In light of the COVID-19 outbreak, the Government of India has notified various relaxations with regard to the Goods and Services Tax (“GST”) compliances. For quick reference the relaxations have been summarized below:
Relaxations with Regards to Furnishing of GST Returns
The interest on delayed payment of GST has been waived off in case there is a 15-day delay in making the payment. For any further delay, interest rate has been reduced from 18% p.a. to 9% p.a. for the payments related to months of February, March, and April 2020. Also, the late fees for delayed filing of returns and outward supply reports have been waived off. These relaxations are available provided the returns/reports are filed by June end. For taxpayers, whose aggregate turnover in previous year is below five crores the interest on delayed payment of GST is completely waived off. However, it has been clarified that if returns and reports are furnished after June end, then interest at the rate of 18% p.a. and applicable late fees will be payable from the original due date until the actual date of filing returns.
Relaxation in Alignment of ITC in case of Unmatched Invoices
From October 2020 on Investment Tax Credit (“ITC”), in respect of unmatched invoices/debit notes, is restricted to 10% of the eligible ITC of matched invoices/debit notes – as of January 2020 it was 20%. This restriction has been temporarily relaxed for the period of February to August 2020. However, the restriction should be applied on a cumulative basis while filing the GST returns for the month of September 2020.
Extension of Validity of E-Way Bill
Where an e-way bill has been generated and its period of validity expires during the periodMarch 20, 2020 to April 15, 2020,the validity period of such e-way bill wasextended until April 30, 2020.
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Extension of Due Date of Furnishing Letter of Undertaking for Export Ttransactions
The letter of undertaking for export of goods and services without payment of GST for fiscal years 2020-2021 can now be furnished by June 30, 2020.
Extension of Time Limit for Completion of Tax Assessment, Investigations, Appeal Matters and Other Compliances Under GST
The time limit for completion or compliance of any action, by any authority, by taxpayers or by any person which falls during the period of March 20, 2020 to June 29, 2020, and where completion or compliance of such action has not been made within such time, then, the time limit for the sameis extended to June 30, 2020.
This will include completion of any proceeding or passing of any order or issuance of any notice, intimation, notification, sanction or approval or such other action, by any authority, commission, or tribunal.
Also, due date for filing of any appeal, reply or application or furnishing of any report, document, return, statement, or such other record to be made by taxpayers which falls during the period from March 20, 2020 to June 29, 2020 is extended to June 30, 2020. However, this extension is not applicable for matters like filing of periodic returns (GSTR-3B, GSTR-1 and GSTR-4), tax payment, liability to raise invoices and obtaining registrations.
Extension of Foreign Trade Policy and Relaxations Related to Export Incentives
Ministry of Commerce and Industry has introduced several relaxations and extensions in deadlines regarding compliances mandated under its schemes and activities. The Foreign Trade Policy (FTP) 2015-2020 and Handbook of Procedures (HBP) which was valid until March 31, 2020 have been extended by one year to March 31, 2021. Also, the timelines for completion of export obligations under various export promotion schemes has been extended for a six month period.
GST Relief Package
The above relaxations given by the Government were on the assumption that lockdown will end on April 14, 2020. Now that lockdown is extended until May 2020, with high chances of further extension, the GST council is expected to revisit the relaxations and grant additional relief. A comprehensive GST relief package is expected to be announced very soon which supports the taxpayers in managing the liquidity crisis. It is expected that relief measures shall be sector-specific especially for the highly impacted sectors like MSMEs, real estate, hospitality, travel and tourism among others.
International Services Tax
Disclaimer: The information contained in this document is to provide a general guide to the intended user. The information should not be used as a substitute for specific consultations. We recommend that professional advice is sought before taking any action on specific issues.
