The Recent Changes in Direct and Indirect Tax amid Covid 19

The lockdown has pushed the Indian Economy into a temporary depression that has unprecedented in its magnitude. While tackling this the only option that a common man has to look up to the Government. In this regard Union Finance Minister Nirmala Sitharaman has announced a stimulus package of Rs 20000 lacs cr to various constituents of the Indian Economy.

While the package reflects different aspects of the economy, while we are going to discuss the changes in the taxation regime of the Indian economy.

Direct Taxation

• Boosting short-term liquidity to business, the Finance Minister has reduced the rate of TDS and TCS by 25% starting from 14th of May, 2020 to 31st of March, 2020. This concession will be applicable for 23 specified payments where TDS is levied ranging between 20% and 1% and 11 payments where TCS is applicable.

Comments: While in the first instance it will make us feel the more of the inflows will come to the organization, but while the reduction in the TDS and TCS rates they have not reduced the tax rates for the organization nor they have reduced the advance tax rates or deferred the due date (due date of advance tax is due on 15th June, 15th September, 15th December, 15th March). Therefore, they will end up paying more advance tax or total tax, it has only deferred the outflow to only some extent.

• All pending refunds to Charitable Trust and non-corporate business and profession including proprietorship, partnership, and LLP and co-operative society could be issued immediately.
• Validity of concessional version of dispute resolution cum amnesty scheme (Vivad Se Vishwas) for Income tax matters has been further extended till 31st of December, 2020.
• Additionally, assessment of IT returns which were time-barred on 30th September would be valid till 31st December and those getting barred on 31st March 2021 is extended to 30th September 2021.
• Due dates of filing IT returns for the Financial year 19-20 have been extended to 30th November 2020 from 31st July 2020 and 30th October 2020.

Due date of Tax audit has been extended from 30th September 2020 to 31st October 2020.

Customs

• Electronic communication of PDF-based Gate Pass and OOC (Out of Charge) copy of Bill of entry to custom brokers/Importers.
• Drive to expeditiously process all pending customs refund and drawback claims in order to provide immediate relief to business entities especially MSMEs.
• Exemption of Custom Duty on ventilators, personal protective equipment, Covid-19 testing kits, and inputs for these goods.
• Provisional clearance of goods while extending preferential treatment without the submission of the original signed certificate of origin.
• The time limit for filing an appeal, furnishing of returns, or any other compliance under Customs Act or Customs Tariff Act, which has been expiring from 20th March 2020 to 29th June 2020, has been extended to 30th June 2020.

GST

• GST CMP-08 for the quarter ending March shall be filled within 7th of July, 2020.
• GSTR 4 for the financial year 19-20 shall be filed on or before 15th of July, 2020.
• Late fees u/s 47 for filing of GSTR 1 shall be waived off for the month of March, April, May, and for the quarter ending on 31st March, 2020 shall be filled before 30th June 2020.
• Due dates of GSTR1 & GSTR3B dates have been extended

The due date of filing GSTR-9 and GSTR-9C for the FY 2018-19 is extended up to 30th September 2020.