The novel coronavirus pandemic has unleashed havoc in every sector of human life. The government has declared lockdown to contain the virus, which will continue till April 30 in Maharashtra. And the tax authorities were busy chasing taxpayers for recoveries to streamline revenue shortfall (direct tax and indirect tax collection), fulfil targets, etc.
Amid this difficult juncture, CA Varun Vijaywargi said that nevertheless, the government had to shift its focus from recovery drive to offering relief considering the dent COVID-19 is giving not just to India but to worldwide economies.
A variety of relief measures are being announced globally during this crisis, like Australia has allowed accelerated depreciation deduction, cash flow assistance to small businesses and 50% wage subsidy to employers. â€œEven the Government of India has announced extension of due dates and waiver of late filing fee, concessional rate of interest on delayed payment of tax. Further, RBI has also announced moratorium of 3 months on terms loan and has deferred interest on working capital facilities among other reliefs,â€ he said. However, on tax front, the breather is largely from compliance perspective and a lot more is expected.
Even the announcement of fast disposal of tax refunds is not a relief in real sense as it is mere expeditious processing of tax payers dues. â€œGiven that small businesses and daily wage earners are on the receiving end in this extremely grave situation, more relief is awaited,â€ he added. Sustenance and growth of employment is the key economic issue, therefore, all businesses must be incentivised to retain and grow their number of employees and for this Government may refer to successful schemes implemented by Greece and the States of Alabama and Delaware in the US. â€œGovt may also consider deferment of tax liability for a period of three to six months as cash inflows will be hampered and businesses will have to prioritise while making choice between paying taxes and paying for employees, raw-material and essential utilities. Banking system may be asked to earmark fund for loans at nominal interest rate for companies to discharge tax liability.