Industry bodies to take up GST issues with govt; GST to mark 4 years on July 1

Simplifying input tax credit procedures, addressing issues arising from inverted duty structure, exploring faceless assessment within the GST structure, introducing process of rectification of returns and improvement in the GST Network system are some of the recommendations that will be highlighted by the industry.

Issues such as blocking of input tax credit of buyers or action by GST authorities due to supplier default or non-compliance and parallel investigation proceedings by state as well as central GST authorities despite assessee being under one of the jurisdictions are among other critical ones that will be highlighted.

“We will send detailed recommendations to the government on the legislative, administrative and compliance challenges being faced by industry,” said Pratik Jain, chairman of the indirect tax committee at Assocham. “It’s been four years, now time has come to simplify and align our laws with global practices.”

“While the government has provided relief to consumers by reducing the GST rate on Covid-related relief material to 5%, the advantage should also be given to stockists and dealers that have already paid the tax at higher rate… that money should be refunded to provide liquidity to trade,” said Bimal Jain, head of indirect tax committee at PHDCCI.

Tax rates on 18 items including medical oxygen, oxygen concentrators, drugs prescribed by the ministry of health and welfare for Covid treatment, Covid testing kits among others were reduced to 5% from either 12% or 18% rates this month. The reduction has been applied on existing stock as well, leading to sellers having to send out revised rate lists, however the balance GST already paid to the government has not been refunded.

The industry body will take up the matter along with other concerns with the GST Council Secretariat.

Seeking relief for the infrastructure sector, the industry will also seek for making tax credit paid available to constructors of malls, hotels or offices which are used for taxable purposes and, on which GST is being charged on the construction. The issue is pending with the Supreme Court following a favourable ruling by the Orissa High Court.

Another issue that the industry is likely to raise is aimed at helping small businesses which have to pay the GST at the time of raising invoice rather than paying tax on receipt of billed amount, which was the case prior to the tax regime. Small businesses have to pay an 18% annual interest on the deposit money to the government, which causes a burden on the industry in case of delayed or non-payments.