Tax & Regulatory Compliance Relaxations Announced to Ease Burden on Business

Key tax and regulatory compliance updates that were announced last week are summarized below:

TAX 

  • Certain clarifications with respect to Lower Withholding Tax (‘WHT’) order passed in March 2020 have been shared by the revenue authorities. The clarifications have been summarized below:
    • The WHT certificates issued for FY 2019-20 shall be valid upto June 2020. Also, the complete amount of threshold/limit mentioned in FY 2019-20 WHT certificate in respect to a vendor and transaction shall be considered afresh for the period April 2020 to June 2020;
    • Fresh applications for issue of WHT certificates shall be submitted through emails and any communication by authorities with respect to the applications shall be done via emails;
    • In cases where the taxpayer has submitted a fresh application for FY 2020-21 under a new/different TAN as compared to the TAN mentioned in the certificate for FY 2019-20, then the extended validity of the certificate for FY 2019-20 shall not be considered;
    • Further, in cases where the taxpayer, on account of COVID-19 impact on its business, wishes to apply for a rate lower than the rate mentioned in the FY 2019-20 WHT certificate, then in such cases, the WHT certificate of FY 2019-20 shall not stand extended for FY 2020-21 and a fresh application will have to be submitted.
  • The Government of India vide a press release directed immediate issuance of all pending income-tax refunds of amount upto INR 0.5 million (~USD 7,143) to business entities and individuals. This would benefit around 1.4 million taxpayers. However, till now, no specific instructions have been shared by the Government on the manner in which refunds shall be processed;
  • The revenue authorities have clarified that in cases where donation is made to PM CARE FUND by an employee through its employer, the non-profit may not be able to issue separate certificate to each and every employee as contributions are made by employer in the form of consolidated payment. Thus, deduction to employee will be allowed u/s 80G on the basis of Form 16 issued by employer.

GOODS & SERVICES TAX AND CUSTOMS 

  • The Government of India vide a press release directed immediate issuance of all pending GST and custom refunds. However, till now, no specific instructions have been shared on disposal of GST refunds. Instructions have been released for immediate processing of all pending customs refund and drawback claims in order to provide immediate relief to businesses.

COMPANY LAW 

  • Under the Companies Act, there is no specific provision that permits companies to hold Extra Ordinary General Meetings (‘EGM’) of shareholders via video conferencing (‘VC’) or other audio-visual means (‘OAVM’). To maintain social distancing norms, the Ministry of Corporate Affairs (‘MCA’) has relaxed this requirement and has allowed companies to hold EGMs via VC or OAVM till June 2020. Resolutions passed in EGM held via VC/ OAVN need to be filed with MCA within 60 days from date of passing of the resolution.

Credits:

  • Sujeet Kumar, Senior Manager – Tax & Regulatory
  • Pragathi Pandey, Manager – Corporate Secretarial
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