FCIK welcomes GST Amnesty Scheme, calls for greater coverage, clarity

23 October 2024

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Srinagar, Oct 23: The Federation of Chambers of Industries Kashmir (FCIK) has welcomed the newly announced GST Amnesty Scheme, while urging for enhanced clarity on specific aspects to eliminate ‘ambiguities.’ In a statement issued to Ziraat Times today, FCIK said it is advocating for the extension of this scheme to encompass all tax periods beyond 2020.

Effective from November 1, 2024, the GST Amnesty Scheme, introduced by the Ministry of Finance under Section 128A of the CGST Act, 2017, aimed to alleviate the financial burdens faced by taxpayers with the waiver of interest and penalties for those who fully settled their tax liabilities for the fiscal years 2017-18 to 2019-20 by March 31, 2025. It specifically targets taxpayers facing demands, provided there are no allegations of fraud or willful misrepresentation.

While expressing satisfaction over the GST Amnesty scheme, FCIK emphasized the necessity of extending the initiative to cover all years of the GST regime from its inception in 2017 to the present, as well as prolonging the period for remittance of arrears.

In analyzing the Amnesty scheme, members of the FCIK Advisory Committee noted that while it aimed to waive outstanding interest and penalties from July 2017 to March 2020, the designated settlement period for qualifying taxpayers ending in March 2025 is inadequate and should be reconsidered.

Members highlighted that the scheme has the potential to reduce litigation stemming from interpretational challenges and errors; however, greater clarity is needed on key points. They questioned whether the scheme applies to all types of tax payments, regardless of the route taken, and whether it is applicable in cases where only interest dues exist without a corresponding tax liability.

Regarding the criteria for non-fraudulent eligibility, committee members raised concerns about how this would be determined, given that the department has issued frivolous notices under Section 74 even in the absence of fraud. They warned that taxpayers may find themselves ensnared in protracted litigation to establish whether any fraudulent activity occurred.

Nonetheless, members expressed optimism that the scheme will provide crucial relief to businesses entangled in transitional credit disputes arising from errors during the transition period, where credits were improperly claimed and utilized.

“While the scheme currently addresses only the first three years of GST, it is vital to extend it beyond 2020 for taxpayers in Jammu and Kashmir, considering the ongoing challenges they faced due to reorganization and the disruptions caused by the COVID-19 pandemic,” FCIK stated.

FCIK emphasized that the challenges related to GST defaults have largely arisen from interpretational difficulties, misunderstandings of forms, human errors, and various other factors encountered over the years of the GST regime. It is therefore crucial to extend relief to all enterprises, particularly MSMEs, which are otherwise grappling with numerous issues at the moment which threatened their very survival.

FCIK has decided to formally take up the issue with UT and Central Government for the sake of extending much needed relief to the taxpayers of Jammu and Kashmir.