GST@6

The Goods and Services Tax (GST) has been in effect for almost six years. The original concept of input credit, which involved matching invoices, has been largely replaced by Form 2B. This has created a significant burden for taxpayers, who must now reconcile their records and follow up with non-compliant vendors. Additionally, taxpayers are constantly being surprised by new notifications and circulars. While there have been some positive developments, such as the introduction of e-invoicing, there are still a number of unresolved issues. A summary of some of these issues, along with suggestions for how they could be addressed, is provided below.

SN	Matter	Suggestion	Rationale
1	GST under Reverse Charge Mechanism (RCM) in the hands of HO located in India on revenue of overseas branch	Charge Mechanism (RCM) in the hands of HO located in India on revenue of overseas branch Issue a circular to provide that the clarification provided by Circular No. 78/52/2018-GST dated December 31, 2018, is not applicable in a situation where the sub-contracting party is branch office, which is merely a distinct person of head office located in India.	There is no provision of service from BO located outside India to HO located in India. There is a direct delivery of services by BO to customer located outside India. For these services, a separate invoice is also issued. Furthermore, payment for the services have been made by the customer directly to BO located outside India. Also, the services provided directly by BO to the customer is rendered outside India and the services are never received in India
2	Grouping of multiple registrations within group entities for ITC utilization	Insert specific provision in S.49 of CGST Act to allow transfer/utilisation of ITC (at least CGST portion, being Central Government tax) between group entities. • Definition of group entities can be linked to related person as provided under Explanation to S.15 Page 21 of 31 of CGST Act. • Alternatively, an "input credit distribution" system can be evaluated to allow transfer of credits between multiple registration within group entities	It is pertinent to note that GST law provides for transfer of un-utilised credits in case of sale, merger, demerger, amalgamation, lease, or transfer of business. However, there is no mechanism to transfer credits to GST registration of the same entity in other state, thereby resulting in additional cash outflow
1	Restriction on input credit based on  GSTR 3B as per section 16(4) of the CGST Act.	Implement invoice matching concept to claim input credit which was first in the plan but never got implemented.	There is a period gap when vendor uploads the invoice in the GST portal and when taxpayer accounts the invoice in their books and claim input credit. Since both are not happening in same month, either input credit is advanced or postponed by the taxpayer & same adds load by way of excess cash outflow & reconciliation task.
2	GST Amnesty Scheme	Request to introduce GST Amnesty scheme for closing the dispute and correcting the initial mistakes done by taxpayer.	This will again reduce the quantum of tax litigation.
3	GST applicability on Cross charge of employee cost across other units.	Need more clarity in the Law along with applicability with prospective effect and not since the inception of GST.	This will bring more clarity to both tax department and taxpayer and reduce the quantum of litigation.
4	GST applicability on Treasury income received by the company and Input tax credit reversal on such treasury income