The relaxation on GST could provide relief not only to worst-hit sectors but also numerous small businesses that may not be in a position to pay GST. 

he government is planning to announce a GST relief package for sectors worst-hit by the Covid-19 pandemic including the likes of restaurants, aviation and hospitality.

As part of the relief package, sectors worst affected may see a suspension of GST for up to six months.

Meanwhile, some sectors including real estate will pay lower GST if the plan is approved by the government, reported The Economic Times.

It may be noted that the relief proposal will need a final nod from the GST Council.

The relaxation on GST could provide relief not only to worst-hit sectors but also numerous small businesses that may not be in a position to pay GST.

Suspension of GST for six months will be a good move as it will help firms scale up their businesses for the period before they start paying GST again.

Speaking to the publication, a government official said there are chances that dues of the services sector will be relaxed.

Another measure that the government is considering is a cash-based system for levying tax rather than the current system based on invoices.

This will ensure that businesses only pay GST when they receive cash for service and not when an invoice is raised.

However, if the relief measures now need to be approved by the GST Council based on inputs from state governments, who may lose out on a significant chunk of GST revenue due to the relief measure.

Both suspension of GST and the cash-based system for levying tax is expected to help firms recover and increase liquidity, which according to experts is the need of the hour, especially for small-scale firms.

The package is likely to be announced nearer to May 3 when the lockdown ends.