GST and some issues waiting for.....

[Alkesh Jani]

The country’s biggest tax reform the GST. The trade had been waiting since so long for this tax reform. The great marathon took place all over the country by organizing various seminars, awareness, programs and what not, by the Government, intellectual person and other agencies, for GST.

Today, after the completion of one Accounting year, still some key areas which requires special attention, are addressed below

The GST law and rules, says to be submitted online on the common portal or through facilitation center notified by the Commissioner. The registered tax payers as recorded on 10.12.2017, is more than 97 lakhs, to which the capacity of server of GST portal is 80 thousand, the website errors and downtime of server or technical problem makes tax payers or consultant or person responsible for GST matters of the firm, are unable to file their returns and / or application before due date. The Government advices the tax payers to file the returns before due date, but enhancing of server may be made although the revenue of approximately more than 80 thousand crores has been generated every month. Even today the small tax payers are searching for these facilitation centre notified by the Commissioner.

Recently, issue was raised for filing of LUT/Bond online. The Para (ii) of Notification No.37/2017-CT dated 04/10/2017, the same reproduced below:-

“(ii) the Letter of Undertaking shall be furnished on the letter head of the registered person, in duplicate, for a financial year in the annexure to FORM GST RFD – 11 referred to in sub-rule (1) of rule 96A of the Central Goods and Services Tax Rules, 2017 and it shall be executed by the working partner, the Managing Director or the Company Secretary or the proprietor or by a person duly authorised by such working partner or Board of Directors of such company or proprietor;….”

          Here it is to be noted that word “shall be” is used which indicates mandatory in nature, further,  Circular No. 8/8/2017-GST, dated 4-10-2017, which states that

c) Form for bond/LUT: Till the time FORM GST RFD-11 is available on the common portal, the registered person (exporters) may download the FORM GST RFD-11 from the website of the Central Board of Excise and Customs (www.cbec.gov.in) and furnish the duly filled form to the jurisdictional Deputy/Assistant Commissioner having jurisdiction over their principal place of business. The LUT shall be furnished on the letter head of the registered person, in duplicate, and it shall be executed by the working partner, the Managing Director or the Company Secretary or the proprietor or by a person duly authorised by such working partner or Board of Directors of such company or proprietor.

          This was effective before March-2018, as the validity of LUT/Bond is of one accounting year. The filing of LUT/Bond was made available online and this created confusion among the trade and stakeholders, that whether online filing is sufficient or hard copy is required to be give, to which another Circular No. 40/14/2018-GST dated 6^th of April, 2018 was issued whereby making partial changes by replacing sub-paras (c), (d) and (e) of para 2 of the Circular dated 4^th October,2018. The sub-para (c) of para 2 is as follows:-

“c) Form for LUT: The registered person (exporters) shall fill and submit FORM GST RFD-11 on the common portal. An LUT shall be deemed to be accepted as soon as an acknowledgement for the same, bearing the Application Reference Number (ARN), is generated online.”

           As per the above, an exporter shall file LUT online and ARN No. is generated online, and the same can be considered as acceptance of LUT. Now, as we all know that Circulars are just for clarification and are not binding in nature for taxpayers but has binding effect on the department, as NO Notification, which are having legal force has been issued, thus, it can be said that Circulars are having over riding effect over Notification.

          As this is beneficial to tax payers and exports, we do not have any objection or we welcomed that step taken by the Government. But legally is this acceptable? 

          As per law and rules made there under, (Normal) registered tax payers are required to file three returns i.e. GSTR-1, GSTR-2 and GSTR-3, the return GSTR-2 is auto populated, but is required to be filed. After the span of 10 months, the GSTR-2 and GSTR-3 are kept in abeyance and a committee will decide before June of this year, keeping awake the tax payers and consultant. The most eye catching scenario is of GSTR-1, the data fields are formulated in such a way that system has no work to do. Each bifurcation of data are on the strong shoulders of taxpayers and person responsible to file the return.

          As there are various issued to be addressed, but the last for this article is cancellation of registered person who has been migrated from the erstwhile law. The small traders or service providers, whose turnover is below the threshold limit can apply for cancellation of their registration. One incident happened that a small service provider migrated from erstwhile law and in GST regime, every registered person has to collect and pay the GST as per law, the small provider followed the law and also applied for cancellation of his registration in the month of January, 2018. He contacted the help desk for assistance that when the order will be issued, the reply was that “ there is no time limit for cancellation and you are required to collect and pay GST and to file the return till the order is issued.”

          Now as per sub-rule 3 of Rule 22 clearly states that the proper officer shall issue the order within 30 days of receipt. Till date the small service provider is waiting for his order and still searching for Final Return which is to be submitted.

          Here, it is pertinent to note that the Government works for the betterment of the countrymen, but it is the duty of the intellectual to bring to the notice of the Government the facts at the ground level. To conclude I would say that Intellectuals should not become NPA of the society, this does not means that Intellectuals are not making efforts, but I would only few are making the efforts. It is our prime duty to bring to the notice of the Government, so that better result is achieved and our country may reach from developing to DEVELOPED country.

Discussions to this article

[KASTURI SETHI]

Sh.Alkesh Ji,

Nice article with good drafting. I request you to highlight more deficiency in Common Portal System and implementation of GST in public interest. Also send a copy of such article to the Chairman, GST Council.

It gives me immense pleasure to see a youngster working hard. Keep it up.

K.L.SETHI

[DR.MARIAPPAN GOVINDARAJAN]

In such cases the assessee should invoke writ jurisdiction and claim extraordinary cost and compensation from GSTIN.

[Alkesh Jani]

Sir, I thank both the intellectuals for giving their valuable time and views, especially, the comments of Sh. Kasturi ji Sir, has always encouraged me and helped me in gaining the self confidence.

Sh. DR.MARIAPPAN GOVINDARAJAN, I welcome your suggestion but I am afraid to pass this suggestion to that small service provider who’s turnover is less than 4 lakhs in a year and he was forced to migrate from Service Tax to GST. As I felt grief of myself that I am not able to help him and thought of writing this article. I also thank TMI for providing such a great platform.

Thanks again to both the intellectuals. With Regards