Ahilya Chamber of Commerce and Industry has made a representation to Chairperson of GST Council, Ministry of Finance for Waiver of Penalty under GST Law, relaxation of RULE 36 (Taxpayer can avail ITC (+10%) what is reflected in GSTR-2A) and relaxation of requirement of 6 Digit HSN Code. Text of the representation is as follows:-
Date : 12/10/2020
GST Council, Ministry of Finance
Subject : Taxpayers seek relief on 3 Points in GST Law and process
Admittedly, the Council has been very receptive to addressing taxpayer’s hardships and have been extending last dates for filing returns, reducing penalties for delays and so on due to the extra ordinary situation created by Covid-19.
However, unfortunately, the Covid-19 epidemic has not subsided to the levels expected at the time of granting these reliefs and trade and industry are still reeling under its adverse impact, which has created a great handicap.
We, therefore, request you to please consider the following:
1) Waiver of Penalty under GST Law :
As mentioned above, you were considerate to waive of/reduce penalty under GST law till 30th Sep 2020. Business is trying to recover and gain momentum. Many sectors were badly affected and they see ray of light now. Coordination between Taxpayer and Tax practitioner / CA in not in full swing due to huge compliance under different laws. We request you to kindly handle this critical situation and waive off all penalty under GST law (pertaining to filing of GST returns) till 31st March 2021. This will not only give relief to tax payers, but will allow extra time for proper filing of returns. Correct filing of returns is “need of hour” instead of filing improper returns in hurry.
2) RULE 36 (Taxpayer can avail ITC (+10%) what is reflected in GSTR-2A) :
Due to large amount of Tax evasion and erroneous GSTR3-B along with incorrect ITC, government has introducedRule 36 in GST LAW to plug in this loophole. This Rule directly links Taxpayer ITC with GSTR-2A. Taxpayer is allowed ITC of amount equal to GSTR-2A + 10% over and above ITC shown in GSTR-2A.
Government has already put many checks / process in filing returns. Recipient has already paid GST component to Supplier. Depriving recipient“ITC” for amount which he has already paid, is a great hardship, unjust and against his fundamental right. WE STRONGLY OPPOSE THIS RULE AND REQUEST FOR DELETION OF THIS RULE IMMEDIATELY. This is increasing more complexity in law and putting heavy work load and uncalled for financial burden on honest tax payer / tax practitioners / C.A.s
3) HSN Code compulsion of 6 Digit instead of 4 Digits:
It took 3 years for taxpayer to get familiar with 4 digits of HSN code under GST law. All necessary software have been designed keeping 4 digit of HSN codeas base. Latest GST council meeting has proposed introducing HSN code of 6 digit for all tax payers having TO above Rs.5 Cr from 01st April 2021. With this letter, we request GST council to please stop new trial.
Taxpayers are not in condition to accept this new trial from GST Council. They cannot redesign / realign their software with 6 digit HSN code. On top of that, it will be herculean task for tax payers to educate accountants with new system of HSN code. It will again derail compliance which is already too much.
We fully trust that the issues raised by us will be found most justified, all of them being without any revenue implications, and the Council will take a positive view on the same.
Very truly yours,
For Ahilya Chamber of Commerce and Industry