Relaxation in Tax and Statutory Norms due to Covid-19 outburst
The COVID-19 pandemic has forced governments to take unprecedented measures such as restricting travel and implementing strict quarantine requirements. Whereas, in view of the spread of pandemic COVID-19 across many countries of the world including India, causing immense loss to the lives of people, it has become imperative to relax certain provisions, including extension of time limit, in the taxation and other laws. And whereas the Parliament is not in session, the President is pleased to promulgate the Ordinance called “THE TAXATION AND OTHER LAWS (RELAXATION OF CERTAIN PROVISIONS) ORDINANCE, 2020”
In this regard, with this write-up an effort is made to summarize all the relaxed norms at one place in more abreast and precise manner.
Table-1
| Law/Rules/Procedures | Actual Norms | Relaxed Norms |
|---|---|---|
| Form 15G/15H for FY 2019-20 under section 197A of Income Tax Act | Was valid till 31st March, 2020 | Existing 15G/H will be valid up to 30.06.2020. |
| Lower Deduction Certificate (LDC) for FY 2019-20 under section 197 of Income Tax Act | Was valid till 31st March, 2020 | Will be valid upto 30.06.2020. However, the assessee should apply for LDC for FY 2020-21 as early as possible. |
| Completion of any proceeding, passing of any order or issuance of any notice/intimation/notification/sanction etc. under Income Tax Act | Due to be completed within the period from 20th March, 2020 to 29th June, 2020 | Shall stand extended to 30th June, 2020 |
| Filing of any appeal or furnishing any document or report or return, statement under Income Tax Act | Due to be filed within the period from 20th March, 2020 to 29th June, 2020 | Shall stand extended to 30th June, 2020Therefore, ITR for FY 2018-19 may be filed till 30.06.2020 (with applicable penalty) Also, the period of filing appeal before CIT(A) or ITAT shall be extended by this period Further, any reply which is due to be submitted in the E-proceeding shall stand extended by this period. Furthermore, the date of sending notices under section 148 shall also be extended till 30.06.2020 |
| Making of any payment or deposit or investment for the purpose of claiming deduction/allowance/exemption under Chapter-VI-A under Heading B | Due to be made before 31.03.2020 | Extended till 30.06.2020 |
| Interest on delayed payment of TDS, TCS, Advance Tax, Self-Assessment Tax, Equalization Levy, STT, CTT | 1% to 1.5% for every month of part thereof (along with applicable late fee) on the payment due to be made for the period from 20th March, 2020 to 29th June, 2020 | 0.75% for every month or part thereof and there will be no late fee and no prosecution if the payment has been made on or before 30.06.2020 |
| Payment of outstanding tax to be made under ‘Direct Tax Vivad se Vishwas Act, 2020 | Due to be made on or before 31.03.2020 in case 100% of outstanding tax and 110% of outstanding tax in case made after 31.03.2020 | Assessee opting for Vivad se Vishwas scheme may make 100% payment of outstanding tax before 30.06.2020 and 110% of outstanding tax after 01.07.2020 |
| Indirect Tax/GST | 4% of (Income Tax + Surcharge) | 4% of (Income Tax + Surcharge) |
| Payment under ‘Sabka Vishwas Legacy Dispute Resolution Scheme’ | Due to be paid in the period from 20th March, 2020 to 29th June, 2020 | Shall be made on or before 30.06.2020 |
| GSTR-1 for the month of March, April and May, 2020 and for quarter ending March, 2020 | GSTR-1 for the month of March, April and May, 2020 and for quarter ending March, 2020 | Shall be filed on or before 30.06.2020 |
| GSTR-3B for the month of February, March, April and May, 2020 | Due to be filed on 20th or 22nd-24th of the following month | Extended as per the table 2 mentioned below |
| Opting for Composition scheme in Form CMP-02 | Due to be filed on 31.03.2020 | Shall stand extended till 30.06.2020 |
| Quarterly return for the quarter ending March, 2020 in Form CMP-08 for Composition dealer under GST | Due to be filed on 18th April, 2020 | Shall be filed on or before 07.07.2020 |
| Annual return for FY 2019-20 in Form GSTR-4 for Composition dealer under GST | Due to be filed on 30th April, 2020 | Shall be filed on or before 15.07.2020 |
| Completion of any proceeding, passing of any order or issuance of any notice/intimation/notification/sanction etc. under GST | Due to be completed within the period from 20th March, 2020 to 29th June, 2020 | Shall stand extended to 30th June, 2020 (refer Note 1) |
| Filing of any appeal or furnishing any document or report or statement under GST | Due to be filed within the period from 20th March, 2020 to 29th June, 2020 | Shall stand extended to 30th June, 2020 |
| E-way bill generated under Rule 138 of CGST Rules | Validity is due to expire during the period from 20.03.2020 to 15.04.2020 | The validity shall be deemed to have been extended till 30.04.2020 |
| Companies Act | 4% of (Income Tax + Surcharge) | 4% of (Income Tax + Surcharge) |
| Applicability of CARO 2020 | To be applicable for FY 2019-20 | Shall stand extended and shall be applicable for FY 2020-2021 |
| Time limit between two Board Meeting under Companies Act | Maximum 120 days | Extended further 60 days (i.e. total 180 days) |
| EPF | 4% of (Income Tax + Surcharge) | 4% of (Income Tax + Surcharge) |
| Employer & Employee contribution in EPF | 12% contribution by both | Total contribution of 24% shall be paid by the Government to those organizations which have less than 100 employees and 90% of the employees draw less that Rs. 15,000/- p.m. |
| PF withdrawal | Allowed only in special case | Withdrawal allowed upto 75% of PF balance or 3 months wages whichever is less |
Note 1: Such extension shall not be applicable for registration and invoicing compliances._**
The relaxation has also been provided in filing GSTR-3B return.
Table-2
| Class of registered persons | Tax period | Extended due date | Rate of interest/Late fee (refer Note 2) |
|---|---|---|---|
| Aggregate turnover is more than 5 crores in the preceding financial year | February, March, April, 2020 May, 2020 | 24.06.20 27.06.2020 | Nil interest for first 15 days from the due date, and 9% thereafter and no penalty/late fee |
| Aggregate turnover is more than 1.5 crores and up to 5 crores in the preceding financial year | February, March, 2020 April, 2020 May, 2020 | 29.06.2020 30.06.2020 12.07.2020/14.07.2020 (refer Note3). | No interest and penalty/late fee |
| Aggregate turnover of up to 1.5 crores in the preceding financial year | March 2020 April, 2020 May, 2020 | 03.07.2020 06.07.2020 12.07.2020/14.07.2020(refer Npte 3) | No interest or penalty/late fee |
Note 2: The levy of lower or nil interest is subject to the condition that the return has been filed on or before the date mentioned above. If the taxpayer fails to file, the return aforementioned then the interest shall be calculated from the original due date of such return and late shall also be leviable for such delay along with liability for penalty.
For better understanding, let’s take an example for a taxpayer whose aggregate turnover is more than Rs. 5 crores and this is how interest will be calculated for delayed filing of return for the month of March, 2020 (due date of filing being 20.04.2020)
| S. No. | Date of filing GSTR-3B | No. of days of delay | Whether condition for reduced interest is fulfilled? | Interest |
|---|---|---|---|---|
| 1 | 02.05.2020 | 11 | Yes | Zero interest |
| 2 | 20.05.2020 | 30 | Yes | Zero interest for 15 days+ interest rate @9% p.a. for 15 days |
| 3 | 20.06.2020 | 61 | Yes | Zero interest for 15 days+ interest rate @9% p.a. for 46 days |
| 4 | 24.06.2020 | 65 | Yes | Zero interest for 15 days+ interest rate @9% p.a. for 50 days |
| 5 | 30.06.2020 | 71 | No | Interest rate @18% p.a. for 71 days (i.e. no benefit of reduced interest) |
Note 3: The due date is 12.07.2020 if the taxpayer is registered in state of 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 and it will be 14.07.2020 if the taxpayer is registered in state of 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.
A proviso has been inserted in Rule 36(4) of CGST Rules whereas the condition mentioned in the said rule shall not apply to Input Tax Credit availed by registered person in GSTR-3B for the month of February, March, April, May, June, July and August, 2020 but the said conditions shall apply cumulatively and a cumulative adjustment of Input Tax Credit for the aforementioned months shall be done in the GSTR-3B for the month of September, 2020.
The government has taken and will further take more actions and will introduce some more financial and economic packages. In the nation-wide fight of Covid-19 the Government is doing its part in many ways whether it’s relaxing certain norms to make life easier for the people. Now it’s our turn to make the Government strategy successful. Therefore, we request all the readers to stay home, stay happy.
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