Introduction: Mopidevi Venkata Ramana Rao, former Minister of Andhra Pradesh and current Member of Parliament, addresses a crucial issue plaguing businesses across India. In a letter to Hon'ble Finance Minister Nirmala Sitaraman, he advocates for the resolution of challenges surrounding Section 16(4) of the Goods and Services Tax Act, 2017.

Detailed Analysis: The representation from the Andhra Pradesh Tax Practitioners and Consultants Association sheds light on the pressing issue of Section 16(4) in the GST Act. This provision prohibits registered individuals from claiming input tax credit after the due date for filing returns, leading to significant repercussions for businesses nationwide. Many businesses, despite genuine efforts, have faced demand notices due to inadvertent errors during the implementation phase of the GST Act.

The letter highlights the challenges faced by businesses, emphasizing the need for a one-time amnesty to rectify past mistakes and alleviate the burden on entrepreneurs. Mopidevi Venkata Ramana Rao underscores the importance of considering the representation from the Association, as it not only benefits Andhra Pradesh but also has implications for the entire country's business ecosystem.

A detailed analysis of Section 16(4) reveals the complexities and practical difficulties faced by taxpayers in adhering to its provisions. The time constraints imposed by the Act often clash with the procedural delays in the tax administration system, resulting in legitimate claims being disallowed.

The association presents a compelling argument for the government to extend relief to businesses grappling with compliance issues under Section 16(4). They reference previous instances where the government provided waivers and amnesties to ease the burden on taxpayers, emphasizing the need for a similar approach in this case.

Conclusion: In conclusion, Mopidevi Venkata Ramana Rao's letter urges the Finance Minister to address the challenges posed by Section 16(4) of the GST Act. By considering the representation from the Andhra Pradesh Tax Practitioners and Consultants Association, the government can provide much-needed relief to businesses and foster a conducive environment for economic growth. Timely action on this matter would not only promote compliance but also demonstrate the government's commitment to supporting the business community during challenging times.

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Dt: 13-03-2024

To
Smt. Nirmala Sitaram Ji,
Hon'ble Finance Minister,
Union of India,
New Delhi,

Respected Madam,

Regarding: Representation received from Andhra Pradesh Tax Practitioners and consultant Association, Andhra Pradesh — Issued faced by the Dealers in Sec 16(4) of the Goods and Services Tax Act,2017 — inadverant mistakes done by the dealers in initial stages of implementation of new enactment — Consider request for one time amnesty — req regards.

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I hope this letter finds you well. Enclosed herewith is a representation letter dated 11-03-2024 from the Andhra Pradesh Tax Practitioners and Consultants Association, highlighting a critical issue affecting businesses across India.

The Association has earnestly requested the grant of One Time Amnesty for Section 16(4) in the Goods & Services Tax Act, 2017, covering the period from 1st July 2017 to 31st March 2023. The essence of their plea revolves around the challenges faced by businesses nationwide due to notices issued by the Department regarding non-compliance with provisions outlined in Section 16(4) within the stipulated timeframe as mandated by the Act.

The repercussions of non-compliance have been significant, leading to unnecessary litigations and disruptions in business operations. By addressing this issue, not only will it alleviate the burden on businesses in Andhra Pradesh but also extend its benefits across the entire nation.

In light of the representation received and the potential positive impact it could have on the business fraternity, I urge you to give due consideration to this request. Taking necessary steps to provide amnesty under Section 16(4) would not only foster compliance but also promote a conducive environment for business growth and development.

Your prompt attention and action on this matter would be highly appreciated and would undoubtedly contribute to the welfare of businesses nationwide.

I request you to please consider the representation and do needful,

Looking forward to your positive action in the Matter.

Yours sincerely,
MOPIDEVI VENKATARAMANA RAO
Member of parliament (Rajiya Sabha)
President-YSRCP PARTY
Bapatia Dist., Andhra pradesh

A.P. TAX PRACTITIONERS AND CONSULTANTS ASSOCIATION

Dt:11-03-2024

To
Smt. Nirmala Sitaraman,
Hon'ble Finance Minister,
Union of India,
New Delhi,

Respected Sir,

The Goods and Services Tax Act, 2017 is a land mark legislation that has the potential to transform the Indian Economy. The Act has been hailed as a major step towards economic integration and simplification of the tax regime. However, there are some challenges that need to be addressed in order to ensure the success of the GST regime. There is a need to address the concerns of the business community. Among others, one such challenge is the application of sec 16(4) which is proving major burden for the business community at large. Many businessman owing to various reason could not comply with the provisions and hence are now facing huge demand notices.

Chankya in his Artha Sastra Says that

"Collect taxes from a Tax payer just like a bee collects honey from a flower with out disturbing its petals"

We are the Body of Advocate, Tax Practitioners & Tax Consultants having more than 2000 registered members and 26 Associated bodies, one of the largest association in South India. Working for the Trade and Tax fraternity from last 10 years.

As well know, the Government do every effort to deny the benefit of Input Tax Credit to the tax payers. One of the effort is made under Sec 16(4) of CGST/SGST Act,2017 in which the time limit is prescribed for availment of input tax credit.

As per Sec 16(4):-

A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier.

The Condition given in Sec 16(4) can be easily complied in the normal course of business, however the problem may arise where the GST Registration is cancelled by the authorities and we cannot deny the fact that the appeal to appellate authority or writ petition to Hon'ble High Court is a time taking process and due to which there may be possibility that the tax payer could not claim input tax credit GST Returns with in the time prescribed in Sec 16(4) of CGST/SGST Act,2017. In other words, delayed GST Returns may be filed after revocation of GST Registration and input tax credit is availed in such delayed GST returns. In the given situation where delayed GST returns is filed it is difficult to comply with in time limit mentioned in Sec 16(4) for availment of Input Tax Credit.

Further recently through Notification No. 03/2023 (CT) dated 31-03-2023 Government has provided one-time amnesty scheme for revocation of GST Registration. However the Government has not given any relief to avail the input tax credit in delayed returns in case of cancelled registrations.

Previously through Notification No.19/2021 (CT) dated:01-06-2021

"Provided also that for the registered persons who failed to furnish the return in FORM GSTR-3Bfor the months/quarter of July, 2017 to April, 2021, by the due date but furnish the said return between the period from the 1st day of June, 2021 to the 3lstday of August, 2021, the total amount of late fee under section 47 of the said Act, shall stand waived which is in excess of five hundred rupees:

Provided also that where the total amount of central tax payable in the said return is nil, the total amount of late fee under section 47 of the said Act shall stand waived which is in excess of two hundred and fifty rupees for the registered persons who failed to furnish the return in FORM GSTR-3B for the months/ quarter of July, 2017 to April, 2021, by the due date but furnish the said return between the period from the 1stday of June, 2021 to the 31st day of August, 2021:

Later Through Notification No:33/2021 (CT) dated:29-08-2021 the period extended up to 30th Day November,2021.

It would be welcome step by the government if relaxation is provided to avail the input tax credit in the delayed returns in the case of cancelled registration. That will avoid huge litigation which is going to arise on this single issue

Few GST Citations wherein ITC claimed held to be allowed or disallowed for belated filing or claim of the input tax credit:

The Madura! Bench of Madras High Court, The Hon`ble high Court grants relief to assessee for financial hardship leading to belated filing of GST-3B, causing disallowed ITC under section 16(4) CGST act, 2017. Tvl. Kavin HP Gas Gramin Vitran v. Commissioner Of Commercial Taxes.

We are requesting the Hon'ble Finance Minister look the issue in a broader way and issue some relaxations to the Business people to claim their eligible legitimate input tax credit in the light of issuance of one time Circular instructions for the period 01-07-2017 to 31-3-2023. Because of the various reasons registered business persons in GST had missed out the time lines prescribed under sec 16(4) of CGST/SGST Act, 2017

Previously also to protect the interest of the business people in India with a great heart the department Issued 2 Circular instructions 183/15/2022-GST dated 27-12-2022

Clarification to deal with difference in Input Tax Credit (ITC) availed in FORM GSTR-3B as compared to that detailed in FORM GSTR-2A for FY 2017-18 and 2018-19.

193/05/2023-GST dated 17-7-2023

Clarification to deal with difference in Input Tax Credit (ITC) availed in FORM GSTR-3B as compared to that detailed in FORM GSTR-2A for the period 01.04.2019 to 31.12.2021

We will hope that due hard ship to business fraternity and especially MSME be avoided by the Government , by taking necessary corrective steps / clarifications even before the judgements come up and give relief to many innocent business persons ( Registered Tax Payers) which will ultimately lead to a situation of creation of good faith in the broader business community.

Thanking you sir,

Yours Sincerely,
P.Sharik khan
(president)

D.Srinivasa Rao
DAMACHERLA
SRINIVASA RAO
(Vice President)