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Highway spanner

1 min read . Updated: 05 Oct 2021, 10:51 PM IST Livemint

While permission for road, rail and other movements can be denied to enforce return-filing, it also involves a spanner thrown in business operations of a kind that other GST assessees do not suffer

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A tax-enforcement mechanism that blocks the generation of e-way bills needed to transport goods in India by those who don’t file their GST returns has been reactivated. It was suspended during the pandemic, when widespread restrictions had made compliance difficult. But now that India’s economy is on the go again, this tool has been brought back into force.

The reactivation was done by the GST Network, a digital system that matches data from buyers and sellers to reconcile transactions. Buyers of raw materials, for example, can’t claim input credits until their vendors file their GST returns. Barring the errant from moving goods, as the explanation goes, should compel them to comply and not deprive other taxpayers of input credits. Yet, the harshness of the system deserves a closer look. While permission for road, rail and other movements can be denied to enforce return-filing, it also involves a spanner thrown in business operations of a kind that other GST assessees do not suffer. But what if technological advances allow this tactic to be extended? Imagine vital work software going on the blink for a missed GST filing. The ease of doing business would be hit hard.