Several textile traders from Ahmedabad and Surat in Gujarat are unable to file their returns despite receiving their GST numbers, according to industry sources.
Many of them applied for GST registration numbers in July and received them in August, and hence could not file their returns for July. Other traders who purchased from them filed their returns but they have not received tax credits.
The traders transacted business in the belief that the ARN number allowed them to do so.
The last date for filing returns is August 25. After they contacted the GST helpline about the problem of not being able to file returns for July, it was found that the the GST network is still working on the issue.
The problem is that many traders will not get a tax credit if they do not file the July return.
Meanwhile, registrations of many traders who did not apply or failed to apply for GST registration numbers stand to be cancelled. In North Gujarat alone, registrations of more than 5,000 traders are likely to be cancelled by the authorities, according to industry sources.
The process of migration from the old system to GST was introduced for traders in the VAT, Excise and Service Tax Departments from January.
Accordingly, about 85,000 traders had applied for the migration number through the VAT department. While most of them got their migration numbers for GST from July, many traders did not apply for the migration number and stopped filing returns.
The VAT department has now sent them a notice that their registration numbers will be cancelled, if they do not submit proper reasons and answers. This has caused uncertainty in the local markets of Surat and Ahmedabad, industry sources said.