New Delhi, May 24 (PTI) - Implementing GST from July 1 will be a challenge for the industry and the government should consider relaxing penal provisions for a couple of quarters to help it comply with the new tax regime, Assocham said today.

The government is working overtime to roll out the goods and services tax regime from July 1 and has held several workshops and seminars to familiarise traders and the industry about the new indirect taxation structure.

"Implementing GST from July 1 will definitely be a challenge for the industry... there could be people making genuine mistakes. I would say the department should be softer in the first quarter or two because it is going to be a learning process," Assocham President Sandeep Jajodia told PTI in an interview.

He sought relaxation on imposition of penal provisions for at least a quarter or two, if not the whole year.

The GST law provides for as many as 21 kinds of penalties for various offences. Short payment will attract a penalty of 10 per cent of the tax due subject to a minimum of ₹ 10,000.

For various other errors, the penalty would be 10 per cent of the tax due.

On the impact of GST on the steel sector, Jajodia, also the CMD of Monnet Ispat and Energy Limited, said: "I don't think there will be much (difference). There are no negatives at all for sure and there could be some positives because the raw material pricing, ores and coal have come down."

However, the Assocham president said GST will provide a huge fillip to the industry in the medium to long term as the tax compliance at present is "quite tedious".

Relaxation of penal provisions urged to ease GST roll-out, allowing grace for initial compliance learning period. Implementation of GST from July 1 will create compliance challenges, and industry urges temporary moderation in enforcement of penal provisions during initial quarters to accommodate a learning period. The GST law establishes multiple penalties, including those tied to short payment and other errors, and stakeholders recommend phased enforcement or targeted relief to smooth transition while preserving the long-term benefits of the new indirect tax structure.