JANUARY 08, 2020

By Vijay Kumar

IT is really difficult to get sabka vishwas. The good government is trying to get the vishwas of a large number of citizens, if not all. In mid-December, the Government announced that the Sabka Viswas Legacy Dispute Resolution Scheme shall not be extended beyond 31st December 2019.

Come December 31st and they announced, "Last date of filing declarations in Sabka Vishwas Legacy Dispute Resolution Scheme is extended to 15th January 2020."

Nothing wrong! After all the government wanted to extend the golden opportunity to its taxpayers by another fortnight. But should they have emphatically stated that the Scheme shall not be extended beyond 31st December 2019? Well, this must have been to prompt people to come without waiting for the last day. Perfectly okay, though it damages the ‘vishwas' a little.

Actually, the scheme requires to be extended by another three months and the problems in availing the scheme addressed. The Scheme was launched with laudable objectives and the officers of the Department are constantly persuading the taxpayers to avail the benefits of the scheme. But unfortunately, the implementation of the scheme is frustratingly cumbersome. The website is absolutely faulty. It is very difficult to register and once you register the trouble starts. Some of the issues are:

1. When you try to login, it says, ‘there is a problem, contact support'

2. Support is not really supportive; if you call them, after getting your bio-data and not understanding your problem, they will ask you to contact the jurisdictional officers. If you send them a mail, they will reply, but will not solve your problem.

3. If you go to the jurisdictional officers, except a few, they are all courteous, but do not know how to solve your problem.

4. If you make a mistake in your PAN or name, God forbid, there is no way you can correct it.

5. If you are able to file your application and you get your SVLDRS-3, the challan is not generated. If the challan is generated, the mandate is not generated, if that is also generated and you pay the amount, the payment particulars are not generated. And nobody knows what to do. Under absolute vishwas, you pay the amount, but you don't get the SVLDRS-4. Even when your payment particulars are visible and the button to generate challan is not visible, you get a message, "not paid". Nobody has a clue as to how to sort out these issues and the ‘vishwas holders' are running helter-skelter to find a saintly officer who can help them.

They have not learnt their lessons from GST – the best of schemes can be ruined by hasty design and faulty systems. Let us restore the vishwas and not let the scheme leave a bad memory. These are small issues and can be easily solved – with a little concern. Will the concerned officers do the needful to the fullest extent? Without that, extending the scheme will not help.

Amendment to Section 50 of GST Act - still not notified.

Some extracts from the Agenda Item 7(xx) of the GST Council Meeting held on 22nd December 2018:

The liability to pay interest in case of non-payment of tax arises out of the provisions contained in Section 50 (1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the "CGST Act") which reads as follows:

"Every person who is liable to pay tax in accordance with the provisions of this Act or the rules made thereunder, but fails to pay the tax or any part thereof to the Government within the period prescribed, shall for the period for which the tax or any part thereof remains unpaid, pay, on his own, interest at such rate, not exceeding eighteen per cent., as may be notified by the Government on the recommendations of the Council."

It may be seen from the above provision that interest is applicable on the amount of tax that has not been paid by the registered person.

Thus, although the law permits part payment of tax but no such facility has been yet made available on the common portal. This being the case, a registered person cannot even avail his eligible ITC as he cannot furnish his return unless he is in a position to deposit his entire tax liability as self-assessed by him. This inflexibility of the system increases the interest burden.

Presently the interest is not calculated by the IT system. The registered person himself calculates the said interest and deposits the same. It appears, therefore, that any change would not pose any IT related challenge.

Therefore, the GST Council approved the Amendment of section 50 of the CGST Act to provide that interest should be charged only on the net tax liability of the taxpayer, after taking into account the admissible input tax credit, i.e. interest would be leviable only on the amount payable through the electronic cash ledger .

The Government brought in this amendment in the Budget 2019 which was enacted as the Finance Act (2) of 2019 on 1st August 2019. This Finance Act by Section 100 inserted the following proviso in Section 50(1) of the CGST Act.

"Provided that the interest on tax payable in respect of supplies made during a tax period and declared in the return for the 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 real vishwas. The GST Council took note of the problem and approved recommended legislative changes. The Government also acted with vishwas and brought the amendment before Parliament which was passed by Parliament and assented by the President.

Problem solved!

No, not yet.

There is a catch! The Finance Act, 2019 stipulated that sections 92 to 112 and section 114 shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint. Our amendment is Section 100 and that would not become law unless and until the government notifies it. The Finance Act, 2019 came into existence on 1st August 2019 and still the provision amending Section 50 is yet to be delivered into law. On 1.1.2020, the government notified certain sections of the Finance Act to come into force from 1.1.2020, but our Section 100 was specifically excluded. So, we have to wait further for the law, which the GST Council proposed to redress the genuine grievance of the assessees, caused by an error in drafting the original law and is yet to be implemented even a year after the GST Council approved it. Even after notifying it, the Government will have to clarify whether it will have retrospective effect. That is another big litigation issue.

In the meantime, the matter is before several High Courts and litigation may even reach the Supreme Court. Why should we have so much of litigation and turbulence? Can't we have a little peace? That is 'Sabka Vishwas '.

Until next week