CODISSIA requests reliefs form MSME Industries under TNVAT Act and GST Act

Coimbatore: CODISSIA has submitted the following Representation to the Minister for Commercial Taxes and Registration, P. Moorthy, during his visit to Coimbatore.

The impact of COVID 19 and the related lockdown on the MSME industry has been huge. The members have highlighted serious working capital difficulties and labour issues. In this situation, it would be befitting for the MSME industry for some relaxations under the taxation laws. Reliefs granted at this time would greatly help for the basic continuity of the various businesses which support a huge class of working labourers.

In this background, they sought the following reliefs under the various provisions of the erstwhile Tamil Nadu Value Added Tax Act (TNVAT), Central Sales Tax Act and the current Goods and Services Tax Act

Tamil Nadu Value Added Tax Act (TNVAT) & Central Sales Tax Act (CST)

* Acceptance of declaration from buyers with other corroborative documents in-lieu of Form “C”, Form “H”, Form “F” and other statutory forms

* Amnesty scheme for clearing pending VAT / CST dues with partial relief in Tax Payable and Full relief from Interest and Penalty

* Relaxation of time for furnishing documents for VAT/CST Assessment or any pending Audit matters

* Guidelines for Assessment/Audit by authorities must be issued which clearly specify that high- pitched assessments are NOT resorted on frivolous legal grounds or procedural infirmities

Goods and Services (GST)

* Increase in Turnover criteria for registration and taxability to Rs.1 Crore

* Ambit of GST to include Electricity & Petroleum Products

* Input Tax Credit benefit to be available for Construction of Industrial and Factory Buildings

Goods & Service Tax Act, 2017 — Adjudication — Appeals — Appeal before the GST Appellate Tribunal — Formation of Appellate Tribunal — State Bench & Area Bench — Request to have an Area Bench of State Tribunal

> Goods and Service Tax Act, 2017 was introduced with effect from 01.07.2017. Now it has crossed 4 years of implementation. The Acts provide for appeals to the Appellate Authority under Section 107 of the Acts, which is the First The current practice followed is hard copy needs to be submitted, only to the concerned assessing authority, who are not available all the time in the concern circle on account of holding additional charge or for other reasons. The circle superintendent advises the Dealer to file it with the Assistant Commissioner only, for which the applicants need to wait for the arrival of the concerned Assistant Commissioner, perhaps he may be attending other work or on meeting with higher officials. Particularly with the Assistant Commissioners who are holding additional charge of another Circle, this problem exists.

> A clear instruction to subordinate officers may be given to receive all the letters, replies, including application for refund and acknowledgement.

> Alternatively, a Centralized counter may be opened at the office of the Joint Commissioner ST., to receive all the communication such as letters, replies, refund application as followed in Income Tax and Central Excise Departments.

> This will help the Dealers to save time and the disposal of the refund claims can be followed by the Office of the Joint Commissioner.

Suggestions for Refund claims in time bound manner, which will financially help the SME and MSME:

> Though the Goods and Service Act provides for sanctioning refund amount within a specific time, the system of adhering to the period specified in the Act is not followed in this Department.

> There is a provision to sanction 90% of the claimed amount within 10 days and the balance amount to be sanctioned after verification of claim, which is being followed at the GST & Central Excise Department. However, this is not strictly followed by the State Tax Department.

> All are aware that the industries more particularly SMEs and MSME’s are facing great financial hardship in this pandemic situation. Sanctioning of refund amount in time will certainly help the industry to meet out their financial needs such as timely payment of Banks dues, vendors’ payment, meet out the working capital requirements etc. will be a timely help to the small industries and support the industry for revival after post COVID period.

> So they requested the Minister to advise the concerned authorities to dispose of the pending refund claims expeditiously and in a time bound manner.

Appellate Forum. The second appellate Forum is the Appellate Tribunal and its Benches. Sec.109 provides for constitution of National Bench, Regional Benches, State Bench and Area Benches.

Presently to hear the appeals, which arise under Tamil Nadu General Sales Tax Act, 1959 and Tamil Nadu Value Added Tax Act, 2006, Tamil Nadu Sales Tax Appellate Tribunal is functioning in Tamil Nadu, having Main Bench at Chennai and additional benches at Chennai, Madurai and Coimbatore. These benches will be wound up, once all the appeals filed under relevant Acts are disposed of.

Now the Governments have to constitute Appellate Tribunal under GST Acts. There will be National Bench, Regional Benches, State Bench and Area Benches. In Tamil Nadu there will be a State Bench and 3 or more area benches. We have to represent to the Government to have an Area Bench at Coimbatore to hear the second appeals arising from the orders passed by the Appellate Authority and Revisional Authority. The Union of India (Central Government) constituted the Appellate Tribunal with 2 members, one Central Officer and another State Officer. 

This formation was objected by advocates stating that the Appellate Tribunal should have one judicial member. The writs filed by advocates are accepted by most of the High Courts and appeal by Union of India against the orders of High Courts is pending before the Apex Court. In the meanwhile, most of the States have requested for Regional Bench, State Bench and two or more Area Benches. Fact being so, we request the Government to have an Area Bench at Coimbatore since the Coimbatore region has more registered dealers.

Refund application and other documents filling and acknowledgment system improvement suggestions:

> Presently there is a need for filing a hard copy of Refund application for the refunds claimed for zero rated supply and inverted tax credit under section 54 (3)(ii) of CGST Act, 2017. Refund mela’s can be organized so that during that period all the pending refund claims can be disposed of in one go.

They also requested to consider the following issues:

* Due to the heavy financial crunch, it is completely impossible for us to make payment towards taxes — GST / Income Tax which fall due during July / August 2021. It is our sincere request to extend the due dates for another six months for all tax payments

* The late fees applicable on delayed filing of GSTR 1 also need to be waived off. We sincerely request that the above due dates be extended without any condition as to the turnover or tax payable.

* Objective of our members has always been towards due and timely compliance. Due to the present situation, it is the sincere request of the Trade and Industry that there shall be FULL WAIVER of Interest and Penalty on GST due dates during April 2021 to July 2021

* They also request that all pending GST refunds be released to industries on a war footing basis to manage the great financial hardship by the industries in this pandemic situation.

* To arrange for a centralized counter to be opened at the office of the Jt. Commissioner, Sales Tax, to receive all communications such as letters, replies, refund application etc. as being followed in Income tax and Central Excise Departments, so that it will save time and follow up can be done regarding the disposal of refund claims with the Office of the Jt. Commissioner.

The above listed reliefs would highly benefit the MSME industry and the timely decision on the same would be highly lauded. We requested the Government to consider the above requested relief in the interest of the economy at large.