Once again, several chartered accountant (CA) associations across India have come together to request prime minister (PM) Narendra Modi to extend deadlines for filing returns for income-tax (I-T), goods and services tax (GST) and other audit forms in view of the hardship caused by coronavirus (COVID-19) pandemic. Last month, the CA bodies had requested finance minister (FM) Nirmala Sitharaman to extend the deadlines of filing returns. Since there was no response from the FM, the CAs, many of who are vocal supporters of this government, have now requested PM Modi to intervene in the matter.
The letter says, "We sincerely believe that indecision in the matter of extension of due dates for filing of Income tax returns and tax audit reports as well as GST annual returns is causing unnecessary hardship and mental trauma to lakhs of people across India."
The letter is signed by presidents of Bombay Chartered Accountants’ Society (BCAS), Chartered Accountants Association of Ahmedabad, Chartered Accountants Association of Surat, Karnataka State Chartered Accountants’ Association and Lucknow Chartered Accountants’ Society.
According to the CA bodies, there are still many states in the country where lock-down has not been lifted and the number of containment zones are rapidly changing.
Further, it says, "there are restrictions on the number of staff members that can come to work. In many cities across India, the life line in terms of public transport is still not available. This has resulted into very low number of people working physically in offices in many organisations especially MSMEs and small corporates. Majority of the CA firms who carry out audits are small and medium sized firms having limited resources to work remotely and work from home."
"Audit is an activity that more often than not happens on the ground and in the premise of the audit clients. Lockdown and continuing fear of spread of virus has resulted in the audit process getting impacted considerably. People are more worried right now about survival than about tax compliances," the CA bodies say.
The CA associations also point out towards non-availability of online forms. It says, "The ITR 6 form (the Income tax return form used by business entities) and the tax audit form –form 3CD relevant for AY 2020-21 have been amended very recently. The utility, which allow taxpayers to file the Form 3CD has not yet been made available by the Central Board of Direct Taxes (CBDT)."
Anshul Agarwal, president of LCAS, says, "The magnitude of disruption caused in the lives and work schedules of the people of the country due to Covid-19 pandemic necessitates a liberal approach from the government in asking the tax payers and professionals to make compliances under various laws. The least the government can do is to extend due dates under various laws notably under Income Tax and GST laws till 31 March 2020 at one go instead of extending it for short periods every month."
According to the CAs, for corporate taxpayers, the ministry of corporate affairs (MCA) has taken a practical and prudent step of extending the due date for holding the annual general meeting (AGM) to 31st December from 30 September 2020. It is challenging to efficiently and effectively adhere to the tax audit filing due date of 31 October 2020 and ITR filing due date of 30 November 2020, it added.
In the indirect tax spectrum, for filing of GSTR-9 (Annual Return) and GSTR-9C (Audit Report) for FY18-19, the due date was extended by a month very recently up to 31 October 2020. However, according to the CA bodies, the time provided is very short considering the parallel deadlines under Income Tax Act and Companies Act.
"Besides, the routine deadline for GST filings for FY19-20 is 31 December 2020 by default, but within such short time, filings cannot be effectively done. Similarly, the clarification in respect of the treatment of certain items to be presented in the GST Annual Return was provided as late as on 9 October 2020. The GSTN Portal also presents significant difficulties in terms of filing speeds and downtime," the letter says.
The CA associations feel that work on uniform and consistent basis cannot be done due to overlapping deadlines, which under COVID-prone environment, ought to have been extended suo motu by the government.