Wednesday, 21 March 2018

CBDT invites suggestions from general public on new direct-tax law, issues questionnaire

CBDT invites suggestions and feedback from stakeholders and general public for drafting the new direct tax law; Issues questionnaire covering over 25 questions on broadly six categories, viz. Filing of return of income, Tax credit, Processing / scrutiny of return, Litigation and recovery of disputed tax demand and Penalty & prosecution and the residuary category; Seeks feedback on e-filing of income-tax returns, TDS returns, working of the Centralised Processing Centre (‘CPC’), seeks suggestions for tackling TDS mismatch; Likewise, seeks views on the newly implemented e-assessment process, effectiveness of the Mutual Agreement Procedure (‘MAP’), working of Income tax Appellate Tribunal, Income tax Settlement Commission; Invites suggestions/ feedback by April 2nd.   

HC : Order prohibiting Customs Broker's operations appealable before CESTAT; Writ petition not maintainable

HC dismisses Custom Broker’s writ petition against prohibition order under Regulation 23 of Customs Brokers Licensing Regulations, 2013 for alleged mis-declaration of rate of duty applicable on imported goods; Referring to earlier ruling in case of Capricon Logistics Pvt. Ltd., HC rejects assessee’s plea that in terms of Section 129-A of Customs Act, only a decision or order passed by Principal Commissioner / Commissioner of Customs as an ‘Adjudicating Authority’ is appealable; Holds that Dept. authorities including Appellate Authorities and CESTAT are better equipped and manned with experts in the field to measure pros and cons of cases arising under Customs Act, and are better disposed of to deal with situations arising under the Regulations; A Customs Broker cannot completely disentangle or distance himself from mis-declaration made on behalf of / by importers themselves, states HC while observing that the non-obstante provisions of Regulation 23 to prohibit a Customs Broker from working in any section of Customs territory have been enacted to put in place effective measures against illegal activities and duty evasion; Hence, procedure of giving prior notice or hearing opportunity has been deliberately excluded, observes HC and accordingly, directs CESTAT to consider matter on merits under appellate jurisdiction  : Karnataka HC

ITAT : Relies McKinsey's earlier years' MAP settlement to determine taxability in subsequent year

Mumbai ITAT holds that taxability of Rs. 150 cr. received by assessee-company (part of the Mckinsey Group based in US) in India during AYs 2011-12 and AY 2012-13 shall be determined as per the MAP settlement for earlier years; Notes that as per the terms of MAP settlement for AYs 2008-09 to 2009-10, it was agreed that payment for providing various consultancy services (including Knowledge Pool Charges, Borrowed Service Charges, Firm Committee Pool Charge, Regional Corporate Finance Charges etc.) to its AE  shall not be taxable in India as ' Royalty ' or ' Fees for Included Service (‘FIS’) '; ITAT rejects Revenue’s stand that the MAP settlement being year-specific, cannot be made applicable to subject assessment years; Notes that the MAP settlement is with respect to amount paid by Mckinsey India to other Mckinsey entities in USA; Relies on co-ordinate bench rulings  in assessee’s own case and in case of its group companies which accepted for applying the MAP terms of earlier years:ITAT 

HC : Invokes 'savings' clause under GST enactment; Allows ITC recovery under repealed VAT Act

HC upholds recovery of refunded Input Tax Credit u/s 10(5) r/w Section 69(1) of Karnataka VAT Act despite repeal of said enactment w.e.f. July 2017 vide Karnataka GST Act, 2017; Perusing repeals and savings provisions u/s 173 r/w Section 174 of KGST Act, HC holds that repeal of KVAT would not affect proceedings initiated by Revenue authorities; Notes that refund had been granted pursuant to Division Bench decision in M K Agro Tech Pvt Ltd which had held that principles of partial rebate u/s 17 of KVAT Act were inapplicable to inputs utilized in exempt by-products, but SC had subsequently reversed said HC order; Finds that HC’s refund order was subject to outcome in SLP before SC in case of M K Agro Tech Pvt Ltd and indemnity bonds furnished by assessee and while ordinarily no rectification can be allowed on the basis of subsequent HC / SC order,  it was obligatory on assessee’s part to obey Court orders and could not now assail Revenue’s recovery proceedings; However, reads down Circular dated October 9 2017 issued by Commissioner of Commercial Taxes to maintain uniformity in collection of taxes, by holding that levy of interest  / penalty shall be subject to provision of reasonable opportunity of hearing to assessee : Karnataka HC