Statutory & Regulatory Relaxation in view of COVID-19 Pandemic- A brief summary of the key announcements made by Hon’ble Finance Minister

Today when the whole globe is on high alert and fighting against the outbreak of novel COVID-19, we wish you healthy and safe stay.

Considering the unrest created due to said pandemic, our hon’ble Finance Minister Ms. Nirmala Sitharaman held a press conference on 24.03.2020 and announced several relaxations in the various statutory and regulatory compliances. Summary of the significant measures proposed to be undertaken are as under:

Laws Measures/Relaxations

Income tax

1.  Belated/Revised income tax returns for financial year 2018-19 can be filed by June 30, 2020.

2.  Last date for Aadhaar-PAN linking extended to June 30,2020.

3.  No extension of penalty on delayed deposit of TDS. However, the interest has been halved to 9% from 18% currently.

4.  All investments for roll over benefit of capital gains under Income Tax act, Prohibition of Benami Property Transfer Act, Black Money Act, Securities Transaction Tax law, equalisation levy law extended to June 30, 2020.

5.  ‘Vivaad se vishwaas’, the amnesty scheme for settlement of tax disputes without payment of additional 10 % amount, where the time limit was expiring on March 31, 2020 now extended to June 30, 2020.

6.  No late fee/penalty will be charged for delay relating to this period.

Goods and Service Tax (GST) 1.  Last date for filing GSTR-3B in March, April and May 2020 including composition scheme extended to June 30,2020, for those having aggregate annual turnover less than  Rs. 5 Crore, no interest,  late fee, and  penalty will be charged.

2.  For those having turnover above 5 crores, no late fee and penalty to be charged, however for any delayed payment made between March 20, 2020 and June 30, 2020 reduced rate of interest @9 % per annum instead of 18% will be charged.

3.  Date for opting for composition scheme is extended to June 30, 2020.  Further, the last date for making payments for the quarter ending March 31, 2020 and filing of return for 2019-20 by the composition dealers have been extended till June 30, 2020.

4.  Due date for issue of notice, notification, approval order, sanction order, filing of appeal, furnishing of return, statements, applications, reports, any other documents, time limit for  any compliance under the GST laws where the time limit is expiring between March 20, 2020 to June 30,2020 shall  be extended to June 30,2020.

5.  Date for filing GST annual returns of FY 18-19, which is due on March 31, 2020  is extended have been extended till June 30, 2020.

6.  Payment date under Sabka Vishwas Scheme shall be extended to June 30, 2020.  No interest for this period shall be charged if paid by June 30, 2020.

Customs 1.  Due date for Issue of notice intimation, notification, approval order, sanction order, filing of appeal, furnishing of returns, return statement, applications, reports, any other documents and any compliance by taxpayer where  the time limit  is expiring between  March 20th,  2020  to June 29th, 2020  shall  be extended to June 30th, 2020.
Corporate laws 1.  Applicability of Companies {Auditor’s Report) Order, 2020 shall be made applicable from the financial year 2020-2021 instead of from 2019-2020 notified earlier. This will significantly ease the burden on companies & their auditors for the year 2019-20.

2.    No additional  fees shall  be charged for  late filing during a  moratorium  period from April 1, 2020   to September 30, 2020,  in  respect of any document,  return, statement etc.,  required to be filed  in the MCA-21  Registry,  irrespective of its due  date, which will  not only   reduce the compliance burden,  including  financial  burden of companies/  LLPs at  large,  but  also enable long-standing non- compliant companies/ LLPs to make a ‘fresh start’.

3.  As per Schedule 4 to the Companies Act, 2013, Independent Directors are required to hold at least one meeting without   the   attendance   of   Non-independent   directors   and members   of management.  For the year 2019-20, if the IDs of a company have not been able to hold even one meeting, the same shall not be viewed as a violation.

4.  Requirement to create  a  Deposit  reserve  of 20% of deposits  maturing  during the financial year 2020-21  before April 30th,2020  shall  be allowed to be complied with till June 30th,2020.

5.  The   mandatory  requirement  of  holding  meetings  of  the  Board   of  the  companies  within prescribed interval  provided in the Companies Act (120 days), 2013, shall  be extended  by a period of 60 days till  next two quarters i.e., till September 30th,2020;

6.  Requirement  to  invest  15%  of  debentures  maturing  during  a  particular  year   in  specified instruments before April 30th, 2020, may  be done so before June 30th, 2020.

7.  Due to the emerging financial distress faced by most companies on account of the large-scale economic distress caused by COVID 19, it has been decided to raise the threshold to Rs 1 crore (from the existing threshold of Rs 1 lakh) in case of default u/s 4 of IBC, 2016. This will by and large prevent triggering of insolvency proceedings against MSMEs. If the current situation continues beyond April 30th,2020, we may consider suspending section 7, 9 and 10 of the IBC 2016 for a period of 6 months so as to stop companies at large from being forced into insolvency proceedings in such force majeure causes of default.

8.  Newly incorporated companies are required to file a declaration for Commencement of Business within 6 months of incorporation. An additional time of 6 more months shall be allowed.

9.  Non-compliance of minimum residency in India for a period of at least 182 days by at least one director of every company, under Section 149 of the Companies Act, shall not be treated as a violation.

It may please be noted that notifications/circulars with regard to aforementioned announcement is yet to be issued by Government. This is expected to be issued very soon.

Hope you would find it useful.

For any assistance or clarification you may require, will be glad to assist you.

Best Regards,

Pankaj Jain, Deepesh Raj & Team

Email: [email protected]


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May 2021