ShineWing India’s Bird’s-Eye View: Finance Ministry’ Relief Package to COVID19-Struck Corporate Sector in Statutory Compliances

ACN NEWS On Mar 30, 2020

NEW DELHI: In view of the difficult time, the Indian corporate sector is experiencing due to global outbreak of Novel Coronavirus (COVID-19) and resultant financial crises and stress, the Union finance ministry recently announced a plethora of measures to ease out tension and to promote the morale of the industry.

Announced by Finance Minister Nirmala Sitharaman on March 24, these measures include relaxations from compliances related to the filing of MCA Forms, conducting Board Meetings, Companies Auditors’ Report Order 2020 (CARO 2020), mandatory board meetings, compulsory residential status of directors, time-limit for declaration of commencement of business, and many more.

Gurugram-headquartered ShineWing India, the member company of ShineWing International, a global network of independent accounting and consulting firms brings you the summary of the relief package as per the following:

Corporate Laws:

No additional fees for the late filing of the MCA Form for the period 01.04.2020 to 30.09.2020.
Mandatory requirement of conducting Board Meetings by the companies within the prescribed interval of 120 days shall be extended by a period of 60 days till the next two quarters i.e., till 30.09.2020, thereby enhancing the minimum prescribed interval to 180 days.
Applicability of Companies Auditors’ Report Order 2020 (CARO,2020) deferred from Financial Year 2019-20 to 2020-21.
No violation, if independent directors are not able to hold one meeting during Financial Year 2019-20.
Conditions for the compulsory residential status of directors are relaxed, now there is no need for a mandatory presence in India for 182 days.
Time-limit for declaration of commencement of business under Form INC-20A is further extended by 6 months, thereby extending the time limit to 1 year.
Debenture Redemption Reserve creation requirements extended till 30.06.2020.
To prevent triggering of insolvency proceedings against MSMEs by large participants, the threshold for default under section 4 of the IBC, 2016 has been increased to Rs 1 crore from the existing threshold of Rs 1 lakh.
Further, if the current situation continues beyond 30.04.2020, Ministry shall consider suspending sections 7, 9 and 10 of the IBC, 2016 for a period of 6 months in order to protect companies at large from being forced into insolvency proceedings in such force majeure causes of default.

Other Changes:

Bank charges to be reduced for digital payment up to 30.06.2020.
No charges for non-maintenance of minimum bank balance up to 30.06.2020.
No charges to debit cardholders for withdrawal of amount from any bank ATM up to 30.06.2020.

The Finance Ministry has also extended the deadline for Income Tax Return filing, Filing of declaration under Vivad Se Vishwas Scheme, Aadhar PAN linking, Opting Composition Scheme, Filing of GST annual returns, Issuance of Notice, Intimation, Filing of Appeal, Furnish Returns, Sanctions, Applications and other compliances by Tax Payers under GST and Income Tax Laws from March 31 to June 30.

The ministry has also reduced the interest rate to be imposed for the delay in tax payment for the FY 2018-19, deposit of tax deducted at source (TDS) for the month of March 2020, Late Fee, Interest and Penalty for Business having a turnover less than Rs. 5 crores, and in many more areas as given below in the tables.