The outbreak of COVID-19 across the globe has been unprecedented, with major economies announcing bailout packages, regulatory relaxations amidst lockdowns. Following the suit, Finance Minister (FM), Ms. Nirmala Sitharaman announced certain relief measures on 24 March 2020 relating to Taxation, Corporate Affairs, Insolvency, and Bankruptcy Code (IBC), Fisheries, Financial Services, and Commerce Sector1.
Below is a brief snapshot of the announcement:
Direct Tax Measures
The taxpayers have most of their deadlines expiring at the end of the financial year i.e., 31 March 2020. Similarly, certain compliances have a threshold date of 30 April such as deposit of withholding taxes (WHT) for March or 31 May filing of statement of financial transactions (SFT), etc. Considering the significant impact, COVID-19 is having on businesses, the FM has proposed the following:
- Timeline for filing delayed and revised tax returns for FY 2018-19 (i.e. AY 2019-20) has been extended from 31 March 2020 to 30 June June 2020. It is to be noted that there is no waiver in terms of late fee of INR 10,000 for filing the delayed return,
- The timeline for various compliances falling between 20 March 2020 and 29 June 2020 has been extended to 30 June 2020
- Issuance of notices falling within the above period, say notice for reopening of assessment under section 147 of domestic tax laws, penalty notices, issuance of the questionnaire under on-going assessments;
- Time limit for filing appeals either by the taxpayers or revenue authorities before any appellate forum;
- Issuance/processing of intimations under section 143(1)/ 200A of the Income Tax Statute;
- Issuance of orders for completion of any proceedings under Direct Tax Laws;
- Furnishing returns/statements (such as WHT), SFT, challan cum statement for WHT on sale/rental of immovable property etc.);
- Issuance of WHT Certificates;
- Filing of Country by Country Report for FY 2018-19;
- Submission of statement (in Form No. 49C) by non-resident having a liaison office in India;
- Investments by individual taxpayers for claiming deductions in their tax returns;
- Filing of applications by the taxpayers under various provisions of the statute (such as revision applications/interest or penalty waiver applications) etc.
- The above measures are applicable mutatis mutandis to the applicable provisions under Wealth Tax Act, Prohibition of Benami Property Transaction Act, Black Money Act, STT law, CTT Law, Equalization Levy law, Vivad Se Vishwas law;
- While the due dates for payment of taxes remain unchanged, the interest cost @ reduced rate of 0.75% per month/ part of the month may continue to be levied from their original due dates. However, the late fee/penalty on such delayed payments have been waived off. It is pertinent to note that the press release did not mention anything on the interest on delayed filing of returns/statements;
- The first cut-off date for payment of taxes without any additional interest cost has been extended from 31 March to 30 June June 2020. Given that the press release issued by the government is silent on the closure date of the scheme, it is believed that the same remains to be 30 June 2020.
- Further, the scheme provided for the issuance of a certificate stating the amount payable, and issuance of the final settlement order within a gap of 15 days. With these relaxations, the authorities and taxpayer would be at ease, and the compliances would become practical;
- Extension of PAN-Aadhar linking deadline till 30 June 2020
Corporate Affairs and IBC Measures
Given below is a brief snapshot of measures announced about Corporate affairs and IBC:
|Regulatory Authority||Relaxation Granted|
|Ministry of Corporate Affairs (MCA)||
|Insolvency & Bankruptcy Code, 2016 (the Code)||
Financial Services Measures
- Three months' relaxation for:
- No charges on cash withdrawal from other bank's ATM,
- Waiver of minimum balance fee;
- Reduced bank charges for digital trade transactions by all trade finance consumers.
Necessary circulars/ notification effecting above legislative amendments are yet to be issued by the Ministry of Finance & Corporate Affairs.
The above relief measures announced by the government are unprecedented and welcomed by all the taxpayers. These extensions are in line with the Supreme Court of India's suo moto order issued on 23 March 20202 extending the limitation period for petitions/applications/suits/ appeals/all other proceedings.
However, taxpayers should take cognizance of the following points:
While these measures would help businesses in planning their affairs with limited resources, they are only indicative, and one has to wait for the fine-print before implementing them.
1. Government of India Press Release dated March 24, 2020
2.2 Suo Motu Writ Petition (Civil) No(S).3/2020
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.