Chamber Voice – April 2020

President's Letter

Dear Friends,

I trust that all of you are safe amid the ongoing coronavirus pandemic. While the world battles to curb the impact of the coronavirus, we can try to overcome this challenge in solidarity by staying at home and following the protocols laid down by the Government. Let’s encourage social distancing and help protect each other from COVID-19.

As COVID-19 continues to impact communities around the world, people are coming together to help one another now more than ever. The whole world is praising the efforts that are being made by the corona warriors to ensure everyone’s safety everywhere. They are working round the clock, assisting those in need, and ensuring that everyone stays well. Today in these challenging times their dedication and efforts to defeat Covid-19 are truly heroic and commendable.

The decision to implement a total lockdown in the country is bound to significantly disrupt economic activity across India. The Government said that where there is life, there is hope and that it will take appropriate action to address the economic concerns. It has already addressed some of the issues related to tax liabilities and indicated that a fiscal stimulus is on the way—a comprehensive one would be needed to minimize the economic costs.

In an economy already reeling under a demand depression, rising unemployment, and lowering of industrial output and profits, all of which have been happening together for several quarters now, a supply-side constraint would deliver a big blow, jeopardising growth prospects and the socio-economic well-being of a large number of people.

The Centre’s move to allow manufacturing across Special Economic Zones (SEZs), Export Oriented Units (EOUs) and units operating from rural areas are being seen as part of the strategy for a gradual exit from the lockdown. The Home Ministry order has also allowed the manufacture of IT hardware and essential goods among a slew of other activities. While many companies engaged in manufacturing are exploring the possibility of opening their factories, they are discussing the plan with other players in the supply chain. However, clearly the options are limited.

The domino effect of COVID-19 and slowdown in the economy is bound to push the States into more debt. In terms of revenue expenditure in the medical and public health sector, Kerala is spending the most at 5.14 percent (Rs 6,389 crore) of its total expenditure followed by Tamil Nadu at 4.15 percent ( Rs 8,814 crore), Maharashtra at 4.07 percent (Rs 13,636 crore) and Uttar Pradesh at 3.63 percent (Rs 13,247 crore). The current public health infrastructure (be it doctors or hospitals) is not sufficient to take care of a large scale pandemic like Covid.

The Confederation of Kerala Tourism Industry (CKTI) estimates that the State’s tourism industry will witness a revenue loss to the tune of Rs 20,000 crore this year due to the impact of COVID 19. The tourism industry body has demanded a revival package from the State and Central Governments.

Industry estimates put the loss of business at nearly 30,000 crores, indicating a sharp fall in State revenues at a time when it was limping back to normalcy after back-to-back catastrophic floods in the last two years.

Kerala is running the highest number of relief camps for migrant workers left stranded by the nationwide lockdown for curbing the spread of the coronavirus pandemic. The state has 15,541 of the 22,567 Government-run relief camps for migrant workers in the country, according to a report filed by the Home Ministry with the Supreme Court. That’s 69 percent of all the relief camps and shelters run by State Governments across India.

Kerala’s multi-pronged response to the Covid-19 pandemic has earned it plaudits across the country and the world. The State was the first in the country to announce a Rs 20,000-crore package in response to the pandemic. Besides, it has also taken measures to ensure that 1.44 lakh migrant workers in the states are provided with accommodation and free meals.

It is feared that the MSME sector will take the biggest hit as a result of the pandemic and the resulting lockdown. The MSME sector contributes 29% to India’s GDP, provides employment to more than 120 million and contributed 48.1% to India’s total exports in 2018-19. Kerala has the 12th largest number of MSMEs in India – around 2.4 million units generating employment for approximately 4.5 million. Kerala has about 44% of its labour force as casual workers in the informal sector.

Around 3 million Keralites are working abroad, mainly in the Middle East and a large percentage of them belong to lower- or middle-income group. Remittances contribute nearly 36.5% to the Net State  Domestic Product. The impending recession and oil price slump are bound to impact many of these jobs resulting in lower remittances. There is even a real possibility that many of these non-residents will move back to Kerala post the pandemic. This will again adversely impact the economic situation in Kerala both directly and indirectly and will also affect the social fabric of the State.

Agriculture and allied sectors contributed 10.5% of the total GSVA of Kerala in 2016-17. All these sectors will be adversely impacted.

The collapse of the economy brought about by the coronavirus pandemic has exposed the extreme vulnerabilities of millions of informal workers, who are disproportionately employed in industries undergoing mass lay-offs as well as high-risk jobs that keep society running when many of us are isolated at home. Many of the undocumented, working in construction, restaurants and other service sectors, have already lost their jobs.

Another sector which has been terribly affected is tourism and hospitality. Tourism constitutes 10 percent of Kerala’s GDP, as per official statistics, and reportedly contributes around 23.5 percent to the total employment in the state. One relief was that the pandemic outbreak happened towards the fag end of the tourist season. However, a revival of the industry is going to take time.

While we do appreciate the fact that the current situation is a cause for deep concern and worry for your respective businesses, we are sure that you will agree that our health and safety are of primary concern at this point in time. Do remember to follow all the protocols prescribed by the State Government and the Health Department for your personal safety and that of your family.

For your benefit, the Chamber has compiled a list of major Covid 19 Government interventions with a special emphasis on the Deadline extensions provided by the various institutions at the State and National levels. We will continue to update this repository regularly to keep the members informed about the developments. The details regarding the same are given in this issue of Newsletter.

Rest assured that we will step in to assist wherever possible given the current circumstances.

Take care and stay safe!

V Venugopal

Chamber's repository for all the Notifications and Guidelines pertaining to COVID-19 outbreak & lockdown

Forthcoming Event

COVID: Impact on the Tax and Regulatory Environment in India

08.05.2020 | Virtual Meeting on Zoom App | 09.00 a.m - 09.40 a.m.

We are pleased to inform you that the Chamber is resuming the CEO FORUM meetings from May 2020. The first meeting post the lockdown will be a “virtual one” and will be held on FRIDAY, 8th MAY, 2020 between 9.00 a.m and 9.40 a.m.

The Speakers will be Mr. Kunal Wadhwa and Aditya Narwekar, Partners at PwC India.

To join the meeting, you will need the Zoom Meeting app on your device.

Meeting Link :

Meeting ID: 760-5752-7040

We request you to join the meeting at 9 a.m. sharp.



Prashanth S Shivadass & Priyanka Yavagal

India has been at the forefront in the rise of the e-commerce market has witnessed substantial and consistent growth. According to an estimate made by the Finance Ministry, the Indian B2C e-commerce market was valued at USD 38.5 billion in 2017 and is estimated to rise to USD 200 billion in 2026, while B2B e-commerce was estimated to be around USD 300 billion. Despite the high rate of growth of e-commerce in India, the sector is still at a nascent stage, and according to some estimates, it is about 3 percent of the retail market worth USD 860 billion, excluding travel and tourism.

This necessitates better policy response and coordination among various wings of the Government. The Department for Promotion of Industry and Internal Trade (“DPIIT”) has introduced a draft National E-commerce Policy (“Draft Policy”) on February 23, 2019, for public comments and suggestions. Several meetings have been held at various levels of the DPIIT including,  Secretary, DPIIT and stakeholders from major e-commerce companies, start-ups, industry associations, academicians, etc. as well as data center providers, logistics companies, export promotion councils to discuss the issues faced by the respective sectors and the provisions contained in the Draft Policy. Since e-commerce is a new issue, it has necessitated detailed consultations over the last few months.

The current regulatory status with respect to e-commerce space in India includes the Information Technology Act which governs and regulates the use of the internet in India, online conduct, and related aspects of e-commerce and recognises electronically concluded contracts, cybercrimes, internet surveillance and intermediary liability. Specific laws, such as the Payment and Settlement Systems Act 2007, regulate payment system operators and payment intermediaries, including in the e-commerce space. The Reserve Bank of India (RBI) issues regulations from time to time that regulates the use of payment instruments for facilitating e-commerce. The Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry of the government of India has issued several guidelines on foreign direct investment (FDI) in e-commerce.

The Draft Policy aims to create a framework for achieving the holistic growth of the e-commerce sector along with existing policies of Make in India and Digital India. The overall objective of the Draft Policy is to prepare and enable stakeholders to fully benefit from the opportunities that would arise from progressive digitalization of the domestic digital economy.

The Draft Policy has been divided into 6 categories and it identifies critical aspects of each issue and lays out strategies to achieve the Government’s vision:

The Draft Policy broadly defines the term ‘e-commerce’ to include buying, selling, marketing or distribution of (i) goods, including digital products and (ii) services; through an electronic network.

The definition is similar to a 1998 WTO definition of eCommerce. It is not in sync with newer statutes in India like the  FDI  Policy,  2017,  Central Goods and  Services  Act,  2017  and the  Ministry of Electronics and  Information  Technology, whose industries are part of the e-Commerce supply chain.

Features of Draft Policy in a nutshell:

1. Indian Control Over Data:Govt to be given access to source code, algorithms of AI systems, Impose custom duties on electronic transmissions to reduce revenue loss. It bars sharing of sensitive data of Indian users with third party entities, even with consent.

2. A data authority’ to look at community data.

3. Local presence for apps & websites: All eCommerce websites, apps available for download in India to have a registered business entity here. Non-compliant eCommerce app/website to be denied access here.

4. Incentives for data localisationLocation of the computing facilities like data centers, server farms within India. Firms to get 3 years to comply with local data storage requirements.

5. Data storage facilities to get infrastructure status’.

6. FDI In E-commerceFDI only in the marketplace model. No FDI in the inventory model.

7. Ecommerce TradeCurbs on Chinese eCommerce exports. Gifting routes, often used by Chinese apps, websites, banned for all parcels except life-saving drugs. Integrating Customs, RBI, and India Post to improve the tacking of imports through eCommerce.

8. Incentives & e-commerce export promotions.

9. Ecommerce start-ups may get the ‘infant industry’ status raising the limit for courier shipments from Rs 25,000 to boost eCommerce export.

10. Regulation: No separate regulator for eCommerce sector.

11. E-consumer courts to be developed.

12. Online Customs clearance would be facilitated by linking all the concerned Departments of the Government, such as Department of Posts, DGFT and RBI, and the stakeholders.



The Draft Policy can be an important step towards the betterment of e-commerce marketplaces, as it affects many stakeholders of the new and old economies, both domestic and foreign. As it stands, its impact can be both negative and positive. Every e-commerce entity must be registered in India. This will ensure better governance. However, this is likely to be a barrier to market entry and innovation, thus inhibiting FDI. The Standing Group of Secretaries on E-Commerce is the stipulated supervisory body,  but there are no provisions on its formation,  constitution, and functioning. This clarity is critical as the Standing Group of Secretaries on e-commerce will be in charge of implementing the legislation across multiple departments to implement the e-commerce regulations. The Draft Policy provides for capacity building by the creation of technology centers in government and regulatory circles. This capacity needs to be extended to the state and the judiciary. For now, the Draft Policy is only a direction and not an enforceable document.

* The authors are Founder and Associate respectively of Shivadass & Shivadass (Law Chambers)

 The contents and comments of this document do not necessarily reflect the views/position of Shivadass and Shivadass (Law Chambers) but remain solely of the author(s). For any further queries or follow up, please contact


Coffee with Venu

Food Waste is one of the biggest problems facing mankind today

Mr. V. Venugopal, President, Cochin Chamber of Commerce & Industry in conversation with Mr. Nandu Govindankutty, Co-Founder, Making a Difference Through Analytics (MADTA) on Food for Thought – Food Waste: A Deep Dive into its Impacts & Concerns especially during the Covid ’19 days

Tax and Regulatory Updates from PricewaterhouseCoopers


Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020

The President of India promulgated the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (Ordinance), on 31 March 2020, to put into immediate effect the relief measures announced by the Finance Minister on 24 March 2020, in response to the Novel Coronavirus (COVID-19) outbreak. The Ordinance is in line with relief measures announced earlier on statutory and regulatory compliances under various laws.

Direct Tax

The Ordinance has further relaxed provisions under direct tax laws as follows:

A) The date for commencement of operation for Special Economic Zone (SEZ) units claiming tax holiday benefit under section 10AA of the Income-tax Act, 1961 (the Act) has been extended to 30 June 2020, provided the unit has received a Letter of Approval from the SEZ authorities on or before 31 March 2020.
B) Any donation to the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) shall be eligible for 100% deduction under section 80G of the Act. In addition, the limit on deduction of 10% of gross total income would not be applicable to such donations.
C) Taxpayers opting for settlement under Direct Tax Vivad se Vishwas Act, 2020 would require remittance of 100% of disputed tax up to 30 June 2020, and 110% of disputed tax from 1 July 2020.

Separately, the Central Board of Direct Taxes (CBDT) issued an order under section 119 of the Act in relation to issuance of certificate for lower rate/ nil deduction/ collection under various sections of the Act. The order extends the validity of certificates issued for financial year (FY) 2019-20 up to 30 June 2020 in cases where an application is pending for disposal for FY 2020-21, or where such applications could not be filed (subject to filing of application as per modified procedures laid down). Payments to non-residents (including foreign companies) having permanent establishment in India and not covered by lower/ nil tax deducted at source/ tax collected at source certificates will be subject to tax withheld at the rate of 10% including surcharge and cess until 30 June 2020 or disposal of applications, whichever is earlier.

Indirect tax

1. Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (Scheme) –

Time limit to issue estimate and final amount payable by the taxpayer under the Scheme by the Designated Committee, extended up to 1 May 2020 in certain cases and 31 May 2020 in other cases.
*Time limit for the taxpayer to pay the amount as decided by the Designated Committee, extended to 30 June 2020.

2. For actions that cannot be completed or complied with due to force majeure the Central Government has been empowered to issue notifications to extend time limits under the Central Goods and Services Tax Act, 2017 (CGST Act), on the recommendations of the GST Council. This includes the power to give retrospective effect to such notifications.

3. The expression “force majeure” has been specifically defined to mean a case of war, epidemic, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature or otherwise, affecting the implementation of any of the provisions of the CGST Act.

PwC comments: The Ordinance brings certainty to the implementation of relief measures announced by the Finance Minister and extends it to additional cases of tax holiday units, donations to the PM CARES Fund and Vivad Se Vishwas Scheme. The CBDT stepping-in to provide further relief is a welcome measure considering the extraordinary circumstances of a lockdown. The clarity on time limits for Sabka Vishwas Scheme and the definition of “force majeure” in the GST law to cover many natural calamities, including the COVID-19 pandemic would assist taxpayers tide over the compliance obligations amidst business discontinuity.

Change in FDI Policy – Prior Government approval required for FDI from countries with which India shares land border

The Department for Promotion of Industry and Internal Trade issued Press Note No. 3 (2020 Series) on 17 April 2020 mandating prior Government approval for foreign direct investments (FDIs) from countries with which India shares a land border. This means any fresh investment or acquisition undertaken by entities belonging to, or beneficially owned, by entities/ citizens of such countries would require prior Government approval.

Currently, FDI is under automatic route for all sectors except certain sectors which are prohibited or restricted. Investment by entities and/ or citizens from Bangladesh and Pakistan are not eligible for automatic route and requires prior Government approval irrespective of the sector. Further, entities and/ or citizens of Pakistan can invest, only under the Government route, in sectors/ activities other than defence, space, atomic energy and sectors/ activities prohibited for foreign investment.

With the amendment issued under Press Note 3 of 2020, any investment from countries with which India shares land border will require a prior Government approval even in sectors where otherwise FDI was permitted under automatic route.

The Government approval route will also apply for any transfer of ownership of existing or future FDI which directly or indirectly results in beneficial ownership in the hands of any entity/ citizen of countries with which India shares land border.

This Press Note will become effective from the date on which the Government notification is issued under the Foreign Exchange Management Act, 1999.

Foreign Trade Policy extended with relaxation in timelines due to COVID-19 pandemic

The Foreign Trade Policy is notified for five years with annual supplements generally notified by the Directorate General of Foreign Trade (DGFT). The present Foreign Trade Policy notified in 2015 was valid until 31 March 2020. It was expected to be replaced by a new Foreign Trade Policy effective 1 April 2020. However, the DGFT has extended the present Foreign Trade Policy by another year, i.e., up to 31 March 2021. Additionally, it also notified relaxation in timelines and procedures for specified export incentive schemes.

The key highlights of the Foreign Trade Policy are listed below.:


  • Facility to import un-shredded metal scrap at designated ports extended up to 30 September 2020, and these ports now need to install and operationalise radiation portal monitors and container scanners by 1 October 2020.
  • Status certificate will be valid for five years from the date of filing of application or 31 March 2021, whichever is later.
  • Last date of application for considering late cut, as applicable, would be taken from the extended dates notified for filing specific applications.

Merchandise Exports from India Scheme
Shipping bills for which the let export order date falls between 1 February 2019 and 31 May 2019, the application can be filed within a period of 15 months from the let export order instead of 12 months.

Service Exports from India Scheme

  • The last date of filing Service Exports from India Scheme for 2018-19 stands extended to 31 December 2020.
  • The eligible service categories and the rate of reward for the period 1 April 2019 to 31 March 2020 will be notified separately.
  • For the services rendered from 1 April 2020, the decision on continuation of scheme will be taken later.

Advance Authorisation Scheme/ Duty Free Import Authorisations

  • All advance authorisations, including Duty Free Import Authorisations, where the validity for import is expiring between 1 February 2020 to 31 July 2020, automatic extension for six months is granted from the date of expiry; further extension of validity is available as per eligibility.
  • All advance authorisations where the export obligation period is expiring between 1 February 2020 and 31 July 2020, automatic extension for six months is granted from the date of expiry. The requirement to file application and pay composition fee is now eliminated, and further extension of validity is available as per eligibility.

Rebate of State and Central Levies and Taxes

Last date to file online claim for shipping bills where the let export order is from 7 March 2019 to 31 December 2019, is now extended to 31 December 2020.

Export Promotion Capital Goods Scheme

  • For authorisations where the validity for import is expiring between 1 February 2020 to 31 July 2020, automatic extension for six months is granted from the date of expiry.
  • The authorisation holder must submit an installation certificate within six months of completion of imports. For cases where this timeline is expiring during 1 February 2020 to 31 July 2020, the period of submission stands extended by further six months from the original due date.
  • For specified authorisations issued under earlier policies or policy periods, including the present period, where the block-wise export obligation is expiring during 1 February 2020 to 31 July 2020, the period stands extended for six months from the date of expiry.

Export-oriented units

  • Letter of Permissions that are expiring on or after 1 March 2020 are deemed to be valid until 31 December 2020.
  • Quarterly Performance Report for the period ending March and June 2020 and Annual Performance Report for 2019-20 can be filed by 30 September 2020.
  • Monthly Reports for February to June 2020 can be filed by 31 July 2020.

Deemed exports

Last date for filing terminal excise duty refund or drawback claims, in cases where the date falls on or after 1 March 2020, stands extended to 30 September 2020.

Transport and marketing assistance for specified agro products

Quarterly claims under the scheme for the period ending March 2019 and 30 June 2019 can be filed by 30 September 2020

PwC comments: The extension of Foreign Trade Policy for one year provides certainty to trade on export benefits and it should ensure a smooth transition to the Remission of Duties and Taxes on Exported Products, which the cabinet recently approved. The extension of timelines to file applications or comply with the procedural requirements will provide much needed relief to trade during this lockdown due to the COVID pandemic. However, a possible revisit of the Service Exports from India Scheme from the perspective of eligible service categories, including its continuity going forward, could impact service exporters that have limited benefits under the Foreign Trade Policy. Hence, the scope and continuity of Service Exports from India Scheme may require a revisit from the service export perspective.

COVID-19 impact on India immigration

Amid growing concerns over rapidly increasing COVID-19 pandemic at a global level, India has taken several preventive measures (including travel restrictions) to mitigate the spread of the virus in the country. Some of these measures have had direct impact on global mobility of employees which have been summarised below:

The Bureau of Immigration (BoI) announced the following visa and travel restrictions:

  • Existing visas of all foreign nationals baring the prescribed exceptions of any country who have not yet arrived in India stand suspended w.e.f. 13 March 2020.
  • Visa free travel granted to Overseas Citizenship of India (OCI) card holders, who are not presently in India remains suspended.
  • Any foreign national (including OCI cardholder) who intends to travel to India for compelling reasons is advised to contact the nearest Indian Mission for fresh visa.
  • All international passengers entering into India are required to furnish duly filled self-declaration form with personal information and contact details with the Immigration authorities and undergo Universal Health Screening.

The BoI also released a FAQ document on COVID-19 situation where the following key points have been clarified:

  • Visas as well as OCI cards of foreign nationals already in India continue to remain valid and active.
  • Any request for extension of the existing visa or conversion of the visa may be made to the nearest Foreigner Regional Registration Offices (FRRO) through the e-FRRO facility.
  • Foreign nationals who are not in India and holding a valid employment or project visa who are travelling from non-restricted countries will be permitted to enter India. Further, dependents of the above-mentioned exempted category of foreign nationals will not be permitted to enter India.
  • Foreign nationals who were in India and have left India recently can return to India only with a fresh visa issued from the relevant Mission/ Post.

In addition to the above, the Ministry of Home Affairs also issued guidelines on 24 March 2020, for the containment of COVID-19. The key measures impacting expatriate population have been laid down as under:

  • A nation-wide lockdown was announced for an initial period of 21-days w.e.f. midnight of 25 March 2020, which has now been extended to 3 May 2020. Exceptions have only been made for prescribed category of establishments including banks, insurance companies, delivery of essential goods like food, pharmaceuticals, medical equipment, fuel stations, healthcare, emergency services, etc.
  • All transportation services via rail, road and air remain suspended until 3 May 2020.
  • All commercial and private establishments have been closed. Companies have asked their employees to work from home (wherever possible) during the period of lockdown.
  • Guidelines on the stringent measures to be undertaken across India are likely to be released shortly. It has also been announced that areas/ locations showing positive development may be provided with concessions on the lock down, however, such concessions will be rolled back in case of any setbacks.

PwC comments: The Government of India has been updating its travel advisory frequently depending on the impact of COVID-19. Therefore, it is advisable to check for latest advisory before scheduling travel plans. Foreign nationals who are present in India and expecting to end their assignment in near future may not be able to depart India unless the restriction on air space is lifted. Therefore, it is advisable that the Indian sponsor entities plans for making applications for Indian visa extensions for such foreign nationals. The impact of their extended presence in India from a business and commercial perspective will also have to be evaluated. The FRRO authorities have currently not issued any guidelines for relaxation of documentation requirement for availing e-FRRO services like extension of visa or change of jurisdiction, etc. In view of COVID-19, it is possible that sponsor entities face practical challenges in issuing documents to be submitted by the foreign nationals along with the applications to be made to e-FRRO. The foreign nationals who are currently not in India but hold an Indian visa are suggested to check for the validity of their visas before departing for India.

Indirect tax

CBIC issues notifications and circular to implement relief measures for COVID-19

Recently, the Central Board of Indirect Taxes and Customs (CBIC), issued notifications and circulars giving effect to the relief measures announced by the Finance Minister in view of COVID-19. While there is no extension of due dates for filing Form GSTR 3B for February 2020 to April 2020, and Form GSTR 1 for March 2020 to May 2020, the CBIC has notified the waiver of late fees, and benefit of reduced rate of interest for delayed payment of tax (waiver for turnover below ₹50m). We have summarised the clarifications as per the notifications released below.

The press release stated that due dates for filing Form GSTR 3B for February to April 2020 would be extended to 30 June 2020 for taxpayers having aggregate turnover up to ₹ 50m. Interest, late fee and penalty would also be waived. For other taxpayers, a reduced interest rate would be charged, although the applicable late fee would be waived.

As per the Notifications

Further, the press release stated that due dates under the Central Goods and Services Tax Act, 2017 (CGST Act), Customs Act, 1962 and other allied laws, falling between 20 March 2020 to 29 June 2020, have been extended to 30 June 2020 for the following events:

  • Issue of notices, notifications, approval orders, sanction orders;
  • Filing of appeals;
  • Furnishing of returns, statements, applications, reports;
  • Any other documents not specified above.

Notification No. 35/ 2020 – Central Tax dated 3 April 2020

This notification has been issued in excise of powers conferred under section 168A of the Ordinance to give effect to the above under GST law. Note that section 168A of the CGST Act was introduced vide the Ordinance3 to empower the Government to extend time limits for completion of compliance or any actions due to “force majeure,” as defined under the CGST Act (COVID-19 has been defined as a “force majeure” under the CGST Act).

The notification also provides that this time extension shall not apply to the following:

  • Chapter IV of CGST Act (Time and value of supply);
  • Registration and procedures therewith;
  • Provisions relating to casual and non-resident taxable person;
  • Due dates relating to issue of invoice;
  • Due dates for filing Forms GSTR-1, GSTR-3B and e-way bill (Specific dates have been separately);
  • Levy of late fee and interest (Specific dates specified separately);
  • Power to arrest;
  • Liability of partners of the firm to pay tax;
  • Penalty;
  • Detention, seizure and release of goods and conveyances in transit.

Additional reliefs (not mentioned in press release)

  • Extension of other due dates: Due dates for Input Service Distributor (ISD), Tax Collected at Source (TCS) and Tax Deducted at Source (TDS) returns for the month of March 2020 to May 2020 extended to 30 June 2020.
  • Validity period of e-way bill: Where an e-way bill has been generated and it expires during the period 20 March 2020 to 15 April 2020, the validity period of such e-way bill shall be deemed to have been extended until 30 April 2020. This is also issued under the powers prescribed under section 168A of the Act.
  • 10% credit restriction: The restriction of credit up to 10% of eligible credit on account of invoices not uploaded by the supplier shall not apply individually for the period February 2020 to August 2020. However, the condition shall be complied cumulatively for the period February 2020 to September 2020 while filing the Form GSTR-3B return of September 2020.

PwC Comments: In addition to notifying the relief measures according to the press release, the Government has provided certain other relief measures, viz., extending the validity of e-way bills and deferring the application of the credit restriction where invoices are not reflected in the taxpayer’s Form GSTR 2A, to further ease the burden of taxpayers. This is a welcome step towards relaxing compliance obligations during these turbulent times.

GST Council extends date for implementation of e-invoice, simplified monthly return and annual returns, extends foreign trade benefits, and introduces various other trade facilitation measures

The thirty ninth meeting of the Goods and Service Tax (GST) Council meeting was held on 14 March 2020. The major decisions by the GST Council in its thirty ninth meeting are summarised as follows:

Introduction of e-invoice and QR code deferred

  • The target date for the introduction of e-invoicing and QR code has been postponed by six months to 1 October 2020.
  • Various categories of taxpayers have now been exempted from the requirement to issue e-invoices and QR codes:
    • insurance companies;
    • banks, financial institutions, non-banking financial companies;
    • goods and passenger transportation service providers.


  • Monthly returns:
    • The existing reporting framework for monthly compliances via Forms GSTR-1 and GSTR-3B has been continued till September 2020.
    • Effectively, this also pushes the introduction of the proposed simplified compliances via Forms ANX 01/ 02 and RET 1 by six months.
    • Extensions to the due dates for filing returns have been provided to taxpayers located in Ladakh in light of the recent reorganisation.
  • Annual returns:
    • The due date for filing the Annual Return and Reconciliation Statement for financial year (FY) 2018-19 has been extended by three months to 30 June 2020.
    • MSMEs with a turnover below ₹ 50m have been exempted from furnishing the Reconciliation Statement for FY 2018-19.
    • Late fees on delayed filing of the Annual Return and Reconciliation Statement for FYs 2017-18 and 2018-19 have been waived for taxpayers with a turnover below ₹ 20m.


The exemptions from IGST and compensation cess on imports made under the advance authorisation, Export Promotion Capital Goods, and Export Oriented Unit schemes have been extended up to 31 March 2021. Additionally, it was announced that the e-wallet scheme would be implemented after 31 March 2021.


  • To facilitate exports, the bunching of refund claims (which are currently bracketed within a FY) would now be allowed across FYs.
  • The ceiling on the value of the supply for exports for the purpose of calculation of refund on zero-rated supplies will be prescribed.
  • Provisions will be introduced for allowing recovery of refund on export of goods where export proceeds are not realised within the time prescribed under the Foreign Exchange Management Act, 1999.

Input Tax Credit

  • A procedure for reversal of input tax credit (ITC) on capital goods, which are partly used for taxable supplies and partly used for exempt supplies, will be introduced.
  • Certain restrictions will be imposed on the utilisation of ITC for new GST registrations, until physical verification of the premises and financial know your customer is undertaken, to curb fake invoicing and fraudulent passing of ITC.
  • Clarifications will be issued to address the apportionment of ITC in cases of business reorganization under section 18(3) of CGST Act, 2017.

Changes in GST rates

  • Rate on mobile phones and specified parts to be increased from 12% to 18%.
  • Rate on Maintenance, Repair and Overhaul (MRO) services for aircraft will be reduced from 18% to 5% with full ITC. Additionally, the place of supply of MRO services to a business entity will be revised to the “location of the recipient” to attract overseas clients.

Other changes

  • Interest for delay in payment of GST to be charged on the net cash tax liability retrospectively with effect from 1 July 2017.
  • A circular will be issued to clarify the procedure for filing appeals to the Tribunal until the Appellate Tribunals are formally constituted.
  • Information returns that would be sought from banks will be prescribed. Currently, only a broad empowering provision exists.
  • Aadhaar-based authentication for new taxpayers will be operationalised.
  • A new facility called “Know Your Supplier” will be introduced to enable registered persons to have basic information about current or prospective suppliers.
  • Procedures will be prescribed for taxpayers undergoing processes related to corporate insolvency resolution under IBC, to enable them to comply with the provisions of GST laws during the period of resolution.

PwC comments: The thirty ninth meeting of the GST Council proposes a slew of taxpayer friendly measures with the objective of easing the compliance burden; these range from technology interface-based compliance (e-invoicing) to those faced by small taxpayers (annual returns). The extended date of implementation for e-invoices and introduction of certain exemptions comes as a relief in view of the industry’s limited readiness, with regard to systems, infrastructure and manpower, to meaningfully target 1 April 2020 as a start date. The industry should utilise the next six months to build Enterprise Resource Planning connected solutions to enable a streamlined e-invoicing system and other protocols.

Other steps being taken by the Government to ameliorate debated issues such as recovery of interest on the net liability, apportionment of credit during business reorganisations, refunds when export proceed are not realised within prescribed time limits and compliance during IBC proceedings would also ease the taxpayers’ compliance burden and reduce litigation. The Government is also seeking to rectify technical glitches faced by taxpayers while accessing the GST Network in a time bound manner with senior level interventions — this provides a positive tone as it is an indication of the Government’s commitment to continually improve India’s GST infrastructure.

Supreme Court holds that principle of promissory estoppel does not apply in cases where the subsequent notification is clarificatory and does not take away any vested right


The Government of India had announced an incentive scheme for setting up new industries in the earthquake-affected district of Kutch. The incentive was provided for a period of five years from the date of commencement of commercial production, by way of refund of the excise duty paid in cash. Subsequent notifications/ policies issued (impugned notifications) provided for the benefit of refund only to the extent of prescribed value addition.

The Gujarat High Court set aside the impugned notifications, as they were retrospective and not retroactive in nature, and hit by the doctrine of promissory estoppel.

The main questions before the Supreme Court regarding the impugned notifications were as follows:

  • whether it was clarificatory in nature and did not take away any vested right already conferred and
  • whether it was hit by the doctrine of promissory estoppel?:

Supreme Court’s decision

The Supreme Court analysed various judicial precedents on the subject considering the object and purpose of the impugned notifications and allowed the Revenue’s appeals, upholding the validity of the impugned notifications on the ground that they were merely clarificatory in nature, and held as follows:

Impugned notifications – whether clarificatory in nature and takes away vested rights

The object, purpose and the intention of the Government is to provide excise duty exemption only in respect of genuine manufacturing activities carried out in the concerned areas.

  • The object of the impugned notifications was to prevent tax evasion. Considering the misuse of the benefit granted vide the original notification (e.g. reporting of bogus production, over valuation of goods, bogus sale invoices), the impugned notification was issued allowing the refund of excise duty only to the extent of duty payable on the actual value addition made by the manufacturers.
  • The impugned notifications can be said to provide mode on determination of the refund of excise duty to achieve the object and purpose of providing incentive/ exemption and they do not take away any vested right conferred under the earlier notifications.
  • The impugned notifications were clarificatory in nature, issued in larger public interest and in the interest of the Revenue, and can be made applicable retrospectively..

Doctrine of promissory estoppel

  • The doctrine of promissory estoppel cannot be invoked when the public interest warrants (based on various past Supreme Court judgements).
  • The rule of promissory estoppel, being an equitable doctrine, has to be moulded to suit the situation. It is not a hard-and-fast rule but an elastic one, the objective of which is to administer justice between parties and to extend equitable treatment to them.
  • The impugned notifications do not take away any vested right conferred under earlier notifications and are not hit by the doctrine of promissory estoppel.

The Court directed that all pending refund applications shall be decided in accordance with the law and on merits, and as per the impugned notifications before the respective High Courts.

However, the Supreme Court held that this judgment shall not affect excise duty already refunded prior to the issue of the impugned notifications.

PwC Comments: This judgment has analysed in detail the exceptions to the applicability of the doctrine of promissory estoppel and the clarificatory nature of a notification and its retrospective operation. Interestingly, this judgment protects refunds already granted prior to the impugned notifications, although they were held as clarificatory and retrospective, thereby, preventing the re-opening of pastrefunds granted in order to reduce further litigation.

Rajasthan AAR rules that consideration paid to directors of a company will attract GST under RCM in the hands of the company

Recently, the Authority for Advance Ruling (AAR) in the State of Rajasthan has ruled that consideration paid to the directors (in the form of salary and commission) by the applicant company will attract goods and services tax (GST) under reverse charge mechanism (RCM)

outcome, it has now been decided to implement faceless e-assessment on full swing across the country.

PwC Comments:

  • This ruling is important since many taxpayers have taken a position that services are rendered by a director in the capacity of an employee and should not be subject to GST as the same are treated as services rendered by an employee to its employer and covered under Schedule III of the CGST Act. Accordingly, no GST is being discharged by them on it. It is also important to note that a similar view was taken in another Advance Ruling of M/s Alcon Consulting Engineers (India) Private Limited by the AAR in the State of Karnataka
  • It is important to note that the AAR does not provide any specific reason for the transaction to be excluded from Schedule III, i.e. as services provided in the course of employment
  • It is also important to note that the issue of the interpretation of the relevant provisions in this regard has been prevalent since the erstwhile regime, wherein the service tax law also had a similar provision. However, the Central Board of Indirect Taxes and Customs (CBIC) vide Circular No. 115/ 09/ 2009-ST dated 31 July 2009 clarified that no service tax is leviable on commission paid to managing directors/ whole-time directors, inasmuch as the said managing directors/ whole-time directors do not perform consultancy or advisory function.
  • Recently, Customs Excise and Service Tax Appellate Tribunal Kolkata in the case of Maithan Alloys Limited has held that whole-time directors who are entitled to variable pay in the form of commission are “employees,” and payments actually made to them are in the nature of salaries.
  • Based on the judicial precedents and the circular issued by the CBIC, the industry in the erstwhile regime adopted the position to not discharge service tax under RCM on salary paid to its directors.
  • Given that the verbiage used under the GST law is exactly similar to service tax law, it can be implied that payments in the nature of fixed salary should not be taxable.
  • While the present Advance Ruling is binding only on the applicant and his jurisdictional officers, it is likely that this ruling may be referred to by the revenue authorities while dealing with the taxability of similar situations. The impact of this ruling should therefore be analysed on a case-to-case basis.


[1] The Taxation and other laws (Relaxation of Certain Provisions) Ordinance, 2020 No. 2 of 2020, comes into force with immediate effective from 31 March 2020

[2] For details please refer to our news flash dated 24 March 2020 on the PIB Press Release dated 24 March 2020.

[3] F. No. 275/25/2020-IT(B) dated 31 March 2020

[4] Press Note No. 3 (2020 Series), DPIIT File No.: No. 5(5)/2020-FDI Policy, dated 17 April 2020

[5] Public Notice No.67/2015-20 and Notification No. 57/2015-20 dated 31 March 2020 issued by the Directorate General of Foreign Trade

[6] Advisory: Travel and visa restrictions related to COVID-19 dated 31 March 2020

[7] Visas issued to Diplomats, Official passport holders, those in UN/ International organisations, those on Employment, Project visas and those who are operating aircrew of scheduled commercial airlines.

[8] FAQs on new visa restrictions COVID-19

[9] Guidelines on the measures to be taken by Ministries/ Departments of Government of India, State/ Union Territory Governments and State/ Union Territory Authorities for containment of COVID-19 epidemic in the country

[10] PIB Press Release dated 24 March 2020 For further details, please refer to our news flash dated 24 March 2020

[11] Notification No. 31/2020 – Central Tax dated 3 April 2020; Notification No. 32/ 2020 – Central Tax dated 3 April 2020; Notification No. 33/ 2020 – Central Tax dated 3 April 2020; Notification No. 36/ 2020 – Central Tax dated 3 April 2020.

[12] The Taxation and Other Law (Relaxation of Certain Provisions) Ordinance, 2020. For further details, please refer to our news flash dated 2 April 2020.

[13] Notification No. 35/ 2020 – Central Tax dated 3 April 2020 and Circular No. 136/ 06/ 2020-GST dated 3 April 2020

[14] Notification No. 35/ 2020 – Central Tax dated 3 April 2020

[15] Notification No. 30/ 2020 – Central Tax dated 3 April 2020.

[16] 1 Press Release on the thirty ninth GST Council Meeting dated 14 March 2020

[17] Please note that the above update is based on the press releases dated 14 March 2020 by the Ministry of Finance.

[18] Civil Appeal Nos. 2256-2263 of 2020 dated 22 April 2020

[19] Advance Ruling No. RAJ/AAR/2019-20/33 dated 20 February 2020

[20] Maithan Alloys Limited v. CCE & ST [Order-in-Original No. 29/ COMMR/ST/BOL/15 dated 30 November 2015]


Relaxation and amendments by MCA from March 19, 2020 to April 22, 2020

Fine Points

From the Research Wing.....

  1. The Chamber had deposed before the Parliamentary Standing Committee on Labour at New Delhi to submit its comments on the Draft Industrial Relations Code 2019. The Standing Committee released their report on the 24th April and we have seen that the report contains various suggestions that the Chamber had raised during the time of the discussions.
  2. The Chamber submitted representations to the Union and State Governments suggesting various measures to address the impact of Covid-19 on the economy.
  3. The Chamber prepared a representation to the Government of India seeking inclusion of CMDRF under Schedule VII( Inclusion of funding to CMDRF as a CSR activity).

Policy Developments Corner

1. The Cochin Chamber has developed a comprehensive repository to help businesses track the Covid-19 related policy developments impacting their businesses. The repository is being updated regularly including all major notifications released by the Government of Kerala and the Government of India.
Check for more details.

2. The Ministry of Corporate Affairs has invited comments on the Draft Valuers Bill, 2020.
The deadline is 14th May. Submission link

3. The Ministry of Power has invited comments on the Draft Electricity (Amendment) Bill 2020. The deadline is 5th June. Contact ids : and

4. The Directorate General of Foreign Trade has extended the current Foreign Trade Policy till 31.03.2021 vide Notification No.57/2015-20.

5. The Employees Provident Fund Organisation has extended the deadline for EPF contribution for wage month March 2020 to 15th May.

6. The Employees State Insurance Corporation extended the deadline for ESI contribution for wage month February 2020 to 15th May.

E-Certificate of Origin


Exclusive EXIM Statistics

Statistical Reports on Exports and Imports through the Cochin Port.

The Cochin Chamber of Commerce and Industry publishes statistical reports on Exports and Imports through the Cochin Port on a monthly basis followed by a Consolidated Annual Report at the end of each calendar year. The reports on exports are classified as commodity wise and pertain to the following commodities:

  • Coffee
  • Tea
  • Spices
  • Cashews
  • Cotton Goods
  • Seafood and
  • Coir and coir products

Details on all other commodities that do not fall under the above-mentioned heads are carried as the ‘Miscellaneous Report’. Customized reports will also be available according to customers requirement.

We have several members in the export/import fraternity subscribing to these reports on a monthly basis and from the feedback received they are immensely benefited by the same.

We are confident that our reports will be of help to your Company in staying one step ahead of your competitors in business. A sample of the report is attached herewith for your reference. Also attached is the ‘Subscription Form’ to enable you to subscribe to the report should you want to do so.

Should you have any queries please feel free to contact Ms. Archana (7025738447).

For more details, visit Export-Import Statistics

Sample Reports