Lok Sabha Clears Taxation & Other Laws (Amendment Bill) To Relax Tax Filings [Read Bill]

The Bill, already in force as an Ordinance, amends as many as eight legislations viz. the Wealth-tax Act, 1957, Income Tax Act, 1961 (IT Act), Prohibition of Benami Property Transactions Act, 1988, three Finance Acts, the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, and the Direct Tax Vivad se Vishwas Act, 2020.

Broadly, the extends the deadlines for payment of taxes, GST dues, and grants exemption for donations made to the PM CARES Fund.

Parliamentary Debate

The discussion on the Bill sparked a debate about transparency of the PM CARES Fund. Many Members sought a justification for introducing a separate, private Fund during the existence of the statutory, National Disaster Relief Fund.

It was highlighted that whereas the NDRF is audited by the CAG, PM CARES is shrouded in mystery and there is no transparency about its donors or the public welfare work carried out under it.

Objections were also made about allowing CSR (Corporate Social Responsibility) donations to the PM CARES but not to the CM Relief Funds. AITC's Mahua Moitra highlighted that CSR was introduced to support the local communities where the industries were situated. However, by allowing CSR donations to PM CARES, the Government has driven away the same to a black hole.

She further objected to the use of PM's name in a fund, which was not amenable to the Parliament. She emphasized that this gives a false impression that the Fund is a Govt authority. She also questioned the Government how it had expanded the scope of Ministerial offices by allowing the Cabinet Ministers to administer a private fund, largely supported by Chinese companies.

Responding to these objections, BJP MP Nishikant Dubey clarified that the CAG Office can audit the Consolidated Funds of India and the State Exchequer. However, since PM CARES is independent of Budgetary allocations, the CAG cannot audit it. He emphasized that the Funds validity has already been upheld by the Supreme Court and the matter should not be discussed again and again.

MoS Finance, Anurag Thakur, informed the House that the Fund was established as a Trust under the Registration Act, 1908 Act and committed that it is absolutely transparent.

On the issue donations by foreign companies, especially banned Chinses companies such as TikTok, the Minister claimed that foreign donations are allowed under Section 50 of the Foreign Contribution Regulation Act.

Extension of time limits

The Bill empowers the Government to extend time limits for compliance or completion of the following, vis-à-vis the eight specified Acts:

• Issuing notices and notifications, completing proceedings, and passing orders by authorities and tribunals
• Filing of appeals, replies, and applications, and furnishing documents
• Making any investment or payment for claiming certain deductions or allowances under the IT Act.

Interest and penalty

The Bill provides that an asssesse will not be liable for prosecution or penalty for payment of tax after the due date (due between March 20, 2020 and June 29, 2020), but before the date so notified by the Government. Further, the rate of interest payable for the delay in payment will not exceed 0.75% per month.

GST-related compliances

The Bill allows the central government to extend the time limits for such GST-related compliances and actions, that cannot be completed due to force majeure, based on recommendations of the GST Council.

Donations to PM CARES Fund

The Bill provides that the donations made to the PM CARES Fund will be eligible for 100% deduction under the Income Tax Act. This implies that the amount donated to the Fund shall be deducted from the concerned assessee's income, while calculating total income under the IT Act.

Resolution of disputes related to direct taxes

The Bill empowers the Government to extend the time limit for filing declarations and making payments under the Direct Tax Vivad se Vishwas Act, 2020 for resolution of pending tax disputes related to income tax and corporation tax. As of now, the deadline is December 31, 2020.

Resolution of disputes related to indirect taxes

The Bill empowers the Government to extend the time limits specified for resolution of pending disputes related to indirect taxes such as central excise duty and various cesses, under the Sabka Vishwas (Legacy Dispute Resolution) Scheme.

Under the Act, the committee must issue the statement within 60 days of the receipt of declaration. The Bill removes the 60-day time limit and specifies that the committee must issue the statement by the extended date so notified.

Further, a person is required to pay the amount determined by the designated committee within 30 days of the issue of statement. The Bill removes the 30-day time limit and specifies that the payment must be made by the extended date so notified.

[With Inputs from PRS Legislative Research]

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