We have all seen how the whole world is battling against an invisible virus Corona (Covid-19). We have heard about its impact on the economy and stock markets however we are yet to experience the impact in coming days. The impact would be on the whole economy though MSME are the one’s who will be greater hit. When MSME’s struggle for survival during regular course of business, can they survive with shutting down shops for days/months?
At this juncture, it was a good move that Finance Minister announced some of the measures on 24th March 2020 to relax the statutory compliances like:
1. Due date for filing GST returns extended to 30th June 2020
2. Extension of filing IT returns of 2018-19 upto 30th June 2020
3. Aadhar and PAN linking extended till 30th June 2020
4. Interest on late payment of TDS reduced to 9%
5. Vivad se Vishwas extended upto June 30th
6. CARO 2020 to be implemented from 2020-21
7. Extension for holding boarding meeting by 60 days for next 2 quarters
8. Charges on debit card withdrawals from any bank ATM waived off till 30th June 2020
9. Waiving of charges for not maintaining minimum balance in Bank Accounts till 30th June 2020
But there are concerns as to whether many of MSME’s will survive after this jolt to take advantage of these lenient deadlines and interest, penalty waivers. It may be too early to decide on this point.
Also, March being the last month of the year, it is very crucial with respect to Accounting and Compliance angle. March is the month when Accounts closure work starts. Most of the big Companies start their Accounts closure in March so that Audit can start in April. Also statutory requirements like Physical verification of Inventory, Fixed Assets verification etc. taking place. Apart from this bigger Companies following ERP system has to pass their yearend entries by 31st March. Completion of Accounting invoices/vouchers, Bank Reconciliations, vendor reconciliations etc., needs to be completed in March for a smooth closure of year and Audit. However, due to lock down in most of the states, these year end activities were not undertaken by most of the Companies. In such situation, looking into the extension of Financial year would have helped or easing of some of these compliances. Further with 21 days lock down announced by Prime Minister, makes it clear that we do not have much options. Hope the same may come out as an announcement soon.