Finance Minister’s Coronavirus Fiscal Relief, Chartered Accountant RK Agrawal Weighs in

Chartered Accountant RK Agrawal demystifies Finance Minister Nirmala Sitharaman’s fiscal relief to counter COVID-19.

By CA RK Agrawal

The outbreak of the coronavirus disease (COVID-19) has turned the whole world upside down. Almost all the countries have been affected by this deadly virus. The COVID -19 has led to havoc in economies. No sector has been left untouched by the adverse impacts of this pandemic the novel coronavirus. To prevent its spread, the governments all around the world have been asking people for social distancing.

In the past few days, we have witnessed lockdown in almost every district of the country. All the offices, shops have been shut down to safeguard its employees. In a scenario like this work-from-home came to rescue many organisations.

The government is taking all possible measures to control the spread of pandemic COVID-19. The number in India has crossed 500. Keeping in mind the current scenario and to provide relaxations to the taxpayers, The Finance Minister has announced the extension of various statutory due dates and other relaxations for the taxpayers via a video press conference.

The relaxations have been provided under various legislations such as the Income Tax Act, Goods and Service Tax Act, Custom and Excise Act, Companies Act, etc.

Some Key Announcements: 

Income Tax Act:

1. Extension of the last date of filing return for AY 2019-20 (FY 2018-19) from March 31, 2020, to June 30, 2020. This covers the revised and belated returns
2. The last date for linking Aadhar and PAN has been extended to June 30, 2020
3. ‘Vivad se Vishwas’ scheme can be availed till June 30, 2020, without payment of an additional 10%
4. Dates for the issue of notices, filing appeal furnishing returns applications where the time limit is expiring between March 20, 2020, to June 29, 2020, has extended to June 30, 2020
5. The date for investment in saving instruments or investments for rollover benefit of capital gains under various acts including Income Tax Act, Black money Act where the time limit is expiring between March 20, 2020, to June 29, 2020, extended to June 30, 2020
6. Interest on delayed payments of advance tax, self-assessment tax, TDS, TCS, equalisation levy made between March 20, 2020, and June 30, 2020, shall be charged at a reduced rate of 9% for this period. Further, no late fee/penalty shall be charged for delay relating to this period.

Goods and Services Act: 

1. The due date for filing GSTR-3B has been extended to June 30, 2020, for March, April and May 2020
2. The date for filing GST Annual returns of FY 18-19, which is due on March 31, 2020, is extended till last week of June 2020
3. The date for opting composition scheme has been extended to June 30, 2020
4. No late fees interest, the penalty will be charged for companies with less than INR 5 Cr turnover on delayed filing of return
5. For Companies with turnover exceeding Rs 5 crore, the late fee & penalty has been waived off and the interest shall be charged a reduced rate of 9%
6. Payment date under ‘SabkaVishwas’ scheme has been extended to June 30, 2020. Further, no interest shall be charged for this period.

Corporate Affairs:

1. No additional fees shall be charged for late filing during moratorium period from April 1 to September 30, 2020, in respect of any document, return, statement, etc required to be filed before MCA -21 registry.
2. Board Meeting to be relaxed by a period of 60 days till the next two quarters.
3. CARO 2020 will now be made effective from the Year 2020-21
4. If no meeting is held with an independent director in 2019-20 it is not to be considered a violation.
5. For newly incorporated companies, the commencement of business form can be filed with an additional time of six months
6. If a company’s director does not comply with the minimum mandatory period of stay in India u/sec 149, it will not be treated as a violation.

Insolvency and Bankruptcy Code, 2016:

1. The threshold of default under Section 4 of IBC has been raised to INR 1 crore. This will by and large prevent triggering of Insolvency proceedings under MSMEs.

Financial Services:

1. Relaxation for 3 months

• For debit cardholders to withdraw cash for free ATM from any other banks ATM
• Waiver of minimum balance fees
• Reduced bank charges for digital trade transactions for all trade finance customer

Customs:

1. 24 X 7 custom clearance till the end of June 30, 2020. This will facilitate the exports and imports related activities and reduce the effect of COVID -19 on the Indian exports-imports

These measures announced by Finance Minister would surely help all the business and taxpayers in dealing with current COVID-19 lockdown and help people to remain in confinement for time being.

The author is a chartered accountant at Krishna R Associates. The views are his own.