New Delhi: In order to counter the impact of coronavirus outbreak, the government may provide a GST relief package. The package may include a six-month suspension of GST payments for the sectors that are worst affected by the outbreak.
Cash-based principle
As per another proposal, the tax levying system may follow the cash-based principle instead of invoice-based. It will not only provide relief to businesses but also improve liquidity.
It may be mentioned that in the invoice-based system, the tax will be levied once the invoice is generated irrespective of the actual payment for the service or goods whereas, in cash-based system, tax will be levied only after the actual payment is made.
The cash-based system will ensure that the taxpayers don’t have to pay tax out of their pockets.
It may be noted that most of the service providers are not getting payments on time.
Liquidity
As per the experts, liquidity is the need of the hour for the business to survive in the current crisis.
The final decision on the GST relief package can be taken by GST Council which is an apex decision-making body.