Kreston OPR Newsletter: July 2020

by Kreston OPR / Thursday, 09 July 2020 / Published in NEWS

Direct Taxation
Indirect Taxation
Ministry of Corporate Affairs (MCA)
Micro, Small & Medium Enterprises (MSMEs)
Others

Direct Taxation

Extension of various time limits under Direct Tax & Benami laws

In view of the challenges faced by taxpayers in meeting the statutory and regulatory compliance requirements across sectors due to the outbreak of Novel Corona Virus (COVID-19), the Government brought the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 on 31st March, 2020 which, inter alia, extended various time limits. Read more

Employees allowed to claim Income Tax exemption on conveyance allowance under new tax regime (Section 115BAC of the Act)

The Central Board of Direct Taxes (CBDT) has amended Income Tax rules to prescribe certain exemptions which can be availed by the employees.These include any allowance granted to meet the cost of travel on tour or on transfer, any allowance, whether, granted on tour or for the period of journey in connection with transfer, to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty. Read more

Higher penal interest on delayed tax payments

In her March press conference, the finance minister announced a relaxation on the penal interest levied on the delayed payments of advanced tax, self-assessment tax, regular tax, TDS, TCS, equalization levy, STT, CTT made between March 20, 2020 and June 30, 2020.She stated that a reduced interest rate at 9 per cent instead of 12 per cent /18 per cent per annum (i.e., 0.75 per cent per month instead of 1/1.5 per cent per month) was to be charged during this period. No late fee/penalty shall be charged for delay relating to this period.

Any delayed tax payment made after June 30, 2020 will attract penal interest of 12 per cent /18 per cent as applicable instead of 9 per cent.

Section 194N – TDS on cash withdrawals over Rs 1 crore

In order to discourage cash transactions in the country and promote the digital economy, section 194N had been introduced in the Union Budget 2019. As per section 194N, TDS is to be deducted at 2% on cash withdrawals over and above Rs 1 crore in a financial year. Read more

Indirect Taxation

CBIC extends validity of e-way bills in new set of relaxations

The Central Board of Indirect Taxes and Customs (CBIC) extended the end-date till August 31, 2020 for several relaxations including issuance of order and appeals by tax authorities, including in case of refunds, and extended the validity of e-way bills issued before lockdown till September 30, 2020. Read more

SC stays Delhi HC order on transitional GST credit on Centre’s SLP

The Supreme Court has stayed Delhi high court order that had allowed availing tax credits for pre-GST period up to June 30 2020. Read more

CBIC launches paperless customs export processing

As an initiative to promote Ease of Doing Business and enhanced use of technology, the Central Board of Indirect Taxes and Customs (CBIC) launched paperless customs export processing, a move aimed at trade facilitation. Read more

Highlights of 40th GST Council Meet

Measures for Trade facilitation:
1. Reduction in Late Fee for past Returns:

As a measure to clean up pendency in return filing, late fee for non-furnishing FORM GSTR-3B for the tax period from July, 2017 to January, 2020 has been reduced / waived as under: –

‘NIL’ late fee if there is no tax liability;
Maximum late fee capped at Rs. 500/- per return if there is any tax liability.

The reduced rate of late fee would apply for all the GSTR-3B returns furnished between 01.07.2020 to 30.09.2020. Read more

Certain clauses of the Finance Act, 2020 amending CGST Act 2017 and IGST Act, 2017 to be brought into force from 30.06.2020. Read more

Ministry of Corporate Affairs (MCA)

Ministry of Corporate Affairs widens ambit of CSR activities

The ministry of corporate affairs (MCA) has included contributions towards the Central Armed Police Forces (CAPF) and Central Para Military Forces (CPMF) veterans and their dependents including widows, within the definition of corporate social responsibility (CSR). Read more

MCA amends the Share Capital and Debentures Rules

MCA vide notification dated 05th June, 2020 has made the following amendments in the Companies (Share Capital and Debentures)Rules, 2014:Now, a start-up company can issue sweat equity shares not exceeding 15% of its paid-up share capital upto 10 (ten) years from the date of incorporation. Earlier the time period was 5 (five) years. Read more

MCA extends timelines for creation of DRR up to 30th September, 2020

In view of the current pandemic situation caused by COVID-19, MCA has further relaxed some compliance timelines up to 30^thSeptember, 2020. Read more

Scheme for relaxation of time for filing forms related to creationor modification of charges under the Companies Act, 2013

On account of the pandemic caused by the COVID-19, MCA has introduced a ‘scheme for relaxation of time for filing forms related tocreation or modification of charges’ for the purposes of condoning the delay in filing certain forms related to creation/ modification ofcharges. Read more

The timelines applicable for filing the charge creation/ modification forms are as under:

Micro, Small &Medium Enterprises (MSMEs)

PM launches technology-based solution CHAMPIONS to provide one stop solutions to MSMEs

Prime Minister Narendra Modi has launched technology-based solution named as CHAMPIONS for MSME sector. Read more

Ministry of Micro, Small and Medium Enterprises (MSMEs) launches another funding scheme to help the distressed MSME sector

Minister of MSME, Shri Nitin Gadkari launched the Credit Guarantee Scheme for Sub-ordinate Debt (CGSSD) which is also called “Distressed Assets Fund–Sub-ordinate Debt for MSMEs”.As per the Scheme, the guarantee cover worth Rs. 20,000 crores will be provided to the promoters who can take debt from the banks to further invest in their stressed MSMEs as equity. Read more

Consolidated notification regarding MSMEs (to be known as Udyam)

Ministry of Micro, Small and Medium Enterprises (MSME) has come out with a consolidated notification in the form of guidelines forclassification and registration of MSMEs on 26th June, 2020.The notification clarifies that Exports of goods or services or both shall be excluded while calculating the turnover of any enterprisewhether Micro, Small or Medium. Read more

Others

RBI extends enhanced borrowing limit under Marginal Standing Facility (MSF) till September 30

The RBI has extended the relaxation on the minimum daily maintenance of the CRR at 80 per cent till September 25, 2020. Amid ongoing economic woes created by the coronavirus pandemic, the Reserve Bank has decided to extend the enhanced borrowing facility provided to banks to meet their liquidity shortages till September 30. Read more

SEBI further relaxes compliance requirement for portfolio managers

SEBI has eased compliance requirement for portfolio managers amid prevailing business conditions amid coronavirus pandemic.In a circular, Securities and Exchange Board of India (SEBI) said it has extended the timeline for compliance with the requirements of portfolio manager’s guideline regarding upfront fee, among others, by further three months till October 1, 2020. Read more

SEBI relaxes pricing norms for preferential issues of listed companies

The Securities and Exchange Board of India (SEBI) has relaxed the pricing norms for preferential issuances to ease the capital-raising process for listed companies.The new pricing formula for allotment of shares under the preferential issue will be higher of the average 12-week price or 2-week price. Read more

SEBI makes raising funds easier for stressed companies

SEBI further relaxed the preferential allotment rules for faster fund raising by stressed companies in the current crisis time. Read more

SEBI allows promoters to increase stake by up to 10%

Stock market regulator, Securities and Exchange Board of India (SEBI) has amended the takeover norms to allow promoters to increase their stake by up to 10 per cent through a preferential allotment. Read more

No coercive action against private firms for non-payment of full wages during lockdown: SC

The Supreme Court has directed the Centre and states not to take any coercive action till July end against private companies, which have failed to pay full wages to their employees during the coronavirus-induced lockdown period. Read more

Stamp duty on buying of shares and mutual fund units

With effect from July 1, 2020, buying of shares and mutual fund units will attract stamp duty. It is clarified that redemption of mutual fund units is not liable to duty as it is neither a transfer nor an issue nor a sale. Stamp duty is imposed on the value of units excluding other charges like service charge, AMC fee, GST etc. Read more

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