Solve GST problems faced by Trade, Industry & Tax Professionals- Request to FM

Association Of Tax Practitioners,  Ernakulam has made a representation on GST problems faced by Trade and Industry and Tax Professionals. They raised the issues which includes the following-

1. Unable to login due to site showing capacity of 150000 already logged in at all the times.

2. Unable to save data to portal and site showing –”Received but pending”

3. GSTR 9 error showing “Return already under process, if error persists quote error number RET00009 when you contact customer care for quick resolution”

4. While filing Annual Returns – many times we get an error as “Unable to Connect to Server”

5. While Login at portal – We get an errors as “there seems to be an inadvertent problem while communication with GST System. This may be on account of one of the followings” thereby unable to access the site.

6. The saved data automatically got lost which compelled the members /assessee to fill again all the details

7. The digital signature facility is not efficient or some time heavy traffic at portal it is not working;

8. While filing information on the GSTN portal, repeatedly errors were shown with no explanation about the problem/rectification which needs to be done by assessee;

Full text of the Representation is as follows:-

Association Of Tax Practitioners

State Committee

Devi Nivas, Varghese Thittel Road,Perumanoor.P.O, Ernakulam-15
Reg.No:ER.38/87

(Registered under the Travancore-Cochin Literary, Scientific & Charitable Societies Registration Act 1955)

MEMORANDUM

To,

The Hon’ble Union Minister of Finance
Government of India
North Block, New Delhi – 110 001,New Delhi.

SUB:  Memorandum for GST problems faced by Trade and Industry and Tax Professionals.

Respected Madam,

1. GST Network: – Why it is not working properly since introduction of GST

Respected Madam, GSTN is creating problems since inception of the GST. It is not well equipped with required capacity hence filing of return is always a problem. The GSTN always crashed before one or two days before the due date of every return. Recently it is advised to file the returns 3 days before the due dates but sir, this is not the solution but it is acceptance of the shortcoming of the GST Network. Recently on 20^th Dec. 2019 at last date of filing of GSTR-3B GST network was working perfectly when internet was blocked for security reason in some part of the county and it shows that GSTN can work smoothly but the capacity is the problem. Respected Madam, Please order for the enhancement of the GSTN capacity so that it can work smoothly, GSTN is a national portal of Indirect Tax and our country and its working, capacity and speed should be a prestigious issue for us since we are the top IT country of the world but the working of GSTN is not up to the mark. As per the accepted principal of IT Industry, the IT system should be construed with visualising the demand of Next 10 years but the GSTN is a not up to mark since first day of its operation.

Your good self is therefore requested to please compel the service provider of GSTN to increase its capacity and if is not possible then changing the service provider in the best interest of the general Public. The problems of GSTN will not be solved by giving all the responsibility to the Dealers and professionals. It is just a capacity and speed problem which can be solved by introducing the technical solution. GSTN is biggest hurdle in smooth Procedural implementation of GST and your good self is requested to please look into the problems related to GSTN and please give the instructions to solve ASAP.

We have faced severe issues at the GST Service Portal for your ready reference: –

1. Unable to login due to site showing capacity of 150000 already logged in at all the times.

2. Unable to save data to portal and site showing –”Received but pending”

3. GSTR 9 error showing “Return already under process, if error persists quote error number RET00009 when you contact customer care for quick resolution”

4. While filing Annual Returns – many times we get an error as “Unable to Connect to Server”

5. While Login at portal – We get an errors as “there seems to be an inadvertent problem while communication with GST System. This may be on account of one of the followings” thereby unable to access the site.

6. The saved data automatically got lost which compelled the members /assessee to fill again all the details

7. The digital signature facility is not efficient or some time heavy traffic at portal it is not working;

8. While filing information on the GSTN portal, repeatedly errors were shown with no explanation about the problem/rectification which needs to be done by assessee;

2. Give one chance to remove technical mistakes and allow the revision of returns

GST is A New tax and Indian Trade & Industry with the help professionals have given its 100% to GST and it’s procedures but since the tax was new hence lot of technical Mistakes were done by the dealers though the same did not have any financial effects or any intention to avoid the tax. Further GSTR-3B was introduced as a stopgap arrangement but later it was inducted as a return in the Law books but Revision facility of GSTR-3B was not given. Some of the mistakes made by the dealers is GSTR-3B are irreparable if the revision facility is not given. The examples are the credit of SGST and CGST is taken in IGST wrongly or vice versa. Tax is wrongly set off etc. These are initial mistakes and the reason is new tax regime and unique and back to back procedures. Your good self is therefore requested to please allow one time amnesty to rectify all these technical mistakes and further allow one time revision of GSTR-3B filed in the Financial Year 2017-18.

The GST is introduced for simplification of existing VAT, Central Excise and Service Tax Laws but in all these Taxation laws there was a facility to revise all the returns and even in Income Tax Return there is a facility to revise the returns. The revision of return was a facility in erstwhile laws and GST has replaced them with a view to simplify the indirect taxation system of the country and this essential facility is withdrawn? To make the law viable and easy to follow and make it logical please give facility to revise the earlier returns otherwise the Annual return will not serve any purpose at the time of assessment and every assessment will be made after issuing the notices and this not the purpose of GST.

3. Interest on gross tax is illogical and impracticable section 50(1)

The intention and notices of the department to collect the interest on Gross amount of tax in case of delay in filing the returns instead of charging the interest on Net due payment is creating very big problems for the Trade and Industry. Even GST council and the Government is not agree with this arrangement and a amendment is moved in this respect in Budget-2019 and a proviso to section 50(1) is inserted to mitigate this hardship but it should be made retrospective instead prospective so that the problem of the Trade and Industry in this respect can be solved.In public interest your good self is requested to make a retrospective amendment in this respect and further disposal of this matter in logical way, please instruct the department not to issue notices in this respect.

4. GST Mismatch problems: – logical and practical solution is need of the hour.

Respected Madam, the provision of 10% Input credit provision should be postponed and it should be introduced again with proper preparation and planning of the time. The time limit given in the provision is very impractical and the dealers should be given at least 3 to 6 Months time for clearing the Mismatch of the input credit. Here I am not supporting the tax evasion or non payment of tax but if the tax is paid by the dealer to the seller then it should not be collected from him again on the ground that there is delay on part of the seller in filing his returns Since the purchasing dealer has no control on return filing activity of the selling dealer.

There may be several reasons for delay in filing of the returns and if in the same month the ITC – Input tax credit is withheld or blocked and purchaser is asked to deposit the same is not a practical solution. It will unnecessarily block working capital of the dealers.In any case the tax will be paid by the purchaser if it is not paid by the selling dealer with interest but he should be given a time of 3 to 6 Months to control the transactions of the seller and compel him to file the returns and clear the mismatch of the ITC.

It is very easy to say that “Choose your vendor wisely” and the RC is also given to the seller by your Government so it is the duty of the Government to compel the seller to deposit the tax instead of punishing the purchaser who has already paid tax to the seller. Your good self is required to see section 36(4) and made suitable arrangement to give  relief to dealer from this hardship and allow them 3 to 6 Months time so solve this problem.

5. Remove Illogical And Impracticable Provision Of RCM

Respected Madam, the provision of RCM on inward supply from unregistered dealers is a very impractical provision especially in the cases where the paying dealer is getting the instant credit of the same. It has Zero revenue effect in most of the cases.

GST is a new tax and RCM is a very innovative provision hence in most of the cases dealers has made default in paying the same though they have paid the full tax as per their tax liability and in these type of cases the RCM is just a technical formality.Respected Madam, please consider the dealer who defaulted in paying the RCM and taking credit of the same due to complications attached of this provision though they have otherwise paid their full tax liability and abolish the same since inception to give relief to these dealers.

Respected Madam, we are giving herewith an example how RCM has no financial effect on the revenue. Let us assume a dealer has to pay tax amounting to Rs. 5.00 out of which RCM is Rs. 50000.00, the dealer failed to pay RCM but paid tax Rs. 5.00 Lakhs. The same dealer has paid Rs.50000.00 as RCM and paid the normal tax as Rs.4.50 Lakhs since he is eligible to get ITC of Rs. 50000.00 paid by him as RCM. Hence in this case also total tax deposited is Rs. 5.00 Lakhs. Rs.50000.00 is paid as RCM and Rs. 4.50 Lakhs paid as Normal Tax. The RCM u/s 9(4) was introduced on 1^st. July 2017 and it was postponed on 13^th Oct. 2017 and after one more postponement the provision was practically scrapped. Why the provision which was postponed for its impracticality is applicable up to 13/10/2017?

In these types of cases the RCM is just a technical formality and having no financial effect so please scrap it since inception of GST i.e. 1^st, July 2017.

6. Input credit time expired please give one more chance to dealers :- section 16(4)

As per section 16(4) the input credit can only be taken up to a definite period but at the initial 2 years of GST lot of dealers make a mistake of not taking the credit within stipulated time but in that case the Government has already received the tax under consideration.If this credit is not give then it will be tantamount to double taxation on a single transaction because at first stage the purchaser has paid the tax to the Seller and at second stage department is not giving him the credit so he is required to pay it again. It is a big hardship to these dealers though GST itself is at initial stage at that time and not fully stabilised. Your good self is therefore requested to please give suitable relief to the sufferers of this provision at least for initial 2 years.

7. Extend annual return date to 30/06/2020

The utility for the Annual Returns for the Assessment year 2018-19 is still not released till writing of this Letter. The dealers and professionals will need the time to file this return up to 30^th June 2020. At present the due date is 31^st. March but till today i.e. on 19^th Feb 2020 the utility is not there at GSTN hence it is prudent that at the time of introduction of utility the final date should be declared at 30^th June 2020.

It is humble request to your good self to consider this Logical demand in a day or two so that dealers can file the annual return easily and without any mistake.

Further The number of Notices issued in recent days are too much and it is clear indication that tax payers are not very comfortable with the GST procedures hence technical mistakes are too much . More Notices means more paper work and more appeals and litigation but these were not the exact objectives of GST. So something is really wrong with GST and it is a humble request and suggestion to your good self please instruct your dedicated GST team to consult some real GST experts who are working on Ground level and facing the real problems. They are facing the real problems hence it is better to consult these experts for practical solutions of GST Problems.

Hope your good self will look into these problems and possible solutions as narrated above and give a big relief to Trade and Industry so that they give their 100% contribution to the Economy of the country.

Our Association is of the belief that in a democratic country, the People of the country are the supreme authority and it is confident that the Government will not suppress the concerns of its People. We understand that the Govt. and department is well aware of the persisting difficulties of the People on account of the incapability of the GST portal.

For Association of Tax Practitioners

s/d
A.M.Remeshkumar
State Working President

Ernakulam
21-02-2020

CC to:

1) Prime Minister’s Office, New Delhi

2) GST Council, New Delhi

3) The Revenue Secretary, Govt. of India, New Delhi

4) Minister of Finance, Govt. of Kerala, Thiruvananthapuram

5) Principal Chief Commissioner, Board of Indirect Taxes and Customs, Thiruvananthapuram Zone

Source–  Memorandum on GST problems faced by Trade and Industry by CA Sudhir Halakhandi

Download above Memorandum in PDF Format