MVIRDC seeks clarity on ITC on capital goods and GST treatment of ESOPs
Input tax credit on capital goods
There are some service providers or goods exporters who incur a substantial part of their expenditure on capital goods. These assessees are unable to get input tax credit (ITC) on procurement of capital goods when they export their products or services without paying IGST under LUT. Even though exports are zero rated under GST law, assessees are unable to get refund of input taxes as the formula does not allow such input tax credit. Under these circumstances, the government may ensure that the benefit of zero rated supply is available to genuine exporters by providing input tax credit on procurement of capital goods.
Clarification on powers & authority of officer with regards to interception/inspection of vehicle
There are several instances where GST inspecting authorities delay the release of cargo in transit by examining the valuation of goods, the appropriateness of the classification of goods and whether the rate of tax paid is appropriate. The power of these inspecting authorities is to verify only the documents such as invoices and e-way bills. Beyond these documents, they lack the jurisdiction to investigate the valuation, classification of goods and rate of duty paid. Even there are High Court rulings which say that as per GST Laws, these authorities do not have the right to hold cargo if the e-way bill and invoices are produced properly. Therefore, CBIC may provide appropriate instructions to the investigating authorities to refrain from holding goods on issues that do not fall under their purview.
Introduce functionality in portal
At present, there is no functionality in the GST portal to file multiple and supplementary claims in case the assessees genuinely missed some refunds. So, the CBIC may introduce functionality in the portal to facilitate such filing. Also, the government may introduce a functionality to rectify form GSTR 1 and GSTR 3B. In one of the ruling, the Karnataka High Court suggested that assessees should be allowed to rectify form GSTR 1 and GSTR 3B, it said.
