Ahmedabad: Rule change in GST to burn cash of bizmen
A recent amendment in provisions of GST Act will end up in more cash outflow from businessmen, say experts. While earlier, the pending Input Tax Credit under Integrated GST (IGST) was to be adjusted against tax liability under Central GST (CGST) and State GST (SGST), under new rule excess ITC credit will be adjusted against CGST only, meaning that the tax payer will have to pay tax under SGST even if he has tax credit pending.
The new rule is applicable from February 1 onwards. City-based tax expert Monish Bhalla said that most businesses will be affected as the share of inter-state businesses and imports are mostly higher than intra-state business. IGST is levied over inter-state trade and imports. As per previous practice, excess tax credit of IGST was equally adjusted with tax liability under CGST and SGST. Businesses had to pay the excess tax liability under CGST and SGST.
As per the latest amendment, excess IGST credit will be adjusted against CGST. It means that if there is an excess tax credit pending under IGST, it will not be adjusted under SGST. So businesses will have to shell out additional cash even though they are entitled for credit.
"The matter has been studied by the tax practitioners but it is the businessmen who will be adversely affected. Now it is up to industry bodies to represent the case to the government," said Sunil Keswani, honourary secretary of the Tax Advocates Association of Gujarat. Bhalla attributes the amendment to the distrust between the Centre and the states. "The reason for the same is trust deficit between states and the centre. This will result into less balance of IGST for state — Central adjustments and more cash revenue to the SGST state kitty directly," said Bhalla.
Rectification in monthly GST returns likely
Businessmen will be able to make amendments in previously filed monthly returns of GSTR 1 and GSTR-3B as well, as per a recent order of the government. This will help them get tax refunds, that has been blocked for so long. Earlier, the government had allowed such rectification in only annual returns.
"Assesses can now make amendments for monthly returns filed for the year 2017-18 as well," said Sun-il Keswani, honorary secretary of Tax Advocates Association of Gujarat.
Source :- Dnaindia.com