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TMI Tax Updates - e-Newsletter
December 18, 2021

Case Laws in this Newsletter:

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



Articles

1. Contributions from members, recovered for spending on weekly meetings, other petty administrative expenses amounts to supply

   By: Bimal jain

Summary: The Maharashtra Authority for Advance Ruling determined that contributions from club members for weekly meetings and administrative expenses are considered a "supply" under the Central Goods and Services Tax Act, 2017. This decision implies that such activities are taxable, as they fall under the definition of "business." The ruling highlights that the principle of mutuality, which previously prevented taxation of transactions between clubs and their members, no longer applies due to amendments to the CGST Act. This has led to varied interpretations by different authorities, with some ruling that such fees are not taxable, while others have upheld the taxability.


News

1. Delhi Customs seize outbound undeclared diamonds valued at ₹ 1.56 crore

Summary: Delhi Customs seized a consignment of undeclared diamonds valued at Rs. 1.56 crore on December 16, 2021. The diamonds, weighing 1,082 carats, were concealed in packets labeled as plastic hot fix, which were declared to be worth only Rs. 5,000. The consignment was intended for Hong Kong and was intercepted by officers at the Air Cargo Export Commissionerate in Delhi. This case is notable for the method of concealment used to smuggle the diamonds out of the country. It represents one of the largest seizures of polished diamonds at the Delhi air cargo facility in recent times. Investigations are ongoing.

2. INDIA, KFW sign Euro 442.26 million loan for Surat Metro Rail Project

Summary: The Government of India and Germany's KFW Development Bank have signed a Euro 442.26 million loan agreement for the Surat Metro Rail Project. This initiative, with a total cost of Euro 1.50 billion, is also co-financed by the French Development Agency, AFD, which contributed Euro 250 million. The 40.35 km project aims to enhance Surat's transport infrastructure, reduce traffic congestion, and integrate land use planning through Transit-Oriented Development. It will feature a multi-modal transport system for improved connectivity and utilize solar energy at its depots, ultimately improving public transport reliability and living standards in Surat.

3. It is possible to achieve a trillion dollars each of services and merchandise exports by 2030 – Shri Piyush Goyal

Summary: The Indian Minister of Commerce and Industry urged the industry to aim for a trillion dollars each in services and merchandise exports by 2030. Speaking at the Federation of Indian Chambers of Commerce and Industry (FICCI) convention, he highlighted the resilience of Indian industry during the pandemic and emphasized government support as a facilitator and partner. The Minister encouraged breaking traditional barriers and setting ambitious goals, citing successful initiatives like the Indian pavilion at the Dubai Expo. He also discussed efforts to improve business ease, reduce compliance, and explore new opportunities, including Free Trade Agreements (FTAs) with several countries.

4. MEASURES UNDERTAKEN TO BOOST MANUFACTURING SECTOR IN INDIA

Summary: The Indian government has implemented several measures to enhance the manufacturing sector and attract investments. Key initiatives include the Production-Linked Incentive Scheme across 14 sectors, the PM Gati Shakti National Master Plan for integrated infrastructure, and the establishment of Empowered Group of Secretaries and Project Development Cells to facilitate investments. A National Single Window System has been introduced for streamlined clearances. The government is developing Industrial Corridor Projects and promoting the Start-up India initiative to foster innovation and employment. Efforts also focus on reducing compliance burdens and boosting specific sub-sectors. Additionally, an investor-friendly policy supports 100% Foreign Direct Investment in most sectors.

5. PLI SCHEMES

Summary: An outlay of INR 1.97 lakh crore (over US$ 26 billion) has been allocated in India's Union Budget 2021-22 for Production Linked Incentive (PLI) schemes targeting 13 key manufacturing sectors. These include existing sectors like mobile manufacturing and medical devices, alongside new sectors such as automobiles, pharmaceuticals, and solar PV modules. The PLI schemes aim to boost production, employment, and economic growth by attracting investments in core and advanced technology sectors, enhancing global competitiveness, and integrating Indian manufacturers into global value chains. Approval for any new sectors under the PLI scheme requires Cabinet approval, with no current plans for expansion.

6. EXPORT AND IMPORT OF MOBILE PHONES

Summary: Exports of mobile phones from India increased significantly from USD 0.2 billion in 2017-18 to USD 1.7 billion in 2021, while imports decreased from USD 3.5 billion to USD 0.5 billion during the same period. The Indian government has implemented several initiatives to boost domestic manufacturing and exports of electronics, including mobile phones. These include the Production Linked Incentive Scheme for electronics and IT hardware, the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors, and the Modified Electronics Manufacturing Clusters under the National Policy on Electronics, 2019. Additionally, 100% FDI is allowed under the automatic route for electronics manufacturing.

7. OBJECTIVES OF SETTING UP SEZs

Summary: The Special Economic Zone (SEZ) Scheme, as per the SEZs Act, 2005, aims to boost economic activity, enhance exports, attract domestic and foreign investments, create jobs, and develop infrastructure. SEZs are established nationwide, and over the past five years, they have shown significant growth. From 2016 to 2021, exports increased from Rs. 5,23,637 crores to Rs. 7,59,524 crores, employment rose from 17,31,641 to 23,58,136 persons, and investments grew from Rs. 4,23,189 crores to Rs. 6,17,499 crores. This data was presented by a government official in a written statement to the Rajya Sabha.

8. STATUS OF FREE TRADE AGREEMENTS

Summary: India has signed only one Free Trade Agreement (FTA) in the past five years, the India-Mauritius Comprehensive Economic Cooperation and Partnership Agreement, effective from April 1, 2021. Ongoing FTA negotiations involve regions including the UAE, Israel, the Eurasian Economic Union, the UK, the EU, Canada, Australia, and the Southern African Customs Union. These agreements often incorporate provisions on Trade in Services, specifically addressing the temporary entry and stay of service suppliers. The timeline for concluding these negotiations remains uncertain, as agreements are finalized only when all parties are satisfied. This information was disclosed by a government official in a parliamentary session.

9. LogiXtics - Unified Logistics Interface Platform’s (ULIP) Hackathon launched by Centre

Summary: The Unified Logistics Interface Platform (ULIP) Hackathon, named LogiXtics, has been launched by the Department for Promotion of Industry and Internal Trade (DPIIT) to enhance India's logistics sector. This initiative aligns with the PM GatiShakti vision and aims to reduce logistics costs, currently at 14%, by creating a transparent, real-time information platform for stakeholders. Organized by NITI Aayog and Atal Innovation Mission, and supported by NICDC, the hackathon seeks innovative solutions to improve efficiency and competitiveness in global trade. The event encourages participation from startups and individuals with expertise in logistics, offering a platform to showcase strategic and coding skills.

10. India’s rice exports rose by over 33% to 11.79 MT in first seven months of current FY, likely to surpass last FY’s record over 17MT

Summary: India's rice exports increased by over 33% to 11.79 million tonnes in the first seven months of the current fiscal year, potentially surpassing last year's record of 17 million tonnes. The rise is driven by non-Basmati rice, with new markets emerging in Africa and Asia. Despite COVID-19 challenges, India remains the largest player in global rice trade due to enhanced port infrastructure and value chain development. In 2020-21, rice exports reached 17.72 million tonnes, with significant growth in both Basmati and non-Basmati varieties. The Agricultural and Processed Food Products Exports Development Authority (APEDA) has been instrumental in promoting exports and improving port facilities.

11. Initiatives to boost domestic and foreign investments

Summary: The Indian government has implemented various measures to enhance domestic and foreign investments, resulting in a record FDI inflow of $81.97 billion in the 2020-21 fiscal year. Key initiatives include reducing corporate tax rates, easing liquidity for NBFCs and banks, and improving the ease of doing business. The government has introduced Production Linked Incentive (PLI) schemes with a $26 billion budget to boost manufacturing in 13 sectors, aiming to generate $504 billion in production and create nearly 10 million jobs. The "Make in India" initiative and the "One District One Product" program further support regional development and export growth.

12. 3.59 crore Income Tax Returns filed on the new e-filing portal of the Income Tax Department

Summary: A meeting between senior finance officials and Infosys discussed the e-filing portal's readiness during peak tax filing. As of December 15, 2021, 3.59 crore Income Tax Returns (ITRs) were filed, with 57.6% being ITR-1. Over 52% of returns used the online form, and 3.11 crore were e-verified, primarily via Aadhaar OTP. More than 2.38 crore returns have been processed, resulting in over 90.95 crore in refunds. Taxpayers are advised to link their PAN with bank accounts for refunds. The department encourages timely filing and offers resources like webinars and educational videos to assist taxpayers.


Notifications

Customs

1. 99/2021 - dated 17-12-2021 - Cus (NT)

Amendment in Notification No. 98/2021-CUSTOMS (N.T.), dated 16th December, 2021

Summary: The Government of India, through the Ministry of Finance and the Central Board of Indirect Taxes and Customs, issued Notification No. 99/2021 on December 17, 2021. This notification amends Notification No. 98/2021-CUSTOMS (N.T.), dated December 16, 2021, effective from December 18, 2021. The amendment specifically updates the exchange rate for the Turkish Lira in Schedule-I of the original notification. The new exchange rates are set at 5.00 Indian rupees for imported goods and 4.70 Indian rupees for export goods.

2. 98/2021 - dated 16-12-2021 - Cus (NT)

Supersession Notification No. 96/2021-Customs(N.T.), dated 2nd December, 2021

Summary: The Central Board of Indirect Taxes and Customs issued Notification No. 98/2021 on December 16, 2021, under section 14 of the Customs Act, 1962. This notification supersedes the previous Notification No. 96/2021, effective from December 17, 2021, and establishes the exchange rates for converting specified foreign currencies into Indian rupees for import and export purposes. The exchange rates are detailed in two schedules: Schedule I for individual foreign currencies and Schedule II for 100 units of foreign currencies. Subsequent notifications updated the exchange rates for the Turkish Lira.

GST

3. 01/2021 - dated 16-12-2021 - GST CESS

Amendment in Notification No. 1/2018 (Goods and Service Tax Compensation) dated 14th November, 2018

Summary: The Central Government has amended Notification No. 1/2018 regarding Goods and Services Tax Compensation, originally dated 14th November 2018. The amendment, effective from 16th December 2021, involves a change in the reference for Tamil Nadu under serial number 99 in the notification's table. The words "Tamil Nadu Sugar Cane Cess (Validation) Act, 1963" are replaced with "Tamil Nadu Sugar Factories Control Act, 1949 (Section 14)." This change was issued by the Ministry of Finance, Department of Revenue, under the authority of the Goods and Services Tax (Compensation to States) Act, 2017.

GST - States

4. 27/2021– State Tax - dated 14-12-2021 - Delhi SGST

Delhi Goods and Services Tax (Fifth Amendment) Rules, 2021

Summary: The Delhi Goods and Services Tax (Fifth Amendment) Rules, 2021, effective from June 1, 2021, amend the Delhi Goods and Services Tax Rules, 2017. Key changes include extending the deadline in sub-rule (1) of rule 26 from May 31, 2021, to August 31, 2021. Additionally, sub-rule (4) of rule 36 now requires cumulative input tax credit adjustments for April to June 2021 in the GSTR-3B return for June 2021. Sub-rule (2) of rule 59 allows registered persons to furnish details for May 2021 using IFF from June 1 to June 28, 2021.

5. 17/2021-State Tax (Rate) - dated 7-12-2021 - Himachal Pradesh SGST

Amendment in Notification No. 17/2017-State Tax (Rate), dated the 30th June, 2017

Summary: The Governor of Himachal Pradesh, based on the Council's recommendations, has amended Notification No. 17/2017-State Tax (Rate) from June 30, 2017. The amendments include changes to the definitions of vehicles, adding "omnibus or any other motor vehicle" alongside "motorcycle." A new clause specifies that restaurant services, excluding those at specified premises, are included. The definition of specified premises now refers to hotels with accommodation tariffs above 7,500 rupees per unit per day. These changes will be effective from January 1, 2022.

6. 16/2021-State Tax (Rate) - dated 7-12-2021 - Himachal Pradesh SGST

Amendment in Notification No. 12/2017-State Tax (Rate), dated the 30th June, 2017

Summary: The notification amends the Himachal Pradesh State Tax (Rate) Notification No. 12/2017, effective January 1, 2022. It removes the phrase "or a Governmental authority or a Government Entity" from the description of services in serial numbers 3 and 3A. Additionally, provisions are added to serial numbers 15 and 17, stating that certain service items do not apply when supplied through an electronic commerce operator, as notified under sub-section (5) of Section 9 of the Himachal Pradesh Goods and Services Tax Act, 2017. These changes are made in the public interest on the Council's recommendations.

7. 15/2021-State Tax (Rate) - dated 7-12-2021 - Himachal Pradesh SGST

Amendment in Notification No. 11/2017-State Tax (Rate), dated the 30th June, 2017

Summary: The notification issued by the State Taxes and Excise Department of Himachal Pradesh amends the earlier Notification No. 11/2017-State Tax (Rate) dated June 30, 2017. Effective January 1, 2022, the amendments involve changes in the description of services and conditions in the notification's table. Specifically, references to "Governmental Authority or a Government Entity" are replaced with "Union territory or a local authority" in certain service descriptions. Additionally, services related to dyeing or printing of textiles are excluded under a specified clause. The amendments are made under various sections of the Himachal Pradesh Goods and Services Tax Act, 2017.

8. 14/2021-State Tax (Rate) - dated 7-12-2021 - Himachal Pradesh SGST

Amendment in Notification No. 1/2017-State Tax (Rate), dated the 30th June, 2017

Summary: The Himachal Pradesh State Tax (Rate) Notification No. 14/2021 amends the earlier Notification No. 1/2017-State Tax (Rate) dated June 30, 2017. Under the Himachal Pradesh Goods and Services Tax Act, 2017, the amendments involve revisions to tax rates and classifications of various goods. Specific serial numbers and entries in Schedules I, II, and III are omitted or modified, affecting items such as woven fabrics, synthetic and artificial fibres, sewing threads, and various textile products. The changes are set to take effect on January 1, 2022, as per the directive from the State Taxes and Excise Department.

9. 13/2021-State Tax (Rate) - dated 7-12-2021 - Himachal Pradesh SGST

Amendment in Notification No. . 1/2017-State Tax (Rate), dated the 30th June, 2017

Summary: The Himachal Pradesh State Government has issued an amendment to Notification No. 1/2017-State Tax (Rate) dated June 30, 2017, under the Himachal Pradesh Goods and Services Tax Act, 2017. Effective from October 27, 2021, the amendment involves two changes: the omission of S. No. 243 and its related entries from Schedule II, which is taxed at 6%, and the removal of the words "in respect of Information Technology software" from column (3) of S. No. 452P in Schedule III, which is taxed at 9%.


Circulars / Instructions / Orders

SEBI

1. SEBI/HO/DDHS/P/CIR/2021/0692 - dated 17-12-2021

Revision to Operational Circular for issue and listing of Non-convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper

Summary: The Securities and Exchange Board of India (SEBI) has revised its operational circular concerning the issuance and listing of Non-convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities, and Commercial Paper. Amendments include modifications to disclosure requirements for Commercial Paper, specifying details such as ISIN, credit ratings, and financial information. New provisions mandate that issuers existing for less than three years must disclose that their issues are open only to Qualified Institutional Buyers. These changes aim to standardize requirements and are effective immediately, under the authority of the SEBI Act, 1992.

2. SEBI/HO/FPIC/P/CIR/2021/691 - dated 17-12-2021

Publishing of Investor Charter and Disclosure of Complaints by Custodians and DDPs on their websites

Summary: The circular mandates that all Custodians and Designated Depository Participants (DDPs) publish an Investor Charter on their websites to enhance investor awareness about their services and timelines. Additionally, they must disclose monthly data on complaints received and their resolutions to ensure transparency in the grievance redressal process. These requirements take effect from January 1, 2022, under the authority of the Securities and Exchange Board of India (SEBI) to protect investor interests and regulate the securities market. The circular outlines specific timelines for various services and provides general guidance for investors.

DGFT

3. 43/2015-20 - dated 16-12-2021

Harmonising MEIS Schedule in the Appendix 3B (Table-2) with amended ITC (HS), 2017

Summary: The Directorate General of Foreign Trade issued a public notice on December 16, 2021, amending Appendix 3B, Table 2 of the Merchandise Exports from India Scheme (MEIS) to align with the amended ITC (HS), 2017. Effective from March 27, 2020, HS Code 85414012, pertaining to solar cells assembled in modules or panels, is added with a 2% MEIS rate. Additionally, the description for HS Code 85414011 is corrected to "Solar Cells, not assembled." These changes harmonize the MEIS schedule with Notification No. 48 dated December 22, 2020, and the Finance Act 2020.


Highlights / Catch Notes

    GST

  • CNG Dispenser Classified Under GST Tariff Chapter Heading 8413.11; Excludes Articles from Chapter 90.

    Case-Laws - AAR : Classification of goods - CNG Dispenser manufactured and supplied by the Applicant - Section XVI of the GST Tariff covers Chapter Heading 84 and 85 of the GST Tariff. Note 1 (m) of the Section Notes states that, articles of Chapter 90 of the GST Tariff are not covered under Section XVI i.e. Chapters 84 and 85 of the GST Tariff. Further primary function of the impugned product is to dispense CNG Fuel and has an inbuilt mechanism to constantly measure and regulate the mass of Gas being transferred to the vehicle. - impugned product is covered under Chapter Heading 8413.11 - AAR

  • "Rava Idli Mix" classified as new product u/r 3(a), taxed at 18% GST under tariff heading 2106.

    Case-Laws - AAR : Classification of goods - Rava Idli Mix - In the instant case the impugned product is admittedly a mixture and does not give the character of either of the constituent flour but altogether a different new product with the different character as “Rava Idli Mix”. Therefore the impugned product is rightly classifiable under Rule 3(a) supra and hence Rule 3(b) is not applicable. Further as the impugned product is covered under rule 3(a), there is no need to look into rule 3(c) - the impugned product “Rava Idli Mix” merits classification under tariff heading 2106 and attract the GST rate of 18% - AAR

  • GST Exemption Denied for Commission Agents: Rice and Paddy Classified as Distinct Commodities Under Tax Rules.

    Case-Laws - AAR : Benefit of exemption from GST - Services of ‘Commission Agent' for rice millers and traders - Supply of services which pertains to selling of agricultural produce as per APMC Act - both rice and paddy are produce out of cultivation of plants. But rice and paddy are not the same as rice is the outcome of milling process of paddy. While rice is readily consumable, paddy when subjected to milling processes yield rice, husk and rice barn. Milling process is not normally done by the paddy producer or cultivator, but is undertaken by the millers. Milling process also changes the essential characteristics of the produce from paddy to rice, which are both distinctly identifiable and separately marketable commodities. Thus, the criteria (ii), and (iv) above are not satisfied in the instant case - AAR

  • GST Rates for Marine Engines: 5% for Fishing Vessels; Classification Determines Rate for Others. No GST on Warranty Replacements.

    Case-Laws - AAR : Classification of goods - Marine Engines - The marine engines and spare parts used for fishing vessels (being part of the fishing vessel) attract 5% GST. If marine engine is supplied for use other than as parts of fishing vessels as stated above, the rate of GST is applicable under the respective Customs Tariff Headings in which they are classified. - the replacement of the goods and service during the warranty period without consideration does not come under the purview of supply and no GST is leviable in such case. - AAR

  • Hospitality Service Invoices Not a 'Composite Supply'; Food Supply Subject to 5% GST Rate Under Specific Entry.

    Case-Laws - AAR : Classification of services - hospitality industry services - Since the Applicant is raising separate invoices for the services supplied by him to AMSL, there is no provision of 'bundled services’ to AMSL by the applicant, but two separate supply of services. - Since there is no provision of 'bundled services' by the applicant to AMSL, the same is not covered under the definition of 'composite supply.' - The service of supply of food provided by the applicant is also covered under the above entry of the and hence attracts GST at 5%. - AAR

  • Income Tax

  • Petitioner's Tax Claim Denied: Lacks Required US Tax Residency Certificate for Treaty Benefits u/s 90(4) of Income Tax Act.

    Case-Laws - HC : Residential status of assessee - The claim of the petitioner is totally misfound. The objective of the Treaty is to avoid double taxation and not to avoid taxation. In order to claim benefit in India, the petitioner has to provide TRC from the Government of USA which admittedly he does not possess. Case of the petitioner in our view is hit by Section 90(4) of the 1961 Act which contemplates that a non-resident assessee claiming benefit under the double taxation avoidance agreement is not entitled for such benefit unless the said assessee obtains TRC from the country of which he is resident. - HC

  • Inquiry Ordered into Issuance of Notices to Non-Existent Vadinar Power Post-Amalgamation, Section 148 Notices Quashed.

    Case-Laws - HC : Notice against company non existing - The Principal Chief Commissioner is directed to hold an enquiry against the concerned officers as to why despite being brought to their notice that Vadinar Power Company Limited is a non existing entity having been amalgamated with petitioner notices were continued to be issued in the name of Vadinar Power Company Limited and even the order disposing of the objections came to be passed in the name of Vadinar Power Company Limited resulting in the notice under Section 148 of the said Act itself being quashed. The Principal Chief Commissioner, after holding an enquiry, may take such action as required against the erring officers, if found guilty. - HC

  • Tax Case Remitted: No Notice Issued u/s 148, Assessment for 2011-12 to be Finalized in 3 Months.

    Case-Laws - HC : Refund claim - petitioner had not filed returns either u/s 139(1) or within the extended period u/s 139 (4) - Since the law mandates a particular thing to be done in a particular manner, it was incumbent on the part of the second respondent or the Jurisdictional Assessing Officer ought to have issued a notice under Section 148 to determine the tax liability of the petitioner. As this was not done, case deserves to be remitted back to the second respondent to first finalize the assessment of the petitioner for the assessment year 2011-12 within a period of three months from the date of receipt of copy of this order. Failure to issue a notice under Section 148 of the IT Act, 1961, cannot be to the prejudice of the petitioner, if ultimately it is found that petitioner was entitled to a refund. However, liberty is given to penalise the petitioner for failure to file returns in time and for levy of interest if any. - HC

  • Court Upholds CIT(A) Decision Against Revenue; AO's Black Money Claims Dismissed in Section 147 Exchange Rate Loss Case.

    Case-Laws - AT : Reopening of assessment u/s 147 - addition made on account of loss on exchange rate difference - if the view of AO is accepted then the purchases would be booked at the time of RBI’s fixed rate and when actual payment will be made, the exchange rate difference would be less and the purchase cost would be increased by corresponding amount which is evident from the observation of AO as he has computed foreign exchange loss of ₹ 3.08 Crores in place of 1.91 Crores calculated by assessee. CIT(A) also held that the allegation of Assessing Officer is that assessee circulated black money is baseless and impounded. Thus, we do not find any infirmity or illegality in the order passed by ld. CIT(A), which we affirm accordingly. - Decided against revenue. - AT

  • Sales Commissions to Foreign Agents Not Taxable in India u/s 195, No TDS Required.

    Case-Laws - AT : TDS u/s 195 - Disallowance of sales commission paid to foreign agents - There is no dispute that these foreign agents do not have permanent establishment in India and hence under Article 7 of India and Austria DTAA as well under Article 7 of India – Italy DTAA, no business profit is taxable in India. Since no income out of commission payment is chargeable to tax in India in the hands of foreign agents, there is no requirement of deducting tax at source u/s 195 - disallowance made u/s 40(a)(i) in all the three years is not justified. - AT

  • CIT Revision Upheld: Assessee Failed to Justify Share Valuation u/s 56(2) and Rule 11UA, Order Deemed Erroneous.

    Case-Laws - AT : Revision u/s 263 by CIT - Addition u/s 56(2) - The admitted position in the present case is that the assessee did not file any valuation report to substantiate the fair market value of shares issued in terms of Sec.56(2)(viib) (a)(i) of the Act and Rule 11UA of the Rules. In such circumstances, we are of the view that the AO could not have accepted the intrinsic value without calling for a value in terms of Rule 11UA of the Rules to find out whether class (i) or class (ii) of explanation (a) to Sec.56(2)(viib) of the Act would be applicable - Thus the order of the AO was erroneous. - Revision order sustained - AT

  • Appellate Authority to Reassess Construction Cost Expenditure Accrual Under Mercantile Accounting System, Ensuring Proper Matching Concept Application.

    Case-Laws - AT : Addition of expenditure on provision for construction cost of various sites in view of mercantile system of accounting - matching concept of accountancy provision - Expenditure can be provided only, if the expenditure has actually accrued. Since in this case, Ld.CIT(A) has not given any finding that the expenditure has accrued, we deem at appropriate to remit the issue to the file of the Ld.CIT(A). The Ld.CIT(A) shall examine the issue afresh and give a finding whether the expenditure allowed by him can be considered to be the expenditure which is accrued during this year - AT

  • Taxpayer Allowed to Present Evidence for Interest Claim u/s 244A; Initial Appeal Dismissed Due to Misinterpretation.

    Case-Laws - AT : Application u/s 154 - grant of interest u/ 244A - On appeal, we find that the CIT(A), being of the view that the impugned order before him was an order passed by the A.O u/s 154 of the Act declining the assessee’s request for rectification, had thus, proceeded with on the basis of the said misconceived factual position and had dismissed the assessee’s appeal, for the reason, that the claim of the assessee did not fall within the realm of a mistake apparent from the record within the meaning of Sec. 154 - Assessee shall in the course of the set-aside proceedings remain at a liberty to substantiate its entitlement for interest u/s 244A on the amount of the self-assessment tax - AT

  • India Can't Tax UAE Resident's Income Under Indo-UAE Tax Treaty: Not Residence or Source Jurisdiction.

    Case-Laws - AT : Income accrued/taxable in India - Tax Resident - The assessee before us is certainly an Indian national, but he is admittedly resident in the UAE so far as his residential status, under the Indo UAE tax treaty is concerned, is of the UAE tax resident. The residuary taxation rights, in terms of the treaty provisions, belong to the residence jurisdiction, but even if that was not to be so, the residence rights can at best go to the source jurisdiction, which in turn refers to a jurisdiction in which the income is earned, rather than a jurisdiction in which the income is invested. By no stretch of logic, therefore, such an income could be taxed in India, which is neither residence nor source jurisdiction; it is at best investment jurisdiction. However, the scheme of tax treaties limits the rights of taxation either to residence or to source jurisdiction. - AT

  • Court Rules Late Fee u/s 234E Unjust; Orders Deletion Due to Conflicting Non-Jurisdictional Decision, Supports Taxpayer Appeal.

    Case-Laws - AT : Levy of late fee u/s. 234E - Fee for default in furnishing statements - delay in filing statement of TDS within the prescribed time - Relief should not be refused to the taxpayer merely because there was a conflicting decision of a non-jurisdictional high court - we are of the view that the levy of interest u/s.234E of the Act in the present case cannot be sustained and the same is directed to be deleted and the appeals of the Assessee are allowed. - AT

  • Court Allows 10% Additional Depreciation on New Machinery for Assessment Year 2013-14; Amendment Not Applicable.

    Case-Laws - AT : Additional depreciation claimed by the assessee company @ 10% in respect on new plant & machinery acquired by it after September 30, 2012 (AY 2013-14) - Number of days asset is used - the additional depreciation is allowable depreciation and the amendment is not applicable in present assessment year i.e. A.Y. 2014-15 in assessee’s case. - AT

  • Customs

  • Court Requires Detailed Show Cause Notice for Duty Refund Claim; Rejects Intra-Departmental Communication as Insufficient Basis.

    Case-Laws - HC : Refund - Concessional rate of duty - In any event, merits of the refund claim of the petitioner would require a proper determination on facts and therefore, the second respondent was required to issue proper show cause notice to the petitioner giving the reasons why refund claim filed by the petitioner should not be rejected. Rejection of the refund claim of the petitioner merely based on a intra-departmental communication is not sufficient. - HC

  • Court Recommends Deleting Harshly Worded Paragraph from Customs Order to Enhance Professional Integrity and Judgment Quality.

    Case-Laws - HC : Levy of penalty on Advocate - Seeking deletion of para from order of the Commissioner of Customs (Appeals) - In some occasions that are marked by their rarity, one may transcend the traditional contours of professional conduct; but this happens even with adjudicators as well; the ultimate object is to do justice to the cause; it hardly needs to be stated that the judgments & orders should not be written with a pen dipped in acid; after all ‘acidity’ affects health; the acidic words rob away the living beauty of the scripts; viewed from this angle, the highlighted portion of the observations in the subject order need to be expunged; it is in the best interest of both the stakeholders, namely, Bar & the Bench; such expunction would only add to the beauty of the order in question which is meticulously texted with appreciable articulation. - HC

  • High Court Rules Time Limit in Section 27 of Customs Act Doesn't Apply to SAD Refund Claims Under Notification.

    Case-Laws - AT : Refund claim of Special Additional Duty (SAD), under Customs Act, in lieu of sales tax - rejection on the ground of time limitation - The Hon’ble High Court has clearly held that the expression “so far as may be” used in sub-section (6) of Section 3 of CTA, has to be followed to the extent possible. Merely because Section 27 of the Customs Act provides for a period of limitation for filing refund claim, it cannot be held that even for the purposes of claiming refund in terms of the Notification, the same limitation has to be applied. - AT

  • Indian Laws

  • High Court Cannot Compel Banks to Grant One Time Settlements Under Article 226, Decision Lies with Financial Institutions.

    Case-Laws - SC : One Time Settlement (OTS) - Non-Performing Asset, (NPA) - The sum and substance of the discussion would be that no writ of mandamus can be issued by the High Court in exercise of powers under Article 226 of the Constitution of India, directing a financial institution/bank to positively grant the benefit of OTS to a borrower. The grant of benefit under the OTS is always subject to the eligibility criteria mentioned under the OTS Scheme and the guidelines issued from time to time - SC

  • Acquittal in Cheque Dishonor Cases: High Threshold for Appellate Reversal Requires Compelling, Exceptional Reasons to Overturn Decision.

    Case-Laws - HC : Dishonor of cheque - insufficiency of funds - discharge of legal liability or not - In the case of acquittal, there is double presumption in favour of the accused. An order of acquittal cannot be interfered with as matter of course. An order of acquittal can only be interfered with when there are compelling and substantial reasons for doing so. Only in exceptional cases where there are compelling circumstances and the judgment in appeal is found to be perverse, the appellate court can interfere with the order of acquittal. - HC

  • IBC

  • Supreme Court Rules NCLT Must Consider Merits Before Dismissing Section 7 IBC Petition Despite Settlement Talks.

    Case-Laws - SC : Initiation of CIRP - pre-admission stage - home buyers and creditors - corporate debtor has initiated the process of settlement with the financial creditors - whether, in terms of the provisions of the IBC, the Adjudicating Authority can without applying its mind to the merits of the petition under Section 7, simply dismiss the petition on the basis that the corporate debtor has initiated the process of settlement with the financial creditors? - HELD No - Matter restored before NCLT - SC

  • NCLT Admits CIRP Application; Appeal Allowed Due to Debtor's Liability Linked to Contract Termination on April 30, 2020.

    Case-Laws - AT : Initiation of CIRP - NCLT admitted the application - Operational creditors - The pivotal plea taken on behalf of the Appellant is that the obligation of the ‘Corporate Debtor’ was to perform the export of goods and the liability arises when the ‘Contract’ was terminated on 30.04.2020 and when the ‘Corporate Debtor’ was directed to return the money. As such, the 1st Respondent cannot bring a default early to the date of 30.04.2020. - Appeal allowed - AT

  • Service Tax

  • Refund of Unutilized Cenvat Credit Allowed Without Nexus Requirement Under Amended Rule 5; Rule 14 Not Invoked.

    Case-Laws - AT : Refund of accumulated/unutilised Cenvat Credit of Service Tax - ‘nexus’ between the input services and the export services - Indisputably, in the refund proceedings under Rule 5 ibid as amended, any such attempt to deny or to vary the credit availed during the period under consideration is not permissible. If the quantum of the Cenvat Credit is to be varied or to be denied on the ground that certain services do not qualify as input services or on the ground of ‘no nexus’, then the same could have been done only by taking recourse to Rule 14 ibid - since the provisions of Rule 14 ibid have not been invoked, the refund of Cenvat Credit as claimed by the Appellant under Rule 5 ibid cannot be denied to them and the same is admissible. - AT

  • CENVAT Credit Refund u/s 142 (3) of GST Act: Cash Refund for Valid Claims from Previous Laws.

    Case-Laws - AT : Refund of CENVAT Credit - Section 142 (3) of GST Act provides how to deal with claims of refund of service tax of tax and duty / credit under the erstwhile law. It is stated that therein that such claims have to be disposed in accordance with the provisions of existing law and any amount eventually accruing has to be paid in cash - In the present case, there is no allegation that the credit is not eligible to the appellant. It is merely stated that tax has been paid voluntarily and therefore credit is not available under the GST regime. Though credit is not available as Input Tax Credit under GST law, the credit under the erstwhile Cenvat Credit Rules is eligible to the appellant. Such credit has to be processed under Section 142 (3) of GST Act, 2017 and refunded in cash to the assessee. - AT

  • Central Excise

  • Failure to Issue Show Cause Notice Voids Appeal Requirement; Refund Claim Only Option Under Central Excise Act, Section 11A(2.

    Case-Laws - AT : Refund of CENVAT Credit - As per the audit proceeding, the department was supposed to issue show cause notice which it failed to do so, therefore, there is no occasion and reason for appellant to file appeal before the Commissioner (Appeals). The only remedy is to claim the refund of such payment made as per the objection raised by the audit. As regard, the judgment relied upon by the appellant it is settled that unless and until the payment along with interest is made by the assessee and the same is intimated specifically in writing to the department, the case cannot be closed under Section11A (2) of Central Excise Act, 1944. - AT

  • CENVAT Credit Refund Granted Despite GST TRAN-1 Deadline; Procedural Formalities Shouldn't Block Eligibility.

    Case-Laws - AT : Refund of CENVAT Credit - In the present case, the appellant would be eligible to avail credit but for the introduction of GST law. The said right cannot be frustrated by pressing on the procedural requirement of filing TRAN-1 before 27.12.2017. The accounting practice adopted by the appellant allows to avail credit only after making payments to the vendors which has made it impossible to carry forward the credit as set out in the GST law. When the credit is eligible, the same cannot be denied by stating procedural requirements - AT


Case Laws:

  • GST

  • 2021 (12) TMI 724
  • 2021 (12) TMI 723
  • 2021 (12) TMI 722
  • 2021 (12) TMI 721
  • 2021 (12) TMI 720
  • 2021 (12) TMI 719
  • Income Tax

  • 2021 (12) TMI 728
  • 2021 (12) TMI 727
  • 2021 (12) TMI 726
  • 2021 (12) TMI 725
  • 2021 (12) TMI 718
  • 2021 (12) TMI 717
  • 2021 (12) TMI 716
  • 2021 (12) TMI 715
  • 2021 (12) TMI 714
  • 2021 (12) TMI 713
  • 2021 (12) TMI 712
  • 2021 (12) TMI 711
  • 2021 (12) TMI 710
  • 2021 (12) TMI 709
  • 2021 (12) TMI 708
  • 2021 (12) TMI 707
  • 2021 (12) TMI 706
  • 2021 (12) TMI 705
  • 2021 (12) TMI 704
  • 2021 (12) TMI 703
  • 2021 (12) TMI 702
  • 2021 (12) TMI 701
  • 2021 (12) TMI 700
  • 2021 (12) TMI 699
  • 2021 (12) TMI 698
  • 2021 (12) TMI 697
  • 2021 (12) TMI 696
  • 2021 (12) TMI 695
  • 2021 (12) TMI 694
  • 2021 (12) TMI 693
  • 2021 (12) TMI 692
  • 2021 (12) TMI 691
  • 2021 (12) TMI 690
  • 2021 (12) TMI 689
  • 2021 (12) TMI 665
  • 2021 (11) TMI 1211
  • Customs

  • 2021 (12) TMI 688
  • 2021 (12) TMI 687
  • 2021 (12) TMI 686
  • 2021 (12) TMI 685
  • 2021 (12) TMI 684
  • Corporate Laws

  • 2021 (12) TMI 682
  • Insolvency & Bankruptcy

  • 2021 (12) TMI 683
  • 2021 (12) TMI 681
  • 2021 (12) TMI 680
  • 2021 (12) TMI 679
  • 2021 (12) TMI 678
  • PMLA

  • 2021 (12) TMI 677
  • Service Tax

  • 2021 (12) TMI 676
  • 2021 (12) TMI 675
  • Central Excise

  • 2021 (12) TMI 674
  • 2021 (12) TMI 673
  • 2021 (12) TMI 672
  • 2021 (12) TMI 671
  • CST, VAT & Sales Tax

  • 2021 (12) TMI 670
  • Indian Laws

  • 2021 (12) TMI 669
  • 2021 (12) TMI 668
  • 2021 (12) TMI 667
  • 2021 (12) TMI 666
 

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