GST - An agenda for reforms - Part - 78 - GST reforms in times of grave crisis
MARCH 24, 2020
By Dr G Gokul Kishore
NATION-STATES are down to their knees in trying to keep at bay tiniest of adversaries. Everybody's thoughts are infected with Covid-19 as nobody can remain immune from schizophrenic approach - one part of the mind fighting to keep itself pre-occupied with the routine while another part is constantly processing the corona thoughts, flood of messages, various orders restricting movement and closure of businesses. The next meeting of GST Council which will be through video conferencing will have a heavy agenda as attempted in this 78th part.
Extension of return filing dates
The only thing which is constant is change, it is said. No tax regime can better vindicate this statement than GST. One may term that the law being new has to be dynamic and responsive and hence, the changes. Another school may subscribe to the necessity of tinkering with system and processes as a new tax system is implemented by testing on real-time basis. The silver lining has been regular extensions in respect of various returns and other compliances. The time cannot be more appropriate than the present. GSTR-3B and GSTR-1 are the major returns and extension of due date for filing such returns beyond the end date of restrictions in force in many States is sine qua non . Work from home is not feasible when the data is sufficiently large and confidentiality concerns do not permit taking such voluminous data home, prepare returns and file from home. While all records are electronic, they do not reside in a single laptop of the person filing returns.
Cessation of production in many factories, vehicles stuck mid-way when restrictions came into force, expired e-way bills, inability to bring back materials from job work, service providers compelled to close or restrict their work, etc., are some of the challenges almost every industry is facing today. When the entire world stays indoors, economy has come to a halt and banks have restricted operations, expecting tax payments on time will be confiscatory. By deferring due date for filing GSTR-3B, taxpayers will get corresponding breather for tax payment.
ITC relaxation and other relief measures
In times of crisis of this magnitude, the government's tax revenues will take a big hit. One cannot expect it to support the industry by extending funds on softer terms. But it can assist the suffocating businesses by liberalizing input tax credit. The negative list under Section 17(5) of CGST Act can be pruned to the barest minimum. The 10% credit restriction on invoices not shown in GSTR-2A can be temporarily suspended. For smaller taxpayers, payment of tax on instalment basis can be considered. When companies are shut, inter-State stock transfers can be exempted for a few months. For the next few months, tax administration should be instructed not to detain vehicles or seize goods for e-way bill related issues. This is not a wish list but certain must-do's for the government at this juncture.
No limitation for appeals and all proceedings
The Supreme Court in Suo Motu Writ Petition (Civil) No. 3/2020, by order dated 23-3-2020 - 2020-TIOL-77-SC-MISC-LB, took suo motu cognizance of the situation arising of Covid-19 virus and difficulties faced by litigants across the country in filing petitions, applications, suits, appeals and all other proceedings within the period of limitation either under the general law of limitation or under special laws (both Central and / or State). As physical presence or attendance in courts is next to impossible in the current situation, the Apex Court ordered that period of limitation in such proceedings shall stand extended with effect from 15th March, 2020 till further orders. The Court categorically stated that it has exercised power under Article 142 read with Article 141 of the Constitution of India and the order will be binding on all courts, tribunals and authorities.
Use of the words "proceedings" and "authorities" unambiguously indicates that tax authorities including those initiating or prosecuting proceedings under GST, Customs and Income Tax laws will be bound by this order. This will include Advance Rulings Authority, National Anti-Profiteering Authority, CESTAT, ITAT, Commissioner (Appeals) and all adjudicating and assessing authorities. Time-limit prescribed in such laws will stand suspended and the period from 15th March, 2020 to the date to be specified by the Court will be excluded in computing the time-limit. The Court has expressly said that such extension will be applicable whether the delay is condonable or not i.e. whether the particular statute has provision for condonation or not. One may tend to interpret "proceedings" as existence of lis i.e. order should have been passed and appeal should have been filed and the same will not cover mere issuance of show cause notice. If a particular action has been proposed by way of notice, then proceedings have begun. Considering the tone and tenor of the order, any alternate interpretation may not be accepted.
The above order has been highlighted so that government may consider issuing appropriate ordinance for extending time-limit under various laws. GST Council may consider recommending removal of difficulty orders to cover the same in the interim. Goods and services which are either directly or indirectly used for treatment, relief and rehabilitation of Covid-19 patients and all caregivers should be considered for exemption till the time the situation is brought under control. Let us sincerely hope the war over the virus is won within short time so that there is no necessity to repeat our plea for such extreme relief.
[To be continued…]
[The author is an Advocate. The views expressed are strictly personal.]
See Part 77
(DISCLAIMER : The views expressed are strictly of the author and Taxindiaonline.com doesn't necessarily subscribe to the same. Taxindiaonline.com Pvt. Ltd. is not responsible or liable for any loss or damage caused to anyone due to any interpretation, error, omission in the articles being hosted on the site) |