Small Businesses Get Pending Income Tax Refunds Worth Rs 5,204 Crore
The government has issued pending income tax refunds worth Rs 5,204 crore to small businesses at a time when the nation has gone under a lockdown following the novel coronavirus outbreak.
About 8.2 lakh small businesses will get their pending refunds for financial year 2018-19 or even the previous years, the government said in a statement today. The Central Board of Direct Taxes will further issue refunds of Rs 7,760 crore that are owed to taxpayers at the earliest, the statement said. These refunds are for those taxpayers who are owed up to Rs 5 lakh, the statement said, while not mentioning when pending refunds above Rs 5 lakh would be released.
This come after the Finance Ministry said on April 8 it would clear all pending income tax, GST and customs refunds worth about Rs 18,000 crore. One month into the lockdown, while all business are shut, the government has so far released Rs 9,454 crore pending as income tax refunds.
MSMEs contribute about 29 percent to India’s GDP, and they’re are incurring losses and facing severe cash flow disruptions, the Federation of Indian Chambers of Commerce and Industry said in a report, adding most MSMEs operate on cash and are in need of immediate liquidity to cope in the current circumstances.
The refunds issued to MSMEs will help in alleviating cash flow issues and meeting the working capital requirements amid the Covid-19 crisis, said Amit Singhania, a partner at Shardul Amarchand Mangaldas & Co.
The CBDT has also written to 1.74 lakh taxpayers for whom refunds are pending, and has sought clarifications in the returns that they have filed, the statement said.
The tax department could have done away with the step of seeking emailed responses from taxpayers during these dire times when people need cash, said Amit Maheshwari, a partner at AKM Global.
In a separate statement, the Central Board of Indirect Taxes and Customs said that it has processed 12,923 GST refund applications involving claims worth Rs 5,575 crore since March 30. In the previous week, CBIC processed refund claims worth Rs 3,854 crore, taking the total refunds released to Rs 13,308 crore.