Adjustment of income tax refund against demand:

 

1.     Section 245 of the Income Tax Act mandates the tax department to send an intimation to the taxpayer before implementing any adjustments. This intimation includes details such as the amount of refund owed, the outstanding tax demand, and the proposed adjustment. 

National Highway Authority of India (NHAI) Bonds Overview:

Commonly referred to as Sec 54EC Bonds, the National Highway Authority of India Bonds serves as an avenue for individuals to mitigate taxes on long-term capital gains resulting from the sale of their investments. NHAI is responsible for the development and maintenance of national highways and various government-backed projects in India.

CBIC extends time limit for issuing order under section 73(9) of CGST Act for FY 2018-19 and 2019-20

This tax alert summarizes a recent Notification ^[1] issued by Central Board of Indirect Taxes and Customs (CBIC) extending time limit specified under Section 73(10) of the Central Goods and Services Tax Act, 2017 (CGST Act) for issuance of order.

Section 73(10) of the CGST Act requires the proper officer to issue order under Section 73(9) within three years from the due date for furnishing of relevant annual return.

Earlier vide Notification No. 9/2023 dated 31 March 2023, CBIC had extended the time limit under section 73(10) for issuance of order under Section 73(9) as follows:

(i) for financial year (FY) 2017-18, up to 31 December 2023,
(ii) for FY 2018-19, up to 31 March 2024,
(iii) for FY 2019-20, up to 30 June 2024.

Vide recent Notification, the time limit for issuance of order is further extended:

(i) for FY 2018-19, up to 30 April 2024,
(ii) for FY 2019-20, up to 31 August 2024.

TAX DUE DATE JANUARY 2024.

Sr No	Due Date	Related to	Compliance to be made
1	11.01.2024	GST	Filing of GSTR 1 for the month of December, 2023
2	20.01.2024	GST	Payment of GST for the month of December 2023 Filing of GSTR 3B for the month of December, 2023
4	07.01.2024	TDS/TCS (Income Tax)	· Deposit TDS for payments of Salary, Interest, Commission or Brokerage, Rent, Professional fee, payment to Contractors, etc. during the month of December 2023. · Deposit TDS from Salaries deducted during the month of December 2023 • Deposit TCS for collections made under section 206C including sale of scrap during the month of December 2023, if any
5	31.01.2024	TDS/TCS	Filing of TDS/TCS quarterly return for Q3 (Oct to Dec-2023).

GST input credit on Elevators.

 Is it possible to claim Input Tax Credit (ITC) for lifts and elevators installed in office buildings?

What is difference between Capital Expenditures and Revenue Expenditures

 

Description	Capital Expenditures	Revenue Expenditures
Nature of Expense	Involves significant investments in assets with long-term benefits, such as buying equipment or property.	Relates to ongoing operational costs, like utilities or repairs, which are consumed within the current accounting period
Duration of Benefits	Yield benefits over an extended period, contributing to future revenue generation.	Provides immediate benefits but is consumed within the current accounting period
Recording in Financial Statements	Typically recorded as assets on the balance sheet and depreciated over time.	Immediately expensed on the income statement
Impact on Profitability	May not impact current profitability significantly but influences future earnings through depreciation.	Directly affects current profitability as these are immediate expenses.
Examples:	Building renovations, purchasing machinery, or acquiring long-term assets.	Routine maintenance, salaries, and utility payments

Indirect Tax Case laws - DEC 23.

 ·       Supreme court further dismiss SLP against decision of Calcutta High court given to Suncraft Energy which quashed demand of ITC against service recipient for mismatch in GSTR 2A and GSTR 3B in the absence of any investigation done at the end of supplier.

DIRECT TAX CASE LAWS- DEC 23.

 ·       The Supreme Court  set aside a 2021 Delhi High Court ruling that allowed Nestle SA, Concentrix Services, Steria and others a concessional withholding tax rate of 5% on dividend income from their Indian arms, extending the MFN clause in the OECD. 

 

TAX UPDATE - DEC 2023.

 Direct Tax

·       CBDT notifies new valuation rules for equity and compulsorily convertible preference shares for angel tax provisions.

 

·       CBDT vide Notification No.2/2023 dated 27 September 2023 provided the procedure for granting of Lower/ Nil witholding certificate under section 197 through TRACES portal.
Rule 28 deals with application of Form 13 for lower/Nil witholding certificate and proviso to Rule 28AA(4) provides for issuance of certificate for lower deduction certificate in case number of deductors exceed 100 in number and details of such deductors are not available at the time of making the application. In this regard the procedure applicable from 01 October 2023 is provided in the above notification. It even mentions that due to the fact that the deductors are not identifiable at the time of making the application, therefore the certificate limit is not prescribed for each deductor, in this regard, the certificate shall be utilised on FIFO basis and the deductors shall verify the consumption status before furnishing the certificate in the TDS Return.

 

CBDT Notifies new Safe Harbour Rules for Intra Group Loans

 Central Board of Direct Tax (CBDT), on 19th December 2023, notifies new Safe Harbour Rules for Intra Group Loans via Notification No. 104/2023/ F. No. 370142/26/2023-TPL, thereby amending the clause (f) of Rule 10TA and serial number (4) and (5) of sub rule (2A) of Rule 10TD.

Main Para in the Notification is insertion of Explanation, defining the term "Reference Rates":

1. For US Dollar- 6-month Term Secured Overnight Financing rate (SOFR)
2. for Euro, 6-month Euro Inter Bank Offered Rate (EURIBOR)
3. for UK Pound Sterling, 6-month Term Sterling Overnight Index Average (SONIA)
4. for Japanese Yen, 6-month Tokyo Term Risk Free Rate (TORF)
5. for Australian dollar, 6-month Bank Bill Swap Rates (BBSW)
6. for Singapore dollar, 6-month Compounded Singapore Overnight Rate Average (SORA)

Therefore, the Interest Rate should not be less than the reference rate of the relevant foreign currency as on 30th September of the relevant previous year plus certain basis points as prescribed in amended rule.

A welcome notification by the CBDT providing more clear guidance regarding the chargeability of Interest Rates on Intra Group loans provided to Associated Enterprises denominated in different foreign currencies.

SC dismisses SLP regarding ITC mismatch in GSTR-2A and GSTR-3B

 This Tax Alert summarizes a recent decision ^[1] of the Supreme Court (SC)dismissing the special leave petition (SLP) filed by the Revenue against the Calcutta High Court (HC) judgment ^[2] regarding input tax credit (ITC) mismatch in Form GSTR-2A and GSTR-3B.

HC holds delay in filing of appeal can be condoned beyond the limitation period prescribed under GST

 This tax alert summarizes a recent decision of the Calcutta High Court (HC)¹ on applicability of Limitation Act, 1963 (Limitation Act) for condoning the delay in filing of appeal under Section 107 of the West Bengal State Goods and Services Tax Act, 2017 (WBGST Act).

As per section 107(1), any person aggrieved by any decision or order passed by an adjudicating authority may appeal to Appellate Authority within three months from the date on which the said decision or order is communicated to such person.

Further as per sub-section (4), the Appellate Authority may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the period of three months, allow it to be presented within a further period of one month.

Revised FAQs for higher pension benefit under the Provident Fund law

 The EPFO in its circular^[1] dated 13 December 2023 has issued the revised FAQs for implementation of judgment of Hon'ble Supreme Court dated 4 November 2022 on higher pension. The circular provides clarity on following key aspects:

• Requirement to obtain permission under Para 26(6) to claim higher pension option – the FAQs clarify that higher pension application will not be rejected even where such permission is not obtained by the employee. The Regional Provident Fund Commissioner is required to obtain required details from the employer to substantiate that the contributions were made on higher salary (full basic salary exceeding the ceiling limit) in the past so that it can be confirmed that the employee is eligible for higher pension option.
• Calculation of pensionable salary for calculation of higher monthly pension – the FAQs clarify that an employee who is eligible for monthly pension after 1 Sep 2014, last 5 years’ average basic salary will be considered for determining pensionable salary for calculation of monthly pension payout.
  
  The formula for calculation of monthly pension is: (Pensionable salary X Pensionable service) / 70.
• Higher pension in future – the FAQs clarify that for a member retiring in future (say for example 2030), the pension will be calculated based on the provisions of the Pension Scheme that will exist as on the date of commencement of pension.
• No set off of arrears higher pension payout against higher contributions – the FAQ clarifies that for an individual eligible for higher monthly pension payout from the EPFO for the past period as arrears – such arrears of pension will be paid to the individual in accordance with the existing process. This will assist EPFO to comply with TDS requirement on such arrears pension payout. Such arrears will not be adjusted against dues if any from the individual for reallocation of funds required from the Provident Fund Scheme to the Pension Scheme where the individual has already claimed lump-sum withdrawal from the Provident Funds Scheme or funds in the Provident Fund Scheme are insufficient.

Unraveling the Web of Taxation: A Call for Clarity and Fairness

In recent months, a series of Supreme Court judgments on tax-related matters have overwhelmingly favored the taxpayers. While these rulings have provided much-needed relief to appellants, they have also shed light on a concerning trend in the tax department's approach to collections.

CBIC issues Instruction w.r.t. applicability of SC ruling on secondment of employees under GST

 This Tax Alert summarizes a recent Instruction^[1] issued by the Central Board of Indirect Taxes and Customs (CBIC) with respect to applicability of Supreme Court (SC) ruling in case of Northern Operating System^[2] (NOS) to secondment of employees under Goods and Services Tax (GST).

SC had earlier held that the secondment of employees by the overseas group company to NOS was a taxable service of 'manpower supply'. 

In the Instruction addressed to tax department, CBIC notes as follows: 

A careful reading of the decision indicates that SC’s emphasis was on a nuanced examination based on the unique characteristics of each specific arrangement, rather than relying on any singular test. 

SC in case of Fiat India (P) Ltd.^[3] had observed that each case depends on its own facts and a close similarity between one case and another is not enough because a single significant detail may alter the entire aspect. 

There may be multiple types of arrangement for secondment of employees and each of them may have different tax implications depending upon the specific nature of the contract and other terms and conditions attached to it. Therefore, SC judgement in case of NOS should not be applied mechanically in all the cases. 

Delhi High Court holds proceedings on representative assessee invalid when principal taxpayer ceases to exist

 This tax alert summarizes a recent ruling of the Delhi High Court (HC) in the case of Cairnhill CIPEF Ltd. (Taxpayer). In this case, the issue before the HC was whether a person can be treated as a Representative Assessee (RA) of a non-resident (NR) for the purpose of tax recovery under the Indian Tax Laws (ITL) if the said non-resident had ceased to exist.

In this case, Taxpayer (BuyerCo) had purchased shares of an Indian listed company from a Mauritian Entity (SellerCo) in tax year 2015-16. Capital gains arising on such transfer were claimed to be exempt from taxation in India under the India-Mauritius Tax Treaty by SellerCo and such claim was also accepted by the tax authority in the original assessment carried out in the hands of SellerCo. Subsequently, SellerCo was liquidated and had ceased to exist. Later, the Commissioner of Income Tax (CIT) had passed orders to treat BuyerCo as an RA of SellerCo and revised the original assessment order to levy tax on BuyerCo on the said capital gains by denying treaty benefit.

On BuyerCo challenging the order of CIT, the HC held that BuyerCo cannot be regarded as an RA as the SellerCo was not in existence on the date when revisionary proceedings were initiated. The expression “agent” in the ITL suggests that there is a principal in existence, on whose behalf the agent acts, which is not fulfilled in the present case.

Indirect Tax update from High Court.

 ·       Karnataka High Court  in the case of Toyota Kirloskar Motor Pvt. Ltd, has granted stay on the Show Cause Notice (‘SCN') issued for denying ITC of GST paid on secondment of employees from a foreign entity to an Indian entity.   

Direct Tax update from High Court.

·       Gujarat High court in the case of SWATIBEN BIHARILAL PAREKH held that settlement of dispute under the Direct Tax Vivad Se Vishwas Act  and finalizing thereof is nothing but the closure of disputes in respect of tax arrears which cannot be subsequently reopened by issuing notice u/s 263 of the Act for revising the assessment order.

Delhi ITAT in the case of LG electronics held that there is no TDS liability on notional profit.

 Delhi Tribunal Held that No TDS on PE's Notional Profit - A Game-Changer for Compliance!

TDS @ 20% in case PAN not linked with Aadhar.- Verify & deduct.

 TDS deductors receiving notices for not deducting TDS at 20% in case of payee not linking PAN with Aadhar:

 

Supreme Court rules on “market value” for inter- divisional transfer for incentive deduction

 This Tax Alert summarizes a two-judge bench Supreme Court (SC) ruling, dated 6 December 2023, in a batch of appeals with the lead case being of the Indian taxpayer. The main issue under consideration before the SC was on determination of market value for profit-linked incentive deduction for transfer of power by the Taxpayer from its captive power generation units (PGU) to its manufacturing units (MU). The SC held that in such a case the rate at which the State Electricity Board (SEB) supplied power to the industrial consumers, and not the rate at which PGU sold its surplus power units to the SEB, which is a statute driven rate, must be regarded as the market value for the purposes of determining profit-linked incentive deduction.

Goods Import value more than Rs. 2 Crore – don’t forget to submit Form 10F.

 Requirement of Form 10F, Tax Residency Certificate and No Permanent Establishment Declaration from the Non-resident Supplier in case of payment for import of goods for more than Rs. 2 crore in a year.

Enabling establishment of non SEZ IT/ITeS businesses in SEZ

 Key amendments to Special Economic Zone Rules, 2006 : Enabling establishment of non SEZ IT/ITeS businesses in SEZ

The Ministry of Commerce and Industry has inserted a new Rule 11B in the SEZ Rules, 2006 - ‘Non-processing areas for IT/ITeS SEZ’ allowing co-existence of SEZ units and non-SEZ IT/ITeS business in the same SEZ premises. This amendment will enable SEZ developers to optimally utilize the vacant space in existing SEZs.

Some of the key features of the amendment are as under:

• Allowing non SEZ IT/ITeS businesses to operate in the non-processing built up area of the SEZ, subject to obtaining consent from the Board of Approval (BOA)
• Repayment of proportionate tax benefits availed by the developers on the demarcated non-processing area
• Minimum built up processing area to be maintained by the developers depending on category of cities
• Control measures in relation to operations of SEZ units and non SEZ IT/ITeS businesses to be put in place
• Repayment of tax benefits already availed on common infrastructure that would be accessed by SEZ units and non SEZ IT/ITeS businesses
• No tax benefits would be available on continuing basis on the operations and maintenance cost in relation to the common infrastructure

Discard Return

The Income Tax Portal now features a "Discard ITR" option for unverified original/belated/revised Income Tax Returns (ITRs) starting from Assessment Year 2023-24.  In this regard, please note the following important points.

Exploring the Dynamics of Letters of Credit (LC)

 

In the realm of international trade, the 'Letter of Credit'

(LC) emerges as a vital financial instrument, gracefully executed by banks on behalf of buyers to assure sellers of guaranteed payment upon the fulfillment of specific conditions. It holds its esteemed position as the primary mode of payment, acting as a secure bridge in the intricate world of transactions. Notably, LCs are transient, typically concluding their financial choreography within a concise 90-day window.

The intricacies of LCs unveil a cost discrepancy between regular LCs and their standby counterparts, with the former incurring a cost ranging from 0.75 percent to 1.50 percent of the LC amount. This financial ballet accentuates the nuanced choices that traders must navigate in the realm of LCs.

Delving into the taxonomy of LCs, we encounter a spectrum of types, each with its distinctive attributes and nuances.

1️⃣ Irrevocable Letter Of Credit An unalterable testament to financial commitment, the irrevocable LC stands unwavering, immune to cancellation or modification without unanimous consent from all involved parties. The issuing bank assumes an absolute liability, weaving a tapestry of assurance for the beneficiaries.

2️⃣  Revocable Letter Of Credit In contrast, the revocable LC dances to the whims of the issuing bank, susceptible to modification or cancellation at the customer's behest. This flexibility, however, comes at the cost of diminished liabilities for the bank post-revocation, leaving the beneficiary in the delicate embrace of uncertainty.

3️⃣  Stand-By Letter Of Credit Functioning as a flexible maestro orchestrating collaboration between seller and buyer, the stand-by LC echoes the tones of a bank guarantee. The bank steps in to honor the LC when the buyer falters in meeting payment obligations, serving as a financial safety net.

4️⃣  Confirmed Letter Of Credit A symphony of dual assurances, the confirmed LC not only bears the imprimatur of the issuing bank but also gains the confirmation of the seller's bank or another financial institution. Regardless of the actions of the issuing bank, the confirming bank shoulders the responsibility for performance.

5️⃣   Unconfirmed Letter Of Credit In contrast, the unconfirmed LC stands solitary, unaccompanied by the backing of any bank beyond the issuer. The advising bank, though not assuming liabilities, undertakes the role of an authenticator, ensuring the integrity of the transaction.

6️⃣   Transferable Letter Of Credit A harmonious solution for scenarios where the seller isn't the exclusive manufacturer, the transferable LC enables the assignment of parts of the credit to other parties. This eradicates the need for multiple LCs, streamlining the process for all involved.

7️⃣   Revolving Letter Of Credit A perpetual dance of replenishment characterizes the revolving LC, designed for ongoing supply arrangements. It imposes limits on each draw, ensuring a rhythmic flow in scenarios where regular payments accompany regular shipments.

8️⃣   Back-To-Back Letter Of Credit The back-to-back LC choreography involves the issuance of a second LC based on the first. Initiated in favor of an intermediary as per the buyer's instructions, a new LC emerges for the seller of the goods, embodying a financial pas de deux rooted in strategic orchestration.

In navigating the intricate tapestry of letters of credit, traders engage in a symphony of financial decisions, each movement shaping the cadence of international trade

GST Council cannot determine classification of goods

 This tax alert summarizes a recent judgement of Madras High Court (HC) regarding classification of “Flavoured Milk” and whether Goods and Services Tax Council (GST Council) is empowered to determine classification of goods.

GST Council, in its 31st meeting held on 22 December 2018, classified “Flavoured milk” under HSN 2202.

HC observed that:

GST is an unsolved puzzle to do business in India.

In the annals of 2017, when the advent of GST dawned upon the business milieu, optimism pervaded. It was widely believed that the tapestry of commerce in our land would be woven with the seamless threads of simplified indirect tax compliance. Alas, the reality unfolded in stark contrast. The enactment and the system proved neither facile nor smooth. A colossal ordeal awaited businesses during the transition.

Income Tax benefits to startups

 

In the collective yearning for enlightenment, the inquiry arises regarding the fiscal inducements

accessible to fledgling enterprises within the Indian realm. Hereinafter, I proffer a concise compendium delineating the aforesaid tax benefits bestowed upon such nascent entities.

 

Delhi HC holds Tax Research Unit of the Department of Revenue lacks authority to issue GST circulars

 This Tax Alert summarizes a recent ruling of the Delhi High Court (HC) ^[1]. The issue involved was whether the Tax Research Unit (TRU) under the Department of Revenue, Ministry of Finance, is authorized to issue circulars under the Goods and Services Tax (GST) law.

Taxpayer in the present case was aggrieved by Circular No. 80/54/2018-GST dated 31 December 2018 issued by TRU to the extent it purports to clarify that polypropylene woven and non-woven bags are classifiable as “plastic bags” under Tariff Heading 3923.

It preferred a writ petition before the HC challenging the authority and jurisdiction of TRU to issue such clarification.

Taxpayer contended that as per Section 168(1) of the Central Goods and Services Tax Act, 2017 (CGST Act), the power to issue orders, instructions or directions to Central Tax Officers stands vested exclusively in the Central Board of Indirect Taxes and Customs (CBIC) and no such power stands conferred upon the TRU.

HC concurred with the views of the taxpayer and observed that there are no provisions under the CGST Act in terms of which TRU could be said to have been clothed with the authority or jurisdiction to render a clarification with respect to classification of goods and articles.

Accordingly, HC quashed the Circular. However, the issue of classification was left open for consideration of the competent authority in appropriate proceedings.

Comments:

Circulars issued by TRU which are unfavorable to the industry may be challenged basis above judgement.

Changes made in CGST Rule 2017 as per Notification No.38/2023-Central Tax dated 04/08/2023

 👉Rule 9. Verification of the application and approval

• For physical verification of premises presence of registered person is not required 👉Rule 10A. Furnishing of Bank Account Details • Time limit for furnishing Bank Account is reduced 👉Rule 21A. Suspension of registration • RC will be suspended if Bank account is not furnished or Discrepancy in GSTR-3B and GSTR-1 👉Rule 23. Revocation of cancellation of registration • Time limit for applying for revocation of cancellation of GST registration extended from 30 days to 90 days and time limit by the Commissioner/officer is extended for a further period of not exceeding 180 days (W.e.f-01-10-23) 👉Rule 25. Physical verification of business premises in certain cases • For physical verification of premises presence of registered person is not required 👉Rule 43. Manner of determination of input tax credit in respect of capital goods and reversal thereof in certain cases • Determination of value of exempted value with reference to certain supplies mentioned in Schedule III. (W.e.f 01/10/23) 👉Rule 46. Tax invoice • Pin code number is not required for supply to unregistered person through e-commerce operator 👉Rule 59. Form and manner of furnishing details of outward supplies • GSTR-1 or IFF will not be allowed if reply is not furnished, or amounts paid for the difference between GSTR-3B and GSTR-2B for the noticed issued under Rule 88D or Bank details are not furnished as required under Rule 10A 👉Rule 64. Form and manner of submission of return by persons providing online information and data base access or retrieval services (W.e.f 01/10/23) • Minor change wrt to non-taxable online recipient 👉Rule 67. Form and manner of submission of statement of supplies through an e-commerce operator • Sub rule redrafted for clarity 👉Rule 88D. Manner of dealing with difference in input tax credit available in auto-generated statement containing the details of input tax credit and that availed in return • New rule for the difference in GSTR-2B and GSTR-3B with reference to availment of ITC 👉Rule 89. Application for refund of tax, interest, penalty, fees or any other amount • Refund on account of casual registrant and modified statement for excess payment of tax, interest and any other amount 👉Rule 94. Order sanctioning interest on delayed refunds • Exclusion of Certain Periods from Delay in Sanctioning Interest on Refunds (W.e.f 01/10/23) 👉Rule 96. Refund of integrated tax paid on goods or services exported out of India • Certain provisos omitted 👉Rule 108. Appeal to the Appellate Authority • Manual filing of Appeal is legalized if the order is not uploaded electronically 👉Rule 109. Application to the Appellate Authority • Manual filing of Appeal is legalized for Department, if the order is not uploaded electronically

Maintenance of books of accounts by Trusts: Rule 17AA

  1. Finance Act 2022 and Rule 17AA of the Income Tax Rules inserted with effect from the assessment year 2022-23 specifies the requirements for maintaining books of accounts and other documents for trusts and institutions.

Issues and Disputes Regarding ITC for Construction-Related Costs, Including Land Lease Transactions

 During their regular operations, business entities often accrue a range of expenses related to immovable properties, such as construction for structures like factory buildings, sheds, ETP/STP plants, as well as securing land through lease agreements for factory setups. These lease agreements typically involve one-time upfront premiums, one-time common infrastructure and development fees, annual lease rentals, and annual maintenance charges.

CBIC issues Circulars pursuant to recommendations made in 52nd GST Council meeting

 This Tax alert summarizes recent Circulars issued by Central Board of Indirect Taxes and Customs (CBIC) based on the recommendations made by the Goods and Services Tax (GST) Council in its 52^nd meeting.

The key clarifications are:

• For personal guarantee provided by director, the open market value is zero and thus, no tax is payable. Corporate guarantee provided by a company to the bank/ financial institutions for providing credit facilities to its related person would be treated as a supply of service, even when made without any consideration. The taxable value of such supply will henceforth be determined as per Rule 28(2) of the Central Goods and Services Tax Rules, 2017.
• The place of supply for service of transportation of goods, including through mail and courier, where location of supplier or location of recipient is outside India, will be the location of recipient of service and in absence of recipient’s location, it will be location of the supplier of services.
• In case of sale of space or grant of rights to use the space on hoarding/ billboard (immovable property) for display of advertisement, the place of supply will be the location where such immovable property is located.
  However, where vendor is providing advertisement services by providing visibility to the recipient’s advertisement for a specific period of time on structure possessed/taken on rent by the vendor at the specified location, the place of supply will be the location of the recipient.
• Co-location services includes both making available the immovable property and various services related to hosting and IT infrastructure. Thus, the place of supply would be the location of recipient.
  However, where the scope of service is restricted to providing physical space on rent along with basic infrastructure, without components of hosting and IT infrastructure provisioning services, it will be considered as supply of renting of immovable property.

Comments

• The clarifications relating to place of supply of various services and fulfillment of export condition when consideration is received in INR through RBI permitted mechanism is likely to benefit trade and industry.
• Courier service providers who had earlier opted to pay GST in view of ambiguity in place of supply provisions, may now explore the possibility of claiming refund.
• There is a view prevailing in the industry that provision of corporate guarantee is a shareholder’s activity basis Income tax rulings and thus, not a service. While the Circular clarifies it to be a supply of service and Rule provides for its valuation, one may still need to analyse its coverage under GST. More clarity may emerge once the agenda and minutes of the Council meeting are released.
• While the provisions of new rule 28(2) are prospectively effective, its applicability to ongoing corporate guarantees may need to be evaluated in light of time of supply provisions.
• It is relevant to note that rule 28(2) covers only the cases where the guarantee is offered to bank/ financial institutions. Taxpayers may need to analyse the relevant valuation provision where such guarantee is given to vendors, customers, or government departments.
• While the rule provides for taxable value at 1% of the amount of guarantee offered, further clarity may be required on its periodicity, particularly, in case of multi-year guarantee arrangement.

Tax Due date - November 2023.

 

S No	Due Date	Related to	Compliance to be made
1	11.11.2023	GSTR – 1	Filing of GSTR 1 for the month of October 2023
2	20.11.2023	GST	-Payment of GST for the month of October, 2023 -Filing of GSTR 3B for the month of October, 2023
3	07.11.2023	TDS/TCS (Income Tax)	·Deposit TDS for payments of Salary, Interest, Commission or Brokerage, Rent, Professional fee, payment to Contractors, etc. during the month of October 2023. ·Deposit TDS from Salaries deducted during the month of October 2023 • Deposit TCS for collections made under section 206C including sale of scrap during the month of October 2023, if any • Deliver a copy of Form 15G/15H, if any to CCIT or CIT for declarations received in the month of October 2023, if any
4	30.11.2023	Filing of returns for the Company and Trusts	Filing of Master File data in Form 3CEAA for FY 2022-23.   Filing of income  tax return for the Corporate assesses with Transfer Pricing