COIMBATORE: Representatives of micro, small and medium enterprises (MSMEs) in Coimbatore have appealed to the Tamil Nadu commercial taxes department to refrain from issuing penalty notices under Section 74 of the State Goods and Services Tax (SGST) law unless fraud or wilful tax evasion is clearly established. They emphasised that this provision is intended for deliberate wrongdoing and should not be applied to routine compliance errors.
SGST Interaction Meeting
During an SGST interaction meeting held with MSME participants on Wednesday, the Coimbatore Industrial Associations (FOCIA) submitted a petition to joint commissioner of commercial taxes Sugam Thakarey. Coordinators J James, S Surulivel, and A Sivasanmugakumar highlighted that over the past year, many MSME taxpayers have received penalty notices under the SGST framework for issues such as mismatches, delayed return filing, and HSN code discrepancies.
Concerns Over Notices for Old Assessments
The representatives alleged that notices were being issued even for older VAT assessment periods, such as 2006-07. They pointed out that penalty notices are often uploaded only on the GST portal, leading to missed responses by taxpayers or their consultants. This, they said, results in penalties of up to 200% and subsequent Form 13 actions that can freeze bank accounts without direct communication.
Digital Literacy and Communication Issues
FOCIA noted that many micro units lack computer access and adequate digital literacy, relying instead on low-cost tax practitioners. The federation sought mandatory dispatch of notices in printed form through registered post to ensure timely receipt.
Demand for Amnesty
The federation also called for a general amnesty approach for the first five years of GST implementation, up to June 30, 2022, citing frequent amendments and the introduction of auto-populated data from December 2020.
Regular Consultative Meetings Sought
Coimbatore Chinnavedampatti Industrial Association (CIA) president N Devakumar urged the Tamil Nadu government to hold SGST consultative meetings at regular intervals, noting that after a gap of two years, an SGST consultative meeting was held in Coimbatore. He requested a separate category for micro units with turnover below Rs 1 crore to resolve accounts and grievances quickly. Devakumar also stated that there are 40,000 job workers in Coimbatore and asked the state finance minister to press the GST Council to reduce job-work GST from 18% to 5%.
