FM extends crucial taxation dates, economic package still work in progress

Source : Sify
Author : Finance Desk
Last Updated: Tue, Mar 24th, 2020, 19:15:50hrs
FM extends crucial taxation dates, economic package still work in progress

New Delhi: Hours before Prime Minister Narendra Modi's second announcement in a Covid-19 marred month, the Finance Ministry has announced extension in several crucial taxation dates. The dates for filing of GST, TDS deposits, Income Tax filings, Aadhar-PAN card linkage, Customs and Excise related deadlines and MCA compliances have been extended.  

Speaking via a video-conference broadcast by the Press Information Bureau and subsquently by various news-agencies, Finance Minister Nirmala Sitharaman and Minister of State for Finance, Anurag Singh Thakur announced several measures on Tuesday.  

A section of media and netizens speculated sops in the form of a waiver in EMIs on housing and personal loans. A larger economic package was also expected. And, here's what the Finance Ministry announced:  

1. Income Tax Related:  

The Finance Minister announced that the last date for filing of income tax returns for the financial year 2018-19 has been extended to 30th June 2020. Also, the interest rate for late payments has been reduced from 12 percent to 9 percent.  

For delayed deposits of TDS, a reduced interest of 9 percent to be levied until June 30, 2020. Previously, interest was at 18 percent.  

Aadhar PAN linking deadline has been extended to 30th June 2020 from the previous 31st March 2020.  

Vivaad se Vishwaas Scheme: Extended to 30th June 2020. "From now to 30th June 2020, there is no 10% additional charge at all. Due dates for issue of notice, notifications and sanction orders, furnishing of returns, applications, reports and any other documents and any compliance by the tax payer including investment in savings instruments or investments for roll-over benefit of capital gains under Income Tax act, wealth tax act, prohibition of benami transaction act, STT law, CTT law, equalization levy law, vivaad se vishwaas law, where the time limit was expiring on 20th March 2020, shall all be extended to 30th June 2020," said Sitharaman.

2. Financial Services  

Debit card holders in the country can withdraw cash from any bank ATM free of charge for the next 3 months. Finance Minister has also clarified that there will not be any minimum balance requirement and as such there will be a waiver on minimum balance fees.  

"We shall reduce bank charges for digital trade transactions for all trade finance consumers. Bank charges are completely reduced for digital trade for all trade finance consumers," added Sitharaman.

3. GST related orders:

The finance ministry announced that the deadline for March April and May 2020 filings have been extended to 30th June 2020. The finance minister also explained that deadline dates are staggered in order to avoid a filing-rush. The specific newer dates will be issued in a note.  

For SMEs and companies having turnover less than Rs 5 crores per annum, there will not be any interest, late fees and penalty for delay in GST filing. For companies having turnover more than Rs 5 crores, a reduced interest rate of 9% will be charged, however there is no late fee and penalty on delays.  

4. Customs & Excise:

The indirect tax scheme called Sabka Vishwaas for settling disputes in indirect tax is extended to 30th June 2020. "During this period, people who are going to pay, shall have no interest levied on them irrespective of the size of the amount," said the Finance Minister.

The FM also added that customs department will work 24X7 upto 30th June 2020 in order to ensure clearance of customs shipments. "We dont want to put any exporter/importer in difficulty. We do not want to upset anybody in process," said Sitharaman.  

5. MCA related norms:

From 1st April 2020 to 30th September 2020, there is no additional fee for late filing. Compliance on board meetings has been extended by a period of 60 days or two quarters.  

Applicability of companies order 2020: Applicability of company auditors report which was supposed to have come into force for 2019-20 itself has been shifted to be effective from the year 2020-21.  

Independent Directors unable to hold a meeting for FY 2019-20 will not count as a violation.

The Finance Ministry has said that it is offering additional time of 6 months for newly incorporated companies to file declaration of commencement of business. It was six months previously.  

Directors must have resided in India for 180 days according to section 149 of Companies Act. This shall not be treated as a violation.  

There is a requirement of investing 15 percent of debentures, maturing during a particular year in specified instruments. That deadline has been shifted from 30th April to 30th June 2020.  

6. Insolvency & Bankruptcy Code:

Finance minister explained that currently the threshold for default to be tried under IBC stood at Rs 1 lakh. "We are raising the threshold to Rs 1 crore, so that we can prevent triggering of insolvency proceedings. This gets implemented straight away," said Sitharaman. 

She also added, "We will watch the situation and if it improves, there is no worry... If the situation continues as today, beyond 30th April, then we may consider suspending section 7, 9, and section 10 of the IBC for a period of 6 months."

7. Commerce & Fisheries:

Speaking on Commerce related policies, Sitharaman who had previously served the Commerce and Defence departments said that import of shrimp root stock and aquaculture imports set to expire between 1-15th April 2020 have been extended by three more months. She also added that re-booking of quarantine cubicles for cancelled consignments in aquatic quarantine facilities (especially at Chennai) will not have any additional booking charge. Verification of documents and grants of NoC will be relaxed from 7 days to 3 days.  

Elaborating on commerce, she said that the principles of Commerce will be followed - "From a procedural and eligibility point of view, extension of timeline will be given, but it will not be an extension or modification of schemed guidelines."

While concluding the Finance Minister hinted that more sops could be in the working. She said that every attention has been given to the economy and the Prime Minister himself was closely monitoring the situation. Speaking about the economic task force she added that its composition  was a multi-layered one - built from sub-groups constituted of industry leaders, MPs, academics, and MPs with interest in economy and finance. Several sub-groups were offering inputs and the task force is likely to soon arrive with more reforms.  

Reactions:  

Dr Niranjan Hiranandani – President – ASSOCHAM and NAREDCO: The move to enhance the amount of default for IBC filing from 1 Lakh to 1 crore is a strong move in the right direction to help companies recover from default related challenges. The Finance Minister’s statement on equity markets being closely monitored, as also the banking related announcements – no minimum balance requirement; no charge for withdrawals from other bank ATMs, as also digital payment charge waivers will uplift the citizen spirits.

He added, "The statutory obligations relief for Companies makes for a good starting point for the economic revival curve especially for the large base SME and MSMEs in India. Industry to look forward for the broader economic packages like One time Roll Over for debt restructuring across the industries to be announced soon for resurrecting economic health of Industries"

Shishir Baijal, Chairman & Managing Director, Knight Frank India in a note said, "Regulatory relaxations given by the Finance Minister in the form of extension in timeline for filing of tax returns will provide much required reprieve to individuals and businesses in these trying times. Also measures like no late fees, penalties and interest on deferred payment for companies with turnover less than Rs 5 crores is a step in the right direction as SMEs will be severely hit by the current economic turmoil. The SMEs would also benefit from the raising of threshold for default under the IBC. While the regulatory relaxations are welcome, the industry players would be keenly awaiting broad economic stimulus package by the Finance Minister."

Kamal Khetan, Chairman and Managing Director, Sunteck Realty Ltd: "In the light of economic slowdown due to Covid -19 pandemic, the government is moving positively to support India Inc. Today’s announcement by honourable Finance Minister on relaxations of rules for TDS, GST and corporate compliances were a much-needed respite. The industry is now eagerly awaiting the proposed economic package, which we believe would be sufficient and consequential to mitigate the anticipated spiral blow on the economic activity."