KCCI makes key GST-related recommendations at GST Week event

Srinagar, July 3: Kashmir Chamber of Commerce & Industry (KCCI) on Monday congratulated the Commercial Taxes Department on successful completion of six years of implementation of GST Regime. At the GST Week related event held in Srinagar on Monday, the senior Vice President Ashaq Hussain Shangloo put forward the following recommendations. The KCCI also said that it would cooperate in all matters pertaining to implementation of GST and play proactive role in bringing genuine issues to the forefront and work for disseminating knowledge of GST among stake holders ensuring due compliances under the Act.

1. Considering Input Tax Credit claimed beyond the cutoff date for the year 2017-18 and 2018-19:

The Goods and Services Tax (GST) was implemented in other parts of country with effect from July 1, 2017, & in J&K was implemented on 7th of July 2017 in bringing about a significant change in the taxation system. However, during the initial period of GST implementation, there were several challenges and complexities faced by the business community in adapting to the new tax regime, particularly concerning the compliance requirements and technological infrastructure.

Due to the aforementioned difficulties, many traders in our federation faced issues in claiming the input tax credit within the stipulated time frame for the financial years 2017-18 and 2018-19. This was primarily due to factors such as delayed reconciliation of invoices, technical glitches in the GSTN portal, and the steep learning curve associated with the new tax regime. Additionally, it is worth noting that the claim of ITC beyond the cutoff date for these financial years will not have any negative impact on the exchequer, as the taxes have already been paid by the traders and only the input credit is being sought.

2. Recovery of Demand of Tax when order not final:

It has been observed that demand order is issued by the Tax officer fort payment of tax, interest and penalty which is always appealable within 3 months from the date of issued, while as the recovery wing of the department starts recovery of the demand immediately for the date of issued of order though it has not become final yet. The recovery is being made from the cash ledger or credit ledger of the registered person and more so the bank account of the person or firm is free zed immediately with the instructions to bank for remittance of the amount. This is injustice and need to be looked into by the Commissioner, State Taxes Department.

3. Constitution of the GST Tribunal for Appeal against the orders of Appellate Authority and stoppage of recovery of demand of tax till its formation.

In absence of the Tribunal to deal with GST appeals to be submitted by dealers against the orders of Appellate Authority, the next forum, at present, is only Hon’ble High Court which is beyond the financial reach of a common dealer with low income. 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. Hence, in order to provide and reach justice to all, State GST Tribunal is required to be constituted at an early date. It will also be in a way to provide justice that no recovery be made against the demands of tax, interest and penalty till said State GST Tribunal is constituted and starts working. The Government has also issued circular in this behalf to the extend that no recovery of tax in full shall be made from the dealers who intend to prefer appeal against the order of Appellate Authority.

4. Remand to appeal cases to assessing authorities:

By amending the provisions to allow the Appellate Authority to remand the matter to the assessing authority so as to reduce the burden of . appellate authorities for checking the detailed calculations and verification of huge number of documents submitted by the appellant during appeal proceedings. The present procedure of modification by the appellate has been causing severe burden both to the appellate authority and to the taxpayer/professional. In most of the cases the appellate authority (now the first appellate authority) is dismissing appeals which in turn increases the cost of litigation to the taxpayer in preferring writs to the hon’ble high courts. Increase in the litigation vitiates the very concept/purpose of introduction of GST in the country.

5. Adjustment of SGST, CGST and IGST paid under wrong heads:

The GST law provides that if, inadvertently or otherwise, SGST or CGST has been paid as IGST or vice versa, the registered person should claim refund for the same and again make the payment under the correct head. At times, practically it is not possible for more than one technical reason. There should be a mechanism to allow the registered persons to adjust on their own in their returns. The flexibility will take care of many litigations and harassment to the registered persons without there being any loss to the revenue. Further, the dealers should not be asked to pay interest on the said tax amount if paid under wrong head and intended to be corrected.

Under VAT laws, if such an error happened, the commissioner had the power to make the adjustment at the back end on the basis of an application made to him by the tax payer. We, therefore, represent that the similar facility should be made available to the proper officer to transfer the tax from one head to the other instead of asking the tax payer to pay again and claim refund of tax paid under the wrong head. This will reduce unnecessary compliance burden and contribute towards ease of doing business.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.

6. E-Invoices- Amendments there in to be allowed for rectification:

At present, certain taxpayers are required to issue e-invoice for B2B transactions. The E-Invoice Portal doesn’t allow correction of mistakes, if any, that may have happened while issuing such an invoice. A mistake in GSTIN of the buyer in the invoice leads to denial of ITC to the buyer. We, therefore, suggest that such inadvertent errors in e-invoice be allowed to be rectified on the e-invoice portal (IRP).

7. Service of Notice:

Section 169(d) provides that notice/order can be served by any one of the methods provided therein. One such method is ‘by making it available on the common portal.’ In case registered person has not logged into the common portal for any reason for many days, he will not be able to know about any such notice/order uploaded on the common Portal which may result in an ex-parte best judgment decision against him, increasing further litigation. It is, therefore, desirable that in addition to uploading of the notice/order on the Common Portal alone, service through registered email of the Regd. Person be made mandatory. It should also be clarified that service of notice shall be in the order of modes prescribed in the section.

8. Recovery of Outstanding demands of Tax, interest and penalty created by Tax Officer in Pre-GST Period (Under J&K VAT Act, 2005 & J&KGST Act,1962):

In this regard we would like to bring to the notice of the Commissioner, Commercial Taxes Department that Cohesive action against registered dealers is being taken by the recovery wing of the department and in some case Warrants of Arrest are issued against the dealer for recovery of the Outstanding demands of Tax, interest and penalty created by Tax Officer in Pre-GST Period (Under J&K VAT Act, 2005 & J&KGST Act,1962) in spite of the fact that their appeals are pending for decision before the Appellate Authorities of the department. This is a clear injustice which needs to be looked into and relief granted to dealers who are forced to closed down their business fearing action by the department.

9. Amnesty under Pre-GST Laws:

Since most of the states have announced and implemented amnesty schemes for settlement of outstanding taxes, the government of UT of Jammu and Kashmir may also be approached for a “VAT Act, 2005” and “J&K GST Act, 1962” Amnesty scheme for the waiver of interest, and penalty after payment of outstanding Tax amount. The dealers can opt to settle the arrears relating to particular assessment years, subject to the condition that all arrears falling under the said assessment year are accepted. This shall minimise all litigations and appeals pending before Appellate Authorities of the department. The government will profit since the extension of the amnesty scheme will bring in significant & immediate revenue for the UT of J&K.