TMI Tax Updates - e-Newsletter
December 20, 2017
Case Laws in this Newsletter:
Articles
By: CASanjay Kumawat
Summary: In a tripartite agreement involving a builder, landowner, and flat buyer, the developer acquires development rights from the landowner, often in exchange for monetary consideration or ownership rights in the developed area. The Goods and Services Tax (GST) implications on such transfers are analyzed, focusing on whether the transfer of development rights (TDRs) constitutes a supply of services or goods. Under GST law, TDRs are considered a supply of services if they involve a lease or license to occupy land, but not if they constitute a sale of land. The article further discusses the taxability of transferring flats to the landowner as consideration, highlighting that GST is applicable on the developer's construction services for both the developer's and landowner's share of the property.
By: DR.MARIAPPAN GOVINDARAJAN
Summary: The Finance Resolution and Deposit Insurance Bill, 2017, was introduced to address the lack of a comprehensive legal framework for resolving the failures of financial service providers in India. It proposed creating a Resolution Corporation with powers to manage failing financial firms, including transferring assets, mergers, and liquidations. The Bill aimed to designate certain financial institutions as Systematically Important Financial Institutions, establish funds for resolution processes, and repeal the Deposit Insurance and Credit Guarantee Corporation Act, 1961. Despite its objectives to ensure financial stability, the Bill faced opposition from bank unions and was eventually withdrawn by the government.
News
Summary: As of March 31, 2017, women constitute 25.01% of directors on company boards according to the MCA21 Registry. The Companies Act, 2013, and SEBI regulations require listed companies to have at least one woman director. However, there is no specific government or SEBI target for companies to have 20% women directors by 2020. This information was provided by the Minister of State for Law and Corporate Affairs in a written statement to the Rajya Sabha.
Summary: After the Insolvency and Bankruptcy Code 2016 provisions were notified on December 1, 2016, 2,434 new cases were filed with the National Company Law Tribunal (NCLT), and 2,304 winding-up cases were transferred from various High Courts. By November 30, 2017, 2,750 cases had been resolved, with 1,988 still pending. Public Sector Banks reported realizing Rs. 39.63 crore following these filings, while incurring a Rs. 2.89 crore loss as a haircut. This information was disclosed by the Minister of State for Law and Justice/Corporate Affairs in a written response to a question in the Rajya Sabha.
Summary: The Government of India has implemented several initiatives to alleviate farmers' debt burdens. These include an interest subvention scheme offering reduced interest rates on short-term crop loans, with additional benefits for timely repayment. The Reserve Bank of India has directed lending institutions to provide relief measures in calamity-affected areas, including loan restructuring. The Pradhan Mantri Fasal Bima Yojana offers insurance against crop failures due to natural risks. Additionally, various schemes like Rashtriya Krishi Vikas Yojana and National Food Security Mission are in place to support agricultural development. The State Bank of India reported that loan waivers, while impacting state finances, include thresholds to mitigate adverse effects.
Summary: The Government of India has implemented several initiatives to enhance GDP growth, focusing on manufacturing, transport, power, and infrastructure sectors. Key measures include reforms in foreign direct investment policy, a special package for the textile industry, and infrastructure development, such as granting infrastructure status to affordable housing and increasing highway construction funding. The government also lowered income tax for companies with turnover up to Rs. 50 crore, promoted ease of doing business, and pushed for a digital economy. The Goods and Services Tax (GST) aims to reduce trade barriers. GDP growth increased from 5.7% to 6.3% between the first and second quarters of 2017-18.
Summary: The government has implemented several measures to combat the parallel economy and unaccounted transactions. Key actions include the enactment of the Black Money Act and the Benami Transactions Amendment Act, the formation of a Special Investigation Team on black money, and a Multi-Agency Group for investigating leaks like the Panama Papers. Efforts also involve mandatory PAN quoting for high-value transactions, restrictions on cash dealings, and international cooperation for tax information exchange. Post-demonetization, significant enforcement actions were taken, including Operation Clean Money and the Pradhan Mantri Garib Kalyan Yojana, to identify and tax undisclosed income.
Summary: The Government of India has formed the Insolvency Law Committee, led by the Secretary of the Ministry of Corporate Affairs, to evaluate the Insolvency and Bankruptcy Code, 2016. The committee aims to identify and address issues affecting the corporate insolvency resolution and liquidation framework's efficiency. In its first meeting on December 8, 2017, the committee decided to solicit feedback from stakeholders on the Code's provisions and related regulations. Stakeholders are invited to submit their comments and suggestions via the Ministry's online platform by January 10, 2018, to improve the Code's implementation.
Summary: The finance ministry stated that it is challenging to determine the specific impact of demonetisation on the Indian economy, emphasizing that there is no economic stagnation. The Minister of State for Finance noted that economic growth relies on various factors, such as capital formation, savings, and technology use. In response to queries about potential stagnation following the demonetisation announced in November of the previous year, the minister highlighted that the economy grew by 6.3% in the second fiscal quarter, up from 5.7% in the April-June period.
Summary: The Reserve Bank of India announced the reference rate for the US Dollar at Rs. 64.1205 on December 19, 2017, compared to Rs. 64.1065 on December 18, 2017. Based on this rate and cross-currency quotes, the exchange rates for the Euro, British Pound, and Japanese Yen against the Rupee were also released. On December 19, 2017, the rates were Rs. 75.6365 for 1 Euro, Rs. 85.7932 for 1 British Pound, and Rs. 56.98 for 100 Japanese Yen. The Special Drawing Rights (SDR) to Rupee rate is also determined by this reference rate.
Summary: The Government of India announced the re-issue of several securities through price-based auctions, including Floating Rate Bonds 2024 (Rs. 3,000 crore), 6.79% Government Stock 2027 (Rs. 8,000 crore), 7.73% Government Stock 2034 (Rs. 2,000 crore), and 6.62% Government Stock 2051 (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 December 22, 2017, using a multiple price method. Up to 5% of stocks will be allotted to eligible individuals and institutions under non-competitive bidding. Results will be announced on the same day, with payments due by December 26, 2017.
Notifications
GST - States
1.
Va Kar/GST/07/2017- S.O. No. 134 - dated
14-11-2017
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Jharkhand SGST
Seeks to amend notification no. S.O 106-State Tax, dated the 20th October, 2017
Summary: The notification issued by the Commercial Taxes Department of Jharkhand amends a previous notification (S.O 106-State Tax) dated 20th October 2017. The amendment changes the deadline mentioned in the original notification from "the 15th day of November, 2017" to "the 24th day of December, 2017." This amendment is made under the authority of the Jharkhand Goods and Services Tax Act, 2017, and is effective retroactively from 15th November 2017. The notification is ordered by the Governor of Jharkhand, with K. K. Khandelwal serving as the Principal Secretary-cum-Commissioner.
2.
Va Kar/GST/07/2017- S.O. No. 133 - dated
14-11-2017
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Jharkhand SGST
Seeks to extend the due dates for the furnishing of FORM GSTR-1 for those taxpayers with aggregate turnover of more than ₹ 1.5 crores
Summary: The Commercial Taxes Department of Jharkhand has issued a notification extending the deadlines for submitting FORM GSTR-1 for taxpayers with an aggregate turnover exceeding 1.5 crore rupees. The extension applies to the months from July 2017 to March 2018, with specific deadlines set for each month. For instance, submissions for July to October 2017 are due by December 31, 2017, while those for March 2018 are due by May 10, 2018. This extension is authorized under the Jharkhand Goods and Services Tax Act, 2017, and is effective from November 15, 2017. Further extensions for other returns will be announced later.
3.
Va Kar/GST/07/2017- S.O. No. 132 - dated
14-11-2017
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Jharkhand SGST
Extension of time to file GSTR-1 quaterly
Summary: The Jharkhand State Government, under the Jharkhand Goods and Services Tax Act, 2017, has extended the deadline for registered persons with an aggregate turnover of up to 1.5 crore rupees to file their GSTR-1 forms. This extension applies to the details of outward supply of goods or services for the quarters of July-September 2017, October-December 2017, and January-March 2018, with new deadlines set for December 31, 2017, February 15, 2018, and April 30, 2018, respectively. This notification is effective from November 15, 2017, and further procedures will be announced in the Official Gazette.
4.
Va Kar/GST/07/2017- S.O. No. 131 - dated
14-11-2017
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Jharkhand SGST
Notification regarding last date for filing of return in FORM GSTR-3B
Summary: The notification from the Commercial Taxes Department of Jharkhand specifies the deadlines for filing the GSTR-3B form under the Jharkhand Goods and Services Tax Act, 2017. The deadlines are set for January, February, and March 2018, with returns due by the 20th of the following month. Registered persons must discharge their tax liabilities, including tax, interest, penalties, and fees, by debiting their electronic cash or credit ledger by the specified deadlines. This notification is effective from 15th November 2017, as ordered by the Principal Secretary-cum-Commissioner.
5.
Va Kar/GST/07/2017- S.O. No. 130 - dated
14-11-2017
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Jharkhand SGST
Jharkhand Goods and Services Tax (Twelfth Amendment) Rules, 2017
Summary: The Jharkhand Goods and Services Tax (Twelfth Amendment) Rules, 2017, effective from November 15, 2017, introduce several amendments to the Jharkhand GST Rules, 2017. Key changes include clarifications on the exclusion of certain service values from exempt supplies in rule 43, optional issuance of certain documents by suppliers in rule 54, and provisions for manual filing and processing in rules 97A and 107A. Rule 109A outlines the appellate authority's structure for appeals against decisions under the GST Acts. Amendments to rule 124 allow the Central Government to terminate appointments of the Chairman and Technical Member with Council approval. New forms for manual refund applications and processing are introduced.
6.
S.O. No. 129-42/2017 State Tax (Rate) - dated
14-11-2017
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Jharkhand SGST
Seeks to amend notification no. 2/2017-State Tax (Rate), dated the 29th June, 2017
Summary: The notification issued by the Jharkhand Commercial Taxes Department on 14th November 2017 amends the previous notification No. 2/2017-State Tax (Rate) dated 29th June 2017. The amendments involve changes in the classification and taxation of various goods under the Jharkhand Goods and Services Tax Act, 2017. Specific serial numbers in the schedule are substituted or omitted, and new entries are added, affecting goods such as fresh or chilled items, vegetables, dried makhana, guar meal, hop cones, coconut shell, jaggery, salt, uranium ore concentrate, and bangles of lac/shellac. The definition of "registered brand name" is also revised, and the changes are effective from 15th November 2017.
7.
S.O. No. 128-41/2017 State Tax (Rate) - dated
14-11-2017
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Jharkhand SGST
Seeks to amend notification no. 1/2017-State Tax (Rate), dated the 29th June, 2017
Summary: The notification dated 14th November 2017 amends Notification No. 1/2017-State Tax (Rate) under the Jharkhand Goods and Services Tax Act, 2017. It revises tax rates and classifications for various goods, including food items, textiles, chemicals, and machinery, across different schedules. Key changes include adjustments to tax rates on branded and packaged goods, the inclusion of new serial numbers for specific items, and the omission of certain serial numbers. The notification also updates the definition of "registered brand name" and specifies the effective date as 15th November 2017.
8.
S.O. No. 127-47/2017 State Tax (Rate) - dated
14-11-2017
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Jharkhand SGST
Seeks to amend notification no. 12/2017- State Tax (Rate), dated the 29th June, 2017
Summary: The Jharkhand State Government has amended Notification No. 12/2017-State Tax (Rate), dated June 29, 2017, under the Jharkhand Goods and Services Tax Act, 2017. Effective November 15, 2017, the amendments include changes to services provided by Fair Price Shops, now specified as selling food grains, kerosene, sugar, and edible oil under the Public Distribution System for commission or margin. Serial number 11B is removed, and a new entry, 79A, is added, exempting services related to admission to protected monuments under relevant Acts from tax. This notification follows the recommendations of the Council.
9.
S.O. No. 126-46/2017 State Tax (Rate) - dated
14-11-2017
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Jharkhand SGST
Seeks to amend notification no. 11/2017- State Tax (Rate), dated the 29th June, 2017
Summary: The notification amends the previous notification No. 11/2017-State Tax (Rate) dated June 29, 2017, under the Jharkhand Goods and Services Tax Act, 2017. Key amendments include changes to the classification and tax rates for services related to works contracts and food supply by restaurants and similar establishments. It specifies that food services in certain accommodations will attract a state tax of 2.5% without input tax credit. Additionally, it introduces provisions for the manufacture of handicraft goods, defining them as per a previous notification. The amendments take effect from November 15, 2017.
10.
S.O. No. 125-45/2017 State Tax (Rate) - dated
14-11-2017
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Jharkhand SGST
Notification regarding prescribing 2.5% concessional JGST rates on certain goods supplied to a specific public funded research institutes and subject to specified condition
Summary: The Jharkhand government issued a notification prescribing a concessional 2.5% Jharkhand Goods and Services Tax (JGST) rate on specified goods supplied to certain public-funded research institutions. Effective from November 15, 2017, this exemption applies to scientific instruments, equipment, software, and prototypes used for research purposes. Eligible institutions include public-funded research bodies, research institutions, government departments, and regional cancer centers, excluding hospitals. Conditions for eligibility include certification from relevant authorities and restrictions on transferring goods within five years. This measure aims to support research institutions by reducing their tax burden on essential research equipment and materials.
11.
S.O. No. 124-44/2017 State Tax (Rate) - dated
14-11-2017
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Jharkhand SGST
Seeks to amend notification no. 5/2017-State Tax (Rate), dated the 29th June, 2017
Summary: The Jharkhand State Government, following the Council's recommendations, amends Notification No. 5/2017-State Tax (Rate) dated June 29, 2017, under the Jharkhand Goods and Services Tax Act, 2017. Effective November 15, 2017, the amendment revises entries in the notification's table. The updated entries include classifications for knotted netting of twine, cordage or rope, made-up fishing nets and other textile nets, corduroy fabrics, and narrow woven fabrics excluding certain goods. This notification is issued by the Commercial Taxes Department and authorized by the Principal Secretary-cum-Commissioner.
12.
Va Kar/GST/07/2017- S.O. 122 - dated
7-11-2017
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Jharkhand SGST
Jharkhand Goods and Services Tax (Eleventh Amendment) Rules, 2017
Summary: The Jharkhand Goods and Services Tax (Eleventh Amendment) Rules, 2017, effective from October 28, 2017, amends the Jharkhand GST Rules, 2017. Key changes include extending the deadline in Rule 24(4) from October 31, 2017, to December 31, 2017. Rule 45(3) allows the Commissioner to extend deadlines for submitting quarterly returns. Rules 96(2) and 96A(2) introduce provisions for furnishing export details in FORM GSTR-1 after FORM GSTR-3B submission, with information auto-drafted in FORM GSTR-1. These amendments are issued by the order of the Governor of Jharkhand.
13.
Va Kar/GST/04/2017- S.O. No. 121 - dated
7-11-2017
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Jharkhand SGST
Waiver the late fee payable FORM GSTR-3B for the months of August and September, 2017 by the due date
Summary: The Government of Jharkhand, under the Jharkhand Goods and Services Tax Act, 2017, has waived the late fee for registered persons who did not file their FORM GSTR-3B returns for August and September 2017 by the due date. This waiver is enacted through the powers granted by section 128 of the Act, following recommendations from the Council. The notification, issued by the Commercial Taxes Department, is effective retroactively from October 24, 2017, as per the order of the Governor of Jharkhand.
14.
S.O. No. 120-40/2017 State Tax (Rate) - dated
7-11-2017
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Jharkhand SGST
Exempts the intra-State supply of taxable goods
Summary: The notification from the Jharkhand Commercial Taxes Department, dated November 7, 2017, exempts intra-State supply of taxable goods by registered suppliers to registered recipients for export from most state taxes under the Jharkhand Goods and Services Tax Act, 2017. The tax rate is reduced to 0.05%, provided specific conditions are met. These conditions include issuing a tax invoice, exporting goods within 90 days, providing GST details in export documents, and ensuring goods are moved directly to export points or registered warehouses. The exemption is void if goods aren't exported within the stipulated timeframe. The notification is effective from October 23, 2017.
15.
NO.F.1-11(91-TAX/GST/2017(Part) - dated
22-11-2017
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Tripura SGST
Notification regarding time period for furnishing the details in Form GSTR-1 for person having aggregate turnover upto ₹ 1.5 crore
Summary: The Government of Tripura's Finance Department issued a notification under the Tripura State Goods and Services Tax Act, 2017, detailing the timeframes for registered persons with an aggregate turnover of up to 1.5 crore rupees to submit their GSTR-1 forms. These individuals must report their outward supply details for the July-September 2017 quarter by December 31, 2017; the October-December 2017 quarter by February 15, 2018; and the January-March 2018 quarter by April 30, 2018. This notification outlines the special procedure for these registered persons as recommended by the Council.
16.
NO.F.1-11(91)-TAX/GST/2017(Part-ix)-40/2017-State Tax (Rate) - dated
22-11-2017
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Tripura SGST
Notification No.40/2017-State Tax (Rate), dated 22.11.2017
Summary: The Government of Tripura issued Notification No. 40/2017-State Tax (Rate) under the Tripura State Goods and Services Tax Act, 2017, exempting intra-State supply of taxable goods for export from certain state taxes. The exemption applies to registered suppliers providing goods to registered recipients for export, with a reduced tax rate of 0.05%. Conditions include issuing a tax invoice, exporting goods within 90 days, and fulfilling documentation and registration requirements with Export Promotion Councils or Commodity Boards. If goods are not exported within the specified period, the supplier loses the tax exemption.
17.
NO.F.1-11(91)-TAX/GST/2017(Part) - dated
22-11-2017
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Tripura SGST
Latest Notification regarding Return Provision for the taxpayers who has not opt for composition levy
Summary: The Government of Tripura has issued a notification under the Tripura State Goods and Services Tax Act, 2017, designating registered taxpayers who have not opted for the composition levy as those required to pay state tax on the outward supply of goods at the time of supply. This notification supersedes the previous one dated November 2, 2017. Affected taxpayers must furnish details and returns as outlined in Chapter IX of the Act, adhering to the specified tax payment periods. This action follows recommendations by the Council and is effective immediately, except for actions completed prior to this notification.
18.
NO.F.1-11(91)-TAX/GST/2017(Part) - dated
22-11-2017
-
Tripura SGST
Notification regarding revised amount of late fee payable by any registered person for failure to furnish the return in Form GSTR-3B
Summary: The Government of Tripura has issued a notification under section 128 of the Tripura State Goods and Services Tax Act, 2017, waiving the late fee for registered persons who failed to submit the GSTR-3B return from October 2017 onwards by the due date. The late fee is reduced to 25 rupees per day of delay. If the state tax payable is nil, the late fee is further reduced to 10 rupees per day. This decision follows recommendations from the Council and aims to alleviate the financial burden on taxpayers.
SEZ
19.
S.O. 3912(E) - dated
12-12-2017
-
SEZ
Central Government notifies an additional area of 10.64 hectares, as a part of above Special Economic Zone, thereby making total area of the Special Economic Zone as 129.785 hectares at Vadakkukaracheri and Thimmarajapuram villages, Tuticorin District in the State of Tamil Nadu
Summary: The Central Government has expanded the Special Economic Zone (SEZ) for the food processing sector at Vadakkukaracheri and Thimmarajapuram villages in Tuticorin District, Tamil Nadu, by adding an additional 10.64 hectares. This increases the total area of the SEZ to 129.785 hectares. The developer, initially M/s. CCCL Infrastructure Limited, now operates as M/s. CCCL Pearl City Food Port SEZ Limited. This expansion is in accordance with the Special Economic Zones Act, 2005, and related rules. The notification lists specific survey numbers and areas within the newly added land.
VAT - Delhi
20.
No. F.2 (12)/Policy/2017/1219-25 - dated
15-12-2017
-
DVAT
Notification regarding extension of last date w.r.t submission of closing stock by dealer
Summary: The Government of the National Capital Territory of Delhi, through the Department of Trade and Taxes, has issued a notification extending the deadline for dealers to submit their closing stock details. This extension applies to stock held on March 31, 2017, and June 30, 2017, which must now be submitted online by December 31, 2017. The submission should be made on the official department website in the specified format, detailing stock at various tax rates. This decision, made by the Commissioner of Value Added Tax, is effective immediately and aims to serve public interest.
Circulars / Instructions / Orders
Customs
1.
158/2017 - dated
18-12-2017
SUB : Refund/ Claim of Countervailing Duty as Duty Drawback reg.
Summary: The circular addresses the refund or claim of Countervailing Duty as Duty Drawback for exporters and customs brokers. It clarifies that Countervailing Duties, under Section 9 of the Customs Tariff Act, are eligible for rebate as Drawback under Section 75 of the Customs Act. These duties are not included in the All Industry Rates of Duty Drawback, so claims must be made via Brand Rate applications under the relevant Customs Drawback Rules. Additionally, for exported goods subject to Countervailing Duties, Drawback under Section 74 includes these duties, provided conditions are met. Any difficulties should be reported to the Deputy/Assistant Commissioner.
2.
50/2017 - dated
18-12-2017
Sale of goods and display of prices at duty free shops in Indian currency amendment of circular 31/2016 - Customs dated 6th July 2016 Reg
Summary: The circular amends previous guidelines regarding payment methods at duty free shops in India. It allows passengers to pay in Indian Rupees using INR credit or debit cards, eliminating the need for currency conversion. Duty free shops must display prices in INR only. Payment limits of Rs. 25,000 apply to incoming passengers using INR cards, while outgoing passengers face no such limit. The circular ensures passengers are not charged in foreign currency when using INR cards. Any issues with implementation should be reported to the Board.
Highlights / Catch Notes
Income Tax
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Assessing Officer's Additional Assessments on Speculation Losses Found Unjustified; No Undisclosed Income Detected Under Chapter-XIVB.
Case-Laws - AT : Undisclosed income - assessee-company did not earn any undisclosed income on account of the speculation losses in block assessment under Chapter-XIVB of the I.T. Act, 1961. Therefore, the A.O. was not justified in making the additions. - AT
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Assessing Officer's TDS Disallowance u/s 195 Upheld Due to Absence of Section 197(2) Certificate.
Case-Laws - AT : TDS u/s 195 - assessee having not obtained the necessary Certificate u/s.197(2), the disallowance made by the AO on account of non-deduction of TDS is on a right footing and does not call for any interference. - AT
Customs
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Amendment to Circular 31/2016: Duty-free shops in India must display prices and sell goods in Indian currency.
Circulars : Sale of goods and display of prices at duty free shops in Indian currency amendment of circular 31/2016 - Customs dated 6th July 2016 Reg - Circular
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Court Rules 15-Year Delay in Adjudicating Show Cause Notice Unjustifiable; SCN Cannot Proceed Further.
Case-Laws - HC : Delay in adjudication of SCN - delay of 15 years - Merely because there are number of such cases in the call book does not mean that we should not grant any relief to the petitioner before us - the subject show cause notice cannot be adjudicated further - HC
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