SC rules application for refund of self-assessed duty without appeal is not maintainable

This Tax Alert summarizes a recent ruling of the Supreme Court (SC)^[1]. The issue before the court was that in absence of any challenge to the order of assessment under Customs and Central Excise, whether refund application against the assessed duty can be entertained.

Tax return and audit reports filing due date for tax year 2018-19 applicable to taxpayers liable for audit is extended to 31 October 2019

As per the Indian tax laws (ITL) ^[1], in case of taxpayers ^[2] being:

(a) company or
(b) other taxpayers whose accounts are required to be audited under the ITL or any other law for the time being in force or
(c) working partner of a firm whose accounts are required to be audited under the ITL or any other law for the time being in force,

the due date for submission of their tax returns for tax year 2018-19 is 30 September 2019. Further, if a taxpayer  furnishes tax return after the due date, but before 31 December of the following tax year, the taxpayer is liable for payment of late fee^[3] of INR 5,000. On further delay, the fee increases to INR 10,000.

The Central Board of Direct Taxes (CBDT) ^[4]  vide order dated 27 September 2019^[5] (Order) has extended the due date for filing tax return and various reports of audit in relation to tax year 2018-19 for aforesaid category of taxpayers who are liable to file their tax returns by 30 September 2019 to 31 October 2019. The extension is granted primarily due to difficulties being faced by taxpayers in furnishing the tax returns for various reasons including availability of limited time with tax professionals for completion of audits, floods in certain parts of the country, etc.

Further, since the time prescribed under the ITL for furnishing tax return itself is extended, fee for late filling of tax return may also not be leviable for the tax returns filed up to 31 October 2019.

While due date for filing tax return is extended, no relief is granted by the CBDT for the levy of interest for filing of tax return beyond 30 September 2019. As a consequence, if the taxpayer files his tax return on or after 1 October 2019 but before 31 October 2019 i.e., within the extended due date, he will be liable to pay an interest @ 1% for one month on the balance amount of tax payable. However, no interest will be leviable if no tax is payable by the taxpayer on account of pre-paid taxes or otherwise.

IS E Assessment is a Game Changes?

A. Introduction:

Through Finance Act, 2018, Central Government has intended to introduce new scheme of scrutiny assessment under the Income Tax Act, 1961 for improving effectiveness of tax administration. It has thus brought three new sections to the Income Tax Act viz. 143(3A) to prescribe new procedure by the Central Government, 143(3B) to enable Central Government to notify applications of provisions of the Income Tax Act with such modification, adaptions or exceptions as may be specified and 143(3C) to provide for laying every notification issued u/s 143(3A) or 143(3B) before each House of Parliament.  

Interest earned on unutillised funds kept in FDRs due to delay in completion of project held as capital receipt

Where assessee-company, incorporated for development and operation of multipurpose port terminal, raised certain share capital in form of foreign inward remittance, in view of fact that said project got delayed due to various reasons beyond assessee's control and, thus, assessee had to keep unutilised funds in banks in form of FDRs, interest income earned on said deposits being in nature of capital receipt, was not liable to tax

[2019] 109 taxmann.com 105 (Mumbai - Trib.)/[2019] 71 ITR(T) 390 (Mumbai - Trib.)

The Companies (Amendment) Act, 2019: key takeaways

The Companies (Amendment) Bill received the President’s assent on 31 July 2019 and was published in the official gazette on the same date as the Companies (Amendment) Act, 2019 (Amendment Act).  The Amendment Act further amends the Companies Act, 2013 (Act). Majority of the provisions of the Amendment Act are deemed to have come into effect on 2 November 2018.  The remaining provisions, barring the amendment relating to corporate social responsibility, were made effective from 15 August 2019.

The key takeaways of the Amendment Act are: 

·         Dematerialized securities

·         Penalty for certain offences

·         Enhanced penalty for repeated defaults

·         Corporate social responsibility (CSR)

·         Commencement of business

·         Registration of charges

·         Beneficial ownership

·         Power of central government and National Company Law Tribunal (NCLT) in case of oppression and mismanagement 

The Amendment Act seeks to strengthen the existing governance norms and compliance management in the corporate sector by making a provision for imposition of enhanced penalties in case of repeated defaults. The central government now has a greater say in cases of oppression and mismanagement, and the individuals responsible for the same can now be directly held accountable. 

The Amendment Act has made it mandatory for all companies (required under the Act) to set aside monetary contributions for corporate social responsibility, even if such contribution is not earmarked for a specific purpose. 

HC rules provision prescribing due date to claim transitional credit under GST is not mandatory

This Tax Alert summarizes a recent ruling  ^[1] of Gujarat High Court (HC). The issues in the Writ Petition was to allow filing of declaration for transitional credit beyond the due date and whether rule 117 of Central Goods and Services Tax Rules, 2017 providing the due date to claim transitional credit is procedural in nature, and thus merely directory and not a mandatory provision.

PUBLIC CONSULTATION ON ELECTRONIC INVOICE STANDARDS TO BE USED UNDER GST SYSTEM

1.    Background

The GST Council has decided to introduce electronic-invoice (hereinafter called as e-invoice) on voluntary basis from January 2020. The new system will lead to one-time reporting on B2B invoice data in the form it is generated to reduce reporting in multiple formats (one for GSTR-1 and the other for e-way bill) and to generate Sales and Purchase Registers (ANX-1 and ANX-2) and from this data to keep the Return (RET-1 etc.) ready for filing. The other aim is to make reporting of invoices as an integral part of the business process to eliminate the process of compilation of invoices at the end of the month. Lastly, it will lead to substantial reduction in input credit verification issues as same data will get reported to tax department as well as to the buyer in his inward supply (purchase) register on receipt of info thru GST System – as buyer can reconcile with his Purchase Order and accept/reject well in time.

CBIC issues further clarifications on Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019

This Tax Alert summarizes a recent circular ^[1] issued by Central Board of Indirect Taxes and Customs (CBIC) on Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.

Apart from reiterating the importance and benefits, the circular clarifies on few more issues arising out of the provisions of the scheme. Circular also provides instructions to the officers to make the scheme a success and ensure its smooth implementation.

The key clarifications are as follows:

•  If a person has been issued a show cause notice (SCN) for erroneous refund, they will still be eligible to file declaration for other disputed cases under the scheme.

•  The dispute relating to only penalty or late fee pending before appellate forum shall also be eligible under the scheme.

•  Ineligibility under the scheme for finally heard matters in appeal shall not apply in cases where the hearings are rescheduled after the final hearing due to new bench, change in officer or any other reason.

•  Cases where proceedings before the Settlement Commission are abated, shall be covered under the scheme, provided the eligibility is otherwise established. Further, any pending appeals, reference or writ petition filed against or any arrears emerging out of the orders of the Commission are also eligible under the scheme.

Clarification issued by the government on eligibility of cases of penalty/ late fee pending before the appellate authority is likely to benefit the taxpayers, considering the quantum of such litigation.

More such clarification may be expected from the CBIC basis practical and technical difficulties faced by the taxpayers in the process of filing the declarations.