All India Federation of Tax Practitioners has made a Representation on issues being faced by taxpayers and tax professionals related to GST Act, GST portal, network and glitches thereof. Text of the same is as follows-
215, Rewa Chain
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Tel.: 2200 6342/437/4970
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All India Federation of Tax Practitioners
(Au Association of Advocates, Chartered Accountants & Tax Practitioners of India)
Hon. Speaker Sir
Om Krishna Birlaji,
Smt. Nirmala Sitharaman,
Hon’ble Union Finance Minister,
Government of India & Chair Person – GST Council,
134, North Block, New Delhi-110001
Hon’ble Sir /Madam,
Subject: Representation on issues being faced by taxpayers and tax professionals related to GST Act, GST portal, network and glitches thereof
We take this opportunity to bring to your kind attention about issues related to GSTN Portal, other procedural and technical aspects including glitches, extension of dates which need to be addressed by the Government to further strengthen the taxpayer’s confidence. En the larger interest of the taxpayers and tax Professionals Of the country as well as improving compliance level this representation is made by All India Federation of Tax Practitioners.
The Professional Association seeking measures to resolve the technical glitches in the GST Portal.
India’s largest tax reforms, the Goods and Services Tax, was launched on July I, 2017 but it yet to be fully put in place due to patchy technical implementation. GST is a complete overhaul of the taxation system in India powered by the GSTN Network. However it has been almost 31 months since its introduction and the GST regime had its fair share of roadblocks. Even today also GST is not error or glitch free. The road ahead promises a bumpy ride for the tax payers. It gives the impression that the Government is still riding on the learning curve.
Any new reform, particularly a tax reform, is bound to have initial resistance.
I lowever tax paying businessmen were so frustrated by multiple taxes and compliances under earlier laws that they welcome GST wholehearted hoping it will solve all their problems and GST will be easy to understand and implement.
The government also trumpeted GST from top of the roof, in spite of the fact that Government was ill prepared for it. It believed that it has taken so long that the drafting personnel have made it full proof. On paper and conceptually (1ST is very good hut practically not easy to understand and implement.
World Bank calling Indian GST a very complex taxation system. The regime is not tax friendly. Frequent technical glitches in the GSTN website have been a big cause of inconvenience for businesses.
The Comptroller and Auditor General of India (CAG) has pointed out lacuna in the goods and service tax (GST) regime, saying that system-validated input tax credit through invoice matching is not in place and a non-intrusive e-tax system still remains elusive after two years of its roll out.
It pulled up the department of revenue, the Central Board of Indirect Taxes and Customs (CBIC), both under the finance ministry and GST Network (GSTN) for their failure to try out the GST System adequately before rolling it out on July 1, 2017.
The implementation of GST and thereafter functioning of GSTN Portal has lead to situation wherein the taxpayers, tax professionals and national interest get jeopardised and all are suffering which would not be in the interest of the nation and its overall growth.
Since the inception of goods and services tax, the register persons are facing many problems and challenges in complying with the provision of the Act and the rules made there under. The GST portal is the main source for the problems caused to the registered person. The glitches in the system prevent the registered persons in tiling the returns in regular time for which the due dates for various returns have been postponed now and then. Major taxpayers reported difficulties in logging in to the portal and filing their returns. There are many technological issues in network. Design bugs in GST Software has added to problems.
There is a lot of technical changes in the area of Indirect Taxation especially in GST. We all are aware of the problems and difficulties faced by the taxpayers related to GSTN Network. The compliance, requirement under the GST has increased many folds.
It is experienced that a day ahead of GST deadline, visitors to the GST Portal are greeted with a message that read: “There seems to be an inadvertent problem while communicating GST system.”. Taxpayers are unable to access GST Return filing system before deadline runs out. The taxpayers are complaining about the perennial inconvenience they face while filing GST Returns. This is the story every month as the GSTN website stop working for hours during last days of filing returns. Frequent technical glitches of the GST Network website is become a big cause of inconvenience for taxpayers and other compliances continue to get affected due to these tech snags. The taxpayers expect the system to work smoothly and efficiently. Moreover, the frequent changes in the GST law mean that every month taxpayer have to wait until last week before the deadline for the complete clarity on the issue. So how can the Government expect the taxpayer to file returns a week ahead of the deadline. GST being a self— assessed tax requires taxpayers to do a thorough checking before submitting returns that means they have to wait till the last date. The Government must give reasonable extension for tiling tax returns in advance especially when their own servers are incapable of taking massive load and there should not be any late fees for late tiling of returns due to non working of portal, server, website. Taxpayers intermittently face outage when submitting their returns to GSTN.
Joint Associations Action Committee believe in Constitutional methods of protest to make their voices heard and to draw the attention of decision makers and appropriate authorities. Keeping the aspects in mind, this memorandum and representation is made with a request to do the needful in the matter and forward the same to appropriate authorities. All members of Professional Associations and Trade Association will participate in symbolic protest held on 12.02.2020, Wednesday at All Districts of the State of Gujarat and will submit the memorandum to following authorities.
1. Collector of the District
2. Chief Commissioner of SGST and/or Office of the SGST
3. Principal Chief Commissioner of CGST and/or Office of the CGST
4 Member of Parliament
5. Member of Legislative Assembly
6. Chamber of Commerce and Industries, Trade Associations etc.
It is pity that Government has not changed it s ways. Over 500 notifications, circulars, clarifications, amendments issued in last 30 months is enough testimony that GST was hastily implemented. Drafting of acts, rules, notification and circulars is full ambiguity and that has really made GST complicated for common taxpayers. It is nightmare for tax professionals, tax officers and tax payers to keep pace with frequent changes and understand it properly. On top of it every small unintended mistake of omission invite penalty. And in addition to that problem of GSTN problem and glitches have added toping on the basket of issues and problems. Businessmen are forced to spend more time in meeting compliances than running their businesses; Tax Laws try to criminalise every non-compliance. ‘Ibis is now the trend.
I he actual issues are fixed on priority and if the same are solved it will be a big hush to the taxpayers and tax professionals who are struggling right now.
Followings are our initial demands to be solved, resolved on priority basis.
1. Immediate solutions of glitches and problems related to GSTN Portal and Network
2. Waiver of Late Fees and refund of late fees earlier paid by the taxpayers in the cases were dates are extended later on
3. Extensions of due dates for filing Tran-1 & Tran-2
4. Extension of due dates for tiling Annual Returns and Reconciliation Statements for F.Y. 2017-18 & 2018-19
5. Revision and Rectifications of all GST Returns
6. Simplification of procedure and format of filing GST Returns
7. Different due dates for payment of tax and filing of returns
8. Single return having all the details of supply and receipt
9. Date of deposit of tax should be considered as payment of tax
10. No late fees till the smooth and efficient function of GST Portal and Network
11. Relaxation in stringent procedure
12. Proper testing of the system and procedure before implementation
13. Amnesty for technical mistakes, pending GST Returns
14. Smooth functioning of helpline and helpdesk
15. Immediate solutions of the problems (Grievance)
16. Section 37 and 39 are to be read with Rules i.e. Rule-71(2)(3), placing a quantitative cape over a specified period is not permissible. As many rectification as are necessary may please be allowed
17. Software systems have to be in tune with the law, and not vice-versa
18. Utility of Annual Returns and Reconciliation Statement for F.Y. 2018-19 is not yet made available. Hence, extension of another three months i.e. up to 30.06.2020 is required
19. To publish email ids and workable telephone numbers of the nodal officers on websites of GST, CBIC and State Commissionarates
20. Self adjustment of Balances in Cash Ledgers across multiple GSTINs of a single legal entity.
21.Transfer of Balances in Electronic Credit Ledger across multiple GSTINs of a single legal entity
22. Retrospective Impact to the amendment for applicability of interest on net amount paid in cash rather than the gross tax amount w.e.f. 01.07.2017.
23. Need to change the constitution and functioning of Advance Ruling Authorities (In Gujarat, since last one year we do not find sitting of Advance Ruling Authority)
24. Clarification on the place of filing of appeal in cases alleging E Way Bill violation
25. Revision of FORM GSTR-9 / 9C. New return filing system, E-Invoicing and / or any new systems should be thoroughly tested before implementation to avoid any technical issues.
26. A comprehensive manual must be released for the aid of the tax payers to understand the system requirements and validations.
27. Increase portal capacity
The major irritant in the entire space of GST has been the systems related challenges. These challenges have occupied the mind space of not only the tax payers and administrators but the judiciary has also been pressed into look at some of the cases. For an IT behemoth like India, it is important that this piece is appropriately addressed. Our representation and memorandum is also supported by the following judicial decisions:
Delhi high Court decision in the case of Sales Tax Bar Association and Others vs. Union of India W.P. (C) 9575/2017 & CM No. 38987/2017.
The rights of Taxpayers cannot be subjugated to the poor and inefficient software s stems adopted by the authorities. The taxpayers suffer due to technical glitches mid the systems limitations cannot be justification to denied the relief and benefit to which the taxpayers are legally entitled. The technical glitches impact the statutory filing or reflection of the right balances of the portal. Unfortunately, even after passage of over 31 months, the authorities have not remedied their omissions and failures by taking corrective steps. The Government, GSTN Council and GSTN Network continued to take shelters in the limitations in, and the inability of their software systems to function properly and smoothly. GST Systems still in a trial and error phase and put to much of a burden on the taxpayer to expect them to comply with the requirement of the law where they are unable to even connect with the system on account of network failures or other failures. The Hon.’ble. Delhi Iligh Court in the case of The Tyre Plaza vs. Union of India & Ors. Appeal No. W.P. (C) 8970/2019, dated 20/08/2019 held that taxpayer should not suffer due to failure of the GST System. The same view has been also observed in several orders i.e. in Bhargava Motors v. Union of India 2019 SCC Online Del 8474. kusuni Enterprises Pvt. Ltd. v. Union of India [WP(C) 7423/2019] and Sanko Gosei Technology India Pvt. Ltd vs. Union of India & On. [WP(C) 7335/2019].
The Delhi high Court has also issued notice to Infosys and Tech Mahindra to be present in a case where technical flaws, glitches and limitation of the goods and services tax network (GSTN) are being challenged. The Court said it was necessary for the companies to be present, as an when required to better understand the issue at hand and its intricacies.
The Finance Ministry has also summoning senior executives of Infosys, to explain by technical glitches have not been resolved. Despite repeated requests from the ministry. The Government has also acknowledged problems in online filing of GST Returns. Government of India has also issued notification dated 4th February, 2020 F. No. CBEC-20/10/16/2018-GST (Pt. 0/352 for Transitional Credit —Ensuring uniformity in the procedure to be followed by the field formations for examining and forwarding the representations of the taxpayers to GSTN on issues pertaining to technical glitches on common portal. The Government also fears that glitches would delay plan to augment GST compliance measures, which need return filing and data capturing to be seamless and Government summons Infosys to explain glitches in GST return filing.
The group of ministers (GoM) (five members) constituted to look into technical glitches in the GST Network (GSTN) led by Bihar Deputy Chief Minister Sushil Kumar Modi in September, 2017 to identify various issues of portal and technical glitches and it was decided to have a review meeting with vendor Infosys and progress on this task every fortnight about solutions of the glitches. Mr. Modi further said that the task of fixing the new Goods and Services Tax Portal was like building a ship while sailing on it. He further said that he has already instructed the Infosys to make the entire system more user — friendly and interactive. The GSIN is back bone of the new Indirect Tax System. He further said that portal should be more interactive with pop-ups and adequate alerts and warning for users.
No report has been published or released so far from such committee. If at all it is published then copy of such report may kindly be given to us. Moreover, Government has also decided to set up IT Grievance Redressal Mechanism to the grievances of due to technical glitches of GST portal somewhere in the April-2018. The function and role and result of such committee is also not published till date.
The Rajasthan High Court has stepped in to addressed the grievances and extend the due date of filing GSTR-9 and GSTR-9C for the taxpayers of the Rajasthan till February, 12, 2020 without late fees. The Court further directed the department to it led a detailed reply about their preparedness and GST capacity. The High Court considered the bottleneck with respect to the GSTN server capacity to handle the tiling of pending returns within the deadline and also perused the screenshots submitted by the Pettioner regarding the unsuccessful attempts of the tax professionals time and again during the extended period. The HC further expressed that it is a legal right of the taxpayers to file return up till the last date. The department has filed SLP before the Hon.’ble. Supreme Court against the such order of the Rajasthan High Court.
Recently, the Hon.’ble. Supreme Court in the case of Union of India vs. Tax Bar Associations and others in SLP to appeal Nos. 3839/2020 dated 10.02.2020 passed the order were by declined to interfere with the order passed by the Rajasthan High court Jodhpur wherein the Hon.’ble. Rajasthan High Court has extended the deadline for submitting the Annual Returns and Reconciliation Statement and disposed off the petition filed by the petitioner (U01). The High Court has also directed the petitioner to come out with a solution in accordance with the aforesaid capacity as soon as it is practicable. The Supreme Court has also clarified that there would be no penal consequences for delayed filing of returns and reconciliation statements due to problems of GSTN server and technical glitches at GSTN Portal, which are beyond the control of taxpayers.
The CBIC extended the due date for furnishing GST Annual Returns and Reconciliation Statements (GSTR-9/9A/9C) for F.Y. 2017-18 on 31′ January, 2020. at mid night in a staggered manner due to portal was not working properly. GSTN Portal was not working for most of February I, with the site showing it was under schedule maintenance.
In it moved aimed at distressing the GST system, the finance ministry has also staggered last dates of filing GSTR-3B, and provided three dates for different categories of taxpayers. In the Notification No. 07/2020 issued dated 03/02/2020 it is said that glitches in the return filing systems of GST network were reported on the last day of filing returns and trade and industry had to face problems and to distress the process the dates are staggered and for further improving the performance of GSTN filing portal on permanent basis, several technological measures arc being worked out with Infosys and will be in place by April, 2020.
Frequent changes and frequent revision of GST Rates have led to uncertainty for businesses and the government as per the recent statements of Union Finance Minister. Therefore, it will make changes a early affair, moving away from frequent changes.
11th February is the last day of filing GSTR-I for the month of January-2020.
Even today also the GSTN portal is not functioning and working properly and the taxpayers are unable to upload the GSTR-1 which may resulted into payment of late fees from 12th February 2020 for no fault of taxpayers.
GST Council, in its 38th meeting held on 18.12.2019 decided to establish a structured grievance redressal mechanism for the taxpayers to tackle the grievances on GST related issues. The issue may be general or specific in nature. The council approved for the constitution of grievance redressal committee at Zone/State level. ON the basis of the decision of the Council the Board issued instructions vide F.No. 20/16/16/2018-GST(Pt.3) dated 24.12.2019.
Functions of the Committee
The committee intends to resolve grievances in a time — bound manner, and all the activities will be displayed on dedicated portal.
As of now. the Government must ponder on the above tricky and debatable points to ensure that the future generations will term India’s second tryst with destiny a resounding success. For GST to really etch itself in the pages of History, the L!P \ eminent must very proactively tend to taxpayers grievances and provide and easy to use digital tax solution for the Indian Diaspora.
Glitches in the GS’IN Portal, cumbersome compliance procedure and documentation are major areas of concern. The issues with the robustness and volume handling capacity of the GST Portal need to be addressed immediately and same has posed major challenges to taxpayers. A major revamp of the portal is necessary to make it more efficient.
The mayhem, chaos experienced by lakhs of taxpayers and tax practitioners and total failure of GSTN has raised serious doubts over its capabilities over and above which it has ensured disruption of business of taxpayers and have exposed the tax payers to legal hassles under various sections of GST Act. The erratic behaviour of GSTN portal while filing GSTR throwing new errors after errors, continuous crashing has made the life of thousands of taxpayers and tax professionals who are working in 3 shifts, non-stop, without holidays, without enjoying any festivals and v‘ ;bout enjoying any family life for the sake of nation building so that legal compliance required under GST ensured without any legal non compliance which vi !I hit taxpayer with penalty interest and fine put into such a miserable and a pathetic situation.
We recollect the statement given by the then revenue secretary Mr. Hasmukh Adhia on completion of one year of GST “Its technology that failed us, not people”
In conclusion. More than 31 months down the lines and after multiple policy updates, it seems that not everything has unfolded as plan. The present GST appears to deliver little on promises. The GST Rollout it seems was done with very little homework both at operational and technical ends. The authorities need to pay heed to grow public as well as taxpayers grievances. It must take note of the het that policy must be designed to reduce the compliances burden on the taxpayers.
The present form of GST law leave a lot of scope for varied interpretation which is likely to result in to possible litigation in the GST regime. GST needs complete cilia)] to make it taxpayer friendly.
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