Indore (Madhya Pradesh): The blocking of input tax credit (ITC) is badly hampering businesses across the state. Since the city is the financial capital of the state, a large number of traders and businessmen of the city have been affected
Tax consultants and chartered accountants of the city raised various issues of the traders related to GST raised before state GST commissioner Lokesh Jatav here on Monday. They handed over a memorandum urging him to solve the issues.
Chartered accountant JP Saraf, of Tax Practitioners Association, informed that Rule 86A of CGST Rules, 2017 empowers the commissioner or its authorised officers to disallow debit of electronic credit ledger and block the credit based on a reasonable belief that credit of input tax available in the electronic credit ledger has been fraudulently availed or is ineligible.
In most of the cases ITC is blocked immediately without looking into the facts of the case. This is causing undue hardship to the bonafide assessee and recipient, where credit was rightfully claimed, but
facing the problem due to the default of their supplier. In cases where ITC is blocked by the department, some of the taxpayers could not file their returns in time and they were bound to close their business. Dueto this, even the department is losing revenue.
Composition dealer facing problems
Chartered accountant Saraf said that the composition taxpayers are facing problems while filing the GSTR-4 for FY 21-22 which was to be filed till 30th April 2022 due to negative liability. While filing GSTR-4 (Annual) of any previous financial year if the taxpayer has not filled up table 6 of the said return, whatever amount was paid through Form CMP-08s of the year was credited to the negative liability statement.