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TMI BlogMemorandum Explaining the Provisions in The Finance BillX X X X Extracts X X X X X X X X Extracts X X X X ..... e mobilisation measures; (G) Improving effectiveness of tax administration; (H) Preventing tax abuse; and (I) Rationalisation of provisions of the Act. DIRECT TAXES A. RATES OF INCOME-TAX I. Rates of income-tax in respect of income liable to tax for the assessment year 2020-21. In respect of income of all categories of assessees liable to tax for the assessment year 2020-21, the rates of income-tax have either been specified in specific sections (like section 115BAA or section 115BAB for domestic companies) or have been specified in Part I of the First Schedule to the Bill. These are the same as those laid down in Part III of the First Schedule to the Finance (No 2) Act, 2019, as amended by Taxation Law Amendment Act, 2019 (TLAA) for the purposes of computation of advance tax , deduction of tax at source from Salaries and charging of tax payable in certain cases. (1) Surcharge on income-tax The amount of income-tax shall be increased by a surcharge for the purposes of the Union,- (a) in the case of every individual or HUF or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eding five crore rupees, at the rate of thirty-seven per cent. of such income-tax; (v) having a total income [including the income of the nature referred to in clause (b) of sub-section (1) of section 115AD of the Act] exceeding two crore rupees but is not covered in sub-clauses (iii) and (iv), at the rate of fifteen per cent. of such income-tax: Provided that in case where the total income includes any income chargeable under clause (b) of sub-section (1) of section 115AD of the Act, the rate of surcharge on the income-tax calculated on that part of income shall not exceed fifteen per cent; (b) in the case of every co-operative society or firm or local authority, at the rate of twelve per cent. of such income-tax, where the total income exceeds one crore rupees; (c) in the case of every domestic company except such domestic company whose income is chargeable to tax under section 115BAA or section 115BAB of the Act,- (i) at the rate of seven per cent. of such income-tax, where the total income exceeds one crore rupees but does not exceed ten crore rupees; (ii) at the rate of twelve per cent. of such income-tax, where the total income exceeds ten crore rupees; (d) in the case of dom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s but does not exceed one crore rupees; (ii) at the rate of fifteen per cent. of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds one crore rupees but does not exceed two crore rupees; (iii) at the rate of twenty-five per cent. of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds two crore rupees but does not exceed five crore rupees; (iv) at the rate of thirty-seven per cent. of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds five crore rupees; (b) in the case of every co-operative society or firm, being a non-resident, calculated at the rate of twelve per cent. of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds one crore rupees; (c) in the case of every company, other than a domestic company, calculated,- (i) at the rate of two per cent. of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds one crore rupees but does n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cent. Above ₹ 10,00,000 30 per cent. (ii) In the case of every individual, being a resident in India, who is of the age of sixty years or more but less than eighty years at any time during the previous year,- Upto ₹ 3,00,000 Nil. ₹ 3,00,001 to ₹ 5,00,000 5 per cent. ₹ 5,00,001 to ₹ 10,00,000 20 per cent. Above ₹ 10,00,000 30 per cent. (iii) in the case of every individual, being a resident in India, who is of the age of eighty years or more at any time during the previous year,- Upto ₹ 5,00,000 Nil. ₹ 5,00,001 to ₹ 10,00,000 20 per cent. Above ₹ 10,00,000 30 per cent. The amount of income-tax computed in accordance with the preceding provisions of this Paragraph (including capital gains under section 111A, 112 and 112A) as well as income tax computed under section 115BAC, shall be increased by a surcharge at the rate of,- (a) having a total income (including the income under the provisions of section 111A and 112A of the Act) exceeding fifty lakh rupees but not exceeding one crore rupees, at the rate of ten per cent. of such income-tax; (b) having a total income (including the income under the provisions of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Bill. This rate will continue to be the same as that specified for FY 2019-20. The amount of income-tax shall be increased by a surcharge at the rate of twelve per cent. of such income-tax in case of a firm having a total income exceeding one crore rupees. However, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees. D. Local authorities The rate of income-tax in the case of every local authority has been specified in Paragraph D of Part III of the First Schedule to the Bill. This rate will continue to be the same as that specified for the FY 2019-20. The amount of income-tax shall be increased by a surcharge at the rate of twelve per cent. of such income-tax in case of a local authority having a total income exceeding one crore rupees. However, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that excee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent co-operative societies. The TLAA, which replaced The Taxation Laws (Amendment) Ordinance, 2019, sought to provide additional fiscal stimulus to attract investment, generate employment and boost the economy in the wake of economic developments post enactment of the Finance (No. 2) Act, 2019 and keeping in view the reduction of rate of corporate income tax by many countries world over. TLAA, inter alia , introduced section 115BAA in the Act so as to provide that an existing domestic company may opt to pay tax at 22 per cent., if it does not claim any incentive and deduction as provided in said section. In case of the domestic company opting to pay tax at the rate of 22 per cent. under said section, it was provided that,- (a) failure to satisfy specified conditions would disqualify it for the concessional rate and normal provisions of the Act shall apply. (b) deemed loss or depreciation arising out of amalgamation attributable to any incentive, deduction or exemption, shall not be allowed in computation of income. (c) for FY 2020-21, where there is unabsorbed depreciation allowance in respect of a block of asset which has not been given full effect to in earlier FYs, correspondin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or to the assessment year beginning on 1st April, 2021, corresponding adjustment shall be made to the written down value of such block of assets as on 1st April, 2020 in the prescribed manner, if the option is exercised for a previous year relevant to the assessment year beginning on 1st April, 2021; (iv) the concessional rate shall not apply unless option is exercised by the co-operative society in the prescribed manner on or before the due date specified under sub-section (1) of section 139 of the Act for furnishing the returns of income for any previous year relevant to the assessment year commencing on or after 1st April, 2021 and such option once exercised shall apply to subsequent assessment years; (v) if the person has a Unit in the International Financial Services Centre (IFSC), as referred to in sub-section (1A) of section 80LA, the deduction under section 80LA shall be available to such Unit subject to fulfilment of the conditions contained in that section; and (vi) the option so exercised cannot be withdrawn; (vii) The surcharge applicable to such co-operative society shall be levied at 10 per cent.. It is further proposed to amend section 115JC of the Act so as to provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 35CCC or clause (iia) of section 57 or under any provisions of Chapter VI-A other than the provisions of sub-section (2) of section 80CCD or section 80JJAA; (b) without set off of any loss,- (i) carried forward or depreciation from any earlier assessment year, if such loss or depreciation is attributable to any of the deductions referred to in (a) above; or (ii) under the head house property with any other head of income; (c) by claiming the depreciation, if any, under section 32, except clause (iia) of sub-section (1) thereof, determined in such manner as may be prescribed; and (d) without any exemption or deduction for allowances or perquisite, by whatever name called, provided under any other law for the time being in force. (v) the loss and depreciation referred to in (ii)(b) above shall be deemed to have been given full effect to and no further deduction for such loss or depreciation shall be allowed for any subsequent year so however, that where there is a depreciation allowance in respect of a block of asset which has not been given full effect to prior to the assessment year beginning on 1st April, 2021, corresponding adjustment shall be made to the written down v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contained in clause (17) of section 10; (v) Allowance for income of minor as contained in clause (32) of section 10; (vi) Exemption for SEZ unit contained in section 10AA; (vii) Standard deduction, deduction for entertainment allowance and employment/professional tax as contained in section 16; (viii) Interest under section 24 in respect of self-occupied or vacant property referred to in sub-section (2) of section 23. (Loss under the head income from house property for rented house shall not be allowed to be set off under any other head and would be allowed to be carried forward as per extant law); (ix) Additional deprecation under clause (iia) of sub-section (1) of section 32; (x) Deductions under section 32AD, 33AB, 33ABA; (xi) Various deduction for donation for or expenditure on scientific research contained in sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) of section 35; (xii) Deduction under section 35AD or section 35CCC; (xiii) Deduction from family pension under clause (iia) of section 57; (xiv) Any deduction under chapter VIA (like section 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perquisites or allowances provided to Union Pubic Services Commission (UPSC) Chairman and members and Chief Election Commissioner and Election Commissioners Section 10 of the Act provides for exemption in respect of certain incomes and activities under specific circumstances. Clause (45) thereof, inserted by the Finance Act, 2011, provides that any allowance or perquisite as may be notified by the Central Government, paid to the serving/ retired Chairman or Members of UPSC shall not be included in computing their total income and hence shall be exempt from income-tax. Further, vide Notification No. 49/2011 dated 6th September, 2011 bearing SO 2045(E), it was notified that in the case of serving Chairman and members of UPSC the following allowances and perquisites shall be exempt from income-tax for the purposes of clause (45) of section 10 of the Act, with effect from 1st April, 2008: (i) the value of rent-free official residence; (ii) the value of conveyance facilities including transport allowance; (iii) the sumptuary allowance; (iv) the value of leave travel concession provided to a serving Chairman or member of the UPSC and members of his family. In the case of retired Chairma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use in the said section so as to provide exemption to any income of a specified person in the nature of dividend, interest or long-term capital gains arising from an investment made by it in India, whether in the form of debt or equity, in a company or enterprise carrying on the business of developing, or operating and maintaining, or developing, operating or maintaining any infrastructure facility as defined in Explanation to clause (i) of sub-section (4) of section 80-IA of the Act or such other business as may be notified by the Central Government in this behalf. In order to be eligible for exemption, the investment is required to be made on or before 31st March, 2024 and is required to be held for at least three years. For the purpose of this exemption, specified person is proposed to be defined to mean,- (a) a wholly owned subsidiary of the ADIA, which is a resident of the United Arab Emirates (UAE) and which makes investment, directly or indirectly, out of the fund owned by the Government of the United Arab Emirates; and (b) a sovereign wealth fund which satisfies the following conditions: A. It is wholly owned and controlled, directly or indirectly, by Government of a foreig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nishment of crude oil stored in its storage facility in pursuance to directions of the Central Government in this behalf. This exemption shall be subject to the condition that the crude oil is replenished in the storage facility within three years from the end of the financial year in which the crude oil was removed from the storage facility for the first time. This amendment will take effect from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-21 and subsequent assessment years. [Clause 7] Rationalization of provisions of start-ups. The existing provisions of section 80-IAC of the Act provide for a deduction of an amount equal to one hundred per cent of the profits and gains derived from an eligible business by an eligible start-up for three consecutive assessment years out of seven years, at the option of the assessee, subject to the condition that the eligible start-up is incorporated on or after 1st April, 2016 but before 1st April, 2021 and the total turnover of its business does not exceed twenty-five crore rupees. In order to further rationalise the provisions relating to start-ups, it is proposed to amend section 80-IAC of the Act so as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty whose stamp duty does not exceed forty-five lakh rupees. In order to continue promoting purchase of affordable housing, the period of sanctioning of loan by the financial institution is proposed to be extended to 31st March, 2021. This amendment will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-22 and subsequent assessment years. [Clause 32] Modification in conditions for offshore funds exemption from business connection . Section 9A of the Act provides for a special regime in respect of offshore funds by providing them exemption from creating a business connection in India on fulfilment of certain conditions. It provides that in the case of an eligible investment fund, the fund management activity carried out through an eligible fund manager acting on behalf of such fund shall not constitute business connection in India of the said fund. Further, an eligible investment fund shall not be said to be resident in India merely because the eligible fund manager undertaking fund management activities on its behalf is located in India. The benefit under section 9A is available subject to the conditions as provided in sub-sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be at one hundred crore rupees shall be fulfilled within twelve months from the last day of the month of its establishment or incorporation. This amendment will take effect from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-21 and subsequent assessment years. [Clause 6] Amendment of section 115BAB of the Act to include generation of electricity as manufacturing. The TLAA, inter-alia , inserted section 115BAB in the Act. The newly inserted section provides that new manufacturing domestic companies set up on or after 1st October, 2019, which commence manufacturing or production by 31st March, 2023 and do not avail of any specified incentives or deductions, may opt to pay tax at a concessional rate of 15 per cent. Further, Explanation to clause (b) of sub-section (2) thereof provides that for the purposes of the said section, businesses engaged in development of computer software, mining, conversion of marble blocks or similar items into slabs, bottling of gas into cylinder, printing of books or production of cinematograph film or any other business as may be notified by the Central Government will not be considered as manufacturing or producti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2020; ii. provide that the rate of TDS shall be four per cent on the interest payable to a non-resident, in respect of monies borrowed in foreign currency from a source outside India, by way of issue of any long term bond or RDB on or after 1st April, 2020 but before 1st July, 2023 and which is listed only on a recognised stock exchange located in any IFSC. This amendment will take effect from 1st April, 2020. [Clause 82] Amendment of section 194LD of the Act to extend the period of concessional rate of withholding tax and also to extend this concessional rate to municipal debt securities. Section 194LD of the Act provides for lower TDS of five per cent in case of interest payments to Foreign Institutional Investors (FII) and Qualified Foreign Investors (QFIs) on their investment in Government securities and RDB of an Indian company subject to the condition that the rate of interest does not exceed the rate notified by the Central Government in this regard. The section further provides that the interest should be payable at any time on or after 1st June, 2013 but before 1st July, 2020. Representations have been received for extension of the time limit and also for a further conces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non-resident in India. Further, the definition of the AE in section 92A, inter alia , deems two enterprises to be AE, if during the previous year a loan advanced by one enterprise to the other enterprise is at 50 per cent. or more of the book value of the total assets of the other enterprise. Thus, the interest paid or payable in respect of loan from the branch of a foreign bank may attract provisions of interest limitation provided for under this section. It is, therefore, proposed to amend section 94B of the Act so as to provide that provisions of interest limitation would not apply to interest paid in respect of a debt issued by a lender which is a PE of a non-resident, being a person engaged in the business of banking, in India. This amendment will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-22 and subsequent assessment years. [Clause 46] Increase in safe harbour limit of 5 per cent. under section 43CA, 50C and 56 of the Act to 10 per cent.. Section 43CA of the Act, inter alia, provides that where the consideration declared to be received or accruing as a result of the transfer of land or building or both, is less than t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thousand rupees, whichever is higher, the stamp duty value of such property as exceeds such consideration shall be charged to tax under the head Income from other sources . Thus, the present provisions of section 43CA, 50C and 56 of the Act provide for safe harbour of five per cent. Representations have been received in this regard requesting that the said safe harbour of five per cent may be increased. It is, therefore, proposed to increase the limit to ten per cent.. This amendment will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-22 and subsequent assessment years. [Clauses 22, 27 29] Providing an option to the assessee for not availing deduction under section 35AD. Section 35AD of the Act, relating to deduction in respect of expenditure on specified business, provides for 100 per cent. deduction on capital expenditure (other than expenditure on land, goodwill and financial assets) incurred by the assessee on certain specified businesses. Under sub-section (1) of section 35AD, the said deduction of 100 per cent. of the capital expenditure is allowable during the previous year in which such expenditure has been incurred. Fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by way of royalty or FTS of the nature as mentioned in point (b) above. Representations have been received to extend this benefit to royalty and FTS income as well. Therefore, it is proposed to amend section 115A of the Act in order to provide that a non-resident, shall not be required to file return of income under sub-section (1) of section 139 of the Act if, - (i) his or its total income consists of only dividend or interest income as referred to in clause (a) of sub-section (1) of said section, or royalty or FTS income of the nature specified in clause (b) of sub-section (1) of section 115A; and (ii) the TDS on such income has been deducted under the provisions of Chapter XVII-B of the Act at the rates which are not lower than the prescribed rates under sub-section (1) of section 115A. This amendment will take effect from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-21 and subsequent assessment years. [Clause 47] Deferring TDS or tax payment in respect of income pertaining to Employee Stock Option Plan (ESOP) of start- ups. ESOPs have been a significant component of the compensation for the employees of start-ups, as it allows the founder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Regulation Act, 1949. This section operates notwithstanding anything contained in sub-clause (i) to (iii) of clause (1B) of section 2 or section 72A of the Act. In order to address the issue faced by the amalgamated public sector banks and public sector General Insurance Companies, it is proposed to extend the benefit of this section to amalgamation of,- (i) one or more corresponding new bank or banks with any other corresponding new bank under a scheme brought into force by the Central Government under section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 or under section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, or both, as the case may be, or (ii) One or more Government company or companies with any other Government company under a scheme sanctioned and brought into force by the Central Government under section 16 of the General Insurance Business (Nationalisation) Act, 1972. Corresponding new bank is proposed to be given the meaning as assigned to it in clause (d) of section 2 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 or clause (b) of section 2 of the Banking Compani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 2 of the Act to modify the definition of business trust so as to do away with the requirement of the units of business trust to be listed on a recognised stock exchange. This amendment will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-22 and subsequent assessment years. [Clause 62] D. MEASURES TO PROVIDE TAX CERTAINTY Amendment for providing attribution of profit to Permanent Establishment in Safe Harbour Rules under section 92CB and in Advance Pricing Agreement under section 92CC Section 92CB of the Act empowers the Central Board of Direct Taxes (Board) for making safe harbour rules (SHR) to which the determination of the arm's length price (ALP) under section 92C or section 92CA of the Act shall be subject to. As per Explanation to said section the term safe harbour means circumstances in which the Income-tax Authority shall accept the transfer price declared by the assessee. This section was inserted in the Act to reduce the number of transfer pricing audits and prolonged disputes especially in case of relatively smaller assessees. Besides reduction of disputes, the SHR provides certainty as well. Further, secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er insurance business. It states that profits and gains of any business of insurance other than life insurance shall be taken to be the profit before tax and appropriations as disclosed in the profit and loss account prepared in accordance with the provisions of the Insurance Act, 1938 or the rule made thereunder or the provisions of the Insurance Regulatory and Development Authority Act, 1999 or the regulations made thereunder, subject to the condition that any expenditure debited to the profit and loss account which is not admissible under the provisions of sections 30 to 43B shall be added back; any gain or loss on realisation of investment shall be added or deducted, as the case may be, if the same is not credited or debited to the profit and loss account; any provision for diminution in the value of investment debited to the profit and loss account shall be added back. Thus, there is no specific provision, in this rule, in the case of other insurance companies, to allow deduction for any payment of certain expenses specified in section 43B if they are paid in subsequent previous year. There is a possibility that such sum may not be allowed as deduction in the previous year in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overns interest other than interest on securities. Sub-section (1) thereof provides that any person not being individual or HUF who is responsible for paying to a resident any income by way of interest other than income by way of interest on securities, shall deduct income-tax at the rates in force. Sub-section (3) of said section provides for circumstances in which the provisions of sub-section (1) shall not apply. Clause (i) thereof provides the circumstance where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year by the person to the account of, or to, the payee, does not exceed a certain threshold. Clause (v) provides circumstance to be the income credited or paid by a co-operative society (other than a co-operative bank) to a member or to income credited or paid by a co-operative society to any other co-operative society. Clause (viia) provides circumstance to be the income credited or paid in respect of deposits with a primary agricultural credit society or a primary credit society or a co-operative land mortgage bank or a co-operative land development bank a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision of this section, if the gross amount of sales or services or both of such individual or HUF, through e-commerce operator, during the previous year does not exceed five lakh rupees and such e-commerce participant has furnished his Permanent Account Number (PAN) or Aadhaar number to the e-commerce operator. A transaction in respect of which tax has been deducted by the e-commerce operator under this section or which is not liable to deduction under the exemption discussed in the previous bullet, there shall not be further liability on that transaction for TDS under any other provision of Chapter XVII-B of the Act. This is to provide clarity so that same transaction is not subjected to TDS more than once. However, it has been clarified that this exemption will not apply to any amount received or receivable by an e-commerce operator for hosting advertisements or providing any other services which are not in connection with the sale of goods or services referred to in sub-section (1) of the proposed section. e-commerce operator is defined to mean any person who owns, operates or manages digital or electronic facility or platform for electronic commerce and is a person responsible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be ten per cent. The above TCS provision shall not apply if the buyer is,- a. liable to deduct tax at source under any other provision of the Act and he has deducted such amount. b. the Central Government, a State Government , an embassy, a High Commission, legation, commission, consulate, the trade representation of a foreign State, a local authority as defined in Explanation to clause (20) of section 10 or any other person notified by the Central Government in the Official Gazette for this purpose subject to such conditions as specified in that notification. authorised dealer is proposed to be defined to mean a person authorised by the Reserve Bank of India under sub-section (1) of section 10 of Foreign Exchange Management Act, 1999 to deal in foreign exchange or foreign security. Overseas tour program package is proposed to be defined to mean any tour package which offers visit to a country or countries or territory or territories outside India and includes expenses for travel or hotel stay or boarding or lodging or any other expense of similar nature or in relation thereto. Further, in order to widen and deepen the tax net, it is proposed to amend section 206C to levy TCS on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of his salary to all these three funds, employees with high salary income are able to design their salary package in a manner where a large part of their salary is paid by the employer in these three funds. Thus, this portion of salary does not suffer taxation at any point of time, since Exempt-Exempt-Exempt (EEE) regime is followed for these three funds. Thus, not having a combined upper cap is iniquitous and hence, not desirable. Therefore, it is proposed to provide a combined upper limit of seven lakh and fifty thousand rupee in respect of employer's contribution in a year to NPS, superannuation fund and recognised provident fund and any excess contribution is proposed to be taxable. Consequently, it is also proposed that any annual accretion by way of interest, dividend or any other amount of similar nature during the previous year to the balance at the credit of the fund or scheme may be treated as perquisite to the extent it relates to the employer s contribution which is included in total income. This amendment will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-22 and subsequent assessment years. [Clause 13] Wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s based on prices or indices of prices of commodity futures is also likely to be introduced as a new product in the commodity derivative market. Necessary changes are, therefore, proposed in Chapter VII of the Finance Act, 2013, to align the provisions of CTT with the changes in commodity derivative market. Moreover, in order to encourage the commodity transactions , settled by physical or actual delivery of goods, it is proposed to charge CTT on the new commodity derivative products at following rates: Sale of a commodity derivative based on prices or indices of prices of commodity derivatives at the rate of 0.01 per cent payable by the seller, which is the same rate at which CTT is currently charged on a transaction of sale of a commodity derivative; Sale of an option in goods, where option is exercised resulting in actual delivery of goods at the rate of 0.0001 per cent payable by purchaser; Sale of an option in goods, where option is exercised resulting in a settlement otherwise than by the actual delivery of goods at the rate of 0.125 per cent payable by purchaser, which is also the rate at which securities transaction tax is levied on a transaction of sale of an option in sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (3) of section 92CA of the Act, the Assessing Officer (AO) is required to forward a draft assessment order to the eligible assessee, if he proposes to make any variation in the income or loss returned which is prejudicial to the interest of such assessee. Such eligible assessee with respect to such variation may file his objection to the DRP, a collegium of three Principal Commissioners or Commissioners of Income-tax. DRP has nine months to pass directions which are binding on the AO. It is proposed that the provisions of section 144C of the Act may be suitably amended to:- (A) include cases, where the AO proposes to make any variation which is prejudicial to the interest of the assessee, within the ambit of section 144C; (B) expand the scope of the said section by defining eligible assessee as a non-resident not being a company, or a foreign company. This amendment will take effect from 1st April, 2020. Thus, if the AO proposes to make any variation after this date, in case of eligible assessee, which is prejudicial to the interest of the assessee, the above provision shall be applicable. [Clause 70] Provision for e-appeal. In order to impart greater efficiency, transparency an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or shall apply with such exceptions, modifications and adaptations as may be specified in the notification. Such directions are to be issued on or before 31st March 2022. It is proposed that every notification issued shall be required to be laid before each House of Parliament. This amendment will take effect from 1st April, 2020. [Clause 95] Providing check on survey operations under section 133A of the Act. Under the existing provisions of section 133A of the Act, an income-tax authority as defined therein is empowered to conduct survey at the business premises of the assessee under his jurisdiction. To prevent the possible misuse of such powers, vide Finance Act 2003, a proviso to sub-section (6) in the said section was inserted to provide that no income-tax authority below the rank of Joint Director or Joint Commissioner, shall conduct any survey under the said section without prior approval of the Joint Director or the Joint Commissioner, as the case may be. It is proposed to substitute the proviso to sub-section (6) of section 133A to provide that,- (A) in a case where the information has been received from the prescribed authority, no income-tax authority below the rank of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n not disposing of the appeal is not attributable to the assessee and the assessee has deposited not less than twenty per cent of the amount of tax, interest, fee, penalty, or any other sum payable under the provisions of this Act, or furnish security of equal amount in respect thereof. The total stay granted by ITAT cannot exceed 365 days. This amendment will take effect from 1st April, 2020. [Clause 97] Provision for e-penalty. In order to impart greater efficiency, transparency and accountability to the assessment process under the Act a new e-assessment scheme has already been introduced. Section 274 of the Act provides for the procedure for imposing penalty under Chapter XXI of the Act. In response to a show cause notice issued by the Assessing Officer (AO), assessee or his authorised representative is still required to visit the office of the Assessing Officer. With the advent of the E-Assessment Scheme-2019 and in order to ensure that the reforms initiated by the Department to eliminate human interface from the system reaches the next level, it is imperative that an e-penalty scheme be launched on the lines of E-assessment Scheme-2019. Therefore, it is proposed to insert a n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n allowing them to visit India for longer duration without becoming resident of India. Instances have come to notice where period of 182 days specified in respect of an Indian citizen or person of Indian origin visiting India during the year, is being misused. Individuals, who are actually carrying out substantial economic activities from India, manage their period of stay in India, so as to remain a non-resident in perpetuity and not be required to declare their global income in India. Sub-section (6) of the said section provides for situations in which a person shall be not ordinarily resident in a previous year. Clause (a) thereof provides that if the person is an individual who has been non-resident in nine out of the ten previous years preceding that year, or has during the seven previous years preceding that year been in India for an overall period of 729 days or less. Clause (b) thereof contains similar provision for the HUF. This category of persons has been carved out essentially to ensure that a non-resident is not suddenly faced with the compliance requirement of a resident, merely because he spends more than specified number of days in India during a particular year. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime of payment whichever is earlier deduct an amount equal to one per cent in case payment is made to an individual or an HUF and two per cent in other cases. Clause (iv) of the Explanation of the said section defines work . Sub-clause (e) of this definition includes manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from such customer within the definition. However, it excludes manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from a person, other than such customer. It has been noted that some assessees are using the escape clause of the section by getting the contract manufacturer to procure the raw material supplied through its related parties. As a result, a substantial amount of income escapes the tax net. Therefore, to bring clarity in the section and plug the leakage, it is proposed to amend the definition of work under section 194C to provide that in a contract manufacturing, the raw material provided by the assessee or its associate shall fall within the purview of the work under section 194C. Associate is proposed to be defi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Instrument (MLI). Section 90 of the Act empowers the Central Government to enter into agreement with foreign countries or specified territories (commonly known as DTAAs) for,- (a) granting relief in respect of - (i) income on which tax has been paid both, in India and that foreign country or territory, or (ii) income-tax chargeable under the laws of both, India and that foreign country or territory, to promote mutual economic relations, trade and investment. (b) avoidance of double taxation of income under the laws of both, India and that foreign country of territory, (c) exchange of information for prevention of evasion or avoidance of income-tax chargeable under the laws of both India and that foreign country or territory, or investigation of cases of such evasion or avoidance, or (d) recovery of income-tax under the laws of both India and that foreign country or territory. Section 90A of the Act contains provision similar to section 90 of the Act so as to empower the Central Government to adopt and implement an agreement between a specified association in India and any specified association in specified territory outside India for granting relief, avoidance of double taxation, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay enter into an agreement with the Government of any country outside India or specified territory outside India for, inter alia, the avoidance of double taxation of income under the Act and under the corresponding law in force in that country or specified territory, as the case may be, without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance (including through treaty-shopping arrangements aimed at obtaining reliefs provided in this agreement for the indirect benefit of residents of any other country or territory). It is also proposed to make similar amendment in clause (b) of sub-section (1) of section 90A of the Act. These amendments will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-22 and subsequent assessment years. [Clauses 41 42] Deferring Significant Economic Presence (SEP) proposal, Extending source rule, Aligning exemption from taxability of Foreign Portfolio Investors (FPIs), on account of indirect transfer of assets, with amended scheme of SEBI, and rationalising the definition of royalty. Section 9 of the Act contains provisions in respect of income which are deemed to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2021-22 and the new provisions will take effect from 1st April, 2022 and will, accordingly, apply in relation to the assessment year 2022-23 and subsequent assessment years. [Clause 5] Further, as per the discussion going on in international forum, countries generally agree that income from advertisement that targets Indian customers or income from sale of data collected from India or income from sale of goods and services using such data collected from India, needs to be accounted for in Indian revenue . Hence, it is proposed to amend the source rule to clarify this position. This amendment will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-22 and subsequent assessment years. However, for attribution of income related to SEP transaction or activities the amendment will take effect from 1st April, 2022 and will, accordingly, apply in relation to the assessment year 2022-23 and subsequent assessment years. [Clause 5] Further, the Finance Act, 2012, inter alia , had inserted Explanation 5 to said clause to clarify that an asset or capital asset being any share or interest in a company or entity registered or incorporated outsid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f royalty, such royalty is not taxable in India even if the DTAA gives India the right to tax such royalty. Such a situation is discriminatory against Indian residents, since India is foregoing its right to tax royalty in case of a non-resident from another country without that other country offering similar concession to Indian resident. Hence, it is proposed to amend the definition of royalty so as not to exclude consideration for the sale, distribution or exhibition of cinematographic films from its meaning. These amendments will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-22 and subsequent assessment years. [Clause 5] It is further proposed to amend section 295 of the Act so as to empower the Board for making rules to provide for the manner in which and the procedure by which the income shall be arrived at in the case of,- (i) operations carried out in India by a non-resident; and (ii) transaction or activities of a non-resident. The amendment at clause (i) will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-22 and subsequent assessment years. The amendment at clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f above, it is proposed to carry out amendments so that dividend or income from units are taxable in the hands of shareholders or unit holders at the applicable rate and the domestic company or specified company or mutual funds are not required to pay any DDT. It is also proposed to provide that the deduction for expense under section 57 of the Act shall be maximum 20 per cent of the dividend or income from units. Therefore, it is proposed to- (i) amend section 115-O to provide that dividend declared, distributed or paid after 1st April, 2003, but on or before 31st March, 2020 shall be covered under the provision of this section. (ii) amend clause (34) of section 10 to provide that the provision of this clause shall not apply to any income, by way of dividend, received on or after 1st April, 2020. (iii) amend section 115R to provide that the income distributed on or before 31st March, 2020 shall only be covered under the provision of this section. (iv) amend clause (35) of section 10 to provide that the provision of this clause shall not apply to any income, in respect of units, received on or after 1st April, 2020. (v) amend clause (23FC) of section 10 so that all dividends receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide for tax deduction by business trust on dividend income paid to unit holder, at the rate of ten per cent. for resident. For non-resident, it would be 5 per cent for interest and ten per cent. for dividend. (xv) insert a new section 194K to provide that any person responsible for paying to a resident any income in respect of units of a Mutual Fund specified under clause (23D) of section 10 or units from the administrator of the specified undertaking or units from the specified company shall at the time of credit of such income to the account of the payee or at the time of payment thereof by any mode, whichever is earlier, deduct income-tax there on at the rate of ten per cent. It may also be provided for threshold limit of ₹ 5,000/- so that income below this amount does not suffer tax deduction. It is also proposed to defined Administrator , specified company , as already defined in clause (35) of section 10. It is also proposed to define specified undertaking as in clause (i) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002. It is also proposed to provide that where any income is credited to any account like suspense account, in the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and (ii), stamp duty value shall mean the value adopted or assessed or assessable by any authority of the Central Government or a State Government for the purpose of payment of stamp duty in respect of an immovable property. These amendments will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-22 and subsequent assessment years. [Clause 28] Rationalisation of provisions relating to trust, institution and funds. Amendment of sub-section (7) of section 11 to allow entities holding registration under section 12A/12AA to apply for notification under clause (46) of section 10 Section 11 of the Act provides for grant of exemption in respect of income derived from property held under trust for charitable or religious purposes to the extent to which such income is applied or accumulated during the previous year for such purposes in accordance with the provisions contained in sections 11, 12, 12A, 12AA and 13 of the Act. Sub-section (7) of section 11 of the Act, inserted by the Finance (No. 2) Act, 2014 with effect from 1st April, 2015, provides that where a trust or an institution has obtained registration under section 12AA [as it stoo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... niversity, college, institution or company etc The present process of registration of trusts, institutions, funds, university, hospital etc under section 12AA or under sub-clauses (iv), (v), (vi) or (via) of clause (23C) of section 10, and approval of association, university, college, institution or company etc need improvement with the advent of technology and keeping in mind the practical issue of difficulty in obtaining registration/ approval/ notification before actually starting the activities. It is also felt that the approval or registration or notification for exemption should also be for a limited period, say for a period not exceeding five years at one time, which would act as check to ensure that the conditions of approval or registration or notification are adhered to for want of continuance of exemption. This would in fact also be a reason for having a non-adversarial regime and not conducting roving inquiry in the affairs of the exempt entities on day to day basis, in general, as in any case they would be revisiting the concerned authorities for new registration before expiry of the period of exemption. This new process needs to be provided for both existing and new e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entity shall be valid for a period not exceeding five previous years at one time calculated from 1st April, 2020. (iv) an entity already approved under section 80G shall also be required to apply for approval and on doing so, the approval, registration or notification in respect of the entity shall be valid for a period not exceeding five years at one time. (v) application for approval under section 80G shall be made to Principal Commissioner or Commissioner. (vi) an entity making fresh application for approval under clause (23C) of section 10, for registration under section 12AA, for approval under section 80G shall be provisionally approved or registered for three years on the basis of application without detailed enquiry even in the cases where activities of the entity are yet to begin and then it has to apply again for approval or registration which, if granted, shall be valid from the date of such provisional registration. The application of registration subsequent to provisional registration should be at least six months prior to expiry of provisional registration or within six months of start of activities, whichever is earlier. (vii) the application pending for approval, re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in case of persons having income from business or profession, it is required that the tax audit report may be furnished by the said assessees at least one month prior to the due date of filing of return of income. This requires amendments in all the sections of the Act which mandates filing of audit report along with the return of income or by the due date of filing of return of income. Thus, provisions of section 10, section 10A, section 12A, section 32AB, section 33AB, section 33ABA, section 35D, section 35E, section 44AB, section 44DA, section 50B, section 80-IA, section 80-IB, section 80JJAA, section 92F, section 115JB, section 115JC and section 115VW of the Act are proposed to be amended accordingly. Further, the due date for filing return of income under sub-section (1) of section 139 is proposed to be amended by:- (A) providing 31st October of the assessment year (as against 30th September) as the due date for an assessee referred to in clause (a) of Explanation 2 of sub-section (1) of Section 139 of the Act; (B) removing the distinction between a working and a non-working partner of a firm with respect to the due date as mentioned in sub-clause (iii) of clause (a) of Explan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BB in the Act regarding annual financial statement. This section proposes to mandate the prescribed income-tax authority or the person authorised by such authority to upload in the registered account of the assessee a statement in such form and manner and setting forth such information, which is in the possession of an income-tax authority, and within such time, as may be prescribed. Consequently, section 203AA is proposed to be deleted. These amendments will take effect from 1st June, 2020. [Clauses 90] Rationalisation of the provisions of section 49 and clause (42A) of section 2 of the Act in respect of segregated portfolios. Section 49 of the Act provides for cost of acquisition for the capital asset which became the property of the assessee under certain situations. Further, clause (42A) of section 2 of the Act provides the definition of the term short-term capital asset . It also provides for determination of period of holding of the capital asset held by the assessee. SEBI has, vide circular SEBI/HO/IMD/DF2/CIR/P/2018/160 dated December 28, 2018, permitted creation of segregated portfolio of debt and money market instruments by Mutual Fund schemes. As per the SEBI circular, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n whose case application for insolvency resolution process has been admitted by the Adjudicating Authority (AA) under the Insolvency and Bankruptcy Code, 2016 (IBC), the return has to be verified by the insolvency professional appointed by such AA. Similarly, in case of a limited liability partnership (LLP), the return has to be verified by the designated partner of the LLP or by any partner, in case there is no such designated partner. Therefore, it is proposed to amend clause (c) and (cd) of section 140 of the Act so as to enable any other person, as may be prescribed by the Board to verify the return of income in the cases of a company and a limited liability partnership. Further, section 288 of the Act provides for the persons entitled to appear before any Income-tax Authority or the Appellate Tribunal, on behalf of an assessee, as its authorised representative , in connection with any proceedings under that Act. While the IBC empowers the Insolvency Professional or the Administrator to exercise the powers of the Board of Directors or corporate debtor, it has been reported that lack of explicit reference in section 288 of the Act for an Insolvency Professional to act as an auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 28AAA of Customs Act, 1962 are also being expanded to include such electronic credit of duties. [107 and 110] 5. Section 111 is being amended to insert a new clause (q), to prescribe that goods imported on claim of preferential tariff treatment, and in relation to which any provision of Chapter VAA or of any rule made under this Act have been contravened shall be liable to confiscation. [111] 6. Section 156 is being amended to insert a new clause (i) in sub-section (2) to empower the Central Government to make rules for the purpose of prescribing the manner, procedures, conditions, restriction and other issue to carry out the purposes of newly inserted Chapter VAA. [112] 7. Section 157 (2) is being amended to empower the Central Government to make regulations for the purpose of prescribing the manner, procedures, conditions, restriction and other issues to carry out the purposes of newly inserted section 51B. [113] ll. AMENDMENTS IN THE CUSTOMS TARIFF ACT 1975 S. No. Amendment Clause of the Finance Bill, 2020 1. Section 8B is being substituted with a new section to empower the Central Government to apply safeguard measures, in case any article is imported into India in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epared knots and tufts for broom or brush making; paint pads and rollers; Squeegees (other than roller squeegees). 10% 20% 13. 9604 00 00 Hand sieves and hand riddles. 10% 20% 14. 9615 Combs, hair-slides and the like, hairpins curling pins, curling grips, hair curlers and the like other than those of heading 8516 and parts thereof. 10% 20% 15. 9617 Vacuum flasks and other vacuum vessels, complete with cases; parts thereof other than glass inners. 10% 20% 16. 8414 51 10 Table Fans 10% 20% 17. 8414 51 20 Ceiling Fans 10% 20% 18. 8414 51 30 Pedestal Fans 10% 20% 19. 8414 59 20 Blowers, Portable 10% 20% 20. 8509 40 10 Food Grinders 10% 20% 21. 8509 40 90 Other grinders and Mixer 10% 20% 22. 8509 80 00 Other Appliances 10% 20% 23. 8510 10 00 Shavers 10% 20% 24. 8510 20 00 Hair Clippers 10% 20% 25. 8510 30 00 Hair-removing appliances 10% 20% 26. 8516 10 00 Water heaters and immersion heaters 10% 20% 27. 8516 21 00 Storage heating radiators 10% 20% 28. 8516 29 00 Other electrical space heating apparatus 10% 20% 29. 8516 31 00 Hair Dryers 10% 20% 30. 8516 32 00 Other hair dressing apparatus 10% 20% 31. 8516 33 00 Hand Drying apparatus 10% 20% 32. 8516 40 00 Electric smoothing irons 10% 20% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 68. 9404 Mattress supports: Articles of bedding and similar furnishing 20% 25% 69. 9405 Lamps and lighting fittings including searchlights and spotlights and pads thereof; Illuminated signs, illuminated name plates and the like, having a permanently fixed light source, and parts thereof (except solar lantern and solar lamps). 20% 25% Toys 70. 9503 Tricycles, scooters, pedal-cars and similar wheeled-toys; dolls' carriages; dolls; other toys; reduced-Size ( scale ) models and similar recreational models, working or not; puzzles of all kinds 20% 60% Stationary items 71. 8304 00 00 Filing, cabinets. card-index cabinets, paper-trays, paper rests, pen trays, office-stamp stands and similar office or desk equipment of base metal, Other than office furniture of heading 9403 10% 20% 72. 8305 Fittings for loose-leaf binders or files, letter clips, letter corners, paper clips, indexing tags and similar office articles, of base metal; staples in strips (for example, for offices, upholstery, packaging), of base metal 10% 20% 73. 8310 Sign-plates, name-plates, address-plates and similar plates, numbers, letters and other symbols, of base metal, excluding those of heading 9405 10% 20% Miscel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .5% 11. 7103 Rubies, emeralds, sapphires - unset and imported uncut Nil 0.5% 12. 7103 Rough coloured gemstones Nil 0.5% 13. 7103 Rough semi-precious stones Nil 0.5% 14. 7103 Pre-forms of precious and semi-precious stones Nil 0.5% 15. 7104 Rough synthetic gemstones Nil 0.5% 16. 7104 Rough cubic zirconia Nil 0.5% 17. 7104 Polished Cubic Zirconia 5% 7.5% 18. 7110 Platinum or Palladium used in manufacture of-. a) All goods, including Noble Metal Compounds and Noble Metal Solutions [2843] b) Catalyst with precious metal or precious metal compounds as the active substance [3815 12] 12.5% 7.5% 19. 7112 Spent Catalyst/Ash containing precious metal like gold from which such precious metal is retrieved subject to specified conditions. 12.5% 11.85% Machinery 20. 84 Goods specified in List 10 of Notification No. 50/2017-Customs dated 30.62017, required for use in high voltage power transmission project 5% 7.5% 21. 8432 80 20 Rotary tillers/weeder 2.5% 7.5% 22. 84 or any other Chapter Goods specified in List 14 of Notification No. 50/2017 - Customs dated 30.6.2017, required for construction of road like paver finisher, machines for filling up cracks in roads, mobile bridge inspection units etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Trucks (with effect from 01.04.2020) 10% 15% Defence sector 41. 73,84,85,87,88,89,90,93 Exemption from import duty for specified military equipment, when imported by Defense PSUs and other PSUs for defence forces. As applicable Nil V. Pruning and review of customs duty concessions/ exemptions: A. Review of concessional rates of BCD prescribed in notification no. 50/2017 - Customs dated 30.62017: The BCD exemption hitherto available on certain goods are being withdrawn by omitting following entries of notification No. 50/2017-Customs dated 30.6.2017. S. No. S. No. of Notification No 50/2017-customs Description 1. 5 Tuna bait [0303] 2. 7 Goods upto an aggregate of ten thousand metric tonnes of total imports of Milk and cream, in powder, granules or other solid form in a financial year. [0402 10, 0402 21 00] 3. 7A Whey, concentrated, evaporated or condensed, liquid or semi-solid [0404 10 10] 4. 7B Other Whey [0404 90 00) 5. 8 Butter Ghee, Butter Oil [0405] 6. 9 Other cheese [0406 90 00) 7. 10 Pancreas (Products of animal origin, not elsewhere specified) (Chapter 5] 8. 11 Conch shell [0508 00] 9. 18 Bulbs or tubers, other live plants [0601 or 0602] 10. 36 All goods other than mesl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , meal, starch or malt extract containing cocoa calculated on a totally defatted basis, in a proportion by weight of 40% or more but less than 50% [1806 90) 27. 95 Preparations for infant use put up for retail sale [1901 10] 28. 98 preserved potatoes [2004 10 00] 29. 99 Peanut Butter [2008 11 00] 30. 105 Wine, for use as sacramental wine [22] 31. 108 Angostura bitters [2208] 32. 113 Fin fish feed [2301 20, 2309 90 32, 2309 90 39] 33. 115 Dietary soya fibre [2304] 34. 148 Naphtha, when imported by Ratnagiri Gas and Power Private Limited (RGPPL), for use in generation of electricity in the power plants of Ratnagiri Gas and Power Private Limited (RGPPL) at Dabhol, District Ratnagiri, Maharashtra [2710] 35. 149 Naphtha, when imported for generation of electrical energy by a generating company as defined in section 2(28) of the Electricity Act, 2003 (36 of 2003) to supply electrical energy-or to engage in the business of supplying electrical energy [2701] 36. 152 Propane, Butane [2711 12 00, 2711 13 00] 37. 160 Electrical energy [ 2716 00 00] 38. 170 Phosphoric acid, for the manufacture of fertilizers(28] 39. 212 Japanese Encephalitis (JE) vaccine, imported by the Andhra Pradesh Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (via All India Institute of Medical Sciences); (c) Shahdara- Dilshad Garden; (d) Indraprastha-New Ashok Nagar; (e) Yamuna Bank-Anand Vihar-lnter State Bus Terminus; and (f) Kirti Nagar-Mundka (along with operational Link to Shahdara- Rithala corridor) (Any Chapter) 59. 412 Goods specified in List 15 required for construction of roads [84 or any other chapter] 60. 447 The following goods required for manufacture of Optical disk drives (ODD), namely: - (i) Pick up assembly (ii) Digital signature procession integrated circuit (iii) DC motor (iv) LDO voltage regulator [84 or Any other Chapter] 61. 456 The following goods, namely: - (a) Sprinklers and drip irrigation systems for agricultural and horticultural purposes; (b) Micro Irrigation equipment [8424] 62. 457 Poultry incubators and brooders [8436 21 00] 63. 459 Parts for manufacture of printers falling under sub heading 8443 32 (except 8443 99 51, 8443 99 52, 8443 99 53) [8443] 64. 465 CD -Writers (8471] 65. 474 MP3 or MP4 or MPEG 4 player with or without radio or video reception facility [85] 66. 483 One set of pre-recorded cassettes accompanying books for learning languages and essential complement to such books, [85] 67. 484 Aud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be exempt from Health Cess. The proceeds of Health Cess shall be used by the Union for funding of health infrastructure in the Country. VIII. OTHER CHANGES (INCLUDING CERTAIN CLARIFICATIONS' TECHNICAL CHANGES) 1. BCD on dyed woven fabric of yarn containing 85% or more by weight of textured polyester filaments, under tariff sub-heading 5407 52 has been prescribed by S. Nos. 47 and 48 of notification No. 14/2006-Customs dated 01.03.2006. S. No. 31A of notification No. 82/2017-Customs dated 27.10.2017 also prescribes rate on this item. This entry is being omitted. 2. a) Technical changes of clarificatory nature are being made in Condition No. 78 so as to make it consistent with entry at S. No. 539 of notification No. 50/2017-Customs dated 30.06.2017. The said S. No. 539 deals with export of ground equipment imported for testing the satellite or payload, within a period of six months. b) A separate new condition (No. 107) is being incorporated for S. No. 539A, which deals with Scientific and Technical instruments, apparatus, equipments for launch of vehicle and satellite and payloads. 3. Entry at S.No. 28 of notification No. 50/2017-Customs dated 30.6.2017 is being amended to retai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , liquid or semi solid 2. 0406 90 00 Cheese, Other 3. 0601,0602 Bulbs or tubers, other live plants 4. 0802 12 00 Almonds, Shelled 5. 0802 31 00 Walnuts, in shell 6. 0802 32 00 Walnuts, shelled 7. 1001 11 00, 1001 91 00, 1001 99 20 Wheat and Meslin 8. 1005 90 Maize 9. 1704 10 00 Chewing Gum, whether or not sugar coated 10. 1901 10 Preparations suitable for infant or young children, put up for retail sale. 11. 2009 11 00 Orange Juice, Frozen 12. 2009 12 00 Orange Juice, not frozen, or a Brix value not exceeding 20 13. 2009 19 00 Orange Juice, Other 14. 2515 12 20 Marble and travertine slabs 15. 6802 10 00 Tiles, cubes and similar articles, whether or not rectangular (including square), the largest surface area of which is capable of being enclosed in a square the side of which is less than 7 cm; artificially coloured granules, chippings and powder, other monumental or building stone and articles thereof, simply cut sawn with a flat even surface 16. 680221 10 Marble blocks/tiles 17. 6802 21 20 Marble monumental stone 18. 6802 21 90 Other tiles, cubes and similar articles 19. 6802 91 00 Marble, travertine and alabaster 20. 6802 92 00 Other calcareous stone 210 8702 or 8704 All commerci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cified in seventh schedule to Finance Act, 2001 (c) Clause Nos. in square brackets [] indicate the relevant clause of the Finance Bill, 2020. (d) Amendments carried out through the Finance Bill, 2020 come into effect on the date of its enactment, unless otherwise specified. l. AMENDMENT IN THE SEVENTH SCHEDULE TO THE FINANCE ACT, 2001* [Clause [145] of the Finance Bill. 2020]: S. No. Tariff Item Description of goods Unit From To 1. 2402 20 10 Other than filter cigarettes, of length not exceeding 65 millimetres Tu ₹ 90 per thousand ₹ 200 per thousand 2. 2402 20 20 Other than filter cigarettes, of length exceeding 65 millimetres but not exceeding 70 millimetres Tu ₹ 145 per thousand ₹ 250 per thousand 3. 2402 20 30 Filter cigarettes of length (including the length of the filter, the length of filter being 11 millimetres or its actual length, whichever is more) not exceeding 65 millimetres Tu ₹ 90 per thousand ₹ 440 per thousand 4. 2402 20 40 Filter cigarettes of length (including the length of the filter, the length of filter being 11 millimetres or its actual length, whichever is more) exceeding 65 millimetres but not exceeding 70 millimetres Tu & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the CGST Act, or (ii) inter-State outward supply of services, or (iii) outward supply of services through an e-Commerce operator. [117] 3. Sub-section (4) of the section 16 of the CGST Act is being amended to delink the date of issuance of debit note from the date of issuance of the underlying invoice for purposes of availing input tax credit. [118] 4. Clause (c) of sub-section (1) of section 29 of the CGST Act is being amended to provide for cancellation of registration which has been obtained voluntarily under sub-section (3) of section 25. [119] 5. A proviso to sub-section 1 of section 30 of the CGST Act is being inserted to empower the jurisdictional tax authorities to extend the date for application of revocation of cancellation of registration in deserving cases. [120] 6. Section 31 of the CGST Act is being amended to provide enabling provision to prescribe the manner of issuance of invoices in case of supply of taxable services. [121] 7. Section 51 of the CGST Act is being amended to remove the requirement of issuance of TDS certificate by the deductor: and to omit the corresponding provision of late fees for delay in issuance of TDS certificate. [122] 8. Section 109 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Goods and Service Tax (Compensation to States) Act is being amended to make provision for enabling the issuance of removal of difficulties orders for another 2 years, i.e. till five years from the date of commencement of the said Act. [138] V. Retrospective Amendments of GST rate notifications S.No. Amendment Clause of the Finance Bill, 2020 1. Exemption from Central Tax, Union Territory Tax and Integrated Tax for fishmeal [HS 2301], for the period 01.07.2017 to 30.09.2019, subject to the condition that if GST has been paid, the same would not be eligible for refund. [130, 133 and 137] 2. Levy of 12% rate of Integrated Tax and 6% Central Tax and 6% Union Territory Tax during the period 01.07.2017 to 31.12.2018, on pulley, wheels and other parts (falling under heading 8483) and used as parts of agricultural machinery of headings 8432, 8433, and 8436, subject to the condition that if GST has been paid, the same would not be eligible for refund. [130, 133 and 137] 3. The refund of accumulated credit of compensation cess on tobacco products arising out of inverted duty structure in compensation cess is disallowed with effect from 01.10.2019 vide notification No. 3/2019-Compensa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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