Four years since the GST reforms were implemented, there is a growing clamor for a comprehensive review of the tax regime to potentially avoid protracted litigation, rigorous exposures in the form of interest and penalties. In an interview, Saket Patawari, executive director – Indirect Tax, Nexdigm, an independent global corporate advisory firm lists the key areas. Edited excerpts.
Last four years have been a roller coaster ride for the government machinery, GSTN and the taxpayers. While a lot has settled now in terms of compliance mechanism and GSTN, however, from a law point of view it is still at a very nascent stage. There are several issues bothering the industry and it will take a while to have things settled. Over the course of four years, various issues/lacunae have come to light in the GST legislation. One such issue faced by the outsourcing industry has been spooked by the extremely wide interpretation of the term ‘Intermediary’ whereby even services provided on principal-to-principal basis to foreign recipients, which otherwise are exports are sought to be taxed by revenue authorities and rejection of export refunds. While the CBIC has tried to allay some of the industry concerns by issuing a clarification on the scope of ‘intermediary’, there still exists several areas / scenarios which remain open for interpretation.