FICO organized session on Anomalies in GST

Author(s): 
FICO organized session on Anomalies in GST

Ludhiana, December 2, 2019: Federation of Industrial & Commercial Organization (FICO) organized a session on Anomalies in GST, at FICO Secretariat Jaimal Road, Janta Nagar, Ludhiana.
Mr.Gurpreet Singh Gogi Chairman, Punjab Small Industries and Export Corporation (PSIEC) listened to the grievance of the FICO members and assured of appropriate solution.
Team FICO under the leadership of S.Gurmeet Singh Kular President FICO, welcomed and congratulated Mr. Gurpreet Singh Gogi Chairman, Punjab Small Industries and Export Corporation (PSIEC), and at the same time explained how the total progress of the Units of Punjab are stuck, due to non-compliance of enhancement, Mr. Kular also explained that the principle amount of Rs.474/- is now approximately 1000/- with compounded interest, so now industry is in crisis, you are requested to exempt this from enhancement & interest. As per the “No Enhancement Policy” of Haryana State Industries Development Corporation, the same should also be applicable in Punjab so as to facilitate the Industry of Punjab.
Also discussed was the Infrastructure of Focal Points, which is in its worst shape ever, the condition of the Roads and the sewerage in the Focal Points is so miserable that the industrialists feel ashamed to bring their customers to factories through these roads. The condition of the roads is so poor that the movement of goods is done at the risk. It has been also been observed that at least 70% of the street lights in the focal point are not working.
Focal points are the Bread & Butter of Punjab which generates huge revenue for the government in shape of GST, Income Tax, Property Tax, Octroi etc., so it is the first & foremost responsibility of the government to facilitate the industrialists with at least the basic infrastructure like proper roads, proper sewerage, proper lighting.
FICO submitted the under noted anomalies found in GST Regime.

• Pending VAT Refunds before GST Period
Industry is facing working Capital shortages due to delayed VAT refunds which are ranging in some hundreds of Crores. Even after the completion of Assessments & issuance of various Circulars in the previous times, Relief is to reach at doorsteps of the Industry. This shortfall in Working Capital funds has landed the Industry in the trap of Loans & interest thereon leading to vicious circle of Capital erosion. It is requested to release the pending VAT refund at the earliest

• Pending Refunds of GST (State Portions)
The State portion of GST i.e. SGST in not being refunded to the fellow industrialist, which is resulting in limitations in Working Capital, heavy interests are being levied by banks on excessive usage of limits, it is industry’s own money, not a grant or subsidy. Tax refunds should be processes early, so as to encourage the ease of doing business in Punjab.

• E-way bill threshold limit
The Current Limit of INR 50,000/- per consignment is too low, As notified by the Government of Punjab vide Notification No. PA/ETC/2018/175 dated 13th September 2018, the limit was increased to INR 100,000/- for all goods and e-way bill generation was made optional for Fabrics sent for job work. However, in notification No. GST-I-2018/2 dated 8th October 2018, some categories of goods were excluded from the above beneficial threshold of INR 100,000/-
It is requested that the government should exempt the intra-state movement of goods for invoice value up to INR 200,000/-.

• E-Way Bill (EWB) on Material sent for Job Work
With the rolling out of E-way Bill on Intra-state movement of Goods, it has become a hardship for our industry where varied components are being manufactured/ fabricated through different Job Workers in & around the City. Daily movements of goods to & fro Job Workers need EWB on each such movement. It makes the Compliance a burden for the Industry. Even movement of Goods from one factory to another factory of same assesses requires EWB irrespective of the amount & distance. It makes compliance to the provisions a cumbersome process at the disposal of assesses.

• Credit Reversal
• The credit claimed on the purchases in which the payment has not been given to the suppliers within the 180 days must be reversed. And to keep note of this thing may indulge an extra burden on the organization.

• No Option for Extra Tax Paid and Refund Challan
If in case the taxpayer had paid excess taxes there is no option to correct the paid challan and problems coming in the claim of refund.

• Adapting to IT Ecosystem is Hard
Indian economy is majorly driven by small business units i.e. SMEs. It will be unfair to expect small-scale business firms to make the transition to an online IT platform and expect no errors in return filing. It is an uphill task for the majority of our working population which has little hands-on experience with IT solutions. The cost of ERP deployment is a major concern for micro-small-medium scale enterprises.

• Annual GSTR Form Utility
There is no proper guide about GSTR 9 annual return form which is due for 30th November and with no solutions such as Invoice Addition, modification, etc. it is hard for the taxpayers to file the return.

• Inverted Duty Structure
An important drawback of commercial policy or the import tariff policy is the problem of inverted duty structure prevailing in different industries. Inverted duty structure is a situation where import duty on finished goods is low compared to the import duty on raw materials that are used in the production of such finished goods.
ITC refund relating to input services is not allowed while claiming refund of inverted duty structure, Input services should be included in net ITC for claiming refund of inverted duty structure.

Mr. Gurpreet Singh Gogi Chairman PSIEC ensured FICO that within a week, a meeting with Chief Minister & Finance Minister Punjab will be arranged and the grievances will be put up for solution.

Date: 
Monday, December 2, 2019