September 2021 / India

The Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Customs (CBIC) have extended the filing and/or payment deadlines of various tax returns and forms, including income tax returns for the assessment year (AY) 2021/22, in view of various difficulties reported by taxpayers and stakeholders.

Direct tax

The filing deadline of the following returns and reports have been extended further:

• income tax return for the AY 2021/22:
  • due on 31 July 2021: from 30 September 2021 to 31 December 2021;
  • due on 31 October 2021: from 30 November 2021 to 15 February 2022; and
  • due on 30 November 2021: from 31 December 2021 to 28 February 2022;
• belated/revised income tax return for AY 2021/22 due on 31 December 2021: from 31 January 2022 to 31 March 2022;
• report of audit for the previous year (PY) 2020/21 due on 30 September 2021: from 31 October 2021 to 15 January 2022; and
• report from an accountant for persons entering international transactions or specified domestic transactions for PY 2020/21 due on 31 October 2021: from 30 November 2021 to 31 January 2022.

Vivad Se Vishwas Scheme

The last day of payment under the Vivad Se Vishwas Scheme (without any additional amount) has been extended further from 31 August 2021 to 30 September 2021.

Indirect tax

• The last day of availing the late fee amnesty scheme for failure to furnish Form GSTR-3B for the tax periods July 2017 to April 2021 has been extended from 31 August 2021 to 30 November 2021.
• The last day of application for revocation of cancellation of registration where the due date of filing the application falls between 1 March 2020 and 31 August 2021 has been extended to 30 September 2021.
• The last day of filing FORM GSTR-3B and FORM GSTR-1/IFF by companies using electronic verification code instead of a digital signature certificate has been extended to 31 October 2021.

The due date for the following submissions have also been extended/further extended, as applicable:

• application under section 10(23C), section 12A, section 35(1)(ii), section 35(1)(iia), section 35(1) (iii) and section 80G in Form 10A due on 30 June 2021: extended further from 31 August 2021 to 31 March 2022;
• application under section 10(23C), section 12AB, section 35(1)(ii), section 35(1)(iia), section 35(1) (iii) and section 80G in Form 10AB due on 28 February 2022: extended to 31 March 2022;
• equalization levy statement in Form No. 1 for the FY 2020/21 due on 30 June 2021: extended further from 31 August 2021 to 31 December 2021;
• quarterly statement in Form No. 15CC:
  • for the quarter ended 30 June 2021: extended further from 31 August to November 2021; and
  • for the quarter ending 30 September 2021: extended from 15 October to 31 December 2021;
• uploading of declarations received from recipients in Form No. 15G/15H:
  • for the quarter ended 30 June 2021: extended further from 31 August to 30 November 2021; and
  • for the quarter ending 30 September 2021: extended from 15 October to 31 December 2021;
• intimation to be made by a sovereign wealth fund in Form II SWF or a pension fund in Form No. 10BBB:
  • for the quarter ended 30 June 2021: extended further from 30 September to 30 November 2021; and
  • for the quarter ending 30 September 2021: extended from 31 October to 31 December 2021; and
• intimation by a constituent entity, resident in India, of an international group, the parent entity of which is not resident in India in Form No.3CEAC; report by a parent entity or an alternate reporting entity or any other constituent entity, resident in India in Form No. 3CEAD; and intimation on behalf of an international group for the purposes of the proviso to sub-section (4) of section 286 of the Income Tax Act in Form No. 3CEAE: extended from 30 November 2021 to 31 December 2021.

Since the Insolvency and Bankruptcy Code was enacted in 2016, it has aided higher realizations of debt and quicker recovery of businesses. The Code has had a positive impact of freeing up capital which was stuck in failed businesses and has allowed companies, on the brink of collapse, to rise and become successful again, thereby also saving jobs.

The government has proactively monitored the implementation of the code and made prompt amendments as and when required to keep it relevant and sensitive to the constantly changing needs of the market. Underscoring this, the government took prompt action to alleviate the impact of Covid-19 on Indian businesses by suspending insolvency proceedings arising for any default occurring during the period from 25th March 2020 to 24th March 2021.

Micro, Small & Medium Enterprises (MSMEs) are a major driver of the Indian economy as significant contributors to the GDP and employment generation. To alleviate the impact faced by the MSME sector due to the pandemic, the government promulgated an Ordinance in April 2021 to introduce pre-packaged insolvency resolution process for MSMEs. This is to augment the existing Corporate Insolvency Resolution Process (CIRP) and provide an efficient alternative insolvency resolution process for MSMEs under the IBC to ensure quicker, cost-effective and value maximising outcomes for all the stakeholders, in a manner which is least disruptive to the continuity of their businesses, and which preserves jobs. The Ordinance was ratified as a law on Parliament on the July 28, 2021.

The pre-packaged insolvency resolution process (PIRP) can be initiated by a corporate debtor, classified as an MSME, who has a default amount of at least one lakh rupees. Once the proceedings under the PIRP begin, the debtor is required to submit the base resolution within two days of commencement of the PIRP. To increase the speed and efficiency of insolvency proceedings against MSMEs, a resolution plan must be approved by the creditors with at least 66% of the voting shares within 90 days from the commencement of PIRP. The approved resolution plan will finally be examined and approved by the National Company Law Tribunal. As a safeguard to ensure timely resolution, the committee of creditors may decide with at least 66% voting share to terminate the PIRP and initiate the CIRP at any time after the PIRP commencement date but before the approval of the resolution plan.

The PIRP amendments have been brought in to provide relief to honest MSME owners who have been severely impacted by the pandemic, by trying to ensure quicker, cost-effective and value maximising outcomes for all stakeholders. Furthermore, to ensure continuity of businesses for MSMEs the resolution process will be carried out while the company remains with the proprietor unless there has been fraudulent conduct or gross mismanagement.

The amendments are expected to reduce process costs, ensure continuity of business operations which benefit the corporate debtor and most importantly maximise the asset realisation for financial creditors. These reforms are expected to further improve the Ease of Doing Business and ensure quick resolutions for honest MSMEs – the backbone of the Indian economy.

Source: Invest India

Textile Machinery Industry Overview

• A ~$2.5 bn textile machine industry which is growing at 5% currently reflects on the growing strength of this sub-segment in the textiles value chain in India.
• A strong textile engineering industry that can grow, compete, and export would be able to provide support to the rising Indian textile industry, adding vibrancy and competitiveness.
• There are about 3,250 companies involved in the manufacturing of textile machineries, accessories, and trading of equipment in India. The industry not only caters to rising domestic demand but also has the potential to establish India as an export hub for textile machinery with spinning machines representing the largest export opportunity.
• A major component of the textile machinery industry in India thrives on the global partnerships that companies in India have forged with their global counterparts be it in Germany, Italy, or Japan.
• As per the 60^th Annual Report by the Textile Machinery Manufacturing Association (TMMA), the Asian region will account for more than 90% of the total textile machinery market share, and in order to expand its technical horizons, many textile machine companies in the country are joining hands with their western counterparts to produce technologically advanced machines.