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Covid-19 Causing Tax Compliance A Tough Task

Author: Dasari Sreenivasa Rao/Wednesday, March 25, 2020/Categories: Exclusive

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Covid-19 Causing Tax Compliance A Tough Task

The concept of ‘work from home’ is catching up fast in the Indian corporate sector thanks to the coronavirus epidemic, which has been forcing not only every economic activity, but also personal life into a complete lockdown. Almost all the corporates and business firms have allowed their employees to work from home. However, the new way of work culture is bringing with itself few challenges.

For instance, generally corporate executives would carry out tax compliances such as filing of returns, generating e-Way bills and other confidential business. But as they’re working from home, they find it difficult to access office ERP systems. The inability to access ERP systems is leading to a situation where compliance delays and allied penalties could crop up for companies, alert tax experts.

Corporates have embraced the concept of work from home to prevent the spread of the coronavirus outbreak. However, the absence of certain tax applications and secure technologies such as digital signature certificate, are some of the issues coming to fore, while undertaking compliance, said an official at GST Bhavan.
Particularly, in the GST regime, tax compliance has become a regular practice as the companies, traders and business firms need to file returns every month. The Prime Minister Narendra Modi-led NDA government introduced Goods and Services Tax (GST) on July 1, 2017, in India.

The government has also changed norms for tax return filings and even introduced staggered return filing systems to ease up the load on the GST Network. If returns filing delayed, then the GST payments also get delayed, which in turn lead to interest or penalty being levied on payments.

A GST practitioner said that “If the data size is large, it’s difficult for employees to file returns sitting at home. They can’t access office ERP system. If the returns are not filed in time, it’ll be another problem for the corporate and business firms. Moreover, the tax compliances becomes a challenge especially in companies where the data size is large. It would also cause some delay in filing returns in the online portal.”

Relaxation in tax norms

Considering the cropping up of several problems in tax returns filing, the central government has turned keen on such issues. The Prime Minister Modi may offer relaxation on various tax compliances. The tax authorities have started studying demands from taxpayers for easing up on regulations amid the Covid-19 outbreak.
Maharashtra and Goa have already took some measures at state level. The tax authorities in the states granted some relaxations for filing value added tax (VAT) assessments for previous years. The deadline for filing GST returns, which is otherwise set to begin from March 20, has been extended. The government announced the extension of GSTR-3B filing from March 20 to April 23. A tax official in Mumbai further stated that the Maharashtra government is working on all possible steps to relax select norms facilitating tax payers with some ease out measures.

The tax authorities are even allowing tax payers to complete the returns filing in a more relaxed way. The officials are corresponding with taxpayers via email, including seeking documents required for completion of time-bound assessment, replies by taxpayers and those sent by authorities.

Tax payers can comply on priority and can do so by making a phone call or sending an email. The authorities had already directed tax officials to ‘avoid any physical visits to the dealer’s place of business or residence. This would facilitate the tax compliance from dealers electronically.

The officials said that all such relaxations and changing norms for tax payers were in order to prevent, control and curtail the spread and transmission of coronavirus in India.

(The writer is a business journalist with 27 years of experience)

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