39,000 Compliances Reduced, Over 3,400 Legal Provisions Decriminalized To Enhance Ease Of Doing Business In India: Finance Minister

Section 276A makes provision for prosecution with rigorous imprisonment up to two years in the case of a person, being a liquidator who fails to give notice in accordance with subsection (1) of section 178, or fails to set aside the amount as required by sub- section (3) of the said section or parts with any of the assets of the company or the properties in contravention of the provisions of the section.

Section 276A provides for prosecution of liquidators for non-compliance with section 178. Section also imposes personal liability on such liquidators for the same non-compliance. With the operationalisation of the Insolvency and Bankruptcy Code, 2016 (IBC), waterfall mechanism for payment of dues is now in place for companies under liquidation and sub-section (6) of section 178 (the parent section) provides that this section shall not have effect when provisions of the IBC are in contrary. Moreover, the liquidator is now working under the oversight of this specific law.

It has been the stated policy of the Government to decriminalise minor offences as a step towards improving ease of business. The provisions of the Income Tax Act have been examined.

The government has proposed to amend section 276A by providing a sunset clause on the section with effect from 31.03.2023. Hence, it was proposed that no fresh prosecution shall be launched on or after 1st April, 2023. The earlier prosecutions will however continue.

The amendment will take effect from 1st April, 2023.

For the business establishments required to have a Permanent Account Number (PAN), the PAN will be used as the common identifier for all digital systems of specified government agencies. This will bring ease of doing business; and it will be facilitated through a legal mandate, the Finance Minister said.

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