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Issues in GST- completion of 4 years of GST-

Today I am discussing some burning issues related to GST even after 4 years of completion of GST-

  • Issue No 1- Denial of ITC in hands of recipient in case of non-payment of taxes by Supplier-

Above issue is very sensitive issue since implementation of GST in 2017.

Whether recipient is justified in reversing itc due to non-payment of taxes by supplier?

Recipient has fulfilled all conditions for claiming ITC AS PER Section 16 (2) OF CGST act 2017 and also made payment to supplier then how can ITC be denied to him for failure on part of supplier. Also, how can recipient comes to know that supplier has not paid taxes related to F.Y 2017-18, F.Y 2018-19 as status of return filed or not by supplier introduced in 2019 at GST PORTAL.

  • Issue No 2 -A new condition introduced in Budget 2021 to avail ITC – New clause A new clause (aa) to section 16 (2) of the CGST Act is sought to be inserted to provide that input tax credit on invoice or debit note may be availed only when the details of such invoice or debit note have been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note.
  • Above stated clause yet to be notified then what is relevance of GSTR-2A OR GSTR-2B in filling returns as on date.
  • There can be various reasons that ITC not reflected in GSTR-2A or GSTR-2B such as wrong GSTN entered while filling GSTR-1 by supplier, B TO B transaction entered as B TO C in GSTR-1 etc.
  • Issue No 3 -ITC on goods & services for construction of immovable property like hotels or malls denied u/s 17(5) of CGST act though intended to be used in course of business or furtherance of business-not justified. It only results in double taxation.
  • Issue No 4 – ITC denied on account of goods distributed as free samples or gifts even though it is related to business for eg -free sanitizers or masks given to employees for their protection or gifts given to dealers or distributors if they achieve sale targets .
  • Issue No 5- Refund of ITC related to capital goods in case export under LUT without IGST payment –

We all know refund can be applied in two ways in case of export – With GST or without IGST but in case of export with IGST payment –ITC related to capital goods also can be utilised for setting off output liability then we cannot get refund of ITC related to capital goods in case export under LUT without IGST payment.

  • Issue No 6- Harassment to taxpayers by sending notices and asking same information by both- Central Tax division and State tax division.

Notices should be issued to taxpayers either by Central tax division or State tax division but repetitive notices issued by both Centre and state causing undue hardship to taxpayers.

  • Issue No 7- Relaxation given by government due to COVID -19 pandemic to two categories of taxpayers- Taxpayers having turnover above 5 crores and less than 5 crores so what about taxpayers having turnover 5.01 crores so there must be some marginal relief provided to such types of taxpayers as small amount of increase of one lac leads to increase in interest rate from 9 % to 18 %.

Above issues are very sensitive and need to be considered by government for betterment of taxpayers and also for making GST- GOOD AND SIMPLE.

Queries related to above mailed at mamta0581@gmail.com


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July 2024