BackKey indirect tax relief measures in India due to Covid-19
The government has waived of interest/late fee for delay in filing returns (GSTR 3B), has extended the various compliance due datesThe due date for furnishing annual return electronically for financial year 2018-19 has been extended to 30 September
PremiumGoods and services tax (GST) was implemented in India on 1 July 2017 and from thereon, it has been an exploratory journey for both the taxpayers and the government. The GST law has gone through various changes and the government has continuously endeavoured to incorporate stakeholder suggestions to make the law simpler and taxpayer-friendly. Efforts put in by the government were paying off and beginning to show results with an upward trend in compliances and GST revenue collections. However, the sudden outbreak of covid-19 has adversely impacted economic growth and consequentially, GST collections. GST revenue collected in January 2020 had crossed ₹1.1 lakh crore ( ₹1.1 trillion) which has seen a downward movement over the last few months, taking into effect the economic slowdown. Due to the nationwide lockdown, which began from 22 March, the government has deferred the release of April GST revenue collection data as the deadlines for various compliances and return filing have been extended to ease the burden on taxpayers.
Considering the difficulties for businesses and taxpayers at large, the government has announced various relief measures related to indirect tax regulations and compliances to enable them to cope up with the unprecedented crisis.
Relief under GST law
Waiver of interest/late fee for delay in filing returns (GSTR 3B): the government has announced a complete waiver of interest/late fee for furnishing of returns (GSTR 3B) pertaining to period February, March and April for taxpayers having a turnover up to ₹5 crore. The return for these months is required to be furnished before 30 June. Further, in case of taxpayers with aggregate turnover more than ₹5 crore, partial waiver of interest/late fee has been provided to ease the financial burden. The relaxation should help in addressing taxpayers’ working capital issues and provide additional time to file the returns with accuracy.
Various compliance due dates extended: The furnishing of central excise returns due in March, April and May 2020 has been extended to 30 June.
Further, the last dates for filing appeals, refund applications, and completion of any proceeding or issuance of any order under the Central Excise Act, 1944, Customs Act, 1962, and the Service tax law which is due between 20 March and 29 June has been extended till 30 June.
— Extension of validity of E-way bill: The validity period of e-way bill generated on/ before 24 March whose validity expires during the period 20 March-15 April, was deemed to have been extended till 31 May.
— Extension of due date for filing annual return for FY 2018-19: The due date for furnishing annual return electronically for financial year 2018-19 has been extended to 30 September.
— Extension for payment date under Sabka Vishwas (Legacy Dispute Resolution Scheme), 2019: In order to clear the backlog of pending litigations from the pre-GST regime, particularly under the central excise and service tax laws, a legacy dispute resolution scheme called the “Sabka Vishwas (Legacy Dispute Resolution Scheme), 2019" was introduced with effect from 1 September 2019. In view of the lockdown, the last date for making the payment under the Sabka Vishwas Scheme has been extended to 30 June.
— Extension of Foreign Trade Policy (FTP 2015 -20) for one more year: In view of the covid-19 crisis, the government has decided to continue relief under various export promotion schemes by extending existing foreign trade policy (FTP) by another one year i.e., up to 31 March 2021. Further, various other changes have also been made in the FTP and procedures to ease the compliance burden of the business concerns. In addition, it has been clarified that the regional authorities will not insist on a valid registration-cum-membership certificate (in cases where it has expired on or before 31 March) from the applicants for any incentive/authorizations till 30 September.
Reliefs under customs policy
— No basic customs duty and health cess on specified medical goods till 30 September 2020: The government has notified that basic custom duty (BCD) and Health Cess shall not be levied on import of medical goods namely ventilators, face masks and surgical masks, personal protection equipment, covid-19 testing kits. Further, the import of inputs required for manufacture of these goods has also been granted exemption subject to meeting required conditions in relation thereto. This has been done considering the increase in demand of face masks and hand sanitizers due the covid-19 outbreak.
— E-communication of out of charge (eOoC) copy of bill of entry and eGatepass: In addition to the above measures, the Central Board of Indirect Taxes and Customs (CBIC), has also decided to enable eOoC copy of bill of entry and eGatepass to the importers/customs brokers. This electronic communication would reduce interface between the customs authorities and the importers/customs brokers and do away with the requirement of taking bulky printouts or maintenance of voluminous physical dockets.
Other key measures
— Special refund and drawback disposal drive: With an intent to provide immediate relief to business entities especially micro, small and medium enterprises (MSMEs) and address their cash flow concerns, the government had introduced a special refund and drawback disposal drive for priority processing and disposal of all pending refund and drawback claims. The special drive was in place till 30 April and it aimed to dispose of all the refund and drawback claims pending as on 7 April.
— Conducting personal hearing through video conferencing: In a bid to ensure social distancing, reduce physical presence, use modern information and communication technology systems, the government has issued guidelines for conducting personal hearing in respect of proceedings under the excise, customs and service tax laws through video conferencing facility. The hearing shall be recorded in writing and the PDF copy of record of personal hearing will be sent by mail to the party within one day of hearing.
— Extension of period of limitation: The Supreme Court (SC) has also taken suo motu cognisance of the challenges faced by litigants due to the covid-19 pandemic across the country in filing their petitions/applications/suits/appeals/all other proceedings within the period of limitation prescribed under the general law of limitation or under special laws (both central and/or state).
— To obviate such difficulties and to ensure that lawyers/litigants do not have to come physically to file such proceedings in respective courts/tribunals across the country including the SC, the period of limitation in all proceedings shall stand extended, with effect from 15 March 2020, till further orders, irrespective of the limitation prescribed under any law.
— The efforts put in by the government in this time of crisis is commendable and deserves appreciation. As they say, every little thing counts, and the various measures taken by the government are expected to go a long way in providing the much-needed relief to the businesses and facilitate trade at large.
Dipti Nayak contributed to this article.
Vikas Vasal is national leader-tax at Grant Thornton India LLP. You can send your queries to vikas.vasal@in.gt.com
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