President's Desk 

President’s Message | October 2020

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From the President

Dear Professional friends,

The month of October marks a month filled with festivity and joy. Dussera which is also known as ‘Nada Habba’ (near translating to ‘State Festival’) signifies victory of good over evil. The significance of this festival has been a historical and traditional one. Especially to the state of Karnataka, the sheer vibrance and cheerfulness through which it is celebrated has got its share of world attention. Interestingly, this festival is celebrated across India, in various ways, fashion, tradition and style, stressing on the diversity of a similar belief, which the country shares in spite of varying beliefs and traditions. However, this year would be a little different from the rest that we are more inclined to spend this joy amongst ourselves and family due to COVID pandemic.

With market opening in many fronts, there has been sign of positivity in activity amongst the businessmen. Many credit agencies have provided varying degree of contraction to the economy. Latest being RBI, Shaktikanta Das – RBI governor, said GDP growth rate may break out of contraction and turn positive during January-March 2021 due to recovery seen across sectors. He also said that the Indian economy will contract to 9.5% in fiscal year 2021 due to disruptions caused by the Covid-19 pandemic that has hit economic activities.

Direct Taxes

(1)    Various relaxations provided via Ordinance 2020 in terms of extension of statutory timelines, reduction of TDS and interest rates, waiver of penalty, etc. have now been incorporated in the Taxation and Other Laws (Relaxation & Amendment of Certain Provisions) Act, 2020.

(2)    The CBDT has now notified (Notification: 25.09.2020) the Faceless Appeal Scheme with 3 centers.

(3)    The FA 2020 has introduced two new provisions for TDS and TCS under Sections 194-O and 206C(1H) respectively.

(4)    CBDT extends the due date for filing returns for AY 2019-20 to 30.11.2020 and notified changes (Notification: 01.10.2020) in ITR 6, Form 3CD, Form 3CEB for AY 2020-21.

(5)    The CBDT issued a Press Release on 26.09.2020 clarifying that while furnishing the tax returns for FY 2019-20, scrip wise details shall be furnished only with respect to long term capital gains as eligible for grandfathering benefit.

Indirect Taxes

GST journey so far is marked with umpteen changes all along. While this could be seen as a good sign of the Government’s responsiveness to the need of the day, the flip side of it, these points fingers at the level of preparedness in approaching the Biggest Tax Reforms.

Professionals and businessmen had a tough time with GST portal for filing of returns, now it’s the turn of E-invoicing portal to test the patience. It was a commitment to start with 10 websites dedicated for E-Invoicing to ensure a hassle-free transition to the new invoicing system, out of which only one is currently operational. As expected, the Government comes with a conditional relaxation for one month to comply with E-Invoicing. Dynamic QR code for B2C transaction is deferred till December 2020.

On the other side, GST council has come up with a big relief to help the cash flows of small taxpayers with turnover less than Rs. 5Cr, allowing payment of tax and filing of GSTR 3B on a quarterly basis from January 2021. Let us wait for the notification to witness how this is implemented, with a hope that there is no twist in the tale by way of added conditions!

Corporate Laws

The Ministry of Corporate Affairs has extended the Companies Fresh Start Scheme (CFSS), LLP Settlement Scheme and Charge related fillings under the Companies Act, 2013 till 31st December 2020.

The Companies (Amendment) Act, 2020 got the assent of the Hon’ble President as on 28th September, 2020 and has been effective since then.

There are amendments in 61 sections in the Act and 4 sections have been newly inserted which includes the provisions for Producer Companies.

The key amendments are focused on:

  • Decriminalization of certain offences and imposition of penalties instead of fines, omission of imprisonment provisions, reduction in quantum of penalty
  • Amendment in CSR provisions leading to shift from ‘Comply or Explain’ to ‘Comply or Pay’ Penalty
  • Minimum remuneration to Independent Directors and Non-executive directors even during inadequacy of profits and excluding sitting fees
  • Introduction of new section 129A of CA, 2013 for preparation of periodical financial results by unlisted Companies
  • Certain relaxations to NBFCs, HFCs and start-ups
  • Introduction of New chapters for Producer companies
  • Other amendments relating to Rights issue, Public issue, Additional fees for repeated defaults etc.

Representations

We along with other professional associations have made various representations. One, to ICAI to extend the due date for making payment of membership fees. Second, was along with other professional associations to the Hon’ble Minister of Finance, Smt. Nirmala Sitaraman with regards to certain measures which needs to be taken against impeding issues in income tax due to COVID outbreak. Third, was also along other professional associations with regards to new TCS provisions under Income Tax Act, 1961. And fourth one was to Ministry of Corporate Affairs to extend CFSS 2020 and LLP Settlement Scheme 2020. Many of the above representations has received a favourable outcome.

I thought to end this month’s message with a positive quote of the Father of our Nation, Mahatma Gandhi, “If I have the belief that I can do it, I shall surely acquire the capacity to do it even if I may not have it at the beginning.” The overall meaning has been conveyed by many famous personalities but this has put an important question of belief ahead of destiny and the process of that turning to reality as a natural process. The willingness to believe in self and knowing that the destiny would conspire naturally is a hidden secret of many successful people. So, the opportunity is the belief itself and not its outcome of result. Hence, let’s stay positive with belief during these times of ambiguity.

On the auspicious days in October, I wish all the readers a very happy Dussera.

Happy reading!

Yours Sincerely,

CA. Kumar S Jigajinni
President