Top Stories Andhra Pradesh Tax Practitioners and Consultants Association vouches for One Time GST Amnesty Scheme for Section 16(4), Former AP Minister writes to FM [Read Representation] The Demand for GST Amnesty Scheme for Section 16(4) limits are on the uprise, owing to issuance of notices under Section 73 of Goods and Services Tax Act By Manu Sharma – On March 16, 2024 6:33 pm – 5 mins read Mopidevi Venkata Ramana Rao, a former Minister of Andhra Pradesh and current Member of Parliament, has highlighted a crucial concern affecting businesses across India.

In a letter addressed to Finance Minister Nirmala Sitaraman, he advocates for addressing issues related to Section 16(4) of the Goods and Services Tax Act of 2017, as raised in a representation raised by the Andhra Pradesh Tax Practitioners and Consultants Association brings attention to the urgent matter concerning Section 16(4) in the Goods and Services Tax Act. This section prohibits registered individuals from claiming input tax credit after the deadline for filing returns, leading to significant consequences for businesses nationwide. Despite sincere efforts, many businesses have received demand notices due to unintentional errors during the GST implementation phase. Read More: Section 16(4) of the CGST Act –

Why It May Never Be Struck Down The text of the letter from the AP Minister to the Finance Minister reads as follows: “I hope this letter finds you well. Enclosed herewith is a representation letter dated 11-03-2024 from the Andhra Pradesh Tax Practitioners and Consultants Association, highlighting a critical issue affecting businesses across India. The Association has earnestly requested the grant of One Time Amnesty for Section 16(4) in the Goods & Services Tax Act. 2017. covering the period from 1st July 2017 to 31st March 2023. The essence of their plea revolves around the challenges faced by businesses nationwide due to notices issued by thc Department regarding non-compliance with provisions outlined in Section 16(4) within the stipulated time frame as mandated by the Act. The repercussions of non-compliance have been significant. leading to unnecessary litigations and disruptions in business operations. By addressing this issue, not only will it alleviate the burden on businesses in Andhra Pradesh but also extend its benefits across the entire nation. In light of the representation received and the potential positive impact it could have on the business fraternity. I urge you to give due consideration to this request. Taking necessary steps to provide amnesty under Section 16(4) would not only foster compliance but also promote a conducive environment for business growth and development.

Your prompt attention and action on this matter would be highly appreciated and would undoubtedly contribute to the welfare of businesses nationwide. I request to please consider the representation and do needful. Looking forward to your positive action in the Matter.” Read More: The Input Tax Credit Conundrum: Section 16(4) GST Act Decoded with Recent Judgements on ITC The text of the representation by the AP Tax Practitioners and Consultants Association is also reproduced here: “Respected Sir, The Goods and Services Tax Act, 2017 is a landmark legislation that has the potential to transform the Indian Economy. The Act has been hailed as a major step towards economic integration and simplification of the tax regime. However, there are some challenges that need to be addressed in order to ensure the success of the GST regime.

There is a need to address the concerns of the business community. Among others, one such challenge is the application of sec 16(4) which is proving a major burden for the business community at large. Many businessmen owing to various reasons could not comply with the provisions and hence are now facing huge demand notices. Chankya in his Artha Sastra Says that “Collect taxes from a Taxpayer Just like a bee collects honey from a flower without disturbing its petals” We are the Body of Advocate, Tax Practitioners & Tax Consultants having more than 2000 registered members and 26 Associated bodies, one ot the largest association in South India. Working for the Trade and Tax fraternity from last 10 years. As well known, the Government does every effort to deny the benefit of Input Tax Credit to the taxpayers. One of the efforts is made under Sec 16(4) of CGST/SGST Act,2017 in which the time limit is prescribed for availment of input tax credit. As per Sec A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note nor supply of goods or services or both after the due date or furnishing or the return under Section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier.

The Condition given in Sec 16(4) can be easily complied in the normal course of business, however the problem may arise where the GST Registration is cancelled by the authorities and we cannot deny the fact that the appeal to appellate authority or writ petition to Hon’ble High Court is a time taking process and due to which there may be possibility that the taxpayer could not claim input tax credit GST Returns with in the time prescribed in Sec 16(4) of CGST/SGST Act,2017. In other words, delayed GST Returns may be filed after revocation of GST Registration and input tax credit is availed in such delayed GST returns. In the given situation where delayed GST returns are filed it is difficult to comply with the time limit mentioned in Sec 16(4) for availment of Input Tax Credit. Further recently through Notification No:03/2023 (CT) dated 31-03-2023 Government has provided a one-time amnesty scheme for revocation of GST Registration. However the Government has not given any relief to avail the input tax credit in delayed returns in case of cancelled registrations. Previously through Notification No:19/20221 (CT) dated:01-06-2021 “Provided also that for the registered persons who failed to furnish the return in FORM GSTR-3B for the months/quarter of July, 2017 to April, 2021, by the due date but furnish the said return between the period from the Istday of June, 2021 to the 31st day or August, 2021, the total amount of late fee under section 47 of the  said Act, Shaf/ stand waived which is in excess of five hundred rupees:

Provided also that where the total amount of central tax payable in the said return is nil, the total amount of late fee under section 47 of the said Act shall stand waived which is in excess or two hundred and fifty rupees for the registered persons who failed to furnish the return in FORM GSTR-3B for the months/ quarter of July, 2017 to April, 2021, by the due date but furnish the said return between the period from the Istday of June, 2021 to the 31st day of August, 2021: Later Through Notification No:33/202i (CT) dated:29-08-2021 the period extended up to 30th Day November, 2021. It would be a welcome step by the government if relaxation is provided to avail the input tax credit in the delayed returns in the case of cancelled registration. That will avoid huge litigation which is going to arise on this single issue Few GST Citations wherein ITC claimed held to be allowed or disallowed for belated filing or claim of the input tax credit: The Madurai Bench of Madras High Court, The Hon’ble high Court grants  relief to assessee for financial hardship leading to belated filing or GST-3B, using disallowed XTC under section 16(4) CGST act, 2017. Tvl. Kavin HP as Gramin Vitran v. Commissioner Of Commercial Taxes.

We are requesting the Hon’ble Finance Minister look at the issue in a broader way and issue some relaxations to the Business people to claim their eligible legitimate input tax credit in the light of issuance of one time Circular instructions for the period 01-07-2017 to 31-3-2023. Because of the various reasons registered business persons in GST had missed out the time lines prescribed under sec 16(4) of CGST/SGST Act, 2017. Previously also to protect the interest of the business people in India with a great heart the department issued 2 Circular instructions 183/15/2022-GST dated 27-12-2022 Clarification to deal with difference in Input Tax Credit ( ITC ) availed in FORM GSTR-3B as compared to that detailed in FORM GSTR-2A for FY 2017-18 and 2018-19. 193/05/2023-GST dated 17-7-2023 Clarification to deal with difference in Input Tax Credit ( ITC ) availed in FORM GSTR-3B as compared to that detailed in FORM GSTR-2A for the period 01.04.2019 to 31.12.2021 We will hope that due hardship to business fraternity and especially MSME, be avoided by the Government by taking necessary corrective steps/clarifications clarifications even before the judgements come up and give relief to many innocent business persons (Registered Taxpayers) which will ultimately lead to a situation of creation of good faith in the broader business community.”