SUFI Represents Strongly for TDS like Mechanism for GST Payment 

SUFI- Steel Users’ Federation of India – delegation led by Shri Samir Sanghvi, Chartered Accountant as well as empanelled member of GST Committee – SUFI attended interactive session with Hon’ble Interim Finance Minister Shri Piyush Goyal ji on Sunday, 15th July 2018 at Sahyadri Guest House, Malabar Hill, Mumbai held on first anniversary of GST.

The session was full house and very well attended by more than 250 representatives of Trade, Industries and Transport as well as professionals. In the financial capital of India, the Hon’ble Finance Minister on behalf of Government appraised patience and support of each person of the Country like businessman, common man or Government authorities in successful rollout of world’s biggest reform i.e. GST, which could not have been possible without support of all.

CA Samir Sanghvi raised various unresolved issues and hardships in GST, still faced by Steel users/ trade and industries. He drew the attention of Hon’ble Finance Minister for below mentioned unresolved below.

Steel Trade/Users specific issues:

1) Input tax credit (ITC) in case of no movement of goods, where sometimes actual movement of the goods do not take place, but delivery is symbolic or constructive (which is permitted under general Sale of goods Act), because of the heavy transportation cost and probable deterioration of quality of goods due to frequent movement.

2)     GST on ocean freight under reverse charge mechanism resulting into double taxation first at time of Import and secondly on Ocean freight element leading to blockage of cash and therefore, recommendation was made to permit use of credit in Electronic ledger account against liability to be discharged under RCM.

3)    Clarification on E-way bill in case of ‘Bill to Ship to’ transaction, where recommendation was made to the Government to protect interest of traders to introduce a technology /mechanism to hide transaction value as well as address of ultimate supplier or ultimate customer from everyone except preparator of E-way bill and concerned GST officers.

4)   Regarding Reversal of input tax credit if supplier defaulted on payment of GST, where recommendation was made to the Government to introduce Tax deducted at source (popularly known as “TDS”) mechanism in B2B transactions by buyer and enabling software to show credit in electronic ledger of supplier while filing GSTR1. The move is proposed to enable (a) buyer to timely claim ITC, as there would be no more scope for supplier to default; and (b) the Government to corner defaulters with preventive approach by notification of Caution list of defaulters on official website.

5)      Inclusion of petroleum products like petrol, diesel etc. in GST regime with ITC, with rationalized approach to reduce logistic cost of raw material procurement and overall cost of production and making “India make” product world competitive as well as beating inflation, creating jobs and financial stabilities amongst the Industries.

6)    Concessional GST rate on Electric Vehicle and related Infrastructure proposed with an aim to make business of Indian steel user Industries such as automobiles and accessories, battery makers, Charging stations etc. competitive in line with MNCs.

7)      Other recommendations in ease of doing business by considering adoption of Maharashtra MVAT’s SAP system for flawless GST compliances.

The Hon’ble Interim Finance Minister raised his concerns over transactions of ‘circulus trading’ behind idea of Government behind no ITC in case of ‘transactions with no movement of goods’, but at the same time, after listening the trade specific issues from SUFI representative, he directed GST department to define parameters to identify transaction as genuine or ‘circulus’ which can protect interest of genuine buyers. He also got convinced with idea of introducing TDS in GST with objective to protect interest of buyer for claiming ITC as well as of Government about timely recovery of taxes and importantly, punish the defaulters on real time basis. He also directed GST Department to implement on this specific SUFI recommendation.

In all it was a very satisfactory and fruitful interactive session which will yield benefits to all without any doubt. Most importantly, it opened up the perception of general public towards efforts of Modi Government to lift the trade to sustainable growth from initial glitches of one-year old GST law.

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