Extension of GST Dates due to Lockdown

Waiver of Interest and Late fees for GSTR-3B and GSTR-1

RETURN	TURNOVER PRECEDING FY	TAX PERIOD	RATE OF INTEREST	LATE FEES	RETURN FILING DATE	REMARK
GSTR-3B	>5 CR	Feb-20	NIL	NIL	BY 04/04/2020
			9%	NIL	FROM 05/04/2020 TO 24/06/2020	Interest applicable from 05/04/2020
			18%	Rs. 20 / 50 (CGST+SGST)	AFTER 24/06/2020	Interest and late fees applicable from 20/03/2020
GSTR-3B	>5 CR	Mar-20	NIL	NIL	05/05/2020
			9%	NIL	FROM 05/05/2020 TO 24/06/2020	Interest applicable from 05/05/2020
			18%	Rs. 20 / 50 (CGST+SGST)	AFTER 24/06/2020	Interest  and late fees applicable from 20/04/2020
GSTR-3B	>5 CR	Apr-20	NIL	NIL	BY 04/06/2020
			9%	NIL	FROM 04/06/2020 TO 24/06/2020	Interest applicable from 04/06/2020
			18%	Rs. 20 / 50 (CGST+SGST)	AFTER 24/06/2020	Interest and late fees applicable from 20/05/2020
GSTR-3B	> 1.5 CR TO <=5 CR	Feb-20	NIL	NIL	BY 29/06/2020
			18%	Rs. 20 / 50 (CGST+SGST)	AFTER 29/06/2020	Interest  and late fees applicable from 20/03/2020
GSTR-3B	> 1.5 CR TO <=5 CR	Mar-20	NIL	NIL	BY 29/06/2020
			18%	Rs. 20 / 50 (CGST+SGST)	AFTER 29/06/2020	Interest  and late fees applicable from 20/04/2020
GSTR-3B	> 1.5 CR TO <=5 CR	Apr-20	NIL	NIL	BY 30/06/2020
			18%	Rs. 20 / 50 (CGST+SGST)	AFTER 30/06/2020	Interest and late fees applicable from 20/05/2020
GSTR-3B	<=1.5 CR	Feb-20	NIL	NIL	BY 30/06/2020
			18%	Rs. 20 / 50 (CGST+SGST)	AFTER 30/06/2020	Interest  and late fees applicable from 30/06/2020
GSTR-3B	<=1.5 CR	Mar-20	NIL	NIL	BY 03/07/2020
			18%	Rs. 20 / 50 (CGST+SGST)	AFTER 03/07/2020	Interest  and late fees applicable from 03/07/2020
GSTR-3B	<=1.5 CR	Apr-20	NIL	NIL	BY 06/07/2020
			18%	Rs. 20 / 50 (CGST+SGST)	AFTER 06/07/2020	Interest and late fees applicable from 06/07/2020
GSTR-1	NA	Mar-20	NA	NIL	BY 30/06/2020
				Rs. 20 / 50 (CGST+SGST)	AFTER 30/06/2020	Late fees applicable from 30/06/2020
GSTR-1	NA	Apr-20	NA	NIL	BY 30/06/2020
				Rs. 20 / 50 (CGST+SGST)	AFTER 30/06/2020	Late fees applicable from 30/06/2020
GSTR-1	NA	May-20	NA	NIL	BY 30/06/2020
				Rs. 20 / 50 (CGST+SGST)	AFTER 30/06/2020	Late fees applicable from 30/06/2020

Notifications and Circular w.r.t. relief measures announced in view of COVID -19

This is to inform you that the Government of India has issued certain notifications and circular on 03^rd April 2020 in order to give effect to relief measures announced on 24^th March 2020, in view of spread of Novel Corona Virus (COVID -19).

E-mail procedure for disposal of pending application of lower withholding of taxes of tax year 2019-20

Income-tax laws (ITL) empower the Tax Authority to give a certificate of lower withholding of taxes if the Tax Authority is satisfied that the total income of the recipient justifies withholding of taxes at any lower rates or no deduction of tax, as the case may be^[2]. For obtaining such certificate, the recipient of income is required to make an application before the Tax Authority in a prescribed form^[3] through TRACES portal^[4] with digital signature or electronic verification code. Central Board of Direct Taxes ^[5] (CBDT) is authorized to prescribe the conditions, procedure and mode under which an application can be made and conditions subject to which certificate may be granted to the recipient.

Indirect Tax Relief measures.

The CBIC vide Circular No. 136/06/2020- GST dated April 3, 2020 clarified various issues (Notification No. 30 to 35/2020 dated April 3, 2020) announced by the Government for providing relief to the taxpayers in view of spread of Novel Corona Virus (COVID- 19).

Government extends FTP 2015-2020 till 31 March 2021 and announces various relief measures

This Tax Alert summarizes Notification and Public Notice^[1] issued by the Directorate General of Foreign Trade (DGFT) extending Foreign Trade Policy 2015-2020 (FTP) by one year and announcing various relief measures due to unprecedented current situation arising out of the pandemic COVID-19.

The validity of FTP, Handbook of Procedures (HBP) and export promotion schemes (except Service Exports from India Scheme) have been extended by one year from 31 March 2020 to 31 March 2021. Decision on continuation of Service Exports from India Scheme (SEIS) will be taken and notified subsequently.

Category of services eligible under (SEIS) and rate of reward on the said services for the period 1 April 2019 to 31 March 2020 will be notified separately.

Exemption from payment of integrated tax and compensation cess on imports made under Advance Authorisation (AA) and Export Promotion Capital Goods (EPCG) scheme has been extended from 31 March 2020 to 31 March 2021.

A similar extension is also given for imports made by Export Oriented Units (EOU), Electronic Hardware Technology Park (EHTP), Software Technology Park (STP) and Bio-Technology Park (BTP).

For all Duty-Free Import Authorisation (DFIA), AA and EPCG authorizations, where validity for import of goods and export obligation period (wherever applicable) is expiring between 1 February 2020 and 31 July 2020, extension of six months from the date of expiry has been provided.

Amendments are also made in HBP for extending due dates for filing various applications and refund claims.

Extension of various due dates in respect of duty credit scrips, refunds and reimbursements is likely to benefit exporters who faced challenges in meeting statutory timelines due to disruption caused by COVID-19.

Authorisation holders whose exports are impacted due to current global situation would benefit from the extension of export obligation period.

Having regard to unprecedented situation, it would be beneficial for the industry if the government considers granting extension also in all such cases where time limit with late cut falls between March 2020 to June 2020.

It is pertinent to note that the government has approved scheme for Remission of Duties or Taxes on Export Product (RoDTEP) which will be introduced in a phased manner, replacing the existing Merchandise Export from India Scheme (MEIS).

Extension of due dates for statutory and regulatory compliances in view of COVID-19 outbreak -

This is to update you that the CBIC has released a series of Notifications providing extension of several statutory and regulatory due dates in the wake of COVID-19 outbreak. We have summarized below the key pointers basis the Notifications issued:

No Part Demurage due to Lockdown.

In wake of outbreak of COVID-19 and same being declared as Pandemic, the Government of India has imposed a lockdown for a period of 21 days to contain COVID-19 Pandemic in the country. Ministry of Home Affairs has issued an addendum, specifically giving exceptions to the operations of Seaports for cargo movement and inter-state movement of Goods/cargo for inland and exports to ensure regular supply of goods in the country.
In accordance to the above and on receipt of representations from various stakeholders, the Ministry of Shipping on 24th March, 2020, issued an advisory to all Major Trusts for invoking “Force Majeure” clause on Port activities and Port operations. Ministry of Shipping has now issued specific guidelines to Major Ports on Exemptions/Remissions on penalties, demurrages charges, fee, rentals levied on any Port user for any delay in Berthing/Loading/Unloading operations or evacuation/arrival of cargo caused due to lockdown measures from 22nd March, 2020 to 14th April, 2020. Major Ports have also been allowed to extend the completion of any project under implementation in PPP mode or otherwise. Moreover, Major Ports can permit waiver of all penal consequences with deferment of performance obligations as per concession agreement on case to case basis, for existing and operational PPP Projects.

Impact on APA mechanism due to lockdown.

Introduction

This ongoing pandemic disease, popularly known as Covid-19, needs no elaboration. The entire world has engulfed under its sweep. This is much more than what any of us have ever

witnessed in the past.

This certainly will have (though already started to have) a ripple effect on the global economy with a complete lockdown all over. The businesses are shut, be it manufacturing operations, aviation operations, hotel chains, restaurant, transportation facilities, etc., sparing no industry. To make the matters worse, it is still not known how much more damage will be caused by it before it eventually subsides – if, at all, it does.

In view of the sudden outbreak of COVID19 pandemic and the nationwide lockdown, most government offices are closed and a few involved in emergency services etc., are functioning with skeletal staff. The Department of Commerce has therefore decided to provide suitable relaxations on compliances to be met by units / developers / codevelopers of Special Economic Zones(SEZs). Such compliances to which the relaxations will apply, include: • Requirement to file Quarterly Progress Report (QPR) attested by Independent Chartered Engineers by Developers/ Codevelopers • SOFTEX form to be filed by IT/ITES units • Filing of Annual Performance Reports (APR) by SEZ units • Extension of Letter of Approvals (LoA) which may expire, in the cases of: ■ Developers/codevelopers who are in the process of developing and operationalising the SEZ; ■ units which are likely to complete their 5 year block for NFE assessment; ■ Units which are yet to commence operations Development Commissioners of SEZs have been directed to ensure that no hardship is caused to Developers / CoDeveloper / Units and no punitive action is taken in cases where any compliance is not met during this period impacted by the above disruption. Further, as may be possible, all extensions of LoAs and other compliances may be facilitated through electronic mode in a timebound manner. In the cases where it is not possible to grant extension through electronic mode or in cases where a physical meeting is required, Development Commissioners have been asked to ensure that the Developer / Codeveloper / Units do not face any hardship due to such expiry of validity during this period of disruption. Adhoc interim extension / deferment of the expiry date may be granted without prejudice till 30.06.2020 or further instructions of the Department on the matter, whichever is earlier.

In view of the sudden outbreak of COVID19 pandemic and the nationwide lockdown, most government offices are closed and a few involved in emergency services etc., are functioning with skeletal staff. The Department of Commerce has therefore decided to provide suitable relaxations on compliances to be met by units / developers / codevelopers of Special Economic Zones(SEZs). Such compliances to which the relaxations will apply, include:

·   Requirement to file Quarterly Progress Report (QPR) attested by Independent Chartered Engineers by Developers/ Codevelopers

·  SOFTEX form to be filed by IT/ITES units

·  Filing of Annual Performance Reports (APR) by SEZ units

·  Extension of Letter of Approvals (LoA) which may expire, in the cases of:

■ Developers/codevelopers who are in the process of developing and operationalising the SEZ;

■ units which are likely to complete their 5 year block for NFE assessment;

■ Units which are yet to commence operations

Development Commissioners of SEZs have been directed to ensure that no hardship is caused to Developers / CoDeveloper / Units and no punitive action is taken in cases where any compliance is not met during this period impacted by the above disruption. Further, as may be possible, all extensions of LoAs and other compliances may be facilitated through electronic mode in a timebound manner. In the cases where it is not possible to grant extension through electronic mode or in cases where a physical meeting is required, Development Commissioners have been asked to ensure that the Developer / Codeveloper / Units do not face any hardship due to such expiry of validity during this period of disruption. Adhoc interim extension / deferment of the expiry date may be granted without prejudice till 30.06.2020 or further instructions of the Department on the matter, whichever is earlier.

List of due dates not extended and relaxations not granted by the Government vide Press Release dated 24 March 2020

Sr No	Particulars	Consequences	Action Points
1	Due date for payment of TDS for the month of March 2020 has not been extended. Relief has been granted with respect to interest to be charged for the default.	Interest at 9% p.a. will be applicable with respect to delayed payment of TDS upto 30 June 2020. Also, there is no immunity from prosecution for non-deposit of TDS within the due date. There is a good case to argue that there was a sufficient cause for the delay but the acceptance of the same will be at the discretion of the officer/ Court.	TDS for the month of March 2020 should be paid by 30 April 2020 in order to avoid interest payment/ prosecution proceedings.
2	Due date for filing revised income tax return for FY 2018-19 has not been extended	It could be argued that all due dates falling within the period of 20 March 2020 to 29 June 2020 have been extended to 30 June 2020. However, in absence of any clarification on the same, there is a possibility that the portal may not accept revised returns post 31 March 2020.	Hence, it is advisable to file revised return on or before 31 March 2020 in order to avoid unnecessary hardship.
3	No embargo on recovery proceedings under income-tax or GST law	Contrary to the submission of the Solicitor General to the Supreme Court last week, there is no embargo with respect to recovery proceedings.	Not a lot can be done to prevent attachment of bank account except trying to stay in touch with the concerned officer and bank officials.
4	No embargo on survey or search proceedings under income-tax or GST law	There is a risk of community spread of coronavirus – to the families of the concerned officials and to the family members/ neighbors residing at the place where survey/ search is carried out	Nothing can be done to prevent this

Sr No	Particulars	Consequences	Action Points
5	Manner of calculation of interest under Section 234B (default in payment of advance tax) for FY 2019-20 has not been amended. Relief has been granted with respect to interest to be charged for the default.	In case 90% of income-tax is not discharged by 31 March 2020, interest at 9% p.a. will be charged upto 30 June 2020 and beyond that 12% p.a. interest will be charged.	Advance tax for FY 2019- 20 should be discharged by 31 March 2020 in order to avoid interest payment.
6	Due dates with respect to various compliances under the Foreign Exchange Management Act, 1999 (‘FEMA’) have not been extended.	In case compliances under FEMA are not completed within the due date, there may be penal consequences. There may also be penal consequences if the compliance is completed by the entity but is pending with the bank (e.g. SMF – FC GPR etc)	As far as practically possible, compliances under FEMA need to be completed. If the bank is unable to complete the same at their end, e-mails should be written to the banks for follow-up – this will help in justifying the delay to Reserve Bank of India.
7	Due date for filing GSTR 3B for the months of February, March and April 2020 for taxpayers having turnover of Rs 5 crores or more has not been extended. Relief has been granted with respect to interest, late fee and penalty for the default.	If taxpayers having turnover of Rs 5 crores or more do not file GSTR 3B and consequently not make GST payment for the months of February, March and April 2020 by the due date, interest will be charged at 9%. Late fee and penalty will be waived.	In order to avoid interest liability, GSTR 3B needs to be filed on or before the respective due date for the months of March and April 2020.
8	The operation of Rule 36(4) of the CGST rules has not been suspended. Rule 36(4) requires that only that much Input Tax Credit (increased by 10% of credit reflecting) as is shown in GSTR 1 by the vendor can be claimed while paying GST.	The due date for filing of GSTR 1 for all taxpayers for the month of March, April and May 2020 (for those who have opted for monthly returns) has been extended to 30 June 2020. In such a situation, no taxpayer will file GSTR 1 – resulting in the recipient being unable to claim ITC.	In these cases, gross GST liability will be required to be paid in order to avoid interest/ other consequences.

CBIC clarifies apportionment and transfer of ITC in case of business reorganization

This Tax Alert summarizes a recent circular  issued by the Central Board of Indirect Taxes and Customs (CBIC) clarifying apportionment and transfer of input tax credit (ITC) in case of business reorganization. 

As per proviso to rule 41(1) of the Central Goods and Services Tax Rules, 2017 (CGST Rules), in case of demerger, ITC shall be apportioned in the ratio of value of assets of the new units as specified in the demerger scheme. 

The circular clarifies the following: 

·         While apportioning ITC as per the proviso, value of assets of new units shall be taken at the state level (i.e., at the level of each distinct person) and not at the entity level.

·         Proviso not only covers demerger but applies to all forms of business reorganizations resulting in partial transfer of business assets along with liabilities.

·         Ratio for apportionment of ITC need not be applied separately in respect of each tax head, viz. central tax (CGST), state tax (SGST) and integrated tax (IGST).

·         Transferor is at liberty to determine the amount to be transferred under each tax head, subject to availability of ITC balance under such head.

·         Apportionment formula shall be applied on ITC balance available in the electronic credit ledger on the date of filing of Form GST ITC–02 by the transferor.

·         Further, the ratio of the value of assets shall be taken as on the appointed date of demerger. 

Clarifications issued by CBIC addresses most of the ITC related open issues faced by industry while implementing various business transfer arrangements. 

Flexibility in determining amount of ITC to be transferred from each tax head could prove beneficial to taxpayer. 

There are few more GST related issues pertaining to business restructuring which may require clarity. Industry should engage with the government to clear the ambiguity in order to avoid any unwarranted litigation.  

GST Update | Year end activities for FY 2019-20

With the new financial year beginning tomorrow, we wish to provide a brief list of action points to be considered to ensure compliance from GST perspective:

Amendments proposed in the Finance Bill 2020 passed by Lok Sabha

The Finance Bill, 2020 was introduced in the lower house of the Parliament on 1st February, 2020 wherein various/ significant changes in the Income Tax Act, 1961 (‘the Act’) were proposed by the Hon’ble Finance Minister

 Recently, on 23rd March 2020, the lower house of the Parliament has passed the aforesaid Bill with certain amendments to the proposed changes in the Finance Bill.