In the light of the outbreak of the COVID-19 across the country and the world, the Ministry of Law and Justice promulgated an ordinance providing relaxation in acts and matters subject thereto. It extends the time limit, in the taxation laws and other laws incidental to. The ordinance came into force on 31.03.2020 in respect to the announcement made by the Union Finance Minister vide press release on 24.03.2020. The ordinance passed is known as the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020.

Key features of the abovementioned Ordinance are as follows:

Provides definition of specified Act, which includes- Wealth-tax Act 1957, the Income Tax Act 1961, Benami Property Transactions Act 1988, Finance Act of 2004, 2013, 2016, the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, the Direct Tax Vivad se Vishwas Act, 2020.

The ordinance provides relaxation in specified Acts in following matters:

  1. In completion of any proceeding, passing of any orders, issuance of any notice, intimation, approval etc. by any authority, commission or tribunal.
  2. In filling an appeal, reply or application and further in furnishing of any report, documents, return statement or such other records prescribed in the specified Acts.
  3. Under the Income tax Act 1961, for claiming deduction, exemption or allowance in activities like investments, deposit, payment, acquisition etc.
  4. In the manufacturing and production of articles or providing services under Section 10AA of Income tax Act, where the letter of approval in accordance to Special Economic Zones Act 2005 is required.
  5. In due dates prescribed in the specified Acts, in relation to payment of tax falling under the dates mentioned by the authorities, the rate of interest payable in such amount for delays would be not more than three fourth percent for every month. Further for such delays no prosecution or penalty would be levied.

The ordinance provides the amendment in the following Acts:

  • Income Tax Act, 1961: The section 10 and section 80G of the Act, is been amended. In clause 23 of the section 10, the Prime Minister’s Citizen Assistance and Relief in Emergency Situation Funds is inserted. Similar insertion is done in section 80G [2](a){iiia}.
  • Direct Tax Vivad Se Vishwas Act, 2020: The section 3 of the Act is amended by extending the date from 31.03.2020 to 31.06.2020 in the third column and in the fourth column the date from 1.04.2020 is now changed to 01.07.2020.
  • Finance Act, 2019: The dates in the section 127 has been substituted accordingly, inter alia, the time limit prescribed under section 127(1) of ’within 60 days’ is substituted with ‘on or before 31.05.2020, under section 127(2) the time limit of ‘within 30 days’ is modified to ‘on or before 01.05.2020’, the time limit under section 127(4) and (5) of ‘within 60 days’ and ‘within 30 days’ are changed to ‘on or before 31.05.2020’ and ‘on or before 30.06.2020’ respectively.
  • Central Goods and Services Tax: A new section 168A is inserted which provides the extension to time limit in respect of activities which could not be performed due to force majeure. Further, provides power to the government to extend the limit in special circumstances.

The ordinance further provide relaxation in time limit in Indirect Tax Laws. The time limit under Central Excise Act, 1944 for furnishing the central excise returns which are due in March, April and May of 2020 is extended to 30.6.2020. The lockdown due to COVID-19 has made the economy come to a halt to certain extent. Except for the essential goods and services, the market is almost closed which is directly impacting citizen’s day today life and ability to generate income. Considering all such difficulties the government is taking measures not only in preventing the spread of COVID-19 but also bearing economic shortcomings to minimum and less burden on citizens.

Ordinance: Ordinance