Due to the spread of COVID-19, several business owners have sought exemption from paying GST for the period during which the lockdown is in force. An exemption from paying GST would grant businesses much-needed relief and may work to assist with the financial burden that companies are facing during this time.
Several stakeholders have also petitioned the Government to not levy GST on the sale of goods like PPEs, ventilators, face masks, and hand sanitisers since these goods are essential to our fight against the coronavirus.
However, no exemption has been granted concerning the payment of GST on any goods or services. There has been an announcement by the central Government that there will be certain relaxations concerning the payment of GST.
Let us take a look at the exact rules for the payment of GST during this time.
Amendment to the Central Goods and Services Act, 2017
A new section has been inserted with this Act that governs the collection of GST in India. This new section allows for the extension of the time limit for compliance with GST rules and regulations. The new section gives the Central Government the power to enforce such relaxation on the recommendation of the GST Council.
Option to Pay GST At a Later Date
According to a notification by the Central Government, all taxpayers who are registered and need to pay the GST can pay their due amounts before 24th June 2020.
All GST payments that were due for February to April 2020 can now be made before 24th June 2020. This payment can be made at such time without the need for payment of any late fees or penalties.
Furthermore, in case of late payment, a concessional rate of interest of 9 per cent per annum instead of the usual 18 per cent per annum will be leviable for payment of taxes that are made after 15 days from the end of the original due date.
Additionally, the monthly return of outward supplies under Form GSTR – 1, which is usually due on the 11th has also seen an extension. These monthly returns can be made on or before 30th June 2020 for those dues that pertain to March, April, and May.
Option to File Returns at a Later Date
Since the filing of annual tax returns can be a massive task for almost any business, it was essential for the Government to provide relief in this regard.
Most businesses are operating with a leaner workforce, and many offices are shut due to the ongoing lockdown. In such circumstances, it is difficult for a company to file its annual return and GST reconciliation statement.
In light of these circumstances, the due date for filing of annual returns and the GST reconciliation statement for the FY 2018- 2019 has been extended to 30th June 2020. Earlier, this was due by 31st March 2020.
Immediate Grant of Refunds
The refunds under GST can take a long time to process. However, in light of the lockdown and the ensuing loss of business, the Government has decided to initiate refunds to companies more quickly.
The Government has given directions to the tax authorities to immediately process all pending refunds under GST and Customs Law and complete them before 30th April 2020.
Temporary Suspension of Section relating to Claim of Input Tax Credit for Unreported Transactions
Usually, the input tax credit that is received by a business is restricted to ten per cent of the matched invoices. An unmatched invoice is an invoice that has not been disclosed by a supplier in its GST return.
To provide immediate relief to businesses the restriction on giving an input tax credit to only ten per cent of the matched invoices has been relaxed for the period between February 2020 and August 2020.
However, taxpayers should know that they will be required to make a cumulative adjustment for these months when they file their GST returns for September 2020.
Conclusion
There have been certain highly needed relaxations to GST norms due to the spread of the coronavirus. These relaxations have been made to provide relief to businesses in India. Do proper research how to get a gst number or about gst registration procedure to always be updated with your tax filings.