An era of uncertainty;
Its ironical that neither the Government nor the citizens are in position to reply to the question, whether we would be having normal life again?
No doubt, everyone wants the life full of hustle bustle back, it was tiring, full of stress but there was a freedom, which we never valued but realised after Covid-19 lockdown.
Let me tell you my dear members, this is New Normal Life. The life with Mask, social distancing, regular hand sanitisation, restriction on large gathering etc., till effective remedy/vaccination is found and made available to public at large. Till then, the shadow of covid-19 would hover over us.
Can we continue to remain indoors with no activity? No, the life must move on, with required cautions. Don’t be stagnant, start moving and the World would start moving, the wheels of economy must start rolling.
Three years of GST – Fading Glory
The Goods and services tax recently hit the 3 year milestone! It has been a roller coaster ride. I have briefly analysed some interesting aspects of the journey so far –
GST was ushered in with much of pomp and show, by canvassing – One Nation One Tax – Goods and simple Tax. Indeed many heads of taxation could be subsumed. Standardisation of Indirect tax Act and procedures through – out India is a greater achievement. Buoyancy in Government Revenue and transparency resulting in reduction in corruption is a promised agenda.
But the aura and the hype didn’t last long. The first hurdle is the Act itself. It reminds me of an elephant being described by five blind folded men. The mixture of Sales tax, Excise and Service tax provisions has failed to result in definite compound. The result is endless notifications, circulars, and clarifications. To add to confusion you have contradicting AAR and AAARs. It’s becoming litigation paradise.
The Centralisation of power in the hands of GST Council has failed to achieve desired objects. Decision making is delayed at the cost of registered persons. None of the Chief Commissioner or top Executives can independently resolve any issue, without intervention by the Court. We earnestly suggest we should have a State authority empowered to resolve State level or simple issues
The failure in technical front is prone to litigation. After three years the Council has not been able to introduce standard returns as per Original design, GSTR 1, 2 and 3. Trans 1 issues are innumerable. Variety of Returns make it a complex administration issue. The new returns were awaited, we spent hours in conferences to learn new returns. The latest news, as on today is all these would be dumped and the present returns may be continued with further modification. This shows failure in strategic planning and unity in thought process. The provision to permit amendment in return enacted in section 39(9) must be implemented soon, it is the need of the hour.
Try to find a notification as on today, you can’t. You must read original, with many more amendments, smaller or bigger, clarifications. The website should have a final notification, incorporating all amendments, with footnote on date wise amendment/clarification. A challenging task but a must.
The assessment under GST would be much less then under VAT. Appellate forums are notified after two years. The GST Tribunal has yet to see the light of the day. Various petitions are filed challenging its constitution having Revenue members as majority. Despite clear guidelines by the Courts, the legislation has opted to open flood gates of litigation.
I would end with two more specific areas. The first is E-way bill administration. Whether it has achieved desired result, time only can tell. But today it’s a nightmare for persons who are not well-versed with technology. A small registered person sending goods to other State has no resources to litigate with the other States Authority if the goods and the transport Vehicle are stopped/ confiscated in other State. Any remedy against such action, right or wrong is in that State, this is practically difficult and legislation must find solution to such impractical remedies. Council is planning e invoicing, but let me warn, if the planning and execution is not perfect, there would be utter failure on this front too.
Seamless flow of Input Tax credit was the big carrot shown to all registered Persons. The biggest drawback is right to take refund is to only few classes of registered persons. The accumulation of credit in credit ledger, instead of refund, as in Vat era, means lack of cash flow available to a registered Person. This leads to various means devised by unscrupulous persons to use the credit. The refund procedures for the persons entitled to receive refund, like exporter etc., is simple but made complex and frustrating by administrators. The worst part of GST legislation is, if for any reason, a persons fails/missed to claim credit, even though genuine, in annual return for the year he is estopped from showing excess credit!
Our Indirect tax teams consistently represents on various issues, but is there any one listening????
Representation and education activities continues
The opening up has helped the members to complete the pending procedural and audit formalities. Obviously we had to slow down the pace of webinars. We had only three more webinars in July month. The leader in webinars, Central Zone has designed a 7 day refresher certificate course under Income-tax Act form 20th July onwards. South zone is planning a two day Virtual tax Conference in second week – 8th and 9th of August.
The few other NTC are also under planning. Keep watching our website or announcements in AIFTP whatsapp groups. If you are not part of any group, please write to us, we would add you in AIFTP family groups.
The representations under GST and Direct tax continues. I am happy to say many of the suggestions are being accepted by the Government. The latest representation under the direct tax made yesterday is requesting CBDT to extend the date for filling return for AY 19-20 to 30th November 2020, instead of 31st July 2020. The reason being major areas in big cities continue to be containment zones. The public transport has not started in major cities. We would be able to get positive response.
I am happy to say we could collect from members and submit to the PM Cares fund an amount of ₹ 11,74,905/-. We would stop accepting any donations now.
So friends back to work, goodbye to lockdown, but stay safe. All the best.
Nikita R. Badheka
National President, AIFTP