42% businesses surveyed finding it difficult to file their tax return and audit report by September 30th deadline
- ● Want 30-45 days extension of deadline and cite preparation for festival season countrywide and recent flood related disruption in some states
September 27, 2022, New Delhi: The big festive season has arrived with small and big businesses banking on revival of consumer spirit to help them not only clear piled up stocks but also push new offerings. The festive season, stretching over the next 45 days accounts for a bulk of consumer goods, white goods and automobile sales. For two years the festive sales had been impacted due to the pandemic, but things are looking up this season. While businesses in many states are gearing up for fulfilling the festive season demand, businesses in some states are also recovering from the impact of recent floods and focusing on expediting shipments in their supply chains.
Amidst the festive season, one issue that some businesses are reporting is that of the looming deadline of Sep 30th to file their audit report and tax return. The small business and startup circles on LocalCircles are seeing posts from businesses for the Government to extend audit report and tax return deadline by 30-45 days i.e. making it Oct 31st or Nov 15th. To understand the state of affairs better, LocalCircles conducted a national survey of businesses to understand their current situation in filing their tax return and audit report by the deadline of September 30th and it received inputs from over 5000 businesses located in 184 districts of India.
16% businesses stated “it will be a significant effort doing it by September 30” and 26% admitted it would be “impossible to file” by deadline
To the survey question “how are you positioned to be able to file your business/ company income tax return and audit report for FY 2021-22 by the deadline of September 30th, 2022”, out of 5,788 respondents 49% shared that they had already filed the tax return and audit report, while 9% are yet to file but are confident they “will comfortably do before September 30” deadline. But of the 42% respondents who are facing difficulty in meeting the deadline, 16% stated “it will be a significant effort doing it by September 30th” and 26% admitted it would be “impossible to file by September 30th and they need an extension by 30-45 days.” In the qualitative comments section, the extension was sought by business on two grounds i.e. many of them, especially those in consumer goods and retail sector getting ready for the festive season and then there were businesses who reported the flooding situation in their district/state and hence have just not been able to get ready for the festive season and would rather do the same in the next few weeks.
The direct tax collection for FY23 is expected to exceed the Budget target of Rs 14.20 trillion with Rs 7.2 trillion expected from corporate tax and Rs 7 trillion from taxes on various incomes, including personal income tax and securities transaction tax. The finance ministry is banking on healthy direct and indirect tax collection this year to maintain its FY23 fiscal deficit target of 6.4% of GDP. The Goods and Services tax collections above Rs 1.4 trillion for the sixth month in a row is boosting this optimism. With such buoyancy in collection, some businesses are hopeful that the Government will consider their request and extend the deadline from September 15th to October 31st or November 15th.
Over 5000 responses were received from businesses located in citizens residing in 184 districts of India. 48% respondents were from tier 1, 31% from tier 2 and 21% respondents were from tier 3, 4 and rural districts. The survey was conducted via LocalCircles platform and all participants were validated who had to be registered with LocalCircles to participate in this survey.