As I am writing this article, our country has been experiencing a massive resurgence of Covid-19 infections. The recent exponential rise in cases has rendered our healthcare system overwhelming by shortages of beds, oxygen, and vaccines. I extend my deepest condolences to families of the deceased and gratitude to frontline healthcare workers for their selfless service. I hope we will win over this tribulation soon.
Business, in general, have started to feel the heat, some of which were hitherto experiencing speedy recovery from last year’s plummet. Increased frequency of lockdowns, re-appropriation of consumer spending to medical expenditure and necessities, and mass exodus of migrant laborers imply that distress for businesses is likely to continue for a while.
While pervasive relief measures for the overall economy are yet to be announced, the government has given immediate relief to taxpayers by extending due dates for routine compliance requirements under the GST Act besides some extensions in the Income Tax and the Companies Act. Such regulatory and statutory extensions/waivers are essential because of difficulties in compliance faced by businesses operating with reduced staff levels due to lockdown.
Let’s have a look on these measures:
Compliances under Goods & Services Act
Waiver of Late Fees
For businesses having aggregate turnover of more than Rs. 5 Crores in the preceding financial year, fees for late filing of GSTR-3B for return periods of March & April have been waived for 15 days after their respective due dates.
The waiver is for 30 days for businesses with turnover less than 5 Crores for late filing of GSTR-3B of March and April 2021(if filed monthly) or Jan-Mar 2021(if filed quarterly) from their respective due dates.
Reduced Rate of Interest on Late Tax Payment
For businesses having aggregate turnover of more than 5 Crores, the interest rate for late payment of tax has been reduced to 9% p.a. (from the existing 18%) for the first 15 days from the due date for the return periods of March and April 2021.
Nil rate of interest for first 15 days and 9% for subsequent 15 days has been stipulated for Businesses having turnover up to 5 crores or those under Composition Scheme, for delayed tax payment for the return periods March and April (under the monthly scheme) or Jan- March 2021 (under QRMP or Composition scheme) from their respective due dates.
Extension in Due Dates
For declaring outward supplies for April 2021, the due date of filing of Form GSTR-1(for monthly filers) or Form IFF(for quarterly filers) has been extended to 26th and 28th May respectively.
The extension has also been granted for the filing of GSTR 4 for Composition Taxpayers for FY 2020-21 till 31st May 2021 besides other business-specific forms
Other Compliances
The due date of filing belated/revised Income Tax Return for Assessment year 2020-21 has been extended till 31st May 2021. Besides, extension has been granted in objections
For Corporate businesses, MCA has allowed relaxation on levy of additional fees in the filing of certain forms under the Companies Act, 2013 and LLP Act 2008 for a specified period.
Initiatives for meeting the steep rise in demand of COVID-19 related medical apparatus
The government, for the time being, has waived off basic customs duty and health cess on import of COVID-related vaccines, oxygen, and oxygen-related equipment. IGST on import of COVID-19 material ‘received free of cost for free distribution anywhere in India for COVID relief’ has also been exempted for two months.
For companies eligible under CSR rules, MCA has clarified that spending of CSR funds, directly or through the pooling of resources, for creating health infrastructures for COVID care will qualify as an eligible CSR Expenditure.
These measures will contribute to provide ad interim relaxation to businesses and taxpayers besides diverting resources towards Pandemic Management. Albeit a slew of structural reforms, penetrating to lowest strata of society, are required for boosting demand and facilitating economic recovery.
While we are amidst depressing times, this shall too, come to pass. Until then, stay healthy and Safe.
(The writer is a practicing chartered accountant )