Lok Sabha Question No. 3213 (UNSTARRED), answered on 2021-03-15
Subject: Tax Relief for Industries affected by Coronavirus
Ministry: FINANCE
Asked by: Sukhbir Singh Jaunapuria

## Government of India Ministry of Finance Department of Revenue

## LOK SABHA UN-STARRED QUESTION NO. 3213

TO BE ANSWERED ON MONDAY, MARCH 15, 2021 PHALGUNA 24, 1942 (SAKA)

## TAX RELIEF FOR INDUSTRIES AFFECTED BY CORONAVIRUS

3213. SHRI SUKHBIR SINGH JAUNAPURIA:

Will the Minister of FINANCE be pleased to state:

(a) whether the Government has extended tax exemptions received by the industries in the whole country due to Coronavirus pandemic;

(b) if so, the details thereof during the last year and the current year;;

(c) whether the Government has taken this decision of providing tax concession in view of recession in the industries and it will continue to remain in force in future also and if so, the details thereof;

(d) whether the Government has taken any concrete steps for the employees fired from the industries in recent days; and

(e) if so, the details thereof?

## ANSWER MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI ANURAG SINGH THAKUR)

## (a) & (b):

- (i) In view of the challenges faced by taxpayers due to the outbreak of Novel Corona Virus (COVID-19), the Government of India has taken several taxation measures to extend tax exemptions received by the industries. These measures inter-alia includes:-
-  extension  of  various  time  limits  for  compliances  and  statutory  actions  under  the taxation  laws,  vide  the  Taxation  and  Other  Laws  (Relaxation  and  Amendment  of  Certain Provisions) Act, 2020;
-  reduction  of  the  TDS  rates  for  specified  non-salaries  payments  to  residents  and specified TCS rates by 25 per cent of the specified rates from 14.05.2020 to 31.03.2021;
-  interest for delay in payment  of  income-tax  (e.g.  advance  tax,  TDS,  TCS), Equalization Levy, Securities Transaction Tax (STT), Commodities Transaction Tax (CTT) due for payment from 20.03.2020 to 29.06.2020 to be charged at reduced rate of 9% per annum (0.75% per month), if the payment is paid by 30.06.2020;
-  issuance of corporate tax refunds of Rs. 1,27,534 crore in 2,19,050 cases between 1 April 2020 to 28 February 2021;
-  extension  of  Period  of  Vivad  se  Vishwas  Scheme  for  making  payment  without additional amount  to 30.04.2021;
-  extension  of  date  of  commencement  of  operation  for  the  SEZ  units  for  claiming deduction under section 10AA  of the Act to 30th September 2020 for the units which have received necessary approval by 31st March, 2020;
-  The date for making investment/construction /purchase/deduction for F.Y. 2019-20 in respect  of  capital  gains  under  sections  54  to  54GB  of  the  Act  was  extended  to  30th September, 2020.
-  The  date  for  making  various  investment/payment  for  claiming  deduction  under Chapter VIA-B of the Act was extended to 31st July, 2020

(ii)  Further,  vide  the  Finance  Bill  2021,  it  has  been  proposed  to  introduce  inter-alia  the following   measures such as:-

-  to boost demand in the real-estate sector, the safe harbour limit has been proposed to be increased from 10% to 20% under section 43CA of the Act for the period from 12th November, 2020 to 30th June, 2021 in respect of only primary sale of residential units  of value up to Rs. 2 crore. Consequentially, to provide relief to home buyers, the safe harbour limit under the provisions of Section 56 has been proposed to be increased from 10 to 20%;
-  the  benefit  of  deduction  under  section  80-IBA  for  the  business  of  developing  and building  affordable  housing  project,  has  been  extended  for  the  affordable  housing  project approved upto 31st March 2022. Also, the benefit of deduction under this section have also been proposed to be extended to rental housing project  approved  upto  31st  March  2022 subject to notified conditions;
-  to provide for extension of the date of incorporation of eligible start up for claiming deduction under the provisions of section 80-IAC of the Act and for claiming deduction under the provisions of section 54GB of the Act on making investment in eligible start-up to 31st March 2022;
-  to reduce compliance burden on small and medium enterprises and carrying 95% or more transactions in digital mode the threshold limit for a  person carrying on business is required  to  get  his  accounts  audited  under  the  provisions  of  section  44AB  has  been proposed to be increased to ten crores.

(iii) In the context of Covid-19 situation, considering the immediate requirement of ventilators and  other  items,  the  Central  Government  vide  notification  No.  20/2020-Custom  dated  9 th April, 2020 had granted exemption from Basic Customs Duty and Health cess, on the import of  the  following  goods,  with  immediate  effect  and  up  to  30 th   September,  2020,  namely  Ventilators,  Face masks, Surgical Masks, Personal Protection Equipment (PPE), Covid-19 test kits and inputs for manufacture of the above items.

(c):

(i) The Government of India has taken several measures inter-alia pertaining to direct taxes to support industries which includes the following:-

Corporate Tax - It has been the stated policy of the Government to simplify the Income-tax Act, 1961 by removing exemptions and incentives while at the same time reducing the rates of taxes. Starting from the Finance Act, 2016, the corporate tax rates have been gradually reduced  while  phasing  out  the  exemptions  and  incentives  available  to  the  corporates.  In furtherance  of  this  policy,  through  Taxation  Laws  (Amendment)  Act,  2019,  an  option  has been  provided  to  the  corporates  to  pay  tax  at  concessional  rate  of  22%  (plus  applicable surcharge and cess) if they do not avail any exemption or incentive. Further, new domestic manufacturing companies (set up after  1st October,  2019  and starting manufacture  on or before 31st March, 2023) has been provided an option for paying tax at 15% (plus applicable surcharge  and  cess)  without  claiming  specified  exemption  and  incentive.  Further,  such companies are not required to pay MAT as well.

Personal  Income  Tax -  In  order  to  reform  personal  income  tax,  Finance  Act,  2020  has provided an option to individual taxpayers for paying income-tax at lower slab rates if they do not avail specified exemption and incentive. Apart from the above, Finance Act, 2020 has also  provided  an  option  to  the  co-operatives  to  pay  taxes  at  concessional  rates  without claiming any specified deduction or incentive.

Abolition of Dividend Distribution Tax (DDT) -  In  order to increase the attractiveness of the Indian Equity Market and to provide relief to a large class of investors in whose case dividend income is taxable at the rate lower than the rate of DDT, the Finance Act, 2020 removed the Dividend Distribution Tax under which the companies shall not be required to pay DDT with effect from 01.04.2020. The dividend income shall be taxed only in the hands of the recipients at their applicable rate.' (ii)  The  tax  exemption  vide  notification  No.  20/2020-Custom  dated  9 th   April,  2020  as mentioned in reply at (a) was granted in view of Coronavirus pandemic and not in view of any recession in the industries. This exemption has expired on 30 th  September, 2020. The  Ministry  of  Labour  and  Employment  set  up  20  region-wise  Control  Rooms Chief  Labour  Commissioner  (Central)  to  address  the of

(d)  &  (e): under  the Supervision of the grievances of workers employed in Central Sphere regarding less/non-payment wages/retrenchment/lay off/termination of employment.

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