The country is in complete lockdown mode for the last

30 days and relaxed manner in few pockets of the

country from 20th April 2020. The business has come

to a standstill, the cash inflows have stopped for the

business, the employees have received salaries for

March 2020, and April is a question for many as most of

the organizations do not have sufficient cash balances

and the working capital limits have exhausted.

Another challenge they are facing amid the crisis is the

transportation of finished goods, availability of raw

materials for starting the operations and shortage of

labor due to the reverse migration. All these are

business challenges, but the compliances cannot be

taken for granted; they have to be followed to ensure

the continuity of business, especially with GST, as per

the current provisions e-waybill cannot be issued if the

returns are not filed for more than two months.

Extension of due dates has been provided through

various notifications based on the address by our

Honourable Finance Minister, Smt Nirmala

Sitharaman, on 24th March 2020.

The due dates have been extended for filing of the

returns, payment of GST, and also an exemption of late

fee and reduction of interest for delayed payments in

certain cases. Due to the uncertain business

conditions, there will be some cancellation of orders or

deferment of orders or returning of advances, etc.,

Taxation is one of the areas through which working

capital can be channelized more effectively during the

hour of crisis especially when there is a lockdown. Let's

discuss some of the areas which can be planned and

executed effectively

1. If you are a service provider and customer is asking to

return the advance paid during the pre-COVID-19

period on which GST has been paid?

If tax has been at the time of receipt of advance from

customersbefore lockdown and reported in GSTR – 1 in

Table 11 and Receipt Voucher is issued.

In such cases, if supply is not made, issue a Refund

Voucher and report the same while filing GSTR – 1

without fail. Also, adjust the same in GSTR – 3B; this

process will ensure that tax liability is reduced to that

extent, and you need not pay additional cash.

2. The tax amount which I am reversing is more than

the liability I need to pay for April 2020. What should I

do in such cases?

If the tax liability to be paid is lesser than then the

amount adjusted through the refund voucher, then

you can claim the excess tax liability by filing Form RFD

– 01 and selecting the category as Refund of excess

payment of tax.”

3. The goods are still in transit, and the customer has

requested the order to be canceled? Tax invoice has

already been issued, what should be done in such

cases?

You can ask your transporter to bring the goods back

and issue a credit note against the invoice issued for

the supply of goods before the lockdown. Report the

credit note accordingly in GSTR – 1 and GSTR – 3B

without fail during the month in which the credit note is

issued. In case if you do not issue the credit note

immediately, this will have an impact on your cash

flows. This will ensure that the liability is reduced in the

month during which credit note is issued and also save

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“Behind Every Successful Business Decision, there is always a CMA”

the cash outflow. Normally we delay in accepting the

return of goods, but in this case, it should be handled

immediately so that the tax amount can be utilized for

new liability.

4. After the issue of the credit note, the tax liability is

not running to a negative amount, what should I do?

Can i get the amount back as it will help in payment of

salaries to my workers?

Yes, you can claim it as a Refund in case if the tax

liability amount is running into a negative amount. For

this, you need fileForm GST RFD – 01 and selecting the

category as a Refund of excess payment of tax.”

5. I am a registered taxpayer in GST and file my returns

every month, and my part-time accountant maintains

my accounts and file the returns every month on time.

He visits my shop and takes the data around the 15th of

every month, and for March 2020, we could not file the

return due to the lockdown. I am already having a

shortage of funds and becoming difficult to pay

salaries to my staff, do I need to file the returns with

late fee and interest?

The Government is aware of these challenges and has

relaxed the due dates for filing of returns as well as

exempted for payment of interest. So you can use

these funds for payment of salaries but do not forgot to

file the returns before the new dates else you will end

up paying interest and late fee, which will be

expensive.

The due dates for filing of GSTR – 3B Sl. NoAggerate

Turnover Interest Return Periods Due Date 1Above Rs

5 during the previous financial year Interest is

exempted for filing within 15 days of the due date and

after that interest is levied at a lower rate of 9?b –

April 2020By 24th June 20202Turnover between Rs

1.50 crores and Rs 5.00 Crores in the previous financial

year Nil Feb and March 2020

April 202029th June 2020

30th June 20203Turnover up to Rs 1.50 crores during

the previous financial year NilFeb – 2020

March – 2020

April – 2020 30th June 2020

3rd July 2020

6th July 2020

This extension is only for filing of GSTR – 3B, GSTR – 1

has to be filed on time. The Government of India has

taught of these challenges and hasshortlisted free

accounting and billing software's which are GST

compliant, and they are free till 31st March 2021 for

taxpayers having a turnover of less than Rs 150 lacs.

6. In February 2020, my accountant has wrongly

deposited tax amount of Rs 1.25 lacs into IGST account

for SGST Account, now I do not have any interstate

sales in March 2020, and in April my sales is Zero due to

lockdown, can I get the tax amount wrongly deposited

in IGST account and not utilized it.

Yes, you can withdraw the same by filing the Form GST

RFD – 01 with the reason as Excess balance in electronic

cash ledger.

7. While making payment for March, the account has

deposited in the wrong tax account; he has deposited in

CGST account instead of IGST account, I don't want to

withdraw the same but transfer the same from CGST

account to IGST account, is it possible to do it else I

need to break my fixed deposit and remit the tax.

Transfer from one tax ledger account to another tax

ledger account is enabled now. This transfer can be

done by using the Form GST PMT – 09. Previously this

was not possible, and taxpayers had to deposit the cash

again, causing a lot of hardships.

8. I have deposited the interest amount of Rs 14,258 for

January 2020 into late fee account, can I transfer the

same to interest account from late fee account else I

need to borrow cash and deposit the same to file my

return?

Yes, you can transfer the amount of Rs14,258 from the

late fee account to an interest account using the Form

GST PMT – 09 and file your returns without borrowing

cash from the market.

9. I am registered as a composition dealer under GST. I

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“Behind Every Successful Business Decision, there is always a CMA”

not having any cash now to pay the taxes as the

available cash has been used to pay salaries for my

staff, is there is any relaxation for filing of returns or I

need to file it immediately or if I delay the same, do I

need to pay interest on it?

Relaxation is also provided for the composition

taxpayers as this will give some legroom for the traders

for payment of salaries and other fi xed

establishments. The due dates for filing of the returns

are Sr.NoForm Period Last date for filing 1Form GST

CMP – 08January 1st to 31st March7th July 20202Form

GSTR – 4 April 1st, 2019 to 31st March 202015th July

2020

10. I am worried a lot like many of my suppliers who are

in MSME, impacted badly due to lockdown will not be

able to file the returns on time and as result of it I will

not be able to take the input tax credit, it is going to

impact my working capital very badly especially in the

current market conditions. Is there any relaxation for

matching for taxpayers like me?

Yes, the Government has provided relaxation and it has

deferred the provisional matching by max 10% till

September 2020. Which means that you can take the

credit of all the invoices which are reflected in GSTR – 1,

but for this, you need to ensure the following points

a) Your supplier must file the returns, follow up with

your suppliers and ensure they file the returns

b) This exemption is available from Feb to August 2020,

and while filing the September return, it has to be

considered 10% on a cumulative basis.

Every sector and every registered taxpayer and daily

wage earners are impacted due to the lockdown, and

the Government has taken this drastic measure to save

lives over the live hood. Still, at the same time, various

measures have been announced from time to time to

support the trade and industry. The above-said process

and business process, if implemented effectively, will

give some lifeline to the business and help them to tide

over the crisis. The GST measures announced to date

will provide the much-needed cash flows to the

taxpayers and help them to meet their business

expenses. Working capital is the lifeline for the

business; cash is not the only component, but

optimizing inventory, aggressive follow up with

debtors, and realizing them at the earliest, along with

adopting the GST measures, will help the taxpayers to

survive the aftermath shocks of COVID – 19.

Disclaimer

Any views or opinions represented above are personal

and belong solely to the author and do not represent

those of people, institutions or organizations that the

author may or may not be associated with in

professional or personal capacity unless explicitly

stated. Any views or opinions are not intended to

malign any religion, ethnic group, club, organization,

company, or individual

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