Finance Minister Nirmala Sitharaman announced a range of steps for the extension of statutory and regulatory compliances in order to stabilise the Indian economy.
The Society of Indian Automobile Manufacturers (SIAM) has welcomed the Finance Ministry’s decision in the wake of the COVID-19 pandemic. Earlier today, Finance Minister Nirmala Sitharaman announced a range of steps for the extension of statutory and regulatory compliances in order to stabilise the Indian economy. The central government has formed an Economic Task Force that will soon announce an economic relief package that will help deal with the impact of the Coronavirus outbreak that’s spreading across the country. Moreover, Prime Minister Narendra Modi announced tonight that the country will be under lockdown from March 25, 2020, for the next 21 days.
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Speaking about the announcements, Rajan Wadhera, President, SIAM said, “The series of announcements made by the Finance minister today, with regard to the extension of return filing for GST and Income Tax till June 30, declaration of 24×7 customs clearance as essential service, and many more relaxations in Insolvency and Bankruptcy Code and penalty charges for companies, especially MSMEs, will lessen the challenges for companies in the immediate term. The earlier announcement of spending for COVID-19 being eligible for CSR activities, along with today’s series of announcements on compliance and regulatory norms, are all in the right direction.”
The measures announced by the Finance Ministry include an extension of the tax filing date till June 30 for the financial year 2018-19. The interest rate has been reduced to nine per cent from 12 per cent for delayed payments, while that for delayed deposit of TDS is down to nine per cent from 18 per cent in a relief order given to companies.
In addition, the GST returns for March, April and May along with the composition returns have been extended till June 30, 2020. For companies with a turnover less than ₹ 5 crore, the government has waived of interest, late fees or penalty. For those with a turnover of ₹ 5 crore or higher, the late fee and penalty have been waived off, while the interest rate has been slashed to nine per cent.
To make things easier, cash withdrawals from bank ATMs are now free for the next three months, while there’s no minimum balance requirement as well in bank accounts. Companies that need to hold statutory board meetings now get a relaxed time duration of 60 days for the next two quarters. A moratorium has been issued from April 1 to September 30, 2020, under which no additional fees will be applied for late filing of MCA 21 registry.
Furthermore, there will be an additional time of six months for newly incorporated companies for filing declaration of commencement of business. The threshold of default has also been increased to ₹ 1 crore from ₹ 1 lakh in a big relief to companies. The Finance Ministry has also said that section 7, 9, 10 of the insolvency and bank code or IBC will be suspended for a period of six months, if the Coronavirus pandemic continues to spread in April 2020.