GST and Corona Impact and Way forward
Table of Contents
GST and Corona Impact and Way forward
How Corona affected business?
1. Global slowdown
- GST / VAT has a direct correlation to consumption trends
- Global inward and outward travel, transport and trade is severely impacted due to border closures
- Due to corona, the world has literally come to a stand-still
- Corona has affected almost all countries on the planet and business therein
2. Local lockdown
- Many countries have announced lockdown and temporarily shut restaurants, malls, gyms, shops, etc
- Events or exhibitions are getting cancelled and thus, Corona is proving to be a catastrophe
- The income of almost all businesses is immediately impacted without any reduction in their fixed costs
- With continued impact, businesses are struggling to survive
3. Consumers not opening their wallet
- The slowdown in revenue is hampering business sentiments and also employment generation
- As regards, daily wage earners (riksha pullers, construction workers, etc) the situation is much graver
- Aforesaid has already lead to loss of jobs for many
- With eroding business sentiments, in turn, there is a reduction in discretionary spends
- Even non-discretionary spends are being impacted
What kind of VAT/ GST measures can be adopted by the Government?
Measures
Impact of Corona on businesses can’t be avoided
However, with appropriate measures, it can be lessened
Various GST / VAT measures
Substantive
- Rate cuts for tourism, travel and other sectors
- Specific products eg. medical devices are being exempted
Procedural
- Relaxation in the due date of payment of GST/ VAT
- Relaxation in the due date of filing of GST/ VAT returns
- Relaxation in time for reply notices or attending a personal hearing
Which countries have already announced GST/ VAT measures?
GST / VAT measures being adopted
- China: Announced VAT cuts
- Italy: Tax payment deadline suspended
- Germany: Relief in tax payment and filing deadlines
What GST Council in India should do?
• Extension of due dates→ Tax payment and filing
• More time to submit reply/ hearing→ Personal hearing and notices
• For travel, transport, etc→ GST rate cuts
• Medicines/ devices etc→ Exemption/ Zero rating
What taxpayers should do?
Step Plan for Taxpayers
1. Co-ordinate well with internal team members as well as with external consultants
2. As far as possible, meet the deadlines
3. Wherever permissible under the procedures, submit/email the extension letters
4. Email/ submit Representations through the Chamber of Commerce/ Associations
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