The World Health Organisation (WHO) declared COVID-19 as a “pandemic” on March 11, 2020

A pandemic is defined by WHO as “an epidemic occurring worldwide, or over a very wide area, crossing international boundaries and usually affecting a large number of people.”

 In view of the above, and the lockdown imposed throughout the country, the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman on  March 24,  2020 announced several important relief measures  specially related to income tax, GST and other statutory compliances.

The following measures (Taxation only) are announced and confirmed by The Taxation And Other Laws (Relaxation Of Certain Provisions) Ordinance, 2020 dated 31.03.20:

1. Direct Taxes

• Income Tax Act
• The due date for filing Income Tax Returns (“ITR”) for the Financial Year 2018-19 has been extended to the June 30, 2020.
• The due date for issuance of notices, filings, compliances, availing benefits under the following acts where the time limit is expiring between March 20, 2020 to June 29, 2020 have been extended to the June 30 2020: The Income Tax Act, 1961; The Wealth Tax Act, 1957; The Benami Transaction (Prohibition) Act, 1988; The Black Money Act; The Security Transaction Tax; and The Commodity Transaction Tax.
• Interest rates on delayed payments of advance tax have been reduced from 12% to 9%.
• No extension has been provided on deposit of TDS. However, interest rates payable on the delayed payment has been reduced from 18% to 9%. This reduction is temporary and the same will only be valid till June 30, 2020.
• Last date for Investment related deduction under section 80, 54, 54B, 54EC etc extended to June 30, 2020.
• Deadline for linking Aadhar and PAN Card has been extended to June 30, 2020 from March 31, 2020.
• Investments/Constructions/purchases for claiming roll over benefit/deduction in respect to capital gains under section 54 to 54G of the Income Tax Act has been extended to June 30, 2020.
• The date for commencement of operation for the SEZ units for claiming deduction under deduction 10AA of the Income Tax Act has been extended to June 30,2020 for the units which received necessary approval by March,31,2020.
• The Direct Tax Vivaad se Vishwaas Scheme Act, 2020
• The deadline for availing the benefits under the Scheme has been extended to June 30, 2020 vide an amendment to Section 3 of the said Act.

1. Indirect Tax

• Goods and Service Tax
• An enabling section 168A has been inserted in the CGST Act, 2017 empowering the Government to extend due dates for various compliances.
• The due date for filing the GSTR-3B for March, April and May have been extended till the June 30, 2020- Notification no. 15/2020 – Central Tax dated 23 March 2020 has already been issued in relation to the extension of due date for filing annual return for FY 2018-19.
• Deadline for availing the composition scheme, which enables taxpayers with less than an annual turnover of INR 1.5 crore to pay Goods and Services Tax at a fixed rate, has been extended to June 30, 2020.
• Sabka Vishwas Scheme i.e. the scheme which was introduced with an aim to resolve and conclude disputes pertaining to the erstwhile indirect tax regime which was earlier extended to March 31, 2020 has now been extended to June 30, 2020. No interest would be levied irrespective of amount involved pertaining to the said scheme.

• Customs & Service Tax Act
• The last date for filing appeal, refund application or any other documents under the Central Excise Act,1944 and the rules made thereunder from March 20, 2020 to June 29, 2020 has been extended to June 30, 2020.
• The last date for filing of appeal etc. relating to Service Tax which is from March 20, 2020 to June 29, 2020 has been extended to June 30, 2020.
• For companies with an annual turnover of less than INR 5 Crores, no interest, late fee or penalty will be charged. However, for companies with a turnover higher than INR 5 Crore, interest at the rate of 9% would be charged from 15 days after the due date. The rate of interest is concessionary as the current rate of interest at 18%.
• Customs clearance would operate 24×7 till June 30, 2020. Further, the due date for issuing of notices, notifications, sanctions, claiming refund and any other document under the Customs Act and other allied laws has been extended to the June 30, 2020.

• Central Excise Act
• The due date for filing the annual return for the financial year 2018-19 has been extended to June 30, 2020 from March 31, 2020.
• The last date for furnishing the Central Excise returns due in March, April and May has been extended to June 30,2020.

1. Pm Cares Fund

• A special fund called as Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES FUND) has been set up for providing relief to the persons affected from the outbreak of the COVID-19.
• Accordingly S.10(23C)(i) and S.80G(2)(a) of Income Tax Act have been amended to include the said fund.
• The donation made to the PM Cares Fund shall be eligible for 100% deduction under section 80G of the Income Tax Act, without any limit.
• Donation made up to June 30, 2020 shall also be eligible for deduction from income of financial year 2019-20.
• Any person including corporate paying concessional tax on income of financial year 2020-21 under new regime can make donation to PM Cares Fund upto June 30, 2020 and can claim deduction under section 80G against income of financial year 2019-20 and shall also not lose his eligibility to pay tax in concessional taxation regime for income of financial year 2020-21.

Apart from the above the Hon’ble Supreme Court of India (SC) has announced that from March 16, 2020, the SC will be hearing only urgent matters. Similar restrictions have been announced by various courts, including the Hon’ble Bombay High Court, Hon’ble Delhi High Court, Hon’ble Karnataka High Court, National Company Law Tribunal, district courts in Karnataka and other tribunals.

Our View

There is an alarmingly high degree of uncertainty looming amidst the countrywide lockdown which has already deeply impacted the businesses. Due to the lockdown there are difficulties being faced by the taxpayers in meeting the compliance requirement under the Income-tax laws, also there is an impact on Goods and Service Tax collection. In this scenario the extension has helped in providing adequate time for compiling the details to ensure qualitative filing of information.