GST Council waives interest penalty

Chief Minister Dr Pramod Sawant addressed his concerns regarding the small entrepreneurial ventures in Goa, at the GST council meeting held recently. These small businesses were unable to file their GST returns during COVID-19, despite being provided with a pre-informed due period, as a result of the financial and technical hardships that the pandemic ushered in.

Section 16(4) of the Central GST act can be elucidated as a taxpayer’s, time-period in context of the input tax credit (ITC) that must be claimed. Dr Sawant in the meeting requested for an extension to be provided in-terms of the time limit under section 16(4) for all the returns of the years 2017-18 to 2020-21, provided these returns have been filed before 30 November 2021.

The request made by the Chief minister was accepted by the GST council due to which an amendment will be made to section 16(4). This amendment will assist the taxpayers, who were denied their ITC claim due to the returns being filed late. Dr Sawant said “With this decision of the GST council, not only the small businessmen from Goa, but altogether around 5 lakh taxpayers will be benefitted. Taxpayers will not be required to pay the denied ITC with interest”.

Sawant advocated the idea of providing a GST amnesty scheme which involves a waiver of interest and penalty issued under the assessment orders provided by section 73 of the GST act for the initial three years, 2017- 2018, 2018-19 and 2019-20 provided that the demanded tax in paid in due time. This scheme also aims to help the businessmen that ‘missed’ the issued noticesand will decrease the heavy load on the administration.

The council further deliberated regarding the Extra Neutral Alcohol (ENA) that is utilised in the making of alcoholic beverages for human usage and decided that the GST law must be amended to ensure that no GST tax is imposed on human consumed alcohol. This will lead to the expansion and growth of the liquor industry, due to the decrease in cost with a removal of  the GST tax. The council also decided to adjust tax rates on items such as accommodation amenities for students and cookers.

Nirmala Sitharaman, the Finance Minster stated that the council is of the opinion that the biometric based Aadhar card authentication must be rolled out for registration applicants, Pan India in a structured manner. This will prevent and reduce dishonest and bogus registrations conducted to acquire ITC. The council also aims to set a tax officer’s monetary restrictions to register appeals before the GST Appellate Tribunal, the High court and the Supreme court, at 20 lakh, 1 crore and 2 crore respectively. In their opinion this will limit litigations and create a more structured environment. Lastly the council suggested a decrease of the quantum of pre-deposit that a taxpayer must pay to be able to fill appeals under GST.

The implementations of these recommendations and amendments will be closely tracked in the following months and the state government must provide the people with a set of rules and guidelines that leads to an easy and smooth implementation of these measures and prevents chaos. Through these initiatives the council aims to create a favourable environment for taxpayers.


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