The Public Accounts Committee (PAC) has called for a comprehensive review of the GST framework to eliminate unnecessary procedures and simplify compliance.
Suggested revamping the GST system after consultations with all stakeholders.
Concerns About GST Compensation to States
No mandatory CAG audit of the Compensation Fund Account for over six years, affecting compensation release to States.
The GST (Compensation to States) Act, 2017 was meant to address States’ fears of fiscal centralisation and revenue loss.
₹32,577.73 crore remains stuck due to 2,447 inconsistencies in 10,667 cases, highlighting inefficiencies in fund disbursement.
Issues in GST Taxation Process
Delays in tax inflow to the government and tax refunds to businesses, affecting working capital.
Confusion over tax jurisdictions leading to incomplete refunds.
Cancellation of registrations without notices – 6,353 out of 14,998 cases lacked proper notice before cancellation.
GST registration issues:
No option for taxpayers to withdraw or edit registration applications.
Some applications rejected without clear reasons.
Problems in GST Filing & Refunds
Prolonged waiting periods for refunds, causing cash flow challenges for businesses.
Lack of clear timelines and poor documentation standards in the refund process.
Manual record-keeping issues, with PAC stressing the need for better data management.
‘Antarang portal’ proposed by the Finance Ministry to streamline the refund process.
Impact on MSMEs & Exporters
Micro, Small & Medium Enterprises (MSMEs) and exporters face issues due to the complexity of GST norms.
Delays in ITC (Input Tax Credit) refunds and export documentation create cash flow constraints.
1.45 lakh crore worth of tax cases (19,730 cases) pending investigation as of March 2022.
Many cases are pending for more than two years due to the lack of a GST Appellate Tribunal.
Key Recommendations
Simplify GST norms and prioritize ITC claims within a specified timeframe.
Expedite appeals and establish the GST Appellate Tribunal to reduce case backlogs.
Automate and improve documentation processes for registration, filing, and refund claims
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