ICAI Suggestions for GST Framework Improvements

The GST & Indirect Taxes Committee of the ICAI has published a set of suggestions aimed at improving the Goods and Services Tax (GST) framework. These recommendations, compiled from inputs provided by Chartered Accountants across the country, address practical issues faced by taxpayers after eight years of GST implementation. The suggestions are categorized into key areas: adjudication and enforcement, input tax credit, registration, and refunds.

For adjudication and enforcement, the ICAI proposes defining a minimum time of 7 working days for taxpayers to respond to intimations, ensuring virtual hearings are consistently granted, and mandating dual-service of notices through both electronic and physical means to prevent taxpayers from missing important communications. It also suggests that physical documents should not be demanded if they are already available on the GST portal and advocates for an Integrated Case Tracker to streamline the handling of cases. Furthermore, it recommends a separate online system for issuing and appealing personal penalties against unregistered individuals.

Regarding input tax credit (ITC), the committee suggests allowing the use of current month's turnover for Input Service Distributor (ISD) credit distribution when other turnover data isn't available. It also calls for restoring the tax rate column and quarterly consolidated view in Form GSTR-2B to simplify reconciliation. Additionally, it proposes an automated system to restore reversed ITC when a GST cancellation application is withdrawn.

In the area of registration, the ICAI suggests enhancing the GST portal with clearer jurisdiction guidelines and allowing for multiple simultaneous amendment applications. It recommends adding a "preview" feature and a 24-hour correction window to the registration process to reduce errors and delays. The committee also highlights the need for specific, non-generic reasons for registration cancellations and a system to manage pending proceedings for businesses undergoing reorganization. Finally, it recommends an online facility for canceling TDS registration and enhancing the integration between the MCA and GSTN portals.

For refunds, the suggestions focus on implementing a faceless and time-bound refund framework. This includes a system-driven process for automatic provisional refunds, automated calculation of interest for delayed refunds, and the introduction of a new refund category on the portal for casual or non-resident taxable persons who have had their registration applications rejected but have paid an advance deposit.

THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)

Suggestions on Practical Issues in GST

INTRODUCTION

ICAI is a statutory body established by an Act of Parliament, viz. The Chartered Accountants Act, 1949, for regulating and developing the profession of Chartered Accountancy in the country. The ICAI is the largest professional body of Chartered Accountants in the world, with a strong tradition of service to the Indian economy in public interest.

The GST & Indirect Taxes Committee of the ICAI plays a vital role in supporting the Government's GST initiatives through policy advisory, capacity-building programmes and knowledge dissemination. The Committee extended unwavering support to the Government during the rollout of GST by providing inputs on GST law and procedures and by undertaking extensive awareness and training initiatives.

As GST marks eight years since its implementation, the Committee though it fit to assess the practical challenges faced by taxpayers in key areas such as registration, refunds, input tax credit and tax demands. To obtain a comprehensive understanding of the ground-level challenges, suggestions were invited from members nationwide who are actively involved in guiding and supporting the taxpayers with GST compliance. These inputs were thoroughly reviewed and thoughtfully deliberated upon by the Committee.

The Committee is pleased to present its considered suggestions on addressing practical issues under GST. These recommendations are aimed at strengthening the effectiveness of the GST framework, enhancing ease of compliance, and alleviating several challenges presently encountered by taxpayers.

Source : http://www.gstclub.in/news/2336/ICAI-Suggestions-for-GST-Framework-Improvements