Request Letter for Doing Important Amendments in GST ACT

To,
Nirmalaji Sitaraman Madam,
The Finance Minister of India
New Delhi 110001.

Subject: Request Letter for Doing Important Amendments in GST Act.

Respected Madam,

At the outset, we congratulate you for implementing GST, the biggest tax reform and we are happy to be a part of this big revolution. We must note that the co-ordination between law implementing and law abiding is very essential and efforts from both the sides are equally important for successful running of tax system in the country.

GST has been implemented in India by the central government w.e.f. 01.07.2017. At the time of implementation it was promised that, it will be lenient with the tax payers till GST tax and the computer system gets streamlined. The government had already promised the same in its introductory commentary, but in the very first month the government levied late fees of Rs.100 per day on late filling of the returns and accordingly collected the late fees. But the government noticed that, there were many errors and technical issues and waived of penalty till Sept 2017. Further the government reduced the late fees to Rs.50 per day and Rs.20 per day for Nil return.

The government must be under the impression that, there are no technical issues anymore and everything is streamlined, because w.e.f. Oct 2017 the government had started collecting late fees.

You will agree to the fact that successful implementation of GST is dependent on a large extent, on the proper implementation of GST computer system, or GSTIN portal and its infrastructure. However, because it was implemented in haste, the system collapsed many times during the first few months of implementation. This fact was confirmed by none other than, the finance secretary, Mr. Hasmukh Adhia in his speech celebrating the completion of one year of GST. Infosys also blamed that frequent changes in goal post failed the GSTIN system.

As this is a completely new and an extremely complex tax system, which largely depends on the GST portal and handling of huge data every month, it is very difficult for taxpayers and CAs and the tax consultants to complete all the necessary documentation within time and hence all the CAs, tax consultants and taxpayers are under tremendous pressure because of GST. We read in the news that some consultant and CA have died of heart attack or have committed suicide due to the stress. So it is absolutely necessary to make it simple. Now five years have been completed. Still it is not streamlined. GST is harassment to small and medium sized Businessmen, CAs and Tax Consultants.

In this connection please note that there are many points which need the attention and amendments in GST Act. You are requested to forward our request to the government on behalf of common public and taxpayers, as we know you are going to say that nothing is in our hands and GST Council will take the decision on this issue for better foundation of this GST Tax system. Please note the points which should be amended.

1) Late Fees: Government should not charge late fees unless and until the online system is streamlined. There were many technical issues with the site, because of which assessee had to pay late fees. So you are requested to waive the late fees. The government itself agreed in its’ GST Council Meeting that there are many technical issues with the site and the site fails to function time and again. Because of that many assesses could not file their return within the time limit. Accordingly the government has extended the due date for GSTR 3B of April 2022 to 24^th May 2022 is the proof that still there are many technical issues in the site. Hence you are requested to waive the penalty for GSTR, as it’s filing also suffers from the same technical issues. Further In the larger interest of public late fees amount should be restricted to the tax payable. Rights should be given to Concern Nodal officer to waive the late fees if it is charged without the fault of assessee. There should not be any late fees for NIL Return. Further please do not charge penalty for GSTR 3B if payment is made in time, as there is no Point to keep GSTR3B pending if payment is done. It is pending just because of technical issues only.

Late fees should be charged only when everything is streamlined. Further current financial position of the small businessmen is not good due to covid and as per RBI report it will take 12 years to streamline the economy. Hence considering the facts you are requested to refund the Late fees you had collected earlier.

You had waived late fees in Dec 2018 for that assesses who had not filed their GST returns. But it is injustice to that assesses who had paid late fees till Dec 2018 irrespective of technical problem. Hence you are requested to refund the same.

2) Input Tax Credit :

Currently input Tax Credit is allowed on the basis of 2B. It is generated on 14^th of every Month. ITC is not reflected in 2B if the other party has not filed GSTR1 in Time. So businessmen could not get ITC in that month. It is affecting cash flows of small businessmen. They had already paid GST to supplier while purchase. Further they have to pay GST amount to Government also. It is double payment of GST. Small Businesses are already in short of capital. Because of such provisions they are further short of capital. In post covid situation it is very difficult to survive. Further ITC of businesses filling quarterly return is reflected quarterly and for first two months you can’t take credit. So you are requested to allow ITC on the basis of purchases Bills and records and finalization of accounts and tallied the same in Annual Return.

Further we can’t file our GSTR 3B before 14^th of every month as we have to wait till generation of 2B. Even if our data is ready on 1^st day of the month we can’t file GSTR 3B between 1^st day of month till 14^th of every month.

3) Input Tax Credit of Import Material : We are claiming Input Tax Credit of IGST paid on import material as per Icegate site and Bill of Lading. Many times this data is not matching with GST 2B and 2A. Data is not reflected in 2B automatically. Every time show cause notice is received an8d we have to reply for the same. It is time consuming. You are therefore requested to tally icegate data on your end instead of sending show cause notice.

4) E invoice Data not reflecting in GSTR1 : Many times e invoice data if not reflecting in GSTR1. If we tried to add manually system is saying particular invoice is already there in system.

5) Credit Notes for Nil Return : System is not accepting credit note for Nil return. We have to wait until sales is made to enter a credit note.

6) Interest Charged : Currently you are considering return filling date for Interest calculation and not the payment date. If anyone paid GST in time and due to some technical reason he filed his return late he is charged interest irrespective of making payment in time. You are charging late fees for late return and also interest even after making payment in time. So you are requested to charge interest from payment date and not from return filling date. For Quarterly return you are charging interest as per payment date and for monthly return as per return date which is contradictory.

7) Registration Under GST : It is very time consuming to get registration under GST. Assessing officer is asking only Electricity Bill for ownership proof. In Joint family bill is in the name of one person. But many times officer insists to make registered rent agreement with family member. Further other documents like city survey, property card etc not accepted. Many times it is taking almost month or two to get the number only. You are requested to fix time limit of three working days only to approve or reject the application with valid reason.

8) Reactivation of Cancelled Number : It is also very time consuming. If number is cancelled or suspended by system officer tells us we can’t reactivate it as done by system and customer care is saying visit nodal officer. In this case late fees is increasing day by day on cumulative manner. Officer is asking to pay late fees in advance before activation. Even though we paid in advance and number not activated it is increasing. So you are requested to activate number for short period of Fifteen days without payment of late fees. Then ask assesses to pay late fees within fifteen days. If assesses fails to pay you can cancel the same again. You are requested to fix time limit of three working days only to approve or reject the application with valid reason.

9) Separate Return: Please treat each return for different period separately. Some returns may be pending due to any technical issue or any other issue. In such case, please allow to us to file the return for the next month. Currently if any return is pending because of any issue all returns for the next months get held up until that issue is sorted out. Subsequently these returns attracts penalty unnecessarily. So please treat each month return separately. If a return for an earlier period is not filed, the next return should get filed. It should not be dependent on return for the earlier month.

10) Revised Return: Currently there is no provision for the revised return. We are human beings and minor errors are bound to happen. So you are requested to allow us to file revised return. Government has made many revisions through notification and circulars, clarifications. Similarly a chance to rectify the mistake should also be given to the taxpayers.

11) Single Return: The complex structure of various returns must be simplified. There should be a single return for small scale businessmen and composition dealers. The submission purchase data should not be compulsory for composite dealers.

12) Techical Glitches : Many times site is not working properly. There are many technical issues in GST portal. Many times site is down. I don’t understand why we have to open the web site https://127.0.0.1:1585 which is never opening to validate the return with DSC.

13) Due Date : As we have to comply various statutory norms such as TDs before 7^th, ESI & PF before 15^th, Advance Tax, Quarterly TDS Returns, Tax Audits, Income Tax returns etc, you are requested to keep the due date of GST return at the month end. It will reduce some burden on tax payer as well as consultants.

14) Other Points: There are many more points which need attention and some revision. Some of these are ITC 04, RCM, Eway Bill, etc. These should not be applicable for small scale dealers. There should be a turnover Limit for this. It is extremely time consuming and the businessman has to maintain huge additional records. This slows down the overall productivity of the small businesses to a great extent.

15) Refund & Claims: While submission of Refund claims Certificate from CA should not be asked. It should be given on the basis of verification of Data from your officer and returns filed by the assesses. If any fake claim filed then officer issued refund and Assesses should be held responsible for the same and not the CA or Consultant.

16) Grace Period: Please allow us grace period for authentication of return through EVC or Digital signature. Many times assesses did not get an OTP and we could not file the return. So please allow us Grace period of 10 days for EVC. Please treat the return in time if it is uploaded in time. Further it takes time to update the payment in GSTR system. Because of that we are unable to submit the return in time. So please allow us grace period of 5 days for the same. As payment could not updated in time it is attracting penalty without the fault of assesses.

17) Party wise data: Uploading the bill wise data is time consuming and increases the workload of client as well as of consultant. Further we get only 10 days to upload the same. So you are requested to accept the party wise data for GSTR1 and not bill wise and extend this date till the next month end.

18) Payments: Many a times there are some errors on the site while making payments, on GST site it is shown as the payment is initiated and our bank accounts also get debited by the same. In such a case return should be treated as filed in time as there is no fault from the assesses.

19) Data Security: The businessman’s bill wise data along with HSN code is uploaded on the portal. Please ensure and assure us the data security for the same. Please assure us that our data will not get hacked by anyone and will not use by our competitor or there will not be any misuse of our data.

20) Rights to Local Nodal Officer: Rights should be given to local nodal officer to attend the grievances filed by the assesee or take any decision regarding the same. Currently officer is saying nothing is in our hands. The taxpayer and the consultants have absolutely no idea whom to approach with the grievances.

21) Shared Responsibility : As successful implementation of GST is the joint responsibility of the government, tax payers and Consultants. So the government should also be responsible for keeping GST site and portal error free. Only tax payers should not be punished for technical issues.

You are requested to kindly take it on record and do the needful at the earliest. Please forward our demands to concern authorities. We are expecting necessary changes and amendments in GST Act very soon. The GST should really be simple to achieve its prime motive.

Please note that we will protest for one day in front of Yerwada GST office if our demands not accepted by GST Council.

For Upendra S. Khollam & Co.
Tax Consultants

Upendra Shankar Khollam
09370260201
07620260201(WhatsApp)
[email protected]
[email protected]

REPLY FROM GST COUNCIL IS AS FOLLOWS:-