GST Council offers big relief to small taxpayers

GST Council offers big relief to small taxpayers

GST Council offers big relief to small taxpayers

In a relief to small taxpayers with turnover up to Rs 5 crore, the GST Council on Friday halved the interest on delayed filing of GST returns for February, March and April to 9 per cent, provided the returns are filed by September 2020. Also, the deadline for filing returns for May, June and July has been extended till September, without any interest or late fee, Finance Minister Nirmala Sitharaman said after a meeting of the council. Asked about revenues in the two months of lockdown, Sitharaman said,

"The states understood where the collections were. It was in the range of about 45 per cent only." Finance secretary Ajay Bhushan Pandey said every state is fully aware of how much money they are getting every month. "It is not a question of we are informing them, Centre and states are together discussing how much revenue we are getting every month. These revenues are not final figures.

Since the date of filing returns have been extended, so we will get correct picture of actual amount of tax that we get in April, May and June, that will be known only after the last date is over”, Pandey, who is also Revenue Secretary, said. With lower Goods and Services Tax (GST) mop-up, the Centre has not released the collection figures for April and May.

Conventionally, GST revenue collection data of a particular month is made public on the first day of the subsequent month. In March, the government had extended the deadline of filing returns for GST for three months -- March to May -- to the end of June without any late fees, penalty and interest for enterprises with turnover less than Rs 5 crore to provide significant relief for MSMEs. On Friday, Sitharaman said for small taxpayers with aggregate turnover up to Rs 5 crore, interest on delayed filing for the months of February, March and April has been lowered to 9 percent from 18 percent, provided returns are filed by September 30. For May to July, the deadline for filing GST returns has been extended till September 30, without any penalty.

Sitharaman said no late fee will be levied for delayed filing of GST returns by registered entities with nil liability between July 2017 and January 2020. Briefing reporters after the GST Council meeting, she said the late fee for non-filing of monthly sales return for others has been reduced to a maximum of Rs 500 for July 2017 to January 2020 period.

The GST Council - the apex decision-making body of the indirect tax regime - discussed the impact of COVID-19, she said. Inverted duty structure hitting GST collections was discussed, she said, adding the panel was looking at correction of duty inversion in footwear, fertilizer and textiles. She said the discussion on taxing pan masala will hopefully be taken up at the GST Council's next regular meeting. A special one-agenda meeting will happen in July to discuss compensation requirements of state, she added. "While there was not much for larger businesses, the late fee waivers and an additional moratorium for smaller businesses is quite a welcome move," EY tax partner Abhishek Jain said. With the current financial flu, smaller businesses were aggressively seeking stimulus and some of their requests have been well considered by the council, he added.

"The government is faced with a tough balancing act. On one hand, it needs robust GST collections to help meet its regular plus the extraordinary nature of expenses during the pandemic. "On the other hand, businesses are looking for reliefs from Government to help them tide the major disruptions, loss of revenue and uncertainties. The announcements made in today's GST council meeting are a reflection of the tight balancing act," Deloitte India senior director Saloni Roy said.

Source: rediff


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