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Home e-Newsletters Index Year 2024 October Day 15 - Tuesday

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TMI Tax Updates - e-Newsletter
October 15, 2024

Case Laws in this Newsletter:

GST Income Tax Customs Insolvency & Bankruptcy PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws



Articles

1. "Any Property" is not "Any Property"

   By: Madhusudan Mishra

Summary: The article discusses the interpretation of the term "property" within the context of Goods and Services Tax (GST) law. It highlights the confusion in categorizing property as either goods or services, emphasizing that immovable properties are considered services, not goods. The author argues against efforts to define "property" under GST, as it doesn't neatly fit into either category. The analogy of excluding dogs from a class of "students" is used to illustrate the complexity of categorizing property, suggesting that exclusions imply a broader category that doesn't encompass the entire scope.

2. Article on Notification No. 22/2024 - Input Tax Credit (ITC)

   By: RAHUL MODI

Summary: Notification No. 22/2024 introduces a rectification procedure for taxpayers who wrongly availed Input Tax Credit (ITC) under Section 16(4) of the CGST Act, 2017. It allows eligible taxpayers to correct past ITC errors if the credit is now claimable under Sections 16(5) or 16(6), provided no appeal is pending. Applications must be submitted electronically within six months, with detailed documentation. Tax officers will review and decide within three months. Taxpayers must ensure eligibility, submit accurate information, and consider withdrawing appeals to utilize this procedure, which aims to streamline GST compliance and reduce disputes.

3. Exploring the Status of Credit in Contemporary Tax Law: A Vested Right or a Lost Status?

   By: Shoubhik Bose

Summary: The article examines the contentious issue of whether Input Tax Credit (ITC) under India's Goods and Services Tax (GST) is a vested right or a government concession. ITC allows businesses to offset taxes paid on inputs against taxes on outputs, reducing the overall tax burden. The transition from MODVAT/CENVAT to GST introduced new rules on ITC eligibility, leading to legal disputes. Courts have varied in their rulings, with some viewing ITC as a vested right once statutory conditions are met, while others see it as a concession subject to government-imposed conditions. The debate continues amid ongoing litigation and policy changes.

4. Common time limit for issuing demand notices and orders, regardless of whether the case involves fraud, suppression, or willful misstatement

   By: Bimal jain

Summary: The introduction of Section 74A in the Central Goods and Services Tax Act, 2017, aims to unify the time limits for issuing demand notices and orders, regardless of fraud or misstatement involvement, starting from the financial year 2024-25. This section consolidates the provisions of Sections 73 and 74, establishing a uniform 42-month period from the due date for filing the annual return. It introduces a threshold limit for tax demands below Rs. 1,000 and extends the time for reduced penalty payments from 30 to 60 days. Section 74A seeks to simplify tax administration, enhance compliance, and ensure efficient tax recovery.

5. CANCELLATION OF DESIGNS

   By: DR.MARIAPPAN GOVINDARAJAN

Summary: The Designs Act, 2000, defines 'design' and outlines the process for cancellation of a design's registration under Section 19. A petition for cancellation can be filed on grounds such as prior registration, lack of originality, or non-compliance with the Act. Appeals against cancellation decisions by the Controller can be made to the High Court. In a specific case, the Madras High Court ruled that it lacks concurrent jurisdiction with the Controller for design cancellation petitions, directing the petitioner to seek recourse through the Controller of Designs. The petitioner was granted 60 days to approach the Controller.

6. ITC benefit allowed on commercial property construction

   By: Bimal jain

Summary: The Supreme Court upheld the validity of Sections 17(5)(c) and 17(5)(d) of the Central Goods and Services Tax Act, 2017, rejecting a constitutional challenge. It clarified that "plant or machinery" in Section 17(5)(d) differs from "plant and machinery" in Section 17(5)(c). The Court emphasized a functionality test to determine if buildings like malls or warehouses qualify as "plants" eligible for Input Tax Credit (ITC), based on their role in business activities. The Court remanded cases for factual analysis, highlighting that ITC is a statutory right and not a fundamental one.


News

1. Advisory for Taxpayers: New GST Provision for Metal Scrap Transactions

Summary: The government has issued Notification 25/2024-Central Tax on October 9, 2024, under GST Section 51 of the CGST Act, 2017, requiring businesses dealing with metal scrap to comply with new provisions. These businesses must register through FORM GST REG-07 on the GST portal, which will soon be updated to facilitate this compliance.

2. National Electricity Plan (Transmission) launched by Cabinet Minister for Power and Housing & Urban Affairs

Summary: The National Electricity Plan (Transmission) aims to transmit 500 GW of renewable energy by 2030 and over 600 GW by 2032. Launched by a Cabinet Minister, the plan includes 47 GW of battery storage and 31 GW of pumped storage. It outlines the addition of 1,91,000 ckm of transmission lines and 1270 GVA of transformation capacity by 2032, with a focus on green hydrogen hubs. Inter-regional capacity will increase to 168 GW by 2032. The plan also explores cross-border connections and new technologies, presenting an investment opportunity of over INR 9,15,000 Crores in the transmission sector.

3. 38 companies apply for PLI Scheme for White Goods (ACs and LED Lights) in the 3rd Round of Application Window

Summary: Thirty-eight companies have applied for the Production Linked Incentive (PLI) Scheme for White Goods, specifically targeting air conditioners (ACs) and LED lights, in the third application round. This round attracted a total investment of Rs 4,121 crore, with 43% of applicants from the MSME sector. The initiative, launched by the Department for Promotion of Industry and Internal Trade, aims to enhance domestic manufacturing capabilities. Investments span 54 districts across 18 states, including clusters in Uttar Pradesh, Rajasthan, Maharashtra, Gujarat, and Andhra Pradesh. The scheme anticipates generating approximately 80,486 jobs and boosting production to Rs 1,81,975 crore.

4. HAL's Maharatna Status: India’s Growth Towards Aerospace Industry

Summary: Hindustan Aeronautics Limited (HAL) has achieved Maharatna status, becoming the 14th Central Public Sector Enterprise in India to receive this recognition. This status, approved by the Finance Minister, provides HAL with greater financial autonomy, enhancing its ability to make significant investment decisions and fostering quicker project implementation. HAL's impressive financial performance, with a turnover of Rs. 28,162 crore and a net profit of Rs. 7,595 crore for the fiscal year 2023-24, underscores its pivotal role in India's aerospace and defense sectors. The company is also advancing indigenous production, notably through a contract to produce aero engines for the Indian Air Force.

5. Central Banking at Crossroads (Keynote Address by Shri Shaktikanta Das, Governor, Reserve Bank of India - October 14, 2024 - at the RBI@90 High-Level Conference organised by the Reserve Bank of India at New Delhi)

Summary: The Governor of the Reserve Bank of India addressed the challenges and transformations facing central banks at a conference in New Delhi. He highlighted the evolving role of central banks amid geopolitical tensions, technological advancements, and climate change. Key issues include the impact of easy monetary policies post-pandemic, the growing public debt, and the international dimensions of monetary policy affecting emerging markets. The speech also emphasized the importance of financial stability, the risks posed by private credit markets, and the potential of new technologies like central bank digital currencies and AI. The Governor urged central banks to remain adaptable and resilient in navigating future challenges.

6. India-EU way trade can grow exponentially with mutual understanding and cooperation: Shri Piyush Goyal, Commerce and Industry Minister

Summary: India's Commerce and Industry Minister emphasized that India-EU trade can significantly grow with mutual understanding and cooperation. Speaking at the Federation of European Business in India (FEBI) launch, he highlighted the importance of fair trade practices and noted that EU policies like deforestation rules and the Carbon Border Adjustment Mechanism affect Indian industry. He urged focusing on business issues in Free Trade Agreement negotiations and praised India's market, democracy, and leadership as attractive to European companies. FEBI is seen as a bridge to enhance trade relations, with key areas including green technology and strategic missions. The India-EU Summit is scheduled for next year.

7. PM GatiShakti National Master Plan completes 3 years of transforming India's Infrastructure landscape

Summary: The PM GatiShakti National Master Plan, launched three years ago, has significantly transformed India's infrastructure landscape by reducing logistics costs and improving service delivery. It integrates data from 44 central ministries and 36 states/UTs, enhancing inter-ministerial coordination and project execution. The plan supports multi-modal connectivity and economic growth, with over 200 major projects evaluated and 533 projects mapped by states. It extends to social sectors, improving infrastructure planning in healthcare, education, and more. The initiative aligns with the National Logistics Policy, boosting India's logistics performance. Training and international collaborations further bolster its impact, supporting India's Atmanirbhar Bharat vision.

8. PM Gati Shakti: Transforming India's Infrastructure and Connectivity

Summary: The PM Gati Shakti initiative, announced by the Prime Minister on India's 75th Independence Day, aims to revolutionize the country's infrastructure and connectivity through a National Master Plan for Multi-modal Connectivity. Launched in 2021, it integrates efforts from 44 Central Ministries and 36 States/UTs, enhancing transport efficiency and reducing travel time. The initiative encompasses various infrastructure schemes and has achieved significant milestones, including planning thousands of kilometers of roads and railway lines. The Gati Shakti Sanchar portal facilitates telecom infrastructure development, supporting the rapid rollout of 5G services. These efforts aim to bolster India's logistics and connectivity, contributing to its economic growth.

9. A Pathway to Professional Growth: PM’s Internship Scheme

Summary: India's government has launched the Prime Minister's Internship Scheme to equip youth with skills for the modern economy. Announced in the 2024-25 Union Budget, the scheme aims to provide one crore internships over five years, with a pilot targeting 1.25 lakh internships in 24 sectors. Eligibility is for Indian nationals aged 21-24, excluding graduates from top institutions and those engaged in existing government training schemes. Interns receive a monthly stipend and insurance coverage. The scheme is managed through an online portal, promoting diversity and social inclusivity, and involves companies with significant CSR expenditure.


Notifications

DGFT

1. 36/2024-25 - dated 13-10-2024 - FTP

Amendment in import policy of parts of lighter Covered under CTH 9613 of Chapter 96 of Schedule -l (Import Policy) of ITC (HS) 2022

Summary: The Government of India, through the Directorate General of Foreign Trade, has amended the import policy for parts of pocket lighters under HS code 96139000, covered in Chapter 96 of the ITC (HS) 2022. Previously categorized as "Free," the import of these parts is now classified as "Restricted." This change applies to both non-refillable and refillable gas-fueled pocket lighters. The amendment is made under the authority of the Foreign Trade (Development & Regulation) Act, 1992, and is effective immediately following approval from the competent authority.

GST - States

2. 03/2024-State Tax (Rate) - dated 10-10-2024 - Delhi SGST

Amendment in Notification No. 02/2017-State Tax (Rate), dated 30th June, 2017

Summary: The Lieutenant Governor of Delhi, using powers under the Delhi Goods and Services Tax Act, 2017, has amended Notification No. 02/2017-State Tax (Rate). Effective from July 15, 2024, the amendment specifies that agricultural farm produce packaged in quantities exceeding 25 kilograms or 25 liters will not be classified as 'pre-packaged and labelled' under the Legal Metrology Act, 2009. This change is deemed necessary in the public interest and follows recommendations from the Council. The original notification was published on June 30, 2017, and has been amended multiple times, most recently on March 7, 2024.

Income Tax

3. 110/2024 - dated 11-10-2024 - IT

Exemption from specified income U/s 10(46) of IT Act 1961 – 'District Legal Service Authority'

Summary: The Central Government has issued a notification under Section 10(46) of the Income-tax Act, 1961, exempting specified income of the District Legal Service Authorities in Haryana from income tax. This exemption applies to income from grants received from legal service authorities, donations from government bodies, court-ordered amounts, recruitment application fees, and interest on bank deposits. The exemption is contingent on the authorities not engaging in commercial activities, maintaining the nature of their income, and filing income returns as required. This notification is effective for assessment years 2024-2025 through 2028-2029.

4. 109/2024 - dated 11-10-2024 - IT

Exemption from specified income U/s 10(46) of IT Act 1961 – ‘Real Estate Regulatory Authority, New Delhi’

Summary: The Central Government has issued Notification No. 109/2024, exempting the Real Estate Regulatory Authority, New Delhi, from specified income under Section 10(46) of the Income-tax Act, 1961. The exempted income includes grants or loans from the government, fees or penalties from stakeholders, and interest on these amounts. The exemption is contingent on the Authority not engaging in commercial activities, maintaining the nature of its income, and filing income returns per the Act. This applies to financial years 2018-2019 to 2022-2023, aligning with assessment years 2019-2020 to 2023-2024. The notification is not expected to adversely affect any individual.

5. 108/2024 - dated 11-10-2024 - IT

Exemption from specified income U/s 10(46) of IT Act 1961 – ‘Gujarat Water Supply and Sewerage Board’

Summary: The Central Government has issued Notification No. 108/2024 under clause (46) of section 10 of the Income-tax Act, 1961, exempting specified income of the Gujarat Water Supply and Sewerage Board, Gandhinagar, from taxation. The exempted income includes grants from government bodies, water charges, pension contributions, and other income such as investigation charges and interest on deposits. The exemption is conditional on the Board not engaging in commercial activities and maintaining the nature of its income. This notification applies retroactively to assessment years 2022-2023 and 2023-2024 and prospectively to 2024-2025, 2025-2026, and 2026-2027.

6. 107/2024 - dated 11-10-2024 - IT

Exemption from specified income U/s 10(46) of IT Act 1961 – ‘State Load Despatch Centre Unscheduled Interchange Fund- West Bengal State Electricity Transmission Company Limited'

Summary: The Central Government has issued a notification under clause (46) of section 10 of the Income-tax Act, 1961, exempting specified income of the 'State Load Despatch Centre Unscheduled Interchange Fund- West Bengal State Electricity Transmission Company Limited' from taxation. This includes residual money from the unscheduled interchange pool balance account, income related to unscheduled interchange, and interest from fixed deposits and auto-sweep accounts. The exemption is conditional upon the fund not engaging in commercial activities, maintaining the nature of specified income, and filing returns as per section 139. The notification applies retrospectively to assessment years 2023-2024 and 2024-2025.


Circulars / Instructions / Orders

SEBI

1. SEBI/HO/MRD/TPD-1/P/CIR/2024/138 - dated 14-10-2024

Corrigendum to Circular on Ease of Doing Business in the context of Standard Operating Procedure for payment of “Financial Disincentives” by Market Infrastructure Institutions (MIIs) as a result of Technical Glitch

Summary: A corrigendum has been issued to a previous SEBI circular concerning the Standard Operating Procedure for the payment of "Financial Disincentives" by Market Infrastructure Institutions (MIIs) due to technical glitches. The amendments now include references to specific sections of the Master Circular for the Commodity Derivatives Segment dated August 4, 2023. The circular outlines the inclusion of various clauses and paragraphs from the Master Circular into the SEBI circular dated September 20, 2024. It also mandates MIIs to conduct internal examinations to determine accountability for technical glitches, with SEBI reserving the right to enforce actions against responsible individuals.

2. SEBI/HO/MRD/MRD-PoD-3/P/CIR/2024/139 - dated 14-10-2024

Monitoring Shareholding of Market Infrastructure Institutions (MIIs)

Summary: The Securities and Exchange Board of India (SEBI) issued a circular to all Market Infrastructure Institutions (MIIs), including stock exchanges, clearing corporations, and depositories, outlining a new framework for monitoring shareholding compliance. The circular mandates that MIIs disclose their shareholding patterns quarterly, appoint a Designated Depository (DD) for monitoring shareholding limits, and ensure that all shareholders meet the "fit and proper" criteria. The DD will oversee shareholding thresholds and inform relevant parties of any breaches, with potential freezing of voting rights and corporate benefits for non-compliance. The provisions will take effect 90 days from the circular's issuance.

GST

3. 236/30/2024-GST - dated 11-10-2024

Clarification regarding the scope of “as is / as is, where is basis” mentioned in the GST Circulars issued on the basis of recommendation of the GST Council in its meetings

Summary: The circular clarifies the scope of "as is" or "as is, where is basis" in GST Circulars, following recommendations from the GST Council. It addresses doubts about regularizing past GST payments where differing rates were applied due to interpretational issues. If taxpayers paid a lower rate or claimed exemptions, these payments are considered as full discharge of tax liability, with no refunds for those who paid higher rates. This regularization applies to past periods before specified dates, ensuring consistency in tax treatment, but does not apply where no tax was paid, in which case the applicable tax will be recovered.

4. 235/29/2024-GST - dated 11-10-2024

Clarification regarding GST rates & classification (goods) based on the recommendations of the GST Council in its 54th meeting held on 9th September, 2024, at New Delhi

Summary: The circular clarifies GST rates and classifications based on the GST Council's recommendations from its 54th meeting. Extruded or expanded savory products, excluding un-fried or un-cooked snack pellets, are classified under HS 1905 90 30 and attract a 12% GST rate from October 10, 2024, while un-fried or un-cooked snack pellets remain at 5%. Roof Mounted Package Unit Air Conditioning Machines for Railways are classified under HS 8415 with a 28% GST rate. Seats for two-wheelers are classified under HS 8714 with a 28% GST rate, and car seats under HS 9401 are now also subject to a 28% GST rate, effective prospectively.

5. 234/28/2024-GST - dated 11-10-2024

Clarifications regarding applicability of GST on certain services

Summary: The circular clarifies the applicability of GST on various services following the 54th GST Council meeting. Affiliation services by universities to colleges and by educational boards to schools are taxable at 18%, with exemptions for government schools. DGCA-approved flying training courses are exempt. Passenger transport by helicopter on a seat-share basis is taxed at 5%, while charter operations remain at 18%. Ancillary services by Goods Transport Agencies are part of composite supply unless separately invoiced. Import of services by foreign airlines without consideration is exempted. Preferential Location Charges are taxed with construction services. Certain utility support services and film distribution services have regularized GST payments for specified periods.


Highlights / Catch Notes

    GST

  • New GST Forms Introduced for Waiver Applications: Streamlined Process for Interest and Penalty Relief u/s 128A.

    Notifications : The key points covered in the legal document are: 1. It introduces new forms (GST SPL-01 to GST SPL-08) for taxpayers to apply for waiver of interest and penalty u/s 128A of the GST Act. 2. Form GST SPL-01 is for making an application to seek waiver, providing details of the order, tax periods, and amount of tax, interest, and penalty demanded. 3. Form GST SPL-03 is a notice issued by the tax officer seeking clarification or raising objections on the application filed in SPL-01. 4. Form GST SPL-04 is for the taxpayer to file a reply to the notice issued in SPL-03. 5. Form GST SPL-05 is the order issued by the tax officer approving or partially approving the waiver application. 6. Form GST SPL-06 is the order issued by the appellate authority approving or partially approving the waiver application in case of an appeal. 7. Form GST SPL-07 is the order rejecting the waiver application filed in SPL-01. 8. Form GST SPL-08 is an undertaking to be provided by the taxpayer to not file an appeal against the appellate order in SPL-06 for restoration of the original.

  • TDS now mandatory for metal scrap supplies between registered businesses from Oct 2024.

    Notifications : This notification amends the Central Goods and Services Tax Act, 2017 to mandate tax deduction at source (TDS) compliance for supply of metal scrap between registered persons. It inserts a new clause (d) specifying that any registered person receiving supplies of metal scrap falling under Chapters 72 to 81 of the Customs Tariff Act, 1975 from another registered person will be subject to TDS provisions. The third proviso is also amended to exclude the newly added clause (d) from the exemption granted to supplies between specified persons u/s 51(1). The notification comes into effect from October 10, 2024.

  • Metal scrap suppliers need GST registration despite reverse charge from 10-10-2024.

    Notifications : The notification amends the earlier Notification No. 5/2017-Central Tax to exclude persons engaged in the supply of metal scrap falling under Chapters 72 to 81 of the Customs Tariff Act, 1975 from the exemption from GST registration if their entire supply is under reverse charge mechanism. The amendment comes into force from 10th October 2024. It mandates GST registration for metal scrap suppliers, irrespective of the applicability of reverse charge mechanism on their supplies.

  • CGST Authority's Registration Cancellation Reinstated; Orders Quashed for Violating Natural Justice Principles.

    Case-Laws - HC : The Central Goods and Services Tax (CGST) Authority accepted the petitioner's voluntary application for cancellation of registration with effect from 8th May 2023. However, the subsequent orders revoking the registration cancellation were passed contrary to the principles of natural justice. Consequently, all proceedings initiated thereafter were quashed. The petitioner's conduct of overlooking the show cause notice was not approved. To balance interests, the petitioner will be restrained from utilizing the Input Tax Credit (ITC) for a reasonable period during which the respondents must conclude proceedings. The orders dated 20th February 2024, 8th March 2024, and 9th May 2024 were quashed, restoring the position as of 8th May 2023, the date of acceptance of the petitioner's application for registration cancellation. The petition was disposed of accordingly.

  • Detention Order Challenged for Export Goods; Court Requires Verification for Zero-Rated Tax Status via GSTR-1 Submission.

    Case-Laws - HC : In the case of a detention order u/s 129(3) of the Central Goods and Services Tax Act, 2017, the petitioner challenged the order on the grounds that the goods were meant for export and thus qualified for Zero Rate Sale, rendering any levy of tax or penalty without jurisdiction. The High Court held that considering the peculiar facts of the case, where the goods relate to export treated as zero rate u/s 16 of the IGST Act, the petitioner shall submit a copy of GSTR-1 before the appropriate respondent. If GSTR-1 reveals the transaction as a zero rate export sale, integrated taxes ought to be paid or the goods must be exported under Bond or Letter of Undertaking in accordance with Section 54 of the Act. If the petitioner can demonstrate the transaction's inclusion in GSTR-1, the goods shall be provisionally released. However, the petitioner can question the impugned proceedings dated 23.08.2024 by filing an appeal before the appropriate appellate authority u/s 107 of the Central Goods and Services Tax Act, 2017, subject to compliance with conditions like payment of pre-deposit. If such an appeal is filed, it shall be disposed of within four weeks from the date of filing. The petition was disposed of accordingly.

  • GST registration cancellation order set aside for lack of reasoning, violating natural justice principles.

    Case-Laws - HC : Order cancelling GST registration quashed due to lack of reasons and violation of principles of natural justice. While SCN proposed cancellation citing incorrect form, impugned order merely reproduced provisions of Sections 29 and 30 without specifying grounds for cancellation. Failure to provide reasoning renders order unsustainable, entitling petitioners to succeed. Petition disposed accordingly.

  • Allegations of tax suppression; statutory remedies advised over writ petition for factual disputes. Rectification plea rightly rejected after due process.

    Case-Laws - HC : Petitioner failed to establish grounds for invoking Section 74 of CGST/SGST Acts regarding suppression allegations. Disputed questions of fact cannot be adjudicated through writ petition under Article 226. Petitioner directed to pursue statutory remedies for adjudication. Rectification application was properly rejected after providing opportunity. Limitation period for appeal against original order excluded from date of rectification application till disposal of writ petition.

  • Court Remands Case for Verification of GST Credit Claims and Invoice Correlation Due to Registration Issues.

    Case-Laws - HC : The High Court examined the recovery of wrongly availed credit with penalty for wrongful availment during transition to GST regime. The petitioner's branches were not registered, and there was no correlation between invoices and claims made. The Court analyzed the registration status u/r 9 of Central Excise Rules, 2002, which allows exemption granted through a 2010 notification. The petitioner produced a centralized registration certificate covering various branches. The correlation between claims and invoices was remanded to the original authority for verification after setting aside the orders. The authorities were directed to determine credit eligibility after verifying branch registration coverage. The writ petition was disposed of through remand.

  • Blocking Input Tax Credit Without Due Process Invalidated; Cross-Utilization Disallowed; Rs. 2.44 Cr Credit Unblocked.

    Case-Laws - HC : Tax authority's action of blocking input tax credit in electronic credit ledger without following due process held untenable. Cross-utilization of credit between CGST and SGST not permissible. Respondents directed to unblock credit of Rs. 2,44,05,567 in petitioners' electronic credit ledger. Utilization of remaining credit disallowed till show cause notice issued under relevant provisions of GST Act. Petition allowed.

  • Tax liability imposed without show cause notice & documents, violating natural justice.

    Case-Laws - HC : Non-service of show cause notice violated principles of natural justice. Respondent imposed tax liability without providing opportunity and documents to petitioner for defense. Court remanded matter to respondent for fresh consideration after petitioner pays 10% of disputed tax amount, setting aside earlier order to maintain consistency with previous cases allowing petitioner to present defense. Petition allowed by way of remand for reconsideration after partial tax payment by petitioner.

  • Income Tax

  • Deadline extension for trusts/institutions to file audit reports in correct form for FY 2023-24.

    Circulars : This order issued by the Central Board of Direct Taxes (CBDT) u/s 119 of the Income Tax Act, 1961, grants an extension for certain trusts/institutions/funds to furnish audit reports in the applicable Form No. 10B/10BB for the assessment year 2023-24. Previously, a circular allowed such entities to file the audit report in the incorrect form by March 31, 2024. However, some entities could not comply. To avoid genuine hardship, the CBDT now allows them to submit the audit report in the correct form on or before November 10, 2024. This extension aims to provide relief and facilitate compliance for the affected trusts/institutions/funds.

  • Protective addition deleted due to lack of substantive addition in related party's case.

    Case-Laws - AT : Protective addition made by Assessing Officer was not sustainable as substantive addition did not survive in concluded assessment proceedings of related party. CIT(A) rightly deleted protective addition as per settled law that if substantive addition does not survive, protective addition also does not survive, as held in Pr. CIT (Central)-2 vs. Electrical and Electronic India Ltd. Revenue's appeal dismissed as no interference warranted with CIT(A)'s order deleting protective addition in absence of incriminating material and substantive addition in related party's case.

  • Comparison of Income Tax Act and Black Money Act: Key Differences in Handling Undisclosed Foreign Assets and Income.

    Case-Laws - AT : The summary highlights the key difference between the scope of total income under the Income Tax Act and the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (BMA). While the Income Tax Act covers all income from whatever source derived, the BMA only considers undisclosed assets located outside India and undisclosed foreign income and assets. Section 4(3) of the BMA explicitly states that income included as undisclosed foreign income and assets shall not form part of the total income under the Income Tax Act. Additionally, Section 65 of the BMA prohibits reopening assessments or claiming set-offs under the Income Tax Act for declared undisclosed assets. The summary emphasizes that the findings under the Income Tax Act proceedings have guiding value but no binding effect on BMA proceedings due to the different scopes of income. It also highlights the distinctions between the deeming provisions of Sections 68 and 69 of the Income Tax Act and the definitions u/ss 2(11) and 2(12) of the BMA. Ultimately, the summary concludes that the assessee is not obliged to disclose overseas assets/income in Income Tax Returns for the relevant assessment years when no specific column existed, as the declaration under the BMA can be made after its commencement date.

  • Cash loan penalty requires AO's satisfaction, mere referral insufficient.

    Case-Laws - HC : The High Court held that for levying penalty u/s 271D for violation of Section 269SS, the Assessing Officer must record satisfaction that the provisions were violated. Mere referral by the Assessing Officer to the Joint Commissioner without recording such satisfaction is insufficient. The Court relied on the Supreme Court's decision in Jai Laxmi Rice Mills, setting aside the penalty order u/s 271D as the Assessing Officer did not record any finding of violation of Section 269SS during assessment proceedings. The Court drew a presumption that the department accepted the assessee's explanation denying cash loan, precluding levy of penalty.

  • Unexplained Cash Deposits Deemed Undisclosed Income; Assessee's Appeal Dismissed Due to Lack of Satisfactory Explanation.

    Case-Laws - HC : Ex-parte assessment u/s 144 treated unexplained cash deposits as undisclosed and unexplained income, added to the assessee's total income u/s 68 read with Section 69A. Where sums are credited in the assessee's books, the same may be charged as income if the assessee's explanation is unsatisfactory, creating prima facie evidence against the assessee. The burden is on the assessee to rebut the presumption of income receipt. In this case, despite notices, the assessee did not appear or furnish explanations before the authorities. The belated explanation of amounts collected as a recovery agent was found unreasonable. The AO, CIT(Appeals), NFAC, and ITAT concurrently concluded that the assessee failed to rebut the presumption u/s 68 read with Section 69A. Following the Supreme Court's decision in Vijay Kumar Talwar, the ITAT's finding based on records is correct, and no substantial question of law arises. The appeal is dismissed at the admission stage without notice to the other side.

  • Court Dismisses Petition on Interest Liability and Costs, Clarifies Review Limits and Appeal Necessity.

    Case-Laws - HC : The review petition challenges the order imposing interest liability over the withheld amount and cost on the Managing Director. The court held that reviewing an order is limited and can only be done under specific conditions laid down by the Supreme Court. Regarding the interest liability, the court found no ambiguity as it was based on the applicable regulations. Challenging this would amount to an appeal rather than a review. As for the cost imposed on the Managing Director, the court held that even if it was a wrong consideration, it cannot be a ground for review but an appeal. If the Managing Director was not a party, his individual liability cannot be questioned by others. Applying the principles for reviewing orders, the court dismissed the review petition.

  • Cash Withdrawals Linked to Deposits in Demonetization Case; USD Claim Dismissed, Rs. 3.7 Lakh Added as Unexplained Income.

    Case-Laws - AT : Cash withdrawals from ICICI and SBI bank accounts were treated as the source for deposits made during demonetization, as evidence showed the withdrawn funds were not used for other purposes. The burden of disproving availability of withdrawn cash for deposits lies with the Department. However, the claim of deposits originating from USD conversion was rejected due to lack of forex receipts and documentation from authorized money exchangers. As a result, an addition of Rs. 3,70,000/- was sustained u/s 69A for unexplained income. The penalty u/s 271AAC and interest u/ss 234A, 234B, and 234C will be recomputed based on the revised assessed income by the Assessing Officer. The Appellate Tribunal's decision was based on judicial precedents and evidentiary requirements for regulated foreign exchange transactions.

  • Pharmaceutical Firm Wins R&D Deduction Dispute; Tribunal Excludes R&D Costs from Eligible Unit Calculations &D.

    Case-Laws - AT : The assessee, a pharmaceutical company, claimed deduction u/s 80-IE for its units located in Sikkim. The Assessing Officer (AO) allocated the Research and Development (R&D) expenditure incurred by the assessee among the 80-IE units and non-80-IE units based on the percentage of sales. The Commissioner of Income Tax (Appeals) [CIT(A)] held that the AO's allocation was incorrect as the assessee had produced evidence that the R&D expenditure was unrelated to the products manufactured in the 80-IE units. The Tribunal observed that the R&D activities were focused on future products and innovations, not the current products manufactured. The products developed in R&D undergo a process of 6-10 years before manufacturing, involving testing and approvals. Thus, the R&D expenditure during the year was not directly related to the products manufactured in the eligible units that year. The Tribunal upheld the CIT(A)'s decision to delete the allocation of R&D expenditure to the 80-IE units, ruling in favor of the assessee.

  • Cash deposits in savings account of a contractor - Revenue failed to rebut presumptive income u/s 44AD.

    Case-Laws - AT : Addition u/s 69A - AIR information revealed cash deposits in assessee's savings bank account - assessee applied Section 44AD of the Act on business income. Held: Assessee was a contractor before appointment, and Revenue did not dispute this. Section 44AD allows computing business profits on presumptive basis for eligible businesses at 8% of turnover. Assessee's business fell under eligible category. AO did not provide evidence that cash deposits were not from business. In absence of contrary evidence, assessee's business was eligible u/s 44AD, and cash deposits were from business. 10% profit offered by assessee u/s 44AD accepted. CIT(A)'s order failed, assessee's grounds allowed.

  • Accountant's salary below TDS threshold, no tax deduction required.

    Case-Laws - AT : Salary paid to an accountant at Rs. 12,000 per month is not liable for tax deduction at source u/s 194J as it is a salary expenditure, not payment towards professional or technical services. The total salary amount paid is below the taxable limit, hence no TDS obligation arises u/s 192. Consequently, the disallowance u/s 40(a)(ia) for non-deduction of tax at source u/s 194J is deleted as the payment is towards salary and not professional fees. The Appellate Tribunal set aside the findings of the CIT(A) and allowed the assessee's appeal on this issue.

  • Taxpayer Wins: No Penalty for Deferred Mining Rights Payment; ITAT Upholds Allowable Expenditure Decision.

    Case-Laws - AT : The assessee claimed deduction for compensation paid to farmers for acquiring mining rights, which was an allowable expenditure. The Assessing Officer allowed the expenditure over 20 years and made an addition. The CIT(A) allowed the assessee's appeal, relying on the Supreme Court's decision in M/s Reliance Petro Products Pvt. Ltd., holding that it was not a case of furnishing inaccurate particulars of income, and penalty u/s 271(1)(c) of the Income Tax Act was not leviable. The assessee did not furnish inaccurate particulars, and the expenditure was allowed on a deferred basis. The ITAT, in Simplex Pharma (P) Ltd. and Onicra Credit Rating Agency of India Ltd., had deleted the penalty levied u/s 271(1)(c) on deferred revenue expenditure. The ITAT concurred with the CIT(A)'s findings and dismissed the revenue's ground.

  • Tribunal Allows Deduction for Interest Income, Remands Case for Further Evidence on Loan Nexus Clarity.

    Case-Laws - AT : Deduction u/s 57 was disallowed for interest income from savings bank account and interest from Thangamayil Jewellery Limited, classified under "other sources". The issue was whether a direct nexus existed between the loan borrowed and loan given. The names on loan documents did not match the assessee's name, and deductions u/s 57 were denied as the loans were for specific purposes like home and agriculture. However, relying on ACIT vs. Nishith Desai, the Tribunal allowed interest expenditure deduction u/s 57, as it was wholly and exclusively for earning interest income, following CIT vs. Rajendra Prasad Moody. Lack of evidence like bank statements showing loan credit to Thangamayil Jewellery Limited necessitated remanding the matter to the Assessing Officer for fresh examination. The assessee was directed to file evidence for the claim u/s 57. The appeal was allowed for statistical purposes.

  • Tax Tribunal Overturns Dismissal; Orders Re-evaluation of Appeal Due to Procedural Errors and Improper Notice.

    Case-Laws - AT : The Income Tax Appellate Tribunal observed that the Commissioner of Income Tax (Appeals) dismissed the assessee's appeal ex-parte without deciding issues on merits, which is not in consonance with Section 250(6) of the Income Tax Act, 1961. The CIT(A) is required to adjudicate issues arising in the appeal on merits by stating points for determination, decision thereon, and reasons. The CIT(A) has power to make inquiries u/s 250(4). The notice of hearing was not properly served on the assessee as required u/s 282 read with Rule 127. The assessee claimed business closure since 2018 but did not intimate the revenue as required u/s 176(3). The assessee is a partnership firm, and Section 189(4) applies in case of discontinuance or dissolution after assessment proceedings commenced. Complete inquiry is required regarding the firm's status, and the assessee must furnish true and correct facts before the CIT(A). The appellate order is set aside, and the matter is restored to the CIT(A) for de novo adjudication, providing proper opportunity to both parties. The assessee must comply with notices; otherwise, an ex-parte order on merits may be passed.

  • Customs

  • Incorrect adjudicating officer's order can't be challenged via contempt, but through proper legal channels.

    Case-Laws - HC : The adjudicating officer's order dated 15 May 2024, made after complying with the principles of natural justice, cannot be challenged through contempt proceedings, even if it is incorrect. The correctness of the order can be examined in appropriate proceedings. The non-entertainment of the contempt petition is without prejudice to the petitioner's right to challenge the adjudicating authority's orders before the appropriate court. The contempt petitions are disposed of.

  • Customs tariff classification: Motorcycle parts rightly taxed, confiscation overturned.

    Case-Laws - AT : Imported goods classified under Customs Tariff Item (CTI) 8714 10 90 or 8714 91 00 - General Rules of Interpretation applied for classification - Goods rightly classified under 8714 10 90 as parts of motorcycle frames, not entitled to exemption under Notification No. 50/2017-CUS - Confiscation of goods u/s 111(m) and redemption fine set aside as classification by importer during self-assessment differing from officer's view not ground for confiscation - Penalties u/ss 112 and 114AA on appellant and employee set aside for lack of evidence of false declaration - Appeal disposed.

  • Licensing authority's appeals against customs brokers not maintainable for CBLR violations.

    Case-Laws - AT : This case pertains to the maintainability of appeals by the Committee of Chief Commissioners u/s 129D of the Customs Act, 1962, concerning breaches of regulation 10 of the Customs Brokers Licensing Regulations (CBLR), 2018. The Tribunal, relying on the Delhi High Court's decision in a similar case, held that such appeals by the licensing authority are not maintainable. Consequently, the Tribunal dismissed the appeal, stating that it was initiated without legal authority.

  • Importers denied duty exemption on fraudulent scrips; penalty waived for lack of knowledge.

    Case-Laws - AT : The appellants imported goods by utilizing DEPB scrips which were later found to be fraudulently obtained, though the appellants were unaware of this fact. The key issues were the validity of such DEPB scrips for duty exemption and the imposition of penalty u/s 114A of the Customs Act, 1962. The Supreme Court has held that exemption benefit cannot be availed on forged/fake DEPB licenses/scrips, even if purchased from the open market. Therefore, the demand for duty was upheld as per the impugned order. However, since the appellants were unaware of the fraud, the penalty was set aside. The appeal was allowed in part by the CESTAT.

  • Customs Broker License Revoked for Using Another's Credentials to Illegally Clear Prohibited Imports; Appeal Dismissed.

    Case-Laws - AT : Customs broker licence revocation - importer engaged appellant to file import bill of entry but appellant used another broker's credentials instead of its own - imported goods prohibited - violations of multiple regulations under Customs Broker Licensing Regulations 2018 including failure to obtain authorization, non-compliance advisory, withholding import prohibition information, improper records maintenance - intentional facilitation of prohibited imports using another's identity - revocation and penalties proportionate to grave violations involving attempt to illegally clear prohibited goods by misusing another's broker licence instead of acting transparently under own licence - no leniency warranted given intentional illegal actions to profit from facilitating prohibited imports - appeal dismissed upholding revocation order.

  • DGFT

  • Easing procurement of Acetic Anhydride for Advance Authorization holders from SEZ units.

    Circulars : The policy circular clarifies that the requirement of obtaining a 'No Objection Certificate' from the Drug Controller and Narcotics Commissioner of India, as stipulated in Paragraph 4.08(ii) of the Handbook of Procedures 2023, will not be applicable for Advance Authorisation holders procuring Acetic Anhydride from units located in Special Economic Zones (SEZs). This exemption is granted provided the Acetic Anhydride is manufactured by a unit operating within the SEZ and the procurement is against a Certificate of Supplies. The circular aims to facilitate ease of doing business for Advance Authorisation holders while ensuring compliance with relevant regulations.

  • Govt restricts import of parts for refillable & non-refillable pocket gas lighters under HS code 96139000.

    Notifications : The notification amends the import policy for HS code 96139000 (parts of lighters) under Chapter 96 of the ITC (HS) 2022. The import policy for parts of pocket lighters, gas fuelled, non-refillable or refillable is revised from 'Free' to 'Restricted' with immediate effect. The amendment is issued under the Foreign Trade (Development & Regulation) Act, 1992, and the Foreign Trade Policy 2023, by the Directorate General of Foreign Trade, Ministry of Commerce & Industry, Government of India.

  • IBC

  • Extended deadline for liquidators' form submission in voluntary liquidations under IBC 2016.

    Circulars : The Insolvency and Bankruptcy Board of India has extended the deadline for liquidators to file forms related to voluntary liquidation processes under the Insolvency and Bankruptcy Code, 2016, and its regulations. Initially, the deadline was set for September 30, 2024, as per Circular No. IBBI/LIQ/74/2024 dated June 28, 2024. However, due to representations from liquidators and Insolvency Professional Agencies citing technicalities and issues in form submission, the Board has extended the last date for submission of forms until November 30, 2024. This extension is issued under the powers conferred by sub-section (1) of section 196 of the Insolvency and Bankruptcy Code, 2016.

  • Deadline extended for liquidators to file forms for insolvency cases until Nov 30, 2024 by IBBI.

    Circulars : The Insolvency and Bankruptcy Board of India (IBBI) has extended the deadline for liquidators to file forms related to liquidation processes under the Insolvency and Bankruptcy Code, 2016, and its regulations. Initially, the deadline was set for September 30, 2024, but due to representations from liquidators and Insolvency Professional Agencies citing technicalities and issues, the IBBI has extended the last date for submission of forms until November 30, 2024. This circular is issued under the powers conferred by sub-section (1) of section 196 of the Insolvency and Bankruptcy Code, 2016.

  • Bankruptcy court approves resolution plan, govt demands for pre-plan period extinguished.

    Case-Laws - HC : Upon approval of the Resolution Plan by the NCLT, it is binding on all creditors, including the Central and State Governments, u/s 31 of the Insolvency and Bankruptcy Code. The demands raised against the Petitioner-Company pertaining to the period prior to the Plan Effective Date stand automatically extinguished. The Opposite Parties are directed to revise the demands by limiting them to the period from the Plan Effective Date onwards and raise them afresh against the Petitioner-Company in accordance with the law. The impugned letters raising demands covering the period up to the Plan Effective Date are set aside as unsustainable in law.

  • Debt revival by acknowledgment upheld, restructuring revocation allowed on default, malice unproven, liability reinstatement clause valid.

    Case-Laws - AT : Debt acknowledgment prior to limitation expiry, legal exercise of restructuring revocation upon default, compliance with circulars substantiated, unsubstantiated allegations of malice, explicit restructuring clause allowing liability reinstatement, discretion exercised per Supreme Court precedents, admitted facts and evidence upholding CIRP initiation order, appeal dismissed.

  • NCLAT Rules Performance Bank Guarantee Invocation Legal During Moratorium, Upholds Adjudicating Authority's Decision.

    Case-Laws - AT : The NCLAT upheld the legality of invoking a Performance Bank Guarantee (PBG) by the Nominated Authority during the moratorium period. It relied on the Supreme Court's judgment in Standard Chartered Bank vs. Heavy Engineering Corporation Limited, which established that a bank is obligated to honor an unconditional and irrevocable bank guarantee, subject to exceptions like fraud or irretrievable harm. In the present case, the Corporate Debtor's default was established, and the Nominated Authority followed due process by issuing a show cause notice, considering the Scrutiny Committee's recommendation, and invoking the PBG as per the agreement's terms. The NCLAT found no error in the Adjudicating Authority's refusal to set aside the invocation letter, as subsequent letters were consequences of the earlier appropriation order. The Corporate Debtor's notice of dispute was disposed of, upholding the invocation decision. The NCLAT dismissed the appeal, finding no grounds for interference.

  • Appellant's inconsistent stance on debt vs investment leads to dismissal of IBC appeal & cost imposition.

    Case-Laws - AT : Dismissal of Section 7 application under IBC by Adjudicating Authority upheld. Appellant argued amount of interest could be claimed u/s 7, but failed to notify Adjudicating Authority about alleged bonafide mistake in Section 9 application where it averred amount was an investment instead of loan. Appellant paid principal amount but pursued appeal for interest. Held, filing Section 7 petition after taking contrary stance in Section 9 application is an abuse of process. Appellant's conduct deprecated as unacceptable practice of changing stance as per convenience, dragging respondent into unnecessary litigation. Appeal dismissed with cost of Rs. 1 lakh imposed on appellant, payable to respondent within 30 days.

  • Appellant Lacks Standing to Challenge Admission Order in Rs. 300 Crore Loan Default Case; Appeal Dismissed.

    Case-Laws - AT : The appellant lacked locus standi to challenge the admission order passed by the Adjudicating Authority on a Section 7 application filed by SREI Equipment Finance Limited against the corporate debtor for default in repayment of a Rs. 300 crore loan. The appellant's case was based on a Share Purchase Agreement with two shareholders of the corporate debtor, which could not be implemented due to the Enforcement Directorate's attachment of the land. The appellant had agreed to repay the corporate debtor's loan amount through a Settlement Award. However, the debt and default were not denied by either the corporate debtor or the appellant. Since the debt and default were admitted facts, the Adjudicating Authority did not err in admitting the Section 7 application. The appeal was dismissed.

  • Indian Laws

  • Cheque Dishonor Case: Accused Fails to Rebut Presumption; Revision Petition Dismissed, Sentence to Be Served.

    Case-Laws - HC : Dishonour of cheque case - petitioner-accused failed to deposit the amount despite existence of legally enforceable debt/liability. No evidence led to rebut presumption u/ss 118 and 139 of Negotiable Instruments Act. Both lower courts meticulously dealt with all aspects. Factum of cheque issuance and signature undisputed. Defence of borrowing only Rs. 2,00,000/- and returning it not probablized through cogent evidence. Presumption rightly invoked as no probable defence raised despite opportunity. Complainant's evidence not contested regarding Rs. 6,50,000/- borrowed. Supreme Court's ruling in Laxmi Dyechem case applied - accused neither established probable defence nor contested legally enforceable debt/liability, attracting statutory presumption. No illegality in invoking Sections 118 and 139. Well-reasoned judgments by lower courts upheld based on evidence appreciation. Revision petition dismissed, petitioner directed to surrender and serve sentence if not already served.

  • PMLA

  • Court Upholds Denial of Discharge Petition in Money Laundering Case; Accused Must Prove Innocence Under PMLA.

    Case-Laws - HC : Money laundering offences encompass various processes and activities related to dealing with proceeds of crime, directly or indirectly, beyond just the final act of integration into the formal economy. Mere possession of proceeds of crime is sufficient to invoke the Prevention of Money Laundering Act (PMLA). Section 3 has a wider scope, covering various circumstances to curb economic offences. Section 24 places the burden of proof on the accused, who must prove their innocence during trial unless the contrary is established. The authorities' presumptions, investigations, and collected documents are sufficient to proceed under PMLA. The High Court upheld the Trial Court's rejection of the discharge petition, finding no infirmity or perversity in its opinion that the petitioner failed to make out a prima facie case for discharge.

  • SEBI

  • Faster securities settlement: 3:30 PM payout, direct demat credit on T+1.

    Circulars : Securities payout timing revised from 1:30 PM to 3:30 PM under T+1 rolling settlement. Clearing Corporations to credit securities directly to client demat accounts on settlement day instead of one working day later. Stock Exchanges, Clearing Corporations and Depositories to amend relevant bye-laws, rules and regulations accordingly. Circular issued under SEBI Act 1992, Securities Contracts (Regulation) Act 1956 and Depositories Act 1996 to protect investor interests and regulate securities market.

  • Stricter Due Diligence for AIFs: Compliance with Standards and Reporting Requirements for Significant Investments.

    Circulars : This circular specifies due diligence requirements for Alternative Investment Funds (AIFs) to prevent circumvention of regulatory frameworks. Key points include: AIFs designated as Qualified Institutional Buyers (QIBs) must conduct due diligence per Standard Setting Forum (SFA) standards when investor(s) contribute 50% or more to a scheme's corpus, before availing QIB benefits. Similar due diligence is required for AIFs as Qualified Buyers investing in security receipts issued by Asset Reconstruction Companies. For schemes with RBI-regulated investors/sponsors contributing 25% or more, due diligence must ensure indirect exposures comply with RBI norms. Schemes with 50% or more corpus from investors in countries sharing land borders with India require due diligence, and investments over 10% in Indian companies must be reported. Existing investments not meeting due diligence standards must be reported to custodians by specified dates. Custodians must report compiled information to SEBI. Implementation standards by SFA must be adopted.

  • VAT

  • Court Dismisses Challenge to Tax Assessment for BOT Contract, Citing Works Contract Execution and Previous Ruling.

    Case-Laws - HC : The High Court dismissed the petition challenging the assessment orders levying commercial tax under the Commercial Tax Act and Entry Tax Act. The key points are: The Build, Operate and Transfer (BOT) contract executed by the petitioner for constructing a bypass road amounted to a works contract. The petitioner was authorized to collect toll from vehicles to recover the construction cost, which is a deferred payment mode. The court held that the contract falls within the definition of a works contract under the relevant laws. The petitioner's contention that it did not execute a works contract was rejected. The court relied on its previous Full Bench decision in Viva Highways case, which clarified the scope of works contract. Consequently, the petition was dismissed as devoid of merit and substance.

  • Refining Crude Soybean Oil Considered Manufacturing; Entry Tax Applies in Madhya Pradesh Despite Exemption Claims.

    Case-Laws - HC : The petitioner challenged the imposition of entry tax on crude soybean oil brought into Madhya Pradesh for manufacturing/refining soybean refined oil under the MPCT Act and Entry Tax Act. The petitioner argued that if refining crude soybean oil is considered manufacturing, then crude oil being a raw material would be exempt. The court held that refining crude oil into refined soybean oil constitutes a manufacturing process, resulting in a new consumable product. Despite the notification excluding refining from manufacturing under the MPCT Act, entry tax is leviable under the Entry Tax Act for consumption/use or sale in the local area. The court dismissed the petitions, upholding the tax authorities' orders imposing entry tax on crude soybean oil brought for refining into refined soybean oil.

  • Service Tax

  • Service Tax Not Double Charged on ATM Fees; Appeals Allowed for Banks Over Interchange and Notional Consideration.

    Case-Laws - AT : Levy of service tax on ATM interchange fees received by State Bank of Hyderabad from SBI for deploying its ATMs in the shared network, and on notional consideration for free ATM services provided to other associate banks and SBI. It holds that since SBI paid service tax as an agent for associate banks, service tax cannot be demanded again from associate banks. The demand for service tax on ATM interchange fees received from SBI is set aside. Regarding notional consideration for free ATM services, it states that no fee was charged as per the contractual understanding, and hence no service tax is leviable. The extended period of limitation u/s 73(1) of the Finance Act was correctly invoked as there was no willful suppression of facts with intent to evade tax. Consequently, the appeals filed by State Bank of India are allowed.

  • Tribunal affirms no service tax on income from sale of flat allotment rights & related charges.

    Case-Laws - AT : Noticee earned income from selling allotment rights of flats, which was not exigible to service tax as it involved transfer of rights in immovable property, excluded from the definition of 'service'. The amount charged as 'demand survey' was rightly excluded as it was adjustable against property price or refundable. Cancellation charges and miscellaneous income were not for any service provided, hence not leviable to service tax. Extended period of limitation, penalty, and interest were rendered inconsequential as the main issue was decided in favor of the noticee. The Tribunal affirmed the impugned order, dismissing the Revenue's appeal.

  • Cab Operator's Kilometer-Based Rentals Liable for Service Tax as 'Rent-a-Cab Services'; Exemptions and Abatements Denied.

    Case-Laws - AT : Appellant registered for providing cab operator's service rented vehicles to clients for transporting their employees, charges levied on kilometer basis inclusive of taxes and insurance for long periods like 11 months. Agreements indicated renting out cabs, not point-to-point transportation. Liable for service tax under 'rent-a-cab services' as per case laws. Ineligible for exemption under Notification 25/2012-ST as conditions for contract carriage not fulfilled. No evidence produced for abatement under Notification 1/2006. Entitled to cum-duty benefit as per case law. Extended period rightly invoked due to non-payment of collected service tax establishing intent to evade. Interest compensatory in nature upheld. Penalty u/s 77(2) upheld. Demand to be recalculated allowing cum-duty benefit, penalty u/s 78 modified accordingly. Appeal allowed for recalculation of demand.

  • Service Tax Exemption Denied for Domestic IT and Maintenance Services; Penalties Upheld for Suppressed Valuation.

    Case-Laws - AT : The appellant's services cannot be classified as "Business Auxiliary Service" under the Export of Service Rules, 2005, and hence are not exempt from service tax. The services provided by the appellant relate to maintenance, repair, commissioning, installation, training, testing, certification, and IT software, which are not marketing or sales promotion services. Since the services are provided and used in India, they do not qualify as export of services. The extended period of limitation was rightly invoked as the audit revealed suppression of correct valuation. The penalty u/s 78 and interest on delayed payment are upheld. The appellant's services do not fall under "Commission Agent" in "Business Auxiliary Service" as per Section 65(19) and are not entitled to export service exemption as they are not used outside India. The Tribunal affirmed the impugned order, dismissing the appeal.


Case Laws:

  • GST

  • 2024 (10) TMI 610
  • 2024 (10) TMI 609
  • 2024 (10) TMI 608
  • 2024 (10) TMI 607
  • 2024 (10) TMI 606
  • 2024 (10) TMI 605
  • 2024 (10) TMI 604
  • 2024 (10) TMI 603
  • 2024 (10) TMI 602
  • Income Tax

  • 2024 (10) TMI 601
  • 2024 (10) TMI 600
  • 2024 (10) TMI 599
  • 2024 (10) TMI 598
  • 2024 (10) TMI 597
  • 2024 (10) TMI 596
  • 2024 (10) TMI 595
  • 2024 (10) TMI 594
  • 2024 (10) TMI 593
  • 2024 (10) TMI 592
  • 2024 (10) TMI 591
  • 2024 (10) TMI 590
  • 2024 (10) TMI 589
  • 2024 (10) TMI 588
  • 2024 (10) TMI 587
  • 2024 (10) TMI 586
  • 2024 (10) TMI 585
  • 2024 (10) TMI 584
  • 2024 (10) TMI 583
  • 2024 (10) TMI 582
  • 2024 (10) TMI 581
  • Customs

  • 2024 (10) TMI 611
  • 2024 (10) TMI 580
  • 2024 (10) TMI 579
  • 2024 (10) TMI 578
  • 2024 (10) TMI 577
  • 2024 (10) TMI 576
  • 2024 (10) TMI 553
  • Insolvency & Bankruptcy

  • 2024 (10) TMI 575
  • 2024 (10) TMI 574
  • 2024 (10) TMI 573
  • 2024 (10) TMI 572
  • 2024 (10) TMI 571
  • PMLA

  • 2024 (10) TMI 570
  • Service Tax

  • 2024 (10) TMI 569
  • 2024 (10) TMI 568
  • 2024 (10) TMI 567
  • 2024 (10) TMI 566
  • 2024 (10) TMI 565
  • 2024 (10) TMI 564
  • Central Excise

  • 2024 (10) TMI 563
  • 2024 (10) TMI 562
  • 2024 (10) TMI 561
  • 2024 (10) TMI 560
  • CST, VAT & Sales Tax

  • 2024 (10) TMI 559
  • 2024 (10) TMI 558
  • 2024 (10) TMI 557
  • 2024 (10) TMI 556
  • Indian Laws

  • 2024 (10) TMI 555
  • 2024 (10) TMI 554
 

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