Government gives leeway to MSMEs from penalties, interest for GST non compliance

TOP NEWSGSTView in App Government gives leeway to MSMEs from penalties, interest for GST non compliance Industry trackers say that the government is trying to do a balancing act as it needs more revenue through GST but also doesn’t want to create hurdles for companies in terms of compliance. By Sachin Dave, ET Bureau | Updated: Jun 12, 2020, 08.26 PM IST0:00 / 3:46GST Council meet key takeaways: Late fee reduced on GSTR-3B filings; relief for small taxpayers MUMBAI: The government on Friday announced some leeway for small and medium companies in the Goods and Services Tax (GST) framework during the GST council meeting. The relief came in the form of reduced penalties and intrest for small and medium companies. The government has announced relief by the way of waiver or reduced late fee and interest for delayed filings and payment of taxes by the dealers who have a turnover of less than Rs 5 crore. Tax experts say that many companies were unable to comply with the regulations and slapping them with interest and penalties was a double whammy for them. ADVERTISEMENTThe government also allowed tax credit on the corporate social responsibility, which many say would go a long way at a time when many companies are looking to spend more on Covid related relief work. “Allowing input tax credit for goods and services used in CSR expenditure, GST paid on additional health insurance premiums due to COVID-19, masks, hand sanitizers etc. to be used in offices, was one relaxation/ clarification that the businesses were looking forward to. Guess, one would now need to wait for the next meeting, to get clarity on this critical business expenditure,” said Harpreet Singh, Partner – Indirect Tax, KPMG in India. ADVERTISEMENT Industry trackers say that the government is trying to do a balancing act as it needs more revenue through GST but also doesn’t want to create hurdles for companies in terms of compliance. The government is worried that it would face a major shortfall in revenue collections due to Covid pandemic at a time when even companies are facing major issues with their revenues and cash flows. “The Government is faced with a tough balancing act. On one hand, it needs robust GST collections to help meet its regular plus the extraordinary nature of expenses during the pandemic. On the other hand, businesses are looking for reliefs from the Government to help them tide the major disruptions, loss of revenue and uncertainties. The announcements made in today’s GST council meeting are a reflection of the tight balancing act that the government has on hand,” said Saloni Roy, Senior Director, Deloitte India ADVERTISEMENT All the announcements are set to benefit the smaller organisations more than the larger ones, say experts. Abhishek Jain, Tax Partner, EY said, “While there was not much for larger businesses, the late fee waivers and additional moratorium for smaller businesses is quite a welcome move. With the current financial flu, smaller businesses were aggressively seeking stimulus and some of their requests have been well considered by the council. ADVERTISEMENT In Video: GST Council meet key takeaways: Late fee reduced on GSTR-3B filings; relief for small taxpayers Related Articles MSME sector on verge of collapse: Gadkari May 07, 2020, 06.06 PM IST Government’s Rs 3 lakh crore MSME package best disbursed via digital MSME underwriting May 26, 2020, 01.59 PM IST Cabinet approves MSME, farm support measures Jun 01, 2020, 04.54 PM IST READ MORE:MSME |KPMG |GST Collections |gst |CSR expenditure 6 habits that are holding you back from being rich and successful LATEST COMMENT LOOK AT THE IRONY. ROTIS MADE ARE LESS GST 5% BUT PAROTTAS ATTRACT 18% GST. THE GST COUNCIL DOES NOT BOTHER ABOUT PEOPLE OF INDIAS FOOD. THEY WANT GST BY ANY METHODS. IT IS A MATTER OF GREAT SHAME TO SAY WE ARE PAYING 18% GST.IT IS OUR FATE WE HAVE SUCH FINANCE MINISTER TO ADD REVENUE FROM ANY SOURCE, I THINK MR MODIJI SHOULD APPOINT DR SUBRAMANIAM SWAMY AS OUR FM. – Sornam Alagarsamy Alagarsamy VIEW ALL 1 COMMENTADD COMMENT NEXT GST Council Meet: FM gives relief to small taxpayers Most Recent What the Ambani family scorecard at Reliance looks like The lockdown googly no firm saw coming ‘I lost my job. 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