Industry Fears of Credit Loss Due GST Portal Errors

The 28th of August 2017 was the last date for filing GSTR-3B return – for those who want to avail input tax credit on their old stock (of the previous regime) when transitioning to the Goods and Services Tax Regime. As the deadline is already here, businesses are worried about losing credit over GST filing errors. The offline utility feature of GST Trans 1 form to claim ITC for Value Added Tax (VAT) was not accessible since Sunday, only a day before the closure of deadline for filing returns.

In the absence of offline utility feature, the details are required to be filed online which constitutes a higher probability of error. Taxpayers are facing problems to meet the deadline for filing returns as they have to employ additional persons to manually input invoices and other details resulting in a lot of data to be filled.

The industries have shown concerned about the input tax credit, as there is no clarification whether the TRAN 1 can be altered later for any inaccurate typing error, human error (fat finger) while entering manually or they will simply lose the tax credit. ITC is an important part of every business as it ensures that the investment capability of the business is always in good state. The offline utility feature of GSTN portal allows you to fill information details, careful scrutiny, subsequent submission and there are less chances of errors, whereas, the online utility can lead to inaccurate typing called as ‘fat finger’ and other errors. ET company has reportedly made mistakes in filing online return and shown concerned about losing its input tax credit.

Tax assessees will be required to furnish all the information details separately – invoice wise or chalan wise. These can further allow you to claim for Cenvat or value added tax credit on capital goods, details of stocks at job workers premises and the concessional rate of central sales tax claimed under the Value Added Tax Regime and claim in the case when invoices were not received till 30th June.

According to the GSTN officials, experts are working overtime to fix all technical glitches and IT issues related to filing tax returns and registrations. The officials said that the government is continuously keeping an eye on the situation. The industry has already requested to the government about technical glitches on the GSTN portal. Last week, the Confederation of All India Traders communicated to the government for solution a technical issue faced by them at the time of filing taxes at GSTN portal.

Bipin Sapra, the partner at Ernst & Young said, “Problems in filing TRAN 1 returns due to the absence of (offline) utility is compounded by inadvertent errors made in a filing, with no recourse or visibility of a change in the returns… The compliance calendar should be pushed forward to allow GSTN to be fully ready with its software.”

Read Also: List of Goods and Services Not Eligible for Input Tax Credit

Pratik Jain, indirect tax leader at PricewaterhouseCoopers said “Without any utility on GSTN for filing TRAN 1, companies have to manually punch thousands of invoice and other details on the portal. It is both time-consuming and error-prone. Also, there is confusion as to whether TRAN 1 can be revised later (or not).”

Jain stated that the industry is expecting a further extent of deadline for filing TRAN 1, once the utility is in place, and an immediate clarification that it can be revised at least till September 30.

MS Mani, Senior Director at Deloitte Haskins & Sells LLP, stated that the service providers are equally influenced with the implementation of the new regime. “Several businesses that had filed their service tax returns by August 15 and thereafter realized they are required to revise the service tax returns are now in a quandary,” said MS Mani.