Fuel for Businesses During COVID Pandemic

The COVID-19 outbreak has severely disrupted and even halted the business operations in almost all the countries of the world, creating an ambiguity over future sustenance. The dates of business resumption, impact of COVID-19 on business environment and its growth cannot be assessed presently. The need of the hour is to plan in these uncertainties for the existence and perpetual development of business during and post COVID pandemic.

AKGVG & Associates is making an effort to stay connected at this peculiar times with all its valued acquaintance via the medium of updates, information and services as required. Moving ahead, we have synopsized the reliefs as provided by the Indian government under several dimensions till 29.04.2020 to various entities during COVID-19 pandemic.

Ministry of Corporate Affairs (MCA):

Extension has not been permitted for commencement of the FY 2020-2021. In other words, FY 2020-2021 shall commence from 01.04.2020. However, MCA has provided following relaxations to the companies.

Relaxation in provisions of Companies Act, 2013:
Particular Provision related to Liberation offered
Commencement of Business [Sec 10A] Date of Filing Declaration 360 days from the date of incorporation (+180 days)
CARO 2020 [Sec 143] Applicability From FY 2020-21
Deposit repayment reserve account [Sec 73(2)(c)] Due date to deposit 20% of deposits maturing in 2020-21 30.06.2020
Investor Education and Protection Fund [Sec 124 & 125] Due date to file e-forms (all) 30.09.2020
Meetings of Board and Audit committee [Sec 173] Interval Between 2 Consecutive Meetings Not more than 180 days (+60 days)
Debenture Redemption Reserve [Rule 18] Due date to deposit/ invest 15% of debentures maturing in 2020- 21 30.06. 2020
MCA clarified eligibility of CSR expenditure u/s 135 :
Expenditure Eligibility
Spending CSR Funds for COVID-19 Eligible
Contribution to PM CARES fund Eligible
Contribution to Chief Minister’s Relief Fund or State Relief Fund for COVID-19 Not Eligible
Payment of Salary/wages during lockdown Not Eligible

‘Companies Fresh Start Scheme, 2020’ (‘CFSS 2020’) introduced providing one time opportunity for the companies and LLPs to file all the pending documents and make a fresh start as a fully complaint entity. The scheme shall come in force from 1st April, 2020 and will remain in force till 30th September, 2020.


MCA allowed companies to hold Extraordinary General Meetings (EGMs) through Video Conferencing (VC) or Other Audio Visual Means (OAVM) complemented with e-voting facility/simplified voting through registered emails.


Other liberations:

a. Following actions shall not constitute violation:

  • Independent Directors meeting not held in the FY 2020-2021. [Sec 149]
  • Non-compliance of minimum residency in India for a period of 182 days by at least one director of every company. [Sec 148(8) Sch IV]
  • b. No additional fees for late filing till 30.09.2020.

    c. AGM can be conducted up to 30.09.2020 for those companies whose FY end on 31.12.2019

HOW AKGVG CAN ASSIST?

Clarifying the ambiguity over the changes in legal provisions, assessing the impact on the financial statements due to stated relaxations, ensuring that secretarial compliances are aligned with the revised guidelines on the extended due dates.

Income tax

Extension of due dates:

The due dates for items listed in each description has been extended to 30.06.2020:

Description Original Due Date
Filing of Income Tax Return (Original/Revised) for FY 2018-19 31.03.2020
Investments under Section 80C, 80D, 80G, etc. (Chapter - VIA deductions under the Heading B) 31.03.2020
Investment in Capital Gains Account/ Construction or Purchase of Property or any other
action for claiming deductions under Section 54 to 54GB
Falls during the period from 20.03.2020 to 29.06.2020
Vivad Se Vishwas 31.03.2020
Filing Form 15G/H 07.04.2020
Filing of Form 61A 31.05.2020
Lower / Nil Deduction Certificate (Validity extended) Lower / Nil Deduction Certificate (Validity extended)
Filing of any appeal, reply or application or furnishing of any
report, document, return, statement or such other record, by whatever name called,
under the provisions of the Income Tax Act.
Falls during the period from 20.03.2020 to 29.06.2020
Completion of any proceeding or passing of any order or issuance of any notice, intimation,
notification, sanction or approval or such other action, by whatever name called, by any authority,
commission or tribunal, by whatever name called, under the provisions of the Income Tax Act.
Falls during the period from 20.03.2020 to 29.06.2020
Other liberations:
Particulars Current Rate/ Taxability Revised Rate / Taxability
TDS for Non-Resident having PE in India and not Obtained
any Lower / Nil Deduction Certificate
30% - Individuals 40% - Other 10% plus surcharge and cess till 30.06.2020 or
disposal of application, whichever is earlier
Interest on Delayed Payments of Advance
Tax, Self Assessment Tax, TDS / TCS & Equalization Levy (Between 20.03.2020 to 29.06.2020)
1% or 1.5% per month 0.75% per month 29.06.2020)
Withdrawal from Provident Fund (In Service) Taxable Not Taxable (Lower of 3 months’ Basic and DA or 75% of
the balance in PF account)

Refund of Income Tax upto Rs.5 Lakhs will be release immediately. (Press Note dated 8th April 2020)

HOW AKGVG CAN ASSIST?

Ensuring timely compliance for those filings and submissions for which due date has not been extended so that reduced interest and penalties can be avoided, analysing the tax impact for transactions, backend workings for filing of returns as per the revised government utilities incorporating the impacts for the extended dates, drafting/ e-filing (wherever applicable) replies to notice, intimation, notification, sanction or approval or such other action and assisting in filing of refunds applications in accordance with the revised provisions.

Goods And Services Tax:

CGST Rules has been amended to allow opting Composition Scheme for FY 2020-21 till 30.06.2020 and for cumulative application of condition in rule 36(4).

The Central Government (CG) has made the following amendments:

a. Extension of time limit for furnishing of the following for taxpayers opting for the Composition scheme for the financial year 2020-21 as under:-
S.No. Forms Revised Date
(i) Filing an intimation in FORM GST CMP-02 30.06.2020
(ii) Furnishing the statement in FORM GST ITC-03 31.07.2020
b. Cumulative application of condition in 36(4) of CGST Rule:

A proviso has been inserted in CGST Rules 2017, to provide that the condition as specified in Rule 36(4) ,i.e. Capping of ITC on the basis of Form-2A ,shall not apply to input tax credit availed by the registered persons in the returns in FORM GSTR-3B for the months of February, March, April, May, June, July and August, 2020, but that the said condition shall apply cumulatively for the said period and that the return in FORM GSTR-3B for the tax period of September, 2020 shall be furnished with cumulative adjustment of input tax credit for the said months in accordance with the condition under rule 36(4).

Conditional Waiver/Lowering of interest rate & Conditional Waiver of Late Fees for delay in furnishing of FORM GSTR-3B:
S.No. Taxpayers having an aggregate turnover in the preceding financial year of Rate of interest Late fees Tax period Condition : If return in FORM GSTR-3B is furnished by
1 More than Rupees 5 crores Nil for first 15 days from the due date, and 9% thereafter NIL February, 2020, March, 2020, April, 2020 24.06.2020
2 More than Rupees 1.5 crores and up to Rupees 5 crores NIL NIL February,2020 & 29.06.2020
        March, 2020  
      NIL April, 2020 30.06.2020
3 Up to Rupees 1.5 crores NIL NIL February, 2020 30.06.2020
      NIL March, 2020 03.07.2020
    NIL NIL April, 2020 06.07.2020

Conditional waiver of late fee for delay in furnishing FORM GSTR-1: CG has waived late fees payable , for the registered persons who fail to furnish the details of outward supplies in FORM GSTR-1 by the due date for the months of March, 2020, April, 2020 and May, 2020, and for the quarter ending 31st March, 2020 , but furnishes the said details in FORM GSTR-1, on or before the 30th day of June, 2020.

Extension of due date of furnishing FORM GST CMP-08 and filing FORM GSTR-4: CBIC has extended the due dates of furnishing the following forms by taxpayers registered under the Composition scheme as under:

S.No. Forms For the Period Revised Due Date
1 FORM GST CMP 08 Quarter ending 31st March, 2020 07.07.2020
2 FORM GSTR-4 Financial year 31st March, 2020 15.07.2020
Extension of Validity of E-Way Bill:

Where an e-way bill has been generated under rule 138 of CGST Rules, 2017 and its period of validity expires during the period 20.03.2020 to 15.04.2020, the validity period of such e-way bill shall be deemed to have been extended till the 30.04.2020.

Extension of Due date for furnishing FORM GSTR-3B for the month of May, 2020:

CBIC has extended the due date for filing of return in Form GSTR-3B in a staggered manner for the month of May, 2020 as under:-

Class of Taxpayers Revised Due Date
Registered person having an aggregate turnover above Rupees 5 Crore in the previous financial year 27.06.2020
Registered person having an aggregate turnover of up to Rupees Five Crore in the previous financial year,
whose principal place of business is in the States of :-
Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra,
Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh ,the Union territories of
Daman and Diu and Dadra and Nagar Haveli, Puducherry,
Andaman and Nicobar Islands or Lakshadweep
12.07.2020
Registered person having an aggregate turnover of up to Rupees Five Crore in the previous financial year,
whose principal place of business is in the States of :-
Himachal Pradesh, Punjab, Uttarakhand,
Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland,
Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or
Odisha or the Union territories of Jammu and Kashmir,
Ladakh, Chandigarh or Delhi.
14.07.2020
Expedited refunds:

Pending GST refund applications to be expedited as per instruction 2/1 GST dated 9.4.2020.

HOW AKGVG CAN ASSIST?

Staying compliant by timely fling of returns within the original due dates itself so that interest & penalties (although reduced) do not absurd the working capital of the registered person, support with updated information on tax measures, latest amendments in tax provisions thereby assessing their impact on business and taking necessary actions, supporting in refund application as per revised norms.

Employment Laws:

The Indian government has provided an extension of due dates under several labour related laws with no interest, penalty, damage to be levied during the extended period:

Employees State Insurance (ESI) Act:
Period for ESI contribution Extended due date
(a) Feb 2020 15.05.2020
(b) March 2020 15.05.2020
(b) March 2020 15.05.2020
Employee Provident Fund (EPF) Act:
Description Extended due date
Due date for filing of Electronic Challan Cum Return (ECR)
for wage month March, 2020 for employers who have
paid wages to their employees – Grace period
15.05.2020

HOW AKGVG CAN ASSIST?

Consultations regarding labor related matters, applicability of several labour acts, managing compliance under each act.

Reliefs by Reserve Bank of India (RBI):

General reliefs in the banking sector:
  • No charges on withdrawal of cash through ATM from any bank for 3 months
  • No minimum account balance charges.
Quantitive reliefs:
  • Repo Rate cut from 5.15% to 4.4%.
  • Reverse Repo reduced from 4.9% to 3.75%.
  • CRR Ratio of all banks by 100 basis points to 3% from 4%.
  • Marginal Standing Facility (MSF) made available via which banks having government bonds can keep it as security and borrow from RBI.
  • 4.4% 3 year loan from RBI to Banks.
  • Banks to pay 6.5% on FD.
Suggestive measure:

RBI has advised all bank to provide following post their board approval:

  • Three-month moratorium for the instalment payment of term loans for instalments due between March and May.
  • Repayment will be after the three-month extension, which is after May. However, the interest will still be calculated during the moratorium period of the outstanding due.
  • Cash credit or overdraft can allow the interest recovery during the three months. Further, the accumulated interest will be subjected to recovery post-May 31st, 2020.
  • Extension, Rescheduling and re-assessment are for borrowers under pressure from the pandemic.
  • Term Loan and working capital Asset reclassification due to change in the due dates and payment schedule, the interest accumulation, and the new terms.
  • Banks to pay 6.5% on FD.

Foreign Trade Policy Relaxations:

Description Extended Due Date
(i) Extension of realization period of export proceeds 15 months from the date of export
(ii) Validity of Registration Cum Membership Certificate (RCMC) expiring after March 31, 2020 stands extended FTP duty refunds 30.09.2020
Filing of annual claims under SEIS (Service Exports from India Scheme) for 2018-19 31.12.2020
Filing of MEIS (Merchandise Exports from India Scheme) expiring on or after Feb 1, 2020 up to May 31, 2020 3 months beyond the expiry date
Filing of Rebate of State and Central Tax and Levies for export shipments between March 7, 2019 to Dec 31, 2019 of June 30,2020 31.12.2020
Validity period of all status certificates issued under FTP 2015-20 to an IEC holder has been extended 31.03.2021

Insolvency and Bankruptcy Code (IBC):

The qualifying threshold amount u/s 4 of IBC 2016, has been raised from Rs 1 lakh to Rs 1 crore for liquidating a company that has defaulted its corporate debtor.

At these testing times, AKGVG & Associates with its well-structured team, network of experts, technological knowhow, suffice infrastructure and software solutions, is capable to aid you in all business endeavours seamlessly and efficiently. For any inquiries or concerns, please feel free to contact us.

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