In a welcome move that is set to give some relief to India’s tourism and hospitality sectors which are struggling in the midst of a nationwide lockdown due to Covid-19, the country’s Central Board of Indirect Taxes and Customs (CBIC) is to allow company refund claims on goods and services tax (GST) paid on advances for events or bookings that have since been cancelled.
Suppliers in such cases are required to issue a credit note, the Indirect Tax Board said in a circular dated 13 April, explaining that claims could be filed under ‘Excess payment of tax, if any’.
A similar principle will also apply where goods have been returned to the supplier but GST has been paid on the sale. The measure should mean an additional flow of funds to industry players and “ease their liquidity position” and save jobs, said Rajat Mohan, Senior Partner at AMRG Associates.
The CBIC has also said that Indian exporters can continue to export goods and/or services without payment of tax, a measure that should benefit numerous small and medium-sized exporters.
Further, government entities have also been given some tax extension breaks and relief from interest.
Delhi-based CMD Mice Affairs Media Group Sachin Manocha tells CMW: “Business across verticals is impacted due to Covid. The MICE industry has been hit badly worldwide. GST refunds for cancelled events can be considered as a welcome and initial step towards the support, but there is a long road to be covered as various bodies are studying the business losses.
“We are sure the government of India shall be considering the various facts and figures and a support mechanism shall be announced very soon for MICE Industry.”
India’s exhibition sector has lost an estimated Rs3,750 crore due to the Covid-19 lockdown, according to the Indian Exhibition Industry Association (IEIA). Recent weeks had seen around 100 tradeshows cancelled or postponed, according to the IEIA.
