In view of the complete standstill to the trade & industrial activities, Income Recognition & sset classification norms should be suitably amended by RBI so that borrowers account doesn’t get classified as NPA due to non payment of installments & interest as the case may be in view of the unforeseen & unpredictable circumstances due to the outbreak of COVID-19.. said CA Julfesh Shah,Vice Chairman,COSIA Vidarbha.
He further said that presently 90 days norm is there for declaring NPA & moratorium has been already extended by RBI for 3 months I.e.Upto 30th June 2020. But since lockdown has been further extended up to 3rd May & thereafter also as there is the uncertainty of commencing the activities it will put a tremendous burden on the borrowers on & after 30th June .So moratorium.needs to be increased by at least 90 days further after June I.e uptoÂ 30th Sept 2020 which will give ample time to the borrowers to streamline its working capital cycle as well as payment of instalments.
One should be kept in mind is that the loan liability is only deferred ,not waived as per the directions of the RBI..Mr Shah added.A huge amount of MSME payments are blocked in PSUs,Govt organisations & big corporates.To improve the liquidity & provide stabilityÂ to MSME sector ,PSUs, Govt Undertakings,Corporate should release theÂ payments as per MSME Act demanded Shri.Mayank Shukla ,Chairman ,COSIA Vidarbha Chapter.Representing the cause of MSME Sector,COSIA urged the Govt that employers of MSMEs should be supported from Labour Welfare Fund/ Accumalated unclaimed PF funds or other suitable govt funds to facilitate them to pay employees salary for the month April & till the lockdown persists.
Electricity Boards should waive the recovery of monthly fixed Charges from Industrial and Commercial Consumers for the Lockdown period.
Professional Tax levied by some states should be immediately withdrawn as it was supposed to be subsumed in GST.
*While offering relief package to MSME the basic principle should be to help out maximum numbers rather than adding some Riders to elliminate maximum benificiaries*
The glaring example is in offering PF contribution subsidy where in a rider of minimum 90% employment drawing salary below 15,000/- is totally unreasonable,added Shukla.
Tax compliances which were due on 31st March & which are due in the ensuing months need to be deferred to a later date until the normalcy returns without any interest late fees or penalty.As per the latestÂ circular by the Govt.that all Income Tax refunds below 5 lacs to be immediately released will bring some relief for the taxpayers,but at the same time GST refund , Export benefits incentives, subsidy amounts claimed under various Govt schemes need to be immediately released to the stake holders to give them financial solace in these difficult times,remarked CA Julfesh Shah.
Mr Shukla also said that although we admire the decision of dividingÂ the entire state, Districtwise in three type of categories,Â ( Red,Orange& Green), depending on number of suffering cases ,Â for the purpose of implementing the intensity of lockdown, effectively it is suggested that in place of implementingÂ LOCKDOWN , can we not think of CONTAINMENT,Â of the areas which are severely affected, colony wise in Cities and small villages in rural areas.
which will yield more intense and effective control over small pockets and create room to other areas to carry out their commercial activities, observing all safety norms & precautions laid down as per the guidelines of the Government.This will also help to support The economy and Government revenue to a great extent,Shukla remarked.