Month: April 2020

In the wake of COVID-19 outbreak, and to facilitate the fight to contain its spread, the Government has issued a Notification No. 20/2020-Customs dated April 9, 2020, exempting the following medical devices from all customs duty and health cess:

1. COVID-19 test kits;
2. Face masks and surgical masks;
3. Personal Protection Equipment (PPE);
4. Artificial respiration or other therapeutic respiration apparatus (i.e. ventilators); and
5. Inputs required in manufacturing such products provided that importer follows the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017.

This exemption will remain effective until 30 September 2020.

In a petition filed before it as a public interest litigation seeking to make testing for COVID-19 free of cost, the Supreme Court on 8th April 2020 issued interim directions and ordered that:

1. The tests relating to COVID-19 whether in approved government laboratories or approved private laboratories shall be free of cost and the government shall issue necessary direction in this regard immediately.
2. The tests relating to COVID-19 must be carried out in National Accreditation Board for Testing and Calibration Laboratories (NABL) accredited labs or any agencies approved by the World Health Organisation (WHO) or Indian Council of Medical Research (ICMR).

The petition was filed under Article 32 of the Constitution of India seeking a direction to be issued to the government of India providing for free testing facilities of COVID-19, both by private laboratories and government laboratories. It further sought that a direction shall be issued providing that all tests for COVID-19 shall be carried out by only those laboratories which are NABL accredited or approved by WHO or ICMR.

Before this order of the Supreme Court, the charges for screening and confirmation of COVID-19 by private laboratories were capped at INR 4500. However, the testing by government laboratories were being conducted for free.

The Supreme Court agreed with the petitioners submission that, in India, despite of the steps and efforts taken by the government the number of patients and deaths due to COVID-19 were increasing rapidly and in this time of national crisis it may not be feasible for a large part of the population to pay for the testing of COVID-19. It further observed that private hospitals and laboratories shall also play their part in containing the scale of the pandemic and do so on humanitarian grounds. The Supreme Court said that it will be decided later whether the private laboratories conducting free COVID-19 tests are entitled for any reimbursement of expenses incurred by them.

The Supreme Court further agreed with the petitioner that the tests for COVID-19 shall only be conducted by NABL accredited laboratories or any agencies approved by ICMR and it issued necessary orders in this regard as mentioned above.

A clarification/modification order to the above mentioned order was passed by the Supreme Court on 13 April 2020, wherein it was, inter alia, stated that:

1. Free testing for COVID-19 shall be available only to persons eligible under Ayushman Bharat Pradhan Mantri Jan Aarogya Yojana, and any other category of economically weaker sections of the society as may be notified by the Government.
   
2. Government of India may consider as to whether any other categories of the weaker sections of the society are also eligible for the benefit of free testing and may issue appropriate guidelines in the above regard.
   
3. Private labs can continue to charge the payment for testing of COVID-19 from persons who are able to make payment of testing fee as fixed by ICMR.
   
4. The Ministry of Health and Family Welfare may issue necessary guidelines for reimbursement of cost of free testing of COVID-19 undertaken by private labs.

In view of the difficulties faced by the stakeholders on account of the threat posed by COVID-19, the Ministry of Corporate Affairs (“MCA”) issued a clarification on 08 April 2020 relating to passing of ordinary and special resolutions at the companies general meetings (“Circular”). The following clarifications have been issued in this regard, to ease the process of convening general meetings and the manner in which the members may cast their votes in such general meeting(s) held on or before 30 June 2020.

Procedure for convening a General Meeting

All decisions of urgent nature requiring members approval (except the items of ordinary business or a business where any person has a right to be heard) shall be taken through postal ballot/e-voting in accordance with the provisions of the Companies Act, 2013 (“Act”) and rules made thereunder, without holding a general meeting, which requires physical presence of the members at a common venue.

However, where holding an extraordinary general meeting (“EGM”) during this time is unavoidable, the following procedure is to be adopted for conducting an EGM on or before 30 June 2020 in addition to the other requirements provided under the Act and rules made thereunder:

For companies that are required to provide the facility of e-voting, or companies which have adopted such a facility:

For companies which are not required to provide the facility of e-voting under the Act:

In addition to the procedure detailed above in S. No. 1, 2, 4 to 6 and 10 to 16, the following shall be applicable in case of companies that are not required to provide the e-voting facility:

1. Meetings through VC / OAVM facility should allow two-way teleconferencing or WebEx and must have the capacity to allow at least 500 members or members equal to the total number of members of the company (whichever is lower), to participate on a first-cum-first-served basis. The shareholders holding 2% of more of the share capital of the company, promoters, institutional investors, directors, KMPs, chairpersons of various statutory committees, auditors, etc., may not be subject to the restriction of attending the meeting on first-cum-first served basis. Further, the participants must be allowed to pose questions concurrently or should be given time to submit questions in advance via e-mail;
   
2. The chairman for the meeting shall be appointed in the following manner, unless the articles of the company provides for a specific person to be appointed as the chairman for the meeting: (i) Where there are less than 50 members, the chairman shall be appointed in accordance with Section 104 (Chairman of the meeting) of the Act; (ii) In all other cases, he/she shall be appointed by a poll conducted in the manner provided hereunder.
   
3. A designated e-mail address of the company shall be provided to all members at the time of sending the notice for the meeting so that the members can convey their vote to such e-mail address, when a poll is required to be taken during the meeting on any resolution.
   
4. The company shall ensure confidentiality of passwords. Further, all privacy related issues shall be maintained strictly, by the company at all times and due safeguards with regard to authenticity of e-mail address and other details of the members shall be taken by the company;
   
5. During such a meeting where a poll on any item is required, the members shall cast their vote on resolutions only by sending e-mails to the designated e-mail address through their registered e-mail address;
   
6. Where less than 50 members are present in a meeting, the chairman may decide to conduct a vote by show of hands, unless a demand for poll is made in accordance with the provisions of Section 109 (Demand for poll) of the Act;
   
7. In case the counting of votes requires time, the said meeting may be adjourned and called later to declare the results.

Both, the companies which are required to provide e-voting facilities or have adopted such facility and those which are not required to provide such e-voting facilities under the Act and rules made thereunder, shall ensure that all other compliances associated with the provisions relating to general meetings, including but not limited to, making disclosures, inspection of documents, authorizations for voting by body corporates, etc., as provided under the Act and rules made thereunder; and under the articles of association of the company are made through electronic mode.

In wake of COVID-19 pandemic, the Government has notified various amendments in the Foreign Trade Policy 2015-2020 (“FTP”) and in the Handbook of Procedure, providing one more year’s extension to exporters (i.e. till March 31, 2021) to undertake various compliances and to meet conditions under various export schemes.

Some key changes are summarized below:

1. Service categories eligible for benefits granted under the Service Exports from India Scheme (“SEIS”) and the rates of rewards on such services rendered during the period April 01, 2019 to March 31, 2020 will be notified separately. For services rendered with effect from April 01, 2020, decision on continuation of SEIS is pending and will be notified separately.

The last date of filing an application for obtaining Scrips under SEIS for financial year 2018-19 is extended till December 31, 2020.

2. The last date of filing of an application for obtaining Duty Credit Scrips (“Scrips”) under Merchandise Exports from India Scheme (“MEIS”) was 12 months from the Let Export Order (“LEO”) date. For shipping bills, where LEO date falls between the period February 1, 2019 to May 31, 2019, the applications may be filed within a period of 15 months (instead of 12 months) from the LEO date.
   
3. For shipping bills with LEO date falling during the period March 7, 2019 to December 31, 2019, the last date of filing online claim for obtaining Scrips under the Scheme for Rebate of State and Central Levies and Taxes (“RoSCTL”) and Additional Ad hoc incentive under RoSCTL was June 30, 2020. The last date for filing online claim for the same has been extended to December 31, 2020.
   
4. Accordingly, for the purposes of calculating late-cut while filing application for obtaining Scrips under the MEIS, SEIS and RoSCTL, the last date of submission of application would be taken as extended in the paragraphs above.
   
5. Exemption from payment of Integrated Tax and Compensation Cess on imports made against Advance Authorization or Export Promotion Capital Goods (“EPCG”) Authorization and imports / procurements made by an Export Oriented Unit (“EOU”) / Electronic Hardware Technology Park (“EHTP”) / Software Technology Park (“STP”) / Bio-Technology Park (“BTP”) unit from bonded warehouses in Domestic Tariff Area (“DTA”) or international exhibitions held in India was granted till March 31, 2020. The exemption granted under these schemes is now further extended by one more year until March 31, 2021.
   
6. Validity period for all Advance Authorizations, where the validity for import was expiring between February 01, 2020 and July 31, 2020, is extended automatically by 6 months from the date of expiry. In such cases, no separate amendment / endorsement is required on the authorizations for obtaining extension.
   
7. Extension of prescribed period by another 6 months for specific circumstances, inter-alia including the below: For all Advance Authorizations, where the export obligation period is expiring between February 01, 2020 and July 31, 2020, the period of export obligation is automatically extended by 6 months from the date of expiry. In such cases, no separate application with composition fee, amendment or endorsement is required on the authorizations;
   For EPCG Authorizations, where the period of 6 months to submit Installation Certificate of capital goods before the Regional Authority, expires during the period February 01, 2020 and July 31, 2020, the period of submission of such Installation Certificate is extended further by 6 months from the original due date; and,
   If the period for fulfilling block of export obligation under EPCG Authorization expires during February 01, 2020 and July 31, 2020, such period is deemed to be automatically extended by further 6 months from the date of such expiry
   
8. All Letters of Permission (“LoP”) / Letters of Intent (“LoI”) issued to EOU / EHTP / STP / BTP units have an initial validity period of 2 years (or as extended by the authorities) to enable the unit to construct and install plant & machinery and commence production. In this respect, for all LoPs / LoIs, whose original or extended validity expires on or after March 1, 2020, the same may deemed to be valid up to December 31, 2020.
   
9. In addition to the above, certain sector-specific amendments have been made for sectors such as gems and jewellery, tea, etc. Please refer the Notification No. 57/2015-2020 dated March 31, 2020 and Public Notice No. 67/2015-2020 dated March 31, 2020 for details of the same.

In its press release dated 1 April 2020 (Press Release : 2019-2020/2167), the Reserve Bank of India (“RBI”) announced the following measures to deal with the COVID-19 pandemic:

1. Extension of realisation period of export proceeds

In view of the disruption caused by the COVID-19 pandemic and in order to enable exporters of goods and software to realise their receipts and to provide greater flexibility to these exporters to negotiate future export contracts with foreign buyers, the time period for realization and repatriation to the country of export proceeds with respect to exports of goods and software made till 31 July 2020 shall be extended to 15 months from the date of the export instead of the existing 9 months from the date of the export.

2. Review of limits of Way and Means Advances (WMA) of states/union territories

The final recommendation of the Advisory Committee constituted by RBI, under the chairmanship of Shri Sudhir Shrivastava, to review the Ways and Means limits for state governments and union territories is pending to be submitted. However, in the interim, in order to enable the state governments to effectively deal with the situation arising due to the outbreak of the COVID-19 pandemic, RBI has decided to increase WMA limit by 30% from the existing limit for all states and union territories. The revised limits shall come into force with effect from 1 April 2020 and shall be valid till 30 September 2020.

3. Implementation of countercyclical capital buffer

RBI in its Guidelines for implementation of Countercyclical Capital Buffer (CCCB) dated 5 February 2015 had laid down the framework on CCCB wherein it was advised that the activation of the CCCB shall take place when the circumstances warrant, and that the decision would be pre-announced. Per the framework the credit-to-GDP gap shall be the main indicator for the CCCB and it shall be used in conjunction with other supplementary indicators. Based on the review and analysis of CCCB indicators, RBI has decided that it shall not be necessary to activate the CCCB for a period of one year or earlier.