How Extending The Deadline Of Filing GST & Tax Filing By Our Finance Minister Would Be Beneficial For Startups.
The process of generating e-way bills and filing GST for startups is slightly complicated due to the limited availability of fintech applications for startups with limited and they mainly have to rely on their Chartered accountants
March is the financial year closing month which leads to finalization of Income tax returns (ITR) and Goods and Services Tax (GST) returns in coming months and everyone tries extra hard to pick up their sales and profits to end the financial year on high. But due to the outbreak of the highly contagious virus, Covid 19, (immediate cause of CoronaVirus pandemic,) the economy is facing terrible instability. The whole nation is under complete lockdown for about 30 days to ensure the safety of its citizens. Hence filing taxes and GST is next to impossible. Therefore, the deadlines for filing GST and taxes have been shifted. In the conference conducted on 24th March 2020, Union Finance Minister, Nirmala Sitharaman, has made a few announcements.
- The last date of filing ITR has been shifted from March 2020 to 30thJune 2020 for the financial year, April 2018 till March 2019
- The deadline for the GST filing is moved to30th June.In a particular region, the dates will be 27th and 29th June.
- The companies withturnover less than five million / 5 croreare abstained from paying any interest, penalties, and late fees.
Startups and small and medium businesses (SMEs) are benefited most from this new shift as they will get more time for the herculean task of filing GST.
The big headlines for startups, new businesses, and SME’s among the lockdown are given below.
- The extension on GST filing is a blessing for businesses filing the returns for the first time. The deferment of e-invoicing is an added benefit.
- The startups and SME’s have been abstained from any penalties whatsoever. This will help the businesses to re-establish themselves once the normalcy is restored.
The process of generating e-way bills and filing GST for startups is slightly complicated due to the limited availability of fintech applications for startups with limited and they mainly have to rely on their Chartered accountants leading to delays and extra compliance costs
In the times of shutdown, work from home is the new way of working life. But startups with small teams cannot operate remotely. As they need their tax staff in person for the process of consolidation, validation, recording, accounting, and calculating GST using the sale, purchase, and other expense bills obtained from all the departments.
The huge startups may have an aligned process to fulfill the required tasks, but small startups are the hardest hit. But thanks to the unusual shift in the deadline, companies work in compliance and at ease with extra time. The extension for payment is given under the Sabka Vishwas scheme of governments. The zero penalties, late fees, and interest on GST clauses will support the industries to catch up with the substantial cash crunch and thus sail out of this challenging time smoothly.
'The threshold of default loan, which has the power to trigger insolvency proceedings, has been raised from Rs 1 lakh to 1 crore' says Finance Minister.
Once the air of panic is settled, Businesses can switch to digital and mobile based services for filing ITR and GST returns. Along with tax and GST filing services, these digital solutions can help with accounting, invoicing, GST, VAT, tax filing, and inventory services.
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