STANLY JAMES, FCA
GST Law introduced in India w.e.f. 1 st July 2017. The preliminary slogan was one nation one tax. Subsequently it has been changed to one nation seven different tax. During this period more than 1000 Notifications, Circulars, clarifications issued under GST Law. Subsequently, e invoicing compulsorily implemented for tax payer having turnover more than Rs.500 crs which has been subsequently reduced to 10crs. This limit is again reduced to Rs.5 crs from the ensuing year preferably by January 2023 onwards. Now manufactures, traders and the industries struggling with numerous practical issues and also not able to manage the complex filing of returns. Filing of return subsequently ended up with mismatching between Form 2A, 2B & 3B etc for which continuously notices issuing from GST Authorities. Generation of e way bill for which also several changes and amendments introduced regularly. In the case of builders there is no provision to avail ITC which has rightly eligible during the pre GST period of Service Tax and VAT. Now there is only two rates namely for affordable residential unit 1% and others @ 5%. There was a compounding method of filing the return during the pre GST period which is no more valid now. The end result is that builders who procure cement etc., with 28% of GST on which they are not entitled to avail such input tax credit. Their liability also of the same principle of either 1% or 5%. In short all the purchases of raw material including such GST is embedded in the cost of the finished product meaning there by sq.ft rate of the flat increased. Government is not considering any attempt to interfere this issue of considering a compounding method & regular method. (Compounding method without ITC & Regular method with ITC). At present there is no such option as such seen which was very much helpful to the segment of builders of choosing an option as below:
1. Remitting GST liability at 1% or 5% without ITC. or
2. Charging GST 18% for which tax payers are entitled to avail all the related ITC accordingly. In short MSME, Small Scale Industry etc paralyzed and moving towards a tragedy. Even for a dealer having turnover below 5 crs has to comply with all the formalities by filing various type of returns and also to answer enormous questions issued to such dealers through GST portal. The one of the quite tragic situation to the tax payers is that still there is no provision to revise a monthly return. In the case of Advance Ruling also I may like to conceal the fact that for the same subject matter different States in India issuing difference opinion or clarification u/s 96 of SGST Act. This also resulted in wrong interpretation of GST rate for which also there is no uniform decision to obtain a common consences among the different States. During 2017 for availing ITC tax payers need to comply with conditions which has been subsequently enhanced to five conditions and now running such vehicle after satisfying six conditions. If a return for a single month not file the portal will automatically block filing of subsequent months. There is no breathing time giving to the dealers in such situations. Similarly, in the case of audit, investigation, assessment etc., for which scrutiny notices issued from Central GST and State GST to the same tax payers. It is evident that in the case of verification if Tran – 1 the migration period of GST there was confusion in filing such forms. However, subsequently even if the filing belongs Central CGST, officers dispatching such file to State GST officers to verify the accuracy of closing stock. It is pertinent to say that even after five years why this officers issuing such notices.
3. Coming to delay in filing returns in addition to levy of penalty, interest @ 18% is applicable. However, during the initial period of 4 years the software of GST Department not made sufficient updation so that interest portion was not reflected properly in the case of filing returns at delay. Now only this interest is reflecting in the GST portal in addition to penalty amount. It is not the failure on the part of tax payer for the above delay and many of the tax payers not paid interest while submitting the returns under delay. Please take notice that the same matter in which there is a refund eligible to the tax payers to dealers on which tax @ 6% only eligible for such refund. During the Covid Pantemic only one small relief granted to the business group was amnesty scheme issued during 2021. Here also there was only a reduction in the late fee while delay in filing monthly/quarterly returns Government not touched upon the cancellation of reduction of interest for such delay.
4. I would like to invite you all the above burning issues on the ground that there is an urgent need to declare Amnesty scheme GST for arrears. Accordingly, there shall be waiver of interest and penalty to the tax payers at least for initial 2/3 years from the commencement of GST. Public is well aware of the fact while introducing GST there was strong confirmation and clarity on the subject that there will not be any harassment and it was a dealer friendly law and for minor mistake for eg: in the generation of e way bill, filing of returns mismatch of 2A,2B with 3B, wrong availement of GST between SGST,CGST & IGST will be dropped. The Government of India after giving all such special offers and now ignored such promises. Similarly, if the purchasing dealer not remitted the consideration against purchases of goods /services within a period of 180 days such dealer has to reverse ITC along with interest.
5. It is very upset now to the tax payers that after a period of 5 years and officers issuing various notices stating the difference in the availment of ITC, wrong utilization, reverse of tax along with interest. Normally, the duration for the assessment period was five years (period of limitation) now extended one more year for the assessment of financial year 2017-18 .
This is a serious issue since the Government also giving direction how to do the business and penetrates into the secrecy of such traders.
Similarly, no ITC for availing purchases of goods or services resulting to an immovable property and motor vehicle owned by Managing Director, Managing Partner of company and firm accordingly. Still in the construction of factory, warehouse etc constructed for the furtherance of business tax payers is banned from such availment of ITC on the connected purchases.
6. In this circumstances it is the necessary of the business group in India to have an Amnesty Scheme at the earliest considering the various issued explained as above.