KVAT- Burden of Proof To avail ITC should be both on seller and buyer

At the outset we congratulate one and all for successful implementation of Value Added Tax and more particularly electronic uploading of purchases and sales, as first key of success of economy lies in accounting of all the transactions.

As we are all hopeful of implementation mother VAT Act i.e. GST at any time during the financial year 2016.

In this connection we would like to share some of the difficulties and pains had in during the decade old VAT in the state and the country.

The Department has faced severe challenge of tracing out of first issuer of tax invoice in the state.

The Dealer has faced two very important and painful things under the present system of vat is namely

1.Hurdles in claiming of Input tax credit under the guise of partial rebate/time limit etc.,

2.Burden of proof

To address this and for hearty welcome by all the stake holders the introduction of GST we have some suggestions which may your good office to think of .

1.There should not be any barricades or hurdles in claiming of input tax credit, whatever the reason.

2.Success of GST mainly depends on accounting and reporting of all the transactions by all the dealers without any legal, practical or technical difficulties.

e-upass

1.Instead of uploading one transaction details by two persons namely seller and buyer we should make mandatory uploading of sale details by all the sellers irrespective of turnover in the system through his account and buyer should acknowledge/reject the data available in his account.

We can also make mandatory to mention of e sugama No along with sale details wherever it is mandatory it can also be linked to his e sugama data. This will help in checking the tax evaders by not accounting sale transactions.

Advantages of the proposed system.

1.By doing this we can avoid duplication of work.

2.More than 60% work of dealers and the practitioners work will get reduced and compliance become easy and user friendly.

3.There will be no problem of Mismatch.

4.No problem of targeted and non targeted dealers, no discrimination & no excessive delegation issue.

5.Very importantly pushing of wrong sales to wrong persons can be avoided.As in the present system there is every possibility of pushing wrong cash sales to wrong persons and later denial of buyer will give chance to litigations.

6.Further under the present system the buying dealer has no means to compel the selling dealer to upload their (seller)sales details or to rectify the error crept in uploaded data.

7.Department can put restriction of availing input tax credit only to those dealers who have accepted their purchases transaction through online.

8.By making compulsory uploading of sales of every dealer irrespective of their turnover the State GDP will go up drastically

9.Time of the department officials in running the system can be saved.

10.Further instead of waiting upto the 20^th day of succeeding month for uploading the data the selling dealer can upload his sales details then and there and on receipt the buyer can acknowledge or reject the same.

11.Further under the present system if a selling dealer uploads as lumpsum sale it is very difficult to verify the data by a purchasing dealer.

12.Existing provision is like a snake without poision or we can say a teeth less provision as under the existing system department cannot deny input tax claim to purchasing dealer not because of not uploading the sales details of seller. At the most the Dept.can only levy a penalty of Rs.50/- per day for non submission e upass details only after issue of notice by the department.

13.With the proposed system BURDEN OF PROOF can be fixed both on the seller and the buyer instead of only on buyer as per the present system, which is really painful one.

14.Further suggested system will act like online acknowledgement by the purchaser having received the goods which help in litigations of the dealer community and dept will be serving the prompt dealers as witness to the transactions.

15.If the same system is implemented for interstate sales the problem of statutory forms like form C/F can be removed by generating a unique number after accepting purchases by the buying dealer.

16.Last but not least by making online billing we can save cost of the dealer, save paper, save trees, remove check post increase the running kilometer of our transport vehicles to the international standards.

17.Finally the proposed system helps it auto generation monthly return under KVAT Act with sales details uploaded by seller and accepted by the purchaser.