Industry bodies have requested the Finance ministry to provide clarity, speed up applications and ultimately provide more handholding on a plethora of tax issues. This includes input Tax Credit, GSTR 2A/2B, classification of Goods and Services under HSN, and the Monthly Payment of Taxes Scheme, among others.
"In the light of recent economic developments and uncertainty, all major industry bodies have requested the government to ease tax issues and provide more handholding. They have also requested that the deadline for filing taxes under the Income Tax Act, Companies Act and GST Act be extended," an official in the know said. These issues have also been brought up during recent meetings held by Finance Minister Nirmala Sitharaman with industry bodies.
"There are unresolved issues with Input Tax Credit, QRMP, GST Returns among others and it is important that the Government facilitate ease of doing business. There is a need to address the issues in the already rolled out schemes in the interest of trade and industry," Sanjay Aggarwal, President, PHD Chamber, said.
The tax authorities need to be more proactive in solving tax-related confusion on the ground, Bimal Jain, Chairman of the chamber's Indirect Taxes Committee, said.
"There is no handholding from the Government at any non-government forums to address burning issues of stated topics in GST. It is important to boost the morale of industry and issue clarifications on litigation-prone issues. Numerous issues are raised at such forums and it is important for governmentt officers to attend such events and hear out industry concerns and issue clarifications," he said.
Industry has also raised the issue of classification of products under the GST regime. The rate of tax to be charged on a particular product depends on the two major classification systems specified under the GST law.
While the universal Harmonized System of Nomenclature (HSN) is used for traded products and is the same for customs purposes, the Services Accounting Code (SAC) is issued by the CBEC to uniformly classify each service under GST. From April 1, it has been made mandatory for taxpayers under GST with a turnover of more than Rs 5 crore in the preceding financial year to furnish six-digit HSN Codes or SAC codes on invoices issued for supply of taxable goods and services.
Incorrect classification may lead to wrong chargeability, leading to erroneous payment of taxes. Businesses say that while the codes were in use earlier as well, the rule to make them mandatory during the height of the tax season has led to confusion. Not knowing which code applies to a product or service may lead to incorrect classification, cause disputes with customers and result in penalties being imposed by the revenue department, businesses say.
"As in all years, confusion with regards to technical issues remains. Businesses are unsure of what happens to sanction of refunds delayed due to technical errors on the GST portal and (whether) supply of parts under repair services qualifies as a composite supply of service," a senior functionary of the Confederation of Indian Industry said. The chamber is creating its list of inputs on the tax front and will soon submit it to the Finance Minister, he said.