Major Amendment to GST prior to its Implementation

Dear Finance Minister,  

Sub: Some Amendments in GST Act & Rules to Ensure GST is a Success 

1. Forms to be Notified  

• For Rules Notified: The rules notified earlier have provided formats which are in the process of revision esp GST Return Related Rules. A period of 3 months from the date of finalizing formats be provided to design/ configure the ERP/ Accounting systems.  
• For Rules Not Notified: The new rules have been notified without the formats- these formats need to be finalised. Then a period of 3 months be given to implement.    

Some rules like ITC credit, Weigh Bill are simply unworkable for the SME who constitute 90% of the tax payers. They need to be omitted of made substantially easy.    

Everybody from Govt side is CANNOT BE READY- FAR FROM THAT due to above  

2. Small Assesse  

• URD: in the current law, Rs. 20 lakhs exempted assesses CANNOT do business with a registered dealer as URD purchases liable under RCM, Rather  

• allow small assesse to get registered and give 20lacs Basic Exemption.  
• Considering the ease of doing business there shall be monitory threshold limit for applicability of RCM else a small transaction purchase of Rs.200 will invoke RCM.  

Suggested Rs.10,000.  

3. Also, consider for 1 year keep URD out of GST.  

2. Composition suppliers / dealers:  

• limit to be increased to Rs. 1 crore and  
• allow them to have stocks on interstate/ imported goods iii. Extend scheme to all service providers (works contractors) also.  

iv. Change from Regular Dealer to composition dealer be extended for 90 days from registration rather than 30 days.  

3. Valuation Rules  

a. to be mainly on transaction value - May need major revamp: Exception valuation of Goods as per Central excise valuation Rules, Services to be redrafted considering reality.  

i. Open market Value will lead to unending 10 years of litigation.  

4. Input Tax Credit  

• Condition of Valid Return filed by supplier for availing credit by Recipient shall be removed.  

• Restricted credits: Restriction in Credits though promised to be of the past- reintroduced. Continuing litigation as also cascading of duty. All credits for business to be allowed.  

• Matching concept only for GST above 5K for 1 year then reduced to 2k in 2nd year.  

• ITC credit analysis- an impossibility even for any SME- to be only invoice wise to be segregated at year end.  

• Pre-registration credits available for period + where payment of GST made for past.  

• ISD Credit Rules be simplified  

5. Transitional Provisions  

• Rule 1 of draft GST Transitional Provision Rules be replaced with data certified by an accounting professional, rather filing all the details.  

• Filing of GSTR-Tran 1 shall be extended to 180 days, since assesse has business related reviews and works when migrated to GST and due time to be given to file the opening Return.  

6. Others  

• Payment Adjustment: Like credit adjustment any monies paid under  

• CGST/SGST/IGST shall be inter setoff & be allowed.  

• Import for personal uses- exempted up to Rs. 25,000/-  

• No retrospectivity in exemptions.  

• Exempt supplies not to include Reverse charge.  

• POS: B2B transaction shall have seam less credit and not denied because of Place of supply Rules, Eg: Accommodation in Hotel, will raise invoice with CGST+SGST and other eligible assesse may not get the credit UNLESS they have place of business in such estate, which may not be the intention of the law.