CBIC issues clarification on Customs (IGCRS) Rules, 2022

 This Tax Alert summarizes a recent Circular issued by Central Board of Indirect Taxes and Customs (CBIC) on Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022 (IGCRS Rules). These rules supersede the existing Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 (IGCR Rules).

The key clarifications are as follows:

• Basic contours of IGCR Rules have been retained. Changes made are to broaden the scope of IGCR and capture additional useful data fields in forms.
• The scope of IGCRS Rules is widened to include cases where imported goods are utilized for specified end use which can be other than manufacturing or providing output services.
• Where time period for utilization of goods is specified in respective notifications, the said period will apply. If the same is not specified, time period of six months will apply. Jurisdictional Commissioner can extend such period by another three months in cases where the delay in utilization is beyond importer’s control.
• Procedures have been prescribed for immediate re-credit of Bonds by jurisdictional AC/DC, rather than waiting till the time of filing the monthly statement.

CBDT issues additional guidelines on withholding provision on payment of business perquisites to residents

This Tax Alert explains Circular No. 18 dated 13 September 2022 (Circular) issued by the Central Board of Direct Taxes (CBDT) with a view to remove difficulties and provide guidance on various issues on interpretation and application of a withholding provision, Section (S.) 194R, under the Income Tax Law (ITL).

GST reporting in Income Tax Audit Report (Form 3CD) - Clause-44

 Since the inception of cross-sharing of information between Direct Tax authorities and Indirect Tax authorities, the taxpayers are at the receiving end. One of the major challenges is the GST reporting in Income Tax Audit Report i.e., Form 3CD.

Reform on Japan consumption tax return.

 

Below the  facts towards reform on Japan consumption tax return.

·         Currently consumption tax is being computed purely based on accounting transaction

Eg: If vendor has not charged consumption tax, but the item qualifies to be consumption tax then we can go ahead and claim consumption tax (That was how accounting system was done) . Even though there was no consumption tax in the invoice, just by seeing accounting entries input was being claimed.

CESTAT holds GST ITC cannot be utilized towards pre-deposit for appeals under earlier regime

 

This Tax Alert summarizes a recent ruling of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Allahabad on utilization of Input Tax Credit (ITC) under Central Goods and Services Tax Act, 2017 (CGST Act) for payment of mandatory pre-deposit under Central Excise Act, 1944 (CEA).

Amendment in Customs IGCR Rules to include imports for specific end use

 The Government vide. Notification No. 74/2022-Customs (NT) dated September 9, 2022, has notified the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022 ('IGCR-SEU Rules').

CBIC issues guidelines for claim of transitional credit pursuant to SC ruling

 This Tax Alert summarizes recent Circular issued by Central Board of Indirect Taxes and Customs (CBIC) providing guidelines for filing/ revising TRAN-1/ TRAN-2 pursuant to the Supreme Court (SC) ruling. Reference is invited to our earlier tax alerts dated 26 July 2022 and 5 September 2022.

The key clarifications are:

CBIC issues guidelines for launching prosecution under the GST law

 Section 132 of the Central Goods and Services Tax Act, 2017 (CGST Act) codifies the offences under the Act which warrant the institution of criminal proceedings and prosecution. Recently, CBIC has issued Instruction No. 04/2022-23 [GST-Investigation] dated 1 September 2022 which provides the guidelines for launching prosecution proceedings. The gist of the guidelines is as follows:

GST Activities due by September 2022

 

We have highlighted some of key activities under GST that need attention and action by the forthcoming due dates prescribed for the FY 2021-22.

 

Re-Charge Without Markup vs Reimbursement

  

 The taxability of reimbursements has always been a contentious issue in India. However, before the taxability of reimbursements is discussed, it is important to understand when an amount constitutes reimbursement. The term reimbursement is not defined in the Income-tax Act, 1961 (‘ITA’), however, the same has been explained by the Indian courts.

Is TDS u/s 194R applicable on Liquidated Damages?

 

 

With effect from July 1, 2022, a new obligation to deduct tax has been introduced in Section 194R. This provision now requires any person providing a benefit or perquisite to deduct tax at 10% of the value or aggregate value of such benefit or perquisite. Since its introduction, the applicability of this provision has been debated and discussed in great detail in different fora. Readers of this Article would therefore be aware that the expression 'benefit or perquisite' though not defined in the Section, is not a phrase that is new to the Income Tax Act and finds place in Section 28(iv) of the IT Act.

ITC changes in Form GSTR-3B

 that the changes in manner of reporting in GSTR 3B (i.e. ITC reversal and ineligible ITC details etc), as notified earlier vide Notification No. 14/2022 – Central Tax dated 5 July 2022 and subsequent Circular No 170/02/2022-GST dated 6 July 2022, have now been made available on the GST portal. Screenshot of the GSTN portal w.r.t. Input tax credit has been attached herewith for your reference.

 

Suggestions to improve GST

 

Following are the suggestions to improve & make GST more taxpayer friendly.

1.     Input Credit: – Sellers should be made responsible for Deposit of Tax and in case of Mismatch sufficient time should be given to the dealers to settle it but ultimate liability should be of sellers.