The post-GST era has so far witnessed exporter numerous strikes, errors and mismatches in returns filed as well as the World Bank calling GST a very complex Taxation system. But, several months ago, on July 1st, 2017, India as a nation had taken a giant leap towards a new order in its taxation History. GST was touted as India’s second tryst with destiny.
However, more than 4 years down the line and after multiple policy updates, it seems that not everything has unfolded as planned. This was, however, a possibility and the Government was prepared to incur short-term losses in exchange for large future gains. GST in India not only boasts one of the highest tax rates but also consists of the largest number of tax slabs. Add to this the growing compliance burdens, technical as well as compliance issues.
Latest Update in GST Issue
- 02nd September 2022: The Confederation of All India Traders MP and Bhopal Chamber of Commerce and Industry organized an event for traders. The topics were GST issues, new tax provisions and their suggestions.
- 31st August 2022: The Delhi High Court admitted the complaint of the Sales Tax Bar Association against GST system glitches and requested responses from the government, Infosys, and Tech Mahindra. Read More
- 28th April 2022: Shri Ananth Rakh additional State commissioner has been appointed to resolve the GST (Goods and Services Tax) issues leniently by Nagpur Vidarbha Commerce Chamber.
- 23rd March 2022: On Tuesday, Puducherry CGST & Central Excise Commissionerate met to resolve the systemic glitches or GST-related issues.
- 01st March 2022: Maharashtra SGST department has showcased the guidelines via internal circular related to the GST legal issues with clarification for the taxpayers. Read PDF
- 17th February 2022: The GST tax practitioners association of Maharashtra has written a letter to the Chief Commissioner of CGST, Mumbai Commissionerate. The letter has raised some GST issues that have been faced by taxpayers.
- 14th December 2021: The GST commissioner and Excise department of Puducherry and Tamil Nadu arranged a meeting to the resolution of Goods and Services Tax (GST) problems for manufacturers of auto parts & cars.
- 13th November 2021: The Kerala Minister of Finance K. N. Balagopal said at the Gulati Institute of Finance and Taxation (GIFT) international seminar that GST compensation shortfall of INR 13,000 crores to state and approx INR 10,000 crores will be having lesser in the next year. “We are witnessing a worst-case scenario where the revenues of the States are plummeting,” he said.
- 20th September 2021: “Clarification in respect of certain GST related issues” Read PDF
- 22nd July 2021: All India Federation of Tax Practitioners has prepared a presentation related to 39 GST issues. It has submitted the presentation to the finance minister of India and wants an immediate solution as businesses are facing difficulties due to these technical issues. Check PDF
- 15th July 2021: Kerala FM KN Balagopal has suggested some structural changes for GST ACT. He is an educated person and postgraduate in commerce & law. He demanded that the GST compensation period should be prolonged by additional 5 years. Furthermore, there is a need to revise the GST structure. The minister wants to discuss this topic in the next meeting. The upcoming 45th GST council meeting is to be expected in the month of August 2021. Continuous state tax revenue collection affected on reduced GST rate. An important consideration on this matter is to be needed.
- 11th July 2021: CG CAIT National Meeting: Discussions on common problems related to GST (Goods and Services Tax), Income Tax, bank, ROC rules
Among Asian countries, India has the highest standard GST rate. On the planet, it is second only to Chile. The non-zero rated products ( 0, 0.1, 0.25, 1, 1.5, 3, 5, 7.5, 12, 18 and 28 per cent) combined with the remaining zero-rated products and the 3 percent GST-rated Gold are a sharp deviation from the one Nation one GST Tax dream. Petroleum products, power, and real estate are still outside the GST ambit.
In this blog, we try to throw light on the issues that currently plague the newly levied GST taxation system in India as well as the taxpayer’s grievances.
Technical GST Issues for Indian Taxpayers
Goods and services tax is currently going under tremendous pressure to go through some of the burnings and solution-seeking problems of the year-old implemented indirect tax regime. The finance ministry, as well as the GST council, needs to take care of the GST return filing issues and forms-related consequences that have to be faced by the taxpayers alike.
Let us discuss and find those priority topics of GST on which the GST council and the finance ministry must work immediately:
September Return Due Dates
It might be wrong to the taxpayers as they cannot claim the ITC before matching the invoice, for the date being shortened to October 20th. Also, the credit of ITC claimed or unclaimed is to be claimed or reversed according to the filing dates, so the dates must be extended.
Credit Reversal
The credit claimed on the purchases in which the payment has not been given to the suppliers within the 180 days must be reversed. And to keep a note of these things may indulge an extra burden on the organization.
GSTR 2A Availability
As the annual GSTR 2A can’t be downloaded and has to be viewed monthly, this has created difficulties to match the returns with the books of accounts with 2A returns. Comply of Rule 36(4) on a mandatory basis also creates now a problem.
Agricultural Commission Agent & Joint Development Agreement Agreement Issues
The tax liability has to be paid on the commission according to the taxable goods but when the goods are rated NIL and the commission is not taxable therefore making it an issue for builders and landlord taxation liability.
GSTR 3B Issues
Under this return type, there is no modification or amendment facility available and in case the changes are to be made then there is a lengthy one month period time for the amendment making it an interest liability issue.
Issues in TRAN 1 form
There will be issues in the Trans 1 notice in Form 603 as it is now sent by the department to everyone making it troublesome for the real taxpayers. As the notice requires all the previous records to be available making it a tiresome issue for the taxpayer to provide the details again.
Some Other Important GST Issues
Below is the list of other important issues that have been continuously facing by small traders and businesses such as e waybill, technical glitches and much more.
Some Pertinent Issues for Small Traders
GST implies additional operational costs for Small businesses. In a developing country like ours, not all SMEs will be able to afford the cost of computers and accountants required to implement GST (make bills and file tax returns). 28% GST rate on some products like plywood, automobile parts, and electronic items forces potential buyers to opt for unregistered dealers.
It is too difficult to assign MRP to handmade products like local shoes, Banarasi Sarees, etc. Most small artisans are illiterate and therefore unable to write MRP on their products and/or do any paperwork. Dealers are confused about how to rate such products.
Small businesses that have a small turnover and need not pay GST face trust issues. Buyers demand bills from even those sellers who are exempted from GST. Without proof of a certificate of GST exemption, small shop owners find themselves stranded and immobile.
Issues for E-commerce Companies
E-commerce giants like Flipkart, Amazon also have not escaped the aftereffects of GST rollout. TCS has to be collected by the e-commerce companies from the sellers at the time of payment.
The capital blockage will hamper day to day operational costs due to TCS provisions. The GST council has fixed the 1 per cent TCS over the deduction made while payment to the sellers.
E-way Bill and Interstate Trade
The E-way bill had the potential to liberate interstate trade from all sorts of obstructions. The excitement could be felt among the slightly nervous business community. But on the day when the Finance Budget 2018 was being introduced to the Lower House, the lethargic GST network turned to be a major spoilsport and February 1 turned out to be a watershed moment for the upbeat government. The inability of the network to handle large volume e-way bill requests was at the forefront of public jokes and disappointment. Immediately e-way bill was rolled back. In the aftermath of the failure, goods carrying vehicles were left stranded and highways enjoyed pin drop silence for a few hours. The crumbling GST network has been in the spotlight from the very beginning and it continues to garner unwanted criticism and public grievances.
The GST Council need to find permanent scalable solutions rather than interim ones like the GSTR-3B. The sloppy GSTN Network raises serious concerns over the Government’s claim of a digital powered economy. GSTN is managed by Infosys, a premier IT services company. The e-way bill network was managed by the venerated NIC.
The GST E-way bill is a major concern for most of the companies which are regularly into the business of transporting goods and sending material over the locations, the transport company is also trying to figure out how it would deal with the GST E-way bill provisions. As soon the bill expires the transport company or the trucker himself has to generate the GST E-way bill on his own. The GST Council must have taken all these concerns into strict consideration and ensured easy and simple e-way bill generation procedure which has been effective from April 1, 2018
Evaders Bonanza
The consistent policy rollbacks and amendments, powered by the glitchy GSTN Network, have enabled massive tax evasion. The benevolent composition scheme, as well as windows for filing quarterly returns, raise concerns about the intention and execution prowess of the government at the centre. The increased pool of registered taxpayers has had little but no impact on Revenue generation. Only 70% of taxpayers file returns regularly. A major headache is, however, the mismatch between initial and final returns filed by taxpayers. There is an estimated mismatch of Rs 34,000 crore tax liabilities reported in GSTR-1 and GSTR-3B. The present GST structure has no mechanism for checking discrepancies found between GST Returns for July-Dec and Final Returns. About 84 % of the taxpayers were unable to correctly report revenue statements. The discrepancies and e-way bill failure demand that the GST Council now needs to take rigorous measures to tackle the menace of tax evasion through under-invoicing.
GST and Fiscal Fractures
The GST revenue shortfall promises large dents in the Centre and states’ fiscal applecart. The Center and State budgets will be pegged down by the gap in Tax revenue. The common man will find himself on the receiving end if such a gap in revenue continues. To bring states on the same wavelength and approve GST, the government had offered state compensations to the tune of Rs 60,000 crore for July to March in FY18. In order to stay true to its pre-GST promises, it is estimated the Central Government will have to make payment to the tune of Rs 90,000 crore further in FY19.
Understandably, the Budget 2018 unleashed record taxation of over Rs 90,000 crore in the form of capital gains tax, increase in customs duty, cess and surcharge. The fall in revenue has further made states apprehensive about bringing petroleum products and real estate under the GST ambit.
Adapting to The IT Ecosystem is Hard
Indian economy is majorly driven by small business units i.e SMEs. It will be unfair to expect small-scale business firms to make the transition to an online IT platform and expect no errors in return filing. It is an uphill task for the majority of our working population which has little hands-on experience with IT solutions. The cost of SRP deployment is a major concern for micro-small-medium scale enterprises.
The Confusion
For a frictionless and less burdened GST, the government is looking to shore up revenues to the tune of Rs 1 lakh crore per month. It would be interesting to see if the Government still has the courage to take stern measures against tax evaders and other business firms involved in anti-profiteering activities. The GST was projected as India’s second tryst with destiny. However, the financial budget of 2018 has thrown a wide plethora of taxes at the Indians to gobble up. Increased taxation is the only way of generating operational revenues for a complex system like GST in the nonlinear Indian Demographics.
Read Also: How to Fill Anti-Profiteering Complaint Form Under GST?
In conclusion, the present GST appears to deliver little promises. The GST rollout it seems was done with very little homework both at operational and technical ends. For the time being, the GST Council needs to pay heed to grow public as well as taxpayer grievances. It must take note of the fact that policy must be designed to reduce the compliance burden on the taxpayers. Compliance strategies must include compulsory education and assistance programs and risk-based audit programs. It must also run a communications campaign that enlightens the various effects as well as benefits of GST amidst businesses, consumers and important intermediaries.
Challenges CA is Facing Under GST
The roll-out of the Goods and Services Tax Act (GST) in India is followed by the beginning of online GST Registration and e-filing of GST Return filing. Among regular amendments & digitalization of tax-related tasks, Chartered Accountants are constantly coming across various challenges that vary from using the online GST mechanism to the alignment of their books & records to meet the new GST requirements. This led to the investment of increased efforts and time by CA due to incorporation of details such as customer’s address & GST Number, HSN Code (Harmonized System of Nomenclature) for products & SAC Code (Services Accounting Code) for services in the invoices and issuance of documents such as a Debit note, Credit note, Receipt Vouchers, Bill of Supply & E-Way Bill under the various circumstance.
The administrative work of CA has also increased due to mandatorily filing of several returns, based on the constitution & the sales turnover of the business. Besides a CA has to manually furnish details & enter all invoices & bills into different tools or company’s software or spreadsheet to adhere to the GST mechanism, followed by the creation of GST reports, cross-verification of company’s purchases, sales & ITC details, correction of mismatches and finally upload of information to Government’s GST portal. Under GST, a CA has to ensure the reconciliation of data between the seller and his supplier to claim full ITC and avert unnecessary payment of taxes. Reconciliation is a tiresome & a time-consuming job that has to be executed on a monthly or quarterly basis, depending on the company’s turnover.
Dear Sir,
My customer Bill date is 29-8-2019 Bill value is Rs. 2912153, Gst Amount Rs. 5,24,188/-, August,2019 month GSTR-1 & GSTR-B is nil filed, Sep-2019 month GSTR -1 & GSTR-3B Nil Filed.
For the month of Oct, 2019 the above bills GSTR-1 is filed bill date is 29-8-2019 mentioned in GSTR-1. Tax Rs. 524188/- Not filed GSTR-3B, In the month of March, 2020 GSTR-3B filed tax amount Rs. 524188/- is it correct or not please explain sir
Regards
P.Srinivas
Regard
P. Srinivas
It is not correct, you have to enter particular liability in a particular period, otherwise, it will create interest liability on your end
Sir, can you explain in detail about complexities of GST with some Cases.
Dear Sir
We, the batchmate of Jalpaiguri Govt. Engineering College, North Bengal of 1983 batch raising some amount through a savings account which is operated jointly by two of our batchmate for the purpose of purchasing 5 Nos. of oxygen concentrator and after purchasing we want to donate the same to Ramakrishna Mission Hospital for the helping of treatment of people. Ramakrishna Mission is an organisation involved in many social activities.
Now, we want to know that as we are donating the oxygen concentrator to an organisation that is not making any profit of that, then for purchasing we have to pay GST or the GST will be exempted. If there is any scope of GST exemption then what procedure we have to follow (the billing will be in whose name and from which account we should make the payment etc.).
Please guide us and thank you in advance.
Yours faithfully
P. Mukherjee
“please contact to GST practitioner for the same”
please send me GST question and answers and Govt amendments in GST Laws.
Click here – https://blog.saginfotech.com/gst-latest-updates
Doubt about GST for Affiliate Marketing Professionals.
I am working as an affiliate marketer (for Amazon and Flipkart) and earned around Rs. 16 lakhs till November 2020 and hope will cross Rs. 20 lakhs this financial year. I think I have to take my GST registration once my earning crosses Rs.20 lakhs in this financial year. I have the following doubts?
1) If I take GST registration now, am I responsible to pay the whole GST for this financial year (ie. 18% of 20 Lakhs)?
2) If I take GST registration, am I responsible to file GST returns monthly even my earnings will be below Rs.20 lakhs in the next financial years?
3) Since my earning are based on the advertisement of Facebook Ads and Google Ads, is it a wise decision to limit my earnings below Rs.20 lakhs this year and take GST registration in the next Finacial Year?
i. Liability starts after registration
ii. You can opt for Quarterly return filing or opt for monthly return filing
iii. Yes that’s also a good option
Could Not understand this question
The tax liability has to be paid on the commission according to the taxable goods but when the goods are rated NIL and the commission is not taxable therefore making it an issue for builders and landlord taxation liability.
Not able to understand what you want to ask
Hi Team,
pls help to understand how can Refurbished Electronics goods like mobile handsets can be accounted under Margin Scheme of GST.
Currently Tally n Bizy are popular amongst resellers..which don’t have any provision to account for Margin Scheme.
Thanks!
Hello Everyone just want to ask one question
we have 3 layers of business we give big order to the manufacturer and sale the same product under over brand name not when we purchase good manufacturer charge GST and we pay and take credit
now when we sale product to over franchise we charge GST on bill amount
we deal in the pharma sector
so how the GST calculated on MRP based product
as at last at least GST not paid on the profit margin of the retail seller
if anyone has any clarification if I have not the knowledge of any computation method please let me know
thanks
Kindly contact to GST practitioner or senior CA practitioner
If an item is despatched by a GST registered dealer to a GST registered end-user and some parts are short due to non-availability during despatch of the item but are included in the cost of the item and GST collected on the item and parts despatched later what procedure needs to be followed.
And if item amount more than 50k. Also clear again GST dealer pay GST on pending part when despatched or not?
We have one contractor, he is working in both companies, by mistake he submitted both companies GST amount on one company in Sep 2018, we suggested him do amendment for it and make reverse our GST amount in our portal, he said he done amendment but its didn’t see in our portal till, extra payment we can see another company,
can he do amendment right now ? or can he claim to refund which extra amount filled by him
now we hold his 3+ amount as a penalty base(200000*3=600000),.. please give suggestions.
WE HAVE FILED A NIL RETURN BUT IT WAS NOT NIL
There is no option for rectification of wrongly filed returns as of now.
Well said
GST is a good concept and this Govt had the political will to implement it and also succeeded. GST rates have fairly stabilized within one year of its implementation. But, the GST implementation is marred by terrible GSTN/IT backbone. Govt should do something quickly to sort this out, Else GST will be termed as a draconian law and used as a tool to hit the present Govt.
well said.
We have availed ITC of around RS 25 lakhs on a supply made by our supplier from within the state. We have paid our tax liability by utilising the ITC. However, the supplier did not file the prescribed return for the relevant period wherein the tax paid by them amounting to Rs 25 lakhs has to be shown. The department is asking the reason of mismatch. What is the remedy? Which is the Section and Rule of GST attracted? How to calculate interest on this amount if at all we are required to pay the same.
As per Section 16 of CGST Act, 2017 a registered person(“recipient”) can claim input tax credit if the tax on supply effected is paid/deposited to Government and a valid return is furnished showing such supply.
As per Section 42(5) of CGST Act, 2017, the amount in respect of which any discrepancy is communicated under and which is not rectified by the supplier in his valid return for the month in which discrepancy is communicated shall be added to the output tax liability of the recipient.
Section 42(8) of CGST Act, 2017 provides that a recipient in whose output tax liability any amount has been added under
sub-section (5) of Section 42, shall be liable to pay interest at the rate specified under sub-section (1) of section 50 on the amount so added from the date of availing of credit till the corresponding additions are made under the said sub-sections.
Therefore, the recipient needs to reverse the excess claimed ITC in return of the succeeding period along with payment of interest @ 18% as per provisions of Section 50(1) of CGST Act, 2017
Please refer to Section 16 (2) (c) of the CGST Act, 2017. For calculation of interest please refer Section 50 (3) supra
Yes, refer the same
thanks
good
Not good now all India. PM not good decision.
Dear Sir/ Madam,
We are a company based in Delhi and organised an event in Mumbai and received a catering bill with CGST and SGST @9% each. Our GST number is registered in Delhi. Should the bill be corrected to IGST or can we claim input for the same?
You can claim the credit of CGST only since SGST is state specific. IGST cannot be charged since the place of supply of service in Mumbai and the company providing service has the place of business in Mumbai only.
You will go for input credit
Dear Sir/Madam,
I am working with a company under accounts department, we sold goods under GST to one of our party who has registration in Maharashtra State and In Daman Also. We have received order From Party in Maharashtra, to supply the goods in Daman. So as per GST law Place of Supply is Maharashtra and Delivery of Goods are in Daman. So which tax levied on Invoice IGST or CGST & SGST.
Because our Party (i.e. Artek Surfin Chemicals) has registration in Maharashtra and we received the purchase order from Maharashtra office. and sold goods in Daman (i.e. Artek Surfin Chemicals). So please clarify about GST type
CGST and SGST will be charged since the place of supply will be assumed to be Maharashtra.
Sir, I paid the GSTR3B- that is final GST payment for the Particular month. In our GST Software only when we pay GST Tax – GSTR3B- Status is Filed. How the Business people calculate the payable Tax. Once we paid the GST that is final. GSTR1 and GSTR2 Should automatically file then only Software system is correct. Still the GST Software in Problem. GSTR1 and GSTR2 from July-2017, AUG-2017, SEPT-2017- Status- Not filed. Once the GST paid by the dealer, can he alter the purchase and sales entries for the particular period?
GSTR 3b is a provisional return for the period up to Dec 2017. So GSTR 01,02 and 03 are the regular returns which need to be filed.
Hello Sir/Madam,
I have one query about Unregistered Dealer Threshold Limit in One Day. i.e. on 1st August 2017, if i purchase freight service from GTA which is Rs.4500/- & i have paid tax under reverse charge and spent another Rs.3000/- for other expenses and purchase in same day. then i have to pay tax under reverse charge on remaining Rs. 3000/- because GTA is unregistered.
Please clarify in detail
In case of purchases/ services availed from unregistered dealer then the limit of Rs. 5000 per day is applicable. In case if the limit is exceeded then, reverse charge is applicable on the full amount.
Do the INDIAN GOVERNMENT take any major step to solve the problems faced by poor peoples in the marketplace?
When interstate purchases are allowed to Composition dealers, why dealers having interstate purchase stock in hand are not allowed to come under the scheme? Some sort of RCM tax could have been asked on the existing stock.
Please clarify your question
Say, I have 2 lakh interstate purchases stock on appointed date and I only sell in my state and my turnover is below 75 lakh, why I am not allowed to go to Composition scheme during transition, I have paid 2% CST and 1% Entry tax on this, tax rate under VAT regime was 5%, and also under GST 5% on my goods , so either by paying (5-2-1=)2% or full 5% tax under RCM on my existing stock I should have been able to opt for composition scheme . Why a regular dealer holding interstate purchase stock is disallowed composition scheme , rule 5(1)(b).