GST relief to overcome lockdown

1. GST will be continue to be leviable on PPE, mask etc ..

For now , the government is taking a step back on any GST rate reduction for items like PPE, ventilators, test kits and sanitisers as this can encourage sub-standard imports from China. GST exemption would make prices fall leading to hardships and distortion for domestic manufacturers without much cost-benefit to the consumers. They said such a step would ensure that imports get an advantage on domestic supplies. The distortion of the rate structure at the cost of domestic supplier may not be desirable in a situation where government is the biggest buyer of these goods and is supplying these goods for free. Domestic units are making serious efforts to ramp up their capacities.

GST exemption leads to a block input tax credit (ITC) which thus increasing the cost of manufacturing for domestic manufacturers. Therefore, while the consumer does not gain from GST exemption, the compliance burden would increase for the manufacturer. They added that imports would not suffer any such blockage of ITC and thus, imports get an advantage. The government had exempted basic customs duty and health cess on such items, except sanitisers till 30th September 2020.

2. Relief to taxpayers

GST Returns can now be filed with EVC in case of compulsory filing with DSC. Taxpayers can now file GSTR3B without DSC also.

3. Late fees waived

CBIC has waived off late fee of ₹29 crores pertaining to 7821 Bills of Entry, in order to ensure no supply chain disruption of essential goods during this lockdown period.

4. Circular issued to clear issues over challenges faced by taxpayer over implementation of GST 

The circular answers questions like :

1. An advance is received by a supplier for a Service contract which subsequently got cancelled: 
(i) Supplier has issued the invoice before supply of service and paid the GST.
(ii) The supplier has issued receipt voucher and paid the GST on such advance received.

2. Adjusting amount of credit note when there is no output liability in particular period.

3. Last date to furnish ”LUT for FY 2020-21” and other remedy

4. Whether date of deposit of GST-TDS extended along with return?

5. Time limit for reckoning 2 years limit for refund application falls during the period from 20.03.2020 to 29.06.2020 ?

All the above questions are answered in the circular.





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