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February 17, 2022

Representation on various issues faced by tax payers under GST laws

by CA Shivam Jaiswal in GST

Representation on various issues faced by tax payers under GST laws

GOODS AND SERVICES TAX PRACTITIONERS’ ASSOCIATION OF MAHARASHTRA

To,

The Chief Commissioner of CGST,

Mumbai Commissionerate

Sub: Representation on various issues faced by tax payers under GST laws

Respected Sir,

1. At the outset, we would firstly like to thank you on behalf of our members and the tax payers in general for allowing us to represent them on various issues being faced by the tax payers under the GST laws.

2. The Goods and Service Tax Practitioner’s Association of Maharashtra (GSTPAM) is a State-level body of Sales Tax Practitioners’ established in the year 1951. GSTPAM has 70 years of experience in representing the various issues faced by the tax payers and its members before the Tax Authorities. GSTPAM has acted as a conduit for implementation of new laws such as MVAT Act in 2005 and GST laws in 2017. GSTPAM has been the pioneer association in the State of Maharashtra carrying out regular educational events and programmes for imparting knowledge amongst its members and tax payers in general thereby helping in implementation of the Indirect Tax laws across the State.

3. GSTPAM has been the torchbearer for tax payers to take forward its issues and represent before the tax authorities and also helped the Tax Authorities to reach out to tax payers in general by carrying out various public events. GSTPAM has its membership spread all over the State of Maharashtra comprising of more than

4. 3000 Tax Practitioners and other professionals such as Chartered Accountants, Cost Accountants, Company Secretaries and Advocates practicing in GST, VAT, Service tax and allied laws. The Association has Regional Centres at district places to cater to the needs of members practicing in various districts of Maharashtra.

5. Sir, we had filed Representation on various issues being faced by the tax payers and practitioners on 20.08.2021, 16.09.2021 and 09.12.2021. We await resolution for the said issues.

6. Sir, our various Regional Centres as well as the members of GSTPAM have reported further various other technical as well as legal issues being faced by the tax payers under the MVAT and GST law. We are filing the present compilation of all issues (new and previously represented issues) with workable suggestions for easing out the compliances for the tax payers and also increasing the tax base for the Authorities.

7. Sir, we request to please consider the compilation of issues and our suggestion to such issues and forward the same to concerned authorities for taking appropriate action.

8. Sir, we shall be happy to meet you personally and explain the situation. The issue requires your immediate attention and intervention.

Thanking You

The Goods and Service Tax Practitioner’s Association of Maharashtra

Law and Representation Committee

Issues under GST Law

Sr. No.IssueCategoryReference to concerned provisionWorkable suggestion
1.Time limit for Revocation Application against cancellation of registration is restricted to Ninety days: Though the time limit for filing the revocation has been increased from 30 days to 90 days, however, still the tax payers are rendered remedy less after the expiry of 90 days.   Many times the tax payers are not able to file the returns due to temporary financial crunch or sudden financial hardship due to various reasons because of which the tax payers are not able to file the returns for more than 3 months.

Such tax payers are bona fide businessmen and want to pay all their taxes, however, arranging the finances still takes time.
 
In case 90 days are over, such tax payers is not able to file the revocation application under
Section 30(1).
 
The only other option available to such person would be to file the appeal. However, in case of appeal, the maximum time limit by which appeal can be filed including the condonation period is 120 days.
 
Thus, after 120 days, the tax payer is rendered remedy less and cannot do business even if he arranges the finances.
 
Further, it is often seen that the Banks and other Financial
Institutions are hesitant to provide the finances if the tax payer’s GST number is cancelled. Thus, it is a vicious circle in which a genuine tax payer who wants to do business is becoming helpless.
Further, the option for applying for new registration after 120 days is also not suitable for: a) the tax payer will have to forgo its entire ITC during the interregnum period thereby leading to double taxation and b) the new application may be rejected based on the past record
LegalSection 30(1) of CGST Act, 2017Time limit of Ninety days may be removed and revocation application may be accepted on case to case basis thereby giving an opportunity to the tax payer to revive its business.
Sr. No.IssueCategoryReference to concerned provisionWorkable suggestion
2Refund of excess tax paid on Advances:   In a case of Works Contractor who has received Advances, GST has been discharged on the said advances. Thereafter as and when the work is done, the Tax Invoices are raised. However, inadvertently, instead of adjusting the tax paid at the time of receipt of Advances, the Works Contractor has once again paid the GST at the time of reporting the invoice in GSTR 3B. In some cases where the contracts are at end stages, there is no scope for adjusting the GST paid on said advances. Hence applications for GST Refund have been filed under the category of “Excess Tax Paid”.   However, the Refund Applications are being rejected by the Proper Officers taking a view that the said refund applications do not fall under u/s. 54 of the CGST Act, 2017, neither such circumstances are clarified in Circular no. 137/07/2020 dt. 13-4-20.LegalSection 54 of the CGST Act, 2017 Circular no 137/07/ 2020 dt. 13-4- 2020  This is a clear case of double taxation. The tax has already been paid once at the time of receipt of advances. On the same consideration, inadvertently, the tax has been paid once again at the time of issuing Tax Invoice.   Appropriate clarification or instructions may be issued by modifying Circular No. 137/07/2020 dt. 13-4-2020 to even include this kind of transactions where tax has been paid twice on the same ransaction and grant the refund under the category of “Excess payment of tax”.

     
Sr. No.IssueCategoryReference to concerned provisionWorkable suggestion
3.Intermediary services provided to foreign recipient against foreign exchange must be treated as export of services: Currently, Intermediary services provided to foreign customer is liable to GST in India.   In most cases, the GST has to be borne by the Indian Supplier only as the foreign customer is not reimbursing for GST separately.   It is important to boost the intermediary sector in India by treating the intermediary services to foreign recipient against foreign currency exchange as exports.   Under make in India the job work in India is treated as export of service, like wise intermediary services should also be treated as export of services as was the case under service tax before 2014.LegalSection 13(8) of the IGST Act, 2017Appropriate amendments may be carried out in place of supply provisions to treat the intermediary services to foreign customer as export of services.
4.Refund of excess ITC appearing in GSTR 2A after cancellation of Registration Certificate: If the Registered Tax Payer has followed Rule 36(4) and has discharged tax through cash by not taking the ITC of purchases not matching in GSTR – 2B,   subsequently the said purchases appear in GSTR 2A and matches with the books of the Registered Tax Payers. In the meanwhile, if the Registered Tax Payer has cancelled the registration (due to any genuine   reason), the ITC is accumulated as balance since at later date it gets matched with GSTR-2A.   Since there is no more outward supplies liable to GST, the said ITC remains unadjusted.   The above cam be explained by way of an example: A Joint Venture of two contractors was formed to carry out widening of particular road in the month of April 2021. An invoice was raised on which tax had to be paid in cash due to mismatch of ITC since one subcontractor didn’t file GSTR – 1 in time. Now the said road contract is over and JV is left with this ITC from sub-contractor. There will be no future billing as work is completed.   In such cases ITC should be refunded even after the cancellation of Registration Certificate.   Also note the Proposed clause (aa) of Section 16(2) and proposed amendment to Rule 36(4) as recommended in the 45th Meeting of the GST Council.LegalSection 54 of the CGST Act, 2017Appropriate amendments may be required in law for allowing the refund on accumulated ITC due to delayed filing of returns by the Suppliers even after the cancellation of registration.

Sr. No.IssueCategoryReference to concerned provisionWorkable suggestion
5.Input Tax Credit (ITC) sought to be denied at the time of revocation application as per Section 16(4) of the CGST Act, 2017: The above issue can be explained by way of an example as under:   Let us say that the Tax Payer ‘A Ltd.’ has not filed the returns since September 2019. Since returns were not filed for more than six months in the Financial Year 2019- 2020, the registration certification has been cancelled under Section 29 of the CGST Act, 2019 vide order dated 10th March 2020.
Thereafter, though A Ltd. had filed the revocation application in time but since the A Ltd. did not have adequate finances to deposit the tax, interest, late fee in the cash
ledger the said revocation application was pending.
It is only in the month of
November, 2021 that A Ltd. could deposit the net tax liability payable in cash, interest on the same and
late fee in the cash ledger. At this point, the proper officer are taking a stand that since ITC for the period from September 2019 to March 2020 is no more available in view of Section 16(4) of CGST Act, 2017, the tax payer A Ltd. has to deposit the gross liability in cash
ledger along with the interest on gross liability.
 
In many cases, the Proper Officer which deciding the revocation application is asking to deposit the tax equivalent to mis-match in ITC as per GSTR 3B and GSTR 2A in order to allow the revocation application.
 
It is the submission of the Tax Payers that once the return for September 2019 is filed in
November 2020 along with late fees, it is a regular return and thus ITC should be available dehors the provision of Section 16(4).

It is also submitted that if no ITC is given to the Tax Payer, it will essentially amount to double taxation as the Tax payer has already paid the GST equivalent to ITC to his supplier, who in turn has paid it to the Government. Now once again asking to make payment of the Tax on gross basis without allowing the ITC would
lead to double taxation.

Lastly, it is humble submission of tax payer’s that eligibility of ITC is a separate proceedings for which a show cause notice under Section 73 / 74 may be issued for dis- allowing the same. However, asking to make the payment for the same at the time of revocation application would essentially result in taking away the right to do business.
LegLegalalSection 16(4) of CGST Act, 2017LegalAppropriate clarifications or instructions may be issued that Revocation Application may be allowed de hors the applicability of Section 16(4).
 
If at all Section 16(4) is
applicable, the Proper Officer may issue a separate
Show Cause Notice under Section 73 /74 of the CGST Act, 2017 as it is a separate proceeding

7.ITC sought to be denied as per Section 16(4) for delayed filing of returns: In many cases, the Proper Officer has been denying ITC for delayed filing of returns by the registered person or by the vendors of registered person beyond the time limit prescribed under Section 16(4) of the CGST Act, 2017.   The Proper Officers are taking a stand that ITC for any return period in a particular Financial Year is not available beyond the due date for filing the September return even in a case where all the returns are filed belatedly along with late fee.   It is the submission of the Tax Payers that once the return is filed belatedly along with the late fees, it is a regular return and thus ITC should be available dehors the provision of Section 16(4).   It is also submitted that if no ITC is given to the Tax Payer, it will essentially amount to double taxation as the Tax payer has already paid the GST equivalent to ITC to his supplier, who in turn has paid it to the Government. Now once again asking to make payment of the Tax on gross basis without allowing the ITC would result in to double taxation.LegalSection 16(4) CGST Act, 2017Appropriate clarifications or instructions may be issued that Section 16(4) is not applicable in a case where the returns are filed belatedly along with late fees beyond the time limit prescribed in Section 16(4) of the CGST Act, 2017.
ITC sought to be denied in
imported goods not appearing in GSTR 2A or 2B Recently it has been observed that invariably in all the importers case notices have been issued seeking to deny ITC on the ground that said ITC is not appearing in GSTR 2A / 2B.
In many cases, the imports are made courier or logistics fellow and ITC is sought to be denied because a common Bill of Entry is filed. It is to be borne in mind that the appearance of the said ITC in GSTR 2A / 2B is beyond the control of tax payer. The system requires to be develop to capture such transactions and avoid unnecessary litigation.
LegalSection 16(2)(a) and
(b) of the CGST Act, 2017
Section 16(2)(a) and
(b) of the CGST Act, 2017
8Restriction on utilisation of ITC (regular and RCM) towards payment of output liability in case of partly inter-state sales and partly intra state sales:
Please allow us to illustrate the above issue with an example.
A taxpayer purchasing raw cotton of Rs 10 Crores in July 2021 from agriculturist in Maharashtra State is paying RCM of Rs. 50 lacs (CGST Rs 25 lacs and SGST Rs
25 lacs) on these purchases. He is manufacturing cotton bales, and selling these cotton bales in Madhya Pradesh and Maharashtra. His sales in Madhya Pradesh is Rs. 5 Crores in July 2021 and sales in Maharashtra is Rs 6 Crores in August 2021.
For July 2021, he has to pay IGST Rs 25 lakh which he will pay utilizing CGST ITC of Rs 25 lakh. Now for August 2021, he has to pay CGST Rs 15 lakh and SGST Rs 15 lakh. He cannot utilize excess SGST credit of Rs 10 lakh to pay CGST liability. He has to pay CGST liability of Rs 15 lakh in cash and shall have unutilized
SGST ITC of Rs 10 lakh.
 
In such cases, there is blocking of working capital of taxpayer. There is similar situation in case of
dealers who are making partly intra and partly inter-state sales
LegalSection 49A and Section 49B of
CGST Act, 2017
Appropriate amendments may be required for allowing seamless utilization of ITC towards output liability.
9Defect Memo in RFD – 03 being issued even for legal grounds to reject Refund application:
It is observed that in many cases the Proper Officer are issuing
Defect Memo in RFD – 03 even for the legal issues such as GSTR 2A mis-match.
Whereas, as per Rule 90(3), the Defect Memo is to be issued only in case where the Refund
Application is not complete as per Rule 89.
 
By issuing the Defect Memo in
RFD – 03, the Refund Applications are getting delayed thereby resulting in financial hardships to the Tax Payers.
 
Further, in many cases, despite submitting all the documents and complete refund applications, RFD
– 02 is being issued only after complete verification of the Refund Applications by the Proper Officers so that the statutory period of 60 days for payment of refund will only start from the date of issuance of RFD- 02.
LegalSection 54 of the CGST
Act, 2017
read with
Rule 90(3) of the CGST
Rules, 2017
Appropriate instructions
may be issued for not issuing Defect Memo
in RFD – 03
for legal issues
10. Notices in ASMT 10 are being
issued for dis-allowance of the ITC merely on technical grounds:
It is observed that in many cases the Proper Officers are issuing scrutiny notices in ASMT – 10 proposing to raise demand on tax, interest and penalty by dis-allowing ITC merely on the ground that certain purchases are not appearing in GSTR 2A.

The reason for said mis-match is GSTR -2A can be for various reasons such as the supplier has shown the supplies to tax payer in B2C, or the supplier has
inadvertently failed to upload the invoices in his GSTR – 1 or the supplier has shown the said
invoice in GSTR – 1 after the. Due date for filing the return for
September falling immediately after the end of the Financial Year.
It is submitted that, the said ITC has been claimed by the tax payer after complying with the conditions of Section 16(2). The said ITC should not be dis-allowed merely on technical grounds when the transaction is genuine and the supplier and recipient are bonafide tax payers.
Replies in ASMT 11 to Notices in ASMT 10 are being summarily rejected without giving any reason:
 
It is observed that in most cases where ASMT 10 are issued, despite filing proper replies by the Registered Tax Persons, the
Proper Officers are issuing DRC- 01A and DRC-01. The Replies in ASMT 11 are summarily rejected without giving proper. Reasons or justification as to why contention is
not accepted and on what grounds reply is rejected.
 
In some cases it is observed that even though the Registered
Person has filed replies in ASMT – 11 on online portal well in time, still DRC- 01A or DRC-01 are issued stating nobody attended nor reply filed.
LegalSection 16 of the CGST
Act, 2017
r.w. Section 61 and
Section 99 of the CGST
Act, 2017.
Clarifications / instructions may be issued that Notice in ASMT – 10 is
not required to be issued for dis-allowance of ITC merely on technical grounds if all other
substantive conditions prescribed under Section 16(2) have been fulfilled for availing ITC.
11.Disallowance of Transitional credit of service tax paid on advances received for composite contract covered by Section 142(11)(c)
It has been reported by our members that the Proper officer while verifying the transitional credit have raised the question of applicability of Section 142(11)(c) in case of composite contracts
where VAT was not applicable on advances received in the pre-GST regime. Value added tax on advances was applicable in some states, whereas the same was not applicable in some other states.
 
Thus, in those states where the value added tax was not applicable on advances, VAT tax was not paid adhering to the law. Thus, only service tax was paid on said composite supplies as there was no legal obligation to pay value added tax as per the law of the state.
However, the Proper officers are ruling out the applicability of
Section 142(11)(c) on advances received for such composite supplies, such as works contract services, on the ground that only service tax was paid in pre-GST regime and not VAT has been paid.
Additionally, the Rule 118 of CGST Rules which prescribes the methodology for claiming credit under Section 142(11)(c) requires assesse to ‘submit a declaration electronically in FORM GST TRAN-1 furnishing the proportion of supply on which Value Added Tax or Service Tax has been paid before the appointed day but the supply is made after the appointed day, and the Input Tax Credit admissible thereon.’
LegalAppropriate Circular or clarification
may be issued clarifying that applicability of Section 142(11)(c)
should not be ruled out merely on the ground that only service tax was paid and value added tax was not paid considering VAT law provisions of particular
State.
12.Registered Persons rendered remedy less in case of unilateral assessment orders
Section 62 grants power to proper officer to pass unilateral assessment orders in case of non- filers of returns.
In some case, the non-filing of return may be due to genuine financial difficulties or other bona fide reasons.
 
On passing of the best judgment order under Section 62(1), the
Proper officer are passing the orders by making ad-hoc additions to the turnover of previous comparable period and not granting ITC ate the same time.
Further, in many case, the Proper Officers are also imposing equivalent amount of penalties in the unilateral assessment orders.
By any reason, if the registered taxable person does not file the return within 30 days or could not even file the appeal within 120 days, the registered person is rendered remedy less. The unilateral assessment order become final and registered person is saddled with further financial burden of high pitched assessment as well as 100% penalties even though there is no fraud, mis-statement or wilful suppression of facts with intention to evade payment of tax.
LegalSection 62(1) of the CGST Act, 2017It is suggested that the
Proviso needs to be amended to bring it in line with the similar provision under Section 23(1) of the MVAT Act, 2002. The
unilateral assessment order must be cancelled on filing of a valid return without any time limit.
12Jurisdiction of First Appeals against orders passed by CGST Proper Officers:
The CGST Authorities have continued its erstwhile system of Appeals under the Excise and
Service Tax under the GST Regime also.
 
However, now the tax payer base under CGST is not restricted merely to manufacturers and service providers. Even traders and small time dealers fall under the jurisdiction of CGST
Authorities.
 
As per the current system of First Appeals being followed by CGST Authorities, the First Appeal against an order passed by Proper Officer located in districts of Sangli, Satara, Kolhapur, Ratnagiri or
Sidhudurg are to be filed before the Appellate Authorities sitting at Pune District only.
 
This is causing lot of hardships to the tax payers in the above districts.
TechnicalIt is requested that similar to SGST
Authorities, the First
Appellate Authorities
under CGST Authorities may also be appointed in the respective Districts itself. This will not only be beneficial to the Tax
Payers but also help in faster disposal of appeal matters.
14. Jurisdiction of Registration
Authorities falling under CGST: Similar to First Appellate
Authorities, all new Registration Applications from Sangli, Satara, Kolhapur, Ratnagiri or Sidhudurg assigned to CGST jurisdiction are being processed at Pune District only.
 
This is again causing lot of hardships to the tax payers in the above districts.
TechnicalIt is requested that similar to SGST
Authorities, the
Registration Authorities under CGST Jurisdiction
15. GST Registration Applications being rejected on illegal and flimsy grounds by CGST Authorities:
It is seen that the new registration applications being allotted to
CGST Authorities are being rejected on illegal and flimsy grounds such as:
1)  The rent agreement even though for 11 months is not registered. Under Registration Act law, 11 months’ rent agreement is not required to be registered still registration is being mandated by Proper Officers under CGST
Authorities
 
2)  Applications are rejected on the ground that there is specific demarcations in godown where there is already another registration is granted as same place of business. It is submitted that demarcation is not required as under the erstwhile excise laws
where separate demarcation was required for dutiable and duty free goods. Further the where the registration is being obtained at the GST Registration Applications being rejected on illegal and flimsy grounds by CGST Authorities:
It is seen that the new registration applications being allotted to
CGST Authorities are being rejected on illegal and flimsy grounds such as:
1)  The rent agreement even though for 11 months is not registered. Under Registration Act law, 11 months’ rent agreement is not required to be registered still registration is being mandated by Proper Officers under CGST
Authorities
 
2)  Applications are rejected on the ground that there is specific demarcations in godown where there is already another registration is granted as same place of business. It is submitted that demarcation is not required as under the erstwhile excise laws
where separate demarcation was required for dutiable and duty free goods. Further the where the registration is being obtained at the godown only as a place of business and not for storing goods, there is no requirement for any demarcation.
 
3)  Registration Applications are being rejected even where physical verification repots are positive.
 
4) Registration applications are being rejected if the premises are owned by forefathers and is still showing in forefathers name. The Proper officers are insisting upon the applicants to get the name in the property records changed for GST registration purpose.
LegalSection 24 of the CGST
Act, 2017
Appropriate Circular or clarification
may be issued clarifying that Registration
Applications should not be rejected on
illegal and flimsy grounds making
15.Formation of GST Tribunal:
It has been more than 4 years since the GST has been
implemented.
 
Many matters have reached the First Appeal stage and are on the verge of being decided by the First Appellate Authorities. In many cases, the First Appellate
Authorities have also passed orders.
 
The Tax Payers have right to file the Second Appeal before the GST Tribunal.
 
However, since the GST Tribunal has not yet been formed, the Tax Payers are remedy less.
TechnicalThe GST Tribunal needs to be formed at the earliest in order to provide appropriate and timely appeal remedies to the Tax
Payers.
16.Extension of due dates for GSTR 3B where GST -TDS credit is available:
During last 2 years it is observed that many a times Due date of filing TDS returns in Form GSTR7 is extended. However equivalent extension is not given to GSTR-3B filers who are supposed to get the TDS credit deducted by the
Recipient. Thus, it is resulting in blocking of working Capital of dealers who are eligible for TDS credit.
TechnicalAppropriate Notifications
may be issued providing that if there is extension for filing GSTR-7, than appropriate extension be given in case of deductee too in filing GSTR – 3B.
17.Aadhar Authentication for
Registration where mobile number is not linked to Aadhar card:
It has been found that there are many Adhaar cards which are not linked to mobile numbers or there are change in mobile numbers not updated in the Aadhar data.
 
Thus aadhar authentication is not possible through OTP.
This is resulting in delay in granting registration under GST.
TechnicalTechnicalAppropriate online method may be provided on GSTN Portal to add mobile number for aadhar authentication or alternate manner of authenticating adhaar data may be developed.
Delay in issuance of registration certificate for new applicants and transfer of business cases despite aadhar authentication:
Rule 9 of CGST Rules mandates issuance of GST Registration
Certificate within 7 working days, if aadhar authentication is done and there is no other compliance pending.
 
However, it is observed that there is delay in issuance of registration certificates to new registration applicants. The delay is upto 30 days in some cases. In case of
transfer of business cases like due to death of proprietor or change in constitution, the transferee is forced to stop business for want of registration, as e-way bill cannot be generated without registration number.
TechnicalSection 25 of CGST Act,
2017 read
with Rule 9 of CGST
Rules, 2017
Appropriate instructions
may be issued for early registration as businesses cannot commence or continue activities (in transfer of business cases) without GST RC. In
case of transfer of business, since business address proofs and bank details are already available on portal, these documents may not be again called for.
Further
appropriate instructions
may be issued for acceptance of consent
letters and tax receipts as valid documents for granting registrations
Non acceptance of Consent Letters and Tax Receipts as address proofs while registration: Many a times, electricity bill of business premises where registration is sought, is not in the name of applicant, but in the name of his/her relative. In such cases, consent letter from such relatives
is being submitted. Consent letter is an acceptable document for registration. However, Proper Officers are asking for rent agreement in such cases too. It is requested that appropriate
instructions be kindly issued to accept consent letters in such cases.
Municipal Tax Receipts, Electricity Bills mention short address consisting Ward No. and Property No. It is not a detailed address with building name, street name etc. In filing registration application, taxpayer mentions full address (communication address) of the place of business, instead of short address as per tax receipt or electricity bill. However, deficiency memos are being issued by Proper Officers citing address mismatch, which causes delay in issuance of RC.
TechnicalSection 25 of CGST Act,
2017 read
with Rule 9 of CGST
Rules, 2017
Section 25 of CGST Act,
2017 read
with Rule 9 of CGST
Rules, 2017
18. Proper service of Notices and Orders under GST:
Now a days, it is seen that the Proper Officers are merely
uploading the Notices or Orders on the GSTN portal and not informing the Registered Tax Payers by any other way of service.
 
The GSTP portal though sends an email, those emails do not have attachment of Notices or Orders. Further, many times the emails are also lost or unseen under the barrage of spam mails.
 
This results in the Registered Tax Payers not being properly served with the Notices and orders for taking timely actions.
TechnicalSection 169(1) of the CGST Act, 2017It is of utmost importance to properly serve the Notices and Orders on Registered
Persons to avoid unnecessary litigations.
Thus, appropriate mechanism of serving the
Notices and Orders requires to be developed and communicated to all the
Proper Officers.
Appropriate clarifications and
instructions may be issued in this behalf.
Appeals pending against Revocation Applications:
As you are aware unless the Revocation applications are allowed in appeals and
registrations are reactivated, the GSTN Portal does not allow to file the returns for the pending tax periods which are falling after the date of cancellation of registration.
Thus, those tax payers, whose appeals against the revocation rejection orders are pending for hearing, have been trying to get the earliest date of hearing for getting the Registration numbers activated at the earliest in order to avail the benefit of the rationalised late fees.
 
We have been informed that more than 200 such appeals against
Revocation rejection orders were pending before the CGST
Appellate Authorities in Pune.
TechnicalGSTN PortalIt is requested that the First Appeals pending against revocation application rejection orders must be heard on priority basis It is also
suggested that CGST First
Appellate Authorities should be
appointed in each respective District in order to
enable faster disposal of
Appeals.
The process of giving effect to the physical Appeal Orders on the GSTN Portal should be streamlined so that the registration numbers can be reactivated immediately
within a day
CGST Appellate Authorities are passing appeal orders against revocation rejection orders in gross violation of principle of natural
justice.
It is seen in many cases that the CGST Appellate Authorities after giving personal hearing to the
Appellant are calling for reports from the jurisdictional office. The said report is no shared with the Appellant and no opportunity is granted to the Appellant to rebut the same. The Appellate authorities are passing the orders in gross violation of principles of natural justice.
 
The Appellant authorities are further going beyond the Show Cause Notice for upholding the Revocation Rejection Orders
without granting any opportunity of being heard to the Appellant.
LegalSection 107 of the CGST Act, 2017Appropriate instructions and clarifications
may be issued to the
Appellate
Authorities to follow the principles of natural justice.
19Delay in giving effect to the
Revocation Applications allowed in Appeal:
In many cases, it is recently seen that the Appellate Authorities are only giving manual orders allowing the Revocation Applications in
Appeals.
 
But the corresponding online orders or online effect of those orders are taking lot of time, in some cases more than 90 days on GST portal for reactivating the
Registration Certificate.
 
This is causing lot of hardship and in some cases the Tax Payer loses the benefit of amnesty in late fees because of the said delay.
TechnicalGSTN portalAppropriate instructions
may be given to Appellate Authorities and other concerned authorities to
streamline the process of reactivating the
Registration Certificate as
per the Appeal Order at the earliest.
20Insufficiency of space to upload documents in registration and refund applicationsTechnicalSection 25 of CGST Act,
2017 read
with Rule 9 of CGST
Rules, 2017 Section 54(3) of
CGST Act,
2017 read
with Rule 89 of CGST
Rules, 2017 Master
Refund
Circular No. 125/44/2019-
GST dated 18th the
November 2019.
Appropriate instructions
may be issued for accepting supporting documents in manual form or on pen drives so that applications may not be rejected merely on the ground that documents are not uploaded on the portal.
Alternatively larger space may be provided on the portal for uploading of large files.
21Heavy Late Fee for filing of belated GSTR – 10:
Filing of GSTR-10 for transfer of business where business is continued:
In case of cancellation of registration of deceased erstwhile proprietor, it is required to file GSTR-10 giving details of stocks within three months of date of cancellation order.
 
When the legal heir applies for new registration on account of transfer of business due to death of proprietor, the reason for transfer of business with supporting documents is submitted. In such cases, where business is continued, the GSTR-10 would be a NIL return. However, late fee of Rs 10,000/- is being levied in case of non filing/delayed filing of this return, even when it is a NIL return.
Similar issue is in case of change in constitution of business
 
Technical
Section 18(3) of the CGST Act, 2017It is requested that requirement of mandatory filing of GSTR- 10 in cases
where business is being continued by transferee, be waived.
21.Facility to save draft reply in ASMT
– 11 module:
When a tax payer is preparing reply in GST ASMT 11 module against a notice in ASMT 10 the GSTN portal does not allow to save draft reply.
 
The entire reply has to be completed in one go only. Each time, there is time out, the entire process has to be started again.
TechnicalGSTN portalIt is suggested that just like in refund and other application modules, the replies under ASMT – 11
should also be given facility to save draft replies.
22Problems faced while filing ITC-04: Despite the changes and extensions in time limits f or filing quarterly ITC – 04 showing record of goods sent on job-work basis, many tax payers are still facing the problem for filing the ITC-04 on the portal. In many cases, even the
Proper Officer are not able to solve the problems in filing the ITC-04 on the GSTN portal despite giving all the data for filing the ITC-04.
The Proper Officer are further proceeding to dis-allow ITC as well as refund on the ground that ITC- 04 has not been filed by the tax payer.
TechnicalRule 45(3) of CGST Rules. 2017It is suggested that appropriated circulars or
instructions may be issued to accepted the ITC-04 manually if tax payer is unable to file the ITC-04 on the GSTN portal.
23.Common Emails being sent to various tax payers under a common DIN by the Anti-evasion Branch:
Recently, in various instances it has been found that Anti-evasion Branch are sending common emails to registered email ids of various tax payers under a common DIN without actually mentioning the GSTIN or Name of the Tax Payer in the said common email asking for reconciliation of records for various periods under GST.
The said common emails are
issued in total disregard of privacy of each individual tax payer. All the tax payer are marked together in said emails. The demand for reconciliation itself is in total disregard of the GSTR 9 and 9C filed by the tax payers giving the entire reconciliation.
 
Further in many cases the registered email ids on the GSTN portal belong to the
CA/Adv/Practitioner. The
CA/ADV/Practitioner are in total dark regarding the concerned party for which the said reconciliation is being asked.
Technical 
Appropriate instructions
may be issued to the concerned authorities for protecting the privacy of tax payers and also sending emails privately to each tax payer properly addressed to the concerned tax payer
24. Incorrect data in auto-populated GSTR 9
Recently, while filing the GSTR 9 for F.Y. 2020-2021, it has been observed by many of our members that the auto-populated data in GSTR – 9 is incorrect. Despite filing proper returns the figures appearing in auto-populated GSTR 9 are not matching with the returns.
TechnicalGSTN portalAppropriate technical team may be appointed to receive such
illustrations of incorrect data appearing in GSTR – 9 and to carry out remedial measures in the GST
Portal after finding out the reasons.
GSTR 7 regarding TDS deducted to be filed by the Government
Departments should contain Invoice Level details
Currently Government
Departments are filing GSTR 7 vendor wise and hence a consolidated statement without any invoice details is generated. The deductee has to either accept the whole deduction or reject the
whole amount deducted. He cannot choose invoice wise deduction. Many a times it so happens that the Government
Department has erred by showing excess TDS amount of some other vendor in the Registered Person’s GSTIN. In that case, the
Registered Person only has option to either accept or reject the entire TDS deduction amount at his end. This is ultimately result in excess availment of credit thereby making the Registered Person exposed to recovery of excess credit with
interest for no fault of the registered person.
TechnicalGSTN PortalAppropriate technical team may be appointed to receive such
illustrations and recommend the change in the GSTN
Portal.
Warning for suspension of registration in case of deviation of more than 10% in output liability or ITC
Recently, it has been seen that a warning sign pops up on the portal where the portal detects deviation of more than 10% in the output
liability between GSTR 3B and GSTR 1 or ITC claimed in GSTR 3B and GSTR 2B.
 
While, we appreciate that the said checks and balances in system are put to safeguard the interest of the revenue and flag off the bogus transactions from being reported on the portal, it equally important to safeguard the interest of a genuine tax payer.
 
In a genuine case, the said deviation may be due to various reasons.
 
Hence, it is important that before taking any such step for suspension of Registration which may result in stoppage of business for the genuine tax payer, a proper notice or opportunity is given to explain the deviation.
TechnicalGSTN PortalAppropriate instructions
may be issued to the concerned authorities for issuing notice and giving opportunity of explaining the deviation before placing the Registered Person under suspension.
10% Penalties being imposed in all cases where returns have been filed late but with late fees
Recently, it has been observed in many cases that the Proper Officers are imposing penalty of 10% on all Registered Persons who have delayed in filing the returns or failed to file the returns
in time. In some cases, even Show Cause Notice is not issued for
imposing penalty and straightaway orders are passed.
LegalSection 122(2)(a)Appropriate
instructions or clarifications may be issued to concerned authorities for not imposing penalties
without issuing the Show
Cause Notice and also no penalty should be imposed merely as a matter of procedure.
Investigating authorities insisting upon making payment in DRC-03 and issuing repeated summons
It is has been observed that in many cases of investigations where the amount involved are
also insignificant, the investigation authorities have been issuing repeated summons to the
Registered Person as way to coerce him to make payment of the tax.
 
In many case, the investigation authorities are even making phone calls to the customers of the
Registered Person under
investigation and threatening to dis- allow the ITC as a tactic to coerce the Registered Person under investigation to make the payment of the GST.
 
This practice of issuing repeated summons and making informal calls to customers even after the statement has been recorded is
leading to coercive practices being adopted by the Departmental authorities and contrary to the Instructions and Circulars issued by CBIC.
 
In fear of the adverse actions which may be taken by the
Investigation Authorities to stop the business of the Registered Person are not able to approach the higher authorities.
LegalAppropriate instructions
may be issued to Investigating Authorities to follow the Instructions and Circulars sissies by
CBIC
scrupulously. Also provision may be made on the GST portal to allow filing of complaints against the
illegal
investigating practices adopted by Proper Officers.

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