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FM: Eases rules for bank customers, taxpayers, firms

Easy rules for bank customers, taxpayers, firms

Approx Read Time: 4 minutes 
Easy rules for bank customers, taxpayers, firms
Easy rules for bank customers, taxpayers, firms

In News: Easy rules for bank customers, taxpayers, firms

  • The Finance ministry has announced several measures aimed at alleviating the growing economic stress in the country in the wake of the disruption caused by the spread of the novel coronavirus SARS-CoV-2.
  • The Minister did not announce any fiscal sops, and limited herself to providing extensions for a range of regulatory requirements.

Objective of the announcement:

  • To reduce the regulatory and compliance burden in the formal sector of the economy.
  • These decisions will certainly help at a time when firms are not only facing tremendous disruption in their supply chains, but are also finding that the demand for their products and services has almost evaporated overnight.

Key announcements:

  • Income tax:
    1. Last date for I-T returns for FY 18-19 extended to June 30
    2. Aadhaar-PAN linking date extended to June 30
  • Retail Banking:
    1. No fee to be charged on ATM withdrawals from any other bank ATM for 3 months.
    2. Waiver of min balance fee
    3. Digital transaction charge cut for trade finance consumers
  • GST & Indirect Tax:
    1. For cos with Rs 5 Cr. Turnover, returns can be filed by June-end. No penalty, interest and late fee.
    2. For other firms, reduced rate of interest of 9% (current rate 18%), no late fee & penalty
    3. GST annual returns for FY 18-19 extended to June 30.
    4. Payment date under Sabka Vishwas extended to June 30
    5. 24×7 customs clearance.

About: Sabka Vishwas Scheme

  • The Sabka Vishwas Scheme is a scheme proposed in the Union Budget, 2019, and introduced to resolve all disputes relating to the erstwhile Service Tax and Central Excise Acts, which are now subsumed under GST, as well as 26 other Indirect Tax enactments.
  • Allowing bank customers, the flexibility to use their debit cards at ATMs without any fee.
  • Waived the penalty for those who are unable to maintain the stipulated minimum balance in their accounts.
  • Extension in Vivad Se Vishwas scheme deadline: The government has extended the deadline for settling tax disputes under the Vivad se Vishwaas scheme without paying any interest and penalty to June 30, 2020 from March 31, 2020.

About: ‘Vivad se Vishwas’ Scheme

  • It was announced during the Union Budget, 2020, to provide for dispute resolution in respect of pending income tax litigation.
  • The objective of Vivad se Vishwas is to inter alia reduce pending income tax litigation, generate timely revenue for the Government and benefit taxpayers by providing them peace of mind, certainty and savings on account of time and resources that would otherwise be spent on the long-drawn and vexatious litigation process.
  • Raising the threshold under the Insolvency & Bankruptcy Code: Small companies were sought to be protected from insolvency action by raising the threshold under the Insolvency & Bankruptcy Code to a loan of Rs 1 crore, instead of the current Rs 1 lakh.
  • This will immediately help micro, small and medium enterprises (MSMEs) which are expected to be among the worst hit due to the ongoing economic slowdown.
  • By raising the threshold, the government has provided immediate reprieve to all such firms.
  • This relief is there from now till April end. The IBC provisions may be waived in case the coronavirus crisis persisted till beyond April.
  • Extension of Sanitary Import Permits: In the fisheries sector, Sanitary Import Permits, which were to expire by April 15 have been extended for 3 more months.

Limitations of the announcements:

  • These measures only stop asking for dues for the time being and do not directly provide money to the distressed sectors.
  • These measures target only the organized sector of the economy.
  • However, about 93% of employment in India is in the informal or unorganized sector.

Way ahead:

  • A multi-layered taskforce headed by Finance Minister has already begun work on analyzing the impact.
  • Several sub-groups within the main taskforce such as sub group of MPs, academicians, business leaders and sub group of specialists have begun discussions and the government will soon come out with an economic package and work is on to finalize the relief measures for the other affected sectors.

Also Read: National Bytes: Parliament adjourns sine die

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