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GST - CII favours extension of ITC period from 2 to 6 months

Published: Sep 29, 2017

By TIOL News Service

NEW DELHI, SEPT 29, 2017: ON the issue of GST the CII has stated that the Govt needs to handhold the industry, especially the MSME sector. For ease of doing business especially for the MSME, provisional Input tax credit period may be extended to 6 months from the current two months’ period; this will help cross matching of invoices through the GSTN portal and also save the blockage of the working capital for the small players.

Filing of GST Return may be made on a quarterly basis, as against the current monthly filing requirement as the MSME sector is still not well equipped with the IT infrastructure and a qualified manpower; this small measure will help bring them into the GST mainstream.

Another issue which need attention is the reverse charge mechanism (RCM). Under RCM, threshold exemption for payment of tax may be increased from the present Rs. 5000/- to 50,000/- which shall help ease burden of excessive compliances especially for the MSME players. Format of Returns may also be simplified and only basic core details may be required to be furnished, suggested Mr Banerjee.

Government may consider special initiatives for promoting exports, including by addressing teething troubles for exporters under the GST regime.

Payment of IGST for imports under Advance Authorisation, EPCG and on advance receipts adds to credit requirements of manufacturers and raises costs. All import duties including IGST should be allowed to be debited under Advance Authorization as the authorization is utilised for self and the finished goods manufactured from imported material is exported. Further, advance receipts for exports should be exempted from payment of IGST.

Another important issue is that under VAT/CST, merchant exporters could purchase goods without payment of tax on furnishing of a declaration form. This provision needs to be added under the GST law so that refund of tax is faster and capital is not held up. Currently, the tax for inputs for exports is needed to be paid directly even though provision for refund is provided. Further, delays in filing of GSTR 3 should be addressed for quick refunds of IGST paid on exports.