The Federation of Coimbatore Industrial Associations (FOCIA) has urged the Commercial Taxes Department to ease compliance burdens on micro and small enterprises, citing excessive penalties, bank account attachment notices, and a lack of clarity in GST procedures.
Coimbatore: Representatives of the Federation of Coimbatore Industrial Associations (FOCIA), led by coordinators James and Siva Shanmuga Kumar, along with office-bearers of various industrial associations, participated in a meeting organized by the Commercial Taxes Department on Wednesday. They submitted a representation to Joint Commissioner Sudha, requesting that their concerns be forwarded to the Commissioner of Commercial Taxes in Chennai.
The association expressed concern over the increasing number of penalty notices issued to micro and small enterprises under the SGST Act. According to FOCIA, many notices relate to Input Tax Credit (ITC) discrepancies, delayed return filings, HSN code mismatches, and even assessments dating back to the VAT regime of 2006–07.
FOCIA also highlighted the difficulties faced by small businesses due to the department’s reliance on digital communication. Since many micro enterprises depend on tax practitioners for GST compliance, notices uploaded solely on the GST portal are often missed, resulting in penalties, ex parte orders, and Form-13 proceedings for the attachment of bank accounts.
To address these concerns, the association urged the department to issue notices through both digital and physical modes, including registered post, and to ensure that taxpayers are given an opportunity for a personal hearing before any adverse order is passed.
The representation further called for the first five years of GST implementation, up to June 30, 2022, to be treated as an “Amnesty Period,” during which genuine compliance errors should be dealt with through guidance and corrective measures rather than punitive action.
FOCIA also raised concerns over hefty penalties imposed during the transportation of goods for minor clerical errors and documentation discrepancies. The association requested a reduction in such penalties and sought clear guidelines for the movement of goods involved in engineering job-work activities, a sector that supports nearly 30,000 micro units.
Additionally, the association recommended that bank account attachment proceedings through Form-13 be initiated only by officers of Assistant Commissioner rank or above. It also urged the department to exercise restraint in invoking Section 74 of the GST Act, which pertains to wilful tax evasion, and not apply it in routine cases involving ITC mismatches or classification errors.
Stating that the present GST enforcement framework places a disproportionate compliance burden on small businesses, FOCIA appealed for practical reforms that would support industrial growth while ensuring tax compliance.
The association expressed concern over the increasing number of penalty notices issued to micro and small enterprises under the SGST Act. According to FOCIA, many notices relate to Input Tax Credit (ITC) discrepancies, delayed return filings, HSN code mismatches, and even assessments dating back to the VAT regime of 2006–07.
FOCIA also highlighted the difficulties faced by small businesses due to the department’s reliance on digital communication. Since many micro enterprises depend on tax practitioners for GST compliance, notices uploaded solely on the GST portal are often missed, resulting in penalties, ex parte orders, and Form-13 proceedings for the attachment of bank accounts.
To address these concerns, the association urged the department to issue notices through both digital and physical modes, including registered post, and to ensure that taxpayers are given an opportunity for a personal hearing before any adverse order is passed.
The representation further called for the first five years of GST implementation, up to June 30, 2022, to be treated as an “Amnesty Period,” during which genuine compliance errors should be dealt with through guidance and corrective measures rather than punitive action.
FOCIA also raised concerns over hefty penalties imposed during the transportation of goods for minor clerical errors and documentation discrepancies. The association requested a reduction in such penalties and sought clear guidelines for the movement of goods involved in engineering job-work activities, a sector that supports nearly 30,000 micro units.
Additionally, the association recommended that bank account attachment proceedings through Form-13 be initiated only by officers of Assistant Commissioner rank or above. It also urged the department to exercise restraint in invoking Section 74 of the GST Act, which pertains to wilful tax evasion, and not apply it in routine cases involving ITC mismatches or classification errors.
Stating that the present GST enforcement framework places a disproportionate compliance burden on small businesses, FOCIA appealed for practical reforms that would support industrial growth while ensuring tax compliance.