GST update on payment of taxes in instalment allowed by Kerala High Court 144/2020-21

Concerns about the financial repercussions of the coronavirus crisis have largely faded since the pandemic has hit to the trade and industries at large.
The GST Law gives powers to tax officers to allow a taxpayer on an application filed by the taxpayer to pay dues in a staggered manner if he is facing a financial crunch. The move is aimed at improving the scope of revenue recovery without causing hardships to assessee.
In a recent judgement pronounced by the Kerala High Court in the case of M/s Malayalam Motors Pvt Ltd has allowed the petitioner to discharge the tax liability inclusive of interest and late fees thereon in equal successive monthly instalments in view of financial difficulties faced by his business during COVID 19 pandemic situation. The department was directed by the hon’ble high court to accept the belated return filed by the petitioner for the period from feb 2020 to april 2020 without insisting on payment of the admitted tax declared therein. The petitioner was permitted to discharge the tax liability thereon, in equal successive monthly instalments which shall commence from 15-11-2020 till 15-08-2021.
The company pleaded before the Honourable Court that they had filed GSTR-1 returns for February 2020 to May 2020 but could not make the payment of the admitted tax amount.
The company pleaded before the Court that the company has no dispute regarding its liability to pay but is just requesting to pay the amount in instalments and that the company's business has come to a total standstill, and no revenue was the reason that they are unable to pay the tax liability.
This is a challenging time for tax administrations, as well, as the taxpayers whom they serve and from whom they collect. On the one hand, there is the need to provide support, through the tax system, to boost a struggling economy.By taking responsible steps now, policy makers must ensure that the recovery of tax or demands raised to the taxpayers in these circumstances must be provided up with a option to pay in instalments.
The tax officers must allow the taxpayers on the genuine concerns raised before them, to pay the tax liabilities on instalment basis which can play a significant role in easing the financial pressure on taxpayers in these situations.
This is landmark decision in favour of taxpayers by Kerala High Court. Even though the payment of dues in instalments is allowed under Section 80 of CGST Act, 2017 but the same is allowed only when the liability is other than self-assessed liability in any return. Even the online portal also allows filing of application in case of any demand pending by the department. But it does not allow when the person is filing regular returns.

However, the impugned High Court decision has given this facility even in case of self-assessed liability to taxpayers under COVID-19 situation. We have seen that trade and industry particularly hospitality industry is worst hit in the current circumstances. Even they are not able to pay Government dues. This landmark judgement has come as a big relief for them. We expect that the Government officer will also accept the same and allow payment of tax in instalments so that worst hit industry is able to stand on their feet.
This is solely for educational purpose.
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GST update on payment of taxes in instalment allowed by Kerala High Court 144/2020-21

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