To help businesses manage the economic impacts of COVID-19, the Indian government is offering a range of measures including subsidies, insolvency and tax changes. These initiatives offer local businesses a mix of support that aims to provide financial relief and carry businesses through the pandemic.

Here is NetSuite’s guide to decoding India’s stimulus package and grants:

 

Tax Measures – Indirect Tax

Overview: All GST returns for March, April, May and composition returns have been extended to June 30, 2020. No late fee or penalty will be applied to companies with less than Rs 50 million annual revenue for late returns.

Who is eligible? All businesses with payments due during this period.

How to access it: Through regular tax processes.

 

Tax Measures – Income Tax

Overview: A number of measures around income tax have been introduced. These include:

  • For the FY 2018-19, the last date for returns has been extended to June 20, 2020. Delayed payments made up until June 30 have interest rates reduced from 18% to 9%.
  • Tax Deductions at Source (TDS) delayed deposits will also have interest rates reduced from 18% to 9%.
  • The Tax Dispute Resolution Scheme is extended until June 30, 2020 and is exempt from the additional 10% payment.

Who is eligible? Businesses filing taxes during this period.

How to access it: Through regular tax processes.

 

Employees’ Provident Fund Organisation Changes

Overview: The government will pay the employee provident fund contribution for eligible businesses for both the employer and the employee. This amounts to 12% each for April 2020 to June 2020.

The due date for March payments has also been extended by 30 days, from 15 April to 15 May 2020.

Who is eligible? Businesses with less than 100 employees, 90% of whom earn up to Rs 15,000 per month are eligible for the fund contribution. All businesses are eligible for the payment extension.

How to access it: For more information contact the EPFO.

 

Insolvency and Bankruptcy Changes

Overview: The threshold under the Insolvency and Bankruptcy Code (IBC) has been increased from Rs 100,000 to Rs 10 million with the aim of preventing insolvency proceedings against micro, small and midsized businesses.

If the current situation extends beyond 30 April, further measures will come into play to avoid widespread insolvency proceedings.

Who is eligible? All businesses.

How to access it: These changes automatically apply.

 

Loan Extensions

Overview: All lending institutions can allow a moratorium of three months on repayment of instalments for term loans outstanding on March 1, 2020.

Lending institutions are also permitted to allow deferment of three months on payment of interest for working capital facilities as of March 1, 2020.

Who is eligible? Check with your lender, as this may depend on your loan.

How to access it: Contact your lender for more information.