COVID-19: Nasscom urges govt to defer tax payment, return filing for startups, MSMEs

New Delhi, Mar 28 () Industry body Nasscom has urged the government to suspend all deadlines, including for tax payment and return filing, until four weeks post lifting of the lockdown to provide relief to startups and SMEs.

To contain the spread of COVID-19, the government has announced a 21-day nationwide lockdown starting March 26.

"The COVID-19 pandemic has caused high stress on startups, putting their continuity at risk. They are looking to government to provide support and relief..." Nasscom said in a statement.

The industry body said startups are facing severe time loss and project delays due to the prevailing circumstances that has contributed to financial pressure on them.Advertisement

"We request that the government consider rental subsidy for workspaces used by startups which are regulated/owned/managed by government agencies," it added.

The body also requested for a "blanket suspension of all deadlines including tax payment deadlines and filing deadlines until at least four weeks post lifting of all city lockdown".

These include relaxation of deadline to file Foreign Inward Remittance Certificate (FIRC), option to avail overdraft facility/interest free and equity convertible funding, waiver of fines/penalties for offences violations related to procedural matters, extension of due date for payment of advance tax, and waiver of restrictions for claiming an expense as a deduction under Section 40 of the IT Act.
Advertisement

Nasscom suggested that payment of provident fund and gratuity deposits should be deferred for the duration of the lockdown, and provide an option to employees for a one-time PF opt-out option for the next financial year 2020-21 given that startups are unlikely to be able to provide any salary increments due to subdued business environment.

"In such a case, both the employee and employer contributions towards the PF may be transferred directly to the employee. This will result in an increase in the take home pay of the employees. This move will be beneficial for the employees in the lower salary bracket and would lead to a higher take home pay for a majority of the start-up workforce," it said.Nasscom also sought deferral of interest payment deadlines and relaxation of loan interest payments. Besides, it suggested that governments and PSUs be encouraged to procure Make-in-India software products, and incentives/sops for consumption of indigenous products.Advertisement

For MSMEs, Nasscom said interest and penalties should be waived for delayed payments of TDS and GST due for the month of March, April and May 2020 if such payment is made by June 30, 2020.

"The working capital of MSME businesses is already stressed and the pandemic has further aggravated the situation. As an immediate relief, all government departments (Centre/State)/PSUs/large corporations must be directed to release all pending payments/invoice receivables raised by the MSMEs within 15 working days," it added.

The body recommended that separate credit lines be given to MSMEs for handling global recessions.Advertisement

"To minimise the impact of the pandemic and ensure minimum disruption in supply chain, government must ensure adequate credit flow to the MSMEs (small and medium enterprises)," it noted.

Therefore, it must be ensured that the existing Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is accelerated with the Turn Around Time (TAT) of issuance of funds by SIDBI reduced to 7 working days, it added. SR BALBAL
{{}}

(This story has not been edited by Business Insider and is auto-generated from a syndicated feed we subscribe to.)