FISME Calls for GST Reforms to Address Industry Challenges

ENA Economy 2024-09-17 15:58:11 New Delhi, Sep 17 (KNN) The Federation of Indian Micro and Small & Medium Enterprises (FISME) in its recent submission to the Directorate General of Goods and Service Tax (DGGST), has highlighted key challenges and proposed solutions for improving GST compliance. FISME's feedback aims to streamline GST processes and address pressing issues. A major concern is the denial of Input Tax Credit (ITC) due to bogus invoices. Bona fide buyers who purchase goods from sellers accused of issuing such invoices face unfair denial of ITC, affecting the entire supply chain. FISME argues that ITC should not be denied if the goods have been received by legitimate customers, ensuring fair treatment across the supply chain. Another critical issue involves the treatment of goods seized during raids. Currently, these goods must be disposed of within one year, while final assessments can be delayed for up to five years. FISME suggests that show cause notices be issued within one year of a search or raid to expedite the resolution process. The extension of the demand period from three to four years has also caused significant hardship for businesses due to increased penalties and interest. FISME recommends reverting to the original three-year period to ease the financial burden on assessees. Raids and surveys present additional challenges, with assessees often required to deposit tax under DRC3, contrary to CBICs instructions 1/22. These funds are rarely refunded if no dispute is assessed. FISME proposes allowing tax deposits under protest when disagreements arise. Amendments to Rule 37A, allowing credit if the supplier has paid tax by September of the subsequent year, are a positive development but should be applied retroactively from July 1, 2017, to benefit all genuine assessees. The issue of GST credit denial if customers do not pay within six months is particularly problematic for capital goods transactions. FISME suggests charging interest on the ITC credit amount, which should be passed on to the buyer to alleviate financial strain. Finally, the non-interchangeability of SGST with IGST and CGST complicates refunds, especially for businesses engaged in interstate transactions. FISME calls for SGST to be made interchangeable with IGST and CGST to simplify the refund process. FISME submitted its suggestions in response to a request from DGGST, which had sought inputs from industry associations on the practical challenges industries face in complying with GST laws, along with recommendations for improvement. (KNN Bureau) 39306 https://knnindia.co.in/news/newsdetails/economy/fisme-calls-for-gst-reforms-to-address-industry-challenges 2024-09-17 15:58:11 knnindia.co.in FISME Calls for GST Reforms to Address Industry Challenges