(1) Implementation of GST Act, 2017 has completed 100 days and Government is trying to solve the queries and seriously considering the complaints made by the taxpayers and trying to simplify the provisions of GST Act and its Rules.
(2) At this juncture, we humbly suggest that, “there is a need to do away with input tax credit provisions for all the dealers for real simplification and for eradication of corruption at large, by keeping low rate of tax to be levied on every transaction of supply of goods and services under the Goods and Services Tax Act, 2017 (GST) and no input credit is required to be claimed by the dealer/s and there is no necessity to issue ‘tax invoice’ by the dealer/s”.
(3) Our above suggestion is similar to that of the Composition Scheme under the GST Act, 2017. Under the said scheme only the small dealer/s having turnover up to 75 lakhs has an option to select the Composition Scheme under which he cannot claim input credit of taxes paid by him. Further, he cannot issue tax invoice like other registered dealers under the said GST Act. However, different category of dealers have to pay a small tax at the flat rate, as prescribed under the Composition Scheme of the said Act, as per particulars below:
|Category of dealer
|Flat rate of GST to be paid
(4) Further, under the said Composition Scheme, the taxpayers are not required to file monthly returns under the GST Act and are also not required to give the particulars of the purchases and services for claiming the set off of the Input Credit of Taxes paid. They are required to file one annual return and four quarterly returns only. The compliance under this scheme is easy and no tension for any disallowance of the claim of Input Credits like other registered dealers. They know their tax liability under the GST Act beforehand and once they have paid the above prescribed flat rate of tax, in time, they have not to pay a single rupee more to the Government. Thus, they know their tax liability under the GST Act, in advance and can do business peacefully, without any headache for keeping various details of records to prove the claim of Input Tax Credit for taxes paid by them. Further, if the vendor fails to pay the tax collected by him to the Government for any reason whatsoever, the dealer will not get input credit to that extent. In fact, the implication of the above composition scheme is easy and better for the Government to collect the revenue also.
(5) As reported in Gujarati ‘Mid-Day’, dated 4th October, 2017, more and more taxpayers have opted for the above Composition Scheme. Up to the deadline of 21st July, 2017 about 1 lakh taxpayers had opted for the above Composition Scheme. Thereafter, up to the revised deadline of 16th August, 2017 about 10 lakhs taxpayers had opted for the above Composition Scheme. Further, up to the another revised deadline of 30th September, 2017, about 5 lakh 40 thousand additional taxpayers had opted for the above Composition Scheme. At present, out of 89 lakhs taxpayers under the GST Act, 2017, about 15 lakh taxpayers have opted for the above Composition Scheme.
(6) As reported in Gujarati ‘Mid-Day’, dated 10th October, 2017, the Revenue Secretary Mr. Hasmukh Adhia has informed that deadline for Composition Scheme may be further extended up to 31st March, 2018, so that more and more small dealers/taxpayers can opt for the above Composition Scheme which is very simple.
(7) At this juncture, we humbly suggest that the benefit of the above Composition Scheme may be extended at the option of the big dealers/tax payers having turnover of more than ₹ 75 lakhs but upto say ₹ 5 crores imposing a little higher flat rate of tax than the small dealers have to pay having turnover u to ₹ 75 lakh. Similarly, the Composition Scheme can also be extended at the option of the other big dealers having turnover of above ₹ 5 crores but up to ₹ 25 crores and so on, covering all the dealers under the GST Act to opt for the Composition Scheme, imposing little higher and higher flat rate of tax as may be thought fit by the Government. Such flat rate of tax may be increased and/or decreased from time-to-time, as per the required revenue collection under the GST Act, 2017 and we are sure that the dealers/taxpayers, whether small or big, will opt for the Composition Scheme that may be prescribed by the Government for all the taxpayers as suggested above. There will be no necessity of complex audit report by Chartered Accountant or Cost Accountant for verification of the purchases and services and/or tax invoices for verifying the claim of input credit of taxes paid by the Dealer/s.
(8) In short, for real simplification and difficulties faced by the taxpayers under the GST Act, 2017, there is a need to do away with input tax credit provisions, by keeping low flat rate of tax to be levied on every transaction of supply of goods and services and also to do away with the provisions of reverse charge mechanism. Hence, there will be no temptation to do wrong by not issuing sale bill/s or by issuing fake/bogus and unaccounted sale bill/s. Further, there will be better tax compliance and no chance of revenue loss, on account of giving wrongful input tax credit and/or input tax credit in respect of bogus bills. Consequently, there will be no need to have complex audit provision and comprehensive audit report.
(9) Our above suggestion may amount to multiple tax system but if that is found beneficial to us as stated above, the Government should introduce the same and discard the present VAT type GST legislation.
(10) We humbly further suggest that to simplify the provisions of present GST Act, 2017, instead of SGST, CGST and IGST with their respective rules and procedures there should be only single GST, with low rate of tax, and the Government and members of the GST Council may kindly consider the same.
(11) The Central and all the State Governments concerned, may consider the above important suggestions to make good the complaints of hardship made by the
dealers and to achieve the goal of real simplification.