TMI BlogMemorandum Explaining the Provisions in The Finance BillX X X X Extracts X X X X X X X X Extracts X X X X ..... d deepening of tax base; (F) Revenue mobilisation measures; (G) Improving effectiveness of tax administration; (H) Preventing tax abuse; and (I) Rationalisation of provisions of the Act. DIRECT TAXES A. RATES OF INCOME-TAX I. Rates of income-tax in respect of income liable to tax for the assessment year 2020-21. In respect of income of all categories of assessees liable to tax for the assessment year 2020-21, the rates of income-tax have either been specified in specific sections (like section 115BAA or section 115BAB for domestic companies) or have been specified in Part I of the First Schedule to the Bill. These are the same as those laid down in Part III of the First Schedule to the Finance (No 2) Act, 2019, as amended by Taxation Law Amendment Act, 2019 (TLAA) for the purposes of computation of advance tax , deduction of tax at source from Salaries and charging of tax payable in certain cases. (1) Surcharge on income-tax The amount of income-tax shall be increased by a surcharge for the purposes of the Union,- (a) in the case of every individual or HUF or association of persons or body of individuals, whether incorporated or not, or e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcluding the income of the nature referred to in clause (b) of sub-section (1) of section 115AD of the Act] exceeding five crore rupees, at the rate of thirty-seven per cent. of such income-tax; (v) having a total income [including the income of the nature referred to in clause (b) of sub-section (1) of section 115AD of the Act] exceeding two crore rupees but is not covered in sub-clauses (iii) and (iv), at the rate of fifteen per cent. of such income-tax: Provided that in case where the total income includes any income chargeable under clause (b) of sub-section (1) of section 115AD of the Act, the rate of surcharge on the income-tax calculated on that part of income shall not exceed fifteen per cent; (b) in the case of every co-operative society or firm or local authority, at the rate of twelve per cent. of such income-tax, where the total income exceeds one crore rupees; (c) in the case of every domestic company except such domestic company whose income is chargeable to tax under section 115BAA or section 115BAB of the Act,- (i) at the rate of seven per cent. of such income-tax, where the total income exceeds one crore rupees but does not exceed ten crore rupees; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... culated,- (i) at the rate of ten per cent. of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds fifty lakh rupees but does not exceed one crore rupees; (ii) at the rate of fifteen per cent. of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds one crore rupees but does not exceed two crore rupees; (iii) at the rate of twenty-five per cent. of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds two crore rupees but does not exceed five crore rupees; (iv) at the rate of thirty-seven per cent. of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds five crore rupees; (b) in the case of every co-operative society or firm, being a non-resident, calculated at the rate of twelve per cent. of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds one crore rupees; (c) in the case of every company, other than a domestic compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (vii) of clause (31) of section 2 of the Act (not being a case to which any other Paragraph of Part III applies) are as under:- Upto ₹ 2,50,000 Nil. ₹ 2,50,001 to ₹ 5,00,000 5 per cent. ₹ 5,00,001 to ₹ 10,00,000 20 per cent. Above ₹ 10,00,000 30 per cent. (ii) In the case of every individual, being a resident in India, who is of the age of sixty years or more but less than eighty years at any time during the previous year,- Upto ₹ 3,00,000 Nil. ₹ 3,00,001 to ₹ 5,00,000 5 per cent. ₹ 5,00,001 to ₹ 10,00,000 20 per cent. Above ₹ 10,00,000 30 per cent. (iii) in the case of every individual, being a resident in India, who is of the age of eighty years or more at any time during the previous year,- Upto ₹ 5,00,000 Nil. ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income-tax shall be increased by a surcharge at the rate of twelve per cent. of such income-tax in case of a co-operative society having a total income exceeding one crore rupees. However, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees. From the assessment year 2021-22, resident co-operative societies have an option to opt for taxation under newly inserted section 115BAD of the Act. This is discussed later. C. Firms In the case of firms, the rate of income-tax has been specified in Paragraph C of Part III of the First Schedule to the Bill. This rate will continue to be the same as that specified for FY 2019-20. The amount of income-tax shall be increased by a surcharge at the rate of twelve per cent. of such income-tax in case of a firm having a total income exceeding one crore rupees. However, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate of five per cent shall continue to be levied, if the total income of the company other than domestic company exceeds ten crore rupees. Marginal relief is provided in surcharge in all cases. In other cases [including sub-section (2A) of section 92CE, sections 115-O, 115QA, 115R, 115TA or 115TD], the surcharge shall be levied at the rate of twelve per cent.. For FY 2020-21, additional surcharge called the Health and Education Cess on income-tax shall be levied at the rate of four per cent on the amount of tax computed, inclusive of surcharge (wherever applicable), in all cases. No marginal relief shall be available in respect of such cess. [Clause 2 the First Schedule] IV Other amendments having impact on rates for various categories of person A. Incentives to resident co-operative societies. The TLAA, which replaced The Taxation Laws (Amendment) Ordinance, 2019, sought to provide additional fiscal stimulus to attract investment, generate employment and boost the economy in the wake of economic developments post enactment of the Finance (No. 2) Act, 2019 and keeping in view the reduction of rate of corporate income tax by many countries world over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e (iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) of section 35 or section 35AD or section 35CCC or under any provisions of Chapter VI-A; (b) without set off of any loss carried forward or depreciation from any earlier assessment year, if such loss or depreciation is attributable to any of the deductions referred to in (a) above; and (c) by claiming the depreciation, if any, under section 32, except clause (iia) of sub-section (1) thereof, determined in such manner as may be prescribed; (iii) the loss and depreciation referred to in (ii)(b) above shall be deemed to have been given full effect to and no further deduction for such loss or depreciation shall be allowed for any subsequent year. However, where there is a depreciation allowance in respect of a block of asset which has not been given full effect to prior to the assessment year beginning on 1st April, 2021, corresponding adjustment shall be made to the written down value of such block of assets as on 1st April, 2020 in the prescribed manner, if the option is exercised for a previous year relevant to the assessment year beginning on 1st April, 2021; (iv) the concessional rate shall not apply un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Above 15,00,000 30 per cent. (ii) The option shall be exercised for every previous year where the individual or the HUF has no business income, and in other cases the option once exercised for a previous year shall be valid for that previous year and all subsequent years. (iii) The option shall become invalid for a previous year or previous years, as the case may be, if the Individual or HUF fails to satisfy the conditions and other provisions of the Act shall apply; (iv) the condition for concessional rate shall be that the total income of the individual or HUF is computed,- (a) without any exemption or deduction under the provisions of clause (5) or clause (13A) or prescribed under clause (14) (other than those as may be prescribed for this purpose) or clause (17) or clause (32) of section 10 or section 10AA or section 16 or clause (b) of section 24 [in respect of property referred to in sub-section (2) of section 23] or clause (iia) of sub-section (1) of section 32 or section 32AD or section 33AB or section 33ABA or sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he option can be withdrawn only once where it was exercised by the individual or HUF having business income for a previous year other than the year in which it was exercised and thereafter, the individual or HUF shall never be eligible to exercise option under this section, except where such individual or HUF ceases to have any business income in which case, option under para (vi)(a) above shall be available. It is further proposed to amend section 115JC of the Act so as to provide that the provisions relating to AMT shall not apply to such individual or HUF having business income. It is also proposed to amend section 115JD of the Act so as to provide that the provisions relating to carry forward and set off of AMT credit, if any, shall not apply to such individual or HUF having business income. The condition listed at (iva) above, means that the individual or HUF opting for taxation under the newly inserted section 115BAC of the Act shall not be entitled to the following exemptions/ deductions: (i) Leave travel concession as contained in clause (5) of section 10; (ii) House rent allowance as contained in clause (13A) of section 10; (iii) Some of the allowance as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o as to remove exemption in respect of free food and beverage through vouchers provided to the employee, being the person exercising option under the proposed section, by the employer. This amendment will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-22 and subsequent assessment years. [Clauses 53, 57 58] C. Modification of concessional tax schemes for domestic companies under section 115BAA and 115BAB TLAA inserted section 115BAA and section 115BAB in the Act to provide domestic companies an option to be taxed at concessional tax rates provided they do not avail specified deductions and incentives. Some of the deductions prohibited are deductions under any provisions of Chapter VI-A under the heading C. Deduction in respect of certain incomes other than the provisions of section 80JJAA. It is now proposed to amend the provisions of section 115BAA and section 115BAB to not allow deduction under any provisions of Chapter VI-A other than section 80JJAA or section 80M, in case of domestic companies opting for taxation under these sections. These amendments will take effect from 1st April, 2020 and will, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowance, medical facilities and other such conditions of service as are applicable to a Judge of the Supreme Court under Chapter IV of the Supreme Court Judges (Conditions of Service) Act, 1958 and the rules made thereunder. It is proposed to remove these exemptions. Accordingly, it proposed to: (i) delete cause (45) of section 10 of the Act; (ii) amend section 8 of the Election Commission (Conditions of Service of Election Commissioners and Transaction of Business) Act, 1991, so as to delete the exemption from income-tax on value of rent-free residence, conveyance facilities, sumptuary allowance, medical facilities and other such conditions of service as are applicable to a Judge of the Supreme Court, paid to Chief Election Commissioner and other Election Commissioners. These amendments will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-22 and subsequent assessment years. [Clause 7] B. TAX INCENTIVES Exemption in respect of certain income of wholly owned subsidiary of Abu Dhabi Investment Authority and Sovereign Wealth Fund. Section 10 of the Act provides for exemption in respect of certain inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Clause (48A) thereof, inserted by the Finance Act, 2016, provides that any income accruing or arising to a foreign company on account of storage of crude oil in a facility in India and sale of crude oil therefrom to any person resident in India shall not be included in the total income, if such storage and sale by the foreign company is pursuant to an agreement or an arrangement entered into by the Central Government or approved by the Central Government; and having regard to the national interest, the foreign company and the agreement or arrangement are notified. Clause (48B) of said section, inserted by the Finance Act, 2017 and amended by the Finance Act, 2018, provides for exemption in respect of any income accruing or arising to a foreign company on account of sale of leftover stock of crude oil, if any, from the facility in India after the expiry of the agreement or the arrangement referred to in clause (48A) or on termination of the said agreement or the arrangement, in accordance with the terms mentioned therein, as the case may be, subject to such conditions as may be notified by the Central Government in this behalf. It is now proposed to provide exemption, by inser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee includes any profits and gains derived from the business of developing and building affordable housing projects, there shall, subject to certain conditions specified therein, be allowed a deduction of an amount equal to one hundred per cent of the profits and gains derived from such business. The conditions contained in the section, inter alia, prescribe that the project is approved by the competent authority during the period from 1st June, 2016 to 31st March, 2020. In order to incentivise building affordable housing to boost the supply of such houses, the period of approval of the project by the competent authority is proposed to be extended to 31st March, 2021. This amendment will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-22 and subsequent assessment years. [Clause 38] Extending time limit for sanctioning of loan for affordable housing for availing deduction under section 80EEA of the Act The existing provisions of section 80EEA of the Act provide for a deduction in respect of interest on loan taken from any financial institution for acquisition of an affordable residential house property. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fund shall not be less than one hundred crore rupees except where the fund has been established or incorporated in the previous year in which case, the corpus of fund shall not be less than one hundred crore rupees at the end of a period of six months from the last day of the month of its establishment or incorporation, or at the end of such previous year, whichever is later. This condition does not apply in a case where the fund has been wound up. Representations have been received in this regard stating that as per this condition, the period for fulfilling the requirement of monthly average of the corpus of one hundred crore rupees ranges from six months to eighteen months, in so far as the fund established or incorporated on last day of the financial year would get six months and the fund established or incorporated on first day of the financial year would get eighteen months. It has been stated that this results in anomaly as certain funds due to its date of establishment and incorporation get favoured or discriminated against. Accordingly, it is proposed to amend section 9A of the Act to relax these two conditions so as to provide that,- (i) for the purpose of ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal rate to bonds listed in stock exchanges in IFSC. Section 194LC of the Act, provided for a concessional rate of Tax Deductible at Source (TDS) at five per cent by a specified company or a business trust, on interest paid to non-residents on the following forms of borrowings (approved by the Central Government) made in foreign currency from sources outside India: i. Monies borrowed under a loan agreement at any time on or after 1st July, 2012 and before 1st July, 2020; ii. Borrowings by way of issue of any long-term infrastructure bond at any time on or after 1st July, 2012 and before 1st July, 2014; iii. Borrowings by way of issue of long-term bond including long-term infrastructure bonds at any time on or after 1st of October 2014 and before 1st July, 2020; The concessional rate of TDS of five per cent is also applicable in respect of monies borrowed by a specified company or a business trust from a source outside India by way of issue of rupee denominated bond (RDB) before 1st July, 2020, to the extent such interest does not exceed the amount of interest calculated at the rate approved by the Central Government in this behalf. Representations have been received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... April, 2020 but before 1st July, 2023, to a FII or QFI in respect of the investment made in municipal debt security. This amendment will take effect from 1st April, 2020. [Clause 83] C. REMOVING DIFFICULTIES FACED BY TAXPAYERS Excluding interest paid or payable to Permanent Establishment of a non-resident Bank for the purpose of disallowance of interest under section 94B. Section 94B of the Act, inter alia , provides that deductible interest or similar expenses exceeding one crore rupees of an Indian company, or a permanent establishment (PE) of a foreign company, paid to the associated enterprises (AE) shall be restricted to 30 per cent. of its earnings before interest, taxes, depreciation and amortisation (EBITDA) or interest paid or payable to AE, whichever is less. Further, a loan is deemed to be from an AE, if an AE provides implicit or explicit guarantee in respect of that loan. AE for the purposes of this section has the meaning assigned to it in section 92A of the Act. This section was inserted in the Act through the Finance Act, 2017 in order to implement the measures recommended in final report on Action Plan 4 of the Base Erosion and Profit Shifting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansfer shall, for the purposes of computing profits and gains from transfer of such asset, be deemed to be the full value of the consideration. Section 50C of the Act provides that where the consideration declared to be received or accruing as a result of the transfer of land or building or both, is less than the value adopted or assessed or assessable by stamp valuation authority for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall be deemed to be the full value of the consideration and capital gains shall be computed on the basis of such consideration under section 48 of the Act. The said section also provides that where the value adopted or assessed or assessable by the stamp valuation authority does not exceed one hundred and five per cent of the consideration received or accruing as a result of the transfer, the consideration so received or accruing as a result of the transfer shall, for the purposes of section 48, be deemed to be the full value of the consideration. Clause (x) of sub-section (2) of section 56 of the Act, inter alia , provides that where any person receives, in any previous year, from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd sub-section (1) of section 35AD to make the deduction thereunder optional. It is further proposed to amend sub-section (4) of section 35AD to provide that no deduction will be allowed in respect of expenditure incurred under sub-section (1) in any other section in any previous year or under this section in any other previous year, if the deduction has been claimed by the assessee and allowed to him under this section. This amendment will take effect from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-21 and subsequent assessment years. [Clause 18] Exempting non-resident from filing of Income-tax return in certain conditions. Section 115A of the Act provides for the determination of tax for a non-resident whose total income consists of: (a) certain dividend or interest income; (b) royalty or fees for technical services (FTS) received from the Government or Indian concern in pursuance of an agreement made after 31st March 1976, and which is not effectively connected with a PE, if any, of the non-resident in India. Sub-section (5) of said section provides that a non-resident is not required to furnish its return of inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase the burden of payment of taxes by the employees of the eligible start-ups or TDS by the start-up employer, it is proposed to amend section 192 of the Act, and insert sub-section (1C) therein to clarify that for the purpose of deducting or paying tax under sub-sections (1) or (1A) thereof, as the case may be, a person, being an eligible start-up referred to in section 80-IAC, responsible for paying any income to the assessee being perquisite of the nature specified in clause (vi) of sub-section (2) of section 17 of the Act, in any previous year relevant to the assessment year 2021-22 or subsequent assessment year, deduct or pay, as the case may be, tax on such income within fourteen days - (i) after the expiry of forty eight months from the end of the relevant assessment year; or (ii) from the date of the sale of such specified security or sweat equity share by the assessee; or (iii) from the date of which the assessee ceases to be the employee of the person; whichever is the earliest on the basis of rates in force of the financial year in which the said specified security or sweat equity share is allotted or transferred . Similar amendments have been carried out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Nationalisation) Act, 1972. This amendment will take effect from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-21 and subsequent assessment years. [Clause 31] Modification of the definition of business trust Section 115UA of the Act provides for a taxation regime applicable to business trusts. Under the said regime, the total income of the trust, excluding capital gains income is charged at the maximum marginal rate. Further, the income by way of interest and rent, received by the business trust from a Special Purpose Vehicle (SPV) is accorded pass through treatment i.e. there is no taxation of such interest or rental income in the hands of the trust and no withholding tax at the level of SPV. The business trusts are also required to furnish return of income and adhere to other reporting requirements. The definition of business trust has been provided in clause (13A) of section 2 of the Act, to mean a trust registered as an Infrastructure Investment Trust (InvIT) or a Real Estate Investment Trust (REIT) under the relevant regulations made under the Securities and Exchange Board of India (SEBI) Act, 1992 and the units o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... general terms, while APA provides tax certainty on case to case basis not only for future years but also Rollback years. Both SHR and the APA have been successful in reducing litigation in determination of the ALP. It has been represented that the attribution of profits to the PE of a non-resident under clause (i) of sub-section (1) of section 9 of the Act in accordance with rule 10 of the Rules also results in avoidable disputes in a number of cases. In order to provide certainty, the attribution of income in case of a non-resident person to the PE is also required to be clearly covered under the provisions of the SHR and the APA. In view of the above, it is proposed to amend section 92CB and section 92CC of the Act to cover determination of attribution to PE within the scope of SHR and APA. With respect to section 92CB, the amendment will take effect from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-21 and subsequent assessment years. With respect to section 92CC, the amendment will take effect from 1st April, 2020 and therefore will apply to an APA entered into on or after 1st April, 2020. [Clauses 43 44] Allowing d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his amendment will take effect from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-21 and subsequent assessment years. [Clause 104] Reducing the rate of TDS on fees for technical services (other than professional services). Section 194J of the Act provides that any person, not being an individual or a HUF, who is responsible for paying to a resident any sum by way of fees for professional services, or fees for technical services, or any remuneration or fees or commission by whatever name called (other than those on which tax is deductible under section 192 of the Act, to a director), or royalty or any sum referred to in clause (va) of section 28, shall, at the time of payment or credit of such sum to the account of the payee, deduct an amount equal to ten per cent as income-tax. Section 194C of the Act provides that any person responsible for paying any sum to a resident for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract shall at the time of payment or credit of such sum deduct an amount equal to one per cent in case payment is made to an individual or a HUF and two per ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) or clause (viia) of said sub-section (3) shall be liable to deduct income-tax in accordance with the provisions of sub-section (1), if- (a) the total sales, gross receipts or turnover of the co-operative society exceeds fifty crore rupees during the financial year immediately preceding the financial year in which the interest referred to in sub-section (1) is credited or paid; and (b) the amount of interest, or the aggregate of the amount of such interest, credited or paid, or is likely to be credited or paid, during the financial year is more than fifty thousand rupees in case of payee being a senior citizen and forty thousand rupees, in any other case. This amendment will take effect from 1st April, 2020. [Clause 75] Widening the scope of TDS on E-commerce transactions through insertion of a new section. In order to widen and deepen the tax net by bringing participants of e-commerce within tax net, it is proposed to insert a new section 194-O in the Act so as to provide for a new levy of TDS at the rate of one per cent. with the following key points: The TDS is to be paid by e-commerce operator for sale of goods or provision of service facilitated by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he supply of goods or services or both, including digital products, over digital or electronic network. services is defined to include fees for technical services and fees for professional services, as defined in section 194J. Consequential amendments are being proposed in section 197 (for lower TDS), in section 204 (to define person responsible for paying any sum) and in section 206AA (to provide for tax deduction at 5 per cent. in non-PAN/ Aadhaar cases). This amendment will take effect from 1st April, 2020. [Clause 84] Widening the scope of section 206C to include TCS on foreign remittance through Liberalised Remittance Scheme (LRS) and on selling of overseas tour package as well as TCS on sale of goods over a limit. Section 206C of the Act provides for the collection of tax at source (TCS) on business of trading in alcohol, liquor, forest produce, scrap etc. Sub-section (1) of the said section, inter-alia , provides that every person, being a seller shall, at the time of debiting of the amount payable by the buyer to the account of the buyer or at the time of receipt of such amount from the said buyer in cash or by the issue of a cheque or draft or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Aadhaar cases the rate shall be one per cent. Only those seller whose total sales, gross receipts or turnover from the business carried on by it exceed ten crore rupees during the financial year immediately preceding the financial year, shall be liable to collect such TCS. Central Government may notify person, subject to conditions contained in such notification, who shall not be liable to collect such TCS. No TCS is to be collected from the Central Government, a State Government and an embassy, a High Commission, legation, commission, consulate, the trade representation of a foreign State, a local authority as defined in Explanation to clause (20) of section 10 or any other person as the Central Government may, by notification in the Official Gazette, specify for this purpose, subject to conditions as prescribed in such notification. No such TCS is to be collected, if the seller is liable to collect TCS under other provision of section 206C or the buyer is liable to deduct TDS under any provision of the Act and has deducted such amount. These amendments will take effect from 1st April, 2020. [Clause 93] F. REVENUE MOBILISATION MEASURES Rationa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based on non-agricultural commodities traded in recognised associations. The intention behind introducing CTT was to bring parity between the derivative trading in the securities market and the commodity market. The CTT was levied at the rate of 0.01 per cent, which was also the rate of Securities Transaction Tax (STT) levied on sale of futures (a contract, which derives its value from an underlying asset and is settled by physical delivery) in securities. Subsequently, the scope of CTT was expanded vide the Finance Act, 2018 by also including the sale of options on commodity derivatives as taxable commodity transactions. Trading in derivatives including commodity derivatives is regulated by the Securities Contract (Regulation) Act, 1956 (SCRA). Prior to 2015, derivative trading in commodities was regulated by the Forward Markets Commission (FMC) under the Forward Contracts (Regulation) Act, 1952 (FCRA). In 2015, the FCRA was repealed and the FMC was merged with the SEBI. As a result, the recognised associations defined in the FCRA were replaced by the recognised stock exchange defined in the SCRA. Subsequently, the scope of commodity derivatives was expanded vide notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2013 (a) The definition of taxable commodities transaction in clause (7) of section 116 is proposed to be amended to (i) include the transactions of sale of option in goods and sale of commodity derivatives based on prices or indices of prices of commodity derivatives and (ii) substitute recognised stock exchange in place of recognised association . (b) The reference to FCRA in clause (8) of section 116 is proposed to be changed to SCRA. (c) The table in section 117 to be amended to incorporate the taxable commodities transactions referred to in (a) above, specify the rate of CTT and specify the person by whom CTT is payable. (d) The value of taxable commodities transactions defined in section 118 is proposed to be amended to incorporate the taxable commodities transaction referred to in para (a) (i) above. This amendment will take effect from 1st April, 2020. [Clause 147] G. IMPROVING EFFECTIVENESS OF TAX ADMINISTRATION Modification of e-assessment scheme. Section 143 of the Act provides the manner for processing and assessment of return of income (ITR) where a return has been made under section 139, or in response to a notice unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... untability to the assessment process under the Act a new e-assessment scheme has already been introduced. With the advent of the e-assessment scheme, most of the functions/ processes under the Act, including of filing of return, processing of returns, issuance of refunds or demand notices and assessment, which used to require person-to-person contact between the taxpayer and the Income-tax Department, are now in the electronic mode. This is a result of efforts by the Department to harness the power of technology in reforming the system. All these processes are now not only faceless but also very taxpayer-friendly. Now a taxpayer can manage to comply with most of his obligations under the Act without any requirement for physical attendance in the offices of the Department. The filing of appeals before Commissioner (Appeals) has already been enabled in an electronic mode. However, the first appeal process under the Commissioner (Appeals), which is one of the major functions/ processes that is not yet in full electronic mode. A taxpayer can file appeal through his registered account on the e-filing portal. However, the process that follows after filing of appeal is neither electron ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, no income-tax authority below the rank of Joint Director or Joint Commissioner, shall conduct any survey under the said section without prior approval of the Joint Director or the Joint Commissioner, as the case may be; and (B) in any other case, no income-tax authority below the rank of Commissioner or Director, shall conduct any survey under the said section without prior approval of the Commissioner or the Director, as the case may be. This amendment will take effect from 1st April, 2020. [Clause 65] Clarity on stay by the Income Tax Appellate Tribunal (ITAT). The existing provisions of the first proviso to sub-section (2A) of section 254 of the Act, inter-alia , provides that the ITAT may, after considering the merits of the application made by the assessee pass an order of stay for a maximum period of 180 days in any proceedings against the order of the Commissioner of Income-tax (Appeal). Second proviso to the said sub-section prescribes that where the appeal is not so disposed of, the ITAT on being satisfied that the delay is not attributable to the assessee, extend the stay for a further period subject to the restriction that the aggregate of the peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... launched on the lines of E-assessment Scheme-2019. Therefore, it is proposed to insert a new sub-section (2A) in the said section so as to provide that the Central Government may notify an e-scheme for the purposes of imposing penalty so as to impart greater efficiency, transparency and accountability by,- (a) eliminating the interface between the Assessing Officer and the assessee in the course of proceedings to the extent technologically feasible; (b) optimising utilisation of the resources through economies of scale and functional specialisation; (c) introducing a mechanism for imposing of penalty with dynamic jurisdiction in which penalty shall be imposed by one or more income-tax authorities. It is also proposed to empower the Central Government, for the purpose of giving effect to the scheme made under the proposed sub-section, for issuing notification in the Official Gazette, to direct that any of the provisions of this Act relating to jurisdiction and procedure of imposing penalty shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification. Such directions are to be issued on or before 31st March, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot suddenly faced with the compliance requirement of a resident, merely because he spends more than specified number of days in India during a particular year. The conditions specified in the present law in respect of this carve out have been the subject matter of disputes, amendments and further disputes. Further, due to reduction in number of days, as proposed, for visiting Indian citizen or person of Indian origin, there would be need for relaxation in the conditions. The issue of stateless persons has been bothering the tax world for quite some time. It is entirely possible for an individual to arrange his affairs in such a fashion that he is not liable to tax in any country or jurisdiction during a year. This arrangement is typically employed by high net worth individuals (HNWI) to avoid paying taxes to any country/ jurisdiction on income they earn. Tax laws should not encourage a situation where a person is not liable to tax in any country. The current rules governing tax residence make it possible for HNWIs and other individuals, who may be Indian citizen to not to be liable for tax anywhere in the world. Such a circumstance is certainly not desirable; particularly in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 194C to provide that in a contract manufacturing, the raw material provided by the assessee or its associate shall fall within the purview of the work under section 194C. Associate is proposed to be defined to mean a person who is placed similarly in relation to the customer as is the person placed in relation to the assessee under the provisions contained in clause (b) of sub-section (2) of section 40A of the Act. This amendment will take effect from 1st April, 2020. [Clause 76] Penalty for fake invoice. In the recent past after the launch of Goods Services Tax (GST), several cases of fraudulent input tax credit (ITC) claim have been caught by the GST authorities. In these cases, fake invoices are obtained by suppliers registered under GST to fraudulently claim ITC and reduce their GST liability. These invoices are found to be issued by racketeers who do not actually carry on any business or profession. They only issue invoices without actually supplying any goods or services. The GST shown to have been charged on such invoices is neither paid nor is intended to be paid. Such fraudulent arrangements deserve to be dealt with harsher provisions under the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ains provision similar to section 90 of the Act so as to empower the Central Government to adopt and implement an agreement between a specified association in India and any specified association in specified territory outside India for granting relief, avoidance of double taxation, exchange of information and recovery of income-tax. India has signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (commonly referred to as MLI) along with representatives of many countries, which has since been ratified. India has since deposited the Instrument of Ratification to OECD, Paris along with its Final Position in terms of Covered Tax Agreements (CTAs), Reservations, Options and Notifications under the MLI, as a result of which MLI has entered into force for India on 1st October, 2019 and its provisions will be applicable on India s DTAAs from FY 2020-21 onwards. The MLI is an outcome of the G20-OECD project to tackle Base Erosion and Profit Shifting (the BEPS Project), i.e. tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations where there is little ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sence (SEP) proposal, Extending source rule, Aligning exemption from taxability of Foreign Portfolio Investors (FPIs), on account of indirect transfer of assets, with amended scheme of SEBI, and rationalising the definition of royalty. Section 9 of the Act contains provisions in respect of income which are deemed to accrue or arise in India. Sub-section (1) thereof creates a legal fiction that certain incomes shall be deemed to accrue or arise in India. Clause (i) of sub-section (1) deems the following income to accrue or arise in India: all income accruing or arising, whether directly or indirectly, through or from any business connection in India, or through or from any property in India, or through or from any asset or source of income in India, or through the transfer of a capital asset situate in India. Finance Act, 2018, inter alia , inserted Explanation 2A to said clause so as to clarify that the significant economic presence (SEP) of a non-resident in India shall constitute business connection in India and SEP for this purpose, shall mean: (a) transaction in respect of any goods, services or property carried out by a non-resident in India including pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will take effect from 1st April, 2022 and will, accordingly, apply in relation to the assessment year 2022-23 and subsequent assessment years. [Clause 5] Further, the Finance Act, 2012, inter alia , had inserted Explanation 5 to said clause to clarify that an asset or capital asset being any share or interest in a company or entity registered or incorporated outside India shall be deemed to be and shall always be deemed to have been situated in India if the share or interest derives, directly or indirectly, its value substantially from the assets located in India. Second proviso to said Explanation, inserted through the Finance Act, 2017, provides that the Explanation shall not apply to an asset or capital asset, which is held by a non-resident by way of investment, directly or indirectly, in Category-I or Category-II foreign portfolio investor under the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014 [SEBI (FPI) Regulations, 2014]. Vide Gazette Notification No. SEBI/LAD-NRO/GN/2019/36, SEBI has notified Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019 [SEBI (FPI) Regulations, 2019] and repeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide for the manner in which and the procedure by which the income shall be arrived at in the case of,- (i) operations carried out in India by a non-resident; and (ii) transaction or activities of a non-resident. The amendment at clause (i) will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-22 and subsequent assessment years. The amendment at clause (ii) will take effect from 1st April, 2022 and will, accordingly, apply in relation to the assessment year 2022-23 and subsequent assessment years. [Clause 103] Removing dividend distribution tax (DDT) and moving to classical system of taxing dividend in the hands of shareholders/unit holders. Section 115-O provides that, in addition to the income-tax chargeable in respect of the total income of a domestic company, any amount declared, distributed or paid by way of dividends shall be charged to additional income-tax at the rate of 15 per cent. The tax so paid by the company (called DDT) is treated as the final payment of tax in respect of the amount declared, distributed or paid by way of dividend. Such dividend referred to in section 115-O is exempt in the ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way of dividend, received on or after 1st April, 2020. (iii) amend section 115R to provide that the income distributed on or before 31st March, 2020 shall only be covered under the provision of this section. (iv) amend clause (35) of section 10 to provide that the provision of this clause shall not apply to any income, in respect of units, received on or after 1st April, 2020. (v) amend clause (23FC) of section 10 so that all dividends received or receivable by business trust from a special purpose vehicle is exempt income under this clause. (vi) amend clause (23FD) of section 10 to exclude dividend income received by a unit holder from business trust from the exemption so that the dividend income is taxable in the hand of unit holder of the business trust. (vii) amend sub-section (3) of section 115UA to delete reference to sub-clause (a) so that distributed income of the nature as referred to in clause (23FC) or clause (23FCA) of section 10 shall be deemed to be income of the unit holder and shall be charged to tax as income of the previous year. Thus dividend income distributed by a special purpose vehicle to business trust would be taxed in the hands of unit hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for threshold limit of ₹ 5,000/- so that income below this amount does not suffer tax deduction. It is also proposed to defined Administrator , specified company , as already defined in clause (35) of section 10. It is also proposed to define specified undertaking as in clause (i) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002. It is also proposed to provide that where any income is credited to any account like suspense account, in the books of account of the person liable to pay such income, the liability for tax deduction under this section would arise at that time. (xvi) amend section 195 to delete exemption provided to dividend referred to in section 115-O. (xvii) amend section 196A to revive its applicability on TDS on income in respect of units of a Mutual Fund. It is also proposed to substitute of the Unit Trust of India with from the specified company defined in Explanation to clause (35) of section 10 and in cash or by the issue of a cheque or draft or by any other mode with by any mode . (xviii) amend section 196C to remove exclusion provided to dividend under section 115-O. It is also proposed to substitute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 of the Act provides for grant of exemption in respect of income derived from property held under trust for charitable or religious purposes to the extent to which such income is applied or accumulated during the previous year for such purposes in accordance with the provisions contained in sections 11, 12, 12A, 12AA and 13 of the Act. Sub-section (7) of section 11 of the Act, inserted by the Finance (No. 2) Act, 2014 with effect from 1st April, 2015, provides that where a trust or an institution has obtained registration under section 12AA [as it stood immediately before its proposed amendment] or under section 12A [as it stood immediately before its amendment by the Finance (No 2) Act, 1996] and said registration is in force for any previous year, then, exemption under section 10 [except under clauses (1) and (23C)] shall not be allowed. This sub-section was inserted on the basis that the provisions contained in sections 11, 12, 12A, 12AA and 13 of the Act constitute a complete code and that once any trust or institution has voluntarily opted for it by obtaining registration required for exemption of income, it should comply with the conditions of such exemption and in cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od, say for a period not exceeding five years at one time, which would act as check to ensure that the conditions of approval or registration or notification are adhered to for want of continuance of exemption. This would in fact also be a reason for having a non-adversarial regime and not conducting roving inquiry in the affairs of the exempt entities on day to day basis, in general, as in any case they would be revisiting the concerned authorities for new registration before expiry of the period of exemption. This new process needs to be provided for both existing and new exempt entities. Filing of statement of donation by donee to cross-check claim of donation by donor It may further be mentioned that certain provisions of the Act provide that an exempt entity may accept donations or certain sum for utilisation towards their objects or activities in respect of which the payer, being the donor, gets deduction in computation of his income. At present, there is no reporting obligation by the exempt entity receiving donation/ any sum in respect of such donation/ sum. With the advancement in technology, it is now feasible to standardise the process through which one-to-one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2AA, for approval under section 80G shall be provisionally approved or registered for three years on the basis of application without detailed enquiry even in the cases where activities of the entity are yet to begin and then it has to apply again for approval or registration which, if granted, shall be valid from the date of such provisional registration. The application of registration subsequent to provisional registration should be at least six months prior to expiry of provisional registration or within six months of start of activities, whichever is earlier. (vii) the application pending for approval, registration, as the case may be, shall be treated as application in accordance with the new provisions, wherever they are being provided for. (viii) deduction under section 80G/ 80GGA to a donor shall be allowed only if a statement is furnished by the donee who shall be required to furnish a statement in respect of donations received and in the event of failure to do so, fee and penalty shall be levied. (ix) similar to section 80G of the Act, deduction of cash donation under section 80GGA shall be restricted to ₹ 2,000/- only. These amendments will take effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 44AB, section 44DA, section 50B, section 80-IA, section 80-IB, section 80JJAA, section 92F, section 115JB, section 115JC and section 115VW of the Act are proposed to be amended accordingly. Further, the due date for filing return of income under sub-section (1) of section 139 is proposed to be amended by:- (A) providing 31st October of the assessment year (as against 30th September) as the due date for an assessee referred to in clause (a) of Explanation 2 of sub-section (1) of Section 139 of the Act; (B) removing the distinction between a working and a non-working partner of a firm with respect to the due date as mentioned in sub-clause (iii) of clause (a) of Explanation 2 of sub-section (1) of Section 139 of the Act. These amendments will take effect from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-21 and subsequent assessment years. [Clauses 7,8,10,14,15,16,19,20,23,24,26,35,37,39,45,56,57,63 66] The amendment relating to extending threshold for getting books of accounts audited will have consequential effect on TDS/TCS provisions contained in sections 194A, 194C, 194H, 194I, 194J and 206C as these provisions fasten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill take effect from 1st June, 2020. [Clauses 90] Rationalisation of the provisions of section 49 and clause (42A) of section 2 of the Act in respect of segregated portfolios. Section 49 of the Act provides for cost of acquisition for the capital asset which became the property of the assessee under certain situations. Further, clause (42A) of section 2 of the Act provides the definition of the term short-term capital asset . It also provides for determination of period of holding of the capital asset held by the assessee. SEBI has, vide circular SEBI/HO/IMD/DF2/CIR/P/2018/160 dated December 28, 2018, permitted creation of segregated portfolio of debt and money market instruments by Mutual Fund schemes. As per the SEBI circular, all the existing unit holders in the affected scheme as on the day of the credit event shall be allotted equal number of units in the segregated portfolio as held in the main portfolio. On segregation, the unit holders come to hold same number of units in two schemes the main scheme and segregated scheme. In view of the above, it is proposed to amend sub-section (42A) of section 2 of the Act to provide that in the case of a capital asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is no such designated partner. Therefore, it is proposed to amend clause (c) and (cd) of section 140 of the Act so as to enable any other person, as may be prescribed by the Board to verify the return of income in the cases of a company and a limited liability partnership. Further, section 288 of the Act provides for the persons entitled to appear before any Income-tax Authority or the Appellate Tribunal, on behalf of an assessee, as its authorised representative , in connection with any proceedings under that Act. While the IBC empowers the Insolvency Professional or the Administrator to exercise the powers of the Board of Directors or corporate debtor, it has been reported that lack of explicit reference in section 288 of the Act for an Insolvency Professional to act as an authorised representative of the corporate debtor has been raising certain practical difficulties. Therefore, it is proposed to amend sub-section (2) of section 288 to enable any other person, as may be prescribed by the Board, to appear as an authorised representative. These amendments will take effect from 1st April, 2020. [Clauses 67 102] CUSTOMS Note : (a) Basic Cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties. [107 and 110] 5. Section 111 is being amended to insert a new clause (q), to prescribe that goods imported on claim of preferential tariff treatment, and in relation to which any provision of Chapter VAA or of any rule made under this Act have been contravened shall be liable to confiscation. [111] 6. Section 156 is being amended to insert a new clause (i) in sub-section (2) to empower the Central Government to make rules for the purpose of prescribing the manner, procedures, conditions, restriction and other issue to carry out the purposes of newly inserted Chapter VAA. [112] 7. Section 157 (2) is being amended to empower the Central Government to make regulations for the purpose of prescribing the manner, procedures, conditions, restriction and other issues to carry out the purposes of newly inserted section 51B. [113] ll. AMENDMENTS IN THE CUSTOMS TARIFF ACT 1975 S. No. Amendment Clause of the Finance Bill, 2020 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kitchen-ware, clay articles and other household articles 10% 20% 7. 7013 Glassware of a kind used for table, kitchen, toilet, office, indoor decoration or Similar purposes (other than that of heading 7010 or 7018) 10% 20% 8. 7323 Table kitchen or other household articles and parts thereof, of iron or steel, iron or steel wool; pot scourers and scouring or polishing pads, gloves and the like, of iron or steel, including pressure cookers pans utensils, misc articles such as iron steel wool, polishing pads, gloves etc. 10% 20% 9. 7418 10 Table, kitchen or other household articles and parts thereof, of copper; pot scourers and scouring or polishing pads, gloves and the like, of copper. 10% 20% 10. 7615 10 Table, kitchen or other household articles and parts thereof, of aluminum; pot scourer and scouring or polishing pads, gloves and the like, of aluminum. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 8510 30 00 Hair-removing appliances 10% 20% 26. 8516 10 00 Water heaters and immersion heaters 10% 20% 27. 8516 21 00 Storage heating radiators 10% 20% 28. 8516 29 00 Other electrical space heating apparatus 10% 20% 29. 8516 31 00 Hair Dryers 10% 20% 30. 8516 32 00 Other hair dressing apparatus 10% 20% 31. 8516 33 00 Hand Drying apparatus 10% 20% 32. 8516 40 00 Electric smoothing irons 10% 20% 33. 8516 60 00 Other ovens, cookers, cooking plates, boiling rings, grillers and roasters 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8418 30 10 Commercial freezer of chest type, not exceeding 800 litre capacity 7.5% 15% 50. 8418 30 90 Other chest type freezers 10% 15% 51. 8418 40 10 Electrical freezers of upright type, not exceeding 800 litre capacity 7.5% 15% 52. 8418 40 90 Other freezers of upright type, not exceeding 800 litre capacity 7.5% 15% 53. 8418 50 00 Refrigerating or freezing display counters, cabinets, Show-cases and the like 7.5% 15% 54. 8418 61 00 Heat pumps other than air conditioning machines 7.5% 15% 55. 8418 69 10 Ice making machinery 7.5% 15% 56. 8418 69 20 Water cooler 10% 15% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d light source, and parts thereof (except solar lantern and solar lamps). 20% 25% Toys 70. 9503 Tricycles, scooters, pedal-cars and similar wheeled-toys; dolls' carriages; dolls; other toys; reduced-Size ( scale ) models and similar recreational models, working or not; puzzles of all kinds 20% 60% Stationary items 71. 8304 00 00 Filing, cabinets. card-index cabinets, paper-trays, paper rests, pen trays, office-stamp stands and similar office or desk equipment of base metal, Other than office furniture of heading 9403 10% 20% 72. 8305 Fittings for loose-leaf binders or files, letter clips, letter corners, paper clips, indexing tags and similar office articles, of base metal; staples in strips (for example, for offices, upholstery, packaging), of base m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Fuels, Chemicals and Plastics 2. 27 Very low Sulphur fuel oil meeting ISO 8217:2017 RMG380 Viscosity in 220-400 CST standards/Marine Fuel 0.5% (FO), under the same conditions as available to IFO 180 CST and IFO 380 CST under entry at S. No. 139 of notification No. 50/2017-Customs dated 30.06.2017. 10% Nil 3. 2713 12 10, 2713 1290 Calcined Petroleum Coke 10% 7.5% 4. 2843 Colloidal precious metals; compounds of precious metals; amalgams of precious metals 7.5% 10% 5. 2916 12 10 Butyl Acrylate 5% 7.5% 6. 3907 99 90 Polyester Liquid Crystal Polymers (LCP) for use in manufacture of connectors 7.5% Nil 7. 3920 10 99 Calendared plastic sheets for use in man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Noble Metal Compounds and Noble Metal Solutions [2843] b) Catalyst with precious metal or precious metal compounds as the active substance [3815 12] 12.5% 7.5% 19. 7112 Spent Catalyst/Ash containing precious metal like gold from which such precious metal is retrieved subject to specified conditions. 12.5% 11.85% Machinery 20. 84 Goods specified in List 10 of Notification No. 50/2017-Customs dated 30.62017, required for use in high voltage power transmission project 5% 7.5% 21. 8432 80 20 Rotary tillers/weeder 2.5% 7.5% 22. 84 or any other Chapter Goods specified in List 14 of Notification No. 50/2017 - Customs dated 30.6.2017, required for construction of road like paver finisher, machines for filling up cracks in roads, mobile bridge inspection units etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10% 34. 7110 Platinum or Palladium used in manufacturing of catalytic converter and their parts 5% Applicable BCD 35. 84 or any other Chapter (A) Parts of catalytic converter tor manufacture of catalytic converters. (B) The following goods for use in the manufacture of catalytic converters and its parts, namely: - (i) Raw substrates (ceramics) (ii) Wash coated substrates (ceramics) (iii) Raw substrates (metal) (iv) Wash coated substrates (metal) (v) Stainless steel wire cloth stripe (vi) Wash coat 5% 7.5% 36. 8702, 8704 Completely Built Units (CBUs) of commercial vehicles (other than electric vehicles) (with effect from 01.04.2020) 30% 40% 37. 8702, 8704 Completely Built Units (CBUs) of commercial electric vehicles (with effect from 01.04.2020) 25% 40% 38. 8703 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18 Bulbs or tubers, other live plants [0601 or 0602] 10. 36 All goods other than meslin or wheat [1001] 11. 38 Meslin [1001] 12. 40 Maize upto an aggregate of five lakh metric tonnes of total imports of such goods in a financial year [1005 90] 13. 47 Sugar beet seeds [1209 10 00) 14. 56 Edible oils [1508, 1512, 1513, 1514, 1515 or 1511 10] 15. 58 Refined vegetable oils of edible grade, in loose or bulk form (other than palm oil) [chapter 15] 16. 59 Vegetable oils of edible grade, in loose or bulk form (other than those specified against S. No. 58 and palm oil), imported for the manufacture of oil commonly known as Vanaspati or for refining. Explanation . -The expression Vegetable oil means- (a) in the case of cottonseed oil, oil having a free fatty acid content of at least 0.2%; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27. 95 Preparations for infant use put up for retail sale [1901 10] 28. 98 preserved potatoes [2004 10 00] 29. 99 Peanut Butter [2008 11 00] 30. 105 Wine, for use as sacramental wine [22] 31. 108 Angostura bitters [2208] 32. 113 Fin fish feed [2301 20, 2309 90 32, 2309 90 39] 33. 115 Dietary soya fibre [2304] 34. 148 Naphtha, when imported by Ratnagiri Gas and Power Private Limited (RGPPL), for use in generation of electricity in the power plants of Ratnagiri Gas and Power Private Limited (RGPPL) at Dabhol, District Ratnagiri, Maharashtra [2710] 35. 149 Naphtha, when imported for generation of electrical energy by a generating company as defined in section 2(28) of the Electricity Act, 2003 (36 of 2003) to supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 51. 278 Subbed polyester base, imported by M/s. Hindustan Photo Films Manufacturing Company Limited, Udhagamandalam for the manufacture of medical or industrial X-ray films and graphic art films [39201 52. 286 Patent leather [4114 20 10] 53. 287 Raw furskins [4301). tanned and dried furskins [4302] 54. 386 Lead bars. rods. profiles and wire [7806] 55. 388 Zinc tubes, pipes and tube or pipe fittings [7907] 56. 389 Tin plates, sheets and strip, of a thickness exceeding 0.2 mm; tin foil (whether or not printed or backed with paper, paperboard, plastics or similar backing materials), of a thickness (excluding any backing) not exceeding 0.2 mm; tin powders and flakes [8007] 57. 398 Parts and components of the goods specified in List 10 required for use in high voltage power transmission project (Any chapter] 58. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B. Customs duty exemptions which have been granted through certain other stand-alone notifications have also been reviewed. The following notifications, which have ceased to be relevant, are being withdrawn: S. No. Notification No. Notification Subject 1. 13/2010-customs dated 19.2.2010 Exemption to import of goods in relation to Commonwealth Games, 2010 2. 73/1999-Customs dated 8.6.1999 Exemption to import by Power Grid Corporation of India for the setting up of Rihand-Sasaram-Bihar shariff HV DC Link Back to Back Station Project. 3. 205/1992-Customs dated 19.5.1992 Exemption to imports under Advance Customs Clearance Permit 4. 105/1999-Customs dated 10.8.1999 Exemption under SAARC Preferential Trade Agreement 5. 56/2006-Customs dated 7.6.2006 Exemption from Special additional duty to specified goods produced in Nepal 6. 22/200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said S. No. 539 deals with export of ground equipment imported for testing the satellite or payload, within a period of six months. b) A separate new condition (No. 107) is being incorporated for S. No. 539A, which deals with Scientific and Technical instruments, apparatus, equipments for launch of vehicle and satellite and payloads. 3. Entry at S.No. 28 of notification No. 50/2017-Customs dated 30.6.2017 is being amended to retain only tariff item 0802 90 00 in it. The other goods hitherto covered in this entry have the tariff rate same as the duty rate prescribed in this entry. Hence, these items do not require inclusion in this entry. 4. Import of Bamboo for use in the manufacture of Agarbatti attracts concessional rate of 10% under Entry at S. No. 55 of notification No. 50/2017-Customs dated 30.6.2017. This concession shall henceforth be subject to actual user condition. 5. S.NO. 57 of notification No. 50/2017-Customs dated 30.6.2017 (prescribing effective rate on certain edible oils) is redundant as these goods are covered in certain other entries with lowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Almonds, Shelled 5. 0802 31 00 Walnuts, in shell 6. 0802 32 00 Walnuts, shelled 7. 1001 11 00, 1001 91 00, 1001 99 20 Wheat and Meslin 8. 1005 90 Maize 9. 1704 10 00 Chewing Gum, whether or not sugar coated 10. 1901 10 Preparations suitable for infant or young children, put up for retail sale. 11. 2009 11 00 Orange Juice, Frozen 12. 2009 12 00 Orange Juice, not frozen, or a Brix value not exceeding 20 13. 2009 19 00 Orange Juice, Other 14. 2515 12 20 Marble and travertine slabs 15. 6802 10 00 Tiles, cubes and similar articles, whether or not rectangular (including square), the largest surface area ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision for investigation in case of circumvention of countervailing duties. A provision is being incorporated in the Countervailing Duty Rules to enable investigation into case of circumvention of countervailing duty for enabling imposition of such duty. Certain other changes are being made for bringing clarity in the Rules. 3. Revocation of Anti-dumping duty on import of Purified Terephthalic Acid originating in or exported from: - i. South Korea and Thailand imposed vide notification No. 28/2019-Customs (ADD) dated 24.7.2019 ii. China. Iran, Indonesia, Malaysia and Taiwan imposed vide notification No. 28/2016-Customs (ADD) dated 5.7.2016 EXCISE Note : (a) Basic Excise Duty means the excise duty set forth in the Fourth Schedule to the Central Excise Act, 1944. (b) NCCD means National Calamity Contingent Duty levied under Finance Act, 2001, as a duty of excise on specified goods at rates specified in seventh schedule to Finance Act, 2001 (c) Clause Nos. in square brackets [] indicate the relevant clause of the Finance Bill, 2020. (d) Amendments carried out through the Finance Bill, 2020 come ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udaku tobacco Kg 10% 25% 9. 2403 19 10 Smoking mixtures for pipes and cigarettes Kg. 45% 60% 10. 2403 19 90 Other smoking tobacco Kg. 10% 25% 11. 2403 91 00 Homogenised or reconstituted tobacco Kg. 10% 25% 12. 2403 99 10 Chewing tobacco Kg. 10% 25% 13. 2403 99 20 Preparations containing chewing tobacco Kg. 10% 25% 14. 2403 99 20 Jarda scented tobacco Kg. 10% 25% 15. 2403 99 40 Snuff Kg. 10% 25% 16. 2403 99 50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being amended to provide for cancellation of registration which has been obtained voluntarily under sub-section (3) of section 25. [119] 5. A proviso to sub-section 1 of section 30 of the CGST Act is being inserted to empower the jurisdictional tax authorities to extend the date for application of revocation of cancellation of registration in deserving cases. [120] 6. Section 31 of the CGST Act is being amended to provide enabling provision to prescribe the manner of issuance of invoices in case of supply of taxable services. [121] 7. Section 51 of the CGST Act is being amended to remove the requirement of issuance of TDS certificate by the deductor: and to omit the corresponding provision of late fees for delay in issuance of TDS certificate. [122] 8. Section 109 of the CGST Act is being amended to bring the provision for Appellate Tribunal under the CGST Act in the Union territory of Jammu and Kashmir and Ladakh. [123] 9. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 26 of the UTGST Act is being amended to make provision for enabling the issuance of removal of difficulties orders for another 2 years. i.e. till five years from the date of commencement of the said Act. [136] IV. AMENDMENTS IN THE Goods and Services Tax (Compensation to States) ACT, 2017: S.No. Amendment Clause of the Finance Bill, 2020 1. Section 14 of the Goods and Service Tax (Compensation to States) Act is being amended to make provision for enabling the issuance of removal of difficulties orders for another 2 years, i.e. till five years from the date of commencement of the said Act. [138] V. Retrospective Amendments of GST rate notifications S.No. Amendment Clause of the Finance Bill, 2020 1. Exemption from Central Tax, Union Territory Tax and Integrated Tax for fishmeal [HS 2301], for the period 01.07.2017 to 30.09.2019, subject to the condition that if GST has been paid, the same would not be eligible for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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