FM Sitharaman announces economic relief measures to quash coronavirus impact

With the COVID-19 pandemic on the rise, FM Nirmala Sitharaman has announced certain relaxations aimed at benefiting the country’s economy and compliance burden.

FM Sitharaman announces economic relief measures to quash coronavirus impact

As the world’s economy reels under the impact of the COVID-19 pandemic, India’s slowing economy too is likely to come to a grinding halt due to the possible ‘inertia of rest’ resulting from a 21-day national lockdown. 

PM Modi recently asked all state and local administrations to treat ‘health’ as top priority, and FM Nirmala Sitharaman has aided this cause by declaring a series of measures that relaxes various compliance-related deadlines and requirements. 

These relief measures, which are intended to benefit common people, are in areas such as income tax, indirect taxes, banking and commerce, corporate affairs, insolvency and bankruptcy code (IBC), and fisheries. Let’s consider each of them.

Income Tax

  • The last date for filing of IT returns for FY 2018-19 has been extended from 31st March 2020 to 30th June 2020.
  • Deadline for Aadhaar-PAN linkage has been extended from 31st March 2020 to 30th June 2020.
  • The additional 10% amount will not be applicable for the ‘Vivad se Vishwas’ scheme if payments are made by 30th June 2020.
  • A single extended deadline has been declared for various compliances under the Income Tax Act, Wealth Tax Act, Prohibition of Benami Property Transaction Act, Black Money Act, STT Law, CTT Law, Equalisation Levy law, and Vivad Se Vishwas law. These compliances include the issue of notice, intimation, notification, approval order, sanction order, filing of appeal, furnishing of return, statements, applications, reports, any other documents, and time limit for completion of proceedings by the authority and any compliance by the taxpayer, including investment in saving instruments or investments for roll-over benefit of capital gains. Earlier deadlines between 20th March 2020 and 29th June 2020 have now been extended to 30th June 2020.  
  • In case of delay in payment of advance tax, self-assessment tax, regular tax, TDS, TCS, equalisation levy, STT, and CTT – which were to be made between 20th March 2020 and 30th June 2020 – a reduced interest rate of 9% will apply instead of 12% or 18%.  No late fee or penalty will be charged for delays during this period.

Related: 6 Income sources that do not attract tax

Indirect taxes

  • Entities with an aggregate annual turnover of less than Rs 5 crore can file the GSTR-3B of March, April, and May 2020 by the last week of June 2020. No interest, late fee, or penalty will be charged. This will also be applicable for all other entities, except for a reduced interest of 9%.
  • The last date for opting for composition scheme and the last date for making payments for the quarter ending 31st March 2020 and filing of annual return by the composition dealers has been extended till the last week of June 2020. 
  • The last date for filing of GST annual returns for FY 2018-19 has been extended from 31st March 2020 to the last week of June 2020.
  • Deadline for all the GST compliances falling between 20th March 2020 and 29th June 2020 will be extended to 30th June 2020. 
  • Payment date under the Sabka Vishwas Scheme will also be extended to 30th June 2020 and no interest will be applied if it’s paid by the extended date.

Related: Understanding the differences between direct and indirect taxes

Customs

  • The 24x7 basis customs clearance window has been extended by a month to 30th June 2020.
  • Deadlines of all compliances under the Customs Act and other allied laws that were expiring between 20th March 2020 and 29th June 2020 have been extended to 30th June 2020. 

Financial services

A relaxation of three months has been provided for the below three points:

  • Withdrawal of cash via debit card from the ATM of any bank will be free of charge. 
  • Minimum balance fee has been waived.
  • Bank charges for digital trade transactions have been reduced for all trade finance consumers.

Related: Initiatives by the Indian government to boost startups in India

Corporate affairs

  • In a bid to reduce the compliance burden on companies and LLPs, and to allow a fresh start for non-compliant ones, additional fees for late filing have been waived for the period from 1st April 2020 to 30th September 2020. This will apply to the filing of any document, return, statement etc. required under the MCA-21 registry, irrespective of its due date.
  • The mandatory requirement of holding company board meetings will be extended by 60 days to encompass the next two quarters ending 30th September 2020.
  • The applicability of Companies (Auditor’s Report) Order 2020 has been shifted to FY 2020-21 from FY 2019-20.
  • In the year 2019-20, if the independent directors of any company do not hold even one meeting, it will not be considered a violation.
  • The requirement of creating a deposit reserve with 20% maturing during the financial year 2020-21 (which was to be complied with by 30th April 2020) has been extended by two months. The same extension has been provided for the requirement to invest 15% of debentures maturing during a particular year in specified instruments.
  • An additional six months has been allowed to newly incorporated companies to file a declaration for Commencement of Business, thus allowing a total of 12 months from incorporation.
  • The requirement of residency of at least one director of every company in India for at least 182 days has been waived.
  • To avoid insolvency proceedings against MSMEs due to the large-scale economic distress, the threshold of default under Section 4 of IBC 2016 has been raised from Rs 1 lakh to Rs 1 crore. 
  • If the situation doesn’t improve by 30th April 2020, Sections 7, 9, and 10 of IBC 2016 may be suspended for six months to protect companies from insolvency proceedings.

Related: 7 Government schemes to aid economic development and financial stability that you can benefit from

Department of Fisheries

  •  All sanitary permits for import of SPF shrimp broodstock and other agriculture inputs that were to expire between 1st March 2020 and 15th April 2020 will be extended by three months.
  • Consignment arrival delays of up to one month will be condoned.
  •  In case of cancelled consignments in Aquatic Quarantine Facility (Chennai), rebooking of quarantine cubicles will be allowed without additional booking charges.
  •  Time for verification of documents and grant of NOC for quarantine will be relaxed from 7 days to 3 days.

Department of Commerce

  • Timelines for various compliance and procedures will be extended, and notifications in this regard will be issued by the Ministry of Commerce.

These timely declarations from the FM are aimed to benefit all stakeholders of the Indian economy. While such sops will ease compliance pressure on individuals and businesses alike, they will also relive additional stress such as ATM withdrawal charges, minimum balance charges etc. Steps have also been taken to ensure the solvency of MSMEs and other businesses in these dire times. Have a look at government’s social welfare and health schemes and check if you are eligible for the same.
 

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