Coimbatore MSMEs Urge Tamil Nadu Govt To Restrict SGST Section 74 Notices To Only Fraud Cases

Chennai, Jun 4 (KNN) Micro, small and medium enterprise (MSME) representatives in Coimbatore have urged the Tamil Nadu Commercial Taxes Department not to invoke Section 74 of the State Goods and Services Tax (SGST) Act for routine compliance lapses.

They stated that the provision should be reserved for cases involving fraud or deliberate tax evasion.

At an SGST interaction meeting held on Wednesday, the Federation of Coimbatore Industrial Associations (FOCIA) submitted a petition to Sugam Thakarey, Joint Commissioner of Commercial Taxes, highlighting concerns over the increasing issuance of penalty notices to MSMEs, reported the Times Of India.

FOCIA coordinators J James, S Surulivel and A Sivasanmugakumar said several MSME taxpayers have received notices over the past year for issues such as return filing delays, tax mismatches and HSN code discrepancies. They alleged that notices were also being issued for older VAT assessment periods, including 2006-07.

Concerns Over Notice Delivery And Recovery Proceedings

The federation further claimed that notices are often uploaded only on the GST portal, resulting in missed responses from taxpayers and consultants. According to FOCIA, this can lead to penalties of up to 200 per cent and subsequent recovery proceedings, including bank account freezes.

Citing limited digital access and awareness among micro enterprises, FOCIA sought mandatory dispatch of notices through registered posts in addition to portal-based communication.

The association also called for a general amnesty for the first five years of GST implementation up to June 30, 2022, noting that businesses faced challenges due to frequent regulatory changes and the introduction of auto-populated GST data from December 2020.

Industry Seeks Regular Consultations, Lower Job Work GST

Separately, Coimbatore Chinnavedampatti Industrial Association (CIA) President N Devakumar urged the state government to hold SGST consultative meetings on a regular basis, noting that the latest interaction was held after a gap of two years.

He also proposed a separate grievance redressal category for micro enterprises with annual turnover below Rs 1 crore to enable faster resolution of tax-related issues.

Highlighting the presence of around 40,000 job workers in Coimbatore, Devakumar urged the state finance minister to take up with the GST Council a proposal to reduce the GST rate on job work from 18 percent to 5 percent.

(KNN Bureau)