The government has extended key compliance timelines for income tax and goods and services tax (GST) and waived late fees to ease the compliance burden during the second wave of Covid-19.

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The Ministry of Finance had received multiple industry representations, including from micro, small and medium enterprises, seeking a breather of up to three months.

With Covid cases rising in the country, experts feel the government will need to extend the timelines further.

The due date has been extended for filing belated or revised income tax returns for financial year 2019-20, GSTR-1 (sales return), GSTR-3B (summary return), GSTR-4 (annual composition return), filing any appeal, and paying taxes. The rate of interest has been rationalised and late fees waived off in certain cases.

“In view of the adverse circumstances arising due to the severe Covid-19 pandemic and also in view of the several requests received from taxpayers, tax consultants & other stakeholders from across the country, requesting that various compliance dates may be relaxed, the government has extended certain timelines today,” the Central Board of Direct Taxes (CBDT) said in a statement.

Those with a turnover of up to Rs 1 crore filing GSTR-3B for March and April have 30 more days after which they will have to pay late fee. Those with a turnover of up to Rs 5 crore have 15 more days to file with nil late fee. The due date for filing annual return by compensation dealers has been extended to May 31 from April 30. Due date for GSTR-1 or sales return has been extended till May 26.

Several parts of the country including Delhi, Mumbai, Haryana and Uttar Pradesh are facing some form of a lockdown. Tax experts said small and medium enterprises would have been the worst-hit if compliance timelines were not extended.

Meanwhile, interest rate has been halved to 9 per cent for a delay of 15 days for GST assesses with a turnover of over Rs 5 crore. Those with a turnover of up to Rs 5 crore would not have to pay any interest for the first 15 days and 9 per cent for the next 15 days.

As for income tax, the government has extended the date for filing of belated and revised return under Assessment Year 2020-21 till May 31, 2021 from March 31.

Income-tax return in response to notice under Section 148 of the Act can be filed till May 31 as opposed to till April 1 earlier.

Also, the due date for filing objections to Dispute Resolution Panel (DRP) and filing appeals to the commissioner has been extended till May 31.

Nangia & Co LLP Partner Shailesh Kumar said while the government had provided much-needed compliance relief to the taxpayers, if the Covid situation did not improve in the next 2 weeks, “the government may need to extend these timelines further… considering that a large number of families are suffering under Covid presently”.

Abhishek Jain, tax partner, EY said, “With the unprecedented surge in Covid-19 pandemic and lockdown in several parts of the country, many industry players would have struggled to meet the GST compliance deadlines. The extension in the deadlines would provide much needed relief to the industry”.

Sachin Taparia, chairman and founder, LocalCirlcles, said the government may have to provide extension till June 30 if lockdowns and restrictions persist beyond May 24 in parts of India, preventing small businesses from filing.

“Though there was a good bit of back and forth this time and a lot of time was taken, we are glad the government made the right decision which will provide much-needed relief to small businesses,” Taparia said.

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