TAX DUE DATE - FEBRUARY 2024.

 

Sr No	Due Date	Related to	Compliance to be made
1	11.02.2024	GST	Filing of GSTR 1 for the month of January, 2024

2

20.02.2024

GST

Payment of GST for the month of January, 2024 Filing of GSTR 3B for the month of January, 2024

3

07.02.2024

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 January 2024. · Deposit TDS from Salaries deducted during the month of January 2024 • Deposit TCS for collections made under section 206C including sale of scrap during the month of January 2024, if any

No interest if GST is deposited in cash ledger

 This is to apprise you about an important decision by the Hon’ble Madras High Court (‘HC'), in the case of Eicher Motors Limited, WP No. 16866 & 22013 of 2023, wherein the Court held that where GST was deposited in Electronic Cash Ledger (‘ECL’), it would amount to payment to Government and interest cannot be levied merely because GSTR-3B was not filed.

GST on overseas branches.

Facts

An Indian company has branches in other countries. These branches earn money by providing services to customers in those countries. The company pays local taxes (VAT/GST) in each country and pays income tax there on the money they earn. Since the income comes from the branches, it is combined in the accounts of the main headquarters.  

Uploading of GST Notices and Orders on Portal

 This is to apprise you about a recent advisory issued by the GST Department related to ‘Notices and Orders’ Tab on GST Portal. There were confusions amongst the taxpayers about the type of GST Notices uploaded on ‘Notices and Orders’ Tab and ‘Additional Notices and Orders’ Tab.

The burden of proof in relation to the Prevention of Money Laundering Act

 1. Section 45 of the Prevention of Money Laundering Act (PMLA) deals with the provision for bail.

Everything you need to know about the ITR-U

Introduction:
 1. Section 139(8A) under the Income Tax Act allows you a chance to update your ITR within two years.
 2. Two years will be calculated from the end of the year in which the original return was filed. ITR-U was introduced to optimise tax compliance by taxpayers without provoking legal action.
 3. Updated Return can be filed only if there is an increase in tax liability.

"Navigating Shifting Tides: Reassessing Singapore's Allure for Indian Businesses

 In recent times, Singapore has been a preferred hub for Indian companies aiming for efficient global expansion. Many Indian startups have chosen Singapore as their base, leveraging its stability and business-friendly environment.

I-T Dept mandates LEI for Non-individuals for Refunds of INR 50 Crore or above

 1. The Income Tax Department recently made an announcement by displaying on its website a message stating that “According to the RBI Notification, in the case of non-individuals, a Legal Entity Identifier (LEI) No. is required for credit of refunds of Rs. 50 Crores and above. For hassle-free refund processing, please submit LEI details on the Income Tax portal in Login->Dashboard->Services->LEI.”

FREQUENTLY ASKED QUESTIONS

Q. What is a TRC certificate?

Ans :

1.     A person who qualifies as a ‘Resident and Ordinarily Resident’ (ROR) is required to offer to tax all his income earned across the globe. Both his Indian and foreign income will be subject to tax. Also, such foreign income may be taxed in the source country as well. You will end up paying tax on the same income twice- once in the source country and once in the country of residence. 

Karnataka Compulsory Gratuity Insurance Rules, 2024 notified effective 10 January 2024

 On 10 January 2024, the Karnataka Government published the Karnataka Compulsory Gratuity Insurance Rules, 2024 (Rules) (No: LD 397 LET 2023) to prescribe the requirement for employers to obtain a valid insurance policy for the employer’s liability towards payment of gratuity to eligible employees as per the Payment of Gratuity Act 1972 (‘Gratuity Act’). With this, Karnataka has become the second state to issue rules on compulsory gratuity insurance after the Andhra Pradesh Compulsory Gratuity Insurance Rules issued in 2011.

The Rules prescribe the following key aspects in relation to the requirement to obtain insurance:

1. Obtaining insurance - The insurance policy can be obtained from the Life Insurance Corporation (LIC) or any other insurance company incorporated under applicable law for insurance companies.

Existing companies have been provided a timeline of sixty days to obtain such insurance policy (i.e., till 10 March 2024). New employers are required to obtain such insurance within a period of thirty days from the date on which the Rules become applicable to the establishment

2. Registration – Employer is required to submit an application to get the establishment registered with the Controlling Authority in the prescribed format, within thirty days from the date of obtaining insurance. Further, whenever there is a change in the employees insured or policies or any other pertinent information, the employer is required to furnish the details to the Controlling Authority.

3. Payments and Intimation – Employer is required to exercise due diligence and ensure that the payment of premium to the insurance company is made on a timely basis (before lapse of the policy), renewal of the insurance is done periodically the same is intimated to the Controlling Authority within fifteen days from renewal.

4. Recovery of the amount of Gratuity –The Controlling Authority is authorised to recover the gratuity payable to an employee directly from the LIC or other insurance provider.

5. Incorporation/continuation of Approved Gratuity Fund – An employer who has already established an approved gratuity fund OR has more employed 500 or more persons may opt to continue / adopt such arrangement. Such employer is required to submit an application in a prescribed form and is required to ensure that the approved gratuity fund covers the entire liability of all the employees of the establishment.

6. Conditions for Gratuity Trust – The Rules also prescribe the following key aspects in relation to the Gratuity Trust for it to qualify as Approved Gratuity Fund (Rule 7 of the Rules):

a. Employer to maintain the Gratuity Trust as an irrevocable trust.
b. Gratuity Trust should have 5 but not equal number of representatives of the employer and employees
c. Gratuity Trust should be registered with the authority notified under Indian Trusts Act, 1882 or any other applicable law and also ensure compliance with provisions of Income Tax Act, 1961 and any other applicable law.
d. Gratuity Trust shall be managed privately OR by the insurance company OR jointly by paying the calculated amount to the approved Gratuity Trust fund periodically.
e. Where employer has obtained a group gratuity scheme from an insurance company, the same should be approved under Part C of the Fourth Schedule to the Income-tax Act.
f. For privately managed Gratuity Trust, investment of funds by the Gratuity Trust shall be in accordance with the Investment Pattern prescribed in the Income-tax Act.
g. The gratuity funds are totally protected and the outflow shall be only to eligible employees at the time of their exit from service. Money shall not be withdrawn by employer or by the Gratuity Trust for any purpose other than the payment of gratuity to eligible employees.
h. Bye-laws should have detailed procedures on claim and release of the calculated amount of gratuity to eligible employees.
i. Gratuity Trust is required to adhere to Indian accounting standard on Employee Benefits.
j. The Board of Trustees of the Gratuity Trust shall send discharge letter and advise insurance company or make arrangement of payment of gratuity as per the scheme at the time of exit of an employee.
k. The Gratuity Trust and the insurance company are jointly and severally responsible for fulfilment of liabilities under the Act.

HC holds GST audit cannot be conducted after cancellation of registration

 This tax alert summarizes a recent ruling of the Madras High Court (HC) ^[1]. The issue involved was whether an audit under the Central Goods and Services Tax Act, 2017 (CGST Act) could be conducted after the registration had been canceled.

HC holds GST Compensation Cess is not exempt on import of goods by SEZ

This tax alert summarizes a recent decision of the Andhra Pradesh High Court (HC)^[1]. The issue involved was whether exemption from payment of Compensation cess under Goods and Services Tax (GST) is available on import of goods by Special Economic Zone (SEZ) units.

HC observed that Section 7, 26 and 50 of the SEZ Act, 2005 are the three main provisions which allow the SEZ units to claim the exemptions of duties, tax, cess and certain drawbacks and concessions.

SEZ Act is a self-contained law that provides exemptions from various taxes and duties, including those on goods imported and exported by developers and units in SEZs. Therefore, the exemptions have to be looked into from the provisions of the said Act and not from elsewhere.

The key requirement for Section 7 to apply is that the law which imposes the tax, duty, or cess must be referenced in the First Schedule of SEZ Act. Goods and Services Tax (Compensation to States) Act, 2017 is not mentioned in the First Schedule.

HC noted that there is difference between the terms “tax/duty” and “cess”. On considering Section 26(1)(a) and 2(zd) of SEZ Act along with Section 2(15) of the Customs Act, it becomes clear that “duty of customs” used in Section 26(1)(a) pertains only to duty of customs and not any cess much-less the GST Compensation cess.

Further, there is no exemption provided for compensation cess either under Customs Act or GST Act.

Accordingly, HC held that GST Compensation cess is not exempt on import of goods by SEZ.

Comments

CBDT issues further guidelines on withholding tax on e-commerce transactions involving multiple e-commerce operators and other issues

This Tax Alert summarizes Circular No. 20/2023 dated 28 December 2023 (Circular) issued by the Central Board of Direct Taxes (CBDT), which provides further guidelines for removing certain difficulties in the application of tax deduction at source (TDS) on e-commerce transactions.

In the wake of representations received from stakeholders, the Circular provides the following additional clarifications on the applicability of withholding tax on single transactions involving multiple e-commerce operators (EOPs) and other issues: