TMI Tax Updates - e-Newsletter
November 24, 2017
Case Laws in this Newsletter:
TMI SMS
Articles
By: Surender Gupta
Summary: The article discusses the implementation of Tax Deducted at Source (TDS) under Section 51 of the Central Goods and Services Tax Act, 2017, questioning the possibility of applying it retrospectively. The author argues that neither central nor state governments are empowered to enforce provisions retrospectively due to Section 1(3) of the Act. A notification by the Central Government dated September 15, 2017, set the effective date for TDS as September 18, 2017. However, only 8 out of 23 states issued timely notifications, leading to discrepancies and potential legal complications, urging the GST Council to address the issue.
By: Dr. Sanjiv Agarwal
Summary: The article discusses recent judicial pronouncements related to the Goods and Services Tax (GST) in India, highlighting issues faced by stakeholders since its implementation in July 2017. Various court rulings address registration errors, interpretation of inter-state supply, and the extension of deadlines for the Composition Scheme. For example, courts have ordered corrections in GST registration from sole proprietorship to partnership and recognized inter-state supply based on warehouse location. Additionally, benefits under previous tax regimes were allowed to continue, and credit for clean energy cess payments was granted under GST, indicating evolving interpretations and potential for increased litigation.
By: DR.MARIAPPAN GOVINDARAJAN
Summary: An assessee challenged an ex-parte order by a customs authority demanding significant customs duty and confiscating goods, claiming a breach of natural justice. The Karnataka High Court found that the adjudicating authority failed to provide adequate hearing opportunities and acted hastily. The court criticized the authority's rash actions and emphasized the importance of fair procedures and reasonable application of mind. The court set aside the order, imposed costs on the authority, and directed a fresh adjudication with proper hearing opportunities for the assessee. The case highlighted the misuse of power by the authority and the resultant increase in litigation.
News
Summary: The President of India has approved an Ordinance amending the Insolvency and Bankruptcy Code, 2016, to prevent misuse by unscrupulous individuals. The amendments aim to exclude willful defaulters and those linked to non-performing assets from the resolution process. It mandates the Committee of Creditors to assess the viability of resolution plans and empowers the Insolvency and Bankruptcy Board of India with additional oversight. New sections, such as 29A, define ineligible applicants, and penalties are introduced for contraventions. These changes are part of broader government reforms to strengthen the economy and promote a fair business environment.
Summary: The Reserve Bank of India set the reference rate for the US Dollar at Rs. 64.7949 on November 23, 2017, up from Rs. 64.7453 the previous day. The exchange rates for other currencies against the Rupee were also updated: the Euro increased from Rs. 76.0757 to Rs. 76.6264, the British Pound from Rs. 85.8523 to Rs. 86.3327, and 100 Japanese Yen from Rs. 57.75 to Rs. 58.22. The SDR-Rupee rate will be calculated based on this reference rate.
Notifications
DGFT
1.
39/2015-2020 - dated
23-11-2017
-
FTP
Export Policy of Onions- Imposition of Minimum Export Price (MEP)
Summary: The Government of India, through the Directorate General of Foreign Trade, has amended its export policy for onions, effective immediately. Under the revised policy, the export of onions listed under Serial Numbers 51 and 52 of Chapter 7 in the ITC (HS) classification will be permitted only with a Letter of Credit (LC) and a Minimum Export Price (MEP) of US$ 850 F.O.B. per Metric Ton. This regulation will remain in effect until December 31, 2017, with subsequent amendments extending or modifying these terms as necessary.
GST - States
2.
ERTS(T) 65/2017/191 - dated
9-11-2017
-
Meghalaya SGST
Amendments in the notification No. ERTS(T) 65/2017/12, dated 29.6.2017.
Summary: The Government of Meghalaya issued an amendment to notification No. ERTS(T) 65/2017/12, dated June 29, 2017, under the Meghalaya Goods and Services Tax Act, 2017. This amendment, effective from November 9, 2017, adds a new entry to the existing notification. It specifies that services related to the right of admission to events organized under the FIFA U-17 World Cup 2017 are exempt from GST. This decision was made in the public interest, following recommendations from the Council.
3.
ERTS(T) 65/2017/190 - dated
9-11-2017
-
Meghalaya SGST
Amendment in the Notification No. ERTS(T) 65/2017/12, dated 29.06.2017.
Summary: The Government of Meghalaya has amended Notification No. ERTS(T) 65/2017/12, dated 29.06.2017, under the Meghalaya Goods and Services Tax Act, 2017. This amendment, effective from November 9, 2017, introduces a new entry in the notification's table. It specifies that the supply of services related to transit cargo to the landlocked countries of Nepal and Bhutan is exempt from tax, with both the rate and condition being set to "Nil." The amendment was made in the public interest following the council's recommendation.
4.
ERTS(T) 65/2017/189 - dated
9-11-2017
-
Meghalaya SGST
Corrigendum - Notification No. ERTS(T) 65/2017/13, dated 29.06.2017
Summary: The Government of Meghalaya issued a corrigendum to Notification No. ERTS(T) 65/2017/13, dated June 29, 2017, regarding the Meghalaya SGST. The amendment concerns the description of services provided by advocates. Initially, the notification specified "services supplied by an individual advocate, including senior advocates, by way of representational services to any business entity." The corrigendum revises this to "services provided by an individual advocate, including senior advocates or a firm of advocates, by way of legal services." Legal services are defined as services related to advice, consultancy, or assistance in any law branch, including representational services before courts or authorities.
5.
ERTS(T) 65/2017/188 - dated
9-11-2017
-
Meghalaya SGST
Waiver the late fee payable return for the FORM GSTR-3B for the month of July, 2017.
Summary: The Government of Meghalaya, through the Excise, Registration, Taxation & Stamps Department, has waived the late fee for all registered persons who did not file the return in FORM GSTR-3B for July 2017 by the due date. This waiver is enacted under section 128 of the Meghalaya Goods and Services Tax Act, 2017, following recommendations from the Council. The notification, identified as No. ERTS(T) 65/2017/188, was issued on November 9, 2017, by the Additional Chief Secretary to the Government of Meghalaya.
6.
ERTS(T) 65/2017/187 - dated
9-11-2017
-
Meghalaya SGST
TDS deduction from the payment made or credited to the supplier of taxable goods or services or both with effect from a date to be notified.
Summary: The Government of Meghalaya, under the Meghalaya Goods and Services Tax Act, 2017, has appointed September 18, 2017, as the date for implementing provisions of section 51(1) of the Act. This applies to specific authorities, boards, societies, and public sector undertakings defined under section 51(1) clauses (a), (b), and (d). These entities are required to deduct tax from payments to suppliers of taxable goods or services. The effective date for this tax deduction will be announced later based on recommendations from the Council and the State Government.
7.
ERTS(T) 65/2017/186 - dated
9-11-2017
-
Meghalaya SGST
Specifies the casual taxable persons making taxable supplies of handicraft goods.
Summary: The Government of Meghalaya, under section 23(2) of the Meghalaya Goods and Services Tax Act, 2017, exempts casual taxable persons making taxable supplies of handicraft goods from registration, provided their aggregate value does not exceed twenty lakh rupees annually. Such persons must obtain a Permanent Account Number and generate e-way bills per rule 138 of the Meghalaya GST Rules, 2017. This exemption applies to those making inter-State supplies and utilizing notification No. 8/2017-Integrated Tax. Handicraft goods include items like leather articles, carved wood products, bamboo products, textiles, pottery, metalware, and more, as specified by their HSN codes.
8.
F.NO.FIN/REV-3/GST/1/08 (Pt-1)/473 - dated
27-9-2017
-
Nagaland SGST
Provisions of Subsection 1 of section 51 come into force wef 18th Sept,2017
Summary: The Government of Nagaland, under the Nagaland Goods and Services Tax Act, 2017, has designated September 18, 2017, as the effective date for implementing provisions of subsection (1) of Section 51. This applies to authorities, boards, or bodies with significant government participation, societies established by government entities under the Societies Registration Act, 1860, and public sector undertakings. These entities are required to deduct tax from payments to suppliers of taxable goods or services. The specific date for enforcing this deduction will be announced later based on the Council's recommendations.
9.
G.O. Ms. No. 238 - dated
26-10-2017
-
Telangana SGST
Notifying the appointed day for section 51 (Tax Deduction at Source).
Summary: The Government of Telangana has appointed September 18, 2017, as the effective date for implementing sub-section (1) of section 51 of the Telangana Goods and Services Tax Act, 2017. This provision mandates tax deduction at source for specified entities, including authorities or boards established by legislation or government with significant equity control, societies under the Societies Registration Act, and public sector undertakings. These entities are required to deduct tax from payments to suppliers of taxable goods or services. The notification, issued by the Revenue Department, is effective from the specified date.
10.
KA.NI.-2-1415/XI-9(15)/17 - dated
27-9-2017
-
Uttar Pradesh SGST
REGARDING TDS DEDECTION
Summary: The notification issued by the Uttar Pradesh government, dated September 27, 2017, under the Uttar Pradesh Goods and Services Tax Act, 2017, announces the commencement of tax deduction at source (TDS) provisions. Effective from September 18, 2017, these provisions apply to specified entities, including authorities or boards set up by legislative acts, societies established by government bodies, and public sector undertakings. These entities are required to deduct tax from payments made to suppliers of taxable goods or services. The specific date for enforcing tax deductions will be determined later based on recommendations from the Council and the State Government.
11.
919/2017/9(120)/XXVII(8)/2017 - dated
10-11-2017
-
Uttarakhand SGST
Regarding appointing the day 18th September 2017 as the date on which the certain provision of sub-section (1) of Section 51 shall come into force.
Summary: The Government of Uttarakhand, exercising its powers under the Uttarakhand Goods and Services Tax Act, 2017, has designated September 18, 2017, as the effective date for implementing certain provisions of Section 51(1) of the Act. These provisions apply to authorities, boards, or bodies established by legislation or government with significant equity or control, societies registered under the Societies Registration Act, 1860, and public sector undertakings. These entities are required to deduct tax from payments to suppliers of taxable goods or services, with the specific start date for this obligation to be announced later based on the Council's recommendations.
Law of Competition
12.
F. No. Comp-07/7/2017-Comp-MCA - S.O. 3714(E) - dated
22-11-2017
-
Competition Law
Exemption Combinations all cases of the Central Public Sector Enterprises (CPSEs) operating in the Oil and Gas Sectors.
Summary: The Ministry of Corporate Affairs, exercising powers under Section 54 of the Competition Act, 2002, exempts all combinations involving Central Public Sector Enterprises (CPSEs) in the Oil and Gas sectors from the provisions of Sections 5 and 6 of the Act. This exemption, applicable to CPSEs and their wholly or partly owned subsidiaries operating under the Petroleum Act, 1934, and the Oilfields (Regulation and Development) Act, 1948, is granted for five years from the notification's publication date in the Official Gazette.
Circulars / Instructions / Orders
Central Excise
1.
F. No. 296/202/2017-CX.9 - dated
20-10-2017
Corrigendum - Circular no. 1059/8/2017-CX issued vide F. No. 296/202/2017-CX.9 dated 3rd October, 2017
Summary: The corrigendum to Circular no. 1059/8/2017-CX revises the table in paragraph 4 regarding the writing off of arrears for Central Excise, Service Tax, and Customs duty. It establishes committees comprising three Chief Commissioners or equivalent officers with full authority to abandon irrecoverable fines and penalties under relevant acts. These committees can write off irrecoverable duties up to Rs. 15 lakhs and Rs. 10 lakhs, respectively, with reports submitted to the Board or Commissioner. Other details in the original circular remain unchanged.
Highlights / Catch Notes
GST
-
Can GST TDS Liability Be Applied Retrospectively? Examining Legal Implications and Challenges Under Tax Law Principles.
Articles : Can the TDS liability under GST be fixed with retrospective effect? - Goods and Services Tax - GST
Income Tax
-
High Court Grants Waiver of Interest to Petitioner u/s 220(2A) of Income Tax Act, Satisfying All Conditions.
Case-Laws - HC : Entitlement for waiver of interest u/s 220(2A) - petitioner has satisfied all the three conditions as enumerated under Section 220(2A) of the Act and therefore are entitled for waiver of interest. - HC
-
Court Rules Interest from Dispute with Irrigation Department is Taxable Income for Assessee.
Case-Laws - HC : Assessment of income - nature of amount of interest - work could not be completed by the stipulated period and hence a dispute arose between the assessee and the Irrigation Department - interest actually received was income. - HC
-
Legal Fees for FIR Against Directors Qualify as Business Expenses, Says Court in Favor of Assessee Company.
Case-Laws - AT : Disallowance of legal and professional charges - When the assessee company has found FIR against Directors of the company, there cannot be any dispute that the Directors were arrayed as accused in their official capacity and these expenses are certainly business expenditure - AT
-
CIT's Goodwill Apportionment Directive Ruled Unjustified in Transfer Pricing Case Involving Assessee and Affiliates.
Case-Laws - AT : If there are any transactions between the assessee and its affiliates that would be a subject matter of transfer pricing regulation. In our view, the CIT was not justified in giving a direction for apportionment of goodwill - AT
Customs
-
DA Can Set Individual Anti-Dumping Rates Using Data from Cooperating Channels When Not All Channels Participate in Investigation.
Case-Laws - AT : Levy of anti dumping duty (ADD) - In a situation where a producer sold the goods through multiple trading channel and one or more trading channel did not participate in the investigation, the DA can proceed to determine the need for fixing individual anti dumping rates based on the data provided by cooperating trading channels - AT
-
Import Valuation Dispute: Revaluation of Goods Unjustified Due to Two-Month Gap Between Compared Consignments.
Case-Laws - AT : Valuation - enhancement of value - value was enhanced on the ground that the similar goods were imported at higher price - there is more than two months gap in comparison of similar consignments - ejection of transaction value and refixing of such value not justified. - AT
DGFT
-
New DGFT Policy Imposes Minimum Export Price on Onions to Stabilize Domestic Market and Control Exports.
Notifications : Export Policy of Onions- Imposition of Minimum Export Price (MEP) - Notification
Service Tax
-
Service Tax Dispute: Are Courses Offering University of London Degrees Exempt from Commercial Coaching Center Tax?
Case-Laws - AT : Demand of service tax on fees received for offering courses of London School of Economics (University of London) resulting in issue of degree by the University of London - appellants will fall outside the purview of commercial coaching or training centre - AT
-
Footwear repair classified under "management, maintenance of repair service" per section 65 (105) (zzzg), includes service component.
Case-Laws - AT : Service of repairing of footwear - sale or service? - such activity cannot be considered purely as sale of repair materials but is an activity covered under sec 65 (105) (zzzg) under the heading ‘management, maintenance of repair service’ - AT
Central Excise
-
"Write Off" of Damaged Inputs in Manufacturing Doesn't Require Credit Reversal u/s Guidelines.
Case-Laws - AT : Whether “write off” of inputs on account of damage or become unfit during the course of manufacture, can be equated to clearance of inputs as such and no reversal of credit is warranted in such situation? - credit not to be reversed - AT
9911796707
