While we are all stay put at home, all types of experiences are out in the open during this lockdown. Some played out in the media as we see thousands of our brethren struggling for food and shelter, despite governmental and societal support. Some heroic deeds of cycling hundreds of kilometres to reach home or double-ride on a cycle to get a chemo treatment done for the wife or drive a scooty to bring home a son. Some appalling accounts of irresponsible celebrities enjoying parties and crashing in the middle of the road in the middle of the night, only to abandon a luxury car and scoot. Of course stories of sacrifice, duty & grit of cops, nurses, doctors, armed forces. Some success stories that showcase how aam admi (common man) has risen above all differences and is making a ‘difference’ in the lives of the less-fortunate through various innovative services – from food packets to grocery packs to delivery of medicines to online sessions to caring for the elderly ! Amidst all this are the creative memes and Corona jokes doing the rounds. Life in a kaleidoscope I would say. What better way to capture than crowd source the Corona-times experience. Two of my colleagues who help me come up with Samhita fortnight after fortnight have shared their personal experience /
Poornima Jayarao from Mumbai has this to say …..”The phone rang. It was my in-laws’ caretaker who told me that my mother-in-law had a fall and had injured herself. He wanted me to rush to their apartment immediately. I told him to give me some time and hung up the call. Lockdown…no transport…how do I reach there?? I kept chanting Hanuman Chalisa and gathered some strength. Packed my bags and waited on the main road for more than half an hour for an auto. Somehow I am always blessed. I finally got an auto and Wahid Bhai, the auto driver drove me to my in-laws apartment very safely.
It was sad to see both my in-laws on bed. Satish, the caretaker who has been nursing both of them caringly for more than a year now had not gone home for 15+ days due to the lockdown. He was on 24 hours duty all alone – nursing, shopping, cooking, cleaning, bathing, feeding two aged adults who are to be cared for as young children. He was at his wits’ end. My mom-in-law needed a lady caretaker. With great difficulty I convinced Satish’s wife to take up the job. The toughest challenge for me was to bring her to my apartment in the lockdown, as she had to travel 56 kms from her place. I spoke to my close family friend who happens to be a doctor by profession and requested him to make some arrangements. He promised me that by end of the day the caretaker would reach my place. I did not question him much. Just trusted. I kept thinking…..Around 6pm in the evening the doorbell rang and there she was…Ruby, the caretaker, our saviour. I welcomed her with a hot cup of tea and asked her curiously “How did you manage to come?”. She replied with a big smile “Madam, mai toh ambulance me aayi and who bhi jaanwaron ka ambulance”? (Madam I came in a veterinary ambulance). The whole room was filled with laughter. Behind the mask I could see Satish blushing, seeing his wife after many days and my toothless in-laws chuckling too?.
Inspite of Corona eclipsing all our lives, there are angels like Wahid Bhai, Satish, Ruby and my doctor friend. Grateful for the help received. Humanity is still alive !!”
Another post is from my youngest team member Krithika Murali, who is part of a joint family in Bangalore. She has another perspective, another take on these strange #Stayhome times. “…….It has taken most of us a pandemic and 21 days lockdown to realise what it feels like to spend time with the people who we adore the most but are also most negligent towards. While most people spend 10-12 hours each day working to make their lives better, they often tend to ignore small moments of joy.
Last week during dinner with my family of 12 members, suddenly one of them said, “I don’t even remember when was the last we all spent so much time together without being tied to our phones and laptops”. At that moment a few questions crossed my mind – Why are we only focussing on being distanced from the outside world when we have an opportunity of focussing on ourselves? On binding with family members by being home-bound ? When was the last time we cooked, painted, read a good long book, sang or danced to a song just because it is our passion?
Do the things you love when you have the time in hand – Smile while you still have teeth!!”
Two completely diverse experiences across generations, across cities but fundamentally focussing on human lives and our interdependency that I talked about in the last issue. I also talked about the umpteen number of Corona-triggered regulatory changes. The downpour continues in this issue as well which is welcome. Just that good planning and clear drafting can avoid many of these ‘clarifications on clarifications’. Expect inundation now that the lockdown is set to continue further. Along with the updates from MCA, RBI, DGFT, IT, GST and a few funding support schemes, do catch up with Balaji’s tips under “Let’s excel in English” and read up the FAQs answered by our Associate Sreenivasan Narasimhan in the article “Borrowing and Lending”. 234th issue of Samhita is again a heavy-duty stuff. But there is a funny quote hidden in the issue somewhere if you have an eye for it ?
During the COVID-19 pandemic, holding shareholders meetings poses many difficulties. To ease this burden on companies, MCA has come out with a Circular dated 08.04.2020 which clarifies that wherever holding of an Extra-ordinary General Meeting is unavoidable, the same can be held through Video conferencing (VC) or other audio visual means (OAVM) till 30.06.2020 to take approval of shareholders for important and urgent matters while also adhering to the social distancing norms.
To convene an EGM through VC or OAVM, several requirements w.r.t. notice of EGM, mode of dispatch, e-voting / postal ballot, mandatory presence of auditor, filing of all such resolutions with RoC etc. are detailed by way of a Note. There are separate provisions w.r.t. companies where e-voting is applicable / opted for and where e-voting is not applicable in case of smaller companies / with lesser shareholders. As expected, this Circular has thrown up further practical challenges w.r.t. mode of sending notice, postal ballot etc. which has been clarified vide another Circular dated 13.04.2020. More and more clarifications can be expected with the lockdown extending upto 03.05.2020!
Eligibility of CSR expenditure for COVID related activities
Vide Circular dated 10.04.2020, MCA has clarified the following:
Contribution made to PM CARES fund and State Disaster Management Fund will qualify as CSR expenditure
Contribution made to Chief Minister’s Relief Fund or State’s Relief Fund will not qualify as CSR expenditure
Payment of salary / wages to employees, workers, casual workers or daily wage workers during the lockdown period will not qualify as admissible CSR expenditure
If any ex-gratia payment is made to temporary /casual workers / daily wage workers over and above their wages, specifically for the purpose of fighting COVID 19, the same shall be admissible towards CSR expenditure as a onetime exception provided the same has been explicitly declared by the Board and certified by the Auditor
Relaxation of additional fee for various IEPF filings
During the moratorium period from 01.04.2020 to 30.09.2020 delayed filing of various IEPF related e-forms like IEPF-1, IEPF-1A, IEPF-3, IEPF-4, IEPF-7, IEPF-5 will not attract any additional fee.
Extension of FTP 2015-2020
Vide notification dated 31.03.2020 the Foreign Trade Policy 2015-20 which was to remain in force till 31.03.2020 has been extended to remain in force for an additional year ending 31.03.2021.
Eligible services under the Service Exports from India Scheme (SEIS) will be notified separately.
Validity period for making imports and exports under various Duty Free Import Authorizations expiring between 01.02.2020 and 31.07.2020, has been extended for another six months from the date of expiry.
Extension in time has been allowed for filing various Reports/Returns etc. under the policy.
Exemption from payment of IGST and Compensation Cess on the imports made under EPCG Authorisations has been extended up to 31.03.2021.
Validity period of Letter of Permission/ Letter of Intent as granted to EOUs, units in STPs / EHTPs / BTPs is further extended up to 31st December, 2020.
Last date of filing applications for refund of TED/Drawback, Transport and Marketing Assistance has been extended.
More time for export realisation
Export of goods / software/ services must be realised and repatriated to India within 9 months from date of export whether by a normal exporter or by units of SEZ, Export Oriented Units (EOUs), Electronics Hardware Technology Parks (EHTPs), Software Technology Parks (STPs) and Bio-Technology Parks (BTPs).
Export of Goods to a warehouse established outside India with the permission of RBI, has 15 months’ time for realisation and repatriation to India.
Now the words “within such other period” has been added to the above 9 months / 15 months, giving powers to RBI to modify the period in consultation with the Government. Accordingly RBI has extended the export realisation time period from 9 months to 15 months.
COVID-19 STARTUP ASSISTANCE SCHEME (CSAS)
CSAS has been floated by SIDBI to sanction Working Capital Term Loan to eligible start-ups under a fast track approval scheme:
Working capital term loan of not more than 2 crores with 36 months tenor
Must be a DPIIT recognised start-up with funding from any Alternate investment Fund
Start-up must be less than 10 years old
Must have a turnover between 10 and 60 crores during FY 2019 & 2020
Must have minimum 50 employees
Must have a positive net worth and positive unit economics
Hypothecation of assets as security
The loan may also be considered against the GST refund
There must be no outstanding bank loan
Start-up must not have been written off by any AIF
In case of default loan will be converted to equity at par
CAWACH – DST funding for start ups
The Department of Science and Technology (DST) is funding eligible start ups upto Rs. 1 crore if they have high impact, innovative and scalable solutions that address challenges faced by the society due to COVID-19 – Diagnostics, Ventilators & PPE, Sterilizers, Disinfectants and Health informatics.
Start ups should be less than 7 years old, registered on start up India portal, at revenue stage, funded earlier and have a ready to deploy product / service. Applications to be made to www.isba.in/CAWACH.
ICSI Auditing standards mandatory from July, 2020
Due to the spread of the COVID-19 pandemic, the ICSI Auditing Standards CSAS-1 to CSAS-4 shall be applicable to Audit engagements accepted by the auditor on or after 01.10.2020 and the requirement to issue Diligence Report for Banks in case of Consortium lending or Multiple Banking Arrangements by Peer Reviewed Units only shall be effective from 01.07.2020 instead of 01.04.2020.
Delay in payment of interest / principal due to lockdown- not a default
In view of the nationwide lockdown and the 3 month moratorium / deferment on payment permitted by RBI, if the delay in payment of interest / principal has arisen solely due to the lockdown conditions, Credit Rating Agencies may not consider the same as a default event or recognize the default.
Extension of timeline for compliances
Relaxation has been granted to intermediaries / market participants of the 21 days lockdown period, over and above the prescribed time limits for the following activities:
Processing of requests for – Remat , Transmission, Issue of Duplicate Share Certificates , Name Deletion/ Name Change/ Transposition/ Pending Share Transfers (Re-lodgement cases in the case of share transfers), Consolidation / Split / Replacement of Share
Submission of Half Yearly Report to SEBI pursuant to Circular dated 5.06.2012
Compulsory Internal Audit of RTAs(Registrar and Transfer Agent) by CA / CS / CMA
Submission of Audit Report by QRTAs (Qualified RTA) on Cyber Security and Cyber Security Resilience framework for QRTAs
Confirmation by the issue to the depository w.r.t. listing of security within 15 days of receipt of certificate of security on the recognised stock exchange it was previously listed
Submission quarterly Audit report from a practicing CA / CS or the purposes of reconciliation of the total issued capital, listed capital and capital held by depositories in dematerialized form, the details of changes in share capital during the quarter
Ministry of Finance
Extended time line for keeping Small accounts operational
Time line w.r.t requirement of Client due diligence of a Small account has been extended vide amendment to the Prevention of Money Laundering (Maintenance of Records) Rules, 2005.
Small account with a bank means a savings account in which:
aggregate of credits in a FY doesn’t exceed Rs.1 lakh,
aggregate of withdrawals & transfers in a month doesn’t exceed Rs.10,000 and
balance at any point doesn’t exceed Rs.50,000
A small account holder had 12 months’ time after opening his account and keeping it operational to submit proof of identity. The Circular clarifies that during the period 01.04.2020 to 30.06.2020 the small account shall be kept operational even if the proof has not been submitted. Necessary changes to RBI master directions on KYC have been made.
Extension of due dates
Date for opting for composition scheme and the last date for making payments for the quarter ending 31st March, 2020 and filing of return for 2019-20 by the composition dealers
Last week of June, 2020
Filing of GST annual returns of FY 18-19, which is due on 31st March, 2020
Due date for issue of notice, notification, approval order, sanction order, filing of appeal, furnishing of return, statements, applications, reports, any other documents, time limit for any compliance under the GST laws where the time limit is expiring between 20.03.2020 to 29.06.2020 shall be extended to 30.06.2020.
Payment date under Sabka Vishwas Scheme
Those having aggregate annual turnover less than Rs. 5 Crore Last date can file Form GSTR-3B due in March, April and May 2020 by the last week of June, 2020. No interest, late fee, and penalty to be charged. Others can file returns due in March, April and May 2020 by last week of June 2020 but the same would attract reduced rate of interest @9 % per annum from 15 days after due date (current interest rate is 18 % per annum). No late fee and penalty to be charged, if complied before till 30.06.2020.
Customs and other Indirect tax updates
Extension of due dates
Following due dates have been extended vide the Press release dated 24.03.2020
Extended due dates
Due date for issue of notice, notification, approval order, sanction order, filing of appeal, furnishing applications, reports, any other documents etc., time limit for any compliance under the Customs Act and other allied Laws where the time limit is expiring between 20.03.2020 to 29.06.2020
Furnishing of the Central Excise returns due in March, April and May 2020
Wherever the last date for filing of appeal, refund applications etc., under the Central Excise Act, 1944 and rules made thereunder is from 20.03.2020 to 29.06.2020
For filing of appeal etc., relating to Service Tax is from 20.03.2020 to 29.06.2020
The date for making payment to avail of the benefit under Sabka Vishwas Legal Dispute Resolution Scheme, 2019
Extension of due dates and other relaxations vide press release dated 24.03.2020
Following are the extended due dates:
Extended due dates
Vivad se Vishwas scheme
Due dates for issue of notice, intimation, notification, approval order, sanction order, filing of appeal, furnishing of return, statements, applications, reports, any other documents and time limit for completion of proceedings by the authority and any compliance by the taxpayer including investment in saving instruments or investments for roll over benefit of capital gains under Income Tax Act, Wealth Tax Act, Prohibition of Benami Property Transaction Act, Black Money Act, STT law, CTT Law, Equalization Levy law, Vivad Se Vishwas law where the time limit is expiring between 20.03.2020 to 29.06.2020
Filing of original as well as revised income-tax returns for the FY 2018-19 (AY 2019-20)
Investment/payment for claiming deduction under Chapter-VIA-B of IT Act which includes Section 80C (LIC, PPF, NSC etc.), 80D (Medi-claim), 80G (Donations), etc and Making investment / construction / purchase for claiming roll over benefit / deduction in respect of capital gains under sections 54 to 54GB of the IT Act
Date for commencement of operation for the SEZ units for claiming deduction under deduction 10AA of the IT Act
Date for passing of order or issuance of notice by the authorities under various direct taxes & Benami Law
Vivad se Vishwas scheme – Declaration and payment under the Scheme can be made up to 30.06.2020 without additional payment of 10% amount.
For delayed payments of advanced tax, self-assessment tax, regular tax, TDS, TCS, equalization levy, STT, CTT made between 20.03.2020 and 30.06.2020, reduced interest rate at 9% instead of 12 %/18 % per annum ( i.e. 0.75% per month instead of 1/1.5% per month) will be charged for this period. No late fee / penalty shall be charged for delay relating to this period.
It has provided that reduced rate of interest of 9% shall be charged for non-payment of Income-tax (e.g. advance tax, TDS, TCS) Equalization Levy, Securities Transaction Tax (STT), Commodities Transaction Tax (CTT) which are due for payment from 20.03.2020 to 29.06.2020 if they are paid by 30.06.2020. Further, no penalty/ prosecution shall be initiated for these non-payments.
Concessional tax option under Sec. 115BAC
Every individual or HUF having income other than from business or profession can opt for concessional tax rates under Section 115BAC of the Income Tax Act for any previous year, as announced in the budget 2020-21.
In order to help employer deduct the correct TDS such individual being an employee must inform the employer that he intends to opt for the concessional rate under 115BAC for each previous year. The employer shall deduct TDS accordingly. Once an option is exercised at the time of filing return under cannot be changed for subsequent FY except in certain cases.
Article on Corporate Borrowings and Lending – Companies Act, 2013
Sreenivasan Narasimhan, Associate, has analysed Borrowings and Lendings under Companies Act, 2013 in an easy to understand, FAQ format with practical insights.
Note: The contents of this Newsletter are only a summary and has not dealt with any issue in detail. Any action taken or proposed to be taken must be in consultation with professionals and not merely based on the articles / news updates. S. C. Sharada & Associates disclaims all liability on action taken without professional advice.
S. C. Sharada & Associates,
Company Secretaries. #405, 7th Cross, IV Block, Koramangala, Bangalore – 560 034.
sharadasc.com Phone : +91 80 25534374 , +91 80 25536618 Email: [email protected]