Covid-19: Govt to Release Pending GST and Custom Refunds, 1 Lakh Businesses to Benefit
The government will also release pending income tax refunds up to INR 5 lakh immediately to individual taxpayers and business entities
The Ministry of Finance has decided to issue all pending Goods and Services Tax (GST) and custom refunds, it said on Wednesday. This move is expected to benefit around one lakh business entities, including micro, small and medium enterprises (MSMEs).
The move comes two weeks into the countrywide lockdown—imposed to check the spread of coronavirus— which has severely hit businesses across sectors.
To grant immediate relief to taxpayers, the government will also release pending income tax refunds up to INR 5 lakh immediately, it stated on Wednesday. Both business entities and individual taxpayers will be given tax refunds, benefitting about 14 lakh taxpayers.
For both the categories combined, a total refund of approximately INR 18,000 crore will be granted.
Last month, the finance ministry had announced several regulatory and compliance measures to provide business relief from economic fallout of Covid-19. Interest, late fee or penalty on late GST filing for companies with turnover of less than INR 5 crore has been waived, whereas for bigger companies above this threshold a subsidized rate of 9 per cent will be levied.
Additionally, deadline for GST returns for March-May 2020 has been extended till June 30 for all firms.
Among other measures, threshold of default for MSMEs has been increased to INR 1 crore from INR 1 lakh to prevent insolvency proceedings.
The Reserve Bank of India also announced a liquidity stimulus package worth INR 3.7 lakh last month, which included repo rate cut of 75 basis points (bps), 90 bps reduction in reverse repo rate and cash reserve ratio slashed by 100 bps. Also, the central bank has allowed banks to offer a three-month moratorium on term loans to businesses of all scale and sizes.