TMI Tax Updates - e-Newsletter
August 12, 2017
Case Laws in this Newsletter:
TMI SMS
TMI Short Notes
Income Tax:
Summary: ICDS does not apply to computing exemptions under sections 11 to 13, as these are based on the commercial concept of income. If the income loses exemption, it is computed under various income heads, and ICDS applies if accounts are maintained on a mercantile basis. According to section 11(4A), if a trust or institution conducts business incidental to its objectives with separate books, exemptions under sections 11 to 13 apply. In such cases, business income must be computed commercially, and ICDS provisions apply, requiring the trust to compute business income per ICDS while still eligible for exemptions.
Income Tax:
Summary: ICDS indirectly affects the applicability of TDS by influencing the determination of gross receipts or turnover under sections 44AD and 44AB of the Income Tax Act. For individuals and Hindu Undivided Families (HUFs), TDS provisions are triggered only if the gross receipts or turnover in the preceding financial year exceed the limits specified in section 44AB. Although ICDS is primarily intended for income computation, it indirectly impacts the applicability of TDS provisions by affecting the calculation of gross receipts or turnover, which determines whether TDS provisions apply to an individual or HUF.
Income Tax:
Summary: ICDS applies to the computation of taxable income under the heads of Profit and Gains of Business or Profession (PGBP) or Income from other sources, regardless of whether a company has adopted the traditional Accounting Standards or the newer Indian Accounting Standards (Ind-AS). This framework, based on standards notified by the Ministry of Corporate Affairs in 2006, remains applicable for tax purposes despite the introduction of Ind-AS in 2015. The adoption of Ind-AS by companies does not alter the applicability of ICDS for tax computation.
Income Tax:
Summary: ICDS provisions apply to non-residents for computing income such as interest, royalty, and fees for technical services taxed at a flat rate under section 115A. The tax rate is applied after determining the income using ICDS guidelines.
Income Tax:
Summary: The Income Computation and Disclosure Standards (ICDS) apply generally to all entities unless specific provisions exist for particular sectors in the ICDS or the Income-tax Act. For insurance companies, Section 44 and the First Schedule of the Act take precedence, rendering ICDS inapplicable for their business income computation. The Insurance Regulatory and Development Authority (IRDA) mandates the use of Accounting Standards prescribed by the Institute of Chartered Accountants of India (ICAI) for insurance companies. ICDS VIII includes specific provisions for banks and certain financial institutions, while Schedule I of the Act addresses the insurance sector.
Income Tax:
Summary: Income Computation and Disclosure Standards (ICDS) apply to taxpayers under presumptive tax schemes such as sections 44AD, 44ADA, 44AE, 44BB, 44BBA, and 44BBB, as there is no specific exclusion. When tax is computed based on gross receipts or turnover, ICDS on revenue recognition is applicable to determine these amounts. This is clarified in Circular No. 10/2017 by the Central Board of Direct Taxes (CBDT), which provides guidance on applying ICDS under section 145(2) of the Income-tax Act, 1961.
Income Tax:
Summary: An assessee is permitted to change their method of accounting from mercantile to cash basis, provided the change is bona fide and consistently applied thereafter. This shift in accounting method is distinct from a change in accounting policy. The change must be genuine, and the assessee must adhere to this new method consistently in future accounting periods.
Income Tax:
Summary: An assessee can adopt different accounting methods for various sources of income under the same or different income heads. The Income Computation and Disclosure Standards (ICDS) apply only to income sources using the mercantile accounting system, not to those using the cash system. This approach aims to prevent income escapement due to diverse accounting practices. For instance, if an assessee uses the mercantile system for a manufacturing business and the cash system for a commission agency, ICDS would apply solely to the manufacturing business.
Income Tax:
Summary: ICDS applies to individuals and entities following the mercantile system of accounting, regardless of income level. It does not apply to those using the cash system or to individuals and Hindu Undivided Families (HUFs) whose accounts are not subject to audit under section 44AB, which is necessary only for those engaged in business or profession. Therefore, ICDS is applicable to individuals or HUFs only if they are conducting business or profession. ICDS does not apply if their income is solely from "Income from Other Sources," even if they use the mercantile system for such income.
News
Summary: Transitional provisions in the Goods and Services Tax (GST) framework address the shift from the previous tax regime to the GST system. These provisions ensure a smooth transition for businesses by allowing the carry forward of input tax credits and addressing pending tax liabilities under the old system. They also provide guidelines for the treatment of ongoing contracts and stock held during the transition. The aim is to minimize disruption and provide clarity to businesses adapting to the new tax structure.
Summary: A recent press release highlights key aspects of Input Tax Credit (ITC) under the Goods and Services Tax (GST) framework. It outlines the eligibility criteria for claiming ITC, emphasizing the necessity for businesses to maintain proper documentation and compliance with GST regulations. The release also addresses the conditions under which ITC can be availed, including the requirement for goods and services to be used in the course of business. Additionally, it discusses the procedures for reversing ITC in cases of non-payment to suppliers within a specified period, ensuring transparency and accountability in the tax system.
Summary: The Chief Economic Adviser presented the Economic Survey 2016-17: Volume-II at a press conference in the national capital. The survey provides an analysis of the economic developments and challenges faced by the country during the fiscal year. It highlights key areas such as tax reforms, economic growth, and policy recommendations. The presentation aimed to offer insights into the country's economic performance and suggest measures for future improvement.
Summary: The Union Finance Minister clarified that the government has not written off any corporate loans, emphasizing that loan write-offs are commercial decisions made by banks. He refuted opposition claims that corporate loans were forgiven while farmer loans were not. As of March, gross non-performing assets in agriculture stood at Rs. 62,307 crore. The Reserve Bank of India reported a reduction of Rs. 7,548 crore in NPAs due to write-offs in agriculture for FY 2016-17. The government plans to invest Rs. 2.92 lakh crore in the farm and rural sectors this financial year. There is no decision to waive farm loans.
Summary: The Economic Survey 2016-17 Volume-2 highlights India's fiscal management, with a fiscal deficit of 3.5% of GDP in 2016-17 and a target of 3% by 2018-19. The introduction of the Goods and Services Tax marked a significant policy shift. The Reserve Bank of India adjusted interest rates, and currency circulation contracted post-demonetization. Inflation rates fell, with food prices declining. India ratified the Paris Agreement and set ambitious renewable energy targets. The balance of payments improved, with increased foreign exchange reserves and FDI inflows. Challenges persist in agriculture, industry, and infrastructure, while the services sector remains a key growth driver. Social infrastructure and employment face challenges, but initiatives like Swachh Bharat Mission show progress.
Summary: The Economic Survey 2016-17 Volume-2 outlines several reform measures across agriculture, industry, infrastructure, and social sectors. To mitigate risks in agriculture, it suggests enhancing marketing infrastructure, expanding irrigation, and improving seed quality. Railways should explore non-fare revenue sources, while non-major ports require development. Air India privatization and aviation hub creation are proposed for the airline sector. Education reforms focus on learning outcomes, while labor market efficiency is targeted through legislative and technological initiatives. Health sector reforms include standardizing diagnostic rates and providing equitable access. Social security for informal workers and women's safety in economic activities are emphasized.
Summary: The Economic Survey 2016-17 Volume 2 highlights optimism in India's structural reforms, citing GST implementation, demonetization impacts, and Air India privatization plans. It acknowledges macroeconomic stability due to government and RBI actions, but warns of deflationary pressures from declining farm revenues, loan waivers, and sectoral profitability issues. The Survey notes a shift towards low inflation, influenced by changes in the oil market. Demonetization led to increased tax compliance and social insurance demand. Sustaining growth requires investment, exports, and balance sheet clean-ups. The power and telecom sectors face financial stress, impacting economic momentum. The GDP growth forecast for 2017-18 is 6.75% to 7.5%, with inflation expected below the RBI's 4% target.
Summary: The Reserve Bank of India set the reference rate for the US Dollar at Rs. 64.1693 on August 11, 2017, up from Rs. 63.9437 on August 10, 2017. Consequently, the exchange rates for other currencies against the Rupee were adjusted. On August 11, 2017, the Euro was valued at Rs. 75.4567, the British Pound at Rs. 83.2661, and 100 Japanese Yen at Rs. 58.76. These rates are determined based on the US Dollar reference rate and the middle rates of cross-currency quotes. The SDR-Rupee rate will also follow this reference rate.
Summary: ECGC declared a dividend of Rs. 72.5 Crores and recorded a 5% increase in profit before tax, amounting to Rs. 407 Crores, despite reducing premium rates by 17%. It supported 15% of India's merchandise exports in 2016-17, with 85% of this support directed towards MSME exporters. ECGC's efforts to boost exports to Africa resulted in a 15% growth in coverage despite a 5% decline in exports to the region. The organization won the Best ECA Award by Trade and Forfaiting Review for 2017. ECGC also manages the NEIA Trust, supporting 76 contracts valued at Rs. 35,000 Crores across 29 countries.
Notifications
GST - States
1.
G.O.Ms. No. 23/CT/2017-18 - dated
31-7-2017
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Puducherry SGST
Corrigendum - G.O. Ms. No.2/2017- Puducherry GST (Rate), dated the 29th June, 2017
Summary: The Government of Puducherry issued a corrigendum to the notification G.O. Ms. No.2/2017 regarding Puducherry GST (Rate), dated June 29, 2017. This amendment, published in the Extraordinary Gazette, modifies the Schedule by changing the entries in specific serial numbers. In S. No. 59, the entry "9" is revised to "7, 9 or 10," and in S. No. 102, "2302" is updated to "2301, 2302." These changes are mandated by the Lieutenant-Governor and communicated by the Commissioner-cum-Secretary to the Government (Finance).
2.
G.O.Ms. No. 22/CT/2017-18 - dated
31-7-2017
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Puducherry SGST
Corrigendum - G.O. Ms. No. 1/2017-Puducherry GST (Rate), dated the 29th June, 2017.
Summary: The Government of Puducherry issued a corrigendum to the notification G.O. Ms. No. 1/2017-Puducherry GST (Rate) dated 29th June 2017, published in the Extraordinary Gazette. Amendments were made across various schedules affecting the GST rates. In Schedule I, changes include corrections to item codes and product descriptions. Schedule II adjustments involve clarifications on product descriptions. Schedule III modifications include changes to product descriptions and the removal of certain items. Schedule IV updates involve corrections to product descriptions related to optical fibers and video game consoles. These amendments were ordered by the Commissioner-cum-Secretary to the Government (Finance).
3.
G.O. Ms. No. 180 - dated
9-8-2017
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Telangana SGST
Notification - Waybill.
Summary: The Government of Telangana, under the Telangana Goods and Services Tax Act, 2017, mandates the use of an online-generated Waybill for the movement of goods exceeding INR 50,000. Registered persons must generate Waybills via the TGCT portal. The Waybill is necessary for intra- and inter-state transport, except for certain exempted goods like alcoholic liquor and petroleum products. The Waybill includes transaction and vehicle details, and its validity is based on the distance of transport, ranging from two to twelve days. The system aims to prevent misuse, with cancellations allowed within 24 hours of generation.
4.
03/2017 - dated
26-7-2017
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Telangana SGST
Notification on HSN Codes
Summary: The Government of Telangana's Commercial Taxes Department issued Notification No. 03/2017 under the Telangana Goods and Services Tax (TGST) Act, 2017, concerning the use of Harmonised System of Nomenclature (HSN) Codes in tax invoices. The notification mandates that registered persons must include HSN codes on invoices based on their annual turnover: no HSN code for turnovers up to INR 1.5 crore, two-digit codes for turnovers between INR 1.5 crore and INR 5 crore, and four-digit codes for turnovers exceeding INR 5 crore. This notification is effective from July 1, 2017.
5.
02/2017 - dated
26-7-2017
-
Telangana SGST
Notifications for authentication of documentation – Issuance - modes of verification
Summary: The Telangana Commercial Taxes Department issued Notification No. 02/2017 under the TGST Act, 2017, detailing modes of verification for document authentication. The notification specifies three methods: Aadhaar-based Electronic Verification Code (EVC), EVC generated through net banking login on the common portal, and EVC generated on the common portal. Verification must occur within two days of document submission. This notification is effective retroactively from June 22, 2017.
6.
G.O. Ms. No. 175 - dated
25-7-2017
-
Telangana SGST
Amendments in the Notification No. 01/2017- State Tax (Rate) Dated 29-06-2017
Summary: The Government of Telangana has issued amendments to Notification No. 01/2017-State Tax (Rate) under the Telangana Goods and Services Tax Act, 2017. Effective from July 1, 2017, these amendments include the insertion of new serial numbers and entries in Schedule I, specifically for certain mineral or chemical fertilizers, which are now taxable at 2.5%. These fertilizers include nitrogenous, phosphatic, potassic, and those containing multiple fertilizing elements, provided they are not clearly intended for non-fertilizer use. Additionally, certain entries in Schedule II taxed at 6% have been omitted.
7.
F.1-11(92)-TAX/GST/2017(Part) - dated
11-8-2017
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Tripura SGST
Constitution of National Anti-profiteering Authority under GST.
Summary: The Government of Tripura, through its Commissioner of Taxes, announced the constitution of the National Anti-profiteering Authority (NAA) under the Goods and Services Tax (GST) framework. The NAA aims to ensure that tax reductions benefit consumers. According to Rule 122 of the Central GST Rules, the NAA will include a Chairman and four Technical Members, who must be current or former Commissioners of State or Central Tax, nominated by the GST Council. Rule 124(5) stipulates that Technical Members must be under 62 years of age. Eligible officers were invited to submit nominations by August 11, 2017.
8.
F.11(100)-TAX/GST/2017 - dated
8-8-2017
-
Tripura SGST
Notification regarding date for filing of GSTR-3B.
Summary: The Government of Tripura's Finance Department issued a notification under the Tripura State Goods and Services Tax Rules, 2017, specifying the filing dates for GSTR-3B returns. The Chief Commissioner, following recommendations from the Council, mandates that the GSTR-3B return for July 2017 must be filed by August 20, 2017, and for August 2017 by September 20, 2017. This notification, effective from August 8, 2017, requires electronic submission through the common portal.
9.
2322/CSTUK/GST-Vidhi Section/2017-18 - dated
8-8-2017
-
Uttarakhand SGST
Regarding extension of date for filing Form GSTR-3 for the Month of July & August
Summary: The Commissioner of State Tax in Uttarakhand has issued a notification extending the deadlines for filing Form GSTR-3 under the Uttarakhand Goods and Services Act, 2017. The new deadlines are set for the months of July and August 2017. For July, the filing period is extended to September 11-15, 2017, and for August, it is extended to September 26-30, 2017. This notification is effective from August 8, 2017.
10.
2321/CSTUK/GST-Vidhi Section/2017-18 - dated
8-8-2017
-
Uttarakhand SGST
Regarding extension of date for filing Form GSTR-2 for the Month of July & August
Summary: The Commissioner of State Tax, Uttarakhand, has extended the deadlines for filing Form GSTR-2 for July and August 2017 under the Uttarakhand Goods and Services Act, 2017. For July 2017, the filing period is extended to September 6-10, 2017, and for August 2017, to September 21-25, 2017. This notification, based on the recommendations of the Council, is effective from August 8, 2017.
11.
2320/CSTUK/GST-Vidhi Section/2017-18 - dated
8-8-2017
-
Uttarakhand SGST
Regarding extension of date for filing Form GSTR-1 for the Month of July & August
Summary: The Commissioner of State Tax, Uttarakhand, has extended the deadline for filing Form GSTR-1 for the months of July and August 2017. For July, the new filing period is from September 1 to September 5, 2017, and for August, it is from September 16 to September 20, 2017. This extension is enacted under the authority granted by the Uttarakhand Goods and Services Tax Act, 2017, based on recommendations from the Council. The notification is effective from August 8, 2017.
12.
2319/CSTUK/GST-Vidhi Section/2017-18 - dated
8-8-2017
-
Uttarakhand SGST
Regarding extension of date for filing Form GSTR-3B for the Month of July & August
Summary: The Commissioner of State Tax, Uttarakhand, has issued a notification extending the deadline for filing Form GSTR-3B for July and August 2017. According to this notification, the filing deadline for July 2017 is set for August 20, 2017, and for August 2017, it is September 20, 2017. This decision is made under the authority of the Uttarakhand Goods and Services Tax Rules, 2017, and the Uttarakhand Goods and Services Act, 2017, based on recommendations from the GST Council. The notification takes effect from August 8, 2017.
13.
630/2017 - dated
3-8-2017
-
Uttarakhand SGST
Regarding amendment in the notification no. 514 dt. 29/06/2017
Summary: The Government of Uttarakhand has issued a corrigendum to amend Notification No. 514 dated June 29, 2017, under the Uttarakhand Goods and Services Tax Act, 2017. The amendments involve changes across multiple schedules affecting tax rates on various goods. Schedule I sees modifications in the classification and description of items such as Palmyra sugar and Agarbatti. Schedule II updates include changes to items like desiccated coconuts and dates. Schedule III adjustments involve items like fountain pen ink and optical fiber cables. Schedule IV amends the classification of optical fibers and video game consoles. These changes are intended to align classifications and descriptions with current standards.
14.
629/2017 - dated
3-8-2017
-
Uttarakhand SGST
Regarding amendment in the notification no. 518 dt 29/06/2017
Summary: The Government of Uttarakhand issued a corrigendum to amend Notification No. 518 dated June 29, 2017, under the Uttarakhand Goods and Services Tax Act, 2017. The amendments are made in the public interest and involve changes to the Schedule of the original notification. Specifically, in S.No. 59, the entry "9" is replaced with "7, 9 or 10," and in S.No. 102, the entry "2302" is updated to "2301, 2302." These changes are authorized by the Governor under section 11(1) of the Uttarakhand GST Act, 2017.
15.
530/2017 - dated
29-6-2017
-
Uttarakhand SGST
Exempted intra-state supply of services
Summary: The Government of Uttarakhand issued a notification exempting specific intra-state service supplies from state tax under the Uttarakhand Goods and Services Tax Act, 2017. This exemption applies to services such as charitable activities, transfer of a going concern, pure services provided to government entities, and services by governmental authorities related to Panchayat or municipal functions. Additional exemptions include services related to education, health care, agriculture, transportation, insurance, and activities by recognized sports bodies, among others. The notification specifies conditions and categories for these exemptions, effective from July 1, 2017.
16.
525/2017 - dated
29-6-2017
-
Uttarakhand SGST
Regarding Rate Of Tax on Different Services
Summary: The Government of Uttarakhand issued a notification detailing the state tax rates on various intra-state services under the Uttarakhand Goods and Services Tax Act, 2017. The notification specifies tax rates for services across different sectors, including construction, distributive trade, accommodation, food and beverage, transport, postal and courier, electricity, gas, financial, real estate, and more. Rates vary from 2.5% to 14%, with specific conditions for input tax credit applicability. The notification, effective from July 1, 2017, also includes detailed classifications of services and conditions for tax exemptions or reductions.
17.
518/2017 - dated
29-6-2017
-
Uttarakhand SGST
Regarding Exempted Intra-state supplies of some scheduled goods
Summary: The Government of Uttarakhand, under the Uttarakhand Goods and Services Tax Act, 2017, has exempted intra-state supplies of specific goods from state tax. The exemption applies to goods listed in the appended schedule, covering various categories such as live animals, fresh meat, fish, dairy products, vegetables, fruits, seeds, cereals, and other agricultural products. Additional exempted items include human blood, contraceptives, books, newspapers, certain textiles, and religious items. This notification, effective from July 1, 2017, aims to relieve these goods from state tax to promote public interest and align with the recommendations of the GST Council.
Income Tax
18.
79/2017 - dated
8-8-2017
-
IT
Tax savings bonds issued by the Indian Railway Finance Corporation Limited
Summary: The Central Government, through the Ministry of Finance's Department of Revenue, has issued Notification No. 79/2017, dated August 8, 2017. This notification designates bonds issued by the Indian Railway Finance Corporation Limited as 'long-term specified assets' under section 54EC of the Income-tax Act, 1961. These bonds, which are redeemable after three years, qualify for tax benefits as outlined in the Act. The notification applies to bonds issued on or after the date of its publication in the Official Gazette.
Law of Competition
19.
F. No. 5/31/2015-CS - S.O. 2561(E) - dated
10-8-2017
-
Competition Law
U/s 54 (a) of the Competition Act, 2002 Central Government, exempts the Regional Rural Banks
Summary: The Central Government, invoking clause (a) of section 54 of the Competition Act, 2002, exempts Regional Rural Banks from the application of sections 5 and 6 of the same Act. This exemption applies to banks for which a notification has been issued under section 23A(1) of the Regional Rural Banks Act, 1976. The exemption is valid for five years from the publication date of this notification in the Official Gazette, as stated by the Ministry of Corporate Affairs.
Circulars / Instructions / Orders
GST - States
1.
GST Circular No. 01/ 2017 - dated
14-7-2017
Issue related to Bond/Letter of Undertaking for exports without payment of integrated tax.
Summary: The Government of Rajasthan issued a circular addressing issues related to the submission of Bonds or Letters of Undertaking (LUT) for exporting goods or services without paying integrated tax. Under rule 96A of the Rajasthan GST Rules, registered exporters must furnish a bond or LUT in FORM GST RFD-11 before export. Due to the non-operational status of the online portal, these documents must be submitted manually to the jurisdictional Deputy/Assistant Commissioner. The Joint Commissioner may waive the bank guarantee requirement based on the exporter's track record. Proper record-keeping and compliance with these directives are mandated for all relevant authorities.
2.
CCT’s Ref No. A(1)/72/2017 - dated
24-6-2017
Goods and Service Tax-transition relief –scenario and Guidelines-Issuance of certain instructions – Reg.
Summary: The circular from the Commissioner of Commercial Taxes in Telangana provides guidelines on transitional relief under the Goods and Services Tax (GST) Act, effective from July 1, 2017. It outlines provisions under sections 139 to 142 of the Telangana and Central GST Acts, detailing migration of existing dealers, transitional arrangements for input tax credit, and job work provisions. Dealers must claim transitional relief within 90 days using Form GST TRAN-1. The circular specifies eligibility criteria, including the possession of tax invoices, and details actions for ensuring compliance, such as software development for stock tracking and verification of dealer claims.
Customs
3.
42/2017 - dated
3-8-2017
Subject: Clarification regarding exports under claim for drawback in GST Scenario -reg.
Summary: The circular addresses issues related to claiming duty drawback under the GST regime. It clarifies that for exports made from July 1, 2017, the requirement for a certificate from the jurisdictional GST officer is waived. Instead, exporters can claim higher drawback rates through a self-declaration, as per amended Notification 131/2016-Cus (NT). This change applies retroactively to exports from July 1, 2017. For goods cleared before this date but exported later, previous conditions apply. The circular emphasizes the importance of audit checks to prevent double taxation benefits and urges prompt processing of pending drawback claims.
Highlights / Catch Notes
Income Tax
-
ICDS Application Limited to Determining Turnover for Taxpayers Under Presumptive Tax Schemes Like Sections 44AD, 44ADA, 44AE.
Notes : ICDS would apply to the taxpayers whose income is taxed under presumptive tax schemes (i.e. u/s 44AD, 44ADA, 44AE, 4BB, 44BBA, 44BBB) for limited purpose of determination of turnover
-
ICDS Applies Only to Manufacturing Business When Assessee Uses Mixed Accounting Systems for Different Business Activities.
Notes : ICDS - If the assessee is following mercantile system of accounting for his manufacturing business and cash system of accounting for his commission agency business, then ICDS would then apply only to the manufacturing business, and not to the commission agency business
-
High Court Clarifies MAT Computation: Provision for Bad Debts Write-Off Unaffected by Section 115JB Explanation Clause (i.
Case-Laws - HC : MAT computation - Provision for bad and doubtful debts - If, at the end of the year showing the loans and advances on the asset aside of the balance sheet as net of the provision for bad debt, it would amount to a write off and such actual write off would not be hit by clause (i) of the explanation to section 115JB - HC
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ITAT Missteps: Accountancy Principles Used Over Legal Precedent in Unexplained Deposits u/s 68 Case.
Case-Laws - HC : Addition u/s 68 - peak credit theory - accommodation entry provider - ITAT went merely on the basis of accountancy, overlooking the settled legal position that peak credit is not applicable where deposits remain unexplained under Section 68 - HC
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No Penalty Imposed for Genuine Loan Transactions via Cheques u/s 271D Despite Section 269SS Contravention.
Case-Laws - AT : Penalty u/s. 271D - contravention of provision of Section 269SS - reasonable cause for not accepting loans by way of account payee cheque or demand draft - These loans are genuine transaction which were accepted by way of cheques by its sister concern - No penalty
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Agricultural Income Exemption Granted u/s 10(1) for Floriculture and Tissue Culture Operations.
Case-Laws - AT : Exemption u/s 10(1) - agricultural income - proof of agricultural operations - business of plant floriculture / tissue culture - exemption allowed.
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Compensation to Deceased Divers' Families Deemed Legitimate Business Expense for Assessee's Operations Due to Business Expediency.
Case-Laws - AT : Compensation paid by the assessee to the family members of deceased divers was in course of the assessee business, and the assessee had rightly considered the business expediency and there after incurred the said legitimate business expenses.
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No TDS Liability on SIM Card Sales and Recharge Coupons Discounts u/s 194H of Income Tax Act.
Case-Laws - AT : TDS u/s 194H - SIM cards and recharge coupons were sold in cash. The customers and shopkeepers were offered discount on the face value of the SIM cards. Apropos the recharge coupons, on the other hand, a small margin was kept by the assessee out of the commission/discount offered by BSNL - No TDS liability.
Customs
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High Court Grants CST Refund for Goods from EOUs, Upholds Eligibility Under Foreign Trade Policy, Despite Inter-State Trade.
Case-Laws - HC : Reimbursement of Central Sales Tax (CST) - goods purchased from EOU - Irrespective of the location of the Manufacturing Units selling such products to the petitioner in the course of inter-state Trade and charging CST, the goods continue to be the "Goods manufactured in India" which is the requirement in the said Foreign Trade Policy for entitling the petitioner - refund allowed - HC
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Refund Claim on Cess Not Subject to Unjust Enrichment: Aligns with Customs Tax Regulations and Case Laws.
Case-Laws - AT : Refund claim - Cess - unjust enrichment - The amount realized from the foreign buyer was only FOB value - the refund of cess is not hit by unjust enrichment
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Confiscated Goods Exported Despite Unrecorded Shipping Bills at CFS, Show Cause Notice Dismissed.
Case-Laws - AT : Confiscation of goods - shipping bills were not entered in export goods arrival register maintained at CFS, STT, ICD, Dadri - drawback claim - goods were exported and export proceeds were realized - show cause notice set aside
Corporate Law
-
High Court Rules on Employee Quota Shares and Membership Cap in Private Companies Under Article 59.
Case-Laws - HC : Membership of the private company exceeded 50 or not - joint share holdings - exclusion of employee quota - The submission that such employee quota share does not remain as employee quota or that there is no bar for transfer of such shares by the employees under Article 59 of the Articles of Association, cannot be accepted - HC
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Court Rules Share Transfer Keeps Company Private; Membership Stays Under 50, Avoiding Public Company Status.
Case-Laws - HC : Membership of the private company exceeded 50 or not - Deemed public company - The number of members of the compnay has not exceeded 50 by virtue of transfer of shares by the appellant (singly) to the appellant jointly with his children and wife - HC
Service Tax
-
Maintenance and Repair Services for Buildings Not Classified as Commercial Construction Under Service Tax Law.
Case-Laws - AT : Maintenance and repair service - repair, alteration, renovation or restoration or similar service in relation to commercial buildings and civil structures - the classification under commercial and industrial construction service has to be ruled out.
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