From Registration to Refunds: ICAI Suggests Fixes for Practical Issues in GST [Read suggestions]

ICAI, the largest professional body of Chartered Accountants in the world, invited inputs from members across India to assess difficulties in compliance relating to registration, refunds, input tax credit (ITC), tax demands, adjudication and enforcement.

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The suggestions has been divided to 6 heads :

1. Adjudication and enforcement
2. Input Tax Credit
3. Registration
4. Refund
5. Returns
6. E-way bill

The suggestions are as follows:

A. Adjudication & Enforcement

1. Minimum 7 working days to be given.
2. Reiterate instructions making virtual hearings compulsory unless physical is opted.
3. Denial must be recorded with reasons.
4. Dual service (electronic + physical) mandatory unless opted out.
5. Portal alerts: pop-ups, dashboard status (unread/pending/closed).
6. Notices uploaded in a dedicated section.
7. Use portal records; physical copies only if unavailable online with recorded reasons.
8. Introduce Case Lifecycle Module with single ID, version-controlled document repository, chronological history.
9. Add Save Draft option for replies/appeals.
10. Create an Unregistered Person (URP) login on the GST portal.
11. Issue/upload separate orders (DRC-07) against individuals.
12. CBIC to reiterate circulars and ensure strict adherence.

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Input Tax Credit

1. Amend Rule 39 to allow current month’s turnover as the basis when prior data is unavailable.
2. Reintroduce tax rate column in GSTR-2B.
3. Restore quarterly consolidated view for all taxpayers.
4. Issue CBIC circular with clear procedure and timelines.
5. Build a system-driven mechanism to automatically restore ITC.
6. Introduce a dedicated form (like PMT-03) for restoration.

GST Registration

1. Portal should give automatic suggestions based on business location and provide clear guidelines.
2. Allow multiple amendments simultaneously/quick succession, with safeguards for review.
3. Add Preview tab to check details & documents before submission.
4. Provide 24-hour correction window post-submission for minor edits.
5. Orders must cite specific case-based reasons.
6. Real-time alerts to taxpayer (email & SMS).
7. Cancellation approval by senior officer (Asst. Commissioner or above).
8. Create “Legacy Proceedings” module under new GSTIN to auto-transfer all pending notices, demands, appeals.
9. Issue clear CBIC procedure.
10. Train MCA & GST officers.
11. Enhance system integration & fixed timelines for approvals.
12. Enable online cancellation facility for TDS registrations.
13. Amend Rule 12(3) to align with portal-based cancellation.

Refund

1. Automate provisional refunds within 7 days (low-risk cases).
2. Ensure balance refund within 60 days using AI-based scrutiny.
3. Auto-compute and credit interest u/s 56 for delays.
4. Make the refund process faceless to minimize discretion.
5. Introduce a new refund category: “Refund of excess deposit against rejected casual/non-resident registration”.
6. Issue clarification that SEZ units can claim refund of ISD-distributed ITC, in line with judicial precedents (Britannia Industries Ltd. v. UOI, 2022
   ).

Returns

1. The default display should be the previous month.
2. Allow advance generation of EVC, similar to Income Tax Portal.
3. Add separate line items in CMP-08 for taxable and exempt supplies.

E-Way Bill

Add optional fields in the e-way bill system for Ultimate Recipient GSTIN & Name. The ICAI clarifies that this aligns with multi-party supply chain practices, prevents unwarranted penal actions, and reduces disputes.

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