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TMI Tax Updates - e-Newsletter
January 3, 2019
Case Laws in this Newsletter:
Income Tax
Central Excise
CST, VAT & Sales Tax
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Rate of GST on Multimodal transportation of goods, services - Explanation 2 inserted to item no. 9(vi)
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3 new services specified to be taxed under Reverse Charge Mechanism (RCM) as recommended by Goods and Services Tax Council in its 31st meeting held on 22.12.2018.
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Fresh exemption from GST on certain services as recommended by Goods and Services Tax Council in its 31st meeting held on 22.12.2018.
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GST rates of various services as recommended by Goods and Services Tax Council in its 31st meeting held on 22.12.2018.
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Fresh exemption from GST on supply of gold by nominated agencies to registered persons.
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Fresh exemption from GST on certain goods as per recommendations of the GST Council in its 31st meeting.
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Changes in the GST rates on certain goods as per recommendations of the GST Council in its 31st meeting
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Power given to Board to assign territories jurisdiction to specified officers in specified cases.
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Due date extended for furnishing FORM ITC-04 for the period from July, 2017 to December, 2018 till 31.03.2019.
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Amount of late fee payable for delayed filing of FORM GSTR-3B and fully waiver of the amount of late fees leviable on account of delayed furnishing of FORM GSTR-3B for the period July, 2017 to September, 2018 in specified cases.
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Waiver of Late fees leviable on account of delayed furnishing of FORM GSTR-1 for the period July, 2017 to September, 2018 in specified cases.
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Supplies made by Government Departments and PSUs to other Government Departments and vice-versa exempted from TDS.
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Time limit for furnishing the return in FORM GSTR-3B for the newly migrated taxpayers extended.
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Due date extended for availing the special procedure for completing migration of taxpayers who received provisional IDs but could not complete the migration process.
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Clarification regarding GST tax rate for Sprinkler and Drip Irrigation System including laterals
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Clarification regarding GST rates & classification (goods)
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GST Revenue collection for December 2018
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GST on Services of Business Facilitator (BF) or a Business Correspondent (BC) to Banking Company
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Clarification on GST rate applicable on supply of food and beverage services by educational institution
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Clarification on issue of classification of service of printing of pictures covered under 998386
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Applicability of GST on Asian Development Bank (ADB) and International Finance Corporation (IFC)
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Applicability of GST on various programmes conducted by the Indian Institutes of Managements (IIMs)
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Due date for furnishing the statement in FORM GSTR-8 by e-commerce companies for the months of October to December, 2018 extended till 31.01.2019
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Due date for furnishing of annual returns in FORM GSTR-9, FORM GSTR-9A and reconciliation statement in FORM GSTR-9C for the FY 2017-2018 extended till 30.06.2019.
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Due date for availing ITC on the invoices or debit notes relating to such invoices issued during the FY 2017-18 extended till 31.3.2019
Income Tax
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Procedure, Formats and Standards of issue of Permanent Account Number (PAN)
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INCOME-TAX DEDUCTION FROM SALARIES DURING THE FINANCIAL YEAR 2018-19 UNDER SECTION 192 OF THE INCOME-TAX ACT, 1961
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Disallowance of expenses and depreciation - the assessee showed the alienation of the parcel of the land at Baramati. There is nothing on record that the assessee has wound up the business. There is a temporary lull in the business - Claim of deduction allowed.
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Denial of deduction u/s 10B - alternate claim of assessee for deduction under section 10A - after the amendment it is not case of exemption but a case of deduction under section 10A of the Act.
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Estimation of gross profit - assessee had given a reasonable explanation for the lower gross profit shown by it during the relevant previous year - addition for lower gross profit was not warranted.
Customs
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Procedure for disposal of un-claimed/un-cleared cargo under section 48 of the Customs Act, 1962, lying with the custodians
Central Excise
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Once the appellant has paid the amount as per Rule 6(3) of CCR, the Revenue cannot insist that the appellants should reverse the entire credit - the appellants in order to buy peace reverse the entire credit and also paid the interest on the remaining amount - thus, it was not justified to impose penalty.
Case Laws:
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Income Tax
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2019 (1) TMI 51
Adjustment of dues - bank's refund for the assessment year 2010-11 was adjusted in part against the alleged tax dues of the bank principally for the assessment years 2008-09 and 2012-13 - Commissioner(Appeals) had already granted substantial reliefs to the Petitioner and therefore, tax demand for the said year would not survive - adjustment of dues came to be dropped by the Authority - Held that:- We are conscious that the Revenue Authorities are under considerable pressure of work and time limits staring at the face. We also understand that the Government machinery and the Government Officers need to be cautious when the question of large amount of refund arises. Internal checks and verifications must be unbuilt in the system. Nevertheless we do expect that the Officers do not act insensitively and without justifiable reasons delay the refunds giving rise to dissatisfaction and at times need less litigation. In the affidavit-in-reply dated 3rd August 2018, the Deputy Commissioner of Income Tax has in addition to explaining the reason for some delay in correcting position visavis the assessment year 2008-09 has tendered apology to the Court and also to the Petitioner. We, therefore, close the issue without any further order or observations.
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2019 (1) TMI 50
Allowable business expenditure - Disallowance of foreign travel expenditure relating to its director’s son - Held that:- Assessee’s case throughout has seen that it had incurred the impugned expenditure for Shri Kejriwal as a management trading wholly and exclusively for the purpose of its business allowable as deduction u/s 37 of the Act. We find this issue to be no more res integra as a co-ordinate bench’s decision in assessee’s case itself for assessment year 2011-12 [2018 (2) TMI 1818 - ITAT KOLKATA] - decided in favour of assessee
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2019 (1) TMI 49
Disallowance of expenses and depreciation - assessee has not undertaken any business activities during the year or during the previous year thereby not put to use the assets for business - Held that:- The company was engaged in the business of execution construction contracts and forming part of the Gammon group. Undoubtedly in the year in question, the assessee did not do any business at all. However, the assessee showed the alienation of the parcel of the land at Baramati. There is nothing on record that the assessee has wound up the business. There is a temporary lull in the business. The CIT(A) has decided the matter of controversy on the basis of numbers of decisions which have been mentioned in the order and is not required to be repeated. But the expenses and the depreciation are not in dispute - Decided in favour of assessee.
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2019 (1) TMI 48
Reopening of assessment - unexplained cash payments for purchase of immovable property - as contended that no independent enquiry was carried out by the assessing officer - denial of natural justice - non providing opportunity of cross examining - Held that:- A.O. has to form a belief that certain income has escaped assessment and he does not require to verify whether the information is correct or false. Such exercise would be carried out only after issuing notice u/s 148. Hence, this contention of the assessee is rejected. Another contention of the assessee is that he was not provided opportunity of cross examining Shri Deepak Gupta and the Directors of M/s. Amrit Colonizers Pvt. Ltd. we find merit into these submissions of the assessee as the revenue has based its finding on the basis of certain documents belonging to third party where certain entry is recorded by that third party relating to the assessee. A.O. before making assessment should have granted opportunity of cross examining such person - set aside the assessment order and restore the issue of assessment to the file of the A.O. to make a de-novo assessment after providing opportunity of cross examination to the assessee. A.O. would decide on the basis of material available on record and the cross examination made by the assessee. - Decided in favour of assessee for statistical purposes.
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2019 (1) TMI 47
Denial of deduction u/s 10B - alternate claim of assessee for deduction under section 10A - Held that:- Present appeal is squarely covered by the decision of Pune Bench of Tribunal in Approva Systems Pvt. Ltd. Vs. DCIT [2018 (3) TMI 1031 - ITAT PUNE] and we hold that the assessee is entitled to the alternate claim of deduction under section 10A of the Act. The matter is set aside to the file of Assessing Officer for the limited purpose of computing the said deduction in accordance with law. There is no merit in the order of Assessing Officer in holding that the assessee is not entitled to the said deduction under section 10A of the Act, since the assessee in written submissions had claimed the deduction under section 10B of the Act and not 10A of the Act. The assessee is at liberty to raise the issue before the Assessing Officer or CIT(A) and make fresh claim in this regard as held in CIT Vs. Pruthvi Brokers & Shareholders Pvt. Ltd. [2012 (7) TMI 158 - BOMBAY HIGH COURT]. Deduction u/s 10A before setting off of brought forward losses and unabsorbed depreciation - Held that:- This issue stands covered in favour of assessee by the ratio laid down by the Hon’ble Bombay High Court in CIT Vs. Black & Veatch Consulting Pvt. Ltd. [2012 (4) TMI 450 - BOMBAY HIGH COURT] and the aforesaid deduction u/s 10B is to be computed before adjusting brought forward unabsorbed losses / depreciation. Revenue has pointed out that the issue stands covered in the case of Himatasingike Seide Ltd. Vs. CIT [2013 (10) TMI 823 - SUPREME COURT]. As held in Himatasingike Seide Ltd. Vs. CIT (supra) is with relation to pre-amended provisions of section 10A of the Act. However, after the amendment it is not case of exemption but a case of deduction under section 10A of the Act, hence, the said proposition is not to be applied. - Decided against revenue
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2019 (1) TMI 46
Revision u/s 263 - Estimation of gross profit - Held that:- There is no case for the Revenue that assessee failed to produce its books of accounts or the evidence in support of such books of accounts during the course of assessment proceedings. It is to be noted that original by the assessment was completed u/s. 143(3) on 30.09.2012 accepting the returned income. Impugned assessment was in a second round of proceedings pursuant an order under Section 263 of the Act. In both the rounds, AO could not point out any defect in the books of accounts. Just for a reason that gross profit was lower, in our opinion an addition could not have been made. No doubt as held in the case of Goodyear India Ltd [2000 (7) TMI 32 - DELHI HIGH COURT], it is not necessary to accept the books just because an audit u/s.44AB of the Act was conducted. Here the question is not audit conducted u/s.44AB of the Act, the question is whether there were any defects in the books of accounts. AO was unable to find any deficiency in the books produced by the assessee. That apart, we also find that assessee had given a reasonable explanation for the lower gross profit shown by it during the relevant previous year - addition for lower gross profit was not warranted. In our opinion, CIT (Appeals) was justified in deleting such addition - decided against revenue
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Central Excise
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2019 (1) TMI 45
CENVAT Credit - input services - GTA Service - ‘FOR’ basis - Rule 2(1) of the CCR, 2004 - Held that:- The appellants as per the contracts entered into between the parties, the appellants are supplying the goods on ‘FOR’ basis and are availing the credit on Service Tax paid on GTA services on the ground that it falls under the definition of ‘input service’ as contained in Rule 2(1) of the CCR, 2004 - in the purchase order itself the terms and conditions are on ‘FOR’ basis and ownership remains with the appellant till the goods are delivered to the buyer at the buyers’ premises and the cost of transit insurance and freight in respect of the goods sold are borne by the appellant. Extended period of limitation - suppression of facts - Held that:- The appellants have not suppressed any fact and they have been filing return regularly and has been showing the CENVAT credit availed on various input services including the GTA services - the Service Tax paid on GTA services is admissible as credit being input service and there were decisions in favor of the appellant regarding the same issue before the decisions of the Apex Court in the case of Ultratech Cement Ltd. [2018 (2) TMI 117 - SUPREME COURT OF INDIA] - the demand beyond the normal period of limitation is set aside as there was no intention to evade payment of duty. Penalty - Held that:- The penalties imposed on the appellant are also not sustainable. Appeal disposed off.
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2019 (1) TMI 44
Imposition of penalty - reversal of credit on inputs used exclusively for exempted goods on being pointed out - non-maintenance of separate records - Rule 6(3) of CCR - Held that:- The appellants have opted to pay 6% of the value of the exempted goods as per the option given under Rule 6(3)(i) because they are unable to maintain separate accounts relating to inputs used in the exempted goods - the appellants have taken total credit of ₹ 56,79,065 and in order to buy peace, he has further reversed ₹ 10,34,237 along with interest; though, he was not required to pay the same. Once the appellant has paid the amount as per Rule 6(3) of CCR, the Revenue cannot insist that the appellants should reverse the entire credit - the appellants in order to buy peace reverse the entire credit and also paid the interest on the remaining amount - thus, it was not justified to impose penalty - appeal allowed - decided in favor of appellant.
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2019 (1) TMI 43
CENVAT Credit - fake invoices - credit denied on the ground that the appellants have received only invoices and not the goods - penalty - Held that:- The Revenue has failed to prove that if the said inputs have not been received in their factory, then from where the inputs have been replaced by the appellants against those invoices - also, M/s Prime Metalloys Pvt Ltd have specifically mentioned that they have supplied the goods to the appellant. The investigation conducted by the DGCEI in this case is not proper and having various infirmities - the benefit of doubt goes to the favour of the appellants - credit allowed. Penalty - Held that:- As Cenvat credit cannot be denied, therefore, no penalty can be imposed on the appellants. Appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2019 (1) TMI 42
Principles of natural justice - Levy of VAT - differential turnover between the balance sheet and form WW - development of software and sales turnover of branch office in the State of Kerala - grievance of the petitioner is that the order of assessment came to be passed for each assessment year without considering the documents filed along with the reply and without affording an opportunity of personal hearing to the petitioner - Held that:- It is seen that while filing the objections to the notice of proposal, the petitioner has filed the documents, as is evident from the acknowledgment dated 14.05.2018 sent in the letter delivery book - When such being the factual position, this Court is not in a position to know as to how the Assessing Officer has come to the conclusion that the petitioner has not filed any supportive documents - Whether the documents filed by the petitioner are supporting the case of the petitioner or not, is another question, which has to be considered and decided only by dealing with those documents. Personal hearing - Held that:- It is for the Assessing Officer to indicate a specific date of personal hearing after getting the reply from the petitioner - In this case, it has not been done. This Court is inclined to remit the matter in respect of these two issues - the matter is remitted back to the Assessing Officer to re-do the assessment, after considering the documents already filed by the petitioner and also by providing an opportunity of personal hearing to the petitioner - petition allowed by way of remand.
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