Relaxation in GST due to COVID-19 pandemic

Recently, changes have been made vide CGST Notifications dated 23-3-2020 and 3-4-2020, in respect of filing GSTR-3B and GSTR-1 returns for the period February 2020 to May 2020. The extension is due to COVID-19 pandemic (Corona Virus). There is impression in some quarters that due dates of filing of GSTR-1 and GSTR-3B return has been extended. In fact, it is not so. There are only relaxations in respect of filing these returns to be filed for tax period February 2020 to May 2020 and there is relaxation in respect of interest on late payment. These can be termed as “extended dates”. If the returns have been filed beyond ‘due dates’ but on or before specified ‘extended dates’, late fee will not be payable. Further, interest will be reduced/waived, only if returns are filed and taxes are paid on or before ‘extended date. If not so done, interest @ 18% and late fee as applicable and is payable from ‘due date’ and not from ‘extended date’. If you miss this trap of distinction between ‘due date’ and ‘extended date’ for filing return, you can come in deep trouble. Changes in Foreign Trade Policy w.e.f. 1-4-2020 The Foreign Trade Policy – FTP 2015-20 was expiring on 31-3-2020. However, it has been extended upto 31-3-2021, due to COVID-19 pandemic (Corona virus) crisis. All export promotion schemes under the present Foreign Trade Policy are continuing, except SEIS. Existing FTP 2015-20 and HBP 2015-20 will continue upto 31-3-2021. The major amendments are as follows. SEIS scheme was extended upto 31-3-2020. Decision of its continuation beyond 31-3-2020 will be taken subsequently and notified accordingly – para 3.08(a) of FTP 2015-2020 as amended on 31-3-2020. MEIS- For shipping bills where the Let Export Order (ELO) falls between 1-2-2019 to 31-5-2019, application for MEIS may be filed within 15 months (instead of 12 months) – para 3.15(a)(i) of HBP 2015-2020 as amended on 31-3-2020. Advance Authorisation – IGST and GST Compensation Cess on imports under Advance Authorisation has been exempted upto 31-3-2021 – para 4.14 of FTP 2015-2020 amended on 20-3-2019 and 31-3-2020. Limit for FPI investment in G-secs and State Development Loans remain unchanged at 6% and 2%: RBI The limits for FPI investment in Government securities (G-secs) and State Development Loans (SDLs) shall remain unchanged at 6% and 2%, respectively, of outstanding stocks of securities for FY 2020-21. All investments by eligible investors in the specified securities will be under the Fully Accessible Route (FAR) from the date on which the FAR comes into effect. Also, all existing FPI investments in the specified securities shall be reckoned under the FAR. The calculation of outstanding stock of G-secs and utilization levels of limits under the MTF has accordingly been adjusted. MCA-21 Initiative towards E- Governance & Ease of Doing Business Ministry of Corporate affairs (MCA 21) is continuously working towards achieving the E-Governance Model. To strengthen Compliance Governance, Ministry is trying to set up E – Governance model with an aim to facilitate world class governance of corporates. MCA has taken various steps to transform regulatory environment for easy compliance. Corporate affairs ministry will upgrade its online services to companies offered through its MCA21 portal so that certain breaches under the Companies Act can be adjudicated remotely through electronic means. As per press news dated 03rd April, to enable social distancing as well as eliminate bureaucratic discretion, The Ministry of Corporate Affairs (MCA) will take a leaf out of the Income Tax department’s book to offer faceless adjudication of specified company law offences. Increasing the Threshold For Initiation of Proceedings Under IBC: Impact on MSMEs Covid-19 and the lockdown imposed to curb its further outbreak has far reaching social and economic implications particularly in a country like India. In India Medium and Small Scale Enterprises (MSMEs) contribute significantly towards the GDP of the Country. To protect the MSMEs from proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC) the Ministry of Corporate Affairs vide its notification dated 24th March 2020 increased the threshold for initiation of proceedings under the IBC from the existing default amount of Rs. 1 lacs to Rs.1 crore. The Finance Minister while mentioning about the increase in threshold for proceedings under the Code specifically stated that the said increase is being brought in force with immediate effect to protect the interest of MSMEs whose operations might be prejudicially impacted because of Covid-19. Govt. notifies Forms under Sovereign Gold Bond Scheme 2020-21 The Government has notified Sovereign Gold Bond Scheme 2020-21. The Scheme has prescribed Forms, eligibility criteria, tax exemption and procedure for making application for subscription of Gold Bonds. (i) The interest on the Gold Bonds shall commence from the date of issue and shall be paid at a fixed rate of 2.50 percent per annum on the nominal value of the bond. (ii) The interest shall be payable in half-yearly rests and the last interest shall be payable along with the principal on maturity. Taxation: The interest on the Gold Bond shall be taxable as per the provisions of the Income-tax Act, 1961 (43 of 1961). The capital gains tax arising on redemption of these bonds to an individual is exempted. The indexation benefits will be provided to long-term capital gains arising to any person on transfer of bond.