A COVID19 Relief Package for SMEs
Fiscal stimulus through Direct Benefit Transfer is surely the way to help the economically weaker sections but what about the 7,00,000 tax paying SMEs? Their businesses are completely jolted and disrupted. Even from the 70 million SMEs in the country 99% have a turnover of less than Rs 250 crores (Rs 2.5 billion). They do not have the cash to run the operation for more than a month or two and hence the government needs to act and FAST!
Here is the "Relief Package" that the Govt of India needs to introduce for SMEs due to the COVID19 outbreak.
1. Defer tax payment deadlines by a month
2. All defaults on contracts expecting execution by March to be given a three-month extension.
3. Allow corporates / firms paying taxes of less that Rs 50 lacs, a three-month extension
4. Loan defaults which have got triggered in Jan-March 2020 to be given a six-month extension
5. Extend Vivaad se Vishwas amnesty scheme by two months and release all dues back to the taxpayer once settled.
6. Announce 'interest payment holiday' for borrowers bearing loans during Jan - March 2020 for three months
7. Align GST rates to two slabs
8. All employers, who do not retrench staff during March - June 2020 and have a turnover of less than Rs 250 crores (Rs 2.5 billion), to be given a tax deduction of 25% of tax payable
9. Tax refunds & exporter drawbacks held up need to be released on an urgent basis
10. Legal compliances for PF/ GST/ TDS need to be considered leniently for April 2020
Pratap Padode, Founder, ASAPP Info Global Group, and Founder & Executive Director at FIRST Construction Council and Smart Cities Council India