Amid lockdown, FM raises default threshold to Rs 1 cr to help MSMEs
In view of the lockdown due Coronavirus breakout, the Finance Ministry on Tuesday announced special relief package for companies under the Companies Act and the Insolvency and Bankruptcy Code (IBC).
''Due to the emerging financial distress faced by most companies on account of the large-scale economic distress caused by COVID 19, it has been decided to raise the threshold of default under section 4 of the IBC 2016 to Rs 1 crore (from the existing threshold of Rs 1 lakh). This will by and large prevent triggering of insolvency proceedings against Micro Small and Medium Enterprises (MSMEs), an official statement said on Tuesday.
''If the current situation continues beyond 30th of April 2020, we may consider suspending section 7, 9 and 10 of the IBC 2016 for a period of 6 months so as to stop companies at large from being forced into insolvency proceedings in such force majeure causes of default,'' the statement read further.
The Finance Minister said that raising of the threshold will help small and medium enterprises, adding that ''this would help companies being forced into insolvency on default of loans.
The government also announced the due date for filing return in FORM GSTR-3B for February by all registered persons has been extended to April 7, 2020.
''Those having aggregate annual turnover less than Rs. 5 Crore Last date can file GSTR-3B due in March, April and May 2020 by the last week of June, 2020. No interest, late fee, and penalty to be charged,'' the Finance Ministry said.
The Finance Ministry also extended the deadline for filing GST annual returns of FY 18-19, which is due on 31st March, 2020 to the last week of June 2020.
''Payment date under Sabka Vishwas Scheme shall be extended to 30th June, 2020. No interest for this period shall be charged if paid by 30th June, 2020,'' the statement read further.