Kalpesh Soni (name changed to protect identity), owns a chemical factory in Odhav area of Ahmedabad, which has been shut ever since the nationwide lockdown was imposed. Since professional services such as tax advocates and chartered accountants have not yet resumed operations due to lockdown, Soni is facing difficulties in getting the TDS amount computed. With no extension in deadline for depositing TDS collection for March 2020, he will have to pay a lump-sum amount by April 30 i.e. Thursday, or else have to incur interest penalty.
“There is a major revenue loss due to the lockdown. Besides, computing interest has been a challenge. There is a serious confusion as to how we will clear payments,” said Soni.
Many industrialists and businessmen have been facing similar troubles. Despite representations made by Gujarat Chamber of Commerce and Industry (GCCI) as well as Tax Advocates Association of Gujarat (TAAG), before Central Board of Direct Taxes (CBDT) as well as the Union finance ministry – seeking to extend the April 30 deadline and waiver of penal interest charged for late payment, no decision regarding this has been taken as yet.
Tax professionals have also raised issues of extending deadlines for other tax liabilities. “The government should also consider the deadline for clearing instalments for amnesty scheme, which was rolled out for tax dispute settlement under the VAT regime and also for advance tax payments,” said Varis Isani, a city-based tax practitioner.
In the ordinance passed by the Union government regarding TDS deduction, the late-fee has been waived off for filing of TDS return up to June 30, but interest will be charged if the tax is paid late. In such circumstances, the traders will have to bear huge losses for late filing of TDS and GST return.
“This mere relief in interest is not sufficient, especially when logistics do not permit movement of professionals in a lockdown scenario. When the ordinance was issued, at that time, the lockdown was contemplated till April 14. Now it has been further extended. With force majeure for several industries, many taxpayers would be unable to comply,” said eminent tax expert, Mukesh Patel.
“Provisions in the ordinance granting relief will need to be reviewed and suitably modified to meet taxpayers’ interest,” Patel further added.
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