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GST Compliances for the Insolvent and Bankrupt Companies in India after the impact of the pandemic disease of Novel Coronavirus, COVID- 19

GST Compliances for the Insolvent and Bankrupt Companies in India after the impact of the pandemic disease of  Novel Coronavirus, COVID- 19

The following amendments will be needed to be passed or notified through the issuance of the legal circulars and legislative amendments, after being approved by the Goods and Services Tax (GST) Council which are as follows: Read more:

  • Taxpayers having an annual aggregate of up to Rs. 5 Crore:

The due dates for filing of GSTR-3B for the month of February 2020, March 2020, and April 2020 have been extended up to the last week of June 2020. No late fee, penalty or fineshall be levied for them.

  • Taxpayers with an aggregate turnover of more than Rs. 5 Crore:

Except for a reduced interest charge, the due dates of filing GSTR-3B for the month of February 2020, March 2020 , and April 2020 stand extended up to the last week of June, 2020. No late fee or penalty or fine shall be levied on them. If any tax payments have been made after a delay of 15 days from the original due dates, they will be attracting a reduced rate of interest at 9% p.a. instead of 18% p.a. The reduced rate of interest charged will apply for the payment of taxes made between 20th March 2020 and 30th June 2020.

  • Taxpayers who are registered under the composition scheme:

The due date for filing the statement-cum-challan in CMP-08 for the last quarter of the FY 2019-20, i.e., January-March 2020  has been extended till the last week of June, 2020. Similarly, the due date for filing of GSTR-4 for the F.Y. 2019-20 has been also extended from 30th April, 2020 to the last week of June, 2020.

  • The last date for opting into the composition scheme for the F.Y. 2020-21 has been also extended from 31st March, 2020 up to 30th June, 2020:

It applies to taxpayers availing both the schemes under Section 10 of the CGST Act as well as the Notification No. 2/2019 dated 7th March, 2020.

  • Sabka Vishwas Scheme LDRS: The last date to avail this scheme is extended up to 30th June, 2020. Interest will not be charged for this period if the dues are paid before 30th June, 2020.
  • The taxpayers and/ or the tax authorities have got an extended time limit of up to 30th June, 2020, where the time-limit for the following compliance matter expires between 20th March, 2020 and 29th June, 2020:
  • Issue of the notice/notification/approval order/sanction order.
  • Filing of an appeal/furnishing of a return/statements/applications/reports or any other documents.

Insolvency and Bankruptcy Code:  The COVID-19 pandemic has severely hit the businesses across India, especially that of the MSMEs since they are unable to operate at the same pace and scale as they were doing before the impact of this virus. Accordingly, the sections have been redefined under the Insolvency and Bankruptcy Code, 2016 to assess the applicability of IBC to the distressed companies as a part of the relief which are as follows:

  • The qualifying threshold amount has been raised/increased from Rs. 1 lakh to Rs. 1 Crore for liquidating a company that has defaulted its corporate debtors under Section 4 of the IBC, 2016.
  • If the critical situation of the pandemic of COVID-19 continues even after 30th April, 2020, the Ministry may think of suspending a few sections of IBC 2016 for six months i.e., till October, 2020. It may be done by way of a bidding to disallow the creditors/ corporate applicants to initiate the Corporate Insolvency Resolution Process (CIRP) under Sections 7,9 and 10 of the IBC, 2016.


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