TMI Tax Updates - e-Newsletter
January 1, 2018
Case Laws in this Newsletter:
Articles
By: DEVKUMAR KOTHARI
Summary: Amendments to tax laws should be prospective to avoid unnecessary litigation and uncertainty for taxpayers. Recent court rulings have reinforced that amendments should not be applied retrospectively unless explicitly stated. Retrospective amendments can create significant burdens for taxpayers, despite minimal fiscal impact on the government. They often arise from bureaucratic bias and lack thorough legislative discussion. To maintain legal stability and government credibility, tax amendments should be carefully considered and generally prospective. Clear instructions should guide tax authorities to prevent litigation over retrospective interpretations, aligning with established legal positions and minimizing unnecessary disputes.
By: CASanjay Kumawat
Summary: In the case between Chemico Synthetics Limited and the Union of India, the Delhi High Court addressed a petition for interim relief concerning duty-free imports under Advance Authorization licenses. These licenses, issued before July 1, 2017, allowed the petitioner to import goods without additional levies for fulfilling export orders placed before that date. The court permitted the clearance of such consignments, provided they matched the specified quantity and value in the licenses and were verified by Customs. The petitioner was required to submit an affidavit undertaking to pay applicable IGST with interest if they failed in their petition or export obligations.
News
Summary: The document provides answers to common questions regarding the Goods and Services Tax (GST) in India. It clarifies that Reverse Charge Mechanism (RCM) details should be shown in Table 4B of FORM GSTR-1. Taxpayers can file combined quarterly returns if they missed filing for individual months. Online sellers can claim GST credit on commissions from platforms like Amazon and Flipkart. Suppliers can issue a single invoice for services across multiple states based on contract terms. Tarpaulins sent back to suppliers can be documented with a delivery challan. The document also addresses issues with credit note entries, GST return filing for merchant exporters, and HSN code requirements for businesses with turnovers below 1.5 crore.
Summary: The deadline for filing the Goods and Services Tax return in FORM GSTR-1 has been extended to January 10, 2018, for all taxpayers. For registered persons with an aggregate turnover of up to 1.5 crore rupees, the quarterly return for July to September 2017 was initially due on December 31, 2017. For those with a turnover exceeding 1.5 crore rupees, the monthly returns for July to October 2017 were also originally due on December 31, 2017.
Summary: The eighteenth meeting of the Financial Stability and Development Council (FSDC) took place in New Delhi, chaired by the Union Finance Minister as part of pre-Budget 2018-19 consultations. Attendees included key figures from the Reserve Bank of India, Department of Revenue, Economic Affairs, Financial Services, Corporate Affairs, and other financial regulators. The meeting focused on proposals from these regulators for the upcoming Union Budget, with discussions on sectoral development. The Council instructed relevant ministries and departments to thoroughly review these proposals to make informed decisions moving forward.
Summary: The Finance Minister dismissed claims that India's growth rate hit an all-time low, labeling such remarks as exaggerated. He emphasized that India has been the fastest-growing economy for three consecutive years. Despite a reported dip to 5.7% in the first quarter of 2017-18, the minister highlighted robust growth in the services sector and projected an upward trend in future quarters. He attributed temporary manufacturing declines to GST-related destocking, which rebounded later. The minister argued against tax cuts and larger fiscal deficits, suggesting these measures are unnecessary given the current economic performance.
Summary: India's external debt at the end of September 2017 was $495.7 billion, a 5.1% increase from March 2017, driven mainly by foreign portfolio investment in domestic debt and trade-related credit. Long-term debt comprised 81.3% of the total, while short-term debt was 18.7%. Government debt increased to 21.6% of the total due to foreign investment in government securities. The US dollar accounted for 50% of the debt. The foreign exchange cover improved to 80.7%. Short-term debt by original maturity was 23.2% of foreign exchange reserves, and concessional debt was 9.1% of the total external debt.
Notifications
Customs
1.
97/2017 - dated
29-12-2017
-
Cus
Seeks to amend notification No. 53/2011-Customs dated 01st July, 2011 so as to provide deeper tariff concessions in respect of specified goods imported from Malaysia under the India-Malaysia Comprehensive Economic Cooperation Agreement (IMCECA) w.e.f. 01.01.2018
Summary: The Government of India has issued Notification No. 97/2017-Customs, amending Notification No. 53/2011-Customs to provide deeper tariff concessions for specific goods imported from Malaysia under the India-Malaysia Comprehensive Economic Cooperation Agreement. Effective January 1, 2018, the amendments adjust tariff rates for several items, including changes to entries in the notification's table, such as substituting tariff rates in specified serial numbers. This amendment is made under the authority of the Customs Act, 1962, and aims to enhance economic cooperation between India and Malaysia.
2.
96/2017 - dated
29-12-2017
-
Cus
Seeks to amend notification No. 46/2011-Customs dated 01.06.2011 so as to provide deeper tariff concessions in respect of specified goods when imported from ASEAN under the India-ASEAN Free Trade Agreement w.e.f. 01.01.2018
Summary: The Government of India issued Notification No. 96/2017-Customs on December 29, 2017, amending Notification No. 46/2011-Customs to implement deeper tariff concessions on specified goods imported from ASEAN countries under the India-ASEAN Free Trade Agreement, effective January 1, 2018. The notification outlines the revised tariff rates applicable to various goods, aiming to enhance trade relations and economic cooperation between India and ASEAN nations. The changes are made under the authority of the Customs Act, 1962, prioritizing public interest. This amendment follows previous modifications, the last being Notification No. 63/2016-Customs.
3.
20/2017-Customs (N.T./CAA/DRI) - dated
29-12-2017
-
Cus (NT)
Appointed common adjudicating authority
Summary: The notification issued by the Ministry of Finance, Department of Revenue, appoints officers as common adjudicating authorities for customs cases. It specifies the officers responsible for adjudicating show cause notices for various entities. The document lists the noticees, the corresponding show cause notice numbers and dates, the original adjudicating authorities, and the newly appointed adjudicating authorities. This appointment is part of the Directorate of Revenue Intelligence's efforts to streamline the adjudication process for customs-related cases, as per the Customs Act, 1962.
GST - States
4.
47/2017-State Tax (Rate) - dated
14-11-2017
-
Arunachal Pradesh SGST
Amendments in the Notification No. 12/2017 State Tax (rate), dated the 28th June, 2017.
Summary: The Government of Arunachal Pradesh has issued amendments to Notification No. 12/2017 regarding State Tax rates under the Arunachal Pradesh Goods and Services Tax Act, 2017. Effective from November 15, 2017, the amendments include changes to services provided by Fair Price Shops, which now cover services to government entities under the Public Distribution System with compensation as commission or margin. Additionally, serial number 11B is removed, and a new entry, 79A, is added, exempting services related to admission to protected monuments under relevant legislation from tax.
5.
46/2017-State Tax (Rate) - dated
14-11-2017
-
Arunachal Pradesh SGST
Amendments in the Notification No.11/2017- State Tax (Rate), dated the 28th June, 2017.
Summary: The Government of Arunachal Pradesh has issued amendments to Notification No. 11/2017-State Tax (Rate) under the Arunachal Pradesh Goods and Services Tax Act, 2017, effective from November 15, 2017. Key changes include redefining "composite supply of works contract" in relation to services and revising tax rates for food and beverage services provided by restaurants and similar establishments. The notification clarifies the tax applicability based on the premises' tariff and specifies that certain accommodation and food services will attract a central tax of 2.5% without input tax credit. Additionally, the manufacture of handicraft goods has been included in the taxable category.
6.
45/2017-State Tax (Rate) - dated
14-11-2017
-
Arunachal Pradesh SGST
Recommendations of the Council, hereby exempts the goods the amount calculated at the rate of 2.5 per cent., when supplied to the institutions specified.
Summary: The Government of Arunachal Pradesh has issued a notification under the Arunachal Pradesh Goods and Services Tax Act, 2017, exempting certain goods from central tax beyond a 2.5% rate when supplied to specified institutions. These include public-funded research institutions, research institutions, and regional cancer centers. The exemption applies to scientific instruments, equipment, software, and live animals for research, provided the institutions meet specific conditions, such as producing certificates from relevant authorities and ensuring goods are used solely for research. The notification is effective from November 15, 2017.
7.
44/2017-State Tax (Rate) - dated
14-11-2017
-
Arunachal Pradesh SGST
Amendments in the Notification No.5/2017-State Tax (Rate), dated the 28th June, 2017.
Summary: The Government of Arunachal Pradesh has issued Notification No. 44/2017-State Tax (Rate) on November 14, 2017, amending Notification No. 5/2017-State Tax (Rate) dated June 28, 2017, under the Arunachal Pradesh Goods and Services Tax Act, 2017. The amendments involve changes to the entries in the table for Sl. No. 6A, replacing them with new entries for knotted netting of twine, cordage or rope, made-up fishing nets, corduroy fabrics, and narrow woven fabrics. These changes will take effect from November 15, 2017.
8.
43/2017-State Tax (Rate) - dated
14-11-2017
-
Arunachal Pradesh SGST
Amendments in the Notification No.4/2017- State Tax (Rate), dated the 28th June, 2017.
Summary: The Government of Arunachal Pradesh has issued Notification No. 43/2017-State Tax (Rate) amending Notification No. 4/2017-State Tax (Rate), dated 28th June 2017, under the Arunachal Pradesh Goods and Services Tax Act, 2017. Effective from 15th November 2017, the amendment introduces a new entry in the notification's table, specifically Serial No. 4A, which pertains to raw cotton transactions involving agriculturists and any registered person. This amendment follows the recommendations of the GST Council.
9.
42/2017-State Tax (Rate) - dated
14-11-2017
-
Arunachal Pradesh SGST
Amendments in the Notification No. 2/2017-State Tax (Rate), dated the 28th June, 2017.
Summary: The Government of Arunachal Pradesh has amended Notification No. 2/2017-State Tax (Rate) under the Arunachal Pradesh Goods and Services Tax Act, 2017. These amendments include changes to the schedule of goods, specifying which items are fresh or chilled and those not in unit containers with registered brand names or enforceable rights. Several serial numbers and entries have been substituted, omitted, or added, affecting categories such as meats, vegetables, roots, dried products, and other goods. The definition of "registered brand name" has been updated to include brands registered under various acts as of May 15, 2017. The notification takes effect on November 15, 2017.
10.
41/2017-State Tax (Rate) - dated
14-11-2017
-
Arunachal Pradesh SGST
Amendments in the Notification No.1/2017-State Tax (Rate), dated the 28th June, 2017.
Summary: The Government of Arunachal Pradesh has issued amendments to Notification No. 1/2017-State Tax (Rate), dated June 28, 2017, under the Arunachal Pradesh Goods and Services Tax Act, 2017. These amendments, effective November 15, 2017, involve changes to various schedules, including the addition, omission, and substitution of items and their descriptions. The modifications affect tax rates and classifications of numerous goods, specifying conditions related to brand names and packaging. The notification also clarifies the definition of "registered brand name" under the Trade Marks Act, 1999, and other applicable laws.
11.
40/2017-State Tax (Rate) - dated
13-11-2017
-
Arunachal Pradesh SGST
Exempts the intra-State supply of taxable goods amount calculated at the rate of 0.05 per cent.,
Summary: The Government of Arunachal Pradesh, under the Arunachal Pradesh Goods and Services Tax Act, 2017, exempts intra-State supply of taxable goods for export from central tax exceeding 0.05% under specified conditions. These include the requirement for goods to be supplied on a tax invoice, exported within 90 days, and documented with GST Identification Numbers. The recipient must be registered with an Export Promotion Council, and goods must be moved directly to export points or registered warehouses. Failure to export within the stipulated time voids the exemption. Compliance with these conditions is mandatory for both suppliers and recipients.
12.
39/2017-State Tax (Rate) - dated
13-11-2017
-
Arunachal Pradesh SGST
Notifies the State tax rate of 2.5 per cent on intra-State supplies of goods - Food preparations put up in unit containers and intended for free distribution to economically weaker.
Summary: The Government of Arunachal Pradesh, under the Arunachal Pradesh Goods and Services Tax Act, 2017, has set a State tax rate of 2.5% on intra-State supplies of food preparations packaged in unit containers intended for free distribution to economically weaker sections. This applies to goods under tariff items 19 or 21, as approved by the Central or State Government. Suppliers must provide a certificate from a Deputy Secretary-level officer confirming the distribution within five months, or an extended period as allowed by the jurisdictional tax commissioner. This notification aligns with the Customs Tariff Act, 1975 for interpretation.
13.
38/2017-State Tax (Rate) - dated
13-10-2017
-
Arunachal Pradesh SGST
Amendment in the Notification No. 8/2017 - State Tax (Rate), dated the 28th June, 2017.
Summary: The Government of Arunachal Pradesh has issued an amendment to Notification No. 8/2017 - State Tax (Rate) dated June 28, 2017, under the Arunachal Pradesh Goods and Services Tax Act, 2017. This amendment, effective from October 13, 2017, involves the removal of the proviso under Paragraph 1 of the original notification. The exemption provided by the amended notification will be applicable to all registered persons until March 31, 2018. This amendment is made in the public interest based on recommendations from the Council.
14.
37/2017-State Tax (Rate) - dated
13-10-2017
-
Arunachal Pradesh SGST
Notifies the State tax on intra-State supplies of goods 65% of state tax applicable on Motor Vehicles.
Summary: The Government of Arunachal Pradesh, through Notification No. 37/2017-State Tax (Rate) dated October 13, 2017, has imposed a state tax on intra-state supplies of motor vehicles at 65% of the applicable state tax under Notification No. 1/2017-State Tax (Rate) dated June 28, 2017. This notification is effective until July 1, 2020. Conditions for this tax rate include that the motor vehicles were purchased and supplied on lease before July 1, 2017, and the supplier is registered and has not claimed input tax credit for certain taxes on these vehicles.
15.
36/2017-State Tax (Rate) - dated
13-10-2017
-
Arunachal Pradesh SGST
Amendments in the Notification No.4/2017- State Tax (Rate), dated the 28th June, 2017.
Summary: The Government of Arunachal Pradesh has issued an amendment to Notification No. 4/2017-State Tax (Rate), dated June 28, 2017, under the Arunachal Pradesh Goods and Services Tax Act, 2017. This amendment, effective from October 13, 2017, introduces a new entry in the notification concerning the supply of used vehicles, seized and confiscated goods, old and used goods, waste, and scrap. These goods, supplied by the Central Government, State Government, Union Territory, or a local authority, are to be received by any registered person. The amendment was issued by the Commissioner to the Government of Arunachal Pradesh, Itanagar.
16.
35/2017-State Tax (Rate) - dated
13-10-2017
-
Arunachal Pradesh SGST
Amendments in the Notification No. 2/2017-State Tax (Rate), dated the 28th June, 2017.
Summary: The Government of Arunachal Pradesh has amended Notification No. 2/2017-State Tax (Rate) under the Arunachal Pradesh Goods and Services Tax Act, 2017. The amendments include the addition of new entries for duty credit scrips and the supply of goods by a government entity to various government bodies. A new explanation defines "Government Entity" as an authority or body with significant government participation. An annexure proviso requires individuals with actionable claims on brand names to file an affidavit if they authorize another to use the brand name for packaging, indicating voluntary forfeiture of such claims.
17.
34/2017-State Tax (Rate) - dated
13-10-2017
-
Arunachal Pradesh SGST
Amendments in the Notification No.1/2017-State Tax (Rate), dated the 28th June, 2017.
Summary: The Government of Arunachal Pradesh has issued amendments to Notification No. 1/2017-State Tax (Rate) under the Arunachal Pradesh Goods and Services Tax Act, 2017. Key changes include updates to various schedules, affecting tax rates on specific goods. Notable amendments involve the inclusion and substitution of items like dried mangoes, khakhra, chapatti, roti, certain edible preparations, kerosene oil, bunker fuels, and various types of waste, among others. New provisions address the voluntary forfeiture of brand rights in specific cases. These adjustments aim to refine the tax structure and clarify the categorization of goods for state tax purposes.
18.
33/2017-State Tax (Rate) - dated
13-10-2017
-
Arunachal Pradesh SGST
Amendments in the Notification No. 13/2017-State Tax (Rate), dated the 28th June, 2017.
Summary: The Government of Arunachal Pradesh has amended Notification No. 13/2017-State Tax (Rate) under the Arunachal Pradesh Goods and Services Tax Act, 2017. The amendment, effective from October 13, 2017, introduces a new entry in the notification's table. It specifies that services supplied by members of the Overseeing Committee to the Reserve Bank of India are included under the state tax provisions. This amendment was issued by the Department of Tax and Excise, Itanagar, and is documented as Notification No. 33/2017-State Tax (Rate).
19.
32/2017-State Tax (Rate) - dated
13-10-2017
-
Arunachal Pradesh SGST
Amendments in the Notification No.12/2017- State Tax (Rate), dated the 28th June, 2017.
Summary: The Government of Arunachal Pradesh issued amendments to Notification No.12/2017-State Tax (Rate) under the Arunachal Pradesh Goods and Services Tax Act, 2017. Key changes include replacing "governmental authority" with broader terms like "Central Government, State Government, Union territory, local authority, or Governmental Authority." New entries were added for services provided by government entities and goods transport agencies, specifying conditions under which services are exempt. Definitions for "Governmental Authority" and "Government Entity" were updated to include entities with significant government participation. These amendments aim to clarify and expand the scope of tax exemptions and definitions under the GST framework.
20.
31/2017-State Tax (Rate) - dated
13-10-2017
-
Arunachal Pradesh SGST
Amendments in the Notification No.11/2017- State Tax (Rate), dated the 28th June, 2017.
Summary: The Government of Arunachal Pradesh has issued amendments to Notification No. 11/2017-State Tax (Rate), initially dated 28th June 2017, under the Arunachal Pradesh Goods and Services Tax Act, 2017. These amendments, effective from 13th October 2017, include changes to tax rates and conditions for various services and goods. Key modifications involve the substitution of terms to include entities such as the Central Government, State Government, and Government Entities in service provisions. Specific changes are made to works contracts, transportation services, leasing, and printing services, with detailed conditions on tax credits and applicability. Definitions for "Governmental Authority" and "Government Entity" are also clarified.
21.
30/2017-State Tax (Rate) - dated
13-10-2017
-
Arunachal Pradesh SGST
Amendments in the Notification No. 12/2017 -State Tax (Rate), dated the 28th June, 2017.
Summary: The Government of Arunachal Pradesh has issued Notification No. 30/2017-State Tax (Rate) dated October 13, 2017, amending Notification No. 12/2017-State Tax (Rate) from June 28, 2017. Under the authority of the Arunachal Pradesh Goods and Services Tax Act, 2017, the amendment introduces a new entry in the tax exemption table. It specifies that the supply of services related to transit cargo to Nepal and Bhutan, both landlocked countries, is exempt from state tax. This decision was made in the public interest based on recommendations from the Council.
Circulars / Instructions / Orders
Companies Law
1.
16/2017 - dated
29-12-2017
Condonation of Delay Scheme, 2018
Summary: The Condonation of Delay Scheme, 2018, introduced by the Ministry of Corporate Affairs, allows defaulting companies to file overdue financial statements and annual returns without facing disqualification penalties. Effective from January 1 to March 31, 2018, the scheme temporarily reactivates the Director Identification Numbers (DINs) of disqualified directors, enabling them to submit overdue documents. Companies must file these documents and a condonation form with a fee of Rs. 30,000. This scheme excludes companies removed from the register and does not apply to certain documents. Legal actions will be withdrawn for compliant companies, but non-compliant companies may face prosecution.
Highlights / Catch Notes
GST
-
Department to Reconcile FORM GSTR-3B with FORM GSTR-1 Data; Discrepancies Addressed Per CGST Act 2017 Rules.
Circulars : The information furnished by the registered person in the return in FORM GSTR-3B would be reconciled by the department‟s system with the information furnished in FORM GSTR-1 and discrepancies, if any, shall be dealt with in accordance with the relevant provisions of the CGST Act, 2017 and rules made thereunder.
-
Quarterly GSTR-1 Filers Risk Penalties for Incorrect Aggregate Turnover Reporting under CGST Act 2017.
Circulars : Where the registered person wrongly reports his aggregate turnover and opts to file FORM GSTR-1 on quarterly basis, he may be liable for punitive action under the CGST Act, 2017.
-
GSTR-1 and GSTR-3B filing dates organized into calendar format for easier compliance and understanding.
Circulars : Dates for filing of FORM GSTR-1 and FORM GSTR-3B have been put in a calendar format for ease of understanding
Income Tax
-
High Court rules Section 194C TDS not applicable for payments made directly to laborers without formal contracts.
Case-Laws - HC : TDS u/s 194C - The assessee had got the work done directly through labourers and had merely paid them through the head labourer. In the absence of any contract to carry out any work with a specified person, the provisions of section 194C of the Act would not be attracted - HC
-
High Court Decision: Assessing Officers to Manually Process Tax Returns When System Errors Persist Beyond Reasonable Timeframe.
Case-Laws - HC : Claim of refund - Centralised Processing of Return Scheme, 2011 - If returns cannot be processed due to system failure and if the errors cannot be rectified and system cannot be made functional within a reasonable time, the Commissioner ought to permit the AOs to process the returns manually. - HC
-
No Penalty Imposed on Company for Cash Transactions Due to Lack of Officer's Satisfaction u/s 271D.
Case-Laws - AT : Penalty u/s 271D - the company has accepted cash loan / cash deposits from Director - repayment of the same was also made in cash - AO did not record any satisfaction regarding penalty proceedings - No penalty - AT
Customs
-
India Amends Customs Duties to Grant Duty Concessions for Philippines and ASEAN Under ASEAN-India Free Trade Agreement.
Notifications : Duty concessions to Philippines and other ASEAN countries in view of ASEAN- India FTA (AIFTA). - Notification as amended
-
India-Malaysia CECA: Tariff Concession Granted for Specific Malaysian Imports under Updated Customs Notification.
Notifications : Tariff concession to specified goods imported from Malaysia under India-Malaysia CECA. - Notification as amended.
Corporate Law
-
Condonation of Delay Scheme 2018: Opportunity for Defaulting Companies to Rectify Compliance Under Companies Act Sections 403, 459, 460.
Circulars : With a view to giving an opportunity for the non-compliant, defaulting companies to rectify the default, in exercise of its powers conferred u/s 403, 459 and 460 of the Companies Act, 2013, the Central Government has decided to introduce a Scheme namely "Condonation of Delay Scheme 2018" [CODS-2018]
9911796707
