All India Federation of Tax Practitioners has made a Representation on issues being faced by taxpayers and tax professionals relating to GSTN glitches and GST Act to Smt. Nirmala Sitharaman,
Hon’ble Minister for Finance. Text of the representation is as follows:-
All India Federation of Tax Practitioners
(An Association of Advocates, Chartered Accountants & Tax Practitioners of India)
Regd. Office : 215, Rewa Chambers, 31, New Marine Lines, Mumbai 400 020.
Tel.: 022-22006342 /43/49706343 | E-mail: firstname.lastname@example.org | Website: www.aiftponline.org
Smt. Nirmala Sitharaman,
Hon’ble Minister for Finance
Government of India,
Subject: Representation on issues being faced by taxpayers and tax professionals relating to GSTN glitches and GST Act.
We take this opportunity to bring to your kind notice issues relating to technical aspects including glitches of GSTN Portal and other procedural aspects, which needs to be addressed by the Government to strengthen the tax payers’ confidence Registered Person which would result in proper compliance of the provisions of the GST Act by the Registered Person. In the larger interest of the Taxpayers and Tax Professionals of the country this representation is being submitted.
India’s largest tax reforms, the Goods and Services Tax, was launched on July 1, 2017 but it is yet to be fully put in plqce, due to technical glitches. GST is a complete overhaul of the taxation system in India powered by the GSTN Network, which unfortunately has to failed to deliver to the full satisfaction of Government as well as tax payer,
The GSTN website, very frequently stops working for hours together more particularly during last days of filing returns. The problem is more frequent and serious in remote, mofussil places. Frequent technical glitches in the GST portal are causing severe inconvenience, frustration and hardship to the taxpayers and tax professionals in complying with the statutory requirements.
Followings are the some of the issues to be resolved on a priority basis.
1. Technical glitches in GSTN Portal :
With the inception of goods and services tax, we have entered in to E era The GST portal is the main cause of problems faced by the registered persons. The glitches in the system makes it difficult for the registered persons to file the returns in time. You are aware Madam, the due dates for various returns had to be postponed from time to time in public interest. There are many issues in network which needs to be addressed. Immediate solutions are to be looked into glitches and problems relating to the GSTN Portal and also to increase portal capacity. Despite the extension, the interest is automatically charged, which is thereafter required to be reversed by tax payers in the next return. This means, the payment must be made first, the credit is in credit ledger not in cash.
We request the Hon’ble Finance Minister to kindly look into the above concerns in order to increase the compliance.
2. Interest payment on tax when the returns filed belatedly.
GST is extension of VAT principles and the intent of the legislature is to collect tax on the value addition made by the supplier. to The present provisions charge interest on the Gross tax liability of a RP , without reducing therefrom the credit legitimately available to them This effectively means the legislature is levying interest on the GST amount paid by the purchaser to the Government. Levying interest on the gross amount of tax, which is inclusive of tax paid to the supplier, is nothing but collecting interest- on the tax already received from the supplier by him. Section 50 does not use the term “Output Tax” rather it uses the term “Tax” which is liable to be paid by the taxpayer. Had the term output tax been used, the levy of interest on gross amount might have some substance. The government must interpret the law in right spirit. Levying interest on the amount already collected by the government is to be avoided. The proposed amendment by way of insertion of proviso to the Section 50(1) should be introduced as clarification and hence applicable retrospectively i.e., w.e.f., 01.07.2017.
Taxable persons are already facing the problem with the provision of Rule 36(4) as majority of their suppliers file GSTR 1 quarterly, levy of interest on gross amount will seriously affect their working capital as they are not getting the benefit of ITC on purchases made from small suppliers and on top of it whatever ITC has been accumulated as per law, they are forced to pay interest on the amount which they have already paid to the suppliers. This is causing grave hardship to the taxable persons.
3. Amendment to Rule 36(4) — Restriction of ITC
Rule 36(4) was inserted w.e.f., October 9, 2019 to restrict ITC to 20% for missed invoices and w.e.f., 01/01/2020 it was further reduced to 10% for missed invoices in GSTR-2A. It may be noted the provision for restriction of invoices was introduced in new Section 43A of the Act providing for new returns, which is yet to be implemented from 1St April January, 2020. Till then the existing provision of the Act would apply. Therefore the aforesaid Rule 36(4) is required to be deleted.
4. Restriction in Time Limit to Avail ITC credit — Section 16(4). Section 16(4) which provides for time limit for claiming ITC in respect of any invoices received till due date of filing return for September of next year may be deleted on account of practical difficulties faced by the taxable persons.
Many taxpayers got the details of invoices uploaded by their suppliers recently when they filed their GSTR1 for which time was given up to 15th January, 2020 for the period from July 2017 onwards. Due to non-submission of invoices, the taxpayers did not claim ITC as the invoices were not reflected in their GSTR-2A.
In view of above we request Hon’ble FM to kindly delete the time limit for claiming of ITC and allow it as and when claimed by the taxpayers. By doing this there is no loss of revenue but it will remove double taxation, difficulties and hardship to the taxpayers.
5. Revision and rectification of all GST Returns.
We bring to your kind notice that, ‘under the erstwhile Indirect Tax regime or under Direct Taxes, the tax payers were allowed to rectify errors or omissions occurred while filing the returns, by way of filing revised returns. We would like to draw your attention to the following provisions of erstwhile and current Direct Tax laws:
Under Service Tax : An assessee can file revised return within 90 days from the date of filing of the ST3 return as per Rule 7B of the Service Tax Rules, 1994.
Under Central Excise : The provisions of the Central Excise Rules provide for filing of revised monthly return by the last date of the month in which return was filed under Rule 12(1) of CE Rules.
Under State VAT and CST : Identical provisions were existing in the said Acts, enabling the tax payers to revise the returns, within stipulated period, for errors or omissions occurred during the filing.
Income Tax : Income Tax Returns filed can be revised within a period of One Year from the date of filing of return.
However, no such revised return is provided under the GST regime. Since filing of revised return is not available, errors or omissions crept in while filing GST returns would result in unnecessary litigation, liability and agony to the tax payers as well as to the tax professionals. If revised return facility is introduced under GST enormous inadvertent errors would get rectified which results in reduction of litigation. We request you to kindly consider the same. After the audit, the Registered Person should be allowed to file single annual return, which should be accepted as final from a Registered Person.
6. Waiver of late fee and penalty for 2017-18.
The Government can consider the request for waiver of late fee and penalty for belated filing of Annual Returns and Reconciliation Statements for F.Y. 2017-18 to enable the tax payers to comply with the provisions of the GST Act.
7. Relaxation in stringent procedures.
The following measures would be very helpful to the tax payers in ease of doing business which is the motto of the Government for economic development of the Country.
(i) Self-adjustment of balances in Cash Ledgers across multiple GSTINs of a single legal entity.
(ii) Transfer of Balances in Electronic Credit Ledger across multiple GSTINs of a single legal entity.
(iii) Providing for taking Input Tax Credit during any subsequent financial year in respect of transactions relating to the earlier year without any restrictions or cut off period for availing the credit relating to the earlier period/year.
8. Conclusion :
We hope that the Hon’ble Finance Minister would look in the grievances/submissions made by us for the proper compliance and implementation of the scheme of the GST in the larger interest of the economic development of the country and instruct the officials to properly guide the tax payers in the matter relating to the compliance of the provisions of the law keeping in view of the technical glitches in the GSTN Portal.
Thanking you Madam,
For All India Federation of Tax Practitioners
[S S Satyanarayana]
Indirect Taxes Representation Committee.