It is necessary to introduce structural changes and amendments to the law in order to bring the regulations with the provisions that finish the long-running list of refund claims that are disputed and to reduce any future disputes.
To make taxpayers more comfortable, the government must offer an easy and smooth refund procedure. An efficient and consistent refund process is crucial to tax management. It aids in trade by opening money that is blocked to fund working capital and thereby aiding in modernizing and expanding their existing businesses.
As the second wave of tsunamis hit the Indian businesses in a massive way, the Government has been closely working to resolve the numerous issues related to GST refund. In the last few days, CBIC had launched a special campaign to complete all outstanding refunds within the next month. The initiative was in keeping with similar initiatives by CBIC to refund refunds under a variety of other laws such as customs or duty drawback claims and so on. Additionally, the government has made a number of modifications, such as the removal of the time period for issuance of deficiency notice from the overall time period of two years to submit an application for a refund as well as the facility to cancel refund applications as well as other changes. These actions are welcome and should give some relief to taxpayers. But, there are other questions that have to be resolved with regard to the crucial aspect of refunds under GST.
The detailed circulars explain the complete process of claiming GST refunds through an online application, along with the supporting documents that must be provided; however, there are many problems that remain at the ground level. Some of them are listed below:
Documents that support the application and their legality
When processing refund applications for cash ledgers There has been a demand from the responsible officer to provide Cash Ledger certified by a Chartered Accountant. It is crucial to know that the cash ledger can be described as an electronic report accessible through the GST portal. Therefore, the certification of an automated report does not have legal support.
Additionally, in a handful of cases officers have requested an Chartered Accountant certificate concerning the possibility of tax being not passed when a refund is due from the bank ledger. This is also logical reasoning. The cash ledger’s balance could be due to cash deposits by the taxpayer himself or TDS/TCS that is deposited through the tax deductor. Therefore, the document that states there is no tax implication passed to the purchaser lacks logic and legality when you consider that the law doesn’t define any specific requirements.
Additionally, in the case of certain tax refunds GSTR-2A must be submitted. GSTR-2A is an automatic report that is available on the GST portal. GST portal. So having to submit the auto-mated document when submitting the application for refund is not appropriate.
In the circular issued on March 20, 2020 the reimbursement of ITC accumulated was limited to invoices submitted by the supplier in Form GSTR-1 and then reflected on the form GSTR-2A submitted by the applicant. There has been no clarity on the documents that must be uploaded, including those self-certified invoice copies whose information are not included in the Form GSTR-2A for the applicable period. If there isn’t a refund for the invoices, the uploading of such invoices is not a good idea.
Incompleteness of the time limit set by law
According to the regulations under GST, in the case of a refund that is not cash ledger the officer has to issue an acknowledgement within 15 calendar days of submitting the application when he is satisfied the application is correct in all respects. Moreover, if officers are satisfied the entire or a portion of the amount claimed as a refund is refundable the officer must issue an order within 60 days of the date of filing the application that is complete with all the required information.
If there are any deficiencies identified, the officer in charge will issue a deficiency notice. Additionally, there aren’t any deadlines set by law that govern the issue of deficiency memos. On a careful review of the Circular that was issued in November of 2019 it could be assumed that the timeframes of 15 days are applicable to both.
But, in reality, the timelines aren’t being strictly adhered to and neither acknowledgement nor deficiency memos are issued for certain refund applications that last longer than one year. This is why the primary goal of the timelines being introduced, i.e. quicker refunds, is much from being accomplished. The Government needs to keep coming back with special efforts to close a lot of refund cases pending due to these gaps in the law.
Online or Manual?
In the course of refund procedures the appropriate officer is required to issue a deficiency note in the event that any corrections are required to the payer. Additional information or clarifications is available through the GST Portal. However, numerous notices are sent directly to the addresses of taxpayers seeking clarifications via numerous letters. But, there is no information on the portal’s status and the status of the application is unchanged as it is pending. Therefore, a manual process does not align with the vision of creating a New India with the help of technology.
New application is required in the event of deficiency in memo
In accordance with the legal requirements after the officer has issued a deficiency notice, a new request for refunds must be submitted. There isn’t a provision in GST which allows for rectifying the mistakes made by the official. In some instances of refunds, like the inverted duty structure, submitting an application from scratch is a lengthy and time demanding task that causes delay in refund , and results in a lack of confidence in the taxpayers on the “fully electronic refund process” in the form submitted by CBIC.
In conclusion, the law provides an easy, time-bound, technologically-driven refund process with a minimum human interaction between the taxpayer as well as tax officials. But, due to imperfections in the procedure and the law and law, there have been a number of disputes over refund claims.
The Government is working to end the accumulated disputes by releasing different clarifications and adjustments such as the possibility of withdrawing of refund request, removal of the time period from submission of the application until the date of the issuance of the deficiency memo, exclusion from the two-year time limit for filing the refund application, and special drives for processing refunds earlier as well as other.
But, there is the need to make some structural changes, coupled with changes to the law in order to align the regulations with the main laws to stop the lengthy inactive list of refund claims, and to reduce the likelihood of future disputes.
It is necessary to make structural changes and amendments in the law to align regulations with the provisions that stop the lengthy list of disputes over refunds and reduce the likelihood of any future disputes.
To make taxpayers more comfortable, the government must offer an efficient and easy refund procedure. An efficient and consistent refund process is crucial to tax management. It aids in trade by opening the funds that are blocked for working capital, thereby aiding them in expanding and modernizing their existing businesses.
The second wave of the tsunami has hit the Indian businesses in a massive way. The Government has been closely working to resolve the numerous problems related to GST refund. In the last few days, CBIC had launched a special campaign to complete all outstanding refunds within the next month. The initiative was in keeping with similar initiatives by CBIC to reimburse refunds in accordance with other laws such as customs and duty drawback claims and so on. In addition, the government has introduced a variety of new modifications, such as the removal of the time period for issue of deficiency letters from the overall time period of two years for filing the new refund application as well as the facility to cancel the refund application as well as other changes. These actions are welcome and give some relief to taxpayers. But, there are other problems that must be addressed with regards to the issue of refunds under GST.
Thoughtfully-detailed circulars provide clarity on the procedure for claiming GST refund through online applications as well as the relevant supporting documents to be submitted. However, there are a variety of issues to be addressed at the grassroots. Some of them are listed below:
Documents supporting the documents and their legal validity
When processing refund applications for the cash ledger, there has been a request from the officer in charge to provide Cash Ledger certified by a Chartered Accountant. It is crucial to know that the cash ledger can be described as an electronic report that is accessible on the GST portal. Therefore, the certification of an automated report is not legally enforceable.
In a few instances officers are requesting the issuance of a Chartered Accountant certificate concerning the situation of tax not being paid when a refund is due from the bank ledger. This is also logical. The balance in the Cash ledger could result from cash deposited by the taxpayer or from TDS/TCS deposits made through the tax deductor. So, the proof that there is no tax implication passed to the purchaser lacks the legal and logical reasoning in this scenario, considering that the law doesn’t stipulate any particular obligation.
Additionally, in the case specific refunds GSTR-2A must be submitted. GSTR-2A is an automatic report available through the GST portal. GST portal. So it is not necessary to download the report that is auto-mated when submitting the refund application isn’t appropriate.
In the circular issued at the end of March, 2020 the reimbursement of the accumulated ITC was limited to invoices uploaded by the supplier on Form GSTR-1, and are reflected in the form GSTR-2A submitted by the applicant. There has been no explanation on the documents that must be uploaded, including the self-certified copies of invoices whose information are not included in the GSTR-2A form for the time period. If there isn’t a refund for the invoices, uploading these invoices appears to be ineffective.
Incompleteness of the time limit set by law
According to the regulations under GST, in the case of a refund that is not cash ledger reimbursement the officer has to issue an acknowledgement within 15 calendar days of submitting the application when he is satisfied the application is correct in all respects. If an officer believes the entirety or a part of the amount claimed for refund can be refunded, he is obliged to issue the order within 60 days of the date of the application that is fully completed with all the required information.
If there are any deficiencies discovered, the appropriate officer is required to issue a deficiency note. Furthermore, there are no timeframes stipulated by law for the issuance of deficiency letters. But, if you take a close study of the Circular that was issued in November of 2019 it could be taken to mean that the deadlines of 15 days apply to both.
But, in reality, these deadlines are not being followed in practice, and neither deficiency or acknowledgement memos are being given in certain refund requests for longer than one year. Therefore, the purpose of the timelines, i.e. quicker refunds, is away from being achieved. The Government needs to keep coming back with special efforts to end a huge number of outstanding refund cases because of such lapses in the law.
Online or Manual?
In the course of refund procedures the responsible officer needs to issue a deficiency note in the event that any corrections are required to be completed to the payer. Additional information or clarifications is available through an announcement made via GST Portal. But, notices are being issued directly to the addresses of taxpayers who require multiple clarifications, via letters. But, there is no information on the portal’s status and the status of the application is unchanged as it is pending. Therefore, a manual process is not compatible with the goal of building a New India with the help of technology.
New application is required in the event of deficiency in memo
In accordance with the legal requirements when the officer issues a deficiency notice, a new request for refunds must be submitted. There isn’t a provision in GST that permits the correction of the mistakes made in the memo issued by an officer. In certain cases of refunds, like the inverted duty structure, submitting new applications is a time-consuming and tedious intensive process that results in delays in refunds and causes a lack of trust in the taxpayers on the “fully electronic refund process” according to CBIC.
To sum up this, the law permits a streamlined, time-bound technologically-driven refund process with a very limited human interface between the taxpayer and the tax authority. But, due to some imperfections in the procedure and the law and law, there have been a number of disputes over refund claims.
The Government is working to resolve the disputes that have accumulated by issuing numerous clarifications and modifications such as the possibility for withdrawal of refund applications as well as the exclusion of time for filing the application until the date of issue of the deficiency memo, exclusion of the two-year time limit to file an application for refund, the use of special drives to expedite refund processing and so on.
There is an urgent need to introduce certain structural changes along with a few amendments to the law to align regulations with the main rules to end the long waiting list of disputed refund claims and reduce the risk of any future disputes. If You are looking for any kind of Gst Refund Services Visit My Gst Refund.
