6-month GST Payment Freeze For Worst-hit Sectors, A Lower Rate For Realty Among Covid Options Mulled

Other proposals include switch to a cash-based tax system from current invoice-based one.

New Delhi: India is considering a goods and services tax (GST) relief package to counter the impact of Covid-19 and help prop up the economy, said people with knowledge of the matter. The package being considered could include a six-month suspension of GST payments for the worst-hit sectors such as restaurants, aviation and hospitality as well as a lower rate for the real estate sector.

Other proposals include a switch to a cash-based principle of levying tax from the current invoice-based system and providing GST relief on sales for which payment is not received due to the lockdown by treating those as bad debts.

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These measures are expected to ease the liquidity pressure on businesses that are strapped for cash, said the people cited above. A final decision on the proposals will be taken by the GST Council, which is the apex decision-making body for the tax.

“There is a thinking that for these service sectors, the government should at least spare its dues,” a government official told ET.

The government could also consider exempting them from other statutory charges for some time.

Source: Economic Times

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