SRINAGAR: The Federation of Chambers of Industries Kashmir (FCIK) has expressed its support for the newly introduced GST Amnesty Scheme but has also called for broader coverage and greater clarity on several key aspects. The FCIK believes that further steps are needed to remove ambiguities and extend the scheme to include tax periods beyond 2020.
The GST Amnesty Scheme, which will come into effect on 1 November 2024, was introduced by the Ministry of Finance under Section 128A of the CGST Act, 2017. It aims to alleviate the financial strain on taxpayers by waiving interest and penalties for those who settle their tax liabilities for the fiscal years 2017-18 to 2019-20 by 31 March 2025. The scheme specifically targets taxpayers facing demands, provided there are no allegations of fraud or deliberate misrepresentation.
While the FCIK has welcomed this move, they have emphasised the need to extend the scheme to cover all tax periods from the inception of the GST regime in 2017 to the present day. They have also urged for an extension of the deadline for settling arrears.
Members of the FCIK Advisory Committee, after reviewing the scheme, acknowledged its potential to waive outstanding interest and penalties for the period between July 2017 and March 2020. However, they noted that the March 2025 settlement deadline is insufficient and should be reconsidered to provide more time for qualifying taxpayers.
The committee also highlighted that while the scheme could help reduce litigation related to interpretational errors and compliance mistakes, certain areas need more clarity. Specifically, they questioned whether the scheme covers all types of tax payments and whether it applies in cases where only interest dues exist without a corresponding tax liability.
There was also concern about the criteria for non-fraudulent eligibility. The committee pointed out that in some instances, frivolous notices have been issued under Section 74, even in the absence of fraud. They warned that such taxpayers could become entangled in lengthy litigation to prove their innocence.
Despite these concerns, the FCIK remains optimistic that the amnesty scheme will offer vital relief to businesses dealing with transitional credit disputes. These disputes stem from errors during the GST transition period, where credits were incorrectly claimed or utilised.
The FCIK particularly stressed that while the scheme addresses the first three years of GST, it is crucial to extend it beyond 2020, especially for businesses in Jammu and Kashmir. This region has faced unique challenges due to its reorganisation and the disruptions caused by the COVID-19 pandemic.
The FCIK emphasised that GST defaults have largely resulted from interpretational difficulties, misunderstandings of forms, and human errors. It is, therefore, essential to offer relief to all enterprises, particularly small and medium-sized enterprises (MSMEs), many of which are currently facing severe challenges threatening their survival.
The FCIK has decided to formally raise these concerns with both the Union Territory and Central Government, advocating for an expansion of the scheme to provide much-needed relief to taxpayers in Jammu and Kashmir.
