Pending reliefs

Non availability of DSCs

Technical difficulty in Filing of GSTR 3Bs returns would be faced because of a sudden lockdown being announced with digital signature certificates (DSCs) locked in offices or not readily available. Filing of Gst returns is a mechanism, currently, wherein taxes can be paid through adjustments made in the GSTR-3B return filed by businesses; the said taxes being paid either through utilization of input tax credit or in cash. Due to sudden lockdown, dsc’s are stuck in offices and the movement to fetch them is restricted.

Cash Tax payment but late credit of inputs in ECL

Even the companies who can and wish to pay taxes on time/ extended time to avoid interest liabilities, have been facing a concern on adjusting the said taxes deposited – as they are unable to file the returns without DSC. Another concern is on claiming input tax credits for the months of March, April and May without filing GSTR-3B. Now, as per Section 50, currently interest is only applicable on net liability i.e., tax payable in cash – after offsetting the available input tax credit. For companies filing late Gst returns, the inputs for the receivers would be credited lately In respective ECLs. Those companies opting to belatedly file GSTR-3B returns are apprehensive on whether the reduced interest would apply on only the liability payable in cash with input tax credit available being credited to the electronic credit ledger at a later date say in the months of June/ July 2020.

ECL Blocked since 17th January 2020

Another concern, for some businesses has been adverse/ labelled precautionary actions taken by revenue authorities for investigations underway. The authorities had recently blocked electronic credit ledgers of businesses with initiating investigations as a part of the anti-evasion drive; this essentially to prevent further misuse of fraudulently availed credits. Now, with pendency of investigations which will take time to resolve in the case of lockdown, the businesses cannot use that ECL credit.

Digital vs Printed Investigations

Most of the investigations were under course on the day of the lockdown and have now been paused as most lower level revenue authorities were operating on the conventional printed document model. Universally, such credit ledger continuing to be blocked; due to which even for genuine cases, that could have been unblocked while investigations could have continued. Provisional credit be allowed till the investigations reach to some conclusion to ease out liquidity pressure on businesses. While digital investigations could have been conducted with temporary unblocking of credit ledger where preliminary information is provided by them (through email or other digital means). The tax officers will take time to move to digital investigations.

Blocking of E Way Bills in case of non-filing of Gst returns

The Govt has decided to give relief for late filing of Gst returns instead of extending the due dates.  While on delayed filings (even within extended timelines), do businesses continue to qualify as non-compliant for reporting purposes. Any possibility for blockage of E-Way Bill generation by companies where the GST returns for two consecutive months are not filed within the due date envisaged in the law remains unanswered if companies avail benefit of the relief measures announced by the Government

Payment within 180 days

Second proviso to Sec. 16(2) clearly provides that the reversal shall apply when a recipient fails to pay the amount towards the value of supply along with the tax payable thereon. Hence mere payment of tax within the stipulated period of 180 days is not enough. Even the value of supply needs to be paid within 180 days to avoid the reversal. Now with the businesses facing liquidity crunch, payment of taxes along with the principal value seems to be an uphill task when the lockdown opens.

Sectoral Reliefs

Already reeling sectors due to global economic slowdown like tourism, tour and travel operators, hotels, hospitality and aviation would also look forward to supplementary help from the Government including rate cuts, tax waivers and similar fiscal measures. After the lockdown, it is imperative that there would be a tepid response to these sectors. Businesses would first try to stabilise their own functionalities and the spending on tourism, hotels, hospitality sector would be limited to only necessary ones.

GST Audit for financial year 2018-19

With all the due dates of filing Gst returns colliding in June 2020 and the businesses and tax professionals would take time to stabilise their functionalities, it is very obvious that the Gst audit due date for financial year 2018-19 being 30th June 2020 would require extension. For completing Gst audit, one or one and a half month would not suffice assuming April month of lockdown and other 15-20 days for regular Gst compliances after opening of the lockdown.

Blocked Credit u/s 17(5)(h)

Input tax credit shall not be available in respect of the following namely: –

(h) goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples

There would be lot of instances where in for FMCG sector and other perishable goods, the stock would be not be realisable at the market values or may be at lower than cost value or may be destroyed and have to be written off due to sudden lockdown.

Govt need to address this issue for stock destroyed or written off due to lockdown and the reversal of respective ITC over it.


The Indian government have appreciably empathised and undoubtedly understood and followed a proactive approach and in the current situation as well; with proactive steps to ease the burden of businesses to a large extent. Businesses believe and look up to the Govt for the timely solution of the above genuine hardships and appropriate reliefs/ clarifications be issued.

While every care has been taken to ensure the accuracy/ authenticity of the above, the readers are advised to recheck/ reconfirm the same from the original sources/ relevant departments. The company shall in no way be responsible for any loss or damage suffered to any person on account of the same. The views expressed are personal opinion, compilation and is no way, to be used for any legal opinion, matters

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November 2020