The document provides an FAQ-style overview of the Input Service Distributor (ISD) mechanism, which will become mandatory under GST regulations effective April 1, 2025. The ISD mechanism aims to streamline the distribution of input tax credits (ITC) among entities with multiple GST registrations. Key highlights include:
1. Situation
I. Tax Department Summons
An employee received a summons from the tax department demanding an explanation for failing to disclose €X deposited in his German bank account.
Summary of the relevant
updates is provided below for ease of your reference:
A) Proposals relating to GST law, Compliances and Procedures
This Tax Alert summarizes Circular No. 19/2024 dated 16 December 2024 (VSV 2- December Circular) issued by the Central Board of Direct Taxes[1] (CBDT) which contains second round of 27 frequently asked questions (FAQs) on the operation of Direct Tax Vivad Se Vishwas Scheme, 2024 (VSV 2). The Circular is issued in continuation of an earlier Circular No. 12/2024 dated 15 October 2024[2] (VSV 2 - October Circular) which contained the first round of 35 FAQs.
This is to update you about a recent decision passed by Delhi High Court in the case of Centrans Logistics Pvt Ltd (W.P.(C) 7983/2023, dated December 09, 2024) wherein it was held that a separate Document Identification Number (‘DIN’) is not required for issuance of communications related to processing of refund claims under the GST laws.
This Tax Alert summarizes a recent Statement issued by Switzerland Competent Authority[1] (Swiss CA) on 11 December 2024 (2024 Statement) withdrawing Switzerland’s unilateral application through earlier Statement published on 13 August 2021 (2021 Statement) of Most Favored Nation (MFN) Clause in India- Switzerland (I-S) Double Taxation Avoidance Agreement (DTAA or Treaty) w.e.f. 1 January 2025.
The 2024 Statement acknowledges the interpretation given by the Supreme Court
(SC) of India in the case of Nestle SA [2], wherein the SC held that
the benefit of MFN Clause is not applicable in absence of a notification
granting such benefit in accordance with the provisions of the Indian Tax Law
(ITL). Further, the SC held that the term ‘third
State which is a member of the OECD’ is to be interpreted as being
limited to the member states of the Organisation for Economic Co-operation and
Development (OECD) at the time when such treaties were entered into with India.
Hence, the 2024 Statement acknowledges that the interpretation of MFN clause by
Swiss CA through its 2021 Statement is not shared by India. Accordingly, in
terms of the right reserved in 2021 Statement to reverse the unilateral
interpretation if there is no reciprocity by the Indian CA, the 2024 Statement
waives its unilateral application prospectively from 1 January 2025.
Further, the 2024 Statement clarifies the effect of such withdrawal w.e.f. 1
January 2025 on Indian and Swiss tax residents deriving dividend income from
Switzerland and India respectively. Indian residents deriving dividend income
from Switzerland, on or after 1 January 2025, shall be taxed @10% on such
income without giving effect to the MFN clause. However, benefit of lower tax
rate of 5% on such incomes as per MFN clause may continue to apply for dividend
income earned during the tax years from 2018 to 2024.
Correspondingly, Swiss residents deriving dividend income from India w.e.f. 1
January 2025 shall get higher foreign tax credit up to 10% instead of 5%.
A. Introduction: Section 270A of the Income Tax Act classifies variations in income into two categories: under-reporting and misreporting. Penalties for under-reported income are 50% of the tax payable, while for misreported income, they escalate to 200% of the tax base calculated on such income.
This Tax Alert summarizes a recent decision of the Special Bench (SB) of the Ahmedabad Income-tax Appellate Tribunal (ITAT), in the case of TBEA Shenyang Transformer Group Company Limited (Taxpayer or the Head Office or HO).
The question before the SB was whether transactions between a foreign
enterprise and its Indian permanent establishment (PE) can be considered an
international transaction for the purpose of section 92 of the Income-tax Act,
1961 (the Act) and accordingly subject to the transfer pricing (TP) provisions
of the Act. The SB ruled that a PE is a separate enterprise distinct from the
HO for the purpose of the Act as well as under Article 7 of the applicable
Double Taxation Avoidance Agreement (DTAA). The SB thereafter concluded that transactions
between a foreign enterprise and its PE in India can be considered an
international transaction and be subject to transfer pricing provisions. The SB
however left the questions on whether the HO and its Indian PE are Associated
Enterprises (AE) as defined in section 92A(2) of the Act and whether the
transactions of the PE could be deemed international transactions under section
92B(2) of the Act for the Division Bench of the ITAT to decide based on the
facts and circumstances of the case and the provisions of applicable law.
The Reserve Bank of India (RBI) announced its monetary policy review on December 6, 2024, leaving the repo rate unchanged at 6.5%. However, it implemented non-conventional measures, including a phased 50 basis points (bps) reduction in the Cash Reserve Ratio (CRR) to 4.0% from 4.5%. This move is expected to inject INR 1.1 trillion ($13 billion) into the banking system, addressing liquidity concerns.
Small and Medium Enterprises (SMEs) are a cornerstone of India’s economy, driving employment and contributing to growth. However, they often operate with limited margins while navigating complex regulations. Effective tax planning can alleviate financial pressure, allowing SMEs to maximize savings through appropriate tax deductions and credits.
The Central Board of Direct Taxes (CBDT) has issued a press release providing clarifications on the newly introduced PAN 2.0 system. Among the Frequently Asked Questions (FAQs) shared, two stand out for their importance: FAQ 3 and FAQ 7. These address concerns about the continued validity of existing PAN cards and the functionality of QR codes in PAN 2.0.
The taxation of transactions within a Hindu Undivided Family (HUF) is governed by specific provisions under the Income Tax Act, 1961. This article examines the tax implications of transfers from HUF members to the HUF and vice versa, focusing on income derived, gifts, and the treatment of HUF partition.
|
S No |
Due
Date |
Related
to |
Compliance
to be made |
|
1 |
11.12.2024 |
GSTR –
1 |
Filing
of GSTR – 1 for the month of November 2024 |
|
2 |
20.12.2024 |
GST |
Payment
of GST for the month of November, 2024 Filing
of GSTR 3B for the month of November, 2024 |
|
3 |
07.12.2024 |
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 November
2024. · Deposit TDS from Salaries deducted during the month of November 2024 • Deposit TCS for collections made under section 206C including sale
of scrap during the month of November 2024, if any • Deliver a copy of Form 15G/15H, if any to CCIT or CIT for
declarations received in the month of November 2024, if any |
|
4 |
15.12.2024 |
Income
tax |
Payment
of Advance tax for the Corporate and Non Corporate assesses –Amount not less
than 75% and 60% of advance tax respectively. |
|
5 |
31.12.2024 |
GST |
Filing
of Annual Return - GSTR 9 & 9C. |
