Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram
Tax Updates - TMI e-Newsletters

Home e-Newsletters Index Year 2019 August Day 29 - Thursday

TMI e-Newsletters FAQ
You need to Subscribe a package.

Newsletter: Where Service Meets Reader Approval.

TMI Tax Updates - e-Newsletter
August 29, 2019

Case Laws in this Newsletter:

GST Income Tax Customs Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax



Articles

1. INCOME TAX RETURNS WITH CLAIM FOR CREDIT OF TDS AND TCS NEED MORE TIME – DUE DATE SHOULD BE POSTPONED IN SUCH CASES.

   By: DEVKUMAR KOTHARI

Summary: The article argues for extending the deadline for filing Income Tax Returns (ROI) when claiming Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) credits. It highlights the complexities and potential discrepancies in reconciling income with TDS/TCS, which can lead to issues like undisclosed income or defective returns. The author suggests that allowing more time would not harm revenue, as most taxes are prepaid through TDS/TCS and advance tax. Furthermore, it proposes that the Assessing Officer should have the authority to extend deadlines without penalties, particularly when refunds are involved, to ensure accurate and complete filings.

2. A Gist of Workshop on Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019

   By: Shripada Hegde

Summary: A workshop organized by the Directorate General of Taxpayer Services and NACIN Bengaluru focused on the Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019, aiming to raise awareness about its provisions. A panel of experts addressed various queries from trade and industry professionals. Key points included the ineligibility of cases initiated after June 30, 2019, for the scheme, the adjustment of deposits against total payable amounts, and the inability to opt for parts of a demand while contesting others. There was division on certain issues, such as eligibility for customs and central excise demands, and the treatment of CENVAT credit payments. The workshop clarified that the scheme's benefits are limited to specific periods and do not prejudice other periods. The discussions highlighted areas lacking clarity, emphasizing the need for further clarification from the authorities.


News

1. CBDT clarifies differential regime between domestic investors (including AIF category III) and FPIs existed even prior to General Budget 2019 and was not creation of the Finance (No. 2) Act, 2019

Summary: The Central Board of Direct Taxes (CBDT) clarified that the differential tax regime between domestic investors, including Alternative Investment Funds (AIF) category III, and Foreign Portfolio Investors (FPIs) existed prior to the General Budget 2019. This regime was not a result of the Finance (No. 2) Act, 2019 or the Finance Ministry's announcements on August 23, 2019. Under this regime, FPIs' income from derivatives is treated as capital gains with a special tax rate, while domestic investors' income from derivatives is treated as business income, taxed at normal rates. The CBDT emphasized that this differential treatment was already established under section 115AD of the Income Tax Act, 1961.


Notifications

DGFT

1. 14/2015-2020 - dated 28-8-2019 - FTP

Insertion of a new policy condition under Chapter 87 of ITC (HS), 2017 - Schedule - 1 (Import Policy)

Summary: The Central Government of India has introduced a new policy condition under Chapter 87 of the ITC (HS) 2017 - Schedule - 1 (Import Policy). This condition mandates that the registration of imported vehicles by manufacturers, authorized representatives, organizations, or individuals for personal use, demonstration, testing, research, or scientific purposes must adhere to the Standard Operating Procedure outlined in the Central Motor Vehicles (Eleventh Amendment) Rules, 2018. This amendment, effective as of 28 August 2019, aligns with the rules notified by the Ministry of Road Transport and Highways.

2. 13/2015-2020 - dated 28-8-2019 - FTP

Amendment of import policy of polymethyl methacrylate under Exim code 39169032 of ITC (HS) 2017 - Schedule - 1 (Import Policy)

Summary: The Government of India has amended the import policy for polymethyl methacrylate under Exim code 39169032, as per the Foreign Trade Policy 2015-2020. Effective from September 1, 2019, the import policy for this item is changed from 'Free' to 'Prohibited'. This amendment is authorized under Section 3 of the FT (D&R) Act, 1992, and approved by the Minister of Commerce & Industry. The notification was issued by the Director General of Foreign Trade and references the principal notification from January 17, 2017.


Circulars / Instructions / Orders

Income Tax

1. 21/2019 - dated 27-8-2019

Clarifications in respect of filling-up of the ITR forms for the Assessment Year 2019-20

Summary: The circular provides clarifications on filling out Income Tax Return (ITR) forms for the Assessment Year 2019-20. It addresses queries regarding the disclosure of directorships in foreign companies by non-residents, stating that non-residents need not disclose foreign directorships unless the company has income connected to India. Resident taxpayers must disclose all directorships. Additionally, it clarifies reporting requirements for foreign assets, stating that taxpayers should only report assets held during both the "previous year" in India and the "relevant accounting period" abroad. This aims to ensure accurate reporting without unnecessary disclosures.

IBC

2. IBBI/LIQ/024/2019 - dated 26-8-2019

Applicability of the Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations, 2019 notified on 25th July, 2019

Summary: The Insolvency and Bankruptcy Board of India (IBBI) issued a circular clarifying the applicability of the Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations, 2019. These regulations, effective from 25th July 2019, apply only to liquidation processes initiated on or after this date. Stakeholders raised concerns about applying these amendments to processes started before this date. The circular confirms that the amendments do not apply to liquidation processes that began before 25th July 2019. This directive is issued under the authority of section 196 of the Insolvency and Bankruptcy Code, 2016.

3. IBBI/RV/022/2019 - dated 13-8-2019

Valuation under the Insolvency and Bankruptcy Code, 2016: Appointment of Registered Valuer

Summary: The circular from the Insolvency and Bankruptcy Board of India (IBBI) emphasizes that all valuations required under the Insolvency and Bankruptcy Code, 2016, must be conducted by a registered valuer, as per the Companies (Registered Valuers and Valuation) Rules, 2017. Effective from February 1, 2019, appointing any person other than a registered valuer for such valuations is illegal and violates the specified regulations. Additionally, any payment to non-registered valuers for these services cannot be included in insolvency resolution or liquidation costs. This directive is issued under the authority granted by the Insolvency and Bankruptcy Code, 2016.

DGFT

4. 28/2015-2020 - dated 28-8-2019

Enlistment under Appendix 2E to issue Certificate of Origin (Non-Preferential) and Change of Office Address (location)

Summary: The public notice from the Directorate General of Foreign Trade announces the change of office address for the Indian Industries Association and authorizes two additional associations to issue Certificates of Origin (Non-Preferential) under Appendix 2E of the Foreign Trade Policy 2015-2020. The Indian Industries Association's new address is Thakkar Bapa Smarak Sadan, New Delhi. Additionally, the Millennial India International Chamber of Commerce Industry & Agriculture and the Bombay Industries Association are now authorized to issue these certificates, with their respective addresses and contact details included in the notice.


Highlights / Catch Notes

    GST

  • Loans Exempt from GST: No Distinction Between Related or Unrelated Parties; Notional Consideration Not Applicable.

    Case-Laws - AAR : Providing services of financial assistance in the form of Loan - Benefit of exemption from GST - The said notification neither talks about related-unrelated party nor about notional consideration. Therefore the question of charging GST on notional consideration does not arise in this case.

  • GST Applied on Higher Value for Goods or Services; Includes Freight and Insurance Costs in Composite Supply Value.

    Case-Laws - AAR : GST is applied on supply of goods or services. If there are two values of any supply, then GST is to be taxed on the higher value of supply. Hence in this case, the higher of the two value i.e. the actual cost of Freight and insurance or the pre contracted fixed freight per unit of the product, shall be included in the value of composite supply.

  • GST Not Applicable on Refundable Deposits Unless Used as Consideration; Deposit Provision Still Subject to GST.

    Case-Laws - AAR : Supply or not - Refundable Interest Free Deposit (assume ₹ 2500) - the amount of ₹ 2500/- will not attract the GST being the deposit unless the supplier applies such deposit as consideration, however the monetary value of the act of providing this deposit of ₹ 2500/- will attract GST

  • Single Super Phosphate Exports Subject to 18% IGST Due to Non-Fertilizer Use in India (IGST Act Sec 11(b.

    Case-Laws - AAR : Rate of IGST - export of single super phosphate(SSP) - fertilizer - since the SSP being exported is not to be used as fertiliser in India, as the place of supply, according to section 11(b) of the IGST Act, will be the location outside India - IGST rate is 18%

  • Tarpaulins from HDPE classified as plastic, not textile, under Tariff Act; impacts GST classification.

    Case-Laws - AAR : Classification of goods - tarpaulins made from High Density Polyethylene - classifiable as textile or plastic - a woven fabric if completely embedded in plastics or entirely coated or covered on both sides with such material, and if such coating or covering can be seen with the naked eye, is not to be treated as textile material for classification under the Tariff Act

  • Income Tax

  • Taxpayer's Fresh Claim for Business Expenses u/s 153A Deemed Allowable Like Section 139(1) Returns.

    Case-Laws - AT : Fresh claim of business expenses in return u/s 153A - because of disallowing the original claim of deferred revenue expenses the assessee has rightly raised the alternate claim of expenses incurred during the year under consideration for the first time under 153A proceedings as the provisions applicable in return filed u/s 139(1) would also continue to apply in the case of a return filed u/s 153A - duly allowable

  • Guidance for Accurate Income Tax Return Filing for Assessment Year 2019-20: Key Updates and Instructions for Taxpayers.

    Circulars : Clarifications in respect of filling-up of the ITR forms for the Assessment Year 2019-20

  • Court Rules Registry Must Release Judgment-Debt Without TDS Deduction Under Code of Civil Procedure, 1908.

    Case-Laws - HC : Liability of Registry of court to deduct TDS (withhold tax) on interest on deposits - Once a claim merges into a decree of the Court it transcends into a judgment-debt and, therefore, only those adjustments and deductions can be made which are permissible under the Code of Civil Procedure, 1908 - Registry directed to release the amount without TDS

  • Assessment Order Invalid: Non-Compliance with Section 143(3) and Section 144C Procedures by Assessing Officer.

    Case-Laws - AT : Violation of Section 144C - draft assessment order passed alongwith notice of demand and penalty notice - though he AO said that he is passing draft assessment order and the assessee was also at liberty to file the objections before the DRP or accept the same, but in actual fact, the order passed by the AO was complete assessment order which is not envisaged u/s 143(3) r.w.s. 144C - order is invalid

  • Stay Order Expired: Application to Recall Deemed Infructuous Due to Six-Month Time Lapse.

    Case-Laws - AT : Stay of demand - Misc. Application to recall the stay order - when the stay orders has expired due to lapse of six month time period from the date of the order, the orders have outlived their utility and lost their force in course of time, nothing survives for either recall or modification - MA is infructuous

  • Transfer Pricing Case: No Income Adjustments for Receivables Delayed Beyond 30 Days, Deemed Reasonable Not Unsecured Loans.

    Case-Laws - AT : TP Adjustment - outstanding receivables having delay beyond 30 days - Since the receivables have been received within ordinary time period, it cannot be recharacterized as unsecured loans and accordingly, no adjustment on account of delay in receipt of receivable can be made in the income of the assessee considering the fact that delay is not inordinate but reasonable - no addition

  • Abandoned Project Expenses Allowed for Current Year; No Dispute on Capital Nature or Expense Timing.

    Case-Laws - AT : Allowability of expenses of abundant project - there is no allegation that the expenditure incurred by the assessee is capital in nature - It is also not the case of the revenue that the assessee has not incurred the expenditure at all or these expenditure are not pertaining to this year - the expenditure incurred by the assessee for the abandoned project as allowable during the year

  • Deemed Dividends u/s 2(22)(e): Taxable Only to Verizon Singapore, Not the Borrowing Entity.

    Case-Laws - HC : Deemed dividend u/s 2(22)(e) - taxability in hand of concern - proper reading of Section 2(22)(e) can only lead to one conclusion that the amount which is borrowed by the Assessee from VCIPL, in which Verizon Singapore holds more than 10% of voting power can if it all, be taxed only as deemed dividend in the hands of Verizon Singapore and not the Assessee - no substantial question of law arises

  • Revenue Fails to Prove Misuse of Funds; No Income Addition for Cash Deposits Despite Four-Month Transaction Gap.

    Case-Laws - AT : Addition on cash deposits - availability of funds for re-depositing - no evidence has been made available by the Revenue to support the possibly unarticulated suspicion that the funds have been utilised elsewhere - a gap of about four months by itself in the peculiar circumstances does not lead to any conclusion which detracts from the merits of the claims made - no addition

  • Section 50C's 5% Variation Benefit in Capital Gains is Retrospective from April 1, 2003, Despite 2019 Insertion.

    Case-Laws - AT : Capital Gain - addition u/s 50C - third proviso to Section 50C inserted w.e.f 1-4-2019 - benefit of variation of 5% - even when the statute does not specifically state so the insertion of third proviso to Section 50C is declaratory and curative in nature, can only be treated as retrospective and effective from the date related statutory provisions was introduced i.e. from 1st April 2003 - retrospective

  • Foreign tour expenses for educational trips abroad qualify as charitable application u/s 11, benefiting students.

    Case-Laws - AT : Exemption u/s 11 - Allowability of foreign Tour expenses incurred by the assessee in foreign currency is outside India for the purpose of educational tours undertaken by the students of the assessee - as beneficiaries of the education imparted outside India were the assessee’s students, it is application for charitable purpose - duly allowable

  • Final Assessment Order Quashed: DRP Must Reconsider Objections u/s 144 Before Issuing Directions to Assessing Officer.

    Case-Laws - HC : Non consideration of objections to the draft assessment order u/s 144 - since the objections were well within time, the action of the AO in proceeding with the final assessment order and the action of the DRP in rejecting the objections, on the same ground, therefore cannot be countenanced - final assessment order quashed and directed to the DRP to issue necessary directions to the AO after considering the objections

  • Director Held Liable for Company Tax u/s 179; Directed to File Revision u/s 264 for Remedy.

    Case-Laws - HC : Proceedings u/s 179 - AO held that the petitioner(director) is jointly and severally liable towards the tax/penalty imposed on company - a perusal of Section 264 makes it clear that writ petitioner has an effective and efficacious alternate remedy as the Revisional Authority has powers to pass orders which are not prejudicial to the assessee by revising the impugned order - directed to file revision

  • Court Directs Petitioner to Seek Alternate Remedy in Bogus Donation Case; Issues to be Addressed by CIT-A.

    Case-Laws - HC : Challenge of assessment order passed in remand proceeding in writ - bogus donation - It is a fit case to relegate the petitioner to alternate remedy making it clear that all questions raised including questions pertaining to cross-examination can be raised before CIT-A and the issue of whether the cash was rerouted to the writ petitioner against payment of donation being a factual dispute can also be gone into by CIT-A

  • No penalty for salaried individual u/s 271AAB due to non-disclosure of investment not required in tax returns.

    Case-Laws - AT : Penalty u/s 271AAB - undisclosed investment - the assessee is a salaried person who is not required to maintain any books of accounts and there is no mechanism to report the investment in the tax return, hence the investment found in property cannot be held as undisclosed investment and more so, undisclosed income so defined in section 271AAB - no penalty

  • DGFT

  • India Prohibits Import of Polymethyl Methacrylate Under Exim Code 39169032, Updates DGFT Policy.

    Notifications : Import Policy of polymethyl methacrylate under Exim code 39169032 of ITC (HS) 2017 - Schedule - 1 (Import Policy) is revised from 'Free' to 'Prohibited'

  • India's Vehicle Imports Must Comply with Central Motor Vehicles (Eleventh Amendment) Rules, 2018 for Various Uses.

    Notifications : Registration of vehicles imported by the vehicle manufactures or through their authorised representatives in India or by the organisation / citizen for personal use, demonstration, testing, research or scientific use etc. shall comply with the Central Motor Vehicles (Eleventh Amendment) Rules, 2018.

  • Service Tax

  • Application for Service Tax Refund Denied Due to Late Filing; No Protest or Provisional Assessment Involved.

    Case-Laws - HC : Refund of service tax - The application for refund of Service Tax having been moved beyond the period of limitation prescribed, was rightly rejected and further the appellant had himself conceded before the CESTAT that Service Tax was not deposited under protest nor was there any provisional assessment.

  • Central Excise

  • CENVAT Credit Denied for Capital Goods Used Solely in Making Exempt Products per Rule 6(4) of 2004 Rules.

    Case-Laws - AT : CENVAT Credit - capital goods which are used exclusively for the manufacture of exempted products - Decanter for Gluten - CENVAT Credit cannot be availed by the appellant in view of the explicit provisions of Rule 6(4) of CCR 2004.

  • Refunds on Exported Goods: Central Excise Duty Claims Must Follow Section 11B Time Limits for Eligibility.

    Case-Laws - AT : Refund of central excise duty paid on the exported goods - time limitation - it cannot be pleaded that the duty amount deposited by them should be construed as ‘mere deposit’ in the hands of the Government and for grant of the said refund amount, the provisions of Section 11B ibid would not be applicable.


Case Laws:

  • GST

  • 2019 (8) TMI 1224
  • 2019 (8) TMI 1223
  • 2019 (8) TMI 1222
  • 2019 (8) TMI 1221
  • 2019 (8) TMI 1220
  • 2019 (8) TMI 1219
  • 2019 (8) TMI 1218
  • 2019 (8) TMI 1217
  • 2019 (8) TMI 1216
  • 2019 (8) TMI 1215
  • 2019 (8) TMI 1214
  • 2019 (8) TMI 1213
  • Income Tax

  • 2019 (8) TMI 1226
  • 2019 (8) TMI 1225
  • 2019 (8) TMI 1212
  • 2019 (8) TMI 1211
  • 2019 (8) TMI 1210
  • 2019 (8) TMI 1209
  • 2019 (8) TMI 1208
  • 2019 (8) TMI 1207
  • 2019 (8) TMI 1206
  • 2019 (8) TMI 1205
  • 2019 (8) TMI 1204
  • 2019 (8) TMI 1203
  • 2019 (8) TMI 1202
  • 2019 (8) TMI 1201
  • 2019 (8) TMI 1200
  • 2019 (8) TMI 1199
  • 2019 (8) TMI 1198
  • 2019 (8) TMI 1197
  • 2019 (8) TMI 1196
  • 2019 (8) TMI 1195
  • 2019 (8) TMI 1194
  • 2019 (8) TMI 1193
  • 2019 (8) TMI 1192
  • 2019 (8) TMI 1191
  • 2019 (8) TMI 1157
  • Customs

  • 2019 (8) TMI 1190
  • Insolvency & Bankruptcy

  • 2019 (8) TMI 1189
  • Service Tax

  • 2019 (8) TMI 1188
  • 2019 (8) TMI 1187
  • 2019 (8) TMI 1186
  • 2019 (8) TMI 1185
  • 2019 (8) TMI 1184
  • 2019 (8) TMI 1183
  • 2019 (8) TMI 1182
  • 2019 (8) TMI 1181
  • 2019 (8) TMI 1180
  • 2019 (8) TMI 1179
  • 2019 (8) TMI 1178
  • 2019 (8) TMI 1177
  • Central Excise

  • 2019 (8) TMI 1176
  • 2019 (8) TMI 1175
  • 2019 (8) TMI 1174
  • 2019 (8) TMI 1173
  • 2019 (8) TMI 1172
  • 2019 (8) TMI 1171
  • 2019 (8) TMI 1170
  • 2019 (8) TMI 1169
  • 2019 (8) TMI 1168
  • 2019 (8) TMI 1167
  • CST, VAT & Sales Tax

  • 2019 (8) TMI 1166
  • 2019 (8) TMI 1165
  • 2019 (8) TMI 1164
  • 2019 (8) TMI 1163
  • 2019 (8) TMI 1162
  • 2019 (8) TMI 1161
  • 2019 (8) TMI 1160
  • 2019 (8) TMI 1159
  • 2019 (8) TMI 1158
 

Quick Updates:Latest Updates