Amid the ongoing crisis, the government is considering putting a 6- month freeze on payment of goods and service tax for the works- affected sectors of the economy. In order to curb the impact of lockdown on the industries, Central government is mulling the option and may provide GST tax relief to some worst hit sectors such as restaurants, aviation and hospitality in form of temporary suspension of GST payment.
The freezing of GST payments can being relief to affected sectors as the is in a lockdown due to which business operations are at a halt, said Govt sources. Other proposals have also been considered including transforming to cash-based principle of paying taxes from the current- invoice based system. The measures are aimed at bringing liquidity in cash- strapped sectors.
Based on the ANI report Indian Government is considering a Goods and Services Tax (GST) relief package to counter impact of Covid19 on economy. The sales on which payment is not recieved will be exempted from GST classifying them as bad debts. Reducing the GST rate for real estate sector is also being considered as one one of the amendments. All these steps will help in solving the liquidity issue and the lower GST will spur demand in the sectors, said Govt officials.
'There is a thinking that for the worst hit sectors including service sectors, the government should at least spare its dues,' a government official said. Government may also waive some other statutory charges for some time. A final decision is bound to be taken by the GST council.
Amid the nationwide lockdown, the industries are in a crisis, liquidity and slump in demand being the major problems. GST temporary suspension will provide some help to the businesses to hail through the crisis.