I must share certain pathetic situations of corporates which i came across while rendering ex-parte counsel opinions in last 5-6 months on certain already implemented process of GST in different organisations including anti-profiteering on regular basis.

Peculiar Transition– I found experiments and typical thought process have led miserable situations for many companies even in TRAN 1 and ITC.

The inputs as such cleared on reversal of CENVAT credit and also goods sent on job work were treated in a devastating manner.

The transition will be most prone to litigation as it has already been reflected by the officials that more than Rs 1 Crore of ITC is under audit card.

Costing & Anti-profiteering-The costing which one could have kept at ease and with authority were discarded either due to lack of clarity or due to superficial instructions from too many cooks.

The reduction of taxes and availment of ITC were identified but still not taken in justifying manner. In most of the companies, I found that it was more or less confined to board room dictum.

Inter Border Transaction -The IGST transactions were carried out in such a manner as if they wanted to have litigation as early as possible. Consolidations of warehouses were done in panic .

Realistic Impact Study-The impact study was obsessed with artificial aspects and reality was neither factored nor could be understood.

The impact study has reflected titles and figures without actually understanding as to what shall be the implication of transactions with various anticipations. This reminds me one saying that half of something is always suicidal.

Clarity on Basics– I wish that they should have focussed more on clearing their basics rather than craving for superficial advice.

The issues of GST were mixed with concepts of excise & service tax and this resulted more confusion amongst new and seasoned IDT persons. This led them to land on various isolated land which has nothing to do with the concept of GST in an accurate manner.

Contracts -Contracts were changed to effect GST provisions as a formality rather than adding atleast 2 pages as GST has various impacting clauses.

The contracts which is heart and soul of a business was  left with loopholes. Most of them ignored ITC, ITC matching, anti-profiteering, credit/debit notes, debts, return, accountability, etc.

There is a history of disputes mainly due to badly worded contracts even in countries which have had GST regime.

It is the high time when CFO, IDT, Legal & Management persons realize as to where we are heading to in GST regime. Since, actual GST will be realized when one complete cycle of GSTR-1, GSTR -2 & GSTR -3 will occur and till then its only trial phase of GST.

Just realise that if this was the situation with well known companies in 2017 then God save the other companies in 2018.

The sole intention of this educational write up is to caution business entities to focus on prevention and keep your basics right rather than fighting litigation at a later stage.

Anandaday Misshra, Founder Advocate – AMLEGALS & VAT Profs

The author is a litigation and arbitration advocate practicing in High Court and Tribunals. He has authored book on GST- Law & Procedure ( Taxmann). His other book on ITC in GST is also coming shortly. He could be contacted on [email protected]

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Qualification: LL.B / Advocate
Location: AHMEDABAD, Gujarat, IN
Member Since: 14 Apr 2018 | Total Posts: 152
I am a litigation & arbitration advocate. I am founder of a leading full service law firm AMLEGALS. I handle litigation in indirect taxes, Insolvency & Bankruptcy Code, IPR, Arbitration, Contracts etc in High Courts, Tribunals-NCLT,CESTAT,NCLAT etc, Arbitral Tribunals and various Court of View Full Profile

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June 2021