Extend Deadlines for Filing Income Tax, GST Returns and Other Audits Plead CA Bodies
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.
 
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    No Consensus on GST Compensation, Willing States Can Approach Centre for Borrowing
    The GST (goods and services tax) council's meeting on Monday, which was held exclusively to discuss the issue of borrowing in lieu of GST compensation, ended without any consensus.
     
    Addressing the media after the meeting, finance minister Nirmala Sitharaman said the meeting was an extension of the previous meeting and all the states spoke on the issue of borrowing and extension of the compensation cess, and clarifications were sought by the states on specific points.
     
    However, in a major development, Ms Sitharaman indicated that the states which wanted to borrow as per the proposed first option which has largely been opted for, could themselves approach the Centre, which will facilitate such borrowings.
     
    "I put before the council if a state is confident, can anyone or the council stop a member from doing it (borrowing)? Article 293 of the Constitution says it is the state's right to decide what they want to borrow," she said.
     
    Expressing her displeasure with the states which continued to stand against borrowing, she noted that on the one hand there were states which wanted to get the money as soon as possible to meet their expenditure requirements, while few others kept saying that the decision must be reached on the basis of consensus.
     
    On the question of why the Centre cannot borrow, Ms Sitharaman told the states that the Centre has already finalised its borrowing calendar and any additional borrowing will lead to an increase in G-Sec yields that will make borrowings expensive for the states and even for the private sector.
     
    She reiterated that the entire interest and principal amount will be paid from cess. The council has already extended the period of cess beyond the five-year transition period that ends in June 2022. So there should be no concerns as to how the states would be compensated.
     
    A total of 21 states want Option 1 where the entire GST related shortfall of Rs1.10 lakh crore expected for this year could be borrowed without the borrowing impacting any other debt raising plan of the states.
     
    The entire compensation calculation of the states will be paid. And states will not have to pay from any other resource.
     
    Replying to a question on the apparent tussle between the opposition-ruled states and the Centre, the FM said: "There is no dispute, we may have differences."
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    Don't levy GST on auto, realty, hospitality for 6 months: PwC Report
    As the pandemic has severely hit businesses and more so in the case of automobiles, hospitality and real estate sectors, a PwC report has suggested the suspension of Goods and Services Tax (GST) on these sectors for a minimum of six months.
     
    The report titled "Reimagining [email protected]" said that such a measure will provide much-needed cash liquidity to these sectors and ensure business continuity.
     
    It noted that considering the impact on the economy, the Centre provided relief to the industry by extending deadlines for payment of taxes. Businesses were allowed to delay their tax payments for 15 days without incurring interest.
     
    "However, several sectors such as hospitality, automobile and real estate have been severely impacted and the government should consider suspending the GST payments of these sectors for at least six months," it said.
     
    It has also recommended the implementation of a facility to deposit GST to the government treasury on cash basis and suggested dispensation of credit reversal requirement on expired stock during this period.
     
    Among other suggestions, the report has also recommended expanding the tax base under GST.
     
    It noted that a reason for the implementation of GST was to levy a single tax on all goods and services, resulting in free-flowing credit in the country. However, at present, certain items such as petroleum products -- petrol, diesel, aviation turbine fuel and natural gas -- and alcohol are outside the GST net.
     
    To reassure states regarding protection of their fiscal autonomy, the government had initially decided to keep petroleum products, which form a major part of state revenues, outside the ambit of GST till revenue collections stabilise.
     
    However, it is notable that due to the inward supplies of these sectors being subject to GST and the output supplies being beyond the scope of GST levy, the tax incidence in these sectors is significantly high, it said, adding that moreover, their compliance-related requirements have become fairly complicated.
     
    "This is to some extent defeating the Government's purpose of implementing the new tax regime. Representations have been made to bring industrial fuel, including natural gas and ATF, under the GST net," it said.
     
    Noting that bringing the petroleum sector within the GST net requires more consensus-building, however, in the absence of constitutional limitations, it is only a matter of time before this shift takes place and states are assured that they can maintain their levels of tax revenues.
     
    Pratik Jain, Partner & Leader, Indirect Tax, PwC India says that the country embarked upon a very ambitious reform little over three years ago, which has definitely resulted in reduction in overall tax incidence and supply chain efficiencies.
     
    With the wealth of data available with the government and measures such as focused coordination between direct, indirect tax administrations and technological advancements such as e-invoicing and e-way bills, the tax base is likely to expand further, he added.
     
    "That said, there are several issues that still need to be addressed which will require all the stakeholders to work together. We now need a 'white paper' articulating what is the form of GST we want in the next few years. The regime requires more stability, simplicity and transparency," Jain said
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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