Chennai: The Southern Chamber of Commerce and Industry (SICCI) on Monday made a representation to the government to instruct banks not to invoke Insolvency and Bankruptcy Code (IBC) for non-payment as one of the measures to provide businesses with relief owing to the impact of the novel Coronavirus.

"Possibility of delayed payments cannot be ruled out due to various factors including production losses, non-availability of manpower, reduction of sale and other extraneous factors. Banks should be instructed not to invoke IBC for non-payment and should suspend any action by a quarter for the economy to settle down," the organisation said in its letter to the Finance Minister Nirmala Sitharaman.

SICCI provided a slew of other suggestions in its letter which focused on measures with regard to tax and other legislations and operation of businesses. In its letter, R Ganapathi, President of SICCI said the penetration of the virus was impacting industry.

"There is visible contraction in production, manufacture, import and exports, including consumption. This could be attributed to various concerns including - shortage of raw material, non-availability of manpower, uncertainty of consumption and general reluctance due to ambiguity of the future turn of the virus," the letter read.

SICCI went on to add that the Government should play a 'supportive role' and 'build confidence in the minds of industry while also boosting morale and ensuring that the economy is not crippled.' It lauded the initiatives that the Government has taken in response to curbing the outbreak but sent a list of suggestions that it believed would further help the industry.

"The Government of India has taken a number of initiatives to support the trade and industry as providing work from home facility for IT/ITes companies, relaxation from DOT standpoint and extension of GST audits for the period 2018-19 and deferment of e-invoicing and new returns till October 1, 2020. Owing to cases across India, the business community has been facing a lot of challenges in conducting business as well as from an employee safety perspective."

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Banks should be instructed not to invoke IBC for non-payment in testing times of Coronavirus: SICCI - Economic Times