ALL ODISHA TAX ADVOCATES ASSOCIATION (AOTAA)
Regd No : 270/7202000078 of 2020-21
Address : Link Road, Near Prime Hospital, Cuttack – 753012, Odisha, India
Contact No : +91 8908700000, Email :/[email protected]
Web : www.odishataxadvocates.in
Date: 28/01/2022
To
Smt. Nirmala Sitharaman,
Hon’ble Union Minister of Finance,
Government of India, North Block,
New Delhi-110001
Sub: Difficulties faced by small and medium scale taxpayers under the GST regime.
Respected Madam,
At the outset we the members of All Odisha Tax Advocates Association want to state that ours is an Association of Tax Professionals of Odisha, rendering services of compliances under tax laws. Small and medium sector Tax Payers are totally dependent upon our support for very complicated compliances under the GST law. We are facing those tax payers. Hence, we are the affected party in this issue. During last year the GST collection was robust and therefore there is perception of the Government that everything is running fairly. But the reality is something different. The Corporate Tax Payers are not facing any problem or are sufficiently strong to find the ways and means. But the small and medium Tax Payers are the silent sufferers of unjust GST provisions and unfair treatment by officials. By this letter we would like to invite your attention to some of the problems and appeal before you to use your good offices to ‘solve these pressing issues.
(1)ISSUES RELATED TO REGISTRATION:
We appreciate that registration process is much more improved under GSTN system than earlier laws. Due to Aadhaar card and PAN card the KYC norms are reliable to decide the genuineness of a person. Other documents may be considered accordingly. It is experienced that for minor discrepancies the application for registration is rejected. Some instances are as follows:
(a) Discrepancy in the name or address: In India the names and addresses are written in ifferent ways. There is no uniformity. Hence the name appearing in one document may be different in other documents of the same person. Similarly address appearing in one document may not be ad verbatim with other.
The Registering Officers treat it as discrepancy in the application and reject the same without application of mind. If the applicant is otherwise genuine the registration should not be denied.
(b) Proof of Place of Business: India is known for undivided large families, where the family members and the relatives stay together under one roof. But such person may not be from the said family as defined by western notion of family. The property is in the name of one person, electricity bill in the name of another. The rules provide for consent letter of property owner/holder. But many officers insist upon registered rent agreement otherwise registration is rejected. Further, registration of rent agreement can be done within four months of execution. Hence registered rent agreement may not be insisted.
(c) Documents are not visible to officer due to size restriction in the portal, resulting rejection of Application: Rent Agreement / Lease Agreement, Ownership document in general runs into number of pages (upto 50-100). However, on GST Portal, while uploading said document at the time of registration, there is size limit of file, restricted to 2mb. It means, maximum 2mb file can be uploaded. Due to said restriction in file size, less quality file gets uploaded on GST portal, which is not visible to officer properly and hence he rejects the application. Registration documents are important for Government to preserve. Therefore, it is suggested that said size limit should be increased to This will solve number of unrequired rejections in registration process.
(d) List of documents asked by Officers for grant of registration: That the GST Rule clearly specifies the list of documents to be filed for the purpose of registration categorically. Further interpretation by the concerned Officers is clearly beyond their scope and ultimately the tax payer is harassed and due to delay in getting the registration revenue collection of the Government is jeopardized.
02. ISSUES RELATED TO CANCELLATION OF REGISTRATION:
The GST authorities are authorized to cancel registration on their own for lapse in compliances. The main purpose for which large number of registrations is cancelled is due to default in filing returns. The major reason for not able to pay tax is that many small and medium scale tax payers depend upon recovery and do not have any other source of finance. Cancellation of registration is not only forcing them in further deep trouble but has cascading effect of of his customers also.
(a) Delink return filing and payment of tax: ITC is not granted till it is received by Government. If returns are allowed without payment of tax there is no loss of revenue. Filing of return and payment of tax be treated as two different activities and be delinked. Further part payment of tax and payment in installments also may be provided in the system. By allowing returns without payment at least the information about outward supply will be available for further action.
(b) No retrospective cancellation: Registration Certificate of a Tax Payer should not be cancelled retrospectively as it hurts the innocent and honest tax payer. Because his customers must not have any knowledge of cancellation. Fact of cancellation becomes known to customers when the ITC is refused to him. He has to bear the impact of cancellation of registration of other tax payer. The problem gets compounded if the cancellation is with retrospective effect. In this case innocent tax payers are worst sufferers.
(b) Financial stress in covid period: During covid period many small and medium tax payers are facing serious financial problems. Government is trying to help by giving them financial assistance. In such a situation cancellation of registration is detrimental to the needs of the hour i.e. handholding of small and medium Tax papers by the Government. Even if the registration certificate is cancelled, he cannot afford to suspend or stop his business. Survival is more important than tax compliances. Mostly tax payers in unorganized sector face this problem. They are semi-literate and do not have any other skill or avenues of livelihood. Therefore, Cancellation of their registration certificate virtually means forcing them in grey market.
03. ISSUES RELATED TO INPUT TAX CREDIT:
Sec 16 of CGST/SGST Acts has provided some time limits to claim and/or declare outward supply necessary to claim ITC. They are proving to be the major thorn in business and are resulting into substantial additional cost and cascading effect. It has caused lot of resentment among the honest tax payers.
(a) Time limit of six months may be removed: After recent amendment to sec 16(2) tax payer cannot take credit of ITC unless it is reflected in Form 2B. The GSTN system is very effective to cross verify and can rule out duplication of claims. Therefore, time limit of six months may be totally removed. It serves no purpose except to deny otherwise valid ITC claims.
(b) Time limit of 180 days serves no meaningful purpose: The payment terms are decided by the purchasers. Many times, terms of payment exceed the limit of 180 days. In such case it is apprehended that ITC has to be reversed and added to outward tax. When payment is made, ITC is required to be reclaimed. Post sale discount or mutually agreed less payment adds to the confusion, whether the provision is applicable in such case or not is yet to be decided in clear terms. This exercise does not increase the tax revenue but puts added compliance cost as well as blocking of capital. If there is large number of transactions then monitoring the same, is a challenging job. When the Government has already received the tax, reversal and reclaim of ITC is the unnecessary exercise. To think that those who delay the payment of principal amount will pay it to supplier because they have to reverse ITC at any time is only wishful thinking and not reality.
(c) 16(2) relevant proviso should be removed:
We sincerely feel that GST as concept is very business friendly, but many provisions are unjust and unfair to honest tax payers, which is increasing burden on them. We are sure that if above suggestions are accepted then the GST will be fair and just for the honest tax payers.
(d) IGST Credit not reflected in Form-2B:
Auto population of bill of entry data is not captured or reflected in GSTN portal. Therefore, the taxpayers have difficulty in getting input tax credit. This needs urgent solutionrby way of linking IGST payment on imports to GSTN portal.
04. ISSUE RELATING TO FILING OF REVISED RETURN TO RECTIFY THE ARITHMETICAL ERRORS:
As GST was new and there were various unintentional arithmetical mistakes made by tax payers while filing GST Returns and also regarding compliances on various rules like E-way Bill, reporting of B2B as B2C, reporting Invoices to incorrect GSTIN due to typographical mistake etc. Hence, we request you to give onetime opportunity to rectify the genuine & unintentional mistakes. It will help all the taxpayers to comply with the GST law and also help free flow of ITC. In the new rule it has been provided to initiate adjudication proceeding u/s.74 of the Act in case the figures in GSTR-1 & GSTR-3B are mismatched. This will again become hardship to the Tax Payers and create number of litigation throughout the country.
05. ISSUE RELATED TO FILING OF REVISION PETITION BEFORE THE COMMISSIONER IN CASE FIRST APPEAL IS DISMISSED IN LIMINE:
It is a fact that Government is unable to set up GST Appellate Tribunals across the country till today. In case the Tax Payer’s First Appeal is dismissed for any reason including for default, then he will have to approach the Hon’ble High Court of the State. Many small Tax Payers are unable to afford the fees and expenses of the Lawyer. Hence for the interest of justice a provision may be made to file Revision Petition before the Commissioner of the concerned State in case the First Appeal is dismissed on limine.
06. ISSUE RELATED TO FORMATION OF CIRCLE / RANGE / DIVISION LEVEL ADVISORY COMMITTEE:-
A popular Government always tries to know the defects in the system of working. Hence in past Circle/Division/Range level advisory committee meetings were held at least twice in a year to know about the technical as well as other problems faced by the Tax Payers. Information collected from the Tax Payers were compiled and placed in the website of the Department and the problems are solved gradually relating to different sections. Hence it is suggested that Government should start the process again to find out the problems faced by the Tax Payers at grass root level and try to solve them one by one.
We are sure that you will agree with the above points raised for the simplification of GST and do the needful at your earliest convenience.
With Kind Regards,
Yours Sincerely,
For All Odisha Tax Advocates Association
(Natabar Panda)
Working Secretary
Working Secretary
All Odisha Tax Advocates Association
CC to:
1) Narendra Modi,
Hon’ble Prime Minister of India
152, South Block, Raisina Hills, New Delhi 110 011
2) Shri Pankaj Choudhary, Hon’ble Union Minister of State for Finance
North Block, New Delhi 110 001
3) Shri Bhagwat Karad, Hon’ble Union Minister of State for Finance
North Block, New Delhi 110 001
4) Hon’ble GST Council Secretariat
5th Floor, Tower II, Jeevan Bharati Building, Janpath Road, Connaught Place, New Delhi 110 001
5) Hon’ble Commissioner of CT & GST, Odisha,
Banijyakar Bhawan, P.0-Buxi Bazar, Cuttack-753001
6) Hon’ble Chief Commissioner of GST, Central Excise & Customs, Odisha
Rajaswa Vihar, Bhubaneswar-751007 for information and necessary action
