Page 10 - Banking Finance January 2020

GST UPDATE

GST

NEWS
NEWS
NEWS
NEWS
NEWS

GST growth records 6% rise Govt to relieve GST for companies under IBC process

crossing 1 lakh crore mark The Centre likely to give allowance companies undergoing resolution under the
Insolvency and Bankruptcy Code (IBC) to
The GST revenue in November reg- pay current levies of goods and services
isters Rs. 1,03,492 crore, crossing the
Rs. 1 lakh crore mark once again, tax (GST) without the mandatory pay-
having dipped below it for three suc- ment of past dues.
cessive months. Average collections According to sources, Ministry of Corpo-
in the financial year 2019-20 so far rate Affairs and Department of Revenue
stand at Rs. 1,00,646 crore. The col- (DoR) officials have begun talks on the
lections in November 2019 are the matter and a framework is likely to be
third highest since the GST was intro- unveiled soon.
duced, next only to April, 2019 and “The issue is under discussion... A procedure will be worked out,” said one of
March, 2019.
them, adding that the officials are expected to meet this week to finalise the
“The gross GST revenue collected in contours. Tax authorities are treated on a par with operational creditors and
November, 2019 is Rs. 1,03,492 crore, eligible to receive payments with others.
of which the CGST is Rs. 19,592 crore,
the SGST is Rs. 27,144 crore, the IGST However, GST framework currently doesn’t allow a firm to file current tax dues
is Rs. 49,028 crore and the cess is Rs. if it has past dues. Penal action has been initiated for noncompliance even in
7,727 crore,” the government said in cases where the insolvency resolution process has been initiated or GST regis-
a release. “After two months of nega- tration has been cancelled. This comes in the way of efforts to revive a com-
tive growth, GST revenues witnessed pany under IBC process. Industry organisations have lobbied the government
an impressive recovery, with a positive on the issue, asking it to accept current GST dues while giving a moratorium on
growth of 6% in November, 2019 over past ones. Experts said there’s a need to align GST and IBC.
the November, 2018 collections,” the “It is important that the period during which the corporate insolvency resolu-
release added.
tion process (CIRP) takes place is insulated from the past GST compliances of
According to the government, the the company,” said Pratik Jain, indirect taxes leader, PwC. Industry backs immu-
GST from domestic transactions saw nity for corporate debtors from penalties or prosecution for noncompliance under
a growth of 12%, the highest during the GST regime. “There is a need to recognise the fact that there could be
the year. The GST collections from several cases of default in GST filings/payments due to genuine reasons,” said
imports continued to contract, by MS Mani, partner, Deloitte India. “Such defaults should be condoned, possibly
13%, compared with a contraction of with a small penalty and the focus should be to avoid business disruptions,” he
20% in the previous month.
added.

10 | 2020 | JANUARY | BANKING FINANCE