goods and service tax

Enhancing GST Compliance: Key Concerns and Recommendations from the Sales Tax Bar Association

Introduction

The Sales Tax Bar Association (Regd.) has presented significant GST-related concerns to the Principal Chief Commissioner of CGST & Central Excise in Delhi. The primary issues range from unclear documentation processes for businesses operating in shared premises to challenges in withdrawing or editing GST registration applications.

Major Concerns Raised by the Sales Tax Bar Association

1. GST Registration Issues

a) Clarity on Documentation for Shared Business Premises
Businesses using co-working spaces, shared workspaces, or metro station shops often face confusion regarding required documentation for GST registration. The lack of clear guidelines on this matter leads to complications.

b) Excessive Document Demands
During the GST registration process, officers frequently require additional documentation, such as:

  • Photographs and copies of PAN and Aadhaar cards of proprietors, partners, or directors
  • Geotagged photographs of the business premises
  • Multiple ownership proofs aside from the rent agreement and consent letter (e.g., electricity bills, property tax receipts)
  • IDs of witnesses

These requests often contribute to unnecessary delays, especially when these additional documents are not specified in the application. To address this, the association recommends:

  • Inclusion of these documentation requirements within the GST registration form, or
  • Issuance of proper guidelines to officers prohibiting unnecessary requests that lack legal support under the GST Act and Rules.

c) Inability to Withdraw or Edit Applications
Currently, the GST portal does not allow users to withdraw or edit their registration applications after submission. This limitation can lead to delays or rejections over minor errors. Enabling a facility for application modification within a specified timeframe would streamline the process and ensure only accurate submissions undergo officer verification.

2. Mandatory Notice Viewing for Effective Communication

The previous VAT system permitted taxpayers to access their login only after acknowledging pending notices, thus ensuring effective communication. A similar mechanism should be integrated into the GST portal, making it mandatory for taxpayers to view notices before proceeding. This would enhance communication, minimize disputes concerning non-receipt, and promote timely compliance.

3. Requirement of DRC-03A for the GST Amnesty Scheme

The GST Amnesty Scheme (waiver of interest and penalty) mandates the submission of DRC-03A with Form SPL-02. However, in situations where:

  • Appeals have been partially accepted, leading to a liability lower than the pre-deposit, or
  • Direct payments have been made via the Electronic Liability Register (ELR),

the requirement for DRC-03A may prove impractical. Clarification is needed regarding alternate proof of payment or auto-adjustment of liabilities to support genuine cases and ensure adherence to the scheme’s objectives.

4. Delay in Appeal Disposals Due to Manpower Shortages

A critical concern is the pending appeals due to limited staff; presently, only two officers handle appeals in the Delhi SGST office. This shortage has resulted in delays, preventing taxpayers from establishing their final tax liabilities within the timeframe necessary for the Amnesty Scheme. Furthermore, the belated release of prescribed forms and necessary clarifications on the GST portal has left insufficient time for compliance.

Suggestions for Improvement:

  • Increase manpower to expedite the processing of pending appeals.
  • Extend the deadline for payments under the Amnesty Scheme from March 31 to June 30, 2025, granting taxpayers a fair opportunity to take advantage of the program.

Conclusion

By addressing these key concerns presented by the Sales Tax Bar Association, the GST system can enhance its efficiency and clarity. The recommendations, including improved documentation guidelines and better communication mechanisms, stand to significantly improve the taxpayer experience and compliance with GST regulations.