Goa Chief Minister Advocates for Input Tax Credit Relief at GST Council Meet

At the 53rd GST Council meeting held in New Delhi, Goa Chief Minister Pramod Sawant highlighted the challenges faced by small traders due to the denial of their input tax credit (ITC) claims. These claims were rejected for those who filed their GST returns late, a situation exacerbated by the COVID-19 pandemic, alongside financial and technical difficulties. Sawant's advocacy aimed at securing relief for these traders, emphasizing the need for a relaxation from the stringent timelines set under Section 164 of the GST Law.

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The Chief Minister's proposal sought to extend leniency for all returns from the fiscal years 2017-18 to 2020-21, provided they were filed by or before November 2021. This move was met with approval from the GST Council, marking a significant decision that promises to benefit approximately 5 lakh taxpayers across India. This exemption means that affected taxpayers will no longer be required to pay the previously denied ITC along with interest, offering substantial financial relief to the small business sector.

In addition to addressing the ITC claims issue, Sawant also supported an amnesty initiative aimed at waiving interest and penalty charges levied in assessment orders under Section 73 of the GST Act. This waiver applies to the initial three years of GST implementation—2017-18, 2018-19, and 2019-20—conditional upon the payment of the tax demanded. This measure is designed to assist businessmen who were unaware of issued notices due to not checking their dashboard on the GST portal in a timely manner.

Another significant decision made during the meeting was regarding the taxation of extra neutral alcohol (ENA), which is used in the manufacture of alcoholic beverages for human consumption. The GST Council resolved to amend the law suitably to clarify that ENA is not subject to GST. This clarification is expected to reduce manufacturing costs within the liquor industry and stimulate growth within this sector.

The decisions made at the GST Council meeting reflect a concerted effort to alleviate some of the financial pressures faced by small traders and businesses in India. By addressing specific concerns such as late filing penalties and clarifying tax regulations, the council aims to foster a more supportive environment for business growth and compliance. These measures are anticipated to have a positive impact on a wide range of stakeholders across various industries, contributing to broader economic benefits.