Lower interest on delayed GST filing
In a relief for MSMEs with a turnover of up to Rs 5 crore, the GST Council on Friday halved the interest rate on delayed filing of GST returns for three months beginning February to 9 per cent. There is a rider: the returns are to be filed by September.
However, a special one-agenda meeting to discuss compensation requirements of states will happen only in July.
The deadline for filing GST returns for May, June and July has also been extended till September without any interest or late fee, finance minister Nirmala Sitharaman said after a meeting of the council.
Tax experts said many companies were unable to comply with the regulations and slapping them with interest and penalties was a double whammy for them.
Divakar Vijayasarathy, founder & managing partner, DVS Advisors LLP, said: “It was widely expected that the GST council would decide on raising loans on cess accounts to compensate the shortfall. This option has been doing rounds for quite some time. With the GST collections falling drastically, states are under severe stress, especially states such as Bengal which also had to bear the wrath of the cyclone.
“With the severity of Covid-19 increasing, the delay in decision making could worsen the situation. Procrastinating on critical decisions would not help in the fight against Covid-19 and a dwindling economy.”
M.S. Mani, partner at Deloitte India, said: “Providing compliance relief , even beyond September if required, to all businesses is essential at the present stage where the primary focus has to be on business revival and working capital management.”