Amid uncertainties in business environment due to COVID-19 lockdown, Indian IT industry’s apex body Nasscom has sought government support for startups so that they can continue doing their business.
The COVID-19 pandemic has caused high stress on start-ups putting their continuity at risk, Nasscom said.
Start-ups are facing severe time loss and project delays due to the prevailing circumstances. This has contributed to financial pressure on start-ups.
So the industry body is requesting the government to consider rental subsidy for workspaces used by start-ups which are regulated/owned/managed by government agencies.
It also requested blanket suspension of all deadlines including tax payment deadlines and filing deadlines until at least four weeks post lifting of all city lockdown.
With the global scale of the current business disruption, banks in certain instances are unable to provide companies with the Foreign Inward Remittance Certificate (FIRC) in a timely manner.
Given that the FIRC forms a crucial part of the compliance documentation for regulatory filings before the Reserve Bank of India (RBI) and the Ministry of Corporate Affairs (MCA), the requirement for filing FIRC may be kept in abeyance till June 30, 2020, Nasscom said.
It also sought option to avail of overdraft facility/interest free and equity convertible funding.
To tide over the liquidity crunch created by the pandemic and ensure timely payment of salaries to employees, the banks may voluntarily provide for an overdraft facility/Interest free and equity convertible funding to start-ups, subject to requisite due diligence on credit history and cash flow constraints, the industry body suggested.
Such facilities should cover for equivalent to three months’ salary for a maximum period of two years without any collaterals, it added.
Among other relief measures that it sought from the governent included waiver of fines/penalties for offences violations related to procedural matters – waive off interest and penalties for delayed payments of TDS and GST due for the month of March, April and May 2020 if such TDS/ GST payment is made by June 30, 2020.
