GST – Pain Points

Where Modi Ji is dreaming of making India a $5 Trillion economy, GST is going totally reverse of it. Handling GST affairs become a battle now-a-day. Whereas GST Collections are showing upward trends, GST execution is totally on different path. In this article, I am highlighting some pain points in GST which are significantly affecting the day-to-day business: –

1. Time- Limits

Time-Limits of GST laws are very less in comparison to time limits of Limitation Act, 1963. Where Limitation Act provides the time-limits of three years comparatively GST law prescribes very short time-limits i.e., 6 months or 9 months or 1 year.

It seems to be that GST trying to control the business transactions by these short time-limits.

Various time limits as per CGST Act and Rules, 2017: –

2. GST Refunds

Biggest hurdle in GST Refunds are: –

> Passing of non-speaking orders

> Faulty Deficiency Memos – Lack of Clarity, vague issues raised and improper reasons. Repetition of DMs on same issues which has been sought out by the party work like oil in fire.

> Rejection of refunds on frivolous grounds.

>Delay in Re-Credit where the partial refund / refund rejection is also a big issue.

3. GST Raids

> Misuse of Summons – Summon can be issued at last resort. But in Indian GST, it has been seen that the powers of issuing summons are widely misused, and these are issued at first instance.

> Excessive powers to GST officers – Blocking of Electronic Credit Ledger, suspension of GST Registration by the department on reasons of receipt of fake invoices and attaching the Bank Account without any concrete reason is putting the businesses on halt.

> Recovery pressure – Recovery pressure on GST officers make the situation critical where they are not accepting any contention of assessee.

4. Returns

> GSTR-2B – Mistake of Supplier – Why Recipient has to suffer? When Government has all the information about taxpayers? Why to put burden on recipient?

> Non-filing / incorrect filing/ delay filing of GST returns by supplier is not a mistake of recipient. But why recipient should suffer. Government can easily capture the supplier by the Artificial Intelligence and Data Mining.

> Revision /amendment of returns is not allowed

5. GST Litigation

Non-formation of GST Tribunals putting a lot of burden on overburdened High-Courts. Matters travelled to High-Court via Writ Petition due to non-existence GST Tribunal.

CBIC must take more proactive actions on industry issues and issue the necessary instructions to departmental officers to tackle with the issues.

6. GST Registration

A new business should be welcome. But in GST story is totally different. Whenever a business applied for registration, it was burdened with lot of queries and clarifications which many of times is weird and without visit & explaining, obtaining GST registration is totally becomes a chance of luck.

7. Accountability and Responsibility of Officers

In this regard, over the time things have improved in a significant manner but still there are certain areas which should be improved a lot.

Some of the areas which directly affect the business, where the officer’s accountability and responsibility must be set: –

a. Rejection of Refunds

b. Blocking of Electronic Credit Ledger and Attachment of accounts.

c. Creation of Demands – Orders must be speaking one with countering all the points raised by the assessee.

There must be a proper check on the demands raised by the departmental officers. Where the demands are dropped at appellate or judiciary level, a brainstorming must be done at department level so that this repetitive demand on covered matters should not be raised.

8. GST Audit

Instead of GST Audit – It must be done as like in Income Tax – Complete Scrutiny, and Limited Scrutiny.

In GST department audit notices – Majority of the GST related information is available on GST portal which they are asking again in audit letter from assessee like Electronic Credit Ledger, Electronic Cash Ledger, GSTR-3B and GSTR-1, GSTR-9 and 9C etc.

Only purpose of the GST audit is tax recovery, no suggestions and measures are given to assessee for improving the practice. Audit should be done for improvement of tax practices of business – where GST Audit is completely lacking on this aspect – Infact it become a burden on assessee.

Also, the GST audit notice generally comes for three years – It must be done on yearly basis.

(The above writeup is based on the experiences, struggle, failure, and practice of the author. Readers views and experience might be different.)