Blog

Sunday, November 10, 2024

bombay_chambers_years_exp

The Chamber deeply appreciates the direct tax measures announced and implemented by the Government intended to generate liquidity for the businesses and defer compliance deadlines amidst the difficulties caused by Covid-19.

 

The Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance 2020 promulgated on 31 March 2020 relaxed the compliances becoming due during 20 March 2020 to 29 June 2020. While the due date for payment of taxes was not deferred, the Ordinance reduced the interest rate for delayed payments for taxes becoming due during the said period and paid by 30 June 2020 to 9% per annum instead of 12%/18% and also waived fees, penalties and prosecution for such delayed payments.

 

The Chamber had made representations on 7 April 2020 on certain direct tax and indirect tax measures related to Covid-19 for consideration of the Government.

 

As part of the first tranche of economic stimulus package, on 13 May 2020, the Hon’ble Finance Minister announced reduction in TDS rates on payments to residents (barring certain exceptions like salaries, statutory PF withdrawals, lottery winnings) by 25% for F.Y. 2020-21. This is intended to generate liquidity of Rs. 50,000 Cr for businesses. Further, announcements for extension of due dates for other matters like tax audit reports, return filing, completion of assessments and direct tax dispute resolution under Vivaad Se Vishwas Scheme were also made.

 

However, the Covid-19 lockdown got extended four times till 31 May 2020. Considering ever increasing number of Covid-19 positive cases day by day, it is expected that while there may be greater relaxations beyond 31 May 2020 to start the economic activities in the country, yet there are likely to be several constraints which will prevent businesses from operating at their full potential until a vaccine or cure is found for Covid-19. Such adverse conditions will prevail due to a combination of economic factors like reduced demand in the economy, non-availability of labour due to large scale migration to rural areas and public health safety measures like social distancing, reduced public transport, etc.

 

The industry appreciates the theme of ‘Aatmanirbhar Bharat Abhiyan’ to make India self-reliant and is fully committed to achieve this object. The industry also appreciates that Covid-19 has severely impacted Government’s revenues and hence there is limited fiscal space available to further forego tax revenues through exemptions or deductions. But the industry requires support in the form of increased liquidity in the short term period at least till 31 March 2021 in order to survive the unprecedented human and economic crises due to Covid-19.

 

In this background, the Chamber would like to put forth certain representations on direct tax measures for consideration of the Government. These mainly include reduction of TDS rates by further 25%, waiving first advance tax instalment due on 15 June 2020, further reducing interest rate on delayed tax payments, liquidity support for salaried class having income upto Rs. 15 lakhs through reduced TDS, liberalisation and operationalising of Rule 30(3) for quarterly TDS payments, allowing OTP based submission of TDS/TCS returns, expeditiously releasing refunds to corporates and extending Work from Home relaxation for SEZ units till 31 March 2021. The detailed representations in relation to these measures are attached herewith.

 

The industry would deeply appreciate if its suggestions are favourably considered by the government to ease the liquidity problems faced by the industry due to unprecedented and extraordinary circumstances created by Covid-19 pandemic.

instagram default popup image round
Follow Me
502k 100k 3 month ago
Share