1. Section 245 of the Income Tax Act mandates the tax department to send an intimation to the taxpayer before implementing any adjustments. This intimation includes details such as the amount of refund owed, the outstanding tax demand, and the proposed adjustment.
Commonly referred to as Sec 54EC Bonds, the National Highway
Authority of India Bonds serves as an avenue for individuals to mitigate taxes
on long-term capital gains resulting from the sale of their investments. NHAI
is responsible for the development and maintenance of national highways and
various government-backed projects in India.
This tax
alert summarizes a recent Notification [1] issued by Central
Board of Indirect Taxes and Customs (CBIC) extending time limit specified under
Section 73(10) of the Central Goods and Services Tax Act, 2017 (CGST Act) for
issuance of order.
Section 73(10) of the CGST Act requires the proper officer to issue order under
Section 73(9) within three years from the due date for furnishing of relevant
annual return.
Earlier vide
Notification No. 9/2023 dated 31 March 2023, CBIC had extended the time limit
under section 73(10) for issuance of order under Section 73(9) as follows:
(i) for financial year (FY) 2017-18, up to 31 December 2023,
(ii) for FY 2018-19, up to 31 March 2024,
(iii) for FY 2019-20, up to 30 June 2024.
Vide recent
Notification, the time limit for issuance of order is further extended:
(i) for FY 2018-19, up to 30 April 2024,
(ii) for FY 2019-20, up to 31 August 2024.
|
Sr No |
Due
Date |
Related
to |
Compliance
to be made |
|
1 |
11.01.2024 |
GST |
Filing
of GSTR 1 for the month of December, 2023 |
|
2 |
20.01.2024 |
GST |
Payment
of GST for the month of December 2023 Filing
of GSTR 3B for the month of December, 2023 |
|
4 |
07.01.2024 |
TDS/TCS (Income Tax) |
·
Deposit TDS for payments of Salary, Interest, Commission or Brokerage, Rent,
Professional fee, payment to Contractors, etc. during the month of December
2023. · Deposit TDS from Salaries deducted during the month of December 2023 • Deposit TCS for collections made under section 206C including sale
of scrap during the month of December 2023, if any |
|
5 |
31.01.2024 |
TDS/TCS |
Filing
of TDS/TCS quarterly return for Q3 (Oct to Dec-2023). |
Is it possible to claim Input Tax Credit (ITC) for lifts and elevators installed in office buildings?
|
Description |
Capital Expenditures |
Revenue Expenditures |
|
Nature of Expense |
Involves significant investments
in assets with long-term benefits, such as buying equipment or property. |
Relates to ongoing operational
costs, like utilities or repairs, which are consumed within the current
accounting period |
|
Duration of Benefits |
Yield benefits over an extended
period, contributing to future revenue generation. |
Provides immediate benefits but is
consumed within the current accounting period |
|
Recording in Financial Statements |
Typically recorded as assets on
the balance sheet and depreciated over time. |
Immediately expensed on the income
statement |
|
Impact on Profitability |
May not impact current
profitability significantly but influences future earnings through
depreciation. |
Directly affects current
profitability as these are immediate expenses. |
|
Examples: |
Building renovations, purchasing
machinery, or acquiring long-term assets. |
Routine maintenance, salaries, and
utility payments |
· Supreme court further dismiss SLP against decision of Calcutta High court given to Suncraft Energy which quashed demand of ITC against service recipient for mismatch in GSTR 2A and GSTR 3B in the absence of any investigation done at the end of supplier.
· The Supreme Court set aside a 2021 Delhi High Court ruling that allowed Nestle SA, Concentrix Services, Steria and others a concessional withholding tax rate of 5% on dividend income from their Indian arms, extending the MFN clause in the OECD.
Direct Tax
· CBDT
notifies new valuation rules for equity and compulsorily convertible preference
shares for angel tax provisions.
· CBDT vide Notification
No.2/2023 dated 27 September 2023 provided the procedure for granting of Lower/
Nil witholding certificate under section 197 through TRACES portal.
Rule 28
deals with application of Form 13 for lower/Nil witholding certificate and
proviso to Rule 28AA(4) provides for issuance of certificate for lower
deduction certificate in case number of deductors exceed 100 in number and
details of such deductors are not available at the time of making the
application. In this regard the procedure applicable from 01 October 2023 is
provided in the above notification. It even mentions that due to the fact that
the deductors are not identifiable at the time of making the application,
therefore the certificate limit is not prescribed for each deductor, in this
regard, the certificate shall be utilised on FIFO basis and the deductors shall
verify the consumption status before furnishing the certificate in the TDS Return.
Central Board of Direct Tax (CBDT), on 19th December 2023, notifies new Safe Harbour Rules for Intra Group Loans via Notification No. 104/2023/ F. No. 370142/26/2023-TPL, thereby amending the clause (f) of Rule 10TA and serial number (4) and (5) of sub rule (2A) of Rule 10TD.
Main Para in the Notification is insertion of
Explanation, defining the term "Reference Rates":
1. For US Dollar- 6-month Term Secured Overnight
Financing rate (SOFR)
2. for Euro, 6-month Euro Inter Bank Offered Rate
(EURIBOR)
3. for UK Pound Sterling, 6-month Term Sterling
Overnight Index Average (SONIA)
4. for Japanese Yen, 6-month Tokyo Term Risk Free
Rate (TORF)
5. for Australian dollar, 6-month Bank Bill Swap
Rates (BBSW)
6. for Singapore dollar, 6-month Compounded
Singapore Overnight Rate Average (SORA)
Therefore, the Interest Rate should not be less
than the reference rate of the relevant foreign currency as on 30th September
of the relevant previous year plus certain basis points as prescribed in
amended rule.
A welcome notification by the CBDT providing more
clear guidance regarding the chargeability of Interest Rates on Intra Group
loans provided to Associated Enterprises denominated in different foreign
currencies.
This Tax Alert summarizes a recent decision [1] of the Supreme Court (SC)dismissing the special leave petition (SLP) filed by the Revenue against the Calcutta High Court (HC) judgment [2] regarding input tax credit (ITC) mismatch in Form GSTR-2A and GSTR-3B.
This tax alert summarizes a recent decision of the Calcutta High Court (HC)1 on applicability of Limitation Act, 1963 (Limitation Act) for condoning the delay in filing of appeal under Section 107 of the West Bengal State Goods and Services Tax Act, 2017 (WBGST Act).
As per section 107(1), any person aggrieved by any decision or order passed by
an adjudicating authority may appeal to Appellate Authority within three months
from the date on which the said decision or order is communicated to such
person.
Further as per sub-section (4), the Appellate Authority may, if he is satisfied
that the appellant was prevented by sufficient cause from presenting the appeal
within the period of three months, allow it to be presented within a further
period of one month.
The EPFO in its circular[1] dated 13 December 2023 has issued the revised FAQs for implementation of judgment of Hon'ble Supreme Court dated 4 November 2022 on higher pension. The circular provides clarity on following key aspects:
This Tax Alert summarizes a recent Instruction[1] issued by the Central Board of Indirect Taxes and Customs (CBIC) with respect to applicability of Supreme Court (SC) ruling in case of Northern Operating System[2] (NOS) to secondment of employees under Goods and Services Tax (GST).
This tax alert summarizes a recent ruling of the Delhi High Court (HC) in the case of Cairnhill CIPEF Ltd. (Taxpayer). In this case, the issue before the HC was whether a person can be treated as a Representative Assessee (RA) of a non-resident (NR) for the purpose of tax recovery under the Indian Tax Laws (ITL) if the said non-resident had ceased to exist.
In this case, Taxpayer (BuyerCo) had purchased shares of an Indian listed
company from a Mauritian Entity (SellerCo) in tax year 2015-16. Capital gains
arising on such transfer were claimed to be exempt from taxation in India under
the India-Mauritius Tax Treaty by SellerCo and such claim was also accepted by
the tax authority in the original assessment carried out in the hands of
SellerCo. Subsequently, SellerCo was liquidated and had ceased to exist. Later,
the Commissioner of Income Tax (CIT) had passed orders to treat BuyerCo as an
RA of SellerCo and revised the original assessment order to levy tax on BuyerCo
on the said capital gains by denying treaty benefit.
On BuyerCo challenging the order of CIT, the HC held that BuyerCo cannot be
regarded as an RA as the SellerCo was not in existence on the date when
revisionary proceedings were initiated. The expression “agent” in the ITL
suggests that there is a principal in existence, on whose behalf the agent
acts, which is not fulfilled in the present case.
· Karnataka High Court in the case of Toyota Kirloskar Motor Pvt. Ltd, has granted stay on the Show Cause Notice (‘SCN') issued for denying ITC of GST paid on secondment of employees from a foreign entity to an Indian entity.
· Gujarat High court in the case of SWATIBEN BIHARILAL PAREKH held that settlement of dispute under the Direct Tax Vivad Se Vishwas Act and finalizing thereof is nothing but the closure of disputes in respect of tax arrears which cannot be subsequently reopened by issuing notice u/s 263 of the Act for revising the assessment order.
Delhi Tribunal Held that No TDS on PE's Notional Profit - A Game-Changer for Compliance!
TDS deductors receiving notices for not deducting TDS at 20% in case of payee not linking PAN with Aadhar:
This Tax Alert summarizes a two-judge bench Supreme Court (SC) ruling, dated 6 December 2023, in a batch of appeals with the lead case being of the Indian taxpayer. The main issue under consideration before the SC was on determination of market value for profit-linked incentive deduction for transfer of power by the Taxpayer from its captive power generation units (PGU) to its manufacturing units (MU). The SC held that in such a case the rate at which the State Electricity Board (SEB) supplied power to the industrial consumers, and not the rate at which PGU sold its surplus power units to the SEB, which is a statute driven rate, must be regarded as the market value for the purposes of determining profit-linked incentive deduction.
Requirement of Form 10F, Tax Residency Certificate and No Permanent Establishment Declaration from the Non-resident Supplier in case of payment for import of goods for more than Rs. 2 crore in a year.
Key amendments to Special Economic Zone Rules, 2006 : Enabling establishment of non SEZ IT/ITeS businesses in SEZ
The Ministry of
Commerce and Industry has inserted a new Rule 11B in the SEZ Rules, 2006 -
‘Non-processing areas for IT/ITeS SEZ’ allowing co-existence of SEZ units and
non-SEZ IT/ITeS business in the same SEZ premises. This amendment will enable
SEZ developers to optimally utilize the vacant space in existing SEZs.
Some of the key features of the amendment are as under:
The Income Tax Portal now features a "Discard ITR" option for unverified original/belated/revised Income Tax Returns (ITRs) starting from Assessment Year 2023-24. In this regard, please note the following important points.
In the realm of international trade, the 'Letter of Credit'
(LC) emerges as a vital financial instrument, gracefully executed by banks on
behalf of buyers to assure sellers of guaranteed payment upon the fulfillment
of specific conditions. It holds its esteemed position as the primary mode of
payment, acting as a secure bridge in the intricate world of transactions.
Notably, LCs are transient, typically concluding their financial choreography
within a concise 90-day window.
The intricacies of LCs unveil a cost discrepancy between
regular LCs and their standby counterparts, with the former incurring a cost
ranging from 0.75 percent to 1.50 percent of the LC amount. This financial
ballet accentuates the nuanced choices that traders must navigate in the realm
of LCs.
Delving into the taxonomy of LCs, we encounter a spectrum of
types, each with its distinctive attributes and nuances.
1️⃣ Irrevocable Letter Of Credit An unalterable testament
to financial commitment, the irrevocable LC stands unwavering, immune to
cancellation or modification without unanimous consent from all involved
parties. The issuing bank assumes an absolute liability, weaving a tapestry of
assurance for the beneficiaries.
2️⃣ Revocable Letter
Of Credit In contrast, the revocable LC dances to the whims of the issuing
bank, susceptible to modification or cancellation at the customer's behest.
This flexibility, however, comes at the cost of diminished liabilities for the
bank post-revocation, leaving the beneficiary in the delicate embrace of
uncertainty.
3️⃣ Stand-By Letter Of
Credit Functioning as a flexible maestro orchestrating collaboration
between seller and buyer, the stand-by LC echoes the tones of a bank guarantee.
The bank steps in to honor the LC when the buyer falters in meeting payment
obligations, serving as a financial safety net.
4️⃣ Confirmed Letter
Of Credit A symphony of dual assurances, the confirmed LC not only bears
the imprimatur of the issuing bank but also gains the confirmation of the
seller's bank or another financial institution. Regardless of the actions of
the issuing bank, the confirming bank shoulders the responsibility for
performance.
5️⃣ Unconfirmed
Letter Of Credit In contrast, the unconfirmed LC stands solitary,
unaccompanied by the backing of any bank beyond the issuer. The advising bank,
though not assuming liabilities, undertakes the role of an authenticator,
ensuring the integrity of the transaction.
6️⃣ Transferable
Letter Of Credit A harmonious solution for scenarios where the seller isn't
the exclusive manufacturer, the transferable LC enables the assignment of parts
of the credit to other parties. This eradicates the need for multiple LCs,
streamlining the process for all involved.
7️⃣ Revolving Letter
Of Credit A perpetual dance of replenishment characterizes the revolving
LC, designed for ongoing supply arrangements. It imposes limits on each draw,
ensuring a rhythmic flow in scenarios where regular payments accompany regular
shipments.
8️⃣ Back-To-Back
Letter Of Credit The back-to-back LC choreography involves the issuance of
a second LC based on the first. Initiated in favor of an intermediary as per
the buyer's instructions, a new LC emerges for the seller of the goods,
embodying a financial pas de deux rooted in strategic orchestration.
In navigating the intricate tapestry of letters of credit,
traders engage in a symphony of financial decisions, each movement shaping the
cadence of international trade
This tax alert summarizes a recent judgement of Madras High Court (HC) regarding classification of “Flavoured Milk” and whether Goods and Services Tax Council (GST Council) is empowered to determine classification of goods.
GST Council, in its 31st meeting held on 22 December 2018, classified
“Flavoured milk” under HSN 2202.
HC observed that:
In the annals of 2017, when the advent of GST dawned upon the business milieu, optimism pervaded. It was widely believed that the tapestry of commerce in our land would be woven with the seamless threads of simplified indirect tax compliance. Alas, the reality unfolded in stark contrast. The enactment and the system proved neither facile nor smooth. A colossal ordeal awaited businesses during the transition.
In the collective yearning for enlightenment, the inquiry arises regarding the fiscal inducements
accessible to fledgling enterprises within the Indian realm. Hereinafter, I proffer a concise compendium delineating the aforesaid tax benefits bestowed upon such nascent entities.
This Tax Alert summarizes a recent ruling of the Delhi High Court (HC) [1]. The issue involved was whether the Tax Research Unit (TRU) under the Department of Revenue, Ministry of Finance, is authorized to issue circulars under the Goods and Services Tax (GST) law.
👉Rule 9. Verification of the application and approval
• For physical verification of premises presence of registered person is not required 👉Rule 10A. Furnishing of Bank Account Details • Time limit for furnishing Bank Account is reduced 👉Rule 21A. Suspension of registration • RC will be suspended if Bank account is not furnished or Discrepancy in GSTR-3B and GSTR-1 👉Rule 23. Revocation of cancellation of registration • Time limit for applying for revocation of cancellation of GST registration extended from 30 days to 90 days and time limit by the Commissioner/officer is extended for a further period of not exceeding 180 days (W.e.f-01-10-23) 👉Rule 25. Physical verification of business premises in certain cases • For physical verification of premises presence of registered person is not required 👉Rule 43. Manner of determination of input tax credit in respect of capital goods and reversal thereof in certain cases • Determination of value of exempted value with reference to certain supplies mentioned in Schedule III. (W.e.f 01/10/23) 👉Rule 46. Tax invoice • Pin code number is not required for supply to unregistered person through e-commerce operator 👉Rule 59. Form and manner of furnishing details of outward supplies • GSTR-1 or IFF will not be allowed if reply is not furnished, or amounts paid for the difference between GSTR-3B and GSTR-2B for the noticed issued under Rule 88D or Bank details are not furnished as required under Rule 10A 👉Rule 64. Form and manner of submission of return by persons providing online information and data base access or retrieval services (W.e.f 01/10/23) • Minor change wrt to non-taxable online recipient 👉Rule 67. Form and manner of submission of statement of supplies through an e-commerce operator • Sub rule redrafted for clarity 👉Rule 88D. Manner of dealing with difference in input tax credit available in auto-generated statement containing the details of input tax credit and that availed in return • New rule for the difference in GSTR-2B and GSTR-3B with reference to availment of ITC 👉Rule 89. Application for refund of tax, interest, penalty, fees or any other amount • Refund on account of casual registrant and modified statement for excess payment of tax, interest and any other amount 👉Rule 94. Order sanctioning interest on delayed refunds • Exclusion of Certain Periods from Delay in Sanctioning Interest on Refunds (W.e.f 01/10/23) 👉Rule 96. Refund of integrated tax paid on goods or services exported out of India • Certain provisos omitted 👉Rule 108. Appeal to the Appellate Authority • Manual filing of Appeal is legalized if the order is not uploaded electronically 👉Rule 109. Application to the Appellate Authority • Manual filing of Appeal is legalized for Department, if the order is not uploaded electronically1. Finance Act 2022 and Rule 17AA of the Income Tax Rules inserted with effect from the assessment year 2022-23 specifies the requirements for maintaining books of accounts and other documents for trusts and institutions.
During their regular operations, business entities often accrue a range of expenses related to immovable properties, such as construction for structures like factory buildings, sheds, ETP/STP plants, as well as securing land through lease agreements for factory setups. These lease agreements typically involve one-time upfront premiums, one-time common infrastructure and development fees, annual lease rentals, and annual maintenance charges.
This Tax alert summarizes recent Circulars issued by Central Board of Indirect Taxes and Customs (CBIC) based on the recommendations made by the Goods and Services Tax (GST) Council in its 52nd meeting.
The key clarifications are:
Comments
|
S No |
Due
Date |
Related
to |
Compliance
to be made |
|
1 |
11.11.2023 |
GSTR –
1 |
Filing
of GSTR 1 for the month of October 2023
|
|
2 |
20.11.2023 |
GST |
-Payment
of GST for the month of October, 2023 -Filing
of GSTR 3B for the month of October, 2023 |
|
3 |
07.11.2023 |
TDS/TCS (Income Tax) |
·Deposit
TDS for payments of Salary, Interest, Commission or Brokerage, Rent,
Professional fee, payment to Contractors, etc. during the month of October 2023. ·Deposit TDS from Salaries deducted during the
month of October 2023 • Deposit TCS for collections made under section
206C including sale of scrap during the month of October 2023, if any • Deliver a copy of Form 15G/15H, if any to CCIT
or CIT for declarations received in the month of October 2023, if any |
|
4 |
30.11.2023 |
Filing
of returns for the Company and Trusts |
Filing of Master File data in Form 3CEAA for FY
2022-23.
Filing of income
tax return for the Corporate assesses with Transfer Pricing |
