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Update on issues raised by NASSCOM during third meeting of Karnataka Grievance Redressal Committee

As you may be aware, the third meeting of Karnataka State Grievance Redressal Committee (GRC) was held on January 8, 2021 wherein NASSCOM raised some key issues highlighted by member companies. Pursuant to the meeting, GRC has shared its response with NASSCOM on the recommendations. Given below are the recommendations which NASSCOM made and GRC’s response against each of them:

A. Issuance of notices on email 

GRC’s Response: GST Act provides for mode of delivery of service of notice through registered post, through registered e-mail ids of the taxpayer, and other modes of communication. Rule 142 (1) of the CGST Rules, 2017, provides for serving of the notice electronically in FORM GST DRC-01 and GST DRC-02 and these are electronically sent to the taxpayer to their registered e-mail ids provided at the time of registration. The FORM GST DRC-04, DRC-05, DRC-07 and DRC-08 are issued electronically to the registered e-mail ids of the taxpayer.

B. Error while keying in the value of zero rated supply in Refund application in statement of 3A of GST RFD-01

GRC’s Response: Turnover of zero-rated supply also include advance payments received earlier for supplies completed during the refund
period but does not include the advance payments received for which the supply is not completed during the refund period. The error occurs in RFD- 01 only when the turnover is not calculated correctly as per the provisions of the Rule 89.

C. Summons during COVID when employees are working from home

GRC’s Response: It was clarified that due to pandemic, the conduct of certain proceedings like personal hearings and online submission of documents have been put in place and is being implemented by the field formations. However, certain proceedings like recording of statements during investigation will necessitate the appearance of the concerned individual. The Delhi High Court in the case of Think Solutions Pvt Ltd has also concurred with this view. Therefore, while summons are being issued for cases under investigation, the formations have been advised to follow all COVID protocols to ensure safety of the persons appearing in response to the summons.

D. Power to cancel the registration be vested with the Commissioner (while seeking inputs from the jurisdictional officer)

GRC’s Response: It was clarified that the request to entrust the power to cancel a registration with the jurisdictional Commissioner is a policy issue.

E. Cancellation and suspension of registration

GRC’s Response: The taxpayer is given opportunity to explain the differences and anomalies between the GSTR-1 and GSTR-3B. The proper officer has to follow the procedure laid down in Rule 22 of the CGST Rules, 2017, before cancelling the registration. Since the procedure takes time, the provisions for suspension of the registration was brought in by inserting Rule 21A. The suspension of the registration is only until the proper officer takes a decision regarding the cancellation of the registration. Amendment to block filing of GSTR-1 when GSTR 3B is not filed for two consecutive periods is a measure taken to improve compliance

We will continue to engage with the Government to ensure that GST policies are in line with the needs of the industry.

In case you have suggestions/ clarifications pertaining to this matter, please write to tejasvi@nasscom.in

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