Goods and Services Tax is on the verge of completion of its first year in our Country. The first year was full of doubts & dilemmas. Apart from Tax payers, Tax practitioners and Tax officers were also seen struggling to answer various questions. The Govt. has taken every possible step to do away with the confusion by publishing various literatures, write ups, flyers, webinars etc. But the problems still persists. The complexity was further added by numerous notifications, circulars, press releases etc. which always cannot be tracked by common masses.

All the steps so far taken by the Govt. in making GST simpler are really a welcome move. We are thankful to the Govt. for understanding the problems of common mass and resolving the issues. But there is still a long way to go and GST law is yet to be made simpler. As on date traders, Tax payers and Tax practitioners are getting problems with the complexity of GST and now it is high time to do away with such complexity. If Govt. makes this law simpler and user friendly then it is really going to be a reform of the decade and will boost our economy. It is further seen that people don’t have problems with the GST law rather problems are coming in its compliance, tremendous increase in paper works, improper functioning of GST portal etc.

There are various problems being faced under present system of GST. However the author has identified some core issues which need immediate attention of the Govt. In order to make GST law simpler the following are the few suggestions to the Govt. and the author is not only sure but confident enough that the Govt. will take care of each and every issue in the coming period. The key points are:

1. Simplification of GST return and rectification/revision facility:

GST returns are posing a big problem since its implementation. Today there is a common question all around as how to rectify/revise GST returns of the earlier tax period? Though the Central Govt. has come out with a Circular No. 26/26/2017-GST dated: 29.12.2017 wherein detailed procedure of correction is specified. It has been explained that mistakes of the earlier tax returns can be cured by making addition /subtraction in the figures of the current tax period. But this circular has given birth to some new problems.

  • First of all it is not clear whether the procedure stated in the said circular is applicable even to the cases which are falling in the next financial year i.e after March’2018. In other words whether the procedure specified in the circular covers cases where mistakes of last F.Y. 2017-18 are rectified in the next F.Y.2018-19?
  • Secondly, if we go by the said circular then there will be a mismatch in our current period’s GSTR-3B and GSTR-1 because of the fact that the current period GSTR-3B is having earlier period’s adjustment too. Now, owing to everything online, the system of tax dept. does not know what adjustment has been made to current month’s GSTR-3B. So it simply matches data with GSTR-1 and start reporting mismatch.

So it is suggested that Govt. should either make provision of filing revised /rectified GSTR-3B else add a separate tile/column for prior period adjustments in the GSTR-3B so that mismatch can be avoided.

2. Facility of a Common Cash ledger to be introduced:

Presently, under GST law there is a concept of Cash Ledger wherein cash payments are being made by the tax payers under the three major heads viz: CGST, SGST & IGST. These major heads are further sub-divided into five different minor heads viz: Tax, Interest, Fee, and Penalty & Others. Now, a tax payer has to pay tax under one major head and under one minor head combination. Further tax paid is credited to that particular major & minor heads and is adjustable with the liability under such heads only. Even if a tax payer has a surplus amount under one head and deficit under the other he has no option to offset. He needs to pay the deficit amount and to claim the surplus amount either as refund or to carry forward it for future liability. Due to such a bar the tax payer’s not only working capitals is blocked but also they are saddled with the burden of claiming refund.

Thus it is suggested that the Govt. should collect money under one common cash ledger and allow assessee to adjust the liability there from as per their need and requirement.

3. No further interest liability once money is credited to the Cash Ledger:

The provisions of GST in respect of payment of tax and levy of interest are quite peculiar. The assessee has to pay interest till the time amount is debited to his Electronic Cash Ledger. It is immaterial how much balance lying to his Electronic Cash ledger but the interest liability will be claculated till the date amount is debited to Electronic Cash Ledger. Until and unless liability gets offset/debited the assessee need to pay interest from the due date of payment till the date of offsetting liability. For example, if I am having IGST tax liability of Rs 1000/- for the month of May’2018 and my cash ledger is already having balance of Rs 1100/- under IGST. Now, the due date for filing my tax return for the month of May’2018 is 20th June 2018 and if I do offset my liability on 25th June 2018 I have to pay interest on account of delay of 5 days. This is really a harsh provision and should be amended. An assessee who has already parted with the money and his cash ledger is also having balance he should not be called upon to pay interest. The difficulties become double where an assessee runs its affairs by means of bank finance /loan. In such cases on the one hand he/she needs to pay interest to bank and on the other hand due to not offsetting or late offsetting of liability the GST law demands interest inspite the fact the assessee has got sufficient balance in cash ledger.

So it is suggested that Govt. should change/amend GST rules suitably and make sure that wherever the assessee has balance in cash ledger no interest will be collected even if offsetting of liability is done after the due date.

4. Definition of ‘Aggregate Turnover for the purpose of registration should be changed:

As per the provisions of section 22(1) of the CGST Act, 2017 if the aggregate turnover during a financial year exceeds Rs 10 lakhs/20 Lakhs then one has to obtain registration number under GST. Now, section 2(6) of the Act has laid down the meaning of ‘Aggregate Turnover’ which includes exempted and non-taxable turnover as well. This provision of law is causing some genuine hardship to the small assessees and they are very much affected by this provision of law. It can be understood with the help of an example. Suppose, if an assessee of Assam is having rental income of Rs 4.00 lakhs (which is taxable under GST) and Interest Income on Fixed Deposits worth Rs 7.00 lakhs (which is not subject to GST) during a particular year. Then by virtue of section 22(1) read with section 2(6) the aggregate turnover of the assessee is exceeded Rs 10.00 Lakhs and he needs to take GST registration and do other compliances. It is really surprising that inspite of having taxable turnover of rental income Rs 4.00 lakhs which is much below the threshold, the assessee has no option but to pay GST.

Such provisions of law are really disturbing and thus it is suggested to remove such an anomaly by amending the definition of ‘aggregate turnover’ suitably for the purpose of registration.

5. Late Fee should not exceed Tax liability of an assessee:

Though the Govt. has already reduced the quantum of late fee but still there are some

issues involved with the levy of late fee under GST. The late fee on account of delay in filing tax returns is causing some disturbances in those cases where the figures of late fee exceeds the payable tax. In such a situation it is really harsh to demand late fee more than the tax payable. If we refer the Income Tax law also (which is a Central legislation) section 234E is having provisions for late fee payments for delay in submitting TDS statements. But under that section also the maximum amount of late fee payable is restricted to the quantum of tax payable.

Thus it is suggested to rationalize further the provisions of late fee payment under GST.

6. Provisions of Composition Scheme to be amended further:

Under present provisions an assessee is debarred from opting Composition Scheme if one has got stocks left out of the Inter-State purchases and Imports made.

Further if an assessee is having more than one business then he has to either opt composition for all such businesses or to opt regular /normal provision for all those businesses. He has no option to opt composition scheme for one business and normal to others. We understand that such provision of law was made to stop assessee from playing with the tax rates. But the situation become worst in a scenario where an assessee is having various businesses and one of them is relating to providing of service (other than restaurant). In such cases he is completely debarred from entering into the composition scheme even though he is meeting threshold criteria etc. He has to take registration under regular /normal scheme and pay tax and file monthly return. It is immaterial how small his business is. His fault is only that he is rendering services other than restaurant. But in real the provision of law should debar from entering into composition in respect of that particular service rather not for all his businesses.

Further composition tax payers are also not allowed to make inter-state sales though the Govt. has made announcement in respect thereto.

Thus it is suggested to make the scheme more comprehensive and make suitable amendments in the light of above problems.

7. Settlement of earlier taxation laws disputes through ‘Kar Samadhan Scheme’:

GST is going to complete its first year and now the assessment and appeal provisions are likely to play their respective roles. But until and unless old long pending disputes are settled tax officials will hardly find any time to deal with GST disputes. Therefore   Govt. should introduce a ‘Kar Samadhan Scheme’ whereby one time opportunity should be given to the assessees to settle their old pending disputes. Further such scheme should be made available only for a prescribed time frame. This will give an opportunity to the assessee to settle their disputed matter without any further litigation. Not only the time and money will be saved by this but early collection of taxes will also be ensured.

8. Issues related to GST Registration should be resolved:

Though the registration provisions under GST are quite simple and easy and one can get registration certificate without visiting tax dept. Further GST law has provision for early issuance of registration within 3 days if documents submitted are found to be correct and complete. But practically the registration process is taking longer than prescribed time. Further Govt. should also think of Centralized registration of a few sectors like Banking, Insurance, Telecom, Govt. departments etc.

Presently, the registration certificate do not have date of actual liability and complete name, address and jurisdictional code of the issuing authority. Also if an assessee is having more than one trade then the trade name of all businesses should appear in the registration certificate issued. But present system lacks such facilities. Hence Govt. should take appropriate steps to resolve the matter.

9. Centralization of Advance Ruling Authority:

Advance ruling authority under GST is the first forum to get clarification on any disputed matter. Thus the ruling issued by the authority is of paramount importance. But since recent past it is seen that some of the rulings were not backed by the provisions of the law. Furthermore, being a State specific body, different authorities from different States are interpreting the same subject matter in their own individual manner. It has resulted in some discrepancies in the ruling issued which created chaos and confusion and more litigations. This has also somewhere disturbed the theme of ‘One Nation- One Tax –One Market. Hence the Govt. should seriously take note of this matter and would try to constitute a Centralized Advance Ruling Authority so that all the rulings can be issued from a common platform.

10. Provisions of Input Tax credit should be more comprehensive:

Section 17(5) of the CGST Act, 2017 has blocked input tax credit on certain goods and services which inter-alia includes input tax credit in relation to ‘Motor Vehicle’. There is a long debate with respect to the input tax credit available to the works contractor in respect of Plant and Machineries which are also covered under the definition of  ‘Motor vehicle’ under the Motor Vehicle Act 1988.

But till today there is no clarity in law whether input tax on such machines (motor vehicles) which though purchased for the furtherance of the business can be taken or not. ‘Works Contract’ business is mainly dependent on heavy machines. Major part of their fixed assets comprises of such machines. So if the input tax credit on such machines is denied then there will be a huge loss to the Industry which will result in high cost. Thus Govt. should come out with suitable clarification to put the matter at rest.

Conclusion:

GST will be the biggest Tax reform of this decade and in the coming days it will break all the records of revenue collection in the Country. It will surpass the age old Direct Taxation law of the Country. Agenda of Govt. to make law simpler is going to be a path breaking reform. The dream of One Nation-One Tax-One Market will sooner achieve its objects in totality.

Note: The above write up is prepared keeping in mind the recent problems faced by the tax payers & tax practitioners. The views expressed above are the personal views of the author. Thus it is requested that before acting on the basis of same, please check and confirm relevant provisions of the laws/circulars/notifications etc.

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4 Comments

  1. Vijay Goyal says:

    To,
    Mr. Piyush Goyal
    Finance Minister
    Govt. of India
    Camp : Raipur

    Sub:-Main Hurdles’ in GST & E-way Bill laws for smooth operation of Business need to be addressed Immediately.

    हम व्यापार के सुचारु संचालन के लिए जीएसटी कानूनों में मुख्य बाधाएं को व्यक्त करते हुए कुछ बदलावों का अपेक्छा रखते है
    (1) हमारे अनुसार वर्तमान मे जीएसटी रेग्युलर रेजिस्टर्ड डीलर्स पर लागू रिवर्स चार्ज मेकानिस्म को पूर्ण रूप से हटा देना चाहिए क्योँकि इस नियम के पालन से सिर्फ डीलर को अनुपालन का आर्थिक भार तथा समय के नष्ट होने का सामना करना पड़ रहा है इससे सरकार को 1 रुपये के अतरिक्त राजस्व का भी कोई फायदा नहीं हो रहा।
    (2) मेरा मानना है कि एचएसएन कोड व्यापार और सेवा उद्योगों में विशेष रूप से एकाउंटिंग मुद्दे उत्पन्न कर रहा है ,जीएसटी स्लैब दर के आधार पर एकाउंटिंग अनुमति दे दी जानी चाहिए।
    (3) मासिक आधार पर रिटर्न दाखिल करने के बजाय 3 करोड़ तक सालाना टॉर्न ओवर की पात्रता वालो को तिमाही रेतुर्न को सुविधा दी जानी (मगर 25000 से ज्यादा मासिक टैक्स दाइत्व होने पर GST भुगतान मासिक करना होगा) चाहिये व अन्य को मासिक रेतुर्न में बिक्री के साथ खरीद के डेटा भी 1 तारीख से 20 तारीख तक एक साथ सबमिट कर सम्पूर्ण कर दाइत्व 20 तारीख या उसके पूर्व चालान पटाने के नियम होना चाहिए । तथा पोर्टल डेटा का मिसमैच हर तिमाही के अंत के 21 से 25 तारीख के बीच जनरेट करें व अगर कोई मिसमैच हो तो 60 डेज का समय मिसमैच की प्रोविसंल क्रेडिट allow करे ।फिर भी मिसमैच क्लियर नही हो तो व्यापारी को मिसमैच GST अमाउंट की प्रोविसंल जमा करवा लें ।
    जिससे पोर्टल पर लोड 80% कम पड़ेगा ।
    व्यपारी का समय व कॉम्प्लांस कॉस्ट में भी बचत होगी। वर्तमान नियमो के तहत 70% व्यापारी का समय सरकारी नियमो को कॉम्प्लांस में ही चला जाता है जिसका असर कम राजस्व की प्राप्ति के रूप मे स्पष्ट दिखाई पड़ रहा है।
    (4) कम्पोजीशन स्कीम को ₹ 3 करोड़ तक बढ़ा देना चाहिए । ऐसा करने से सेल्फ एम्प्लॉयमेंट को भी बढ़ावा मिलेगा । व रोजगार के नए अवसर भी उत्पन्न होंगे।
    (5) जीएसटीएन कम्पनी (नोडल एजेंसी) को ऑनलाइन फ्री डाउनलोड करने योग्य प्री मैपड फ्री अकाउंटिंग सॉफ्टवेयर, ट्रेड एंड इंडस्ट्रीज और अन्य संबंधित पंजीकृत व्यापारियों को देना चाहिए जो जीएसटी कानून और आयकर अधिनियम के तहत प्रस्तुत किए जाने के लिए आवश्यक विभिन्न रिटर्न फॉर्म में डेटा अपलोड करने के लिए अनुकूल हो ।साथ ही ई-वे बिल, सेल्स इनवॉइस, डेबिट नोट, क्रेडिट नोट, आदि (जैसे टैली अकाउंटिंग सॉफ़्टवेयर) भी निकले जा सके का निर्माण कर व्यपारियो की देना चाहिए ।और इस सॉफ़्टवेयर को वर्तमान जीएसटी / आयकर अधिनियम के अनुसार समय-समय पर अपडेट किया जाना भी GST कौंसिल की जुम्मेदारी हो ।
    (6) ई -वे बिल उत्पन्न करने की आवश्यकता ₹ 50000 के बजाय ₹ 200000 से अधिक के लिए होनी चाहिए। प्रीफेरबली इंटरस्टेट ट्रांसक्शन पर e way बिल की बाध्यता ही ज्यादा उचित कदम होगा।
    साथ ही जिले (डिस्ट्रिक्ट) की सीमा के अंदर माल के परिवहन पर किसी भी प्रकार के E way बिल की पूरे देश मे जरूरत को तत्काल समाप्त किया जाना चाहिये।ऐसा कर ही रिटेल व्यवसाय को गति दी जा सकती है । ऐसा करने से E way पोर्टल पर करीब 50% लोड कम हो जावेगा।
    (7) हमारे अनुसार GSTN में एक पहचान अंक होना चाहिए ताकि कोई जीएसटी पंजीकृत डीलर की स्थिति की पहचान कर सके। उदाहरण के लिए, B: – बैंक, C: कॉम्पोजिशन डीलर, D: – डीलर, E: – निर्यातकों, L: – बड़े इंडस्ट्रीज, M: – मध्यम स्केल इंडस्ट्रीज, G: – सरकारी संगठन, N: – एनबीएफसी, S: – स्मॉल स्केल इंडस्ट्रीज, T: – टाइनी इंडस्ट्रीज़ आदि के। इस चेक डिजिट से सरकार आसानी से क्षेत्र के सांख्यिकीय / राजस्व डेटा का विश्लेषण कर सेक्टर विसेष की विकाश की योजनाओं के सटीक क्रियान्वन कर सके ।
    (8)व्यवसाय के संबंध में किए गए खर्चों का विवरण मासिक रिटर्न में नहीं पूछा जाना चाहिए क्योंकि ये विवरण पहले से ही हमारी वार्षिक बैलेंस शीट में प्रदान किए जा रहे हैं, यह केवल अनुपालन लागत बोझ और समय बढ़ा रहा है।
    (9) व्यापारियों की टैक्स संबंधित शिकायतों व समस्यायों के कानूनी समाधान के लिये बैंकिंग लोकपाल की तरह GST लोकपाल का तुरंत गाठन करना चाहिये
    (10) देश में त्वरित आर्थिक प्रगति के लिए नेट बैंकिंग माध्यम से 24×7 NEFT व RTGS की सुविधा तुरंत दी जानी चाहिए ।ऐसा न कर बैंको ने देश के आर्थिक विकास में बहुत बड़ा रोड़ा अटकाया हुआ है।
    बार बार RBI के ध्यान मे लाने के बाद भी सारा नेटवर्क उपलब्ध होने के बाद भी RBI का बैंको को इस कार्य के लिये बाध्य न किया जाना Ease of doing Business की विचार धारा के विपरीत है
    (11) अगर GST के कंप्लाइन्स में जो तकनीकी बधाये है जिनको दूर करने से सरकार के नेट राजस्व पर कोई कमी भी नही होती है तो उसे तुरंत दूर कर दिया जाना चाहिए।तो यह GST नव युवको को सम्मान के साथ स्व रोजगार के लिए प्ररित करेगा।
    GST ही एक मात्र उपाय है जिससे इंस्पेक्टर राज को देश मे पूर्ण तह समाप्त किया जा सकता है।
    (12) जब फाइनल क्रेडिट GST पोर्टल पर ट्रांसक्शन मैच होने पर दिया जायगा तो व्यवसाइयों के यहाँ ( उत्पादकों को छोड़ कर)डिपार्टमेंटल ऑडिट के उद्देश्य क्या है…….?????????
    (13)साथ ही GST की टैक्स ऑडिट रिपोर्ट को भी इनकम टैक्स एक्ट की ऑडिट रिपोट का पार्ट बना कर हम कंप्लाइन्स कॉस्ट , समय दोनों की बचत भी कर सकते है
    वैसे भी GST नंबर आलरेडी PAN बेस है। ऐसा करना बहुत ज्यादा जरूरी है क्योंकि वर्तमान मे टैक्सऑडिट रिपोर्ट व GST ऑडिट रिपोर्ट दोनों विभाग मांगते है।
    (14)जब गुड्स के परिवहन के समय E-way bill के साथ sale बिल आवस्यक है तो e way bill में HSN wise डिटेल्स की क्या जरूरत है यह एक ease of doing bussiness के लिये एक बहुत बड़ा कंप्लाइन्स बर्डन है जिससे केवल डुप्लीकेसीय ऑफ वर्क ही बढेगा ।साथ ही GST E-Way Bill पोर्टल पर भी दबाव कम से कम 5 गुना बढ़ जावेगा अतः सर्वर बिजी रहने के कारण लोगों का समय भी बर्बाद होगा।विभाग के उद्देश्य रेवेनुए का सेफ गार्ड है लोगो को कठनाइयों को बढ़ाना नही
    E way बिल में निम्न जानकारी लेकर प्रोसेस को सुगम बनाना चाहिए।
    1, बिक्री बीजक क्रमांक व दिनांक
    2, Consignor का नाम व GSTIN
    3. Consignee का नाम व GSTIN
    4. Buyer का नाम व GSTIN
    5. कुल मात्रा/ वजन
    6. Total Bill Value व कुल GST अमाउंट
    7. Lorry No
    8. Name of Transporter व उसका GSTIN या एनरॉलमेंट Number.
    9. आइटम/ कमोडिटी
    (15) Soft Copy of GST Invoice on E mail /whatsapp or soft copy Print should be allowed if carried along with E-way Bill (जहाँ पर E बिल अनिवार्य है) .This is need of the hour for Ease of Doing Bussiness .
    (16)यह बात व्यापारियों द्वारा ध्यान मे लाई गई है कि अगर एक ट्रक में बहुत सारे व्यापारियों का माल है जांच के दौरान किसी एक व्यपारी के कागजात में कोई कमी है तो अधिकारी सभी व्यापारी के माल के रोक कर रख लेते जिनके कागजात में किसी भी प्रकार की कोई कमी नही है। इस विषय पर अवयस्क दिशा निर्देश फील्ड की टीम की दिया जावे ताकि निर्दोष व्यापारी को कोई आर्थिक हानि व मानसिक प्रताड़ना न झेलना पड़े।
    (17)छत्तीशगढ़ में फर्शी पत्थर जो गरीब परिवारों द्वारा अपने घर की फ्लोरिंग में उपयोग में लाया जाता है के कटिंग के कार्य मे ग्रामीण अंचल में बहुत सारे लोगों को रोजगार मिल हुआ है पूर्व में छत्तीशगढ़ सरकार द्वारा VAT कर मुक्त की श्रेणी में रखा गया है GST के अंतर्गत 18% slab रख कर प्रदेश के लघु उद्योगो व प्रदेश की गरीब जनता के साथ पूर्णत: अन्याय है। इसे तत्काल NIL GST की श्रेणी में रखा जाना चाहिए ताकि ग्रामीण छेत्र के करीब 10 हजार लोगों को बेरोजगार होने से बचाया जा सके। व हमारे प्रधानमंत्री की 2022 तक सभी का अपना पक्का घर हो योजना को भी बल मिले।
    (18) वर्तमान मे चालू माह में क्रेडिट नोट व डेबिट नोट एवं Purchase रेतुर्न इनवॉइस GSTR1 में एंट्री नही एक्सेप्ट करता है केवल अगले माह में एंट्री एक्सेप्ट करता है। वह चालू माह में भी एंट्री असेप्ट करे पोर्टल में अवयस्क सुधार तत्काल किये जाने चाहिये।
    (19) वर्तमान मे यह देखा गया कि लिपिकीय त्रुटि के कारण भी विभाग को टीम GST 18%+18% पेनाल्टी वसूल कर रही जिन प्रकरणों में प्रथम दृष्ट्या कोई भी राजस्व को चोरी प्रतीत नही होती है Bill की ओरिजिनल कॉपी के साथ E way बिल भी है। उद्धरण के लिए GST बिल मे lorry No CG-04AD-1234 की जगह E way बिल में लिपिकीय त्रुटि से CG-04AE-1234 लिखा गया हो। वे प्रकरण जहाँ पर राजस्व की चोरी नही है वहाँ केवल लिपकीय त्रुटि की पेनल्टी ही लगाई जानी चाहिये।
    Regards
    (Vijay Goyal)
    From:- Vijay Goyal ,
    5, Farishta Complex
    Raipur-492-001 (Chattishgarh)
    Contact:- 9301704200
    Email : [email protected]
    Date :- Raipur ,15/07/2018

  2. Mahabir says:

    GST law and utilisation system highly defected technical base. Most Indian are not till date is habitual to adopt highly technical system. Our businessmen Moto are to do business. We request to government give chance public to rectify their mistake if government is interested to avoid litigation and think their businessmen do honestly business.

  3. INDRESWAR ROY says:

    We need clarification regarding applicability of GST on works contracts and mainly Road works awarded pre GST regime and still continuing. The contracts awarded before implementation of GST were considered including WCT ( VAT ) and Service tax was already under exemption on Roads and Bridges which are for Public. What is the impact of GST on Road Works Contracts existing as on 30.06.2017.

  4. Pankaj Kumar says:

    Please share the section under which “No further interest liability once money is credited to the Cash Ledger” is quot3d

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