A memorandum is submitted to Finance Minister on Grievance related to scheme of annual return filing for the composition dealers under GST Act — modify the Late fee Rs. 10000/- imposing contrary to the 43rd GST Council decision – rectifications need to erroneous auto filled columns in GSTR 4 forms. Full text of the same is as follows:-

A memorandum is submitted to Finance Minister  on Grievance related to scheme of annual return filing for the composition dealers under GST Act — modify the Late fee Rs. 10000/- imposing contrary to the 43rd GST Council decision – rectifications need to erroneous auto filled columns in GSTR 4 forms. Full text of the same is as follows:-

Date: 29-04-2022
Perinthalmanna

Member, State Grievance Redressal Committee, Kerala
Immediate Past Chairman — SZ
All India Federation of Tax Practitioners

To,
Smt. Nirmala Sitharaman
Chairman,
Goods and Service Tax Council and
Hon'ble Union Minister of Finance, Ministry of Finance,
Government of India,
North Block, New Delhi — 110001

Respected Madam,

Sub: Grievance submitting on the scheme of annual return filing for the composition dealers under GST Act — modify the Late fee Rs. 10000/- imposing contrary to the 43rd GST Council decision – rectifications need to erroneous auto filled columns in GST 4 forms – req — reg:

Firstly, We on behalf of All India Federation of Tax Practitioners (Kerala State), appreciate your constant efforts towards simplifying the compliance burden in GST statutory return filing to the tax payer in the GST Act.

We also congratulate for the tremendous and record achievement in GST collection for the Month March 2022 in amid slowdown of economy across the world in the prolonged covid crisis and Ukraine — Russia war. It is pertinent to point out here the introduction and efficient implementation of E way bill and E bill system followed by increasing level of compliance by the tax payers helped the Government to achieve the bench mark collection. As a tax professional since we are also the part of the great endeavor and development of our mother India we are also very happy and feel proud in this occasion.

Respected madam, the composition scheme under section 10 of CGST act is originally brought to help the small tax payers, the tax payer only who has turnover up to 1.5 crore can opt under the scheme to avail the benefits envisaged under composition rules.

Respected Madam, from the year 2019-20 onwards the tax payer under the scheme need to file GSTR 4 annual return in contrary to the relief given to the tax payer under the regular scheme. A tax payer only who has aggregate turnover above Rs. 2 crore in a financial year under regular scheme need to file annual return and if the aggregate turnover is below Rs. 2 crore he  may optionally file before the 31′ December of the following year, i.e no need of filing annual  return in the said cases and late fee shall not arise to them instead though a tax payer opted  composition dealers has turnover only below Rs. 1.5 crore needs to file annual return  within 30 days of the end of the financial year and for delayed annual returns he has to pay up to Rs. 2000 . We humbly  pray to remove this disparity among the tax payers who are  facing same issues in certain area of accounting of business transactions especially in credit not debit note issues.

Respected Madam it is humbly submitted, clue to technical glitches in GSTIN or for other technical reasons many tax payers were faced difficulty while filling column 6 of GSTR4 to the year 2020-21 since no facilitation available to settle the arrear tax amount through GSTR 4 of 2020-21 then as per the directions of officers in the technical wing they have paid the difference of tax arrived for the year 2020-21 through DRC 03 and filed GSTR 4 in fact they have paid the tax through DRC 03 have compelled to file GST4 with tax due on the belief that the payment will reflected into cash ledger and could set of the due tax later from that, it is noticed that the amount paid through DRC 03 for the earlier year was not either linked to the GSTR 4 or cash ledger and resultant to remain unsettled. Due to these technical glitches in GSTIN thousands of tax payers under the scheme could not file GSTR 4 for the year 2021-22 within the stipulated time, it a big blow on the face of small tax payer who is already facing big financial crisis and troubling to surviving following pandemic disaster. It is humbly submitted and prayed to your honor the issue may be taken seriously and give directions to the officials in the GSTIN wing to resolve the problem immediately.

Respected Madam, in accordance with the 43rd GST council decisions the maximum late fee for GSTR-4 that can be charged will be restricted to Rs.500 per return for nil filing and Rs. 2000 for other than nil filing, it is humbly submitted the GSTIN did not change ill accordance with the notification henceforth the tax payers could not file annual return in GSTR 4 within the stipulated time for the previous years should pay Rs. 10000/- as late fee to file, delayed annual returns for the year 2019-20 and 2020-21.

Respected Madam, there are thousands of tax payers under composition scheme were not filed annual return GSTR 4 for many reasons particularly lack of knowledge and under the impression of a tax payer having turnover under 2 crore need not to file annual return. Hence it is prayed for directions to the GSTIN officials to change late fee in accordance with notification. It is pertinent to submit here a tax payer under the scheme could file his annual return for the year 2021-22 in GSTR 4 after filing the pending GSTR 4 returns for the years 2019-20 and 2020-21 hence it is very urgent to change late the fee limitation ill GSTIN to enable the aspirant tax payer to file his annual return 2021.22 and get it updated.

For the facts and above genuine reasons and removal of disparity between regular tax payer and composition tax payer it is humbly prayed

1. To extend the time limit for filing annual return in GSTR 4 up to 31st December of 2022.

2. To give directions to GSTIN authorities to change late fee for GST4 since from 2019­-20 and limit to Rs.500 and RS.2000 in accordance with GST council decisions.

3. To consider to increase the threshold limit to Rs. 3 crore to opt composition u/s 10 of CGST in the back drop of inflation and make mandatory to file annual return under the scheme for tax payer who has turnover above Rs. 2 crore and render justice to the small tax payers.

4. Humbly prayed your earlier actions and directions in this regard;

Thanking you,
Yours faithfully,