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Impact of Coronavirus on GST

On March 24, 2020, the government of India imposed a nationwide lockdown in the country. The lockdown imposed the curbs on any kind of economic activity in the country, leaving the economy in crisis. While the strict restrictions were relaxed in some parts of the country, however, the limits in the economy have reflected the overall negative trend. The collection of GST returns have slipped as low as Rs 28,309 crore as on April 30, 2020. The fact that the government has extended the deadline of filing the returns of GST till June 30, 2020, maybe a reason why GST filings have seen negative growth.

Impact of Coronavirus on Goods and Services( GST) taxes in India: 

The government has however relaxed the norms and deadlines for the GST filings as the pandemic has affected the millions of people. These are some of the impacts of coronavirus on the goods and services tax in India.

1. Ease tax payments: The government is taking measures to review the following sectors for the payment of GST and move to cash-based VAT payments to ease tax payments on the bad debts.

  •  Restaurants and cafes 
  • Catering and Hospitality 
  •  Airlines

There have been proposals to relax payments on GST invoice where the customers have not paid the outstanding amount.

2. Refund of GST returns: Further, the Central Board of Indirect Taxes & Customs has announced that it will immediately refund the duties on goods and services tax. The taxpayers can check the status of GST refund online on the GST portal.

3. Extension of e-bills validity: The government has announced the extension of the validity of e-bills whose validation date expires between March 15 to April 30. The decision to extend the validity date has been taken as lakhs of trucks are stranded on the highway, causing hefty losses to the assignments. In Delhi, VAT payments have been postponed from March 31 to June 30 2020.

4. Dates for filing the GST returns: These are the decisions made regarding the expansion of dates for filing the GST returns.

  • The businesses whose turnover is less than five crores, and there is no due interest or penalty can now submit the GSTRA-3B returns by the end of June 2020.
  • The taxpayers whose business turnover exceeds the limit of five crores have also been provided with the deadline till June 2020; however, they have to pay an additional interest of 9% for the fifteen days after the original due date of filing the returns.
  • For the annual returns of 2018-19, the time for filing annual GST returns has been postponed from March 2020 to June 2020.
  • The government has also given relaxation on choosing the composition scheme for paying the taxes. The taxpayers can now select the scheme till June 30, 2020.
  •  Further, any dates for assessment or any due notice has been shifted to June 30, 2020.

5. Deferment of input tax credit: The government has also decided to defer the 10% restriction imposed on availing the input tax credit. The amount which is to be paid for the tenure of February- August on the input tax credit will be adjusted in the month of September.

Here is the list of current GST rates in India on various goods and services:

The four types of GST rates imposed in India are as follows:

  • GST Rate of 5%- Frozen vegetables, Fertilizers, Spices, Plastic waste, Newspaper printing, Takeaway Food, Restaurants
  • GST Rate of 12%-Ghee, Nuts, Fruits, Pouches, Purses and Handbag,Temporary basis IP rights, Building construction for sale
  • GST Rate of 18%- Washing Machine, Camera, Shampoo,Outdoor Catering, IT services, Telecom services
  • GST Rate of 28%- Sunscreen, Motorcycles, Pan Masala, Cinema, Food/Drinks/Stay at AC Five Star Hotels

With the lockdown, most of the businesses are suffering huge losses and have also asked for the cut in GST rates in India. While there has been no change in GST rates , however, these relaxations may ease the process of filing the GST returns.

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