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COVID-19: Relief measures in Income Tax and GST

D.V. Mittal and Co. 
on 16 April 2020

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As we all are aware about the current scenario that the World Health Organization declared Novel Corona Virus (COVID-19) a pandemic on 11th March 2020, causing huge impact on people's lives, families and communities.

Considering the seriousness of the impact of COVID- 19 on Peoples' health and lives, Honourable Prime Minister of India as on 24th March 2020 in his address to the nation imposed a first Nationwide lockdown of 21 days (From 25th March to 14th April) and on 14th April 2020 imposed a second Nationwide lockdown of 19 days (From 15th April to 3rd May) to contain the spread of coronavirus in the country.

In addition to the serious impact on people's health and healthcare services, COVID-19 is having a significant impact on Indian Economy and business.

According to United Nations Development Programme,

'The coronavirus COVID-19 pandemic is the defining global health crisis of our time and the greatest challenge we have faced since World War Two.

But COVID-19 is much more than a health crisis. By stressing every one of the countries it touches, it has the potential to create devastating social, economic and political crises that will leave deep scars.”

A Survey by the International Crisis Group said the full impact is hard to anticipate, but,

”If the disease spreads in densely packed urban centres in fragile states, it may be virtually impossible to control. The dramatic economy slowdown already underway will disrupt trade flows and create unemployment that will do damage at levels that are hard to forecast grim to contemplate.”

COVID-19: Relief measures in Income Tax and GST

The spread of Novel Corona Virus (COVID-19) across many countries of the world, including India has caused immense loss to the lives of people and resultantly impacted the trade and industry. In view of the emergent situation and challenges faced by various taxpayers in meeting the compliance requirement under various provisions of the taxation and Regulatory laws, Government has announced various relief measures relating to statutory and regulatory compliance matters.

In this document, we hereby brief the relief measures as announced by the Government of India under various taxation and regulatory laws.

1. Income Tax Act, 1961

  1. Due date of filling of Income Tax Return for the A.Y 2019-20 i.e F.Y 2018-19 with late fees is extended to 30th June 2020 from 31st March 2020.
  2. Due date of filling of Revise ITR for the A.Y 2019-20 i.e F.Y 2018-19 is extended till 30th June 2020.
  3. Due date of Filling of TDS and TCS statement of the last Quarter of F.Y 2019-20 is extended till 30th June 2020.
  4. Any time limit which has been specified under the provision of Income Tax Act 1961 for completion of any proceedings or passing of any order or issuance of Notice, intimation notification, sanction or approval or any such other action by whatever name called which falls during the period from 20th March 2020 to 29th June 2020 can be completed or issued till 30th June 2020.

For analysing the above provision let us take an example: last date of issuance of notice u/s 148 for reopening of assessment proceedings under section 147 for the Assessment year 2013-14 relevant to F.Y 2012-13 is 31st March 2020 but now Assessing officer can issue notice u/s 148 till 30th June 2020.

  1. Due date of filling of appeal, reply or application or furnishing of any report which falls during the period from 20th March 2020 to 29th June 2020 is extended till 30th June 2020.
  2. Due date of linking of Aadhar and PAN is extended till 30th June 2020.
  3. Time limit of making of investment, deposit, payment, acquisition, purchase, construction or such other action by whatever name called for the purpose of claiming deduction, exemption or allowance under the provision of chapter VI A under the heading B or section 54 to 54G for the Assessment Year 2020-21 relevant to Financial Year 2019-20 is extended to 30th June 2020 from 31st March 2020.

For Example: Maximum amount of deduction allowed under section 80C is Rs 1,50,000/- and a person has made the investment as specified under the provision of section 80C till 31st March 2020 is Rs 1,20,000/- and made the investment of Rs 30,000/- during the period April 2020 to June 2020. Now he has an option to take the deduction of Rs 1,50,000/- while computing the taxable income as per the provision of Income Tax Act for the assessment year 2020-21 relevant to Financial Year 2019-20.

  1. Due date of deposit of TDS remain same. But the interest on late deposit of TDS deducted in the month of March, April and May is charged at the rate of 0.75% per month instead of 1.5% per month if the same is deposited on or before 30th June 2020.
  2. A maximum amount of interest at the rate of 0.75% per month is charged on delayed payment of any tax or levy which falls due during the period from 20th March 2020 to 29th June 2020 if the same is paid on or before 30th June 2020. Further no penalty shall be levied and no prosecution shall be sanctioned in respect of such amount of delay.
  3. The option for opting Vivad Se Vishwas scheme also extended to 30th June 2020 without 10% additional charge.
  4. Donation made to Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund (PM CARES FUND) is eligible for deduction under section 80G while computing the Taxable Income as per the provision of the Act.

2. Goods and Service Tax

  1. The taxpayer who has opted for composition tax scheme under GST for the Financial Year 2019-20 have been allowed to furnish the statement in the Form GST CMP-08 for the quarter ended March 2020 by 07th July 2020 and furnish the Return in the Form GSTR-4 for the F.Y 2019-20 by 15th July 2020.
  2. The taxpayers opting for composition scheme for the F.Y 2020-21 can file intimation in Form GST CMP-02 by 30th June 2020 and file the statement in Form GST ITC 03 till 31st July 2020.
  3. Due date of furnishing the Form GSTR 3B for the month of February, March and April 2020 has not been extended. But the Government has waived the late fees for delay in furnishing the return in Form GSTR 3B for the Month of February, March, April 2020 if the same is furnished on or before the date as mentioned in the corresponding entry in Column (4)

S.NO

(1)

Class of Taxpayers

(2)

Tax Period

(3)

Dates

(4)

1

Taxpayers having an aggregate turnover of more than rupees 5 crores in the preceding financial year

February 2020

March 2020 and April 2020

If return in FORM GSTR3B is furnished on or before the 24th day of June, 2020

2

Taxpayers having an aggregate turnover of more than rupees 1.5 crores and up to rupees five crores in the preceding financial year

February 2020

And March 2020

If return in FORM GSTR- 3B is furnished on or before the 29th day of June, 2020

April 2020

If return in FORM GSTR3B is furnished on or before the 30th day of June, 2020

3

Taxpayers having an aggregate turnover of up to rupees 1.5 crores in the preceding financial year

February 2020

If return in FORM GSTR3B is furnished on or before the 30th day of June, 2020

March, 2020

If return in FORM GSTR3B is furnished on or before the 3 rd day of July, 2020

April, 2020

If return in FORM GSTR3B is furnished on or before the 6 th day of July, 202

  1. For those registered person having turnover upto Rs 5 Cr in the preceding Financial Year no interest should be charged for the delay payment of taxes if the due taxes has been paid by filling the GSTR 3B on or before the date as specified in column (4) of point (v). In the case return for the said period is not furnished on or before the date as mentioned in notification then interest at 18% per annum shall be charged from the due date of return, till the date on which the return is filed.
  2. Nil Rate of Interest for the first 15 days after the due date of filling return in Form GSTR 3B and reduced rate of interest @ 9% thereafter have been notified for those registered persons whose aggregate turnover in the preceding Financial Year is above Rs 5 Cr. The lower rate of interest is applicable only if the due taxes are paid by filling of Form GSTR 3B on or before the date as specified in column (4) of point (v). In case the return in Form GSTR 3B for the said months are not furnished on or before 24th June 2020 then Interest @ 18% per annum shall be payable from the due date of return till the date on which the return is filled. In addition, regular late fees shall also be leviable for such delay.
  3. Illustrations: Calculation of interest for delayed filling of Return for the month of March 2020 ( Due date of filling of Form GSTR 3B is 20th April 2020) for the registered person whose aggregate turnover is more than 5 Cr in the preceding Financial Year,

S.No

Date of Filling GSTR 3B

No. of days of delay

Whether condition for reduced interest is fulfilled?

Interest

1

02.05.2020

11

Yes

Zero Interest

2

24.06.2020

65

Yes

Zero interest for 15 days + interest rate @9% p.a. for 50 days

3

30.06.2020

71

No

Interest rate @18% p.a. for 71 days (i.e. no benefit of reduced interest)

  1. Point to be remember at the time of filling of GSTR -3B for the month of March 2020: Section 16 of the CGST Act 2017 states that a registered person shall be entitled to the input tax credit in respect of goods or services or both only when he has received the goods or service or both. As you all are aware that honourable Prime Minister has imposed a lock down as on 24th March 2020 due to which many of you has not received supply of goods or services or both on or before 31st March 2020 and invoice in respect to the same has already been received on or before 31st March 2020. In that case you are not eligible for availing the ITC in respect of these goods or service or both in the month of March 2020.
  2. Late fees leviable under section 47 of CGST Act 2017 has been waived for delay in furnishing the statement of outward supply in Form GSTR 1 for the Tax period March 2020, April 2020, May 2020 and quarter ending 31st March 2020 if the same are furnished on or before 30th June 2020.
  3. Where the validity of an e-way bill generated under rule 138 of the CGST Rules expires during the period 20th March 2020 to 15th April 2020, the validity period of such e-way bill has been extended till 30th April 2020.
  4. Rule No 36(4) of the CGST Rule read as under:

'Input tax credit to be availed by a registered person in respect of invoices or debit notes, the details of which have not been uploaded by the suppliers under sub-section (1) of section 37, shall not exceed 20 per cent. of the eligible credit available in respect of invoices or debit notes the details of which have been uploaded by the suppliers under sub-section (1) of section 37”

Vide notification No. 30/2020- Central Tax, dated 03.04.2020, a proviso has been inserted in CGST Rules 2017 to provide that the said condition shall not apply to input tax credit availed by the registered persons in the returns in FORM GSTR-3B for the months of February, March, April, May, June, July and August, 2020, but that the said condition shall apply cumulatively for the said period and that the return in FORM GSTR-3B for the tax period of September, 2020 shall be furnished with cumulative adjustment of input tax credit for the said months in accordance with the condition under rule 36(4).

  1. For the taxpayers who are required to collect tax at source under section 52 have been allowed to furnish the statement specified in section 52, for the months of March, 2020 to May, 2020 on or before the 30th day of June, 2020.
  2. For the taxpayers who are required to deduct tax at source under section 51, Input Service Distributors and Non-resident Taxable persons have been allowed to furnish the respective returns specified in sub-sections (3), (4) and (5) of section 39 of the said Act, for the months of March, 2020 to May, 2020 on or before the 30th day of June, 2020.
  3. Vide notification No. 35/2020- Central Tax, dated 03.04.2020, issued under the provisions of 168A of the CGST Act, except for few provisions covered in exclusion clause, any time limit for completion or compliance of any action which falls during the period from the 20th day of March, 2020 to the 29th day of June, 2020, and where completion or compliance of such action has not been made within such time, has been extended to 30th day of June, 2020.

3. Companies Act 2013 and LLP Act 2008

  1. No additional fees shall be charged for late filing during a moratorium period from 01sr April to 30th September 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'.
  2. The mandatory requirement of holding meetings of the Board of the companies within the intervals provided in section 173 of the Companies Act, 2013 (120 days) stands extended by a period of 60 days till next two quarters i.e., till 30th September. Accordingly, as a one-time relaxation the gap between two consecutive meetings of the Board may extend to 180 days till the next two quarters, instead of 120 days as required in the Act.
  3. The Companies (Auditor's Report) Order, 2020 shall be made applicable from the financial year 2O2O-2O21 instead of being applicable from the financial year 2019-2020 notified earlier. This will significantly ease the burden on companies & their auditors for the financial year 2019-20.
  4. As per Para Vll (1) of Schedule lV 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 financial year 2019-20, if the Independent Directors of a company have not been able to hold such a meeting, the same shall not be viewed as a violation.
  5. Requirement under section 73(2)(c) of Companies Act 2013 to create the deposit repayment reserve of 20% of deposits maturing during the financial year 2020-21 before 30th April 2020 shall be allowed to be complied with till 30th June 2020.
  6. Newly incorporated companies are required to file a declaration for Commencement of Business within '180 days of incorporation under section 10A of the Companies Act 2013. An additional period of 180 more days is allowed for this compliance.
  7. 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 Act shall not be treated as a non-compliance for the financial Year 2019-20.
  8. Requirement under rule 18 of the Companies (Share Capital & Debentures) Rules, 2014 to invest or deposit at least 15% of amount of debentures maturing in specified methods of investments or deposits before 30th April 2020, may be complied with till 30th June 2020.

Should you require any clarification in this regard, please feel free to revert.


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