The government is likely to provide large entities with income tax and GST refunds, to ensure additional liquidity during the lockdown. Officials said the refund amount is expected to be much higher than the Rs 18,000 crore, which is currently being paid out to small taxpayers.
“Large (refund) cases will be dealt with after a week or ten days, after which we will be giving refunds to small taxpayers. We seek to process them as quickly as possible, which will also provide some liquidity to the industry” one official said. Also, it is to be noted that about 93% of all refund cases were small taxpayers, and the outgoing amount is small, but it will be higher for large entities.
On April 08, the government said it would clear pending refunds of Rs 18,000 crore to taxpayers with a refund up to Rs 5 lakh each. This special refund drive will help in combating the liquidity crunch for around 14 lakhs income taxpayers and 1 lakh business under GST and Customs.
Within a week of the announcement, the Central Board of Direct Taxes issued refunds worth Rs 4,250 crore to around 1.02 million taxpayers. In the near term an equivalent sum will be given, bringing the total sum to Rs 8,000 – Rs 8,500 crore.
The government has also enhanced refunds under the Tax on Goods and Services (GST) and Customs, with preference given to micro, small and medium-sized enterprises hit hardest by the lockdown. Also, the CBIC has directed its officers to avoid physical submission of documents from entities who are claiming GST and customs refunds.
The industry had sought early granting of refunds even though they exceeded Rs 5 lakh as they required immediate funds given the extension of the lockdown to May 03 2020.
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DVSR Anjaneyulu known as AJ, is a Chartered Accountant by profession. Loves to listening to music & spending time with family and friends.