With the increased transmissibility, morbidity, mortality of the emerging P2 Corona Variant and its ability to evade detection by diagnostic tests and decreased susceptibility to antiviral drugs, this new variant has taken everyone with a major surprise and setback. The so-called night curfews are a kind of mini lockdowns impending to be major lockdown if the situation does not improve within coming days.

The health services are already under lot of pressure and the rising cases have taken a toll on them and might collapse or cripple the health support services.

That is why, it has become more important for the Govt to announce certain financial support measures so as to give some sign of relief to the already bleeding businesses which were thriving to surface out of Covid 2020 pandemic.

Some of the suggestive measures to the Govt are listed as below:


1. GST Tax payment extensions

Extension of GST tax payments and filing of GST returns for the months of March, April and May 2021 so that the businesses can take this mini lockdown seriously and focus more on sitting at home to break this expanding chain.

2. Blocking of electronic credit ledger

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.

3. Blocking of E-way Bills in case of non-filing of GST returns

If the GST returns are delayed or not filed for the pandemic reasons, the possibility for blockage of E-Way Bill generation by companies should not be there and need to be taken leniently.

4. 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.

5. 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 realizable 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 should consider to address this issue for stock destroyed or written off due to lockdown and the reversal of respective itc over it.

6. Blocked credit u/s 17(5)

Blanket allowability of input tax credit for arranging cabs for transportation of employees lifting the ban of up to 13 passenger vehicles, allowability of ITC on purchase of masks, sanitizers, protection equipment’s, thermal scanning machines, thermal beep machines and related machineries

7. Input tax credit u/s 16 and blocked tax credit u/s 17(5)

Allowability of input tax credit on building super structures or night camps or shelter homes or quarantine homes within the factory premises, the Covid 19 is not a temporary phase. As it has been said that now we have to learn to live with it. There can be instances where the worker is detected with Covid 19 and needs immediate relief within the factory premises and a dedicated ambulance van or super structure need to be pre built and kept ready for such a scenario.

8. Job work related issues

With the advent of closure of economy and migrant workers, small artisans moving to their home town, who might be working in rental premises; there could be situations where the time lag to return the goods within one year, might expire during this mini-lockdown period and there would be a rare possibility of the job workers resuming back to business, the goods would remain stranded in their premises. Adequate consideration is expected and a practical way out need to be transpired.

9. Change in business discountings/ marketing strategies

With the stock being locked down and inventory being held up and daily increase in the carrying costs and the goods not being marketable at the pre Covid regime, there would be lots of offers and discounting and different marketing strategies to offload the products. Now, the sole objective would be to fuel the businesses with the sales picking up even at a reduced margin and generate cash flows as soon as possible. The Pre and Post mini lockdown Strategies ought not be brought on a common parlance since there would be a significant drift from the core objectives/ business goals.

10. 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 stabilize their own functionalities and the spending on tourism, hotels, hospitality sector would be limited to only necessary ones.


Disclaimer- 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. 

(Republished with amendments)

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    One time relief shall be given to all the GST assessees by extending the due date for filing GST refund claims for FY2017-18 and FY2018-19 to 30th June 2021

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May 2021