Union Budget 2024: Changes Expected in Streamlining Indirect Tax Compliances

By: Admin
July 19, 2024
Categories: GST Recent News
4 Min Read

Challenges in Claiming Input Tax Credit (ITC) under GST and Customs Issues: A Call for Government Action

GST Portal Robustness Concerns

In the realm of GST, claiming Input Tax Credit (ITC) poses significant challenges. A crucial condition mandates that vendors must remit GST to the government for buyers to claim ITC. Currently, there’s no online mechanism enabling buyers to verify if vendors have fulfilled this requirement, leading to compliance issues and potential denial of ITC unfairly.

Issues with Form GSTR-2B and Compliance

Form GSTR-2B relies on vendors’ GSTR-1 data for ITC calculations. Yet, recipients lack tools to confirm compliance with GST payment conditions set by vendors, contributing to disputes and litigations.

Legal Dilemma and Impact on Businesses

High courts’ divergent rulings exacerbate the situation. While some courts protect genuine buyers from ITC denial due to vendors’ faults, others stress strict adherence to GST laws. This inconsistency burdens businesses unfairly, demanding a balanced approach from policymakers.

Vendor Registration Cancellation and ITC Disallowance

Another critical issue arises when vendors’ GST registrations are retroactively canceled. Buyers face ITC rejections despite goods procurement, as they struggle to monitor vendors’ registration statuses continuously. This systemic flaw necessitates urgent governmental intervention for industry-wide relief.

Customs Challenges: SVB Investigations and Digitization

SVB Investigation Timeliness

In Customs, Special Valuations Branch (SVB) investigations into related-party imports often prolong excessively, lasting 4-5 years. This delay forces importers into provisional import arrangements, tying up significant financial resources. Establishing a strict time frame for SVB proceedings is imperative to alleviate importer burdens and streamline trade operations.

Digital Transformation in Customs

While strides have been made in digitalizing customs clearance through faceless assessments, manual processes persist in refund applications and notice replies. Aligning with the ‘Digital Bharat’ initiative, an integrated online portal for Customs would expedite procedures, reducing bureaucratic delays and enhancing trade efficiency.

Looking Ahead: Budget 2024 and Economic Growth

As India eyes sustained economic growth, the upcoming Budget holds pivotal importance. It will outline the government’s strategies to propel India as a global economic leader, emphasizing reforms in GST and Customs to foster a business-friendly environment.

Conclusion

Addressing the complexities surrounding GST compliance and Customs procedures is crucial for India’s economic vibrancy. By resolving these issues and embracing digital advancements, the government can empower businesses, ensuring seamless trade operations and sustained growth.

Hashtags:#GSTReform #CustomsDigitization #ITCChallenges #EconomicGrowth #Budget2024 #DigitalIndia