Finance Minister announces several economic relief measures due to the outbreak of COVID-19
To provide an easement to businesses dealing with the economic impact of Covid 19, on Tuesday the government said that it is extending the filing dates of Return for the month of March, April and May 2020 and composition returns under GST to June 30.
Addressing the Media, Finance Minister Nirmala Sitharaman added that lurched filing will apply. “While I announce 30th June as the date, specific regions will have dates like 27, 29 or 30th.
“Others can file returns due in March, April and May 2020 by last week of June 2020 but the same would attract a reduced rate of interest at 9 per cent per annum from 15 days after the due date (current interest rate is 18 % per annum),” Nirmala Sitharaman said.
During the address to the media, the Finance Minister made these announcements besides the important announcements on measures to tackle the economic impact of coronavirus. Additionally, she added that no different stupefying dates will be followed while filing GST returns for March, April and May.
Addressing the media through video conference, Nirmala Sitharaman announced that companies having turnover less than Rs 5 crore won’t be charged penalty or interest for the late filing of GST. Whereas bigger companies having turnover more than Rs.5 crore will have to pay the interest amount of about 9 per cent for delayed filing of GST, but no penalty or late fee will be levied. “On the late filing of GST returns, no late fee, penalty or interest will be charged for companies with turnover of up to Rs 5 crore,”. On adding details, she said there is no late fee and penalty will be charged on GST return filed by 15 days for the companies with over Rs 5 crore turnover.
The deadline for opting for the compensation scheme has been extended to June 30, 2020.
The Finance Minister has also announced that the last date for filing income tax returns for Financial Year 2018-2019 has been extended to June 31, 2020. And the deadline for Aadhar-PAN linking has also been extended to June 30. The interest levied on delayed deposits of TDS has been reduced to 9 per cent from 12 per cent and will be charged till June 2020.
In her address to the media, the FM also added that the customs clearance has been made as a mandatory service, so it will continue to operate 24/7 till June 30, 2020. Vivad se Vishwas tax dispute resolution scheme has been extended for the next three months that is to June. Individuals who are willing to use the scheme not have to pay any additional charges of about 10 per cent.
As per the FMs announcements, debit cardholders can withdraw money from any bank ATM without any fee, and the minimum balance maintenance charges have also been moved out from all bank accounts for the next three months. “Debit cardholders who withdraw cash from any other bank ATM can do it free of charge for the next three months, no minimum balance maintenance fee will be charged by the banks,” Ms Sitharaman said.
In addition, if the current economic situation continues beyond April, the government will consider suspending Sections 7, 9, 10 of the Insolvency and Bankruptcy Code (IBC) for next six months, she said, adding this would help small and medium companies being forced into insolvency on default of loans.
Experts Opinion on the Above Announcements
MS Mani, Partner, Deloitte India says, “The extension of GST return filing timelines together with the deferment of e-invoicing and new returns announced earlier would allow businesses to focus on resumption of business processes once normalcy resumes in future, “ He further added that the waiver of interest, penalties and late fees for SME’s would be helpful for the business owners to focus on reviving their businesses after things gets normal again.
The announcements on extended dates are likely to give some relief. “Some key filing and payment relaxations that should bring rejoice to the industry. One hopes this is the first tranche and there are other tranches to follow, wherein benefits like GST rate reductions, exemption from import duties, reduced compliances etc. are announced,” said Harpreet Singh, Partner, KPMG India.
The Government has also determined that the last date for issue of notice, approval order, notification, sanction order, furnishing of return, filing of the appeal, statements, reports, applications, any other documents, the time limit for any compliance under the GST laws where the due date is expiring between 20th March 2020 to 29th June 2020 will be prolonged to 30th June 2020.
Rajat Bose, Partner, Shardul Amarchand Mangaldas & Co says “It is heartening to see that the government is looking after the interests of small businesses by waiving off interest, penalty and late fee. The government should also consider exempting essential commodities from GST as a temporary measure to ensure that basic necessities are available at reasonable prices during this time,”. According to him, the current situation has given some degree of disruption in many businesses, the extension of the due date for filing of GST returns is a much-needed relief for the business industry.
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