S. Maheswaran. B.Sc., B.L., Superintendent of Central Tax & Central Excise, Chennai
Now the much awaited tax reform , the GST in India has completed almost 40 days and still implementation of the same, is yet to be streamlined in the following areas;
(a) Tax payment heads for CGST/SGST/IGST for payment of tax in cash is yet to be announced by the Govt, though the due date for payment of GST for the month of July 2017 is fixed as 20.08.2017.
(b) Online filing of Declaration in form viz., GST TRAN -1,2 for availing transitional credit available in the assessee’s account for existing assesses and for the non assesses having duty paid documents/without having duty paid documents on 30.06.2017, is yet to be made ready in GSTN portal.
(c) The assesse base is yet to be segregated between the states and centre for administration to implement the GST Act and Rules. In other words the assesses do not know whether they will be administered by Central govt or State govt and are keeping their fingers crossed till date.
In this article I would like to highlight the plight of the taxpayers who have sufficient ITC credit in their account/eligible to avail the same as on 30.06.2017, but in a fix whether to utilize the same for payment of tax for the month of July 2017 or not due to non issuance of clarification from the department.
Section 140 of the CGST Act, 2017 provides transitional ITC available as on 30.06.2017 for the registered persons by filing Transitional ITC / Stock Statement declaration in Form GST TRAN -1 [ rule 117(1), 118, 119 & 120] by the existing registrants/exempted goods manufacturers/service providers/non registrants having duty paid invoices within 90 days of appointed date or further period of 30 days after getting permission from the department. And Form GST TRAN -2 [rule 117(4)] to be filed by the existing non registrants for the six consecutive tax periods. who do not have duty paid documents in their possession. Till today these modules have not been activated in GSTN portal.
As per the afore said rules, the said stock statements filed by the registered person through online will provide automatic credit of eligible ITC to the said persons in their respective electronic credit ledger (FORM GST PM-2). It will reduce their cash payments towards tax liability which will be auto populated in the GSTR-3 Return for the respective month.
The GST TRAN -1 and 2 have not been activated till date in GSTN portal. The temporary return form GSTR-3B for the month of July 2017 does’nt contain any column to mention the transitional credit lying in the tax payers account as on 30.06.2017. As no clarification has been issued in this regard by the department, the registered persons who are having considerable ITC in their account as on 30.06.2017 are in dilemma whether to pay the tax in cash, except to the extent of ITC availed on receipts of goods and services during July 2017. If this happens then this will create financial burden on those existing registered persons having substantial ITC as on 30.06.2017.
To avoid this financial hardship, it is suggested that CBEC may issue clarification in this regard and some temporary method like, filing the declarations in Form GST TRAN-1 and 2 manually with the concerned authorities and allowing the assesses to adjust the credit claimed in the temporary return GSTR-3B may be announced. This temporary credit can be regularized once the GSTN portal is ready with declaration in Form TRAN-1 & 2. (Even if any credit is wrongly availed it can be recovered initiating proceedings under Section 73 or 74 of the afore said Act). We hope that CBEC will come up with clarification shortly.