Work from home raises unique tax challenges

NEW DELHI: Work from home is bringing with itself unique challenges, as corporate executives designated to file returns, generate e-way bills and conduct other confidential business are unable to access their office ERP systems. The lack of access is leading to a situation where compliance delays and allied penalties could crop up.

While corporates are encouraging work from home in order to prevent the spread of the Coronavirus outbreak, absence of certain tax applications and secure technologies such as digital signature certificate, are some of the issues coming to fore while undertaking compliance, said industry executives and sector experts.

This at a time when the government has changed norms for tax return filing and even introduced staggered return filing systems to ease up the load on the Goods and Services Tax (GST) Network. However, in case of delays in return filing, the GST payments also get delayed, which then lead to interest being levied on payments.


"As most corporates encourage employees to work from home, ensuring timely filing of returns and other compliances is becoming a challenge especially in companies where the data size is large... it is likely that there is some delay in filing returns in the online portal," said Rajat Bose, partner at law firm Shardul Amarchand Mangaldas.

He cautioned that as more and more people get quarantined, companies will need to have a plan B in place to ensure that multiple employees have access to the data required for filing of returns as well as the requisite training on the process of filing of returns.

“Limited availability of tax technology applications at home, DSC for digital signatures and other confidential documents at office, are some of the challenges being faced by industry in undertaking statutory compliances while working from home,” said Harpreet Singh, Partner, KPMG

Getting data collated to complete the compliance formalities will itself pose another challenge, said Bipin Sapra, partner at EY, adding that the sudden change in work flow will also test existing systems that companies have in place. For filing monthly GST returns, data on entire sale and purchase, input credit data, sale returns, export data, stock transfer data and other details are required to be compiled.

"Since new processes are getting set up, some delays may happen specially for MSMEs where robust processes do not exist," he added.

Lack of working infrastructure like scanners, referral books, are some of the challenges being faced by industry in undertaking statutory compliances while working from home, KPMG's Singh added.

Officials said that while some industry associations representing restaurants, travel agencies, airlines and others in the service sector have sought for extension in the time limits for filing returns and for paying GST, but the government is yet to take to call on the matter.