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Unmet expectations, despite an INR 20 trillion stimulus package
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....nmet expectations, despite an INR 20 trillion stimulus package<br>By: - BDO India<br>Goods and Services Tax - GST<br>Dated:- 27-5-2020<br>Gunjan Prabhakaran<br>The COVID-19 pandemic continues to have a dreadful impact on the global economy. All aspects of business viz. supply chain, finances, liquidity, demand etc. have been disrupted. Governments worldwide are busy formulating and announcing vari....
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....ous relief measures with the objective of mitigating economic hardships and at the same time striking an optimum balance between lives and livelihoods. The Government of India, through the Ministry of Finance released a comprehensive stimulus package in a bid to spur domestic consumption and demand. The package was announced by the Hon'ble Finance Minister of India in five tranches and is approxi....
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....mately worth INR 20 trillion, which works out to around 10% of India's GDP. The package focuses on making India 'Atmanirbhar' or 'self-reliant' and concentrates majorly on providing an impetus to the MSMEs and agricultural sector. Though a lot has been done in the stimulus package to infuse liquidity into small businesses, the industry is still yearning for reliefs in the direct and indirect taxe....
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....s arena. Indirect tax, being a transaction-based tax, is practically levied on all business activities viz. purchase, sales, inventory/ creditor/ vendor accounting etc. It has a direct impact on consumer demand, product costing and financial management. Therefore, it becomes imperative to have a focussed thrust on providing indirect tax specific reliefs. Easing of Goods & Service Tax (GST) provis....
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....ions would not only help in easing liquidity concerns faced by businesses but would also help in stimulating consumer demand. Specific indirect tax reliefs that could have formed a part of the stimulus package are: Liquidity reliefs: * Non - litigious & effortless refund of excess taxes paid in the previous tax periods * Unconditional and complete waiver of interest and late fee for delayed p....
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....ayment of GST and delayed filing of returns for all taxpayers * Instalment based payment system for payment of GST dues * Cash based payment of GST for small taxpayers Input tax credit reliefs: * Allowance of ITC on GST paid on health and life insurance premium of employees * Relaxation in the requirement of matching ITC with the supplier's outward detail under Rule 36(4) for an extended ....
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....period * Extending the last day of availing ITC for FY 2019-20 from September 2020 to a later date Other policy measures: * Reduction/ waiver in GST rates to spur demand * Liberalisation of export restrictions for ongoing transnational orders, to honour overseas trade commitments The mammoth stimulus package and its critical focus on providing liquidity to the small and medium sized player....
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....s is certainly a positive step towards putting the economy back in motion. However, relaxation of indirect tax provisions, easing compliance burdens and concession in tax rates have always proved to be an effective tool to accelerate the economy by boosting both supply and demand. Though these reforms may give a temporary jolt to the exchequer, they will go a long way in re-building India's dwindl....
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....ing economy. Reply By niranjan gupta as = I agree to the last suggestion i.e waiver of GST for a specific period. You need bold move to face such a worst situation. Waiver to maximize production and demand, which is need of the hour. N K GUPTA-SSKM Dated: 28-5-2020<br> Scholarly articles for knowledge sharing by authors, experts, professionals ....