GST (Goods & Services Tax) Council on Friday gave some relief to businesses in terms of compliance. It also proposed to consider and decide about borrowing as a mean to pay compensation to States next month.

Meanwhile, Chairperson of GST Council and Finance Minister Nirmala Sitharaman said that GST collection during the month of April and May has been in the range of 45 per cent of the normal collection (which is approximately ₹1 lakh crore).

Though, 40th meeting of the Council had limited agenda but went for nearly four hours to discuss and deliberate various issues. Finally, it took decisions only on a few. Accepting demand from businesses, it decided to make changes in a late fee and interest structure for late filing of GST returns for the tax period July 2017 and January 2020. Sitharaman said assesses with no tax liability can file returns without any late fee or interest. However, assesses with tax liability will have to pay a maximum of ₹500 per return along with interest (up to 18 per cent).

To avail the benefit of lower fee regime, the assesses will have to file all the pending returns and pay the tax dues between July 1 and September 30.

Returns during Covid period

The Council decided that for small taxpayers (means annual turnover up to ₹5 crore, rate of interest to be halved (from 18 per cent to 9 per cent) in case returns related for the period February, March and April are is filed after July 6 but before September 30. This also means no interest on returns filed till July 6 and afterwards interest to be levied.

The Council also approved a proposal related with returns for May, June & July. It was decided that for taxpayers having aggregate turnover up to ₹5 crore, further relief provided by waiver of late fees and interest if the returns in Form GSTR-3B for these three months are furnished by September. Staggered dates for different States will be notified later.

In order to facilitate taxpayers who could not get their cancelled GST registrations restored in time, an opportunity is being provided for filing of the application for revocation of cancellation of registration up to September 30 in all cases where registrations have been cancelled till June 12.

Experts' take

 

Talking about relaxation in fee etc. Harpreet Singh, Partner at KPMG, said: “These are logical as many taxpayers were unable to undertake compliances during the lockdown and late fees or interest could have been a bit harsh.” According to Pritam Mahure, a Chartered Accountant, almost all the reliefs announced in GST Council Meeting are more around procedural compliance such as late fees waiver, relaxation in filing due dates and the substantive measures are still awaited. “Whilst the procedural measures will help certain section of taxpayers still it may be noted that, in the long-run, only substantive GST measures would help GST payers sail over the challenging Covid-19 times," he said.

Saloni Roy, Senior Director at Deloitte India, feels the Government is faced with a tough balancing act. On the one hand, it needs robust GST collections to help meet its regular plus the extraordinary nature of expenses during the pandemic. On the other side, businesses are looking for reliefs from Government to help them tide the major disruptions, loss of revenue and uncertainties.

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