Even after completion of six bumpy years of GST implementation, a lot many painful and critical issues are still giving sleepless nights to the taxpayers. Every taxpayer needs to be vigilant and extra cautious on few aspects which currently are troubling to them & their tax professionals. This article highlights the essential aspects that taxpayers and their tax professionals should be cautious about in the current GST landscape.
Critical GST Issues Requiring Attention:
1. GST Scrutiny & Audit: Many cases have been selected for GST Scrutiny on various parameter like excess claim of input tax credit, short payment of tax, payment of interest for delayed payment of tax, mismatch in GST TDS data etc. Similarly, GST Audits has been taken up in large number for doing a comprehensive assessment and adjudication of these taxpayers. The tax payer needs to be alert and respond to these notices which are mostly issued online and on non-submission of replies we have observed that many cases are decided against the tax payer by passing and ex-parte orders.
2. Correct filing of GST Returns: It is very important to file GST returns timely and accurately. It is seen that many taxpayers are not serious in filing accurate returns and they are getting penalised in future. One instance is of reporting taxable outward supply which if not reported in the same month attracts payment of interest even if paid through input tax credit in future period. This provision of law in Rule 88B read with Sec. 50(1) of CGST Act is proving draconian for genuine taxpayer who made un intentional mistake in filing GST returns.
3. Timely filing of GST Appeals: GST department have passed a large number of ex parte asseesment order against the tax payers in many of the cases which the taxpayers themselves were not aware of. The GST provision allows filing of GST appeal within 3 months of time along with 1 month of delay condonation. Thereafter the appellate authority has no power to condone the delay howsoever the genuine ground be for the delay. Only recourse left is to knock the doors of High Court for getting relief. Taxpayers need to be careful about any order passed against them and its timeline for filing GST appeals.
4. Proper claim of Input tax credit: Lot of litigations are getting revolved around the claim of input tax credit. Non-payment of tax by supplier, cancellation of suppliers’ GST number, non-filing of GST return either by supplier or recipient, claim of ineligible input credit, delay claiming of input credit by recipient after the time limit prescribed in Sec. 16(4) of CGST Act etc. are giving sleepless night to the genuine taxpayers.
5. E way bill: Lot of cases are been observed where penal action is taken by the department on the grounds of e way bill violation. Violation like incorrect data in e way bill, expiry of e way bill, incorrect GST rate in e way bill etc. are resulting into huge penal action along with seizing of vehicle across the country. Taxpayer needs to be extra cautious while preparing e way bill and tracking it till final delivery
6. E invoicing: The limit of e invoicing has been brought down to all businesses having aggregate turnover of more than Rs. 5.00 Crore. This has brought a lot many taxpayers in the net of e invoicing. In case the supplier is liable for e invoicing and he fails to issue the e invoice the recipient would not be eligible for its input tax credit. The recipient of goods and services need to check whether proper e invoice wherever applicable is received by it.
7. Additional place of business: The department has initiated personal verification campaign to check the existence of GST taxpayer and has found that many taxpayers has not properly reported additional place of business like godown, warehouse etc. on GST Portal. Even many taxpayers have not reported all categories of goods and services dealt by them on the GST portal. This may be merely due to ignorance but it may have serious repercussion.
8. HSN Classifications: HSN audits are undertaken by the department in almost all GST audit cases and many variances are being found in course of it. Proper HSN identification & classification is an important task which every taxpayer must do instead of relying on their suppliers or customers.
9. Books of accounts: Proper maintenance of books of accounts along with paying GST on all other incidental income and receipts are very important. It is seen that many taxpayers fail to pay GST on other income like rental income, incentive income, sale of assets etc.
10. Linking of Aadhar and Geo Coding of address: The Aadhar number of the taxpayer has to be linked on the GST Portal otherwise a lot many processes like filing of GST refund, revocation of GST cancellation, filing of GST appeal etc. can’t be accessed. Similarly, Geo coding of Principal place of business has to be done as required by the portal.
Conclusion:
GST, meant to be a simple tax, poses challenges for uninformed and non-compliant taxpayers. Those who are vigilant and fully compliant will navigate the trust-based tax regime with ease. Staying informed, addressing these critical issues, and maintaining compliance will ensure peace of mind for genuine taxpayers.
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