Income Tax, GST and MCA announcements on 24th March 2020

COVID-19 has hit almost all sectors of the economy. PM Modi has also announced a 21-day complete lockdown till 14th April 2020 to check the spread of COVID-19.  

On the other hand, the Union FM Smt Nirmala Sitharaman has announced some reliefs for businesses to cope up with the difficult times of COVID-19. The press briefing was held around 2:30 p.m. via video conferencing on the 24th of March 2020 where the FM was accompanied by Shri Anurag Thakur, the Union MoS for Finance & Corporate Affairs.  

Latest Updates

Income Tax

The following announcements will need to be passed or notified through the legal circulars and legislative amendments:  

• The last date for the belated/revised filing of the income tax returns for the FY 2018-19 (AY 2019-20) is extended from 31st March 2020 to 30th June 2020.
• The last date for Aadhaar-PAN linking is extended from 31st March 2020 to 30th June 2020. 
• The time limit to avail the Vivad Se Vishwas scheme is extended up to 30th June 2020. The waiver of the 10% additional charge continues up to 30th June 2020 instead of the earlier time limit of 31st March 2020.
• Interest at a reduced rate of 9% p.a. shall be charged instead of 12% or 18% p.a. towards the delayed payment/deposit of the following income tax levies, made between 20th March 2020 and 30th June 2020. Note that there is no extension in the deadlines.
  • Advance Tax
  • Tax Deduction at Source (TDS)
  • Tax Collection at Source (TCS)
  • Self-assessment tax
  • Equalisation levy
  • Security Transaction Tax (STT
  • Commodity Transaction Tax (CTT)

No late fee/penalty shall be charged for any delay relating to this period.

• The assessees and/or the tax authorities have got an extended time limit of up to 30th June 2020 where the time limit for the following compliance matter expires between 20th March 2020 and 29th June 2020:
  • Issue of notice/intimation/notification/approval order/sanction order
  • Filing of an appeal/furnishing of a return/statements/reports or any other documents
  • The time limit for the completion of proceedings by the tax authority
  • Investment in saving instruments or investments for rollover benefit of capital gains 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 the Vivad Se Vishwas law

GST, Excise and Service Tax

The following announcements will need to be passed or notified through the legal circulars and legislative amendments, after being approved by the GST Council:  

• Taxpayers with an annual aggregate turnover of up to Rs 5 crore: The due dates for filing GSTR-3B for February 2020, March 2020, and April 2020 have been extended up to the last week of June 2020. Accordingly, no late fee, interest or penalty shall be levied for them.

• Taxpayers with an annual aggregate turnover of more than Rs 5 crore: Except for a reduced interest charge, the due dates of GSTR-3B for February 2020, March 2020, and April 2020 stand extended up to the last week of June 2020. No late fee or penalty shall be levied. Any tax payments made after a delay of 15 days from the original due dates will attract a reduced interest at 9% p.a. instead of 18% p.a. The reduced interest charge will apply for the tax payments made between 20th March 2020 and 30th June 2020.
• Taxpayers registered under the composition scheme: The due date for filing the statement-cum-challan in CMP-08 for the last quarter of FY 2019-20, i.e. Jan-Mar 2020 is extended till the last week of June 2020. Similarly, the due date for filing GSTR-4 for FY 2019-20 is extended from 30th April 2020 to the last week of June 2020.
  • The last date for opting into the composition scheme for the FY 2020-21 has been extended from 31st March 2020 up to 30th June 2020. It applies to taxpayers availing both the schemes under Section 10 of the CGST Act as well as the Notification no. 2/2019 dated 7th March 2019.

• Sabka Vishwas Scheme LDRS: The last date to avail the scheme is extended up to 30th June 2020. No interest will be charged for this period if the dues are paid before 30th June 2020.

• The taxpayers and/or the tax authorities have got an extended time limit of up to 30th June 2020, where the time limit for the following compliance matter expires between 20th March 2020 and 29th June 2020:
  • Issue of notice/notification/approval order/sanction order
  • Filing of an appeal/furnishing of a return/statements/applications/reports or any other documents

Customs

• All exporters or importers have been assured about not facing any challenges in the customs clearance, as the facility will now operate 24×7 up to 30th June 2020.
• The taxpayers and/or the tax authorities have got an extended time limit of up to 30th June 2020, where the time limit for the following compliance matter expires between 20th March 2020 and 29th June 2020:
  • Issue of notice/notification/approval order/sanction order
  • Filing of an appeal/furnishing of applications/reports or any other documents

Financial Services

The following financial/banking services have been relaxed for up to three months:

• Debit cardholders can withdraw cash for free from any other banks’ ATM 
• The minimum balance fee has been waived
• The trade finance consumers will be charged with a lower bank charge for all the digital trade transactions.

Corporate Affairs

• Relaxations for any compliances on MCA 21 registry: A moratorium period has been defined from 1st April 2020 till 30th September 2020 during which companies and LLPs need not pay any additional fees for any late filing of documents/returns/statements, irrespective of its due dates. It will provide a breather to the existing companies and LLPs as well as an opportunity for non-compliant companies/LLPs to start afresh.
• The conduct of the board meetings by the companies within an interval of 120 days is now extended by a further period of 60 days until the next two quarters, i.e. 30th September 2020.
• Companies (Auditor’s Report) Order 2020 (CARO, 2020) will be made applicable from FY 2020-21 instead of FY 2019-20, benefiting the companies and its statutory auditors.
• Section 4 of the Companies Act, 2013 is not considered to be violated if the independent directors of a company could not hold their exclusive meeting during the FY 2019-20.
• The newly incorporated companies will get an additional 6 months for filing the declaration form for the commencement of business.
• Any director of a company who has not stayed in India for more than 182 days will still be considered as a resident of India in compliance with the law.
• The following requirements have been postponed from 30th April 2020 to 20th June 2020:
  • Creation of a deposit reserve containing at least 20% of deposits maturing in the FY 2020-21
  • Investment of 15% of debentures maturing in a specific year in specified instruments 

Insolvency and Bankruptcy Code (IBC)

The COVID-19 crisis has severely hit the businesses across India, especially the MSMEs since they are unable to operate at the same pace and scale. Accordingly, the sections have been redefined to assess the applicability of IBC to the distressed companies as a part of the relief.  

• The qualifying threshold amount has been raised from Rs 1 lakh to Rs 1 crore for liquidating a company that has defaulted its corporate debtors under Section 4 of the IBC 2016.
• If the critical situation continues even after 30th April 2020, the Ministry may suspend a few sections of IBC 2016  for six months. It may be done in a bid to disallow the creditors/corporate applicants to initiate the insolvency resolution process under Section 7, 9 and 10.

Commerce

• Extension of timelines for various compliance and procedures will be given by the Ministry of Commerce through notifications.

Fisheries

• All the Sanitary Permits (SIP) for the import of SPF Shrimp Broodstock and other Agriculture inputs which expires between 1st March 2020 and 15th April 2020 has been extended by three months.
• The late arrival of import consignments by up to one month will not be considered as ‘delayed receipts’. 
• Rebooking of quarantine cubicles for those cancelled consignments in the Aquatic Quarantine Facility (AQF) of Chennai can be done without any additional charges.
• The time limit for the verification of documents and issuance of NOC has been reduced from seven days to three days.

It will take a considerable period of time for businesses to recoup from the aftermath of the COVID-19. Hence, the extended time should be prudently used by the businesses to explore ways to be more tech-focussed. They should now completely alleviate compliance using digital means. The steps include the use of cloud-based services, developing strong controls and systems for their teams to work digitally and remotely. The Union FM will also be announcing the economic package to beat COVID-19 crisis and help the businesses recover from the fall in revenues for the coming quarter.  

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