Nirmala Sitharaman’s compliance relief package: Extemporary measures in while waiting for big guns

Updated: Mar 24, 2020 7:31 PM

Certain respites from company law compliances will be highly welcomed by top management executives of India Inc.

msme, relief package, nirmala sitharaman, finance minister, FM SitharamanThough the deadline for TDS deposits has not been extended beyond stipulated timelines, interest on delay in remittance till June 30, 2020 has been halved to 9 percent.
  • Sandeep Jhunjhunwala

In the midst of Pandemic Covid-19 and the beginning of economic meltdown in the country, the Hon’ble Finance Minister announced much-awaited relief from deadlines for various statutory and regulatory compliances as sought by India Inc. Starting with the announcement on income-tax related reprieve wherein, last date to file a belated tax return for FY 2018-19, PAN-Aadhar linking are extended to June 30, 2020 and delays in payment of taxes to attract interest at a lower rate of 9 percent till June 30, 2020, thereby providing interim relief to the individual taxpayers.

Though the deadline for TDS deposits has not been extended beyond stipulated timelines, interest on delay in remittance till June 30, 2020 has been halved to 9 percent. Further, covering a wide array of compliances including response to notices, filing of appeals against the orders or other applications, reports, documents or any such other compliances by the taxpayers, the deadlines have been extended till June 30, 2020.

Also, the much-sought extension for Vivad se Vishwas Scheme has been announced and disputed taxes could now be deposited by June 30, 2020 without any additional charge of 10 percent. The extension of the time limit for opting under Vivad se Vishwas scheme would provide additional decision-making time to the taxpayers who want to unlatch themselves from past income tax disputes.

On the indirect taxes part where March 31, 2020, holds utmost important day for filing various returns, the Finance Minister has relaxed the burden by extending the last date to June 30, 2020 for filing GST annual returns for FY 18-19, GST returns for the month of March, April, May 2020 and returns for composition opted dealers. Additionally, no late fee or penalty to be charged for companies with less than INR 5 crore turnover.

However, a reduced interest rate of 9 percent to be charged on companies with a turnover higher than INR 5 crores. The last date for the opting composition scheme is also extended to June 30, 2020. With a view to maintaining Vishwas of all the stakeholders, the Sabka Vishwas Scheme has also been extended till June 30, 2020 with no interest being levied for the extension period. Where the import and export sectors of the country are one of the worst affected by the pandemic, the FM has assured that the customs clearance shall operate 24*7 till June 30, 2020.

Certain respites from company law compliances will be highly welcomed by top management executives of India Inc. Inter-alia, no additional fees for late filings on MCA21 registry till September 30, Companies’ auditor’s report order 2020 to be effective from FY 21, extension by 6 months for filing declaration for the commencement of business by newly incorporated companies, absence of independent directors from all the board meetings for FY20 not to be considered as a violation, relaxation for holding board meetings for 60 days till next two quarters and relaxation from Section 149 to the directors for not complying with a minimum mandatory period of stay in India, ie 182 days in FY20, are stress-relieving announcements sought by thousands of entrepreneurs, directors, management executives, company secretaries, and many other stakeholders.

The business world agonizes the level of disruption caused to the economy from suppression measures, including lockdown and travel constraints. In such a scenario, an increase of bankruptcy trigger threshold to 1 crore and the assurance to suspend Insolvency and Bankruptcy Code, 2016 provisions for 6 months after April 2020 depending on the state of affairs is highly commendable. 

Announcements on the eradication of minimum balance requirements for bank accounts, nil transaction fee for cash withdrawals from other bank ATMs and reduced bank charges on digital transactions would definitely ease the crisis of confidence on customers’ side in this slowdown period. While the economic task force needs to quickly pull out the big guns, looking ahead, these slew of extemporary measures shall certainly ease the crisis of confidence on customers’ side and equally be applauded by business houses in the country. 

Sandeep Jhunjhunwala is Director, Nangia Andersen. Views expressed are the author’s personal.

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