20 policy changes impacting Individual and Business from October 2020

Introduction-

The Central government has initiated several policy changes that will be implemented from 1st October 2020, which includes various health insurance cover rule changes, various additions to the taxation policy and the rules for the drivers as well as car owners. 

From October 1st, 2020, the rules relating to different aspects of the economy, mainly for the motorists, and those who avail the free LPG connections under the Ujjwala scheme. Furthermore, there have been many changes in the taxation policies and stringent rules will be imposed on certain food products to ensure quality. 

Key features- 

GST- 

Information on GST returns to appear on form 26AS 

Form 26AS is an annual consolidated income tax credit statement which helps the taxpayer to ascertain the tax deducted and advance tax paid during the year and match with the tax deposited as per the tax department’s records. The Central Board of Direct Taxes (CBDT) has given the authority to the Principle Director General of Income-tax or the Director-General of Income-Tax to upload the information relating to GST returns in form 26AS within 3 months from the end of the month in which the information is received by him. They will specify the procedures and formats and set standards of uploading of the required information. 

New GST e-invoicing system

Under the purposed e-invoicing system, an identification number will be issued under every invoice by the Invoice Registration Portal (IRP) which will be managed by the GST Network (GSTN). This new GST e-invoicing system will be implemented from October 2020. Through this system, all the invoice information will be transferred from this portal to both the GST portal and e-way bill portal in real-time. The new policy excludes compulsory e-invoicing for the Businesses with sales up to Rs 500 crore. 

 

TCS 

TCS to be collected on the sale of overseas tour package

A seller of an oversea tour package who receives any amount from any buyer shall be liable to collect TCS at the rate of 5%. In the case of non-Pan or Aadhaar, the rate shall be increased to 10%. 

TCS is to be collected on Sale of goods u/s 206C (1H) 

The sellers who have turnover during the pendency of FY exceeding Rs 10 Crore and receives Rs 50 Lakhs or more from the domestic buyer of the goods has to collect TCS at 0.1% but in case of non-Pan or Aadhar at 1% of the amount received including GST. For the period of 1st October 2020 to 31st March, 2021 TCS rate is reduced to 0.075%.

TDS to be deducted on payments made to e-commerce participants 

According to the new policy, as implemented from October 1st,2020 e-commerce operators should deduct TDS at 1% at the time of credit of the amount of sale of goods, services or both to the account of an e-commerce participant. 

 

New Rules applicable to RBI 

New guidelines have been issued to RBI regarding the usage of debit or credit cards. According to the new rules, at the time of issue or reissue, all these digital cards will only be enabled for the use at ATMs or PoS devices within India. If the cardholder wants to use these cards outside India, they would request banks for the same. People will be allowed -to register the preferences, opt-in or opt-out services, other services of online transactions etc. Many banks will issue contactless cards, it will have the feature of enabling or disabling abilities. The customers will also have the facility to set up the transaction limits.   

 

Health Insurance Rules 

  • IRDA on 11th June 2020 issued guidelines regarding the Standardization of general terms and clauses in Health Insurance Policy Contracts. These guidelines were made applicable to all the health insurers on and after1st October 2020 who provide indemnity-based health insurance to individuals or a group. These guidelines are applicable in a number of situations such as where the policy will be declared void, withdrawal, cancellation, settlement of a claim, renewal of policy etc.
  • According to the new policy, as initiated from 1st October 2020, any health insurer shall settle or reject a claim with 30 days from the date of the receipt of last necessary document. In case of any delay in payment of a claim, the Company shall pay interest to the policyholder. In case any investigation is conducted regarding the claim of settlement or rejection, the same shall be done within 45 days from the date of the receipt of last necessary document, and in delay, the interest of above 2% shall be provided by the company. 
  • Another major change in a health insurance policy is that any policyholder can cancel the policy by giving 15days notice and the company shall be liable to pay the refund. However, no refund will be given if a claim has been lodged or any benefit is availed. The company can also cancel any policy on the grounds of fraud, misappropriation or non-disclosure of facts by giving 15 days’ notice and no refund shall be given to policyholder if their policy is cancelled on these grounds. 
  • No health insurance company can reject any genuine claim after moratorium period i.e. continuous 8 years who pays the premium for this continuous period except for proven fraud and permanent exclusions as specified in the policy contract. 
  • From 1st October 2020, the definition of ‘pre-existing disease’ as per clause 33 of Chapter 1 under section 1 of the master circular on Standardization of Health Insurance products was rectified. Any ‘pre-existing disease’ means any injury, ailment, condition or disease that is diagnosed within 48 months before the effective date of the policy and for which the medical advice or treatment was recommended or received within 48 months before the effective date of the policy. 
  • According to a new policy on health insurance, the premium can be paid in instalments i.e. monthly, quarterly or yearly as specified on insurance contracts or certificates and some of the conditions will be applied like grave period given to pay instalments, no interest to be charged in that grace period. If payment did not receive cancellation of the policy. In the event of a claim, all subsequent instalments shall be due and payable and the company has the right to recover and deduct all the pending instalments. 

 

The Motor Vehicle Act,1989 amendments 

From 1st October 2020, according to the new rules, the individuals can carry their documents on mobile i.e. soft copies of driving licence or other related documents. There is no need for physical verification of vehicular documents. All these records will also be updated on the portal including the behaviour of driver and officer regularly. The driving license or RC can be saved online on governments Digi-locker or m-parivahan. 

Another amendment to the Motor Vehicle Act 1989 is that any handheld communication devices like smartphones can be used for route navigation by making sure that the driver’s concentration is intact while driving. 

Those who violate the traffic rules, the fine will be imposed in form of E-Challan on the digital portal. 

 

Amendments by FSSAI

FSSAI has issued on order from 1st October 2020 to make food business operators decide that the display of ‘best before date’ of sweets on the container or tray of non-packaged or loose sweets to be mandatory. The food safety commissions are ordered to comply with these orders. 

FSSAI has imposed a ban on a mixture of other edible oils with mustard oil. This is done to increase the consumption of pure mustard oil which will increase the income of mustard farmers and get a fair price which will increase the production of mustard eventually. 

 

The free-gas connection came to the end 

Under the Pradhan Mantri Ujjwala Yojana (PMUY) the process of Free-gas connection came to end as Union government announced three 14.2 KG of LPG cylinders free of cost to help people cope up with the economic issues amidst COVID-19 pandemic. 

 

Prices of Television go up from October 2020

Due to the policy of ‘Atmanirbhar Bharat’, there is an expansion of domestic production capacity and thus prices of television will go up as 5% import duty concession offered last year ends on Sept 30th.

-Arushi Lamba

University institute of Legal Studies, Punjab University, Chandigarh