COVID: Impact on the Tax and Regulatory Environment in India
09.00 a.m - 09.40 a.m.
Zoom Meeting app
The Cochin Chamber of Commerce and Industry conducted a Virtual CEO Forum Meeting on Friday, 8th of May, 2020.
Mr. Aditya Narwekar, Partner, M&A Tax & Regulatory Practice, PwC India, and Mr. Kunal Wadhwa, Partner, Indirect Tax, PwC India were the Speakers at the meeting. They addressed the “Impact on the Tax and Regulatory Environment in India” in the light of the Covid pandemic.
The President of the Chamber Mr. V Venugopal briefly welcomed the participants to the virtual ‘zoom’ meeting.
Initiating the session, Mr. Narwekar said that in light of the unprecedented times faced by the companies in India, the Ministry of Corporate Affairs (MCA) vide notification dated 19th March 2020 has relaxed certain provisions concerning the requirement of the physical presence of the Directors at Board Meetings allowing for all Board Meetings to be held till 30th June 2020 can now be held through video conferencing or other audiovisual means. For compliances, no additional fees will be charged for late filing during the moratorium period from April 1, 2020, to September 30, 2020.
Mr. Narwekar explained the various measures taken by the RBI and SEBI such as the extension of the period of realization of the value of exports to 15 months from the date of export and the relaxation of certain obligations and disclosure requirements such as filing of corporate governance reports and processing of documents on Foreign Portfolio Investors.
The threshold of default under Section 4 of the IBC has been increased from Rs 100,000 to Rs 10 million to prevent triggering of insolvency proceedings against MSMEs. If the current situation continues beyond 30 April 2020, Section 7, 9, and 10 of IBC will be suspended for 6 months to stop companies at large from being forced into insolvency proceedings in such force majeure causes of default, he said.
Mr. Wadhwa explained the major changes on the Direct and Indirect Tax regime. He said that the due date for filing the belated and revised tax returns for FY 2018-19 had been extended to 31st June 2020. An individual can claim a 100 percent deduction for a donation to PM CARES Fund. For claiming deduction in the return for FY 2019-20, donations to the PM CARES fund can be made till 30th June 2020, he said.
Mr. Wadhwa said that in the Vivad Se Vishwas Scheme, an individual was required to pay an additional percentage of the disputed taxes if the taxes were paid after 31st March but before 30th June 2020. As per the measures announced, even if the taxes are paid after 31st March but on or before 30th June 2020, no additional percentage of the disputed taxes is payable. The lower/NIL withholding certificates held for FY 2019-20 shall be valid till 30th June 2020 pending grant of approval by the tax department for a new certificate for FY 2020-21.
Mr. Wadhwa said that the due date for filing of annual returns under the GST legislation for Financial Year 2018-19 has been extended to June 30th, 2020. The due dates for filing of monthly returns under the CGST Act for February, March, and April 2020 have also been extended to the last week of June/ first week of July for taxpayers, basis their aggregate turnovers in the last FY. Taxpayers with a turnover of up to INR 5 crore are also eligible for a waiver of late fees, interest, and penalty on delayed payment of tax and filing of returns. Those with a turnover of above INR 5 crore would have to pay interest @ 9% per annum (against the prevalent 18%) on late payments, beyond the extended due dates.
The Government has also extended the validity and benefits under the Foreign Trade Policy up to March 31, 2021. Further, the expiry period of import or export authorizations, ending between February 01, 2020, to July 31, 2020, has also been extended for six months, he said. This would maintain the status quo and mitigate any potential pitfalls of the lockdown.
Following this there was a brief discussion wherein the Speakers clarified the issues raised by the participants.
The meeting ended with the President thanking everyone for having participated in the meeting.