1. Write a letter to the principal Secretary Finance Department Government of India
requesting to take measure to stop multiple charging of GST
Answers
Answer:
To,
The Prime Minister
Govt of India
NEW DELHI
Sub: – Section 50(1) of CGST Act, 2017 – Ambiguity and hardship on Tax payers – INTEREST ON GROSS TAX
Respected Sir,
Admittedly, GST has been great reform in indirect taxes but, unfortunately, its implementation has resulted in huge complexity. It has also to be appreciated that the Council has been quite responsive to traders’ woes, but, here again, enormous amount of notifications, circulars and clarifications have made GST a bundle of confusion and contradictions.
Presently, interpretation of Section 50 (1) is causing havoc with the taxpayers. Instead of not only working on the principle of natural justice to tax payers, GST council is imposing interest on GROSS TAX for belated payment of tax and returns despite its having agreed earlier, in its 31st meeting, that interest is payable on NET Tax liability only. En block Notices by department for collection of interest on GROSS amount are being issued giving sleepless nights to taxpayers.
GST law committee has accepted the mistake made while drafting law and has come with Proviso in Section 50(1) which was inserted in Finance Act 2019 from date to be notified, which read as “Provided that the interest on tax payable in respect of supplies made during a tax period and declared in the return for said period furnished after the due date in accordance with the provisions of section 39, except where such return is furnished after commencement of any proceedings under section 73 or section 74 in respect of the said period, shall be levied on that portion of the tax that is paid by debiting the electronic cash ledger.”
This is been passed in Loksabha, Rajya Sabha, included in Finance Act, 2019, passed by and all states + UT except only 2 states (namely Telengana and West Bengal).
Confusion started with judgement from Telengana HC favoured for charging interest on GROSS Amount. Proviso in Section 50(1) was not read properly by court and judgement was passed with incomplete data available to court.