20 suggestions on GST Returns, Procedures, Law & Portal- August 2020 edition

♥ Regarding Return Filling System

1. An ideal return filling system – GSTR 1 & 3B and A Self declared ITC return

i. GSTR 1 + 3B + SELF-DECLARED ITC RETURN – Please continue with GSTR3B monthly and GSTR 1 monthly/ quarterly depends on Turnover as per time limit stated above. Also bring self declared Inward ITC details (i.e say self declared GSTR2) same way required to be uploaded by Taxpayer along with monthly or quarterly GSTR 1. So upload GSTR 1 & 2 & payment of Tax in GSTR 3B. ( No matching/ Accepting/ rejecting with Counter party. Just upload a list of ITC availed during period)

ii. There should be System based ITC matching. Mismatch records should be RED flagged on website. (Same way Gujarat VAT website used to have ITC PROFILE). A report showing those invoices where counter party has not uploaded his return but You have uploaded in your ITC list. Simple mismatch report automatically prepared by System.. All system based. No time-wasting for Dealers to find out who uploaded & who have not uploaded.

(Guj. VAT portal had 2 forms. 201A for uploading sales list in Excel, 201B for uploading ITC list in Excel, An ITC profile on Portal to show matched-Mismatched ITC. This was Simple, smooth, instant, System-based, Revenue leakage proof. )

iii. Time to solve the mismatched records should be maximum 6 months (considering quarterly dealers will file their return quarterly) from the period. For any ITC mismatch both party should be informed. Auto-email. If still not uploaded by counter party within 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.

♥ Regarding Late fees

2. Refund Late Fees collected till 31-01-2020 above Rs. 500 & Remove Late fees from GSTR 1 Refund the late fees collected till 31-1-2020 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 fillers 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 in the initial months of year 2020, the figure of late fees collected since July 2017 was around Rs. 6000 crore. 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”.

3. Reduced late fees for all future returns Reduced late fees of Rs 500 capping for all future returns for all types dealers. Incl composition dealers. When Late fees for late fillers reduced to only RS. 500 per return, this definitely need to be rationalised for future return as well.

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

♥ Regarding Law & Policies

SUGGESTIONS FOR SIMPLIFICATION OF GST LAW & POLICIES 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

5. REMOVE Rule 36(4) permanently Rule 36(4) restricting the credit of Invoice not appearing in GSTR-2A. This is ultra –vires to section 17 for seamless availability of ITC. Also, Ultra-vires to right of ITC which is gainst 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. Even, this rule dosent consider ITC of quarterly dealers. Clarity required about contradiction between Rule 36(4) and Sec 16(4). We request that Rule36(4) may be permanently removed.

6. Interest rates u/s 50 & Auto-calculation of Interest on Portal Reduced 9% interest for FY 20-21 & Reduced 12% interest for all future returns instead 18% currently for delayed 3B. It should be Auto-calculated on portal. It can generate revenue which leaked out. It should be appearing on Portal for any Interest demand with correct calculation so that dealer can pay from there only. Why sending Notices for Interest.

7. ITC mismatch provisions – 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.

8. FOR REMOVAL OF PRVOISION REVERSAL OF ITC IF NON-PAYMENT in 180 DAYS – Delete the provisions of Reversal of ITC in case of non payment to Creditors within 180 days and interest thereof if late reversal. Or make it applicable to only Dealers having Turnover more than 100 Crores. It is used as weapon against Taxpayer in Assessment.

9. 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.

10. 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.

11. Council Decisions already taken- not implemented as yet. Notifications/ Circulars have not been issued w r to Decisions taken by Council. Like Non-linkage of Credit note with original Invoice in GSTR-1. There should be Fast implementation of Council decisions.

12. One Nation, One Tax, And One Authority – Multiple Divisions of State & Central Tax Department reduced to one for each dealer. Only one authority for assessment, Survey, Notices & refund in case of each dealer. This can reduce authorities’ harassment to great extent.

13. Benefit of ITC for those dealers who are filling FY 17-18, 18-19 return – GST council recently allowed to file return from 01-07-2017 if still pending at very lower rate of late fees i.e. max 500 per return even if 36 month delay. Earlier 50 rs. Per day. As per section 16(4), The ITC of FY 17-18, 18-19 cannot be taken who are filling return for FY 17-18 , 18-19 now. If this credit is not give then it will be amount to double taxation on a single transaction & t will be huge injustice. Otherwise this GST late fess amnesty scheme for late fillers will not be useful otherwise then Nil- return fillers.

Regarding Returns & forms – its design & due dates

14. GSTR 3B design – . GSTR 3B should have ROWS for reporting transaction of past year. This can solve multiple problems regarding Annual reporting.

15. GSTR 9 & 9C – Due dates

Keep TO limit 2cr – 9 and 5 cr- 9C. But extend the dates
for 18-19 – 31-12-2020
for 19-20 – 30-6-2021.
For 20-21- 31-3 -2022.

16. Remove ITC4 permanently- This is creating more problem without any purpose.

17. SCRAP GSTR 10 Final return and Combine it with Application for cancelation and Remove its Late fees appearing on portal D. 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.

18. Modification of Format of GSTR 9 (18-19) to give effect of transactions of previous yr shown in current yr 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 17-18 in 18-19. There are no separate rows given in 18-19 Form. So Form design needs radical changes. For instance ,There is no where we deduct ITC of 17-18 but claimed in 18-19, To arrive correct ITC of 18-19 Because GSTR 3B ITC of 18-19 might contains ITC of 17-18 as well as Also same logic for outward, Because we might have tax paid in 1819 Which is of 17-18 liability. Also, Trans 1 credit is reappearing in table 6. How is that possible?? If I want to file GSTR 9 for FY 18-19, I have to file GSTR 9 for FY 17-18? This is ridiculous. What if my taxable turnover in FY 17-18 was below 2 cr . What about Tables which have been made optional GSTR9 and GSTR 9C.. For examples table 8A on 9 and table 10-14 in 9C ? Wait for the Clarification?

19. TDS accept return & its Credit – While filing TDS accept return for a supplier, if in a month one entry not uploaded by supplier, then in next month’s TDS return of supplier that entry not appearing leading to loss of cash tax paid by supplier.

20. GSTR-2A- in GSTR 2A, Amended and original invoice, both are shown leading to availment of wrong credit. Original invoice should not be appearing if amended.

(Republished with amendments)

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  1. 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.

  2. 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

  3. 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

  4. 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.

  5. 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

  6. K.S.SHAH says:


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