During this lockdown, there are various sectors which has been hit hard by the pandemic Covid-19. Now India is planning to consider GST relief package to slow down the impact of covid-19. This package could include a six-month suspension of GST payments for the worst hit sectors such as restaurants, aviation and hospitality as well as a lower rate for the real estate sector.
What could be the possible measures in GST relief package ?
- Switch to a cash based principle of levying tax from the current invoice based system.
- GST relief on sales for which payment is not received due to the lockdown by treating those as bad debts.
- To ease the liquidity pressure on businesses which are strapped for cash.
Although there has been a demand for complete GST exemption, and the government is checking around to the view that suspending tax will work better or not.
Need for Liquidity-Expert opinion
- Tax experts said liquidity is among the immediate needs of industry.
- “At this time, industry needs more liquidity and hence deferment in payment of GST for next few months (without interest) should be considered, said Pratik Jain, national leader, indirect tax, PwC.
- “Since the point of taxation in GST is effectively the issue of invoice, the suppliers pay the GST to the government exchequer before they actually collect it from the customers” said Bipin Sapra, partner, EY.