Date extension relief granted by the Finance Minister in view of Recent Covid 2019 : Know about it

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Date extension relief granted by the Finance Minister in view of Recent Covid 2019 : Know about it

There are lot many relief and concession has been granted to the businessmen & taxpayers of the country.  However, there are lot of confusions as to the nature of benefit. It may be noted that the financial year closure is not extended but only the date of compliance which were required by 31st March 2020 either by the taxpayers or by the tax authorities has been deferred till 30th June 2020. Let us know the exact nature of announcements by the recent announcements.

The Union Finance & Corporate Affairs Minister Smt. Niramla Sitharaman announced several important relief measures taken by the Government of India in view of COVID-19 outbreak, especially on statutory and regulatory compliance matters related to several sectors.

Relief package include relief with respect to compliances in the areas of

  1. Income Tax
  2. GST
  3. Customs & Central Excise
  4. Corporate Affairs
  5. Insolvency & Bankruptcy Code (IBC)
  6. Fisheries
  7. Banking Sector and
  8. Commerce.

Here is a compilation of the exact announcement done by the Government on various front

  1. Income Tax
  2. The due date of filing income tax returns for (FY 18-19) from 31st March, 2020  to  30th June, 2020. It may be noted that the date of financial year is not extended. The year will be required to be closed on 31st March only and not 30th June.
  3. The last date for linking of Aadhaar with PAN was 31st March. Non linking was liable for penalty of Rs. 10,000/-. The date of linking is now extended from 31st March, 2020 to 30th June, 2020.
  4. Vivad se Vishwas  scheme which was offering relief from interest and penalty proceeding in respect of all pending appeals is also relaxed slightly. Now, no additional 10% amount, if payment made by June 30, 2020. It may be noted that the filing date of application for opting this scheme was 31st March only. The same has also been relaxed now. An applciaiton for opting this scheme can now be filed by 30th June.
  5. The Due dates for  issue  of all 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   under Income Tax Act,  Wealth Tax Act, Prohibition of Benami Property Transaction Act, Black Money Act,  STT law, CTT Law, Equalization Levy law, Vivad Se Vishwas  law  where the time limit is expiring between 20th March 2020  to 29th June 2020 shall be extended to 30th June 2020.
  6. Importantly, there is no relaxation from payment of tax. However, concessional rate of interest is provided for such delayed payment. For delayed payments of advanced tax, self-assessment tax,  regular tax, TDS, TCS, equalization levy,  STT, CTT  made between 20th March 2020  and  30th June 2020,  reduced interest rate  at 9%   instead of 12 %/18 % per annum ( i.e. 0.75% per month instead of 1/1.5 percent per month) will be charged  for this period.  No late fee/penalty shall be charged for delay relating to this period.

It may be noted that there is no amendment and notification ahs been issued for such announcements. It is expected that necessary legal circulars and legislative amendments for giving effect to the aforesaid relief shall be issued in due course.

GST/Indirect Tax:

 

The painful compliances from GST & other Indirect Tax has been put on hold till 30th June. More importantly,

  1. Those having aggregate annual turnover less than Rs. 5 Crore, Last date can file GSTR-3B due in March, April and May 2020  by the last week of  June, 2020. No interest, late fee, and penalty to be charged. Interestingly, in such cases, even interest is waived off.
  2. Others with aggregate annual turnover exceeding Rs. 5 Crore, can file returns due in March, April and May 2020 by last week of June 2020  but the same would attract reduced rate of interest @9 % per annum from  15 days after due date (current interest rate is  18 % per annum). No late fee and penalty to be charged, if complied before till 30th June 2020.
  3. Date for opting for composition scheme is extended till the last week of   June, 2020.  Further, the last date for making payments for the quarter ending 31st March, 2020 and filing of return for 2019-20 by the composition dealers  will be extended  till the last week of June, 2020.
  4. GST Annual Return Date also Extended:
    Date for filing GST annual returns of FY 18-19, which is due on 31st March, 2020 is extended till the last week of  June 2020.
  5. The Due date for issue of notice, notification, approval order, sanction order, filing of appeal, furnishing of return, statements, applications, reports, any other documents, time limit for any compliance under the GST laws where the time limit is expiring between 20th March 2020  to 29th June 2020 shall be extended to 30th June 2020.
  6. More importantly, Payment date for dues under the Sabka Vishwas Scheme shall be extended to 30th June, 2020. All the more important, no interest for this period shall be charged if paid by 30th June, 2020.

 

Customs

  1. 24X7 Custom clearance till end of 30th June, 2020
  2. Due date for issue of notice, notification, approval order, sanction order, filing of appeal, furnishing applications, reports, any other documents etc., time limit for any compliance under the Customs Act and other allied Laws where the time limit is expiring between 20th March 2020  to 29th June 2020 shall be extended to 30th June 2020.

Here also, no amendment and notification ahs been issued for such announcements. It is expected that necessary legal circulars and legislative amendments for giving effect to the aforesaid relief shall be done by the GST Council in its next meeting.

Financial Services

On the financial front, following relaxations for 3 months have been provided:

  1. Debit cardholders to withdraw cash for free from any other banks’ ATM for 3 months
  2. Waiver of minimum balance fee charging by the bank during this period.
  3. Reduced bank charges for digital trade transactions for all trade finance consumers.

 

Corporate Affairs:

 Few important changes have been carried out in the compliance of Company Law. The same are as under:

  1. No additional fees shall be charged for late filing during a moratorium period from 1st April to 30th September 2020, in respect of any document, return, statement etc., required to be filed in the MCA-21 Registry, irrespective of its due date. It will not only reduce the compliance burden, including financial burden of companies/ LLPs at large, but also enable long-standing non-compliant companies/ LLPs to make a ‘fresh start’;
  2. The mandatory requirement of holding meetings of the Board of the companies within prescribed interval provided in the Companies Act (120 days), 2013, shall be extended by a period of 60 days till next two quarters i.e., till 30th September. It means that the companies can approve its annual accounts after 30th September which is the due date of filing income tax return.
  3. The new CARO – 2020 was made applicable earlier from FY 2019-20 which requires enormous reporting by the auditor. Now, Applicability of Companies (Auditor’s Report) Order, 2020 shall be made applicable from the financial year 2020-2021 instead of from 2019-2020 notified earlier. This will significantly ease the burden on companies & their auditors for the year 2019-20. The biggest relief by this extension is to the auditor who  may continue to report under earlier CARO format.
  4. Independent directors are also given a relaxation. As per Schedule 4 to the Companies Act, 2013, Independent Directors are required to hold at least one meeting without the attendance of Non-independent directors and members of management. For the year 2019-20, if the IDs of a company have not been able to hold even one meeting, the same shall not be viewed as a violation.
  5. Requirement to create a Deposit reserve of 20% of deposits maturing during the financial year 2020-21 before 30th April 2020 shall be allowed to be complied with till 30th June 2020.
  6. Requirement to invest 15% of debentures maturing during a particular year in specified instruments before 30th April 2020, may be done so before 30th June 2020.
  7. Newly incorporated companies are required to file a declaration for Commencement of Business within 6 months of incorporation. Now, an additional time of 6 more months shall be allowed for seeking commencement of business certificate.
  8. Non-compliance of minimum residency in India for a period of at least 182 days by at least one director of every company, under Section 149 of the Companies Act, shall not be treated as a violation.
  9. The triggering of insolvency proceedings against MSMEs is also intended to be controlled due to the emerging financial distress faced by most companies. In view of the large-scale economic distress caused by COVID 19, it has been decided to raise the threshold of default under section 4 of the IBC 2016 to Rs 1 crore (from the existing threshold of Rs 1 lakh).
    If the current situation continues beyond 30th of April 2020, we may consider suspending section 7, 9 and 10 of the IBC 2016 for a period of 6 months so as to stop companies at large from being forced into insolvency proceedings in such force majeure causes of default.

Here also, no final notification has been issued by MCA. It is expected that detailed notifications/circulars in this regard shall be issued by the Ministry of Corporate Affairs separately.

 

Department of Fisheries:

Few important reliefs has been granted by the Fisheries Department, as under:

  1. All Sanitary Permits (SIPs) for import of SPF Shrimp Broodstock and other Agriculture inputs expiring between 01.03.2020 to 15.04.2020 extended by 3 months
  2. Delay up to 1 month in arrival of consignments to be condoned.
  3. Rebooking of quarantine cubicles for cancelled consignments in Aquatic Quarantine Facility (AQF) Chennai without additional booking charges.
  4. The verification of documents and grant of NOC for Quarantine would be relaxed from 7 days to 3 days

Department of Commerce

Department of Commerce has extended the timelines for various compliance and procedures which will be given by way of detailed notifications to be issued by the Ministry of Commerce.

Conclusions:

Though all the relief has been given appropriately, it is more likely to create the painful compliances immediately after the situation is normalized. It will add to another set of compliances and the business would be forced with the pending compliance burden. In all probability, it looks that the due date of filing income tax return as well due date of audit may also be extended by around 2 months time

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