Tax Concept’s Letter to Hon’ble Prime Minister for Serious Issues Regarding GST

Tax Concept’s Letter to Hon’ble Prime Minister for Serious Issues Regarding GST

Date : 11.10.2020

Ref.: TC/20-21/1


Hon’ble Prime Minister,

Government of India,

New Delhi

Subject : To attract your kind attention on Serious Issues regarding GST

Hon’ble Sir,

GST was introduced in India to simplify the Indirect Tax Structure and to promote Ease of Doing Business. Indian business houses appreciated you for this step and had a lot of expectations from GST. GST was a new initiative of Indirect Tax Reforms.

Government said in 2017 that Indirect Tax structure is very complicated and this needs reforms. But today’s time of GST is saying that GST has made Indirect Tax structure more complicated due to several reasons.

We are here explaining those problems which businesses and professionals are facing due to wrong implementation of GST :

(1.) No opportunity to correct the mistakes committed in regular GST returns :

A lot of problems in GST are due to the reason that the government has not provided any opportunity to correct the mistakes which were committed by the businesses during filing of regular GST returns like GSTR-3B etc.

In previous Indirect Taxation system, there was opportunity to amend the returns filed and even Income Tax Department is also providing opportunity to correct the mistakes by amending filed returns. But why there is no option to amend filed returns in GST? You may note that without correcting GST returns, even annual return can not help tax authorities and all assessment will be done by issuing a lot of notices and this will be against the policy of Ease of Doing Business.

Some taxpayers paid GST tax under wrong head or some claimed GST under wrong head. However GST tax has been reached to government but either they have to reverse or to paid tax with interest because they have not any opportunity to amend the GST returns.

So your good self are kindly requested to provide an opportunity to amend the GST returns with retrospective effect.

(2.) Is GST for collecting Late Fees only?

GST was a new tax system for Indian business houses and professionals, so it is implied that they required some time to read and understand it. But in GST, late fees for late filing of GST returns is huge from starting, so businesses faced and facing huge GST late fees burden. Even late fees is more than tax liability in some cases.

Sometimes the delay in filing GST returns is due to that GSTN portal is not working effectively specially on last dates but the GSTN has not accepted the fact that the portal is committing mistakes and not working effectively. We are attaching screenshots of GSTN portal to let you know about some mistakes which GSTN has not corrected till date :

Due date for quarterly GSTR-1 is “the last day of month succeeding the month ending quarter” but for the quarter July- September, 2020, GST portal is showing due date as 11.10.2020 whereas actual due date of the same is 31.10.2020.

(3.) Notifying rules which are overriding GST Act and even Indian Constitution :

Vide Notification No. 49/2019- Central Tax (09.10.2019) CBIC has inserted new rule 36(4) under the CGST Rules, 2017 and capped the maximum ITC to 120% of invoices uploaded by supplier in his GSTR-1 which was reduced to 110% in 38th GST council meeting held on 18.12.2019.

If we refer the CGST Act, 2017, we can understand that the power to insert Rule 36(4) is coming from Section 43A of the CGST Act, 2017 and the said section is not notified till date. So if the section of any act is not notified then how the rule is notified and implemented? This is against the Article 265 of the Indian Constitution which says that “Rules and Circulars can not override Act”.

The question is that why our lawmakers are not following the law? Please look into this and direct them to notify rules etc. which have a legal validity.

(4.) Restriction on Claiming Input Tax Credit (ITC) :

Due to technical mistakes of taxpayers they have not claimed the ITC of previous years but Section 16(4) of the CGST Act, 2017 is restricting them to avail the said ITC whereas the seller who sold goods to them has paid the tax to government. So when the government has received the tax paid by buyer to seller then why the buyer is not allowed to take ITC of the same? This will result in double taxation.

Hon’ble sir, by mentioning these issues, our team has tried to attract your kind attention on some serious matters of GST.

So your good self are kindly requested to look into these matters and to provide solutions for the same.

Thanking You

Yours Faithfully,

Team Tax Concept

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