Strategy to help tide over liquidity woes during the Covid-19 pandemic
Published 12.10.20, 12:20 AM
The government may consider allowing India Inc to deposit GST on a cash basis to help them tide over the liquidity woes during the Covid-19 pandemic, a PwC report said.
Formalising its support strategy for industry in the next phase, PwC said the government could consider suspending GST payments for select sectors during the Covid-19 period.
In its report titled “Reimagining GST 3”, PwC said cash liquidity support schemes that advance business continuity are the need of the hour.
“The government has announced a timely budgetary support scheme in line with the relief packages of various developed nations. Despite these steps, much ground remains to be covered,” it said.
The report said that some key issues which require the immediate attention of the government before taxpayers get entangled in long-drawn litigation include the eligibility of ITC (input tax credit) on expired stock, intermediary services and taxability of discount schemes.
“The government should consider issuing clear guidelines around these critical issues, keeping in mind the evolving international taxation principles and business models prevalent in the trade and industry,” it said.
On suggestions to overcome the current crisis, the PwC report suggested some measures the government could consider while formalising its support strategy for India Inc in the next phase.
These are facility to deposit GST to the treasury on cash basis, suspension of GST payments for select sectors during the pandemic, dispensation of credit reversal requirement on expired stock during this period.It also suggested one-time dispute settlement scheme under GST.
The government can also consider introducing a scheme for voluntary disclosure of tax payments before the taxpayer undergoes GST audits, the report added.