Page 46 - GSTL_ 28th May 2020_Vol 36_Part 4

J106 GST LAW TIMES [ Vol. 36
registered persons under GST, may be registered or unregistered under the old
regime) has to be filed by December 27, 2017, to carry forward the Input Tax
Credit which further March 31, 2019.
Later Commissioners were authorised to extend the date for submitting
the declaration electronically in Form GST TRAN-1 but not beyond December 31,
2019.
The Court had ruled that the time-limit for transitional credit was only
‘directory’ and not ‘mandatory’ and not only the petitioner but all assessees can
claim all pending transitional credit (technically known as Input Tax Credit or
ITC) till June 30.
[Source : Business Line, New Delhi, dated 18-5-2020]

Government may not heed calls to lower GST

The Government may not accept industry demands to substantially re-
duce the Goods and Services Tax (GST) for six months to boost demand in the
aftermath of the Coronavirus Disease (COVID-19) pandemic. The exemption
would block Input Tax Credit that would have an adverse impact on businesses
and may not result in any significant gain to consumers, two Finance Ministry
officials said on 19-5-2020.
Input Tax Credit reduces the tax paid on inputs from taxes to be paid on
output of finished goods. The proposed GST exemption will make output tax
zero, blocking the Input Tax Credit, which will add to the cost of the finished
goods, the officials with direct knowledge of the matter said, requesting anonym-
ity.
“This will not only be injurious to the industry but also to the consumer
at large and this is certainly not going to revive demand,” one of the officials
said.
GST is an Integrated Levy of Indirect Taxes and the main source of reve-
nue for both the Centre and State Governments. It makes up about one-third of
total tax receipts. Over 70% of the GST Revenue accrues to the States as their own
share of the receipts and funds devolved on them by the Centre.
Demand generation looms as a major challenge after the COVID-19
lockdown is lifted and a substantial reduction in GST rates could stimulate de-
mand, some industry associations have argued.
Niranjan Hiranandani, President of the Associated Chambers of Com-
merce and Industry of India (ASSOCHAM), has proposed a cut in GST rates on
almost all products by 50% for six months to boost demand.
Responding to the Finance Ministry officials’ comments, Hiranandani
said on 19-5-2020 : “In theory, yes - lost Input Tax Credit (ITC) on exemption
from GST is an issue of concern...”
He added : “It has to be viewed from the perspective of incentivizing
consumers by inducing them to make a purchase, leading to the consumption
which is the need of an hour. The argument is that a cut in GST for a short term,
say next six months, will reduce the amount paid for the goods or services, so the
consumer will buy more and thereby, revitalize the economy. It is a simple issue
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