4 Representations by ICAI to GST Council on 10th Sep 2020

The Indirect Tax Committee of ICAI  have made following 4 representations to GST council on 10 September 2020 which relates to request for Extension of due date of Annual Returns in GSTR-9/GSTR-9A and GSTR-9C for the year 2018-19 by 3 months to December 31, 2020, request to  Permit availment of input tax credit under GST pertaining to Financial Year 2019-20 and correction in GSTR- 1 till March, 2021, Request for Mechanism for accepting part payment of taxes and/or adjustment from cash ledger to boost revenue during COVID-19 time and request to remove Difficulties in filing Annual Return in Form GSTR 9 for the year 2018-19.

1. Extension of Annual Returns in GSTR-9/GSTR-9A and GSTR-9C for the year 2018-19 by 3 months to December 31, 2020

The Institute, being a partner in nation building, has always been proactively supporting the Government in implementation of GST by providing suggestions at each stage of development, be it pre-implementation or post-implementation of GST, be it on policy issues or procedural aspects. Further, Institute has been playing crucial role in GST Knowledge Dissemination among all the stakeholders through our technical publications, GST Newsletter, Live Webcasts, E-learning, Courses, Conferences and programme.

It is evident that COVID — 19 (Coronavirus) has affected the entire world including India. The Word Health Organization (WHO) has announced COVID — 19 outbreaks a pandemic. Majority of the offices are working only partially. Life has almost comes to standstill and people are working for survival.

Therefore, we request your good self to provide appropriate relaxation to the registered person and extend due dates of filing GST Annual return and GST Audit for the year 2018-19 by three month till December, 31 2020. This would provide needed relaxation to the trade, in combating the circumstances arising out of Coronavirus.

We would be very grateful if a suitable order may be issued to this effect at the earliest.

2. Permitting availment of input tax credit under GST pertaining to Financial Year 2019-20 and correction in GSTR- 1 till March, 2021

The Institute of Chartered Accountants of India (ICAI) has been proactively supporting the Government by providing suggestions at each stage of development, creating awareness and disseminating knowledge of GST among various stakeholders.

We are writing this letter considering the practical difficulties which would be faced by the taxpayer in claiming input tax credit under the GST. In terms of provision of Section 16(4) of the CGST Act, 2017 the time limit for claiming the input tax credit by a registered person is restricted. The said provision is reproduced below:

A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier:”

Considering the epidemic COVID — 19, we request your good self to provide appropriate relaxation to the registered person and extend due dates for taking the input tax credit for invoices pertaining to Financial Year 2019-20 till March, 2021. Further, it is also requested to allow the taxpayers to make correction in the GSTR- 1 and issuance of credit note for the supplies affected during the FY 2019-20 till March, 2021.

Hope you will consider the request in view of interest of trade and industry.

3. Mechanism for accepting part payment of taxes and/or adjustment from cash ledger to boost revenue during COVID-19 time

Under the present system, the taxpayer is required to file return in GSTR-3B and make the payment through input credit, and short fall, if any, is met from the cash ledger. Only after filing the Return in GSTR-3B, it is presumed that payment has been made by the taxpayers and there is no relevance of the balances lying in the cash ledger of the registered person, although payment has already been credited to the Government.

It has been observed that many taxpayers are not filing their Return in GSTR-3B on timely basis because they are facing difficulties in paying full taxes and managing their working capital as they are receiving late payment generally over a period of 4-6 months from their customers especially in B2B supplies more so because of epidemic Covid- 19 and law demands payment on accrual basis.

Therefore, it is suggested to devise a mechanism for receiving part payment of taxes till the industry recover and stabilises from the effect of Covid-19, which could be a win-win situation for both the Government, as they will receive early payment of taxes and at the same time taxpayers will not be required to pay interest on the part payment made by them.

One of the ways could be treating payment in cash ledger as payment towards taxes. Other way could be developing a new mechanism for accepting part payment towards return for a particular month/period.

4. Difficulties in filing Annual Return in Form GSTR 9 for the year 2018-19

We refer to the Notification No. 47/2019 — Central Tax dated 96 October, 2019 whereby filing of Annual Return under section 44 (1) of the Central Goods and Services Tax Act read with sub-rule (1) of rule 80 of the Central Goods and Services Tax Rules, 2017 by registered persons having turnover upto 2 crore for the financial years 2017-18 and 2018-19 was made optional.

Accordingly, many taxpayers did not file their GST Annual Return for the financial year 2017-18. However, some of them wish to file their Annual Return for the financial year 2018-19, as it is optional.

However, the portal is not allowing them to file Annual Return in Form GSTR-9 for the said year without filing the same for the year 2017-18. Further, if the registered person wishes to file Annual Return for year 2017-2018 now, the GST portal is showing late fee for non-filing of GSTR-9 for the year 2017-18 for those whose turnover less than Rs. 2 crores (Late fee calculated @ 0.25% of turnover)

Considering that filing of Annual Return for registered persons having turnover upto 2 crore for the financial years 2017-18 and 2018-19 is optional. We request that software be accordingly modified allowing the taxpayers to file their Annual Return for financial year 2018-19, if they so wish, even if they have not filed their Annual Return for financial year 2017-18.

Hoping that ICAI suggestions would the addressed positively and suitable amendment be made in the software of GSTN.