Besides, it also decided to issue all pending GST (goods and services tax) and Customs refunds, providing benefit to around 100,000 business entities, including micro, small and medium enterprises.
“Thus, the total refund granted will be approximately Rs 18,000 crore,” the ministry said.
An income tax
refund is issued when the tax deducted from an entity’s income exceeds the total income tax
Shailesh Kumar, director, Nangia Andersen Consulting, said it was a welcome relief at a time when both businesses as well as individuals were facing significant liquidity crisis due to a temporary halt in economic activities and thus resulting in significant reduction in cash flows. “This will infuse aggregate liquidity to the extent of Rs 18,000 crore and will help the businesses as well as individuals meet their short term cash requirement,” he said.
M S Mani, partner, Deloitte, said, “Businesses, which have borne the brunt of the lockdown, would be enthused at the prospect of getting GST refunds enabling quicker resumption of operations.”
The move complements the announcement of extension of deadlines for filing tax returns besides a slew of regulatory and compliance measures across sectors meant to alleviate the hardship being faced by businesses.
The last date for income tax
returns for FY2018-19 has been extended to June 30 and for delayed payments till that time the interest rate has been reduced to 9 per cent from 12 per cent. The mandatory linking of Aadhaar cards with PAN cards, and the direct tax Vivaad se Vishwaas scheme has also been extended to June 30. Besides, the last date for GST return filing for March, April and May, 2020, has been extended to June 30 with no Interest, late fee and penalty for companies with up to Rs 5 crore turnover and subsidized interest of 9 per cent but no penalty or late fees for bigger companies.
The direct tax collections in the country fell for the first time in two decades, by 8 per cent to Rs 10.27 trillion, posting a shortfall of Rs 1.45 trillion. The corporation tax mop up stood at Rs 5.56 trillion, while personal income tax mop-up was Rs 4.58 trillion.