TMI Tax Updates - e-Newsletter
January 10, 2018
Case Laws in this Newsletter:
Articles
By: DR.MARIAPPAN GOVINDARAJAN
Summary: Section 90 of the Companies Act, 2013, addresses the investigation of beneficial ownership of shares. It allows the Central Government to appoint investigators to report on share ownership. The Companies (Amendment) Act, 2017 revised this section, requiring individuals with significant control or interest in a company to declare their interests. Non-compliance results in fines. Companies must maintain a register of beneficial owners and file returns with the Registrar of Companies. They must notify individuals suspected of being beneficial owners to provide information. Failure to comply allows companies to seek Tribunal intervention, potentially restricting share rights. Penalties apply for non-compliance.
By: CASanjay Kumawat
Summary: The article outlines the compliance schedule for filing various Goods and Services Tax (GST) returns in India. It details the objectives and filing requirements for different forms, including GSTR-3B, GSTR-1, GSTR-5, GSTR-5A, GST ITC-01, and GST CMP-03. GSTR-3B is a simplified return for initial GST months, while GSTR-1 is for monthly outward supplies. Non-resident taxable persons file GSTR-5, and OIDAR service providers file GSTR-5A. GST ITC-01 is for claiming input tax credit, and GST CMP-03 is for taxpayers opting for the Composition Scheme. The schedule specifies due dates and applicable notifications for each form.
News
Summary: Direct tax collections in India for the fiscal year 2017-2018 showed an 18.2% increase up to December 2017, reaching Rs. 6.56 lakh crore. This amount represents 67% of the total budgeted direct tax revenue of Rs. 9.8 lakh crore for the year. Gross collections rose by 12.6% to Rs. 7.68 lakh crore, with refunds issued totaling Rs. 1.12 lakh crore. Advance Tax collections amounted to Rs. 3.18 lakh crore, marking a 12.7% growth compared to the previous year. Corporate Income Tax Advance Tax grew by 10.9%, while Personal Income Tax Advance Tax increased by 21.6%.
Summary: The Government of India has announced a relaxation in the provisions related to the levy of Minimum Alternate Tax (MAT) for companies undergoing corporate insolvency resolution under the Insolvency and Bankruptcy Code, 2016. Previously, companies could only reduce the lesser of brought forward loss or unabsorbed depreciation from their book profit for MAT calculation. Effective from Assessment Year 2018-19, companies with admitted insolvency applications can reduce the total loss brought forward, including unabsorbed depreciation, from their book profit. This change aims to alleviate the financial burden on such companies, with legislative amendments to follow.
Notifications
GST - States
1.
38/1/2017-Fin(R&C)(34) - dated
23-11-2017
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Goa SGST
Supersded vide Notification No. 38/1/2017-Fin(R&C)(22)/3599, dated the 24th October, 2017
Summary: The Government of Goa, under the Goa Goods and Services Tax Act, 2017, issued a notification superseding a previous one from October 24, 2017. It mandates that registered persons not opting for the composition levy under section 10 must pay state tax on the outward supply of goods at the time of supply as per section 12(2)(a) of the Act. This includes situations under section 14, requiring them to furnish details and returns as per Chapter IX of the Act. The notification is effective from November 15, 2017, as ordered by the Under Secretary of Finance.
2.
38/1/2017-Fin(R&C)(33) - dated
23-11-2017
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Goa SGST
“Special Category States”.
Summary: The Government of Goa, under the Goa Goods and Services Tax Act, 2017, exempts certain service providers from registration requirements. This applies to those supplying services through an electronic commerce operator who collects tax at source and whose aggregate turnover does not exceed twenty lakh rupees annually. For "special category States," excluding Jammu and Kashmir, the exemption applies if the turnover does not exceed ten lakh rupees. This decision follows recommendations from the Council and is effective as per the notification issued by the Department of Finance, Revenue & Control Division, on November 23, 2017.
3.
38/1/2017-Fin(R&C)(32) - dated
23-11-2017
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Goa SGST
Waiver the penalty amount of late fee payable FORM GSTR-3B.
Summary: The Government of Goa, under the Goa Goods and Services Tax Act, 2017, waives the penalty for late filing of FORM GSTR-3B returns from October 2017 onwards. The late fee payable is reduced to twenty-five rupees per day for delays, with a further reduction to ten rupees per day if no state tax is due in the return. This waiver applies to registered persons who fail to submit their returns by the due date, as recommended by the Council. The notification was issued by the Department of Finance, Revenue & Control Division, on November 23, 2017.
4.
38/1/2017-Fin(R&C)(31) - dated
23-11-2017
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Goa SGST
Recommendations of the Council, notifies the registered persons having aggregate turnover of upto 1.5 crore rupees in the preceding financial year.
Summary: The Government of Goa, under the Goa Goods and Services Tax Act, 2017, has issued a notification for registered persons with an aggregate turnover of up to 1.5 crore rupees in the preceding or current financial year. These individuals must follow a special procedure for submitting details of outward supplies in FORM GSTR-1. The notification specifies deadlines for quarterly submissions: July-September 2017 by December 31, 2017; October-December 2017 by February 15, 2018; and January-March 2018 by April 30, 2018. Further procedures or extensions will be announced in the Official Gazette.
5.
38/1/2017-Fin(R&C)(30) - dated
23-11-2017
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Goa SGST
The Goa Goods and Services Tax (Twelfth Amendment) Rules, 2017.
Summary: The Goa Goods and Services Tax (Twelfth Amendment) Rules, 2017, effective from November 15, 2017, introduce several changes to the Goa GST Rules. Key amendments include clarifications on exempt supplies in rule 43, allowing manual filing and processing in rules 97A and 107A, and provisions for appealing decisions under rule 109A. The amendments also enable the Central Government to terminate certain appointments with Council approval under rule 124. Additionally, new forms for manual refund applications and detailed refund processing guidelines are introduced, enhancing administrative procedures. These changes aim to streamline GST operations and provide clarity on procedural aspects.
6.
38/1/2017-Fin(R&C)(29) - dated
23-11-2017
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Goa SGST
Government of Goa notifies the evidences which are required to be produced by the supplier of deemed export supplies for claiming refund.
Summary: The Government of Goa has issued a notification detailing the evidences required for suppliers of deemed export supplies to claim a refund under the Goa Goods and Services Tax Rules, 2017. Suppliers must provide acknowledgment from the jurisdictional Tax Officer or a signed tax invoice from the recipient Export Oriented Unit confirming receipt of supplies. Additionally, recipients must submit undertakings stating that they have not availed input tax credit on these supplies and will not claim a refund, allowing the supplier to claim it. This notification is issued by the Department of Finance, Revenue & Control Division, Goa.
7.
CCT/26-2/2017-18/21 - dated
15-11-2017
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Goa SGST
Last date for filing of return in FORM GSTR-3B
Summary: The Government of Goa's Department of Finance has issued a notification specifying the deadlines for filing returns in FORM GSTR-3B under the Goa Goods and Services Tax Act, 2017. The Commissioner, following the Council's recommendations, mandates electronic submission of these returns via the common portal. The deadlines are set as follows: for January 2018 by 20th February 2018, February 2018 by 20th March 2018, and March 2018 by 20th April 2018. Registered persons must settle their tax liabilities by debiting the electronic cash or credit ledger by the respective deadlines.
Circulars / Instructions / Orders
GST - States
1.
CCT/26-2/2017-18/10 - dated
15-11-2017
Extension of time limit for submitting the declaration in FORM GST TRAN-1 under Rule 120A of the Goa Goods and Service Tax Rules, 2017.
Summary: The Government of Goa has extended the deadline for submitting the declaration in FORM GST TRAN-1 under Rule 120A of the Goa Goods and Services Tax Rules, 2017. This extension is granted under the authority of Rule 120A and Section 168 of the Goa Goods and Services Tax Act, 2017, following the Council's recommendations. The new deadline for submission is set for 27th December 2017, superseding the previous order dated 30th October 2017, while maintaining actions taken before this supersession.
2.
CCT/26-2/2017-18/09 - dated
15-11-2017
Extension of time limit for submitting the declaration in FORM GST TRAN-1 under Rule 117 of the Goa Goods and Service Tax Rules, 2017.
Summary: The Government of Goa, through the Office of the Commissioner of Commercial Taxes, has extended the deadline for submitting the declaration in FORM GST TRAN-1 under Rule 117 of the Goa Goods and Services Tax Rules, 2017. This extension, based on the recommendations of the Council and in accordance with Section 168 of the Goa Goods and Services Tax Act, 2017, moves the deadline to 27th December 2017. This order supersedes the previous order dated 30th October 2017, except for actions already taken under it.
GST
3.
28/02/2018 - dated
8-1-2018
Clarifications regarding GST on College Hostel Mess Fees – reg.
Summary: The circular addresses the taxability and GST rate on services provided by college hostel mess facilities. It clarifies that the supply of food or drink by a mess or canteen, whether operated by the educational institution or outsourced to a third party, is taxable at a rate of 5% without Input Tax Credit. This is in accordance with the specified notifications. Any issues with implementing this directive should be reported to the Board for resolution.
DGFT
4.
50/2015-2020 - dated
9-1-2018
Enlistment of Agricultural and Processed Food Products Export Development Authority's (APEDA)’s Regional Offices located in Mumbai, Hyderabad, Bangalore, Kolkata and Guwahati under Appendix 2E [List of Agencies Authorized to issue Certificate of Origin (Non-Preferential)] — reg.
Summary: The Agricultural and Processed Food Products Export Development Authority (APEDA) has been authorized to issue Certificates of Origin (Non-Preferential) under Appendix 2E of the Foreign Trade Policy 2015-2020. APEDA's regional offices in Mumbai, Hyderabad, Bangalore, Kolkata, and Guwahati are enlisted for this purpose. These offices are now included at specific serial numbers in the list of agencies authorized to issue these certificates. This authorization facilitates the export process of agricultural and processed food products by providing necessary certification through APEDA's regional offices.
5.
51/2015-2020 - dated
9-1-2018
Certificate of Origin of Goods for European Union Generalised System of Preferences (EU-GSP) - Modification of the system as of 1st January, 2017.
Summary: The Directorate General of Foreign Trade, under the Ministry of Commerce & Industry, Government of India, has amended a previous public notice to extend the transition period for exporters to register under the Registered Exporter System (REX) for the European Union Generalized System of Preferences (EU-GSP). Originally set to end on December 31, 2017, the deadline is now extended to June 30, 2018. Post this date, only exporters registered under the REX system, who can self-certify the Rules of Origin on a commercial document, will be eligible for EU-GSP benefits.
Highlights / Catch Notes
GST
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College Hostel Mess Fees Subject to 5% GST Rate Without Input Tax Credit, Applies to Direct and Outsourced Services.
Circulars : Clarifications regarding GST on College Hostel Mess Fees - taxable at 5% without Input Tax Credit - It is immaterial whether the service is provided by the educational institution itself or the institution outsources the activity to an outside contractor.
Income Tax
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Assessee's Challenge Fails: Revenue's Additions Confirmed Due to Unreliable Purchase Bills from Non-Existent Vendors.
Case-Laws - AT : Bogus purchase - it is strange that assessee wants the Revenue to produce assessee’s own vendors, whom the assessee could not produce. The purchase bills from these non-existent/bogus parties cannot be taken as cogent evidence of purchases - additions confirmed - AT
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Assessing Officer's Oversight on Unexplained Share Application Money Leads to No Additions for Assessee-Company. No Cash Deposits Found.
Case-Laws - AT : Unexplained share application money - A.O. did not perform his duties at the assessment stage so as to make addition against the assessee-company. No cash was found deposited in the account of the Investor. - No additions - AT
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Company's Tax Deduction u/s 10B Valid from Original Approval Date by Development Commissioner, Ratified by Approval Board.
Case-Laws - AT : Claim of deduction made u/s 10B - Development Commissioner granted the approval of 100% EOU in favour of the assessee-Company, which came to be subsequently ratified by the Board of Approval and as observed hereinabove as such the ratification shall be from the date on which the Development Commissioner granted the approval - AT
Corporate Law
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Auditor Resignation Penalty Reduced to 50k Rupees or Remuneration, per Companies Act Section 140(3.
Act-Rules : The penalty with respect to failure to file resignation by auditor reduced to fifty thousand rupees or the remuneration of auditors whichever is less - Section 140(3) of the Companies Act, 2013
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Annual Ratification for Auditor Appointment Removed u/s 139(1) of Companies Act, 2013, Simplifying Processes.
Act-Rules : Appointment of auditors - requirements of annual ratification by members with respect to appointment of auditors done away with - Section 139(1) of the Companies Act, 2013
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Foreign Subsidiaries Can File Unaudited Financial Statements with Registrar u/s 137(1)(c) of Companies Act 2013.
Act-Rules : Copy of financial statement to be filed with Registrar - unaudited financial statements of foreign subsidiaries which is not required to get its accounts audited allowed to be filed - Section 137(1)(c) of the Companies Act, 2013
Service Tax
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CENVAT Credit Approved for Port Sector Service Provider; Explanation 2 of Rule 2(k) Not Applicable to Non-Manufacturers.
Case-Laws - AT : CENVAT credit - input/input services - construction of commercial, industrial and residential premises the provisions of Explanation 2 of Rule 2(k) would be applicable only to the factory and manufacturer. The appellant is neither having any factory nor he is manufacturer. The appellant is a service provider of port - credit allowed - AT
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Non-Compete Payments Before July 1, 2012, Exempt from Tax Under Finance Act 1994 for Business Auxiliary Services.
Case-Laws - AT : Business Auxiliary Services - non-competing agreement - the period prior 01.07.2012, the amount recovered by the appellant by way of non-compete agreements are not liable to tax under the Finance Act, 1994. - AT
Central Excise
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CENVAT Credit Reversal: Refund Must Be Paid in Cash as Duty Was Not Recoverable from Respondent.
Case-Laws - AT : Refund claim - reversal of CENVAT credit under protest - whatever duty has been paid by the respondent by reversal of Cenvat credit is required to be refunded to the respondent in cash as the same was not recoverable from the respondent at all - AT
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Cenvat Credit Granted for Service Tax on Hazardous Waste Removal Services.
Case-Laws - AT : Cenvat Credit - whether the respondent is entitled to service tax paid on the services utilized for removal of hazardous waste? - Held Yes - AT
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Waste Crude Oil Classified Under Tariff Item No. 2709 00 00 for Central Excise, Not Tariff Item No. 3814 00 10.
Case-Laws - AT : Classification of Waste Crude Oil - classified under Tariff Item No. 2709 00 00 or under Tariff Item No. 3814 00 10? - - also called as ‘Residual Crude Petroleum Oil’ - to be classfied under Tariff Item No. 2709 00 00. - AT
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