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Arjuna (Fictional Character): Krishna, Maharashtra state SGST department has corrected the mistake related to Trans 1 and MVAT revise return. Because of it, taxpayers suffer from many problems related to it, tell us how much it affects the taxpayers?

Justice delayed is Justice denied case of Trans-1 and MVAT revised return

Krishna (Fictional Character): Arjuna, You’re right, if the government makes a mistake in GST then they are likely to be rectified, but if a taxpayer makes a mistake, there is weird law of imposing fine on them. When the GST act was implemented from 1st July, 2017 the credit available in the MVAT regime was claimed by the taxpayers by filing Form Trans 1 and it was related to MVAT returns. So, many taxpayers claimed VAT credits by filing revised returns and it was opposed by the department. Also, many taxpayers bearded to pay interest on it and they have to reverse the credit on the basis of notice issued by dept and on directions of by officers.

Arjuna: Krishna, on 19th October 2019 internal circular was issued by the department about the above problem of the original and revised return of MVAT?

Krishna: Arjuna, after two years department, realized their mistake and they are trying to rectify it. Earlier there was an instruction in an internal circular that allows MVAT credit up to only as much as there is in the original returns,  because of it taxpayers suffer from harassment. For e.g. In original MVAT return refund was claimed by taxpayers of credit of Rs.1,00,000 and after that, they want to carry forward the credit in SGST Trans 1 instead of refund by filing a revised return, credit was in SGST was not given. It is now directed to give credit in October 2019. Further many related issues are resolved in the above internal circular.

Arjuna: Krishna, Everyone wanted the GST to be a simple law, but it seems that the government started with a mistake by which taxpayers suffered a beating?

Krishna: Arjuna, Maharashtra SGST department issued the Internal Circular on 1st January 2018 and on 1st September 2018 which creates an unfair condition. As per circulars many taxpayers reverse the credit and paid interest. Now it is said that the credit may be allowed, to be claimed in Trans-1, as per the revised return. Also, in the Internal Circular published in October 2019, other questions have been answered positively. On such Internal Circulars, the taxpayer may file an appeal in the court, because of these Circulars as it has been found to be unfair with them.

Arjuna: Krishna, Such mistakes of Government are removed by issuing the circulars, but why do not have an opportunity to rectify the taxpayer’s mistakes?

Krishna: Arjuna, if there is a mistake in the GST returns then the taxpayer should be given a chance to rectify the same by filing a revised return. Whether it is an original return or a revised return, the law states that the revised return is also a valid return so the taxpayer should get justice accordingly.

Arjuna: Krishna, What lesson the taxpayer should take from this?

Krishna: Arjuna, Even late but taxpayers who fight under the law get justice or benefits. But taxpayers who feel that they do not want to be intimidated by the law or any authorities and they pay taxes and interest,  but they later regret, which is totally wrong. The government should make and follow the same law for all people, Otherwise, it has been seeming an unfair situation that the person who pays tax will be beaten. It’s a case of Justice delayed is justice denied.


Published by

CA Umesh Sharma
Category GST   Report

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