Suggestions to provide ease of business to dealers addressing burning issues in law & to make GST actually ‘simple’ so that compliance level can be increased. These SUGGESTIONS can assure lot of relaxation to businessmen against in-genuine hardships.

>Regarding Seamless ITC

1. REMOVE ITC restrictions of rule 36(4) and proposed Sec. 16(2)(aa)

REMOVE Rule 36(4) 16(2)(aa) permanently – Rule 36(4) AND proposed 16(2)(aa) restricting the credit of Invoice not appearing in GSTR-2B in particular month. This is ultra –vires to section 17 for seamless availability of ITC. Also, Ultra-vires to right of ITC which is against Natural law of justice. It’s not just possible to calculate on every 11th & that to cumulatively every month. It’s financially burdening as well as Business killing decision. Claim of ITC should not be depend on action of Counter party, which is beyond our control. Let’s not make condition which is impossible to fulfil. Even, this rule doesn’t consider that ITC of quarterly dealers may be reflected after quarter end..We request that Rule 36(4) and 16(2)(aa) may be permanently removed. This Section & rule are business -killing.

30 Suggestions For Simplification of GST Law, Procedures & Returns

2. Remove rule for Denial of utilizing ITC u/r 86B

Registered persons (to whom this Rule is made applicable) cannot use ITC in excess of 99% of output tax liability. In simple words, more than 99% of the output tax liability cannot be discharged by using input tax credit. Again, this is Ultra-vires to right of ITC which is against Natural law of justice. Seamless ITC is natural right. Please remove Rule 86B

3. Remove Provision ITC reversal due to 180 days Non-payment u/s 16(2)

Government by inserting Second proviso to S. 16(2) and rule 37 i.e., for reversal of ITC in case of non-payment of consideration within 180 days made an apparent absurdity is the GST law which is over riding the mutual agreements between supplier and recipient which may not be in line with the intention of the GST law which was to enable ITC to taxpayers. We request to Delete the provisions of Reversal of ITC in case of non payment to Creditors within 180 days and interest thereof if late payment is made beyond 180 days. It is used as weapon against Taxpayer in Assessment

GOODS AND SERVICE TAX GST

4. Allow ITC of Capital Goods in Export refund

Rule 89(4) restricts ITC on capital goods while allowing refund on zero rated supplies. I.e. In refund of Accumulated ITC in case of Export under LUT, Why ITC of Capital Goods not allowed whereas ITC of Input services allowed? This curtails refund Amount. Also If Taxpayer is doing export with IGST then Full IGST is allowed as Refund. Why such discrimination in both scheme? If purpose is to give full refund to Exporters, Then GST law must allow Refund of Accumulated ITC without putting bar on ITC of Capital goods

5. Allow ITC of Capital Goods & Services in Inverted duty refund

In case of Refund of Accumulated ITC in case of inverted duty structure, Section 54(3)(iii) provides for refund of credit accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies. However, Rule 89(5) provides that credit on inputs is admissible for refund and not on input services. Experience shows that input services for inverted duty structure forms a substantial value addition and therefore, the tax paid on the same be permitted for refund and rules be amended accordingly. There are numerous high courts had upheld that ITC of services and Capital Goods are allowed to be part of “Eligible ITC”. And Refund must be given without putting such restriction. We request that GST law must allow Refund of ITC of CG & Services also in Inverted duty refund.

6. Relaxation on Sec. 16(4) regarding time limit & GST Amnesty

Eligibility for ITC depending on Section 16(4) condition – Section 16(4) provides that ITC can only be available till next year September month due date. However, this is double edge sword in case where GSTR 3B was pending for longer time. CBIC implemented the GST Amnesty Scheme for the second time through a Central Tax notification number 19/2021 issued on 1st June 2021. It applies to all the pending GSTR-3B returns of previous tax periods between July 2017 and April 2021. The GST amnesty scheme applied from 1st June 2021 to 31st August 2021. Due to sec. 16(4) restriction on claim of ITC, Government has made huge money.This GST Amnesty has not pushed the time limit for claiming ITC for the same periods. So it legally disallows a taxpayer from reporting ITC while filing GSTR-3B of the past tax period. The recipient cannot claim such ITC under the amnesty scheme. The taxpayers must be provided with the full advantage of the scheme by allowing ITC of past periods where the time limit has expired.

Even for Regular taxpayers, Restriction on claiming of ITC of a particular year till the due date of filing September Return of the next Financial Year should be done away with and such restriction may be linked with the date of filing of annual return of the concerned financial year as certain unclaimed/short claimed ITC come to knowledge only while preparing/filing of the annual return.

7. Remove Input tax restrictions on distribution of free samples:

To promote sales, free sample distribution is required to be made by the business entities. Restriction is imposed on input tax credit relating to free samples under Section 17(5)(h) of the CGST Act, 2017. Distribution of free samples is required in the course of business or for furtherance of business. Therefore, we represent that the said restriction should be removed.

8. ONE NATION ONE TAX – CGST credit must be available to set of SGST liability & vice-versa

There are many who have accumulated either CGST or SGST because of set off one credit against IGST without using half-half CGST SGST credit balance. Now problem is they have huge CGST or SGST balance in either ledger. In many cases of utilization of ITC, the taxpayer had to pay CGST although he has credit of SGST available. GST being one nation one tax, set off of SGST may be allowed against COST to further the ease of doing business and also ease the working capital requirement of the taxpayer, there being no loss to the revenue. CGST CREDIT MUST BE AVAILABLE TO SET OF SGST liability & VICE-VERSA. We request to amend GST law and provide this facility to truly prove this claim “One Nation One tax”.

9. ITC Of factory or business car – section 17(5)

What could have been reason to specifically denial of ITC of construction of a Factory or ITC of Car used for business? Why? This always haunts me? ITC on Construction of factory buildings or office property should be allowed. This is essential ITC which should be allowed. Benefits for Manufacturer who are investing huge money. ITC on Motor cars which are used especially for the Business. You may give at least 50% for Non-goods carriage vehicles. This can generate lots of demands in the Auto-mobile sector which is struggling. We request that please allow Input Tax credit of construction of Factory and Motor vehicles used for Business.

10. Remove 16(2)(c) condition – Eligibility for ITC depending on Actual payment to Govt.

Section 16(2) provides that the tax charged in respect of such supply has been actually paid to the Government in cash and he has furnished the return under section 39. Both the conditions are impossible for a buyer to satisfy in the same month he has received invoice. Also it is tough for him to check that the Supplier has paid tax by filling return. Please delete this provision. Similar provisions existed in State VAT Laws also where courts held that if there is no connivance between the buyer and the seller; ITC can’t be refused to the buyer. It’s the duty of the Govt. to collect the tax from the supplier through its machinery. Genuine buyers shouldn’t be made to suffer on this count. Demanding of tax from purchaser shall tantamount to double taxation. Accordingly, we represent that it is unfair to burden the genuine buyers and the section be amended to provide the remedy for the genuine buyers.

>Regarding Late fees

11. REMOVE LATE FEES OF GSTR 1

Remove late fees provision from GST law for GSTR -1. At least give relaxation from swinging sword.

12. Remove late fees and penalty for GSTR 9 & 9C since it is initial years i.e. FY 17-18 & 18-19 & 19-20.

Currently it is exorbitant high. Since, this forms are still new & very technical, many have not filed. Late fees of GSTR 9 & 9C should be waived for larger public interest. Amnesty for GSTR 9/9C for years i.e. FY 17-18 & 18-19 & 19-20

13. REFUND LATE FEES collected till APRIL-2021 above Rs. 500

Refund the late fees collected till APRIL-2021 in excess of Rs 500 per return. For Normal taxpayer as well as Composition dealers Refund of all late fees for all GSTR 3B filled up to period March 2019. It was anyways waived for some very late filers lately & recently they made it to max. Capping at Rs. 500. If this is not done then it will be injustice to those who have been late in filling only few months & paid LATE FEES in lacs / thousands. -As per one RTI, the figure of late fees collected since July 2017 was around Rs. 13000 crores. Most of this money belongs to MSMEs. They filed late with huge late fees because of financial crunch. It is worthwhile to note that the GST council has waived / reduced the late fees in GSTR 3B. However, no decision has been taken for refund of late fees already paid by the dealers in excess of such reduced amount. This kind of discretionary waiver / reduction to only those dealers who have not yet filed GSTR 3B will lead to thorough demotivation to the dealers who have made good the non-compliance by paying hefty late fees. Non refund of late fees is grossly a violation of “Principle of natural justice” and “Principle of unjust enrichment”. It is also a violation of fundamental “Right to equality”.

14. Reduced late fees for all future returns

Reduced late fees of Rs 500 capping for all future returns (i.e Rs. 50 per day or max 500 in total Whichever is lower) for all types dealers. Including composition dealers. When Late fees for late fillers reduced to only RS. 500 capping per return, this definitely need to be rationalised for future return as well.

>Regarding Returns & forms – its design

15. Modify GSTR 3B portal interface so that Negative liability allowed in GSTR 3B

The return in GSTR-3B is not accepting negative figures in table 3.1(a). This creates difficulties in filing of return when the Sales Returns during a month exceed the Sales. Due to this reason, the adjustment can be made only up to the value of sales and the balance has to be carried over and the staff engaged in filing the returns needs to keep a record of the same till it is not finally adjusted. We, therefore, represent to provide this facility immediately as the same is pending for the last 4 years.

16. GSTR 3B design for previous year transactions

the ITC for earlier tax periods, if claimed by taxpayer in subsequent returns as permissible in GST law, there is no separate row to show the same in GSTR-3B of the subsequent period and has to be reported in 4A(5). We suggest that if a new row is inserted in GSTR-3B to report earlier ITC, it will be useful, both for the taxpayer and the department during reconciliation.

GSTR 3B should have ROWS for reporting transaction of past year. This can solve multiple problems regarding annual reporting. For example, Claiming ITC pertaining to FY 20-21 in GSTR 3B OF Sept- 2021 GSTR 3B, Then There should be specific ROW in GSTR 3B where one can report transactions of Previous year. This small change can solve thousands of problems of reporting & auditing.

17. Overhauling complete return filling module – Allow to upload All Inward Supply Transactions – in Self Declared Manner

I want to explain this point in detail – What is an ideal return filling system? Current structure does not allow uploading Transactions related to claim of ITC. This is creating many problems. What is solution? We have answer lying in VAT regime. One of best return filling model was GUJARAT VAT RETURN FILLING MODEL – An ideal return filling system – GSTR 1 & 3B and A Self declared ITC return GSTR 2 with Auto-Reconciliation on ITC profile

1. GSTR 1+ SELF-DECLARED ITC RETURN GSTR 2+GSTR 3B

Please Continue with GSTR-3B monthly/quarterly and GSTR1 monthly/ quarterly depends on Turnover as per time limit stated above and OPTIONAL monthly IFF for small dealers. Also bring self declared Inward ITC details (i.e say self declared GSTR 2) Which required to be uploaded by Taxpayer along with monthly or quarterly GSTR1. So upload SALES in GSTR 1 & PURCHASE in GSTR 2 & payment of Tax in GSTR 3B.

2. AVAILMENT OF ITC –

As said above, A self declared Inward ITC details to be uploaded (i.e say self declared GSTR-2) same way required to be uploaded by Taxpayer along with monthly or quarterly GSTR1. ( The way we upload GSTR 1 for Outward, Allow us to first upload GSTR -2 for inwards records for availment of ITC). Above system must be seamlessly smooth as far as ITC is concerned. i.e Without any Restrictions on ITC in Law. No Rule 36(4), No Section 16(2)(aa), No GSTR 2B. No dependency on Counter party. No actions required like earlier proposed idea. In GSTR 2, No action required. No matching/ Accepting/ rejecting with Counter party. No time wasting on counter party action. Just upload a list of ITC availed during period. And Based on GSTR 1 & GSTR 2, GSTR 3B is prepared. First, dealer must be allowed to claim full ITC as per Books of Accounts. Lest give this freedom to breathe. Seamless ITC is core of GST. Let’s not kill the soul.

3. MISMATCH OF ITC –

Now You may question what about ITC matching? How Government will be able to filter fake claim or excess claim of ITC from above. Gujarat VAT return filling model had answer for this also? Concept of ITC PROFILE is not new. There should be System based ITC matching. Mismatch records should be RED flagged on website in “ITC PROFILE “. (Same way Gujarat VAT website used to have ITC PROFILE). ITC PROFILE is a report showing those invoices where counter party has not uploaded his return but You have uploaded in your ITC list i.e in your GSTR 2. Simple mismatch report automatically prepared by System.. All system based. No time-wasting for Dealers to find out who uploaded & who have not uploaded.

Time to solve the mismatched records should be maximum 6 months (considering quarterly dealers will file their return quarterly) from the due date of particular return where there is mismatch in ITC. For any ITC mismatch, both party should be informed. Auto-email. If still not uploaded by counter party within 6 Month time given then mismatch ITC claimed by the recipient should be PAID in CASH to the government with interest This must be automatic on portal i.e. Liability must be generated automatically online. Auto-reversal.

4. REVISION OPTION

We also suggest that there should be facility to revise for certain short period of time to give chance to taxpayer for rectifying their error. Atleast for March GSTR 3B. This would solve 90% of problems of correct reporting in GSTR 9 / 9C.

So in Nutshell, Ideal Return filling SYSTEM would be

>Monthly GSTR 3B + +Monthly GSTR1 (Sales) + Monthly GSTR 2 (Purchase) for 1.5 crore above

>Quarterly GSTR 3B + Quarterly GSTR1 (Sales) + Quarterly GSTR 2 (Purchase) + Optional monthly upload of Invoice for 1.5 crore below in IFF

> Reconciliation of ITC & Reversal if ITC not REFLECTED in ITC profile within 6 months from due date of return where mismatch appearing.

IDEAL METHOD OF RETURN FILING IN GST which can be successfully implemented & also tackle ITC MISMATCH ISSUE
upto 1.5 crore = quarterly and above 1.5 crore = Monthly DUE DATE
GSTR 1 ALL SALES DETAILS to be uploaded by Monthly / quarterly dealers in Monthly / quarterly frequency as the case may be -SELF DECLARED 15TH
IFF ALL SALES DETAILS TO BE UPLOADED Monthly by FOR QUARTERLY dealers 15TH
GSTR 2 ALL PURCHASE DETAILS INCLUDING IMPORTS ( SUPPLIER WISE – NOT INVOICE WISE) by Monthly / quarterly dealers in Monthly / quarterly frequency as the case may be – SELF DECLARED 15TH
GSTR 3B AUTO POPULATED. AUTO FILLED From 1 & 2. Just Fill RCM Details and make Payment & file 20TH
GSTR 2A JUST VIEW All inwards based on Counter party records After 15th
ITC PROFILE Showing mismatch in our GSM 2 and GSM 2A After 15th

FEATURES OF ITC PROFILE

1 Recipient tax payer should be able to check ITC after 15th of Each month in his GSTR 2A
2 My Supplier should be communicated for any Inward supplies details if he has not uploaded in his GSTR 1 so he can upload in his Next monthly/quarterly GSTR 1
3 My Supplier will have time to upload till next 6 month.
4 ITC profile will show all RECORDS in my GSTR -2 AND Auto-populated from GSTR 2A. Supplier wise screening.. Matched Records will be shown in Green colour. Mismatch records in RED coloured. If solved in the next 6 months then, It won’t be RED flagged then after.

(Gujarat VAT RETURN filling was best and still best. Gujarat VAT portal had only 3 returns. 201A for uploading sales list in Excel, 201B for uploading ITC list in Excel. 201 Summary return from data of above two.with challan details An ITC profile on Portal to show matched-Mismatched ITC. System based screening. This was Simple, smooth, instant, System-based, Revenue leakage proof.)

18. Make Effective GSTR 9 -GST Annual Return format

Current structure of annual return is non-effective. There should be a mechanism for claiming ITC at time of filing Annual Return, because so many things come out at time of doing reconciliation for Annual Return. Also, when at time of filing Annual Return, We must have option to pay tax or reverse ITC, then why can’t we get option for claiming ITC?

19. Modify of Format of GSTR 9 (20-21) to give effect of transactions of previous year shown in current year GSTR 3B & 1.

Lots of Modifications required. GSTR 9 and 9C Return need lot of modifications. The biggest problem is that No effect of table 10 11 12 13 14 of 19-20 in 20-21. There are no separate rows given in 20-21 Form. So Form design needs radical changes. For instance,There is no where we deduct ITC of 19-20 but claimed in 20-21, To arrive correct ITC of 20-21 Because GSTR 3B ITC of 20-21 might contains ITC of 19-20 as well as Also same logic for outward, Because we might have tax paid in 20-21 Which is of 19-20 Outward liability.

20. Remove Useless forms like GSTR 10 & ITC 4 Remove ITC4 permanently

This is creating more problems without any purpose. SCRAP GSTR 10 Final return and Combine it with Application for cancelation and Remove its late fees appearing on portal.The late fee of Rs. 10000 is too high for that person who has already closed his business. Most of the dealers are not even aware about filing of such final return GSTR 10 after cancellation of his GSTIN. So late fees should be waived. Also remove ITC-4 job work inward outward record return. Its having so many glitches and huge time wasting.

> Regarding other provisions & procedures

21.CATEGARIZATION OF EXEMPT INCOME

Interest income, Rent of House, Income of Medical professionals, are kept in Exempt income. If he has any GST levied TO and together if these cross 20 lacs then Liable for registration. Why they specifically not kept House rent, Interest, dividend, Doctor’s income in Schedule- 3? By making these part of Exempt supply, in future, there will be lots of consequences of taking registration, Liability to file returns, discharge penalties / late fees, Evenif Just Rs. 1 taxable GST turnover has effected by taxpayer and overall Turnover including such exempt income is crossing Rs. 20 lacs.

There are lots of Doctors and Advocates would be in radar GST of because of such provision.

22. Rate Neutralization

GST RATE ON CERTAIN products are 28% – Cement, AC, CCTV, LED, LCD, ELECTRIC Batteries, Electric engines, Two wheelers, Motor cars covered in 28% rate. They are certainly not sin products, but products relate to necessities. Please make it 18% for all those products. Even let’s talk about CESS rate on CARS. We request you to Reduce Cess rates in Motor cars. This can help to reduce price & increase the demand of Motor cars.

23. Forming Appellate Tribunals

Even after notifying of the GST Appellate Tribunals on 21.08.2019, Govt hasn’t been able to constitute a single GST Appellate Tribunal causing great difficulty for the taxpayers. Every taxpayer can’t go to the high-courts as the same is highly expensive and time consuming. In order to provide justice, Tribunals should be immediately constituted and set up so as to minimize the cost of litigation of the aggrieved taxpayers and saving the precious time of the hon’ble high courts.

Even start Application for filing Appeal on Portal for every matter. Only Refund & registration matter online appeal online can be filed.

24. Stop Harassment by categorizing exporters into Risky exporters & not giving refunds

For exporters, Refunds blocked by DGRAM unit of CBIC have not been unblocked even after submission of reports by jurisdictional officers after verification of all documents from the exporters. Clear policy should be made for resolving such matters as no proper information is being given by the respective GST offices and Customs Department to the taxpayers. As a result, exporters and their staff/consultants are running from one office to the other but refunds are not released even in genuine cases and huge amount has been blocked creating difficulty in carrying on business to the taxpayer. There should be a time limit within which report should be sent by the officials to DGRAM etc. and for further disposal of the matter by DGRAM

25. Changing QRMP to QRQP – to make quarterly scheme successful

We suggest that GSTR-1 and GSTR-3B should be made quarterly in true sense of Ease in filling returns to MSME. You may continue with IFF but Payments of taxes must be QUARTERLY only. Because of keeping payment of taxes monthly, currently QRMP scheme is as same as monthly. Even Monthly scheme is better than QRMP for many reasons. That is why QRMP is least preferred. All Taxpayers anyways require to update GSTR 1 monthly as Counter party also insist to show up ITC in his GSTR 2B. MAKE QRMP TO QRQP. I have explained in detail problems related to QRMP in this article https://taxguru.in/goods-and-service-tax/qrmp-headache-asked.html

26. Inclusion on Petrol / Diesel inclusion in GST

Petroleum products are outside GST purview presently. We represent that it should immediately be brought within the GST net to rationalize the process of such products and provide relief to public at large and curb the inflation.

27. Reducing High penalizing Interest rate 18/24%

At present, steep rate of 18% interest is levied on delayed payment of tax by the taxpayer. This rate was decided in 2017 when interest paid by banks on FDRs was around 9-10%. The scenario has drastically changed in the last one year and the prevailing rates have dropped to around 5-6%. Accordingly, we suggest that the rate of interest under GST law should be rationalized and be reduced to 12% or lower.

28. Stop giving Wide power to officers under RULE 21 & 86A for cancellations / suspension & block ITC

Here certain recent Rules enacted in Law which are giving wide powers to Officers

Rule 21(e) – Where a taxpayer avails Input Tax Credit (ITC) in violation of the provisions of Section 16, even for minor differences or unintentional errors, the department can move for suo moto cancellation

Rule 21 (f) – Where the liability declared in GSTR 3B is less than that declared in GSTR 1 in a particular month,the department can move for suo moto cancellation

Rule 21A(2A): A new sub-rule 2A has been inserted via notification 94/2020 which states that if a proper officer finds any discrepancies: LIKE On comparing details of outward supplies furnished under Form GSTR-1 and Form GSTR 3B OR On comparing details of inward supplies reflecting in the Form.GSTR-2B with the Form GSTR-3B These Rules are giving wide power to officer for cancellation / suspension. Please remove such rules which are leading to Inspector raj

Rule 86A- under Rule 86A by Commissioner or authorized officer not below the rank of Assistant Commissioner may block ITC, if they have reason to believe that the credit has been availed fraudulently or is ineligible. The government needs to lay down some guidelines or procedure for the purpose of invoking Rule 86A. In the absence of the same, the Rule is being grossly misused and has an irreversible and detrimental impact on the business of the person concerned. In this regard, please remove such Rule.

29. Harassment due to Minor errors in Eway Bill leads to major penalties

Sec 129 of CGST Act levies very high penalty, if there is minor discrepancies observed in e way bill. This lead to increase in corrupt practices as well. Circular No 64/38/2018 GST dated 14.9.2018 issued to levy Rs 500 penalty for some discrepancies, however it doesn’t cover all clerical mistake. We request that 1) Scope of said circular to be increased to cover below

This circular should be expanded to cover every possible scenarios related to Eway bill. And for all this scenarios, Min penalty should be prescribed like rs. 10000.

There are instances WHEN Vehicle BROKE DOWN or traffic jam or Curfew and due to that Validity got expired. Drivers may not communicate this to Consignor. In such case, Heavy penalties being levied as if Eway bill was never made. Particularly in this scenario, Min. penalty should be levied and validity extension should be allowed beyond 8 hours.

30. Speed & smoothen up Approving New Registrations – Make clear SOP – Reduce delay in approving Registration & Irrelevant documents & delaying approval

A complete synchronisation required between what is mentioned in the rules and what is required in GSTN portal while obtaining registration. There are many optional documents, which are not required mandatorily while applying for registration, but upon applying, the field formations are raising the query. Therefore, an SOP is required for uploading of the documents and processing of the registration application by the field formations for uniform implementation of the procedures.

Following are the common queries observed in recent past by the stakeholders while applying for the registration:

1. Regarding the place of business, the first and foremost issue is of attachment size, which is merely 100 KB in some cases and maximum 1 MB in some cases. It is not possible to attach documents without deteriorating the quality of the document, which sometimes results into genuine difficulty to the field formation to adhere the genuineness of the documents. For instance, in case of a sale deed having on an average 30-40 pages, how come it is possible to manage the file size to 1 MB? Therefore, it is suggested to increase the file size to 5 MB per attachment.

2. In case of residential place as place of business, then registration applications are getting rejected. We understand that there have been instances of bogus billing scandals unearthed by the department and many of which were found to be operated from the residential place. However, this cannot be the sole reason for not approving registration applications having operations in residential premises, especially after the disruptive era of COVID19 pandemic, after which many people have started working from home. Even in case of business through E-commerce, Information Technology based activities; there is no need for separate commercial premises for performing business activities.

3. In relation to above, in some cases the field formations have asked for unwarranted documents such as “NOC from secretary of the residential society”, “Permission from municipal corporation to perform commercial activity from residential premises” etc. Therefore, an SOP is specifically required in order to handle such situation where the interest of the revenue can also be adhered and the genuine applicants do not face any undue hardship. These harassments should stop immediately.

4. In case of death of Proprietor, If business is continued by Son/ Daughter, They ask Consent letter or for use of premises if Place is jointly held. Even, It is difficult to give documents of ownership in name of Son / daughter as transfer of ownership in heritance is yet to perform. Also It becomes impossible to perform this unnecessary tasks in short span when business need to be continued immediately after death. We suggest that for death of proprietor, There should not be asked any question for place of business if Proof of ownership & electric bill is given which are in name of father.

5. In case of new business is started at Factory / Office for which Ownership is yet not transferred & Only Agreement to sale is being entered by buyer and seller, In such case, It is difficult to produce Ownership document in name of taxpayer (Buyer), Officer often denies & raise query regarding Ownership proof. Electric Bill or any other proof is in name of Previous owner. For such case, Banakhat (Agreement to sale) and Electric bill of previous owner may be allowed as proof of place of business.

6. Another requirement is of “Indicate existing registration” field, wherein details ranging from IEC code, CIN, VAT/CST registration etc. is required. However, it is to be noted that this field is also optional, as the GSTN portal allows to not fill any details therein in certain cases such as registration by proprietorship concern, HUF etc. However, it has come to the notice that certain field formations are asking for document such as Gumastadhara license, Udyam MSME certificate etc. Therefore, clarification is required as to which documents are to be provided by respective type of organisation viz., proprietorship, HUF, Partnership, LLP, Company etc.

7. Regarding consent letter, there is no standard format available in the CGST Rules. Moreover, some field formations require the same to be on non-judicial stamp paper and duly notarised; whereas some require it only on stamp paper without notary and some require it only on the letter pad of person giving the premises on consent. Therefore, there is lot of disparity in the procedure to be followed. Hence, a uniform guideline is required in this regard.

8. Apart from all the above suggestions, it is need of an hour that the process of GST registration should be made completely faceless in line with the changes brought in the Income tax act, in the manner that the application will not be assigned to the jurisdictional officer in CGST or SGST, but will go to the dedicated “Processing Centre”, wherein the identity of the officer and the assessee shall be kept anonymous. Upon implementation of this system initially for GST registration, the scope of such dedicated processing centres can be extended to all such activities such as GST refund, GST Audit, GST Assessment, Appeals etc. These changes will certainly bring the transparency in the system.

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Authors’ Note-

This detailed Presentation on 30 burning issues in GST Law, Procedures, Returns, are Hard work of Last 4 year. All GST issues (Problems I have felt in day to day GST practice and many have felt) have been compiled in detailed manner with Suggestions to improve. Updating, Editing, adding points through last 4 years and this is Final Form of My presentation on GST issues covering every corner from Return filling, Law provisions, Refund issues, registration issues, And Most Important ITC restrictions issues.

Last but not the least –

> Whole Journey of ITC- seamless to seems less

Initially, it was GSTR 1/1A for Outward GSTR 2/2A was for Inward. And GSTR 3 for Final payment GSTR 2 was never a practical solution. Because it required huge time to do accept reject edit. Also technically GSTN failed to deliver GSTR 2 module. It was flop mechanism

> Then more emphasis on GSTR 2A.

GSTR 2A is only viewable document. Showing inward supplies. Its daily updated. As and when Suppliers uploads his GSTR 1. Again No much contribution in Monthly return filling system. At year end, It helps to do Reconcile your BOOKS ITC

> Then came Rule 36(4)

36(4) came with restrictions to take only 10% excess ITC of what visible as on 11th date in GSTR 2A. Another impossible & impractical idea. Because

It doesn’t address basic question that What about those who filed return late? Or What about ITC of Quarterly dealers?

> Then now GSTR 2B

Again a Readable Form showing all ITC upto 11th. It is 2A only. But a static one. It will show ITC from those recipients who uploaded GSTR 1 from 1 to 11th.It won’t change. Again It doesn’t address basic question that What about those who filed return late. Or What about ITC of Quarterly dealers?.

> And coming AUTO DRAFTED GSTR 3B. Relying on Auto drafted GSTR 3B,( i.e OUTWARD DETAILS FROM GSTR 1, AND INWARD DETAILS FROM GSTR 2B)

CONSEQUENCES DUE TO ALL THESE

1. This decision will kill MSME

2. It may create Financial crunch to all those who are buying from Quarterly dealers

3. Big co. will not buy from Small dealers, Because ITC of Quarterly dealer will be available after Qtr end. & so buyer not allowed to take FULL ITC

CONCLUSION

Whosoever is drafting rules/procedures for RETURN filling, Has no idea of real world. GSTR 1 and 3B is stable. And Govt should not change this. 2b / Auto 3B / 36(4) are impractical. These are example of Authority having no idea of REAL WORLD. More importantly, Seamless ITC is backbone. You receive invoice from Quarterly dealer. U book the invoice. You prepare GSTR 3B from Your accounting software. Now when u check auto drafted 3B. This ITC WILL NOT BE THERE. Imagine problem will be getting Cumulative effect in next months. The soul of GST is Killed. I.E seamless ITC.

All these ideas that GSTN came with are FAIL outcome only. They did not care TO answer basic question that what to do with Quarterly dealers ITC? Imagine my all ITC from Quarterly dealers only? should I pay tax as equal to all outward supply because i can’t have ITC? How mess accounting entries will be?? Why can’t we can take ITC freely as appearing in my books??? Why making more hardship and injustice to those who are honestly filling their returns? What’s the logic?? What about MSME cash flows who are barely surviving?? Why can’t they take ITC as equal to BOOKS?? Where is Natural justice??

These hardship problems will not be solved unless they scrap 2B Form & rule 36(4). And whole ITC mismatch & match Exercises only DONE AFTER YEAR END.

ALSO We need to have such provisions which protect Buyers & not harass them. Make provision to punish irregular Seller Not innocent buyer when ITC mismatch. Allow enough time to reconcile ITC. FOLLOW System based party wise Total ITC matching for combined 3 years i.e. At least for initial 3 years. For Non-fillers, Don’t harass the purchasers. Catch sellers who have not filed. There should be clear cut provision & department instruction that when there is mismatch of ITC due to Non-filing, Right of ITC cannot be denied.

(Republished with Amendments)

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11 Comments

  1. pramod bhat says:

    Very good suggestion sir. Your suggestions are specific and to the point. Your solutions also impressive and considerable. Hope concerned authorities look into this matter. Thank you

  2. P ARAVINDHAN says:

    very comprehensive, as a one time measure, the assessees to be allowed Excess GST discharged during FYs 2017-2020 to the GST liability of FY2021-2022

  3. ONKAR CHAND says:

    When the date of filing 3b is 20 to 24 of next month then why cut off date is date of filing of GSTR-1 that of monthly tax filers date i.e 11 th .Purchaser is unable to claim input of sellers filing qtly returns. If monthly filers file their return late he is paying penalty but why purchaser who had paid the tax to the seller should suffer on account of this.

  4. ONKAR CHAND says:

    In gst only purchaser is responsible for every thing e.g if seller dont file return purchaser can not claim ITC INPUT why seller who is also registered dealer is not answerable and action should be taken on him as purchaser has paid tax to seller or amend the section that purchaser should pay tax directly to govt and only taxable amount to seller

  5. ONKAR CHAND says:

    In gst only purchaser is responsible for every thing e.g if seller dont file return purchaser can not claim ITC INPUT why seller who is also registered dealer is not answerable and action should be taken on him

  6. S.S.Rampur says:

    All the fifteen points are agreeable in practical way. one more addition is – whenever we are generating eway bills for each transaction that can be auto generated to all the GSTNs concerned and GSTR3B can be automatically generated. Then no need of self declaration of ITCs arises.

  7. Sanjeev says:

    The main problem is the obsession with input credit. The composition scheme must be made as default gst. Reduced tax rate means reduced evasion. Once this is done paperwork will go down. There will not be any need for annual returns. Agree with the author on other things

  8. K.S.SHAH says:

    HARSHIL SHETH,
    VERU GOOD SUGESTION GIVE TO GSTN/GST GOV.
    NOT HEARD ANY SUGGESTION FROM BEGENING
    ADOPT GST.
    GUJARAT VAT SITE IS UP TO DATE FOR ITC.
    GSTN VALO NE ACT OR RULES KA KHAYAL HI NAHI RAKHA FIR BHI ME MAHAN.

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