CAs Urge Govt To Provide Relief to Taxpayers during COVID-19 Pandemic
Moneylife Digital Team 23 September 2020
So severe has been the hardship caused to businesses by the unprecedented COVID-19 pandemic that several chartered accountants' (CAs') associations have taken the initiative to ask the government to save taxpayers from undue and unintended hardships under the Income-tax (I-T) Act. CA associations from across the country have written to finance minister Nirmala Sitharaman to grant relief to taxpayers from provisions of tax collection at source (TCS) under Section 206C(1H) of the I-T Act.
 
The CAs want the finance minister to extend timelines for filing tax returns under Section 139(1) of the I-T Act and also for filing transfer pricing audit report and, consequently, the ITR (income-tax returns) for such taxpayers, improving cash-flows with businesses and to provide relief to taxpayers from unwanted hardship.
 
They have asked for the due date for filing of returns for assessment year (AY) 2020-21 be extended to 31 March 2021 and the due date for filing the tax audit report be extended to 28 February 2021. This will also mean taxpayers availing moratorium will get an extended time for payment of interest and claiming the deduction under Section 43B of the Act in AY20-21.
 
The letter is signed by presidents of Bombay Chartered Accountants’ Society (BCAS), Chartered Accountants Association of Ahmedabad, Chartered Accountants Association of Surat, Karnataka State Chartered Accountants’ Association and Lucknow Chartered Accountants’ Society.  
 
A big issue that is hurting business badly is tax collected at source. Under an amendment by insertion of sub-section (1H) in Section 206C of the I-T Act, where a seller who receives any amount as consideration for sale of any goods of the value or aggregate of such value exceeding Rs50 lakh in any previous year shall at the time of receipt of such amount collect from the buyer, a sum equal to 0.1% of the sale consideration exceeding Rs50 lakh as income-tax.
 
However, assessees who are incurring huge losses cannot apply to the assessing officer for Nil/lower tax collection at source certificate under sub-section (9) of Section 206C of the Act. Tax collection at source in such cases results in blockage of funds, which is subsequently required to be claimed as refund by the assessees from the I-T Department.
 
Under section 206C (1) the TCS is to be collected from the amount payable by the buyer at the time of debiting this account or on its receipt from the buyer. Whereas under Section 206(1H) the TCS is to be collected from receipt of 'sale consideration' which phrase has not been defined anywhere. If one goes to sale of goods act, the sale consideration is simpliciter restricted to the consideration for the goods sold and will not include any taxes on sale, it added.
 
Sub-section (1H) of Section 206C of the Act provides for TCS while receiving payment for a sale Consequently, provisions of Section 206C(1H) is triggered on actual receipt of sales consideration which gives an impression that from 1 October 2020, the date from which the provisions of Section 206C(1H) becomes applicable, recovery of amounts outstanding as on 30 September 2020 would also come within the ambit of section 206C(1H) of the Act even though such sale, as per mercantile system of accounting followed by the seller, would have taken place before 1 October 2020.
 
Here is the representation sent by the CA associations to FM Ms Sitharaman...
 

 

Comments
m.prabhu.shankar
1 year ago
Excellent. Great. Great. More and more civil society members should start speaking out in the public on all the issues always irrespective of which govt is in the ruling.
Nahom
1 year ago
Actions speak louder than words. Govt. seems to ride the Covid crisis by relying on large Indian companies who are proxies to Foreign Multinationals for transforming the Economy. Govt is ready to provide all incentives and low interest rate environment to this ultra top sector of the pyramid at the cost of the others. Govt thinks providing relief to bottom of the pyramid will be wasteful and will not provide benefits of economy of scale suitable for large Indian market. This would mean pauperisation of middle class and below.
krish.queries
1 year ago
FMs response will be "I don't pay income tax, so Income Tax doesn't matter to me". Remember the
FM comments on onion price rise
S.SuchindranathAiyer
1 year ago
Can a mere appeal by Chartered Accountants get the bottomless greed of the Modi Sarkar for money to throw away on global "Multi Appeasement" Policies, to relent and actually see the reality they have pretended does not exist?
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