COVID-19: Policies, Statutory Compliances and Schemes

The recent COVID-19 pandemic has caused a massive disturbance and upheaval in the lives of every individual, corporation and business around the world. Given the 21-Day-Lockdown in India, everything has been put on hold with everyone confined to their homes, without many tools to continue their business or work. While this is integral for people to keep safe and healthy, it causes severe problems to businesses that are dependent of the physical presence of their workforce (manufacturing, factories, restaurants, construction, etc.), small businesses depending on their month-to-month income, health workers on the front-line who high risk for contracting the illness as well as individuals who, far from paying their insurance premiums and loan instalments, are finding it difficult to make ends meet.

In an effort to provide some form of relaxation and aid to their citizens, the Government of India has let out certain schemes and extensions, as given below:

Changes and Schemes by Government of India during Coronavirus

1.      Health Worker’s Insurance Cover: The government proposes to provide insurance cover of INR 50 lakh per person to frontline health workers - sanitation staff, paramedics and nurses, ASHA workers and doctors- who are working to tackle the COVID-19 illness and face the highest risk of contracting the illness.The insurance cover provided to the health workers will be for three months with effect from March 25, 2020. Apart from doctors and nurses the scheme will cover Safaikaramcharis, ward-boys, nurses, ASHA workers, paramedics, technicians, doctors and specialists and other health workers.

2.      Ayushman Bharat-PMJAY Scheme: The government's flagship Ayushman Bharat-PMJAY scheme will include package for treatment of coronavirus. All Ayushman Bharat beneficiaries will be included in the scheme, according to an official statement.  Treatment for confirmed cases of COVID-19 is available free-of-cost for eligible beneficiaries under Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PMJAY) under various packages such as Acute Febrile Illness, Pneumonia, Severe Pneumonia, Pyrexia of unknown origin, Respiratory failure due to any cause (pneumonia, asthma, COPD, ARDS, foreign body, poisoning, head injury etc.), among others.

3.      Jan Dhan Account Holders: An ex-gratia amount of INR 500 per month has been allocated for the next three months to all the women Jan Dhan account holders to run their households. Around 20 crore such women account holders will be covered under this scheme. Additionally, the government will also provide free LPG cylinders to women beneficiaries under the Ujjawala scheme.

4.      Welfare of Construction Workers: The State Governments have been asked to utilize funds from the Central Government Fund for Welfare of Construction Workers to provide assistance and support to workers affected by the economic disruption. It will benefit 3.5 crore workers registered with the fund.

5.      MNREGA: The daily wage under MNREGA has also been increased by INR 20 to INR 202 a day from INR 182 and will benefit five crore workers in India.The government will further front-load a payment of INR 2,000 to farmers in the first week of April under the existing PM Kishan Yojana. 

6.      Food and Supplies Distribution: The government has undertaken the free distribution of 5kgs of food grains per person and 1kg of pulses per household for the next three months to over 80 crore ration card holders in order to combat the shortage of food and hunger that may strike the poor in India during the COVID-19 lockdown.This will be in addition to what the ration card holders receive under the National Food Security Act (NFSA) at a highly subsidized price of INR 2/kg for wheat and INR 3/kg for rice. Moreover, free distribution of food grains and pulses will be provided under the INR 1.7 lakh crore Pradhan Mantri Gareeb Kalyan Yojana (PMGKY).

7.      Mahatma Gandhi National Rural Employment Guarantee Scheme and the National Rural Livelihood Mission: The government plans to pump in cash into rural homes under two major heads. Also, the government has made plans to ensure social pension for three months is distributed in one go by April 10 to help Indian villages cope with the national lockdown. The Centre will release INR 4,431 crore in the coming days to meet arrears on wages and materials for MGNREGS, the people quoted above said. The money will be transferred directly to the beneficiaries’ bank accounts through the direct benefit transfer scheme.

8.      RBI: RBI cuts Repo Rate by 75 basis points to 4.4% and Reverse Repo Rate by 90 basis points to 4%. The RBI Governor has also announced a comprehensive package to mitigate impact of COVID-19, revive growth and preserve financial stability

9.      Moratorium on Loan Instalments: Lending institutions permitted to allow a moratorium of three months on payment of instalments in respect of all term loans outstanding as on March 1, 2020

10.  Deferment of three months on payment of interest to lending institutions allowed for cash credit/overdraft and all such facilities outstanding as on March 1, 2020

11.  3 months moratorium on Discoms to make payment to Gencos and transmission licensees

12.  Grievances Redressal and  Helpdesks: A helpdesk has been operationalized by DGFT for COVID-19 related Export or Import issues. The government has also formalized a Grievance Redressal Cell set up to resolve problems of food processing industry during COVID-19 lockdown.

13.  DPIIT: The Department for Promotion of Industry and Internal Trade has set up a Control Room to monitor the status of transportation and delivery of goods, manufacturing, and delivery of essential commodities

14.  Production of Hand Sanitizers: 100 distilleries and more than 500 manufacturers permitted by the government to resume production and produce hand sanitizers.

15.  The Insurance Regulatory and Development Authority of India (IRDAI): The IRDAI has asked the insurers to come up with need-based insurance policies to cover the coronavirus, for the public at large.

Statutory and Regulatory Compliance Matters Across Sectors

Corporate Affairs

1. Late Filing of Documents to MCA-21 Registry: Irrespective of its due date, no additional fees shall be charged for late filing during a moratorium period from 1st April to 30th September 2020, in respect of any document, statement, return, etc., required to be filed in the MCA-21 Registry. This will help companies reduce their compliance burden and give many non-compliant companies another chance.
2. Board Meetings: The mandatory requirement of holding Board Meetings within prescribed interval provided in the Companies Act, 2013, shall be extended by a period of 60 days for the next two quarters i.e., till 30th September;
3. Companies (Auditor’s Report) Order, 2020: Applicability of Companies (Auditor’s Report) Order, 2020 shall be made applicable from the financial year 2020-2021 instead of from 2019-2020 notified earlier.
4. Independent Director’s Meetings: As per Schedule 4 to the Companies Act, 2013, Independent Directors are required to hold at least one meeting without the attendance of Non-independent directors and members of management. For the year 2019-20, if the Independent Directors have not been able to hold the meetings it shall not be construed as a violation.
5. Deposit Reserve Requirement: The requirement to create a deposit reserve of 20% of deposits maturing during the financial year 2020-21 before 30th April 2020 shall be allowed extended to 30th June 2020.
6. The requirement to invest 15% of debentures maturing during a particular year in specified instruments before 30th April 2020 has been extended to 30th June 2020.
7. Commencement of Business Filing: An additional time period of six months has been given to newly incorporated companies to file a declaration for Commencement of Business, which means that these corporations have 1 year to file.
8. Requirement of Residency of Directors: Non-compliance of minimum residency in India for a period of at least 182 days by at least one director of every company, under Section 149 of the Companies Act, shall not be treated as a violation.
9. Insolvency and Bankruptcy Code: The threshold of default under Section 4 of the Insolvency and Bankruptcy Code, 2019 has been raised to INR 1 crore (from the existing threshold of INR 1 lakh).

Income Tax

1. The government has provided a three-month extension for the income tax filing (FY 18-19). The last date to file the income tax returns has been extended from 31^st March, 2020 to 30^th June, 2020.
2. The last date for the mandatory Aadhaar-PAN linking has been extended from 31^st March, 2020 to 30^th June, 2020.
3.  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^th March 2020  to 29^th June 2020 shall be extended to 30th June 2020.  
4. For delayed payments of advanced tax, self-assessment tax,  regular tax, TDS, TCS, equalization levy,  STT, CTT  made between 20th March 2020  and  30^th June 2020,  reduced interest rate  at 9%   instead of 12 %/18 % per annum ( i.e. 0.75% per month instead of 1/1.5 percent per month) will be charged  for this period.  No late fee/penalty shall be charged for delay relating to this period.
5. Vivad se Vishwas  scheme – There will be no additional 10% amount applicable, if payments are by June 30, 2020. 
6. Necessary legal circulars and legislative amendments for giving effect to the aforesaid relief shall be issued in due course.

GST/Indirect Tax

1. Companies with an aggregate annual turnover less than INR 5 Crore can file 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.
2. Companies with an aggregate annual turnover of more thanINR 5 Crorecan 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^th June 2020.
3. Date for opting for composition scheme is extended till the last week of   June, 2020.  Further, the last date for making payments for the quarter ending 31^st March, 2020 and filing of return for 2019-20 by the composition dealers will be extended  till the last week of June, 2020. 
4. Date for filing GST annual returns of FY 18-19, which is due on 31^st March, 2020 is extended till the last week of  June 2020.
5. 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^th March 2020  to 29th June 2020 shall be extended to 30th June 2020. 
6. Necessary legal circulars and legislative amendments to give effect  to the aforesaid GST relief shall follow with the approval of GST Council.
7. Payment date under Sabka Vishwas Scheme shall be extended to 30^th June, 2020. No interest for this period shall be charged if paid by 30^th June, 2020.

Customs

1.      There shall be 24X7 Custom clearance till end of 30^th June, 2020

2. 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^th March 2020  to 29th June 2020 shall be extended to 30th June 2020. 

Financial Services

1.      There has been a three-month relaxation period announced by the GOI with regard to the following:

·         No fee for cash withdrawals by debit cardholders from the ATM of a different banks;

·