Skip to main content

Government is considering GST Relief package to reduce Covid Impact




For More related articles and updates, connect with us - 


India is considering a goods and services tax (GST) relief package to counter the impact of Covid-19 and help prop up the economy, said people with knowledge of the matter. The package being considered could include a six-month suspension of GST payments for the worst-hit sectors such as restaurants, aviation and hospitality as well as a lower rate for the real estate sector.

Other proposals include a switch to a cash-based principle of levying tax from the current invoice-based system and providing GST relief on sales for which payment is not received due to the lockdown by treating those as bad debts.

These measures are expected to ease the liquidity pressure on businesses that are strapped for cash, said the people cited above. A final decision on the proposals will be taken by the GST Council, which is the apex decision-making body for the tax.

“There is a thinking that for these service sectors, the government should at least spare its dues,” a government official told ET.

The government could also consider exempting them from other statutory charges for some time.

Though there has been a demand for complete GST exemption, the government is veering around to the view that suspending the tax will work better, the official said. Exempting a sector from tax would mean breaking the credit chain, leading to further problems down the line.

Need for Liquidity
A cash-based system will mean businesses pay GST when they get the money and not when the invoice is raised, ensuring they don’t have to pay the tax out of their pocket and get squeezed on working capital. This is most relevant for services where payment is received with a lag after bills are raised.

Most service providers are facing delays in payments from clients but are saddled with GST liabilities. Another option is exempting these from GST, treating them as bad debt.

“The idea is to provide some help to businesses to sail through this crisis,” a second official said, adding that it is expected that states will back the move in view of the unprecedented economic situation.

Tax experts said liquidity is among the immediate needs of industry.

“At this time, industry needs more liquidity and hence deferment in payment of GST for next few months (without interest) should be considered,” said Pratik Jain, national leader, indirect tax, PwC.

While providing selective exemption is an option, it often creates complications as input credit gets blocked, aside from coping with the rigours of anti- profiteering provisions, he said.


For More related articles and updates, connect with us - 



Source : https://economictimes.indiatimes.com/news/economy/policy/govt-mulls-gst-relief-package-to-soothe-covid-pain/articleshow/75396150.cms?utm_source=newsletter&utm_medium=email&utm_campaign=Dailynewsletter&utm_content=Story5&ncode=0dbc743f7c513c6f34fbe3bfc44549f9

Comments

Post a Comment

Popular posts from this blog

Investing in Gold: Bridging Tradition with Modern Strategies in India

Follow us on -  LinkedIn  - https://www.linkedin.com/in/aseem-aggarwal-1b365549/ Youtube  -  https://www.youtube.com/user/aseemaggarwal92 Twitter  -  https://twitter.com/aseem252 Blog  -  https://aseemconsult.blogspot.com/     Gold holds a special place in the hearts of Indians, deeply rooted in tradition and culture. For generations, it has been a symbol of prosperity, a hedge against economic uncertainties, and an integral part of auspicious occasions. As we step into the modern era, the allure of gold remains, but the ways we invest in it have evolved. Let's delve into the world where tradition meets contemporary investment strategies in the context of gold in India. The Timeless Appeal of Gold For centuries, Indians have revered gold not only for its aesthetic appeal but also for its intrinsic value. Traditionally, gold has been acquired in the form of jewelry, coins, or bars, often passed down through generations as a store of wealt...

E-invoice enabled for businesses with annual turnover of Rs 5 crore

Follow us on -  LinkedIn  - https://www.linkedin.com/in/aseem-aggarwal-1b365549/ Youtube  -  https://www.youtube.com/user/aseemaggarwal92 Twitter  -  https://twitter.com/aseem252 Blog  -  https://aseemconsult.blogspot.com/       Introduction: In a significant move to promote digitalization and streamline the tax system, the Indian government has introduced the concept of e-invoicing. Initially implemented for businesses with a turnover of Rs 100 crore or more, the government has now extended e-invoicing to businesses with an annual turnover of Rs 5 crore. This blog post explores the implications of this development and its potential benefits for businesses. What is E-Invoicing? E-invoicing is an electronic method of generating and sharing invoices between businesses and their suppliers or customers. It involves the creation of a standardized digital invoice format, which is then authenticated by the Goods and Services Tax Network (G...

Big Relief for E-Invoicing in GST

  Follow us on -  LinkedIn  - https://www.linkedin.com/in/aseem-aggarwal-1b365549/ Youtube  -  https://www.youtube.com/user/aseemaggarwal92 Twitter  -  https://twitter.com/aseem252 Blog  -  https://aseemconsult.blogspot.com/     Regards  Aseem Aggarwal CA, CPA, CS, B.Com(H) +91 7508000350 aseem@ksafirm.com LinkedIn  - https://www.linkedin.com/in/aseem-aggarwal-1b365549/ Youtube  -  https://www.youtube.com/user/aseemaggarwal92 Twitter  -  https://twitter.com/aseem252 Blog  -  https://aseemconsult.blogspot.com/