Finance Ministry Announces Economic Relief Measures Amid Coronavirus Outbreak

In the wake of the deadly Coronavirus (COVID-19) outbreak, which has affected the global economy, India’s Finance Minister Nirmala Sitharaman today announced relief measures for taxpayers and businesses as the country is fighting to curb the pandemic. The relief measures were announced, especially on statutory and regulatory compliance matters related to several sectors.

Addressing the media via a video conference, the finance minister said that the government is working on an economic package to deal with the tough times caused by the lockdown to control the COVID-19 crisis. Many renewable companies who are affected will likely get some relief as they face a tough few months ahead.

Sitharaman said that the last date of filing income tax (IT) returns for the financial year (FY) 2018-19, has now been extended to June 30, 2020, instead of March 31, 2020. The finance minister announced several measures for providing economic relief to taxpayers.

The finance minister announced that the last date for filing of GST for March, April, and May, has been extended to June 30, 2020.


No late fee or penalty will be charged for the late filing of GST returns for companies whose turnover is  ₹50 million (~$657,236) or less. For firms with over ₹50 million (~$657,236) turnover, no penalty will be charged on GST returns filed within 15 days after June 30, 2020.

Sitharaman said that for delayed payments, the interest rate has now been reduced from 18% to 9% for FY 2018-19. Similarly, for the delayed deposits of tax deducted at source (TDS), the interest rate has been reduced to 9% from 18%.

The minister also announced that the ‘Sab ka Vishwas’ indirect tax dispute redressal program had been extended to June 2020, and no interest will be levied on it.

The customs clearance will also be extended until June 30, 2020. The government said that 24X7 custom clearance would be provided until June 30, 2020. The due date for matters related to the compliance under the Customs Act and other associated laws has also been extended to June 30, 2020.

Newly incorporated companies have been given an additional time of six months for filing a declaration about the commencement of business.

Due to the financial distress that most companies are likely to face due to COVID 19, the ministry has decided to raise the threshold of default under section 4 of the Insolvency and Bankruptcy Code (IBC) 2016 to ₹10 million (~$131,447) (from the existing threshold of ₹100,000 (~$1,314)). This is expected to largely prevent the triggering of insolvency proceedings against MSMEs. If the current situation continues beyond April 30, 2020, the ministry said that it could consider suspending section 7, 9 and 10 of the IBC 2016 for six months to avert companies from being forced into insolvency proceedings in such force majeure causes of default.

She also announced an extension in the due date for the mandatory linking of AADHAAR with PAN card to June 30, 2020.

Recently, Mercom reported that the Ministry of New and Renewable Energy (MNRE) issued an official memorandum, which states that the time extension in scheduled commissioning of renewable projects due to the disruption of supply chains in the wake of the pandemic will be treated as a ‘force majeure’ event.

In February 2020, it was reported that the Ministry of Finance issued a clarification that Coronavirus will be covered in the force majeure clause and should be considered as a case of natural calamity.

 

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