Special Economic Package or AatmaNirbhar Bharat: 4th Phase

Hello friends, Today I’m going to explain the topic "Special Economic Package or AatmaNirbhar Bharat: 4th Phase"

You can read my previous Blogs on Special Economic Package 

• Special Economic Package or AatmaNirbhar Bharat: 1st Phase
• Special Economic Package or AatmaNirbhar Bharat: 2nd Phase
• Special Economic Package or AatmaNirbhar Bharat: 3rd Phase

The Union Finance Minister Smt Nirmala Sitharaman announced the 4th Phase of the Economic Relief Package following the Public Address of the Prime Minister on 12th May 2020. The Prime Minister, announced a special economic package of around Rs 20 lakh crores, amounting to 10% of India’s GDP during his speech to Spur growth, and to build "AatmaNirbhar Bharat"

FM Nirmala Sitharaman announced Structural Reforms in 8 sectors like Coal, Mining, Aerospace, Defence Production, Social Infrastructure, Power Distribution, Space and Atomic Energy. 

Policy Reforms to fast track investment

• Fast track investment Clearance by Empowered Group of Secretaries (EGos).
• Project Development cell in each Ministry will be formed to prepare for investible projects.
• Ranking of States on investment attractiveness to compete for new investments will be done.
• Incentive schemes for Publicity of New Champion Sectors will be started in sectors such as solar PV manufacturing, advanced cell Battery storage.

Upgradation of Industrial Infrastructure

• Availability of Industrial Land/ Land Banks, for promoting new investments will be made available on Industrial Information System (‘IIS’) with GIS Mapping.
• 3376 industrial parks/ estates/ SEZ in 5 lakh hectares will be mapped on IIS.
• All Industrial parks will be ranked in 2020-21.

Coal Sector

• India has the 3rd Largest Deposit of COAL. Despite that, COAL is still imported. To date COAL has been a Government Monopoly, and this has been relaxed.
• An exploration cum production regime for Partially explored blocks will be now allowed, in place of fully explored coal block as done today.
• Commercial mining of coal will ensure more availability of coal. Therefore, Production earlier than scheduled will be incentivized through revenue share.
• Private sector participation in the coal sector will be done by introducing a revenue-sharing mechanism instead of the regime of fixed Rupee/ tonne.
• Entry norms into the industry will be liberalized where 50 blocks will be offered immediately on upfront payment with a ceiling.
• Coal Bed Methane extraction rights to be auctioned from CIL coal mines.
• Coal gasification/ liquefaction will be incentivized through rebate in revenue share.

Mineral Sector

• Seamless composite Exploration cum production regime is being brought in. 500 mining blocks will be offered for open and transparent mechanism. Joint auction of Bauxite and Coal beds will be done.
• The difference between captive and Non-captive mines will be removed. Sale of surplus and unused minerals by transfer of mining lease will be done.
• Ministry of mines is under the process of developing an index of minerals.
• The process of payment of stamp duty at the time of award of mining leases is being rationalized.

Defense Sector

• To encourage make in India for self-reliance in Defence Production, a list of weapons and platforms for Ban on import with year-wise timelines will be notified.
• Indigenization of imported Spares will be done. This will help the producer of defense equipment.
• To improve autonomy, accountability, and efficiency in ordnance Supplied, Ordnance Factory Board will be corporatized, without privatizing it. These corporate may later be listed, which allows ordinary Indian citizens to invest in such factories.
• FDI limits in defense manufacturing sector under automatic route will be raised from 49% to 75%, subject to security Clearance.
• The time-bound defense procurement process will be brought about by ushering Realistic Setting on General Staff qualitative requirements of Weapons and platforms.

Airspace & Civil Aviation

• Presently only 60% of the Air space is freely available. Restrictions on the utilization of Indian airspace will be eased so that civil flying becomes efficient. Measures will optimize the utilization of air space, reduce flight time, and fuel consumption.
• Another 6 more airports identified for investment on a PPP basis.
• India will be made into an MRO Hub – Maintenance, repair, and overhaul Hub. The tax regime is being altered to incentive this sector. This will benefit not just civil aircraft, but defense aircraft as well.

Tariff Policy Reform

• Tariff policy laying out reforms on Consumer rights, progressive reduction in subsidies, and sustainability of the sector will be released.

Social Infrastructure Projects

• Today social Infrastructure projects suffer from poor viability. 
• 30% Viability gap funding will be done by the Government, which was earlier at 20%, so urgent demand for such social infrastructure can be met.
• Boosting private sector investment in Social Infrastructure through revamped Viability Gap Funding Scheme Rs 8100 crores

Space Activities

• India has benefited through ISRO, but individuals and start-ups have developed space-related technologies.
• The level playing field for private companies in satellite, launches, and space services will be provided.
• A predictable policy and regulatory environment will be brought about.
• Future schemes for planetary exploration, outer space travel, etc. to be open for the private sector
• Liberal geospatial data policy to be brought about to provide remote-sensing data to tech-entrepreneurs.

Atomic Energy

• The research reactor in the PPP model will be established for the production of medical isotopes, for promoting the welfare of humanity through the affordable treatment of cancer and other illnesses.
• Establish facilities in PPP mode, to use irradiation technology for food preservation to improve the shelf life of perishable crops like onions.
• Technology Development cum Incubation Centres will be set up for fostering synergy among Research facilities and technical entrepreneurs.

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Special Economic Package or AatmaNirbhar Bharat: 3rd Phase

Hello friends, Today I’m going to explain the topic "Special Economic Package or AatmaNirbhar Bharat: 3rd Phase"

You can read my previous Blogs on Special Economic Package 

• Special Economic Package or AatmaNirbhar Bharat: 1st Phase
• Special Economic Package or AatmaNirbhar Bharat: 2nd Phase

The Union Finance Minister Smt Nirmala Sitharaman announced the 3rd Phase of the Economic Relief Package following the Public Address of the Prime Minister on 12th May 2020. The Prime Minister, announced a special economic package of around Rs 20 lakh crores, amounting to 10% of India’s GDP during his speech to Spur growth, and to build "AatmaNirbhar Bharat"

11 Measures Comprising

• 8 for Agriculture Infrastructure
• 3 for Governance Reforms

Agriculture Infrastructure

1.  Farming Infrastructure

• To strengthen the farming infrastructure, a Fund of Rs 1 Lakh crore is created to finance Agriculture Infrastructure Projects at farm gate and aggregation points.
• This facility will aide Agriculture Cooperative societies, Aggregators, Farmer producer organizations, Agricultural entrepreneurs, and Start-ups. This is expected to give impetus to the Postharvest Management Infrastructure.
• Fund will be created immediately.

2.  Micro Food Processing Enterprises (MFE)

• The scheme promotes the vision of Hon. PM Narendra Modi: ‘Vocal for Local with Global outreach’ 
• Fund of Rs 10k crores will be created for the benefit of Micro Food Enterprises to help them modernize production techniques.
• Existing Micro food enterprises, Farmer Producer Organisations, Self Help Groups, and Organizations to be held 
• Cluster-based approach (e.g. Mango in UP, Kesar in J&K, Bamboo shoots in North-East, Chilli in Andhra Pradesh, Tapioca in Tamil Nadu, etc.) 
• Expected outcomes: Improved health and safety standards, integration with retail markets, improved incomes 
• It will also help in reaching untapped export markets in view of improved health consciousness.

3.  Fisheries

• Rs 20,000 crores for Fishermen through Pradhan Mantri Matsya Sampada Yojana (PMMSY) 
• Rs 11,000 Cr for activities in Marine, Inland fisheries and Aquaculture 
• Rs. 9000 Cr for Infrastructure – Fishing Harbours, Cold chain, Markets, etc. 
• It will lead to Additional Fish Production of 70 lakh tonnes over 5 years. 
• Employment to over 55 lakh persons; double exports to Rs 1,00,000 Cr. 
• Focus on Islands, Himalayan States, North-east, and Aspirational Districts. 
• Cage culture, seaweed farming, ornamental fishery, as well as fishing vessels, Traceability, Laboratory Network will be the key focus.

4.  Animal Husbandry Infrastructure

• Animal Husbandry Infrastructure Development Fund of Rs. 15,000 crore will be set up.
• Propose to encourage private investment in Dairy Processing, value addition and cattle feed Infrastructure
• Incentives to be given for strengthening plants for the export of niche products.

5.  Herbal Cultivation

• Promotion of Herbal Cultivation Fund of Rs. 4000 crore will be set up.
• A network of regional mandis for Medicinal Plants will be created along the banks of river Ganga.
• National Medicinal Plants Board (NMPB) has helped  2.25 lakh hectare area under cultivation of medicinal plants

6.  An animal disease control program

• National Animal Disease Control Programme for Foot and Mouth Disease (FMD) and Brucellosis launched with a total outlay of Rs. 13,343 crores.
• It ensures 100% vaccination of cattle, buffalo, sheep, goat, and pig population (total 53 crore animals) for Foot and Mouth Disease (FMD) and for brucellosis.

7.  Bee-keeping

• Beekeeping initiatives Fund of Rs 500 crores will be set up.
• A scheme for building infrastructure for development, marketing, storage, and capacity building in bee breeding will be implemented.
• Infrastructure expansion related to Integrated Beekeeping Development Centres, Collection, Marketing and Storage Centres, Postharvest & value Addition facilities, etc.
• Development of quality nucleus stock and bee breeders. This will lead to an increase in income for 2 lakh beekeepers and quality honey to consumers. 

8.  Operation Green

• From ‘TOP’ to TOTAL of Find of Rs 500 crores will be set up.
• Tomato, Onion, and Potato to all fruits and vegetables and subsidy for transport and storage for supply to deficient markets will be made available.
• 50% subsidy on transport from surplus to imperfect markets and 50% subsidy on storage, including cold storages. 
• Distress sale and reduction of the price of perishable fruits and vegetables at the farm level needs to be prevented. 

Governance Reforms

9.  Amendments to the Essential Commodities Act

• This Act has been in existence since 1955. This law is very important as it was promulgated when food shortages were common. Farmers are now producing in abundance but export is not allowed.
• Agriculture foodstuff including cereals, edible oils, oilseeds, pulses, potato, and onions to deregulate. 
• Stock limits to be imposed under very exceptional circumstances like national calamities, famine with the surge in prices. 
• No such stock boundary shall apply to processors or value chain participants, subject to their installed size or to any exporter subjected to the export demand. 
• Established capacity or to any exporter subjected to export demand.

10.  Agriculture Marketing Reforms

• Farmers bound to sell agriculture produce only to Licensees in APMCs and Such restriction of sale is not there for any industrial produce 
• Results in Hindrances in the free flow of Agricultural Produce, Fragmentation of Markets, Supply Chain, and Less price realization for farmers. 
• A Central law will be formulated to provide – (i) Adequate choices to farmer to sell produce at attractive price (ii) Barrier-free Inter-State Trade (iii) Framework for e-trading of agriculture produce.

11.  Agriculture products: Assurance of price and quality

• Farmers lack an enforceable standard mechanism for predictable prices of crops at the time of sowing and Private sector investment in the provision of inputs and knowhow in the agriculture sector hindered 
• The facilitative legal framework will be created to enable farmers for engaging with processors, aggregators, large retailers, exporters, etc. in a fair and transparent manner. 
• Risk mitigation for farmers assured returns and quality standardization shall form an integral part of the framework. 

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Special Economic Package or AatmaNirbhar Bharat: 2nd Phase

Hello friends, Today I’m going to explain the topic "Special Economic Package or AatmaNirbhar Bharat: 2nd Phase"

You can read my previous Blogs "Special Economic Package or AatmaNirbhar Bharat: 1st Phase", "Coronavirus(COVID-19): Impact on Real Estate in India", "Coronavirus(COVID-19): Key Announcements on Income Tax, GST, Finance and others", "GST Framework in India" & "GST in India - An Introduction"

The Union Finance Minister Smt Nirmala Sitharaman announced the 2nd  Phase of the Economic Relief Package following the Public Address of the Prime Minister on 12th May 2020. The Prime Minister, announced a special economic package of around Rs 20 lakh crores, amounting to 10% of India’s GDP during his speech to Spur growth, and to build "AatmaNirbhar Bharat"

Announcements Focusing on 

• Migrant workers
• Street Vendors
• Small Traders
• Self Employed People  
• Small Farmers

9 Measures comprising 

• 3 for Migrant Workers
• 1 for Mudra Shishu Loan
• 1 for Street Vendors
• 1 for the Housing Sector
• 1 for Employment generation for Tribals
• 2 for farmers, particularly small farmers.

Migrant Workers

1.  Affordable Rental Housing Complexes (ARHC) for Migrants workers/Urban Poor

• Affordable Rental Housing is going to be made available to Migrant workers by incentivizing manufacturing units, industries, institutions, and associations to develop Affordable Rental Housing Complexes on their private land and operate. Further Central and State Government will make available Affordable Rental Housing Complexes under PPP mode through concessionaires.

2.  MGNREGS support to returning Migrants 

• 4.62 crore person-days of work generated till May 13, 2020, and Actual Expenditure till date is approximately Rs.10,000 crore 
• Work offered to 2.33 crore wage seekers yesterday in 1.87 Lakh Gram Panchayats 
• 40%-50% more persons enrolled, compared to May last year and the Average wage rate rose to Rs. 202 from Rs.182 in last FY 
• Drive being undertaken to enroll returning migrants 
• States/UTs advised providing works to migrant workers as per the provisions of the Act 
• Planning for staying MNREGA works in Monsoon as well: plantations, horticulture, livestock-related sheds. 
• States/ UTs are advised to provide works to migrant workers as per the provisions of the MGNREGS Act.

3.  Support for Migrants and Urban Poor during the last 2 months

• The government of India has permitted State Governments to utilize State Disaster Response Fund (SDRF) for setting up a shelter for migrants and providing them food and water etc. 
• Central Government also released Rs 11002 crore of its contribution ahead to all or any States on 3rd April, to reinforce funds in their SDRF.
• Hygienically prepared three meals each day provided for the residents of Shelters for Urban Homeless (SUH) during the lockdown w.e.f March 28, 2020.
• 12,000 SHGs have produced 3 crore masks and 1.20 lakh liters of sanitizers. This gave additional employment opportunities to the urban poor. 
• Disbursal of fund (RF) to Self Help Groups was on-boarded on PAiSA Portal in April 2020 on a pilot basis in Gujarat and is now being unrolled across all the States in May 2020.
• 7,200 new Self Help Groups of urban poor are formed during the amount starting 15th March 2020.
• Migrants who are neither NFSA or State Card beneficiaries within the state they're stationed are going to be provided 5 kg of grains per person and 1 kg Chana per family per month for two months
• About 8 crores migrants are expected to benefit.
• Rs.3500 Crore will be used on this intervention for 2 months. 
• The cost will be fully borne by the Government of India.

Technology Systems to be used enabling Migrants to access Public Distribution System (Ration) from any Fair Price Shop in India by March 2021 – One Nation One Ration Card 

• Migrant families aren't ready to access food in other states.
• This scheme will enable a migrant beneficiary to access Public Distribution System from any Fair Price Shop within the country (Intra-State portability introduced in 20 States).
• Part of the PM’s Technology-Driven System Reforms.
• 67 crore beneficiaries in 23 states covering 83% of the PDS population are going to be covered by national portability by August 2020.
• 100% National portability is going to be achieved by March, 2021.
• All the States/Union Territories will complete full FPS automation by March 2021
  

Mudra Shishu Loan

4.  Interest Subvention for Mudra Shishu Loans

• Nirmala Sitharaman said that the interest subvention support of 2% for those who have availed loans under Mudra Shishu loan (Rs 50,000 or less) will be given after 3 months moratorium period ends which will benefit over 3 crore people under the Shishu category.
• Interest subvention for Mudra Shishu Loans costs of Rs 1500 crore

Street Vendors

5.  Loans for Streer Vendors

• The government will launch a special scheme worth Rs 5000 crore to facilitate easy access to credit for street vendors to support 50 lakh street vendors.

Housing Sector

6.  Housing CLSS-MIG

• To boost the Housing sector, Nirmala Sitharaman said that the Centre will provide Rs 70,000 crore for it through the extension of Credit Link Subsidy Scheme (CLSS) which was extended to March 31, 2020. The Finance Minister said that the scheme has benefit 3.3 lakh middle-class families so far.
• “This will create jobs and will stimulate demand for steel, cement, and other constructional materials,” Nirmala Sitharaman said.
• 2.5 lakh Middle-Income families will benefit during 2020-21

Employment generation for Tribals

7.  Job creation using CAMPA Funds

• To create jobs for the Tribals and Adivasis, the government said that a plan worth Rs 6,000 crore will be approved shortly under Compensatory Afforestation Management and Planning Authority (CAMPA) Funds. It will create job opportunities in urban, semi-urban, and rural areas.

Farmers

8.  Rs 30000 crore Additional Emergency Working Capital through NABARD

• NABARD will extend additional refinance support of Rs 30000 crore for crop loan requirement of Rural Co-operative banks & RRBs
• Front-loaded on the top facility to 33 state Co-operative banks, 351 District Co-operative banks, and 43 RRBs on top based on their lending.
• To benefit around 3 crores farmers mostly small and marginal farmers.
• To engage post-harvest (Rabi) and current Kharif requirement in May/June.

9.  Rs 2 lakh crore concessional credit through Kisan Credit Cards (KCC)

• Special drive to be undertaken to provide concessional credit to PM-KISAN beneficiaries through KCC
• Fishermen and Animal Husbandry farmers will also be involved in this drive.
• 2.5 crore farmers through KCC which will enable farmers to gain access to institutional credit at concessional interest rates.

Highlights of the Labour Codes and the labor welfare measures which will be brought about in the Labour Codes are as under:

• Minimum wages which are presently applicable to only 30% of workers, will be made universal, after parliament approval.
• The regional disparity in minimum wage will be replaced by a national floor wage concept.
• Fixation of the minimum wage will be simplified, leading to less number of rates of minimum wages and better compliances.
• An appointment letter for all workers will be made Compulsory.
• Annual health checks for workers will be made mandatory.
• It is clear that, the definition of Interstate migrant workers has to be re-looked as not all of them are recruited through agencies, rather, they migrate on their own and are taken on rolls directly by employers. Keeping this in mind, the definition will be changed.
• Pan India, ESI will be made applicable to all districts and will be applicable where more than 10 workers are employed, as against those in notified districts/ areas only.
• For establishments employing less than 10 employees, ESI to be made applicable on a voluntary basis.
• Occupation Safety & Health Code shall also apply to small units engaged in work of hazardous nature even with less than 10 workers.
• Social Security to be made applicable to Gig workers and platform workers.
• Portability of welfare benefits for Migrant workers will be brought about.
• The re-skilling fund will be introduced for retrenched workers especially those who are laid off after COVID-19.
• All occupations are advised to be made open for women even at night with safety provisions made for them.
• A Social Security Fund for unorganized workers will be created.
• Gratuity for fixed-term employment – Provisions of gratuity on completion of one year service as against 5 years will be brought out.

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Special Economic Package or AatmaNirbhar Bharat: 1st Phase

Hello friends, Today I’m going to explain the topic "Special Economic Package or AatmaNirbhar Bharat: 1st Phase"

You can read my previous Blogs "Coronavirus(COVID-19): Impact on Real Estate in India", "Coronavirus(COVID-19): Key Announcements on Income Tax, GST, Finance and others", "GST Framework in India" & "GST in India - An Introduction"

The Union Finance Minister Smt Nirmala Sitharaman announced the 1st Phase of the Economic Relief Package following the Public Address of the Prime Minister on 12th May 2020. The Prime Minister, announced a special economic package of around Rs 20 lakh crores, amounting to 10% of India’s GDP during his speech to Spur growth, and to build "AatmaNirbhar Bharat"

Keeping with the vision of the Prime Minister, Finance Minister made her announcement for businesses including MSMEs and emphasized that in the wake of COVID-19, there is a need for liquidity, Ease of doing business, and reducing the compliance burden and due diligence. In light of the same, she announced

16 Measure Comprising

• 6 for Micro, Small & Medium Enterprise (MSME)
• 2 for Employee Provident Fund (EPF) 
• 2 measures for Non-Banking Finance Companies (NBFCs), Housing Finance Companies (HFCs), Micro Finance Institutions (MFIs)
• 1 for The DISCOMS or Power Distribution Companies
• 1 for Contractors
• 1 for Real Estate 
• 3 for Tax Measures.

Micro, Small & Medium Enterprise (MSME)

1.  Rs. 3 lakh crores Collateral-free automatic loans for business, MSMEs

• Borrowers having outstanding up to Rs. 25 Crores and turnover of Rs. 100 crores are eligible to take credit
• The tenure of the loan would be 4 years with a moratorium of 12 months on Principal repayment.
• There will be a 100% credit guarantee cover to Banks and NBFCs on principal and interest.
• This scheme can be availed till Oct 31, 2020
• It has been clearly specified that there would not be any guarantee fee or fresh collateral requirement for availing benefit under the scheme.

2.  Rs. 20,000 crores subordinate debt for stressed MSMEs

• Rs. 20000 crores to be infused as subordinate debt for stressed MSMEs
• The government will provide Partial Credit Guarantee Support for this purpose to banks.

3.  Rs.50,000 crores equity infusion for MSMEs through funds of funds

• In order to address the issue of a severe shortage of equity in MSMEs during these tough times, The Govt. has proposed to set up Funds of Funds (FoF) with a corpus of Rs. 10,000. The corpus would provide equity funds for MSMEs with growth potential and viability. The FoF will be operated through Mother Fund and few Daughter funds.
• The fund structure will help leverage Rs. 50,000 cr. Of funds at daughter funds level. This step would help to expand MSME size as well as capacity and will also encourage listing of MSMEs on the main board of stock exchanges.

4.  Amendment to Definition of MSME

5.  Government expands the scope for global tenders for MSMEs

• Tenders up to Rs. 200 crores relating to Government procurement not be Global Tenders any more 

6.  Other Measures 

• All Central Government (CG) outstanding will be cleared within 45 Days by Government help all MSME

Employee Provident Fund (EPF)

7.  Employees Provident Fund (EPF) support for Business and Workers

• Govt. had proposed under the Pradhan Mantri Garib Kalyan Package (PMGKP), EPF payments by another 3 months i.e. June, July & August Government to pay 12%+12% i.e. each by employer and employee for wage earner below Rs. 15000 p.m. and business having less than 100 workers.

8.  Reduction in EPF contribution for the next 3 months

• The Statutory Provident Fund contribution for both Employee and Employer has been reduced from 12% to 10% for all establishments covered by EPFO (Employee Provident Fund Organisation) for Government undertaking the contribution shall remain at 12%.

Non-Banking Finance Companies (NBFCs), Housing Finance Companies (HFCs), Micro Finance Institutions (MFIs)

9.  Special Liquidity Scheme

• Rs 30000 crores for Special Liquidity Scheme; liquidity being provided by RBI. The investments will be made in both primary and secondary market transactions in the investment-grade debt paper of these institutions.

10.  Partial Credit Guarantee Scheme

• Rs 45000 crores partial credit guarantee scheme for liabilities of NBFCs/MFIs. The First 20% loss will be borne by Guarantor, i.e. GoI.

 The DISCOMS or Power Distributor Companies

11.  One time money infusion for DISCOMS

• Liquidity infusion in the DISCOMS to the extent of Rs 90000 crores in 2 equal installments. The amount could be used by the DISCOMS to pay their dues.

Contractors

12.  6 months Extension

• Give Extension up to 6 months Government contractor of Railways, Roads, other Departments, etc.

Such extension shall be given for complying with the Contract Conditions, completion of works, and other intermediary milestones. The concession period under PPE Contracts may also be extended by 6 months.

Real Estate

13.  Extension of Registration and Completion Date of Real Estate Projects under RERA 

• Project Registration to be extended by 6 months; completion dates of existing projects to be extended by 6 months.
• This measure will indeed de-stress real estate developers and ensure completion of projects so that home buyers are able to get delivery of their booked house with new timelines.

Tax Measures

14.  List of Announcements

• TDS and TCS rates reduced by 25% of the existing rates. The revised rates will come into effect from 14th May 2020 and will be in effect till 31st March 2021. This relief shall not be available to a salaried and non-resident taxpayer.
• The Due dates for all ITRs (Income Tax Returns) for Financial Year 2019-2020 extended from 31st July 2020 and 31st October 2020 to 30th November 2020.
• Tax Audit for Financial Year 2019-2020 extended from 30th September 2020 to 31st October 2020.
• The period for Vivad se Vishwas Scheme has been extended to the 31st December 2020.
• Due date of 30th September 2020 for completion of assessments shall be extended to 31st December 2020. Where assessments are getting barred on 31st March 2021, it shall be extended to 30th September 2021.

15.  Rate of TDS

The reduced rate of TDS will apply on payment made for the contract, professional fees, interest, rent, dividend, commission, and brokerage income. This will be applicable between 14th May 2020 till 31st March 2021. Non-salaried specified payments made to residents, TDS rates will be reduced by 25% of the existing rates.

16.  Rate of TCS

• The rate of TCS has also been reduced by 25% of the existing rates for the period from 14th May 2020 till 31st March 2020

Thanks for reading friends, I will bring more such interesting topics related to Taxation & Updates regarding COVID-19 Impact on various Business, Sector as well as Tax implications or Tax Announcements due to COVID-19

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Coronavirus (COVID-19): Impact on Real Estate in India

Hello friends, Today I’m going to explain a topic "Coronavirus (COVID-19): Impact on Real Estate in India"
You can Read my previous Blog "GST in India - An Introduction", "GST Framework in India" & "Coronavirus (COVID-19): Key Announcements on Income Tax, GST, Finance and others"

Summary of the Blog:

1. Residential Real Estate 
2. Commercial Real Estate 
3. Industrial Real Estate 

1. Residential Real Estate

• Housing sector 

According to the Ramesh Nair, CEO & Country Head of JLL India "The injected liquidity of Rs 3.74 lakh crore (by the RBI) along with the 3 months moratorium on all term loans by financial institutions will alleviate short-term liquidity concerns and help developers as well as homebuyers . It is a big relief for developers and buyers to help them mitigate the challenges faced by them currently"
Niranjan Hiranandani, National President, NAREDCO, states that "Salvaging Indian realty, the second-largest employment generator is critical, not only from the GDP growth perspective but also for employment generation, since the sector has a multiplier effect on 250-plus allied industries."
Housing market in India’s top 9 cities (October-December 2019)
Sales                            Down 30%
Project launches          Down 44%
Inventory                     778,627 units
Source: PropTiger DataLabs

https://m.rbi.org.in/scripts/FS_FAQs.aspx?Id=77&fn=2

UCO Bank: The bank has announced the 3 months EMI moratorium on its term loans up to May 31, 2020.
Syndicate Bank: The bank has said, "EMIs of housing loan, vehicle loans, Micro, Small and Medium Enterprise (MSME) loans and payment of all other term loans falling due after 1st March 2020 and upto 31st May 2020 have been deferred by 3 months."

• Home Buyers 

(i) According to the survey by 99acres.com "40% of the prospective homebuyers, who were searching flats for purchase before the lockdown, have postponed their plan while 60% are still keen to buy within the next 12 months."
(ii) Major reasons for delaying their plan to buy were uncertainty in the market (56%) and financial factors (30%), the realty portal said.
(iii) As many as 75% preferred to search for homes online, the survey said

2. Commercial Real Estate

• Office Space 

According to JJL’s report, titled COVID-19 Global Real Estate Implications. “Office utilisation rates will fall as remote working increases and landlords with exposure to short-term leases are the most vulnerable as delay to investment activity and softer rental growth than previously forecast are headwinds to 2020 performance.”

Companies worldwide have announced remote working for employees to contain the virus spread, triggering a debate if Work from Home could replace office space in future.

Demand for remote working and investment in collaboration technologies would grow.
Fast-tracking a widespread adoption of these practices.

• Mall Operators 

“Low footfalls and subsequent closure of malls will impact developers’ debt servicing against the project. Even a relaxation from banks for the short-to-medium term should not have a big impact. However, if the virus scare continues beyond one to two quarters, debt servicing challenges may last for a longer period,” points out Rohan Sharma, research head, Cushman and Wakefield.

Niranjan Hiranandani, National President, NAREDCO, states that “The impact of COVID-19 in the form of shutdown of retail outlets and malls as also entertainment and fitness centers has put commercial real estate deals on a wait-and-watch mode.”

3. Industrial Real Estate

• Builders 

The government is expected to launch support measures for the developer community in order to offset the losses they will suffer on account of the Coronavirus spread, including allowing the force majeure clause to skip penalties over project delays. The 3 months EMI holiday for developers during the crucial period is one measure to offset their losses.

Niranjan Hiranandani, National President, NAREDCO, states that “The pandemic menace has hit at a particularly sensitive time. Across realty companies, this is the time when statutory payouts and streamlining of balance sheets happens. In this challenging time, we have asked the government for some economic interventions like rescheduling loan repayments, a one-time rollover for debt restructuring and deep interest rate cut.”

• Construction sector 

Construction-related Gross Value Added (GVA) and employment are expected to reduce between 15% to 34% and 11%to 25%, respectively, when compared to pre-crisis projections for Financial Year 2021.
Labour costs for skilled workers are expected to rise by 20%-25% while that for semi-skilled workers and unskilled workers is pegged to increase by 10%-15%.
Projects that are under development or Work-in-Progress are likely to take a severe hit with a minimum delay of 2 to 3 months, depending on their geography and spread of COVID-19 in and around the project site.

Indian real estate after Coronavirus: Top 11 projections
Source : Housing.com 

• Site visits to drop, impacting sales numbers.
• Project completion deadlines to extend, pushing completion farther.
• Overall cost of project to increase amid delays and supply constraints.
• Inventory levels to increases, intensifying pressure on builders.
• Prices might move slightly upwards despite the slow demand.
• Home loan interest rates to fall after repo rate cut to 4.4%.
• Remote working to gain traction in future as businesses embrace work from home culture.
• Higher investment likely in future office spaces to make them better prepared for crisis situations.
• Occupancy levels in office spaces to decline in the near term as remote working picks up.
• NRI investment in real estate may improve amid rupee fall.
• Cases of builder insolvency might increase as liquidity situations worsens

Thanks for reading friends, I will bring more such interesting topics related to Taxation & Updates regarding COVID-19 Impact on various Business, Sector as well as Tax implications or Tax Announcements due to COVID-19

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Coronavirus (COVID-19): Key Announcements on Income Tax, GST, Finance and others

Hello friends, Today I’m going to explain a topic "Coronavirus (COVID-19): Key Announcements on Income Tax, GST, Finance, and others". 

You can read my previous blogs "GST in India- An Introduction" & "GST Framework In India"

The Union Finance Minister Smt Nirmala Sitharaman made a number of announcements on 24th March 2020 via video conferencing related to statutory and regulatory compliance matters and some reliefs for businesses to cope up with the difficult times of COVID-19.

Below is the summary of the Blog:

Summary

• Income Tax
• Goods & Services Tax (GST)
• Customs
• Financial Services
• Corporate Sector OR Ministry of Corporate Affairs (MCA)
• Insolvency and Bankruptcy Code (IBC)
• Fisheries 

Income Tax

The last date for

• Belated/Revised filing of ITRs for the FY 18-19 
• Permanent Account Number (PAN) and Aadhar linking 
• “Vivad se Vishwas” scheme no additional 10% payment

Extended from
31st March 2020 to 30th June 2020

Issue of notice, intimation, notification, approval order, sanction order, filing of an 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 rollover benefit of capital gains under Income Tax Act, Wealth Tax Act, Prohibition of Benami Property Transaction Act, Black Money Act, Securities Transaction Tax (STT) law, Commodities Transaction Tax (CTT) Law, Equalization Levy law, Vivad Se Vishwas law where the time limit is expiring between March 20,2020 to June 29,2020 shall be

Extended to 30th June 2020 

Interest at a reduced rate of 9% p.a. shall be charged alternately of 12% or 18% p.a. towards the delayed payment/deposit of the following income tax levies, made between March 20,2020 and June 30,2020.

Note that there is no extension in the deadlines.

• Advance Tax
• Tax Deduction at Source (TDS)
• Tax Collection at Source (TCS)
• Self-assessment tax
• Equalization levy
• Security Transaction Tax (STT)
• Commodity Transaction Tax (CTT)

Goods & Services Tax (GST)

The last date for the

• GST Returns for March, April & June 2020 on a staggered basis 
• Opt for composition scheme 
• Sabka Vishwas scheme from 31st March 2020 with no Interest charges
• Issuance of notice, intimation, notification, approval order, sanction order, filing of an appeal, furnishing of return, statements, applications, reports, any other records where the time limit expires between March 20,2020 and  June 20,2020
• Penalty fall to 5% interest on late filing of GST returns beyond 15 days for firms having turnover up to Rs. 5 crore

Extended to 30th June 2020 

Customs 

The taxpayers and/or the tax authorities have got an extensive time limit of up to June 30,2020 where the time limit for the following compliance matter lapses between March 20,2020 and June 29,2020:

• Issue of notice, notification, approval order, sanction order, Filing of an appeal, furnishing of applications, reports, or any other documents.
• Customs clearance will operate 24*7 to help Exporters and Importers up to  June 30,2020.

Financial Services 

• You can now withdraw money from any Bank ATM without charges for 3 months.
• Minimum balance charges waived off for bank accounts.
• There shall not be any minimum balance requirement fees (in Bank accounts). 
• In the case of Digital Trade transactions, Bank charges are being reduced.

Corporate Sector

• The requirement of holding board meetings has been relaxed for 60 days for two quarters. 
• Newly incorporated companies will be given an additional 6 months for declaration of commencement of business. 
• For 2019-20, if independent directors have not been able to hold a single meeting, it will not be seen as a violation.
• Applicability to Create Deposit Reserve of 20% of deposits by April can now be complied with by 30 June 2020.
• Requirements of Auditor's Report order 2020 which was assumed to come into force for Financial Year 2020 will be effective from Financial Year 2021.

Insolvency and Bankruptcy Code (IBC)

Insolvency is a financial position of being – one that is reached when you are unable to pay off your debts or obligations on time.
Bankruptcy is a lawful process that serves the purpose of resolving the issue of insolvency.

• Finance Minister Nirmala Sitharaman's government's move to consider raising the threshold limit to file any action under IBC from Rs. 1 lakh to Rs. 1 crore has come as a huge relief booster shot for SMEs (Small and Medium Enterprises), SSMEs (Sustainable Small and Medium Enterprises) and small businesses.
• Insolvency and Bankruptcy Code (IBC) Section 7 (Initiation of corporate insolvency resolution process by the financial creditor), Section 9 (Application for initiation of corporate insolvency resolution process by the operational creditor), Section 10 (Initiation of corporate insolvency resolution process by corporate applicant) may be considered for 6 months if Economic scenario becomes worse. This will prevent companies from being forced into Insolvency and Bankruptcy Code (IBC) for default if the scenario worsens.

Fisheries

• All the Sanitary Imports Permits (SIP) for the import of SPF Shrimp Broodstock and other Agriculture inputs which expires between 1st April 2020 and 15th April 2020 has been extended by 3 months
• Delay in arrival of import consignments by up to 1 month will not be considered as ‘delayed receipts’. 
• The time limit for the verification of documents and grant of NOC for quarantine has been relaxed from 7 days to 3 days.

Thanks for reading friends, I will bring more such interesting topics related to taxation. 

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