FM rolls out relief measures on taxation, compliance in wake of Covid-19 lockdown

In a video conference addressing the media on Tuesday, finance minister Nirmala Sitharaman announced taxation filing and compliance relief in the wake of a nationwide lockdown on account of the COVID-19 pandemic. The announcements were made by Sitharaman as part of the measures taken by the Economic Response Task Force for COVID-19 announced on March 19 by the Prime Minister. 

Relief measures for MSMEs and relaxation for companies working remotely were announced. For individuals, waiver of minimum balance fee and no surcharge on cash withdrawal from ATMs was announced. 

An extension of the deadline for filing GST returns is likely to provide relief to medium and small enterprises as they will not be charged any interest, penalty of late fee. Startups too will benefit from the measure as well as relaxation of norms for regulatory filing with the Ministry of Corporate Affairs. 

During her address, Sitharaman said that recommendations from sub-groups of industry leaders, members of parliament and academics were being considered by the ministry  from its “multi-layered task force.”

“Economic package is being worked out and sooner we shall come with an announcement for that,” Sitharaman said. during her address.

Here are the key announcements:

• The date for filing income tax for the financial year 2018-19 has been extended to June 30, 2020 instead of March 31, 2020 and at a reduced interest rate of 9% down from 12%
• Reduced interest rate of 9% will be charged on delayed deposit of Tax Deducted at Source. The prevailing rate is 18%
• The last date for linking Aadhaar to PAN has been extended from march 31,2020 to June 30, 2020
• Vivad Se Vishwas scheme which addresses direct tax and related litigation has also been extended to June 30, 2020 at no additional charge of 10%. Individuals and companies  willing to settle their dues will not be charged interest of 10% till the extended date
• Last date for issue of notice intimation, approval order, sanction order, filing of appeal,and other reports and compliance for benefits under IT Act, Wealth Tax Act, Black Money Act, STT Law, Equalisation Levy Law and others have been extended to June 30, 2020
• The last date for filing GST (Goods and Service Tax) returns for March, April and May 2020 and compensation returns have been extended to June 30,2020 for benefiting MSMEs. The deadline will be staggered for specific regions
• Companies with less than Rs 5 crore turnover, no interest, late fee or penalty will be charged under GST. For larger companies, no late fee or penalty will be charged for the first 15 days, though the interest rate thereafter will be charged at a reduced rate of 9%
• Date for opting for composition scheme under GST has also been extended to June 30,2020
• Sabka Vishwas scheme meant for settling disputes in the indirect tax regime was extended to march 31,2020 initially. The last date for this has been further extended to June 30, 2020 without any interest to be levied for the disputed amount
• Customs clearance has been deemed an essential service and will be working 24x7 till June 30, 2020
• A moratorium on MCA 21 was announced from April 1 to September 30, 2020 as relaxation for in-person submission. Delay in filing compliances will not invite late filing fee
•  Companies Auditor’s Report order 2020 which was supposed to be enforced in the FY 2019-20 has now been pushed to the next financial year.
• Absence of meeting with independent director for FY 2019-20 will not be treated as a violation 
• For newly incorporated companies which were required to file declaration for commencement of operations within six months can now do so within 12 months 
• Exemptions have been given to company directors who do not comply with the minimum residency requirement in India which is at 182 days currently
• The deadline for creating deposit reserve of 20% maturing before April 30 has been extended to June 30 for FY 2020-21
• Deadline to invest 15% in debentures by the companies has been extended from April 30 to June 30,2020
• To prevent triggering of default proceedings against MSMEs, the default threshold has been increased from Rs 1 lakh to Rs 1 crore. If the current situation of lockdown continues beyond April 30, the government might consider suspending sections under Insolvency Bankruptcy Code to prevent insolvency proceedings against companies
• Debit card holders can withdraw cash for free from any bank ATM for the next three months. Waiver of minimum balance fee was also announced
• Reduced bank charges for trade finance consumers were announced