tag:blogger.com,1999:blog-53412697919068810592024-03-18T15:17:36.426+05:30TAX BY MANISHmail your tax query at taxbymanish@yahoo.comtaxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.comBlogger7654125tag:blogger.com,1999:blog-5341269791906881059.post-33547197140785941872024-03-16T12:27:00.000+05:302024-03-16T12:27:01.084+05:30Understand CCD & CPS.<p> <b style="text-align: justify;">Certificates of Deposit</b></p>
<p class="MsoNormal" style="text-align: justify;">It is a fixed income financial
tool that is governed by Reserve Bank of India and is issued in a
dematerialized form. It is a type of agreement made between the depositors and
the banks, wherein bank pays an interest on your investment for a tenure. Certificates
of deposit are issued by the Scheduled Commercial Banks (SCBs) and All-India
Financial Institutions. There is a term period of 1 month to 1 year for CDs
that are issued by SCBs, whereas the term period ranges from 1 year to 3 years
for CDs issued by financial institutions. CDs in dematerialized forms can be
transferred through endorsement or delivery. There is no lock-in period for a CD.
<b>Major issuers: All Banks<span></span></b></p><a name='more'></a><o:p></o:p><p></p>
<p class="MsoNormal"><b>Commercial Papers<o:p></o:p></b></p>
<p class="MsoNormal" style="text-align: justify;">Commercial Paper (CP) is an
unsecured money market instrument issued in the form of a promissory note.
Highly rated corporate borrowers, primary dealers (PDs) and satellite dealers
(SDs) and all-India financial institutions (FIs) which have been permitted to
raise resources through money market instruments under the umbrella limit fixed
by Reserve Bank of India are eligible to issue CP. CP can be issued for
maturities between a minimum of 15 days and a maximum upto one year from the
date of issue. CP can be issued in denominations of Rs.5 lakh or multiples
thereof. <b>Major issuers: Finance companies including TATA, HDFC, Kotak,
Aditya Birla, Axis etc.</b><o:p></o:p></p>
<p class="MsoNormal" style="text-align: justify;"><b>How to invest?<o:p></o:p></b></p>
<p class="MsoNormal" style="text-align: justify;"><b>Primary Market: </b>The
investor directly approaches the issuer or the broker / arranger for investing
in the primary issue. Only demat and bank details are required.<o:p></o:p></p>
<p class="MsoNormal" style="text-align: justify;"><b>Secondary Market: </b><span style="background: white; color: #242424; mso-bidi-font-family: Calibri;">Registration
on CCIL F-TRAC platform is required for investing / trading through the
secondary market. F-TRAC is order matching platform for buy & sell of
CPs & CDs. Trades matched on the F-TRAC platform goes to NSE clearing Ltd
or ICCL for the settlement as selected while order matching. Registered members
can only enter orders of buy or sell for the matching. No Broker can put the
trade on behalf of the client. A client can buy from a broker as the counter
party only but have to put buy/sell order for matching from their F-TRAC login.<o:p></o:p></span></p>
<p class="MsoNormal" style="text-align: justify;"><b><span style="background: white; color: #242424; mso-bidi-font-family: Calibri;">Lot Size:</span></b> <span style="background: white; color: #242424; mso-bidi-font-family: Calibri;">Face Value
of a CP/CD is INR 5 lakhs/unit but most of the trades happens in the multiples
of INR 5 Crs. Over 90% of trades in the secondary market happen in the lot size
of INR 25 Crs.<o:p></o:p></span></p>
<p class="MsoNormal" style="text-align: justify;"><b>Daily Volumes:</b> <o:p></o:p></p>
<p class="MsoNormal" style="text-align: justify;"><b>Primary Market: </b>CD: 900
Crs to 10000 Crs with average yield of 7.77% to 8.31%. CP: INR 3000 Crs to 12000
Crs with yield ranging from 8.22% to 9.23%<b><o:p></o:p></b></p>
<p class="MsoNormal" style="text-align: justify;"><b>Secondary Market: </b>CD: 3000
Crs to 10000 Crs with average yield of 6.9% to 7.55%. CP: INR 1200 Crs to 6500
Crs with yield ranging from 6.97% to 7.96%<o:p></o:p></p>
<p class="MsoNormal" style="text-align: justify;"><span style="background: white; color: #242424; mso-bidi-font-family: Calibri;">Below link can give daily volumes in
primary & secondary market.<br />
</span><a href="https://ind01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.ftrac.co.in%2FCD_PRI_MEM_MARK_WATC_VIEW.aspx&data=05%7C02%7Cvella.ashokkumar%40sasken.com%7C5349af8c6e904be53fe808dc3768a31d%7Cabe210bf1f574e9e8d4eb32085d3a991%7C0%7C0%7C638446169772251392%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=NhM8b%2FkegxJ6gh7QdDxx0o1BtT%2FjS4FSmXq1CsnuWf8%3D&reserved=0" title="Original URL: https://www.ftrac.co.in/CD_PRI_MEM_MARK_WATC_VIEW.aspx. Click or tap if you trust this link."><span style="background: white; border: none windowtext 1.0pt; mso-border-alt: none windowtext 0cm; padding: 0cm;">https://www.ftrac.co.in/CD_PRI_MEM_MARK_WATC_VIEW.aspx</span></a><span style="background: white; border: 1pt none windowtext; padding: 0cm;"><o:p></o:p></span></p>
<p class="MsoNormal" style="text-align: justify;"><b><span style="background: white; border: 1pt none windowtext; padding: 0cm;">Settlement Cycle: </span></b><span style="background: white; border: 1pt none windowtext; padding: 0cm;">T+0, T+1 & T+2. (99% trades happen as T+0 or T+1)<o:p></o:p></span></p>
<p class="MsoNormal" style="text-align: justify;"><b><span style="background: white; border: 1pt none windowtext; padding: 0cm;">Charges for F-TRAC: <o:p></o:p></span></b></p>
<p class="MsoNormal" style="text-align: justify;"><u><span style="background: white; color: #242424;">One-time registration fees:<o:p></o:p></span></u></p>
<p class="MsoNormal" style="text-align: justify;"><span style="background: white; color: #242424;">CD: INR 29,500 inclusive of taxes<u><o:p></o:p></u></span></p>
<p class="MsoNormal" style="text-align: justify;"><span style="background: white; color: #242424;">CP: INR 29,500 inclusive of taxes<u> <o:p></o:p></u></span></p>
<p class="Default"><u><span style="background: white; color: #242424; font-family: "Aptos",sans-serif; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">Annual
maintenance charges: </span></u><span style="font-family: "Aptos",sans-serif; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"><o:p></o:p></span></p>
<p class="Default"><span style="font-family: "Aptos",sans-serif; font-size: 11.5pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">Annual
Maintenance Charges would also be levied on a per segment basis based on number
of transactions of concerned member in the previous financial year as per
following slabs:</span><span style="font-family: "Aptos",sans-serif; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"><o:p></o:p></span></p>
<table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; margin-left: -8.4pt; mso-border-alt: none windowtext 0cm; mso-padding-alt: 0cm 0cm 0cm 0cm; mso-table-layout-alt: fixed;">
<tbody><tr style="height: 15.7pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td style="border: none windowtext 1.0pt; height: 15.7pt; mso-border-alt: none windowtext 0cm; padding: 0cm 0cm 0cm 0cm; width: 50.4pt;" valign="top" width="67">
<p class="Default"><b><span style="font-family: "Aptos",sans-serif; font-size: 11.5pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">Sr. No. </span></b><span style="font-family: "Aptos",sans-serif; font-size: 11.5pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"><o:p></o:p></span></p>
</td>
<td style="border-left: none; border: none windowtext 1.0pt; height: 15.7pt; mso-border-alt: none windowtext 0cm; mso-border-left-alt: none windowtext 0cm; padding: 0cm 0cm 0cm 0cm; width: 216.0pt;" valign="top" width="288">
<p class="Default"><span style="font-family: "Aptos",sans-serif; font-size: 11.5pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"> <b>Trade Count in Previous Financial Year </b><o:p></o:p></span></p>
</td>
<td style="border-left: none; border: none windowtext 1.0pt; height: 15.7pt; mso-border-alt: none windowtext 0cm; mso-border-left-alt: none windowtext 0cm; padding: 0cm 0cm 0cm 0cm; width: 112.5pt;" valign="top" width="150">
<p class="Default"><span style="font-family: "Aptos",sans-serif; font-size: 11.5pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"> <b>Charges Applicable </b><o:p></o:p></span></p>
</td>
<td style="border-right: windowtext 1.0pt; border-style: none; border-top: windowtext 1.0pt; height: 15.7pt; mso-border-right-alt: none windowtext 0cm; mso-border-top-alt: none windowtext 0cm; padding: 0cm 0cm 0cm 0cm; width: 18.0pt;" valign="top" width="24">
<p class="MsoNormal"><span style="font-size: 11.5pt; line-height: 107%;"> </span><o:p></o:p></p>
</td>
</tr>
<tr style="height: 5.45pt; mso-yfti-irow: 1;">
<td style="border-top: none; border: none windowtext 1.0pt; height: 5.45pt; mso-border-alt: none windowtext 0cm; mso-border-top-alt: none windowtext 0cm; padding: 0cm 0cm 0cm 0cm; width: 50.4pt;" valign="top" width="67">
<p class="Default"><span style="color: windowtext; font-family: "Aptos",sans-serif; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: Gautami; mso-hansi-theme-font: minor-latin;"> </span><span style="font-family: "Aptos",sans-serif; font-size: 11.5pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">1 <o:p></o:p></span></p>
</td>
<td style="border-bottom: windowtext 1.0pt; border-right: windowtext 1.0pt; border-style: none; height: 5.45pt; mso-border-alt: none windowtext 0cm; mso-border-left-alt: none windowtext 0cm; mso-border-top-alt: none windowtext 0cm; padding: 0cm 0cm 0cm 0cm; width: 216.0pt;" valign="top" width="288">
<p class="Default"><span style="font-family: "Aptos",sans-serif; font-size: 11.5pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"> 0 to less than 10 Trades <o:p></o:p></span></p>
</td>
<td style="border-bottom: windowtext 1.0pt; border-right: windowtext 1.0pt; border-style: none; height: 5.45pt; mso-border-alt: none windowtext 0cm; mso-border-left-alt: none windowtext 0cm; mso-border-top-alt: none windowtext 0cm; padding: 0cm 0cm 0cm 0cm; width: 112.5pt;" valign="top" width="150">
<p class="Default"><span style="font-family: "Aptos",sans-serif; font-size: 11.5pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"> Rs. 2,500/- <o:p></o:p></span></p>
</td>
<td style="border-right: none windowtext 1.0pt; border: none; height: 5.45pt; mso-border-right-alt: none windowtext 0cm; padding: 0cm 0cm 0cm 0cm; width: 18.0pt;" valign="top" width="24">
<p class="MsoNormal"><span style="font-size: 11.5pt; line-height: 107%;"> </span><o:p></o:p></p>
</td>
</tr>
<tr style="height: 5.45pt; mso-yfti-irow: 2;">
<td style="border-top: none; border: none windowtext 1.0pt; height: 5.45pt; mso-border-alt: none windowtext 0cm; mso-border-top-alt: none windowtext 0cm; padding: 0cm 0cm 0cm 0cm; width: 50.4pt;" valign="top" width="67">
<p class="Default"><span style="color: windowtext; font-family: "Aptos",sans-serif; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: Gautami; mso-hansi-theme-font: minor-latin;"> </span><span style="font-family: "Aptos",sans-serif; font-size: 11.5pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">2 <o:p></o:p></span></p>
</td>
<td style="border-bottom: windowtext 1.0pt; border-right: windowtext 1.0pt; border-style: none; height: 5.45pt; mso-border-alt: none windowtext 0cm; mso-border-left-alt: none windowtext 0cm; mso-border-top-alt: none windowtext 0cm; padding: 0cm 0cm 0cm 0cm; width: 216.0pt;" valign="top" width="288">
<p class="Default"><span style="font-family: "Aptos",sans-serif; font-size: 11.5pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"> 10 to less than 100 Trades <o:p></o:p></span></p>
</td>
<td style="border-bottom: windowtext 1.0pt; border-right: windowtext 1.0pt; border-style: none; height: 5.45pt; mso-border-alt: none windowtext 0cm; mso-border-left-alt: none windowtext 0cm; mso-border-top-alt: none windowtext 0cm; padding: 0cm 0cm 0cm 0cm; width: 112.5pt;" valign="top" width="150">
<p class="Default"><span style="font-family: "Aptos",sans-serif; font-size: 11.5pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"> Rs.5,000/- <o:p></o:p></span></p>
</td>
<td style="border-right: none windowtext 1.0pt; border: none; height: 5.45pt; mso-border-right-alt: none windowtext 0cm; padding: 0cm 0cm 0cm 0cm; width: 18.0pt;" valign="top" width="24">
<p class="MsoNormal"><span style="font-size: 11.5pt; line-height: 107%;"> </span><o:p></o:p></p>
</td>
</tr>
<tr style="height: 5.45pt; mso-yfti-irow: 3; mso-yfti-lastrow: yes;">
<td style="border-top: none; border: none windowtext 1.0pt; height: 5.45pt; mso-border-alt: none windowtext 0cm; mso-border-top-alt: none windowtext 0cm; padding: 0cm 0cm 0cm 0cm; width: 50.4pt;" valign="top" width="67">
<p class="Default"><span style="color: windowtext; font-family: "Aptos",sans-serif; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: Gautami; mso-hansi-theme-font: minor-latin;"> </span><span style="font-family: "Aptos",sans-serif; font-size: 11.5pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">3 <o:p></o:p></span></p>
</td>
<td style="border-bottom: windowtext 1.0pt; border-right: windowtext 1.0pt; border-style: none; height: 5.45pt; mso-border-alt: none windowtext 0cm; mso-border-left-alt: none windowtext 0cm; mso-border-top-alt: none windowtext 0cm; padding: 0cm 0cm 0cm 0cm; width: 216.0pt;" valign="top" width="288">
<p class="Default"><span style="font-family: "Aptos",sans-serif; font-size: 11.5pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"> 100 Trades and above <o:p></o:p></span></p>
</td>
<td style="border-bottom: windowtext 1.0pt; border-right: windowtext 1.0pt; border-style: none; height: 5.45pt; mso-border-alt: none windowtext 0cm; mso-border-left-alt: none windowtext 0cm; mso-border-top-alt: none windowtext 0cm; padding: 0cm 0cm 0cm 0cm; width: 112.5pt;" valign="top" width="150">
<p class="Default"><span style="font-family: "Aptos",sans-serif; font-size: 11.5pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"> Rs.7,500/- <o:p></o:p></span></p>
</td>
<td style="border-bottom: windowtext 1.0pt; border-right: windowtext 1.0pt; border-style: none; height: 5.45pt; mso-border-bottom-alt: none windowtext 0cm; mso-border-right-alt: none windowtext 0cm; padding: 0cm 0cm 0cm 0cm; width: 18.0pt;" valign="top" width="24">
<p class="MsoNormal"><span style="font-size: 11.5pt; line-height: 107%;"> </span><o:p></o:p></p>
</td>
</tr>
</tbody></table>taxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.com0tag:blogger.com,1999:blog-5341269791906881059.post-84564998898691231452024-03-16T10:59:00.004+05:302024-03-16T10:59:26.897+05:30CBDT guidelines for priority or out of turn disposal of Income Tax CIT (Appeals):<p> </p><p class="MsoNormal"><span style="font-family: -apple-system; font-size: 10.5pt; line-height: 107%;"><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> 1. In a significant move, the Central Board
of Direct Taxes (CBDT) has released new guidelines aimed at ensuring the
priority or out-of-turn disposal of pending appeals. This directive, issued
under the reference </span></span></span><a data-attribute-index="0" href="http://f.no/" style="border: var(--artdeco-reset-link-border-zero); box-sizing: inherit; font-weight: var(--font-weight-bold); line-height: inherit !important; margin: var(--artdeco-reset-base-margin-zero); overflow-wrap: normal; padding: var(--artdeco-reset-base-padding-zero); text-decoration: var(--artdeco-reset-link-text-decoration-none); touch-action: manipulation; vertical-align: var(--artdeco-reset-base-vertical-align-baseline);" target="_self"><span style="background: white; font-family: -apple-system; font-size: 10.5pt; line-height: 107%;">F.No</span></a><span style="background: white; font-family: -apple-system; font-size: 10.5pt; line-height: 107%;"><span style="color: rgba(0, 0, 0, 0.9);">. 279/Misc./M-102/2021-ITJ, supersedes the
previous guidelines set in December 2021.<span></span></span></span></p><a name='more'></a><span style="font-family: -apple-system; font-size: 10.5pt; line-height: 107%;"><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> 2. The move is aimed at streamlining the
appeals process within the Ministry of Finance’s Department of Revenue,
especially for appeals that cover genuine and exceptional circumstances.</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> 3. The latest notification, dated 7th March
2024, outlines the specific situations under which appeals can be expedited.</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> 4. These situations include:</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">Cases with a demand exceeding Rs. 1 Crore.</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">Appeals involving VIP or Prime Minister’s Office
(PMO) references for quick disposal.</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">Cases with directives from the courts for
expedited processing.</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">Requests made by senior or super senior citizens.</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">Any other case deemed to involve genuine hardship.</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> 5. The process for handling these requests
involves recommendations from the jurisdictional
Pr.CIT/Pr.CIT(Central)/CIT(IT), with final decisions to be made by the
Pr.CCsIT/CCsIT/DGsIT.</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> 6. Furthermore, for appeals falling under
the jurisdiction of faceless CsIT(AU), such requests will be directed to
Pr.CCIT(NFAC) for the necessary action.</span></span></span><span style="font-family: "Times New Roman",serif;"><o:p></o:p></span><p></p>taxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.com0tag:blogger.com,1999:blog-5341269791906881059.post-63406678933226517192024-03-16T10:56:00.003+05:302024-03-16T10:56:15.010+05:30 CBDT has made amendments in Tax Audit Report:<p><span style="background-color: white; color: rgba(0, 0, 0, 0.9); font-family: -apple-system; font-size: 10.5pt;">The Central Board of Direct Taxes (CBDT) has
amended the tax audit form (Form 3CD & Form No. 3CEB) and the form for
filing a tonnage tax application (Form 65).</span></p><p class="MsoNormal"><span style="font-family: -apple-system; font-size: 10.5pt; line-height: 107%;">
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">The following are the key changes introduced in
the forms:<span></span></span></span></span></p><a name='more'></a><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">1. Disclosure of expenses for violation of law in
India or Outside India:</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">Clause 21 of Form 3CD seeks details of amounts
debited to the profit and loss account, including capital, personal,
advertisement expenditure, etc. This includes reporting of ‘Expenditure by way
of penalty or fine for violation of any law for the time being force’. The CBDT
has amended the clause to include expenditure for any purpose which is an
offence or is prohibited by law or expenditure by way of penalty or fine for
violation of any law (enacted in India or outside India).</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">2. Disclosure of expenditure for Compounding of
Offences</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">Clause 21 further seeks details for “Expenditure
by way of any other penalty or fine not covered above”. This field has been
amended to include the expenditure incurred to compound the offences under the
law whether in India or outside India, i.e., “Expenditure incurred to compound
an offence under any law for the time being in force, in India or outside
India”.</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">3. Amendment in Clause 26 for disallowance of
delayed payment to MSEs:</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">Clause (h) of section 43B has been inserted to
seek details of the delayed payments to Micro and Small Enterprises in
violation of section 43(b)(h).</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">4. New disclosure of specified domestic
transaction under section 115BAE(4)</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">Form 3CEB has been amended seeking particulars
with respect to specified domestic transactions in the nature of any business
transacted between the persons referred to in sub-section (4) of section
115BAE, which has resulted in more than ordinary profits expected to arise in
such business.</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">5. Amendments with respect to IFSC and deduction
claimed under section 80LA</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">Form 65 has been amended to include a new filed
under “Verification” seeking certification that the applicant-company is a unit
of an International Financial Services Centre and has filed the application
within three months from the date on which the deduction under section 80LA of
the Income-tax Act, 1961 is no longer applicable. Further, the applicant is
required to specify the date on which such deduction was no longer applicable
if the company availed deduction under section 80LA and date of qualifying company
status.</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">(Notification No. 27/2024, dated 05-03-2024)</span></span><span style="font-family: "Times New Roman",serif;"><o:p></o:p></span><p></p>taxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.com0tag:blogger.com,1999:blog-5341269791906881059.post-81303009966062612752024-03-12T19:58:00.001+05:302024-03-12T19:58:08.478+05:30CBDT clarifies on income tax implications of inter-trust donations by one registered charitable entity to another<p> <span style="color: #2e2e38; font-family: Aptos, sans-serif; font-size: 10.5pt;">This Tax Alert summarizes a recent Circular</span><sup style="color: #2e2e38; font-family: Aptos, sans-serif;">[1]</sup><span style="color: #2e2e38; font-family: Aptos, sans-serif; font-size: 10.5pt;">
issued by the Central Board of Direct Taxes (CBDT) wherein the CBDT clarifies
the tax treatment of non-corpus donations made by one registered charitable
entity to another in the wake of amendment by Finance Act (FA) 2023, which
restricted the eligible application of such donated amount to 85% leaving 15%
as ineligible application in computing the income of the trust under the Income
Tax Laws (ITL) (15% amount is hereinafter referred as Ineligible Application).<span></span></span></p><a name='more'></a><p></p><p><span style="color: #2e2e38; font-family: "Aptos",sans-serif; font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Aptos; mso-bidi-language: AR-SA; mso-fareast-font-family: Aptos; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">
<br />
The CBDT clarifies that Ineligible Application will not trigger any adverse
consequences in the hands of donor charitable entity since such income is spent
by way of inter-trust donation and has relaxed the requirement of making
investment in prescribed modes with respect to such Ineligible Application in
absence of any funds. By way of the illustration given in the Circular, the
CBDT further clarifies that the charitable entity can avail full exemption
under the ITL if 85% of the balance income (i.e., gross income as reduced by
inter-trust donation) is applied for charitable purposes in accordance with the
provisions of the ITL</span></p>taxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.com0tag:blogger.com,1999:blog-5341269791906881059.post-62967023170105075352024-03-09T12:41:00.004+05:302024-03-09T12:41:48.321+05:30 How to handle Notice on Input GST mismatch between 2A & 3B. <p><br /></p>
<p class="MsoNormal"><span style="font-family: "Times New Roman",serif;"> </span></p>
<p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%;">The GST department are
issuing show cause notice to the taxpayers as the input credit available in
GSTR-2A of the year is less than GSTR-3B and asking taxpayer to pay the difference
with interest. In this regard, the Kolkata High court in the case of Suncraft
energy held that GST department first take action on vendor who had not filed
their GST return and in case of no action from GST department buyer cannot be penalized
for wrong act of seller. The Supreme court also confirms the view of
Calcutta High Court. After that we had seen
number of high court decisions which rejected GST department notice on input mismatch. <span style="background: white;">Top 5 High Court recent judgments of 2024 related to the
same.<span></span></span></span></p><a name='more'></a> <span style="background: white;"><o:p></o:p></span><p></p>
<p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%;"><br />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9); text-align: start;">1. Bombay High Court allowed the rectification of
clerical error in GSTR-1 to restore Input Tax Credit, prioritizing fairness
over technicalities. NRB Bearings Ltd. vs Commissioner of State Tax
(14-Feb-2024)</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important; text-align: start;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important; text-align: start;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9); text-align: start;">2. Bombay High Court ruled that if sales invoices
were not disclosed in Form GSTR-1, the assessee should rectify it with GST
Authorities. Anvita Associates vs Union of India (15-Jan-2024)</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important; text-align: start;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important; text-align: start;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9); text-align: start;">3. Bombay High Court: Where assessee made an
inadvertent error in submitting GST number of Mahindra & Mahindra
(Rajasthan) in its form GSTR-1 instead of correct GST number of Mahindra &
Mahindra (Orissa), said dispute was not a case where any loss of revenue</span>
would be caused to government as already tax had been paid, therefore
rectification was to be permitted to assessee. Railroad Logistics India Pvt.
Ltd. vs Union of India (15-Jan-2024)</span></span><span style="background: white;"><o:p></o:p></span></p>
<p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%;"><br />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9); text-align: start;">4. Kerala High Court: Where assessee wrongly
claimed IGST credit under CGST and SGST in GSTR-3B, revenue authority was
directed to consider assessee's rectification application expeditiously.
Jaykrishnan K.S. vs Union of India (03-Jan-2024)</span></span><span style="background: white;"><o:p></o:p></span></span></p>
<p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%;"><br />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9); text-align: start;">5. Kerala High Court: Where assessee by mistake
claimed entire IGST credit under heads of CGST and SGST instead of claiming it
under head IGST and filed rectification application before GST Authorities,
said application of assessee was to be considered</span> and necessary order
was to be passed. Divya S.R. vs Union of India (03-Jan-2024)</span></span><o:p></o:p></p>taxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.com0tag:blogger.com,1999:blog-5341269791906881059.post-90219706521009432922024-03-09T12:21:00.001+05:302024-03-09T12:21:01.640+05:30 What is Form 13 application for lower deduction of TDS?<p><span style="background-color: white; color: rgba(0, 0, 0, 0.9); font-family: "Times New Roman", serif;"> 1. As per the provisions of the Income Tax
Act, TDS is required to be deducted at the time of making any payment. In cases
where such TDS is being deducted, the tax payable will be computed by first
deducting the TDS and then the recipient of income claims a refund of TDS at
the time of filing of his Income.</span></p><p class="MsoNormal"><span style="font-family: "Times New Roman",serif;">
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> 2. Therefore, when a taxpayer’s final tax
liability is less than the amount of TDS being deducted, based on TDS rate in
force, he may file an application for Nil/ Lower deduction of TDS U/S 197 of
the Income Tax Act in Form 13. This is possible in cases where justification
can be made for lower deduction of TDS on the basis of low projected
profitability.</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> 3. Application in FORM 13 can be made by the
recipient of income in case of the following category of receipts where TDS is
required to be made under the following Sections:</span></span><span style="background: white;"><o:p></o:p></span></span><span></span></p><a name='more'></a><p></p>
<p class="MsoNormal"><span style="background: white; font-family: "Times New Roman", serif;"> • Section 193 – Interest on
securities</span><span style="font-family: "Times New Roman",serif;"><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> • Section 194 – Dividends</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> • Section 194A – Interest other than
interest on securities</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> • Section 194C – Contractors income</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> • Section 194D – Insurance commission</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> • Section 194G –
Commission/remuneration/prize on lottery tickets</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> • Section 194H – Commission or brokerage</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> • Section 194-I – Rent</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> • Section 194J – Fee for Professional or
technical services</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> • Section 194LA – Compensation on
acquisition of immovable property</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> • Section 194LBB – Income in respect of
units of investment fund</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> • Section 194LBC – Income in respect of
investment in securitization trust</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> 4. Documents to be submitted for FORM 13?</span></span><span style="background: white;"><o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="font-family: "Times New Roman",serif;"><br />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> • Signed Form 13</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> • Copies of return of income along with
enclosures and acknowledgment for previous 3 financial years</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> • Copies of assessment orders for previous 3
financial years</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> • In case of assessee having business or
profession income, copies of financial statement along with audit report if any
for previous 3 financial years</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> • Projected profit and loss account for the
current financial year</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> • Computation of income statement for
previous 3 financial years and estimated computation for the current financial
year</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> • Copy of PAN card</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> • Tax Deduction Account Number of all
parties responsible for paying you</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> • E-TDS return acknowledgment for previous 2
financial years</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> • Estimated income during financial year</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> • Any other documents depending on nature of
income</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);"> • TDS default, if any</span></span><o:p></o:p></span></p>taxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.com0tag:blogger.com,1999:blog-5341269791906881059.post-20355343612729489182024-03-09T12:09:00.005+05:302024-03-09T12:09:43.683+05:30Principles of Transfer pricing.<p> <span style="background-color: white; font-family: "Times New Roman", serif;">Given
below the major principles of transfer pricing.</span></p><p class="MsoListParagraph" style="background: white; line-height: normal; margin-bottom: 12.0pt; margin-left: 36.0pt; margin-right: 0cm; margin-top: 12.0pt; mso-add-space: auto; mso-list: l0 level1 lfo1; mso-outline-level: 2; text-indent: -18.0pt;"><!--[if !supportLists]--><b><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 0pt; mso-ligatures: none;">1.<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; font-weight: normal; line-height: normal;"> </span></span></b><!--[endif]--><b><span style="font-family: "Times New Roman", serif;">Arm's
length principle</span></b><b><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p></o:p></span></b></p><p class="MsoNormal" style="background: white; line-height: normal; margin-left: 18.0pt;"><span style="font-family: "Times New Roman", serif;">The arm's length principle is the cornerstone of transfer
pricing. It states that the prices of transactions between related parties
should be comparable to those of transactions between independent parties under
similar circumstances. This principle aims to prevent artificial shifting of
profits and ensure a fair allocation of taxable income among countries. To
apply the arm's length principle, you need to identify comparable transactions,
select appropriate transfer pricing methods, and document your analysis and
assumptions.<span></span></span></p><a name='more'></a><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p></o:p></span><p></p><p class="MsoNormal" style="background: white; line-height: normal; margin-left: 18.0pt;"><span style="font-family: "Times New Roman", serif;">An "arm's length price" is the fair and
reasonable price at which goods, services, or assets are bought or sold between
two parties who are not related to each other and have no special relationship.
It's like the price you would expect to pay or receive if you were buying or
selling something to a stranger in an open market, without any special deals or
influence. The idea is to ensure that transactions are fair and not influenced
by any personal or business relationships that could skew the price.</span><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p></o:p></span></p><p class="MsoListParagraph" style="background: white; line-height: normal; margin-bottom: 12.0pt; mso-add-space: auto; mso-list: l0 level1 lfo1; mso-outline-level: 2; text-indent: -18.0pt;"><!--[if !supportLists]--><b><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 0pt; mso-ligatures: none;">2.<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; font-weight: normal; line-height: normal;">
</span></span></b><!--[endif]--><b><span style="font-family: "Times New Roman", serif;">Value creation principle</span></b><b><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p></o:p></span></b></p><p class="MsoNormal" style="background: white; line-height: normal; margin-left: 18.0pt;"><span style="font-family: "Times New Roman", serif;">The value creation principle is another important concept
of transfer pricing. It states that the profits of a multinational group should
reflect the economic activities and functions performed by each entity, rather
than the legal form or contractual arrangements. This principle requires you to
analyze the value chain of your business and identify the key drivers of value
and risk. You also need to consider the intangible assets, such as patents,
trademarks, or know-how, that contribute to your competitive advantage and
profitability.</span><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p></o:p></span></p><p class="MsoListParagraph" style="background: white; line-height: normal; margin-bottom: 12.0pt; mso-add-space: auto; mso-list: l0 level1 lfo1; mso-outline-level: 2; text-indent: -18.0pt;"><!--[if !supportLists]--><b><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 0pt; mso-ligatures: none;">3.<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; font-weight: normal; line-height: normal;">
</span></span></b><!--[endif]--><b><span style="font-family: "Times New Roman", serif;">Substance over form principle</span></b><b><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p></o:p></span></b></p><p class="MsoNormal" style="background: white; line-height: normal; margin-left: 18.0pt;"><span style="font-family: "Times New Roman", serif;">The substance over form principle is a general principle of
tax law that applies to transfer pricing as well. It states that the tax
consequences of a transaction should follow its economic substance, rather than
its legal form or appearance. This principle aims to prevent tax avoidance
schemes that exploit loopholes or inconsistencies in the tax rules. To comply
with the substance over form principle, you need to ensure that your transfer
pricing policies and practices are consistent with your business reality and
objectives.</span><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p></o:p></span></p><p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: 0cm; margin-left: 11.25pt; mso-margin-top-alt: auto;"><span style="font-family: "Times New Roman", serif;">Substance over form means that the
facts are more important than the legal structure and that the facts should
conform to the legal form. Say a transaction is legally called a contract
manufacturing, however it is in reality a full fledged manufacturing activity.
This will give rise to a completely different entity characterisation,
remuneration, IP issues etc. Therefore, there is an increased emphasis on
substance over form over the past many years and tax authorities are trying to
understand the true substance of a transaction and not just go by the legal
form.</span><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p></o:p></span></p><p class="MsoNormal" style="background: white; line-height: normal;"><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 0pt; mso-ligatures: none;"> </span></p><p class="MsoListParagraph" style="background: white; line-height: normal; margin-bottom: 12.0pt; mso-add-space: auto; mso-list: l0 level1 lfo1; mso-outline-level: 2; text-indent: -18.0pt;"><!--[if !supportLists]--><b><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 0pt; mso-ligatures: none;">4.<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; font-weight: normal; line-height: normal;">
</span></span></b><!--[endif]--><b><span style="font-family: "Times New Roman", serif;">Consistency principle</span></b><b><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p></o:p></span></b></p><p class="MsoNormal" style="background: white; line-height: normal; margin-left: 18.0pt;"><span style="font-family: "Times New Roman", serif;">The consistency principle is a practical principle of
transfer pricing that helps you avoid double taxation and disputes with tax
authorities. It states that you should use the same transfer pricing method and
assumptions for both sides of a transaction, unless there is a valid reason to
do otherwise. This principle also implies that you should apply the same
transfer pricing policy across your group, unless there are specific factors
that justify different approaches. To adhere to the consistency principle, you
need to communicate and coordinate with your related parties and document any
deviations or adjustments.</span><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p></o:p></span></p><p class="MsoNormal" style="background: white; line-height: normal; margin-left: 18.0pt;"><span style="font-family: "Times New Roman", serif;">“Inconsistency is the only thing in which men are
consistent,” once, remarked English poet, Horace Smith, in a light vein.. But,
transfer pricing requires consistency principle, which states that when the
facts & circumstances continue to remain the same, there should not be any
variation in the treatment from earlier year. In JCIT Vs M/s Super House
Leather Ltd. (ITAT Lucknow) : Income Tax (Appeal) No. 127 of 2012 case, the
assessee had adopted cost plus method, which was rejected by Transfer Pricing
Officer. No reasons were given. The Tribunal held that one cannot brush aside
the “Principle of Consistency.” Forex loss claimed as non-operating cost in one
year and operating cost earlier is against consistency and may attract tax.</span><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p></o:p></span></p><p class="MsoListParagraph" style="background: white; line-height: normal; margin-bottom: 12.0pt; mso-add-space: auto; mso-list: l0 level1 lfo1; mso-outline-level: 2; text-indent: -18.0pt;"><!--[if !supportLists]--><b><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 0pt; mso-ligatures: none;">5.<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; font-weight: normal; line-height: normal;">
</span></span></b><!--[endif]--><b><span style="font-family: "Times New Roman", serif;">Transparency principle</span></b><b><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p></o:p></span></b></p><p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: 0cm; margin-left: 18.0pt; margin-right: 0cm; margin-top: 0cm;"><span style="font-family: "Times New Roman", serif;">The
transparency principle is a compliance principle of transfer pricing that helps
you demonstrate your good faith and cooperation with the tax authorities. It
states that you should disclose relevant information about your transfer
pricing policies and transactions in a timely and accurate manner. This
principle also involves complying with the reporting and documentation
requirements of the countries where you operate and participate in the exchange
of information agreements. To follow the transparency principle, you need to
prepare and maintain transfer pricing documentation, such as master file, local
file, and country-by-country report, and respond to any inquiries or audits
from the tax authorities.</span><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p></o:p></span></p><p class="MsoNormal" style="background: white; line-height: normal;"><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 0pt; mso-ligatures: none;"> </span></p><p>
<span style="font-family: "Times New Roman",serif; font-size: 11.0pt; line-height: 107%; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US; mso-font-kerning: 0pt; mso-ligatures: none;">Transfer
pricing is a complex and dynamic area of financial management that requires
careful planning and analysis. By understanding and applying the key principles
of transfer pricing, you can optimize your tax position and align your business
model with your strategic goals</span></p>taxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.com0tag:blogger.com,1999:blog-5341269791906881059.post-46753795216178391232024-03-04T21:19:00.001+05:302024-03-04T21:19:06.646+05:30SC rules discount on prepaid SIM cards and recharge coupon vouchers not liable for withholding as commission or brokerage<p> <span style="color: #2e2e38; font-size: 10.5pt;">This Tax Alert summarizes the recent
Supreme Court (SC) decision in a batch of appeals with lead case being that of
Bharti Cellular Ltd. v ACIT</span><sup><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-size: 10.5pt;">[1]</span></sup><span style="color: #2e2e38; font-size: 10.5pt;"> (Taxpayer). The issue before the SC was whether discount
allowed to distributors on print price of prepaid SIM cards and recharge coupon
vouchers by the telecom operators can trigger withholding tax obligation under
the provisions of the Indian Tax Laws (ITL).<span></span></span></p><a name='more'></a><p></p>
<p style="line-height: 12.0pt; mso-line-height-rule: exactly;"><span style="color: #2e2e38; font-size: 10.5pt;">The controversy was dealt with by an
array of High Court decisions with divergent views and hence petitions were
filed before the SC.</span><span style="color: #2e2e38; font-size: 13.5pt;"><o:p></o:p></span></p>
<p style="line-height: 12.0pt; mso-line-height-rule: exactly;"><span style="color: #2e2e38; font-size: 10.5pt;">While adjudicating on the issue, the SC
has elucidated factors for determining principal-agent and principal-principal
relationship. Importantly, it laid down four factor tests to qualify as agent
viz. (a) presence of legal power of agent to legally bind the principal with
third party, (b) principal exercising certain degree of control over the
conduct of agent, (c) fiduciary relationship between them, (d) liability of
agent to render accounts to principal and entitlement to receive remuneration
from the principal. </span><span style="color: #2e2e38; font-size: 13.5pt;"><o:p></o:p></span></p>
<p style="line-height: 12.0pt; mso-line-height-rule: exactly;"><span style="color: #2e2e38; font-size: 10.5pt;">On the facts of the lead case, after
noting the terms of the distribution agreement in case of prepaid vouchers, the
SC ruled that there was no principal-agent relationship between the
distributors and the Taxpayer, as the distributors were required to purchase
the SIM cards, vouchers at discounted price. The distributors had the right to
sell the same at any price below the printed price at their discretion and were
also not required to render any accounts to the Taxpayer. Further, there
existed no fiduciary relationship between the distributors and the Taxpayer. </span><span style="color: #2e2e38; font-size: 13.5pt;"><o:p></o:p></span></p>
<p style="line-height: 12.0pt; mso-line-height-rule: exactly;"><span style="color: #2e2e38; font-size: 10.5pt;">Further, the SC held that the
withholding tax provision of the ITL is not applicable in the hands of the
Taxpayer as it has not credited or paid any income to the distributors in
nature of commission. The SC made it clear that profit earned by resale of SIM
card cannot be regarded as an event leading to indirect payment by telecom
company to the distributors.</span><span style="color: #2e2e38; font-size: 13.5pt;"><o:p></o:p></span></p>
<p style="line-height: 12.0pt; mso-line-height-rule: exactly;"><span style="color: #2e2e38; font-size: 10.5pt;">Further, since the Taxpayer was not
privy to contract between distributors and retailers or end customers, it was
impossible for the Taxpayer to withhold tax at source. The SC also noted that
in absence of a statutory mandate, the Taxpayer cannot be obligated to collect
information of discount from distributor which is a far-fetched requirement
imposing unfair obligation and inconvenience.</span><span style="color: #2e2e38; font-size: 13.5pt;"><o:p></o:p></span></p>
<span style="color: #2e2e38; font-family: "Aptos",sans-serif; font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: Aptos; mso-bidi-language: AR-SA; mso-fareast-font-family: Aptos; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">Additionally,
the SC observed that in order to reduce litigation, the Central Board of Direct
Taxes (CBDT) should issue appropriate instructions/circulars which are clear
and prospective to clarify the doubts on issues arising in withholding tax
provision after adopting consultative approach.<br />
<!--[if !supportLineBreakNewLine]--><br />
<!--[endif]--></span>taxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.com0tag:blogger.com,1999:blog-5341269791906881059.post-35317353420962106352024-03-02T20:05:00.000+05:302024-03-02T20:05:22.434+05:30Tax treaties and tax residence certificates (TRC)<p><span style="background-color: white; color: #0d0d0d; font-family: Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"; font-size: 16px; white-space-collapse: preserve;">Is the Indian Finance Ministry's 2013 press release something the tax authorities have to follow? Sometimes, the Indian tax authorities have not accepted a TRC as definite proof of where a taxpayer lives for tax treaty reasons.</span></p><p style="--tw-border-spacing-x: 0; --tw-border-spacing-y: 0; --tw-ring-color: rgba(69,89,164,.5); --tw-ring-offset-color: #fff; --tw-ring-offset-shadow: 0 0 transparent; --tw-ring-offset-width: 0px; --tw-ring-shadow: 0 0 transparent; --tw-rotate: 0; --tw-scale-x: 1; --tw-scale-y: 1; --tw-scroll-snap-strictness: proximity; --tw-shadow-colored: 0 0 transparent; --tw-shadow: 0 0 transparent; --tw-skew-x: 0; --tw-skew-y: 0; --tw-translate-x: 0; --tw-translate-y: 0; background-color: white; border: 0px solid rgb(227, 227, 227); box-sizing: border-box; color: #0d0d0d; font-family: Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"; font-size: 16px; margin: 1.25em 0px; white-space-collapse: preserve;"><span></span></p><a name='more'></a>But before January 2024, Indian high courts and the Income Tax Appellate Tribunal (ITAT) disagreed with the tax authorities. For example, the Delhi High Court in Blackstone Capital Partners (Singapore) VI FDI Three Pte. Ltd. v. Asst. CIT (dated 18 January 2023).<p></p><p style="--tw-border-spacing-x: 0; --tw-border-spacing-y: 0; --tw-ring-color: rgba(69,89,164,.5); --tw-ring-offset-color: #fff; --tw-ring-offset-shadow: 0 0 transparent; --tw-ring-offset-width: 0px; --tw-ring-shadow: 0 0 transparent; --tw-rotate: 0; --tw-scale-x: 1; --tw-scale-y: 1; --tw-scroll-snap-strictness: proximity; --tw-shadow-colored: 0 0 transparent; --tw-shadow: 0 0 transparent; --tw-skew-x: 0; --tw-skew-y: 0; --tw-translate-x: 0; --tw-translate-y: 0; background-color: white; border: 0px solid rgb(227, 227, 227); box-sizing: border-box; color: #0d0d0d; font-family: Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"; font-size: 16px; margin: 1.25em 0px; white-space-collapse: preserve;">However, in January 2024, the Indian Supreme Court paused the Delhi High Court’s decision.</p><p style="--tw-border-spacing-x: 0; --tw-border-spacing-y: 0; --tw-ring-color: rgba(69,89,164,.5); --tw-ring-offset-color: #fff; --tw-ring-offset-shadow: 0 0 transparent; --tw-ring-offset-width: 0px; --tw-ring-shadow: 0 0 transparent; --tw-rotate: 0; --tw-scale-x: 1; --tw-scale-y: 1; --tw-scroll-snap-strictness: proximity; --tw-shadow-colored: 0 0 transparent; --tw-shadow: 0 0 transparent; --tw-skew-x: 0; --tw-skew-y: 0; --tw-translate-x: 0; --tw-translate-y: 0; background-color: white; border: 0px solid rgb(227, 227, 227); box-sizing: border-box; color: #0d0d0d; font-family: Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"; font-size: 16px; margin: 1.25em 0px; white-space-collapse: preserve;">Taxpayers have been using two circulars (Nos. 682 and 789) from the Central Board of Direct Taxes (CBDT) to support their argument that a TRC should be accepted by tax authorities for treaty rights.</p><p style="--tw-border-spacing-x: 0; --tw-border-spacing-y: 0; --tw-ring-color: rgba(69,89,164,.5); --tw-ring-offset-color: #fff; --tw-ring-offset-shadow: 0 0 transparent; --tw-ring-offset-width: 0px; --tw-ring-shadow: 0 0 transparent; --tw-rotate: 0; --tw-scale-x: 1; --tw-scale-y: 1; --tw-scroll-snap-strictness: proximity; --tw-shadow-colored: 0 0 transparent; --tw-shadow: 0 0 transparent; --tw-skew-x: 0; --tw-skew-y: 0; --tw-translate-x: 0; --tw-translate-y: 0; background-color: white; border: 0px solid rgb(227, 227, 227); box-sizing: border-box; color: #0d0d0d; font-family: Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"; font-size: 16px; margin: 1.25em 0px; white-space-collapse: preserve;">Also, sometimes taxpayers mention a 2013 press release from the Indian Government’s Finance Ministry.</p><p style="--tw-border-spacing-x: 0; --tw-border-spacing-y: 0; --tw-ring-color: rgba(69,89,164,.5); --tw-ring-offset-color: #fff; --tw-ring-offset-shadow: 0 0 transparent; --tw-ring-offset-width: 0px; --tw-ring-shadow: 0 0 transparent; --tw-rotate: 0; --tw-scale-x: 1; --tw-scale-y: 1; --tw-scroll-snap-strictness: proximity; --tw-shadow-colored: 0 0 transparent; --tw-shadow: 0 0 transparent; --tw-skew-x: 0; --tw-skew-y: 0; --tw-translate-x: 0; --tw-translate-y: 0; background-color: white; border: 0px solid rgb(227, 227, 227); box-sizing: border-box; color: #0d0d0d; font-family: Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"; font-size: 16px; margin: 1.25em 0px; white-space-collapse: preserve;">This press release explained that a TRC from a resident of a Contracting State should be accepted as proof that the taxpayer lives there. It also said that Indian tax authorities should not question this. This press release talked about the tax treaty between India and Mauritius.</p><p style="--tw-border-spacing-x: 0; --tw-border-spacing-y: 0; --tw-ring-color: rgba(69,89,164,.5); --tw-ring-offset-color: #fff; --tw-ring-offset-shadow: 0 0 transparent; --tw-ring-offset-width: 0px; --tw-ring-shadow: 0 0 transparent; --tw-rotate: 0; --tw-scale-x: 1; --tw-scale-y: 1; --tw-scroll-snap-strictness: proximity; --tw-shadow-colored: 0 0 transparent; --tw-shadow: 0 0 transparent; --tw-skew-x: 0; --tw-skew-y: 0; --tw-translate-x: 0; --tw-translate-y: 0; background-color: white; border: 0px solid rgb(227, 227, 227); box-sizing: border-box; color: #0d0d0d; font-family: Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"; font-size: 16px; margin: 1.25em 0px; white-space-collapse: preserve;">Now, with the Supreme Court pausing the Delhi High Court’s decision, can taxpayers say that the press release is something the tax authorities must follow? Can taxpayers argue that tax authorities must accept a TRC as proof of where someone lives for tax treaty reasons?</p><p style="--tw-border-spacing-x: 0; --tw-border-spacing-y: 0; --tw-ring-color: rgba(69,89,164,.5); --tw-ring-offset-color: #fff; --tw-ring-offset-shadow: 0 0 transparent; --tw-ring-offset-width: 0px; --tw-ring-shadow: 0 0 transparent; --tw-rotate: 0; --tw-scale-x: 1; --tw-scale-y: 1; --tw-scroll-snap-strictness: proximity; --tw-shadow-colored: 0 0 transparent; --tw-shadow: 0 0 transparent; --tw-skew-x: 0; --tw-skew-y: 0; --tw-translate-x: 0; --tw-translate-y: 0; background-color: white; border: 0px solid rgb(227, 227, 227); box-sizing: border-box; color: #0d0d0d; font-family: Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"; font-size: 16px; margin: 1.25em 0px 0px; white-space-collapse: preserve;">One might think, since CBDT circulars (No. 682 and No. 789) are clearly rules tax authorities must follow, why focus on the press release? I believe it's important because the CBDT could change those circulars. So it's important to see if the press release also must be followed by tax authorities.</p>taxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.com0tag:blogger.com,1999:blog-5341269791906881059.post-85095258819194601082024-03-01T11:19:00.000+05:302024-03-01T11:19:00.993+05:30TAX DUE DATE - MARCH 2024.<p> </p><table border="0" cellpadding="0" cellspacing="3" class="MsoNormalTable" style="mso-cellspacing: 1.5pt; mso-yfti-tbllook: 1184; width: 100%;">
<tbody><tr style="height: 32.25pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td style="border-bottom: solid #C5C5C5 1.0pt; border: none; height: 32.25pt; mso-border-bottom-alt: solid #C5C5C5 .75pt; padding: 4.5pt 4.5pt 4.5pt 4.5pt; width: 41.95pt;" width="56">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 18.0pt;"><i><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Sr No</span></i><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><o:p></o:p></span></p>
</td>
<td style="border-bottom: solid #C5C5C5 1.0pt; border: none; height: 32.25pt; mso-border-bottom-alt: solid #C5C5C5 .75pt; padding: 4.5pt 4.5pt 4.5pt 4.5pt; width: 85.35pt;" width="114">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 18.0pt;"><i><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Due Date</span></i><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><o:p></o:p></span></p>
</td>
<td style="border-bottom: solid #C5C5C5 1.0pt; border: none; height: 32.25pt; mso-border-bottom-alt: solid #C5C5C5 .75pt; padding: 4.5pt 4.5pt 4.5pt 4.5pt; width: 78.05pt;" width="104">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 18.0pt;"><i><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Related to</span></i><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><o:p></o:p></span></p>
</td>
<td style="border-bottom: solid #C5C5C5 1.0pt; border: none; height: 32.25pt; mso-border-bottom-alt: solid #C5C5C5 .75pt; padding: 4.5pt 4.5pt 4.5pt 4.5pt; width: 250.45pt;" width="334">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 18.0pt;"><i><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Compliance to be made</span></i><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 36.15pt; mso-yfti-irow: 1; mso-yfti-lastrow: yes;">
<td style="border-bottom: solid #C5C5C5 1.0pt; border: none; height: 36.15pt; mso-border-bottom-alt: solid #C5C5C5 .75pt; padding: 4.5pt 4.5pt 4.5pt 4.5pt; width: 41.95pt;" width="56">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 18.0pt;"><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">1<o:p></o:p></span></p>
</td>
<td style="border-bottom: solid #C5C5C5 1.0pt; border: none; height: 36.15pt; mso-border-bottom-alt: solid #C5C5C5 .75pt; padding: 4.5pt 4.5pt 4.5pt 4.5pt; width: 85.35pt;" width="114">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 18.0pt;"><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">11.03.2024<o:p></o:p></span></p>
</td>
<td style="border-bottom: solid #C5C5C5 1.0pt; border: none; height: 36.15pt; mso-border-bottom-alt: solid #C5C5C5 .75pt; padding: 4.5pt 4.5pt 4.5pt 4.5pt; width: 78.05pt;" width="104">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 18.0pt;"><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">GST<o:p></o:p></span></p>
</td>
<td style="border-bottom: solid #C5C5C5 1.0pt; border: none; height: 36.15pt; mso-border-bottom-alt: solid #C5C5C5 .75pt; padding: 4.5pt 4.5pt 4.5pt 4.5pt; width: 250.45pt;" width="334">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 18.0pt;"><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Filing of GSTR 1 for the month
of February, 2024<o:p></o:p></span></p>
</td>
</tr>
</tbody></table>
<table border="1" cellpadding="0" cellspacing="0" class="MsoTableGrid" style="border-collapse: collapse; border: none; margin-left: .9pt; mso-border-bottom-alt: solid #C5C5C5 .75pt; mso-border-insideh: none; mso-border-insidev: none; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt; mso-yfti-tbllook: 1184; width: 101%;">
<tbody><tr style="height: 24.85pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0; mso-yfti-lastrow: yes;">
<td style="border-bottom: solid #C5C5C5 1.0pt; border: none; height: 24.85pt; mso-border-bottom-alt: solid #C5C5C5 .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 40.5pt;" width="54">
<p class="MsoNormal" style="margin-bottom: 18.0pt;"><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">2<o:p></o:p></span></p>
</td>
<td style="border-bottom: solid #C5C5C5 1.0pt; border: none; height: 24.85pt; mso-border-bottom-alt: solid #C5C5C5 .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 90.0pt;" width="120">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 18.0pt;"><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">20.03.2024<o:p></o:p></span></p>
</td>
<td style="border-bottom: solid #C5C5C5 1.0pt; border: none; height: 24.85pt; mso-border-bottom-alt: solid #C5C5C5 .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 76.4pt;" width="102">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 18.0pt;"><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">GST<o:p></o:p></span></p>
</td>
<td style="border-bottom: solid #C5C5C5 1.0pt; border: none; height: 24.85pt; mso-border-bottom-alt: solid #C5C5C5 .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 262.6pt;" width="350">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 18.0pt;"><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Payment of GST for the month of
February, 2024<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 18.0pt;"><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Filing of GSTR 3B for the month
of February, 2024<o:p></o:p></span></p>
</td>
</tr>
</tbody></table>
<table border="0" cellpadding="0" cellspacing="3" class="MsoNormalTable" style="mso-cellspacing: 1.5pt; mso-yfti-tbllook: 1184; width: 102%;">
<tbody><tr style="height: 71.55pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td style="height: 71.55pt; padding: 4.5pt 4.5pt 4.5pt 4.5pt; width: 42.95pt;" width="57">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 18.0pt;"><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">3<o:p></o:p></span></p>
</td>
<td style="height: 71.55pt; padding: 4.5pt 4.5pt 4.5pt 4.5pt; width: 87.35pt;" width="116">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 18.0pt;"><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">07.03.2024<o:p></o:p></span></p>
</td>
<td style="height: 71.55pt; padding: 4.5pt 4.5pt 4.5pt 4.5pt; width: 79.85pt;" width="106">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 18.0pt;"><i><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">TDS/TCS</span></i><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 18.0pt; mso-margin-top-alt: auto;"><i><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">(Income
Tax)</span></i><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"><o:p></o:p></span></p>
</td>
<td style="height: 71.55pt; padding: 4.5pt 4.5pt 4.5pt 4.5pt; width: 256.25pt;" width="342">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">· Deposit TDS for payments of
Salary, Interest, Commission or Brokerage, Rent, Professional fee, payment to
Contractors, etc. during the month of February 2024.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 18.0pt; mso-margin-top-alt: auto;"><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">·
Deposit TDS from Salaries deducted during the month of February 2024<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 18.0pt; mso-margin-top-alt: auto;"><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">•
Deposit TCS for collections made under section 206C including sale of scrap
during the month of February 2024, if any<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 71.55pt; mso-yfti-irow: 1;">
<td style="height: 71.55pt; padding: 4.5pt 4.5pt 4.5pt 4.5pt; width: 42.95pt;" valign="top" width="57">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 18.0pt;"><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">4<o:p></o:p></span></p>
</td>
<td style="height: 71.55pt; padding: 4.5pt 4.5pt 4.5pt 4.5pt; width: 87.35pt;" valign="top" width="116">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 18.0pt;"><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">15.03.2024<o:p></o:p></span></p>
</td>
<td style="height: 71.55pt; padding: 4.5pt 4.5pt 4.5pt 4.5pt; width: 79.85pt;" valign="top" width="106">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><i><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Income Tax<o:p></o:p></span></i></p>
</td>
<td style="height: 71.55pt; padding: 4.5pt 4.5pt 4.5pt 4.5pt; width: 256.25pt;" valign="top" width="342">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Payment of Advance Tax<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"> </span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;"> </span></p>
</td>
</tr>
<tr style="height: 71.55pt; mso-yfti-irow: 2; mso-yfti-lastrow: yes;">
<td style="border-bottom: solid #C5C5C5 1.0pt; border: none; height: 71.55pt; mso-border-bottom-alt: solid #C5C5C5 .75pt; padding: 4.5pt 4.5pt 4.5pt 4.5pt; width: 42.95pt;" valign="top" width="57">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 18.0pt;"><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">5<o:p></o:p></span></p>
</td>
<td style="border-bottom: solid #C5C5C5 1.0pt; border: none; height: 71.55pt; mso-border-bottom-alt: solid #C5C5C5 .75pt; padding: 4.5pt 4.5pt 4.5pt 4.5pt; width: 87.35pt;" valign="top" width="116">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 18.0pt;"><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">31.03.2024<o:p></o:p></span></p>
</td>
<td style="border-bottom: solid #C5C5C5 1.0pt; border: none; height: 71.55pt; mso-border-bottom-alt: solid #C5C5C5 .75pt; padding: 4.5pt 4.5pt 4.5pt 4.5pt; width: 79.85pt;" valign="top" width="106">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><i><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">GST LUT<o:p></o:p></span></i></p>
</td>
<td style="border-bottom: solid #C5C5C5 1.0pt; border: none; height: 71.55pt; mso-border-bottom-alt: solid #C5C5C5 .75pt; padding: 4.5pt 4.5pt 4.5pt 4.5pt; width: 256.25pt;" valign="top" width="342">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span lang="EN-IN" style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-IN;">Filing of LUT for the FY 24-25<o:p></o:p></span></p>
</td>
</tr>
</tbody></table>taxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.com0tag:blogger.com,1999:blog-5341269791906881059.post-17947881419445879772024-02-29T20:05:00.003+05:302024-02-29T20:05:25.967+05:30HC holds export benefit cannot be denied where proceeds are received in INR through an intermediary payment gateway <p> <span style="background-color: white; font-size: 10.5pt;">This Tax Alert summarizes
a recent judgement of the Madras High Court (HC)</span><sup style="background-color: white;">[1]</sup><span style="background-color: white; font-size: 10.5pt;">. The issue
involved was whether the transaction would be treated as export of service
where the proceeds are received in Indian Rupees by the petitioner through an
intermediary.<span></span></span></p><a name='more'></a><p></p><p style="background: white; line-height: 12.0pt; mso-line-height-rule: exactly;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-size: 10.5pt;">
<br />
The petitioner is providing services to overseas customers through online
portal. Export proceeds are received from customers in convertible foreign
exchange by an intermediary (payment gateway service provider) and then the
intermediary credits the amount in Indian Rupees to petitioner’s bank account.<br />
<br />
The key observations of the HC are:</span><span style="color: #2e2e38; font-size: 13.5pt;"><o:p></o:p></span></p>
<ul type="disc">
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">Routing
of payment by intermediary from its account to petitioner’s account in
Indian Rupees is in accordance with the provisions of the Foreign Exchange
Management (Manner of Receipt and Payment) Regulations, 2016 (FEMA
Regulations).</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">Regulation
3(2) of FEMA Regulations makes it clear that in respect of an export from
India, receipt shall be made in currency appropriate to the place of final
destination as mentioned in the declaration form.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">Merely
because the receipts are routed through intermediary and received in
Indian currency ipso facto would not mean that the petitioner has not
exported services within the meaning of Section 2(6) of the Integrated
Goods and Services Tax Act, 2017 (IGST Act).</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; margin-bottom: 13.5pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">Receipt
of payment by an intermediary for and on behalf of the petitioner will
qualify as payment received by petitioner.<br />
<br />
Basis above, HC held that the transaction will qualify as export of
services and the petitioner is entitled to claim refund on account of
zero-rated supplies.<br />
<br />
<strong>Comments:</strong></span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">The
ruling is likely to settle the long drawn litigation on the issue and
benefit the businesses where the export proceeds are received in INR
through payment gateway service providers. </span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">It
is relevant to note that this judgement pertains to the period prior to
amendment in export definition allowing remittances in Indian rupees as
per FEMA regulations. </span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
</ul>taxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.com0tag:blogger.com,1999:blog-5341269791906881059.post-61969287373928420642024-02-24T13:35:00.003+05:302024-02-24T13:35:44.743+05:30RECENT DIRECT TAX JUDGEMENT FROM DELHI HIGH COURT<p> <span style="font-family: Symbol; text-indent: -18pt;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><span style="text-indent: -18pt;">Delhi HC in the case of Godaddy held that </span><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%; text-indent: -18pt;">domain name registration
of third parties are not royalty. They
only acting as a Registrar and offering its services to its customers for
having their domain names registered. </span><span style="text-indent: -18pt;"> </span><span style="text-indent: -18pt;"> <span></span></span></p><a name='more'></a><p></p><p class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><o:p></o:p></p>
<p class="MsoListParagraphCxSpMiddle"><o:p> </o:p></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">Delhi High Court recently ruled against UAE-based Hyatt
International Southwest Asia Ltd. (Assessee), holding that it has a Fixed Place
Permanent Establishment (PE) in India, specifically at the premises of Hyatt
Regency, Delhi. Despite the Assessee's argument that attribution should not be
made due to global losses, the court expressed reservations about this stance,
emphasizing the need to treat PE as an independent taxable entity for
attribution purposes.</span><o:p></o:p></p>
<p class="MsoListParagraphCxSpMiddle"><o:p> </o:p></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]-->In the case of Bar council of India, Delhi HC
condones the delay of filing of Form 10. <o:p></o:p></p>
<p class="MsoListParagraphCxSpMiddle"><o:p> </o:p></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">Delhi High Court gave a decision that Software Sale Payment
Not Royalty under India-Singapore DTAA: Case Name : CIT - International
Taxation Vs DXC Technology Services Singapore Pte. Ltd </span><o:p></o:p></p>
<p class="MsoListParagraphCxSpMiddle"><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;"> </span><o:p></o:p></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]-->In the case of Federal Bank, the Delhi HC held
that before passing the order, the AO should provide sufficient time & opportunity
to the taxpayer. Same was further confirmed by court in the case of GAC
Shipping India. <o:p></o:p></p>
<p class="MsoListParagraphCxSpMiddle"><o:p> </o:p></p>
<p class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">Delhi High Court has held that merely because a person holds
an office in a corporate entity, it would not be sufficient to treat such
individual as the “principal officer” for income tax prosecution matters
pertaining to the company. The finding that an individual is the “principal
officer” must be based on the fact that the person was connected with the
management or administration of the company.</span><o:p></o:p></p>taxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.com0tag:blogger.com,1999:blog-5341269791906881059.post-32522499205987666322024-02-24T13:03:00.005+05:302024-02-24T13:03:53.642+05:30Tax Implications of Receiving Money under Section 56(2)(x) of the Indian Income-tax Act, 1961: Does it Attract Tax Based on Fair Market Value of Consideration?<p class="MsoBodyText" style="line-height: 107%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 7.0pt; margin-right: 6.7pt; margin-top: 8.0pt; text-align: justify;"><span style="letter-spacing: -.05pt;">Under</span><span style="letter-spacing: -.45pt;"> </span><span style="letter-spacing: -.05pt;">the</span><span style="letter-spacing: -.85pt;"> </span><span style="letter-spacing: -.05pt;">India’s</span><span style="letter-spacing: -.55pt;"> </span><span style="letter-spacing: -.05pt;">domestic</span><span style="letter-spacing: -.65pt;"> </span><span style="letter-spacing: -.05pt;">tax</span><span style="letter-spacing: -.65pt;"> </span>law,<span style="letter-spacing: -.4pt;"> </span>viz.,<span style="letter-spacing: -.5pt;"> </span>the<span style="letter-spacing: -.7pt;"> </span>Income-tax<span style="letter-spacing: -.65pt;"> </span>Act,<span style="letter-spacing: -.5pt;"> </span>1961<span style="letter-spacing: -.6pt;"> </span>(“<b><span style="font-family: "Arial",sans-serif; mso-bidi-font-family: "Arial MT";">IT<span style="letter-spacing: -.65pt;"> </span>Act</span></b>”),<span style="letter-spacing: -.6pt;"> </span>the<span style="letter-spacing: -.6pt;"> </span>subject<span style="letter-spacing: -.65pt;"> </span>matter<span style="letter-spacing: -2.95pt;">
</span>is tax on ‘income’, i.e., ‘income-tax’. Even if income-tax is levied on
a person distributing the<span style="letter-spacing: .05pt;"> </span>income<span style="letter-spacing: -.2pt;"> </span>(like,<span style="letter-spacing: -.05pt;">
</span>dividend distribution<span style="letter-spacing: -.2pt;"> </span>tax<span style="letter-spacing: -.05pt;"> </span>in<span style="letter-spacing: -.2pt;"> </span>the<span style="letter-spacing: -.15pt;"> </span>earlier<span style="letter-spacing: -.05pt;">
</span>tax<span style="letter-spacing: -.15pt;"> </span>regime<span style="letter-spacing: -.15pt;"> </span>pertaining<span style="letter-spacing: -.15pt;"> </span>to<span style="letter-spacing: -.35pt;"> </span>dividend, or<span style="letter-spacing: -.1pt;"> </span>share<span style="letter-spacing: -2.9pt;"> </span>buy-back<span style="letter-spacing: -.35pt;"> </span>tax<span style="letter-spacing: -.3pt;"> </span>under<span style="letter-spacing: -.2pt;"> </span>section<span style="letter-spacing: -.3pt;">
</span>115QA<span style="letter-spacing: -.35pt;"> </span>of<span style="letter-spacing: -.3pt;"> </span>the<span style="letter-spacing: -.3pt;"> </span>IT<span style="letter-spacing: -.35pt;"> </span>Act<span style="letter-spacing: -.35pt;"> </span>levied<span style="letter-spacing: -.2pt;"> </span>on<span style="letter-spacing: -.3pt;"> </span>the<span style="letter-spacing: -.35pt;"> </span>domestic<span style="letter-spacing: -.3pt;">
</span>companies),<span style="letter-spacing: -.4pt;"> </span>the<span style="letter-spacing: -.2pt;"> </span>same<span style="letter-spacing: -2.95pt;"> </span>retains<span style="letter-spacing: .05pt;"> </span>its character<span style="letter-spacing: -.05pt;"> </span>as tax<span style="letter-spacing: .05pt;"> </span>on<span style="letter-spacing: .05pt;"> </span>‘income’<span style="letter-spacing: -.2pt;">
</span>(to<span style="letter-spacing: -.1pt;"> </span>the<span style="letter-spacing: .05pt;"> </span>extent<span style="letter-spacing: .05pt;"> </span>distributed).<span></span></p><a name='more'></a><o:p></o:p><p></p><p class="MsoBodyText" style="line-height: 107%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 7.0pt; margin-right: 6.6pt; margin-top: 7.9pt; text-align: justify;">As<span style="letter-spacing: -.35pt;"> </span>per<span style="letter-spacing: -.4pt;"> </span>the<span style="letter-spacing: -.35pt;"> </span>provisions<span style="letter-spacing: -.3pt;"> </span>of<span style="letter-spacing: -.45pt;"> </span>section<span style="letter-spacing: -.45pt;"> </span>4<span style="letter-spacing: -.3pt;"> </span>of<span style="letter-spacing: -.25pt;"> </span>the<span style="letter-spacing: -.55pt;"> </span>IT<span style="letter-spacing: -.55pt;"> </span>Act,<span style="letter-spacing: -.25pt;"> </span>income-tax<span style="letter-spacing: -.35pt;"> </span>shall<span style="letter-spacing: -.45pt;">
</span>be<span style="letter-spacing: -.45pt;"> </span>charged<span style="letter-spacing: -.5pt;"> </span>in<span style="letter-spacing: -.45pt;"> </span>respect<span style="letter-spacing: -.35pt;"> </span>of<span style="letter-spacing: -.3pt;"> </span>‘total<span style="letter-spacing: -2.95pt;"> </span>income’<span style="letter-spacing: -.7pt;">
</span>for<span style="letter-spacing: -.6pt;"> </span>a<span style="letter-spacing: -.65pt;"> </span>tax<span style="letter-spacing: -.6pt;"> </span>year<span style="letter-spacing: -.55pt;"> </span>of<span style="letter-spacing: -.6pt;"> </span>every<span style="letter-spacing: -.6pt;"> </span>person.<span style="letter-spacing: -.5pt;">
</span>Further,<span style="letter-spacing: -.7pt;"> </span>the<span style="letter-spacing: -.55pt;"> </span>income-tax<span style="letter-spacing: -.55pt;"> </span>shall<span style="letter-spacing: -.6pt;"> </span>be<span style="letter-spacing: -.65pt;"> </span>charged<span style="letter-spacing: -.5pt;">
</span>in<span style="letter-spacing: -.65pt;"> </span>accordance<span style="letter-spacing: -2.9pt;"> </span>with and subject to the provisions of the
IT Act. The IT Act contains detailed provisions<span style="letter-spacing: .05pt;"> </span>regarding<span style="letter-spacing: -.2pt;"> </span>the scope<span style="letter-spacing: .05pt;"> </span>and<span style="letter-spacing: -.3pt;"> </span>manner<span style="letter-spacing: -.05pt;"> </span>of<span style="letter-spacing: .05pt;"> </span>computation
of<span style="letter-spacing: .1pt;"> </span>‘total<span style="letter-spacing: -.05pt;"> </span>income’.<o:p></o:p></p><p class="MsoBodyText" style="margin-top: .4pt;"><span style="font-size: 11.5pt; mso-bidi-font-size: 11.0pt;"> </span></p><p class="MsoBodyText" style="line-height: 107%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 7.0pt; margin-right: 6.65pt; margin-top: .05pt; text-align: justify;">To begin with, one would need to understand as to what is meant by the
word ‘income’. The<span style="letter-spacing: .05pt;"> </span>word ‘income’ is
defined by section 2(24) of the IT Act. The said definition is an inclusive one<span style="letter-spacing: -2.95pt;"> </span>and it does not precisely define as to
what exactly is meant by ‘income’. There are various<span style="letter-spacing: .05pt;"> </span>landmark judicial precedents on the point as to what is meant by
‘income’, ‘revenue receipts’<span style="letter-spacing: .05pt;"> </span>and<span style="letter-spacing: -.05pt;"> </span>‘capital receipts’.<o:p></o:p></p><p class="MsoBodyText" style="margin-top: .3pt;"><span style="font-size: 11.5pt; mso-bidi-font-size: 11.0pt;"> </span></p><p class="MsoBodyText" style="line-height: 107%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 7.0pt; margin-right: 6.7pt; margin-top: 0cm; text-align: justify;">The definition of the word ‘income’ in section 2(24) of the IT Act, being
an inclusive definition,<span style="letter-spacing: -2.95pt;"> </span>includes
items which are purely in the nature of income, items on which there were
issues as<span style="letter-spacing: -2.95pt;"> </span>to<span style="letter-spacing: -.25pt;"> </span>whether<span style="letter-spacing: -.2pt;"> </span>the<span style="letter-spacing: -.4pt;"> </span>same<span style="letter-spacing: -.45pt;"> </span>constitute<span style="letter-spacing: -.4pt;"> </span>income<span style="letter-spacing: -.3pt;"> </span>or<span style="letter-spacing: -.2pt;"> </span>not<span style="letter-spacing: -.1pt;"> </span>and<span style="letter-spacing: -.4pt;"> </span>the<span style="letter-spacing: -.25pt;"> </span>legislature<span style="letter-spacing: -.4pt;"> </span>thought<span style="letter-spacing: -.2pt;">
</span>it<span style="letter-spacing: -.25pt;"> </span>appropriate<span style="letter-spacing: -.3pt;"> </span>to<span style="letter-spacing: -.1pt;"> </span>levy<span style="letter-spacing: -2.95pt;"> </span>income-tax<span style="letter-spacing: -.2pt;"> </span>on<span style="letter-spacing: -.45pt;"> </span>the<span style="letter-spacing: -.45pt;"> </span>same,<span style="letter-spacing: -.25pt;">
</span>and<span style="letter-spacing: -.25pt;"> </span>capital<span style="letter-spacing: -.25pt;"> </span>receipts<span style="letter-spacing: -.3pt;">
</span>which<span style="letter-spacing: -.35pt;"> </span>the<span style="letter-spacing: -.45pt;"> </span>legislature<span style="letter-spacing: -.35pt;"> </span>deliberately<span style="letter-spacing: -.25pt;"> </span>included<span style="letter-spacing: -.25pt;"> </span>in<span style="letter-spacing: -.35pt;"> </span>the<span style="letter-spacing: -2.95pt;"> </span>definition of income. In other words,
wherever the legislature intended to levy income-tax on<span style="letter-spacing: .05pt;"> </span>capital receipts or gains or something which is not in the
nature of income, the legislature<span style="letter-spacing: .05pt;"> </span>expanded
the definition of the word ‘income’ in section 2(24) of the IT Act to deem the
same<span style="letter-spacing: .05pt;"> </span>as income and introduced
separate provisions regarding charge and computation thereof in<span style="letter-spacing: .05pt;"> </span>detail.<span style="letter-spacing: -.05pt;">
</span>One such<span style="letter-spacing: .05pt;"> </span>provision<span style="letter-spacing: -.05pt;"> </span>is the<span style="letter-spacing: -.1pt;">
</span>levy<span style="letter-spacing: -.05pt;"> </span>of<span style="letter-spacing: -.1pt;"> </span>tax<span style="letter-spacing: -.1pt;"> </span>in
the<span style="letter-spacing: -.15pt;"> </span>hands of recipient of<span style="letter-spacing: -.1pt;"> </span>gifts etc.<o:p></o:p></p><p class="MsoBodyText" style="margin-top: .35pt;"><span style="font-size: 11.5pt; mso-bidi-font-size: 11.0pt;"> </span></p><p class="MsoBodyText" style="line-height: 107%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 7.0pt; margin-right: 6.75pt; margin-top: .05pt; text-align: justify;">The law is well settled that gifts received, unless received in the
course of carrying out a<span style="letter-spacing: .05pt;"> </span>salaried
employment or in the course of carrying out a business or profession, are
capital<span style="letter-spacing: .05pt;"> </span>receipts<span style="letter-spacing: -.05pt;"> </span>and are<span style="letter-spacing: -.1pt;">
</span>not<span style="letter-spacing: .1pt;"> </span>liable<span style="letter-spacing: -.1pt;"> </span>to<span style="letter-spacing: -.2pt;"> </span>tax<span style="letter-spacing: -.1pt;"> </span>as income.<o:p></o:p></p><p class="MsoBodyText" style="margin-top: .35pt;"><span style="font-size: 11.5pt; mso-bidi-font-size: 11.0pt;"> </span></p><p class="MsoBodyText" style="line-height: 107%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 7.0pt; margin-right: 6.7pt; margin-top: 0cm; text-align: justify;">Proceeding<span style="letter-spacing: -.55pt;"> </span>on<span style="letter-spacing: -.6pt;"> </span>the<span style="letter-spacing: -.5pt;"> </span>basis<span style="letter-spacing: -.65pt;"> </span>that<span style="letter-spacing: -.45pt;"> </span>a<span style="letter-spacing: -.45pt;"> </span>gift<span style="letter-spacing: -.55pt;"> </span>received<span style="letter-spacing: -.45pt;"> </span>is<span style="letter-spacing: -.65pt;"> </span>not<span style="letter-spacing: -.5pt;"> </span>liable<span style="letter-spacing: -.5pt;"> </span>to<span style="letter-spacing: -.55pt;"> </span>tax<span style="letter-spacing: -.45pt;"> </span>either<span style="letter-spacing: -.35pt;"> </span>as<span style="letter-spacing: -.55pt;"> </span>‘Income<span style="letter-spacing: -.6pt;"> </span>from<span style="letter-spacing: -.45pt;"> </span>Salaries’,<span style="letter-spacing: -2.95pt;"> </span>or<span style="letter-spacing: 1.05pt;"> </span>‘Income<span style="letter-spacing: .65pt;"> </span>from<span style="letter-spacing: .85pt;"> </span>Business<span style="letter-spacing: .95pt;"> </span>or<span style="letter-spacing: 1.0pt;"> </span>Profession’,<span style="letter-spacing: .95pt;"> </span>it<span style="letter-spacing: .9pt;"> </span>could<span style="letter-spacing: .8pt;"> </span>be<span style="letter-spacing: .85pt;"> </span>taxed<span style="letter-spacing: .8pt;"> </span>as<span style="letter-spacing: .85pt;"> </span>‘Income<span style="letter-spacing: .7pt;"> </span>from<span style="letter-spacing: .85pt;"> </span>Other<span style="letter-spacing: .9pt;"> </span>Sources’<o:p></o:p></p><p class="MsoNormal" style="line-height: 107%; margin-left: 6.0pt; text-align: justify;">under section 56(1) of the IT Act if the same is covered by any
sub-clause of section 2(24) of<span style="letter-spacing: -2.95pt;"> </span>the<span style="letter-spacing: -.1pt;"> </span>IT Act.<o:p></o:p></p><p class="MsoBodyText" style="line-height: 107%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 7.0pt; margin-right: 6.65pt; margin-top: 8.2pt; text-align: justify;">Upto September 30, 1998, gifts made were liable to payment of gift-tax in
the hands of the<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.05pt;">donor</span><span style="letter-spacing: -.7pt;"> </span><span style="letter-spacing: -.05pt;">as</span><span style="letter-spacing: -.75pt;"> </span><span style="letter-spacing: -.05pt;">per</span><span style="letter-spacing: -.75pt;"> </span><span style="letter-spacing: -.05pt;">the</span><span style="letter-spacing: -.85pt;"> </span>provisions<span style="letter-spacing: -.65pt;"> </span>of<span style="letter-spacing: -.65pt;"> </span>the<span style="letter-spacing: -.95pt;"> </span>Gift-tax<span style="letter-spacing: -.75pt;">
</span>Act,<span style="letter-spacing: -.75pt;"> </span>1958<span style="letter-spacing: -.7pt;"> </span>(“<b><span style="font-family: "Arial",sans-serif; mso-bidi-font-family: "Arial MT";">GTA</span></b>”).<span style="letter-spacing: -.75pt;"> </span>The<span style="letter-spacing: -.8pt;"> </span>charge<span style="letter-spacing: -.85pt;"> </span>of<span style="letter-spacing: -.85pt;"> </span>gift-tax<span style="letter-spacing: -.65pt;"> </span>was<span style="letter-spacing: -.75pt;"> </span>subject<span style="letter-spacing: -2.95pt;"> </span>to the detailed provisions contained in
the GTA which included various exemptions and<span style="letter-spacing: .05pt;">
</span>deemed gifts. One such provision of deemed gift was contained in section
4(1)(a) of the GTA<span style="letter-spacing: -2.95pt;"> </span>and it provided
that where property is transferred otherwise for adequate consideration, the<span style="letter-spacing: .05pt;"> </span>amount by<span style="letter-spacing: -.15pt;">
</span>which<span style="letter-spacing: -.15pt;"> </span>the<span style="letter-spacing: -.1pt;"> </span>value<span style="letter-spacing: -.05pt;"> </span>of<span style="letter-spacing: -.15pt;"> </span>the<span style="letter-spacing: -.1pt;"> </span>property<span style="letter-spacing: -.05pt;"> </span>as<span style="letter-spacing: -.05pt;"> </span>on<span style="letter-spacing: -.1pt;"> </span>the<span style="letter-spacing: -.05pt;"> </span>date<span style="letter-spacing: -.15pt;"> </span>of<span style="letter-spacing: -.15pt;"> </span>the<span style="letter-spacing: -.15pt;"> </span>transfer<span style="letter-spacing: -.05pt;">
</span>exceeds<span style="letter-spacing: -.15pt;"> </span>the<span style="letter-spacing: -.15pt;"> </span>value of<span style="letter-spacing: -2.9pt;">
</span>the<span style="letter-spacing: -.05pt;"> </span>consideration shall be<span style="letter-spacing: .1pt;"> </span>deemed<span style="letter-spacing: -.1pt;"> </span>to<span style="letter-spacing: -.1pt;"> </span>be a<span style="letter-spacing: -.15pt;"> </span>gift<span style="letter-spacing: .1pt;"> </span>by<span style="letter-spacing: -.2pt;"> </span>the<span style="letter-spacing: -.1pt;"> </span>transferor.<o:p></o:p></p><p>
<br clear="all" style="mso-special-character: line-break; page-break-before: always;" />
</p><p class="MsoNormal"><o:p> </o:p></p><p class="MsoBodyText" style="line-height: 107%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 7.0pt; margin-right: 6.75pt; margin-top: 7.9pt; text-align: justify;">The reason for giving the above example of the deemed gift here is that
even in the case of<span style="letter-spacing: .05pt;"> </span>transfer of a
property for inadequate consideration, the legislature had sought to levy
gift-tax<span style="letter-spacing: .05pt;"> </span>on the donor and did not
treat the price differential as any income in the hands of the donee.<span style="letter-spacing: .05pt;"> </span>In<span style="letter-spacing: -.15pt;"> </span>other<span style="letter-spacing: -.25pt;"> </span>words,<span style="letter-spacing: -.15pt;">
</span>the<span style="letter-spacing: -.25pt;"> </span>legislature<span style="letter-spacing: -.35pt;"> </span>proceeded<span style="letter-spacing: -.25pt;"> </span>on<span style="letter-spacing: -.2pt;"> </span>the<span style="letter-spacing: -.2pt;"> </span>basis<span style="letter-spacing: -.15pt;"> </span>that<span style="letter-spacing: -.15pt;"> </span>a<span style="letter-spacing: -.2pt;"> </span>bargain<span style="letter-spacing: -.35pt;"> </span>purchase<span style="letter-spacing: -.15pt;">
</span>(i.e.,<span style="letter-spacing: -.15pt;"> </span>purchase<span style="letter-spacing: -2.95pt;"> </span>of<span style="letter-spacing: .05pt;"> </span>a<span style="letter-spacing: -.15pt;"> </span>property<span style="letter-spacing: -.15pt;">
</span>for a<span style="letter-spacing: -.1pt;"> </span>consideration<span style="letter-spacing: -.05pt;"> </span>which<span style="letter-spacing: -.1pt;"> </span>is<span style="letter-spacing: -.15pt;"> </span>less<span style="letter-spacing: -.15pt;"> </span>than<span style="letter-spacing: -.1pt;"> </span>fair<span style="letter-spacing: -.25pt;"> </span>market<span style="letter-spacing: -.15pt;"> </span>value<span style="letter-spacing: -.1pt;"> </span>of
the<span style="letter-spacing: -.2pt;"> </span>property)<span style="letter-spacing: -.05pt;"> </span>does<span style="letter-spacing: -.05pt;"> </span>not<span style="letter-spacing: -2.9pt;"> </span>result<span style="letter-spacing: -.05pt;">
</span>in<span style="letter-spacing: -.05pt;"> </span>any<span style="letter-spacing: .1pt;"> </span>income in<span style="letter-spacing: -.1pt;"> </span>the<span style="letter-spacing: .05pt;"> </span>hands<span style="letter-spacing: -.05pt;"> </span>of
the purchaser or<span style="letter-spacing: -.05pt;"> </span>transferee.<o:p></o:p></p><p class="MsoBodyText" style="line-height: 107%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 7.0pt; margin-right: 6.75pt; margin-top: 7.95pt; text-align: justify;">Thus, a gift received (including a deemed gift) was not liable to tax as
income in the hands of<span style="letter-spacing: -2.95pt;"> </span>the donee
(unless the gift received was in the course of carrying on salaried employment
or<span style="letter-spacing: .05pt;"> </span>in the course of carrying on
business or profession) for the reason that it constituted capital<span style="letter-spacing: .05pt;"> </span>receipt in the hands of the donee. The
levy of gift-tax was abolished by the Finance (No. 2)<span style="letter-spacing: .05pt;"> </span>Act<span style="letter-spacing: .05pt;"> </span>w.e.f.<span style="letter-spacing: -.1pt;"> </span>October 01, 1998.<o:p></o:p></p><p class="MsoBodyText" style="line-height: 107%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 7.0pt; margin-right: 6.75pt; margin-top: 8.0pt; text-align: justify;">A few years down the line, the levy of gift-tax was brought back by the
Finance (No. 2) Act,<span style="letter-spacing: .05pt;"> </span>2004<span style="letter-spacing: -.3pt;"> </span>with<span style="letter-spacing: -.2pt;"> </span>effect<span style="letter-spacing: -.3pt;"> </span>from<span style="letter-spacing: -.35pt;"> </span>September<span style="letter-spacing: -.25pt;"> </span>01,<span style="letter-spacing: -.2pt;"> </span>2004,<span style="letter-spacing: -.3pt;"> </span>in<span style="letter-spacing: -.45pt;"> </span>relation<span style="letter-spacing: -.25pt;"> </span>to<span style="letter-spacing: -.5pt;"> </span>sum<span style="letter-spacing: -.3pt;"> </span>of<span style="letter-spacing: -.35pt;"> </span>money<span style="letter-spacing: -.4pt;"> </span>exceeding<span style="letter-spacing: -.3pt;">
</span>INR<span style="letter-spacing: -.25pt;"> </span>25,000<span style="letter-spacing: -2.95pt;"> </span>received<span style="letter-spacing: -.1pt;"> </span>without<span style="letter-spacing: -.2pt;"> </span>consideration<span style="letter-spacing: -.15pt;"> </span>by<span style="letter-spacing: -.1pt;"> </span>an<span style="letter-spacing: -.1pt;"> </span>individual<span style="letter-spacing: -.1pt;"> </span>of<span style="letter-spacing: -.15pt;"> </span>a<span style="letter-spacing: -.2pt;"> </span>Hindu undivided<span style="letter-spacing: -.2pt;"> </span>family.<span style="letter-spacing: -.15pt;"> </span>This<span style="letter-spacing: -.2pt;"> </span>was<span style="letter-spacing: -.05pt;"> </span>brought<span style="letter-spacing: -2.95pt;"> </span>back not as a gift-tax in the hands of
the donor, but in the form of income-tax in the hands of<span style="letter-spacing: .05pt;"> </span>the<span style="letter-spacing: -.35pt;"> </span>donee<span style="letter-spacing: -.45pt;"> </span>under<span style="letter-spacing: -.3pt;"> </span>section<span style="letter-spacing: -.5pt;"> </span>56(2)(v)<span style="letter-spacing: -.3pt;">
</span>of<span style="letter-spacing: -.45pt;"> </span>the<span style="letter-spacing: -.45pt;"> </span>IT<span style="letter-spacing: -.35pt;"> </span>Act.<span style="letter-spacing: -.45pt;"> </span>This<span style="letter-spacing: -.5pt;"> </span>was<span style="letter-spacing: -.35pt;"> </span>subject<span style="letter-spacing: -.45pt;">
</span>to<span style="letter-spacing: -.4pt;"> </span>certain<span style="letter-spacing: -.45pt;"> </span>exceptions<span style="letter-spacing: -.35pt;"> </span>like<span style="letter-spacing: -.35pt;"> </span>sum<span style="letter-spacing: -2.95pt;"> </span>of money received from<span style="letter-spacing: .05pt;"> </span>any specified relative,<span style="letter-spacing: .05pt;"> </span>on the occasion of the marriage of the<span style="letter-spacing: .05pt;"> </span>individual,<span style="letter-spacing: -.3pt;"> </span>under<span style="letter-spacing: -.2pt;"> </span>a<span style="letter-spacing: -.45pt;"> </span>will<span style="letter-spacing: -.25pt;"> </span>or<span style="letter-spacing: -.5pt;"> </span>by<span style="letter-spacing: -.25pt;"> </span>way<span style="letter-spacing: -.4pt;"> </span>of<span style="letter-spacing: -.35pt;"> </span>inheritance<span style="letter-spacing: -.45pt;"> </span>etc.<span style="letter-spacing: -.15pt;"> </span>This<span style="letter-spacing: -.5pt;"> </span>was<span style="letter-spacing: -.35pt;"> </span>done<span style="letter-spacing: -.25pt;"> </span>by<span style="letter-spacing: -.3pt;"> </span>expanding<span style="letter-spacing: -.35pt;"> </span>the<span style="letter-spacing: -.35pt;"> </span>definition<span style="letter-spacing: -2.95pt;"> </span>of<span style="letter-spacing: .05pt;"> </span>income
by<span style="letter-spacing: -.1pt;"> </span>inserting a<span style="letter-spacing: -.1pt;"> </span>specific clause<span style="letter-spacing: -.15pt;"> </span>(xiii)<span style="letter-spacing: .05pt;"> </span>in<span style="letter-spacing: -.1pt;"> </span>section<span style="letter-spacing: -.05pt;"> </span>2(24)<span style="letter-spacing: .05pt;"> </span>of<span style="letter-spacing: -.1pt;"> </span>the<span style="letter-spacing: -.1pt;"> </span>IT
Act.<o:p></o:p></p><p class="MsoBodyText" style="line-height: 107%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 7.0pt; margin-right: 6.7pt; margin-top: 7.85pt; text-align: justify;">While the above provision was first introduced in the year 2004 by
inserting section 56(2)(v),<span style="letter-spacing: .05pt;"> </span>the scope
of the same was expanded over the years multiple times by inserting section<span style="letter-spacing: .05pt;"> </span>56(2)(vi), 56(2)(vii) and 56(2)(viia), and
the present provision is contained in section 56(2)(x)<span style="letter-spacing: .05pt;"> </span>of<span style="letter-spacing: -.05pt;"> </span>the<span style="letter-spacing: -.25pt;"> </span>IT<span style="letter-spacing: -.05pt;"> </span>Act.
Consequently, section<span style="letter-spacing: -.15pt;"> </span>2(24)<span style="letter-spacing: -.15pt;"> </span>of<span style="letter-spacing: -.15pt;"> </span>the<span style="letter-spacing: -.2pt;"> </span>Act<span style="letter-spacing: -.05pt;"> </span>has<span style="letter-spacing: -.15pt;"> </span>also<span style="letter-spacing: -.2pt;"> </span>been<span style="letter-spacing: -.15pt;"> </span>amended<span style="letter-spacing: -.2pt;">
</span>to<span style="letter-spacing: -.05pt;"> </span>include<span style="letter-spacing: -.15pt;"> </span>in<span style="letter-spacing: -.2pt;"> </span>the<span style="letter-spacing: -2.95pt;"> </span>income<span style="letter-spacing: -.2pt;">
</span>‘<i><span style="font-family: "Arial",sans-serif; mso-bidi-font-family: "Arial MT";">any<span style="letter-spacing: -.25pt;"> </span>sum<span style="letter-spacing: -.2pt;"> </span>of<span style="letter-spacing: -.15pt;"> </span>money<span style="letter-spacing: -.15pt;"> </span>or<span style="letter-spacing: -.2pt;"> </span>value<span style="letter-spacing: -.25pt;"> </span>of<span style="letter-spacing: -.2pt;"> </span>property<span style="letter-spacing: -.25pt;"> </span>referred<span style="letter-spacing: -.25pt;">
</span>to<span style="letter-spacing: -.1pt;"> </span>in<span style="letter-spacing: -.35pt;"> </span>section<span style="letter-spacing: -.2pt;"> </span>56(2)(x)</span></i>’.<span style="letter-spacing: -.25pt;"> </span>It is<span style="letter-spacing: -.2pt;"> </span>relevant<span style="letter-spacing: -.25pt;"> </span>to<span style="letter-spacing: -2.95pt;"> </span>note
that while initially vide section 56(2)(v) of the IT Act, the levy was made
only with<span style="letter-spacing: .05pt;"> </span>reference to the sum of
money, now, under section 56(2)(x) of the IT Act, it stands extended<span style="letter-spacing: .05pt;"> </span>to<span style="letter-spacing: .05pt;"> </span>immovable<span style="letter-spacing: -.1pt;"> </span>properties<span style="letter-spacing: -.1pt;"> </span>and certain<span style="letter-spacing: -.15pt;"> </span>movable<span style="letter-spacing: -.1pt;"> </span>properties.<o:p></o:p></p><p class="MsoBodyText" style="margin-top: .35pt;"><span style="font-size: 11.5pt; mso-bidi-font-size: 11.0pt;"> </span></p><p class="MsoBodyText" style="line-height: 107%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 7.0pt; margin-right: 6.65pt; margin-top: 0cm; text-align: justify;">Section<span style="letter-spacing: -.2pt;"> </span>56(2)(x)<span style="letter-spacing: -.15pt;"> </span>of<span style="letter-spacing: -.25pt;"> </span>the<span style="letter-spacing: -.25pt;"> </span>IT<span style="letter-spacing: -.25pt;"> </span>Act,<span style="letter-spacing: -.25pt;"> </span>as<span style="letter-spacing: -.25pt;"> </span>it<span style="letter-spacing: -.3pt;"> </span>stands<span style="letter-spacing: -.25pt;">
</span>presently,<span style="letter-spacing: -.25pt;"> </span>provides<span style="letter-spacing: -.2pt;"> </span>that<span style="letter-spacing: -.15pt;"> </span>where<span style="letter-spacing: -.25pt;"> </span>any<span style="letter-spacing: -.15pt;"> </span>person<span style="letter-spacing: -.25pt;"> </span>receives<span style="letter-spacing: -2.9pt;">
</span>any sum of money, immovable property or movable property without
consideration or for a<span style="letter-spacing: .05pt;"> </span>consideration
which is less than stamp duty value or fair market value, then, subject to
other<span style="letter-spacing: .05pt;"> </span>provisions<span style="letter-spacing: -.25pt;"> </span>contained<span style="letter-spacing: -.35pt;"> </span>in<span style="letter-spacing: -.45pt;"> </span>section<span style="letter-spacing: -.15pt;"> </span>56(2)(x)<span style="letter-spacing: -.25pt;">
</span>of<span style="letter-spacing: -.35pt;"> </span>the<span style="letter-spacing: -.4pt;"> </span>IT<span style="letter-spacing: -.35pt;"> </span>Act,<span style="letter-spacing: -.35pt;"> </span>a<span style="letter-spacing: -.4pt;"> </span>certain<span style="letter-spacing: -.45pt;"> </span>amount<span style="letter-spacing: -.25pt;">
</span>will<span style="letter-spacing: -.25pt;"> </span>become<span style="letter-spacing: -.4pt;"> </span>taxable<span style="letter-spacing: -.45pt;">
</span>as<span style="letter-spacing: -2.95pt;"> </span>income<span style="letter-spacing: -.05pt;"> </span>in<span style="letter-spacing: -.1pt;"> </span>the<span style="letter-spacing: .05pt;"> </span>hands<span style="letter-spacing: -.05pt;"> </span>of<span style="letter-spacing: -.1pt;"> </span>the recipient<span style="letter-spacing: -.05pt;"> </span>under the<span style="letter-spacing: -.1pt;"> </span>head<span style="letter-spacing: -.05pt;"> </span>‘Income<span style="letter-spacing: -.1pt;">
</span>from<span style="letter-spacing: -.1pt;"> </span>Other Sources’.<o:p></o:p></p><p class="MsoBodyText" style="line-height: 107%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 7.0pt; margin-right: 6.75pt; margin-top: 8.0pt; text-align: justify;"><span style="letter-spacing: -.05pt;">A</span><span style="letter-spacing: -.75pt;"> </span><span style="letter-spacing: -.05pt;">question</span><span style="letter-spacing: -.7pt;"> </span><span style="letter-spacing: -.05pt;">arises</span><span style="letter-spacing: -.65pt;"> </span><span style="letter-spacing: -.05pt;">that</span><span style="letter-spacing: -.65pt;"> </span><span style="letter-spacing: -.05pt;">in</span><span style="letter-spacing: -.8pt;"> </span><span style="letter-spacing: -.05pt;">case</span><span style="letter-spacing: -.65pt;"> </span>a<span style="letter-spacing: -.7pt;"> </span>person<span style="letter-spacing: -.75pt;"> </span>receives<span style="letter-spacing: -.65pt;">
</span>a<span style="letter-spacing: -.85pt;"> </span>sum<span style="letter-spacing: -.65pt;"> </span>of<span style="letter-spacing: -.75pt;"> </span>money<span style="letter-spacing: -.65pt;"> </span>which<span style="letter-spacing: -.65pt;">
</span>is<span style="letter-spacing: -.75pt;"> </span><u>not</u><span style="letter-spacing: -.6pt;"> </span>a<span style="letter-spacing: -.7pt;"> </span>case<span style="letter-spacing: -.85pt;"> </span>of<span style="letter-spacing: -.75pt;"> </span>“without<span style="letter-spacing: -2.9pt;"> </span>consideration” (i.e., it is not a case
that no consideration flows from the recipient to the other<span style="letter-spacing: .05pt;"> </span>person),<span style="letter-spacing: -.1pt;">
</span>whether<span style="letter-spacing: -.05pt;"> </span>a<span style="letter-spacing: -.15pt;"> </span>taxability<span style="letter-spacing: .05pt;"> </span>under<span style="letter-spacing: -.1pt;"> </span>section<span style="letter-spacing: .05pt;"> </span>56(2)(x) of<span style="letter-spacing: -.15pt;"> </span>the<span style="letter-spacing: -.25pt;"> </span>IT<span style="letter-spacing: .05pt;"> </span>Act<span style="letter-spacing: -.15pt;"> </span>can<span style="letter-spacing: -.15pt;"> </span>arise<span style="letter-spacing: -.3pt;"> </span>in
the<span style="letter-spacing: -.1pt;"> </span>hands<span style="letter-spacing: -.15pt;"> </span>of<span style="letter-spacing: -.15pt;"> </span>the<o:p></o:p></p><p class="MsoBodyText" style="line-height: 106%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 7.0pt; margin-right: 6.8pt; margin-top: 4.7pt; text-align: justify;">person<span style="letter-spacing: -.6pt;"> </span>who<span style="letter-spacing: -.75pt;"> </span>receives<span style="letter-spacing: -.7pt;">
</span>the<span style="letter-spacing: -.7pt;"> </span>sum<span style="letter-spacing: -.5pt;"> </span>of<span style="letter-spacing: -.7pt;"> </span>money<span style="letter-spacing: -.6pt;"> </span>if<span style="letter-spacing: -.7pt;"> </span>the<span style="letter-spacing: -.6pt;"> </span>consideration<span style="letter-spacing: -.6pt;"> </span>given<span style="letter-spacing: -.6pt;"> </span>by<span style="letter-spacing: -.7pt;"> </span>such<span style="letter-spacing: -.75pt;"> </span>recipient<span style="letter-spacing: -.6pt;"> </span>to<span style="letter-spacing: -.7pt;"> </span>the<span style="letter-spacing: -.65pt;"> </span>other<span style="letter-spacing: -2.9pt;">
</span>person<span style="letter-spacing: -.05pt;"> </span>is<span style="letter-spacing: -.1pt;"> </span>not<span style="letter-spacing: .05pt;"> </span>commensurate<span style="letter-spacing: -.1pt;"> </span>with<span style="letter-spacing: -.15pt;"> </span>the<span style="letter-spacing: .05pt;"> </span>sum of<span style="letter-spacing: .05pt;"> </span>money
received.<o:p></o:p></p><p class="MsoBodyText" style="line-height: 107%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 7.0pt; margin-right: 6.7pt; margin-top: 8.2pt; text-align: justify;">To amplify it further, if Mr. X receives INR 500,000 from Mr. Y in
consideration of something<span style="letter-spacing: .05pt;"> </span>(which is <u>not</u>
the subject matter of charge under the head Income from Salaries or Capital<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.05pt;">Gains</span><span style="letter-spacing: -.65pt;"> </span><span style="letter-spacing: -.05pt;">or</span><span style="letter-spacing: -.75pt;"> </span><span style="letter-spacing: -.05pt;">Income</span><span style="letter-spacing: -.85pt;"> </span><span style="letter-spacing: -.05pt;">from</span><span style="letter-spacing: -.65pt;"> </span><span style="letter-spacing: -.05pt;">Business</span><span style="letter-spacing: -.65pt;"> </span><span style="letter-spacing: -.05pt;">of</span><span style="letter-spacing: -.65pt;"> </span>Profession,<span style="letter-spacing: -.65pt;"> </span>or<span style="letter-spacing: -.75pt;"> </span>as<span style="letter-spacing: -.75pt;"> </span>‘income’<span style="letter-spacing: -.65pt;">
</span>or<span style="letter-spacing: -.55pt;"> </span>‘revenue<span style="letter-spacing: -.65pt;"> </span>receipt’<span style="letter-spacing: -.8pt;">
</span>taxable<span style="letter-spacing: -.7pt;"> </span>under<span style="letter-spacing: -2.9pt;"> </span>the head Income from Other Sources under
section 56(1) of the IT Act), then, whether the<span style="letter-spacing: .05pt;"> </span>sum of money of INR 500,000 received by Mr. X will be beyond the
scope of section 56(2)(x)<span style="letter-spacing: -2.95pt;"> </span>of the IT
Act simply for the reason that it is not a case of sum of money received
without<span style="letter-spacing: .05pt;"> </span>consideration?<span style="letter-spacing: -.4pt;"> </span>Or,<span style="letter-spacing: -.35pt;"> </span>whether<span style="letter-spacing: -.3pt;"> </span>the<span style="letter-spacing: -.35pt;"> </span>tax<span style="letter-spacing: -.35pt;"> </span>authorities<span style="letter-spacing: -.35pt;"> </span>can<span style="letter-spacing: -.45pt;"> </span>examine<span style="letter-spacing: -.45pt;"> </span>the<span style="letter-spacing: -.4pt;"> </span>appropriateness,<span style="letter-spacing: -.35pt;"> </span>adequacy<span style="letter-spacing: -.35pt;">
</span>or<span style="letter-spacing: -2.95pt;"> </span>arms’<span style="letter-spacing: -.4pt;"> </span>length<span style="letter-spacing: -.2pt;"> </span>nature<span style="letter-spacing: -.45pt;"> </span>of<span style="letter-spacing: -.35pt;"> </span>the<span style="letter-spacing: -.2pt;"> </span>same,<span style="letter-spacing: -.15pt;"> </span>and<span style="letter-spacing: -.35pt;"> </span>in<span style="letter-spacing: -.35pt;"> </span>case<span style="letter-spacing: -.35pt;"> </span>they<span style="letter-spacing: -.35pt;"> </span>reach<span style="letter-spacing: -.35pt;"> </span>to<span style="letter-spacing: -.35pt;"> </span>a<span style="letter-spacing: -.35pt;"> </span>conclusion<span style="letter-spacing: -.25pt;"> </span>that<span style="letter-spacing: -.25pt;"> </span>the<span style="letter-spacing: -.2pt;"> </span>value<span style="letter-spacing: -.35pt;"> </span>of<span style="letter-spacing: -.25pt;"> </span>what<span style="letter-spacing: -2.95pt;">
</span>is<span style="letter-spacing: -.25pt;"> </span>given<span style="letter-spacing: -.2pt;"> </span>up<span style="letter-spacing: -.35pt;"> </span>by<span style="letter-spacing: -.2pt;"> </span>Mr.<span style="letter-spacing: -.25pt;"> </span>X<span style="letter-spacing: -.35pt;"> </span>is<span style="letter-spacing: -.2pt;"> </span>say<span style="letter-spacing: -.25pt;"> </span>INR<span style="letter-spacing: -.25pt;"> </span>300,000,<span style="letter-spacing: -.25pt;"> </span>can<span style="letter-spacing: -.3pt;"> </span>they<span style="letter-spacing: -.35pt;"> </span>tax<span style="letter-spacing: -.25pt;"> </span>the<span style="letter-spacing: -.2pt;"> </span>excess<span style="letter-spacing: -.25pt;">
</span>sum<span style="letter-spacing: -.25pt;"> </span>of<span style="letter-spacing: -.1pt;"> </span>money<span style="letter-spacing: -.15pt;"> </span>received<span style="letter-spacing: -.25pt;"> </span>(i.e.,<span style="letter-spacing: -2.95pt;">
</span>INR 500,000 minus INR 300,000) in the hands of Mr. X as income under
section 56(2)(x) of<span style="letter-spacing: .05pt;"> </span>the<span style="letter-spacing: -.1pt;"> </span>IT Act?<o:p></o:p></p><p>
<br clear="all" style="mso-special-character: line-break; page-break-before: always;" />
</p><p class="MsoNormal"><o:p> </o:p></p><p class="MsoBodyText" style="line-height: 106%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 7.0pt; margin-right: 6.7pt; margin-top: 7.9pt; text-align: justify;">For addressing this issue, let us first have a look at the words used in
section 56(2)(x) of the<span style="letter-spacing: .05pt;"> </span>IT<span style="letter-spacing: .05pt;"> </span>Act which<span style="letter-spacing: -.15pt;">
</span>read as<span style="letter-spacing: -.1pt;"> </span>follows:<o:p></o:p></p><p class="MsoNormal" style="line-height: 106%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 7.0pt; margin-right: 6.75pt; margin-top: 8.2pt; text-align: justify;"><i><span style="font-family: "Arial",sans-serif; mso-bidi-font-family: "Arial MT";">“Where a person receives, in any previous
year, from any person or persons on or after the<span style="letter-spacing: .05pt;"> </span>1st<span style="letter-spacing: .05pt;"> </span>day of<span style="letter-spacing: .1pt;"> </span>April, 2017,—<o:p></o:p></span></i></p><p class="MsoBodyText" style="margin-top: .1pt;"><i><span style="font-family: "Arial",sans-serif; font-size: 10.5pt; mso-bidi-font-family: "Arial MT"; mso-bidi-font-size: 11.0pt; mso-hansi-font-family: "Arial MT";"> </span></i></p><p class="MsoListParagraph" style="line-height: 106%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 1.0cm; margin-right: 6.6pt; margin-top: 0cm; mso-list: l0 level1 lfo2; tab-stops: 28.1pt; text-indent: -21.4pt;"><!--[if !supportLists]--><i><span style="letter-spacing: -.1pt;">(a)<span style="font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;"> </span></span></i><!--[endif]--><i>any<span style="letter-spacing: .7pt;"> </span><u>sum<span style="letter-spacing: .8pt;"> </span>of<span style="letter-spacing: .75pt;"> </span>money</u>,<span style="letter-spacing: .7pt;"> </span><b>without<span style="letter-spacing: .65pt;"> </span>consideration</b>,<span style="letter-spacing: .6pt;"> </span>the<span style="letter-spacing: .75pt;"> </span>aggregate<span style="letter-spacing: .65pt;"> </span>value<span style="letter-spacing: .75pt;"> </span>of<span style="letter-spacing: .65pt;"> </span>which<span style="letter-spacing: .6pt;"> </span>exceeds<span style="letter-spacing: .75pt;"> </span>fifty<span style="letter-spacing: -2.9pt;"> </span>thousand<span style="letter-spacing: -.15pt;"> </span>rupees,<span style="letter-spacing: .05pt;">
</span>the<span style="letter-spacing: .05pt;"> </span>whole<span style="letter-spacing: -.1pt;"> </span>of<span style="letter-spacing: .05pt;"> </span>the
aggregate<span style="letter-spacing: -.25pt;"> </span>value<span style="letter-spacing: .05pt;"> </span>of<span style="letter-spacing: .05pt;"> </span>such<span style="letter-spacing: -.05pt;"> </span>sum;<o:p></o:p></i></p><p class="MsoBodyText" style="margin-top: .2pt;"><i><span style="font-family: "Arial",sans-serif; font-size: 10.5pt; mso-bidi-font-family: "Arial MT"; mso-bidi-font-size: 11.0pt; mso-hansi-font-family: "Arial MT";"> </span></i></p><p class="MsoListParagraph" style="margin-left: 29.6pt; mso-list: l0 level1 lfo2; tab-stops: 29.65pt; text-indent: -22.65pt;"><!--[if !supportLists]--><i><span style="letter-spacing: -.1pt;">(b)<span style="font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;"> </span></span></i><!--[endif]--><i>any <u>immovable<span style="letter-spacing: -.25pt;"> </span>property</u>,-<o:p></o:p></i></p><p class="MsoListParagraph" style="line-height: 105%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 49.6pt; margin-right: 6.7pt; margin-top: 9.1pt; mso-list: l0 level2 lfo2; tab-stops: 48.9pt; text-align: justify; text-indent: -21.25pt;"><!--[if !supportLists]--><i><span style="letter-spacing: -.1pt;">(A)<span style="font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;"> </span></span></i><!--[endif]--><b><i>without<span style="letter-spacing: -.3pt;"> </span></i></b><i>consideration,<span style="letter-spacing: -.15pt;"> </span>the<span style="letter-spacing: -.15pt;"> </span>stamp<span style="letter-spacing: -.2pt;"> </span>duty<span style="letter-spacing: -.35pt;"> </span>value<span style="letter-spacing: -.15pt;">
</span>of<span style="letter-spacing: -.15pt;"> </span>which<span style="letter-spacing: -.2pt;"> </span>exceeds<span style="letter-spacing: -.3pt;">
</span>fifty<span style="letter-spacing: -.25pt;"> </span>thousand<span style="letter-spacing: -.15pt;"> </span>rupees,<span style="letter-spacing: -2.95pt;">
</span>the<span style="letter-spacing: -.05pt;"> </span>stamp<span style="letter-spacing: -.05pt;"> </span>duty value<span style="letter-spacing: -.05pt;"> </span>of<span style="letter-spacing: -.1pt;"> </span>such<span style="letter-spacing: .05pt;"> </span>property;<o:p></o:p></i></p><p class="MsoListParagraph" style="line-height: 106%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 49.6pt; margin-right: 6.7pt; margin-top: 8.45pt; mso-list: l0 level2 lfo2; tab-stops: 49.15pt; text-align: justify; text-indent: -21.25pt;"><!--[if !supportLists]--><i><span style="letter-spacing: -.1pt;">(B)<span style="font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;"> </span></span></i><!--[endif]--><b><i>for<span style="letter-spacing: .05pt;"> </span>a<span style="letter-spacing: .05pt;"> </span>consideration</i></b><i>,<span style="letter-spacing: .05pt;"> </span>the<span style="letter-spacing: .05pt;"> </span>stamp duty<span style="letter-spacing: .05pt;"> </span>value<span style="letter-spacing: .05pt;"> </span>of<span style="letter-spacing: .05pt;"> </span>such<span style="letter-spacing: .05pt;"> </span>property<span style="letter-spacing: .05pt;"> </span>as<span style="letter-spacing: .05pt;"> </span>exceeds<span style="letter-spacing: .05pt;"> </span>such<span style="letter-spacing: -2.95pt;"> </span>consideration,<span style="letter-spacing: -.05pt;"> </span>….<o:p></o:p></i></p><p class="MsoListParagraph" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 29.05pt; margin-right: 0cm; margin-top: 8.1pt; mso-list: l0 level1 lfo2; tab-stops: 29.1pt; text-indent: -22.1pt;"><!--[if !supportLists]--><i><span style="letter-spacing: -.1pt;">(c)<span style="font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;"> </span></span></i><!--[endif]--><i>any<span style="letter-spacing: -.1pt;"> </span><u>property,<span style="letter-spacing: -.05pt;"> </span>other<span style="letter-spacing: -.15pt;">
</span>than<span style="letter-spacing: -.1pt;"> </span>immovable<span style="letter-spacing: -.1pt;"> </span>property</u>,-<o:p></o:p></i></p><p class="MsoListParagraph" style="line-height: 106%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 49.6pt; margin-right: 6.6pt; margin-top: 9.05pt; mso-list: l0 level2 lfo2; tab-stops: 49.6pt; text-align: justify; text-indent: -21.25pt;"><!--[if !supportLists]--><i><span style="letter-spacing: -.1pt;">(A)<span style="font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;"> </span></span></i><!--[endif]--><b><i>without<span style="letter-spacing: .05pt;"> </span></i></b><i>consideration,<span style="letter-spacing: .05pt;"> </span>the<span style="letter-spacing: .05pt;"> </span>aggregate<span style="letter-spacing: .05pt;">
</span>fair<span style="letter-spacing: .05pt;"> </span>market<span style="letter-spacing: .05pt;"> </span>value<span style="letter-spacing: .05pt;"> </span>of<span style="letter-spacing: .05pt;"> </span>which<span style="letter-spacing: .05pt;"> </span>exceeds<span style="letter-spacing: .05pt;"> </span>fifty<span style="letter-spacing: .05pt;"> </span>thousand<span style="letter-spacing: -.15pt;"> </span>rupees,<span style="letter-spacing: .05pt;">
</span>the whole<span style="letter-spacing: -.1pt;"> </span>of the aggregate<span style="letter-spacing: -.3pt;"> </span>fair<span style="letter-spacing: -.05pt;"> </span>market
value<span style="letter-spacing: -.05pt;"> </span>of such<span style="letter-spacing: -.1pt;"> </span>property;<o:p></o:p></i></p><p class="MsoListParagraph" style="line-height: 106%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 49.6pt; margin-right: 6.7pt; margin-top: 8.35pt; mso-list: l0 level2 lfo2; tab-stops: 50.8pt; text-align: justify; text-indent: -21.25pt;"><!--[if !supportLists]--><i><span style="letter-spacing: -.1pt;">(B)<span style="font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;"> </span></span></i><!--[endif]--><b><i><span style="letter-spacing: -.05pt;">for</span><span style="letter-spacing: -.85pt;"> </span><span style="letter-spacing: -.05pt;">a</span><span style="letter-spacing: -.6pt;"> </span><span style="letter-spacing: -.05pt;">consideration</span><span style="letter-spacing: -.8pt;"> </span></i></b><i>which<span style="letter-spacing: -.7pt;"> </span>is<span style="letter-spacing: -.7pt;"> </span>less<span style="letter-spacing: -.6pt;"> </span>than<span style="letter-spacing: -.8pt;"> </span>the<span style="letter-spacing: -.85pt;"> </span>aggregate<span style="letter-spacing: -.65pt;"> </span>fair<span style="letter-spacing: -.75pt;"> </span>market<span style="letter-spacing: -.75pt;"> </span>value<span style="letter-spacing: -.6pt;"> </span>of<span style="letter-spacing: -.7pt;"> </span>the<span style="letter-spacing: -.6pt;"> </span>property<span style="letter-spacing: -2.95pt;"> </span>by an amount exceeding fifty thousand
rupees, the aggregate fair market value of<span style="letter-spacing: .05pt;"> </span>such<span style="letter-spacing: .05pt;"> </span>property as exceeds such<span style="letter-spacing: -.05pt;"> </span>consideration…”<o:p></o:p></i></p><p class="MsoBodyText"><i><span style="font-family: "Arial",sans-serif; font-size: 12.0pt; mso-bidi-font-family: "Arial MT"; mso-bidi-font-size: 11.0pt; mso-hansi-font-family: "Arial MT";"> </span></i></p><p class="MsoNormal" style="line-height: 107%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 7.0pt; margin-right: 6.75pt; margin-top: 8.1pt; text-align: justify;">It would appear from the above that sub-clause (a) of section 56(2)(x) of
the IT Act (which<span style="letter-spacing: .05pt;"> </span>deals with receipt
of “<i><span style="font-family: "Arial",sans-serif; mso-bidi-font-family: "Arial MT";">sum of money</span></i>”) is worded
differently from sub-clause (b) (which deals<span style="letter-spacing: .05pt;">
</span>with “<i><span style="font-family: "Arial",sans-serif; mso-bidi-font-family: "Arial MT";">immovable property</span></i>”)
and sub-clause (c) (which deals with “<i><span style="font-family: "Arial",sans-serif; mso-bidi-font-family: "Arial MT";">any
property, other than<span style="letter-spacing: .05pt;"> </span>immovable
property</span></i>”).<o:p></o:p></p><p class="MsoBodyText" style="margin-top: .45pt;"><span style="font-size: 10.0pt; mso-bidi-font-size: 11.0pt;"> </span></p><p class="MsoBodyText" style="line-height: 107%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 7.0pt; margin-right: 6.65pt; margin-top: 0cm; text-align: justify;">It is relevant to note that while the expression ‘property’ has a very
wide meaning, for the<span style="letter-spacing: .05pt;"> </span>purposes<span style="letter-spacing: -.3pt;"> </span>of<span style="letter-spacing: -.15pt;"> </span>section<span style="letter-spacing: -.35pt;"> </span>56(2)(x)<span style="letter-spacing: -.25pt;">
</span>of<span style="letter-spacing: -.25pt;"> </span>the<span style="letter-spacing: -.35pt;"> </span>IT<span style="letter-spacing: -.4pt;"> </span>Act,<span style="letter-spacing: -.25pt;"> </span>it<span style="letter-spacing: -.35pt;"> </span>has<span style="letter-spacing: -.35pt;"> </span>been<span style="letter-spacing: -.2pt;"> </span>assigned<span style="letter-spacing: -.25pt;"> </span>a<span style="letter-spacing: -.25pt;"> </span>specific<span style="letter-spacing: -.35pt;"> </span>meaning<span style="letter-spacing: -.25pt;">
</span>as<span style="letter-spacing: -.35pt;"> </span>follows:<o:p></o:p></p><p class="MsoBodyText" style="margin-top: .4pt;"><span style="font-size: 11.5pt; mso-bidi-font-size: 11.0pt;"> </span></p><p class="MsoNormal" style="margin-left: 7.0pt; text-align: justify;"><i><span style="font-family: "Arial",sans-serif; mso-bidi-font-family: "Arial MT";">“property’<span style="letter-spacing: -.15pt;">
</span>means<span style="letter-spacing: -.15pt;"> </span>the<span style="letter-spacing: -.1pt;"> </span>following capital<span style="letter-spacing: -.05pt;"> </span>asset<span style="letter-spacing: -.1pt;"> </span>of<span style="letter-spacing: -.05pt;"> </span>the<span style="letter-spacing: -.15pt;"> </span>assessee,<span style="letter-spacing: .05pt;"> </span>namely:—<o:p></o:p></span></i></p><p class="MsoListParagraph" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 49.55pt; margin-right: 0cm; margin-top: 8.95pt; mso-list: l1 level1 lfo1; tab-stops: 49.55pt 49.6pt;"><!--[if !supportLists]--><i><span style="letter-spacing: -.15pt;">(i)<span style="font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span></i><!--[endif]--><i>immovable<span style="letter-spacing: -.15pt;"> </span>property<span style="letter-spacing: -.15pt;">
</span>being land or building<span style="letter-spacing: -.05pt;"> </span>or
both;<o:p></o:p></i></p><p class="MsoBodyText" style="margin-top: .55pt;"><i><span style="font-family: "Arial",sans-serif; font-size: 8.5pt; mso-bidi-font-family: "Arial MT"; mso-bidi-font-size: 11.0pt; mso-hansi-font-family: "Arial MT";"> </span></i></p><p class="MsoListParagraph" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 49.55pt; margin-right: 0cm; margin-top: 4.7pt; mso-list: l1 level1 lfo1; tab-stops: 49.55pt 49.6pt;"><!--[if !supportLists]--><i><span style="letter-spacing: -.15pt;">(ii)<span style="font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span></i><!--[endif]--><i>shares
and<span style="letter-spacing: -.1pt;"> </span>securities;<o:p></o:p></i></p><p class="MsoBodyText"><i><span style="font-family: "Arial",sans-serif; mso-bidi-font-family: "Arial MT"; mso-hansi-font-family: "Arial MT";"> </span></i></p><p class="MsoListParagraph" style="mso-list: l1 level1 lfo1; tab-stops: 49.6pt 49.65pt; text-indent: -28.5pt;"><!--[if !supportLists]--><i><span style="letter-spacing: -.15pt;">(iii)<span style="font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span></i><!--[endif]--><i>jewellery;<o:p></o:p></i></p><p class="MsoBodyText"><i><span style="font-family: "Arial",sans-serif; mso-bidi-font-family: "Arial MT"; mso-hansi-font-family: "Arial MT";"> </span></i></p><p class="MsoListParagraph" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 49.55pt; margin-right: 0cm; margin-top: .05pt; mso-list: l1 level1 lfo1; tab-stops: 49.55pt 49.6pt;"><!--[if !supportLists]--><i><span style="letter-spacing: -.15pt;">(iv)<span style="font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span></i><!--[endif]--><i>archaeological<span style="letter-spacing: -.1pt;"> </span>collections;<o:p></o:p></i></p><p class="MsoBodyText"><i><span style="font-family: "Arial",sans-serif; mso-bidi-font-family: "Arial MT"; mso-hansi-font-family: "Arial MT";"> </span></i></p><p class="MsoListParagraph" style="mso-list: l1 level1 lfo1; tab-stops: 49.6pt 49.65pt; text-indent: -28.5pt;"><!--[if !supportLists]--><i><span style="letter-spacing: -.15pt;">(v)<span style="font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span></i><!--[endif]--><i>drawings;<o:p></o:p></i></p><p class="MsoBodyText"><i><span style="font-family: "Arial",sans-serif; mso-bidi-font-family: "Arial MT"; mso-hansi-font-family: "Arial MT";"> </span></i></p><p class="MsoListParagraph" style="margin-left: 49.55pt; mso-list: l1 level1 lfo1; tab-stops: 49.55pt 49.6pt;"><!--[if !supportLists]--><i><span style="letter-spacing: -.15pt;">(vi)<span style="font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span></i><!--[endif]--><i>paintings;<o:p></o:p></i></p><p class="MsoBodyText" style="margin-top: .5pt;"><i><span style="font-family: "Arial",sans-serif; font-size: 10.5pt; mso-bidi-font-family: "Arial MT"; mso-bidi-font-size: 11.0pt; mso-hansi-font-family: "Arial MT";"> </span></i></p><p class="MsoListParagraph" style="margin-left: 49.55pt; mso-list: l1 level1 lfo1; tab-stops: 49.55pt 49.6pt;"><!--[if !supportLists]--><i><span style="letter-spacing: -.15pt;">(vii)<span style="font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span></i><!--[endif]--><i>sculptures;<o:p></o:p></i></p><p class="MsoBodyText"><i><span style="font-family: "Arial",sans-serif; mso-bidi-font-family: "Arial MT"; mso-hansi-font-family: "Arial MT";"> </span></i></p><p class="MsoListParagraph" style="mso-list: l1 level1 lfo1; tab-stops: 49.65pt; text-indent: -28.5pt;"><!--[if !supportLists]--><i><span style="letter-spacing: -.15pt;">(viii)<span style="font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span></i><!--[endif]--><i>any
work<span style="letter-spacing: -.1pt;"> </span>of<span style="letter-spacing: .05pt;"> </span>art;<span style="letter-spacing: -.1pt;"> </span>or<o:p></o:p></i></p><p class="MsoBodyText" style="margin-top: .05pt;"><i><span style="font-family: "Arial",sans-serif; mso-bidi-font-family: "Arial MT"; mso-hansi-font-family: "Arial MT";"> </span></i></p><p class="MsoListParagraph" style="margin-left: 49.55pt; mso-list: l1 level1 lfo1; tab-stops: 49.55pt 49.6pt;"><!--[if !supportLists]--><i><span style="letter-spacing: -.15pt;">(ix)<span style="font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span></i><!--[endif]--><i>bullion;”<o:p></o:p></i></p><p class="MsoBodyText" style="margin-top: .2pt;"><i><span style="font-family: "Arial",sans-serif; font-size: 17.0pt; mso-bidi-font-family: "Arial MT"; mso-bidi-font-size: 11.0pt; mso-hansi-font-family: "Arial MT";"> </span></i></p><p>
<span style="font-family: "Arial MT",sans-serif; font-size: 11.0pt; mso-ansi-language: EN-US; mso-bidi-font-family: "Arial MT"; mso-bidi-language: AR-SA; mso-fareast-font-family: "Arial MT"; mso-fareast-language: EN-US;"><br clear="all" style="mso-special-character: line-break; page-break-before: always;" />
</span>
</p><p class="MsoNormal"><o:p> </o:p></p><p class="MsoBodyText" style="line-height: 107%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 7.0pt; margin-right: 6.7pt; margin-top: 0cm; text-align: justify;">Thus,<span style="letter-spacing: -.4pt;"> </span>in<span style="letter-spacing: -.45pt;"> </span>view<span style="letter-spacing: -.25pt;"> </span>of<span style="letter-spacing: -.35pt;"> </span>the<span style="letter-spacing: -.4pt;"> </span>above-referred<span style="letter-spacing: -.55pt;"> </span>specific<span style="letter-spacing: -.5pt;">
</span>definition<span style="letter-spacing: -.2pt;"> </span>of<span style="letter-spacing: -.35pt;"> </span>the<span style="letter-spacing: -.4pt;"> </span>expression<span style="letter-spacing: -.35pt;"> </span>“property”,<span style="letter-spacing: -.45pt;"> </span>the<span style="letter-spacing: -.35pt;"> </span>“sum<span style="letter-spacing: -.35pt;"> </span>of<span style="letter-spacing: -2.95pt;"> </span>money”<span style="letter-spacing: -.15pt;"> </span>is<span style="letter-spacing: -.35pt;"> </span>not<span style="letter-spacing: -.25pt;"> </span>considered<span style="letter-spacing: -.25pt;"> </span>as<span style="letter-spacing: -.25pt;"> </span>property<span style="letter-spacing: -.1pt;"> </span>for<span style="letter-spacing: -.3pt;"> </span>the<span style="letter-spacing: -.25pt;"> </span>purposes<span style="letter-spacing: -.05pt;">
</span>of<span style="letter-spacing: -.05pt;"> </span>section<span style="letter-spacing: -.2pt;"> </span>56(2)(x)<span style="letter-spacing: -.2pt;">
</span>of<span style="letter-spacing: -.15pt;"> </span>the<span style="letter-spacing: -.25pt;"> </span>IT<span style="letter-spacing: -.3pt;"> </span>Act.<span style="letter-spacing: -.15pt;"> </span>In<span style="letter-spacing: -.2pt;"> </span>any<span style="letter-spacing: -2.95pt;"> </span>case,<span style="letter-spacing: -.5pt;">
</span>the<span style="letter-spacing: -.65pt;"> </span>“sum<span style="letter-spacing: -.5pt;"> </span>of<span style="letter-spacing: -.5pt;"> </span>money”<span style="letter-spacing: -.35pt;"> </span>has<span style="letter-spacing: -.5pt;"> </span>been<span style="letter-spacing: -.5pt;"> </span>dealt<span style="letter-spacing: -.45pt;"> </span>with<span style="letter-spacing: -.55pt;"> </span>specifically<span style="letter-spacing: -.4pt;"> </span>by<span style="letter-spacing: -.35pt;"> </span>sub-clause<span style="letter-spacing: -.45pt;"> </span>(a)<span style="letter-spacing: -.65pt;"> </span>of<span style="letter-spacing: -.35pt;"> </span>section<span style="letter-spacing: -.45pt;">
</span>56(2)(x)<span style="letter-spacing: -2.95pt;"> </span>of the<span style="letter-spacing: -.1pt;"> </span>IT<span style="letter-spacing: .1pt;"> </span>Act.<o:p></o:p></p><p class="MsoBodyText" style="line-height: 106%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 7.0pt; margin-right: 6.7pt; margin-top: 8.0pt; text-align: justify;">Accordingly, the scope of sub-clause (a) of section 56(2)(x) of the IT
Act is required to be<span style="letter-spacing: .05pt;"> </span>examined only
on the basis of the language used therein without considering the language<span style="letter-spacing: .05pt;"> </span>used<span style="letter-spacing: -.05pt;"> </span>in
sub-clause<span style="letter-spacing: -.1pt;"> </span>(b)<span style="letter-spacing: -.05pt;"> </span>and<span style="letter-spacing: .05pt;"> </span>(c) thereof<span style="letter-spacing: .1pt;"> </span>which<span style="letter-spacing: -.15pt;"> </span>deal
with<span style="letter-spacing: -.1pt;"> </span>‘property’.<o:p></o:p></p><p class="MsoBodyText" style="line-height: 107%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 7.0pt; margin-right: 6.65pt; margin-top: 8.35pt; text-align: justify;">Sub-clause (a) of section 56(2)(x) of the IT Act dealing with “sum of
money” covers only the<span style="letter-spacing: .05pt;"> </span>cases where
the sum of money is received without consideration. In a case wherein the sum<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.05pt;">of</span><span style="letter-spacing: -.55pt;"> </span><span style="letter-spacing: -.05pt;">money</span><span style="letter-spacing: -.65pt;"> </span><span style="letter-spacing: -.05pt;">is</span><span style="letter-spacing: -.85pt;"> </span>received<span style="letter-spacing: -.7pt;">
</span>‘for<span style="letter-spacing: -.75pt;"> </span>consideration’,<span style="letter-spacing: -.65pt;"> </span>the<span style="letter-spacing: -.7pt;"> </span>aspect<span style="letter-spacing: -.65pt;"> </span>whether<span style="letter-spacing: -.75pt;">
</span>the<span style="letter-spacing: -.7pt;"> </span>consideration<span style="letter-spacing: -.6pt;"> </span>paid<span style="letter-spacing: -.7pt;"> </span>is<span style="letter-spacing: -.65pt;"> </span>adequate<span style="letter-spacing: -2.9pt;">
</span>or inadequate, is not covered by section 56(2)(x) of the IT Act for the
recipient of “sum of<span style="letter-spacing: .05pt;"> </span>money”.<o:p></o:p></p><p class="MsoBodyText" style="margin-top: .3pt;"><span style="font-size: 11.5pt; mso-bidi-font-size: 11.0pt;"> </span></p><p class="MsoBodyText" style="line-height: 107%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 7.0pt; margin-right: 6.7pt; margin-top: 0cm; text-align: justify;">A<span style="letter-spacing: -.35pt;"> </span>few<span style="letter-spacing: -.4pt;"> </span>examples<span style="letter-spacing: -.35pt;"> </span>of<span style="letter-spacing: -.1pt;"> </span>such<span style="letter-spacing: -.35pt;"> </span>cases<span style="letter-spacing: -.35pt;"> </span>may<span style="letter-spacing: -.35pt;"> </span>be<span style="letter-spacing: -.3pt;"> </span>where<span style="letter-spacing: -.45pt;"> </span>the<span style="letter-spacing: -.45pt;"> </span>sum<span style="letter-spacing: -.2pt;"> </span>of<span style="letter-spacing: -.35pt;"> </span>money<span style="letter-spacing: -.25pt;">
</span>is<span style="letter-spacing: -.35pt;"> </span>received<span style="letter-spacing: -.2pt;"> </span>as<span style="letter-spacing: -.35pt;"> </span>compensation,<span style="letter-spacing: -2.95pt;"> </span>or where the sum of money is received
from ex-spouse in consideration of ‘agreement to live<span style="letter-spacing: -2.95pt;"> </span>apart’ etc.<o:p></o:p></p><p class="MsoBodyText" style="line-height: 107%; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 7.0pt; margin-right: 6.6pt; margin-top: 8.0pt; text-align: justify;">Having said so, the taxpayers should be mindful of not using this as a
‘device’ to transfer the<span style="letter-spacing: .05pt;"> </span><span style="letter-spacing: -.05pt;">money.</span><span style="letter-spacing: -.65pt;">
</span><span style="letter-spacing: -.05pt;">The</span><span style="letter-spacing: -.7pt;"> </span><span style="letter-spacing: -.05pt;">bonafide</span><span style="letter-spacing: -.65pt;"> </span>of<span style="letter-spacing: -.65pt;"> </span>a<span style="letter-spacing: -.85pt;"> </span>transaction,<span style="letter-spacing: -.6pt;"> </span>commercial<span style="letter-spacing: -.75pt;"> </span>justification,<span style="letter-spacing: -.65pt;"> </span>practical<span style="letter-spacing: -.65pt;"> </span>relevance,<span style="letter-spacing: -.65pt;"> </span>etc.<span style="letter-spacing: -.6pt;"> </span>should<span style="letter-spacing: -2.95pt;">
</span>necessarily<span style="letter-spacing: -.05pt;"> </span>be<span style="letter-spacing: -.05pt;"> </span>kept<span style="letter-spacing: -.1pt;"> </span>in<span style="letter-spacing: -.1pt;"> </span>mind<span style="letter-spacing: .05pt;"> </span>supported
by suitable<span style="letter-spacing: -.05pt;"> </span>documentation.<o:p></o:p></p><p class="MsoBodyText"><span style="font-size: 10.0pt; mso-bidi-font-size: 11.0pt;"> </span></p><p>
</p><p class="MsoBodyText" style="margin-top: .45pt;"><span style="font-size: 7.0pt; mso-bidi-font-size: 11.0pt;"> </span></p>taxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.com0tag:blogger.com,1999:blog-5341269791906881059.post-54882888283528161582024-02-21T21:36:00.001+05:302024-02-21T21:36:06.441+05:30HC holds transfer of development rights by landowner to developer under JDA is exigible to GST<p> <span style="background-color: white; font-size: 10.5pt;">This Tax Alert summarizes
a recent judgement of the Telangana High Court (HC)</span><span style="background-color: white; font-size: 10.5pt;"> on whether
transfer of development rights pursuant to joint development agreement (JDA)
can be treated as outright sale of land and hence, outside the purview of Goods
and Services Tax (GST).</span></p><p style="background: white; line-height: 12.0pt; mso-line-height-rule: exactly;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-size: 10.5pt;">
<br />
Taxpayer is engaged in construction of properties and entered into JDA for
development of land in exchange of undivided share of land in the developed
property. It filed a writ petition before the HC challenging the levy of GST on
transfer of development rights by landowners to developer.<br />
<br />
Key observations of the HC are:</span><span></span></p><a name='more'></a><span style="color: #2e2e38; font-size: 13.5pt;"><o:p></o:p></span><p></p>
<ul type="disc">
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l1 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">Mere
execution of JDA for development of land by itself would not mean that the
right, title and ownership of the property or a portion of that property
stands transferred in the name of the developer.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l1 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">The
title of the property stands vested with the landowners and it is only by
way of a separate conveyance deed, that too, after the completion of
development activity, the undivided share of land to the extent the
developer is entitled could be transferred.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l1 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">Thus,
the contention that JDA eventually results in sale of land is incorrect
and misleading.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l1 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">Further,
Notification No. 4/2018 - Central tax (Rate) merely deals with time of
supply of transfer of development rights which always was taxable since
the introduction of GST. Taking Article 246A of the Constitution and
extraordinary powers of the GST Council into consideration, the challenge
to the Notification can safely held to be devoid of merits.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
</ul>
<p style="background: white; line-height: 12pt;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-size: 10.5pt;">Basis above, HC held that transfer of development
rights is not akin to sale of land and hence, exigible to GST. <br />
<br />
<strong><span style="font-family: "Arial",sans-serif;">Comments:</span></strong></span><span style="color: #2e2e38; font-size: 13.5pt;"><o:p></o:p></span></p>
<ul type="disc">
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo2; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">Since
the issue of taxability of development rights is pending before other HCs
also, the matter may not be said to be settled with this ruling. Further,
the same could be challenged from the perspective of constitutional power.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo2; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">It
is relevant to note that the definition of ‘land’ under other statutes
like Land Acquisition Act, 1894 and Andhra Pradesh Land Grabbing
(Prohibition) Act, 1982 was not referred. In the case of Safiya Bee v.
Mohd. Vajahath Hussain, Supreme Court observed that ‘land’ includes
benefits to arise out of the land considering definition of land as per
section 2(c) of Andhra Pradesh Land Grabbing (Prohibition) Act, 1982.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo2; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">Considering
the provisions of the erstwhile service tax law, Chandigarh CESTAT had
held that service tax was not payable on transfer of development rights
[2019-TIOL-1514-CESTAT-CHD].</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo2; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">It
is pertinent to note that w.e.f. 1 April 2019, exemption has been provided
to supply of development rights by landowner to developer for construction
of residential apartments subject to certain conditions.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
</ul>taxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.com0tag:blogger.com,1999:blog-5341269791906881059.post-50066074063838666272024-02-21T21:33:00.005+05:302024-02-21T21:33:43.984+05:30CBDT issues order giving effect to the Budget proposal of remitting petty tax demands<p> <span style="background-color: white; font-size: 10.5pt;">This Tax Alert summarizes
a recent Order </span><span style="background-color: white; font-size: 10.5pt;"> issued by the Central Board of Direct Taxes
(CBDT), on remission or extinguishment of small tax demands outstanding as on
31 January 2024 under the Income Tax Act 1961 (ITA) or Wealth Tax Act, 1957 or
Gift Tax Act 1958, (referred as relevant Acts).</span></p><p style="background: white; line-height: 12.0pt; mso-line-height-rule: exactly;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-size: 10.5pt;">
<br />
This Order gives effect to the proposal announced by Finance Minister (FM) in
her speech for Interim Budget 2024-25, withdrawing direct tax demands up to
INR25000 pertaining to the period up to tax year 2009-10 and up to INR10000 for
tax years 2010-11 to 2014-15.<br />
<br />
The Order, <em><span style="font-family: "Arial",sans-serif;">inter-alia</span></em>,
provides conditions/guidelines for withdrawal of outstanding demands as under
and it is proposed that the same shall be implemented by Centralized Processing
Centre (CPC) preferably within two months:</span><span></span></p><a name='more'></a><span style="color: #2e2e38; font-size: 13.5pt;"><o:p></o:p></span><p></p>
<ul type="disc">
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">Tax
demands will include principal amount of tax, interest, surcharge, cess,
penalty or fees. </span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">The
maximum ceiling limit for remitting the demands qua a taxpayer will be
INR100000.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">Remission/extinguishment
of demand will be undertaken in a chronological manner for the tax years
and fraction of demand shall be ignored.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">No
interest shall be levied for delay in payment of demands.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">Demands
do not include demands raised under withholding tax or tax collection at
source provisions of the ITA. </span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
</ul>
<span style="background: white; font-family: Arial, sans-serif; font-size: 10.5pt;">Withdrawal/remission of tax
demands under this Order will not give any right to the taxpayers to claim
credit or refund of waived amount and will not grant immunity from any ongoing
litigation</span>taxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.com0tag:blogger.com,1999:blog-5341269791906881059.post-64588669094215859822024-02-20T19:45:00.004+05:302024-02-20T19:45:18.355+05:30HC holds service tax not leviable on recovery of expenses by Venture Capital Fund from the contributors<p> <span style="background-color: white; font-size: 10.5pt;">This Tax Alert summarizes
a recent judgement of the Karnataka High Court (HC)</span><span style="background-color: white; font-size: 10.5pt;">. The issue
relates to applicability of service tax on recovery of various expenses by
Venture Capital Fund (VCF) from the contributors.<span></span></span></p><a name='more'></a><p></p><p style="background: white; line-height: 12.0pt; mso-line-height-rule: exactly;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-size: 10.5pt;">
<br />
Earlier, Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Bangalore upheld levy of service tax on such recovery under the head ‘banking
and other financial services’ (BOFS) defined u/s 65 (105)(zm) of Finance Act,
1994 (Finance Act). Aggrieved, the taxpayer filed an appeal
before the HC. <br />
<br />
The key observations of HC are:</span><span style="color: #2e2e38; font-size: 13.5pt;"><o:p></o:p></span></p>
<ul type="disc">
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l1 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">The
definition clauses of each statute must be read with the object and
purpose of that statute only as intended by the legislature. Various
statutes such as SEBI, GST, IBC recognize ‘trust’ as a person whereas the
Finance Act does not. <br />
Hence, CESTAT has erred in holding the petitioner to be a juridical
person.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l1 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">The
petitioner acts as a ‘pass through’, wherein funds from contributors are
consolidated and invested by the investment manager.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l1 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">The
contributors and the trust cannot be dissected as two different entities
because, it is an admitted fact that contributors investment is held in
trust by the fund and it is invested as per the advice of investment
manager.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l1 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">Therefore,
the doctrine of mutuality must apply in the instant case and there can be
no service to self. </span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
</ul>
<p style="background: white; line-height: 12pt;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-size: 10.5pt;">Basis above, HC quashed service tax liability on
expense recovered by VCF.<br />
<br />
<strong><span style="font-family: "Arial",sans-serif;">Comments:</span></strong></span><span style="color: #2e2e38; font-size: 13.5pt;"><o:p></o:p></span></p>
<ul type="disc">
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo2; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">This
ruling provides much need relief and clarity to the financial services
sector.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo2; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">While
the ruling deals with the matter in case of Venture Capital Fund, it is
likely to impact other similar investment pooling vehicle structures, both
onshore and offshore. </span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo2; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">Basis
the change in the provisions under GST, the applicability of this ruling
may need to be analysed.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
</ul>taxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.com0tag:blogger.com,1999:blog-5341269791906881059.post-25763555548033347582024-02-17T21:55:00.004+05:302024-02-17T21:55:40.838+05:30Recovery of Taxes within 1 month of the Order<p> <span style="background-color: white; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px;">The GST Authorities are initiating recovery proceedings by issuing 'proceedings u/s 78' alongwith the Order and require the taxpayer to pay the entire demand within 1 month from the date of the Order. </span></p><br style="background-color: white; box-sizing: inherit; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px; line-height: inherit !important;" /><span style="background-color: white; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px;">As per Section 78, recovery can commence only after the expiry of 3 months. However, proviso to Sec 78 allows the officer to recover the tax dues within a period of less than 3 months if the officer considers it expedient in the interest of the revenue .... for reasons to be recorded in writing.</span><br style="background-color: white; box-sizing: inherit; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px; line-height: inherit !important;" /><br style="background-color: white; box-sizing: inherit; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px; line-height: inherit !important;" /><span style="background-color: white; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px;">The reason given for initiating recovery</span><br style="background-color: white; box-sizing: inherit; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px; line-height: inherit !important;" /><span style="background-color: white; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px;">1. As per Audit Report, liability detected is Rs ____ but taxpayer failed to discharge the same</span><br style="background-color: white; box-sizing: inherit; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px; line-height: inherit !important;" /><span style="background-color: white; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px;">2. Intimation in DRC 01A issued but taxpayer failed to discharge the tax</span><br style="background-color: white; box-sizing: inherit; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px; line-height: inherit !important;" /><span style="background-color: white; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px;">3. SCN issued but taxpayer failed to discharge the tax</span><br style="background-color: white; box-sizing: inherit; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px; line-height: inherit !important;" /><span style="background-color: white; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px;">4. Order passed confirming the liability</span><br style="background-color: white; box-sizing: inherit; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px; line-height: inherit !important;" /><span style="background-color: white; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px;">5. Considering the time already given to the taxpayer from audit to till date, liability to be discharged by the taxpayer within 30 days of the Order</span><br style="background-color: white; box-sizing: inherit; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px; line-height: inherit !important;" /><br style="background-color: white; box-sizing: inherit; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px; line-height: inherit !important;" /><span style="background-color: white; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px;">Such practices of recovery even before expiry of statutory period of 3 months should be strongly opposed.</span><br style="background-color: white; box-sizing: inherit; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px; line-height: inherit !important;" /><br style="background-color: white; box-sizing: inherit; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px; line-height: inherit !important;" /><span style="background-color: white; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px;">1. Taxpayer has 3 months time to file an appeal and once the appeal is filed upon payment of pre-deposit, the recovery proceedings for the balance amount shall be deemed to be stayed [Sec 107(7)]</span><br style="background-color: white; box-sizing: inherit; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px; line-height: inherit !important;" /><br style="background-color: white; box-sizing: inherit; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px; line-height: inherit !important;" /><span style="background-color: white; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px;">2. The time taken from issuance of audit report to date of order is for finalization of tax liability and not time given to taxpayer to discharge liability</span><br style="background-color: white; box-sizing: inherit; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px; line-height: inherit !important;" /><span style="background-color: white; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px;"> </span><br style="background-color: white; box-sizing: inherit; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px; line-height: inherit !important;" /><span style="background-color: white; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px;">3. Proviso to Section 78 can be used in exceptional circumstances say cases where the officer believes that the taxpayer may be a fly by night operator</span><br style="background-color: white; box-sizing: inherit; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px; line-height: inherit !important;" /><br style="background-color: white; box-sizing: inherit; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px; line-height: inherit !important;" /><span style="background-color: white; color: rgba(0, 0, 0, 0.9); font-family: -apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif; font-size: 14px;">4. Factors like - Number of years in business and investment made in the business should also be taken into consideration by the officer before taking any action under proviso to Sec 78 </span><span><a name='more'></a></span>taxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.com0tag:blogger.com,1999:blog-5341269791906881059.post-27384684412864381852024-02-17T21:24:00.003+05:302024-02-17T21:24:55.953+05:30Changes in ITR 6 applicable to companies:<p> <span style="background-color: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt;">CBDT
has notified Income-tax Return Form 6 for the Assessment Year 2024-25, vide
Notification No. 16/2024, dated 24-01-2024 Changes made have been explained
below:</span></p><p class="MsoNormal"><span style="font-family: "Segoe UI",sans-serif; font-size: 10.5pt; line-height: 107%;">
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">1. Details of Legal Entity Identifier (LEI): The
company is required to furnish the LEI details if it is seeking a refund of Rs.
50 crores or more.</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">2. New Schedule 115TD: Any fund or institution
approved under Section 10(23C) or registered under Section 12AB is liable to
pay additional income tax on the accreted income, arising on conversion into a
non-charitable form.</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">3. CGAS: Schedule-Schedule CG has been modified to
gather more information pertaining to sums deposited in the Capital Gains
Accounts scheme (CGAS).</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">4. Disclosure of donation to political parties
(Sec 80GGC): Disclosure of additional information has to be made, beyond just
the amount eligible for deduction U/S 80GGC, such as contribution amount,
transaction number, IFSC code, etc.</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">5. Disclosure for eligible start ups: New Schedule
seeks details with respect to the deductions claimed by companies under Section
80-IAC such as date of incorporation, nature of business, certificate number
from Inter Ministerial board of certification, first year of deduction, amount
of deduction in CY.</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">6. Offshore banking unit or IFSC: Additional
disclosures have to be made in respect of the same.</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">7. MSME disallowance: A new column is inserted
under Part A-OI (Other Information) to disclose the sum payable to Micro or
small enterprises beyond the specified time limit per the MSMED Act.</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">8. Online games: Schedule OS has been amended to
disclose income by way of winning from online games chargeable under Section
115BBJ.</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">9. Due date of filing ITR: The taxpayer is
required to select the applicable due date for filing the return from the
provided dropdown options.</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">10. UDIN: Companies are now required to furnish
the acknowledgement number of the audit report and the UDIN.</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">11. MSME registration number: The company is
required to provide the registration number allotted as per the Micro, Small
and Medium Enterprises Development Act, 2006.</span></span><br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<br style="box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important;" />
<span style="background: white;"><span style="color: rgba(0, 0, 0, 0.9);">12. Reason for tax audit under Section 44AB: New
ITR-6 seeks reasons for tax audit under Section 44AB.</span></span></span><span></span></p><a name='more'></a><span><!--more--></span><o:p></o:p><p></p>taxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.com0tag:blogger.com,1999:blog-5341269791906881059.post-38543176696783132822024-02-08T20:20:00.001+05:302024-02-08T20:20:08.741+05:30HC holds post-supply discount given by manufacturer is not includible in dealer’s value of supply as subsidy<p> <span style="background-color: white; font-size: 10.5pt;">This Tax Alert summarizes
a recent judgement of the Madras High Court (HC)</span><sup style="background-color: white;">[1]</sup><span style="background-color: white; font-size: 10.5pt;">.The issue
involved was whether the post-supply discount given by manufacturer is to be
included as subsidy while computing value of supply in the hands of dealer.</span></p><p style="background: white; line-height: 12.0pt; mso-line-height-rule: exactly;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-size: 10.5pt;">
<br />
Assessee, a dealer, was directed by the manufacturer to further supply mobile
phone to the customer at a discounted price. The assessee was compensated by
the manufacturer for the discount amount through credit note. Revenue passed an
order demanding GST from the dealer treating such post-supply discount given by
manufacturer as subsidy.<br />
<br />
Section 15(2)(e) of the Central Goods and Services Tax Act, 2017 (CGST Act)
provides for inclusion of subsidies linked to price, excluding Central
Government/ State Government subsidies, in the value of supply.<br />
<br />
The key observations of HC are:</span><span></span></p><a name='more'></a><span style="color: #2e2e38; font-size: 13.5pt;"><o:p></o:p></span><p></p>
<ul type="disc">
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l1 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">Section
15(2)(e) will come into play only when a part of the consideration for the
supply is subsidized by a third-party.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l1 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">The
subsidy will get embedded into the “transaction value” only if the subsidy
is given by a third- party and is disguised as a discount.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l1 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">Further,
Section 15(3)(b) of the CGST Act is relevant only for determining the
transaction value of the supplier where discount is offered to a recipient
after the supply is affected.<br />
Thus, the discount offered to the assessee can impact only the transaction
value of the manufacturer. For transaction value of the supply made by
assessee, the price which has been actually paid or payable for the supply
will be considered.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l1 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">Where
the manufacturer offers discounts to assessee, such discount cannot form
part of the transaction value of further supply by assessee to its
customer.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
</ul>
<p class="MsoNormal" style="line-height: 12.0pt; mso-line-height-rule: exactly;"><span style="font-family: Arial, sans-serif; font-size: 10.5pt;">Accordingly, HC held that such post-supply
discount is not to be included as subsidy while computing value of supply in
the hands of dealer.</span><span style="color: #2e2e38; font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"> </span><span style="font-family: Arial, sans-serif; font-size: 10.5pt;"><br />
<br />
<strong>Comments</strong></span><span style="color: #2e2e38; font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"> <o:p></o:p></span></p>
<ul type="disc">
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo2; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">The ruling provides
much needed clarity to the industry, especially the retail sector where
such practice of post-supply discount is most prevalent.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo2; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">It is relevant to
note that earlier, Government had issued a Circular to clarify the
taxability of post-supply discount. However, the same was subsequently
withdrawn.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
</ul>
<p style="line-height: 12.0pt; mso-line-height-rule: exactly;"><sup><span style="background: white; font-size: 10.5pt;">[1] </span></sup><span style="background: white; font-size: 8pt;">TS-32-HC(MAD)-2024-GST</span><span style="color: #2e2e38; font-size: 13.5pt;"><o:p></o:p></span></p>
taxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.com0tag:blogger.com,1999:blog-5341269791906881059.post-81676267074456605142024-02-08T19:56:00.005+05:302024-02-08T19:56:57.129+05:30RBI Monetary Policy - 8th Feb'2024<p> </p><p class="MsoNormal"><b><u><span lang="EN-IN" style="font-family: "Calibri body"; mso-ansi-language: EN-IN;">Key Highlights:<o:p></o:p></span></u></b></p><ol start="1" style="margin-top: 0cm;" type="1">
<li class="MsoListParagraph" style="margin-left: 0cm; mso-list: l0 level1 lfo1;"><span lang="EN-IN" style="font-family: "Calibri body"; mso-ansi-language: EN-IN; mso-fareast-font-family: "Times New Roman";">RBI kept the interest rates unchanged with the
stance at ‘Withdrawal of Accommodation’.<o:p></o:p></span></li>
<li class="MsoListParagraph" style="margin-left: 0cm; mso-list: l0 level1 lfo1;"><span lang="EN-IN" style="font-family: "Calibri body"; mso-ansi-language: EN-IN; mso-fareast-font-family: "Times New Roman";">The FY24 inflation forecasts were kept unchanged
at 5.4%. However, the GDP forecast was revised upwards at 7.3% citing
buoyant macroeconomic indicators and strong consumer demand. </span><o:p></o:p></li>
<li class="MsoListParagraph" style="margin-left: 0cm; mso-list: l0 level1 lfo1;">Throwing water on the
stance change expectations, Mr. Das highlighted that even though FY25 CPI
forecast is 4.5%,<span lang="EN-IN"> the CPI inflation target
continues to be 4.0%.<span><a name='more'></a></span></span><o:p></o:p></li>
</ol><p class="MsoListParagraph"><span lang="EN-IN" style="font-family: "Calibri body"; mso-ansi-language: EN-IN;"> </span></p><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: 49.1pt; mso-padding-alt: 0cm 0cm 0cm 0cm; mso-yfti-tbllook: 1184; width: 539px;">
<tbody><tr style="height: 17.35pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td colspan="3" style="background: #203764; border: solid black 1.0pt; height: 17.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 404.2pt;" width="539">
<p align="center" class="MsoNormal" style="text-align: center;"><b><span style="color: white; font-size: 12.0pt; mso-fareast-language: EN-IN;">CPI and GDP
Forecast<o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 17.35pt; mso-yfti-irow: 1;">
<td style="background: #E2EFDA; border-top: none; border: solid black 1.0pt; height: 17.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 134.7pt;" width="180">
<p class="MsoNormal"><span style="font-size: 12pt;"> <o:p></o:p></span></p>
</td>
<td style="background: #E2EFDA; border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 17.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 134.7pt;" width="180">
<p align="center" class="MsoNormal" style="text-align: center;"><b><span style="font-size: 12pt;">CPI<o:p></o:p></span></b></p>
</td>
<td style="background: #E2EFDA; border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 17.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 134.8pt;" width="180">
<p align="center" class="MsoNormal" style="text-align: center;"><b><span style="font-size: 12pt;">GDP<o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 17.35pt; mso-yfti-irow: 2;">
<td style="border-top: none; border: solid black 1.0pt; height: 17.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 134.7pt;" width="180">
<p align="center" class="MsoNormal" style="text-align: center;"><b><span style="color: #000099; font-size: 12.0pt; mso-fareast-language: EN-IN;">FY24<o:p></o:p></span></b></p>
</td>
<td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 17.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 134.7pt;" width="180">
<p align="center" class="MsoNormal" style="text-align: center;"><b><span style="color: #000099; font-size: 12.0pt; mso-fareast-language: EN-IN;">5.4<o:p></o:p></span></b></p>
</td>
<td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 17.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 134.8pt;" width="180">
<p align="center" class="MsoNormal" style="text-align: center;"><b><span style="color: #000099; font-size: 12.0pt; mso-fareast-language: EN-IN;">7.3<o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 17.35pt; mso-yfti-irow: 3;">
<td style="border-top: none; border: solid black 1.0pt; height: 17.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 134.7pt;" width="180">
<p align="center" class="MsoNormal" style="text-align: center;"><span style="font-size: 12pt;">FY25<o:p></o:p></span></p>
</td>
<td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 17.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 134.7pt;" width="180">
<p align="center" class="MsoNormal" style="text-align: center;"><span style="font-size: 12pt;">4.5<o:p></o:p></span></p>
</td>
<td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 17.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 134.8pt;" width="180">
<p align="center" class="MsoNormal" style="text-align: center;"><span style="font-size: 12pt;">7.0<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 17.35pt; mso-yfti-irow: 4;">
<td style="border-top: none; border: solid black 1.0pt; height: 17.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 134.7pt;" width="180">
<p align="center" class="MsoNormal" style="text-align: center;"><span style="font-size: 12pt;">Q1 FY25<o:p></o:p></span></p>
</td>
<td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 17.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 134.7pt;" width="180">
<p align="center" class="MsoNormal" style="text-align: center;"><span style="font-size: 12pt;">5.0<o:p></o:p></span></p>
</td>
<td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 17.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 134.8pt;" width="180">
<p align="center" class="MsoNormal" style="text-align: center;"><span style="font-size: 12pt;">7.2<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 17.35pt; mso-yfti-irow: 5;">
<td style="border-top: none; border: solid black 1.0pt; height: 17.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 134.7pt;" width="180">
<p align="center" class="MsoNormal" style="text-align: center;"><span style="font-size: 12pt;">Q2 FY25<o:p></o:p></span></p>
</td>
<td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 17.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 134.7pt;" width="180">
<p align="center" class="MsoNormal" style="text-align: center;"><span style="font-size: 12pt;">4.0<o:p></o:p></span></p>
</td>
<td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 17.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 134.8pt;" width="180">
<p align="center" class="MsoNormal" style="text-align: center;"><span style="font-size: 12pt;">6.8<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 17.35pt; mso-yfti-irow: 6;">
<td style="border-top: none; border: solid black 1.0pt; height: 17.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 134.7pt;" width="180">
<p align="center" class="MsoNormal" style="text-align: center;"><span style="font-size: 12pt;">Q3 FY25<o:p></o:p></span></p>
</td>
<td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 17.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 134.7pt;" valign="bottom" width="180">
<p align="center" class="MsoNormal" style="text-align: center;"><span style="font-size: 12pt;">4.6<o:p></o:p></span></p>
</td>
<td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 17.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 134.8pt;" valign="bottom" width="180">
<p align="center" class="MsoNormal" style="text-align: center;"><span style="font-size: 12pt;">7.0<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 17.35pt; mso-yfti-irow: 7; mso-yfti-lastrow: yes;">
<td style="border-top: none; border: solid black 1.0pt; height: 17.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 134.7pt;" width="180">
<p align="center" class="MsoNormal" style="text-align: center;"><span style="font-size: 12pt;">Q4 FY25<o:p></o:p></span></p>
</td>
<td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 17.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 134.7pt;" valign="bottom" width="180">
<p align="center" class="MsoNormal" style="text-align: center;"><span style="font-size: 12pt;">4.7<o:p></o:p></span></p>
</td>
<td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; height: 17.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 134.8pt;" valign="bottom" width="180">
<p align="center" class="MsoNormal" style="text-align: center;"><span style="font-size: 12pt;">6.9<o:p></o:p></span></p>
</td>
</tr>
</tbody></table><p class="MsoListParagraph"><span lang="EN-IN" style="font-family: "Calibri body"; mso-ansi-language: EN-IN;"> </span></p><ol start="4" style="margin-top: 0cm;" type="1">
<li class="MsoListParagraph" style="margin-left: 0cm; mso-list: l0 level1 lfo1;"><span lang="EN-IN" style="font-family: "Calibri body"; mso-ansi-language: EN-IN; mso-fareast-font-family: "Times New Roman";">RBI’s outlook on growth front remains positive.
Inflations continues to remain above RBI’s tolerance band of 4-6%, driven
by volatile vegetable prices.<o:p></o:p></span></li>
</ol><p class="MsoListParagraph"><span lang="EN-IN" style="font-family: "Calibri body"; mso-ansi-language: EN-IN;"> </span></p><ol start="5" style="margin-top: 0cm;" type="1">
<li class="MsoListParagraph" style="margin-left: 0cm; mso-list: l0 level1 lfo1;"><b><span lang="EN-IN" style="font-family: "Calibri body"; mso-ansi-language: EN-IN; mso-fareast-font-family: "Times New Roman";">Liquidity: <o:p></o:p></span></b></li>
<ol start="1" style="margin-top: 0cm;" type="a">
<li class="MsoListParagraph" style="margin-left: 0cm; mso-list: l0 level2 lfo1;"><b><span lang="EN-IN" style="font-family: "Calibri body"; mso-ansi-language: EN-IN; mso-fareast-font-family: "Times New Roman";">“Systemic liquidity turned
into deficit in September 2023 after a gap of four-and-a-half years. But
after adjusting for government cash balances, potential liquidity in the
banking system is still in surplus,” </span></b><span lang="EN-IN" style="font-family: "Calibri body"; mso-ansi-language: EN-IN; mso-fareast-font-family: "Times New Roman";">Mr.Das said.<b><o:p></o:p></b></span></li>
<li class="MsoListParagraph" style="margin-left: 0cm; mso-list: l0 level2 lfo1;"><span lang="EN-IN" style="font-family: "Calibri body"; mso-ansi-language: EN-IN; mso-fareast-font-family: "Times New Roman";">RBI would continue to be
prudent in the liquidity management. The deficit since December is due to
a confluence of seasonal and ad-hoc macro factors<b>.<o:p></o:p></b></span></li>
</ol>
</ol><p class="MsoListParagraph" style="margin-left: 72.0pt;"><b><span lang="EN-IN" style="font-family: "Calibri body"; mso-ansi-language: EN-IN;"> </span></b></p><p>
</p><ol start="6" style="margin-top: 0cm;" type="1">
<li class="MsoListParagraph" style="margin-left: 0cm; mso-list: l0 level1 lfo1;"><b><span lang="EN-IN" style="font-family: "Calibri body"; mso-ansi-language: EN-IN; mso-fareast-font-family: "Times New Roman";">RBI’s fresh Acknowledgments:<o:p></o:p></span></b></li>
<ol start="1" style="margin-top: 0cm;" type="a">
<li class="MsoListParagraph" style="margin-left: 0cm; mso-list: l0 level2 lfo1;"><span lang="EN-IN" style="font-family: "Calibri body"; mso-ansi-language: EN-IN; mso-fareast-font-family: "Times New Roman";">Gov Das emphasised that the
public debt to GDP ratio (esp. in Advanced Economies) is raising serious
concerns, with global debt to GDP ratio expected to reach 100% by 2030.<o:p></o:p></span></li>
<li class="MsoListParagraph" style="margin-left: 0cm; mso-list: l0 level2 lfo1;"><span lang="EN-IN" style="font-family: "Calibri body"; mso-ansi-language: EN-IN; mso-fareast-font-family: "Times New Roman";">However, unlike other nations,
India might avoid this concern. As highlighted in the Interim budget,
Indian Govt. is focussed on Fiscal consolidation, targeting to reduce its
fiscal deficit to below 4.5% of GDP by 2025-26.<o:p></o:p></span></li>
</ol>
</ol>taxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.com0tag:blogger.com,1999:blog-5341269791906881059.post-27156413159405268672024-02-07T17:44:00.004+05:302024-02-07T17:44:29.837+05:30Delhi HC upholds constitutional validity of anti-profiteering provisions under GST<p> <span style="background-color: white; font-size: 10.5pt;">This Tax Alert summarizes
a recent ruling of the Delhi High Court (HC)</span><span style="background-color: white; font-size: 10.5pt;"> upholding the
constitutional validity of anti-profiteering provision under the Central Goods
and Services Tax Act, 2017 (CGST Act).<span></span></span></p><a name='more'></a><p></p><p style="background: white; line-height: 12.0pt; mso-line-height-rule: exactly;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-size: 10.5pt;">HC observed that:</span><span style="color: #2e2e38; font-size: 13.5pt;"><o:p></o:p></span></p>
<ul type="disc">
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">Article
246A of the Constitution empowers the Parliament and Legislature to make
laws ‘with respect to’ goods and services tax. The expression “with
respect to” is of wide amplitude and thus, the law making power with
regard to GST includes all ancillary, incidental and necessary matters.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">Section
171 is not to be looked at as a price control measure but is to be seen to
be directly connected with the objectives of the GST regime. </span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">As
per Rule 126, National Anti-profiteering Authority (NAA) ‘may determine’
the methodology and not ‘prescribe’ it. Thus, so long as the methodology
determined by NAA is fair and reasonable, objection cannot be raised that
the specifics of the methodology adopted are not prescribed.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">Mandate
of price reduction cannot be tampered with by the supplier by substituting
the benefit with any other form such as increase in volume or weight,
supply of additional or free material, or festival discount.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">If
Legislature chooses not to provide for a right to appeal against an order
of NAA, it cannot be a ground to declare an enactment as unconstitutional.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">Section
164 gives power to the Government to make rules for carrying out
provisions of the Act and in particular to provide for penalty.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">Time
limit provided for furnishing of report by DGAP is directory in nature.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
</ul>
<p style="background: white; line-height: 12pt;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-size: 10.5pt;"><br />
Accordingly, HC upheld the constitutional validity of the anti-profiteering
provisions under CGST Act. <br />
<br />
<strong><span style="font-family: "Arial",sans-serif;">Comments</span></strong></span><span style="color: #2e2e38; font-size: 13.5pt;"><o:p></o:p></span></p>
<ul type="disc">
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l1 level1 lfo2; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">While
the anti-profiteering provision is held constitutional, the NAA orders are
still open to challenge on ground of unreasonableness or for not adopting
appropriate methodology for computing profiteering.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l1 level1 lfo2; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">For
real estate sector, the Court observed that the methodology adopted by NAA
is flawed. Those who are impacted basis the orders passed by NAA may have
to wait for the Court to consider and adopt any particular methodology
while setting aside such orders for re-computation of price. </span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l1 level1 lfo2; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">The
ruling reiterates several settled principles like non-requirement of
judicial member in the performance of quasi-judicial functions, vested
right of appeal etc.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
</ul>taxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.com0tag:blogger.com,1999:blog-5341269791906881059.post-45943992580613428682024-02-06T23:01:00.003+05:302024-02-06T23:01:27.169+05:30DO YOU KNOW UNDER COMPANIES ACT.<p><br /></p><p class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">Sharing video recording of minutes with director is
discretion of the Chairman and Company Secretary; though such director can
always inspect the same at the company's registered office<span></span></span></p><a name='more'></a> <o:p></o:p><p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">Statutory Auditors should always look into minutes books
while evaluating appropriateness of going concern assumption </span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span class="white-space-pre"><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;"> </span></span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">MD or WTD of a company
can not be appointed as CFO of such company<span class="white-space-pre">.</span></span><span class="white-space-pre"><o:p></o:p></span></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">Loan taken by a company from LLP is not exempted from the
definition of deposits. </span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span class="white-space-pre"><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;"> </span></span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">One individual can not
be appointed as CFO cum MD of the company<span class="white-space-pre"> </span></span><span class="white-space-pre"><o:p></o:p></span></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">Independent directors can even be paid profit related
commission.</span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">Compensation for loss of managerial office is at the
discretion of the Board.</span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">Approval of financial statements (and not the books of
account) is what is required to be done by the Board under section 134 </span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">Even Board of Directors has the powers to remove a director</span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">The Independent Directors are different from non executive
directors</span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">One director malafidely creating obstacles or impediments in
functioning of the Board is breach of his duties towards the company</span><span style="border: var(--artdeco-reset-base-border-zero); box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important; margin: var(--artdeco-reset-base-margin-zero); outline: var(--artdeco-reset-base-outline-zero); padding: var(--artdeco-reset-base-padding-zero); vertical-align: var(--artdeco-reset-base-vertical-align-baseline);"> </span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">Subsidiary company always owes accountability towards the
holding company despite being autonomous in it's functioning</span><span style="border: var(--artdeco-reset-base-border-zero); box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important; margin: var(--artdeco-reset-base-margin-zero); outline: var(--artdeco-reset-base-outline-zero); padding: var(--artdeco-reset-base-padding-zero); vertical-align: var(--artdeco-reset-base-vertical-align-baseline);"> </span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span class="white-space-pre"><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;"> </span></span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;"> It is not mandatory that sitting fees must be
paid to independent directors</span><span class="white-space-pre"><span style="border: var(--artdeco-reset-base-border-zero); box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important; margin: var(--artdeco-reset-base-margin-zero); outline: var(--artdeco-reset-base-outline-zero); padding: var(--artdeco-reset-base-padding-zero); vertical-align: var(--artdeco-reset-base-vertical-align-baseline);"> </span></span><span class="white-space-pre"></span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">Unfair obstruction of proceedings at the Board Meeting or
Committee Meeting by any director impacts his performance evaluation</span><o:p></o:p></p><p>
<span style="border: var(--artdeco-reset-base-border-zero); box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important; margin: var(--artdeco-reset-base-margin-zero); outline: var(--artdeco-reset-base-outline-zero); padding: var(--artdeco-reset-base-padding-zero); vertical-align: var(--artdeco-reset-base-vertical-align-baseline);">
<span style="border: var(--artdeco-reset-base-border-zero); box-sizing: inherit; line-height: inherit !important; margin: var(--artdeco-reset-base-margin-zero); outline: var(--artdeco-reset-base-outline-zero); padding: var(--artdeco-reset-base-padding-zero); vertical-align: var(--artdeco-reset-base-vertical-align-baseline);">
<span style="border: var(--artdeco-reset-base-border-zero); box-sizing: inherit; line-height: inherit !important; margin: var(--artdeco-reset-base-margin-zero); outline: var(--artdeco-reset-base-outline-zero); padding: var(--artdeco-reset-base-padding-zero); vertical-align: var(--artdeco-reset-base-vertical-align-baseline);">
<span style="border: var(--artdeco-reset-base-border-zero); box-sizing: inherit; line-height: inherit !important; margin: var(--artdeco-reset-base-margin-zero); outline: var(--artdeco-reset-base-outline-zero); padding: var(--artdeco-reset-base-padding-zero); vertical-align: var(--artdeco-reset-base-vertical-align-baseline);">
<span style="border: var(--artdeco-reset-base-border-zero); box-sizing: inherit; line-height: inherit !important; margin: var(--artdeco-reset-base-margin-zero); outline: var(--artdeco-reset-base-outline-zero); padding: var(--artdeco-reset-base-padding-zero); vertical-align: var(--artdeco-reset-base-vertical-align-baseline);"></span></span></span></span></span></p><p class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="background: white; color: black; font-family: "Segoe UI",sans-serif; font-size: 10.5pt; line-height: 107%; mso-color-alt: windowtext;">Ensuring compliance of Ind AS is one of the monitoring
responsibility of Audit Committee</span><o:p></o:p></p>taxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.com0tag:blogger.com,1999:blog-5341269791906881059.post-30823836286610131752024-02-06T22:57:00.004+05:302024-02-06T22:57:33.639+05:30DO YOU KNOW UNDER IND AS<p> </p><p class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span class="white-space-pre"><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;"> </span></span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">The definitions for
asset and liability are different from the ones given under the Ind AS
Conceptual Framework<span class="white-space-pre"> </span></span><span class="white-space-pre"><o:p></o:p></span></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">The evaluation of liability as "trade payable" has
to be done in accordance with Ind AS 37<span></span></span></p><a name='more'></a><o:p></o:p><p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">Depreciation is to be based upon useful life and not economic
life</span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">information contained in the minutes book is vital for Ind AS
1 disclosures.</span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">while evaluating category of financial instruments, the
information contained in minutes books needs to be collated with the
requirements of Ind AS 109. </span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;"> Transaction price
could itself be the fair value; </span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;"> Revenue from contracts
with customers could result in corresponding trade receivables or contract
assets; </span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;"> Lease arrangements are
different from licensing agreements;</span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">Amendments as to "material accounting policy
information" warrants the entities to evaluate their existing accounting
policies.</span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">Internal Controls over Financial Reporting are not the same
as Internal Control System</span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">Ind AS disclosures are the most "taken for granted"
segments in qualitative financial reporting.</span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">Under Schedule III of the Companies Act, 2013, the
materiality benchmarking is for both expenses and incomes.</span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">The third balance sheet concept is not there in Accounting
Standards.</span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">The word "document" as defined in the Companies
Act, 2013 does include "minutes of the meetings" as its component. </span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span class="white-space-pre"><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;"> </span></span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">Inter corporate loans,
guarantees and investments need to be disclosed separately<span class="white-space-pre">.</span></span><span class="white-space-pre"><o:p></o:p></span></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">Deposits and deemed deposits are required to be disclosed
separately. </span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span class="white-space-pre"><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;"> </span></span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">Books of account are not
dealt by Ind AS but are dealt by the Companies Act<span class="white-space-pre"> </span></span><span class="white-space-pre"><o:p></o:p></span></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">Financial Statements are dealt both by Ind AS and the
Companies Act</span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span class="white-space-pre"><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;"> </span></span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">Reporting under Ind AS
Framework or AS Framework is primarily the responsibility of the Board of
Directors</span><span class="white-space-pre"><span style="border: var(--artdeco-reset-base-border-zero); box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important; margin: var(--artdeco-reset-base-margin-zero); outline: var(--artdeco-reset-base-outline-zero); padding: var(--artdeco-reset-base-padding-zero); vertical-align: var(--artdeco-reset-base-vertical-align-baseline);"> </span><span style="border: var(--artdeco-reset-base-border-zero); box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important; margin: var(--artdeco-reset-base-margin-zero); outline: var(--artdeco-reset-base-outline-zero); padding: var(--artdeco-reset-base-padding-zero); vertical-align: var(--artdeco-reset-base-vertical-align-baseline);"> </span></span><span class="white-space-pre"><o:p></o:p></span></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">There is a difference between useful life and economic life</span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">The expression property, plant and equipment needs to be
carefully evaluated in case of 'enabling assets'</span><o:p></o:p></p><p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span class="white-space-pre"><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;"> </span></span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">Service concession
arrangements can be accounted for on intangible asset model or receivables
model or both</span><span class="white-space-pre"><span style="border: var(--artdeco-reset-base-border-zero); box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important; margin: var(--artdeco-reset-base-margin-zero); outline: var(--artdeco-reset-base-outline-zero); padding: var(--artdeco-reset-base-padding-zero); vertical-align: var(--artdeco-reset-base-vertical-align-baseline);"> </span></span><span class="white-space-pre"></span><o:p></o:p></p><p class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span class="white-space-pre"><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;"> </span></span></span><!--[endif]--><span style="background: white; font-family: "Segoe UI", sans-serif; font-size: 10.5pt; line-height: 107%;">Hedge accounting is not
mandatory</span><span class="white-space-pre"><span style="border: var(--artdeco-reset-base-border-zero); box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important; margin: var(--artdeco-reset-base-margin-zero); outline: var(--artdeco-reset-base-outline-zero); padding: var(--artdeco-reset-base-padding-zero); vertical-align: var(--artdeco-reset-base-vertical-align-baseline);"> </span></span><span class="white-space-pre"></span><o:p></o:p></p><p>
<span style="border: var(--artdeco-reset-base-border-zero); box-sizing: inherit; color: rgba(0, 0, 0, 0.9); line-height: inherit !important; margin: var(--artdeco-reset-base-margin-zero); outline: var(--artdeco-reset-base-outline-zero); padding: var(--artdeco-reset-base-padding-zero); vertical-align: var(--artdeco-reset-base-vertical-align-baseline);">
<span style="border: var(--artdeco-reset-base-border-zero); box-sizing: inherit; line-height: inherit !important; margin: var(--artdeco-reset-base-margin-zero); outline: var(--artdeco-reset-base-outline-zero); padding: var(--artdeco-reset-base-padding-zero); vertical-align: var(--artdeco-reset-base-vertical-align-baseline);">
<span style="border: var(--artdeco-reset-base-border-zero); box-sizing: inherit; line-height: inherit !important; margin: var(--artdeco-reset-base-margin-zero); outline: var(--artdeco-reset-base-outline-zero); padding: var(--artdeco-reset-base-padding-zero); vertical-align: var(--artdeco-reset-base-vertical-align-baseline);">
<span style="border: var(--artdeco-reset-base-border-zero); box-sizing: inherit; line-height: inherit !important; margin: var(--artdeco-reset-base-margin-zero); outline: var(--artdeco-reset-base-outline-zero); padding: var(--artdeco-reset-base-padding-zero); vertical-align: var(--artdeco-reset-base-vertical-align-baseline);"><span style="background: white; color: black; font-family: "Segoe UI",sans-serif; font-size: 10.5pt; line-height: 107%; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-color-alt: windowtext; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">There is no
distinction between integral foreign operation and non-integral foreign
operation</span></span><span style="border: var(--artdeco-reset-base-border-zero); box-sizing: inherit; line-height: inherit !important; margin: var(--artdeco-reset-base-margin-zero); outline: var(--artdeco-reset-base-outline-zero); padding: var(--artdeco-reset-base-padding-zero); vertical-align: var(--artdeco-reset-base-vertical-align-baseline);"></span></span></span></span></p>taxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.com0tag:blogger.com,1999:blog-5341269791906881059.post-20002584920352461222024-02-06T20:44:00.002+05:302024-02-06T20:44:12.520+05:30Reiteration on FEMA Regulations. - Capital Account Transactions<p> </p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">As you would be aware that Foreign Exchange
Transactions in India, are governed by Foreign Exchange Management Act, 1999
(FEMA, 1999) and Rules & Regulations, Notifications, Circulars and
Directions (FEMA Regulations) issued thereunder by Reserve Bank of India in
consultation with Government of India.<span></span></span></p><a name='more'></a> <o:p></o:p><p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><strong><i><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">We wish to draw your
attention to </span></i></strong><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">FEMA 1999 which states that any person undertaking any
Foreign Exchange Transaction, is required to comply with the provisions as laid
down under the extant FEMA Regulations. </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">Section 13 of FEMA, 1999:<s>,</s> if any person
contravenes any provision of this Act, or contravenes any Rule, Regulation,
notification, direction or order issued under this Act, such person shall be
liable to prescribed penalties and fines. </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">Hence, we would like to reiterate and request
you to ensure that all provisions as laid down by extant FEMA guidelines are
complied with for all your Foreign Exchange transactions [Current Account
Transaction or Capital Account Transactions] including Reporting requirements
as prescribed. Failure to comply attracts Penalty and Compounding Provisions as
provided in extant FEMA Regulations.</span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">We would like to share with you a few
illustrations on the Regulatory requirements, in relation to Capital Account
Transactions. These illustrations are not exhaustive. We advise you to go
through FEMA provisions before undertaking any cross border transactions.</span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><strong><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">Please ignore this email if you do not
transact with Citibank for Foreign Direct Investment and Overseas Direct
Investment</span></strong><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><strong><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">Foreign Direct Investments (FDI)</span></strong><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">All FDI transactions have to comply with the
Entry Route, Sectoral cap and all other conditions of extant FDI Policy issued
by Government of India. The reporting of FDI transactions have to be completed
online through the ‘Single Master Form’ (SMF) within the timelines prescribed
following the procedure and documentation as mentioned in the SMF User Manual
released by RBI. Contravention for non-issue/ late issue of capital instruments
or non-transfer/ late transfer of capital instruments and other contraventions
of the provisions FEMA 20(R) will be proceeded against as per the procedure
laid down in sections 13 and 15 of FEMA, 1999.</span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">[Regulatory reference : Extant FDI Policy read
with RBI Master Direction on Foreign investment into India and RBI Master
Direction on Reporting Requirements under FEMA 1999 and User Manual on SMF]</span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">The
Reserve Bank of India has amended RBI User Manual for FDI Reporting's. We
request you to go through RBI User Manual (link as below) before filing the new
forms/ reporting's in FIMRS portal, with immediate effect. RBI has changed
standard format with respect to Company Secretary declaration, Company
declaration, Non-Resident declaration etc. based on filing applicable.<br />
<br />
The above changes are effective from the date of issue of RBI Circular A.P.
(DIR) Circular No. 22 dated January 4, 2023.<br />
<br />
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<!--[endif]--></span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><strong><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">Key Points to Note:</span></strong><o:p></o:p></p><p class="MsoNormal"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify; text-indent: -18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">1. All issue, transfer
of capital instruments by person resident outside India, Indian Entity or
Investment Vehicle or Venture Capital Fund etc receiving foreign investment
have to comply with provisions of extant Non Debt Regulation including pricing,
sector cap, downstream investment guideline, Schedules etc.</span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify; text-indent: -18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">2. Delay in submission
of Reporting requirement like (FCGPR, FCTRS, LLP-I, LLP-II, Investment Vehicle
Reporting, Downstream Investment Reporting etc.) attracts late submission fee
as prescribed by RBI.</span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify; text-indent: -18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">3. In case of overseas
investor being different from the remitter of funds, KYC of both the remitter
and Investor is required in the format prescribed by RBI from the overseas
remitting bank. The fact that the investor does not have a bank account is not
a valid premise for non-receipt of KYC of the investor. Wherein the remitter
and investor are different, a No objection certificate will need to be
furnished from the remitter, conveying that the remitter has no objection in
the shares being allotted to the investor. In case of FDI into LLP, the
remitter and investor cannot be different. [Ref. RBI Master Direction on
FEMA-Reporting requirement]</span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify; text-indent: -18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">3. In case of Funds
received from overseas investor towards proceeds of Rights issue floated by the
investee entity, copy of the RBI letter allotting FDI Registration number for
the initial allotment to such investor, must be in place prior to receipt of
funds. . In case instruments are CCPS/CCD, valuation certificate of equity
shares is mandatory </span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify; text-indent: -18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">4. In case of transfer
of Capital Instruments from Non-resident to Resident, the FDI Registration
number allotted by RBI for FDI by Existing Non-Resident Shareholder is must. In
case existing Non-Resident shareholder earlier acquired the Capital Instruments
from other Resident shareholder, then copy of the AD certified FCTRS Reporting
is a pre-requisite, without which current transaction of FCTRS (Remittance and
reporting) is not permitted. [Press note clarification issued by RBI to all AD
Banks].</span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify; text-indent: -18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">5. The date of
submission of the report complete in all respects with the prescribed
documentation to the AD on SMF shall be deemed to be the date of reporting of
the transaction to RBI. In case the reporting form (whether in physical or
electronic form) is incomplete then the delay will continue till such time the
form is received complete in all respects [Ref. RBI Master Direction on
FEMA-Reporting requirement]</span><o:p></o:p></p><p class="MsoListParagraph" style="margin: 0cm; text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 17.25pt; margin-right: 0cm; margin-top: 0cm; text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">6. In case of conversion (CCPS/CCD to equity).
Conversion ratio should be in format as “CCD/CCPS : Equity”. Number of Equity
shares post conversion, should be disclosed in documents.</span><o:p></o:p></p><p class="MsoListParagraph" style="margin: 0cm; text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="margin-left: 17.25pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">7. In case you have received any FDI, please
check whether you registered in the entity master and if not the same may be
completed on immediate basis. Further it is advised to ensure the correctness
of the data as provided in the entity master.</span><o:p></o:p></p><p class="MsoNormal" style="margin-left: 17.25pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="margin-left: 17.25pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><strong><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">Overseas Direct Investments (ODI)</span></strong><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">All ODI transactions have to comply with the
investment routes, ceiling, sectoral restrictions and all other conditions for
Overseas Direct Investments from India as prescribed under extant FEMA
Regulations.</span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">[Regulatory Reference: Foreign Exchange
Management (Overseas Investment) Rules, Regulation 2022 and Foreign Exchange
Management (Overseas Investment) Directions, 2022]</span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">Please refer regulation 12 of Foreign Exchange
Management (Overseas Investment) Regulations vide No. FEMA 400/2022-RB August
22, 2022 2022, "A person resident in India who has made a financial
commitment in a foreign entity in accordance with the Act or rules or
regulations made thereunder, shall not make any further financial commitment,
whether fund-based or non-fund-based, directly or indirectly, towards such
foreign entity or transfer such investment till any delay in reporting is
regularized"</span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">We request you to pay LSF or compound the
contravention, if any for delayed reporting/submissions made under Overseas
Direct Investment guideline, before submitting any new request at bank counter</span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><strong><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">Key Points to Note:</span></strong><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify; text-indent: -18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">1. All the ODI
documents are to be submitted with the AD bank prior to executing any
transaction (including SBLC/corporate guarantee). </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="margin-left: 36.0pt; text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify; text-indent: -18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">2. Annual performance
report (APR) for each of overseas JV/WOS for every financial year (Mar-Apr) /
Calendar year (Jan-Dec) is required to be submitted ever year by December
31/December 31 of next year respectively as the case may be to the AD bank for
onward reporting to RBI, failing which no further ODI transactions are
permitted for any UIN of same Indian Party.</span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">APR filing guideline:</span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 5.0pt; margin-left: 36.0pt; margin-right: 0cm; margin-top: 0cm;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">•APR
in new format only-Refer page no.105 <a href="https://ind01.safelinks.protection.outlook.com/?url=https%3A%2F%2Frbidocs.rbi.org.in%2Frdocs%2Fcontent%2Fpdfs%2F13MDR291215.pdf&data=05%7C02%7Cmanish.agarwal%40sasken.com%7C2725bcec954f42ee4eef08dc27161da6%7Cabe210bf1f574e9e8d4eb32085d3a991%7C0%7C0%7C638428223162770531%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=95x1uLTMg3elnC%2FjLxPPLccmfkHr3Z6pCkecevrNun8%3D&reserved=0"><span style="color: #0563c1;">https://rbidocs.rbi.org.in/rdocs/content/pdfs/13MDR291215.pdf</span></a></span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 5.0pt; margin-left: 36.0pt; margin-right: 0cm; margin-top: 0cm; text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">• Statutory auditor certificate should be
strictly in RBI prescribed format along with UDIN number</span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 5.0pt; margin-left: 36.0pt; margin-right: 0cm; margin-top: 0cm; text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">• Not applicable points to be strike-off from
Indian Entity certificate & Statutory auditor certificate. Addition,
deletion or rephrasing of RBI format is not acceptable.</span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 5.0pt; margin-left: 36.0pt; margin-right: 0cm; margin-top: 0cm; text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">• Latest Audited Financial of JV/WOS and
Holding to be submitted along with APR and the data in APR should match with
the Financials.</span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 5.0pt; margin-left: 36.0pt; margin-right: 0cm; margin-top: 0cm; text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">• If Any Investment / Disinvestment of SDS has
happened in the period for which APR is being filed, the same needs to be
captured in Part XII of form APR – In case any change in previous reporting, a
clarification letter can be attached. </span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 5.0pt; margin-left: 36.0pt; margin-right: 0cm; margin-top: 0cm; text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">• Please use empty space at bottom of each page
for affixing Sign, Stamp & Date as this is a mandatory requirement.</span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 5.0pt; margin-left: 36.0pt; margin-right: 0cm; margin-top: 0cm; text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">• Please submit reason for delay and acceptance
of LSF application to RBI (in case delay in final </span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 0cm; text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">submission of reporting) </span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify; text-indent: -18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">3. Post investment
changes including investment in Step down subsidiary (SDS), Capital Structure
changes etc, are required to be reported to AD bank along with APR.</span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify; text-indent: -18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">- In case Indian party
acquires an Overseas subsidiary and such subsidiary in turn has multiple layers
of step down subsidiaries – all such step down subsidiaries are required to be
reported in Form ODI itself while initiating first remittance. </span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify; text-indent: -18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">4. The Indian Party is
required to submit details of such disinvestment through its designated AD
category-I bank within 30 days from the date of receipt of disinvestment funds
. Sale proceeds of shares / securities shall be repatriated to India immediately
on receipt thereof and in any case not later than 90 days from the date of sale
of the shares / securities.</span><o:p></o:p></p><p style="margin-left: 36.0pt; text-align: justify; text-indent: -18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">5. An IP/ RI which has
made direct investment abroad is under obligation to,</span><o:p></o:p></p><p style="margin-left: 36.0pt; text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">(i) submit share certificates or any other
document as evidence of investment in the foreign entity to the satisfaction of
the Reserve Bank within six months, or such further period as Reserve Bank may
permit, from the date of effecting remittance or the date on which the amount
to be capitalised became due to the Indian Party or the date on which the
amount due was allowed to be capitalized;</span><o:p></o:p></p><p style="margin-left: 36.0pt; text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">(ii) repatriate to India, all dues receivable
from the foreign entity, like dividend, royalty, technical fees etc., within 90
days of its falling due, or such further period as the Reserve Bank may permit:
</span><o:p></o:p></p><p class="MsoListParagraph" style="margin-left: 36.0pt; text-align: justify; text-indent: -18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">6. The financial commitment by a person resident
in India in a foreign entity that has invested or invests into India at the
time of making such financial commitment or at any time thereafter, either
directly or indirectly, resulting in a structure with more than two layers of
subsidiaries is not permitted i.</span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify; text-indent: -18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">7. Overseas Direct
JV/WOS (whether operating or an SPV) of an Indian Party is not permitted to set
up / make any investment into or acquire another SPV i.e. all Step Down
Subsidiaries must be operating entities only. SPV below SPV/other operating
entities is not envisaged in the ODI guidelines and the same is also not
construed as bona-fide business activities in terms of ODI Regulation.</span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="default" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify; text-indent: -18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">8. The diversification
of the activities through SDS should be for Overseas Direct Investment (ODI)
and not for portfolio investment. Portfolio investment directly or indirectly
through Direct JV/ WOS / Step down subsidiary is a contravention as the definition
of the term ‘Oversea Direction Investment’ <strong>excludes Portfolio investment</strong>.].</span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify; text-indent: -18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">9. In terms of ODI
Regulation, Indian party is not allowed to extend loan to JV/WOS without having
prior equity stake and control. The same provision is extended to Overseas
JV/WOS as well as transactions which are not allowed directly, cannot be
undertaken indirectly (through overseas JV/WOS) as well. </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="default" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">Accordingly Overseas JV/WOS of the Indian
Entities are not permitted to extend loan to other entities (whether or not
group entities or related entities), without having Equity stake. Resident
Individuals may make overseas direct investment only in equity shares/
compulsorily convertible preference shares of a JV or WOS outside India.
Resident individuals are not permitted to extend loan to overseas JV/WOS</span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify; text-indent: -18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">10. Resident
Individuals are not permitted to invest into/set up a Direct JV/WOS which has /
will have Step Down Subsidiary(s).</span><o:p></o:p></p><p class="MsoListParagraph" style="margin: 0cm; text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 18.0pt; margin-right: 0cm; margin-top: 5.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">11.
In the case of corporate guarantees, all guarantees (including performance
guarantees and Bank Guarantees / SBLC) are required to be reported to the
Reserve Bank in Form FC through designated AD, at the time of issuance of such
guarantees. Seek Prior approval from bank before issuance of corporate
guarantees</span><o:p></o:p></p><p class="MsoNormal" style="margin-left: 18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">12. Indian parties/ Indian Residents are
required to submit Forms and documents to bank for reporting of investments/
financial commitments before executing the transaction</span><o:p></o:p></p><p class="MsoNormal" style="margin-left: 18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="margin-left: 18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="margin-left: 18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">14. Each page of the Form FC should be duly
signed and stamped with date, by the RI / authorized person of the IP</span><o:p></o:p></p><p class="MsoListParagraph" style="margin: 0cm; text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><strong><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">External Commercial Borrowing (ECB)</span></strong><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">Transactions
on account of External Commercial Borrowings (ECB) and Trade Credits (TC) are
governed by clause (d) of sub-section 3 of section 6 of the Foreign Exchange
Management Act, 1999 (FEMA). Various provisions in respect of these two types
of borrowings are included in the following Regulations framed under FEMA:</span><o:p></o:p></p><p style="text-align: justify; text-indent: -18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">i. Foreign Exchange
Management (Borrowing and Lending) Regulations, 2018, notified vide <a href="https://ind01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.rbi.org.in%2FScripts%2FNotificationUser.aspx%3FId%3D11441%26Mode%3D0&data=05%7C02%7Cmanish.agarwal%40sasken.com%7C2725bcec954f42ee4eef08dc27161da6%7Cabe210bf1f574e9e8d4eb32085d3a991%7C0%7C0%7C638428223162777780%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=eKv7Df3WcgHRm1eQTh8gPd3Mg%2BUhGhXH4x%2BB0NhKWHw%3D&reserved=0" target="_blank"><span style="color: #0563c1;">Notification No. FEMA 3R/2018-RB
dated December 17, 2018</span></a>, as amended from time to time; and</span><o:p></o:p></p><p style="text-align: justify; text-indent: -18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">ii Foreign Exchange
Management (Guarantees) Regulations, 2000, notified vide <a href="https://ind01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.rbi.org.in%2FScripts%2FNotificationUser.aspx%3FId%3D162%26Mode%3D0&data=05%7C02%7Cmanish.agarwal%40sasken.com%7C2725bcec954f42ee4eef08dc27161da6%7Cabe210bf1f574e9e8d4eb32085d3a991%7C0%7C0%7C638428223162784897%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=lhA0grJZrt7ZCcPUBFNjdpY%2FmeeJLx%2F%2BQkW3aczZVXM%3D&reserved=0" target="_blank"><span style="color: #0563c1;">Notification No. FEMA 8/2000-RB
dated May 03, 2000</span></a>, as amended from time to time.</span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">External Commercial Borrowings are commercial
loans raised by eligible resident entities from recognized non-resident
entities and should conform to parameters such as currency of borrowing,
eligible borrowers, recognized lenders, minimum maturity, permitted and
non-permitted end-uses, maximum all-in-cost ceiling, etc.</span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">Trade Credits (TC) refer to the credits
extended by the overseas supplier, bank, financial institution and other
permitted recognized lenders for maturity, as prescribed in this framework, for
imports of capital/non-capital goods permissible under the Foreign Trade Policy
of the Government of India. Depending on the source of finance, such TCs
include suppliers’ credit and buyers’ credit from recognized lenders.</span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">[Regulatory Reference: RBI Master Direction on
External Commercial Borrowing, FEMA 3R dated December 17, 2018, FEMA
Notification no. 8 dated May 3, 2000] </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><strong><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">Key Points to Note:</span></strong><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify; text-indent: -18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">1. ECB2 Returns are
required to be submitted to RBI by 7<sup>th</sup> of every month through
designated AD Bank.</span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify; text-indent: -18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">2. Revised FORM ECB is
to be submitted within 7 da<span style="letter-spacing: .05pt;">y</span>s fr<span style="letter-spacing: -.05pt;">o</span>m the da<span style="letter-spacing: -.05pt;">t</span>e
<span style="letter-spacing: -.05pt;">o</span>f signing l<span style="letter-spacing: -.05pt;">o</span>an agr<span style="letter-spacing: .05pt;">e</span><span style="letter-spacing: -.05pt;">e</span>m<span style="letter-spacing: .05pt;">e</span>nt
betw<span style="letter-spacing: -.05pt;">e</span><span style="letter-spacing: .05pt;">e</span>n b<span style="letter-spacing: -.05pt;">o</span>rr<span style="letter-spacing: -.05pt;">o</span>w<span style="letter-spacing: .05pt;">e</span>r
and l<span style="letter-spacing: .05pt;">e</span>nde<span style="letter-spacing: -.05pt;">r/for any change in terms of underlying parameters of ECB.</span> </span><o:p></o:p></p><p class="MsoListParagraph" style="margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 5.0pt; text-align: justify; text-indent: -18.0pt;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">3. Submission of both
forms beyond due date attracts Late Submission Fee - LSF</span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">Please
refer below reporting timeline for capital account transaction which should be
adhered, failing to this, may impact on your future transactions along with
late submission fee, penalty , compounding. Reporting documents should be
submitted to bank at least 7 to 10 days prior to the due date, giving
sufficient time for AD Bank to scrutinize the documents before reporting to
RBI. </span><o:p></o:p></p><p class="MsoNormal"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: 24.8pt; mso-padding-alt: 0cm 0cm 0cm 0cm; mso-yfti-tbllook: 1184; width: 630px;">
<tbody><tr style="height: 37.8pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td style="border: solid windowtext 1.0pt; height: 37.8pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 11.8pt;" valign="top" width="16">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">#</span><o:p></o:p></p>
</td>
<td style="border-left: none; border: solid windowtext 1.0pt; height: 37.8pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 59.95pt;" valign="top" width="80">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">Product</span><o:p></o:p></p>
</td>
<td style="border-left: none; border: solid windowtext 1.0pt; height: 37.8pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 149.65pt;" valign="top" width="200">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">Type</span><o:p></o:p></p>
</td>
<td style="border-left: none; border: solid windowtext 1.0pt; height: 37.8pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 251.1pt;" valign="top" width="335">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">Reporting
Timelines</span><o:p></o:p></p>
</td>
</tr>
<tr style="height: 14.4pt; mso-yfti-irow: 1;">
<td style="border-top: none; border: solid windowtext 1.0pt; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 11.8pt;" valign="top" width="16">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;"> </span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 59.95pt;" valign="top" width="80">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;"> </span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 149.65pt;" valign="top" width="200">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;"> </span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 251.1pt;" valign="top" width="335">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;"> </span><o:p></o:p></p>
</td>
</tr>
<tr style="height: 14.4pt; mso-yfti-irow: 2;">
<td style="border-top: none; border: solid windowtext 1.0pt; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 11.8pt;" valign="top" width="16">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">1</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 59.95pt;" valign="top" width="80">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">ODI</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 149.65pt;" valign="top" width="200">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">APR (Annual Performance
Reporting)</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 251.1pt;" valign="top" width="335">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">Annually before 31 December </span><o:p></o:p></p>
</td>
</tr>
<tr style="height: 14.4pt; mso-yfti-irow: 3;">
<td style="border-top: none; border: solid windowtext 1.0pt; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 11.8pt;" valign="top" width="16">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">2</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 59.95pt;" valign="top" width="80">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">ODI</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 149.65pt;" valign="top" width="200">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">Disinvestment Reporting-
Part III</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 251.1pt;" valign="top" width="335">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">Date of receipt of
disinvestment proceed + 30 days </span><o:p></o:p></p>
</td>
</tr>
<tr style="height: 14.4pt; mso-yfti-irow: 4;">
<td style="border-top: none; border: solid windowtext 1.0pt; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 11.8pt;" valign="top" width="16">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">3</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 59.95pt;" valign="top" width="80">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">ODI</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 149.65pt;" valign="top" width="200">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">Reporting of SBLC/Corporate
Guarantee</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 251.1pt;" valign="top" width="335">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">Immediately on issuance of
Guarantee (client to submit form FC to AD bank prior to issuance of
guarantee)</span><o:p></o:p></p>
</td>
</tr>
<tr style="height: 14.4pt; mso-yfti-irow: 5;">
<td style="border-top: none; border: solid windowtext 1.0pt; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 11.8pt;" valign="top" width="16">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">4</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 59.95pt;" valign="top" width="80">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">ODI</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 149.65pt;" valign="top" width="200">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">Post investment changes eg.
Change in capital structure, investment in SDS etc)</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 251.1pt;" valign="top" width="335">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">Along with APR. </span><o:p></o:p></p>
</td>
</tr>
<tr style="height: 14.4pt; mso-yfti-irow: 6;">
<td style="border-top: none; border: solid windowtext 1.0pt; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 11.8pt;" valign="top" width="16">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">5</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 59.95pt;" valign="top" width="80">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">FDI</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 149.65pt;" valign="top" width="200">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">DI (Downstream Investment)</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 251.1pt;" valign="top" width="335">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">Within 30 days from the date
of allotment of equity instruments</span><o:p></o:p></p>
</td>
</tr>
<tr style="height: 14.4pt; mso-yfti-irow: 7;">
<td style="border-top: none; border: solid windowtext 1.0pt; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 11.8pt;" valign="top" width="16">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">6</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 59.95pt;" valign="top" width="80">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">FDI </span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 149.65pt;" valign="top" width="200">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">DPIIT Reporting under
downstream investment.</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 251.1pt;" valign="top" width="335">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">Within 30 days of Downstream
Investment (even if equity instruments have not been allotted) to Secretariat
for Industrial Assistance, DPIIT </span><o:p></o:p></p>
</td>
</tr>
<tr style="height: 14.4pt; mso-yfti-irow: 8;">
<td style="border-top: none; border: solid windowtext 1.0pt; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 11.8pt;" valign="top" width="16">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">7</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 59.95pt;" valign="top" width="80">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">ODI</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 149.65pt;" valign="top" width="200">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">Share certificates </span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 251.1pt;" valign="top" width="335">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">Within 180 days from the
date of equity remittance</span><o:p></o:p></p>
</td>
</tr>
<tr style="height: 27.35pt; mso-yfti-irow: 9;">
<td style="border-top: none; border: solid windowtext 1.0pt; height: 27.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 11.8pt;" valign="top" width="16">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">8</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 27.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 59.95pt;" valign="top" width="80">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">ODI</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 27.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 149.65pt;" valign="top" width="200">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">ESOP & OPI (Overseas
Portfolio Investment)</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 27.35pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 251.1pt;" valign="top" width="335">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">Half yearly reporting
-Within sixty days from the end of the half-year in which such investment or
transfer is made as of September or March-end. I.e. for the period 1 April to
30 September the reporting should be done on or before 29 November and for the
period 1 October to 31 March, the reporting should be done on or before 30
May.</span><o:p></o:p></p>
</td>
</tr>
<tr style="height: 14.4pt; mso-yfti-irow: 10;">
<td style="border-top: none; border: solid windowtext 1.0pt; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 11.8pt;" valign="top" width="16">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">9</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 59.95pt;" valign="top" width="80">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">FDI</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 149.65pt;" valign="top" width="200">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">FCGPR –FDI /LLP-I/ESOP</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 251.1pt;" valign="top" width="335">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">30 days from date of
issuance of capital instruments (60 days to issue capital instruments from
receipt of inward remittance)</span><o:p></o:p></p>
</td>
</tr>
<tr style="height: 14.4pt; mso-yfti-irow: 11;">
<td style="border-top: none; border: solid windowtext 1.0pt; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 11.8pt;" valign="top" width="16">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">10</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 59.95pt;" valign="top" width="80">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">FDI</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 149.65pt;" valign="top" width="200">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">FCTRS/LLP-II for transfer of
Shares</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.4pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 251.1pt;" valign="top" width="335">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">within sixty days of
transfer of equity instruments or receipt/remittance of funds whichever is
earlier</span><o:p></o:p></p>
</td>
</tr>
<tr style="height: 26.05pt; mso-yfti-irow: 12;">
<td style="border-top: none; border: solid windowtext 1.0pt; height: 26.05pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 11.8pt;" valign="top" width="16">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">11</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 26.05pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 59.95pt;" valign="top" width="80">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">ECB</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 26.05pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 149.65pt;" valign="top" width="200">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">ECB 2</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 26.05pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 251.1pt;" valign="top" width="335">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">Within 7 working days of
each month. </span><o:p></o:p></p>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 13; mso-yfti-lastrow: yes;">
<td style="border-top: none; border: solid windowtext 1.0pt; height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 11.8pt;" valign="top" width="16">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">12</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 59.95pt;" valign="top" width="80">
<p align="center" class="MsoNormal" style="line-height: 105%; text-align: center;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">LOBOPO</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 149.65pt;" valign="top" width="200">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">AAC & Financials,
Reporting to DGP, DGIT as applicable</span><o:p></o:p></p>
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">(DGP Reporting applies only
if LOBOPO Head office is from a specific country.)</span><o:p></o:p></p>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 251.1pt;" valign="top" width="335">
<p class="MsoNormal" style="line-height: 105%;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt; line-height: 105%;">30th September Annually
(where accounting year ending date is not 31 March, then 6 months form the
date of accounting year).</span><o:p></o:p></p>
</td>
</tr>
</tbody></table><p class="MsoNormal"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">Late Submission Fee (LSF) for delay in
Reporting’s:</span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt; mso-yfti-tbllook: 1184;">
<tbody><tr>
<td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 44.75pt;" valign="top" width="60">
<p class="default0" style="margin: 0cm;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">Sr. no</span><o:p></o:p></p>
</td>
<td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 266.9pt;" valign="top" width="356">
<p class="default0" style="margin: 0cm;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">Type of Reporting delays</span><o:p></o:p></p>
</td>
<td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 155.85pt;" valign="top" width="208">
<p class="default0" style="margin: 0cm;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">LSF amount </span><o:p></o:p></p>
</td>
</tr>
<tr>
<td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 44.75pt;" valign="top" width="60">
<p class="default0" style="margin: 0cm;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">1.</span><o:p></o:p></p>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 266.9pt;" valign="top" width="356">
<p class="default0" style="margin: 0cm;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">Form ODI Part-II/ APR, FCGPR <strong>, FLA Returns, Form OPI, evidence of
investment or any other return which does not capture flows or any other
periodical reporting</strong></span><o:p></o:p></p>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 155.85pt;" valign="top" width="208">
<p class="default0" style="margin: 0cm;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">7,500/- per return /form</span><o:p></o:p></p>
<p class="default0" style="margin: 0cm;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p>
</td>
</tr>
<tr>
<td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 44.75pt;" valign="top" width="60">
<p class="default0" style="margin: 0cm;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">2.</span><o:p></o:p></p>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 266.9pt;" valign="top" width="356">
<p class="default0" style="margin: 0cm;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">FC-GPR, FCTRS, Form ESOP, Form LLP<em>, Form LLP(II), Form CN, Form DI, Form
InVi, Form ODI-Part I, Form ODI-Part III, Form FC, Form ECB, Form ECB-2,
Revised Form ECB or any other return which captures flows or returns which
capture reporting of non-fund transactions or any other transactional
reporting</em></span><o:p></o:p></p>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 155.85pt;" valign="top" width="208">
<p class="default0" style="margin: 0cm;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">7500 + (0.025% × A × n)</span><o:p></o:p></p>
</td>
</tr>
</tbody></table><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> Notes:</span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">a) “n” is the number of years of delay in
submission rounded-upwards to the nearest month and expressed up to 2 decimal
points. </span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">b) “A” is the amount involved in the delayed
reporting.</span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">c) LSF amount is per return. However, for any
number of Form ECB-2 returns, delayed submission for each LRN will be treated
as one instance for the fixed component. Further, ‘A’ for any ECB-2 return will
be the gross inflow or outflow (including interest and other charges),
whichever is more.</span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">d) Maximum LSF amount will be limited to 100
per cent of ‘A’ and will be rounded upwards to the nearest hundred.</span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">e) Where an advice has been issued for payment
of LSF and such LSF is not paid within 30 days, such advice shall be considered
as null and void and any LSF received beyond this period shall not be accepted.
If the applicant subsequently approaches for payment of LSF for the same
delayed reporting, the date of receipt of such application shall be treated as
the reference date for the purpose of calculation of “n”</span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;"> </span><o:p></o:p></p><p>
</p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Arial",sans-serif; font-size: 10.0pt;">In light of above, we would like to reiterate
here that the failure to comply with extant FEMA Regulations, attracts Penalty
provisions and Compounding Procedure as laid down in FEMA 1999. We request you
to ensure due adherence to extant FEMA Regulations and ensure that foreign
exchange transactions including submission of Reporting requirements are
undertaken in compliance thereof.</span><o:p></o:p></p>taxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.com0tag:blogger.com,1999:blog-5341269791906881059.post-58519647884891049022024-02-04T11:54:00.005+05:302024-02-04T11:54:39.699+05:30HC holds interest not leviable on delayed filing of GSTR 3B<p> </p><p style="background: white; line-height: 12.0pt; mso-line-height-rule: exactly;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-size: 10.5pt;">This tax alert summarizes
a recent judgement of the Madras High Court (HC) on
applicability of interest where tax amount was deposited into Electronic Cash
ledger (ECL) but return was not filed.<span></span></span></p><a name='more'></a><br />
<br />
HC observed that:<span style="color: #2e2e38; font-size: 13.5pt;"><o:p></o:p></span><p></p><ul type="disc">
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">Section
39(7) of Central Goods and Services Tax Act, 2017 (CGST Act) provides that
the tax should be paid to the Government before the last date for filing
the GSTR-3B returns. Thus, it is immaterial whether GSTR-3B is filed
within due date or not for remittance of tax to the account of Government.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">Once
the amount is deposited, it should be made available to the Government for
their use and the Government cannot wait or postpone the utilisation of
the said amount until the date of filing GSTR-3B.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">The
date when the amount is deposited or credited to the Government will be
the actual date of discharge of tax liability. </span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">If
any amount is deposited after due date, only for the said amount, the
liability to payinterest would arise.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">The
law laid down by Jharkhand HC in RSB Transmission and Telangana HC in
Megha Engineering are not in line with the provisions of the CGST Act.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
</ul><p style="background: white; line-height: 12pt;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-size: 10.5pt;">Accordingly, HC held that since the tax amount
has already been credited to the Government within the prescribed time limit,
there will be no interest liability. <br />
<br />
<strong><span style="font-family: "Arial",sans-serif;">Comments</span></strong></span><span style="color: #2e2e38; font-size: 13.5pt;"><o:p></o:p></span></p><ul type="disc">
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l1 level1 lfo2; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">The
judgment provides much needed relief to taxpayers who could not file
GSTR-3B on time but paid the tax in the Electronic Cash Ledger to prevent
interest liability. </span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
<li class="MsoNormal" style="color: #2e2e38; line-height: 12.0pt; mso-line-height-rule: exactly; mso-list: l1 level1 lfo2; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt;"><span style="background: white; color: black; font-family: "Arial",sans-serif; font-size: 10.5pt; mso-fareast-font-family: "Times New Roman";">Since
there are divergent High Court rulings on the subject, the issue is likely
to be finally settled by the Supreme Court.</span><span style="font-family: "Arial",sans-serif; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></li>
</ul><p>
<span style="background: white; font-family: Arial, sans-serif; font-size: 10.5pt;">It may have to be analyzed
whether the ruling can be applied to cases where the tax was short paid in the
return, but sufficient balance was maintained in the cash ledger</span></p>taxbymanishhttp://www.blogger.com/profile/03444845716812998262noreply@blogger.com0