Vistra Insights

Vistra India Update 396

March 16th 2020 to March 31st 2020

INCOME TAX

1.    Order u/s 119 of The Income Tax Act, 1961 on issue of certificates for lower rate/nil deduction/collection of TDS or TCS u/s 195, 197 and 206C(9)

In cases where the assesses could not apply for issue of lower or nil deduction of TDS / TCS in Traces Portal for the FY 1020-21, but were having the certificates for F.Y. 2019-20, such certificate will be applicable till 30.06.2020 of F.Y. 2020-21. However, they need to apply at the earliest giving details of the transactions and the Deductor / Collector to the TDS / TCS Assessing Officer as per procedure laid down in order as soon as normalcy is restored or 30.06.2020, whichever is earlier. 

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2.    Finance Ministry issues Taxation and other Laws (Relaxation of Certain Provisions) Ordinance, 2020

In order to give effect to the announcements made by the Union Finance Minister vide Press Release dated 24.03.2020, regarding several relief measures relating to statutory and regulatory compliance matters across sectors in view of COVID-19 outbreak, the govt has brought in an Ordinance on 31.03.2020 which provides for extension of various time limits under the Taxation and Benami Acts. It also provides for extension of time limits contained in the Rules or Notification which are prescribed/ issued under these Acts.

Direct Taxes:

1.    Extension of last date of filing of original as well as revised income-tax returns for the FY 2018- 19 (AY 2019-20) to 30 June, 2020. 

2.    Extension of Aadhaar-PAN linking date to 30 June, 2020.

3.    The date for making various investment/payment for claiming deduction under Chapter-VIA-B of IT Act which includes Section 80C (LIC, PPF, NSC etc.), 80D (Mediclaim), 80G (Donations), etc. has been extended to 30 June, 2020. Hence the investment/payment can be made up to 30.06.2020 for claiming the deduction under these sections for FY 2019-20.

4.    The date for making investment/construction/purchase for claiming roll over benefit/deduction in respect of capital gains under sections 54 to 54GB of the IT Act has also been extended to 30 June 2020. Therefore, the investment/ construction/ purchase made up to 30.06.2020 shall be eligible for claiming deduction from capital gains arising during FY 2019-20. 

5.    The date for commencement of operation for the SEZ units for claiming deduction under deduction 10AA of the IT Act has also extended to 30.06.2020 for the units which received necessary approval by 31.03.2020.

6.    The date for passing of order or issuance of notice by the authorities under various direct taxes & Benami Law has also been extended to 30.06.2020. 

7.    It has provided that reduced rate of interest of 9% shall be charged for non-payment of Income-tax (e.g. advance tax, TDS, TCS) Equalization Levy, Securities Transaction Tax (STT), Commodities Transaction Tax (CTT) which are due for payment from 20.03.2020 to 29.06.2020 if they are paid by 30.06.2020. Further, no penalty/ prosecution shall be initiated for these non-payments.

8.    Under Vivad se Vishwas Scheme, the date has also been extended up to 30.06.2020. Hence, declaration and payment under the Scheme can be made up to 30.06.2020 without additional payment.

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COMPANY LAW
 

3.    Clarification on spending CSR Funds for COVID-19

Ministry of Corporate Affairs (MCA) clarifies that CSR funds may be utilized towards various activities related to COVID 19 under items numbers (i) to (xii) of schedule VII relating to promotion of health care, including preventive health care and disaster management. 

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4.    Companies (Meetings of Board and its Powers) Amendment Rules, 2020

In view of the outbreak of COVID-19, Ministry of Corporate Affairs (MCA) has amended Companies (Meeting of Board and its Powers) Rules, 2014 to provide that the meeting up to 30th June, 2020 in respect of the matters requiring Board meeting in person can be held through video conferencing or other audio visual means. 

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5.    Special Measure under Companies Act and LLP Act COVID-19 Outbreak

Ministry of Corporate Affairs (MCA) has announced special measures to provide relief to Companies and LLP’s from certain compliances requirement in view of the COVID-19 situation. Few such relaxations are:
•    No additional fees for late filing of any forms filed during period 1st April 2020 to 30th June, 2020
•    The mandatory requirement to hold the Board meeting within interval of 120 days has been extended by another 60 days till the quarter ending till 30th September 2020
•    The Companies (Auditor’s Report) Order, 2020 shall be made applicable from FY commencing 1st April, 2020 rather than 1st April, 2019
•    Requirement to create Deposit Repayment Reserve of up to 20% deposits maturing during FY 2020-21 before 30th April, 2020 is been extended to 30th June, 2020
•    The requirement of filing declaration for commencement of business within 180 days has been extended by another 180 days
•    Noncompliance of minimum residency in India for a period of at least 182 days by at least one director of every company shall not be treated as noncompliance for FY 2019-20

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6.    Company Fresh Start Scheme, 2020

The Ministry of Corporate Affairs has issued a Circular 12/2020 dated 30th March, 2020, in order to facilitate the companies registered in India to make a fresh start on a clean slate. This is to give a onetime opportunity to the defaulting companies and to enable them to file the belated documents in the MCA-21 registry without being subject to a higher additional fees on account of any delay. The scheme will be active during the period starting from 1st April, 2020 and ending on 30th September, 2020

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RBI AND FEMA

7.    Guidelines on Regulation of Payment Aggregators and Payment Gateways

•    RBI has issued guidelines under Section 18 read with Section 10(2) of the Payment and Settlement Systems Act, 2007 to 
    regulate in entirety the activities of Payment Aggregators (PAs) and 
    provide baseline technology-related recommendations to Payment Gateways (PGs)
•    Non-bank PAs shall require authorization from RBI. Existing non-bank entities offering PA services shall apply for authorisation on or before June 30, 2021
•    PA shall be a company incorporated in India under the Companies Act, 1956 / 2013
•    PAs existing as on the date of this circular shall achieve a net-worth of ₹15 crore by March 31, 2021 and a net-worth of ₹25 crore by March 31, 2023
•    These guidelines shall come into effect from April 1, 2020

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8.    Priority Sector Lending - Lending by banks to NBFCs for On-Lending

a.    Bank credit to registered NBFCs (other than MFIs) and HFCs for on-lending will be allowed up to an overall limit of five percent of individual bank’s total priority sector lending.

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9.    COVID-19 – Regulatory Package

a.    In respect of all term loans all commercial banks, co-operative banks, all-India Financial Institutions, and NBFCs are permitted to grant a moratorium of three months on payment of all instalments1 falling due between March 1, 2020 and May 31, 2020.
b.    Interest shall continue to accrue on the outstanding portion of the term loans during the moratorium period.

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10.    Legal Entity Identifier: Extension of deadline

a.    In the context of the difficulties arising from the outbreak of COVID-19, the due date for LEI implementation for entities with Net Worth up to 200 Crores is extended to 30th September 2020.

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11.    Investment by Foreign Portfolio Investors (FPI): Investment limits

a.    The limit for FPI investment in corporate bonds is increased to 15% of outstanding stock for FY 2020-21.

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12.    Foreign Exchange Management (Export of Goods and Services) (Amendment) Regulations, 2020

a.    RBI amends the time line clause for realization of full value of export:
i.    The amount representing the full export value of goods / software/ services exported shall be realised and repatriated to India within nine months or within such period as may be specified by the Reserve Bank, in consultation with the Government, from time to time, from the date of export, provided

ii.    Where goods are exported to a warehouse established outside India with the permission of the Reserve Bank, the amount representing the full export value of goods exported shall be paid to the authorised dealer as soon as it is realised and in any case within fifteen months or within such period as may be specified by the Reserve Bank, in consultation with the Government, from time to time from the date of shipment of goods

b.    RBI, on 1st April 2020, has decided to increase the present period of realization and repatriation of export proceeds to India from nine months to fifteen months from the date of export, for the exports made up to or on July 31, 2020.

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13.    Amendments in the Handbook of Procedures (HBP) 2015-20 and Appendices

a.    The DGFT has made the below amendments in the Handbook of Procedures (HBP) 2015-20 and Appendices:
i.    Application for obtaining Duty Credit Scrip under SEIS shall be filed on or before 31 December 2020 for FY 2018-19.

ii.    Status Certificates issued under FTP 2009-14 to an IEC holder shall be valid for a period of 5 years from the date on which application for recognition was filed or 31st March 2021, whichever is later.

iii.    All LOPs/LOIs granted to EOUs, EHTPs, STPs and BTPs whose original / extended validity expires on or after 1st March 2020, maybe deemed to be valid up to 31st December 2020.

iv.    QPRs for quarters ending March 20 and June 20 and APR for FY 2019-20 can be filed up to 30th September 2020.

v.    Monthly reports for months ending February 20 to June 20 can be filed up to 31st July 2020.

vi.    CST refund claims for quarters ending September 2019 and December 2019 can be filed by EOUs, EHTPs and STPs can be filed up to 30th September 2020.

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GOODS AND SERVICES TAX


14.    Notification No. 12/2020 – Central Tax dated 21st March 2020

A registered taxpayer under the composition scheme has to make payment of taxes on self-assessment basis using the From CMP – 08 but has made the payment of the taxes using the Form GSTR – 3B is not required to file the Form GSTR – 1 for the tax periods falling in the financial year 2019-20.

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15.    Notification No. 13/2020– Central Tax dated 21st March 2020

The class of taxpayers who are having a turnover above Rs 100 crores are required to issue e-invoices form 1st October 2020.

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16.    Notification No. 14/2020– Central Tax Dated 21st March 2020

The class of taxpayers who are having a turnover above Rs 500 crores are required to issue a dynamic QR code on the B2C invoices enabling them to make digital payment. The requirement for generating dynamic QR code has been postponed to 1st October 2020.

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17.    Notification No. 15/2020 – Central Tax dated 23rd March 2020

The Last Date for filing of Annual Returns for the financial year 2018 – 2019 is 30th June 2020.

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18.    Notification No. 16/2020 – Central Tax Dated 23rd March 2020

CGST Rules 2017 have been amended vide this notification and the amendments announced are 

1. Authentication of Aadhar Number is mandatory while obtaining GST Registration filing from 1st April 2020.
In cases, if the applicant does not have PAN Number in such cases, the application can be accepted only on physical varication at the principal place of business in the presence of the applicant within 60 days from the date of filing of the application.
Physical Verification in Certain cases – if the officer feels that physical verification is required for the principal place of business for any other reason or the applicant does not have the PAN Number, the verification report along with the photographs and other documents has to be uploaded on the common portal within 15 days of such physical verification using the Form GST REG – 30.

2. Input Tax Credit on Capital Goods
The life of capital goods for the GST purposes is considered to be five years from the date of invoice, and the amount of tax shown on the tax invoice will be reflected in the input tax credit ledger.
The input tax credit claimed has to be reversed at the rate of 5% per quarter if the capital goods are used for other than taxable supplies.
The tax to be reversed has to be computed separately for each tax and reported in GSTR – 3B.

3. GST Audit Threshold Limit for FY 2018-19
The GST Audit threshold for the financial year 2018-19 has been increased to Rs 5 crores.

4. Refund of excess payment of Taxes
If the registered taxpayer has claimed refund of the taxes paid in excess or paid wrongly in different heads, for which debit has been made from the electronic credit ledger, the said amount, if found admissible, shall be re-credited to the electronic credit ledger by the proper officer by an order made in FORM GST PMT-03.

5. Zero Rated Supply of Goods
For calculating refund of input tax credit (ITC) in case of export of goods, Turnover for Zero Rate Supply of Goods has been defined, and it means the value of zero-rated supply of Goods made during a relevant tax period under letter of credit or bond or the value which is 1.5 time of the value of like goods domestically supplied by the same or, similarly placed, supplier as declared by the supplier whichever is lesser.

6. Order Sanctioning Refund
The proper officer while sanctioning the refund will pass on order for the re-crediting the input tax credit ledger debited to be the extent of discharging the liability for making the payment of taxes for zero who has made the application for a refund using the Form GST RFD – 06 through Form GST PMT- 03.

7. Recovery of Refund
The taxpayers who have claimed a refund for export of goods or services or both have not realized the value of the goods or services exported based on the time limit prescribed under Foreign Exchange Management Act 1999, the amount of refund claimed has to be paid with interest for the pro-rated amount which is not realized. The amount has to be remitted within 30 days of the expiry of the time period prescribed else the recovery proceedings will be initiated under Section 73 or Section 74 of the CGST Act 2017.
Where the sale proceeds have been written off by the Reserve Bank of India, in such cases, no recovery will be made.
The amount of refund recovered from the taxpayer for non-realization will be refunded back if the exporter pays back the amount. The amount will be refunded if the exporter claims the same within three months from the date of remittance along with valid proofs.

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19.    Notification No. 17/2020 – Central Tax dated 23rd March 2020

Aadhar authentication for the obtaining GST registration from 1st April 2020 does not apply to a person who is not a citizen of India and to any other class of persons not mentioned below

1. Individual
2. Authorized Signatory of all types
3. Managing and Authorized Partner
4. Karta of a Hindu Undivided Family

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20.    Notification No. 18/2020 – Central Tax dated 23rd March 2020

As per the new registration process from 1st April 2020, in case if the induvial does not have an Aadhar number, alternative and viable means will be offered to the individual as specified in Rule 9.

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21.    Notification No. 19/2020 – Central Tax dated 23rd March 2020

Aadhar authentication is mandatory for GST Registration from 1st April 2020, and it is mandatorily to be authenticated for the following class of persons

•    Authorized Signatory for all types
•    Managing and Authorized partner for all partnership firms
•    Karta of a Hindu Undivided Family

In case if any of the class of persons do not have Aadhar number, for them, alternative and viable mechanisms for authentication will be provided as per Rule 8 of the CGST Act 2017.

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22.    Notification No. 27/2020 – Central Tax dated 23rd March 2020

Due Date for the for filing of returns for the taxpayers having a turnover below Rs 1.50 Crores

Sl. No  Return     Return Period Due Date
1 GSTR – 1 Apr 2020 to June 2020 31st July 2020
2 GSTR – 1 July 2020 to Sep 2020  31st October 2020

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23.    Notification No. 28/2020 – Central Tax dated 23rd March 2020

Due Date for the for filing of returns for the taxpayers having a turnover above Rs 1.50 Crores

Sl. No  Return       Return Period    Due Date
1 GSTR – 1 Apr 2020 to Sep 2020 11th of the next month

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24.    Notification No. 29/2020 – Central Tax dated 23rd March 2020

Due Date for filing of GSTR – 3B from April 2020 to Sep 2020. The tax liability can be discharged by debiting the input tax credit ledger or the cash ledger on or before the due Date of filing of the return. In case of payment of late fee or interest or penalty, the same has to be discharged by debiting the cash ledger on or before the last Date of filing of the return.  

Sl. No  Turnover     States     Due Date
Up to Rs 5 Crores Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands or Lakshadweep, 22nd of the next month
2 Up to Rs 5 Crores Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal
Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or
Odisha, the Union territories of Jammu and Kashmir, Ladakh, Chandigarh or Delhi,
24th of the next month
3 Above Rs 5 Crores Taxpayers registered in all the states 20th of the next month


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CUSTOMS

25.    Publishing of rate of exchange for conversion of the foreign currency

The Central Board of Excise and Customs (CBEC) vide Notification No. 27, 28, 30, 32, 34 & 35 /2020 - Customs (N.T.) notified the rate of exchange for conversion of the foreign currency into Indian currency or vice versa for Export and Import of goods, with effect from 20th March, 21st March, 25th March, 27th March, 28th March and 31st March of February 2020 respectively.

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LABOUR LAWS

26.    Due date of Employees State Insurance (ESI) contribution for the month of February 2020 and March 2020 extended
Employees State Insurance Corporation(ESIC) vide circular No. P-11/14/Misc/1/2019-Rev dated 16 March 2020 has extended the ESI contribution for the month of February 2020 and March 2020 to 15 April 2020 and 15 May 2020 respectively on account of pandemic in the form of corona virus. 

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27.    One-Time Relaxation given for Employees State Insurance (ESI) contributions for the period April 2019 to September 2019
Employees State Insurance Corporation (ESIC) vide circular No.P-11/12/Misc/SST Misuse/2019-Rev.II dated 18 March 2020 has given one time opportunity to those employers who did not file ESI contribution for the period April 2019 to September 2019 within 42 days after end of contribution period up to  15 May 2020. It is further clarified that this one-time relaxation is limited to the contribution period ending September 2019 only and no further relaxation in limitation for other contribution period allowed.  

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28.    Advice from Employee Provident Fund Organization (EPFO) to its members to avail online services on account of COVID- 19

In view of the Government of India guidelines to contain spreading of COVID-19, Employees’ Provident Fund Organization (EPFO) vide a press release dated 20 March 2020 has advised its members, pensioners and employers to avail various online services offered by EPFO, from the comfort of their homes, and to avoid visiting EPFO offices. 

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29.    Provision of Non-Refundable advance to Members under Employees Provident Funds Scheme

The Government of India has amended the Employees Provident Fund Scheme, 1952 wherein on an application from any member of this Scheme employed in any establishment or factory located in an area declared as affected by outbreak of any epidemic or pandemic by the appropriate Government, permit a non-refundable advance from the provident fund account of such member not exceeding the basic wages and dearness allowances of that member for three months or up to seventy-five per cent of the amount standing to his credit in the Fund, whichever is less.

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