Albeit the Indian Government & judiciary has taken few steps, India can still introduce various measures in order to curtail the spread of COVID-19 and address the tax concerns arising on account of this pandemic.
Extension of due dates for tax compliance
As an immediate measure, deferment or extension of return deadlines, especially the ones which are falling in the month of March and beginning of April, could be considered. For instance, due dates for Indirect tax compliance (such as filing of GSTR-1 and GSTR-3B for the period of February and March 2020) should be extended to a future date.
Further, there are additional compliance for which due date falls in March 2020. For instance, due date for filing SEIS applications for few years (such as 2016-17 and 2017-18) under Foreign Trade Policy, 2020 is 31 March 2020. The month of March also holds importance for taxpayers entangled in Direct tax litigations and are accordingly willing to opt under Vivad Se Vishwas Scheme (VSVS). In fact, industry at large is already seeking an extension of the March 31 deadline for VSVS till May 15, due to the short time period since the enactment of the Bill and concerns over the coronavirus pandemic.
Given that majority of the multi-national Companies have announced work from home/ leaves, relaxations in due date would support such Companies to continue adopting precautionary measures and motivate other businesses to also allow work from home for its employees.
Extension of deadline for assessments
Given that March is the official closing of the financial year, there is mounting pressure on the revenue officers to close the tax assessments, especially the ones which are getting time-barred by March 31, 2020. This should provide a compelling case for the Government to push deadlines for completion of assessments. Such a step would provide the flexibility to the officers, who otherwise are refusing to give the adjournment for hearings and consequently facilitate the larger objective of social distancing by working from home.
Propagate use of video-conferencing and tele-conferencing
It would be safe and comforting, if all the State and Central departments carry out urgent proceedings or assessments using video-conferencing and tele-conferencing.
Further, documents/ information submitted during such conferencing should be admissible as valid submissions and the authorities must pass the orders taking cognizance of such submissions.
Easing out tax collections and compliance
With the current liquidity crisis, the Government may contemplate temporarily suspension of TDS & advance tax compliances and speeding up disbursal of tax refunds. These measures may provide much-needed cash leverage to the industry, which could already be facing a cash crunch. Hike in composition limit, making return frequency quarterly, waiver of interest and penalties with respect to non-compliance during such trying times, especially for Micro, Small and Medium enterprises are some other ideas worth consideration.
Allowing donations made for COVID-19 for Income tax purposes may also motivate the individuals and business to contribute towards the social cause.
Decreasing/ waiving the import duty rate on anti-epidemic and other essential goods
The Government may consider decrease or waiver off the import duties on essential items such as masks, temperature measure (thermometer) and other medical devices, which are vital for use in this fight against COVID-19.
Providing relief to sectors adversely affected by Coronavirus outbreak
GST could be waived off temporarily for hospitality and tourism companies as these sectors would be worst effected on account of onslaught of Coronavirus. Further, relief measures should also be announced for aviation sector as airline companies are also struggling on account of travel lock-down.