council
which consists of 19 members. Fifteen members are elected from amongst the members
for a period of four years. The remaining four of the Council members are nominated by
the government of India.
These kinds of firms provide different kinds of professional services like audit, taxation
and management consultancy to its clients. The Chartered Accountancy course is
conducted by the Institute of Chartered Accountants of India which has its headquarters
in New Delhi, 5 regional offices (Calcutta, Kanpur Mumbai and New Delhi) and 81
branches under these regional centers.

MISSION & VISION

Mission of ICAI
Is to achieve excellence in professional competence, add value to businesses and
economy, safeguard public interest, ensure ethical practices and good corporate
governance while recognizing the needs of globalization.

Vision of ICAI
The profession of Chartered Accountants in India should be the benchmark of
professional excellence uploading the principles of integrity, transparency and
accountability.
ORGANISATION STRUCTURE
A hierarchy is an arrangement of items in which the items are represented as being
“above,” “below” at the same level as one another and with only one “neighbour” above
and below each level as. These classification are made with regard to rank importance
seniority power status or authority. A hierarchy of power is called a power structure.
Following is the organization hierarchy of the firm
 partner
 Director
 Senior managers
 managers
 supervisors
 trainee student

various level of the firm have different function partner are often the founder of the
firms. Most of the firm’ name are associated with the partner. they are basically the
main parties who issue and sign any report on behalf of the firm partner mostly
communicate with the senior manager in other word the progress of any inquiry is made
from the senior manager and hierarchal structure is strictly followed to avoid any
disruption
manager are inquired of senior managers and mostly manager manage audit field work
etc. and after filed work manager with cooperation of senior manager make and finalize
any audit report to be issued. senior managers is qualified chartered accountant having
more than 10 year working experiences.

Field work and information collection and implementation of policies by adopting

change in rules & regulations the main responsibility of supervisor and trainees. they
use different kind of techniques for error and fraud detection
TOP 5 CA FIRMS IN INDIA

Deloitte:-
Deloitte, in terms of Revenue, is the largest professional services
network in the world. Also on the basis of number of professionals, it is the largest
professional services network in the world. Deloitte is known for providing audit, tax,
consulting, enterprise risk and financial advisory services to more than 200,000
professionals in over 150 countries. They are the advisors to many of the World’s most
admired brands.
The consulting services of industries work on the theory of ‘Providing practical
perspectives and solution to queries’. Deloitte believes in ‘Good to make it Great !
They believe in ‘Helping clients to become Leaders’.

PWC:-
Price Waterhouse Coopers (PWC) has been the world’s second largest
professional services network in terms of revenue as surveyed in 2014 and is one of the
Big Four Auditors and stands neck to neck with Deloitte, EY and KPMG.The firm
believes in helping resolve complex issues and identifies opportunities. People from all
backgrounds such as arts, business, economics, finance, health, information technology,
law and more are entertained.

BOD international
BOD international stand at the fifth rank providing the largest accountancy
network in the world it is world- wide professional services network and one of the
public accountancy firm .

BOD

SS Kothari Mehta & Co. :-

The best thing about this firm is that it has over 55 years in existence. SS Kothari has
been one of the highly reputed firms in Delhi and has its branches in 100 other
countries.
It has created a strong national presence through a network creation of 6 offices and 20
associates which covers almost all the regions of the country. With a combination of
Partners and Associates, it has covered almost all the parts of the country. It offers
services in BPO, Tax Advisory services, Merger and Acquisition, Statutory Audit
services, Corporate laws and other different areas.

Ernst & Young (EY) :-

Ernst & Young abbreviated as EY is a multinational professional services
firm having its headquarters in London, United Kingdom. In terms of revenue, it has
been ranked in the world’s third largest professional services firm surveyed in 2012

COMPANY PROFILE
About a company

FIRM NAME – SANJAY SHALINDER & ASSOCIATES

NAME – CA SANJAY SHARMA
ADDRESS – CHANDIGARH SECTOR 38C

Department of accompany:

Audit and assurance department

Firm provide and assurance services to wide range of clients which

include preforming audit of financial statement of limited companies NGO and
partnerships. Firm also assignments Which includes management audit internal audit
and investigation audit focuses on business issues and the matters that can impact on
the financial statement whilist also retaining the basic audit that test the information
contained in the financial statement.

Tax and corporate department

Firm delivers services to clients and assist them in obtaining optimal tax
benefits Available under the laws firm also assist client to comply with the tax rules and
regulation always keep them Update with the latest development and amendments tax
personnel are qualified professionals experienced and knowledgebale.
 Preparation and submission of annual tax return
 Compliance services
 Tax advisor services
 Representation and litigitation with tax authorities
 Personal income tax services

Computer department:
Department handles the computer related matters assists other department
in work properly and efficiently. department deals with online filing of returns of
income tax department and finalize audit reports in proper format in [\presentable
manner.

Correspondence department:
In handles which the correspondence of the firm by sending the
solicited and unsolicited in inform time to time effectively and efficiently manage the
day by day operation of of the correspondence intract with clients to resolve policy and
customer issues.
HR department:

This department is mainly concerned with the recruitment hiring firing of

the firm and this department presents the timely report on effective utilization of the
resource by the firm a purpose of human resources is to keep trained employees and
recruit the new energetic staff to work and other purpose providing the good working
environment to the organization and try to make by facilitating them and arranging
some recreational activities for them

SERVICES OFFRING
 Company registration
 LLP Registration
 GST Registration
 Project Financing
 ROC FILLING
 TDS Return
 Income TAX(Salaried)
 Income tax (business)
 Tally Accounts
 Tax audit
 Internal Audits

CHAPTER 2

LITERATURE REVIEW
 LITERATURE REVIEW

The dream of ‘One country-One tax’ and India becoming an integrated market from an
indirect tax perspective has come into force from 1st July, 2017. The Constitution of
India’s 101st Amendment Act 2016 – has come into force on 8th September, and
notification of the GST Council on 15th September – the road to GST rollout is clear.
Government is keen on introducing GST- the biggest indirect tax reform. One of the
biggest challenges is to train the indirect tax officials of both Centre and State, as well
as the traders. This study assesses the level of GST acceptance, awareness, and
particularly the level of filing of returns and reasons for not filing of returns in time
under GST among the traders. The data for the study were collected by means of
structured questionnaires with the sample of respondents. The findings from the study
showed that there are various technical, administrative, issue which are resulting in late
filing or not filing of GST returns to department. Government should provide sufficient
information pertaining to GST such as the benefits of GST, the mechanism of charging,
collection, training to traders regarding filing and assessment and others. s. Educating
traders on GST matters that could involve a training sessions Q&A meeting with
traders by department to traders in short run and integration of tax education into the
curriculum of education in our institutions of higher learning and organized work- shops
for specific groups. . The results, however, could not be generalized to all traders in
India since the study was conducted in limited jurisdiction
i.e. GSTO-40,
 CHAPTER = 3
RESEARCH METHODOLOGY
Scope of the project:

 This project helps in knowing the reasons for non-filing of returns by the
Traders
 This project helps is assessing the Traders’ perception towards GST
 This project helps the department to know where the gap is growing and the
reasons for such gap in filing returns under GST
.
Objectives of the Project:

1. To study the level of GST awareness among Taxpayers

2. To study the level of returns filing knowledge of Traders/Taxpayers registered under
GST
3. To study in-depth understanding of the new GST Law
4. To know the awareness of the process of filing of returns under GST
5. To identify the issues, problems, grievances faced by the Traders/Taxpayers
registered under GST
6. To identify the reasons for not filing returns
7. To know the reasons for not filing returns on time by GST registration

Research methodology
A research methodology is an outline of how a given piece of
research is carried out. It defines the techniques or procedures that are used to identify
and analyse information regarding a specific research topic
Research Design:
The following research techniques are used in this study: -

Exploratory Research:

Exploratory research has a goal of formulating problems more precisely, clarifying

concepts gathering explanations, gaining insights, eliminating impractical ideas, and
forming hypothesis. It provides insights and comprehensions of the issue or situation.
The initial phase of the project demanded an exploratory research to capture,
understand, interpret and apply the concepts and skills relating to basics of GST and
return filing process of GST and technical implications. This exploratory study helped
in conducting survey in a smooth and healthy way and guided in framing the finding
and suggestions besides drafting the conclusions.

Descriptive Research:

Descriptive research defines questions and finds answers to these questions using
statistical techniques on data gathered. The following null hypothesis has been tested
using collected data:
1. Traders registered under GST have no issues and problems while filing returns to the
department

2. There are no difficulties to the Traders to not file returns in time

Tools of the Study:

conducted to collect data from tax officers dealing with the
responsibility of tax collection in tax department. Survey and observative were
conducted to collect data from registered Traders under GST. A questionnaire was
framed to extract the grievances affecting the Traders to not filing of returns in time.
Sample of the Study:

The sample techniques used for this study is stratified sampling.

Stratified sampling is used where population embraces a number of distinct categories
and the frame can be organised by these categories into separate “strata”. Each stratum
is then opened as an independent subpopulation, out of which, individual elements can
be randomly selected. The targeted audience or respondents, selected for this study, are
the GST-registered Traders or services providers eligible to file returns but not doing so.
The study is conducted on 100 registered Traders under the gst
Questionnaire:
The questionnaire was designed for the targeted audience to extract the
reasons, issues, problems which were reflecting in late filing or non-filing of returns. To
begin with, the exhaustive list of questions were prepared according to expert advices
and some statistical data. The segmentation of questions were made according to the
targeted issues and grievances, and their similarity. These questions were divided into
five groups according to their symmetrical issues starting with general and GST
awareness and ends with segregating the issues into technical, administrative and
monetary issues for non-filing of returns in time. The questionnaire consists of both
open-ended and close-ended questions. The openended questions were asked to gather
the particular issues and problems faced by each trader and close-ended questions were
included to gather data to find out the most commonly-faced problems and issues by
Traders and finding ways to resolve them. According to experiences faced in the
primary phase of the survey, there are some questions which are added and some which
are modified according to the primary responses. The questionnaire also had an
opinionnaire section that was used to capture the degree of agreement on the following
aspects:
1. Awareness on goods and service tax
2. Filing process awareness in GST (GST-returns filing knowledge

Collection of Research Data:

questionnaire was administrated by approaching the Traders at their
work place and by asking them to fill up after explaining them the objectives, purpose
and scope of the survey. In some cases, responses through digital platforms, such as e-
mail, messenger, etc., were also used to collect the data pertaining and binding to the
situations
LIMITATION OF PROJECT
a. Time is the main constraint for the project to do a complete study - the project
was assigned to be completed in two months
b. Since the targeted respondent were technically and educationally poor in
majority of the cases, there may be a deviation in project result and actual
scenario by up to 10 to 20%
c. As many of the respondents were depending upon the consultants, auditors and
third parties, the responses given by them may not be accurate in some of the
cases
 CHAPTER = 4
DATA ANALYSIS

Field-level Analysis:
The questionnaire was divided in to three sections.
The Sections represented dimensions for the current research. The research examines
the associations and inter-relations between the moderating variables defining the
dimensions.

The following are the different phases of questionnaire:-

Section-1 Turnover information and tax liability
Mode of Transactions

Section-2 General GST awareness

GST awareness on filing of returns

Section-3 Technical issues related to GST-returns filing

Administrative issues related to GST-returns filings

QUESTIONNAIRE
The questionnaire used for eliciting responses was divided into
three sections, where the first section involved analysing the tax eligibility and
liability of respondents, mode of transaction. The second section is the key and most
crucial to analyse the GST awareness among Traders and GST-filing awareness and
their comparison. The third section is more productive and highlight the areas of
problems and grievances faced by the respondents and also gives the necessary

information about the pulse and perception towards the GST-filing system.
 OWNWERSHIP STYLE RESPONSES TO THE NATURE OF

OWNERSHIP STYLE RESPONSES

OWNER’S 63

LESSESE’S 2

FRANCHISEES 5

TOTAL 70

It is evident from the above table that 90% of the non-filers of GST returns are owners
of business while 7% are Franchisees and remaining 3% are lessees. This categorisation
was primarily considered to examine if the antecedents influencing the non-filing of
GST returns is same or different across groups.
Duration of the Business:
The below table shows the for the duration of the business (ie, the age of the business
which they are running.

DURATION OF BUSINESS RESPONSES

Less Than 3 Year 2

5 TO Year 4

More than 10 Year 21

TOTAL 70

The below graph shows the percentage representation of respondents’ duration of

business, were 61% of respondents have been running their business from more than 10
years, 30% of respondents were running their business for 5 to 10 years, 6% of them
between 3 to 5 years and 3% have started business less than 3 years, after which GST
came into exist

DURATION OF BUSINESS
LESS THAN 3 YEAR 5 TO 10 YEAR
2% 4%

MORE THAN 10
YEAR
22%

TOTAL
72%
The above graph shows that 61% of respondents were running their business for more
than 10 years, 30% of respondents business tenure is 5-10 years, 6% of respondents
business is between 3-5 years and remaining 3% business were started recently after
which GST regime came into being. In majority of the cases, the Traders were running
their business even before GST regime, which shows that the majority registrations for
GSTN is from various earlier tax regime such as service tax, VAT, entertainment tax,
etc.

Liable for paying Tax:

The following table shows the number of people liable for paying tax under GST which
can be known by their turnover, the table shows the total number of respondents and
their turnover per annum.

ANNUAL TURNOVER RESPONSES

LESS THAN 20 LAKH 2
1.5 TO CRORE 50
MORE THAN 5 CROR 7
MORE THAN 5CRORE 11
TOTAL 70

The below graph explains the respondent’s eligibility to pay tax under GST on the basis
of their annual turnover. As we can see, only

3% of the respondents were not eligible to pay taxes as their turnover is less than Rs 20
lakh, which is the exemption limit provided, 71% of respondents were falling under
turnover of Rs 20 lakh to Rs 1.5 crore, which is generally consisting of Traders who
opted for the composite scheme of filing returns paying taxes, 10% of the respondents’
turnover is between Rs 1.5 crores to Rs 5 crores and 16% of the respondents have their
turnat over Rs 5 crores.
The above graph shows that 71% of respondents’ actual turnover were between Rs 20
lakh to Rs 1.5 crore, 10% of the respondents’ annual turnover is Rs 1.5 crore to Rs 5
crore, and 16% of respondents’ annual turnover is more than Rs 5 crore, and 3% of
respondents’ turnover is less than Rs 20 lakh. By the above graph it is understood that
majority of the respondents’ annual turnover was between Rs 20 lakhs to 1.5 crore
which represents that they may be in composition scheme of filing returns quarterly.

Registrations under VAT/S service Tax:

The following table shows the earlier registrations of Traders under VAT/Service Tax
who were now registered under GST. It merely shows from where GST registrations
were flown from.

PAST REGISTRATION RESPONDENTS

Value added tax 45

Both 4

Not registered 5

Service Tax 16
TOTAL 70
The following is the graphical representation of the above mentioned details of earlier
registration where 45 members were registered under VAT, 16 members under ST, 4
members under both and 5 members were not registered under any of them (i.e. they are
newly-added to the tax regime under GST).

The above graph shows that out of 70 respondents, who have registered for GSTN,
their earlier registration under indirect tax is as follows: 16 respondents migrated from
Service Tax, 45 respondents migrated from VAT, 4 respondents were registered under
both VAT and Service Tax and 5 respondents were newly-registered for GSTN.

By this it was understood that 90% of respondents were paying indirect taxes earlier
were as very few were recently added to GST regime (among 5 respondents all are
having textile business such as garment store, readymade cloth stores etc.,)

Mode of Transactions:
 The following table shows the mode of transactions made by the Traders while
conducting inward and outward supplies in their businesses

MODE OF TRANSACTION INWARD SUPPLY OUTWARD

SUPPLY
The
CASH 12 8
CERIDT 1
BOTH 57 62
TOTAL 70 70

following is the graphical representation of above shown table. It shows that a majority
of Traders was doing business both ways (i.e. cash and credit)

Such respondents, who were doing the transactions both ways, were further divided
into cash and credit proportionately which is shown in below pie diagram that concludes
that respondents were majorly depending upon credit basis of transactions

Cash-credit ratio:
The important issues which are resulting in non- filing of returns under GST is credit
transactions. The taxpayers are highly depending upon credit mode of transaction which
is adversely affecting their cash reserve. The commonly observed response for non-
filing of return is lack of funds. This is because the taxpayers were depending highly on
credit transactions in which they will not receive payment up to a certain period whereas
they have already paid the amount for such transactions while making purchases. This
results in out of funds which is common reply given when asked reasons for non-filing
of GST returns. From executing the survey it is orally asked and observed that the
taxpayers, who opted for both in mode of transactions 60% of which is again made
under credit only 40% of them were in cash

Sashidhar Jagdishan, CFO, HDFC Bank Limited:

The progress of the GST is like building of a flyover in a city. A lot of traffic jam when
it is being built, but once built, it is as sweet as jam”
GST Awareness:

The following is the table which shows about the awareness of the respondents towards
GST which is calculated on a scale of three variables
1. Aware
2. Partly aware
3. Not aware.

This table is a group of five questions which shows one’s knowledge about GST-
namely:-
1.Awareness
2.Concept 3.Complainces
4. Product Categorisation
5. Input Tax Credit (ITC).

The above shown table is represented graphically in the below bar chart where we can
see that the majority of the responses if they were aware of GST.
GST AWARE PARTLY NOT TOTAL
AWARENESS AWARE AWARE
Awareness 41 24 5 70
Concept 40 16 14 70
Compliances 41 21 8 70

Product 40 21 9 70
Categorization
Complains on 40 18 12 70
ITC
The above graph shows the awareness level of basic GST among the respondents. We
can see that around 40 of the respondents has answered that they were aware of the
basics of GST, wereas around 21 respondents answered that they are partly aware and
around 10 members answered that they are not at all aware of the basics of GST. We
can conclude that the overall awareness on basics of GST is moderately high in the
market.

GSu8T “E-filing-returns” Awareness:

The following is the table which shows about the GST “E-filing-returns” awareness of
the respondents towards GST which is calculated on a scale of three variables 1.Aware
2. Partly aware 3. Not aware. In the below graph we can see that majority (49
respondents) were not aware of GST E-filing of returns, 17 respondents were partly
aware and 4 respondents were not aware. The below table shows the returns filing
knowledge of the respondents:-

SALE GST RETURNS

FILING
KNOWLEDGE
AWARE 4

PARTLY AWARE 7

NOT AWARE 49
TOTAL 70
The above table was plotted graphically to observe the various levels of knowledge in
returns filing by the respondents and it is shown below

This is the most important aspect and this is the reason why the non-filers were not
filing the returns in time. This is about the knowledge level of filing of returns under
GST. The above graph shows that 49 respondents were not aware of GST returns filing
system were as the same equivalent number of respondents answered that there are
aware of GST basics in the earlier graph
TECHNICAL ISSUE YES NO TOTAL

Lack of Technical 60 10 70
Skill

Online Portal 59 11 70

Offline portal 56 14 70

Unable to 33 37 70
upload files

Json Format 22 48 70

Excel error 20 50 70

Not 39 27 70
Receiving
confirmation
Uploading in 20 50 70
wrong portal

Waiting for 27 43 70
GST 3Bto be

Generated

Unable to 57 13 70
modify entries

Absence 57 13 70
of complaint portal

Lack of skilled 49 21 70
labour

Confusion in option 13 57 70
in server
Tax 14 56 70
profile difficulties
The above mention table consist of responses of 70 respondents when they were asked
about the various technical issues faced by them while filing the return under GST and
the issues were recognised by the field-level observation and suggestion given by the
commercial tax department were taken into consideration. Out of 18 issues, which were
taken into notice by respondents, it has been observed that a majority of the respondent
raised their concern in the following issues:
1. Lack of technical skills
2. Server synchronisation
3. No option to revise entries, and other issues.
The above mentioned responses for various questions, which were related to technical
issues, were shown graphically in the following bar diagram.
In the above graph we can see that the majority of respondents were having problems in
the cases of
1. Sever synchronisation
2. Modification of entries
3. Complaint portal, which shows that the maintenance and capacity of portals/servers
were very poor, and this is the one of the major reasons for delay in filing returns in
time
Administrative Issues related with GST-Returns Filings:
The following tables shows the various Administrative issues based on the
questionnaire which were the suggested/top-rated issues/problem referred from
Commercial Tax Officer’s and Field officers in GST the department.

ADMINISTRATIVE YES NO TOTAL

ISSU

LACK OF FUNDS 66 4 70

NOTIME FOR 39 31 70
FILING

BACKING UP 57 13 70
INVOICES

GENERATING 17 53 70
OUTWARD
INVOICES

GENRATING 30 40 70
INWARD INVOICES
MUTIPLE RATE OF 32 38 70
TAX
CATEGORISATION 19 51 70
OF GOODS

From the above table it may be observed that 70 respondents questioned about the
Administrative issues affecting them while filing the returns under GST. The issues
were recognised based on the field-level observations and suggestions given by the
commercial tax department. Out of 7 issues, which were taken notice by respondents, it
has been observed that a majority of the them expressed concern regarding the issues
shown graphically in the following bar diagram.
In the above graph we can see that the response rate for the issues in perspective is as
follows: Lack of funds (95%), Backing up of invoices (82%) followed by lack of time
for filing (55%), Multiple rate of taxes (45%), Generating inward invoices (42%),
Outward invoices (24%), Categorisation of goods (27%) with lack of funds being the
majorly reported issues

Monetary Issues related with GST-Returns Fill

The following table shows the various monetary issues affecting non-filers of GST
returns. The tabulated issues were the suggested/top-rated issues/problems referred by
the Commercial Tax Officers and Field officers in GST department.

The above table consist of responses from 70 respondents regarding the monetary issues

MONETARY YES NO TOTAL faced

by ISSUE them
while
Refunds receivable 2 68 70 filing
From department

Tax refunds in 2 68 70
process

Waiting for in 59 68 70
process

Insufficiency of 65 68 70
funds

Difference between 48 68 70
payment and
collection

Difficulties in 36 68 70
payment
returns under GST and the issues were recognised by the field-level observation and
suggestion given by the commercial tax department. F of 7 issues, which were taken
into notice of respondents, it has been observed that a majority of the respondents
indicated their concern regarding the issues demonstrated graphically below on a bar
diagram.

In the above graph we can see that a majority of respondents are facing major problem
in the case of Insufficiency of funds (93%). The response rate for other issues are as
follows: Waiting for Input Tax Credit (84%), Time gap between GST paid and ITC
received (69%), difficulties of payments (51%), tax refunds in process (2 to 3%), and
refunds receivable from department (2 to 3%).

Arvind Subramanian, Chief Economic Advisor

They are either overly centralised, depriving the sub-federal levels of fiscal autonomy
(Australia, Germany, and Austria); or where there is a dual structure, they are either
administered independently creating too many differences in tax rates that weaken
compliance and make interstate transactions difficult to tax (Brazil, Russia and
Argentina); or administered with a modicum
of coordination, which minimises these disadvantages (Canada and India today) but
does not do away with them.”

CHAPTER = 5
FINDINGS AND SUGGESTIONS
Findings:-
 No option for changing Profiles:
The most important issue with the Traders, as well as department, is
that there is no option provided in the GST portal to edit the taxpayers’ profile details
such as change in address of the business etc.

 Poor capacity of Server:

The major and common problem noticed in every non-filer of returns
under GST is server hanging and poorly-maintained server. The server is not maintained
as per the online traffic to the site. There are no detailed guidelines given to circumvent
various technical errors faced while filing the returns, further slowing down the process.

 Time difference between GST-paid and GST-collected:

The main problem with GST returns non-filer’s is insufficiency of
funds to pay tax liability which is reflecting on not filing of returns, this is because of
the difference or lapse of time for GST amount collected whereas, the Traders usually
will pay the amount earlier while making purchases or inward supplies. There is huge
challenge in setting off liability. If there is any mismatch in the amount of set-off or
even punctuation errors, the system shows an error. This delays the process of input
credit set-offs.
  Credit transactions affecting badly on not filing of Returns:
The main problem with Traders leading to non-filing of returns in time is
due to inadequacy of funds to pay tax liability which is adversely affected by the credit
sales.

 Heavy files uploading:

It is difficult to upload heavy files on the GSTN portal. For
instance, the system is not accepting JSON file with more than 5 MB; and an aggregate
turnover involving more than 11 digits.

 Software cost and others:

The survey respondents have highlighted that cost of compliance
under GST has increased in terms of increase in number of registrations, number and
types of returns, and maintenance of state-wise books. They also emphasised that in
comparison with the previous tax 54 regime, additional compliance costs have been
incurred under GST regime for software upgradation and engaging professionals from
the fields of accounting, tax and software.

 Product Categorisation:
In certain cases, there are multiple rates of tax for a single HSN / SAC code
and the process of determining correct classification becomes very time-consuming and
difficult. Often, different HSN codes are being used by different suppliers for the same
goods and also there is a mismatch between buyers and dealers. This often leads to
conflict on applicable rate and also loss

Suggestions

 Empowering Traders:
The main and foremost problem with traders is their perception of
GST as a costly affair. This is because of charges collected by the service providers,
such as, consultancies, auditors and third parties, who are filing returns on behalf of
registered Traders. This can be solved by empowering Traders with the skills of filing
returns by conducting training sessions to them or to any of his family members who is
educated or having basic knowledge.

 Boosting Digital Transactions:

56 Boosting digital transaction will reduce the problems of time gap
between tax paid and collected, for this, eradication of charges levied on POS machines
and online transfer is to be made. This will not only help the Traders but also
digitalisation through increased digital transactions.

 GST Application Software:

Introducing GST application software, where the GSt registrants can file
their returns through mobile, will helps the Traders to self-assess and self-file their
returns, which indirectly reduces their cost and increases faith on GST system.

 Increasing the Cloud and Server Maintenance:

As the GST is applicable to almost all type of business transactions,
including government and non-government, the inflow to the website will be very high
and there should be an equivalent cloud capacity and server maintenance.

 On-field assistance to problematic Traders at the time filing

returns:
On the crucial dates of filing of returns under GST, physical assistance is
to be given to small and medium Traders for the initial period of time

 Increasing the penalty charges:

As the penalty charges levied are lesser amounts, which is
influencing the delay in returns filing, the law has to be made strict and the penalty and
counter charges should be increased to greater extent.
  Binding the dates and taking necessary actions:
The practice of extending dates for filing returns is to be stopped
and serious actions taken for not filing returns in time.

 Lower number of filings:

Due to the issues being faced with monthly filing of GST returns,
respondents have suggested that returns need to be filed on quarterly /half yearly basis.
The number of returns in a year should be reduced to a consolidated lower number.

Conclusion
 Indian businesses have to comply with multiple taxations systems at the intra-state,
inter-state and central level like excise, sales tax, service tax, entertainment tax, VAT
etc. These clusters of taxes have significant cascading effect and are complex to
decipher for both. From a 57 businessman’s perspective he/she is not confident to
commit deliveries and prices because of uncertainties. From a consumer perspective, it
is difficult to fathom the impact of the same and always suspect dubious manipulations.
Introduction of GST aims to alleviate, though not all, many of the problems leading to
efficiency in operations for individuals leading to economic growth of the country.
It also enables businesses to improve their international competitiveness. GST Act came
into existence, leading to the realisation of “One country, one tax”. It is a centralised
tax-paying network which simplifies payment of tax by the citizens as well as revenue
collection by the government
. It widens the tax base. However the success of the GST system mainly depends on its
effective implementation by the Traders and Taxpayers who register under GST and file
returns.
Ground realities are different and during implementation lot of glitches are observed
during the project and observed that a majority of the taxpayers was not able to migrate
from their manual system of filing returns to E-filing system. Important factors
attributable are their educational knowledge, lack of computer skills, and inadequate
support at the grass roots levels in the government. These have been raised and
discussed in this report earlier.
It was also observed, during my personal interaction with tax department employs
during the project, that they are very much influenced by 
a) Past perceptions
b) Illusions of complexity
c) Wrong belief of threats

However, they are not observed in the new tax system.

By this I would like to conclude that it’s time for the tax department to change their
focus from ‘Spreading awareness on GST’ to ‘Gaining trust of Traders/taxpayers’ by
empowering and educating them by showing “How simple GST is?”. GST
implementation can be made successful only by citizen’s trust. The trust has to be
gained by action. (Initial costs of equipment and consultancy fee.)

In the process of collecting data, it has been observed that the main reason for the lag
in implementation is the cost/expenses that were incurred by them additionally, such as
computer, equipment, consultancy fees, etc. On an average, the minimum amount
charged by a consultant for filing GST returns to the traders is Rs 4,000, which is
substantial for many. The Auditors, Consultants, Third parties were exploiting the
opportunity by 58 confusing the traders and charging them huge amount. However, it
can be seen that the government has designed GST filing system in such a way that a
person with minimum computer knowledge can file the returns without any problem.
This fact has to be promoted and the traders educated on filing returns so that the middle
men between government and taxpayers are eliminated and the tax returns filing process
is transparent and easy.
 CHAPTER
BIBLIOGRAPHY
BIBLIOGRAPHY

 https://www.businesstoday.in/current/economy-politics/why-many-registered-
taxpayers-are-nofiling-GST-returns/story/271554.h

 Department, E. (2018, July 17). Education Department. Retrieved from

www.kareducation.com
/economictimes.indiatimes.com/articleshow/63232433.cms?
utm_source=contentofinterest
 https://economictimes.indiatimes.com/news/economy/policy/over-68000-
companies-registeredin-8-months-post-gst-union-minister/articleshow/
63430894.cms
 https://tutorial.gst.gov.in/userguide/returns/
index.htm#t=Creation_of_Outward_Supplies https://gst.caknowledge.com/list-
of-all-sections-of-gst
 https://www.reachaccountant.com/erp-software-pos-software-blog/gst-
compliance
 QUESTIONNAIRE

Antecedents and Implications of Non-Filing of GST Returns”

1. Duration of the business?

☐Less than 3years ☐3 to 5 years
2. ☐5 to 10 years ☐More than 10 years

3. Eligible for paying tax:-

☐Yes ☐No

4. What is the annual turnover of the business?

☐Less than 20lakhs ☐20 lakhs – 1.5crore
☐1.5 to 5crores ☐More than 5crores

5. What is the annual turnover of the business?

☐Less than 20lakhs ☐20 lakhs – 1.5crore
☐1.5 to 5crores ☐More than 5cf registered

6. Mention GSTIN
7. Did/Do you face any issues/problems while registering the GST?
☐ Yes ☐No
8. Is your firm/ shop/establishment subject to Audit u/s:-44 of GST
Act? ☐Yes ☐No

Awareness of GST:

9. Awareness on goods and service tax (GST)?

 ☐Aware ☐Partly aware ☐Not aware

10.Are you aware of the compliance requirements of goods and service

tax (GST) in terms of Supply turnover?

☐Aware ☐Partly aware ☐Not aware

11.Mode of Outward supply made

☐Cash ☐Credit ☐Both

The following questions are only for TRADERS Not filing returns under
GST:- TECHNICAL ISSUES
Any other ADMINISTRATIVE ISSUES that you are facing:-

11.Are you facing any issues regarding multi-applicable tax rates?

☐Yes ☐No

12.Are you facing any issues such as different rate of tax in different
locations That you are operating?
☐Yes ☐No

13.Are you facing any issue regarding categorisation of goods/services

that you are operating?
☐Yes ☐No