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Eight fintech entities that have received in-principle approval from the Reserve Bank of India (RBI) to operate as account aggregators are confident of going live in the next one or two quarters. These include Walmart-backed PhonePe, Tally, and NSDL e-governance Services. This will enable them to join the Account Aggregator (AA) ecosystem where already six players have gone live. AA is a data sharing protocol between financial institution that is envisaged as a mechanism to reduce the need for individuals to wait in long bank branch queues; use complicated internet banking portals, share their passwords, or seek out physical notarisation to access and share their financial documents securely. The protocol, which is the world’s largest open financial ecosystem, is expected to unleash India’s next wave of financial inclusion and fintech innovation. It also has a consumer consent layer where users can use NBFCAA to control their data that is being used by financial instructions. As many as 1.1 billion bank accounts, including all major public and private bank accounts, have now gone live in India’s AA ecosystem, as per Sahamati, a not-for-profit body that is building the AA ecosystem. With customer consent these AAs will share with financial entities user data across bank accounts, insurance, mutual fund and financial service providers. These companies have worked on their respective platforms to requests for data from financial information providers (FIPs), and FIUs (Financial Information Users). The list also includes firms such as Agya, CRIF Connect, Dashboard, Digio Internet and Unacores.
Cryptocurrency exchange WazirX is looking to allay employee’s concerns amid uncertainty following the freezing of its bank accounts by the Directorate of Enforcement (ED) last Friday. In a Slack communication sent by WazirX human resources department on Monday, the company told employees. That it disagreed with ED’s allegations. The company said it has about 250 employees. Last week, ED said it had conducted search operations against one of the directors of Zanmai Lab Pvt Ltd, the Indian entity operating WazirX, and issued an order to freeze its bank accounts containing ?64.67 crore. “In the light of recent news about WazirX, we wanted to let you know that we have been fully cooperating with the ED and have responded to all their queries fully and transparently. We do not agree with the allegations in the ED press release and are evaluating our further plan of action,” according to the message, which ET has reviewed. Due to the recent regulatory action against Zanmai Labs, Binance will remove the off-chain fund transfer channel between WazirX and itself, effective August 11, a spokesperson for Binance said in a statement on Monday.
The Income Tax Department carried out search and seizure operations on 27.07.2022 on several groups engaged in the healthcare services by running hospitals. A total of 44 premises were covered during the search action in Delhi-NCR. During the course of the search operation, huge incriminating physical and digital evidence has been seized. The analysis of evidences revealed that the one of the groups was maintaining a parallel set of books of account, indicating systematic under-reporting of receipts received from patients in cash. The modus-operandi adopted by this group included removal of invoices or deflation of the invoice amount by marking them as “Discounts/Concessions” etc., at the time of discharge of patients from the hospital. This practice, resulting in evasion of income, is being followed across all the hospitals of the group and is spread over various years. The other healthcare groups covered in the search operation have been found to be engaged in obtaining either bogus or inflated invoices for pharmaceutical drugs and/or medical devices such as stents, leading not only to suppression of actual profits, but also overcharging from the patients. The money trail found during the investigations has further corroborated the fact that the groups have been receiving back cash in lieu of payments made through banking channels for these bogus/inflated invoices.
CBDT notifies new conditions for tax exemption given to Covid aid. The Central Board of Direct Taxes (CBDT) has introduced new conditions on 5th August, 2022 for granting tax exemption U/S 56(2) to the Covid-related aid received by the family of a person who died due to Covid. The conditions are as follows:
1. The death of the individual should be within six months from the date of testing positive or from the date of being clinically determined as a COVID-19 case, for which any sum of money has been received by the member of the family.
2. The family member of the individual shall keep a record of the following documents, -
(a) the COVID-19 positive report of the individual, or medical report if clinically determined to be COVID-19 positive through investigations in a hospital or an in- patient facility by a treating physician;
(b) a medical report or death certificate issued by a medical practitioner or a Government civil registration office, in which it is stated that death of the person is related to corona virus disease (COVID-19).
3. The details of the amount received in any financial year shall be furnished in Form A to the Assessing Officer within nine months from the end of such financial year or 31.12.2022 whichever is later.
Whether a PIO is allowed to buy agricultural land in India?
1. Notification No.FEMA 21 /2000-RB dated 3rd May 2000 states that a Non Resident (including a Person of Indian Origin) can buy an immovable property except for agricultural land.
2. A PIO may acquire any immovable property (including agricultural land) in India by way of inheritance from a person resident in India or a person resident outside India.
3. A PIO can transfer any immovable property in India (other than agricultural land) by way of sale to a person resident in India.He may transfer agricultural land in India, by way of gift or sale to a person resident in India, who is a citizen of India.
Elon Musk, in his confidentially filed countersuit in Delaware court, relied on Twitter’s litigation in India to counter the social media giant's claim of breach of their merger agreement by Musk. Musk has claimed that Twitter failed to disclose its litigation with and the investigation by the Indian government. According to Musk, Twitter initiated risky litigation against the Indian government—thereby placing Twitter’s third largest market at risk. Musk has claimed that Twitter’s decision to challenge the Indian government’s decisions is a departure from the ordinary course as it has in the past followed obligations imposed by governments, including going as far as blocking pro-Ukrainian accounts for the Russian government.
The Enforcement Directorate (ED) has searched premises belonging to a director of Zanmai Lab - the company that runs popular cryptocurrency exchange WazirX - in Hyderabad, and ordered a freeze on its bank balance of Rs 64.67 crore, officials said today. This comes just days after Minister of State for Finance Pankaj Chaudhary told Parliament that the ED is investigating two cases related to WazirX, for alleged violation of the Foreign Exchange Management Act. The raids yesterday were conducted on Sameer Mhatre, a director of the company. "He has complete remote access to the database of WazirX, but he is not providing the details of the transactions." It's suspected that some Chinese-backed online financial companies -- or instant-loan apps -- diverted their profits into buying crypto assets, to eventually launder the money abroad. These included fintech firms that were denied loan-business licences, because they had misused personal data and threatened loan takers with abusive calls and extortion, according to ED officials. These companies had tied up with defunct firms to use their licences. After investigation began, they diverted their profits by busying crypto assets and sending the money abroad. Investigators believe Zanmai Labs -- the company that owns WazirX -- has created "a web of agreements" with companies in the US, Cayman Islands, and Singapore. The intention is to "obscure the ownership of the crypto exchange".
ON GST COUNCIL: SC reiterated that GST Council can only recommend to implement the law, and can not compel the states to follow the Circular instructions / Notification by CBIC. Conclusion by Hon’ble SC:
In view of the implementation of the GST and as per Article 279A of the Constitution of India, the GST Council is empowered to make recommendations to the States on any matter relating to GST. The GST Council can also issue advisories to the respective States for implementation of the DIN system, which shall be in the larger public interest and which may bring in transparency and accountability in the indirect tax administration. Therefore, we dispose of the present writ petition by directing the Union of India / GST Council to issue advisory / instructions / recommendations to the respective States regarding implementation of the system of electronic (digital) generation of a DIN in the indirect tax administration, which is already being implemented by the States of Karnataka and Kerala.
Keeping in view rise of Covid 19 infections in NCT of Delhi, and to reduce footfall in the court premises, vide Order dated 03.08.2022; Hon’ble Chief Justice of Delhi High Court request that the hybrid mode of hearing shall continue in this court till further orders.
Very Important Gst circular No 178 dated 03.08.2022, issued by Ministry of Finance regarding GST applicability on various issues. As per said circular:
1. No GST applicable on Liquidated damages
2. No GST applicable on penalties imposed for violation of law. Penalty imposed for violation of laws such as traffic violations, or for violation of pollution norms or other laws are also not consideration for any supply received and are not taxable, which are also not taxable.
3. No GST applicable on forfeiture of salary or payment of bond amount by employee in case of leaving the company
4. No GST applicable on cheque dishonoured fine/penalty.
5. No GST applicable on fixed power charges. Both the components of the price, the minimum fixed charges/capacity charges and the variable/energy charges are charged for sale of electricity and are thus not taxable as electricity is exempt from GST.
6. GST on surcharge/ Late fee for making payment of electricity bill/Water bill/ Telephone bill etc will be charged as applicable on main bill.
7. The facilitation service of allowing cancellation against payment of cancellation charges is also a natural part of this bundle. It is invariably supplied by all suppliers of passenger transportation service as naturally bundled and in conjunction with the principal supply of transportation in the ordinary course of business. Therefore, facilitation supply of allowing cancellation of an intended supply against payment of cancellation fee or retention or forfeiture of a part or whole of the consideration or security deposit in such cases should be assessed as the principal supply. Accordingly, the amount forfeited in the case of non-refundable ticket for air travel or security deposit or earnest money forfeited in case of the customer failing to avail the travel, tour operator or hotel accommodation service or such other intended supplies should be assessed at the same rate as applicable to the service contract, say air transport or tour operator service, or other such services.
Clarifying on misconception over the levy of GST on some popular items in the Rajya Sabha, The finance minister said no tax has been levied either on cash withdrawals from bank accounts, issuance of new cheque books or on crematorium or hospital beds and ICUs. A GST has been levied on the purchase of printed cheque books by banks from printers, she said adding there is no tax on cheque books used by ordinary bank customers. Similarly, a GST has been levied only on the construction of new crematoriums and the equipment used in it. Funeral, cremations or burials are not taxed, she said.
Rs 1,000 crore black money trail detected in tax raid on leading Gujarat business group:
1. The Income Tax department has raided 58 premises spread across Kheda, Ahmedabad, Mumbai, Hyderabad and Kolkata belonging to a Gujarat-based prominent business conglomerate engaged in diversified fields of textiles, chemicals, packaging, real estate and education.
2. The group has been engaged in large-scale tax evasion by adopting various methods, including, by way of unaccounted cash sales outside the books of account, booking of bogus purchases and on-money receipts from real estate transactions, as per the statement released by CBDT.
3. It was also found that the group has been involved in profiteering through manipulation of share prices of its listed companies through operators. Evidences seized also reveal that the group has been siphoning off funds through fictitious entities for personal use of promoters. Further, analysis of evidence suggests that the group is also involved in manipulation of books of account of its public limited companies.
4. The search action has resulted in unearthing unaccounted transactions exceeding Rs 1000 crore. So far, unaccounted cash of Rs 24 crore and unexplained jewellery, bullion, etc valued at Rs 20 crore have been seized during the course of search.
Department of Consumer affairs vide its letter dated 01.08.2022 clarified on the Impact of GST on unsold stock of Pre-Packaged Commodities under Legal Metrology (Packaged Commodities) Rules 2022
1. Permitted to declare revised MRP on unsold stock upto 31.01.2023.
2. Difference between MRP and revised MRP should be in excess to increase in Tax.
3. MRP and revised MRP both slould be displayed on the PDP.
4. Change in MRP shall be advertised
Government has taken the following steps for increasing exports through e-Commerce:
Central Board of Indirect Taxes & Customs (CBIC) has digitized import and export clearances of courier parcels through the launch of Express Cargo Clearance System (ECCS) at all major International Courier Terminals (ICTs). The Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 enables the electronic processing and clearances of courier imports and exports.
With the recent issue of the Notification No. 57/2022-Customs (NT) and Circular 09/2022 both dated 30th June 2022, e-commerce exports of jewellery have been further facilitated in compliance to the budget announcement of 2022 for providing a simplified regulatory framework for e-commerce exports of Jewellery.
Exports by Post Regulations, 2018 and Circular 14/2018-Customs both dated 04.06.2018 were issued in order to facilitate exports and specifically give a fillip to the global outreach of Indian exports via e-commerce (more so to the small & medium enterprises) through Foreign Post Offices.
SEIS benefits can't be denied to exporters merely for not having IEC registration at time of export of services: HC: Smarte Solutions (P.) Ltd. v. Union of India -  141 taxmann.com 60 (Bombay)
The petitioner exported the services but it did not have a valid IEC number. However while applying for the reward/benefit under the scheme, it had obtained an IEC number and applied accordingly. The benefit was denied to the petitioner on the ground that the eligibility criteria of Clause 3.08(f) of the FTP has imposed additional restriction of having IEC number at the time of rendering services. The petitioner filed writ petition against the same. The Honorable High Court observed that the proviso to section 7 of the Foreign Trade (Development and Regulation) Act, 1992 does not lay down that the IEC number is essential at the time of rending services. The requirement of IEC number would be only for taking benefits under the scheme. Therefore, it would be abundant clear that the eligibility criteria of Clause 3.08(f) of the FTP has imposed additional restriction of having IEC number at the time of rendering services which was not intent or purport of the statute. Therefore, the said condition was against the principal legislation and therefore, it can’t be termed as of mandatory nature for availing benefits under the scheme. Thus, the petition was allowed and the Court directed to consider the petitioner's application without insisting for an active IEC number at the time of rendering services
Over 40,000 goods and services tax (GST) returns for 2018-19 under scrutiny: To curb fraudulent availment of input tax credit (ITC) and tax evasion, the Central Board of Indirect Taxes (CBIC) will soon identify about 40,000 goods and services tax (GST) returns for 2018-19, based on the risk parameters, for scrutiny. This would be the second such batch of GST returns to be subjected to scrutiny after the CBIC identified 35,000 GSTINs (assigned to business entities) for 2017-18 earlier this year to see consistency within the returns filed by businesses concerning input supplies, output supplies, input tax credits and tax payments.
“Based on data analytics, we are in the process of identifying cases which need to be scrutinised for 2018-19. We’ll be circulating that list to fill formations soon,” an official told FE. During the scrutiny exercise, the interface with the taxpayer are being minimal and data is made available through various sources like the Directorate General of Analytics and Risk Management, Advanced Analytics in Indirect Taxation, GST Network, E-Way Bill Portal, among others, are being relied upon for this purpose. Income tax payments by these businesses are tallied at the back-end also to see if there is any discrepancy or not. In case any discrepancies are found, the CBIC would quantify the amount of tax, interest and any other amount payable in this regard. The central tax authorities have booked thousands of cases involving fake ITC of over Rs 50,000 crore in the past one-and-half year. While misuse of the beneficial provision of ITC under GST regime was the most common modus of evasion under the GST law, the scale of this was worrisome. As GST slab rejig will take more time due to inflationary concerns, increased scrutiny along with the recent measures to reduce exemptions and correct inversions may help narrow the gap between the present weighted average GST rate of 11.6% and the intended revenue neutral rate of 15.5%, addressing partly the revenue shortfall concerns of the states. Thanks to scrutiny and higher compliance, the average monthly gross GST collection for the first quarter of FY23 has been Rs 1.51 trillion against the average monthly collection of Rs 1.1 trillion in the first quarter of the last financial year, showing an increase of 37%.
Supreme Court passed final order in a PIL with directions to GST Council to issue advisories to all the states for implementation of Document Identification No (DIN) on the all notices sent by State GST Officers, court also directed all the states to implement earliest possible.
CBIC vide Notification no 17/2022 dated 01.08.2022 made e invoicing applicable for dealers above turnover Rs.10 crores applicable from 01st October 2022. It is Important to Note that If Aggregate Turnover has exceeded 10 Crs in Any preceding Financial year i.e. 2017-18,18-19,19-20, 20-21 or 21-22, then E-Invoicing would be applicable from 1st Oct 2022.
GST Revenue : July 2022 Rs.1,48,995 crore gross GST revenue collected in the month of July 2022. GST Revenue collection for July second highest ever & 28% higher than the revenues in the same month last year.
PM Modi launched India's first international bullion exchange at the Gujarat International Finance Tec-City (GIFT City) near Gandhinagar. This exchange will facilitate efficient price discovery with the assurance of responsible sourcing and quality, apart from giving impetus to the financialization of gold in India.
India's foreign exchange reserves declined USD 1.152 billion to USD 571.56 billion for the week ended July 22. The reserves have been declining amid continuing volatility in the rupee which has also significantly depreciated against the US dollar.
CBDT vide Notification no 5 dated 29.7.2022 reduces days for e verification of ITRs:
1. ITR should be verified within 30 days instead of earlier 120 days
2. Only speed post mode is allowed for manual verification
3. Returns filed till 31.07.22 can be verified within 120 days
4. ITRs filed on or after 01.08.2022 need to be e verified within 30 days
5. Date of e-verification or manual verification is the date of filing the returns in case of returns e verified or manually submitted after 30 days, and late fee and interest will be charged accordingly
5. The date of dispatch of speed post of duly verified ITR V shall be considered for counting 30 days period, from the date of electronic transmission of data.
Modus Operandi of the Chinese Loan App racket:
Mumbai Police on Friday busted a loan app racket in which the Cyber crime branch arrested 14 accused across India.
Modus operandi of the racket unearthed by the Police:
1. A group of Chinese nationals came to India in 2018 and established the network in connivance with Indian nationals, and used the existing businesses as a cover to start illegal loan business. They created instant loan apps for granting loan in just one click without RBI approval. The group allegedly left the country before the pandemic hit in 2020.
2. The accused had allegedly already created and uploaded the loan apps on various app platforms like Play Store before arriving in India. While fake Indian addresses were used while uploading the apps, the email IDs used were traced to China, Hong Kong and Macau. There were more than 200 such fraud online instant loan apps.
3. Indians were hired as supervisors who would then go on to hire more people to make calls for loan recovery, while some were hired to morph photos of borrowers. Advertisements were placed on social media, which stated that loans up to Rs 20,000 would be available in just one click with an interest of only Rs 400 for a week.
4. While applying for instant loans on mobile phone applications, all the personal data of the applicants would go to the company of the accused persons, which they then used for harassing people who failed to repay loans. The accused allegedly morphed obscene images of the victims who failed to repay loans or defaulted on the payment of interest and circulated the same to their friends and family members.
5. The money required to run the scam was routed to India through hawala, and the existing businesses of the Chinese nationals played an important role in it. The accused used at least 10-12 layers for each transaction. The recovered money was rapidly sent from one UPI ID to the other for more than 10 times before converting it to cryptocurrency and then sending it to China by way of cryptocurrency.
The local phone company Vivo told the Delhi High Court it hasn’t laundered money or committed financial integrity and economic stability” of India. The Directorate of Enforcement (ED) had alleged that Vivo India laundered money in a bid to destabilize India’s financial system. The company denied in an affidavit submitted to the high court that it sent money to China to avoid payment of taxes in India. It said remittances have a “legitimate basis and were towards the procurement of raw material and other services required for the mobile manufacturing business of the company”. In its affidavit, seen by ET, the company said it “procures and imports certain components and raw materials from China for manufacturing its products, and duly remits payments for the same to its suppliers”.
TNMM is the most appropriate method for Royalty: ITAT Bangalore ; Toyota Boshoku Automotive India Pvt. Ltd. (IT(TP)A No.362/Bang/2021)
1. Royalty was paid by the assessee to its assosicated enterprise (AE) and Transaction Net Margin Method (TNMM) was adopted as the most appropriate method by the assessee to compute the arms length price.
2. Transfer Pricing Officer (TPO) was of the view that Profit Split Method (PSM) is the most appropriate method, since licensee shall commit to pay royalty as a % of sales only if it knows that it can earn profit. So, TPO’s view was that Profitability has to be split between the licensor and the licensee and PSM is most appropriate for benchmarking royalty transactions.
ITAT Bangalore held as below:
1. The existence of unique and valuable contributions by each party to the controlled transaction is perhaps the clearest indicator that a profit split method may be appropriate.
2. In the present case the Assessee leverages on the use of technology from the AE and does not contribute any unique intangibles to the transaction.
3. The Assessee does not make any unique contribution to the transaction, hence PSM in this case cannot be applied.
Landmark SC judgement upholding the powers of the Enforcement Directorate (ED):
Following are the major observations of the Hon SC:
1. The Hon SC upheld the validity of Section 19 (arrest) of the Prevention of Money Laundering Act (PMLA) Act 2002, and said, The challenge to the constitutional validity of Section 19 of the 2002 Act is also rejected. There are stringent safeguards provided in Section 19.
2. A special court can look into the relevant records presented by the ED when the arrested person is produced before it. This will answer the need for the person’s continued detention in connection with the alleged offence of money laundering.
3. Sec 5, relating to attachment of property is constitutionally valid. Sec 5 provides for a balancing arrangement to secure the interest of the person as also ensures that proceeds of crime remain available to be dealt with in the manner provided under the Act.
4. ECIR cannot be equated with FIR and ECIR is an internal document of ED. The supply of ECIR to accused is not mandatory and only disclosure of reasons during arrest is enough.
5. Upholding Section 24 (putting the burden of proof on the accused), the SC said that it has “reasonable nexus” with the objects of the Act.
6. Section 3 has a wider reach and captures every activity indirectly or directly related to money laundering and is not merely related to the final act of laundering the money, the court said adding that mere possession of the proceeds of crime is money laundering.
7. Sec 45, under which, the Public Prosecutor is given the opportunity to oppose the application for such release and where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that the accused is not likely to commit any offence while on bail, has been upheld as being reasonable and having direct nexus with the purposes and objects of the PMLA.
8. Sec 50, which confers the power to ED to summon any person for the purpose of giving evidence, has been upheld by the SC and held that the Sec 50 procedure is in the nature of an inquiry, not an investigation.
(Vijay Madanlal Choudhary vs Union of India (SLP (Crl) 4634 OF 2014 | 27 July 2022)
Union Finance Minister Nirmala Sitharaman said there is no official estimate of the amount of money deposited by Indian citizens and companies in Swiss banks. The minister said in a written reply to a question in the Lok Sabha on Monday. The minister said the Swiss authorities had conveyed that the Swiss National Bank (SNB) annual banking statistics should not be used for analysing deposits held in Switzerland by residents of India. The Govt has taken various steps like
1. enacting the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, Act
2. 29 Foreign Assets Investigation Units have been set up under the Directors General of Income Tax (Investigation) all across India,
3. Double Taxation Avoidance Agreements/Tax Information Exchange Agreements /Multilateral Convention on Mutual Administrative Assistance in Tax Matters/SAARC Multilateral Agreement with various jurisdictions, which facilitate the exchange of information.,
4. A Multi-Agency Group (MAG), consisting of representatives from various enforcement agencies and organisations, has also been set up by the government for expeditious and coordinated investigation of various categories of foreign asset cases like Panama paper leaks, and Paradise paper leaks, and the recent Pandora paper leaks.
Some cases which could be hit by TDS U/S 194R- TDS on perquisite/benefit:
1. A gift of a car by a producer of a film to the director
2. Pharma company sponsoring trips of doctors abroad
3. Reimbursement of travel for an auditor, if the bills are not in the name of the auditee.
4. Dealer conferences for a new product launch, for the benefit of select dealers and not all the dealers.
5. Social media influencer is given a product and he retains it after marketing the same.
Cases where litigation might take place due to a lack of clarity:
1. Interest free deposit/loan
2. Services rendered by CFO of a company to its subsidiary without any cross charge
3. Extending the credit period on a sale of a product
Gst Changes applicable from 18.7.2022:
1. Exemption to Services by way of storage or warehousing of nuts, spices, copra, sugarcane, jaggery, raw vegetable fibers such as cotton, flax, jute etc indigo, unmanufactured tobacco, betle leaves, tendu leaves, coffee and tea have been withdrawn wef 18.7.2022. Now it’s available only for cereals, pulses, fruits and vegetables.
2. Exemption available to room rent for patient has been modified wef 18.7.2022. Now room rent( excluding ICU/ICCU/NICU) exceeding Rs 5000 per day to a patient is taxable @5% without ITC.
3. Now, exemption on renting of residential dwelling / property is restricted to unregistered person. Exemption on renting of residential dwelling to a Gst registered person has been withdrawn wef 18.7.2022.
4. Where GTA decides to charge, collect and deposit Gst @5% under FCM, GTA should
a) Take gst registration
b) Opt for charging gst @5% under FCM
c) Give declaration on invoices for above two points.
5. Exemption to GTA services for transportation of goods by road upto 750 and 1500 have been withdrawn wef 18.7.2022. Now, all consignments are taxable irrespective of the value of transportation charges.
6. Now, GTA has option to charge gst @5% (without itc) under forward charge wef 18.7.2022. He must opt for the same before 16.8.2022 in Annexure V.
7. Unbranded specified food items to be taxed @5% wef 18.7.2022 if
a) Supplies are pre packed
b) Supplies are not packed in more than 25 kgs or 25 litres and
c) Supplies are required to bear declarations as per the Legal Metrology Act.
8. Now, all hotel services are taxable irrespective of the tariff value. Since exemption available to hotel services for stay with declared tariff below 1000 per day has been withdrawn wef 18.7.2022.
Over 3.4 crore ITRs filed till 26th July, 2022 & about 30 lakh ITRs filed on 26th July, 2022 itself. As on 19th July, around 2 crore ITRs were filed. Total expected ITRs to be filed around 6 crores. Highest number of trending tweets are to extend the Itr date - this time. The due date to file ITR for AY 2022-23 is 31st July, 2022.
Government is not considering extending the last date for filing income tax returns as it expects most returns to come in by the due date of July 31. Revenue Secretary Tarun Bajaj said over 2.3 crore income returns were filed by July 20 for fiscal 2021-22 and the numbers are picking up.
Government said it has raised a tax demand of Rs 14,820 crore after completing assessment in 368 cases under the black money law dealing with undisclosed foreign income.
Nitin Gupta, chairman of the Central Board of Direct Taxes (CBDT), said that the department had reported the highest ever tax collection of ?14.09 lakh crore in the fiscal year ended March 31, due to streamlining of policies and processes that eased compliance for taxpayers.
PSUs' buy from small business rose 11% to Rs 41,699 crore in FY21:
1. Public procurement by public sector undertakings (PSUs) from micro and small enterprises rose nearly 11 % YoY to Rs 41,699 crore in the fiscal year 2020-21, according to Public Sector Enterprises Survey.
2. This has been an increase from Rs 37,680-crore procurement made from small businesses in FY20. However, PSUs collectively have barely managed to meet the government-mandated 25 % minimum annual procurement from small businesses.
3. In FY21, PSUs made 24.9% of their annual procurement from micro and small businesses. Total procurement made by PSUs in FY21 was Rs 1.67 trillion. In FY20, annual procurement from MSE was 28%, tad above the Centre’s 25% threshold.
4. Of the total procurement of Rs 1.67 trillion, about Rs 2,948 crore was done through the Government-e-Marketplace (GeM) portal.
I2U2 has a potential to make India a hub for global supply chains:
1. On July 14, 2022, the Heads of Government of India, Israel, the United Arab Emirates (UAE), and the United States, convened for the first leaders’ meeting of the “I2U2” Group.
2. This unique grouping of countries aims to harness the vibrancy and entrepreneurial spirit to tackle some of the greatest challenges confronting our world, with a particular focus on joint investments and new initiatives in water, energy, transportation, space, health, and food security.
3. To this end, the I2U2 leaders have highlighted the following initiatives:
Food Security: The UAE will invest $2 billion USD to develop a series of integrated food parks across India that will incorporate state-of-the-art climate-smart technologies to reduce food waste and spoilage, conserve fresh water, and employ renewable energy sources. U.S. and Israeli private sectors will be invited to lend their expertise and offer innovative solutions that contribute to the overall sustainability of the project. These investments will help maximize crop yields and, in turn, help tackle food insecurity in South Asia and the Middle East.
Clean Energy: The I2U2 Group will advance a hybrid renewable energy project in Gujarat State consisting of 300 megawatts (MW) of wind and solar capacity complemented by a battery energy storage system. The U.S. Trade and Development Agency funded a feasibility study for the $330 million USD project. UAE-based companies are exploring opportunities to serve as critical knowledge and investment partners. Israel and the United States intend to work with the UAE and India to highlight private sector opportunities. Such projects have the potential to make India a global hub for alternate supply chains in the renewable energy sector.
Note: The signing of the Comprehensive Economic Partnership Agreement (CEPA) between India and the UAE, the ongoing talks of an FTA between India and Israel, coupled with the already existing FTA between the UAE and Israel, can help this grouping fructify the economic partnership.
The Central Government has clarified that there will not be any extension for the income tax return filing for the year 2022-23. “Government not considering extending July 31 deadline for filing income tax returns,” the official twitter handle of the Press Trust of India tweeted today. On Wednesday, the income tax department has revealed that it has received more than 2 crore Income Tax Returns (ITRs) for AY 2022-23. The department officials also said that the Income Tax department website for ITR filing (incometaxindia.gov.in) is under review to ensure efficiency in the filing process.
Morris coin crypto scam. How were the investors cheated?
1. The accused promoters allegedly collected deposits from investors under the guise of an Initial Coin Offer (ICO) for the launch of Morris Coin cryptocurrency. A company seeking to raise money to create a new coin, app, or service can launch an ICO as a way to raise funds. Interested investors can buy into an initial coin offering to receive a new cryptocurrency token issued by the company.
2. Unsuspecting investors were lured to invest in the attractive schemes through WhatsApp messages, where they were offered ?270 every day for 300 days and 15 Morris Coin cryptocurrency worth ?1,500 each, on investing ?15,000 through agents in the crypto wallets provided by the promoters.
3. Working like a Multi-Level Marketing scheme, those who made join others in the scam received lucrative commissions and the network flourished rapidly. The agents were reportedly given 10-30% of the commission for making people invest in Morris Coin.
4. The accused promised investors that the cryptocurrency was to be listed on Franc exchange, a fake crypto exchange based out of Coimbatore, after which, the value of the tokens would increase multifold, however, the coins were never listed.
5. While the accused did not have any office of his own, nor did he share his personal contact with anybody, he managed to collect huge funds from unsuspecting investors and transferred the money to his bank account and that of his firms and subsequently to shell companies.
6. When investors stopped receiving money, the whole network collapsed. Investors were earlier pacified with the promise that the promoters of Morris Coin were planning to issue ATM cards to cope with the high number of customer withdrawals.
7. Basis several FIRs registered by the cheated investors, the ED booked and arrested the accused U/S 19 and attached assets U/S 5(1) of the Prevention of Money Laundering Act (PMLA), 2002.
FAQs on GST Applicability of Prepackaged and labeled Commodity w.e.f. 18-07-2022 has confirmed that :
1. single package of items like pulses, cereals like rice, wheat and flour(atta), curd,lassi etc of more than 25 Kgs shall not attract gst.
2. To mitigate the controversy on gst on prepackaged and labeled food items taxable w.e.f. 18-07-2022 FAQ has been issued by CBIC on 17-07-2022 to clarify the contents of notification dated 13-07-2022 on the above subject.
3. FAQ has clarified that gst shall be attracted only if commodities are pre packaged (i.e. package contains pre determined quantity + packed not in the presence of buyer) + required to bear declarations under legal metrology Act and Rules there under
4. Further it is clarified that In the context of food items (such as pulses, cereals like rice, wheat, flour etc), the supply of specified pre-packaged food articles would fall within the purview of the definition of 'pre-packaged commodity' under the Legal Metrology Act, 2009, and the rules made thereunder, if such pre-packaged and labelled packages contained a quantity upto 25 kilogram [or 25 litre].
5. It has also been clarified that for such commodities (food items- pulses, cereals, flour, etc.), package of commodities containing quantities of more than 25 kg or 25 litre do not require a declaration to be made.
6. It is also clarified that Supply of pre-packed atta meant for retail sale to the ultimate consumer of 25 Kg shall be liable to GST. However, supply of such a 30 Kg pack thereof shall be exempt from levy of GST.
7. Further It is clarified that a single package of these items [cereals, pulses, flour etc.] containing a quantity of more than 25 Kg/25 litre would not fall in the category of pre-packaged and labelled commodity for the purposes of GST and would therefore not attract GST
8. If several packages intended for retail sale to the ultimate consumer, say 10 packages of 10 Kg each, are sold in a larger pack, then GST would apply to such supply. Such packages may be sold by a manufacturer through a distributor. These individual packs of 10 Kg each are meant for eventual sale to retail consumer
9. However, a package of say rice containing 50 Kg (in one individual package) would not be considered a pre-packaged and labelled commodity for the purposes of GST levy.
10. When distributor/manufacturer supplies packages up to 25 kgs to retailers, it will attract GST. However, if for any reason, retailer supplies the item in loose quantity from such package, such supply by retailer is not a supply of packaged commodity for the purpose of GST levy
11. Supply of packaged commodity for consumption by industrial consumer or institutional consumer is excluded from the requirement of declaration and shall therefore not attract gst.
12. Rice miller who sells packages containing 20 kg rice but not making the required declaration under legal metrology Act and the Rules made thereunder(although the said Act and the rules requires him/her to make a declaration), would it still be considered as pre-packaged and labelled and therefore be liable to GST.
Gst E-invoicing is likely to be soon notified for taxpayers with turnover between Rs. 10 Cr and Rs. 20 Cr As testing for the same has been enabled on Sandbox.
The CAIT will launch a nationwide agitation from July 26 starting from Bhopal to demand rationalisation of gst rates causing adverse impact on commerce and business. Many tax exemptions have been withdrawn and rates raised on several items.
Curd, lassi, buttermilk, paneer Gst 5%
Rice wheat rye barley oats muri Gst 5%
Jaggery natural honey Gst 5%
Hospital rooms more than 5000 rent per day Gst 5%
Hotel rooms less than 1000 per day Gst 5%
Solar water heaters Gst rate 5% to 12%
Led lamps and lights Gst rate 12% to 18%
Bank cheques 18%
Summary of Gst on Pre packaged and labelled items:
GST on pre-packaged and labeled items:- Up till 17-07-2022: Edible Items not put up in unit container [package designed to hold pre-determined quantity] or bearing NIL or unregistered brand name against which actionable claim has been foregone by filing affidavit with Jurisdictional Commissioner and printing of declaration of foregoing actionable claim are exempt. Thus edible items put up in units container and bearing registered brand name or unregistered brand name on which actionable claim is enforceable were only taxable @ 5%, except tender coconut and namkeen bhujia, mixture chabena taxable @ 12%
NN 6/2022 and 7/2022 have now w.e.f. 18-07-2022 made edible items taxable @ 5%/ 12% if these items are pre packaged and labeled i.e. items are placed in package, whether sealed or not, carrying pre determined quantity. The items must be placed in a package without the purchaser being present to be called pre packaged. Further package or its label must be required to bear declarations under Legal Metrology Act to bring it under taxation net. In other words if a package is not intended to carry pre- determined quantity or is not required to bear statutory declarations, then gst shall not be imposed.
Changes in GST rates recommended by 47 GST Council Meeting are applicable wef 18 July. Ensure to issue invoices with revised rates.
Effect on GTAs
1. RCM on freight applicable from Re. 1 now, exemption of Rs 750/- abolished wef 18-7-22 and Introduction of Optional Scheme of 5% tax without ITC for transporters w.e.f 18-07-2022.
2. Service tax on goods transport agency was initiated by Finance Act 2004 and exemption up to Rs. 750/- towards consideration for transportation per consignee ; and exemption up to Rs. 1500/- towards consideration for transportation per carriage is applicable since 01-01-2005. This exemption stands withdrawn w.e.f. 18-07-2022. Hence all consignment notes for freight below Rs. 750/- and where freight for single carriage is up to Rs. 1500/- shall also be taxable at par with freight of higher volume.
3. Present scheme of taxation for goods transport agencies provides exemption for service of transportation of goods provided to unregistered persons except specified entities as factory, society, cop society, body corporate, partnership firm, registered casual taxable person. Registered persons are required to pay tax under RCM @ 5% except on carriage of agri produce, ,milk, salt and food grain including flour, pulses and rice, organic manure, newspapers or magazines registered with registrar of newspapers, relief material for victims of natural or manmade disasters, calamities, accidents or mishap.
4. Apart from 5% tax under RCM, goods transport agency was provided an option to pay tax @ 12% under forward charge by availing ITC.
5. However, vide NN 3/2022 dated 13-07-2022, while RCM @ 5% continues in the hands of registered persons liable to pay freight, goods transport agency has been provided dual option under forward charge.
6. One option is that the goods transport agency pays tax @ 5% under forward without availing ITC. 2nd Option is that goods transport agency pays tax @ 12% under forward charge by availing ITC.
7. These options are required to be exercised once in every financial year independently.
8. However option for 2022-23 can be exercised by 16-08-2022 while option for 2023-24 and onwards is required to be exercised on 15th March preceding the beginning of the financial year.
9. Option for 2023-24 shall be exercised till 15-03-2023.
10. If an option is exercised by a goods transport agency it needs to mention a declaration on every tax invoice cum consignment note that option has been exercised on this behalf.
11. Registered persons liable to pay freight in such a case need not pay tax under RCM on freight covered by such invoices bearing declaration.
12. Option to pay tax under forward charge to be exercised every year.
13. Further renting of goods carriage with the operator and where cost of fuel is included in consideration charged from service recipient shall be taxable @ 12%.by virtue of NN 3/2022 dated 13-07-2022.
14. Renting of goods carriage with an operator where cost of fuel is not included in the consideration is taxable @ 18%.
15. However, Services by giving on hire to a goods transport agency , a means of transportation of goods are exempt under entry 22(b) of NN 12/2017.
The government has amended the Special Economic Zones (SEZ) Rules, 2006 to accommodate the work-from-home model of employment, a move expected to change the demand for leasing of space at information technology parks. This is also expected to help companies attract and retain talent with flexible work-from-home and hybrid work options. As per the notification issued by the commerce and industry ministry, a unit operating in the SEZ may permit its employees, including contractual staff, to work from-home or from any place outside the SEZ. This proposal for working from-from-home will cover a maximum of 50% of the total employees, including contractual employees, of the unit. The development commissioner may approve a higher number of employees to work-from-home for any bona fide reason to be recorded in writing. “The guidelines are welcome as there were different rules issued by each development commissioner.
New Form has been issued to defer filing of appeals in the case of identical issues. The Finance Act, 2022 has inserted a new Section 158AB which can be explained as below:
1. The Sec is applicable in a case of an assessee wherein the question of law arising from an order of Commissioner (Appeals) or the ITAT for a particular assessment year is identical to a question of law that is pending before jurisdictional High Court or the Supreme Court in assessee’s own case or in the case of any other assessee.
2. So In order to avoid duplicity of appeal before judicial forums, based on the communication from Principal Commissioner or Commissioner, the assessing officer shall not file an appeal before the High Court or the ITAT.
3. The Assessing Officer (AO) shall instead file an application to the jurisdictional High Court or the ITAT that the appeal may be filed when the decision on such question of law, in the other case, becomes final.
What is Form 8A?
1. To notify form for making the above mentioned application by the AO, the CBDT has made the amendments to the Income-tax Rules 1962 vide Income-tax (22nd Amendment) Rules, 2022.
2. The CBDT has renumbered the existing Rule 16 as Rule 15A and inserted a new Rule 16. The new Rule 16 provides that the application, required to be made before the ITAT/High Court, shall be made in Form No. 8A by the AO.
3. Form 8A seeks the following details from the Assessing Officer:
(a) Appellant’s Personal Information;?(b) Respondent’s Personal Information;?(c) Case Details, such as Assessment Year, total income declared, details of order against which appeal is deferred, etc.;?(d) Questions of Law for which appeal is deferred;?(e) Details of other cases on the basis of which appeal is deferred; and?(f) Due date for filing of application as per section 158AB(2).
Impact of Sri Lankan crisis on India. The intensifying crisis in Sri Lanka can have ripple effects in India too. Following could be the impact:
1. India uses Sri Lanka’s Port of Colombo to engage in global trade with its trade partners and has been given the status of transmission hub. The port handles almost 60% of the shipments of India. Operational disruptions at the port, would force India to reroute its cargo shipments which would further increase the cost of transportation and time lag.
2. India exported more than US$4.5 billion worth of goods to Sri Lanka in 2021. A massive cut in exports to Sri Lanka due to its inability to pay for the goods would make a slight dent on India's forex reserves. As per a statement from Federation of Indian Export Organisations (FIEO), exports and imports have come to a complete standstill.
3. Indian companies have been investing in petroleum retail, real estate, telecommunications, tourism and hotels, banking and financial services, etc in Sri Lanka, and the instability in their economy would dampen the viability of investments.
4. Foreign Direct Investment from India to Sri Lanka amounted to about $1.7 billion from 2005 to 2019, which says there is a lot at stake.
5. If the crisis continues in its current state, it might compel a large number of people to flee Sri Lanka to take refuge in India, which might be very difficult for India to handle economically and socially.
(Inputs from the website of Indian High Commission in Sri Lanka, various media reports)
In our continuous endeavour to serve you better, the Ministry of Corporate Affairs is launching first set of Company Forms on MCA21 V3 portal. These forms will be launched on 31st Aug 2022 at 12:00 AM.
Following forms will be rolled-out in this phase:
DIR3-KYC Web, DIR3-KYC Eform, DPT-3, DPT-4, CHG-1, CHG-4, CHG-6, CHG-8 & CHG-9. To facilitate implementation of these forms in V3 MCA21 portal, stakeholders are advised to note the following points:
(1) Company e-Filings on V2 portal will be disabled from 15th Aug 2022 12:00 AM for the above 9 forms. All stakeholders are advised to ensure that there are no SRNs in pending payment and Resubmission status.
(2) Offline payments for the above 9 forms in V2 using Pay later option would be stopped from 07th Aug 2022 12:00 AM. You are requested to make payments for these forms in V2 through online mode (Credit/Debit Card and Net Banking).
The Delhi High Court on Wednesday permitted Vivo India to operate its bank accounts that were frozen last week on directions of the Enforcement Directorate (ED). The agency is probing the Chinese mobile phone maker on charges of money laundering. Vivo will have to furnish a bank guarantee of ?950 crore within seven working days in order to be able to operate the bank accounts, said the court. The company will also need to maintain a balance of at least Rs 251crore-already lying in its bank accounts- as well as keep ED updated about its expenditure, it said.
The Central board of Direct Tax (CBDT) on Wednesday said it has detected a tax evasion of ?300 crore during search conducted on a Bengaluru based pharma company. While the CBDT did not name the company, source from the Income Tax Department told ET the company was Micro labs, the maker of the Dolo tablets the help relieve pain and fever. A statement issued by the CBDT said tax officials conducted searches on July 6, covering around 36 premises spread across nine states. It said the group allegedly had been debiting in its books of account unallowable expenses on account of distribution of freebies to medical professionals under the head ‘Sales and promotion’ these freebies included travel expenses, perquisites and gifts to doctors and medical professionals. The quantum of such freebies is estimated to be around ?1,000 crore and the amount of tax evaded is over ?300 crore, the department said. During the search, unaccounted cash of ?1.20 crore and unaccounted gold and diamond jewellery worth over ?1.40 crore had been seized, it said. S-ET.
The Directorate of revenue intelligence (DRI) has sent a show-cause notice to Chinese smartphone maker Oppo Mobiles India Pvt Ltd (Oppo India) accusing it of evading customs duty amounting to ?4,389 crore. The notice also proposes penalties on Oppo India, Its employees and the provision of the customs Act, 1962, the agency said in a statement on Wednesday. Official said that the penalty amount will be determined later. Oppo India said it has a “different view” on the allegations in the notice and will be taking appropriate steps, including legal remedies. The DRI action comes amid wider scrutiny of Chinese handset makers operating in India. Earlier, Vivo and Xiaomi were charged with financial irregularities by the Directorate of Enforcement (ED), which investigates money laundering and foreign exchange violations.
Major changes in Exemptions applicable from 18-07-22
(1) Renting of residential dwelling to a registered person is taxable.
(2) Hotels, Inns, Guest house, club or campsite by whatever name called - charging even upto Rs 1000/- per room per day are now taxable at 12%
(3) No exemptions of RCM on GTA where freight is ?1500 or ?750. Now Reverse Charge on GTA services will be applicable from ?1.
(4) Services by RBI, IRDA, SEBI, FSSAI, GSTN and cord blood banks are now taxable.
(5) Services by hospital charging room charges more than Rs 5000/- per day is taxable. But if charges are charged for ICU or CCU or ICCU then no GST is applicable.
(6) Treatment or disposal of common bio-medical waste to clinical establishments are taxable
(7) Now Warehousing Services of Nuts & Vegetables, Spices, Copra, Sugarcane, Jaggery, Raw Vegetables Fibres such as Cotton, flax, jute etc., indigo, unmanufactured tobacco, betel leaves, tendu leaves & coffee withdrawn
(8) Tour Operator Services provided to a foreign tourist for the tour performed in India is proportionately taxed based on the number of days spent in India & Outside India.
(9) Few Exemption withdrawn for Fumigation Services
GIST OF IMPORTANT CHANGES VIDE CBIC NOTIFICATIONS ISSUED ON 13.7.2022
04/2022-CT(RATE). Notification 04/2022-CT (Rate) dated 13.07.2022 (with effect from 18.07.2022) withdraws exemption from various services. Some of important services, now taxable, are as under:
1. All services provided by Department of post will now be taxable irrespective of the status of recipient.
2. Exemption to services of GTA where freight upto 1500/- for full truck load and freight upto 750/- per consignment has been withdrawn. Hence, GST will be payable on GTA services irrespective of freight amount.
Currently, GTA who opt to pay GST @ 12% do not have the option to pay GST @ 5%. They have to pay GST at the rate of 12% on all their consignments under forward charge. GTA w.e.f. July 18, 2022 will be allowed to pay GST either at 5% (without ITC) or 12% (with ITC) on their consignments under forward charge. Further, RCM can be opted only if GTA has not opted to pay under forward charge and the option to continue under RCM @ 5% rate will also continue. GTAs will be able to switch from one option to the other at the beginning of the financial year.
New Annexure III has been inserted in the Services RCM Notification w.r.t. declaration by the GTA, opting to pay tax on services in relation to transport of goods under forward charge mechanism for an entire Financial Year.
3. W.e.f. 18.07.2022, now GST will also be leviable on storage or warehousing of nuts, spices, copra, sugarcane, Jaggery, cotton, flax, jute, indigo, unmanufactured tobacco, betel leaves, tandu leaves, coffee and tea
4. Services of licencing, registration, analysis & testing of food sample by FSSAI to ‘food business operator
5. Services of fumigation in a warehouse of agriculture produce
6. Services by the cord blood banks by way of preservation of stem cells or any other service in relation to such preservation.
7. Services of treatment or disposal of bio-medical waste provided by operator of the common bio-medical waste treatment facility to a clinical establishment.
8. Services of training or coaching in recreational activities relating to arts or culture by other than an individual.
Notification no 5 dtd 13.7.2022– Renting of residential dwelling house to registered person is taxable under gst and tax is payable under RCM in case of unregistered supplier of services.
Notification No. 06 and 07/2022-Central Tax (Rate) dated July 13, 2022 has issued amendments in the Goods Exemption Notification so as to withdraw exemption on certain specified food items, grains etc. which are not branded or right on the brand has been foregone. Now, GST will be applicable on supply of pre-packaged & labelled goods.
Notification No. 08/2022-Central Tax (Rate) dated July 13, 2022 amended NN. 3/2017-CT(R) so as to notify rationalised from 5% to 12% for goods supplied for Petroleum/ Coal bed methane operations.
CBIC vide Notification No. 10/2022 Central Tax (Rate), Notification No. 15/2022-Central Tax and Notification No. 16/2022-Central Tax all dated July 13, 2022 has issued amendments in its Earlier Notifications, so as to simplify the measure and done away with the condition of 90% fly ash content w.r.t. fly ash bricks w.e.f. July 18, 2022 so as to apply same concessional rate on fly ash bricks irrespective of its content.
Notification No. 11/2022-Central Tax (Rate) dated July 13, 2022 has rescinded NN. 45/CT(R) to change the concessional GST rate of 5% (2.5% each CGST and SGST or 5% IGST) on scientific and technical equipments to rate applicable on such scientific and technical equipments w.e.f. July 18, 2022.
Mandatory filing of ITRs in 10 Situations.
1. If your total income exceeds the basic exemption limit of Rs. 2,50,000/-.
2. If you have assets outside India.
3. If you deposit more than Rs .1 crore in a bank account.
4. If you incur Rs. 2 lakh on foreign travel.
5. If your electricity Consumption is Rs. 1 lakh per annum.
6. If Turnover of your business is more than Rs. 60 lakh in a year.
7. If Gross Receipt from Profession is more than Rs. 10 lakh.
8. If TDS is Rs. 25,000 or more
9. If TCS is Rs. 50,000 or more.
10. If deposit in a saving bank account is Rs.50 lakh or more
TDS on benefit or perquisite U/S 194R in respect of out of pocket expenses:
1. Any expenditure which is the liability of a person carrying out business or profession, if met by the other person is in effect benefit/perquisite provided by the second person to the first person in the course of business/profession would be subject to TDS U/S 194R
2. For instance, a consultant is rendering service to a person Mr. A for which he is receiving consultancy fee. In the course of rendering that service, he has to travel to different city from the place where is regularly carrying on business or profession. For this purpose, he pays for boarding and lodging expense incurred exclusively for the purposes of rendering the service to Mr. A. Ordinarily, the expenditure incurred by the consultant is a part of his business expenditure which is deductible from the fee that he receives from Mr. A. Now if this travel expenditure is met by the Mr. A, it is a benefit/ perquisite provided by Mr. A to the consultant.
3. In case the invoice is obtained in the name of Mr. A and accordingly, if paid by the consultant, is reimbursed by Mr. A then in this case, the reimbursement made by Mr. A being the service recipient will not be considered as benefit/perquisite for the purposes of Section 194R of the Act.
Perks provided by employer to an employee not liable to GST : CBIC clarifies. This circular on the ‘taxability of perquisites’ to employees, has been issued by the Central Board of Indirect Taxes and Customs (CBIC) in response to clarifications sought from its field officials, in order to ensure uniform implementation of the law. There was a view in some quarters, that since employer and employee constitute related parties any perquisite provided by the former to the latter should attract GST on the fair market value. This apprehension has been put to rest by the clarification. Earlier, in 2017, a press note issued by the CBIC was on the same lines, but a formal circular gives it more heft. While the term ‘contractual agreement’ has been used in the circular, it could have wide application and cover HR policies in general. To illustrate, free food provided to all employees, which doesn’t form part of an employment contract, but is a general corporate policy, can also be argued to be covered and as such not be subject to GST. Many companies have sought advance rulings on whether a nominal sum recovered from employees, for say transport facilities or canteen facilities, which is passed on to the third-party provider will be subject to GST.
CBDT standardizes Process for Approval/Renewal of Electoral Trust
(CIRCULAR F.NO. 173/62/2022-ITA-1)
1. As per clause 5(1)(a) of the Electoral Trust Scheme, 2013, an application for approval under Section 2(22AAA) of the Act is to be made in duplicate in Form A.
2. In order to avoid procedural delay in processing these applications, the applicants are advised to also file, the duly filled in and signed check-list accompanied with documents required therein, before the Commissioner of Income Tax/Director of Income Tax.
3. The applicant shall also enclose a copy of the said checklist while sending the copy of their application to Member(IT&R), CBDT in terms of clause 5(1)(b) of Electoral Trust Scheme, 2013.
Note: Under clause (22AAA) of Section 2 of the Income-tax Act, 1961 Central Board of Direct Taxes is empowered to approve an ‘Electoral Trust’ for the benefit of provisions of Section 13B of the Income-tax Act, 1961.
The Central Board of Indirect taxes and Customs (CBIC) will soon come out with a detailed standard operating procedure (SOP) for serving summons and notices under the goods and services tax (GST) regime, to prevent harassment of businesses. Officials told ET the new SOP will also allow the board to closely monitor the GST probe, including its progress and the line of including its progress and the line of investigation adopted, which will make official more accountable and the department to draw the line in the absence of a clear code of action for official. “We don’t have any SOP under GST for summons and notice, and these are two troublesome things,” said one official, who did not wish to be identifies. “Once there is an SOP in place, we can question any breach.” The draft is almost final, the official said, adding that there has been detailed discussion with field formations and stakeholders with field formations and stakeholders, including businesses. In the past few months, there has been a surge in the number of tax notices being served by GST officials, summoning CXOs, finance chief and even chief executives to be physically present for a hearing. Businesses also ended up getting repeated summons. The official said the proposed SOP will also ensure there is no overlapping of notices between the central and state jurisdiction. Businesses had complained that sometimes they receive multiple notices on the same issue, making compliance difficult for them, apart from consuming a lot of their time.
Chinese mobile phone maker Vivo India has urged the Enforcement Directorate (ED) to unfreeze its bank accounts so it can continue its business, contending that the debit freeze of all its ten banks accounts has “jeopardized its very existence” in the country. Vivo India sent a representation to ED on July 7, two days after the phone maker and 23 associated companies were raided by the central agency. Before launching nationwide raids on 48 premises belonging to Vivo India and its related entities, Ed reached out to nine Banks directing a debit freeze of all 10 Banks accounts belonging to Vivo India. Yes Bank, Bank of Baroda, HSBC, HDFC Bank, Standard Chartered Bank and DBS Banks operate Vivo India’s accounts in branches across Gurgaon, Mumbai, New Delhi, Noida and Badshapur.
The Directorate of Enforcement (ED) said on Wednesday that various fintech companies and non-banks backed by Chinese funds indulged in predatory lending, violating Reserve Bank of India proceeds of crime worth more then rupee 940 crore. The federal agency said decisions on fixing interest rate/ processing fee/ platform fee etc., were taken by fintech companies and based on instructions from people in China and Hong Kong. The agency recently provisionally attached rupee 86.65 crore lying in various bank accounts and payment gateway accounts pertaining to non-banking financial companies (NBFCs) under the prevention of money Laundering Act (PMLA),2002. The non-banks included M/s kudos Finance and investments Pvt Ltd, M/s Ace money (India) Ltd, M/s Rhino Finance Pvt Ltd and M/S Pioneer Financial and Management Services Pvt Ltd. These are Indian NBFCs and multiple fintech companies associated with them. The agency is conducting a money laundering probe against a number of NBFCs that are in the business of instant personal micro loans. The agency said its probe had revealed that various fintech companies backed by Chinese funds have made agreements with these NBFCs for providing instant personal loans for terms ranging from seven to 30 days. Fintech companies brought the funds to be lent to the public and entered into Memoranda of understanding (MoU) with the defunct NBFCs for their lending Licence.
The Mumbai Zonal Unit of the Directorate General of GST Intelligence [DGGI-MZU] on Saturday, 2 July 2022 arrested Amanpuneet Singh Kohli, Director of M/s. Immense Multiventures Pvt. Ltd. and six other Companies under the provisions of the CGST Act, 2017. As per DGGI-MZU, Shri Amanpuneet Singh Kohli is the keyperson and mastermind behind several other firms, which he has operated through dummy proprietors. Shri Kohli was arrested on charges of having fraudulently availed & utilized Input Tax Credit [ITC] on the basis of invoices received, without any actual receipt or supply of goods or services for these firms. A statement issued by the DGGI-MZU states ‘Based on the extensive documentary evidences gathered during the course of the investigation, it was ascertained that Shri Amanpuneet Singh Kohli was the key mastermind behind the said fraud, and had floated these 14 companies / firms with the sole intention of fraudulently availing ineligible Input Tax Credit. The modus operandi adopted in the case was to obtain bogus invoices from shell companies located in Delhi & Mumbai in the name of the 14 firms operated by him, and avail ineligible Input Tax Credit on the strength of such invoices. Shri Amanpuneet Singh Kohli has allegedly accumulated ineligible ITC to the tune of approximately ?35.11 Crores in his 14 firms.
E-invoicing ‘soon to be mandated’ for units with over ?10 cr and then to ?5 cr turnover from January 1, 2023: CBIC Chairman
ED files PMLA case against Amnesty:
1. The Enforcement Directorate (ED) has filed a chargesheet before a Karnataka court under the Prevention of Money Laundering Act (PMLA) against Amnesty International India Pvt Ltd (AIIPL), Indians for Amnesty International Trust (IAIT) and others in a money laundering case.
2. Amnesty International India Foundation Trust was given permission during 2011-’12 for receiving foreign contributions from the Amnesty International-United Kingdom. However, the permission was cancelled following adverse inputs from the security agencies.
3. The agency alleged that the Indians for Amnesty International Trust and the Amnesty International India Private Limited were then formed in 2012-’13 and 2013-’14 to “escape the FCRA [Foreign Contribution Regulation Act] route”.
4. Upon cancellation of FCRA licence of Amnesty International India Foundation Trust by Government of India, a new method was adopted by Amnesty entities to receive money from abroad as Amnesty International, UK sent Rs 51.72 crore to AIIPL in the guise of Export of Services and Foreign Direct Investment,
5. It was alleged that, for export proceeds and advances received for export of services to Amnesty International UK, there was no documentary proof for the alleged export such as invoices and copies of the agreement between AIIPL and Amnesty International UK and the same was not furnished by AIIPL to the Authorized Dealer (AD) Banks.
6. Amnesty International India Pvt Ltd and others have committed scheduled offence by claiming to be carrying out “civil Society work”, however receiving forex in a profit making company, thereby mis-utilizing the FDI, which to amply proved by absence of any details/documents relating to exports made and layering of remittances received by AIIPL, a company into IAIT, a charitable Trust.
7. On Friday, the ED levied a penalty of ?51.72 crore on Amnesty and ?10 crore on Aakar Patel for alleged contraventions of the Foreign Exchange Management Act, 1999 (FEMA) in the same probe.
Vivo India remitted about 50% of its turnover to China to avoid taxes: ED
1. The Enforcement Directive (ED) announced today that Chinese phone maker Vivo has remitted a whooping 50 % of its turnover from India operations, worth Rs 62,476 crore, to avoid payment of taxes in India.
2. These remittances were made in order to disclose huge losses in Indian incorporated companies to avoid payment of taxes in India.
3. The ED also noted that 22 companies associated with Vivo were transferring a huge amount of funds to Vivo India. Eighteen of these companies were incorporated by a Chinese Director, who falsified identification and forged address at the time of incorporation of one of the companies, Grand Prospect International Communication (GPICPL).
4. The ED also said it has seized funds worth ?465 crore kept in 119 bank accounts by various entities, ?73 lakh cash and 2 kg gold bars after its pan-India raids.
5. The ED also alleged that the employees of Vivo India, including some Chinese nationals, did not cooperate with the search proceedings and tried to abscond, remove and hide digital devices which were retrieved by the search teams.
6. The agency had filed an Enforcement Case Information Report (ECIR), the ED equivalent of a police FIR, on February 3 after studying a Delhi Police FIR against GPICPL.
Gist of Gst seven Circulars issued by Government on 06.07.2022
1. Circular 170: discussed on correct disclosure aspects in respect of reversals in Gstr3B and how to use 2b as base for filing returns
2. Circular 171: This circular is in respect of levy of penalty and recovery for persons involved in fake invoice transactions
3. Circular 172: This circular has provided clarity on following aspects:
a. Non applicability of section 17 for ITC availed as recipient of Deemed exports
b. Interpretation of section 17(5) explanation
c. Reiterating the earlier clarification that perquisites provided in the course of employment to employees is outside the preview of GST
d. Defining in what circumstances ITC in Electronic credit ledger can be availed for payment of Tax and in what cases it cannot be utilised
4. Circular 173: clarification that Inverted refund is allowed for same inputs if we have sold as such at concessional rate because of underlying notification
5. Circular 174: Applicable oly for erroneous refund received for select refund claims and if you want to apply for recredit of the amount debited in ECL at the time of refund application *Manually* through pmt03A until the functionality is online
6. Circular 175: Refund mechanism for electricity exports through *Other category* refunds and subject to decelerations specified in the circular
7. Circular 176: withdrawal of earlier circular in respect of refund of tax paid on Inward supply of goods at outlets in international airports.
The Central Board of Indirect Taxes (CBIC) has clarified that the Goods and Services Tax Network (GSTN) has the power to issue advisories that are suggestive in nature and the same cannot be binding on the officers. The Board was responding to an application filed under the Right to Information Act, 2005 with regard to the advisory issued last month providing an interim solution for the incomplete GSTR-2B in certain cases. On 15th May, the GSTN noticed a few cases where certain records are not reflected in the GSTR-2B statement for the period of April 2022. However, such records are visible in the GSTR-2A of such recipients. “The technical team is working to resolve this issue for the impacted taxpayers and generate fresh GSTR-2B at the earliest. In the interim, affected taxpayers interested in filing GSTR-3B are requested to file the return on a self-assessment basis using GSTR-2A. Inconvenience caused in this regard is deeply regretted,” GSTN said. The RTI asked if the advisory is binding on the proper officer and responding to the same, the Board said that “as there was a technical glitch in the generation of GSTR-2B form for the month of April 2022, the GSTN issued the advisory to the taxpayer for filing GSTR-3B returns using GSTR-2A on a self-assessment basis.
Meta-owned WhatsApp banned over 19 lakh Indian accounts in May on the basis of complaints received from users via its grievances channel and through its own mechanism to prevent and detect violations, as per the latest monthly report published by the messaging platform. The new IT rules which came into effect last year mandate large digital platforms (with over 50 lakh users) to publish compliance reports every month, mentioning the details of complaints received and action taken. An Indian account is identified via the +91 phone number prefix. According to the report released on Friday, 19.10 lakh Indian accounts were banned by WhatsApp between May 1 and May 31, 2022 using the “abuse detection approach, which also includes action taken in furtherance to negative feedback received from users…” In comparison, the messaging platform had banned over 16 lakh accounts of Indian users in the month of April, and 18.05 lakh such accounts in March.
Key amendments made in Foreign Contribution (Regulation) Rules, 2011
1. Rule 6 deals with intimation of receiving foreign funds from relatives. It stated earlier that “any person receiving foreign contribution in excess of one lakh rupees or equivalent thereto in a financial year from any of his relatives shall inform the Central government (details of funds) within 30 days from the receipt of such contribution. The amended rule now allows relatives to send ?10 lakhs without informing the government. If the amount exceeds, the individuals will now have three months to inform the government against 30-days earlier.
2. In rule 9, which deals with application of obtaining ‘registration’ or ‘prior permission’ under the FCRA to receive funds, the amended rules given individuals and organisations 45 days to inform the MHA about bank account (s) that are to be used for utilization of such funds, instead of 30 days earlier.
3. Provision ‘b’ in rule 13, which dealt with declaring foreign funds including details of donors, amount received, and date of receipt etc every quarter on its website, has been now omitted.
ED cannot close the cases on their own, if no offence is made out:
1. Proviso to Section 44(1)(d) of the Prevention of Money Laundering Act A provides that on the conclusion of the investigation, if no offence of money laundering is made out, authorities under Enforcement Directorate (ED) shall submit a closure report before the Special Court.
2. This amendment which provides for closure of the case only after the closure report is submitted before the special court was introduced in 2019.
3. Earlier special directors of ED were empowered to close the cases, if there was no substance to support the case.
4. This has made closure of frovoulous cases filed with the ED more complicated.
The Haryana State, in the wake of promoting electric vehicles, has declared numerous tax benefits to the buyers and manufacturers of EVs. Haryana Cabinet which met under the Chairmanship of Chief Minister, Sh. Manohar Lal on Friday accorded approval to the Haryana Electric Vehicle (EV) Policy 2022. The year 2022 will be declared as “Year of the Electric Vehicles” in Haryana. The policy offers various financial incentives to EV manufacturers by giving incentives on Fixed Capital Investment (FCI), Net SGST, Stamp Duty, Employment Generation, etc.There is100% reimbursement of Stamp duty along with exemption in Electricity Duty for a period of 20 years. The SGST reimbursement shall be 50% of the applicable Net SGST for a period of 10 years. Companies manufacturing electric vehicles, components of electric vehicle, EV battery, charging infrastructure etc. shall be incentivized with capital subsidy.
The Central Consumer Protection Authority (CCPA) has issued guidelines for preventing unfair trade practices and violation of consumer rights with regard to levying of service charge in hotels and restaurants. The guidelines issued by CCPA stipulate that hotels or restaurant shall not add service charge automatically or by default in the food bill. No collection of service charge shall be done by any other name. No hotel or restaurant shall force a consumer to pay service charge and shall clearly inform the consumer that service charge is voluntary, optional and at consumer’s discretion. No restriction on entry or provision of services based on collection of service charge shall be imposed on consumers. Service charge shall not be collected by adding it along with the food bill and levying GST on the total amount.
The Supreme Court reiterated that the declaration of law made by court will have retrospective effect, if not otherwise stated to be so specifically. The bench comprising Justices Surya Kant observed thus while it upheld the order of the Jammu & Kashmir and Ladakh High Court that inter-se seniority for Munsiffs appointed by way of direct recruitment on the recommendation of the State Public Service Commission is to be determined on the basis of their inter-se merit at the time of selection and not roster points.
The AAAR, Maharashtra in Dubai Chamber of Commerce and Industry [Order No. MAH/AAAR/AM-RM/08/2022-23 dated June 23, 2022] has modified the order of the AAR, to the extent that, the activities performed by the Liaison Office (“LO”) acting as link for communication, at the behest of foreign Head Office, cannot be considered as an intermediary. Held that, such activities will come under the ambit of “Supply”, for which LO is liable to pay the Goods and Services Tax (“GST”) and required to take GST Registration to discharge their liability, on the amount received from the Head Office.
A division bench of the Orissa High Court has held that the GST appellate authority cannot dismiss an appeal merely on the technical ground that the certified order is not submitted along with the appeal memo. The Petitioner, M/s. Atlas PVC Pipes Limited.
E Invoicing for enterprises above 10 cr snd 5 cr turnovers: Businesses with an annual turnover of more than ?10 crore and then for more than ?5 crore will soon be required to issue e-invoice. As on date, e-invoice is mandatory for businesses with an annual turnover of over ?20 crore. E-invoicing prescribes a standardised format of an invoice that can be read by a machine. It is a system in which B2B invoices are authenticated electronically by the Goods & Services Tax Network (GSTN) for further use on the common GST portal. Under the electronic invoicing system, an identification number will be issued against every invoice by the invoice registration portal (IRP) to be managed by the GSTN. Businesses for which e-invoicing is mandated and if they do not do so then, their invoice will not be valid. In such a situation, input tax credit (ITC) on the same cannot be availed by the recipient, besides attracting applicable penalties. Revenue Secretary Tarun Bajaj said e-invoicing started with those having an annual turnover of ?500 crore, then brought down to ?100 crore and to ?20 crore. Now the plan is to bring it down first to ?10 crore and then to ?5 crore.
Gift cards, vouchers, mileage pints, reward points, and loyalty card will be excluded from the definition of virtual digital assets (VDAs) said in a notification issued that these products do not face the tax applicable on VDAs such as cryptocurrencies and non-fungible tokens (NFTs), introduced this budget. CBDT said the exemption will include gift card or vouchers that may be used to obtain goods or services on a discount on goods, mileage points, reward points or loyalty card under an award, and reward, benefit, loyalty, incentive, rebate or promotional programme that may be used or redeemed to obtain goods or services or a discount on goods or services. It will also include subscription to website or platform or application, the notification, which comes into effect Thursday, said. The Centre had rolled out a new tax regime applicable for cryptocurrencies from April 1 this year. Income from transactions in crypto assets now attracts a 30% tax and 1% tax is deducted at source (TDS) on transactions in such asset classes above a certain threshold. Industry had expressed concerns about the wide definition of VDAs. The clarification came a day before the implementation of the provision of 1% TDS on all VDA transaction. CBDT has also notified from 26QF which is required to be filed by all virtual digital asset exchanges under SEC 194S.
NFTs are taxable as VDAs unless resulting into transfer of underlying asset:
1. The CBDT vide Notification No. 75/2022 dated June 30, 2022 has issued the Income-tax (Twenty Eighth Amendment), Rules, 2022 to further amend the Income-tax Rules, 1962 (“the IT Rules”), in order to specify a Non-Fungible Tokens (“NFT”), to qualify to be a virtual digital asset (VDA)
2. However, a VDA shall not include a NFT whose transfer results in transfer of ownership of underlying tangible asset and the transfer of ownership of such underlying tangible asset is legally enforceable.
3. Finance Act 2022 announced taxation of VDAs, which have been defined as to include any information or code or number or token generated through cryptographic means or otherwise. In other words, VDAs shall mean a cryptocurrency, NFT or another virtual digital asset as notified by the Central Govt.
Major economic outcomes of the recently concluded G7 summit:
1. Support to Ukraine-
G7 countries have pledged and provided EUR 28 billion in budget aid and are strongly committed to support Ukrainian reconstruction through an international reconstruction plan.
2. Energy and food security-
The G7 leaders committed to to phase out our dependency on Russian energy.
They ensured to secure the energy supply and reduce price surges by exploring additional measures such as price caps.
The G7 countries will also increase global food and nutrition security through the Global Alliance on Food Security.
The G7 leaders remain committed to coordinate on economic security, strengthen the resilience of supply chains while tackling rising costs of living for citizens.
3. Climate and the environment-
The G7 leaders endorsed the goals of an international Climate Club to accelerate the implementation of the Paris Agreement.
The G7 leaders are committed to
A highly decarbonised road sector by 2030
A fully or predominantly decarbonised power sector by 2035
Prioritising the acceleration of the phase-out of domestic unabated coal power.
The G7 countries have launched the Partnership for Global Infrastructure and Investment (PGII), a joint initiative to fund infrastructure projects in developing countries.
Through the partnership, they aim to mobilise USD 600 billion over the next five years to narrow the global investment gap.
Building on their existing partnership with South Africa, G7 will work towards new Just Energy Transition Partnerships with Indonesia, India, Senegal and Vietnam.
The G7 leaders reaffirmed their commitment to equitable global access to safe, effective and affordable vaccines, therapeutics, diagnostics and other essential medical goods.
Leaders also endorsed the G7 pact for pandemic readiness.
Update from Ministry of Finance
Taxpayers will be offered a wide range of modes for payment of taxes
Pay at Bank Counter (Over the Counter),
The CBDT vide Circular no. 14 of 2022 dated June 28, 2022 for Tax Deduction at Source ("TDS") on Virtual Digital Assets ("VDA") transactions outside Exchange. Finance Act, 2022 inserted a new section 194S in the Act with effect from July 01, 2022. The new section mandates a person, who is responsible for paying to any resident any sum by way of consideration for transfer of a virtual digital asset (VDA), to deduct an amount equal to 1% of such sum as income tax thereon. The tax deduction is required to be made at the time of credit of such sum to the account of the resident or at the time of payment, whichever is earlier.
Foreign Investors betting on India by putting money into private equity(PE) funds here are taken aback by a recent observation by the Mauritius Revenue Authority(MRA), raising a hitherto ignored angle on tax- and in the process questioning investment structures that have been in vogue for years. According to a private ruling by MRA, investment vehicles in Mauritius used by global investors to enter India, will have to pay tax in Mauritius on ‘capital gain’ they receive from a PE or debt fund in India when the letter exists an investment. Till now, a Mauritius entity paid tax to the Mauritius government only on ‘income follows’ like dividends and interest distributed by funds in India- but not on capital gains booked in India. However, MRA, in a matter related to a global investor, has ruled that “all income distribution’ made by AIF (alternative investment funds) Category II and III “will be treated as dividend income and therefore not retain their initial characteristics”.
Both the buyer and seller will have to withhold taxes for transitions involving the exchanges of a virtual asset for another, the Central Board of Direct Taxes (CBDT) said Tuesday. In a fresh set of clarifications, the CBDT said under Section 194S of the Income Tax Act, the buyers will have to deduct tax in a peer-to-peer transaction of virtual digital assets (VDA). On the liability to deduct tax at source when the consideration is in kind or in exchanges of a VDA, the person responsible for paying the consideration is also required to ensure that the tax is paid before releasing the consideration. When there is an exchange of VDAs between two parties, both are buyers and sellers. “ Thus, both need to pay tax… this would then be required to be reported in TDS statement along with challan number by both of them,” the CBDT said.
E-filing of Updated ITR u/s 139(8A) has been enabled for AY 2020-21 and AY 2021-22 using Excel utility for ITR 1 and 4.
Sh Nitin Gupta is appointed as CBDT chairman from the date of assumption of charge of the post.
As cryptocurrencies reel under the global downturn, Chinese state-run newspaper Economic Daily has warned investors that the price of leading cryptocurrency Bitcoin is "heading to zero". The warning came as the cryptocurrency market continued to face meltdown with Bitcoin hovering around $21,000 per digital coin on Saturday -- a substantial drop from its record high of $68,000 in November last year. Bitcoin is nothing more than a string of digital codes, and its returns mainly come from buying low and selling high," the newspaper said. In the future, once investors' confidence collapses or when sovereign countries declare bitcoin illegal, it will return to its original value, which is utterly worthless," it added, reports South China Morning Post. The Chinese government banned Bitcoin mining in July last year. It has plans to launch its central bank digital currency (CBDC) called the digital Chinese yuan (e-CNY). The country banned all cryptocurrency transactions last September and barred foreign crypto exchanges from operating within the country in 2018.
Cryptocurrency exchange CoinDCX had paused its crypto withdrawal facility without prior communication, sparking concerns among users. The recent liquidity crises at several institutions, including Celsius Network, which paused crypto withdrawals and transfers, has stirred fear among Indian retail, ET reported on June 21. In this backdrop CoinDCX’s decision to restrict crypto withdrawals have caused a furore on social media. The restriction is an enhanced measure to strengthen our safety protocols and was gradually initiated over the past one month for multiple user,” a spokesperson for CoinDCX said in a statement. Retail investors say CoinDCX’s decision to abruptly pause crypto withdrawals and only allow rupee withdrawals in a bear market prevented them from cutting their losses and moving their crypto assets to other platforms that may offer better selling prices.
At a time when the stock market is reeling under extreme volatility owing to the geopolitical tensions and Covid resurgence, India’s rich are investing in places perceived safe or offering better taxation rates and business opportunities. These locations range from Candolim and Assagao in Goa to Medhufaru and Kunfunadhoo islands in the Maldives to Marina beach in Dubai. The key reasons behind this trend are the diversification in investments and residency status in another country as part of business expansion. “The strategy is to de-risk by investing in different geographies. other factors that add to rich Indians’ wish to buy a luxury property outside include visa-free entry, access to better healthcare and infrastructure, and overall quality of life. “Most locations and countries are offering visa residency status for investment of a certain amount, and in Dubai it is one million dirhams (or about Rs 2.1 crore).
Starting July 1, British Columbians could be paying more for goods they buy through online marketplaces such as Amazon. That’s because the B.C. government has made changes that require these online marketplaces that have annual gross revenues of more than $10,000 to collect the provincial sales tax on goods and services sold on their sites. It shifts the responsibility to companies like eBay and Amazon to collect the PST, rather than the small businesses that may use a marketplace facilitator site to sell their products, according to the B.C. finance ministry. In addition, these marketplaces are also being required by the province to charge PST to individual sellers for use of their services, such as help with listing the sales of goods, advertising, warehousing and payment collection.
GST is council is likely to take up a personal for stricter scrutiny and verification of high-risk taxpayers ahead of the next level of reforms in the indirect tax framework that completes five year of roll-out on July One. A group of ministers (GoM) headed by Maharashtra finance minister Ajith Powerwinch is scheduled to give its report one reforms on the GST system to the council, has recommended public disco sure of information of unregistered bogus trader and provision of information on transactions through Point of Sale (POS) by banks, among others. The GoM recommended verification of physical addresses of high -risk taxpayers to prevent input tax credit fraud. It has also suggested making mention of electricity consumer registration number mandatory at the time of GSTN registration, certification of taxpayers’ certification of taxpayers’ bank accounts by National Payments Corporation of India (NPCI) and establishment to detect suspicious transactions.
Transfer of business by way of merger of two GST registration on same PAN is not exempted: AAR, Maharashtra Crystal Crop Protection Ltd., In re -  139 taxmann.com 242–
The applicant was a trader & manufacturer of agrochemical products. It was registered under GST and having two GSTIN in Maharashtra under same PAN. It filed an application of advance ruling to determine whether transaction of transfer of business by way of merger of two GST registrations or distinct persons would be exempted under the GST law. The AAR observed that the change in constitution of business is essential for transaction to be considered as transfer of business as a going concern. The transaction of transfer of business by way of merger would not qualify to be transfer of going concern to another person if units were holders of same PAN and they were merely distinct persons. Hence, the provisions of Para 4(c) of Schedule II of CGST Act, 2017 would not apply in this case. Therefore, the impugned supply would be treated only as supply of goods and exemption under SI. No. 2 of the Notification No. 12/2017-Central Tax (Rate) dated 28th June 2017 shall not be available.
As per the STT Act, every specified person has to file a Return after the end of the Financial Year in respect of the taxable transactions. In this regard, Form 1 , 2 and 2 A have been prescribed for filling the returns by the specified persons. As per the notification, all eligible reporting institutions having obligation to submit Securities Transaction Tax return are requested to submit the registration information and send the signed copy on ITD official email id.
As states and the centre gear up for the 47th GST Council meeting in Chandigarh this week, here is a list of items and services, which sources tell CNBC-TV18 are up for rate revision, clarification, and even some that the Nominated Fitment Committee decided did not merit any change. Here are the recommendations made by the committee:
1. RATE CHANGE ON GOODS
Ostomy appliances: From 12 percent to 5 percent
All orthopaedic implants: 5 percent, instead of differential rate of 5 percent and 12 percent
Napa stone/tiles without mirror polishing: 5 percent, instead of differential rate of 5 percent and 18 percent
2. OTHER RECOMMENDATIONS
Uniform GST rate of 5 percent on all by-products of milling of dal/pulses such as chilka, khanda and churi, etc, with the exception cat and dog food
Exempting basic customs duty and IGST on certain defence imports by private entities, provided that the end users are the Indian Armed Forces.
No GST on sewage treated water as against 18 percent
Clarification on electric vehicles, whether or not fitted with a battery pack, are eligible for the concessional rate at 5 percent
Increase tax on tetra pack/tetra-packaging paper from 12 percent to 18 percent
Correct duty inversion by increasing rate on cut and polished diamonds from 0.25 percent to 1.5 percent
3. NO RATE CHANGE
Fruit drinks, pickles, chutneys and sauces (12 percent)
Ready-to-eat, ready-to-cook foods, instant food mixes, etc (18 percent)
Branded snacks such as chips, bhujia, namkeen, etc (12 percent)
Medical devices (12 percent)
Rooftop solar projects and DCR modules (12 percent)
Meat, bone, flesh, dairy products, branded khoya and paneer, spices and edible oils, which are packaged in small containers or sachets
Tyres and Tubes used in e-rickshaws Heating, Ventilation, Air-Conditioning (HVAC) machines (28 percent)
Electronic devices like tablets, laptops, desktop computers, etc, when used by students and teachers for education purposes
Gems and jewellery (3 percent)
Import of Gold doré (3 percent)
CNG buses and CNG kits (28 percent)
Parts used in electric vehicles
Marble and granite, ceramic tiles and sanitaryware (18 percent)
Carbonated fruit drinks or carbonated beverages with fruit juice (28 percent + 12 percent compensation cess)
Helicopters and aircraft Parts
Aviation Gasoline from (18 percent) Dairy products like ghee, butter, flavoured milk (12 percent)
COVID-19 drugs, such as Itolizumab, etc
Tobacco supplied for manufacture of smokeless tobacco products, beedis, tobacco products.
4. The Nominated Fitment Committee has rejected a proposal to add the names of Industrial and Commercial Bank of China and RBL Bank as a banking institution for exemption of IGST.
5. The committee has further sought time to revisit and revise GST rates on printed books, which it says can be done at a time when the general review of GST rates is carried out.
6. Further, pharmaceuticals will be taxed at 12 percent as fitment committee is of the view that inputs to pharma sector are chemicals, mostly at 18 percent GST. General reduction of GST on the pharmaceutical sector to 5 percent will accentuate inverted duty structure and distortion in GST rate chain.
7. RATE CHANGE ON SERVICES
Ice Cream Parlours to be taxed at 18 percent instead of differential GST rate of either 5 percent or 18 percent
Ropeway services to be taxed at 5 percent as against 18 percent
The committee has clarified that in vitro fertilisation (IVF) services are exempt under GST as they come under care services.
8. The committee has further rejected proposals to change rates imposed on 102 services, a proposal by restaurants to restore GST of 12 percent with input tax credit, and a proposal to reduce GST on dry cleaning and laundry services.
State Bank of India (SBI) is taking steps to take on the combined strength of Housing Development Finance Corp. (HDFC) and HDFC Bank, following the merger, chairman Dinesh Khara told shareholders on Wednesday. HDFC Bank and HDFC had announced a deal in April, to make the merged entity more competitive, and allowing access to a captive customer base to cross-sell products. The merger, expected to close in 18 months subject to regulatory and other approvals, will significantly widen its lead over private sector peers ICICI Bank and Axis Bank, in terms of total loans. As of 31 December, the merged entity‘s loan book is at ?17.9 trillion, way ahead of ICICI Bank’s ?8.14 trillion and Axis Bank’s ?6.65 trillion. SBI had total loans of ?26.64 trillion at the end of December.
The US state of Louisiana is allowing financial institutions and trust companies to provide custody services for cryptos. Last week, Democratic Governor John Bel Edwards signed a bill mandating participating Louisiana financial institutions must “implement effective risk management systems” and adequately insure the crypto assets they custody, whether in a fiduciary or non-fiduciary capacity. The bill, which becomes effective on August 1st, passed unanimously in both chambers of the state’s legislature before signing. Louisiana isn’t the first state to enact a crypto-related policy. In March, Washington state passed a bill to establish a new work group tasked with exploring the possible uses of and policies for blockchain technology across a wide range of industries and public sectors. We are sending a clear message that Washington is ready to start working with the private sector to advance this technology for the benefit of all Washington residents, employers and workers.
Canada's inflation rate rose at its fastest pace in almost 40 years in the year up to May, as the price of just about everything continues to go up fast. Statistics Canada reported Wednesday that an uptick in the price of gasoline was a major factor causing the overall inflation rate to hit 7.7 per cent. Gas prices rose by 12 per cent in the month of May alone, and are up by 48 per cent compared to where they were a year ago. Food prices were also a major factor to the upside, with grocery bills increasing by 9.7 per cent over the past year. Within the food category, the cost of edible fats and oils skyrocketed 30 per cent, the fastest increase on record.
Russia's invasion of Ukraine is a major factor in that uptick, as Ukraine is one of the world's leading suppliers of sunflower oil, and the war has caused shortages of the pantry staple.
Income Tax Department issued Notification number 67 of 2022 dated 21.06.2022 to effectuate certain TDS related amendments brought vide Finance Act 2022. For this purpose vide the said notification certain rules have been inserted /amended. Gist of the notification are:
1. Form 26QE has been notified as the challan cum statement form for TDS deducted on transfer of Virtual Digital Assets(VDA) by specified persons u/s 194S of the Act.
2. TDS deducted by specified person u/s 194S shall be deposited to the credit of the Central Government within 30 days from the end of the month in which TDS was deducted.
3. Form 16E to be issued by specified person as the Tds certificate within 15 days from the due date of filling of challan cum statement Form 26QE.
4. Changes in Form 26Q have been introduced to ensure that the amount deducted as TDS u/s 194R, 194 S and 194B has been deposited before releasing benefits or perquisites u/s 194R, winnings from lotteries u/s 194B or consideration on transfer of VDA u/s 194S.
5. New Forms notified for TDS on sale of immovable property (Form 26 QB, section 194-IA) and renting of immovable property ( Form 26 QC, section 194 IB) and TDS on contractual and professional payments by individuals and HUFs ( not required to get their books audited) if payment more than 50 lakhs during the financial year(Form 26 QD , section 194 M).
The Compensation Cess levy has been extended till 31st of March 2026. This effectively means it got a 45 months extension. This is despite the fact that when GST was introduced Compensation Cess was supposed to be effective only for the initial five years. Now, even after 1st July 2022, the State Governments will continue to be compensated for revenue loss, if any, due to introduction of GST. CG may use it to repay loan/ interest earlier taken as well. In short, consumers will continue to pay Compensation Cess and on certain goods such as car tobacco etc.
NFRA faults IL&FS statutory auditor for deficiencies in IL&FS statutory audit
1. In its 390-page audit quality review report (AQRR) for FY 2017-18, the National Financial Reporting Authority (NFRA) has concluded that the audit firm did not have adequate justification for issuing the audit report asserting that the audit was conducted in accordance with the Standards of Auditing and the financial statements give a true and fair view.
2. NFRA has also highlighted that the initial appointment of auditor and its continuation as statutory auditor for 2017-18 was violative of the norms of independence, since they provided prohibited services to the IL&FS group and also had a business relationship with the IL&FS group.
3. An opinion was formed by the auditor on the financial statements of the company and issued its audit report without obtaining reasonable assurance about whether the financial statements as a whole were free from material misstatement, whether due to fraud or error and thereby failed to meet the requirements of Standards on Auditing 700 (SA 700).
4. The AQRR identifies instances such as impairment of investments, evergreening of loans, approval of related party transactions, recording of revenue, violation of capital and leverage ratios, and numerous other instances given in the AQRR where the audit firm failed to exercise professional scepticism and failed to challenge the management assumptions and claims in key areas of financial reporting.
5. The AQRR identified lapses in almost all stages of the audit, such as at the planning stage, substantive testing and adherence to independence norms.
MHA extends FCRA validity of NGOs with pending renewal till Sept 30. The validity of those Foreign Contribution (Regulation) Act, 2010 (FCRA) entities whose five years validity period is expiring during July 1, 2022 to September 30 and which have applied or apply for renewal before expiry of five years validity period will stand extended up to September 30, 2022 or till the date of disposal of renewal application, whichever is earlier as per a public notice issued by the Ministry of Home Affairs. However, those NGOs whose renewal application has been rejected will not be able to receive foreign fundings. All NGOs intend to receive foreign fundings are mandatorily required to register under the FCRA.
CBDT Circular on cryptocurrency and other VDAs:
In a move to levy one percent TDS on the virtual digital assets under section 194S of the Income Tax Act, 1961, the Central Board of Direct Taxes (CBDT) has issued a circular (number 13 of 2022), applicable with effect from 1st July 2022. Finance Act 2022 inserted a new section 194S in the Income-tax Act, 1961 with effect from 1st July 2022. The new section mandates a person, who is responsible for paying to any resident any sum by way of consideration for the transfer of a virtual digital asset (VDA), to deduct an amount equal to 1% of such sum as income tax thereon. Following are some of the guidelines issued:
1. In a peer-to-peer (i.e. direct buyer to seller) transaction, the buyer (i.e person paying the consideration) is required to deduct tax under section 194S of the Act.
2. In case the transaction is through an exchange/broker, exchange or broker who makes payment to the seller, is responsible for deducting TDS.
3. Now, if the exchange owns the VDA, the buyer in most probability will not be aware that the exchange owns the VDA and so for all such transactions the Exchange would be paying the tax on or before the due date for that quarter.
4. If the consideration of VDA is in kind, both buyer and seller will have to pay tax. However if the transaction is through an exchange, exchange shall have to deduct TDS for both legs of the transaction.
5. Once tax is deducted under section 194S of the Act, tax would not be required to be deducted under section 194Q of the Act.
6. Since the provision of section 194S of the Act applies at the time of credit or payment (whichever is earlier) of any sum, representing consideration for transfer of VDA, such sum which has been credited or paid before 1st July 2022 would not be subjected to tax deduction under section 194S of the Act.
The Russian ruble continues to rise against the dollar, making it the best-performing currency in the world this year.
1. Three months after the ruble's value fell to less than a U.S. penny amid the toughest economic sanctions imposed on a country in modern history, Russia's currency has mounted a stunning turnaround.
2. The ruble has jumped 40% against the dollar since January. Normally, a country facing international sanctions and a major military conflict would see investors fleeing and a steady outflow of capital, causing its currency to drop.
3. But Russia's unusually aggressive measures to keep money from leaving the country, in combination with a dramatic rise in fossil-fuel prices, are working to create demand for rubles and pushing up its value.
4. The main reason for the ruble's recovery is soaring commodity prices. After Russia invaded Ukraine on February 24, already high oil and natural gas prices rose even further.
5. the increase in commodity prices more than compensates for these drops. Russia is pulling in nearly $20 billion a month from energy exports. Since the end of March, many foreign buyers have complied with a demand to pay for energy in rubles, pushing up the currency's value.
6. At the same time, Western sanctions and a wave of businesses leaving the country have led to a drop in imports. In the first four months of the year, Russia's account surplus — the difference between exports and imports — rose to a record $96 billion.
7. Strict capital controls including a ban on foreign holders of Russian stock and bonds taking dividend payments out of the country.
8. Russian exporters are required to convert half of their excess revenues into rubles, creating demand for the currency. (The conversion requirement was 80% until the end of May, when it dropped to 50%.)
9. Western companies are leaving Russia, quite often they simply have to hand over their stakes to their local partners. It doesn't actually mean they are being paid a fair price for their stakes, so they are not moving large amounts of cash from the country.
The Modi government is likely to implement four labour codes on wages, social security, industrial relations and occupation safety, health and working conditions from July 1, as per media reports. If these labour codes are implemented, the new wage code will impact employees' working hours, salary restructuring, PF contribution, gratuity aspect and encashing of Earned Leaves among the prominent ones. Since these are now early speculations, nothing concreted should be infered till the government officially notifies the rules.
1. Till now, 23 states have pre-published draft rules on these laws, while the Centre has completed the process of finalising the draft rules on these codes in February 2021.
2. The central government had notified four labour codes, namely, the Code on Wages, 2019, on August 8, 2019, and the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 on September 29, 2020.
3. Since labour is a concurrent subject, the Centre wants the states to implement these as well in one go.
Immediate Impact of the New Wage Code
1. Reduced in-hand salary after implementation of Wage Code— the new wage code mentions provision entailing that the employee's basic salary will be at least 50 percent of his/her net monthly CTC. Hence, if this provision comes into effect, it will mean that employees will not be able to get more than 50 percent of his/her net monthly salary in form of allowance.
2. Higher PF after implementation of Wage Code— while the take home pay of the employees may be reduced, the Gratuity and PF component may rise.
3. 12 hours work-week— employees may be allowed a four-day workweek but they will have to work for 12 hours on those four days. The labour ministry has apparently made it clear that 48-hour weekly work requirement is a must.
4. Big changes in Earned Leave policy after new wage code implementation— The biggest change could be seen in cases of Earned Leave. Government departments now allows 30 holidays in 1 year, defense employees get 60 holidays in 1 year. Employees can cash up to 300 holidays on carry forward, however the Labor union is demanding to increase number of holidays to 450 in new code. At present there are 240 to 300 holidays in different departments. Employees can take these holidays in cash only after 20 years of service.
Droupadi Murmu, a tribal woman leader, is the Modi government's pick for presidential race. She is up against Yashwant Sinha, a former Union Minister, the joint opposition candidate for the July polls. If elected, the 64-year-old will be the first tribal woman to become the President of India. BJP parliamentary board discussed 20 names for presidential nominee, it was decided to pick someone from east India, a tribal and a woman, said BJP Chief JP Nadda.
A total of 2,783 foreign companies with registered offices or subsidiaries in India closed their operations in the country between 2014 and November 2021, Commerce and Industry Minister Piyush Goyal told Parliament late last year. That is not a small small figure, given that there are only 12,458 active foreign subsidiaries operating in India.
1. A slew of big names including German retailer Metro AG, Swiss building-materials firm Holcim, US automaker Ford, UK banking major Royal Bank of Scotland, US bikemaker Harley-Davidson and US banking behemoth Citibank have chosen to pull the plug on their operations in India or downsize their presence here in recent years.
2. That is a worrying trend at a time when India is trying to position itself as an alternative to China, in a post-Covid world where many MNCs are looking to diversify their supply chain.
3. India suffers from ‘regulatory cholesterol’ that is getting in the way of doing business. The legislations, rules and regulations enacted by the union and state governments have over time created barriers to the smooth flow of ideas, organisation, money, entrepreneurship and through them the creation of jobs, wealth and GDP,”
4. This might also explain why some of the world’s biggest chipmakers have not warmed up to India despite its government rolling out a red carpet for them by approving a $10 billion incentive plan last year to establish chip and display industries in the country.
5. India's struggle has been its inability to simplify regulations. Complex framework causes confusion and proves to be tedious for investors. However, simplification leads to exploitation and tax leakage.
6. In February this year, the government paid British firm Cairn Energy Plc ?7,900 crore to refund taxes it had collected to enforce a retrospective tax demand. Last year, it passed a legislation to drop outstanding claims against MNCs including telecom telecom giant Vodafone, pharma major Sanofi and brewer SABMiller.
7. Last month, Tesla said it had put its plans to sell electric vehicles in India on hold, after failing to convince the government to cut the prohibitive import taxes. India levies 100% tax on imported cars with a price tag over Rs 30 lakh, while cars cheaper than that are taxed at 60%.
8. A Parliamentary Standing Committee report of 2021 titled “Attracting investment in post-Covid Economy: Challenges and Opportunities for India” pointed out that foreign companies that shifted their manufacturing bases out of China during the pandemic picked countries such as Vietnam, Taiwan and Thailand, and only a few came to India.
9. There are key challenges in attracting investment, including administrative and regulatory hurdles, inadequate and costly credit, tedious land acquisition procedure and inadequate infrastructural facilities, high logistics cost and large unorganised manufacturing sector, the report said.
10. The policy changes and the incentive schemes brought in by the government to overcome these challenges are welcome measures and are in the right direction. However, success depends on the implementation of the of the reforms,” the committee pointed out.
Last time Nasdaq 100 broke its 200 Week Moving Average was in Aug 2008 at the start of Global Financial Crisis.
What followed? Massive layoffs, immense financial pain etc. Even after breaking down 200 EMA, it further went down ~42% for next 7 months before recovering.
Yesterday, it broke down below that same 200 EMA for the first time since then. Next few months will be interesting.
Down from All Time High
Canada visa backlog: 700,000 Indians wait for their papers to be processed. The worldwide backlog has ballooned to nearly 2.4 million, according to watchdog CIC News. And India is among the most affected nations, accounting for over a quarter of those pending cases, at approximately 700,000. The Canadian government is well aware of this situation. It is planning an infusion of 85 million Canadian dollars ($65.16 million) to reduce the application inventory and hire more staff. A team from Immigration, Refugees and Citizenship Canada (IRCC) is also expected to travel to India soon to try and resolve issues related to delays.
Decisions made at the World Trade Organisation (WTO) 12th Ministerial Conference at Geneva:
Decision on World Food Programme food purchase exemptions from export prohibitions:
1. Members shall not impose export prohibitions or restrictions on foodstuffs purchased for non-
commercial humanitarian purposes by the World Food Programme.
2. This Decision shall not be construed to prevent the adoption by any Member of measures to ensure its domestic food security in accordance with the relevant provisions of the WTO agreements.
Decision on TRIPS agreement:
1. An eligible Member may authorize the use of the subject matter of a patent required for COVID vaccines without the right holder's consent whether or not a Member has a compulsory license regime in place.
2. The eligible member may use the subject matter of the patent for domestic markets or for exports. Eligible members shall not reexport such exported products as far as possible, unless, in accordance with the relevant authorisations.
3. For purposes of transparency, as soon as possible after the adoption of the measure, an eligible Member shall communicate to the Council for TRIPS any measure related to the implementation of this Decision, including the granting of an authorization.
4. An eligible Member may apply the provisions of this Decision until 5 years from the date of this Decision, which may be extended.
Decision on Fisheries:
1. No Member shall grant or maintain any subsidy to a vessel or operator engaged in illegal, unreported and unregulated (IUU) fishing or fishing related activities in support of IUU fishing.
2. No Member shall grant or maintain subsidies for fishing or fishing related activities regarding an overfished stock.
3. No Member shall grant or maintain subsidies provided to fishing or fishing related activities outside of the jurisdiction of a coastal Member or a coastal non-Member.
McDonalds to pay France $1.3 billion in tax evasion case:
1. McDonald's will pay 1.25 billion euros ($1.3 billion) in France to avoid a legal case over tax evasion between 2009 and 2020, under an agreement approved by Court. of Justice of Paris.
2. President of the Court, Stephane Noel confirmed the second-biggest tax settlement in French history, made up of a 508-million-euro fine and 737 million euros in back taxes already agreed in May, years after McDonald's was accused of reporting artificially low profits to reduce its tax bill.
3. Investigators had since 2014 been probing whether brand fees paid by McDonald's French operation to its European parent company located in lower tax Luxembourg for use of the chain's brand in fact served to artificially slash its profits.
4. The brand fees could surprisingly double from one McDonald's branch to the next without any justification at all, which made it possible to prove that it was done exclusively for tax reasons.
5. Prosecutors had opened an official probe in 2016 after union officials reported the company for covering up tax evasion.
6. On condition of payment of the fine, the validation of the agreement means the end of the prosecution. McDonald's would pay 2.5 times the amount of tax avoided. This agreement ends the tax case and a judicial investigation without acknowledging fault.
7. France's biggest-ever tax fine dates to 2020, when aircraft builder Airbus had to cough up 2.1 billion euros.
Delhi Pollution Control Committee : PROHIBITION ON MANUFACTURE, IMPORT, STOCKING , DISTRIBUTION , SALE AND USE OF SINGLE USE PLASTIC W.E.F. 1ST JULY 2022.
Single Use Plastics (SUPs ) Name of Plastic items :
1. Ear buds with plastic sticks
2. Plastic sticks for balloons
3. Plastic flags
5.Ice cream sticks
6.Polystyrene (Thermocol) for decoration
15.Wrapping/ packing films around sweet boxes 16.Invitation cards
18.Plastic / PVC banners less than 100 microns 19.Stirrers
The 47th meeting of the GST Council will be held on 28-29 June, 2022 (Tuesday and Wednesday) at Chandigarh instead of Srinagar. The venue is being shifted owing to security concerns.
More than 1100 Amendment in GST Law in last 5 years; since 2017; by the Government – Dealers not allowed to rectify just one Mistake- Urged CAIT secretary Mr Parveen Khandelwal ahead of Gst council meeting in June end.
PAN, Aadhar compulsory for cash deposits, withdrawal above Rs 20 Lakhs: The CBDT vide Notification No. 53/2022-Income Tax, Dated: 10th May, 2022 has notified a new set of rules
(a) cash deposit or deposits aggregating to twenty lakh rupees or more in a financial year, in one or more account of a person with a banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act) or a Post Office.
(b) cash withdrawal or withdrawals aggregating to twenty lakh rupees or more in a financial year, in one or more account of a person with a banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act) or a Post Office.
(c) opening of a current account or cash credit account by a person with a banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act) or a Post Office.
Foreign Visitors to declare gold and silver ornaments: In a significant ruling, the Madras High Court has held that the foreign visitors shall declare to the customs while wearing gold/silver ornaments exceeding Rs. 50,000 during travel. Justice C. Saravanan was considering a writ petition filed by a Srilankan Family based in Colombo.
Cinema theatres and cinegoers are restricted in their choice of alternate ticketing platforms, during the working of the contracts that BookMyShow has with large number of theatres/multiplex chains, the CCI noted. The Competition Commission of India (CCI) has called for an investigation against online ticket platform BookMyShow, noting that its exclusive agreements with cinemas and multiplexes can potentially reduce competition in the relevant market. [In Re: Showtyme (through Vijay Gopal, prop. of Vanila Entertainments) and Big Tree Entertainment Pvt Ltd].
The Vancouver Model is a method of money laundering that is highly used in Vancouver, British Columbia.
1. The model uses casino gambling as a way for foreign and domestic criminals to launder illegitimate funds and exploits Canada’s traditionally lax regulatory approach to financial crime.
2. With reports suggesting that money laundering in British Columbia now amounts to around $1 billion per year, the provincial government has stepped up efforts to identify and prevent Vancouver Model money laundering and the type of financial activities associated with it.
3. The Vancouver Model process begins in China, where currency controls prevent citizens from taking more than $50,000 out of the country.
4. To avoid that rule, wealthy Chinese citizens enter into arrangements with domestic criminal syndicates with links to Vancouver.
5. The citizens transfer money to criminal-controlled bank accounts in China before traveling to Vancouver where the criminals’ associates provide them with their funds in Canadian dollars (which may be profits from fentanyl sales, for example). That money is then laundered through casino gambling.
6. In more detail, the Vancouver Model involves the following steps:
a. Chinese citizens seeking to move funds outside China transfer their money to bank accounts within China that are controlled by Chinese criminal gangs.
b. Those citizens then travel to Canada where the criminals’ associates hand them back their money as cash (Canadian dollars).
C. The Chinese citizens visit casinos in Vancouver, exchange their money for casino chips, and then make a series of low-value bets.
d. The casino chips are then exchanged back to Canadian dollars, now clean of their illegitimate criminal origin.
e. The outcomes of wagers made in the casinos are irrelevant since the money is effectively laundered at the point of conversion from cash to casino chips. f. From there, financial proceeds from the Vancouver Model are either invested back into the acquisition of fentanyl supplies by the criminal gangs or invested into BC real estate by the Chinese citizens themselves, who are able to avoid the scrutiny of Chinese regulators and Chinese taxes by doing so.
7. The influx of foreign citizens buying property in Vancouver with their laundered money also impacted the city, causing the cost of living and housing prices to rise to levels unaffordable to most local residents.
8. A report by Transparency International Canada in 2016 suggested that almost 50% of the city’s most expensive homes were bought using structured purchase methods that could conceal the identity of the owners.
9. Similarly, the Institute of International Finance estimated that capital flight from China since 2014 has been in excess of $800 billion.
Source : Complyadvantage.com
Urging employees to not save “any internal, restricted or confidential government data files on any non-government cloud service such as Google Drive or Dropbox,” the Centre has issued a directive prohibiting its employees from using third-party virtual private networks (VPN). They also been barred from using any anonymisation services offered by companies like Nord VPN, ExpressVPN and Tor. It may be recalled here that CamScanner was among the several Chinese apps banned by the Indian government in July 2020, citing national security concerns. India’s nodal cyber security agency Cert-In had, on April 28, mandated that VPN providers in India must keep a log of their customers’ details, including names, addresses, and the purpose for which the VPN service was being used.
According to price data from CoinGecko compiled by CoinGoLive, the current bear market has seen a whopping 72 out of the top 100 tokens fall more than 90% from their all-time highs.
1. The larger-cap coins are faring better than most. Among the top 10 cryptocurrencies by market capitalization, nine have dipped less than 90% during the current market downturn.
2. Bitcoin (BTC), the largest crypto, is down 70.3% from its November 2021 high of $69,000.
3. In second place is Ether (ETH), which is down 78% from its high of $4,878.
4. Others in the top 10 include Binance’s BNB, Cardano’s ADA, Solana’s SOL and Polkadot’s DOT, which are down between 68% and 88%.
5. The list excludes the stablecoins Tether (USDT), USD Coin (USDC) and Binance USD (BUSD). XRP is the exception, falling 90.56% from its all-time high.
6. The average fall from ATH for these top 10 coins is 79%. Among the top 20 coins, the average fall from the all-time high is 81.1%.
7. Exchange tokens appear to be doing better than many other sectors, with a 68.3% average fall from their ATHs.
8. The best performer there is Unus Sed Leo (LEO), which has only fallen 38.87% and which Cointelegraph reported saw “aggressive buying at lower levels” on June 13.
The sheer size of the GainBitcoin scam that rocked the nation some time back is turning out to be way bigger than thought, with reports suggesting that around 1 lakh victims may have lost more than Rs 1 trillion in the scam. Earlier this month, the ED raided six locations, including in Delhi, as part of a large investigation into the alleged scamming of over 1 lakh investors.
An investor in dogecoin, originally created as a joke but whose value increased and fell as it was promoted by Elon Musk, filed a $258 billion lawsuit Thursday against the billionaire and his companies Tesla and SpaceX. Keith Johnson, who says he lost money after investing in dogecoin, described himself as an "American citizen who was defrauded" by what he called a "Dogecoin Crypto Pyramid Scheme." Since Musk began promoting the virtual currency, investors have lost around $86 billion, Johnson estimates. He would like Musk to reimburse investors this sum, plus pay double that in damages -- an additional $172 billion.
A bankers' group on Washington, the Institute of International Finance, recently projected that foreign capital worth USDD 300 billion would slither out of China in 2022 - substantially up from USD 129 billion in 2021.
1. Highly toxic political environment and caffeinated policy eco-system have already cost market capitalisation loss of over USD 2 trillion to its own tech giants listed outside China! The American Chamber of Commerce in China conducted a survey and issued a warning that travel hassles confronted by the expats would trigger precipitous fall in foreign investment in the coming years.
2. The Biden Administration has already set up a committee which examines and permits flow of capital from the US to China!
3. Apple has already begun shifting out a part of its annual production. 4. Many US companies have begun onshoring their plants in Mexico bordering the US. With Mexico offering many spigots, it has emerged as an attractive destination for capital being ejected out of China.
5. The story is no different for the EU. As per the EU Chamber of Commerce in Beijing, the darkening clouds of uncertainty have nudged EU businesses to put investments into China 'on hold'!
6. The German Chamber of Commerce is on record with its observation that more than 30% of foreign employees have plans to leave China for good!
7. No new strand is found even in the Japanese story. Toshiba which had set up its factory in Dalian, has just downed its shutters.
8. Besides heavy-handedness of the Communist Party and soaring hourly wages - USD 6.2 as against the half of it in Thailand, the geopolitical tensions and China's policy of hara-kiri in the South China Sea, many Japanese MNCs have shifted their production from China to India, Thailand, Vietnam and Indonesia.
9. Oki Electric Industry which had set up its factory in Shenzhen 20 years back, recently stopped its production and shifted its capacity to Japan and Thailand. With Japan cushioning reverse-migration of such companies with huge incentives, the China-bound FDI which has been on decline since 2012, is likely to bottom out in the coming years.
(Extract From TIOL)
The Federal Reserve raised interest rates by 75 basis points -- the biggest increase since 1994 -- and Chair Jerome Powell signaled another big move next month, intensifying a fight to contain rampant inflation. They forecast interest rates would rise even further this year, to 3.4% by December and 3.8% by the end of 2023. That was a big upgrade from the 1.9% and 2.8% that they penciled in for their March projections. US Faces a Fed-Triggered Recession and Biden's Presidency May Not Survive.
UK Govt: UK announces Inflation Package just like the Covid Pandemic Package - free money distribution. UK Govt has decided to print more fiat (£) and distribute it from July 14. This is during when inflation is at 40-year high. And inflation was created in the first place because of this same fiat money distribution by Govt for last 2 years.
The Bank of England on Thursday implemented a fifth consecutive hike to interest rates as it looks to rein in soaring inflation. The Monetary Policy Committee voted 6-3 to increase the Bank Rate by 25 basis points to 1.25%, with the three dissenting members voting for a 50 basis point hike to 1.5%. The committee said in a statement Thursday that it will “take the actions necessary to return inflation to the 2% target sustainably in the medium term,” with the the scale, pace and timing of any further hikes depending on the economic outlook and inflationary pressures. The economy unexpectedly shrank by 0.3% in April after a 0.1% contraction in March, the first back-to-back declines since April and March 2020. The OECD has forecast that the U.K. will be the weakest G-7 economy next year as higher interest rates, tax rises, reduced trade and spiraling food and energy prices hammer households.
IBBI Press release dated 15.6.2022 provides the operational creditors to furnish extracts of Form GSTR-1, Form GSTR-3B and e-way bills, wherever applicable along with the application filed under section 9 of the Insolvency and bankruptcy Code, 2016. These additional set of documents, can be used as evidence of transaction with the corporate debtor, debt and default easing the process of admission. These documents will also to be submitted as part of the claims submitted to the resolution professional to help collation of claims. Further, creditors filing applications under section 7 or 9 of the Code are required to furnish details of their PAN and Email ID to ensure smooth correspondence.
The Gujarat Goods and Services Tax (SGST) department conducted searches on hotels, resorts and booking agents operating in and around Sasan-Gir National Park and found tax evasion to the tune of Rs 11.97 crore. The teams from the department searched 25 locations, including 17 hotels and resorts and offices of two booking agents in Ahmedabad. The hotels and resorts in Sasan-Gir were found to have recorded lower room tariffs, unaccounted services provided and paid tax under low slabs, said an official statement from the department Saturday. The officers have asked the erring hotels and resorts to pay Rs 3.04 crore, which included pending tax and penalties. The department has already recovered Rs 2.14 crore, the release said.
National Anti-profiteering Authority (NAA) is all set to be subsumed into the Competition Commission of India (CCI), according to a report in Livemint. NAA is the anti-profiteering watchdog of GST. Its term ends in November, and no extension has been planned, per the report.
Karnataka Chief Minister Basavaraj Bommai-led group of ministers (GoM), which was set up last year by the GST Council to suggest ways for augmenting revenue by rationalising tax rates and correcting anomalies in the tax structure, is likely to meet on June 17. The panel of ministers is likely to discuss a proposal to shift rate slabs from the current five per cent to seven or eight per cent; and from 18 per cent to 20 per cent, sources told CNBC-TV18. The GoM, which was given time to submit its final report before the next GST Council meet, might also discuss pruning the list of exempted items under the GST regime. The panel of state ministers may also discuss the proposal to correct inverted duty structure in textiles, the sources said. The GST Council, which is the highest decision-making body under the GST regime, is likely to meet in the last week of June. The GoM member states include Bihar, Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Goa and Kerala. The panel last met in November 2021.
Cost Inflation Index CII for Financial Year 2022-23 (AY 2023-24) Notified as 331. Cost Inflation Index for FY 2021-22 (AY 2022-23) was 317.
The Employees’ Provident Fund Organisation (EPFO) is likely to discuss raising its equity investment limit from 15% to 25% at its upcoming board meeting next month, said people aware of the matter. The board could also take up administrative issues and hold further deliberations and finalization of the recommendations of the four sub-committees formed under the EPFO, they said. These four sub-committees pertain to establishment related matters, futuristic implementation of the Social Security Code, building up digital capacities and pension related issues of the EPFO. The 231st meeting of the central board of trustees (CBT) of EPFO will be held on July 8 and 9 in Bengaluru.
SBI Fixed Deposit Interest Rates: A week after the Reserve Bank of India increased its repo rates for the second straight time in a row, India’s largest pubic sector lender State Bank of India hiked its interest rates on fixed deposits by up to 20 basis points. The rates have come into effect from Tuesday, June 14. The new SBI FD interest rates are applicable to deposits below Rs 2 crore, the lender has said on its website. The maximum interest rate will be enjoyed by depositors who have or will open an FD account in the 211 days to less than a year tenure. There is an increase of 20 bps on these tenures, which has consequently made the interest rates on these deposits 4.60 per cent as against the rate of 4.40 per cent earlier, as per the bank’s website. For tenures of one year to less than two years, the rates have been hiked from 5.10 per cent to 5.30 per cent, which is also an increase of 20 basis points. SBI FD rates for deposits maturing between two years and less than three years have been hiked by 15 basis points from 5.20 per cent to 5.35 per cent, the bank said. The revised interest rates will now apply to new deposits as well as renewals of maturing deposits, the SBI said. NRO term deposit interest rates will be matched with domestic term deposit interest rates. The interest rate payable to SBI Staff and SBI pensioners will be 1 per cent above the applicable rate. The rate applicable to all Senior Citizens and SBI Pensioners of age 60 years and above will be 0.50 per cent above the rate payable for all tenors to resident Indian senior citizens.
As many as 8,000 high net worth individuals are expected to migrate out of
India in 2022, a a new study has estimated. Stringent tax rules and reporting requirements in India along with the desire for stronger passports remain the biggest drivers for the migration, said the latest Henley Global Citizens Report.
Wall Street stocks sank early Monday, tumbling into a "bear market" in anticipation of more Federal Reserve monetary tightening this week amid runaway inflation. The market's latest losses, which come on the heels of three straight down sessions, put the S&P 500 into a bear market, defined as a 20 percent drop from a market peak. About 35 minutes into trading, the broad-based S&P 500 was at 3,796.66, down 2.7 from Friday's session and off more than 21 percent from January. The Dow Jones Industrial Average dropped 2.1 percent to 30,746.33, while the tech-rich Nasdaq Composite Index plunged 3.2 percent to 10,972.92. US equities have been on shaky ground throughout 2022.
Bitcoin plunged to the lowest in about 18 months after the freezing of withdrawals by the Celsius lending platform added to concern that systemic risk in the crypto ecosystem will accelerate the digital-asset market meltdown. The world’s largest digital token tumbled as much as 15% to 23,336- its lowest since December 2020. Other cryptocurrencies also declined as a broader sell-off continued. The MVIS Crypto compare digital Assets 100 Index, which measures 100 of the top tokens, dropped as much as 15% and the total market value, which topped 3 trillion in November, was 1.02 trillion as of 9:48 a.m. New York time on Monday, according to Coin Gecko.” The fundamentals to support stabilization and recovery just aren’t there.
WTO’s 12th ministerial meeting opens at Geneva:
WTO has been holding a meeting since Sunday, (first in the last 4.5 years) with members nations discussing various trade related issues such as:
1. Easing of export restrictions on food: Ministers at the meeting are considering whether to lift or ease export restrictions on food to help countries facing a shortage of wheat, fertilizer and other products because of the war in Ukraine. They also will decide whether to increase support for the U.N.'s World Food Program to help needy countries around the world. India would like to continue protecting its food security programme meant for the poor and assistance provided to farmers. Case in point is the recent ban on export of wheat.
2. TRIPS waiver on vaccines: Members are also contemplating whether to temporarily waive WTO's protections of trade