In light of the COVID-19 pandemic, the Finance Minister, Ms. Nirmala Sitharaman, on March 24, 2020, announced various changes to statutory and regulatory compliance matters to deal with the economic impact caused by the outbreak. Our Client Alert on March 26, 2020, available here, sets out details of the same. Various direct and indirect tax measures as announced by the Finance Minister were promulgated by the Ministry of Law and Justice, by its notification dated March 31, 2020, in which it notified the Taxation and Other Laws (Relaxing of Certain Provisions) Ordinance, 2020 (‘Tax Relaxation Ordinance’). The Tax Relaxation Ordinance also introduced certain additional tax measures. A few key amendments are:

Direct Tax 

i.    Date for commencement of operations for SEZ units for claiming deduction under Section 10AA of the Income-tax Act, 1961 (‘IT Act’) extended to June 30, 2020 for the units which received necessary approvals by March 31, 2020; and

ii.   Amended Section 80G of the IT Act to provide that any donation made by a taxpayer to the PM-CARES Fund is allowable as deduction from the total income of such donor, similar to the treatment of donations to Prime Minister’s National Relief Fund. Any donation made up to June 30, 2020 will be eligible for deduction from income of FY 2019-20. Hence, any person including a corporate paying concessional tax on income of FY 2020-21 under the new regime can make a donation to PM-CARES Fund up to June 30, 2020 and can claim deduction under Section 80G of the IT Act against income of FY 2019-20 and will also not lose its eligibility to pay tax in concessional taxation regime for income of FY 2020-21. Further, to a clarification dated April 9, 2020, issued by the Government, an employee who donates to the PM-CARES Fund through his/her employer, will also be eligible to claim a deduction under Section 80G of the IT Act on the basis of the Form 16 / certificate issued by the Drawing and Disbursing Officer/ Employer.

Indirect Tax

An enabling section has been inserted in the Central Goods and Services Tax Act, 2017 (‘CGST Act’) empowering the Government to extend due dates for various compliances inter alia including statement of outward supplies, filing refund claims, filing appeals, etc. specified, prescribed or notified under the CGST Act, on recommendations of the GST Council. Accordingly, the GoI by a notification dated April 3, 2020 (‘Notification’) has extended the time limit for completion or compliance of any action by any authority or person prescribed / notified under the CGST Act (except certain specified provisions) which falls during the time period from March 20, 2020 to June 29, 2020 till June 30, 2020. Further, where an e-way bill has been generated under Rule 138 of the Central Goods and Services Tax Rules, 2017 with its validity expiring during the period of March 20, 2020 to April 15, 2020, the validity period of such e-way bill will be deemed to have been extended till April 30, 2020.