TMI Tax Updates - e-Newsletter
November 28, 2017
Case Laws in this Newsletter:
TMI SMS
Articles
By: Sanjeev Singhal
Summary: The article outlines various types of assessments under the Goods and Services Tax (GST) as per the CGST Act, 2017. These include self-assessment, where registered persons assess their taxable value; provisional assessment, allowing temporary tax payments when values are uncertain; scrutiny of returns, where discrepancies are investigated; assessment of non-filers, for those who fail to submit returns; assessment of unregistered persons, targeting those who should be registered; and summary assessments in special cases, addressing immediate tax liabilities. Each type has specific procedures and forms, with timelines and conditions for adjustments and appeals.
News
Summary: The Central Board of Excise and Customs in India has updated the Know Your Customer (KYC) norms for import and export processes. For individuals, documents like Aadhaar, passport, PAN, driving license, or voter ID are sufficient for KYC verification, with the delivery address recorded by courier services. For firms registered under GST laws, the GSTIN will suffice for KYC, while non-registered firms can use a Unique Identification Number or PAN. These changes aim to simplify the KYC process in light of GST implementation and emphasize a unified identifier system. Feedback on the draft circular is invited from stakeholders.
Summary: The Government of India announced the re-issue auction of various government bonds, including Floating Rate Bonds 2024 for Rs. 3,000 crore, 6.79% Government Stock 2027 for Rs. 8,000 crore, 7.73% Government Stock 2034 for Rs. 2,000 crore, and 7.06% Government Stock 2046 for Rs. 2,000 crore. The total notified amount is Rs. 15,000 crore, with an option to retain an additional Rs. 1,000 crore. The Reserve Bank of India will conduct the auctions on November 30, 2017, using a multiple price method. Up to 5% will be allotted to eligible individuals and institutions, with bids submitted electronically via the RBI's E-Kuber system.
Summary: Officer-trainees from the 2016 batch of the Indian Economic Service met with the Minister of State for Finance and Shipping. The discussion included insights from their training, particularly in the shipping sector, and their experiences in implementing schemes at state and district levels. The minister encouraged them to be prepared for future challenges and wished them success in their government careers. The trainees are set to receive their first postings in various ministries and departments by the end of the month.
Summary: India's Central Board of Direct Taxes (CBDT) has decided to accept Transfer Pricing Mutual Agreement Procedure (MAP) and bilateral Advance Pricing Agreement (APA) applications even if the Double Taxation Avoidance Agreement (DTAA) with the country of the Associated Enterprise does not include Paragraph 2 of Article 9 concerning Corresponding Adjustment. This decision clarifies India's stance on handling such applications, ensuring that the absence of this specific provision in DTAAs will not hinder the acceptance of MAP and bilateral APA requests.
Summary: The Global Entrepreneurship Summit (GES) is set to take place in Hyderabad, India, from November 28-30, co-hosted by the U.S. and Indian governments. The event will be inaugurated by India's Prime Minister, with Advisor to the U.S. President leading the U.S. delegation. This eighth edition of GES focuses on the theme "Women First, Prosperity for All," with over 52.5% female participation. The summit will feature discussions on women's entrepreneurial leadership, workforce development, and inclusive environments for women entrepreneurs. It aims to foster networking, mentorship, and collaboration among 1,500 global participants, including entrepreneurs, investors, and government officials.
Summary: The Reserve Bank of India set the reference rate for the US Dollar at Rs. 64.6948 on November 27, 2017, compared to Rs. 64.7328 on November 24, 2017. Based on this rate and cross-currency quotes, the exchange rates for the Euro, British Pound, and Japanese Yen against the Indian Rupee were updated. On November 27, 2017, 1 Euro was Rs. 77.1421, 1 British Pound was Rs. 86.1605, and 100 Japanese Yen was Rs. 58.10. The Special Drawing Rights (SDR) to Rupee rate will be calculated using this reference rate.
Notifications
Customs
1.
19/2017-Customs (N.T./CAA/DRI) - dated
24-11-2017
-
Cus (NT)
Appointment of Common Adjudicating Authority by DGRI
Summary: The Directorate of Revenue Intelligence (DRI) has appointed a Common Adjudicating Authority to handle the adjudication of various customs-related show cause notices. This appointment is made under the authority of the Ministry of Finance, Government of India, as per the Customs Act, 1962. The notification lists several entities involved in customs cases, specifying the appointed adjudicating officers who will exercise powers and discharge duties for each case. The entities include various companies and individuals across different locations in India, with the adjudicating authorities being Joint/Additional Commissioners of Customs at various customs houses and depots.
2.
18/2017-Customs (N.T./CAA/DRI) - dated
24-11-2017
-
Cus (NT)
Appointment of Common Adjudicating Authority by DGRI
Summary: The Directorate of Revenue Intelligence has issued Notification No. 18/2017-Customs (N.T./CAA/DRI), dated November 24, 2017, amending a previous notification (No. 10/2017-Customs) dated September 29, 2017. This amendment concerns the appointment of a Common Adjudicating Authority under the Customs Act, 1962. Specifically, the entry for serial number 5 in the notification's table has been updated to replace the existing designation with "Joint/Additional Commissioner of Customs, Trichy Customs Commissionerate, Williams Road, Trichy." This change is formalized by the Director General of Revenue Intelligence.
3.
17/2017-Customs (N.T./CAA/DRI) - dated
24-11-2017
-
Cus (NT)
Appoints Principal Commissioner/Commissioner of Customs (Nhava Sheva-V), Jawaharlal Nehru Custom House, Raigad
Summary: The Ministry of Finance, Department of Revenue, through the Directorate of Revenue Intelligence, has appointed the Principal Commissioner/Commissioner of Customs at Nhava Sheva-V, Jawaharlal Nehru Custom House, Raigad, as the Common Adjudicating Authority. This appointment is for adjudicating matters related to the Show Cause Notice issued to M/s. K. K. Enterprises and nine others by the Additional Director General, Directorate of Revenue Intelligence, Chennai Zonal Unit. This notification supersedes a previous order from December 2010 and is in accordance with the Customs Act, 1962.
4.
16/2017-Customs (N.T./CAA/DRI) - dated
24-11-2017
-
Cus (NT)
Amendment in Notification No. 53/2016-Customs (N.T.) dated 13.04.2016
Summary: The amendment to Notification No. 53/2016-Customs (N.T.) dated 13.04.2016, issued by the Ministry of Finance, Department of Revenue, involves a change in the designation of the adjudicating authority. The entry in the table for serial number 7 is revised to replace the existing designation with "Additional Director General (Adjudication), Directorate of Revenue Intelligence, Mumbai." This amendment is made under the authority of the Director General of Revenue Intelligence as per the Customs Act, 1962.
5.
15/2017-Customs (N.T./CAA/DRI) - dated
24-11-2017
-
Cus (NT)
Appointment of Common Adjudicating Authority by DGRI
Summary: The Government of India, through the Directorate of Revenue Intelligence, has issued Notification No. 15/2017-Customs (N.T./CAA/DRI) on November 24, 2017, appointing a Common Adjudicating Authority (CAA) for customs matters. This notification follows previous amendments and notifications, specifically rescinding Notification No. 56/2010-Customs (NT) dated July 7, 2010. The appointment is made under the authority granted by section 152 of the Customs Act, 1962, and is part of the ongoing efforts by the Ministry of Finance to streamline customs adjudication processes.
DGFT
6.
40/2015-2020 - dated
27-11-2017
-
FTP
Relaxation in export policy for export of Red Sanders wood by Government of Karnataka under Sl. No. 188, Chapter 44 of Schedule 2 of ITC (HS) Classification of Export and Import 2012
Summary: The Government of India has relaxed the export policy to permit the Government of Karnataka to export 186.588 metric tons of Red Sanders wood in log form. This wood is sourced from confiscated or seized stock by the Police and Forest Departments. The export can be conducted by Karnataka itself or through authorized entities, with necessary export authorization provided by the Directorate General of Foreign Trade upon submission of a quantity allocation letter from the State Government. The entire export process must be completed by December 31, 2021.
GST - States
7.
ERTS(T) 65/2017/237 - dated
15-11-2017
-
Meghalaya SGST
Amendments in the Notification No. ERTS(T) 65/2017/12, dated the 29.6.2017.
Summary: The Government of Meghalaya has amended Notification No. ERTS(T) 65/2017/12 under the Meghalaya Goods and Services Tax Act, 2017. Effective from November 15, 2017, the amendments include changes to the description of services provided by Fair Price Shops to government entities under the Public Distribution System, specifying they are against commission or margin. Additionally, serial number 11B is removed, and a new entry, 79A, is added for services related to admission to protected monuments under relevant Acts, with no applicable tax.
8.
ERTS(T) 65/2017/236 - dated
15-11-2017
-
Meghalaya SGST
Amendments in the Notification No. ERTS(T) 65/2017/11, dated 29.6.2017
Summary: The Government of Meghalaya has amended Notification No. ERTS(T) 65/2017/11 under the Meghalaya Goods and Services Tax Act, 2017. Key changes include the substitution of terms related to composite supply of works contracts and the redefinition of tax rates for food and beverage services provided by restaurants and similar establishments. Services provided by these entities, except those located in high-tariff accommodations, will attract a central tax of 2.5% without input tax credit. Additionally, the manufacture of handicraft goods is now included under the notification. These amendments take effect from November 15, 2017.
9.
ERTS(T) 65/2017/234 - dated
15-11-2017
-
Meghalaya SGST
Amendments in the Notification No. ERTS(T) 65/2017/4, dated 29.6.2017
Summary: The Government of Meghalaya has amended Notification No. ERTS(T) 65/2017/4, dated 29th June 2017, under the Meghalaya Goods and Services Tax Act, 2017. The amendment involves an addition to the existing table in the notification, specifically inserting a new entry, "4A 5201 Raw cotton Agriculturist Any registered person." This change is effective from 15th November 2017. The notification was issued by the Additional Chief Secretary to the Government of Meghalaya, Excise, Registration, Taxation & Stamps Department.
10.
ERTS(T) 65/2017/233 - dated
15-11-2017
-
Meghalaya SGST
Amendments in the Notification No. ERTS(T) 65/2017/5, dated 29.6.2017
Summary: The Government of Meghalaya has amended Notification No. ERTS(T) 65/2017/5 under the Meghalaya Goods and Services Tax Act, 2017, effective November 15, 2017. The amendment involves changes in the TABLE of the original notification, specifically replacing entries for Sl. No. 6A with new entries for knotted netting of twine, cordage or rope, made-up fishing nets, and other textile nets, as well as new entries for corduroy fabrics and narrow woven fabrics. These changes were made on the recommendation of the Council.
11.
ERTS(T) 65/2017/232 - dated
15-11-2017
-
Meghalaya SGST
Amendments in the Notification No. ERTS(T)65/2017/2, dated 29.6.2017.
Summary: The Government of Meghalaya has issued amendments to Notification No. ERTS(T)65/2017/2 under the Meghalaya Goods and Services Tax Act, 2017. The amendments involve changes to several serial numbers and entries in the notification's schedule, including the substitution and omission of certain goods classifications. New entries have been added for various goods, such as vegetables, dried makhana, and coconut shell, among others. The definition of "registered brand name" has been updated to include brands registered under the Trade Marks Act, 1999, the Copyright Act, 1957, or any applicable law in other countries as of May 15, 2017. These changes are effective from November 15, 2017.
12.
ERTS(T) 65/2017/045 - dated
15-11-2017
-
Meghalaya SGST
2.5% concessional rate for intra-state supplies of goods as listed therein required in connection with petroleum operations like exploration.
Summary: The Government of Meghalaya, under the Meghalaya Goods and Services Tax Act, 2017, has issued a notification effective from November 15, 2017, reducing the state tax rate to 2.5% for specified intra-state supplies related to petroleum operations. This concessional rate applies to goods supplied to certain institutions, including public-funded research institutions, research institutions, government departments, and regional cancer centers, provided they meet specified conditions. These conditions include the requirement for institutions to produce certificates verifying the goods' necessity for research purposes and, in some cases, a no-objection certificate for live animals used in experiments.
13.
ERTS(T) 65/2017/Pt I/092 - dated
9-11-2017
-
Meghalaya SGST
Amendments in the Notification No. ERTS(T) 65/2017/11, dated 29.6.2017
Summary: The Government of Meghalaya has issued amendments to Notification No. ERTS(T) 65/2017/11, dated 29.6.2017, under the Meghalaya Goods and Services Tax Act, 2017. Key changes include the substitution of terms related to governmental entities, adjustments in tax rates for specific services, and clarifications on input tax credit provisions. The amendments redefine "Governmental Authority" and "Government Entity" to include bodies with significant government participation. These changes affect various services, including works contracts, passenger transport, natural gas transportation, and printing services, specifying conditions under which input tax credits can be claimed.
14.
ERTS(T) 65/2017/Pt I/033 - dated
31-10-2017
-
Meghalaya SGST
Appointed proper officers for the purpose of sanction of refund of section 54 or section 55.
Summary: The Government of Meghalaya, through its Excise, Registration, Taxation & Stamps Department, has appointed officers under the Central Goods and Services Tax Act, 2017, as proper officers for sanctioning refunds under sections 54 and 55 of the Meghalaya Goods and Services Tax Act, 2017. These officers, authorized by the Commissioner, will handle refund applications from registered persons within their jurisdiction, excluding rule 96 of the Meghalaya GST Rules, 2017. This appointment follows recommendations from the Council and is effective from October 31, 2017.
SEZ
15.
S.O. 3719(E) - dated
13-11-2017
-
SEZ
Central Government de-notifies an area of 4.8722 hectares, thereby making resultant area as 650.6321 hectares at Baikampady, Near Mangalore, District Dakshin Kannada in the State of Karnataka;
Summary: The Central Government has de-notified an area of 4.8722 hectares from the Special Economic Zone (SEZ) at Baikampady, near Mangalore, Karnataka, reducing the total SEZ area to 650.6321 hectares. Initially proposed for petrochemicals and petroleum, the SEZ's sector was changed to multi-product in 2013. The de-notification was approved by the Karnataka State Government and recommended by the Development Commissioner of the Mangalore SEZ. The de-notified area includes various survey numbers across the villages of Kalavar and Thokur.
16.
S.O. 3537(E) - dated
30-10-2017
-
SEZ
Central Government de-notifies an area of 518.22 hectares thereby making resultant area as 782.6 hectares at Atchutapuram and Rambilli Mandals, Visakhapatnam District in the State of Andhra Pradesh
Summary: The Central Government has de-notified 518.22 hectares from a Multi Product Special Economic Zone (SEZ) located in Atchutapuram and Rambilli Mandals, Visakhapatnam District, Andhra Pradesh. This adjustment reduces the total area of the SEZ to 782.6 hectares. The de-notification was proposed by Andhra Pradesh Industrial Infrastructure Corporation Limited and approved by the State Government of Andhra Pradesh. The Development Commissioner of the Visakhapatnam SEZ recommended the proposal, and the Central Government confirmed compliance with the Special Economic Zones Act, 2005, and related rules before proceeding with the de-notification.
Circulars / Instructions / Orders
GST - States
1.
Order No. 01/2017-State Tax - dated
9-11-2017
THE MEGHALAYA GOODS AND SERVICES TAX (REMOVAL OF DIFFICULTIES) ORDER, 2017
Summary: The Meghalaya Goods and Services Tax (Removal of Difficulties) Order, 2017, addresses challenges in implementing the Meghalaya GST Act, 2017, particularly section 10. The order clarifies that individuals supplying both taxable goods/services and exempt services, such as those involving interest or discounts from deposits, loans, or advances, remain eligible for the composition scheme under section 10, provided all other conditions are met. Additionally, when calculating aggregate turnover for composition scheme eligibility, the value of exempt services like those involving interest or discounts should not be included.
Central Excise
2.
F. No.278A/33/2016-Legal(Pt.l) - dated
22-11-2017
Constitution of a fresh panel of Senior/Junior Standing Counsels for handling CBEC cases of Indirect taxation before the various High Courts and other fora - reg.
Summary: The circular from the Ministry of Finance, Department of Revenue, announces the constitution of a new panel of Senior and Junior Standing Counsels to handle Central Board of Excise and Customs (CBEC) cases related to indirect taxation across various High Courts and other forums. Initially, a panel was established for three years starting from June 9, 2016, but some appointments were rescinded. A new panel of 120 counsels has been constituted, effective from October 3, 2017, to June 8, 2019, including those not rescinded from the previous panel. The circular provides details on the continuation and appointment of counsels.
Highlights / Catch Notes
Income Tax
-
Central Excise Duty Advance Deposit Counts as Actual Payment u/s 43B, Allowing Assessee Deduction Claim.
Case-Laws - SC : The advance deposit of central excise duty constitutes actual payment of duty within the meaning of Section 43B and, therefore, the assessee is entitled to the benefit of deduction of the said amount - SC
-
Income Tax Act's Section 40(a)(i) deemed discriminatory, conflicts with Indo-Japan and Indo-US DTAA Articles 24(3) and 26(3).
Case-Laws - HC : TDS u/s 195 - Since Section 40(a)(i) as it stood in AY 2006-07 continued to discriminate in the above manner and was inconsistent with Article 24(3) of the Indo Japan DTAA or Article 26 (3) of the Indo US DTAA, the Assessee was entitled to rely on the above DTAA provisions to claim deduction of the sums paid to entities in Japan and USA. - HC
-
Assessee Penalized for Deferring Income Declaration, Furnishing Inaccurate Income Details u/s 271(1)(c) of Income Tax Act.
Case-Laws - HC : Penalty u/s 271(1)(c) - by deferring the declaration to the subsequent year, the assessee certainly furnished inaccurate particulars of income for the year under appeal and either avoided or deferred his tax liability - HC
-
Appeal Possible Against Interest Levy u/s 220(2) for Delayed Tax Payment as Per Income Tax Act.
Case-Laws - HC : Maintainability of appeal before CIT(A) against Levy of interest u/s 220(2) - enhanced assessment - AO directed that interest u/s 220(2) chargeable on the amount demanded u/s 156 - the order is appealable - HC
-
Taxpayers Can Use Consistent Accounting Method for Tax Returns Despite Statutory Balance Sheet Requirements.
Case-Laws - HC : Preparation of the balance sheet in accordance with the statutory provision would not disentitle the assessee in submitting income tax return on the real taxable income in accordance with a method of account adopted by the assessee consistently and regularly. - HC
-
Capital Asset Distribution in Partnerships: Section 45(4) Allows Retiring Partners to Benefit from Revaluation Surplus Without Tax Avoidance.
Case-Laws - AT : Distribution of capital assets u/s 45(4) - partnership firm - crediting revaluation surplus to partners account settling their accounts on their retirement - It is the retiring partners who have been benefitted by receiving much more than actual capital contributed by them on account of revaluation. Thus there can be no case of tax avoidance by colorable device by the firm - AT
-
Excise license renewal fee disallowed as deduction due to non-payment by income tax return deadline u/s 43B.
Case-Laws - AT : Allowability of Provision towards licence fee for renewal of Excise licence fee - no payment has been made by the assessee to the Government till the due date of filing the return of income u/s 139(1) which has infringed Section 43B of the 1961 Act - expenses not allowed - AT
Service Tax
-
Amendment to Rule 6 (1) exempts pre-May 10, 2008, debit entries from reverse charge Service Tax.
Case-Laws - AT : Outstanding consideration to be paid by Holding Company - effect of amendment - the debit entries made prior to 10.05.2008 and shown outstanding on that date cannot be subjected to Service Tax on reverse charge basis based on the explanation, which was introduced under Rule 6 (1) of the Service Tax Rules, 1994 w.e.f. 10.05.2008.- AT
Central Excise
-
High Court Misapplies Promissory Estoppel, Grants Exemption from Production Date Instead of Notification Date.
Case-Laws - SC : High Court was not correct in applying the principle of Promissory Estoppel to grant the benefit of exemption to the industrial unit from the date of production instead of the date of the exemption notification. - SC
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