Highlights of Speech by Finance Minister Dated 13.05.2020 in the Matter of Covid-19

1. Central Armed Police Forces (CAPFs) canteens to sell only indigenous products from 1st June, 2020;

2. The economic package aims to spur growth and make India self-reliant based on 5 pillars- Economy, infrastructure, System, Demography, Demand, intention is to make local brands and take it into global level;

3. There is collateral free, automatic loans that will give facility upto INR 3 lakh crore for businesses including SMEs. These have 4 year tenor and will valid up to October 31, 2020;

4. Government will facilitate the provision of Rs. 20,000 Crores as subordinate debt to MSMEs for equity support;

5. Collateral free loan to be provided to SMEs with 12 month moratorium;

MSMEs

6. Definition of MSME revised:

7. For government procurement, tenders upto INR 200 crore global tenders shall be disqualified and MSMEs will be eligible for participation.Necessary amendments to be brought about in General Financial Rules;

8. All receivables of MSMEs will be cleared by govt and PSUs in 45 days

9. INR 2500 Cr EPF support upto 6750 Cr for business and workers for 3 more months under Pradhan Mantri Garib Kalyan Package;

10. INR 45,000 Cr partial credit guarantee scheme 2.0 for NBFCs and existing PCGS scheme to be extended to cover borrowings such as primary issuance of bonds/CPs liquidity side of balance sheets of such entities;

11. First 20% of loss incurred by NBFCs will be borne by the guarantor i.e. the Government of India;

12. INR 30,000 crore special liquidity scheme for investment in primary and secondary markets to buy investment quality debt papers which will be fully guaranteed by Government of India;

13. One-time provision by PFCs and RECs to infuse Rs 90,000 crore liquidity for DISCOMS against receivables towards Power Generation and Transmission Companies;

14. Digital payments facility by DISCOMS for consumers, liquidation of outstanding dues of state govts, plan to reduce financial and operations losses;

15. Central Public Sector Generation Companies shall give rebate to DISCOMS which shall be passed on to the final consumers (industries)

16. Extension of registration and completion date certificates by 6 months (without costs to contractor) to be provided by all Central Agencies (like Railways, Ministry of Road Transport & Highways, Central Public Works Dept, etc) having expiry as of 25 March, 2020

  • Covers construction/ works and goods and services contracts
  • Covers obligations like completion of work, intermediate milestones etc. and extension of Concession period in PPP contracts
  • Government agencies to partially release bank guarantees, to the extent contracts are partially completed, to ease cash flows;

17. Ministry of Housing and Urban Affairs will advise States/UTs and their Regulatory Authorities to the following effect:

  • Treat COVID-19 as an event of ‘Force Majeure’ under RERA;
  • Extend the registration and completion date suo-moto by 6 months for all registered projects expiring on or after 25th March, 2020 without individual applications;
  • Regulatory Authorities may extend this for another period of upto 3 months, if needed
  • Issue fresh ‘Project Registration Certificates’ automatically with revised timelines;
  • Extend timelines for various statuary compliances under RERA concurrently;
  • These measures will de-stress real estate developers and ensure completion of projects so that homebuyers are able to get delivery of their booked houses with new timelines;

18. Rs 50,000 crores liquidity through TDS/TCS rate reduction;

19. The rates of Tax Deduction at Source (TDS) for non-salaried specified payments made to residents and rates of Tax Collection at Source (TCS) for the specified receipts shall be reduced by 25% of the existing rates;

  • Payment for contract, professional fees, interest, rent, dividend, commission, brokerage, etc. shall be eligible for this reduced rate of TDS;
  • This reduction shall be applicable for the remaining part of the FY 2020-21 i.e. from tomorrow to 31st March, 2021;

20. Date of filing Income Tax returns for FY 19-20 extended

21. Direct Tax Measures announced:

  • All pending refunds to charitable trusts and noncorporate businesses & professions including proprietorship, partnership, LLP and Co-operatives shall be issued immediately;
  • Due date of all income-tax return for FY 2019-20 will be extended from 31st July, 2020 & 31st October, 2020 to 30th November, 2020 and Tax audit from 30th September, 2020 to 31st October,2020;
  • Date of assessments getting barred on 30th September,2020 extended to 31st December,2020 and those getting barred on 31st March,2021 will be extended to 30th September,2021;
  • Period of Vivad se Vishwas Scheme for making payment without additional amount will be extended to 31st December,2020.

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