Government extends deadline to file tax to July 9

A day after the Supreme Court's verdict,  the government today extended the deadline to submit tax details and settlement of tax dues to July 9.

Citing the ongoing prohibitory orders imposed across the country, the Inland Revenue Department said that the deadline has been extended according to the decision of Finance Ministry.

The Supreme Court has yesterday decided that the Finance Minister, according to the Economic Act 2077, can extend the deadline for tax settlement, and the court need not decide on it.

Issuing a public notice today, the Inland Revenue Department (IRD) said the new deadline will be applicable in clearance of value added tax (VAT), income tax, excise duty, education service fee, telephone ownership fee and telecommunication service charge.

The private sector has been asking the government to extend the tax payment period citing their inability to file tax due to the prohibitory order.

Earlier, last year, the Supreme Court had issued an interim order to the Finance Ministry not to collect VAT or impose fine on taxpayers for not paying taxes during the period of the ongoing prohibitory orders.

The government to check the spread of coronavirus imposed lockdown on March 24, 2020 across the country. Them also when the government tightened the tax noose, advocates Srijana Adhikary moved the the Supreme Court, which issued a showcase notice not to collect tax in the time of lockdown. The Supreme Court had, then ordered the government not to collect tax before the lockdown is completely lifted. It had ordered the government to allow 30 days after the complete lifting of the lockdown time to the taxpayers to pay their dues.

Citing difficulties in managing its financial resources, the Finance Ministry also went to the Supreme Court demanding that the court vacate its order. The government argued that it was collecting only around Rs 15 billion a month from the customs and a few billion rupees from other internal revenues, though it spends around Rs 40 billion to meet basic liabilities. On June 15, 2020, The Supreme Court turned down the government’s request to review its interim order that was against the decision of the Finance Ministry’s notice to the taxpayers.

This year too, during the second wave of coronavirus, the government imposed prohibitory order, and the economic activities have been stalled. The private sector has been asking the government to postpone the tax filing dates, and not impose fines during the prohibitory times.