In its report titled 'Reimagining GST@3',''PwC said cash liquidity support schemes that advance business continuity are the need of the hour.'' "The government has announced a timely budgetary support scheme in line with the relief packages of various developed nations. Despite these steps, much ground remains to be covered," it said.
The average interest rate for the borrowing under special window so far stood at 4.71%, the government said.
The government may consider allowing India Inc to deposit GST on cash basis to help them tide over the liquidity woes during the COVID-19 pandemic, a PwC report said. It said while formalising its support strategy for the industry in the next phase, the government could also consider suspending GST payments for select sectors during the COVID-19 period.
In its report titled ‘Reimagining GST@3’,”PwC said cash liquidity support schemes that advance business continuity are the need of the hour.” “The government has announced a timely budgetary support scheme in line with the relief packages of various developed nations. Despite these steps, much ground remains to be covered,” it said.
The report said that some key issues which require immediate attention of the government before taxpayers get entangled in long-drawn litigation include eligibility of ITC on expired stock, intermediary services and taxability of discount schemes.
“The government should consider issuing clear guidelines around these critical issues, keeping in mind the evolving international taxation principles and business models prevalent in the trade and industry,” it said.
With regard to suggestions to overcome the current crisis, the PwC report suggested some measures the government could consider while formalising its support strategy for India Inc in the next phase. These are facility to deposit GST to the treasury on cash basis, suspension of GST payments for select sectors during the COVID-19 period, dispensation of credit reversal requirement on expired stock during this period.
It also suggested one-time dispute settlement scheme under Goods and Services Tax (GST). “The government can consider introducing a scheme under the GST regime for voluntary disclosure of tax payments before the taxpayer undergoes GST audits. The GST law has evolved over the past three years and the government has clarified several provisions after its introduction. Therefore, a one-time scheme to clear previous irregularities can be considered, which will help the industry in clearing past baggage and reduce litigation,” it said.
PwC India, Partner & Leader, Indirect Tax Pratik Jain saidwith the wealth of data available with the government and measures such as coordination between direct, indirect tax administrations and technological advancements such as E invoicing and E waybills, tax base is likely to expand further.
“We now need a ‘white paper’ articulating what is the form of GST we want in the next few years. The regime requires more stability, simplicity and transparency. The report provides some food for thought as we reimagine the new and much improved GST regime,” Jain added.