Govt. extends tax related compliance due dates amid covid-19

Ashish M. Shaji

10 Sep, 2022

In what has come as a massive relief for taxpayers, the government has extended key tax related compliance timelines for income tax as well as Goods and Services Tax. The government has also waived late fees to ease compliance burden amidst the second wave of Covid-19 pandemic. With the Covid-19 cases rising exponentially in the country, experts are of the opinion that the government might need to extend the timelines further.

Extension of Tax related Compliance: Statement of Central Board of Direct Taxes

The CBDT, in a statement, stated that due to adverse circumstances owing to the Covid-19 pandemic and considering several requests from taxpayers, tax consultants and other stakeholders across the country, requesting for relaxation in compliance dates, the government has extended certain timelines today.

The Ministry of Finance had received many industry representations, also from MSMEs (Micro, Small and Medium Enterprises), for a breather of up to 3 months.

The due date stands extended with respect to filing belated or revised income tax returns for financial year 2019-20, GSTR-1 (sales return), GSTR-4 (annual composition return), GSTR-3B (summary return), filing appeal and paying taxes. Further, the rate of interest has been rationalised and also the late fee has been waived off in many cases.

Relaxations offered by CBDT to taxpayers

Here is the list of relaxations provided to taxpayers with regard to tax related compliance amidst Covid-19:

• Appeal to commissioner under Chapter XX of the Income Tax Act has been extended to May 31, 2021, or time provided under that section, whichever is later. Earlier, the deadline was 1^st of April 2021.
• Objections to Dispute Resolution Panel under section 144C of the Income Tax Act have been extended to May 31, 2021, or time provided under that section, whichever is later. Earlier the last date of filing was 1^st of April 2021.
• Income Tax return in response to notice under Section 148 of the Income Tax Act^[1] has been extended to May 31, 2021, or time permitted under that notice, whichever is later. Earlier the last date of filing was 1^st of April 2021.
• Filing belated return under sub-section (4) and filing of revised return under sub-section (5) of Section 139 of the Income Tax Act for the assessment year 2020-21 can be filed on or before 31^st May 2021. Earlier it had to be filed on or before 31^st March 2021.
• Payment of tax deducted under Section 194-IA, Section 194-1B and Section 194 M of the Income Tax Act and filing Challan cum statement for the tax deducted can be now paid and furnished on or before 31^st May 2021. Earlier it had to be paid and furnished by 30^th April 2021 under Rule 30 of the Income Tax Rules 1962.
• Statement in Form 61, having particulars of declarations obtained in Form 50, can be furnished on or before 31^st May 2021. Earlier it had to be furnished on or before 30^th April 2021.

Extension of GST compliances

The Finance Ministry has notified nine changes in the GST compliance requirements. The notifications have been issued on the basis of recommendations from the GST council.

• Businesses having a turnover of more than 5 crore rupees in the preceding financial year have their late fee waived off in case they fail to submit their returns in GST Form- 3B within 15 days from due date for march and april.
• Business having a turnover of up to 5 crore rupees, the late fee is waived off for up to 30 days delay during two months. Taxpayers having a turnover of up to 5 crore rupees, the 30 day window is applicable for January to March.
• The date to furnish return in Form GSTR-4 of CGST Rules, 2017 for financial year ending 31^st March 2021 is now extended by a month to 31^st May 2021.
• The government also extended the period for furnishing declaration in Form GST ITC-04, in respect of goods dispatched to job worker or obtained from such worker, during the period from 1^st January to 31^st March to 31^st May 2021.
• The government gave more time to officials to do their statutory duties through action considering the raging pandemic.

Extension of Tax related Compliance: Expert view

As you would be aware of the fact that many parts of India are facing some sort of a lockdown. Tax experts believe that SMEs would have been among the worst-hit sectors, had tax related compliances timelines were not extended.

Shailesh Kumar, Nangia and Co. LLP Partner, is of the opinion that the government has given much needed compliance relief to taxpayers, and in case the situation in the country doesn’t improve in future, the government may have to extend these deadlines further as large number of people reel under the pandemic.

Abhishek Jain, Tax Partner, EY stated that with an unprecedented surge in the pandemic and lockdown in several parts of the nation, many industry players would have found it difficult to meet the deadlines of GST compliances. Therefore the extension shall provide much needed relief.

Sachin Taparia, Chairman and Founder, Local Cirlcles, opined that the government might have to extend timelines till 30^th June in case lockdown and restriction continue beyond 24^th May, preventing small businesses to file. 

Conclusion

It is no doubt a much needed relief for taxpayers and businesses as the timelines for tax related compliances have been extended. The Covid-19 pandemic has caused so much uncertainty in everyone’s mind that it has become imperative to make informed decisions. The way things are moving forward, we might see yet another extension in future.

Read our article: All about Section 269ST of Income Tax Act, 1961