Chamber Voice – June 2020

The COVID-19 infection curve is not showing any signs of flattening even after two months of the lockdown, which is a problem that the Governments at the Centre, and the States, are struggling to come to terms with. The timing of Unlock 1.0 couldn’t have been more critical. And that’s why a lot; including decisions on further easing or reinstating restrictions will depend on how this first phase pans out.

In just 17 straight days, India’s state-owned oil marketing companies have raised the retail prices of petrol and diesel by Rs. 8.5 and Rs. 10.01 a litre respectively. The timing of the recent moves to raise fuel prices has put the common man in great difficulties.

With public transport yet to restart fully in most urban areas and operating with tight restrictions and at lower frequencies even where some services have resumed, most commuters continue to have little choice but to use personal vehicles. Given that diesel is the primary fuel for the vast and essential road freight sector, these hikes in price end up dampening both the transport industry and wider economic revival. It is imperative that the authorities remove the speed breakers on the path to regaining normalcy.

The GST Council has decided to relax late fees and interest payable for those taxpayers failing to file returns on time. For businesses with no tax liabilities under the indirect tax regime, the late fees were completely waived. This is in line with similar relaxations announced by the Centre in March, before the lockdown was declared, to ease compliance deadline worries of small businesses in particular. Since the full lockdown lasted longer than initially envisaged, and only began to unwind this month, the forbearance on offer was a necessary step.

To provide further relief to the taxpayers for making various compliances, the Government has announced an extension of filing of the income tax return for the fiscal 2019-20 to 30 November 2020 from the original 31 July 2020. Additionally, in a major relief to small taxpayers, the central government has extended the deadline for making tax-saving investments for the financial year 2019-20 by another month to 31 July 2020. Not just for the previous fiscal, the last date of filing of original as well as revised income-tax returns for the financial year 2018-19 has also been extended to 31 July 2020.

Coming to the Chamber’s activities, we organised a Virtual CEO Forum Meeting on Friday, 5th of June, 2020. Dr. Sujit Vasudevan, a Renowned Consultant Physician with over 35 years of experience in private Medical Practice was the Speaker at the meeting and he spoke on “How to move ahead, beyond the Pandemic.” A detailed report of the program is carried elsewhere in this issue of Newsletter.

The next CEO Forum Virtual Meeting is scheduled for Friday, 3^rd of July, 2020 on Google Meet App. Mr. Deepak Varghese, Head-Client Relations of IIFL Wealth & Asset Management, Kerala will be the Speaker at this session and will speak on “Wealth Management – Approach and a Perspective.” I trust you all will participate in the meeting.

On 6^th of July, we are organizing a session on “Business and Contracts: Pandemic Impact and Future.” Mr. Prashanth S Shivadass, Advocate & Founder, Shivadass & Shivadass (Law Chambers) will be the Speaker at the meeting. The details of the same have already been shared with you. Do block this date and ensure your participation in this important programme.

Stay healthy and keep your spirits up during these challenging times.

Stay Safe Everyone!!!

V Venugopal

The Chamber has released 10 videos under the Chamber Vlog Series since the first one in May 2020. All the videos can be viewed on the Cochin Chamber’s YouTube Channel. The most recent ones are added to the video players below. We will keep uploading new and relevant content for our members and the industry in general.

The Cochin Chamber of Commerce and Industry conducted a Virtual CEO Forum Meeting on Friday, 5th of June, 2020.

Dr. Sujit Vasudevan, a Renowned Consultant Physician with over 35 years of experience in private Medical Practice was the Speaker at the meeting and he spoke on “How to move ahead, beyond the Pandemic.”

The President of the Chamber Mr. V Venugopal welcomed the participants to the virtual meeting.

Dr. Vasudevan gave a brief description of COVID-19 and mooted the possibility of the virus remaining with the human population for the near future. The 2002 outbreak known as SARS (Severe Acute Respiratory Syndrome) and the 2012 outbreak of MERS (Middle East Respiratory Syndrome) both originated from a similar strain of virus. Because specific antiviral treatments and vaccines are still under development, testing, quarantine, and social distancing are encouraged to prevent COVID spread, he said.

Dr. Vasudevan suggested frequent hand washing with an alcohol-based hand rub or soap and water, avoiding touching eyes, nose, and mouth, and practicing respiratory hygiene. He also explained the use of various masks and the need for proper disposal of the same. Restrictive measures like social distancing, lockdown, case detection, contact tracing, and quarantine of exposed are said to be the most efficient actions to control the disease spreading, he added.

Dr. Vasudevan said that a delay in detection and response in major countries, led to an excessive burdening of the local health systems. On the other hand, some countries had adopted effective strategies to contain the infection and had recorded a very low number of cases since the beginning of the pandemic.

Dr. Vasudevan shed some light on the efforts of countries like New Zealand, South Korea, and Hong Kong which were successful in flattening the curve. One of the key factors in the success of these countries was continuous testing, isolation of the infected, and quarantining of contacts. On the other hand, countries like Italy, Spain, the United Kingdom, and the United States delayed implementing containment measures and failed in anticipating the impact of the pandemic. The health care system was literally overwhelmed with new cases, with a considerable number of them in critical conditions, he said.

As compared to other countries worldwide, a very low number of tests have been conducted in India, though the testing is expected to increase in the near future, Dr. Vasudevan added. At the same time, the capacity for rapid testing at the primary level should be implemented, to identify cases earlier and limit the transmission. He also pointed out the importance of producing a large supply of PPE for the safety of health care workers and increasing the number of available ventilators, in case the outbreak worsens.

Dr. Vasudevan said that it’s high time India run rapid antibody testing on a large scale to identify who is already immune to the virus. Moreover, months are needed before a vaccine is developed and approved. Even though herd immunity develops over time, vulnerable groups such as the healthcare workforce and elderly people should still be safeguarded. He explained the importance of adopting smart working and staggered shifts to mitigate COVID-19 transmission in the future.

Looking into the near future, containing the COVID-19 epidemic is likely to take several months. Testing, contact tracing, isolation of infected and precautionary self-isolation of contacts is critical in reducing the number of new cases. An exceptionally high degree of understanding in the population and acceptance of these measures is also critical, Dr. Vasudevan said.

Following this, there was a brief discussion wherein the Speaker clarified the issues raised by the participants.

The meeting ended with the Vice President of the Chamber, Mr. K Harikumar thanking everyone for having participated in the meeting.

The aim of rising the rate of EPF contributions from 12% to 10% is to support all 4.3 crore workers, leaders and employers of 6.5 lakhs establishments to some degree during the pandemic over the immediate liquidity crisis.

Regarding wage months, the mandatory contribution limit will be 10 per cent-May and July this year.

As a result of the decrease in the statutory rate of contributions. It is from 12% to 10%, the employee will have a higher take-home pay leads. It is to a decrease in the deduction from his salary due to EPF contributions. Also, the employer will also have a reduction in his liability by 2% of his employees ‘ salaries. If Rs.10000/- is a monthly EPFO wage, only Rs.1000/- is deducted. It is from employee wages instead of Rs.1200/- and the employer pays Rs.1000/- in lieu of Rs.1200/- to EPF contributions.

I receive a salary under the CTC model, will I still benefit from the reduced rate. It is of contributions from 12 to 10 per cent? In cost to enterprise (CTC) model, if Rs.10,000/- is monthly EPF wages. It is in the CTC Model the employee receives Rs.200/- more directly. It is from the employer as the EPF / EPS contribution. So, it is from the employer is reduced and Rs.200/- less is deducted from his / her wages.

It is EPFO during the wage months of May 2020, June 2020 and July 2020? Establishments covered during the May-July 2020 salary months will be eligible. It is for a reduced rate for the remaining eligible period from the date of coverage.

EPFO administrative charges (0.5% of EPF wages subject to minimum prescribed). EDLI contributions (0.5% of wages) both payable by employers do not change.

The EPS contributions are derived from the employer’s share of EPF contributions. It is 8.33 per cent of salaries (subject to a cap of Rs.15000/-). The reduced rate of 10 per cent EPF contributions would not decrease pension contributions or benefits.

The Chamber releases a Bi-Monthly print version of its Newsletter, containing articles and information that are different from what comes on the Monthly E-Newsletter. Check out the covers from the last two editions.

The next print version will be out in the first week of July.

The next CEO FORUM Virtual Meeting is scheduled for Friday, 3rd July, 2020 between 8.30 a.m and 10:00 a.m.

Mr. Deepak Varghese, Head-Client Relations of IIFL Wealth & Asset Management, Kerala will be the Speaker at this Session and will speak on “Wealth Management – Approach and a Perspective.”

You will need to have the Google Meet Application installed on your mobile phones, to join the meeting. However, an App is not required if you are logging in on your laptop.

Kindly note that there is no password required to join this meeting.

We request you to kindly join the meeting at 8:30 am sharp using the link below.

https://meet.google.com/nkz-jcei-bkb