27/12/2022
Snippets of CBIC notifications dated 26.12.2022
1. 26/2022-Central Tax
CGST: Central Goods and Services Tax (Fifth Amendment) Rules, 2022 - Amendment to Rules 8, 9, 12, 37, 46, 46A, 59, 87, 89, 108, 109, 138, 161, FORM GST REG-01, FORM GST REG-17, FORM GSTR-1, FORM GST RFD-01, FORM GST APL-02, FORM GST DRC-25; Insertion of Rule 37A, 88C, 109C, FORM GST APL-01/03W, FORM GST DRC-01B and Substitution of FORM GST REG-19, FORM GST DRC-03
2. 27/2022-Central Tax
CGST: Provisions of sub-rule (4A) of Rule 8 of the CGST Rules regarding authentication of Aadhaar Number shall not apply in all the States and Union territories except the State of Gujarat
Ministry of Finance, The Directorate of Intelligence Revenue (DRI) seizes around 25 kg of Mephedrone worth around Rs 50 crore during raids on two clandestine manufacturing labs at Hyderabad, 7 arrested. The mastermind and main financer of this activity was nabbed at Gorakhpur, as he was attempting to flee to Nepal with cash of Rs. 60 lakh. DRI remains committed to safeguarding the nation’s health and tackle the challenge of narco-terrorism. The Entire drug syndicate has dealt a blow to their plans for committing nefarious activities in the wake of new year and thereafter.
Link to read full https://www.pib.gov.in/PressReleasePage.aspx?PRID=1886720
The Income Tax department issued an advisory that those PAN which are not linked with Aadhaar by the end of March next year 31.3.2023 will be rendered inoperative. The last date for filing a belated Income Tax return for the assessment year 2022-23 (Financial Year ended 31.3.2022) is 31st December, 2022. So please ensure to file the income tax return for the Asst year 2022-23 positively by 31st December,2022, if not already filed. After 31st December, 2022, it will not be possible to file the return for assessment year 2022-23. The only alternative option will be to file an updated return under section 139(8A) [subject to certain conditions and restrictions stated therein] with additional liability of 25% of the aggregate amount of tax and interest. It may be noted that failure to file Income Tax return may lead to prosecution under section 276CC of the Act. With the complete digitisation of all the data of every entity, it has become very easy for the income tax department to identify non filers of tax returns and to initiate proceedings against such non filers /defaulters. It is also important to point out that the Income Tax Act mandates all partnership firms, LLPs and Companies to file Income Tax returns, irrespective of the fact whether such firm, LLP or the company is dormant with no activity or no transaction during the year. So, even if there is no income or no transaction during the year in any partnership firm, LLP or a company, make sure to file returns of every partnership firm , LLP and Company showing Nil income before 31st December, 2022, to avoid any penal consequences.
26/12/2022
Ten Astonishing numbers of the closing year 2022:
1. Twitter slashed half of it workforce, while Meta slashed 13% this year. The global youth unemployment rate is projected to be 14.9 % in 2022.
2. Gautam Adani earned approx Rs1000 crore every day in 2022, while Elon Musk lost Rs 2500 crores every day in 2022.
3. World population has reached 8 billion on 15th Nov, 2022.
4. Sri Lanka’s National Consumer Price Index (NCPI) rose to a whopping 73.7 % in September from a year earlier. In Argentina, Prices in October 2022 were 88% higher than October 2021. While Turkey’s rate reached 85.51% compared with prices in October 2021.
5. European Union has adopted 15% as Global Minimum Corporate Tax. The minimum tax will apply to MNEs with revenue above EUR 750 million and is estimated to generate around USD 150 billion in additional global tax revenues annually.
6. India’s GDP at the constant price has increased 93 % from Rs 76.5 lakh crore in FY10 to Rs 147.4 lakh crore in FY22.
7. The government’s gross tax revenue to GDP ratio has improved to 17.1 % in FY22 from 8.2 % in FY10. The Central government’s tax revenue has witnessed a whopping 303% jump in the last 12 years, from Rs 6.2 lakh crore in FY10 to Rs 25.2 crore (revised estimates) in FY22.
8. Fertiliser subsidy bill in FY 23 is a huge Rs 2.3-2.5 lakh crores. It was Rs 1.62 lakh crores in FY 22. The government’s food subsidy bill is likely to cross Rs 3 lakh crore during the FY 23, nearly 50% more than the budget estimate of Rs 2lakh crore.
9. Union Minister of Road, Transport, and Highways Nitin Gadkari told the Lok Sabha that total highway construction in the country stood at 4,766 km till November-end this year, against the target to construct 12,200 km of them during 2022-2023.
10. The total currency in circulation was all-time high of Rs 32,445,745.158 mn on 9th Dec 2022 and a record low of Rs 1,273,747.200 mn on 1st Nov 1996.
Bill tabled to decriminalise offences in 42 laws
1. Commerce and industry minister tabled a Bill in the Lok Sabha which proposes to decriminalize 183 provisions in 42 legislations including over half a dozen colonial era laws to make doing business easier.
2. The 108-page Jan Vishwas (Amendment of Provisions) Bill, 2022 covers the Boilers Act, The Aadhar Act, 2016, the Legal Metrology Act, 2009, The Collection of Statistics Act, The Government Securities Act, 2006, and The Food Safety and Standards Act, 2006, among others.
3. Besides decriminalization of minor offences, the Bill envisages the rationalization of monetary penalties. It proposes a 10% increase in the minimum amount of fine and penalty levied, after every three years of enactment of the Act.
4. For instance, there was a two-year imprisonment under Indian Post Office Act 1898 for sending unpaid postal articles which has been proposed to be removed. There was provision of six-month jail for carrying non-biodegradable plastic in a (military) cantonment under the Cantonments Act, 2006 that has been changed to penalty.
5. The Bill has been referred to a 31-member joint Parliamentary committee for scrutiny. The committee will submit its report to parliament by the second part of the Budget session in 2023.
The Reserve Bank of India has updated Master Direction – Opening and Maintenance of Rupee/Foreign Currency Vostro Accounts of Non-resident Exchange Houses as on December 22, 2022 to make certain amendments Vide Notification No: RBI/FED/ 2015-16/16 FED Master Direction No.2/2015-16 dated 22.12.2022
The Investor Education and Protection Fund Authority has notified that due to non-receipt of e-verification report in respect of claims so filed by the companies even after communication within the mandated time period to this effect, all the SRNs under Rule 7(3) or 7(7) (Refund to claimants from Fund) of the said rules are proposed to be rejected. In case any claimant has any objection then the same may be intimated via email and if no objection is received within 15 days from the issue of this notice, then the pending SRNs shall be rejected at the sole liability of the company and its nodal officer Vide Notification No: 7(3)&7(7) (2022-2023) dated 20.12.2022.
25/12/2022
If cryptocurrencies are allowed to grow, they would cause the next financial crisis, RBI Governor Shaktikanta Das warned Wednesday. According to Das, the RBI views private cryptocurrencies as a 100% speculative asset that should be prohibited. “If you try to regulate it and allow it to grow, please mark my words, the next financial crisis will come from private crypto currencies,” he said while speaking at a conference organised by a media company. Cryptocurrency has certain huge inherent risks for our macroeconomic and financial stability, and we have been pointing it out. After looking at the latest episode of FTX (the bankrupt cryptocurrency exchange), I don’t think so we need to say anymore,” the RBI governor said. Unlike any other asset, or any other product, “our main concern about the cryptocurrencies is that it does not have any underlying (asset) whatsoever”, the governor said.
RBI has slightly raised inflation projections for the December and March quarters and retained the full-year forecast at 6.7%. It has projected inflation in the December quarter at 6.6% and 5.9% in the following three months. Consumer Price Index inflation for the June quarter is expected at 5% and at 5.4% in the September quarter, assuming a normal monsoon. Reserve Bank of India’s (RBI) policymakers are wary of halting monetary policy tightening too soon, fearing it may be a costly error in the current economic climate despite their confidence that inflation has peaked. Although slightly benign, the trajectory of price rises remains above target, according to the minutes of the latest monetary policy committee (MPC) meeting published on Wednesday. Governor Shaktikanta Das said that while the worst is behind us, inflation remains above the upper tolerance level and is expected to decline in the first half of the next fiscal, albeit above RBI’s target. “I am, therefore, of the view that a premature pause in monetary policy action would be a costly policy error at this juncture," Das said.
24/12/2022
The CBI has registered an FIR against an officer of Punjab National Bank (PNB), now suspended, for allegedly cheating the state-run lender to the tune of Rs 168.59 crore through 34 fake bank guarantees, officials said Thursday. As per the interim investigation report dated November 27, 2022, it emerges that the fraud has been perpetrated by the bank staff in collusion with some unknown persons through illegal and unauthorized usage of the bank's systems. Further, the aforesaid fake bank guarantee has no record in the Finacle system of the bank," the FIR alleged. The new scam came to light when Kohima branch of Canara Bank sent intimation to Parliament Street branch of the PNB on November 18 for the invocation of Rs 5.70 crore bank guarantee purportedly issued by the latter.
Only gross margin can be disallowed in the case of bogus purchases:
M/s. Accra Pac (India) Pvt. Ltd. v. D.C.I.T [ITA No. 514/Ahd/2018]
Facts:
1. During the Financial Year 2010-11 the Appellant had purchased chemicals amounting to INR 7,71,22,502/- from one of the suppliers.
2. The AO during the course of assessment observed that the Appellant has not furnished the PAN number of such supplier. Further, the supplier has shut the business and therefore, came to the conclusion that purchases were not genuine and should be added back to the income of the Appellant on the ground of bogus purchases as the Appellant was not able to prove the identity of the supplier.
3. The Appellant contention was that, since the Appellant’s outward sales is taxable and the Appellant is subject to Excise and tax Audit where auditors had not made any adverse opinion, therefore, the AO cannot add the entire purchases to the income of the Appellant.
4. Further, the appellant contended that in case if the impugned amount is to be added then it should be restricted to reasonable amount as the Appellant only had gross profit margin of 7.63% of the turnover.
ITAT Ahmedabad held as below:
1. The purchases were utilized for making the final finished product which is subject to tax and only the profit element should be added back to the income.
2. The balances standing at the end of the year in the balance sheet of the assessee were audited. Further, the bankers have confirmed the year end balances which tallies with the balances as per the books of the Appellant.
3. A certain percentage of such alleged bogus purchases may be disallowed, keeping into consideration the profit offered to tax by the Appellant.
4. Accordingly, in the interest of justice, 10% of the purchases may be disallowed and added back to the income of the Appellant.
5. Remanded back the matter to the AO for verifying the correctness of the claim made by the Appellant in the issue of fixed deposit mis-match.
23/12/2022
MCA Update:
In our continuous endeavour to serve you better, the Ministry of Corporate Affairs is launching Second set of Company Forms covering 56 forms in two different lots on MCA21 V3 portal. 10 out of 56 forms will be launched on 09th January 2023 at 12:00 AM
and the remaining 46 forms on 23rd January 2023.
Following forms will be rolled-out on 09th January 2023:
SPICe+ PART A, SPICe+ PART B, RUN, AGILE PRO-S, INC-33, INC-34, INC-13, INC-31, INC-9 and URC-1.
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 07th January 2023 12:00 AM to 08th January 2023 11:59 pm for 10 forms which are planned for roll-out on 09th January 2023.
(2) Company e-Filings on V2 portal will be disabled from 07th January 2023 12:00 AM to 22nd January 2023 11:59 pm for 46 forms which are planned for roll-out on 23rd January 2023.
(3) All stakeholders are advised to ensure that there are no SRNs in pending payment and Resubmission status.
(4) Offline payments for the above 56 forms in V2 using Pay later option would be stopped from 28th December 2022 12:00 AM. You are requested to make payments for these forms in V2 through online mode (Credit/Debit Card and Net Banking).
(5) In view of the upcoming launch of 56 Company forms, V3 portal will not be available from 07th January 2023 12:00 AM to 08th Jan 2023 11:59 pm due to 10 company forms roll-out and from 21st January 2023 to 22nd January 2023 for 46 company forms roll-out.
(6) V2 Portal for company filing will remain available for all the forms excluding above mentioned 56 forms.
Stakeholders may plan accordingly.
A company incorporated and registered in Bihar had failed to paint or affix its name and the address of its registered office outside its office or place in which its business was being carried upon.Section 12 of the companies Act 2013 says A Company shall, on and from the fifteenth day of its incorporation within thirty days of its incorporation and at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it. The Company fails to meet the requirement of Sec 12.
Provisions of Companies Act, 2013:
12(1) A company shall, on and from the thirty days of its incorporation and at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notice as may be addressed to it.
12(4) Notice of every change of the situation of the registered office, verified in the manner prescribed, after the date of incorporation of the company, shall be given to the Registrar within thirty days of the change, who shall record the same.
12(8) If any default is made in complying with the requirements of this section, the company and every officer who is in default shall be liable to a penalty of one thousand rupees for every day during which the default continues but not exceeding one lakh rupees.
CBDT exempts non residents from e-filing form 10F upto 31st Mar:
The CBDT has exempted non-resident Indians (NRIs) without permanent account numbers (PANs) from e-filing Form 10F up to March 2023.
The notification No. 03/2022, dated July 16, 2022, issued by the Directorate of Income Tax (Systems), New Delhi, mandated the furnishing of Form 10F electronically. On consideration of the practical challenge being faced by non-resident (NR) taxpayers not having PAN in making compliance as per the notification, and with a view to mitigate genuine hardship to taxpayers, it has been decided by the Competent Authority that the category of Non-resident taxpayers who are not having PAN and not required to have PAN as per relevant provisions of the Income-tax Act,1961 read with Income-tax Rules, 1962, are exempted from mandatory electronic filing of Form 10 F till 31 March 2023.
Notification: F. No. DGIT(S)-ADG(S)-3/e-Filing Notification/Forms/2022/9227
22/12/2022
EU adopts global minimum tax of 15% on corporates:
1. European Union (EU) member states achieved a historic breakthrough, by agreeing to implement the OECD’s global corporate minimum tax rate of 15% across the bloc.
2. The landmark two-pillar solution, which was reached at the OECD Inclusive Framework by 137 countries in October 2021, represents the most wide-reaching attempt to reduce profit-shifting by global corporations.
3. Pillar two aims to ensure that large multinationals with revenues of at least €750 million ($790 million) pay an international minimum effective tax rate of 15% in all the countries in which they operate.
4. The EU’s minimum tax rate move is seen as crucial to saving pillar two after the measure had gone cold on both sides of the Atlantic due to fierce political and business resistance.
5. European ambassadors have now set the ball rolling on applying the tax floor rate by advising the Council of Ministers to formally adopt the pillar two directive. The EU law is expected to be transposed into member states’ domestic rules by the end of 2023.
6. One feature of the Pillar two is that a country that enacts the measure can collect taxes on profits made by companies based in other jurisdictions to ensure the goal of 15% is reached if those other jurisdictions don’t collect the tax themselves. This could let the U.K. tax a U.S. company on some of its profits until the U.S. adopts the minimum tax.
Allahabad HC imprisons DC of Income Tax for a week and imposes a fine for contempt of court
Prashant Chandra Versus Harish Gidwani Deputy Commissioner Of Income Tax Range 2 Citation: Contempt Application (Civil) No. 562 of 2016
Facts:
1. The applicant/assessee has filed a contempt application under Section 12 of the Contempt of Courts Act, 1971, alleging willful and deliberate disobedience of a judgment and order dated March 31, 2015, passed by a Division Bench of the Court.
2. The notice U/S 143(2) of the Income Tax Act, of the Assessing Officer for the AY 2011-12 was originally quashed on the ground of jurisdiction, and consequential orders were also directed to be set aside.
3. The petitioner contended that deliberately and intentionally, the outstanding notice became operative on the web portal for seven months, which ruined the reputation of the applicant. The act of the Income Tax Authority was deliberate and willful disobedience of the judgement.
Hon Allahabad HC held as below:
1. There is an element of public policy in punishing civil contempt since the administration of justice would be undermined if the order of any court of law could be disregarded with impunity.
2. Unnecessarily mens rea is not required to be proved in a case of contempt, but in the present case the violation is willful, deliberate, and coupled with intention and motive to harass the petitioner. The violation is not only contemptuous but also malicious.
3. A fine of Rs. 25,000 be imposed, along with simple imprisonment for a period of one week on the contemnor who was the Deputy Commissioner of Income Tax. In case of default, the contemnor would suffer one day's further simple imprisonment.
21/12/2022
GST Council Proposals:
The 48th Meeting of the GST Council was held on 17th December, 2022 through Video Conference, under the chairpersonship of the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman. Some relevant extracts from the discussions are given below:
1. Clarification on Rental Charges:
No GST is payable where the residential dwelling is rented to a registered person if it is rented it in his/her personal capacity for use as his/her own residence and on his own account and not on account of his business.
2. Incentive paid to banks by Central Government under the scheme for promotion of RuPay Debit Cards and low value BHIM-UPI transactions are in the nature of subsidy and thus not taxable.
3. Measures for facilitation of trade:
Decriminalization under GST:
The Council has recommended to -
a. raise the minimum threshold of tax amount for launching prosecution under GST from Rs. One Crore to Rs. Two Crores, except for the offence of issuance of invoices without supply of goods or services or both;
b. reduce the compounding amount from the present range of 50% to 150% of tax amount to the range of 25% to 100%;
c. decriminalise certain offences specified under clause (g), (j) and (k) of sub-section of section 132 of CGST Act, 2017, viz.-
obstruction or preventing any officer in discharge of his duties;
deliberate tempering of material evidence;
failure to supply the information.
It will lessen the pain of the assessees who are struggling hard to comply with the various provisions and sometimes due to certain reason are not able to comply fully knowingly or unknowingly
4. Good News for Unregistered persons for Refund in case of cancellation of contract etc.:
Refund to unregistered persons:
There is no procedure for claim of refund of tax borne by the unregistered buyers in cases where the contract/ agreement for supply of services, like construction of flat/house and long-term insurance policy, is cancelled and the time period of issuance of credit note by the concerned supplier is over. The Council recommended amendment in CGST Rules, 2017, along with issuance of a circular, to prescribe the procedure for filing application of refund by the unregistered buyers in such cases.
5. Reversal of ITC in case of part payment to supplier: The Council has recommended to amend sub-rule (1) of rule 37 of CGST Rules, 2017 retrospectively with effect from 01.10.2022 to provide for reversal of input tax credit, in terms of second proviso to section 16 of CGST Act, only proportionate to the amount not paid to the supplier vis a vis the value of the supply, including tax payable.
6. The Council recommended to insert Rule 37A in CGST Rules, 2017 to prescribe the mechanism for reversal of input tax credit by a registered person in the event of non- payment of tax by the supplier by a specified date and mechanism for re-availment of such credit, if the supplier pays tax subsequently. This would ease the process for complying with the condition for availment of input tax credit under section 16(2)(c) of CGST Act, 2017.
7. Clarity on the requirement of submission of certified copy . Sub-rule (3) of rule 108 and rule 109 of the CGST Rules, 2017 to be amended to provide clarity on the requirement of submission of certified copy of the order appealed against and the issuance of final acknowledgment by the appellate authority. This would facilitate timely processing of appeals and ease the compliance burden for the appellants.
8. Withdrawal of Appeals.: Rule 109C and FORM GST APL-01/03 W to be inserted in the CGST Rules, 2017 to provide the facility for withdrawal of an application of appeal up to certain specified stage. This would help in reducing litigations at the level of appellate authorities.
9. Cancellation of Registration of Tax Deductor or Tax Collector. Sub-rule (3) of rule 12 of CGST Rules, 2017 to be amended to provide for facility to the registered persons, who are required to collect tax at source under section 52 or deduct tax at source under section 51 of CGST Act, 2017, for cancellation of their registration on their request.
10. Issuance of the following circulars in order to remove ambiguity and legal disputes on various issues, thus benefiting taxpayers at large:
Procedure for verification of input tax credit in cases involving difference in input tax credit availed in FORM GSTR-3B vis a vis that available as per FORM GSTR-2A during FY 2017-18 and 2018-19.
Clarifying the manner of re-determination of demand in terms of sub-section (2) of section 75 of CGST Act, 2017.
Clarification in respect of applicability of e-invoicing with respect to an entity Detailed note on such clarifications may be shared later.
11. Linking of CBDT data base:
PAN-linked mobile number and e-mail address (fetched from CBDT database) to be captured and recorded in FORM GST REG-01 and OTP-based verification to be conducted at the time of registration on such PAN-linked mobile number and email address to restrict misuse of PAN of a person by unscrupulous elements without knowledge of the said PAN-holder.
12. Restriction of return filings upto three years only from due date: Section 37, 39, 44 and 52 of CGST Act, 2017 to be amended to restrict filing of returns/ statements to a maximum period of three years from the due date of filing of the relevant return / statement:
13. New Compliance with regard to mismatches of Tax Liability as per GSTR1 and GSTR 3B: Nav Rule 88C and FORM GST DRC-01B to be inserted in CGST Rules, 2017 for intimation to the taxpayer, by the common portal, about the difference between liability reported by the taxpayer in FORM GSTR-1 and in FORM GSTR-3B for a tax period, where such difference exceeds a specified amount and/ or percentage, for enabling the taxpayer to either pay the differential liability or explain the difference.
Further, clause (d) to be inserted in sub-rule (6) of rule 59 of CGST Rules, 2017 to restrict furnishing of FORM GSTR-1 for a subsequent tax period if the taxpayer has neither deposited the amount specified in the intimation nor has furnished a reply explaining the reasons for the amount remaining unpaid. This would facilitate taxpayers to pay/ explain the reason for the difference in such liabilities reported by them, without intervention of the tax officers.
The above would be given effect through the relevant circulars/ notifications/ law amendments which alone shall have the force of law.
20/12/2022
Ahead of the Uttar Pradesh urban local body polls, the state wide raids on traders to detect GST evasion has left a bitter state in the community’s mouth. The trader community is a key voter group in the urban local body polls which is expected to be watched keenly as it is the last major one in the state before the 2024 general elections. The raids were started in 71 of the 75 districts across the state on December 5. However, a week later, the state government halted the raids owing to protests across cities by the trader community.
Karnataka HC sets aside Xiaomi’s Provisional Attachment of Rs. 3700 Crore by Income Tax Dept: Xiaomi Technology India Pvt. Ltd. (WP No.16692 Of 2022)
Facts:
1. As part of its business, the petitioner has to pay royalties to Qualcomm and Beijing Xiaomi Mobile Software Company Ltd.
2. The Income Tax Department issued a show cause notice as to why the Royalty should not be disallowed. They contended that email correspondence, investigation reports, findings of the TPO, etc., clearly indicated that the petitioner was attempting to reduce the taxable income for the purpose of evading payment of tax.
3. Subsequently, the department passed the impugned order, provisionally attaching the fixed deposits of the petitioner in a sum of INR 3,700 crores for a period of six months. The aggrieved assessee approached the Karnataka High Court with the present writ petitioner.
Karnataka HC held as below:
1. Except for stating that there is likely addition of the amount mentioned in the order, no valid or reasons were presented by the revenue in showing the necessity of attaching the assets of the assessee.
2. A mere apprehension that huge tax demands are likely to be raised on completion of assessment is not sufficient for the purpose of passing a provisional attachment order and the exercise of the same must necessarily be preceded by the formation of an opinion that it was necessary to do so for the purpose of protecting the interest of Government revenue.
3. In the interest of justice, it would be just and appropriate to direct the petitioner not to make payment in the form of royalty or any other form to any entities outside India till the conclusion of assessment proceedings by the respondents. However, the petitioner's right to take overdrafts on the subject fixed deposits and make payments from overdrafts from the respective banks to foreign entities would also serve the interests of justice.
18/12/2022
Net Direct Tax collections for the FY 2022-23have grown at over 19.81% Advance Tax collections for the FY 2022-23 stand at Rs. 5,21,302 crore as on 17.12.2022 which shows a growth of 12.83% Refunds aggregating to Rs. 2,27,896 crore have been issued in the current fiscal. The figures of Direct Tax collections for the Financial Year 2022-23, as on 17.12.2022 show that net collections are at Rs. 11,35,754 crore, compared to Rs. 9,47,959 crore in the corresponding period of the preceding Financial Year i.e FY 2021-22, representing an increase of 19.81%. The Net Direct Tax collection of Rs. 11,35,754 crore (as on 17.12.2022) includes Corporation Tax (CIT) at Rs. 6,06,679 crore (net of refund) and Personal Income Tax (PIT) including Securities Transaction Tax(STT) at Rs. 5,26,477 crore (net of refund).
In the case of GST evasion, Uttarakhand has got the first conviction under the GST Act. The Court of Chief Judicial Magistrate (CJM) Haridwar has sentenced convicted businessman Surendra Singh to five years imprisonment and fined one lakh. The state tax department claims that this is the first case in the country of a court conviction for GST evasion.
Validity of Show Cause Notice/Order communicated on e-mail but not uploaded on GST Common Portal— Such communication does not follow the mandatory procedure prescribed under Rule 142(1) of GST Rules therefore, not a valid communication. - Madhya Pradesh High Court
Title: Shri Shayam Baba Edible Oils vs The Chief Commissioner
Court: Madhya Pradesh High Court
Citation: 2021 (99) Karnataka Law Journal 59 (MP HC) (DB).
The Delhi High Court Division Bench of Justices Vibhu Bakhru and Purushaindra Kumar Kaurav directed the department (respondents) to unblock the Input Tax Credit (ITC) of petitioner available in his Electronic Credit Ledger (ECL). Additionally, solely because the supplier has not been paid, it is not possible to restrict the ITC. Under the name “Mahavir Impex”, the petitioner operates business and supplies of mobiles and mobile parts. The petitioner filed a Writ Petition in opposition to the respondents’ action in blocking the ITC of Rs.1,37,17,022/-, which is credited in the petitioner’s ECL. On February 11, 2020, the department blocked the ITC without providing any chance to be heard. The petitioner expressed his dissatisfaction that his ITC had been suspended for more than 18 months (more than a year). According to the bench, the conjoint reading of Rule 37 of the Central Goods and Services Tax Rules and the proviso to Section 16(2) of the Central Goods and Services Tax Act leaves no room for doubt that a taxpayer is entitled to avail of ITC in the first instance even though he has not paid the supplier for the goods/services. Additionally, it was noted that restrictions placed on ITC cannot last longer than a year from the day they were put in place. Thus, the petitioner has the right to get the merits of such a long and unauthorised restriction.
17/12/2022
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT), held that Insurance Premium for paid for Keyman insurance policy of Life Insurance Corporation of India (LIC) and is allowable as expenses.
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT), presided over by a Judicial Member Chandra Mohan Garg and and an Accountant Member Pradeep Kumar Khedla upheld the decision of the Commissioner of Income Tax (Appeal) [CIT(A)] that the security premium reserve cannot be regarded as part of accumulated profits while deciding the case of Bhagwati Coal Movers (P) Ltd. The appeal was filed by the Revenue against the order of the CIT(A), Faridabad raised from an assessment order passed by the Assessing Officer (AO) for the A.Y. 2013-14. The Appellate Tribunal upheld the decision of the CIT(A) and observed that the CIT(A) has restricted the addition to the extent of ‘General Reserve’ after excluding the ‘Security Premium Reserve’ which has been regarded to be outside the ambit of expression ‘accumulated profits’ under Section 2(22)(e) of the Income Tax Act and held that the security premium reserve cannot be regarded as a part of accumulated profits.
16/12/2022
Goods and Services Tax Appellate Tribunal likely by mid-2023: The much-awaited GSTAT could be set up by the middle of 2023. The GST Council is expected to take up the report of the group of ministers on the appellate tribunal in its upcoming meeting on 17-Dec. GSTAT will hear appeals against orders passed by the GST appellate authorities. Appeals for cases involving up to Rs 50 lakh would be heard by a single member while those above this threshold would be heard by a division bench of at least one judicial and one technical member.
The U.S. Federal Reserve reinforced its inflation fight Wednesday by raising its key interest rate for the seventh time this year and signalling more hikes to come. But the Fed announced a smaller hike than it had in its past four meetings at a time when inflation is showing signs of easing. The Fed boosted its benchmark rate a half-point to a range of 4.25 per cent to 4.5 per cent, its highest level in 15 years. Though lower than its previous three-quarter-point hikes, the latest move will further heighten the costs of many consumer and business loans and the risk of a recession. The policymakers also forecast that their key short-term rate will reach a range of five per cent to 5.25 per cent by the end of 2023. That suggests that the Fed is prepared to raise its benchmark rate by an additional three-quarters of a point and leave it there until the end of next year. Some economists had expected that the Fed would project only an additional half-point increase.
After tech giants like Meta, Twitter, Microsoft and Amazon, Google could be the next to issue pink slips to thousands of employees as CEO Sundar Pichai reportedly had no reassuring words for employees on layoffs. The Indian-origin chief executive of the tech major said that its "tough to predict the future".
During a recent all-hands meeting, Pichai was asked about layoffs, to which his response was he can’t honestly make forward-looking commitments about the same as the future is tough to predict. After an employees enquired whether Google would “cull” its workforce in 2023, the CEO stated that Google was making changes to "better weather the storm" of the economy, but he wouldn't rule out cuts. Last month, it had emerged that the search engine giant is now planning to ease out 10,000 employees through a new ranking and performance improvement plan. According to a report in The Information, this is due to pressure from an activist hedge fund, adverse market conditions and a need to cut costs.
15/12/2022
Starting in 2023, Immigration, Refugees and Citizenship Canada (IRCC) will use new authorities to hold Express Entry draws that invite candidates based on specific attributes rather than their overall CRS score. The expected changes to Express Entry were made possible by Bill C-19 which received Royal Assent, or passed in both houses of parliament, on June 23. Under the Bill, the immigration minister has the authority to invite candidates with any in-demand skills or abilities. Immigration Minister Sean Fraser told CIC News in an interview last June that the changes to Express Entry would help Canada select immigrants who are already primed for economic success. Canada is currently undergoing a labour shortage due to an aging population and low birth rate. It is expected that nine million Canadians will reach the retirement age of 65 by 2030, and there are not enough younger Canadians to fill their positions, leading to a high number of job vacancies that will be difficult to fill. Canada relies on immigration to maintain its workforce and keep the economy strong.
To help maintain and grow the workforce, the immigration levels plan 2023-2025 targets admissions of up to 500,000 new permanent residents per year by 2025. Of these, over 110,000 will be admitted through Express Entry programs. The Express Entry application management system endeavours to streamline processing for skilled workers who apply under three economic immigration programs; the Federal Skilled Worker Program (FSWP), the Federal Skilled Trades Program (FSTP) and the Canadian Experience Class (CEC).
14/12/2022
The third advance tax payment instalment for fiscal year 2022-2023 is due on December 15, 2022, and must be paid by this date. Advance tax is income tax paid in advance during the fiscal year rather than at the conclusion. The tax laws specify when this must be paid throughout the year. Advance tax, also called as earn tax, is to be paid in instalments on the due dates set by the income tax department.
Advance tax due dates:
15% of the advance tax should be paid on or before 15 June of the financial year.
45% of the advance tax (less tax already paid) should be paid on or before 15 September.
75% of the advance tax (less tax already paid) should be paid on or before 15 December.
100% of the advance tax (less tax already paid) should be paid on or before 15 March.
European Union policy makers reached a landmark deal to slap an emissions levy on some imports, in an attempt to ensure the bloc’s green overhaul doesn’t leave its industries at a disadvantage. After hours of late-night negotiations, EU governments and the European Parliament thrashed out key details of the so-called Carbon Border Adjustment Mechanism. The idea is that carbon-intensive industries forced to comply with Europe’s world-leading climate laws won’t face unfair competition from unfair competition from producers operating in countries with weaker rules. The EU’s plans have already caused diplomatic unease in nations such as China and India, and there’s concern that Russia may not comply. The move comes amid growing tensions over a major US climate package offering subsidies to American manufacturers — seen as putting European counterparts at risk. The CBAM will also include indirect emissions under certain conditions. The commission will assess the methodology for such pollution before the end of the transition period. The measure covers carbon-intensive sectors such as cement, steel, aluminum, fertilizers, electricity production and hydrogen. Reporting requirements will start in October 2023, as part of a gradual phase-in.
The Central Board of Direct Tax (CBDT) has notified relaxation of e-filing of Form 10F required to be filed by the non-residents for claiming benefits of any tax-treaty with respect to any income earned in India. Notification No. 03/2022 dated 16th July 2022 issued by Directorate of Income Tax (Systems) New Delhi in exercise of powers conferred under Rule 131(1)/(2) of the Income-tax Rules had mandated furnishing of Form 10F electronically. Many practical challenges were faced by the NRI taxpayers without a PAN Card as a result of this. The CBDT notified via issuance of DGIT(Systems) Notification No. 3 of 2022 that, Non-Resident taxpayers who are not having PAN and not required to have PAN as per relevant provisions of the Income Tax Act and Rules are exempted from mandatory electronic filing of Form 10F till 31st March 2023. It was also clarified by way of the notification that “such category of taxpayers may make statutory compliance of filing Form 10F till 31’t March 2023 in manual form as was being done prior to issuance of the DGIT(Systems) Notification No. 3 of 2022.”
The Goods and Services Tax (GST) Council will on Saturday consider raising the monetary threshold for launching prosecution for tax evasion, two people familiar with the Centre-state discussions said, as the federal indirect tax body aims to improve business climate and ease of doing business. The council is considering amending the penalty provisions for tax evasion, wrongful use of tax credits, and other offences. Currently, tax evasion of 1-2 crore attracts a jail term of up to one year and that for 2-5 crore up to three years, under Section 132 of the Central GST Act and corresponding state laws. The idea is to raise this monetary threshold for initiating prosecution in these cases, said one of the two people cited above. A third threshold. specified in the law, up to five years of imprisonment and fine where the tax evasion is 5 crore or more, is unlikely to be changed, the person said.
13/12/2022
Gold seizures by enforcement agencies have hit a three-year high of 3,083 kg in November this year, with Kerala accounting for the maximum cases of smuggled gold seized, Parliament was in- formed on Monday. Gold seizures across the country have gone up this year when compared to 2,383 kg seized in the 2021 calendar year and 2,154 kg in 2020. In 2019, 3,673 kg of gold was seized. In 2022 (up to November), 3,083.61 kg of gold was seized in 3,588 cases. In Kerala, 690 kg of the yellow metal was seized in 948 cases in 2022, up from 587 kg in 2021 and 406 kg in 2020. In 2019, 725 kg was seized. Maharashtra (474 kg in 484 cases), Tamil Nadu (440 kg in 809 cases) and West Bengal (369 kg in 214 cases) followed Kerala. MOS for Finance Pankaj Chaudhary said the Customs field formations and the Directorate of Revenue Intelligence (DRI) keep constant vigil and take operational measures, such as passenger profiling, risk-based interdiction and targeting of cargo consignments, non-intrusive inspection, rummaging of aircraft and coordination with other agencies to deter gold smuggling.
What is Form ITR-A?
1. ITR-A is a form provided to furnish a modified return by a successor company to a business reorganization for an assessment year.
2. Where businesses go through a reorganization the successor entity, is required to file modified returns for the period between the date of effectivity of the order and the date of issuance of the final order of the competent authority. Form ITR-A is the prescribed form by the Income Tax Department for filing such a return.
3. When two or more business goes under remodeling, reconstruction, amalgamation, or merger the resulting business or entity is known as the successor entity, and the businesses going under reorganization are known as the predecessor entity.
4. The prescribed form should be furnished within six months from the end of the month in which said order was issued.
5. The ITR-6 (applicable for companies) has been modified to include information contained in FORM ITR-A.
6. In Appendix II, in Form ITR-6- PART A-GEN, entries of the serial number (A19)(a)(i), have been substituted, for every assessment year commencing on April 01, 2022, or any, earlier assessment year.
(Rule 12AD of the Income Tax Rules)
Tax collection increased by 24 percent:
In the current financial year, between April and November, the net direct tax collection has increased by 24 percent to reach Rs 8.77 lakh crore. The Income Tax Department has recently given this information. This tax collection is 61.79 percent of the budget estimate for the whole year 2022-23. The ministry told through social media, “The net direct tax collection till November 30 stood at Rs 8.77 lakh crore, which is 24.26 per cent higher than the net collection of the same period last year.”
The latest round of the legal battle between diamantaire Jatin Mehta and Standard Chartered Bank and Grant Thornton, on the former’s application that India, and not England, is the appropriate jurisdiction for the proceedings, has concluded after a two-day hearing in the high court. The Mehtas have challenged the English court’s jurisdiction on grounds of forum non conveniens (inconvenient forum), but interestingly references were made to another case originating in the late 1960s involving the Maharani of Baroda and an international French art dealer. Mehta and his family members face allegations of using UK registered companies to launder proceeds of a fraud involving $1 billion of gold which arose due to default on repayments to 15 Indian banks in 2013. Over a decade after the default, the Mehtas are subject to a worldwide freezing order, but are seeking to halt the proceedings on the ground that the dispute has “everything to do with India" and has no meaningful connection with England.
In 1965, the Maharani of Baroda, who resided in France, bought a painting from Wildenstein for £32,920. It was supposed to be the painting of a female allegorical figure ‘La Poesie’ by the 18th century master Francois Boucher. It was a highly-sought-after work. Wildenstein belonged to a family famous for dealing in artefacts – his grandfather had started the business which had a presence in New York, Paris and London. In London he had an office in New Bond Street – incidentally, Nirav Mody too had an outlet there – and was a regular visitor to England. The painting he sold to the Maharani was certified by his London office to be authentic and valuable. The painting was brought to London to be sold in an auction by Sotheby’s. To the Maharani’s surprise, the auction house said it was worth £750 as it was not by Boucher but from someone in his circle. The Maharani approached the UK court seeking return of the money she paid for the painting along with damages. It took nine months for the writ, filed in 1969, to be served on Wildenstein. In June 1970, he was at the Ascot Races for a day where he was handed the papers. Wildenstein asked the court to set aside the writ on the ground that it was frivolous, vexatious, an abuse of process and caused him inconvenience. He also advanced the argument that France and not England was the correct jurisdiction. Besides, the correct jurisdiction would be France where the transaction took place and where both the parties ordinarily resided. The Maharani went to the court of appeal which ruled in her favour in March 1972.
12/12/2022
Few Salient features of CBDC:
1. As in the case of paper currency, the digital rupee would be distributed through banks. Currently, four banks have been selected — State Bank of India, ICICI Bank, IDFC First Bank and Yes Bank. 2. Users must have a digital wallet through a participating bank, which would be stored on their mobile phone or other electronic device.
3. Payments to merchants can be made using QR codes displayed at merchant locations. These four banks are expected to invite merchants and customers who would be part of the pilot project in the coming weeks which will help to build an ecosystem.
5. It is expected that the digital rupee will eventually replace the use of currency notes. The pilot project will be implemented in thirteen cities in India.
6. The digital currency will have denominations like regular currency and will also have images with serial numbers.
7. The digital rupee pilot project is the first phase of the two-phase CBDC deployment program. It was carried out on 1st November 2022 and allows people to use this digital currency for various transactions related to government securities.
8. While it is a completely central bank-issued and managed form of virtual currency, as of now, a few selected banks are to act as intermediaries to support the implementation of CBDCs.
9. Like cryptocurrency, the digital rupee is based on blockchain technology and aims to increase transaction efficiency and transparency.
10. In case of a token-based CBDC, the owner verify that his ownership of the token is genuine, while on the other hand, an account-based CBDC will be verified by the intermediary that it has been issued from.
11. The digital rupee is similar to sovereign currency and can be exchanged with fiat currency at par, i.e., one-to-one.
India is the second biggest consumer of gold, after China, which has led to massive imports worth USD 46.16 billion during 2021-22, up by nearly 33.41% from the previous year. This has been a major factor in the widening trade deficit of the country. The trade deficit rose from USD 102.62 billion to almost double at USD 192.41 billion in 2021-22.Gold is placed in the 102 ‘priority items,’ as listed by the Department of Commerce. Hence, it is stated that gold imports are high and need immediate intervention for domestic production and reducing India’s foreign trade deficit.Currently, there is only one gold mining company in the country in Karnataka – the Hutti Gold Mine. It has produced 84 tonnes of gold since independence.
Gold mining and refining can benefit India in the following ways:
1. Mining can help bring infrastructural investment and create employment in states like Bihar and Rajasthan – the two primary sources of gold.
2. Mining will help in supporting associated industries, as need for materials and machines to extract gold is there.
3. Using our mining potential will help in reduction of current account deficit (CAD).
4. While oil imports are primarily responsible for CAD, India’s huge gold imports are also a major factor in our CAD.
5. India imports gold, but also exports gems and jewellery in large quantities. Some of the largest customers of India are US, Russia, Hong Kong, and China. Thus, the industry, including gold, plays a huge role in maintaining foreign reserves of the country.
6. Gold is a crucial collateral for customers seeking loans. Pledging gold as security has been an ever-present feature of India’s market, especially during festive periods
India expected to receive $ 100 billion thru Forex remittances:
It is true that the trade deficit has been increasing due to higher volume and value of imports of oil and commodities. Exports have been rising but at a muted rate on account of recessionary trends in foreign countries. However, the silver lining on the cloud is that foreign exchange remittances to India from Indians working abroad are estimated to grow by 12 per cent during the current fiscal year and likely to touch $100 billion. This estimate has been made by the World Bank’s Migration and Development Division. The $100 billion remittance will be way ahead of what is received by China, Mexico and the Philippines. Mexico receives $60 billion every year by way of remittances from its overseas citizens and China receives $51 billion. The main reason for India achieving the milestone of $100 billion is that the share of remittances from skilled Indians working in the US, UK and Singapore has increased to 36 per cent from 26 per cent. Remittances from the US are the highest as a result of thousands of software engineers and others engaged in high skilled engineering jobs working in the US. Many students who graduated a couple of years ago have now got steady jobs in the developed countries which is reflected in the higher remittances to India in the current fiscal year.
11/12/2022
On Wednesday, RBI raised its repo rate by 35 basis points, or 0.35 of a percentage point. The latest was s the fifth successive hike in the policy rate since May, pushing it to 6.25% and making loans expensive. The policy rate has now reached the highest level since August 2018. A combination of rising interest rates and prices has affected affordability, and it may weaken further in 2023 amid the increasing cost of acquiring a house, said a JLL India study. But the momentum inhibitor is unlikely to last long, as India's focus on economic growth and likely easing of inflationary pressures are expected to reverse the current interest rate growth.
The Central Board of Indirect Taxes and Customs has notified dtd 09.12.2022 Postal Export (Electronic Declaration and Processing) Regulations, 2022 which shall apply to export of goods by any person, holding a valid Import-Export Code issued by the Director General of Foreign Trade, in furtherance of business through a foreign post office appointed by the Board. These regulations shall apply to export of goods by any person, holding a valid Import-Export Code issued by the Director General of Foreign Trade, in furtherance of business through a foreign post office appointed by the Board under clause (e) of sub-section (1) of section 7 of the Customs Act, 1962. The postal authorities shall set up, operate and maintain the PBE Automated System for filing of electronic declaration for export of goods through post. An exporter who wishes to export goods through post or his authorised agent shall register himself on the PBE Automated System. The PBE Automated System shall validate and recognise the registered person and enable him to file electronic declaration and upload supporting documents on the said system.
New circular on TDS from Salaries u/s 192 during the FY 2022-23:
1. The Central Board of Direct Taxes (CBDT) has issued a circular (F. No. 275/15/2022-IT(B)) dated 7th Dec, 2022, regarding the deduction of tax at source from salaries.
2. The Circular comprehensively explained employers' obligations regarding the deduction of tax at source from salaries under Section 192 of the Income-tax Act, 1961, for the financial year 2022–23.
3. The employer will deduct TDS from the salary payable to the employee. The salary received from the employer is classified as "Income" under the heading "Salary," and the employer is responsible for deducting TDS at the employee's normal income tax rates for the relevant fiscal year. The TDS deducted under Section 192 is reflected in Form 16, which is issued by the employer to the employee.
4. As per the circular, the employer should quote the gross amount of salary (including any amount exempt under section 10 and the deductions under chapter VI A) in column 321 (Amount paid or credited) of Annexure I of Form 24Q as per NSDL RPU (Return Preparation Utility) and mention codes as per Form 24Q of the Income Tax Rules, 2022.
5. The employer should quote the amount of salary, excluding any amount exempt under Section 10, in column 338 (Total amount of gross salary) of Annexure II of Form 24Q as per NSDL RPU.
6. Where a certificate is to be furnished in Form No. 16, the deductor may, at his option, use digital signatures to authenticate certificates.
10/12/2022
Loss making Paytm unusually considers a share buyback
1. Loss-making One 97 Communications, the parent company of Paytm, on Thursday, said its board will meet on December 13, 2022, to decide on a proposal for buyback of its shares.
2. Paytm has a net cash pile (including cash equivalent and investable balance) of Rs 9,182 crore as of September 2022 including around Rs 5,600 crore left from IPO proceeds of Rs 8300 crore.
3. While companies such as Infosys, TCS and RIL have done buy-backs from cash generated from their profits, that is not the case with Paytm as the company is not generating profits.
4. The company has made huge losses of Rs 2,325 crore in 2021-22, Rs 628 crore loss in the June quarter of 2022-23 and Rs 588 crore loss in the September quarter.
5. The buyback is being unusually done through funds raised from investors as the company has been incurring huge losses.
The Ministry of Finance has issued reminder dtd 09.12.2022 that all PAN Holders to link Aadhaar with PAN who have not linked it yet, except those who are exempted under Notification No. 37/2017 dated May 11, 2017. Failure to do so will lead to the unlinked PAN becoming inoperative. The Ministry of Finance has notified dtd 06.12.2022 that entities onboarded to perform authentication under Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 for the purpose of Prevention of Money Laundering Act, 2002 to use e-KYC Setu System after ensuring compliance by the System with standards of privacy and security under Aadhaar Act. The e-KYC setu shall be a system put in place by National Payments Corporation of India (NPCI) to enable verification of identity of a client or its beneficial owner by a reporting entity through authentication under the Aadhaar Act without disclosing the Aadhaar number of the individual to the reporting entity.
09/12/2022
The central bank digital currency (CBDC) will be as anonymous as paper notes, and all the relevant laws applicable to traditional cash will also apply to the new- age money now being trialled, the Reserve Bank of India (RBI) said on Wednesday. The amendment to the RBI Act, regard to CBDC, says that currency will also include digital currency,” said RBI Governor Shaktikanta Das while interacting with reporters after the monetary policy announcement. “So, in all respects, there is no difference in the eyes of the law; there is no difference in treatment between paper currency and digital currency. The income tax department has got certain limits on cash payments and withdrawals; the same rules will apply to CBDC. The central bank has Benefits For Customers asked lenders not to report low- value transactions made via the digital rupee, seeking to ensure its proposed virtual currency offers a similar degree of anonymity associated with paper money for business exchanges be- low a material value threshold. Bankers told ET that once the CBDC-R (Central Bank Backed Digital Currency-Retail) is transferred to customer wallets, banks will not track or re- port these transactions. “These transactions don’t leave a trace in the core banking system and that’s why they are more anonymous than the cur- rent digital transactions,” said a senior official at a bank involved in the Reserve Bank of India (RBI) pilot project. Hence, the RBI has asked banks “not to report these wallet transactions as part of mandatory regulatory reporting”. At present, most cash transactions in excess of Rs 50,000, such as bank deposits or purchases, require customers to disclose their permanent account number (PAN). While the RBI has not seta limit for CBDC-R, it is believed that retail transactions up to Rs 50,000 will not be reported. At the same time, transactions in excess of Rs 2 lakh will have to be reported for tax purposes. The CBDC-R gives far greater anonymity because the transactions are not hitting your bank account. Once you move the money to the wallet, they will not be reported,” said another banker. The RBI will know the aggregate CBDC-R in circulation, but it will not know exactly who owns how much of the virtual money, sources said.
The government on Wednesday told the Delhi High Court it will soon “arrive at a consensus” to settle a ?4,250-crore transfer pricing taxation demand raised on Vodafone India Services (VISPL). Vodafone thro- ugh its counsel Anuradha Dutt sought liberty to proceed with the arbitration relating to this dispute if the settlement talks with the government fail, and requested clarification to the court’s November 17, 2020, and December 8, 2020, orders relating to the case. A division bench comprising Justices Siddharth Mridul and Amit Sharma asked the government to respond to the modification application filed by telecom service provider and posted the matter for further hearing on December 14. “We will be able to arrive at a consensus soon,” government counsel Kirti Man Singh told the court. To this Dutt said, “We are largely agreeable. Vodafone had in January 2017 sought arbitration relating to two disputes with the government. One of these was the 2012 retrospective tax case that was settled through an amendment in 2021 after Vodafone won the arbitration case in September 2020. The other unsettled one relates to transfer pricing taxation demands raised against Vodafone India Services, a downstream subsidiary of Vodafone International Holdings BV (VIHBV).
India’s Financial Intelligence Unit (FIU) tracked 3,300 crypto accounts in the last eight months that it suspected were being used for money laundering, drug trafficking and other illegal activities, including funding social unrest. The agency has shared the information with other enforcement agencies and crypto exchanges, both in India and overseas. FIU has recommended closure of these accounts and has also reached out to international agencies. India is a member of the Egmont Group, an international group of financial intelligence units of 166 countries. “In last few months (April to November) we have tracked about 3,300 accounts, associated with various illegal activities,” a senior official said, adding that the list had been shared with the Enforcement Directorate, the Income Tax Department and the Central Bureau of Investigation. The enforcement agencies have already raised requests for closure of the crypto accounts in cases where they we- re local and operating on India-based crypto exchanges. The official added that the majority of transactions by these accounts were linked to drug trafficking, money laundering, child pornography and wildlife smuggling, with many going back to 2019. Three digital asset management companies are under the scanner and a detailed probe helped trace some of these accounts. Between 2019 and 2021, FIU detected illicit cryptocurrency facilitated drug transactions worth ?28,000 crore.
08/12/2022
Highlights of RBI changes:
1. Repo rate raised by 35 bps to 6.25%
2. MPC voted with 5-1 majority in favour of a 35 bps rate hike
3. MPC decision and market expectations by and large aligned
4. MSF rate adjusted to 6.5%
5. SDF rate adjusted to 6.0%
6. MPC decided to focus on withdrawal of accommodation
7. Monetary policy stance retained by 4-2 majority
8. Calibrated action needed to anchor inflation expectations
9. MPC felt further calibrated policy action warranted
10. Adjusted for inflation policy rate is still accommodative
11. Overall monetary and liquidity conditions are accommodative
12. FY23 GDP growth projection at 6.8%
13. Apr-Jun real GDP growth seen at 7.1%
14. Revises FY23 GDP growth projection to 6.8% from 7.0%
15. Revises Apr-Jun real GDP growth projection to 7.1% from 7.2%
16. Jul-Sep real GDP growth seen at 5.9%
17. Revises Oct-Dec real GDP growth projection to 4.4% from 4.6%
18. Revises Jan-Mar real GDP growth projection to 4.2% from 4.6%
19. FY23 inflation projection at 6.7%
20. Outlook for dollar, imported inflation remains uncertain
21. Jul-Sep CPI inflation seen at 5.4%
22. Revises Jan-Mar CPI inflation projection to 5.9% from 5.8%
23. Retains Apr-Jun CPI inflation projection at 5.0%
24. Revises Oct-Dec CPI inflation projection to 6.6% from 6.5%
25. Projections assume India crude basket at $100/bbl
26. Actions to be nimble, in best interest of economy
27. To restore trade hours to 0900-1700 IST for all money markets
28. To keep Arjuna's eye on evolving inflation dynamics
29. Monetary policy will not be tightened endlessly
30. Terminal rate can be anybody's guess
07/12/2022
Some companies that dealt with third parties in carrying out trades with Iran and other countries have come under the lens of the Enforcement Directorate (ED). The central agency has asked about a dozen of them to share information on payments against third-party exports and imports for the past 6-7 years. In such trade transactions, an Indian exporter shipping goods to Iran receives payments from another party located in a third country, such as the UAE. Such transactions are allowed and have been permitted by the Reserve Bank of India since 2013. But companies that made or received payments from another country without any tripartite agreement have drawn the attention of ED. “Probably, no agreement was signed as they did not want to leave a paper trail of having received payments in dollars from a third party representing an Iranian entity,” said a person familiar with the development. The notices from the ED make no mention of Iran, but a predominant portion of third-party trades have been with the West Asian country that has over the years faced harsh sanctions from the US.
The Goods and Services Tax (GST) Network has introduced a new facility that allows for revoking the suspension of registration. The facility is for those taxpayers who file their pending returns after the receipt of the show-cause notice issued by the GST system. “Facility to initiate drop proceeding for suspension of registration at the GST portal and revoke the suspension of registration,” GST Network said in a post on Twitter on Wednesday It said before this functionality, the registration of those taxpayers who had filed their pending returns but did not respond to the show-cause notice remained suspended despite filing their returns. “Now such taxpayers have been given the facility to initiate drop proceedings on their own once the pending returns are filed. So, if taxpayers have filed all pending returns, and their registration status is still suspended, then taxpayers can revoke the suspension with a single click by initiating drop proceeding,” GST Network tweeted. The move will provide relief to taxpayers who were facing suspension of their registration for a long time, resulting in litigation and before various courts.
06/12/2022
Important ruling by Madras HC :
Chartered Accountant can't be prosecuted under the PMLA for the certificate issued in Form 15CB based on non-genuine documents submitted by the client:
Murali Krishna Chakrala v. Deputy Director, Directorate of Enforcement. Even on a demurrer, on a perusal of Form 15CB, we find that a Chartered Accountant is required to only examine the nature of the remittance and nothing more. The Chartered Accountant is not required to go into the genuineness or otherwise of the documents submitted by his clients. This could be compared with the legal opinion that are normally given by panel lawyers of banks, after scrutinizing title documents without going into their genuinity. A Panel Advocate, who has no means to go into the genuinity of title deeds and who gives an opinion based on such title deeds, cannot be prosecuted along with the principal offender. Applying the same anomaly, we find that the prosecution of Murali Krishna Chakrala, in the facts and circumstances of the case at hand, cannot be sustained.
Royal Bank of Canada (RBC) has agreed to buy the Canadian arm of multinational financial service company HSBC for $13.5 billion. The deal is the largest ever reached between two domestic banks in Canadian history. RBC says the transaction is subject to “closing conditions,” including regulatory and government approvals before making the deal official. HSBC Canada offers the opportunity to add a complementary business and client base in the market we know best and position us to be the bank of choice for commercial clients with international needs, newcomers to Canada and affluent clients who need global banking and wealth management capabilities,” says RBC President and CEO Dave McKay.
05/12/2022
Appropriateness of TP method not a question of law, when the department has based its conclusion on factual evidence: Delhi HC
Akzonobel India Pvt Ltd (ITA 370/2022)
Facts:
1. The appellant filed an appeal on the ground that ITAT has erred in subjecting the transaction pertaining to receipt of administrative services to comparable uncontrolled price (‘CUP’) method without demonstrating any comparable instances and ignoring the arm's length analysis submitted by the Appellant.
2. He also stated that similar administrative services have been provided in the subsequent assessment years and have been accepted by the ITAT.
3. The ITAT, on the other hand, has given concurrent findings of fact that the Appellant had failed to furnish evidence to demonstrate that administrative services were actually rendered by the AE and the assessee had received such services.
4. In fact, the ITAT has noted in the impugned order that “On a specific query made by the Bench to demonstrate the receipt of services from AE through cogent evidence, including, any communication with the AE, learned counsel for the assessee expressed his inability to furnish any evidence and repeated his submission to restore the matter back the Assessing Officer for enabling the assessee to furnish evidence, if any”.
Hon. Delhi HC held as below:
1. Every Assessment Year is a separate unit which is governed by its own peculiar facts. Further, the ITAT in the impugned order has clarified that its decision would not prejudice the assessee’s claim in any other assessment year, as it has to be decided based on the evidences produced to establish the claim of receipt of services from AE.
2. This court in Principal Commissioner of Income Tax vs. Make My Trip India (P) Ltd., (2017) 87 taxmann. com 284 (Delhi) has held that difference of opinion between the parties, as to the appropriateness of one or the other methods to calculate arm’s length price, cannot per se be a ground for intereference and the appropriateness of the method unless shown to be contrary to the Rules specially 10B and 10C are hardly issues that ought to be gone into under Section 260A of the Act.
3. The appeal is dismissed.
04/12/2022
FATCA Reporting for investors:
1. The United States Tax Department came up with FATCA guidelines in 2010 to enforce tax compliance and avoid tax evasion. FACTA stands for Foreign Account Tax Compliance Act.
2. The Indian Government signed the Inter-Governmental Agreement (IGA) with the United States of America in the year 2015 for the implementation of FATCA.
3. Effective January 2016, it is mandatory for all Indian and NRI investors (existing and new) to file a FATCA self-declaration. While the details might be slightly different with each financial institution, the standard information required is as follows:
a. Name
b. Permanent Account Number (PAN)
c. Address
d. Place (city/state) of birth
e. Country of birth
f. Nationality
g. Gross Annual Income
h. Occupation
i. Whether the resident of another country? If yes, then the country of residence, Tax ID number, and type
4. The declaration asks explicitly to include the USA as a country of residence if you are a US citizen or a green cardholder. This holds even if you have moved to India and are now an Indian resident.
5. IRS of USA requires an annual report from Indian and foreign banks located in India against bank accounts as maintained in India by person of USA about maximum outstanding balance in account in calendar year in India.
Impact of SC judgement on taxability of surplus amount after revaluation of assets credited to partners’ capital account:
1. Hon SC has recently pronounced its judgement in respect of taxability of surplus amount after revaluation of any assets, which is credited to the partners’ capital account.
2. Hon SC has held that the assets so revalued and the credit into the capital accounts of the respective partners can be said to be ‘transfer’ and which fall in the category of ‘otherwise’ and therefore, the provision of Section 45(4) shall be applicable.
3. The amendment in Section 45(4) with effect from 1st April 2021 takes cares of the taxability of profit due to revaluation profit/ reserve in a partnership firm in the case of reconstitution of the firm.
4. However this judgement is applicable to cases prior to 1st April 2021, wherein, one step ahead and declare the revaluation of any assets and credited the same in Partners’ capital account as ‘transfer’ and it’s a taxable event.
5. Thus, now, even before the distribution / withdrawal by partners, the transaction of revaluation and credit the same in partners’ capital account will be taxable at the time of event of revaluation.
6. This judgement can affect the transactions prior to 1st April 2021, which resulted in to transfer of properties worth crores through the medium of a partnership firm without payment of any capital gains- these cases may now be reopened for scrutiny by the income tax authorities.
Case: CIT Vs Mansukh Dyeing and Printing Mills (Civil Appeal No. 8258 of 2022)
03/12/2022
10 Salient features of the just launched Digital Rupee:
1. The Digital Rupee (eRs-R) would be in the form of a digital token that represents legal tender.
2. It would be issued in the same denominations that paper currency and coins are currently issued.
3. It would be distributed through intermediaries ie. banks.
4. Eight banks have been identified for phase-wise participation in this pilot.
5. The first phase will begin with four banks, namely State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank in four cities across the country.
6. The pilot would initially cover four cities, namely, Mumbai, New Delhi, Bengaluru and Bhubaneswar.
7. Users will be able to transact with eRs-R through a digital wallet offered by the participating banks and stored on mobile phones/devices.
8. When you have money in your bank account, it usually attracts interest. When it comes to the eRs-R , it won’t earn any interest and its value of it will remain constant.
9. Transactions can be both person-to-person (P2P) and person-to-merchant (P2M). Payments to merchants can be made using quick response (QR) codes displayed at merchant locations.
10. The main advantage over crypto currency is that eRs-R is issued and controlled by RBI.
01/12/2022
CBDC is a Digital form of currency notes issued by RBI (e-Rupee). In layman's terms, it is money that don't have physical existence and exists digitally only! It’s not much different from banknotes, but being digital it is easier, faster and cheaper
A. Types of CBDC:
Two broad types
1. General purpose/Retail (e-R)
2. Wholesale (e- W)
Retail e- would be potentially available for use by all (Private sector, non-financial consumers and businesses)
Wholesale e- is intended for the settlement of Inter-bank transfers and related wholesale transactions
While Retail e- is an electronic version of cash primarily meant for retail transactions. While wholesale CBDC is designed for restricted access to select financial institutions.
B. Two models for issuance and management of e-rupee
1. Direct model (Single Tier model)
2. Indirect model (Two-Tier model)
A Direct model would be the one where RBI is responsible for managing all aspects of the CBDC system viz. issuance, account-keeping and transaction verification.
In an Indirect model, RBI & intermediaries (Banks), each play their respective role. In this model RBI issues CBDC to consumers indirectly through intermediaries and any claim by consumers is managed by the intermediary (RBI only handles wholesale payments to intermediaries).
C. Forms of CBDC:
e-rupee can be structured as:
- token-based
- account-based
A token-based CBDC is a bearer-instrument like banknotes i.e whosoever holds e-Rupee at a given point would be presumed owner
An account-based system would require maintenance of record of balances & transactions of all holders of e-rupee and indicate the ownership of monetary balance. Also, in a token-based e-rupee, the person receiving e-rupee will verify that his ownership of the token is genuine, whereas in an account-based CBDC, an intermediary verifies the identity of an account holder. Considering the features offered by both the forms of CBDCs, a token-based e-rupee is viewed as a preferred mode for CBDC-R as it would be closer to physical cash, while account-based CBDC may be considered for CBDC-W.
D. Choice of Technology:
1. On Conventional centrally controlled database
2. On Distributed Ledger Technology
The two technologies differ in terms of efficiency and degree of protection from single point of failure.
The gross GST revenue collected in the month of November 2022 is 1,45,867 crore of which CGST is 25,681 crore, SGST is 32,651 crore, IGST is 77,103 crore (including 38,635 crore collected on import of goods) and Cess is 10,433 crore (including 817 crore collected on import of goods). The government has settled rs 33,997 crore to CGST and rs 28,538 crore to SGST from IGST as regular settlement. The total revenue of Centre and the States after regular settlements in the month of November 2022 is rs 59678 crore for CGST and rs 61189 crore for the SGST. In addition, Centre had also released rs17,000 crore as GST compensation to States/UTs in November 2022. The revenues for the month of November 2022 are 11% higher than the GST revenues in the same month last year, which itself was Rs. 1.31,526 crore. During the month, revenues from import of goods was 20% higher and the revenues from domestic transaction (including import of services) are 8% higher than the revenues from these sources during the same month last year. Revenues from import of goods 20% higher and revenues from domestic transaction (including import of services) 8% higher than the same month last year.
GSTN ) has enabled 21 banks to make GST Payments:
Axis Bank
Bank of Baroda
Bank of India
Bank of Maharashtra
Canara Bank
Central Bank of India
City Union Bank
Federal Bank
HDFC Bank
ICICI Bank Limited
IDBI Bank
Indian Bank
Indian Overseas Bank
Jammu and Kashmir Bank Limited
Karur Vysya Bank
Kotak Mahindra Bank Limited
Punjab and Sind Bank
Punjab National Bank
State Bank of India
UCO Bank
Union Bank of India
30/11/2022
The Reserve Bank of India (RBI) has announced the launch of the first pilot for retail digital Rupee (e?-R) on December 01, 2022. Earlier, on 31st October 2022, the RBI had, in a Press Release, indicated that the pilot in e?-R would commence in a month’s time. The pilot would cover select locations in closed user group (CUG) comprising participating customers and merchants. The e?-R would be in the form of a digital token that represents legal tender. It would be issued in the same denominations that paper currency and coins are currently issued. It would be distributed through intermediaries, i.e., banks. Users will be able to transact with e?-R through a digital wallet offered by the participating banks and stored on mobile phones / devices. Transactions can be both Person to Person (P2P) and Person to Merchant (P2M). Payments to merchants can be made using QR codes displayed at merchant locations. The e?-R would offer features of physical cash like trust, safety and settlement finality. As in the case of cash, it will not earn any interest and can be converted to other forms of money, like deposits with banks.
The Kerala High Court, while considering a writ petition against the delay in processing the income tax refund due to the technical glitches in the online portal, has directed the Centralized Processing Centre (CPC) to initiate the process and allow the refund to the assessee along with interest. On the other hand, the department has held that the refund could not be made only on account of some technical defect and the Director General of Income Tax has already taken up the matter with the Centralized Processing Centre, Bengaluru. The department contended that the no manual refund is possible and all refund applications are processed at the Centralized Processing Centre at Bengaluru.
29/11/2022
India’s super rich are splurging on long-range business jets that can fly as far as Europe and even the US, buoyed by a rise in personal wealth and a preference for exclusive modes of travel post Co- vid-19. Media baron Kalanithi Ma- ran’s Sun TV, the Adani Group and the [Cyrus and Adar] Poonawallas, owners of Serum Institute of India, are among the corporates and high net-worth individuals who have bought bigger private jets in recent times, multiple people in the know said. Sun TV, for instance, invested in a Bombardier Global 7500, the longest range private jet currently in India, this year. Priced at $75 million, the jet has a range of 7,700 nautical miles, which would take it as far as the US. Adani Group bought a Bombardireer Global 6500 this year while the Poonawallas bought the same air craft last year. At list prices, the jet can cost up to $56 million and has a range of 6,600 nautical miles, reaching destinations beyond Europe. People who have business, travel to the UK or Europe and need a minimum range of 9-10 hours of non-stop flying and that is why we have invested and got these aircraft,” Adar Poonawalla, CEO of Serum Institute of India, told ET. Navin Jindal-owned Jindal Group, invested in a Gulfstream G650ER with a range of 7,000 nautical miles, and Hero Group that bought a Falcon 8X with a similar range. The reason behind this is that having a non-Indian registry gives you flexibility of operations, ability to fly at shorter notice as most countries do not require permits for aircraft under these registrations.
According to a Knight Frank survey the billionaire population in India grew at the fastest-yet rate of 19% in 2021, while their wealth grew 21.4% to $384 billion.
The Ministry of Corporate Affairs (MCA) has penalized the director of “KOSHER REALHOME PRIVATE LIMITED” for incorrect filing and certification of e-form AOC-4. The company viz. KOSHER REALHOME PRIVATE LIMITED (hereinafter known as ‘company’) is a registered company with this office under the Companies Act, 1956 having its registered office as per MCA21 Registry at the office. No 208, Shopping 3-A, Centre, Veer Savarkar Block, Shakarpur, Delhi East Delhi DL 110092 IN. The company’s paid-up share capital of Rs. 1,00,000 is divided into 10,000 shares @10 each. The subject company has admitted that at the time of filing e-form AOC-4 vide SRN R86029659 dated 11.10.2022 the financial statements of Ice Glory Communication Private Limited.
MCA penalizes directors for not filing Notes to Accounts forming part of Financial Statements
The Ministry of Corporate Affairs(MCA) has imposed penalty of Rs.4,50,000 on directors for not filing Notes to Accounts forming part of Financial Statements.
Company M/s. HYDRO PROKAV PUMPS INDIA PRIVATE LIMITED (hereinafter Known as Company) is a company registered with this office under the provisions of the Companies Act, 2013 having its registered address at Door No.1/18, 1/18-1, Palladam Main Road, Othakkalmandapam, Coimbatore-641 032.
Section 134 Sub-section (8) provides that if a company is in default in complying with the provisions of this section, the company shall be liable to a penalty of three lakh rupees and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees.
Hackers have allegedly demanded 200 crore in cryptocurrency from the All India of Medical Sciences (AIIMS), Delhi as its server remained out of order for the sixth consecutive day, official sources said on Monday. It is feared that data of around 3-4 crore patients could have been compromised due to the breach detected Wednesday morning. Patient care services in emergency, outpatient, inpatient and laboratory wings are being managed manually as the server remained down, the sources said. The AIIMS server has stored data of several VIPs, including former prime ministers, ministers, bureaucrats and judges. “Hackers have allegedly demanded around 200 crore in cryptocurrency,” one of the sources told PTI. Meanwhile, the NIC e-hospital database and application servers for e-hospital have been restored. The NIC team is scanning and cleaning infection from other e-hospital servers located at AIIMS which are required for delivery of hospital services, an official source said.
28/11/2022
DTAA amendment by Australia may come into effect from 1st April:
1. Australia’s parliament ratified the India-Australia Economic Cooperation and Trade Agreement (ECTA) on November 22.
2. During the signing of the ECTA in April, Australia had agreed to amend its domestic taxation law to stop the taxation of income of non-resident Indian firms providing technical services remotely to Australian customers.
3. Subsequently, the Australian government proposed amendments to the double tax avoidance agreement (DTAA) with India with respect to the technical services section – Treasury Laws Amendment (Measures for Consultation) Bill 2022: Adjustment to tax on certain payments or credits paid to Indian firms.
4. The above development is in the context of a decision of Australia’s Full Federal Court in 2018, which had held that the payment received by an Indian resident for providing offshore services to Australian customers was taxable in Australia under the provisions of the India-Australia DTAA, even though the Australian domestic tax laws do not contain any provision to tax such offshore income.
5. The DTAA ratified by Australian Parliament, along with its trade deal with India, may come into force on April 1 next year, as per the finance ministry.
27/11/2022
Is there a connection between cryptocurrency and terror financing?
Background: India's Prime Minister said at the conference on Countering Financing of Terrorism that digital currencies need more regulation to stamp out funding for terror operations.
1. An official from the United Nations had sounded an alarm in October, when she declared that up to 20% of all terror attacks are now being financed by cryptocurrency.
2. At a recently held event by the United Nations Security Council –Counter Terrorism Committee in the capital, members agreed to enhance cooperation on countering terrorism and adopt ways to monitor the use of new and emerging technologies for terrorist purposes.
3. A report by Chainalysis, a Singapore-based blockchain data platform, earlier this year revealed that several terror outfits have increased the usage of crypto currencies.
4. The Financial Action Task Force (FATF) had earlier noted that virtual assets have made payments easier, faster, and cheaper while providing alternative methods for those without access to regular financial products. It added that without proper regulation, “they risk becoming a virtual safe haven for the financial transactions of criminals and terrorists.”
No PE under Article 5(2)(g) of India Cyprus Treaty when twelve months are not exceeded, Income Taxable: Delhi HC
The Commissioner Of Income Tax vs Bellsea Ltd (ITA 90/2019)
Facts:
1. One of the employees had visited India sometime in September, 2007 for the purpose of collecting data and information necessary for tendering purpose and to bid for the contract.
2. The first mobilisation of vessel/barge was 23rd February, 2008). In so far as the date of completion, the Contract provides the completion date of 1st August, 2008, whereas as per the material placed on record and also the payment schedule etc., points out that all the activities connected with the project including the receiving of the payments was before 30th September 2008 and even the completion certificate mentions 30th September 2008.
3. Article 5(2)(g) of the India Cyprus Treaty refers to Permanent Establishment (PE) as construction, assembly or installation project or supervisory activities in connection therewith where such activities continue for a period of more than twelve months.
4. The AO held that the activities of the assessee continued for more than 12 months and hence there was a PE in India.
Delhi HC held as below:
1. The duration of 12 months per se is activity specific qua the site, construction, assembly or installation project. If the contract would not have been awarded, then any kind of preparatory work for tendering of contract cannot be reckoned for carrying out any activity as stipulated in this clause.
2. Though certain formalities for final completion certificate may have exceeded one or two months, activity of the assessee qua the project as per the terms of contract had come to an end on or before 30th September, 2008 for the reason that; firstly, last sail out of barge/vessel was 25th September 2008 and Customs authorities have also certified the demobilization by this date.
3. Thus, on the facts and material on record, we hold that threshold period of 12 months have not exceeded in the present case and consequently no PE can be said to have been established.
26/11/2022
Notification No: RBI/2022-23/140 DoR.FIN.REC.82/03.10.123/2022-23 dated 23.11.2022
Description: The Reserve Bank of India has decided to include Goods and Services Tax Network (GSTN) as a Financial Information Provider (FIP) under the Account Aggregator (AA) Framework with the aim to facilitate cash flow-based lending to the MSMEs. The Department of Revenue will be the Regulator of GSTN for this purpose and GST Returns in form GSRT-1 and GSTR-3B shall be the Financial Information. The Master Direction for Account Aggregators is amended accordingly.
Notification No: RBI/FED/2015-16/11 FED Master Direction No. 16/2015-16
Description: The Reserve Bank of India has updated the Master Direction – Export of Goods and Services on November 22, 2022 to include provisions for payment, invoicing and settlements in Indian Rupee.
Notification No: P-11/14/19/Misc/02/2022-Rev.II dated 21.11.2022
Description: The Employees' State Insurance Corporation (ESIC) has issued a notification to issue standard mass mails to MCA registered units for starting the compliance with various provisions of the ESI Act from the date of reaching the threshold limit of employees with respect to the following conditions:
1. Companies registered through the MCA portal are found not coverable as per the Statutory Provisions of the ESI Act, they need not make compliance for the next 6 months or till they reach the threshold of ESIC coverage/whichever is earlier
2. Company has to log in on the ESIC website to further extend the 'dormant' mode if it does not reach the threshold in six months
3. The registration will automatically activate and the company has to start compliance under ESIC Act if it does not reach the threshold in six months
4. Necessary actions under the existing provisions of the ESI Act may be taken against the defaulting units or by respective employers, in case of non-compliance.
25/11/2022
The Ministry of Corporate Affairs (MCA) has notified the Companies (Registered Valuers and Valuation) Amendment Rules, 2022 dated November 21, 2022 stating the following amendments:
1. Insertion of new clause (f) under Rule 3(2) wherein No partnership entity or company shall be eligible to be a registered valuer if he is not a member of registered valuers organization subject to such entity being a member of not more than one such organization at a given point of time and in case already registered then comply with these provisions within six months of the commencement of these amendment rules
2. Insertion of new rule 7A wherein a registered valuer is required to intimate the authority for any change in the personal details etc. which may affect their registration
3. Insertion of new rule 14A wherein a registered valuer is required to intimate the authority for any change in the composition of its governing board etc.
4. Insertion of Annexure - V providing the details of the fees to be paid by registered valuers along with the intimations pertaining to the change in details to the authority.
The Kerala High Court reiterated that the promise alleged to have been made by the accused to a married woman that he could marry her is a promise which is not enforceable in law. The single judge bench of Justice Kauser Edappagath noted that both the petitioner and the victim are natives of India and they went to Australia. They met through facebook in Australia. The said relationship developed into a love affair and they decided to marry also. But the marriage did not take place. The court stated that no question of promise to marry arise, since, the victim is a married woman and she knew that legal marriage with the petitioner was not possible under the law. The court observed that there is nothing on record to attract the ingredients of Sections 417 and 493 of the IPC. There are no ingredients to attract the offence of cheating.
24/11/2022
The hunt for black money in foreign shores is broadening from individuals to companies. For the first time, the Foreign Asset Investigation Unit (FAIU), a wing of the Income Tax (1-T) department, has sent notices to local companies, including a few listed entities. Some cos told to share details of their links with any foreign entity, bank accounts Till now, enquiries carried out by the FAIU pertained to hidden assets of residents — their over- seas bank accounts, shareholdings in closely held foreign firms and links with discretionary trusts floated in tax havens. Under the law, FAIUS can look into companies, trusts as well as individuals. “While possible to hold undisclosed assets through companies, it is not perceived to be the preferred route. FAIU may be looking at commissions paid by companies abroad, over-invoicing and under-invoicing of exports and imports, or a surge in activities of a subsidiary set up in a tax haven by an Indian company.
The Income Tax Department has sent notices to dozens of foreign portfolio investors (FPIs) and alternative investment funds (AIFs), flagging discrepancies in their tax returns. These tax red flags include errors in capital gains tax computations, erroneous declarations, suppression of income and wrong exemption claims, people with direct knowledge of the matter told ET. The notices were sent in October and up to November 15 and largely relate to tax returns for FY22. A senior Income Tax (I-T) Department official estimated the tax discrepancies aggregated to about ?13,000 crore, adding that digital data integration is helping spot errors and evasion.
23/11/2022
The Goods and Services Tax E - invoice systems have issued various FAQs to clarify some important issues related to generation of e-invoice as under:
Is there any time limit for delivery of goods or generation of e-waybill in e-Invoice?
No, there is no time limit for delivery of goods or generation of e-waybill for the e-Invoice
Do you need to upload RCM Invoices also?
Yes, if you are eligible for e-Invoicing, all the invoices including RCM invoices issued by the Supplier need to be registered.
In how many days can we generate e-Invoice after preparing a manual invoice and e-Waybill?
Ideally, the e-invoice must be generated after preparing the manual invoice and before issuing it to the customer. The system presently allows to register invoices for the previous periods also.
How to include freight charges in E invoice?
Freight charges may be entered as line items in case there is a GST component or else, they may be entered under ‘Other charges’.
I have crossed the notified Turnover in the current year, do I need to upload my invoices?
No, e-Invoice is applicable only if the notified turnover is crossed in the previous years.
If we miss uploading the invoices, then what is the solution?
Presently, the system allows for the invoices to be registered for the previous period. So, if you have missed uploading, then you may still generate e-Invoice for the previous period invoices.
How should I generate e-Waybill for carrying goods through the train?
e-waybills may be generated for all modes of travel such as Road, Train, Air and Ship. In the case of a train, you may enter the railway receipt number and date instead of the vehicle number.
Whether manual invoice with USD/EURO Currency and E-Invoice with INR be used? (Or) Can we upload export invoice details with foreign currency?
All invoices to be registered on the portal should contain the values in INR, however, there are some optional fields in the schema in which the foreign currency may be included.
22/11/2022
Two officials of the Goods and Service Tax (GST) department were arrested in connection with the bogus billing scam by the Bhavnagar police on Tuesday.
Those arrested were identified as Niraj Meena, superintendent at central GST office in Vadodara and Pritesh Dudhat posted with the department’s mobile squad in Bhavnagar.
Police said that the accused duo had developed a nexus with traders involved in the bogus billing scam. They were booked for forgery under sections 465, 467 and 468 of the Indian Penal Code.
According to police, the names of Meena and Dudhat cropped up during the interrogation of two accused arrested for transporting goods using bogus e-way bills.
On November 2, during night patrolling Bhavnagar police intercepted two suspicious trucks loaded with iron bars near Sanesh village on Bhavnagar-Ahmedabad highway. The police got suspicious when the driver produced the e-way bills and sent it to the GST department for verification.
GST department’s report confirmed that the bills were bogus. Following this police seized the two trucks with 33 tonne of iron bars worth Rs 22 lakh and arrested traders Mrugesh Adhiya and Devanshu Gohil.
More than 480 million WhatsApp users’ phone numbers have been compromised, and the database of the numbers is currently up for sale on a hacking forum. As reported by CyberNews, 487 million WhatsApp numbers are up for sale, and they belong to users from 84 different countries, including Canada, the United States, the United Kingdom, India and more. Out of the 487 million, the database contains more than 44.8 million numbers from Egypt, 35.5 million from Italy and 32.3 million from the United States. Canadian compromised phone number count isn’t as high as some of the other countries, coming in at roughly 3.5 million. The leaked phone numbers could be sold to marketers, who are often willing to pay a high sum for such a large quantity of active numbers, or they could end up in the hands of fraudsters and impersonators.
Currently, there seems to be no way of finding out if your phone number ended up in the data leak. One way to know for certain, however, is by purchasing the database on sale.
21/11/2022
The Enforcement Directorate (ED) on Thursday said that it had conducted searches on payment gateways and banks, and frozen balances worth 1 crore belonging to the accused persons in an online ponzi scheme having Chinese links. According to the agency, 16 locations of the banks and payment gateways, including Phonepay, Paytm, Googlepay, Amazonpay etc. and few banks like HDFC Bank, ICICI Bank, Dhanalakshmi Bank, were searched between Monday and Tuesday in an alleged money laundering case related to ‘Super Like Online Earning Application (part- time job scam)’. During the said search proceedings, around 80 bank accounts having balance to the tune of 1 crore, belonging to the accused persons, have been frozen by the ED,” the agency said.
The DGFT vide Notification No. 41/2015-2020 dated November 07, 2022, an importer may apply for registration no earlier than the 60th day and no later than 5 days before the expected date of arrival of an import consignment. The Notification can be accessed at: https://content.dgft.gov.in/Website/dgftprod/519b2149-2419-4c01-8a5b-a1086e556dd4/Noti%2041%20-%20Eng.pdf
20/11/2022
Basic facts about draft common ITR Form:
A. The Central Board of Direct Taxes (CBDT) has proposed the introduction of common Income Tax Return (ITR) Form which will replace the current different types of ITR forms available with taxpayers for filling of their Income Tax Returns with the Income Tax Department.
B. At present for filling the tax returns, taxpayers have to select the applicable ITR form from the ITR 1 to ITR 7 depending upon the nature/type of person (individual, HUF, firm) in accordance with their nature of income (such as salary, business income, capital gains, rental income).
C. In the proposed common ITR form, the taxpayer will be required to answer the questions which apply to it and fill the schedules linked to those questions where the answers has been given as ‘yes’. This will increase ease of compliance.
D. Following is the scheme in the proposed common ITR:
1. Basic information (comprising parts A to E), Schedule for computation of total income (Schedule TI), Schedule for computation of tax (schedule TTI), Details of bank accounts, and a schedule for the tax payments (schedule TXP) is applicable for all taxpayers.
2. The ITR is customized for taxpayers with applicable schedules based on certain questions answered by the taxpayers.
3. The questions have been designed in such a manner and order that if the answer to any question is ‘no’, the other questions linked to this question will not be shown to the taxpayer.
18/11/2022
MCA imposes 4 Lakh Penalty on company & directors for not having registered office; on the date of hearing, neither anyone appeared for hearing nor any reply has been received
The office of the Registrar of Companies, Bihar-cum-Official Liquidator, High Court Patna, has issued letter no. ROC/Pat/Compt/ 2091/761-765 dated 10.08.2022 to the company and its directors; however the said letter addressed to the company returned undelivered in this office with postal remarks ‘Left‘. Therefore, it appears that the company is not maintaining registered office as required under section 12(1) of the Companies Act 2013.
Sections 12(1), 12(4) and 12(8) are reproduced as under:-
Section 12(1) – “A company shall, on and from the thirtieth day of its incorporation and at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be prescribed”
Section 12(4) – “Notice of every change of the situation of the registered office, verified in the manner prescribed, after the date of incorporation of the company, shall be given to the Registrar within thirty days of the change, who shall record the same”.
Section 12(8) – If any default is made in complying with the requirement of this section, the company and even] officer who is in default shall be liable to a penalty of one thousand rupees for every day during which the default continues but not exceeding one lakh rupees”.
MCA imposes penalty for not filing Annual Return on Company & Directors. MCA imposes penalty exceeding Rs. 11 Lakh for not filing Financial Statements on Company & Directors
Section 92(5):- “If a company fails to file its annual return under sub-section (4), before the expiry of the per specified therein, such company and its every officer who is in default shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day during when such failure continues, subject to a maximum of two lakh rupee in case of a company and fifty thousand rupees case of an officer who is in default”
Section 137(3) states that:- “If a company fails to file the copy of the financial statements under sub-section (1) or sub-section (2), as the case may be, before the expiry of the period specified therein, the company shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day during which such failure continues, subject to a maximum of two lakh rupees, and the managing director and the Chief Financial Officer of the company if any, and, in the absence of the managing director and the Chief Financial Officer, any other director who is charged by the with the responsibility of complying with the provisions of this section, and, in the absence of any such director, all the directors of the company, shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with fort penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of fifty thousand rupees”.
A Vostro account is an account that a domestic bank holds for a foreign bank in the domestic bank’s currency, i.e., rupee. The idea is to get around Western sanctions against Russia by carrying on trade in rupees. On Tuesday (November 15), the government announced that nine special Vostro accounts have been opened with two Indian banks after permission from the RBI to facilitate trade in rupee in the wake of sanctions on Russia by the US and European countries. A Nostro Account is said to be a record of deposits held by a bank with a foreign bank in the currency of the country holding the funds.
A Vostro Account is one that is managed by a correspondent bank on another bank’s behalf. Example: If an Indian bank like the SBI wants to open an account in the United States, it will get in touch with a bank in the US, which will open a Nostro account and accept payments for SBI in dollars.
The account opened by the Indian bank in the US will be a Nostro account for the Indian bank, while for the US bank, the account will be considered a Vostro account. In the Indian context, the accounts opened by IndusInd and UCO are Vostro, and the ones opened by Russia’s Sberbank and VTB Bank are Nostro accounts.
Advantages:
1. They help in executing large foreign exchange transactions without having any physical presence in other countries.
2. They enable banks to keep funds in foreign currency without any exchange rate risk.
3. It is easy to operate since it is a mere transfer of funds from one account to another in the same bank.
Technology companies around the world and in Singapore are freezing hiring or downsizing in the face of sluggish consumer spending, higher interest rates and inflation. Meta, the parent company of Facebook, has announced it was laying off about 11,000 employees, or 13 per cent of its global workforce. It's the first mass redundancy exercise for the 18-year-old social media behemoth.
Its Asia-Pacific headquarters in Singapore was not spared. Media reports speculated that out of the estimated 1,000 employees in Singapore, perhaps up to 100, have been affected, majority of whom are tech workers including software engineers. Based on the 2021 Singapore Ministry of Manpower figures, about a quarter of the 177,100 employment pass holders or around 45,000, are from India. Employment pass holders are the highest qualified foreign professionals that are allowed to work in the country and must earn at least SGD 5,000 ($3,700) per month. Singapore-based gaming and ecommerce powerhouse Sea Limited, the parent company of Garena, (publisher of games like League of Legends and Free Fire), and Shopee, made two rounds of cuts in June and September and rescinded job offers. Sea had 67,300 employees as at the end of 2021, doubled its headcount the year before, according to the company's most recent annual report. On November 3, Stripe announced said it would cut its global workforce by 1,000 or 14 per cent. A day later, Twitter laid off half of its global headcount or about 3,700 employees - a week after Elon Musk's takeover.
17/11/2022
Income Tax Department conducts search actions in Karnataka:
Income Tax Department initiated Search & Seizure actions on 20.10.2022 and 02.11.2022 on certain individuals who had executed Joint Development Agreements (JDAs) with various real-estate developers. The search action covered more than 50 premises spread across Bengaluru, Mumbai and Goa. During the course of the search operations, a large number of incriminating evidences, in the form of documents and digital data have been found & seized. Evidences regarding the sale agreements, development agreements and occupancy certificates (OCs) have also been seized. These evidences revealed that the land owners had not disclosed income accrued to them from capital gains on transfer of the land given for development through JDAs to various developers, even after issue of the OCs from the authorities. It was also unearthed that in many instances, the land owners suppressed income from capital gains for various years by artificially inflating the cost of acquisition & various other costs, and by not disclosing full value of consideration on transfer land. It was also found that some of the land owners didn’t even file their ITRs for various years, where capital gains income had accrued to them. When confronted , the assessees concerned admitted their lapses and agreed to disclose income from capital gains detected in their respective cases, and pay due taxes thereon. So far, the search actions have led to detection of unaccounted income of more than Rs. 1300 crore. Further, undisclosed assets in the nature of cash and gold jewellery worth more than Rs. 24 crore have also been seized. Further investigations are in progress.
When a user receives a call, the Telecom Regulatory Authority of India (TRAI) will shortly start taking steps to ensure that the caller’s name shows on the phone screen. The name would be in accordance with the subscribers’ “know your customer” (KYC) records that are kept on file by telecom companies. When the policy is put into place, callers’ names will be made known to subscribers even if they haven’t saved them in their phone books. At the moment, apps like Truecaller help some users determine who a mysterious caller is. However, the drawback with apps similar to Truecaller is that because the data is crowdsourced, 100% authenticity cannot be guaranteed, whereas it can with KYC data. With the use of the KYC data, the authorities will be able to determine if the service providers followed the procedure exactly or took short cuts that made it possible for a caller’s identity to be faked.
World population projected to be 8 billion
1. The population of the planet is 8 billion, according to projections from the United Nations that forecast the number will grow to 8.5 billion by 2030 as life expectancy rises.
2. Globally, life expectancy reached 72.8 years in 2019, an increase of almost nine years since 1990, though it fell to 71.0 years in 2021 as a result of the Covid-19 pandemic. In the least developed nations, life expectancy lagged behind the global average by seven years in 2021.
3. In 2021, the average fertility worldwide stood at 2.3 births a woman over a lifetime, having fallen from about five births a woman in 1950, the U.N. said. In 2020, the global population growth rate fell under 1% a year for the first time since 1950.
4. The U.N. predicts that the global population will peak at around 10.4 billion during the 2080s and remain around that level until the start of the next century. Another forecast has it peaking at 9.67 billion in 2070, before a slow decline.
5. Beyond the balance of births and deaths, a significant driver of population growth is immigration. Over the next few decades, the U.N. forecasts, migration will be the sole driver of population growth in high-income countries.
16/11/2022
Uttar Pradesh has added the most number of new companies after Maharashtra since the outbreak of Covid-19, beating industrial hubs such as Delhi, Karnataka and Tamil Nadu, data combined by the corporate affairs ministry (MCA) show. Uttar Pradesh added nearly 30,000 new companies in the last three years, which helped it emerge the third state in terms of number of active companies behind only Maharashtra and Delhi. In the post-pandemic phase, UP has overtaken Karnataka, Tamil Nadu and Telangana. UP is home to 1.08 lakh active companies as of September end while Maharashtra and Delhi have 3 lakh and 2.2 lakh active companies, respectively. Karnataka and Tamil Nadu stand fourth and fifth with 1.04 lakh and 99,038 active companies, respectively.
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.
Centre allows rupee settlement in export promotion schemes:
The change in the Foreign Trade Policy 2015-2022 comes after the Reserve Bank of India had, on 11th July 2022, issued guidelines for the settlement of international trade in Indian rupees. Central government has made changes to the FTP 2015-22 to allow for rupee settlement of international trade for export promotion schemes immediately. Given the rise in interest in internationalisation of Indian Rupee, this Policy amendments have been undertaken to facilitate and to bring ease in international trade transactions in Indian Rupees, for Indian EXIM business entities.
Changes have been notified for:
1. Imports
2. Exports,
3. Export performance for recognition as Status Holders,
4. Realisation of export proceeds under advance authorisation & Duty-Free Import Authorisation schemes,
5. Realisation of export proceeds under export promotion capital goods scheme.(EPCG).
Effect of this notification: to permit export benefits/ fulfillment of export obligation for invoicing payment and settlement of exports & imports in INR as outlined by the Reserve Bank of India (RBI) on 11th July 2022.
The RBI has given approval for opening of nine Vostro accounts of Russians banks with banks in India in order to allow bilateral trade to take place in rupee — a mechanism that can provide insulation against Western sanctions on Russia. While three accounts have already been opened—Gazprom Bank with UCO Bank and VTB and Sber Bank with their own branch offices in India—the remaining six will be opened by Indusind bank and talks are on. A Vostro account is an account that a domestic bank holds on behalf of a foreign bank. Following Russia’s invasion of Ukraine on February 24, a number Russian banks were banned from using the SWIFT messaging system that effectively stopped them from participating in international trade. The number of sanctioned banks have been increasing since then.
WhatsApp is rolling out a new feature that allows people to use one WhatsApp number on two mobile phones. This is an expansion of the current Linked devices feature that was launched earlier this year. However, the latest update is currently only available for beta testers of the platforms. It is yet to come to the stable version of WhatsApp and the company could make it available for everyone in the coming months. Currently, all WhatsApp users can access their existing account only on one smartphone and people are allowed to link up to four other devices like laptops, and tablets. Now that the company is planning to let people log in to one WhatsApp number on two phones, it will make life easier for those who use two mobile phones.
15/11/2022
After years of delay, the Centre is aiming to set up the GST Appellate Tribunals (GSTATs) across the country by December next year with the principal Bench in New Delhi to quickly resolve disputes relating to the key indirect tax, and further improve ease of doing business and boost tax collections. Even five years after the GST rollout, the country is still awaiting an appellate body to resolve tax disputes. On August 18, the group of ministers (GoM) on tribunals convened by Haryana deputy chief minister Dushyant Chautala finalised that GSTAT will be set up with a principal Bench in New Delhi and similar Benches at the state level.
Paytm, India’s leading digital payments brand, faces another reckoning, a year after it recorded the grisliest initial public offering in India’s history. This week, the lock-up period for the company’s stock will expire, freeing investors to sell shares that haven’t yet been allowed onto the market. The biggest shareholders in One97 Communications Ltd., Paytm’s parent company, are Alibaba Group Holding Ltd. and its fintech affiliate Ant Group Co., as well as Japan’s SoftBank Group Corp. Paytm founder Vijay Shekhar Sharma pulled off India’s largest-ever IPO last November only to see its shares plummet in one of the worst debuts ever. The company has had to spend heavily to boost revenues since then, piling up losses just as investors have grown increasingly skittish about money-losing startups. The free money days for cash-burning companies are well and truly gone,” said Deven Choksey, managing director of wealth manager KRChoksey Holdings. “Even with Paytm’s lock-in expiry, new investors will only come in after seeing free cash flow in the near horizon.
L&T Infotech and Mindtree have received merger approval and will begin operating as a merged entity on November 14, becoming the country's fifth-largest IT provider by market capitalisation and sixth-largest by revenue. This is one of the largest mergers in the Indian information technology (IT) sector. LTIMindtree, the combined entity, will benefit from scale, allowing it to pursue larger outsourcing contracts as clients look to consolidate vendors in an increasingly challenging macro environment. L&T Group Chairman AM Naik said that the merger has been approved by the National Company Law Tribunal's (NCLT) Mumbai and Bengaluru benches in separate orders. Naik said that the merged entity, along with L&T Technology Services (LTTS), will generate $5.6 billion in revenue this year. He expects LTIMindtree alone to generate $5 billion in revenue next year. Mindtree will be delisted from stock exchanges and LTI will be rebranded as LTIMindtree effective November 24, said Vinit Teredesai, the combined entity's Chief Financial Officer.
14/11/2022
Why did FTX run into trouble?
1. FTX, one of the world’s largest crypto exchanges, was run by Sam Bankman-Fried and is headquartered in the Bahamas. FTX also has a native cryptocurrency token called FTT, which traders use for operations like paying transaction fees.
2. On November 2, the crypto publication CoinDesk reported on a leaked document that appeared to show that Alameda Research, a hedge fund run by Bankman-Fried, held an unusually large amount of FTT tokens. FTX and Alameda are meant to be separate businesses, but the report claimed that they had close financial ties.
3. Last year, Changpeng Zhao, who runs the largest exchange Binance, sold his stake in FTX back to Bankman-Fried, who paid for it partially with FTT tokens.
4. Binance announced on November 6 that it would sell its FTT tokens due to recent revelations. In response, FTT’s price plummeted and traders rushed to pull out of FTX, fearful that it would be yet another fallen crypto company.
5. FTX scrambled to process requests for withdrawals, which amounted to an estimated $6 billion over three days. It seemed to enter a liquidity crunch, ie it lacked the money to fulfill requests.
6. On November 8, Binance said it had reached an agreement to bail out FTX by buying the company. On November 9, Binance, however, announced it would no longer buy FTX, saying it had arrived at that decision as a result of corporate due diligence. It also cited regulatory investigations and reports of mishandled funds.
7. Figures from Singapore based Analytics Firm, Nansen showed more than $2 billion in unauthorised outflows from the FTX, within hours of brankruptcy announcement.
8. A document that Bankman-Fried shared with investors and was reviewed by Reuters showed FTX had $13.86 billion in liabilities and $14.6 billion in assets. However, only $900 million of those assets were liquid, leading to the cash crunch that ended with the company filing for Chapter 11 bankruptcy protection in the US.
13/11/2022
GST authorities have detected GST fraud of Rs 55,575 crore over the last two years and arrested over 700 persons for causing loss to the exchequer, an official said on Thursday.
Over 22,300 fake GST identification numbers (GSTIN) were detected by the officers of the Directorate General of GST Intelligence (DGGI).
The government on November 9, 2020, launched a nationwide special drive against unscrupulous entities for availing and passing on Input Tax Credit (ITC) fraudulently by issuing fake/bogus invoices, thereby evading Goods and Services Tax (GST). Voluntary deposits of Goods and Services Tax (GST) worth Rs 3,050 crore have been made during the period.
12/11/2022
The direct tax collections continue to register steady growth as the gross collections till 10 November were at ?10.54 lakh crore, which is 30.69% higher than the gross collections for the corresponding period of last year, said Ministry of Finance on 11 November. The Direct Tax collection, net of refunds, stands at Rs. 8.71 lakh crore which is 25.71% higher than the net collections for the corresponding period of last year, the ministry said in a statement. Apart from this, the Ministry added that this collection is 61.31 per cent of the total budget estimates of direct taxes for FY 2022-23. Apart from this, the ministry said that the refunds amounting to ?1.83 lakh crore have been issued during 1 April, 2022 to 10 November, 2022, which are 61.07 per cent higher than refunds issued during the same period in the preceding year.
CIC rejects the appeal to access TDS records via RTI
The Central Information Commissioner (CIC) rejected the appeal of an assessee, Shivi Mohan Rastogi, to access his Tax Deducted at Source (TDS) records through Right to Information (RTI). The CIC made the following observations:
1. TDS record of the assessee is a document/ information which is available with the Appellant himself and not held by the Public Authority; moreover such documents can be accessed from the weblink portal of the Income Tax Authorities.
2. Further, during the course of hearing, the Appellant nowhere expressed his inability to access the document/ information sought for which is available on the web portal.
10/11/2022
GST revenues have exceeded Rs 1 lakh crore for the eleventh consecutive month. Some of the reasons behind this surge:
1. Decisions made at the 47th GST Council Meeting:
The GST Council, in its 47th meeting that coincided with the 5th anniversary, had recommended rationalizing GST rates and withdrawal of exemptions on certain goods such as pre-packaged and labelled food items.
2. Rise in inflation:
In notion, it's eye-opening to note that inflation is also responsible for this. Nearly 8% of the current surge in the GST collection can be attributed to higher inflation. Record-high inflation (wholesale inflation of 13.9 percent) led to high wholesale and retail prices pushing GST revenues to a high extreme.
3. Significant improvement in tax compliance:
The fact that the government is now utilizing technology to its advantage is a key reason for the rise in tax compliance.
4. Contributions by individual states:
Odisha saw a growth in GST collections, mainly from the mining and manufacturing sectors. Odisha, Maharashtra, Haryana, and Andhra Pradesh all forecast a more than 21% increase in revenue.
5. Surge in imports:
A considerable surge in goods imports is another reason behind the massive rise in GST.
Goods imports in 2021-22 jumped up around 56% to $612 billion. Under GST, imports are deemed inter-state supplies and are subject to an integrated GST. The integrated GST from imports stood at INR 3.8 lakh crore in 2021-22, around 41% higher than in 2019-20. The overall GST in 2021-22 was 22% higher than in 2019-20.
6. Government initiatives:
Compulsory e-invoicing, Auto-population of tax forms, deterring fraudsters from claiming ineligible tax credits, incentive linked schemes, etc
7. Increase in demand:
The outbreak boosted extensive IT and FMCG industries, and pent-up demand has also raised company earnings and underpinned tax payments. The adoption of crypto tax has helped propel government revenues by widening the tax base.
Since collections have continuously exceeded Rs 1.3 billion since October 2021, it is not surprising that the revenue exceeded in April 2022; for the first time, it reached Rs 1.67 lakh crore, setting a new record despite escalating geo-political disputes in Russia and Ukraine.
If India fulfils its goal of turning into a 5-trillion-dollar economy, these tax collections could surge to as much as Rs 18 trillion.
Source: the news india express
The Gst late returns filing provision has now also been incorporated in the return of transactions GSTR-1. Sequential filing of gst returns has been enabled now. For late filing, Businesses have to pay a maximum penalty of Rs 10,000 for filing GSTR-1 after the date.
If the tax liability is 0, a penalty of Rs 40 will be levied daily, maximum Rs 1000. On the basis of penalty slab, the tax liability will be charged as follows
1. Rs 100 per day on turnover from Re 1 to Rs 1.5 crore. Maximum Rs.2,000.
2. Rs 100 per day on turnover of 1.5 crores to 5 crores. Maximum Rs.5,000.
3. Rs 100 per day on turnover of more than Rs 5 crore. Maximum Rs 10,000.
The Goods and Service Tax Network (“GSTN”) has started allowing the amendment related to Financial Year 2021-22 in October 2022 return period. This line with the recent amendment in the GST Law wherein amendment can be done up to 30th November of the next Financial Year. Don’t forget to file October 2022 GST returns before 30th November 2022.
A search and seizure action was initiated by the Income Tax Department on few business groups engaged in coal trading/ transportation, execution of civil contracts, extraction of iron ore and production of sponge iron, on 04.11.2022. Those searched include two politically exposed persons and their associates. The searches were carried out at more than 50 premises spread over Ranchi, Godda, Bermo, Dumka, Jamshedpur, Chaibasa, Patna, Gurugram, and Kolkata. The search operation has led to the seizure of large number of incriminating documents and digital evidences. A preliminary analysis of these evidences indicates that these groups have resorted to various modus-operandi of tax evasion including inflation of expenses, transactions of loans in cash, payments/receipts in cash and suppression of production. During the search, it has also been found that investments have been made in immovable properties, the source of which could not be fully explained. During the search, undisclosed cash exceeding Rs 2 crore has been seized. A total of 16 bank lockers have been put under restraint. So far, the searches have revealed unaccounted transactions/ investments exceeding Rs 100 crore. Further investigations are under progress.
Education is not a business to earn profit and tuition fees shall always be affordable, the Supreme Court has said while upholding the Andhra Pradesh High Court order quashing the state government's decision to enhance the tuition fee in medical colleges to Rs 24 lakh per annum. A bench of Justices M R Shah and Sudhanshu Dhulia imposed a cost of Rs 5 lakh on the petitioner, Narayana Medical College, and Andhra Pradesh to be deposited with the court registry within a period of six weeks. "To enhance the fee to Rs 24 lakh per annum i.e., seven times more than the fee fixed earlier was not justifiable at all. Education is not the business to earn profit. The tuition fee shall always be affordable,
Stepping up its anti-evasion drive, the goods and services tax (GST) wing of the Central Board of Indirect Taxes and Customs (CBIC) has started a process of issuing show-cause notices to thousands of entities for alleged evasion or under-payment of tax. It has already issued notices in about 20,000 cases among 34,000 scrutinised for tax evasion in 2017-18, the year in which the comprehensive indirect tax was rolled out, sources said. The tax department reckons that evasion by the entities in the year were to the tune of Rs 2,000 crore. It is also sending out notices to another lot of 35,000 cases for the year 2018-19.
The Supreme Court Constitution Bench has by 3:2 majority upheld the validity of the 103rd Constitutional Amendment which introduced 10% reservation for Economically Weaker Sections (EWS) in education and public employment.
09/11/2022
The Income Tax Department has issued a List of Banks dated November 06, 2022 for tax payments available:
Banks available at e-Filing Portal : Axis Bank , Bank of India, Bank of Maharashtra, Canara Bank, Central Bank of India
, Federal Bank, ICICI Bank, Indian Bank, Indian Overseas Bank, Karur Vysya Bank, Kotak Mahindra Bank
Banks available at Protean (previously NSDL) Portal:
Bank of Baroda
HDFC Bank
IDBI Bank
Jammu & Kashmir Bank
Punjab and Sind Bank
Punjab National Bank State Bank of India
UCO Bank
Union Bank of India
Taxpayers should check their annual information statement every quarter and flag any discrepancies to help curb instances of wrongful HRA deductions, a senior finance ministry official said on Monday. The I-T department had in November last year rolled out a new Annual Information Statement (AIS) on its portal that provides a comprehensive view of taxpayer information and an option to submit feedback. It includes additional information related to interest, dividend, securities transactions, mutual fund transactions and foreign remittance information. “You must keep on checking your AIS not only at the time of return filing, but quarterly. You should check your AIS and (report) if anything wrong is reported so that the other person who is wrongly claiming some kind of benefit should be caught.
'F**K off' is a sexually coloured American remark, not used in Indian society to ask anyone to leave: Delhi court
Additional Sessions Judge (ASJ) Sanjay Sharma of Tis Hazari Court, therefore, rejected the argument of an accused person who had contended that the dictionary meaning of the phrase is ‘to leave’.
08/11/2022
08th November 2016:: 6 years of Demonetisation:
On November 8, six years ago, Prime Minister Narendra Modi announced the demonetisation of old Rs 1,000 and Rs 500 banknotes and one of the key objectives of the unprecedented decision was to promote digital payments and curb black money, besides eliminating terror funding.
The jury is still out on the efficacy of the decision to demonetise high value currency notes on November 8, 2016, with the government claiming it has helped greater formalisation of the economy while critics saying it has failed to curb black money and reduce dependence on cash.
1. On curbing black money :
As per a Reserve Bank data, currency with the public has jumped to a new high of Rs 30.88 lakh crore on October 21, indicating that cash usage is still substantial even six years after the demonetisation move. At Rs 30.88 lakh crore, the currency with the public is 71.84 per cent higher than the level for the fortnight that ended November 4, 2016. The government estimated that Rs 3-5 lakh crore would never be handed back into the system, and this would be a one-off windfall gain for the government. Since currency notes are basically promissory notes issued by the RBI, any notes that are extinguished result in a drop in the RBI’s liability. The extra capital can then be returned to the government as a one-off dividend. This was a widely touted and anticipated outcome.
It never happened.
2. On reducing the corruption element:
Transparency International’s Corruption Perceptions Index tracks the perceived level of corruption in countries across the world each year. Denmark is ranked on top. India has consistently had a CPI score of around 40/100 and ranked a steady 40 or 41 out of 180 countries between 2016 and 2021.
3. On curbing terrorism front:
The evidence is clear that to choke terrorist financing, you need international collaboration through the Financial Action Task Force, of which India has been a member since 2010. While counterfeiting is one of the means of financing terror, it is by no means the main one, nor is it confined to counterfeiting high-value Indian rupee currency notes. Indeed, the US dollar is the favoured currency of international criminal and terrorist gangs.
The Supreme Court has decided to examine a whole gamut of issues leading to the arbitrary decision and its disastrous consequences. While taking up a clutch of petitions against demonetisation, a constitutional bench of the apex court has called for all related files, including the communication between the government and the Reserve Bank of India on the issue as well as the proceedings of the RBI board meeting in the wake of the announcement, where members had expressed disbelief about the abruptness of the decision.
The government tried its best to block reopening of the issue, but the court refused to oblige, saying the issue has to be settled one way or the other for the benefit of posterity. The court has also promised to examine how far the stated objectives of the decision have materialised.
07/11/2022
Tirupati Temple’s assets are valued at more than Rs 2.5 Lakh Crore:
1. Tirupati's Lord Venkateswara temple’s assets are valued at over Rs 2.5 lakh crore (about USD 30 billion) and is more than the market capitalisation of IT services firm Wipro, food and beverage company Nestle and state-owned oil giants ONGC and IOC.
2. As a perspective, Nestle India’s market cap is Rs 1.96 lakh crore. Wipro had a market cap of Rs 2.14 lakh crore, while UltraTech Cement had a market value of Rs 1.99 lakh crore.
3. The assets owned by Tirumala Tirupati Devasthanam (TTD) include land parcels, buildings, cash and gold deposits in the banks, given as offerings to the temple by devotees.
4. Its assets include 10.25 tonnes of gold deposits in banks, 2.5 tonnes of gold jewellery, about Rs 16,000 crore of fixed deposits in banks, and 960 properties across India. All these total to over Rs 2.5 lakh crore.
5. As per a white paper released by TTD in this year, the temple trust as of today has 960 properties located across the country which is spread across in an extent of 7,123 acres valued at Rs 85,705 crore
6. In its about Rs 3,100 crore annual budget for 2022-23 presented in February, the TTD has projected over Rs 668 crore as income in the form of interests from cash deposits in banks. Also, Rs 1,000 crore income was predicted in the form of cash offerings alone by about 2.5 crore devotees in the hundi.
Source: PTI News
Currency in Circulation dipped during the Diwali Week:
1. State Bank of India in a report stated that the currency in circulation (CIC) declined by ?7,600 crore during Diwali week for the first time in 20 years.
2. The SBI's Ecowrap said that this was due to the growth in digital transactions in the country. The report further stated that the Indian economy is undergoing a structural transformation.
3. A lower currency in circulation also is akin to a CRR cut for the banking system, as it results in less leakage of deposits and it will impact monetary transmission positively.
4. The interoperable payments systems like UPI, Wallets & PPIs have made it simple and cheaper to transfer money digitally, even for those who don’t have bank accounts, the report added.
5. The trends are revealing, as the share of CIC in payment systems has been declining from 88% in FY16 to 20% in FY22 and is estimated to go down further to 11.15% in FY27.
6. Consequently, the digital transactions share is continuously increasing from 11.26% in FY16 to 80.4% in FY22 and is expected to touch 88% in FY27, it added.
06/11/2022
The Directorate General of Foreign Trade (DGFT) may soon notify norms for permitting exporters to avail incentives under the foreign trade policy, even on realization in rupee. Reportedly, the DGFT, under the commerce ministry, has already allowed invoicing, payment and settlement of exports and imports in Indian rupee, a move aimed at facilitating trade in the domestic currency. In July this year, the Reserve Bank of India (RBI) asked banks to put in place additional arrangements for export and import transactions in Indian rupees in view of the increasing interest of the global trading community in the domestic currency.
“To permit exporters avail incentives under the foreign trade policy, norms will have to be notified for that,” the official said.
The corporate affairs ministry (MCA) plans to deregister over 40,000 dormant companies which did not start business activities even after six months since incorporation, the Economic Times reported on November 3, citing people aware of the matter. The government’s motive behind the move is to counter money laundering through the shell and dormant companies. Out of the 40,000 companies identified for the deregistration, more than 7,500 have been identified by the registrar of companies (RoC) in Delhi and Haryana alone, the report said. According to the ministry, there are more than 23 lakh registered companies in India, of which approximately 14 lakh are active. As many as 800,000 companies have closed operations. The government had conducted a similar exercise after the demonetisation in 2016, as per the report. It is to be noted that the deregistration of the company would not remove the liabilities of the company.
Accounting personnel’s resignation, MD’s health problem held to be acceptable reason for deleting audit delay penalty: ITAT Chennai
Chennai ITAT allows Assessee’s appeal and deletes the penalty of Rs.1.5 Lacs imposed under Section 271B for non-filling of tax audit report within the due date, finding the explanation offered by Assessee for causing the delay of 51 days to be reasonable; Assessee-Company, for AY 2016-17, was subjected to penalty under Section 271B for non-filling of audit report before the due date which was confirmed by CIT(A); ITAT accepts following explanation as reasonable: (i) sudden resignation of the employee responsible for looking into financial transactions and finalising accounts, (ii) involvement of the auditor and other staff in attending the post-search assessment hearings and (iii) old age and health problems of the managing director; Accordingly deletes the penalty of Rs. 1,50,000 levied by Revenue under Section 271B. (Related Assessment year : 2016-17) – [Perfect Stone Ltd. v. ACIT [TS-836-ITAT-2022(CHNY)] – Date of Judgement : 28.10.2022 (ITAT Chennai)]
Education Not Commercial Activity, Collection Of Capitation Fee For Admission Illegal, No Tax Exemption: Madras High Court:
Commissioner of Income Tax v. M/s MAC Public Charitable Trust (batch) (Appeal No. 303 of 2022 (batch))
Facts:
1. The assessing officer (AO) was of the view that the assesssee acted as a fund transferor to transfer the ‘capitation fee’ received for giving admission to the students who enrolled during the FY 2010-11 by receiving the money from M/s. United Educational Foundation and transferring them to Sri Venkateswara College of Engineering which is a unit of M/s.Sri Venkateswara Educational & Health Trust in the form of 'donations received' and 'donation paid'.
2. The AO was of the opinion that the amount of non-voluntary contribution i.e., capitation fee received at Rs.22,03,77,500/- has to be treated as income and the Assessee was not eligible for exemption under section 11 of the Act, for the assessment year 2011-12.
3. The assessee contended that the donations were received voluntarily; and the Assessee Trusts were in no way connected with the securing admission of students in Sri Venkateswara College of Engineering for the children of the donors. In the records of the Assessee Trusts, they had shown these donations as income only and applied the same for charitable purposes as per law.
Madras HC held as below:
1. On lifting the veil, it is as clear as daylight that the modus operandi adopted by the Assessee Institutions and Trusts are with the twin objectives of circumventing/violating the provisions of the Capitation Fee Act as well as evading tax while seeking tax exemption under the corporate veil of being different and distinct entities receiving funds from each other for purely charitable purposes.
2. The amounts collected by the assessees are capitation fee in quid pro qua for allotment of seat in deviation of the Tamil Nadu Educational Institutions (Prohibition of Collection of Capitation Fee) Act, 1992 and the same are neither a voluntary contribution nor to be treated as applied for charitable purpose.
3. Unless a payment was made gratuitously without any consideration, it could not be termed as a "voluntary contribution" for claiming tax exemption under Section 11 and 12 of the Act.
4. The Assessing Authority shall also proceed further for cancellation of registration certificate issued to the Assessees/trusts under Section 12A of the Act thereby not to treat the respondents as charitable institutions any longer.
5. The AO shall also proceed to reopen the previous assessments, if permissible by law, based on tangible materials relating to collection of capitation fee, since it is illegal and is punishable.
05/11/2022
For “Insider Trading”, mere possession of sensitive information not enough; actual profit motive essential: Supreme Court upholds Gammon India promoter Abhijit Rajan acquittal:
The Hon’ble Supreme Court in a landmark judgment on insider trading (SEBI v. Abhijit Rajan) has held that to establish a charge of insider trading, the critical test is whether there was an attempt by the ‘insider’ to benefit or gain from unpublished price sensitive information (“UPSI”). Distinguishing between mens rea and profit motive, the Supreme Court held that while in matters under PFUTP Regulations, it has been held that mens rea is not an indispensable requirement, in respect of matters under the PIT Regulations, the test to be applied is that of profit motive i.e., whether the insider’s actions in dealing in securities represented an effort to gain from or exploit the asymmetrical / unpublished information in his possession. Applying this test, the Supreme Court held that since the Respondent sold his shares before the UPSI became public and before it could have a positive impact on the price of the shares, the sale of shares by the Respondent was akin to a distress sale which was not done with the intent to take advantage of or encash the benefit of the information, and therefore, the Respondent’s action would not amount to the mischief of insider trading. While insider trading charges will always be decided based on the facts and circumstances of each case, the decision in the present matter will have a far-reaching effect on the manner in which insider trading cases are decided by regulators and courts.
[SEBI (Appellant) vs. Abhijit Rajan (Respondent), SC, Civil Appeal No.563 of 2020]
The Supreme Court observed that the income tax returns may not be an accurate guide of the real income of parties engaged in a matrimonial conflict. Family Court has to determine the real income on a holistic assessment of the evidence before it, the bench of Justices DY Chandrachud and Hima Kohli said. In this case, the Family Court ordered a Husband to pay maintenance at the rate of Rs 20,000 per month to his wife and Rs 15,000 each to their daughters. This was based on a finding that he is earning Rs. 2 lacs as monthly income. Particularly, when parties are engaged in a matrimonial conflict, there is a tendency to underestimate income. Hence, it is for the Family Court to determine on a holistic assessment of the evidence what would be the real income. While considering the revision petition filed by the Husband, the High Court noticed as per the Income Tax Return (I.T.R.) filed by thim he is only earning Rs. 4.5 lacs per annum. It was further observed that the Family Court had not indicated the basis on which it had assessed his income at Rs Two Lakhs per month.
Axis Bank', 'Indian Bank', 'Central Bank of India', 'ICICI Bank', 'Bank of India', 'Canara Bank', 'Bank of Maharashtra' and 'Indian Overseas Bank' have been migrated from OLTAS e-Payment of Taxes facility to e-Pay Tax facility of E-Filing portal. Users are advised to navigate to e-Pay Tax on https://www.incometax.gov.in/ to make direct tax payments.
Data from GSTN, the company that processes GST returns, showed that over 76.8 million e-way bills were raised in October, compared with more than 84 million electronic permits raised in September. E-way bills, taken by analysts as a high-frequency indicator of consumption and production trends, remained well above 70 million since March, showing robust goods shipments across the country and witnessing sustained growth from May till September.
04/11/2022
With Elon Musk starting firings at Twitter, Twitter India employees have been logged out of their systems ahead of the official announcement. Like other Twitter offices worldwide, the Twitter India office too is a place of chaos with several employees severely distressed and in tears. Following that email, many of the Twitter employees in India were logged out of their official email ids this morning, India Today Tech has learnt. Many others were being logged out at the time of writing. This came unannounced. They were not prepared for this layoff. There was no official communication leading up to the sackings, nor were the employees prepared for them. Most of the Tweets, as they fondly call each other, were crying amid the uncertainty. The layoffs come about a week after Elon Musk officially took charge of the platform. He has already made some changes to the way the company runs. There were reports suggesting that Musk may ask a lot of current Twitter employees to leave the company once he takes over but, the Tesla chief never confirmed it.
A sessions court here on Thursday stayed till further orders a magistrate court’s order summoning Huawei Telecommunications India chief executive Li Xiongwei and three other top executives in a tax case. The case will come up for resumed hearing on December 13. The Income Tax Department had accused the company and its top executives of withholding information sought by it and had launched prosecution proceedings against them. Following this, the magistrate court in May ordered the executives to appear before it on November 25. Aggrieved, the company, which has denied the accusation of non-cooperation, recently filed a revision application seeking setting aside of the summoning order. Apart from the CEO, the Huawei executives who were summoned by the magistrate court were deputy chief financial officer Sandeep Bhatia, head of tax Amit Duggal and Long Cheng, who is in charge of transfer pricing.
India's forex reserves jump to $531.081 billion in the week ending October 28, 2022, rising by $6.561 billion compared to the previous week; making it the biggest weekly gain in more than a year. All indicators in reserves witnessed an upside in the latest week with foreign currency assets outperforming. Generally, RBI announces its weekly statistical supplement data every Friday. Meanwhile, gold reserves soared by $556 million in the week ending October 28 to $37.762 billion. SDRs stood at $17,625 billion in the week increasing by $185 million.
Provisions of Section 56(2)(viia) of Income Tax Act not applicable if Company had bought back its own shares from its holding Company. [VITP (P) Ltd. v. DCIT (2022) 143 taxmann.com 304 (ITAT Hyderabad)].
GSTN added Federal Bank for GST payments making 20 banks as per the recent tweet dated 04/11/2022.
Finance minister called on businesses to step up investment in energy resources, asserting that the country offers policy stability, transparency and a consultative mode of governance to promote investment.
Ease of doing business for MSMEs: Weeks after public procurement of goods and services by central government ministries and departments crossed Rs 3 lakh crore from the business-to-government portal Government e-Marketplace (GeM), the order volume has now crossed the whopping 12 million or 1.2 crores amid government's growing focus on procuring from MSMEs via Gem.
Adopting the circle rate of the property is a violation of 56(2)(viib), the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the order of CIT(A)which deleted the addition of Rs.2,95,23,400/ made by the AO. Malibu Estate Dispensary Pvt. Ltd, the assessee company is undertakingthe construction of a dispensary/ hospital at Gurgaon. The assessee introduced share capital/ share premium in respect of a total number of shares allotted at 152816 with a face value of Rs.1428160/- and premium of Rs.69979840/-. The share premium was @ 490 per share. The AO viewed that the NAV of shares was Rs. 10 as per rule 11 UA of the IT Rules as per book value of assets and liabilities as of 31.03.2015. The assessee filed a detailed reply and supported its claim with a valuation report from a registered valuer and a certificate from the CA in respect of the valuation. The AO found that the stamp dutyrate was Rs. 30,000/- per square yard and adopting the same the AO computed the addition on account of the excess share premium received at Rs.29562912/-.
On appeal, the CIT(A)held that the AO was required to adopt the fair market value of the property as provided by the appellant and deleted the addition of Rs.2,95,23,400/ made by the AO.
A Coram of Sh. N K Billaiya, accountant member and Sh. Anubhav Sharma, a judicial member observed that as per the explanation to section 56 (2)(viib) of the Act, the fair market value of the shares shall be based on (1) the value determined under rule 11UA or (2) fair market value of the underlying assets whichever is higher. The Tribunal observed that the AO erred in adopting the circle rate of the property and upheld the findings of the CIT(A).
03/11/2022
Prime Minister Shri Narendra Modi will address programme marking Vigilance Awareness Week of Central Vigilance Commission (CVC) on 3rd November at 11 AM in Vigyan Bhawan, New Delhi. On the occasion, Prime Minister will launch the new Complaint Management System portal of the CVC. The portal is envisioned to provide end to end information to the citizens through regular updates on the status of their complaints. He will also release a series of pictorial booklets on “Ethics and Good Practices”; Compilation of best practices on “Preventive Vigilance” and Special issue “VIGEYE-VANI” on public procurement. CVC observes Vigilance Awareness Week every year to bring together all stakeholders in spreading the message of integrity in all spheres of life. This year, It is being observed from 31st October to 6th November with the following theme “Corruption free India for a developed nation”. Prime Minister will also award prizes to five students who wrote best essays during a nationwide essay competition conducted by CVC on the above theme of Vigilance Awareness Week.
The Financial Reporting Review Board (FRRB), a non-standing committee of the CA Institute’s Council, is likely to take up edtech major BYJU’S financial statements and its allegedly irregular accounting practices for review. FRRB is meeting in the next two days to look into the issue,” said sources, adding that the President of the CA Institute, too, is in favour of the move. This comes in the backdrop of several complaints received by the Ministry of Corporate Affairs (MCA), Serious Frauds Investigation Office (SFIO) and the CA Institute in the recent months, over the alleged irregular accounting practices at BYJU’S. BYJU’S recently raised $250 million in a new funding round from existing investors, including the Qatar Investment Authority at $22-billion valuation. This fundraise came a week after the start-up announced laying off of more than 2,500 employees.
ICAI announced clarification on 16.8.22 wrt maintenance of books of accounts under Companies Rules
1. MCA has stepped up the record keeping requirements of businesses in a bid to make sure that various documents and records are readily available for the authorities to check any time.
2. The Companies (Accounts) Fourth Amendment Rules, 2022 amended that the books of account and other relevant books and papers maintained in electronic mode should remain accessible in India “at all times".
3. The latest amendment says that the back up of the books of account and other documents kept in electronic mode, including at any place outside India have to be kept in servers physically located in India “on a daily basis." The earlier requirement was to maintain them in servers in India on a periodic basis.
4. Also, companies have to give more information about the service provider that maintains the books of accounts and other documents in electronic mode. The amendment says that where the service provider is located outside India, the name and address of the person in control of the books of account and other books and papers in India has to be reported. This has to be reported to the registrar of companies on an annual basis at the time of filing of financial statements: (must be AOC 4)
5. The idea seems to make sure that the financial and key operational details of businesses are available for the authorities at any given point in time. This reflects the increased monitoring that regulatory agencies are undertaking for better compliance.
Telangana’s Appellate Authority for Advance Ruling has upheld that chemically processed seed is not an agricultural produce and hence, activities related with it will not get the exemption from Goods & Services Tax (GST). After going though all the arguments and facts placed, AAAR observed that to get into the bracket of agriculture produce for claiming exemption, the main condition is that either no processing is done on the produce or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market. If the activities of the applicant are only cleaning, drying, grading without involving any chemical processing on the subject produce, then the services would be on agriculture produce and exemption would be available,” AAAR said, while adding that this is not the case here and upheld the ruling by AAR.
No penalty under section 271B if assessee was under bona fide belief that audit was not required relying upon ICAI’s guidance note.
Assessee-individual entered into shares and derivative transaction in relevant assessment year. Assessing Officer opined that total turnover/gross receipts of assessee was Rs. 82 crores and assessee was liable to get his accounts audited under section 44AB. He, thus, held that assessee was in default and levied penalty under section 271B on failure of assessee to get his books audited.
On appeal to the Commissioner (Appeals), the assessee claimed that the total turnover from derivatives as per Guidance note on tax audit under section 44AB issued by ICAI did not exceed Rs. 1 crore and assessee was not eligible to get the books audited. However, the Commissioner (Appeals) held that the turnover in cases speculative transaction involving derivatives was not defined in section 44AB, thus, one need not apply normal meaning of 'turnover' and accordingly the turnover/gross receipts of the assessee from the transaction as computed by the Assessing Officer had to be construed as 'turnover' for the purpose of section 44AB. He further held that guidelines given by the ICAI could not be directly imported here since the same was not binding for the Income-tax proceedings.
The assessee vide its reply brought to the attention of the Assessing Officer, CBDT Circular No. 6/2016 which clarified the taxpayers to choose whether the gains or losses from sale of listed shares/securities either should be treated as business income or capital gains. Further the assessee is of the bona fide belief that the net result in the trading of shares, cash and commodity shall be considered as ‘turnover’ as per the Guidance Note issued by the Institute of Chartered Accountants of India (ICAI). Thus the total turnover from Derivatives, Equity Shares and Mutual Fund which does not exceed Rs. 1 crore specified under section 44AB for the present assessment year 2016-17. Therefore the assessee is not liable to get his books audited and furnish audited report under section 44AB and consequently penalty cannot be levied under section 271B. The imposition of penalty under section 271B is not mandatory, rather it is discretionary, because if the assessee proves that there was a “reasonable cause” for the said failure, then the Assessing Officer ought to have considered the same and then proceed with levying penalty.
A perusal of the provision of section 271B shows that the Parliament has used the words 'may' and not 'shall', thereby making their intention clear inasmuch as that levy of penalty is discretionary and not automatic. The said conclusion is further justified by section 273B namely ‘penalty not to be imposed in certain cases’. A careful reading of section 273B encompasses that certain penalties ‘shall’ be imposed in cases where ‘reasonable cause’ is successfully pleaded. It is seen that penalty imposable under section 271B is also included therein. By the said provisions, the Parliament has unambiguously made it clear that no penalty ‘shall be’ imposed, if the assessee ‘proves that there was a reasonable cause for the said failure’. As noticed, if the statutory provision shows that the word ‘shall’ has been used in section 271B, then the imposition of penalty would have been mandatory. Section 271B as extracted above further throws light on the legislative intent as it specifically provides that no penalty ‘shall’ be imposed if the assessee proves ‘that there was reasonable cause for the said failure’.
In the facts of the instant case, it is seen that the explanations offered by the assessee have been ignored by the Assessing Officer as well as Commissioner (Appeals) on the ground that the Guidance Note issued by the ICAI is not binding on the Income-tax Authorities whereas the Supreme Court and Co-ordinate Bench of the Tribunal recognizes the same and applicable in the case of the assessee.
Imposition of penalty under section 271B was not mandatory, rather it was discretionary, thus, where assessee proved that there was reasonable cause for failure to get books audited, Assessing Officer was required to consider same. Since assessee was under bona fide belief that as per Guidance Note issued by ICAI on ‘tax audit under section 44AB’ net result in derivative transaction was to be considered as turnover and as same did not exceed more than Rs. 1 crore, assessee would not be liable to get his books audited thus, for the above reasons, the penalty levied under section 271B was to be deleted. [In favour of assessee] Assessment year 2016-17 - [Sachin Marotrao Rangari v. ACIT (2022) 143 taxmann.com 318 (ITAT Rajkot)]
02/11/2022
Proposed Common ITR form vide CBDT file no 370133/16/2022 dated 01.11.2022:
All taxpayers, except trusts and non-profit organisations, can file returns with the proposed new common ITR form, on which the Central Board of Direct Taxes (CBDT) has invited stakeholder comments by 15 December. Some proposed features of the common ITR form are :
1. Basic information (comprising parts A to E), Schedule for computation of total income (Schedule TI), Schedule for computation of tax (schedule TTI), Details of bank accounts, and a schedule for the tax payments (schedule TXP) is applicable for all taxpayers.
2 The ITR is customized for taxpayers with applicable schedules based on certain questions answered by the taxpayers (wizard questions).
3. The questions have been designed in such a manner and order that if the answer to any question is ‘no’, the other questions linked to this question will not be shown to the taxpayer.
4. Instructions have been added to assist the filing of the return containing the directions regarding the applicable schedules.
5. The proposed ITR has been designed in such a manner that each row contains one distinct value only. This will simplify the return filing process.
6. The utility for the ITR will be rolled out in such a manner that only applicable fields of the schedule will be visible and wherever necessary, the set of fields will appear more than once.
India’s central bank started a pilot program of its digital currency Tuesday, allowing select banks to use it for settling secondary-market transactions in government securities. Banks traded 2.75 billion rupees ($33.3 million) of bonds on the first day using the new form of currency, data from Clearing Corp. of India Ltd. showed. Nine participating banks executed 24 trades worth 1.4 billion rupees in 7.38% 2027 bond, 23 trades totaling 1.3 billion rupees in 7.26% 2032 bonds and one transaction in 6.54% 2032 bond. The e-rupee will be tested for retail use within a month in some locations, the Reserve Bank of India said on Monday. The launch comes as India steps up its fight against private digital currencies. Officials announced a new tax regime this year that decimated volumes on crypto exchanges. Banks involved in the pilot are the State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank Ltd., Kotak Mahindra Bank, Yes Bank, IDFC First Bank and the Indian unit of HSBC Holdings Plc.
While China has claimed that trade with India touched $103 billion in the first nine months of 2022, India’s data show that bilateral trade stood at just $91 billion. Trade experts claim that the significant gap is most likely because of the under-invoicing of shipments by Indian importers to avoid paying import taxes. Under-invoicing of imports involves marking the stated value of imports below the actual value paid to the exporter abroad, reducing the import tax outgo.
In Finance Act 2022, the Government clarified that a deduction for such cess and surcharge on income tax is not an allowable deduction from the taxable profit. The clarification was made by way of amendment of the income tax act with retrospective effect from 2005. However, the Government provided a one-time window, allowing those taxpayers who had claimed the cess or surcharges as a deduction from their taxable profits, to recompute their taxable profits after removing such cess or surcharge and deposit the tax on such income.
Rule 132 lays down the procedure for recomputing such income.
“Any taxpayer who has claimed deduction of cess or surcharge can share the details of their taxable income, tax paid and the amount of cess/surcharge claimed as a deduction with the tax authorities. The information is to be submitted electronically on the income tax portal using Form 69. On receipt of Form 69, the tax officer will recompute the taxable income of the taxpayer and inform the additional tax to be payable by the taxpayer. The taxpayer can then make the payment of tax and inform the tax officer of the payment of tax in Form 70. No penalty would be leviable on such payment.
Benefits of Rule 132:
Rule 132 is a beneficial clause allowing assessees to comply with the provision of Section 155 which allowed Assessing Officers to re-compute the total income for such previous years in which the assessee would have claimed deduction of surcharge or cess subject to be disallowed u/s 40(a)(ii). This recomputation invariably attracts provisions of section 270A(3) wherein this disallowed surcharge is treated as under-reported income and subject to taxes and importantly penalties.
“As per the new Rule, an assessee can suo moto submit an application in the prescribed form for re-computation of income, without claiming a deduction for surcharge or cess and on payment of appropriate taxes (if any) in that case it would not be deemed as under-reported income hence no penalty will be levied under section 270A(3). This application has to be moved in form 69 on or before the 31st day of March 2023 for the re-computation of income under the new Income Tax Section 155(18), as inserted by the Finance Act, 2022. Taxes payable post recomputation of income have to be separately reported in form 70.
Rule 132 vs Revised Returns:
Rule 132 differs greatly from a revised return. A Revised return can only be filed up to 31st December 2022 for ITR filed for FY 2021-22 (AY 2022-23). However, an assessee can file for re-computation of income all the way from FY 2004-05 (AY 2005–06) in Form 69 up to 31st March 2023.
01/11/2022
India collected Rs 1.52 lakh crore in Goods and Services Tax (GST) in October, the second-highest ever collection, the finance ministry said on November 1. Monthly GST revenues have been more than Rs 1.40 lakh crore for eight months in a row, an indication of continued economic recovery. The GST mop-up in April 2022 was Rs 1.68 lakh crore. The gross GST collection was Rs 1.30 lakh crore in October 2021 and Rs 1.42 lakh crore in September 2022.
Sebi on Monday barred fugitive businessman Mehul Choksi from the securities markets for 10 years and imposed a fine of Rs 5 crore on him for indulging in fraudulent trading in the shares of Gitanjali Gems Ltd. He has been directed to pay the penalty within 45 days, as per the Securities and Exchange Board of India (Sebi) order. Choksi, who was the chairman and managing director as well as part of the promoter group of Gitanjali Gems, is the maternal uncle of Nirav Modi. Both of them are facing charges of defrauding state-owned Punjab National Bank (PNB) of more than Rs 14,000 crore. Both Choksi and Modi fled India after the PNB scam came to light in early 2018. While Choksi is said to be in Antigua and Barbuda, Modi is lodged in a British jail and has challenged India's extradition request. In its order, Sebi said that Choksi had funded a set of 15 entities known as 'front entities', who were directly or indirectly connected with him and with each other and who had taken position in the scrip of Gitanjali Gems both in the cash and derivative segments during the investigation period. He had used them as front entities for manipulation in the company's scrip.
Australia is one of the world’s most desired migration destinations. Inviting 195,000 migrants in 2022-2023 with 90% of applications processed in 8 -12 months. Residents Get free or affordable healthcare for yourself and your family. One can Sponsor eligible relatives for permanent residence. It’s a Great alternative to H1-B. Australian passport allows you to travel to 184 countries.
The federal government is planning a massive increase in the number of immigrants entering Canada, with a goal of bringing in 500,000 people in 2025. The announcement signals a significant increase from the 405,000 immigrants that came to Canada last year and the 465,000 expected to arrive next year. Every job that is not filled represents one less person contributing to Canada's economic growth and one less person paying taxes to support Canada's social infrastructure. The BCC says that a recent survey of its members found that 67 per cent of its members had cancelled or delayed major projects because they could not find workers.
Union Minister Rajeev Chandrasekhar on Monday announced that an Electronics Manufacturing Cluster will be developed in Ranjangaon, Maharashtra, at a cost of Rs 500 crore. The Electronics Manufacturing Cluster (EMC) is targeted to attract an investment of over Rs 2,000 crore, with a potential to generate thousands of jobs in the coming years.
"To make Maharashtra into an electronics hub, we have approved an Electronics Manufacturing Cluster project in Ranjangaon, Pune. The total investment of the government will be about Rs 500 crore," Minister of State for Electronics and Information Technology Chandrasekhar said at a briefing. The overall cost for development of the EMC is Rs 492.85 crore, out of which Rs 207.98 crore will be funded by the government of India and balance contribution of Rs 284.87 crore will be infused by the Maharashtra Industrial Development Corporation (MIDC), State Industrial Agency of Government of Maharashtra, according to a background note.
31/10/2022
Bank Locker rules change effective 01.01.2022
1. CCTV is necessary- also, it has also been made necessary to keep the data of CCTV for 180 days.
2. It is necessary to send e-mail and SMS alerts every time a customer accesses his locker. This alert will protect customers from fraud.
3. Information about empty locker will have to be made public- These have to be put on the display board of the bank. Also, they will have to accept all the applications related to opening the locker and inform the customers about the waiting list.
4. Bank will give compensation for theft- Now if anything is stolen from your locker or there is any kind of disturbance, then the bank will have to compensate the customer 100 times the rent of the locker. Now banks cannot say that they are not responsible for theft.
The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has granted relief to Serum Institute of India by allowing the expense incurred on foreign travel of the director and his wife of the company for purpose of running the business as revenue expenditure.
The Income Tax Appellate Tribunal (ITAT), Bangalore deleted penalty as the cash loan under Section 269SS of the Income Tax Act, 1961 given by Executive Directors to meet urgent financial needs of company. The assessee company is JICE Academy for Excellence Pvt. Ltd. During the scrutiny proceedings, the Assessing Officer noted the cash loan received from the 2 Directors viz. Akhil Anand Biraj of Rs. 14,62,470 and K V Kanaghavi of Rs. 27,00,000. Hence, as per Section 271D of the Act, the Joint Commissioner of Income Tax, initiated penalty proceedings u/s 271D of the Act for contravention of Sec. 269SS of the Act. The penalty proceeding u/s 271D of the Act was subsequently transferred to National Faceless Assessment Centre. In response the assessee company filed the reply explaining that the company in cash for urgent exigency of the company wherein the above said Directors were holding management affairs of the company. The Coram observed that “the transaction between assessee company and its Executive Directors is on account to meet the urgent financial requirements of the company. Accordingly, it cannot be considered and there exist reasonable causes for accepting the money in cash from the Executive Directors of the company who are responsible for day-to-day affairs of the company. In our opinion, in this case, levy of penalty u/s 271D of the is unwarranted.
30/10/2022
The Kochi Zonal Unit of the Directorate General of GST Intelligence, which has jurisdiction all over Kerala and Lakshadweep, has detected GST evasion of around rs 420 crore. It has realized around rs 115 crore of the tax amount evaded in FY 2021-22 in various sectors. The Unit also detected around rs 283 crore with a realisation of about rs 47 crore in the current financial year. The office has also made two arrests in FY 2021-22 and one more arrest in the current financial year for gross violations of the GST law. The builders take input tax credits commonly for all the units and they are required to reverse the credit attributable to the inputs used in the units on which no GST is payable. By not doing so, they illegally accumulate input tax credit. This credit is then used for payment of GST instead of paying it in cash.
US economy bounces back in Q3 despite inflation woes:
1. Gross domestic product rose 2.6% in the third quarter versus the estimate of 2.3%.
2. A narrowing trade deficit and increases in consumer spending and government outlays boosted the number.
3. A sharp pullback in housing subtracted from the number, part of a broader decline in private investment.
4. Consumer spending decelerated, increasing at just a 1.4% pace in the quarter, down from 2% in Q2.
5. The weekly jobless claims edged higher to 217,000 but were still below the 220,000 estimate.
6. The International Monetary Fund, citing the Ukraine war, this month downgraded its outlook for the world economy in 2023. Global growth is forecast to slow from 6% in 2021 to 3.2% in 2022 and 2.7% in 2023.
7. Global inflation is forecast to rise from 4.7% in 2021 to 8.8% in 2022 but to decline to 6.5% in 2023 and to 4.1% by 2024.
RBI infuses massive liquidity into the banking system:
1. Reserve Bank infuses massive liquidity into banking system, largest since April 2019.
2. The Reserve Bank of India on October 21 injected the largest amount of funds into the banking system in three and a half years. The central bank has injected liquidity worth Rs 72,860.70 crore, the highest since April 30, 2019.
3. Three days later, on October 24, the central bank injected Rs 62,835.70 crore, RBI data showed. The abrupt tightening of liquidity conditions is attributed to outflows due to GST payments and higher currency in circulation during the festive season.
4. Why it’s important: The Reserve Bank’s move indicates surplus cash with banks is drying up at a faster pace. An injection of funds implies tight liquidity in the banking system.
29/10/2022
As per the company statement, Rummy has been held to be a ‘game of skill’ by several high courts and the Supreme Court, which constitutes 96 percent of the games played on its online platformKarnataka-based online gaming platform Gameskraft has challenged the intimation notice of Rs 21,000 crore by the directorate general of Goods and Services Tax (GST) Intelligence. For games which have already been decided as ‘games of skill’ by the courts, the Rs 21,000 crore tax notice on an online gaming company will go nowhere, the High Court of Karnataka, said. As per reports, the GST intelligence has claimed that the platform is used for gambling. The notice was released on September 8 and attempted to impose a 28 percent GST on the company’s transactions. In its submission before the High Court bench of Justice SR Krishna Kumar, the company has argued that the platform only conducts games of skill. As per the company statement, Rummy has been held to be a ‘game of skill’ by several high courts and the Supreme Court, constituting 96 percent of the games played on its online platform.
Exporters get incentives and duty rebates for settling trades in rupees. 1. In an effort to boost shipments to countries like Russia the government is likely to allow exporters settling their trades in rupees to use export incentives and duty rebates under India’s foreign trade policy.
2. After receiving an approval from the Finance Ministry, DGFT may issue a clarification on this matter soon.
3. Presently, if payment or export realizations come in freely convertible currencies including the dollar, British pound, euro and yen, only then incentives to exporters in the form of duty drawbacks, EPCG incentives, and rebates on duties and taxes under different government schemes ROSCTL and RODTEP are available.
4. With the clarification, the FTP will be suitably amended to enable exporters to claim export benefits for settling trade in rupees.
5. Russia’s Gazprom bank has opened a special rupee account with state-owned UCO Bank to facilitate trade in rupee.
6. Earlier in July the RBI introduced a rupee settlement system for international trade. Invoicing, payment, and settlement of exports and imports to all countries, on the central bank’s approval, can be done in Indian rupees.
7. To use this mechanism banks need approval from the central bank. Under this mechanism, exporters and importers can use a Special Vostro account linked to the correspondent bank of the partner country for receipts and payments denominated in rupees.
28/10/2022
Three digital asset management companies have come under the scanner of the investigative agencies, including the Enforcement Directorate and the income tax department, following an alert by the Financial Intelligence Unit (FIU) about their alleged role in illicit drug transactions worth 28,000 crore. Digital currency was used to buy and sell drugs and some of these companies facilitated it,” a senior government official told ET. “So far the agency has been able to track transactions worth *28,000 crore.” Most of the transactions were carried out through three digital asset management companies and were not reported to the authorities. Detailed findings have been sent to the Enforcement Directorate to look into the money laundering aspect and to the income tax department to probe tax evasion by the entities involved. The FIU has zeroed in on about 200 transactions that were carried out in the Cayman Islands, the British Virgin Is lands and Nigeria using digital currencies and routed via exchanges located in India, the official said. These transactions took place between 2019 and 2021,” the person said, without divulging the names of the three companies as the probe is still on. The FIU is keeping close tabs on transactions in digital currencies, the official said.
India aims to raise the share of its exports in global trade to 3% by 2027 and 10% by 2047 from the current 2.1%, promoting hundred Indian brands as global champions. A Customs ‘ONE’ will be set up to provide import-export clearance within one hour of arrival at entry points and customs ports to facilitate trade. These are among the commerce and industry ministry’s several India’s hundredth year of independence year goals under the India@2047 umbrella. It includes setting up economic zones outside India as an extension of the Atmanirbhar Bharat initiative. The goals for 2047 have been set for international trade and till 2027, the commerce department will work towards laying a strong foundation to achieve these goals,” said an official. The plan is to increase the share of exports in the gross domestic product to 25%.
27/10/2022
According to Juwai IQI, a n Asian real estate technology group, Vancouver is still popular with mainland and Hong Kong Chinese buyers, even though Canadian real estate inquiries collapsed to an all-time low in 2021’s fourth quarter. Chinese demand for Vancouver real estate plummeted during the pandemic, but it has come back strongly since Q4 2021,” said Juwai IQI co-founder and group CEO Kashif Ansari in a statement. Demand in 2022 is at about half the 2019 average, although it has climbed in each of the past two quarters,” Ansari said. “We see demand continuing to grow slowly through the end of 2023, at which point policy decisions by the Chinese government will determine what happens next.” He added that he doesn’t see Canada’s impending ban on foreign buyers, which will come into effect in January 2023, as a deterrent for Chinese buyers. Only a small fraction of Chinese buyers still live in China, and Ansari said that most buyers are looking to live permanently in Canada. Canada’s high migration targets and appealing educational system are powerful magnets for migrants and expats from all over Greater China. Vancouver is one of the world cities that Chinese buyers like the most. This means that Canada’s slowing real estate market may still welcome investment.
Gst: Some Classification Controversies:
GST is now generating more than $17bn (£15bn) a month for the world's fifth largest economy.
Why India's GST is one of the world's most complex tax reforms.
1. Pizza mozzarella toppings:
In court, the Khera Trading Company argued that their mozzarella topping should be classified as cheese, which attracts a lower GST of 12%. After all, cheese and milk solids made up more than a third of the toppings, it said. But a court in Haryana state disagreed. It said the cheese in the topping could not be truly classified as cheese alone. The toppings, it said, contained vegetable oil - 22% of the ingredients, to be precise. The firm said the oil helped with the texture, added flavour to the pizza and was cheap as well. The court said vegetable fat was not an ingredient of cheese. That would disqualify the toppings to be counted as cheese - instead, it would be called an "edible preparation" and taxed at a higher 18%. The firm lost its case.
2. Roti Va Paratha:
In September, a court ruled on a 20-month-long case over the paratha, a crisp, flaky pan-fried flatbread which attracts a GST of 18% as opposed to roti, a basic round flatbread which is taxed at 5%. A Gujarat-based firm, Vadilal Industries, went to the court in June last year questioning why their packed frozen parathas - it made eight different types, some stuffed with cooked vegetables - should be taxed differently from rotis, a subcontinental staple. After all, the key ingredient in both was wheat flour. The court said no. The judge agreed that packed parathas mainly contained wheat flour but - here comes the catch - also had "other ingredients" such as water, vegetable oil, salt, vegetables and radish. Rejecting the plea the court said: "The parathas supplied by the appellant are different from roti."
3. Ice creams sold by parlours:
A court decided that ice creams sold by parlours would attract a higher (18%) tax than ice cream sold in restaurants since they sell "already manufactured ice cream and do not cook/prepare ice cream for consumption like a restaurant". The parlours sell ice cream as a "good and not as a service, even if the supply has certain ingredients of a service".
4. Fryums Vs Papadams:
there was a case in Gujarat involving a maker of 'fryums' - an Indian snack food made of potato starch and sago - who wanted his product to be exempt from GST like papadams, thin, round pancake snacks. But the court noted that fryums were ready-to-eat when sold, while papadams had to be cooked. "Both the products are different and have their individual identity," the judge said. The 'fryums' continue to attract a 18% tax.
5. Flavoured Milk:
A flavoured milk maker went to court challenging the 12% tax on his drink when ordinary milk enjoyed a tax exemption. The firm said its product comprised "92% milk, and only 8% sugar". But the court said flavoured milk was not covered under the "definition of milk" in the laws and therefore was not exempt from the tax.
6. Ready to cook dosa:
And then there was a dispute over whether ready-to-cook dosa (a popular breakfast food) and idli (a steamed rice cake) should attract a higher tax than the batter used to make them.
A low single rate is likely to eliminate classification disputes, reduce incentives for evasion and bring down compliance costs. The moment you conflate or reduce the rates, classification disputes will reduce. But in a country like India with high income disparities, a single or even a dual rate structure risks imposing a larger tax burden on the poor.
Source: bbc.com/news/world-asia-india-63281037
26/10/2022
the Goods and Services Tax (GST) portal has asked taxpayers with up to Rs 5 crore turnover to report 4-digit HSN codes in their GSTR-1 from 1st November 2022.
As per Notification No. 78/2020 – Central Tax dated 15th October 2020, it is mandatory for the taxpayers to report a minimum 4 digit or 6-digit HSN Code in table-12 of GSTR-I on the basis of their Aggregate Annual Turnover (AATO) in the preceding Financial Year. Part I & Part II of Phase 1 have already been implemented from 01st April 2022 & 01st August 2022 respectively and are currently live on GST Portal. From 01st November 2022, Phase-2 would be implemented on GST Portal, and the taxpayers with up to Rs 5 crore turnover would be required to report 4-digit HSN codes in their GSTR-1,” the GSTN said.
Central Government has amended Section 37 & Section 39 of CGST, 2017 vide Notification No. 18/2022 dated 28th Sept, 2022 with effect from 01 October, 2022. According to sec 37(4) a taxpayer shall not be allowed to file GSTR-1 if previous GSTR-1 is not filed and as per sec 39(10) a taxpayer shall not be allowed to file GSTR-3B if GSTR-1 for the same tax period is not filed.
25/10/2022
Tax on Diwali Gifts :
Gifts from Relatives Monetary gifts received by an individual will not be charged to tax in a case like money received from relatives which can be spouse, brother, sister, or parents, among others. As per Section 56(2) of the Income Tax Act, gifts received in a financial year can be taxed as “income from other sources” as per the slab rate. However, gifts from close family members are exempted. Taxation of Diwali gifts would generally depend upon the nature of the gift as well as the person gifting such cash, gold, car and property. Such taxation would be governed in accordance with Section 56(2)(x) of the Income Tax Act, 1961. Section 56(2)(x) of Income Tax Act, 1961 provides that any sum of money or value of property received without consideration or with inadequate consideration to be subject to tax in the hands of recipient as Income from Other sources. Gifts from Employers Gifts or vouchers received in a financial year shall be tax-exempted under the Income Tax Act if their total amount is less than rs 5,000. Any gifts you receive over rs 5,000 will be added to your income and taxed as per your tax bracket. For instance, if you get presents of around rs 5000 during Diwali and rs 3,000 again at Christmas, you will be required to pay tax on the gifts worth rs 3000, which is over Rs. 5,000. Some employers give Diwali bonus instead of gifts. This will be considered as a part of their salary and charged to tax.
RBI deputy governor T Rabi Shankar has said the central bank is receiving encouraging responses from countries to participate in the rupee-based trading. The RBI in July allowed rupee settlement in external trade, including the flexibility of investing surplus rupees in Indian bond markets.
24/10/2022
Insurance company cannot go beyond grounds mentioned in letter of repudiation of claim: Case Name : JSK Industries Pvt. Ltd. Vs Oriental Insurance Company Limited (Supreme Court of India).
India is pushing for a valuation of around $7.7 billion for state-owned IDBI Bank Ltd. in what could be the biggest sale of the government’s stake in a lender in decades, according to a person familiar with the matter. The government earlier this month invited bidders for a 60.72% stake in the Mumbai-listed lender. The valuation target means the administration is seeking a premium of roughly 33%, based on IDBI Bank’s market value of about $5.8 billion as of Thursday close. Shares of IDBI Bank rose as much as 3% on Friday after the Bloomberg News report. IDBI Bank’s improved profitability could support the valuation target, said the person, who asked not to be identified as the information is confidential. Potential investors ranging from domestic and foreign banks to non-banking financial companies and private equity funds have expressed initial interest in the asset, the person added. Bidders could get regulatory approvals and security clearances after November as the process proceeds, according to the person. A sale of the majority stake could be completed as soon as in the next fiscal year starting from April 1, the person said. The federal government and the state-owned Life Insurance Corp. of India together own about 95% in IDBI Bank.
22/10/2022
Assessee Advancing General Public Utility Cannot Engage In Any Trade, Commerce Or Business To Avail Tax Exemption- SC: Assistant Commissioner of Income Tax (Exemptions) v. Ahmedabad Urban Development Authority (CA No. 21762 Of 2017). Hon Supreme Court has observed that an assessee advancing general public utility (GPU) cannot engage in any trade, commerce or business in order to avail tax exemptions that are available to organizations carrying on charitable work. The Director General of Income Tax for exemptions had assailed the decisions of various High Courts which had held that carrying on any trade, commerce, or business, is not a per se bar or disqualification for a GPU category charitable trust to claim to be such, precluding its tax-exempt status under the IT Act.
Following are the observations of the Hon SC:
1. In the course of achieving the object of general public utility, the concerned trust, society, or other such organization, can carry on trade, commerce or business or provide services in relation thereto for consideration, provided that (i) the activities of trade, commerce or business are connected ("actual carrying out…" inserted w.e.f. 01.04.2016) to the achievement of its objects of GPU; and (ii) the receipt from such business or commercial activity or service in relation thereto, does not exceed the quantified limit, as amended over the years (Rs. 10 lakhs w.e.f. 01.04.2009; then Rs. 25 lakhs w.e.f. 01.04.2012; and now 20% of total receipts of the previous year, w.e.f. 01.04.2016).
2. As far as state cricket associations like Saurashtra, Gujarat, Rajasthan, Baroda, and Rajkot are concerned, their case needed further scrutiny.
3. The amounts or any money whatsoever charged by a statutory corporation for achieving what are essentially 'public functions/services' may resemble trade, commercial, or business activities. However, since their objects are essential for advancement of public purposes/functions (and are accordingly restrained by way of statutory provisions), such receipts are prima facie to be excluded from the mischief of business or commercial receipts.
4. The income and receipts of statutory regulatory bodies which are for instance, tasked with exclusive duties of prescribing curriculum, disciplining professionals and prescribing standards of professional conduct, are prima facie not business or commercial receipts.
5. However, for statutory regulatory bodies, this is subject to the caveat that if the assessing authorities discern that certain kinds of activities carried out by such regulatory body involved charging of fees that are significantly higher than the cost incurred (with a nominal mark-up) or providing other facilities or services at markedly higher prices, those would constitute commercial or business receipts. In that event, the overall quantitative limit prescribed in the proviso to Section 2(15) (as amended from time to time) has to be complied with.
6. The assessing authorities must on a yearly basis, scrutinize the record to discern whether the nature of the assessee's activities amount to "trade, commerce or business" based on its receipts and income and further added if it is found that they are in the nature of trade, commerce or business, then it must be examined whether the quantified limit under Section 2(15), has been breached, thus disentitling them to exemption.
An analysis of CSR Amendment Rules, 2022: Introduction: Companies (CSR Policy) Amendment Rules, 2022 came into force on 20th Sep 2022, to amend few sub-rules of Companies (Corporate Social Responsibility Policy) Rules, 2014. Some major amendments:
1. Establishment of a CSR committee for unspent CSR amount- Companies are required to establish a CSR committee to monitor the execution of their CSR commitments and in particular any funds in their “Unspent Corporate Social Responsibility Account”. Companies may keep unused funds set aside for CSR in this designated account as long as they use them within three financial years. Its utilisation is to be monitored by the CSR committee. The Amendment Rules have also done away with the relaxation given to companies to not form a CSR committee if they no longer satisfy the required criteria.
2. Change in Expenditure for Impact Assessment-
The CSR Rules earlier had authorised up to 5% of overall CSR expenditures, or Rupees 50 lakh, whichever was less for impact assessment. The Amendment Rules provide that the cost of social impact assessments, which can be considered as CSR spending, cannot be greater than 2% of all CSR expenditures for the applicable financial year or Rupees 50 lakh, whichever is higher. The amendment permits greater impact assessment spending in the event of substantial CSR projects.
3. Revised format for annual report on CSR activities
The Amendment Rules provide for a new format for the annual report on CSR activities. All companies are required to provide the following information in the annual report:
Brief explanation of its CSR policy;
I) Information about the members of the CSR committee such as name of the director, his/her designation, number of meetings of CSR Committee held and number of meetings of attended by the director;
II) Web-links to the company's website where the CSR Committee's membership, CSR policy, and CSR projects approved by the board are listed; and
III) Executive summary and web links for the impact assessments of CSR projects.
4. Rule 4(1) got amended- Previously, the CSR activities were allowed to be undertaken “by the company itself or through (a) a company established under section 8 of the Act, or a registered public trust or a registered society, registered under section 12A and 80 G of the Income Tax Act, 1961 (43 of 1961)…” Now, an additional requisite is added which says that for a Section 8 company or a registered trust or a registered society, it should be exempted under sub-clauses (iv), (v), (vi) or (via) of clause (23C) of section 10 or registered under section 12A and approved under Section 80G of the Income Tax Act, 1961 (43 of 1961).
The government on Wednesday named Financial Services Secretary Sanjay Malhotra as Revenue Secretary. He will succeed Tarun Bajaj, who is retiring on 30 November. Sanjay Malhotra who will assume the post of Officer on Special Duty in the finance ministry's Department of Revenue. He will take charge after Tarun Bajaj retires.
21/10/2022
The Odisha-based authority for advance ruling (AAR) has held that the Konkan Railway Corporation Limited requires a separate registration in the state for carrying out construction work given by the East Coast Railway. The order is in conflict with earlier ones by other AARs. The place of service is important for imposition of Goods and Services Tax (GST) by Odisha. Konkan Railway, registered in Maharashtra’s Thane district, received a letter of acceptance (LoA) earlier this year for executing a Rs 337.18 crore project for constructing bridges and other allied works of a new rail line of East Coast Railway in Budha district of Odisha. The Odisha AAR held that Konkan Railway is required to be registered under the Odisha Goods and Services Act, 2017 and the Central Goods and Services Act, 2017 for the contract. AAR held that the location of the supplier would be the project site.
Earlier, the Karnataka-based AAR had ruled in the GEW (India) Pvt Ltd case that no separate registration is needed by the company in the state and invoices can be raised from its registered office in Noida in Uttar Pradesh.
Similarly, the Karnataka AAR in RITCO Shopping Complex case had held that the company need not take a separate registration in the state. However, the company is at liberty to take the same if it intends a fixed establishment at the project site in Karnataka, the authority had said.
Source: Business Standard
A special court on Wednesday allowed the ED to confiscate around 39 proper ties of fugitive businessman. Nirav Modi worth Rs 500 crore. Additionally Punjab National Bank’s plea seeking nine properties worth ?424 crore that were mortgaged or hypothecated by Modi and his companies was allowed, reports Rebecca Samervel. The properties the ED will confiscate include 12 immovable properties attached to Rhythm House at Kalaghoda, consignments seized by agencies when in transit, amounts parked in several bank accounts held outside the country and valuables seized from Modi’s Alibaug bungalow. They include 22 cars, including a Mercedes and a Bentley, and the ED could now auction them.
20/10/2022
SC, in a landmark ruling, in the context of "advancement of general public utility", holds that any body which involves in "trade or commerce" and charges over and above cost, would cease to be a Charitable Institution for the purpose of Income tax Act; When services are provided at cost or nominal basis, the same will not constitute "trade or commerce" but not when charges are markedly above cost; Three judges bench, while pronouncing the verdict, remarks that they have comprehensively dealt with each category of cases involving Development Authorities, Cricket Associations, Trusts and other similarly situated assessees; In a second batch of appeals, concerning educational institutions, Apex Court holds that the object of such institutions must be "wholly, solely and exclusively" for the purpose of education; SC rules that if educational institutions are making profits and gains and run for that purpose, then the benefit u/s Sec.10(23C) of Income Tax Act will not be extended to such institutions; SC disposes of the batch by dismissing several Revenue & Assessee appeals respectively. The ruling was delivered by a Three Judges Bench of the Supreme Court comprising Chief Justice U.U. Lalit, Justice S. Ravindra Bhat and Justice P.S. Narasimha
Commerce and Industry Minister Piyush Goyal on Sunday expressed confidence that the country will achieve the export target for goods and services to USD 2 trillion by 2030. The minister was speaking at the Exporters Conclave held at Chennai. Goyal emphasised on sustaining the export momentum and said that he is confident that Indian exports will be able to wither the global headwinds and will surpass growth in exports by a “big” margin. He also said that by 2047, the country will become a USD 30 trillion economy with 25 per cent share in exports. By the year 2030, exports from India will be USD 2 trillion,” he said.
The Enforcement Directorate on 17 October informed it has provisionally attached 28 immovable properties and other assets worth rs 80.65 crore belonging to Nama Nageshwar Rao, TRS Lok Sabha MP and his family members in an ongoing alleged money laundering case. The case pertains to Ranchi Expressway Ltd, Madhucon Projects Limited and its director and promoters under the provisions of PML Act 2022, ED said in a press release. As per details, Nageshwar Rao is promoter and director of Madhucon group of companies and a personal guarantor to the bank loan defaulted by Ranchi Expressway Ltd.
19/10/2022
The Gujarat Goods and Service Tax (GST) department arrested one person from Bhavnagar who it claimed to be the “mastermind” in a bogus billing scam worth Rs 700 crore. The accused, identified as Mohammad Abbas Shabbirali Savjani alias Mohammad Tata, was arrested Sunday by the state GST department near SG highway in Ahmedabad. We have recovered over Rs 60 crore of tax credit till now. Bogus billing was about Rs 700 crore and the tax credit of about Rs 130 crore was scammed.
The Hon’ble CESTAT, Delhi in M/s Bharat Heavy Electricals Ltd. v. Commissioner, Central Excise & CGST-Dehradun [Final Order No. 50958 / 2022] held that the Hotel accommodation service received by the appellant is an eligible input service under Rule 2(l) of the CENVAT Credit Rules, 2004 (“CCR”). Further, the CESTAT allowed the appeal and held that the assessee is also entitled to consequential benefits. Observed that the hotel accommodation service received by the appellant is an eligible input service under Rule 2(l) of CCR. Therefore, the CESTAT allowed the appeal, set aside the impugned order, and concluded that the Appellant is entitled to consequential benefits.
In a significant ruling, the Madras High Court has held that the filing of a reply to the show-cause notice in form GST-DRC-06 is not mandatory under Section 73(9), 74(9) and 76(3) of GST Act and the reply so filed through post shall also be treated as valid. The petitioner, Asia (Chennai) Engineering Company Private Limited, sent physical representation on 08.01.2022 received by them on 10.01.2022. The petitioner denied the opportunity of hearing to the petitioner. Noting that the department ought to have referred to it and considered the same and thereafter given the petitioner an opportunity to give his explanation, Justice M. Nirmal Kumar observed that “In view of non-consideration, the petitioner denied his right of opportunity, and principles of natural justice.” The Court further held that the only objection of the Department is that the postal/physical reply not considered since it was not sent through the portal. The petitioner deserves a personal hearing so that his objections can be heard.
18/10/2022
While allowing a taxpayer’s plea seeking withdrawal of an order passed by tax authorities, which granted only seven days to file a reply to a show cause notice (SCN), the Bombay high court (HC) asked the tax authorities to donate Rs10,000 to the PM Cares Fund. The order was erroneous because, in the SCN, only seven days were given to reply to the notice, and on the eighth day, the order came to be passed. Therefore, the question of not paying (the tax along with interest) within 30 days of the issue of the notice will not arise,” the bench of justice KR Shriram and justice AS Doctor says. Criticising the approach of assessing officers (AO) while passing orders contrary to the basic provisions of the goods and service tax (GST) law without application of mind, the HC stated that such acts are adding to the already overburdened dockets of the court. Valuable judicial time is wasted because such unacceptable orders are being passed by respondents’ officers. The officers do not seem to understand or appreciate the hardship that is caused to the general public,” the bench says.
Section 126. General disciplines related to penalty.-
(1) No officer under this Act shall impose any penalty for minor breaches of tax regulations or procedural requirements and in particular, any omission or mistake in documentation which is easily rectifiable and made without fraudulent intent or gross negligence.
Explanation.-For the purpose of this sub-section,-
(a) a breach shall be considered a "minor breach" if the amount of tax involved is less than five thousand rupees;
(b) an omission or mistake in documentation shall be considered to be easily rectifiable if the same is an error apparent on the face of record.
(2) The penalty imposed under this Act shall depend on the facts and circumstances of each case and shall be commensurate with the degree and severity of the breach.
(3) No penalty shall be imposed on any person without giving him an opportunity of being heard.
(4) The officer under this Act shall while imposing penalty in an order for a breach of any law, regulation or procedural requirement, specify the nature of the breach and the applicable law, regulation or procedure under which the amount of penalty for the breach has been specified.
(5) When a person voluntarily discloses to an officer under this Act the circumstances of a breach of the tax law, regulation or procedural requirement prior to the discovery of the breach by the officer under this Act, the proper officer may consider this fact as a mitigating factor when quantifying a penalty for that person.
(6) The provisions of this section shall not apply in such cases where the penalty specified under this Act is either a fixed sum or expressed as a fixed percentage. The above is provisions of Section 126 of GST Act and sub section 6 says this provision is not applicable in certain cases. However in almost all the case the penalty is fixed either as fixed sum or percentage. For example, 73, 74, 122, 129 .
An analysis of CSR Amendment Rules, 2022:
Introduction: Companies (CSR Policy) Amendment Rules, 2022 came into force on 20th Sep 2022, to amend few sub-rules of Companies (Corporate Social Responsibility Policy) Rules, 2014. Some major amendments:
1. Establishment of a CSR committee for unspent CSR amount- Companies are required to establish a CSR committee to monitor the execution of their CSR commitments and in particular any funds in their “Unspent Corporate Social Responsibility Account”. Companies may keep unused funds set aside for CSR in this designated account as long as they use them within three financial years. Its utilisation is to be monitored by the CSR committee. The Amendment Rules have also done away with the relaxation given to companies to not form a CSR committee if they no longer satisfy the required criteria.
2. Change in Expenditure for Impact Assessment-
The CSR Rules earlier had authorised up to 5% of overall CSR expenditures, or Rupees 50 lakh, whichever was less for impact assessment. The Amendment Rules provide that the cost of social impact assessments, which can be considered as CSR spending, cannot be greater than 2% of all CSR expenditures for the applicable financial year or Rupees 50 lakh, whichever is higher. The amendment permits greater impact assessment spending in the event of substantial CSR projects.
3. Revised format for annual report on CSR activities
The Amendment Rules provide for a new format for the annual report on CSR activities. All companies are required to provide the following information in the annual report:
Brief explanation of its CSR policy;
Information about the members of the CSR committee such as name of the director, his/her designation, number of meetings of CSR Committee held and number of meetings of attended by the director;
Web-links to the company's website where the CSR Committee's membership, CSR policy, and CSR projects approved by the board are listed; and
Executive summary and web links for the impact assessments of CSR projects.
4. Rule 4(1) got amended- Previously, the CSR activities were allowed to be undertaken “by the company itself or through (a) a company established under section 8 of the Act, or a registered public trust or a registered society, registered under section 12A and 80 G of the Income Tax Act, 1961 (43 of 1961)…” Now, an additional requisite is added which says that for a Section 8 company or a registered trust or a registered society, it should be exempted under sub-clauses (iv), (v), (vi) or (via) of clause (23C) of section 10 or registered under section 12A and approved under Section 80G of the Income Tax Act, 1961 (43 of 1961).
17/10/2022
What is a Digital Banking Unit?
Prime Minister Narendra Modi on Sunday inaugurated 75 Digital Banking Units across 75 districts. Eleven banks in the public sector, 12 in the private sector and one Small Finance Bank are participating in the endeavour.
What is a Digital Banking Unit?
1. A digital banking unit is a specialised fixed point business unit or hub housing certain minimum digital infrastructure for delivering digital banking products and services as well as servicing existing financial products and services digitally in self-service mode at any time.
2. Commercial banks (other than regional rural banks, payment banks and local area banks) with past digital banking experience are permitted to open DBUs in tier 1 to tier 6 centres, unless otherwise specifically restricted, without having the need to take permission from the RBI in each case.
3. Each DBU must offer certain minimum digital banking products and services. Such products should be on both liabilities and assets side of the balance sheet of the digital banking segment.
4. Some of the digital services:(i) Cash withdrawal and Cash Deposit only through ATM and Cash Deposit Machines respectively- no physical cash acceptance/disbursal across counters; (ii) Passbook printing / Statement Generation; (iii) Internet Banking Kiosk which may also include facilities to provide all/majority of services available on internet banking including indent and issuance/processing of Cheque Book request, receipt and online processing of various standing instructions of clients;(iv) transfer of funds (NEFT/IMPS support); (v) updation of KYC / other personal details, etc.; (iv) Lodging of grievance digitally and acknowledgement thereof and also tracking of resolution status; (v) Account Opening Kiosk; (vi) Kiosk with e-KYC/ Video KYC; (vii) Digital onboarding of customers for schemes such as Atal Pension Yojana (APY); Insurance onboarding for Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY).
(Source: RBI notification dated 7th April, 2022)
What is a convertible note?
1. As per Rule 2 sub-rule (e)of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, Convertible Note means:- an instrument issued by a startup company acknowledging receipt of money initially as debt, repayable at the option of the holder, or which is convertible into such number of equity shares of that company, within a period not exceeding ten years from the date of issue of the convertible note, upon occurrence of specified events as per the other terms and conditions agreed and indicated in the instrument.
2. As per Rule 2(ixa) of Companies (Acceptance of Deposits) Rules, 2014, an amount of twenty five lakh rupees or more can be received by a startup company, by way of a convertible note in a single tranche, from a person.
3. An important pre requisite for issuing a convertible note is that the company must be recognized as “Start-up” by the Department for Promotion of Industry and Internal Trade (DPIIT).
16/10/2022
Employee Contributions cannot be allowed as a deduction in case of payment made beyond the respective due date: SC : Checkmate Services Pvt. Ltd. v Commissioner of Income Tax (C.A. No. 2383 of 2016)
Facts:
1. In the years under consideration, the Assessing Officers (AO) had ruled that the appellants had belatedly deposited their employees’ contribution towards the EPF and ESI, considering the due dates under the relevant acts and regulations.
2 Consequently, the AO ruled that by virtue of Section 36(1)(va) read with Section 2(24)(x) of the IT Act, such sums received by the appellants constituted “income”. Those amounts could not have been allowed as deductions under Section 36(1)(va) of the IT Act when the payment was made beyond the relevant due date under the respective acts.
3. In other words, as per the AO, as such sums were paid beyond the due dates as prescribed under the respective acts, the right to claim such sums as allowable deduction while computing the income was lost forever.
4. Since the various HCs passed conflicting judgements, the matter went to the Hon SC.
Hon SC has held as below:
1. Parliament, while introducing Section 36(1)(va) along with Section 2(24)(x), was aware of the distinction between the two types of contributions- employer and employee. There was a statutory classification, under the IT Act, between the two.
2. When Parliament introduced Section 43B, which allows certain deductions only on actual payment, what was on the statute book, was only employer’s contribution and not employees’ contribution.
3. The assessees are given some leeway in that as long as deposits are made beyond the due date, but before the date of filing the return, the deduction is allowed. That, however, cannot apply in the case of amounts which are held in trust, as it is in the case of employees’ contributions- which are deducted from their income.
4. The non- obstante clause under Section 43B or anything contained in that provision would not absolve the assessee from its liability to deposit the employee’s contribution on or before the due date as a condition for deduction.
15/10/2022
Important indirect tax Rulings :
1. Reply to SCN to be considered even if sent by post and not through portal: Madras HC : Asia (Chennai) Engineering Company (P.) Ltd. v. Assistant Commissioner (ST) (FAC) - [2022] 143 taxmann.com 126 (Madras)
The show cause notice (SCN) was issued against the petitioner by the department for revoking the erroneous refund claim. It replied to the SCN which was sent by the post. The department didn’t consider the reply as it was not sent through portal and passed adverse order. The petitioner filed writ petition against the same and contended that any adverse decision to be passed only after hearing the petitioner. The Honorable High Court noted that the only objection of the Department was that the postal/physical reply had not been considered, since it was not sent through portal. The petitioner had sent a detailed representation which received by the department and it was not disputed. This was a case for erroneous refund and the petitioner would deserve personal hearing so that his objections can be heard. Therefore, the Court directed department to hear objections and give opportunity of personal hearing to the petitioner.
2. Bombay HC sets aside the order of the proper officer, wherein, amendment to Bills of Entry as per Section 149 of the Customs Act has been rejected for a reason that GST law does not permit such amendment post clearance from Customs and holds that if the system does not permit for amendment of Bills of Entry then till such time measures are taken to equip the system appropriately, amendment of documents must be considered manually. - HINDUSTAN UNILEVER LIMITED vs. THE UOI AND ORS - 2022 (10) TMI 268 - BOMBAY HIGH COURT.
3. As a result of cancellation of registration, the petitioner would be deprived of their livelihood which amounts to violation of right to life and liberty as enshrined in Article 21 of the Constitution of India. Hence, an appeal against cancellation of GST registration is allowed by excluding the bar of limitation in preferring the appeal - POONAMCHAND SARAN & OTHERS - 2022 (10) TMI 180 - RAJASTHAN HIGH COURT
03
14/10/2022
5 reasons to avoid Digital Gold buying in this festival season:
1. Digital Gold investment is not regularised in India. Last year, the markets regulator Securities and Exchange Board of India (SEBI) barred investment advisors and brokers from dealing in digital gold.
2. Digital gold rates are always lower than jewellery rates. Moreover, when going for an exchange, customers have to pay extra costs in terms of taxes and making charges. GST is levied twice – first when the digital gold is sold to the customer and once again on the final value of finished jewellery.
3. Sellers promise that each gram of digital gold sold online is backed by real gold kept in a secured vault. However, customers can’t go and check if their gold is actually stored in the vault. There will always be the risk of losing some digital gold if the refiner goes bankrupt.
4. No interest on your deposits. The only return Digital Gold buyers may expect is if the gold price goes up in the market. The final income from digital gold is also affected by tax implications and selling charges. In case of enquiries by government authorities, digital gold sellers will have to provide the requested information.
5. There is no free storage; free storage is provided for five years. After that, a fee will be charged on a monthly basis for the next 5 years.
Gst interest rate on non filing of Gst returns/ short or non payment of Gst/ itc wrongly utilised
As per Section 50, read with Rule 88B, the interest liabilities are as under
1. Interest on delay in filing of GSTR-Return- [Ref: Rule 88(B)(1)]
-In case non-payment of GST is due delay in filing of return. Interest is payable @ 18% on the GST paid on the Cash portion from the due date of filing to date of payment and this is also subject to the condition that no action is initiated under Section 73 or 74 .
2. Interest on short payment or Non-payment of GST [Ref: Rule 88(B)(2)]
-In case non- payment is due to the reasons other than the above, interest is payable on the amount not paid or short paid irrespective of the payment made (In Cash or Credit), the interest is payable @ 18% on the entire amount short-paid or not-paid from the due date of filing to date of payment.
3. Interest on Input tax wrongly availed and utilized [Ref: Rule 88(B)(3)]
In case of ITC wrong availed and utilised, interest @24% will be calculated for the period starting from the date of utilisation of such wrongly availed input tax credit till the date of reversal of such credit or payment of tax in respect of such amount.
Input tax credit wrongly availed shall be construed to have been utilised, when the balance in the electronic credit ledger falls below the amount of input tax credit wrongly availed. Interest will be applicable on the amount, by which the balance in the electronic credit ledger falls below the amount of input tax credit wrongly availed. In case the Electronic Credit ledger must be re-casted and interest liability to be worked out. [Ref: Explanation 1 to Rule 88B (3)]
In line with explanation on clause 115 of FA,2022
Clause 115 seeks to amend notification number G.S.R. 661(E), dated the 28th June,
2017, so as to notify rate of interest under sub-section (3) of section 50 of the Central Goods
and Services Tax Act as 18%, retrospectively, with effect from the 1st day of July, 2017.
4. No Interest on Input tax wrongly availed and not utilized, mere reversal only.
Allowability of CSR Expenses U/S 80G: As per Explanation 2 to Section 37(1), expenditure incurred towards CSR activities shall not be allowed as ‘business expenditure’ and shall be deemed to have not been incurred for business. So many Assessing Officers have refused to allow valid deduction U/S 80G in respect of donations made under CSR and which satisfy the provisions of Sec 80G too. Explanation 2 to Section 37(1), applies only to the extent of computing business income under Chapter IV-D. It cannot be extended or imported to CSR contributions which are otherwise eligible for deduction under any other provision or Chapter. Following ITAT judgements have allowed the deduction U/S 80G of CSR Funds:
1. American (India) Pvt. Ltd v. ACIT (ITA No.1762/Bang/2019)
2. Allegis services (India) Pvt. Ltd v. ACIT (ITA No.1693/Bang/2019
3. JMS Mining Pvt.Limited Vs PCIT, Kolkata Tribunal ITA/146/KOL/2021 Dt.22.07.2021
4. Goldman Sachs Services Pvt. Ltd. vs. JCIT in IT(TP) A No. 2355/Bang/2019.
5. FNF India Pvt. Limted Vs ACIT ( 1565/Bang/2019) dated 05.01.2021
13/10/2022
Income tax portal has informed that the functionality to update Unique Document Identification Number (UDIN) is available on the portal till 30th November. Time for updating UDINs for forms filed in the assessment year 2021-2022 is available till 30th November, 2022,” the e-filing portal said.
IMF urges governments restrain spending to fight inflation
1. Governments fighting inflation should limit spending increases to programs focused on helping the poor, the International Monetary Fund said, as surging food and energy prices create hardships worldwide.
2. Such measures could include discounts on utility bills and allowances for school meals and public transportation, limited to low-income households, said IMF economists in their latest report on global fiscal conditions.
3. Global government debt will be equivalent to 91% of the world’s GDP in 2022, sharply lower than a record 256% in 2020 but still 7.5 percentage points higher than the prepandemic level.
4. The average debt-to-GDP ratio for advanced economies is 112.4% this year, and is projected to be 114% in 2027, according to the IMF.
5. The IMF urged central bankers to keep raising interest rates, and discouraged broad government spending boosts or tax cuts.
6. The global economy will expand 2.7% in 2023, down from 3.2% this year and 6% in 2021, with inflation, the war in Ukraine, and China’s slowdown putting downward pressure, the IMF said.
7. The IMF said many governments should reduce their budget deficits to help tackle inflation and ease their debt burdens. To do so, they may need to raise additional revenues and curb spending growth, including public wages.
RBI concept note on Central Bank Digital Currency
1. The Reserve Bank of India (RBI) indicated that it will soon commence a pilot launch of ‘e-rupee (e ‘) or Central Bank Digital Currency (CBDC).
2. It has hinted at two broad categories for the use of e-rupee — retail and wholesale — taking the payment system in the country to a new level where the common people and businesses will be able to use the digital currency seamlessly for various transactions.
3. RBI’s concept note proclaims it ready for e-rupee trials as part of a strategic implementation plan geared for minimal disruption.
4. The creation of a e- rupee will assist the Indian economy minimise operating expenses associated with physical cash management, improving the efficiency of payment settlements, and stimulating innovation in cross-border payments.
5. With an offline function in the e- rupee, people in distant places with restricted internet connectivity will be able to access financial services more easily.
6. E- rupee is a sovereign currency issued by central banks in alignment with their monetary policy. It appears as a liability on the central bank’s balance sheet.
7. E- rupee is freely convertible against commercial bank money and cash. It is a fungible legal tender for which holders need not have a bank account.
8. Records will be maintained using a distributed ledger technology (DLT) like Blockchain. The RBI has said that all CBDC transactions would be traceable, with “no scope of anonymous transaction.”
9. The e- rupee will likely lean on a non-interest bearing design, just like physical cash, according to the RBI.
10. The e- rupee may also become a rich data source for service providers for financial product insights. Further, the data would be highly useful for enforcing money laundering regulations.
12/10/2022
Businesses with annual turnover of over 5crore will have to move to e-invoicing under goods and services tax (GST) from January 1. The GST Network has asked its technology providers to make the portal ready to handle the increased capacity by December, a government official privy to the development, told ET. The official said the target is to bring all businesses with turnover above ?1 crore under this framework by next fiscal year, which will further plug revenue leakages and improve compliance.
India has received the fourth set of Swiss bank account details of its nationals and organisations as part of an annual automatic information exchange under which Switzerland has shared particulars of nearly 34 lakh financial accounts with 101 countries.
Supreme Court of India decided that Terms & Conditions of Invitation to Tender are not open to judicial scrutiny, unless arbitrary, discriminatory or mala fide. Case Name : Airport Authority of India Vs Centre for Aviation Policy (Supreme Court of India).
11/10/2022
RBI said loan ratings without information about lenders' details should be treated as unrated exposure. Capital should be set aside using risk weightings applicable for unrated exposure to companies and non-banking finance companies. The RBI said these instructions would be effective on March 31, 2023.
Organisation for Economic Cooperation and Development (OECD) has released a global tax reporting framework for cryptocurrencies. The framework will help keep track of cross-border transactions of crypto assets. The exchange of information between countries is proposed to be automatic under the new framework.
10/10/2022
Employers will not be required to deduct GST on the subsidised meal cost recovered from employees, the Authority of Advance Ruling has said. Zydus Lifesciences had approached the Gujarat bench of the AAR on whether GST would be levied on the amount deducted from the salaries of its employees who avail food in the factory/corporate office. The company has entered into an agreement with the canteen service provider as per which it pays full amount to the service provider for the food served during a prescribed period on behalf of the employees.
Colombian pop star Shakira is accused of failing to pay income taxes to the Spanish government between 2012 and 2014. According to the prosecution, Shakira bought a house in Barcelona in 2012, which became a primary home for her and partner, footballer Gerard Piqué. In a July indictment, prosecutors said Shakira spent more than half of each year between 2012 and 2014 in Spain, and used a previously established “corporate framework” to hide income and assets during those years. The “business plot” included companies based in the US, the British Virgin Islands, Cayman Islands, Malta, Panama and Luxembourg. Shakira, however, has said that she was on tour for much of the time in question and hence, “there is no way I qualified as a resident”. “The Spanish tax authorities saw that I was dating a Spanish citizen and started to salivate. It’s clear they wanted to go after that money no matter what,” she said. She also rejected a plea deal and said she will go to trial “as a matter of principle”. A date for the trial has not been set yet. Spanish domestic tax law uses three criteria to consider if a person is a resident of Spanish territory: Physical presence, economic interests and the location of a spouse and children. In Shakira’s case, the first criteria is key, said Adolfo Martín Jiménez, a professor of tax law at the University of Cádiz, Spain. “Even if you are not present for that many days, a sporadic presence is regarded as presence,” Jiménez said. Spain also applies a worldwide nexus to income. Fines such as the one that’s sought from Shakira are based on income, Jiménez explaine The singer is not the first celebrity to be targeted by Spanish tax authorities. Cristiano Ronaldo had to pay $22 million in back taxes and fines as part of a 2018 settlement over undeclared earnings from his advertising contracts back when he was playing for real Madrid. S-ET
09/10/2022
30 days notice to be given to file reply of SCN : It is often observed that departmental officers do not follow proper and legal adjudication process and consequently, the business house have to face the repercussions of the same. Lately, there had been various cases wherein either the show cause notice was not issued or was not signed or was not uploaded on the GST portal. The aggrieved taxpayers knocked the doors of court to seek relief but the question as to “until when” is still unanswered. Recently, one such issue on the same subject matter was reported before hon’ble Bombay High Court in the case of M/S SHEETAL DILIP JAIN V/S THE STATE OF MAHARASHTRA & ORS.
The petitioner raised a grievance since a show cause notice was issued under Section 73 of CGST Act, 2017 with maximum period of 7 day’s time to submit the reply. Furthermore, on the 8th day, the impugned order was passed by the departmental officer. It was argued that as per provisions of Section 73 of CGST Act, 2017, a period of 30 days is required to be given from the date of issue of show cause notice for filing reply by the assessee.
The Court therefore, upheld the submissions of the petitioner since as per provisions of Section 73 of CGST Act, 2017, a period of 30 days from issuance of show cause notice is to be given to file reply or make payment of tax along with interest. The statutory prescribed period cannot be reduced arbitrarily to 7 days. Further, the impugned order itself mentions a period of 30 days to submit the reply. It was therefore, stated that the order is passed erroneously and hence, the allegation of non-payment of tax within 30 days is improper and unjust. It was further held that the order is passed without application of mind and is contrary to the provisions of the Statue. The omission on the part of officers overburdens the dockets of the Court and results into wastage of valuable judicial time. The officers were bashed since they failed to understand the hardships faced by the taxpayers. Further, it is difficult for the taxpayer to approach the Court and spend on a lawyer. It was therefore, held that the respondent will pay a sum of Rs. 10,000/- to PM Cares Fund as cost within a period of 2 weeks.
The above decision is yet another example of the fact that the departmental officers failed to perform their duties effectively. There had been various judicial precedents in the past as well wherein the same practices were followed by the departmental authorities. Reference can be drawn to various cases such as Bombay High Court in the case of Ramani Suchit Malushte v/s Union of India and Ors, Andhra Pradesh High Court in the case of Navya Foods (P) Ltd. V/s Superintendent Of Central Tax, Kerala High Court in the case of M/s Pee Bee Enterprises V/s Assistant Commissioner. Relevant updates on these have also been made by us having Serial No. 298, 296, and 124 respectively. However, it is high time that these departmental authorities should follow these binding judicial rulings otherwise the taxpayers will continue to face the difficulties and knock the doors of courts.
07/10/2022
Gold-supplying banks have cut back shipments to India ahead of major festivals in favor of focusing on China, Turkey, and other markets where better premiums are offered, three bank officials and two vault operators told Reuters. That could create scarcity in the world's second-biggest market for gold, and force Indian buyers to start paying hefty premiums for supplies in the approaching peak-demand season. India's gold imports in September fell 30% from a year ago to 68 tonnes, while Turkish gold imports soared 543%. China's net gold imports via Hong Kong jumped nearly 40% to a more than four-year high in August.
The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) in the matter of M/s. Trinity Infraventures Limited; held that the interest paid on delayed TDS payment is allowable as a deduction. The assessee pleaded that under section 37(1) of the Act, only such expenditure incurred in connection with an offence, for an illegal act, or breach of law or prohibited in law alone is not allowable and in other cases, the payment of interest, more particularly in respect of TDS is only compensatory in nature. CIT(A) upheld the findings of the Assessing Officer and dismissed the appeal of the assessee. It was contended that the expenditure was incurred wholly and exclusively for business and allowable as business expenditure under section 37 of the Act. Further stated that the interest paid for delay in making payment of TDS is not like a penalty and does not amount to breach of law or an illegal act or prohibited act.
06/10/2022
UK drops plan to cut income tax rate for top earners but other tax sops remain:
1. UK has dropped its plan to cut the top personal income tax rate from 45% to 40%, but other proposed tax cuts remain in play. The 45% rate is levied on annual incomes in excess of 150,000 GBP.
2. On September 23, the UK Finance Minister released a mini-budget, containing 23 announcements. The removal of the top rate of tax only made up around 2 billion out of the 45 billion GBP of tax cuts announced.
3. Starting in April 2023, the basic rate of income tax will drop from 20% to 19%, one year earlier than planned. A planned rise in the corporation tax rate to 25% is canceled, keeping it the lowest in the G20 at 19%. It’s done to promote growth and for re investment in businesses. This should benefit 31 million taxpayers in England Wales and Northern Ireland.
4. The other cuts announced are permanent increase in the 0% band for stamp duty land tax, the reversal of rises in national insurance and to dividend tax rates. A 1.25p in the pound increase in National Insurance was introduced in April 2022. It is now being reversed from 6 November. It will apply throughout the UK, to about 28 million people.
5. A planned shake up of the way alcohol is taxed will no longer take place, Stamp duty will be cut for homes worth up to GBP 250,000 ($420,000) and for GBP 425,000 ($710,000) for first home buyers. The price at which Stamp Duty Land Tax starts to be payable on property purchases in England and Northern Ireland has doubled, from £125,000 to £250,000.
There is also a special rate for first-time buyers. The price at which they start paying stamp duty has gone up from £300,000 to £425,000.
05/10/2022
The Institute of Chartered Accountants of India ( ICAI ) is to form Self-Regulatory Organisation for Social Auditors. The Council of ICAI recently approved the formation of Self-Regulatory Organisation (SRO) for the social auditors as envisaged in the SEBI notification dated 25th July, 2022. The SRO is proposed to be named as “Institute of Social Auditors of India” and will be set up as a Section 8 company under the Companies Act, 2013, under the aegis of ICAI. ICAI has decided to form the company with the vision to be a leading institution for the development of an independent, ethical, and world-class Social Auditors’ profession responding to needs and expectations of the stakeholders. The proposed SRO will focus on capacity building of social auditors through continuous professional advancement with a focus on adherence to the highest ethical standards and compliance with the letter and spirit of social stock exchange requirements.
A division bench of the Rajasthan High Court in the matter of Poonamchand Saran vs Union Of India has restored an appeal against the order cancelling GST Registration on the ground that the assessee failed to submit the hard copies after filling the appeal through online within the prescribed time. The assessee, Poonamchand Saran filed appeal against cancellation of the GST registration. As per the Act, the appeal can be filed within thirty days which can be extended by a further period of 30 days. The petitioner Poonamchand Saran filed the e-appeal in time but could not submit the hard-copy. On the other hand, the petitioner Mohan Singh failed to submit an appeal against the cancellation order dated 09.05.2022. The petitioner Poonamchand has challenged the order dated 09.09.2022 whereby his appeal has been dismissed on the ground of same being time-barred. The petitioner Mohan Singh has raised the grievance of not being able to file an appeal on account of unavoidable reasons. Justice Sandeep Mehta and Justice Kuldeep Mathur held that “It cannot be denied that the petitioners herein would not be able to continue with their business in absence of GST registration and thus, would be deprived of their livelihood which amounts to violation of right to life and liberty as enshrined in Article 21 of the Constitution of India.
04/10/2022
The Income Tax Department has issued an Updated dated October 01, 2022 stating that the Bank of Maharashtra, Canara Bank and Indian Overseas Bank have been migrated from the Online Tax Accounting System ("OLTAS") e-Payment of Taxes at the National Securities Depository Limited ("NSDL") to the e-Pay Tax facility at the e-Filing portal for payment of taxes henceforth.
The MCA vide. Notification No. GSR 207 (E), Dated 24-03-2021 introduced an amendment in Schedule III of the Companies Act, 2013 whereby the companies were mandated to round off the figures appearing in the Financial Statements depending upon their total income. Now, the MCA has clarified that in case the companies provide an absolute figure in e-forms i.e. AOC-4, the same shall not be treated as an incorrect certification by the professionals.
Exporters under Gst to pay Attention — GST on Export Freight: The GST exemption on export Freight was valid until 30th September 2018, and was further extended till 30th September 2022 but with no further extension effective from 1st October 2022, the following transactions would be taxable under GST –
1. Ocean export freight billed to customers in India to be charged at the GST rate of 5%
2. Air export freight billed to customers in India to be charged at the GST rate of 18%
Under Section 12(8) of the IGST Act, since there have been no further extensions in exemption, the GST shall be charged on all outbound freight transactions when billed to Indian customers considering the place of supply as 97 (i.e. Other Territory) w.e.f. 1st October 2022.
Status of RCM on ocean freight :
Scenario 1. Import of goods into India using foreign Shipping line services.
At present IGST is payable on FOB import of goods on RCM basis.( Section 13 of IGSTA) . Take ITC.
CIF : No tax as per the decision of Hon'ble SC in Mohit Minerals .
Scenario 2: Export from India using services of Indian Shipper .
FOB: it is an export of service if foreign buyer of goods takes services of Indian Shipping lines by paying in convertible foreign currency. ( Section 13 of IGST Act).
CIF : Indian exporter takes services of Indian Shipping lines . IGST is payable as no extension is given.( Section 12 of IGSTAct) Take ITC and use for payment of IGST and claim refund or take refund of ITC as goods are exported.
In above 2 scenarios, tax is payable once.
Note: Above understanding changes depending on the location of Shipping lines services provider also.
03/10/2022
GST rules Amendments enacted by Finance Act 2022 become effective from 01.10.2022: Six GST changes with the restrictions as appended as below :
(A) Restrictions imposed for availing ITC- New clause (ba) inserted in Sec 16(2) – Additional condition for claiming ITC by buyer that ITC can be claimed only if that ITC has not been restricted in auto generated statement -GSTR-2B u/s 38 of CGST ACT.
So ITC which cannot be availed such as-
1. Related to suppliers who have taken new registration for such period as may be prescribed.
2. Related to suppliers who have defaulted in payment of tax and default continues for such
period as may be prescribed.
3. Related to suppliers who have declared output tax liability more in GSTR-1 but paid tax less
in GSTR-3B.
4. ITC claimed more than ITC auto-populated in GSTR-2B
5. ITC claimed in violation of conditions prescribed in Section 49 (12)- Maximum proportion
of output tax liability which may discharged through electronic credit ledger.
(B) Time period extended for claiming ITC related to previous financial year: Section 16(4) amended to provide that time limit for claiming ITC in respect of Invoices related to previous financial year now extended upto 30th November of following financial year. This amendment also applicable for F.Y 2021-22.
(C) Time period for Cancellation of registration –
1. In case of composite taxpayers – Section 29 (2) (b) amended now registration of composite taxpayer will be cancelled if he fails to furnish return for a financial year beyond 3 months from due date.
2. In case of regular taxpayers- Registration will be cancelled if he fails to furnish return for such continuous period as may be prescribed. (presently 6 months)
3. In case of registered person under QRMP scheme -registration will be cancelled if not furnished returns for continuous two tax periods.
(D) Extension of time limit for issuing credit note -Section 34 of CGST ACT- Now time limit for issuing credit note now extended up to 30th Nov of following financial year.
(E) Amendment in Section 37- Return of outward supply- Now amendment in Section 37 also made regarding rectification of errors related to previous year up to 30th November of following financial year.
(F) Other Misc:
1. Now it is mandatory to file sequential returns.
2. Refund of any balance in cash ledger – Now registered person can claim any balance in Cash ledger in such form and manner as may be prescribed.
3. Levy of late fees for not filling GSTR-8 with in due date -Rs 100 per day subject to maximum of Rs.5000/-.
4. Transfer any amount of tax, interest and penalty or any other amount available in electronic cash ledger to IGST /CGST of a distinct person as specified in sec 25(4) or Sec 25(5) in such form and manner subject to such conditions and restrictions as may be prescribed and such transfer shall be deemed to be refund from cash ledger.
5. Registration can be cancelled if rule 86B not compiled with i.e compulsory payment of 1 % output tax liability in cash. (Section 49 (12) notified).
02/10/2022
Case Title: Curil Tradex Pvt. Ltd. Versus The Commissioner
The Delhi High Court has held that the physical verification of business premises for GST registration without issuing a notice is a violation of the principle of natural justice. The division bench of Justice Rajeev Shakdher and Justice Taravitasta Ganju has noted that the proper officer opted to have the petitioner’s business premises inspected, albeit without the presence of its authorised representative. Had notice or intimation been given, the glitch could have been overcome. The cancellation of registration was based on the show cause notice. The show cause notice, in turn, refered to a letter received from the Deputy Commissioner (DC), CGST Delhi South Commissionerate. The respondents/department suspended the registration of the petitioner w.e.f. the date of the issuance of the show cause notice. The petitioner contended that if the proper officer opted for physical verification of the petitioner’s business premises, it could only be carried out in the presence of its authorised representative. In other words, in this eventuality, a prior notice or intimation would have to be served by the proper officer.
FTP policy validity extended up to 31.03.2023.
The existing Foreign Trade Policy 2015-2020 which is valid upto 30.09.2022 is extended upto 31st March, 2023 by DGFT.
Income tax Act: The new rule 17AA will be applicable from October 1. If the Income Tax Department asks for an account of the income and expenditure of any previous year, then it will have to be provided. Now institutions, hospitals, schools and colleges will now have to give the account of every pie. Full account of the amount donated will also have to be kept. Entities will have to keep a complete account of the transactions like corporate companies.
Gambling and betting, whether online or offline, are supplies of services as per the goods and services tax (GST) law. Currently, an 18 per cent GST is levied on online Games of skill, while a 28 per cent GST is levied on online games of chance. GST is computed on gross gaming value or stake instead of the gross gaming revenue (total collection minus winnings distributed) or service fee. Hence, a 28% GST is charged and collected on betting and gambling under the HSN code 999692 on the total stake or bet value. Game of skills attracts 18% GST under HSN 998439 on a commission fee. In gambling/betting, GST is collected on gross gaming value or stake value. Hence, GST collection is secured despite the players winning/losing. The I-T department action comes close on the heels of the GST intelligence wing issuing a show cause notice earlier this month to a Bengaluru-based online gaming portal GamesKraft Technologies Pvt Ltd demanding rs 21,000 crore in taxes, interest and penalty.
Taxability on Upcoming Diwali gifts and vouchers:
Gifts or vouchers received in a financial year shall be tax-exempt if their total amount is less than rs 5,000. Any gifts you receive over rs 5,000 will be added to your income and taxed as per your tax bracket. For instance, if you get presents of around rs 5000 during Diwali and rs 3,000 again at Christmas, you will be required to pay tax on the gifts worth rs 3000, which is over Rs. 5,000. Diwali Bonus received from employer is considered to be income from salary and is fully taxable. Gifts from family members are not subject to tax. If the total value of gifts received during the year, whether in cash or kind, exceeds Rs. 50,000, they are subject to tax under Section 56(2) of the Income Tax Act. According to this section, gifts up to Rs. 50,000 are tax-free; however, if this threshold is breached, the entire gift value will be taxable. Any income generated by investing this gift amount will be taxable as per the applicable tax rules on that investment. A land or building received as a gift during the year will be taxed if its stamp duty value exceeds rs 50,000. Tax will be levied on the stamp duty value. Taxpayers should know that the gifts are taxed as per their income tax slab.
Every Trust, Educational Institution, Hospital, University shall keep receipt of every payment for each day along with its Cash Book, Ledger, General. If any donation has been received from someone, then along with it, the information of the donor’s pen and Aadhaar number will also have to be kept. The trust will also have to maintain a record of the credit transactions.
Such trusts or religious-charitable institutions shall also maintain records of their reforms, repair bills. Hospitals and schools, colleges have been increasing the fees till now with the claim of operating without profit or loss. Now hiding income and hiding losses will not be easy. Hospitals and schools and colleges are also registered with religious and social institutions. Till now the rule of keeping their accounts was not clear.
01/10/2022
E-invoicing for businesses with aggregate turnover exceeding rs 5 crore will be mandatory from next year. At present, the threshold is rs 20 crore, which has come down to rs 10 crore from October 1. The system is ready to facilitate e-invoicing for threshold of over rs 10 crore. Our effort is to lower the threshold to rs 5 crore from next year for which a notification prescribing the exact date is to be issued later,” a senior Government official told.
The gross GST revenue collected in the month of September 2022 is rs 1,47,686 crore of which CGST is rs 25,271 crore, SGST is rs 31,813 crore, IGST is rs 80,464crore (including rs 41,215 crore collected on import of goods) and Cess is rs 10,137 crore (including rs 856 crore collected on import of goods). The revenues for the month of September 2022 are 26% higher than the GST revenues in the same month last year. During the month, revenues from import of goods was 39% higher and the revenues from domestic transaction (including import of services) are 22% higher than the revenues from these sources during the same month last year. This is the eighth month and for seventh months in a row now, that the monthly GST revenues have been more than the rs 1.4 lakh crore mark. September also saw another milestone getting crossed when more than 1.1 crore e-way bills and e-invoices, combined (72.94 lakh e-invoices and 37.74 lakh e-way bills), were generated without any glitch on the portal run by NIC on 30th September 2022.
GST officers have detected Rs 824 crore tax evasion by 15 insurance companies, intermediaries and banks through issuance of fake invoices, officials said on Thursday. Acting on specific inputs, GST Intelligence Officers in Mumbai searched the premises of a number of corporates -- insurance companies, intermediary marketing/branding companies, NBFCs and banks, in multiple cities. As many as 15 insurance companies, intermediaries, marketing companies, NBFCs and banks were allegedly following this modus operandi and evading GST. The investigations revealed that these entities had formed an arrangement to pass on ineligible ITC in the guise of marketing services and fraudulent invoices were raised in connivance with each other, officials said. Investigation points to systematically planning and executing the modus operandi mainly at the behest of insurance companies, they added. Statements of key persons involved indicate that the insurance companies have been executing the modus since the inception of GST. So far, GST evasion to the tune of Rs 824 crore has been unearthed. Various insurance companies which have availed and utilised the ineligible ITC have voluntarily paid a total amount of Rs 217 crore in cash, officials said, adding further investigations are in progress.
On September 19, when Dubai markets were selling 1 gram of 22K gold at AED 196.50 or Rs 4,252 — Indian markets were quoting a price of Rs 4,656 per gram (Mumbai). This difference is largely because of the import duty hike by the Indian government, to 15 percent (excluding 3% cess), in July 2022 from 10.75 per cent earlier. India’s fetish for gold is costing the Indian Government dearly — the rupee has slid due to imports going through the roof, surging 790% in May to $6 billion vis-à-vis $670 million a year ago. This forced the government to hike the import duty. This festive season, jewellers in India have tough competition from Dubai, where import duty is not levied. The import duty results in a significant cost advantage for buyers in Dubai, at least on the face of it.
But if this tempts you to pick up gold from Dubai on your next holiday there, it won’t really work.
That’s because there are duty charges to be paid if you bring gold from Dubai into India. Moreover, making charges are higher in Dubai. On the face of it, gold sourced from Dubai appears cheaper, but customs duty and making charges will eat into your savings, as will the currency conversion fee. In addition, you will need to comply with various rules if you want to bring the yellow metal into India.
30/09/2022
According to another tweet made by the Income Tax Department, 1.55 lakh updated returns have been filed till 2 September 2022. More than 20 thousand taxpayers have filed updated returns (ITR-U) for assessment years 2020-21 and 2021-22. The provision of updated returns was announced in the Finance Act 2022.
the Income Tax Department has so far issued a refund of Rs 1.14 lakh crore. This information has been given by tweeting on behalf of Income Tax Department. According to the tweet, individual tax refund of Rs 61252 crore and corporate tax refund of Rs 53158 crore have been issued. Individual refund has been issued to 1 crore 96 lakh 998 taxpayers, while corporate refund has been done in 1 lakh 46 thousand 871 cases.
29/09/2022
CBDT Notification No. 111/2022 dtd 28.09.2022
Application for recomputation of income under sub-section (18) of section 155.: An application requesting for recomputation of total income of the previous year without allowing the claim for deduction of surcharge or cess, which has been claimed and allowed as deduction under section 40 in the said previous year, shall be made in Form No. 69 on or before the 31st day of March, 2023.
Form 70 — Intimation to the Assessing Officer of the payment of tax on income recomputed under sub-section (18) of section 155
https://egazette.nic.in/WriteReadData/2022/239196.pdf
CBIC Notification 19 dtd 28.09.2022 :: Changes in Rules
in rule 21, after clause
(g), the following clauses shall be inserted, namely:-
?(h) being a registered person required to file return under subsection (1) of section 39 for each month or part thereof, has not furnished returns for a continuous period of six months;
i) being a registered person required to file return under proviso to subsection (1) of section 39 for each quarter or part thereof, has not furnished returns for a continuous period of two tax periods.
In rule 36 of the said rules,–
(a) in sub-rule (2), the words, letters and figure, ?, and the relevant information, as contained in the said document, is furnished in FORM GSTR-2 by such person? shall be omitted;
(b) in sub-rule (4), in clause (b), after the words, ?the details of the words, ?input tax credit in respect of shall be inserted;
In rule 37
A registered person, who has availed of input tax credit on any inward supply of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, but fails to pay to the supplier thereof, the amount towards the value of such supply along with the tax payable thereon, within the time limit specified in the second proviso to sub-section(2) of section 16, shall pay an amount equal to the input tax credit availed in respect of such supply along with interest payable thereon under section 50, while furnishing the return in FORM GSTR-3B for the tax period immediately following the period of one hundred and eighty days from the date of the issue of the invoice:
Provided that the value of supplies made without consideration as specified in Schedule I of the said Act shall be deemed to have been paid for the purposes of the second proviso to sub-section (2) of section 16:
Provided further that the value of supplies on account of any amount added in accordance with the provisions of clause (b) of sub-section (2) of section 15 shall be deemed to have been paid for the purposes of the second proviso to sub-section (2) of section 16.;
(2) Where the said registered person subsequently makes the payment of the amount towards the value of such supply along with tax payable thereon to the supplier thereof, he shall be entitled to re-avail the input tax credit referred to in sub-rule (1).
In rule 38, 42, 43 FORM GSTR-2 shall be omitted
In rule 60 auto-generated shall be substituted;
rules 69, 70, 71, 72, 73, 74, 75, 76, 77 and 79 of the said rules shall be omitted;
In rule 83 of the said rules, in sub-rule (8), in clause (a), the words ?and inward shall be omitted;
In rule 85 of the said rules, in sub-rule (2), –
(a) in clause (b), for the words ?said person; the words ?said person; or shall be substituted;
(b) clause (c) shall be omitted;
In rule 89, of the said rules, in sub-rule (1), –
(a) after the words ? claiming refund of the words, brackets and figures any balance in the electronic cash ledger in accordance with the provisions of sub-section (6) of section 49 or shall be inserted;
In rule 96 FORM GSTR-3B shall be substituted;
Read More
https://egazette.nic.in/WriteReadData/2022/239191.pdf
CBIC Notification no 18 dtd 28.09.2022
(E).—In exercise of the powers conferred by clause (b) of sub-section (2) of section 1 of the Finance Act, 2022 (6 of 2022), the Central Government hereby appoints the 1st day of October, 2022, as the date on which the provisions of sections 100 to 114, except clause (c) of section 110 and section 111, of the said Act shall come into force.
Read More
https://egazette.nic.in/WriteReadData/2022/239189.pdf
The CBIC has issued Circular No. 21/2022-Customs dated September 26, 2022 regarding the amendments to the Scheme for Remission of Duties and Taxes on Exported Products (“RoDTEP”).
The undersigned is directed to say that the RoDTEP scheme notification No. 76/2021-Customs (N.T.) dated September 23, 2021 has been amended vide notification No. 75/2022 – Customs (N.T.) dated September 14, 2022 whereby the para 4(2), para 5(5) and the words “or the transferee” in para 6 of the principal notification have been deleted. The effect of these amendments is the deletion of certain conditions related to transferee-holder of the scrip.
Further, the Electronic Duty Credit Ledger Regulations, 2021 issued vide notification No. 75/2021-Customs (N.T.) dated September 23, 2021 have been amended vide notification No. 79/2022 – Customs (N.T.) dated September 15, 2022. In Regulations 6(2) and 7(3) of the principal regulations, the words “two years” have been substituted for the words “one year”. The effect of these amendments is that the validity period of scrips is increased from one year to two years from the date of their generation.
28/09/2022
As per the RBI, tokenisation refers to replacement of actual card details with an alternate code called the “token”, which shall be unique for a combination of card, token requestor (i.e. the entity which accepts request from the customer for tokenisation of a card and passes it on to the card network to issue a corresponding token) and device (referred hereafter as identified device). This token — representing the customer's card data — is saved in the merchant’s payment system and processes the transaction. A tokenised card transaction is considered safer as the actual card details are not shared with the merchant during transaction processing. The card network will create a token, which will act as a proxy card number and send it back to the merchant. The merchant will save this token for future transactions. Now, they will be required to enter CVV and OTP like before to give approval.
A person may not refuse to share generic details of his net taxable income/gross income with his wife in cases where matrimonial disputes are involved. In a recent order, the Central Information Commission (CIC) directed the Income Tax Department to inform the appellant about the generic details of the net taxable income/gross income of her husband within 15 days. Details relating to assets, liabilities income tax returns, details of investments, lending and borrowing etc. come under the category of personal information. As per Section 8(1)(j) of the RTI Act, such personal information is entitled to protection from unwarranted invasion.
1. the Supreme Court has previously held in CPIO, Supreme Court of India vs Subhash Chandra Agarwal (20210) case that “conditional access is available when stipulation of larger public interest is satisfied.” In Vijay Prakash vs. Union of India (2009), the Delhi High court observed that in private disputes, the “basic protection afforded by virtue of the exemption (from disclosure) enacted under Section 8 (1) (j) cannot be lifted for disturbed.
2. In the Rahmat Bano case, the CIC allowed disclosure of gross income to the estranged wife on the ground of sustenance and livelihood of the family.
3. In Rajesh Ramachandra Kidile vs. Maharashtra SIC and Others, the High Court of Bombay (Nagpur Bench) had observed: “In a litigation, where the issue involved is of maintenance of wife, the information relating to the salary details no longer remain confined to the category of personal information concerning both husband and wife, which is available with the husband hence accessible by the wife.”
Anil Ambani given temporary relief in prosecution under the Black Money Law by Bom HC
Facts:
1. Tax authorities discovered that Anil Ambani (petitioner) was a “economic contributor as well as beneficial owner” of two businesses: Northern Atlantic Trading Unlimited (NATU), which was incorporated in the British Virgin Islands, and Diamond Trust, which has its headquarters in the Bahamas (BVI). The businessman has been accused with avoiding taxes to the tune of Rs 420 crores for the assessment years 2012–2013 through 2019–2020 by holding undeclared assets abroad.
2. The AO had issued an assessment order U/S Section 10(3) of the Black Money (undisclosed foreign income and assets) Imposition of Tax Act, stating that petitioner had unreported overseas assets. He appealed against the assessment order from the 31/03/22 before the CIT(Appeals).
3. A show cause had been issued U/S 50 and 51 of the Black Money (undisclosed foreign income and assets) Imposition of Tax Act of 2015, for prosecution. A conviction under which carries a maximum penalty of 10 years in prison and a fine.
4. It was argued before the Hon HC that Section 3(1) and the Sections 50, 51, 59, and 72C, which permit retrospective application, are extra vires and in violation of Articles 14, 20, and 21 of the Constitution. The petition states that provisions of the BM Act, which came into force with effect from 1st July 2015, cannot be invoked retrospectively to tax the value of any alleged undisclosed foreign asset, which may have existed prior to its coming into force on 1st July 2015.
Hon Bombay HC while granting a temporary relief held as below:
1. Many High Courts, including the Bombay High Court, were now hearing petitions questioning the BM Act’s prospective application.
2. The Income Tax Department shall till the next date, not take any coercive action against the petitioner in pursuance to the show cause notice.
3. The petition was adjourned to November 17, 2022.
27/09/2022
ITAT allows Sonakshi Sinha to claim credit of foreign taxes, even though there was a delay in filing the form to claim the same.
Sonakshi Sinha (ITA No. 1704/Mum/2022)
Facts:
1. The CIT (A), National Faceless Appeal Centre (NFAC) has not disputed the allowability of the foreign tax credit to the assessee. He has however disallowed the foreign tax credit on the ground that form 67 has not been filed on or before the due date of filing of return of income as per rule 128 (9) of the income tax rules, 1962.
2. The assessee has uploaded form number 67 for claiming foreign tax credit in respect of income earned in United Kingdom on 20/1/2020. However, the assessee has filed her return of income on 22/09/2018, within the due date as per provisions of Section 139 (1).
3. The assessee claimed that filing of form number 67 is a procedural requirement and not mandatory for claiming of the foreign tax credit.
ITAT Mumbai held as below:
1. Rule 128(9), which provides for filing of Form No. 67, does not provide for disallowance of FTC in case of delay in filing the same.
2. It is well settled that while laying down a particular procedure, if no negative or adverse consequences are contemplated for non-adherence to such procedure, the relevant provision is normally not taken to be mandatory and is considered to be purely directory.
3. Here it is not the case of violation of any of the provisions of the Act but of the Rule, which does not provide for any consequence, if not complied with.
4. It is held that, the assessee is eligible for foreign tax credit, as she has filed Form Number 67 before completion of the assessment, though not in accordance with rule 128 (9) of The Income Tax Rules.
Google’s latest offer of a lower commission and an additional billing choice to non-game developers will not make much of a difference to the search giant, as it will still be effectively charging 30% on a larger share of the revenue it generates, according to Indian startups and developers. Google launched the next phase of its user choice-billing pilot in India earlier this month, offering a billing option in addition to through Google Play. Under this, Indian app developers and startups offering audio, or book content may have to pay only 6% commission for in-app purchases on Google Play Store, starting October 31. The commission for other non-gaming apps will be close to 11%. This offer of lower commission covers app developers with up to $1 million of annual revenue, who were previously charged 15%. For others, the commission is 30%. Snehil Khanor, chief executive of Truly Madly.com, told ET that Apple had last year reduced commission to 15% for those earning less than $1 million in a year and claimed that 98% of developers would be eligible for it later (consumer and market data firm) Statista revealed that those 98% developers only account for 5% of total app still charging 30% commission on 95% of the revenue generated.”
26/09/2022
Centre has extended the validity of FCRA registration of NGOs, the renewal applications of which are pending, till March 31, 2023. MHA also said that the validity of those FCRA entities whose five years validity period is expiring during October 1, 2022 to March 31, 2023, and which have applied for renewal before expiry of five years validity period, will stand extended up to March 31, 2023 or till the date of disposal of renewal application.
Andhra Pradesh High Court has ruled that mango pulp be taxed at 12% under GST as per the existing regulations and framework. The court said that the Appellate Authority for Advance Ruling's decision to impose GST on mango pulp at 18% was incorrect.
GST? E-Invoicing is now mandatory for every taxpayer from October 1, 2022 whose aggregate Turnover exceeds Rs 10 crore in any of the FY from 17-18.
30/09/2022 is the Last Date for:
1. Filing 12A/10(23C) or other Charitable Final Registrations.
2. Form 10B
3. Tax Audit Report
4. Assessment Income Tax cases AY 2020-21
5. To conduct AGM
The Last Date of the Annual General Meeting (AGM) is approaching i.e. 30.09.2022. However, you can extend the date of AGM by making an application to the ROC before the above date, as per the Provisions of Section 96(1) of Companies Act, 2013, for any special reason, the ROC may extend the time to conduct the annual general meeting by a period not exceeding 3 (three) months.
25/09/2022
Learning lessons from the recent ROC Penalty / Charges orders:
1. ROC Ahmedabad imposed a penalty of Rs 6 lakhs on a private limited company and its directors for “non mentioning the DIN” in the financial statements for the financial years 2018-19 to 2020-21, attracting non compliance with the provisions of Section 158 of the Companies Act 2013 (CA2013)
https://lnkd.in/gaSbr2Uz
2. ROC Ahmedabad imposed a penalty of Rs.40,000 on a private limited company and its directors for not sending financial statements to its members violating Section 136(1) of the CA2013
https://lnkd.in/gG4m2cDQ
3. ROC Delhi imposed a penalty of Rs. 18.23 lakhs on a private limited company and its directors for non-appointment of company secretary (in a company having a paid up capital of more than 10 crores) violating provisions of Section 203 of the CA2013, where in case of any office of KMP is vacated, such vacancy shall be filled within 6 months.
https://lnkd.in/gKyd3Bfn
4. ROC Bangalore levied a penalty on a company and its directors, where the company had filed certain documents with the ROC and missed to mention the CIN on letterhead attracting a violation of Section 12(3)(c) of the CA 2013
https://lnkd.in/guQJDYYs
5. ROC Ahmedabad imposed a penalty of Rs. 1.65 lakhs where the company had failed to file its financial statements along with the documents for the financial year 2019-2020 [causing a delay of 553 days from the due date 01.02.2021 to 08.05.2022 (till the order date)]and thereby violating the provisions of Section 137 of the CA2013
https://lnkd.in/gZWhGsK7
6. ROC Ahmedabad imposed a penalty of Rs. 1.58 lakhs on a listed company for non-maintenance of registered office. ROC had issued two letters to the company regarding certain discrepancy in MGT-7 but the letters got returned back to the ROC office with the postal remarks ‘not known’. The Company was not maintaining its registered office in compliance of the Section 12 of the CA2013 and was not capable of receiving communications and notices. The company changed its registered office effective 01.01.2022, however filed INC-22 on 15.03.2022 (due date of INC-22- 30.01.2022) causing a delay of 42 days.
Physical Verification of the Registered offices of the Companies by ROC officials:
1. Mca has notified Companies(Incorporation) Third Amendment Rules,2022
2. Rule 25B is about physical verification of registered office
3. Kindly prepare and be updated for
a. Name plate of the company
b. Rent/ Lease agreement
C. Electricity/ utility bills in support of the registered office
D. Updated No objection certificates from landlord for use of registered office
e. KYC of directors/ officers in charge
f. Any local witnesses
ROCs and MCA are working to verify all the registered offices of the companies / LLPs registered in India by geo tagging and physical verification (to the extent possible) to ensure that all the companies are real and not fake. This drive is to identify fake companies which are used for fake GST Invoices and fake business transactions to evade taxation in India. Hence, ensure all your companies / LLPs have proper registered offices, with proper address, sign boards including all updated details in MCA portal as per Companies Act, 2013. The first target would be the place where multiple companies have the same registered office address.
24/09/2022
Exemptions from the Corporate Tax in UAE:
Introduction: The Corporate Tax (CT) is set to be introduced from 1st June, 2023 as per a consultation document issued by the UAE.
The CT rate is set at 0% for taxable income between AED 0 and AED 375,000, and 9% for taxable income above AED 375,000. UAE entities within a large multinational group that is subject to BEPS pillar two (i.e. those with consolidated global revenues of more than €750m, or approximately AED 3.15bn) will have a different rate, which is still to be announced (but which is likely to be 15%).
The following entities will be exempt from UAE CT:
1. Entities engaged in the extraction of UAE natural resources (these are subject to Emirate level corporate taxation).
2. Charities and other public benefit organisations
3. The federal UAE government, Emirate governments and their departments and authorities.
4. Wholly government-owned UAE companies that carry out specified activities, provided they are approved by Cabinet decision;
5. Public and regulated private social security and retirement pension funds.
6. Investment funds that are organised as flow-through limited partnerships. Regulated investment funds and REITs can apply for exemption if they meet certain requirements.
7. Companies operating within the UAE’s free zones will have to register and file a CT return. However, they will continue to be eligible for 0% CT rate provided they continue to comply with all regulatory requirements within the zone and do not carry out business with the mainland.
8. Dividends, capital gains and other investment returns earned by foreign investors would also outside the purview of CT.
9. Income from domestic dividends earned from UAE companies will also be exempt, including those paid from entities within a free zone.
10. Income earned in the UAE by a non-resident from operating or leasing aircraft or ships used in international transportation will be exempt from CT provided the same tax treatment is granted to UAE businesses in their home jurisdiction.
Rs. 58,521 crore in taxes lost due to illicit trade in FMCG, mobile, tobacco, alcohol industry: Ficci report
1. According to a report released by Federation of Indian Chambers of Commerce & Industry (FICCI) on Thursday, illicit trade of commodities in five important sectors, including the FMCG, mobile phone, cigarette, and alcohol industries has costed the exchequer an estimated Rs. 58,521 crore in taxes in 2019–20.
2. The size of the illicit markets in these sectors is little over Rs. 2.60 lakh crore for the 2019–20 fiscal year. The FMCG sector accounts for 75% of illicit trade in the overall value of products in the five core industries, according to the report.
3. The two heavily taxed and regulated sectors of alcoholic drinks and tobacco products account for roughly 49% of the total tax revenue lost to the government as a result of illicit trade in these five crucial sectors.
4. The FMCG packaged food business lost the most employment (7.94 lakh) as a result of illicit trade, followed by the tobacco industry (3.7 lakh), the FMCG household and personal products industry (2.989 lakh), the alcoholic beverage industry (97,000), and the mobile phone industry (35,000).
5. The tax loss to the government due to illicit trade in these five sectors stood at Rs. 17,074 crore (FMCG packaged foods), Rs. 15,262 crore (alcoholic beverages), Rs. 13,331 crore (tobacco products), Rs. 9,995 crore (FMCG household and personal goods), and Rs. 2,859 crore (mobile phones).
6. FMCG (household and personal products, packaged foods) business revenue accounts for about Rs. 1.97 lakh crore of the overall illicit trade revenue of Rs. 2.60 lakh crore. Alcoholic beverages ($23,466 billion), cigarette goods ($22,930 billion), and mobile phones ($23,466 billion) follow.
Source: The report titled ‘Illicit Markets: A Threat to Our National Interests' by FICCI’s Committee Against Smuggling and Counterfeiting Activities Destroying the Economy (CASCADE)
23/09/2022
Ola not liable to deduct TDS on payments made to drivers: ITAT Chandigarh: M/s ANI Technologies Private Limited (ITA No. 163-Chd-2020)
Facts:
1. The assessee company submitted that essentially, it partakes the character of an "aggregator" or an online market place for a Rider to communicate with the TSPs/ Drivers for the purpose of transportation. It also maintained that it is primarily a technology company to connect with a driver for the purpose of transportation. It also reiterated that electronic payments are routed through the assessee to make the transaction between the driver and rider hassle free.
2. AO on the other hand held that, the assessee provides the business of transport service to riders by sub- contracting with the TSPs/ Drivers and hence the Ride Charges disbursed by the assessee to TSPs/ Drivers are exigible to tax deduction at source U/S 194C (TDS on payment to contractors).
3. As per the Subscription Agreement, by virtue of which the TSPs can list on the OLA Partner App, contract for availing the Service shall only be between the TSPs/Drivers and the Customers and the assessee shall have no obligation in respect of such Contract.
ITAT Chandigarh held as below:
1. The entire basis of the AO to come to the conclusion that payments have been made in pursuance of a Contract between the TSPs/Drivers and the assessee is unsupported by any material on record and is only surmises and conjunctures or his erroneous understanding of the contractual relationship.
2. The assessee acts as a mere intermediary. The driver is solely liable for any accident/incident involving the vehicle while providing taxi services.
3. The appeal is allowed and the assessee need not deduct and pay TDS U/S 194C.
In a nationwide crackdown 106 senior functionaries and cadres of the popular front of India were arrested on Thursday in a joint operation conducted by the national investigation agency enforcement directorate and the state police at multiple locations across 15 states officials said while the ED claimed to have discovered an alleged Chinese link to the funding of PET the NIA arrest were made after they seized incriminating document and weapons during the raids meanwhile the state police have also made arrests after receiving reliable information on PFI workers being responsible for stoking communal sentiments. The raids were conducted in Andhra Pradesh (5 raids) Assam (9) Delhi (3) Karnataka (20) Madhva Pradesh (4) Maharashtra (20) Puducherry (3) Rajasthan (2) Tamil Nadu (10) and Uttar Pradesh (8) the operation started late Wednesday night and went on till Thursday involving over 1500 Personnel of the state police central armed police forces and officers of the NIA and ED during the raids on Thursday PFI chairman OMA Salam and state president CP Muhammad Basheer were taken into custody while Delhi PFI chief Parvez Ahmed and his brother were held from Okhla others arrested by the agencies include PFI’s general secretary Ilyas Ahmed Shafique Daru Rahima and Abdul Muqeed.
22/09/2022
Karnataka GST Authority of Advance Ruling has said that GST on malt-based drinks should be increased to 40 per cent. Soft drinks, at present, attract 40 per cent GST which includes 28% GST along with a cess of 12%.
Union Minister Nitin Gadkari told sugar mills That Increasing sugar production shall create problems for the industry, whereas boosting ethanol output can bring rich returns.
Delhi High Court held that alleged transaction not relating to the assessee in as much as in the information on Insight portal the name of the assessee was of some other person, no transaction done in unlisted shares through Asian Bulls , all mistakes were due to wrong posting in Insight portal, the AO had to apply his own mind and analyse the reply of the assessee. AO was personally called in the court. Notice U/S 148 with order U/S 148A(d) quashed.
DRI foils attempts of gold smuggling, seizes 65.46 kg of gold at Mumbai, Patna and Delhi in one of the biggest seizures of Smuggled Gold in recent past. Specific intelligence indicated that a syndicate is actively planning to smuggle foreign origin gold from Mizoram and using domestic courier consignment of supply chain & logistic company (hereinafter referred as logistics company). In order to interdict the contraband, “Op Gold Rush” was launched by DRI and a particular consignment declared to contain ‘Personal Goods’ destined to Mumbai was intercepted. Examination of the consignment at Bhiwandi (Maharashtra) on 19.09.2022 led to recovery and seizure of 120 pieces of foreign origin gold biscuits weighing approximately 19.93 Kg and valued at about Rs. 10.18 crore. The second consignment was located and intercepted in Bihar. Upon examination at the Warehouse of the logistics company, it led to recovery of 172 foreign origin gold bars weighing approximately 28.57 kgs and valued at about Rs.14.50 crore. Similarly, the third consignment was intercepted and examined at the Delhi hub of the logistics company which led to recovery and seizure of 102 pieces of foreign origin gold bars weighing approximately 16.96 kg and valued at about Rs. 8.69 crore.
21/09/2022
CBDT, vide Notification No. 110/2022 dated 19.09.2022, notifies Rule 12AD and Form ITR-A as return of income under Section 170A to be filed by the successor entity pursuant to a business reorganisation;
1. The Rule comes into force with effect from Nov 1, 2022
2. The Rule provides that if the assessment or reassessment proceedings for an AY relevant to the year in which the order of the business reorganisation applies have been completed or are pending on the date of furnishing of the modified return in accordance with the provisions of section 170A, the AO shall, pass an order modifying the total income of the relevant AY determined in such assessment or reassessment, or proceed to complete the assessment or reassessment proceedings, as the case may be, in accordance with the order of the business reorganisation and the modified return so furnished;
3. The Rule also modifies ITR-6 for AY 2022-23 or prior Assessment years to include a tick box for ITR filed as per Section 170A.
Import Gst Update: The High Court of Karnataka has ruled that "In the cases where the power to inspect, seize or detain the goods and conveyances is invoked either under Section 67 or Section 129 of the CGST Act, the power to confiscate under Section 130 of the CGST Act would not be available."
[M/S Rajeev Traders v. Union of India]
20/09/2022
Alphabet Inc’s Google has been asked by the India government and the central bank to introduce more stringent checks to help curb the use of illegal digitallending application in India, according to sources. Even though google doesn’t fall under the reserve bank of India’s (RBI) ambit, the US tech giant has been called several times in the last few months to meetings by the central bank and the government and urged to introduce tougher checks and balances that can help in weeding out such apps according to four sources the regulators have already asked lenders to step up checks against illegal lending apps which became popular during the pandemic. Regulators seek to control the proliferation of such apps that engage in unscrupulous activities such as charging excessive interest rates and fees or in recovery practices which are not authorized by the central bank or violate money laundering and other government guidelines. Google said that last year it revised its play store developer programme policy for financial services apps including requiring additional requirements for personal loan apps in India effective September 2021. We have removed over 2,000 personal loan apps targeting India from the play store for violation of the play policy requirements a google spokesperson said adding that such steps are taken if its policies are violated we will continue to engage with law enforcement agencies and industry bodies to help address this issue that spokesperson added.
The enforcement directorate (ED) has frozen funds totaling Rs46.67 crore belonging to merchant entities kept in four-payment gateways payment Easebuzz, Razorpay and cashfree in its money laundering probe against a Chinese-controlled app-based investment token people familiar with the development said. The freezing of found under the prevention of money laundering Act (PMLA) followed raids on Wednesday at 22 locations linked to several businesses and branch offices of these payment gateways in Delhi Ghaziabad Lucknow Gaya Gurugram Mumbai Pune Chennai Hyderabad Jaipur jodhpur and Bengaluru. A statement issued by ED said the probe against app-based token HPZ, and its related entities was initiated based on FIR filed by Kohima police in October last year HPZ was an app-based token which promised users large gains from investments in mining machines for Bitcoin and other cryptocurrencies. The modus operandi of the fraudsters according to ED was to lure the victims to invest in the company on the pretext of doubling investment through the HPZ token.
19/09/2022
The government has amended the Foreign Trade Policy on Friday to allow international trade invoicing, payment and settlement in the Indian rupee, activating the mechanism announced by the Reserve Bank of India (RBI) to facilitate trade in the domestic currency.
1. The central bank allowed authorised banks in India to open special rupee Vostro accounts of correspondent banks of any partner trading country to facilitate trade in the Indian currency.
2. Under the arrangement, Indian importers will make payment in rupees into the special Vostro account of the partner country bank against the invoices for the supply of goods or services from the overseas seller or supplier, the trade policy said.
3. Indian exporters undertaking exports of goods and services through this mechanism shall be paid the export proceeds in Indian Rupees from the balances in the designated special Vostro account of the correspondent bank of the partner country," it added.
4. The department of commerce has also been asked to reach out to traders to encourage them to adopt this route.
India's decision to ban exports of broken rice and impose export duties of up to 20% on other rice varieties has come under fire at the World Trade Organization (WTO). At a meeting on Thursday, the United States, the European Union and Senegal posed questions about the decision's adverse effect on global markets. They said it would cause market volatility and undermine collective efforts in fighting the world food crisis. Last week, New Delhi imposed a 20% duty on export of all varieties of rice, except basmati and parboiled rice, along with a complete ban on broken rice exports. On its part, India clarified that the export restriction is only on broken rice yield used in poultry feed following a rise in their exports in recent months which has put pressure on its domestic market.
No qualification/ reporting in Audit Report with respect to omissions/mistakes in the audited financial statements vis-à-vis format prescribed by Schedule III of Companies Act, 2013 is being taken as basis of complaints against auditors by Banks, SFIO, EOW etc. As per CA Act, 1949, a chartered accountant in practice shall be deemed to be guilty of professional misconduct, if he fails to disclose, fails to report, does not exercise due diligence and fails to obtain, what he should have done, under clauses 5 to 9 of Part I to the Second Schedule to said Act.
Examples of such omissions/ mistakes:
1. Non-bifurcation of Sundry Debtors – Ageing, Secured, Unsecured, Debts due by firms/ companies where director is partner/ director/ member, etc.
2. Non-disclosure of security given/ mortgaged against secured borrowings.
3. Non-disclosure of details of investments.
4. Disclosing Share Application Money as part of Shareholders Funds or Unsecured Loans.
5. Disclosing/ classifying short-term borrowings as long-term borrowings.
6. Non-disclosure of information pertaining to each category of property, plant & equipment in the prescribed manner, e.g. accumulated depreciation amount separately for each asset category.
CBDT Notification No: G.S.R. 697(E) dtd 14.9.2022 The Central Board of Direct Taxes (CBDT) has issued the Income-tax (30th Amendment) Rules, 2022, w.e.f. September 14, 2022. The Amendment Rule has amended Rule 121A concerned with Form of statement to be furnished by producers of cinematograph films or persons engaged in specified activity and substituted Form No. 52A.
Parveez Ahmad Baba Vs Union Territory of J&K and others (Jammu & Kashmir High Court) Held that the license under the Act or registration under the GST Act cannot be renewed/ granted due to the fact that the subject premise is under dispute between two persons:
In the instant case, as held above, till dispute between the petitioner and respondent is settled and two, either jointly apply or property is partitioned and fall in the share of the person applying, no license can be issued by the designated authority under the Act. From the above, this Court arrives at the conclusion that neither the petitioner nor respondent is entitled to have a license under the Act or registration under the GST Act in his favour to the exclusion of other. However, if dispute between the two continues, it would be appropriate for both the authorities to refuse grant of license and registration to them.
18/09/2022
Gross Direct Tax collections for FY 22-23 as on 17.09.22 at Rs. 8.36 lakh crore grow at 30% over collections of corresponding period in preceding yr. Net DT collections at Rs. 7.01 lakh crore grow at 23%. Cumulative Advance Tax collections at Rs. 2.95 lakh crore against advance tax collections of Rs.2.52 lakh crore for the corresponding period of the immediately preceding Financial Year i.e FY 2021-22; growth of 17%. The Central Board of Direct Taxes statement said on Sunday that the net direct tax collections so far this financial year are at rs 700,669 crore, an increase of 23% as compared to rs 568,147 crore till the same period of the corresponding financial year. The total includes corporation tax of rs 368,484 crore and personal income tax (including securities transaction tax) worth rs 330,490 crore.
Issuing the revised guidelines for Compounding of offences under the Income-tax Act, 1961, the Central Board of Direct Taxes (CBDT) said: "The scope of eligibility for compounding of cases has been relaxed whereby case of an applicant who has been convicted with imprisonment for less than 2 years being previously non-compoundable, has now been made compoundable." It said that if the taxpayer fraudulently removes, conceals, transfers or delivers to any person, any property or any interest therein, intending thereby to prevent that property or interest therein from being attached for recovery of tax, then prosecution proceedings can be initiated under section 276. As per the revised guidelines dated September 16, the time limit for acceptance of compounding applications has also been relaxed from the earlier limit of 24 months to 36 months from the date of filing of the complaint. Also, Specific upper limits have been introduced for the compounding fee covering defaults across several provisions of the Act. Additional compounding charges in the nature of penal interest of 2 per cent per month up to 3 months and 3 per cent per month beyond 3 months have been reduced to 1 per cent and 2 per cent respectively.
The Reserve Bank of India (RBI) is all set to implement the new rules regarding payment by credit card and debit card, which will come into effect from October 1.
1. As per the new rule, Card on File (CoF) tokenization, will change the payment experience of debit and credit card holders.
2. If you have not yet tokenized your card then you can contact your bank.
3. Tokenization is a process of converting sensitive data into ‘non-sensitive’ data, known as “tokens”. These tokens convert the debit or credit card holder’s 16-digit account number into a digital credential that cannot be stolen or reused.
4. With the help of this token, you can save and transact from any site. There is also no risk of fraud or tampering with it.
5. The last date given by RBI to bring it into effect was 1 July, but it has been later extended to 30 September.
6. Many merchants have already completed this under Card on File Tokenization, but there are still many more.
7. So far, tokens of 19.5 crore people have been issued under this rule. RBI had last year barred commerce websites from saving customer card details and made it mandatory to accept tokenization.
8. This rule will be brought into effect from next month.
9. In online payments, many entities, including merchants, store card data such as card number and last date – card-on-file (COF) – bringing convenience and comfort to cardholders. However, it can also promote fraud, as the availability of card details with multiple entities increases the risk of card data theft or misuse.
To consider some concession in GST rates for those purchasing new commercial vehicles, after scrapping old ones: Gadkari said; at the 62nd Annual Convention of the Society of Indian Auto mobile Manufacturers (SIAM); that overall, more than 10 million vehicles are scrappage worthy. “There is a potential of using the copper, aluminium, steel and rubber scrap, recycling them and using it for self-consumption which can save cost by 30%. The minister said he wants to discourage sales of petrol and diesel cars. “A fuel import bill of 16 lakh crore is a big challenge. I request your support in finding solutions of coming out with more cleaner alternative solutions. The pollution from one old truck equal to the pollution of 15 new trucks.
17/09/2022
Few achievements of PM Modi’s on his Birthday 17th September :
1. Best Chief Minister in a 2007 nationwide survey by India Today.
2. Appeared on the cover of the Asian edition of Time Magazine. Indian of the Year by CNN-IBN news network in 2014.
3. He was among Time magazine's 100 Most Influential People in the World in 2014, 2015 and 2017.
4. Winner of Time magazine reader's poll for Person of the Year in 2014 and 2016.
5. Forbes Magazine ranked him the 15th-Most-Powerful Person in the World in 2014.
6. Modi was ranked fifth on Fortune Magazine's first annual list of the "World's Greatest Leaders" in 2015.
7. He was 9th-Most-Powerful Person in the World in 2015, 2016 and 2018. During his premiership, India rose to the 100th rank in the 2018 Ease of Doing Business ranking by World Bank.
8. In 2020, Modi Ji was one of the eight world leaders, who was awarded the parodic Ig Nobel Prize in Medical Education "for using the COVID-19 viral pandemic to teach the world that politicians can have a more immediate effect on life and death than scientists and doctors can".
9. President Donald Trump awarded Modi with the Legion of Merit for elevating the India–United States relations on 21 December, 2020.
10. The largest cricket stadium across world at Ahmedabad was renamed as Narendra Modi Stadium by the Gujarat Cricket Association on 24 February, 2021.
11. Another side, PM Modi is featured in TIME Magazine's 100 most influential people of 2021 list.
12. Moreover, He was called as third "pivotal leader" of independent India after Jawaharlal Nehru and Indira Gandhi who "dominated the country's politics like no one since then".
ICAI UDIN Advisory : Updation of UDINs at e-filing Portal: Various instances of invalidation of UDINs at the e-filing portal of Income Tax Department are being reported by Members. In view of these, certain technological changes have been made. The Members are advised to try again to update those UDINs which have been invalidated earlier at the e-filing Portal. Please note that the last date for updating UDINs at the e-filing portal is 30th September, 2022. Further, all the members are advised to be more careful in selecting correct fields while generating UDIN.
Country’s largest lender, State Bank of India (SBI) is opening special rupee accounts to handle Russia-related trade settlements in the local currency but is not the main bank for such business. The banking regulator had allowed Indian banks in July to open special rupee vostro accounts with lenders of other nations to settle overseas trades in the Indian currency. Russia is going to announce the name of the bank in 15 days.
Under the erstwhile regulations on overseas direct investment issued by RBI in 2004, gifting of foreign securities by non-residents to an Indian resident individual was permitted freely. However, as per the new overseas investment rules gift of any such foreign securities must adhere to the provisions of Foreign Contribution Regulation Act or FCRA, a law that regulates foreign contribution to NGOs and other establishments, mandates registration or approval for receiving foreign contribution by certain person and prohibits certain category of persons from accepting foreign contribution. Interestingly, not all categories of Indian residents are barred from receiving foreign contribution under FCRA. Preamble of FCRA legislation clearly suggests that its intent is to regulate only ‘certain’ categories of persons, companies, associations, and individuals, firstly political persons or establishments, media undertakings and government employees; and secondly persons having a definite cultural, economic, educational, religious, or social agenda. Besides, any foreign contribution from a relative living overseas to an Indian resident has been exempted from FCRA clutches.
India is starting to accept cross-border payments, according to the new RBI rule. Thus, NRIs can directly make payments for their bills using the new Government payment portal BBPS or Bharat Bill Pay System, and they do not need to transfer the money first to the Indian accounts. Different Types of Payments That You Can Make through BBPS- Electricity bills, Water bills, Telephone-related bills of their families. NRIs can use different digital channels for making the payments, such as Internet and internet banking, Point of Sale terminal or POS
Mobiles and mobile banking, Mobile Point of sale Terminal or MPOS
Offline mediums like bank branches, business correspondents, ATMs, and bank agents.
World Bank warns higher interest rates could trigger global recession. A new study by the World Bank has revealed that with the central banks across the world simultaneously hiking interest rates in response to inflation, the world may be edging toward a global recession in 2023. The central banks may need to raise interest rates by an additional 2 % to control inflation, since the core inflation is expected to hover around 5%. If this were accompanied by financial-market stress, global GDP growth would slow to 0.5% in 2023--a 0.4% contraction in per-capita terms that would meet the technical definition of a global recession. The report further added that, to achieve low inflation rates, currency stability and faster growth, policymakers could shift their focus from reducing consumption to boosting production. Policies should seek to generate additional investment and improve productivity and capital allocation, which are critical for growth and poverty reduction.
16/09/2022
ESIC has given relaxation to Employers who did not file ESI Contribution for the Month of August 2022. Employers are now allowed to file contribution up to 22 Sep, 2022.
MCA Amendment in definition of Small Company, Section 2(85) of the Companies Act, 2013 With effect from 15th September, 2022, MCA has amended the Companies (Specification of definition details) Rules amending the definition of Small Company, the limit of Paid up Capital and Turnover for the small company has been increased to Rupees Four Crores (Earlier 2 Crs.) and Rupees Forty Crores (Earlier 20 Crs.) respectively.
Notification Link:
https://www.mca.gov.in/bin/dms/getdocument?mds=tiMs9IFJ8xuPm%252B%252Foxc6fUw%253D%253D&type=open
Nevertheless to mention, as the Amendment is effective from 15th September, 2022, the earlier threshold limit of Rupees Two Crores and Twenty Crores for Paid Up Share Capital and Turnover respectively for the purpose of Preparation of Cash Flow Statement and Reporting under CARO, 2020 for the financial year ended 31st March, 2022 would stand still.
The ten points that you need to know about EPF:
1. Any interest on contributions made towards EPF of an employee only remains tax-free for contributions of up to rs 2.5 lakh a year.
2. Interest on contributions of over rs 2.5 lakh is taxed from the employee yearly.
3. The contribution threshold is increased to rs 5 lakh if an employer is not contributing towards the EPF of an employee.
4. Only the excess contribution above the threshold is taxed, not the total contribution itself.
5. The excess contributions and interest accrued on it will be maintained in a separate account with the EPFO.
6. Employer's contribution to Provident Fund (PF), NPS and superannuation aggregating to a total sum of rs 7.5 lakh a year is exempt from taxes.
7. Since employers will withhold taxes based on accruals, these details must be filled in Form 16 and Form 12BA.
8. Employers must mandatorily provide EPF contributions for employees whose monthly income is up to rs 15,000.
9. Taxes withheld in such a manner need to be reported by employees as "Income from other sources."
10. The EPFO has reduced the interest rate to a four-decade low of 8.1 per cent for FY 2021-22.
Byju's fees to the auditor (Deloitte) increased to Rs 5.8 crore for FY21 from Rs 1.75 crore in FY20 -- a 300% jump. The reason given is additional efforts due "to material weaknesses observed in internal controls". Byju’s Raveendran the cofounder and CEO of Byju’s has briefed shareholder and board members about the difference between its projected revenue and audited numbers multiple sources briefed on the matter said. The discrepancies arose due to a change in the way the startup recognises its revenue sources privy to the matter said adding that the revenue number would be lower and will reflect in its annual report soon. The discussions with investors which include sequoia capital general Atlantic T Rowe price and Blackrock- come at a time when Byju’s has delayed reporting its financials for the fiscal year ending march 31,2021 (FYCAL). Deloitte is the company’s official accountant. So far, the accounting firm has not signed off on Byju’s accounts and has raised issues around the company’s revenue recognition. They (Byju’s) have had to move parts of their revenue for it to be approved as per Indian accounting standard (Ind-AS) 115 rules. BYJU’s posted a loss of rs 4500 crore against revenue of rs 2428 crores.
RBI had decided to cancel the license of Pune-based Rupee Co-operative Bank Limited in August. The Reserve Bank has told that the bank will close its business on 22 September. After this, customers will neither be able to deposit nor withdraw their money. Apart from this, you will not be able to do any kind of financial transaction. RBI said that the bank does not have sufficient capital and further earning prospects. For this reason the license of this bank is being canceled.
The securities and exchange board of India (Sebi) moved the supreme court last week seeking a review of the apex court’s ruling in the PC jewelers inside-trading case in April the court had rejected the capital markets regulator’s decision that estranged family members of a promoter- if they share the same residential address must be considered connected persons under the insider-trading rules the case pertains to the promoter family of PC jewellers. Sebi and the Securities Appellate Tribunal (SAT) took the view that the common address could be construed as preponderance of probability that price-sensitive information could be shared among parties however in April a two-judge bench of the supreme court ruled that both Sebi and SAT had erred since they did not take into account family disputes.
15/09/2022
CBDT issues Circular no 18 dtd 13.9.22 clarifying issues on section 194R :
1. one-time loan settlement with borrowers or waiver of loan granted on reaching settlement with the borrowers by the following would not be subjected to tax deduction at source
2. amount incurred by such "pure agent" for which he is reimbursed by the recipient would not be treated as benefit/perquisite for the purpose of section 194R of the Act.
3. If out of pocket expense is already included as part of professional fee, then there IS no further benefit/perquisite which requires tax deduction
4. if benefit/perquisite is provided in a group activity in a manner that it is difficult to match such benefit/perquisite to each participant using a reasonable allocation key, the benefit/perquisite provider may at his option not claim the expense, representing such benefit/perquisite, as deductible expenditure for calculating his total income. If he decides to opt so, he will not be required to deduct tax under section 194R.
5. dealer can get depreciation benefit on the gifted car when tds has already been deducted u/s 194R
6. section 194R is not applicable on benefit/perquisite provided by, an organization in scope of The United Nations (Privileges and Immunity Act) 1947, an international organization whose income is exempt under specific Act of Parliament (such as the Asian Development Bank Act 1966), an embassy, a High Commission, legation, commission, consulate and the trade representation ofa foreign state.
7. section 194R of the Act is not required to be deducted on issuance of bonus or right shares by a company in which the public are substantially interested as defined in clause (18) of section 2 of the Act, where bonus shares are issued to all shareholders by such a company or right shares are offered to all shareholders by such a company.
Read More
https://www.incometaxindia.gov.in/communications/circular/circular-no-18-2022.pdf
Recovery of Income Tax from the director cannot be resorted to casually: Bombay HC: Rajendra R. Singh (WP No. 3590 of 2019)
Facts:
1. The AO passed an order under Section 179 of the Income Tax Act, 1961, holding that the petitioner, the director of the assessee company- M/s. Crest Paper Mills Ltd., was liable to pay the tax dues which were otherwise payable by the said Company.
2. Section 179 of the Income Tax Act provides that if the tax dues of a private company, in respect of any income of any previous year, cannot be recovered, then, every person who was a director of the private company at any time during the relevant previous year shall be jointly and severally liable for the payment of such tax unless he proves that the non-recovery cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company.
3. The petitioner challenged the order passed by the AO in a revision petition filed under Section 264 of the Income Tax Act before the DCIT, which was dismissed. Thereafter, the petitioner filed a writ petition before the Bombay High Court for quashing the order passed by the AO.
Hon Bombay HC held as below:
1. To justify that the tax dues cannot be recovered from the company U/S 179, the AO has to enumerate the steps taken towards recovery of tax dues from the company, which may include attachment of the accounts and the movable and immovable assets of the company.
2. The AO had mechanically and casually resorted to the provisions of Sec 179 and so the order passed is hereby quashed.
14/09/2022
The UK has just been overtaken by India as the world’s fifth biggest economy. The nation of 1.4 billion people is on track to move into third place behind the US and China by 2030, according to economists. And while the world became familiar with Chinese business titans such as Alibaba founder Jack Ma, the staggering wealth accumulated in recent years by Indian billionaires Gautam Adani and Mukesh Ambani has been less well publicised. Adani- Having entered the global Top 10 when he became Asia’s richest person in February, he is now ranked third with a fortune of $143bn (£123bn) and is closing fast on second-placed Amazon boss Jeff Bezos. The group is ploughing $70bn into green energy projects by 2030 with the aim of becoming the world’s largest renewable-energy producer – ironic given the controversy over its plans to expand coal mining in Australia. Gross domestic product (GDP) grew by 13.8% in the second quarter of this year as pandemic controls were lifted and manufacturing and services boomed. India also has strong consumer demand, which accounts for about 55% of the economy compared with less than 40% in China. With Modi’s government rolling out a 100tn rupees ($1.35tn, £1.1tn) infrastructure programme – it aims to build 25,000km of new roads in the current financial year alone.
Indian students are coming to B.C. — and Canada — by the thousands.
1. Quality of life, rise of Indian middle class, and youth unemployment are some of the main reasons.
2. India's private and tech sectors — which have been growing rapidly — don't offer the job security or benefits that Canada's employers do.
3. Canada is in need of skilled immigrants and skilled workers to further their economy. Canada has a very accepting culture.
13/09/2022
15/09/2022 will be the last date to pay for the second Installment of the advance tax for FY 2022-23. Second Instalment of advance tax is due by 15th September, you have to pay 45% of the total tax liability.
CAs can withdraw Form 15CB where 15CA Part-C has not been filed for corresponding 15CB-
Filing made after 1st April 2021 till 29th July 2022: Form can be withdrawn at any point of time.
Filing made on 30th July 2022 onwards: within 7 days midnight 23:59:59 hours from the date of successful submission of Form 15CB.
On click of Withdraw button, a popup screen containing below dropdowns are displayed for Reasons of withdrawal which is to be selected by CA
Change in fields of Form 15CB
Cancellation of remittance
Others
In case of selection of “Others”, text box is provided to enter description with max length of 200 characters. CA is required to confirm “This is to inform you that you are agreeing to withdraw your Form 15CB. Upon withdrawal, selected Form 15CB will no longer be valid” to withdraw form. Once Form is withdrawn, e-mail and SMS are sent to taxpayer and CA and status of Form 15CB is updated as “Withdrawn”.
https://docs.google.com/document/u/0/d/1mpRJuVqTl5PTXEgtT5elAofbeFenuc8k/mobilebasic
In a significant move, the Supreme Court has admitted the appeal filed by the GST department against the order of the Odisha High Court wherein the High Court held that input tax credit is available in respect of GST paid while constructing the immovable property intending to let out for rent in the matter of The petitioner, M/s Safari retreats pvt ltd.
Gst Important tasks cut out in the September month:
1. E-invoicing under GST wef 01.10.2022 for dealers with turnover above 10 crores
2. Time barring of ITC-
Section 16 of Central Goods & Services Tax Act 2017 provides that ITC in respect of invoices pertaining to Financial Year (FY) 2021-22 can be availed till September 2022.
3. Amendments/rectifications in GSTR-8 furnished by e-commerce operator by 10th October 2022 for financial year 2021-22
4. Issuing Credit Notes for outward supplies—
In terms of Section 34 of CGST Act 2017, Credit Notes pertaining to any supply of FY 2021-22 can be reported till the due date of GSTR-3B for the month of September 2022. Therefore, Credit Notes in relation to the said period should be issued on or before 30 September 2022 and duly reported in GSTR-1 in order to claim the requisite adjustment of GST.
5. Rectification of invoices issued—
Any amendment in the invoices issued for outward supplies pertaining to FY 2021-22 can be made till the due date of furnishing the return for the month of September 2022.
12/09/2022
As per the Government recommendation, E-Way Bill generation has been provisioned for movement of Gold (HSN Chapter 71) for all Intrastate and Interstate transactions. The taxpayers of the state may generate the E-Waybill for Gold as per the notification issued by their respective states. The e-Waybill for Gold is available as a separate option in the main menu. The e-Waybill for Gold has all the same parameters as that of normal e-waybill except that such e-waybills will not be updated with Part-B details. The validity of such e-Waybill is calculated based on the pin to pin distance of origin and destination.
For generating E-Waybill for Gold it is mandatory that all the items must belong to the HSN Chapter 71 only. In case of items belonging to other HSN chapter along with HSN chapter 71 exist, then it may be treated as a normal e-Waybill and may be generated along with Part-B details.
The changes in functionalities with respect to e-Waybill for Gold are as follows:
1. No Part-B details can be updated
2. Transporter update is not allowed
3. Consolidated EWB cannot be generated
4. Extension of e-waybill is allowed without updating Part-B details Multivehicle facility is not allowed.
However, there is no change in cancellation and rejection of e-waybill.
Non updation of Part B transporter details shows the safety concerns and to maintain the confidentiality for the high value items.
The Reserve Bank of India is estimated to have sold about $13 billion in the spot market in August to defend the rupee from falling further against the US dollar, top dealers told ET, citing the depletion in the country's forex reserves. This is the highest monthly currency market intervention so far in 2022-23 as the central bank is said to be defending the psychological mark of 80. Foreign exchange reserves plunged by nearly $21 billion to $553.1 in five consecutive weeks between July 29 and September 2, show latest data from RBI.
Yes Bank Ltd is hoping to receive approval from the Reserve Bank of India (RBI) in the next two months for its proposed stake sale to infuse ?8,898 crore, said chief executive Prashant Kumar.
The regulator’s approval is the only one pending as the bank’s board and shareholders have voted in favour of the stake sale. On 24 August, shareholders approved the fundraising proposal at an extraordinary general meeting. On 29 July, the bank said its board approved the fundraising by selling shares and warrants to private equity investors Carlyle Group and Advent International. These investments would give Carlyle and Advent as much as 10% each in the bank once the warrants are converted into shares. Under RBI regulations, any stake sale over 4.99% in a private bank to an investor requires regulatory approval.
King Charles will not have to pay inheritance tax on the Duchy of Lancaster estate he inherited from the Queen due to a rule allowing assets to be passed from one sovereign to another.
1. Charles automatically inherited the estate, the monarch's primary source of income, while his eldest son, Prince William, inherited the Duchy of Cornwall estate - valued at more than $1 billion - from his father. The new king will avoid inheritance tax on the estate worth more than $750 million due to a rule introduced by the UK government in 1993 to guard against the royal family's assets being wiped out if two monarchs were to die in a short period of time, i News reported.
2. The provision was first exercised in 2002 when the Queen Mother passed on an estate worth about $80 million to the Queen including a collection of Faberge eggs.
3. The clause means that, to help protect its assets, members of the royal family do not have to pay the 40% levy on property valued at more than £325,000 ($377,000) that non-royal UK residents do.
4. The Lancaster estate generated revenue of £24 million ($27 million) last year, its financial records state, and the King is now entitled to its income.
5. It had assets worth more than £650 million ($754 million) at the end of March this year, the duchy's website states. A law passed in 1702 forbids the monarch from selling any of the assets.
11/09/2022
Canada, Australia, and New Zealand have announced that King Charles III, who succeeded his mother, Queen Elizabeth II, to the British throne on Saturday (September 10), will be their head of state as well.
1. On behalf of the Government of Canada, we affirm our loyalty to Canada’s new King, His Majesty King Charles III, and offer him our full support,” Prime Minister Justin Trudeau said in a statement.
2. In New Zealand, Prime Minister Jacinda Ardern participated in the Proclamation of Accession for the King on the steps of the country’s Parliament along with Governor General Cindy Kiro and Speaker Adrian Rurawhe.
3. In Australia, Governor General David Hurley proclaimed King Charles as head of state at Parliament House, accompanied by a 21-gun salute. The Governor General is the British monarch’s representative in New Zealand and Australia.
India has opted out of the trade pillar of IPEF:
1. India has not joined the trade pillar of the Indo-Pacific Economic Framework(IPEF). India had agreed to three out of four pillars of trade relating to supply chains: tax, anti-corruption and clean energy.
2. On one pillar which deals primarily with trade, the contours of the framework particularly, any commitments required on environment, labour, the digital trade, public procurement are certain areas in which a broader consensus has yet to emerge amongst all the nations.
3. The main concerns in the trade pillar are digital trade, linkage of environment and labour to trade and possible binding commitments of any nature juxtaposed with the benefits that India will receive as a developing economy.
4. The US has earlier expressed concerns about the the Indian side demanding data localisation or the storage and processing of Indian users’ data in servers located in India and not the US, even in the case of data of US-based companies. So there was always a divergent view with US on the digital trade.
5. The Indian side also believes that linkage of environment may discriminate against developing countries who have the imperative to provide low cost and affordable energy to meet the needs of a growing economy.
6. A robust IPEF is being proposed to be presented in the parliament.
Note:
1. The IPEF was launched jointly by the U.S. and other partner countries of the Indo-Pacific region on May 23 in Tokyo. The 14 IPEF partners represent 40% of global GDP and 28% of global goods and services trade.
2. The IPEF Ministerial was held in Los Angeles on September 8-9, 2022
10/09/2022
Salient features of the Pradhan Mantri Vaya Vandana Yojana (PMVVY) scheme. SIC operates this scheme.
1. In the PMVVY scheme, the government provides a subsidized pension scheme for senior citizens aged 60 years and above. 2. Under this scheme, immediate monthly, quarterly, half-yearly or annual pension facility is given to senior citizens. Investors have to pay a lump sum of Rs 15 lakh to take advantage of this scheme.
3. Any person who has attained the age of 60 years can invest in this scheme till March 31, 2023. With only a few months left for the PMVVY sale to end, let’s take a look at how much benefits, eligibility and how much pension senior citizens can get by subscribing to this scheme.
4. The duration of this scheme for senior citizens is 10 years. Pension payment under PMVVY can be made on monthly, quarterly, half yearly or yearly basis depending upon the mode chosen by the buyer. The first installment of pension under PMVVY starts after 1 year, 6 months, 3 months or 1 month from the date of purchase of the scheme. For example, if you have opted for monthly mode of pension payment and if you buy the plan now then your pension will start after 1 month.
5. The minimum pension allowed under investment in PMVVY is Rs 1000 per month while the maximum pension is Rs 9250 per month. The minimum purchase price available under the scheme is Rs 1,62,162 for monthly pension, Rs 1,61,074 for quarterly pension, Rs 1,59,574 for half yearly pension and Rs 1,56,658 for annual pension. The maximum purchase price available under the scheme is Rs 15 lakh for monthly pension, Rs 14,89,933 for quarterly pension, Rs 14,76,064 for half yearly pension and Rs 14,49,086 for annual pension.
6. For policies purchased up to 31-03-2023, the interest rate applicable to the scheme will be 7.40% p.a. payable monthly (i.e. equal to 7.6% p.a.). This assured interest rate will be payable for the full policy term of 10 years for all policies purchased up to 31st March 2023.
The Ministry of Corporate Affairs (MCA) Thursday carried out searches on 300 entities having Chinese nationals on board after its preliminary found them to be engaged in 'dubious activities'. The searches were carried out at various locations including in Delhi, Hyderabada and Bengaluru after the MCA's probe found that many of these were "shell entities" formed forging credentials and subsequently had Chinese nationals on board who controlled the affairs of the companies. This is probably the first instance of a pan-India coordinated search operation by the ministry to crack down on entities having Chinese nationals on board. In April, the MCA had registered over 700 cases across the country against companies with Chinese nationals as promoters and directors. Among those under probe include Vivo, Xiaomi, Oppo and several India units of Alibaba.
The income tax department has detected "unaccounted income" of more than Rs 100 crore after it recently raided two Maharashtra-based business groups, the CBDT said Friday. The searches were launched on August 25 against the two groups that have not been identified by the authorities and are engaged in business of sand mining, sugar manufacturing, road construction, health care and running of medical college, officials said. More than 20 premises located in Solapur, Osmanabad, Nashik and Kolhapur districts of Maharashtra were covered as part of the action, the Central Board of Direct Taxes (CBDT) said in a statement.
09/09/2022
In a major development, the professional services firm EY split its audit and consulting units into two companies on Thursday, as it looks to ease regulatory concerns over potential conflicts of interest. For years, the Big Four accounting firms, comprising EY, Deloitte, KPMG and PricewaterhouseCoopers, have been under regulatory scanner over concerns their advisory services could undermine their ability to conduct independent reviews. The split would mark the biggest shake-up in the sector since the 2002 collapse of Arthur Andersen, the auditor that was mired in the Enron scandal and whose downfall reduced the Big Five to Big Four. EY is a network of national member firms in about 150 countries. The leaders of EY’s 15 largest members, which account for about 80 per cent of its $45bn annual revenues, were ‘unanimous’ in wanting to put the split to partner votes. As per the reports, EY’s audit-focused business with revenues of about $18bn would remain in the existing partnership structure.
Expected Increase in India’s trade deficit in the coming months:
Russia invaded Ukraine on February 24, 2022. The West has since imposed multiple sanctions and in effect, Europe is now suffering from the worst energy crisis in 50 years. Soaring gas prices are pushing economies to the brink of recession and as a result, India is expected to suffer. India’s merchandise exports declined 1.15% to $33 billion and the trade deficit more than doubled to $28.68 billion as imports rose by 37%. India is a big importer of oil and liquefied natural gas and coal and the prices of all these commodities have sharply increased. India’s trade deficit is now going to something like $30 billion a month which is a crippling amount and not sustainable. So, we are suffering in a major way. It is not just Europe that is suffering.
Full list of apps and websites unauthorised for forex transactions in India by RBI: The Reserve Bank of India recently issued an “Alert List” comprising names of apps and entities that have not been authorised to deal in forex and to operate electronic trading platforms for forex transactions. Many unauthorised platforms lure people by promising lofty returns on investment. However, using such platforms is not just risky but may also land the users in legal troubles. Users of these unauthorised platforms may be prosecuted, according to RBI. Members of the public are once again cautioned not to undertake forex transactions on unauthorised ETPs or remit/deposit money for such unauthorised transactions. Resident persons undertaking forex transactions for purposes other than those permitted under the FEMA or on ETPs not authorised by the RBI shall render themselves liable for legal action under the FEMA,” the RBI said in a notification date 7 September 2022.
08/09/2022
Officers of CGST Mumbai South Commissionerate have busted a fake GST invoice racket, which was used to pass on fake GST Input Tax Credit (ITC) of Rs. 27.80 crore on invoices of Rs 142 Crore, and have arrested the Director of M/s Techno Satcomm India Pvt. Ltd. for issuing GST invoices without actual supply of goods. Acting on a specific input received from the Central Intelligence Unit of CGST Mumbai Zone, the anti-evasion wing of CGST Mumbai South Commissionerate initiated an investigation against this company. During the investigation, the company was found to be non-existent at the declared business address. Subsequently, the statement of its Director was recorded on September 05, 2022 wherein he admitted his role in the generation of fake ITC and passing on this ITC in the downward supply chain. Investigation revealed that this company had fraudulently claimed input tax credit of Rs. 27.80 Crore in its GST returns and passed on this ITC to its various recipients. Bogus invoices of around Rs. 142 Crore were issued for passing on this tax credit, without any supply of goods, in gross violation of provisions of the CGST Act, 2017.
India becomes the 5th largest economy:
1. According to Bloomberg, which has used figures from the International Monetary Fund (IMF), India passed the United Kingdom (UK) to become the fifth-largest economy in the world in the last quarter of 2021.
2. India's economy currently ranks just four nations ahead of it in terms of size in dollars. The United States, China, Japan, and Germany are the only nations with economies larger than India's. The UK is currently in sixth place, just behind India.
3. A decade back, India was ranked 11th among the large economies while the U.K. was at the fifth position.
4. India is expected to pip Germany in 2027 and Japan by 2029 at the current rate of growth, as per a research report by State Bank of India (SBI)’s Economic Research Department.
5. India currently has per capita income of USD 2,000 and is categorised as a lower middle-income country. India can become a middle-income country and reach a per capita income of USD 10,000 or USD 20 trillion economy by 2047 if it manages to achieve a sustained growth rate of 7-7.5%, said Bibek Debroy, Chairman to the Economic Advisory Council (EAC)
07/09/2022
The Uttar Pradesh cabinet on Tuesday approved draft of Uttar Pradesh Goods and Services Tax (Amendment) Bill 2022 to give relief to small tax payers (using settlement scheme) who fail to file tax returns. The amendment provides for extending the period of cancellation of registration up to three months after the end of respective financial year. Chief minister Yogi Adityanath presided over the meeting of state cabinet that approved the draft bill and the state government proposes to get the same passed in the monsoon session of the state legislature scheduled to commence on September 19, 2022.
Just 23 days left. e-Invoicing will be mandatory for all B2B businesses with turnover exceeding Rs.10 crore starting from 1st October 2022, all companies need to comply with the Electronic invoicing. Initially, e-invoicing was made mandatory for businesses having an annual turnover of ?500 cr, then it was brought down to ?100 cr and then to ?20 cr and finally to ?10 cr.
It has been decided to close the 54 EC capital gain bond issue 2022-23 of NHAI with immediate effect. Accordingly, please ensure that no fresh application/money is accepted for these bonds on or after 3rd September 2022. Bank are requested to freeze the credit in the bank accounts opened for NHAI 54 EC bonds collection from 03rd Sept 2022. The application money if credited on 03rd Sept 2022 onwards shall be refunded by NHAI and claim, if any, made by the investor towards capital gain exemption, shall be the responsibility of the concerned bank/arrangers.
The online gaming industry is heaving a collective sigh of relief after the Group of Ministers (GoM) decided not to mix online gaming with horse racing and gambling. In July, the GST Council had decided to increase taxes on the industry to 28% from 18%, which was largely accepted by industry stakeholders. At the moment, the 18% GST on the sector applies to gross gaming revenue (GGR). However, the GoM had been mulling over levying it on gross gaming value (GVV), which is the total value of the stake put in by players. In the online gaming industry, players combine their money to create a prize pool, which is then used to pay out winnings. The difference between these combined deposits and winnings makes the GGR. Industry experts and stakeholders were worried that applying 28% GST to GVV would more than double the tax the industry had to pay, and force some firms to shut down.
India’s online gaming industry is expected to grow to $5 billion by 2025, according to a report by BCG and Sequoia India. And, while there have been unicorns like Dream Sports and Mobile Premier League, the sector largely remains at a nascent stage.
06/09/2022
Gst 3B changes applicable from gst returns filed in September 2022:
Amendment of Table 4(B) & (D) of Form GSTR – 3B vide Notification no. 14/2022 Central Tax dated July 5,2022 and clarification issued in regard to reporting of the same vide Circular 170/02/2022 is made live on the GSTN portal.
1. After the amendment in Table 4(B) of GSTR-3B, all the ITC as available in GSTR-2B including ITC ineligible in terms of section 17(5), Rule 42,43, 38 and reclaimed ITC (earlier reversed due to ineligibility as per section 16(2)(c) & (d) and Rule 37) needs to be reported in Table 4(A).
Rule 38 – 50% ITC for Banking Company.
Rule 42 – Inputs/Services being partly for business/partly for personal purpose.
Rule 43 – Capital Goods being used partly used for business/partly for other purposes or partly for effecting taxable/zero-rated and partly for effecting exempt supplies/non-GST supplies.
2. Reversal of ITC – Table 4(B) Ineligible ITC (Permanent reversal and Temporary reversal) will be reported separately in Table 4(B). Consequently, Net ITC as per Table 4(C) i.e., [4(A) – 4(B)] shall only be credited to the electronic credit ledger.
3. In the Table 4(D) – Other details, following needs to be reported-:
(1) ITC reclaimed which was reversed under Table 4(B)(2) in earlier tax periods
(2) Ineligible ITC under section 16(4) and ITC restricted due to POS provisions or cut off date.
Advance Ruling towards Canteen Services provided to employees and to contractual workers.
Source - https://www.livelaw.in/news-updates/gujarat-authority-of-advance-ruling-aar-gst-canteen-charges-cgst-act-itc-208483
M/s. Troikaa Pharmaceuticals Limited
Date of Order – 10-08-2022 - ADVANCE RULTNG NO. GUJ/GAAR/R/2022/38
GUJARAT AUTHORITY FOR ADVANCE RULING
M/s Troikaa made arrangement of food (lunch and dinner) through an outside party, who prepares the food and supplies it to the company's employees and the contractual workers. M/S Troikaa provides the canteen facility at a subsidized rate of 50% to its employees and contractual workers.
Question on which Advance Ruling sought:
l. Whether GST shall be applicable on the amount recovered by the company from employees or contractual workers, when provision of third-party canteen service is obligatory under section 46 of the Factories Act, 1948?
2. Whether input tax credit of GST paid on food bill of the Canteen Service Provider shall be available, since providing this canteen facility is mandatory as per the Section 46 of the Factories Act, 1948?
RULING
l. GST, at the hands of M/S Troikaa, is not leviable on the amount representing the employees portion of canteen charges, which is collected by M/s Troikaa and paid to the Canteen service provider.
2. GST, at the hands of M/s Troikaa, is leviable on the amount representing the contractual worker portion of canteen charges, which is collected by M/s Troikaa and paid to the Canteen service provider.
3. ITC on GST paid on canteen facility is admissible to M/s Troikaa under Section l7 (5)(b) of CGST Act on the food supplied to employees of the company subject to the condition that burden of GST have not been passed on to the employees of the company.
4. ITC on GST paid on canteen facility is not admissible to M/s Troikaa under Section 17 (5)(b) of CGST Act on the food supplied to contractual worker supplied by labour contractor.
It is informed that there is no mandate to the applicant company to provide canteen facility to the contractual worker under the Factory Act.
05/09/2022
Income tax laws prohibit cash transactions above Rs 2 lakh for any reason. Therefore, avoid excessive cash transactions, otherwise you may have to pay a fine.
1. The government prohibits accepting cash above Rs 2 lakh. Therefore, in a single day, you cannot take more than Rs 2 lakh in cash even from your close relatives.
2. Not more than Rs 2 lakh can be accepted as a cash gift from a single donor at a time. If anyone violates this, he can be fined equal to the amount received.
3. Do not pay cash for health insurance. If the taxpayer pays the insurance premium in cash, he will not be eligible for section 80D deduction.
4. In a property transaction, the maximum cash allowed is also Rs 20,000. If a seller is in advance, then the maximum limit is only two lakh rupees.
5. Under the new rules, it has now been made mandatory to provide PAN or Aadhaar for depositing or withdrawing more than Rs 20 lakh in banks. On May 10, 2022, the government had implemented these rules by issuing a notification. The Central Board of Direct Taxes (CBDT) has made new rules under the Income Tax (15th Amendment) Rules, 2022. After the implementation of these new rules, if a person deposits a total amount of 20 lakh rupees or more in a financial year in one or more accounts in any banking company, co-operative bank or post office, then giving PAN and Aadhar card for him has become mandatory.
Requirement to quote PAN on cash deposit/withdrawal not applicable on Central/State Govt. and Consular Office: CBDT
The CBDT has inserted a new proviso to Rule 114BB to provide that requirement of quoting PAN or Aadhaar on deposit/withdrawal of cash aggregating to Rs. 20 lakh or more or opening a current/cash credit account shall not apply to a person who is the Central Government, the State Government or the Consular Office.
Note: CBDT issued a notification dated 10th May, 2022, thereby amended Rule 114 and added clauses 114BA and 114BB, thereby providing that, every person should obtain and quote Permanent Account Number ("PAN"), wherein he enters into any of the following transactions:
Cash deposits aggregating to Rs 20 lakhs or more in the financial year in one or more accounts with a bank or a post office.
Cash withdrawal or withdrawal aggregating to Rs 20 lakhs or more in the financial year in one or more accounts with a bank or a post office.
Opening of current account or cash credit account with a bank.
Senior citizens card is made by the state governments at their level. For this, one has to apply on the online website of the state government. Some documents also have to be submitted along with the application so that the process of verification of the application can be completed.
1- Papers for Age Proof
For this, passport, PAN card, school leaving certificate can be given.
2-residence certificate papers
In this, you can give valid documents like ration card, passport, election card, electricity or phone bill which is in the name of the applicant.
3-Medical information papers
In this, blood report, medication and allergy report have to be given.
4- 3 stamp size photographs are also to be attached
How to apply
To make a Senior Citizen ID card: one has to apply on the website of the state government. Its form is available only on the state government website where it can be filled online. If you live in Delhi and want to make Delhi Senior Citizen ID Card, then you can click on this link http://www.delhipolice.nic.in/seniorcitizen/index.html. Similarly, forms are also available on the online websites of other state governments where they can be filled and applied.
Senior citizen card benefits:
1. a separate ticket counter at railways is provided.
2. Discounts are given in flight tickets.
3. Income tax is less as compared to others.
4. FD earns more interest than the general public. 5. Post office investment scheme offers more benefits and facilities than common people.
6. Free treatment is provided in government hospitals and at subsidized rates in government hospitals.
7. If applying for government company MTNL and BSNL, exemption in registration charge and monthly rental charge is also waived.
The Income Tax Appellate Tribunal (ITAT), Mumbai Bench has held that Minimum Alternate Tax (MAT) provisions under section 115JB are applicable only to domestic companies and not to foreign companies. The assessee, Credit Suisse AG (CSAG) is a company incorporated in Switzerland and is a tax resident of Switzerland.
04/09/2022
Hoping for a double-digit growth in GDP in this financial year, Union Finance Minister Nirmala Sitharaman on Saturday said the nation is on a strong wicket when compared to others, and is responsive in terms of extending hand-holding to the required sections. Recent figures released by the Centre indicated that the nation clocked 13.5 per cent growth in GDP in the first quarter of the current financial year. It was 20.1 per cent a year ago.
The current interest rate on PPF account is 7.1 percent per annum. A minimum of Rs 500 and a maximum of Rs 1.5 lakh can be deposited in PPF in a financial year. A person can open only one PPF account in his own name.
The maturity period of PPF is 15 years. Some people have a misconception that the money invested in it cannot be withdrawn midway. Even before the completion of the PPF maturity period, it can be closed under certain circumstances:
1. PPF account holder can withdraw money in case of illness of spouse and children.
2. Apart from this, account holders can also withdraw full money from PPF account for the education of their children.
3. Even if an account holder becomes a Non-Resident Indian (NRI), he can close his PPF account.
4. Any account holder can close the PPF account only after completion of 5 years of opening it.
5. If it is closed before the maturity period, then 1% interest will be deducted from the date of opening of the account till the date of closure.
6. If the account holder dies before the maturity of the PPF account, then this five-year condition does not apply to the nominee of the account holder. The nominee can withdraw money before five years. 7. The account is closed after the death of the account holder. Nominee is not entitled to continue it.
IT officials detect Rs 250 Cr of unaccounted income
1. The IT department has detected “unaccounted” income of more than Rs 250 crore after it raided a Kolkata-based group engaged in manufacturing of power transmission and distribution equipments apart from few other businesses.
2. The searches were launched on August 24 and 28 on the premises of the group, which is also involved in manufacturing of steel pipes and polymer products, in West Bengal and Jharkhand.
3. Accommodation entries by an entry operator through a web of numerous shell companies aggregating to more than Rs 150 crore have been detected.
4. The shell entities have been found to have routed back the unaccounted money in the guise of share capital or unsecured loan into the business of the group.
5. Evidence of use of unaccounted cash for acquisition of immovable property and unaccounted cash loan, etc. has also been found.
03/09/2022
Payment enabled via UPI & Credit Card on Income Tax Portal via Payment Gateway. Convenience Fees for Credit Cards is 0.85% + 18% GST = 1.003%.
Reserve Bank of India (RBI) Governor Shaktikanta Das said inflation is likely to go down in the coming months in India and the impact of high inflation is past its peak. Inflation has become a global phenomenon. The globalisation of inflation has happened now. Firstly, crude oil prices are coming down. Commodity and food prices have also softened. India’s inflation reached its highest level in April 2022, when Consumer Price Index (CPI)-based inflation touched 7.79 percent. The CPI went down to 6.71 percent in July from 7.01 percent in June.
Recycling Supertech twin towers demolition debris needs core policy changes to create environmental impact, say experts. As much as Rs 50 lakh would be earned from processing 30,000 tonnes of Supertech demolition waste but it will be liable for a GST amount of at least Rs 2.5 lakh (5 percent), recyclers say. Every recycled precast product that has cement/concrete material attracts a GST rate of 18 percent. For other products, the levy is 5 percent. However, with high GST slabs of 18 percent for concrete products, recyclers say they are not able to sell the products and instead look for individual tie-ups. Even though customers love recycled products and their durability, they prefer buying non-recycled items to save on the additional GST cost.
Circular No. 4 clarifies the distinction between the payments by a person to the advertising agency and the payments made by advertising agency to the television channel or newspaper company etc. A reading of Circular No. 714 and 4 makes it amply clear that when a person makes a payment to advertising agency, such payments are covered by section 194C whereas if the advertising agency makes any payment to a film artist such as an actor, a cameraman, a director etc., it would be covered by section 194J. This distinction is based on the fact that when the advertising agency makes such payments to a film artist, the intellectual property in the contents will be acquired by the advertising agency and the services secured are only broadcast and telecast and nothing more. Further, a contract need not always be in writing and could be implied also. In the circumstances, we find that the payment made by the assessee for advertisement in connection with their business falls within the ambit of section 194C and not section 194J. Held by ITAT Mumbai in the matter of M/s. Cowtown Software Vs. Design Pvt. Ltd., (Formerly known as Nabhiraja Software Design Pvt.Ltd.,)
412, Floor-4, 17G Vardhaman Chamber Cawasji Patel Road Horniman Circle, Fort Mumbai.
02/09/2022
GST collection in August was ?1.43 lakh crore, 28% YoY increase. Punjab registers 23 pc growth in GST revenue in first five months of FY23. ? 1,43,612 crore of which CGST is ? 24,710 crore, SGST is ? 30,951 crore, IGST is
? 77,782 crore (including ? 42,067 crore collected on import of goods) and cess is
? 10,168 crore (including ? 1,018 crore collected on import of goods). For six months in a row now, the monthly GST revenues have been more than the ? 1.4 lakh crore mark.
Central Board of Direct Taxes Chairman Nitin Gupta has revealed that the body undertook enforcement actions and search and seizure operations on 33 percent more groups till July 31, this year than last. And this has led to more cash seizures as well — to be precise a 525 percent jump. Cash seizures have been to the tune of around Rs 250 crore, as against Rs 40 crore during the same period last year. Against the Budget target of Rs 14.20 lakh crore, we have achieved collections of more than Rs 4.75 lakh crore, which is a growth of around 33 percent.
MCA- Update 9 Company forms ( DIR3-KYC, DIR3-KYC eform, CHG-1, CHG-4, CHG-6, CHG-8, CHG-9, DPT-3, DPT-4) are now available in MCA V3 portal for filing.
GST on Train Ticket Cancellation Applicable to AC Class Only: Railway Clarifies.
01/09/2022
Don’t summon CEOs in first instance’: CBIC’s 10 commandments to GST officials.
GSTN: updating reporting of Table-4 "Eligible ITC in GSTR-3B is live on portal".
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that CSR expenses cannot be added to book profit under section 115JB of the Income Tax Act, 1961. The assessee company, GE Power Systems India, is engaged in the business of manufacturing turbines and generators for thermal projects. The Assessing Officer noted that from the financial statements, it has been noticed that the assessee company has debited an amount of Rs.48,00,000/- towards expenditure on corporate social responsibility. The Assessing Officer asked the assessee that Rs.48 Lakhs has been shown as expenditure but the same has not been added back in your MAT computation and confirmed the addition rejecting the contentions of the assessee.
31/08/2022
Corporate Gifts Association of India (CGAI), a registered corporate gift manufacturing association is seeking an amendment to Section 194R of Income Tax, which makes it necessary to deduct 10% tax at source on the value of any benefit or perquisite received by an Indian resident. However, now Gifts Association feels that this has led to many corporate avoiding corporate gifting completely.
The Ministry of Corporate Affairs (MCA) vide its notification dated 29th August 2022 has amended Rule 16 of Companies (Acceptance of Deposit) Rules, 2014 regarding the return of the deposit to be filed with the Registrar of Companies. The amendments are as follows: 1) Rule 16 which states “Return of deposits to be filed with the Registrar” has been amended to say that the auditor of the company has to submit a declaration in form DPT-3 while filing a return. 2) Particulars of Form DPT-3 have been amended and have been substituted with new form DPT-3 3) Particulars of Form DPT-4 have been amended and have been substituted with new form DPT-4.
According to the Actual Motor Vehicle Act, if you are not wearing a helmet strip while driving a motorcycle, scooter, then your challan of Rs 1000 as per rule 194D MVA and if you are wearing a defective helmet (without BIS) then your 1000 rupees according to 194D MVA Invoice may be deducted. In such a situation, despite wearing a helmet, you may have to face a challan of 2000 rupees for not following the new rules.
The blistering rally in Adani Group shares has catapulted founder Gautam Adani to become the third-richest man in the world. With a fortune of $142.7 billion, Adani is the first Asian to break into the top three, according to Bloomberg Billionaires Index. The value of Gautam Adani’s holdings in Adani Group companies soared $112 billion in the past two years, the highest among all billionaires in the world. His wealth has jumped 365% in the previous two years from $30.7 billion to $142.7 billion, pushing up his rank in the global billionaires’ list from 40th to the 3rd spot during this period. So far in 2022, the value of his companies’ holdings has gone up by $66.2 billion, surpassing the market capitalization of blue chips such as the State Bank of India, Bajaj Finance, HDFC, Bharti Airtel, and Life Insurance Corporation.
30/08/2022
Emphasis on Physical verification for carrying or otherwise of the business or operations:
The Ministry of Company Affairs (MCA) has amended the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016.
a) in Form No. STK-1, in paragraph (1), for the brackets and words “(tick whichever is applicable)” , the following shall be substituted, namely:- “ the company is not carrying on any business or operations, as revealed after the physical verification carried out under sub-section (9) of section 12. (tick whichever is applicable)”;
b) in Form STK-5, in paragraph 1, after sub-paragraph (iii) and before the long line, the following shall be inserted, namely:- “(iv) the following companies are not carrying on any business or operations, as revealed after the physical verification carried out under sub-section (9) of section 12.”
C) in Form No. STK-5A, in paragraph 1, for the brackets and words “[Strike off whichever is not applicable]”, the following shall be substituted, namely:- “(iv) are not carrying on any business or operations, as revealed after the physical verification carried out under sub-section (9) of section 12.”
Notification Link
https://egazette.nic.in/WriteReadData/2022/238410.pdf
In the Companies (Appointment and Qualification of Directors) Rules, 2014, in the Annexure, for e-form DIR-3-KYC and web-form DIR-3-KYC-WEB, the forms shall respectively, be substituted.
Notification Link
https://egazette.nic.in/WriteReadData/2022/238447.pdf
A division bench of the Delhi High Court, while dismissing a petition by ERNST AND YOUNG U.S. LLP, has held that an order under section 143(1) of the Income Tax Act, 1961 is not an “assessment”. The Petitioner contended that the amount received by it from S.R. Batliboi & Co LLP was not taxable in India by reason of Article 15 of Double Taxation Avoidance Agreement and the said position had been examined and accepted by the Respondent in subsequent assessment year 2019-20. It was contended that an order dated 13th April 2022 under Section148A(d) of the Act was passed by Respondent on the erroneous footing that the Petitioner had not filed a reply to the Show Cause Notice and further stated that the Petitioner had not objected to the re-opening of its assessments.
Conclusions of the recent Supreme Court Judgement on whether tax authorities can dispose off the assets of a company in liquidation:
1. Once moratorium is imposed in terms of Sections 14 or 33(5) of the Insolvency and Bankruptcy Code (IBC), as the case may be, the tax authority only has a limited jurisdiction to assess/determine the quantum of taxes and other levies.
2. The tax authority does not have the power to initiate recovery of dues by means of sale/confiscation, as provided under the relevant tax laws.
3. After such assessment, the tax authority has to submit its claims, in terms of the procedure laid down, in strict compliance of the time periods prescribed under the IBC, before the adjudicating authority.
4. In any case, the IRP/RP/liquidator can immediately secure goods from the tax authority to be dealt with appropriately, in terms of the IBC.
Relevant provisions of the IBC:
1. As per Sec 14 of the IBC, on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting - the institution of suits or continuation suits or proceedings against the corporate debtor, disposing of assets by the corporate debtor or any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property. Moratorium shall also be imposed on the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor.
2. As per Sec 238- The provisions of IBC shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force, override other laws.
3. As per Sec 33(5)- When a liquidation order has been passed, no suit or other legal proceeding shall be instituted by or against the corporate debtor.
Case: Sundaresh Bhatt, Liquidator of ABG Shipyard (SC, CA 7667 of 2021)
Startup founders and company promoters looking to save on taxes have emerged as the main buyers of super luxury real estate properties after selling shares or stakes in their companies, said representative of international brokerage firms. Long-term capital gains from the transfer of equity shares (listed and non-listed) or from stake sales in a startup can be avoided under section 54F of the Income Tax Act, 1961, if the gains are invested in residential property. “We have facilitated many such transactions in the last two years, where startup founders have sold their stakes and invested in high end luxury residential properties to save on capital gains tax,” said Amit Goyal, CEO, India Sotheby’s International Realty. High-net-worth individuals (HNI) across the spectrum have bought properties in the recent past. The list includes promoters such as Shekhar Bajaj of Bajaj Electricals and his family; Bharti Enterprises vice chairman Rajan Bharti Mittal; Siddharth Jain of Inox; Pooja Dhoot, wife of Video Con Group director Anirudh Dhoot; Shailesh Dalmia and his wife Natasha; and KEI Industries promoter Anil Gupta. “Reinvesting in residential property can help them save as much as 20% plus applicable surcharge and cess. In other words, the property cost to them is about 20% cheaper, which, in a high-value transaction, is substantial,” said Goyal.
29/08/2022
In exercise of the power conferred by clause (2) of Article 124 of the Constitution of India, the President has appointed Shri Justice Uday Umesh Lalit, Judge of the Supreme Court as the Chief Justice of India. Justice Uday Umesh Lalit will take over as the 49th Chief Justice of India on 27th August 2022.
Justice Uday Umesh Lalit was appointed as Judge of the Supreme Court of India on August 2014 from the Bar. Justice Lalit will become the second Chief Justice of India to be directly elevated to the Supreme Court from the Bar, after Justice S.M. Sikri, who served as the 13 th CJI in 1971. Justice Lalit has served as a Member of Supreme Court Legal Services Committee for two terms.
India's GDP is expected to be much higher in Q1FY23 and growth is expected around 15.7 per cent with a large possibility of an upward bias because several indicators have shown good progress in the Indian economy, SBI Ecowrap report said. As per our (SBI) 'Nowcasting Model', the forecasted GDP growth for Q1 FY23 would be 15.7 pr cent, with an upward bias," the report added. The progress in the economy is seen despite global spillovers, elevated inflation and some slackening of external demand as geopolitical developments take their toll on world trade.
The Hon’ble High Court, New Delhi in the matter of Railsys Engineers Private Limited & Anr v. The Additional Commissioner of Central Goods and Services Tax [W.P.(C) 4712/2022 dated July 21, 2022] sets aside order cancelling Goods and Services Tax (“GST”) registration, and held that Supreme Court suo moto extension of limitation period is applicable for filing appeal against cancellation.
The National Company Law Appellate Tribunal (NCLAT), New Delhi bench comprising Justice Rakesh Kumar, Judicial Member and Dr. Ashok Kumar Mishra, Technical Member was hearing an Appeal on the issue of limitation and held that a duly audited Balance Sheet will act as an acknowledgement of debt under Section 18 of the Limitation Act, 1963. The NCLAT bench observed, that the Apex Court had already settled the law that Balance Sheet dues so reflected appropriately in the Balance Sheet and that too a duly audited Balance Sheet will act as an acknowledgement of debt under Section 18 of the Limitation Act, 1963 & hence the initiation of CIRP was permissible under Section 7 of the “Code”.
28/08/2022
The income tax department is going into “new areas" of the economy to check tax evasion even as its investigation units are using analytics to sift through voluminous data on Indians holding assets abroad, CBDT Chairman Nitin Gupta has said. The Central Board of Direct Taxes, the administrative body for the tax department, undertakes search and seizure operations to check instances of tax evasion apart from performing its regular task of collecting revenue for the government under the direct taxes category.
“We are covering a variety of sectors of the economy (while undertaking searches and raids). We are not limiting ourselves to real estate or developers only…our action is spread across sections of economy right from healthcare to pharma to developers to industries, manufacturers, service providers etc. “We are touching new areas and various sectors of the economy which were never touched like asset reconstruction companies, gaming, betting etc.," The CBDT chief said India was also getting “large" data through the CRS (common reporting standard) and FATCA (foreign account tax compliance act) regime from various countries apart from several global tax leaks on Indians holding assets abroad. While the CRS is a global uniform standard for automatic exchange of financial account information, FATCA is a tax information reporting regime between India and the US which requires financial institutions to identify their US accounts through enhanced due diligence reviews and report them periodically with each other. “We have got information thorough Panama, Paradise and Pandora Papers (global tax data leaks of asset holding by various individuals and entities) and while they are limited number of cases, we are ‘populating’ this information into the CRS and FATCA to cull out data for our use," the CBDT chairman said.
Acquisition of NDTV stake by Adani:
Adani group has acquired 29.18% stake in NDTV. Let us understand the complex transactions that unfolded in this process:
1. NDTV’s shareholding pattern before Adani’s acquisition was- Radhika Roy: 16.32% Prannoy Roy: 15.94% RRPR : 29.18% Others: 38.56%
2. RRPR had taken interest free loan from Vishva pradhan Commercial Private Limited (VCPL) amounting to Rs. 403.85 during 2009-10, granting it a warrant that gave VCPL right to convert the warrants into equity shares upto 99.99% of total equity shares of Radhika Roy Prannoy Roy (RRPR ) holding private limited
3. Adani bought VCPL through one of its wholly owned subsidiaries AMG Media Network Limited in an all cash deal amounting to Rs. 113.75 Crore.
4. Adani announced that, VCPL has exercised its right to convert warrants into equity shares constituting 99.50% of total equity share of RRPR by issuing a warrant exercise notice.
5. The said actions gave an indirect control of RRPR to Adani Enterprises. It means now Adani enterprises hold 99.50% shares of RRPR through its subsidiaries AMG Media Network Limited and VCPL.
6. As the RRPR had 29.18% shareholding in NDTV. Adani Enterprises now will hold 29.03% indirectly through RRPR.
27/08/2022
Supreme Court Declares Section 3(2) and 5 Of Benami Transactions Prohibition Act As Unconstitutional; 2016 Amendment Act To Have Only Prospective Effect. Hon SC has ruled in the case of M/s. GANPATI DEALCOM PVT. LTD. (CIVIL APPEAL No. 5783 of 2022), that the authorities cannot initiate or continue criminal prosecution or confiscation proceedings for benami transactions entered into before the 2016 Act came into force, and hence, all such proceedings stand quashed.
1. Drawing a distinction between the 2016 Act and its predecessor, a three-judge bench of the apex court dismissed the central government’s argument that the 2016 amendment was promulgated merely to fill gaps in the Benami Act, 1988 law.
2 Hon SC held that the Benami Act, 2016 can apply only prospectively, and struck down sections 3(2) and 5 of the 2016 Act as unconstitutional. While section 3(2) allowed criminal prosecution of those found guilty of acquiring benami properties between 1988 and 2016, section 5 permitted forfeiture of such properties.
Key SC observations:
1. Retroactive criminal legislation is prohibited under Article 20(1) of the constitution. The prohibition contained in Article 20(1) is that no person shall be convicted of any offence except for violation of a law in force at the time of the commission of the act. Section 3(2) of the 2016 Act is unconstitutional as it is violative of Article 20(1) of the Constitution.
2. Sec 5 has created a confiscation procedure which is distinct from the procedure contemplated under the criminal procedure code or any other enactment. Under the CrPc, confiscation is dependent on the result of the criminal trial. But under the Benami law, there is an implicit recognition of the forfeiture and the officer is mandated to build a case against the accused for such confiscation. So it is not appropriate for the Centre to suggest that property seizure under the Benami prohibition law was a civil action. Rather, the seizure was punitive in nature and, hence, cannot be applied retrospectively.
3. The recent PMLA judgement, could be a tool for the arbitrary application of confiscation provisions under the stringent Prevention of Money Laundering Act (PMLA).
4. Overall, the 1988 Act was merely a shell, lacking the substance that a criminal legislation requires for being sustained.
Note: 57th and 130th reports of the Law Commission had asserted that it was not “suitable to accept the stringent provisions of Benami Act, 1986, for making benami transactions liable to criminal action”. The commission, the SC noted, had recommended the adoption of certain less stringent, civil alternatives.
26/08/2022
The Enforcement Directorate (ED) on Thursday carried out searches at five locations linked to crypto currency exchange Coin switch Kuber in connection with its probe into an instant micro loan app scam, people privy to the third crypto exchange to come under the ED’s scanner for allegedly diverting proceeds of crime raised by 365 instant loan apps by offering loans at exorbitant rate of interest them. Coin Switch Kuber, which is backed by Silicon valley-based Andreessen Horowitz and Sequioa capital India, has over 18 million registered users. According to its website, over ?1 lakh crore of crypto has been traded on its platform.
The Income-tax department has collected around Rs 28 crore in taxes after about 1 lakh returns were filed by taxpayers under the newly introduced return filing form called ITR-U, that was notified this year as part of the Budget 2022-23.
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CBDT said that online gaming players associated with just one gaming portal have been found to have netted as much as Rs 58,000 crore in the three years through FY22 as the gross winning amount. IT Deptt Having identified huge tax evasion in the thriving online gaming industry, the tax department wants the winners in such games to use the updated income tax returns (ITR-U) scheme to disclose their incomes and pay the right amounts of taxes with applicable interest.
25/08/2022
?The Supreme Court agreed to consider a plea seeking a review of its earlier judgment upholding the constitutional validity of anti-money laundering provisions, including the powers of arrest and seizure. The court said it would re-examine two provisions of the Prevention of Money Laundering Act (PMLA), one with respect to providing a copy of the Enforcement Case Information Report (ECIR) to the accused and another related to the burden of proof on the accused regarding innocence.
Direct tax collections (post-refunds) grew by a robust 33% in the year till August 24 of the current financial year, with both personal income tax (PIT) and corporate income tax (CIT) performing much better than anticipated.
Authority for Advance Ruling (AAR) judgement saying tax credit should be allowed on goods and services tax (GST) paid on upfront lease premium could give a breather to companies and even corporate individuals. Tax authorities have been disallowing the tax credit up until now.
24/08/2022
The government has sought reasons from Byju’s the country’s most-valuable startup backed by Tiger Global, for not yet fling its audited financial accounts for year ended March 2021, according to people familiar with the matter. Earlier this month, Ministry of Corporate Affairs sent a letter to Byju’s parent coming asking them to explain the seventeen-month delay in filing audited accounts, the people said, asking not to be named. The delay in filing is due to consolidating the accounts of a number of companies that the online education provider acquired during the accounting year, the company has replied to MCA, one of the people said. Byju’s, also backed by Mark Zuckerberg’s Chan Zuckerberg Initiative, had been on an accelerated expansion spree globally, buying multiple startups in the US and elsewhere.
A Supreme Court bench issued notice on a petition seeking review of a ruling by the top court last month that upheld the constitutional validity of key provisions of the Prevention of Money Laundering Act (PMLA). The three-member bench said Thursday that”. These include providing a copy of the Enforcement Case Information Report (ECIR) – equivalent to a first information report – to the accused and the “reversal of presumption of innocence,” it said. The bench was led by Chief justice NV Ramana, who’s retiring August 26. When senior lawyer Kapil Sibal, counsel for the review petitioner, insisted that the entire judgement needed reconsideration, the chief justice orally remarked that his two fellow judges “are not agreeable to” having a relook at the other provisions.
23/08/2022
The Supreme Court has said all details of the bidder winning a government contract need to be shared with the Goods and Services Tax (GST) jurisdictional officers concerned to enable them to correctly assess tax liability. The Supreme Court also held that it is the responsibility of the bidder to quote the correct Harmonised System of Nomenclature (HSN) code and the corresponding SGT rate. The ruling came in response to the government’s plea following the high court’s decision in a case pertaining to Bharat forge Ltd in connection with a railway contract. Diesel Locomotive Works, under the Indian Railways, floated a global tender inviting e-tender for procurement of turbo wheel impeller balance in 2019, under the Make in India scheme. Bharat forge, one of the bidders, had approached the Allahabad High court, saying that neither the Notice Inviting Tender (NIT) nor the bid documents mentioned the relevant HSN code. The company contended that it had disclosed the correct GST, at the rate of 18%, whereas the top three bidders had shown the SGT at the rate of 5% and accordingly their overall prices were lower in comparison to that quoted by Bharat forge. The high court allowed the company’s petition, following which the Union government and the Railway Board filed an appeal in the Supreme Court seeking clarity on whether it is part of public duty to indicate the HSN Code when a public tender is floated. The Supreme Court said that when the sate decides to award a contract it is not obliged to undertake the ordeal of finding out the correct HSN code and the tax rate applicable to the product which it wishes to procure However, it ruled that a copy of the document that forms the basis of award of contract details will have to be immediately forwarded to the jurisdictional officer concerned by the appellant to ensure that there is no tax evasion
The Income-tax department has sought to Prosecute Reliance Group chairman Anil Ambani under the Black Money Act for allegedly evading ?420 crore in taxes on undisclosed funds worth more than ?814 crore held in two Swiss bank accounts. The department has charged Ambani, 63, with “willful” evasion, saying he “intentionally” did not disclose his foreign bank accounts details and financial interests to Indian tax authorities. A show cause notice in this context was issued to Ambani early this month. The department said he was liable to be prosecuted under section 50 and 51 of the Black Money (undisclosed foreign income and assets) Imposition of Tax Act of 2015 that stipulates a maximum punishment of 10 years’ imprisonment with a fine. It has sought his response to the charges by August31.
The Enforcement Directorate (ED) has allegedly found proceeds of crime of over ?800 crore as part of a long-drawn money laundering probe against 365 fintechs and their nonbanking financial companies (NBFCs) partners, sources close to the matter told ET. These lending apps flourished amid the Covid-19 pandemic when many in the blue-collar workforce lost their jobs as the country went into a lockdown these firms have been under the scanner for more than a year. People aware of the ED investigation said that loans of over 4,000 crore were disbursed by these fintech firms, which then sought to recovery the amounts lent through tele callers. The companies mostly used defunct NBFCs which allegedly lent there RBI-issued licence for a share of profit ranging from 0.5% to 1%. In most of these cases, the investigation has found that the platforms were backed by Chinese money. Chinese nationals had taken operational or directorship control of the service provider companies and provided funds to run these apps. Of the loans disbursed, over ?700 crore was recovered upfront by these fintechs under the guise of processing fees and over ?85 crore in the forms of interest and penalty charges, people in the know said on the condition of anonymity.
22/08/2022
MCA Update dated 19/08/2022. MCA notifies Companies (Incorporation) Third Amendment Rules, 2022. Rule 25B to be read after 25A
PHYSICAL VERIFICATION OF THE REGISTERED OFFICE OF THE COMPANY - BY ROC
1. ROC has to prepare Physical Verification Report of the Registered Office of the company in the given format.
2. Need to attach Photograph of the Registered Office of the company to his report
3. Copy of Agreement /ownership / rent agreement /NOC of the Registered Office of the company from owner /tenant / lessor-Self attested ID-card of the person available, if any.
4. Independent witness of the locality. Assistance of the local police for such verification.
Haryana Govt. Cancelled Registration of Firms Generating Fake Input Tax Credit. The Excise and Taxation Department, Government of Haryana identified a list of 213 suspicious taxpayers in the State who were claiming Input Tax Credit (ITC) in their FORM GSTR-3B but had no input tax credit reflected in their FORM GSTR-2A / FORM GSTR-2B. It was believed that a small number of these taxpayers were essentially false invoice generators who would claim suo moto input tax credits before transferring fraudulent or non-existent input tax credits to other businesses both inside and outside the State. As a result, between August 8 and August 16, 2022, a Special Drive was launched against these taxpayers to physically verify and cancel the registration of fraudulent or fictitious taxpayers in accordance with the requirements of the Haryana GST Act, 2017 and rules made thereunder. Out of 213 taxpayers, 205 had undergone physical verification, and 114 of those were discovered to be false or nonexistent at their primary place of business. The department has suspended registration of 103 of these taxpayers. As a preventive measure ITC worth 14.84 Cr of these fake taxpayers has been blocked and a total recovery of 16.70 lakhs has been made from these suspicious taxpayers. Further, physical verification and cancellation of registrations of remaining fake taxpayers is under process. The Government of Haryana has zero tolerance for phony/nonexistent businesses, and appropriate legal action would be taken under the Act against those who promote such bogus businesses and those who receive input tax credit from such fraudulent businesses.
21/08/2022
Amidst the confusions on the levy of Goods and Services Tax on the services relating to Unified Payments Interface (UPI), the Ministry of Finance has clarified that no levy is imposed on such charges. The Ministry took its official twitter handle to clarify that “UPI is a digital public good with immense convenience for the public & productivity gains for the economy. There is no consideration in Govt to levy any charges for UPI services. The concerns of the service providers for cost recovery have to be met through other means.” According to the RBI, fund transfers made through UPI are equivalent to those made through IMPS (Instant Payment Service), so theoretically, UPI should charge the same fee as IMPS.
Private training or coaching companies would draw the goods and services tax (GST) for they are not education institutions as the government has defined under the indirect tax regime, according to the Kerala-based authority for advance rulings (AAR). Experts said 18 per cent GST would continue to be imposed on these companies--BYJU's, Vedantu, and Udemy are some examples--after the AAR recent ruling. They said these companies whether they offer education online or offline would be subject to GST. The AAR ruled that Ernakulam-based Tutor Comp Infotech India is not exempt from GST for its services. Note that education is exempt from service under GST. Tutor Comp Infotech, which is based in the Infopark special economic zone in Kochi, offers online education services. It had asked AAR whether services offered to individual students one-to-one and providing education up to higher secondary school are exempt from GST. The AAR, however, observed that the company is not a formal school but an institution providing special training/coaching to students enrolled in formal schools for education up to higher secondary or equivalent. The company’s work can be claimed to be an education service in layman's understanding, but it does not qualify so as prescribed under the government notification, it said.
20/08/2022
Gist of Recent Income Tax Notifications:
1. Notification No: 100/2022 G.S.R. 636(E) dated 18.8.2022
Description: The Central Board of Direct Taxes (CBDT) has issued the Income-tax (27th Amendment) Rules, 2022, w.e.f. April 01, 2022. The Amendment Rule has amended Rule 128(9) which states that the statement of income from the country or specified territory outside India offered for tax shall be in Form No. 67 and the certificate shall be furnished before the end of the assessment year relevant to the previous year in which the income has been offered to tax or assessed to tax in India and the return for such assessment year has been furnished within the specified time. Provided that where the return has been furnished and the certificate or the statement to the extent it relates to the income included in the updated return, shall be furnished on or before the date on which such return is furnished.
2. Notification No: 99/2022 S.O. 3878(E) dated 17.8.2022
Description: The Central Board of Direct Taxes (CBDT) has notified that the provisions of Section 206C(1G) of the Act shall not be applicable to a person (being a buyer) who is a non-resident and who does not have a permanent establishment in India, wherein Section 206C(1G) provides that every person:
1. Being an authorised dealer, who receives an amount, for remittance out of India from a buyer, being a person remitting such amount out of India under the Liberalised Remittance Scheme of the Reserve Bank of India
2. Being a seller of an overseas tour program package, who receives any amount from a buyer, being the person who purchases such package,
shall, at the time of debiting the amount payable by the buyer or at the time of receipt of such amount from the said buyer, by any mode, whichever is earlier, collect from the buyer, a sum equal to five per cent of such amount as income-tax.
3. Notification No: 98/2022 G.S.R. 634(E) dated 17.8.2022
Description: The Central Board of Direct Taxes (CBDT) has issued the Income-tax (26th Amendment) Rules, 2022, w.e.f. August 17, 2022. The Amendment Rule has introduced a new provision regarding refund for denying liability to deduct tax in certain cases.
4. Notification No: 96/2022 G.S.R. 632(E) dated 17.8.2022
Description: The Central Board of Direct Taxes (CBDT) has issued the Income-tax (25th Amendment) Rules, 2022, w.e.f. April 01, 2023. The Amendment Rules has substituted the existing provision regarding exercise of option in respect of any income from property held for charitable or religious purposes.
19/08/2022
CBIC has raised the monetary thresholds for prose. There will be prosecution against foreigners and non-residents Indians (NRIs) on detection of non-declaration of foreign currency, if it is legally acquired said on CBIC circular issued on Wednesday. The threshold for prosecution involving baggage has been increased to ?50 lakh from from ?20 lakh. Similarly, for financial fraud, which included duty evasion or wrong declaration, the threshold has been doubled to ?2 crore. The exemption, however, will not cover offences relating to items such as arms and ammunition, explosives, antiques, art treasures, wildlife items and endangered species of flora and fauna, irrespective of threshold. This move will help bringing more clarity for importers as well as departments.
Bank Privatisation should be a gradual process as big-bang sales of public sector banks can do more harm than good, a Reserve Bank of India (RBI) paper said. The paper argued that while private sector lenders are more efficient in profit maximisation, public sector banks(PSBs) have done much better at promoting financial inclusion, delivering farm loans and achieving monetary transmission, which are key objectives of both government and the RBI. The government had announced a plan to privatise two state-owned banks in the FY22 budget. Such a gradual approach would ensure that large-scale privatisation does not create a void in fulfilling important social objectives of financial inclusion and monetary transmission,” said the paper authorised by Snehal S Herwadkar; Sonali Goel and Rishuka Bansal of the RBI’s banking research division. A recent policy paper by former NitiAayog vice chairman Arvind Panagariya and Poonam Gupta, a member of the economic advisory council to the prime minister, had called for the privatisation of all PSBs except State Bank of India.
18/08/2022
Nirmala Sitharaman is an Indian economist and politician serving as the Minister of Finance and Corporate Affairs of India since 2019. She is a member of the Rajya Sabha, upper house of the Indian Parliament, since 2014. One of the most interactive Finance Ministers India has ever had. She regularly takes feedback from industry bodies and businesses over government policies. She also makes amends to her policies if businesses push back. She is the second woman to hold the post but the first full-time woman Finance Minister. Before her, only Indira Gandhi held the post for a brief period between 1970 and 71. On her 63rd birthday, here are some of her major decisions as the Finance Minister:
1. The amalgamation of public-sector banks.
2. Rs 20 lakh crore fiscal stimulus during the COVID-19 pandemic.
3. Simplifying tax slabs.
4. Credit to MSMEs.
5. Reforms in key sectors like commercial mining in the coal sector, self-reliance in the defence sector, private participation in space activities, approved the construction of more world-class airports through PPP mode, brought tariff policy reforms in the power sector.
6. Cryptocurrency taxation.
7. Fiscal prudence like she doesn’t believe in doling out freebies to win elections, asked power generation firms to clear their outstanding dues, levied GST on pre-packaged and pre-labelled milk and other related items.
HC Dismisses plea against GST levy based on Facebook posts:
A division bench of Andhra Pradesh High Court comprising Justices C Praveen Kumar and T Rajasekhar Rao said: “Prima facie it cannot be said that the petitioner has not conducted any event during the relevant period.” It said it did not want to go into the facts and, accordingly, “the writ petition is dismissed”, allowing the petitioner to approach the appellate authority for remedy. After going through the facts and arguments, the bench said that the petitioner had been given time to respond but had not done so. So, it cannot be said that there was any violation of the principles of natural justice, the bench added. Also, it took note of 17 posts on the social media platform related to various events organised between October 8, 2017, and March 25, and dismissed the petition.
Updated requirement of maintenance of books of accounts under Companies Rules:
1. MCA has stepped up the record keeping requirements of businesses in a bid to make sure that various documents and records are readily available for the authorities to check any time.
2. The Companies (Accounts) Fourth Amendment Rules, 2022 amended that the books of account and other relevant books and papers maintained in electronic mode should remain accessible in India “at all times".
3. The latest amendment says that the back up of the books of account and other documents kept in electronic mode, including at any place outside India have to be kept in servers physically located in India “on a daily basis." The earlier requirement was to maintain them in servers in India on a periodic basis.
4. Also, companies have to give more information about the service provider that maintains the books of accounts and other documents in electronic mode. The amendment says that where the service provider is located outside India, the name and address of the person in control of the books of account and other books and papers in India has to be reported. This has to be reported to the registrar of companies on an annual basis at the time of filing of financial statements: (must be AOC 4)
5. The idea seems to make sure that the financial and key operational details of businesses are available for the authorities at any given point in time. This reflects the increased monitoring that regulatory agencies are undertaking for better compliance.
17/08/2022
The Jacqueline Fernandez-Sukesh Chandrashekhar controversy seems to be coming back to haunt the popular Bollywood actress. The actress, who has been linked to the ?200 crore extortion case linked to conman Sukesh Chandrashekar, has been named as an accused in the charge sheet by the Enforcement Directorate (ED), which is probing the matter. The Central agency has filed a prosecution complaint in the case. According to latest reports, Fernandez was aware of the extortion by Chandrashekhar. The supplementary charge sheet has clearly mentioned that the actress was aware of the crime. The Bollywood actress might not be arrested, as the court is yet to acknowledge the charge sheet. However, she may not be allowed to travel outside the country. Reportedly the actress spoke to Sukesh while he was behind the bars.
Future Consumer Ltd (FCL) has defaulted on the payment of ?51.85 crore towards principal and interest due on non-convertible debentures, a regulatory filing said on Tuesday. The default, which happened on August 15, 2022, includes an interest amount of ?10.73 crore and a principal Amount of 41.12 crore, FCL said a regulatory filing. “The Company has been unable to service its obligations towards payment of the amount of principal and interest due on unlisted Non-convertible Debentures issued by the Company to CDC Emerging Markets Ltd,” said FCL. The default is on the amount issued for a sum of ?200 crore. This was allocated on February 15, 2018, with a coupon rate of 11.07% per annum. As of June 30, 2022, the total financial indebtedness of FCL including short-term and long-term was ?446.82 crore. FCL is in the business of manufacturing, branding and distributing FMCG food and processed food products. It was part of the 19 group companies operating in retail, wholesale, logistics and warehousing segments, which were supposed to be transferred to reliance Retail under a ?24,713 crore deal announced in August 2020. The deal was called off by the billionaire Mukesh Ambani-led Reliance industries Ltd in April.
16/08/2022
The ministry laid down four steps to fold the national flag correctly.
Step 1: The Indian national flag must be placed horizontally.
Step 2: The saffron and green bands need to be folded beneath the white band.
Step 3: The white band needs to be then folded in such a manner that only the Ashoka Chakra is visible with parts of the saffron and green bands.
Step 4: The folded Indian national flag needs to be carried in arms or palms to store it in a safe place.
The announcement that India will soon have 5G mobile services will make many happy in a country with a young population and 1.2 billion mobile phone subscribers.
With more than 500 million internet users, India is among the fastest-growing digital markets with more and more people logging in. But the growth has been uneven, mostly restricted to cities and towns while millions in rural areas have to put up with patchy connectivity. India recently sold spectrum for 5G airwaves for approximately $19bn and reports say that the much-awaited high-speed mobile services would be launched in a few weeks.
E-Commerce Operator (“ECO”) are liable to pay GST on specified supply of services under Section 9(5) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) viz. Passenger Transportation Services, Accommodation Services, House Keeping Services and more specifically, Restaurant Services and all provisions of the CGST Act shall apply to such ECO as if he is the supplier liable for paying the tax in relation to the supply of such specified services.
Earlier, restaurant was liable to pay GST on their restaurant services but, w.e.f January 01, 2022, GST on restaurant services supplied through the ECO viz. Zomato and Swiggy, etc., is to be paid by the ECO in cash at the rate of 5% and no Input Tax Credit (“ITC”) can be availed on such supplies irrespective of fact whether the restaurant is registered or not.
Accordingly, a new table Table 3.1.1 has been inserted as per [Notification No. 14/2022 – Central Tax dated July 05, 2022] in Form GSTR-3B and the same will be available on the GST portal from August 01, 2022 wherein both the ECO and registered restaurant can report supplies made under Section 9(5) of the CGST Act.
GST under RCM is payable on the hire of a motor vehicle by a body corporate for a period of time:
It was clarified that where the body corporate hires the motor vehicle (for transport of employees etc.) for a period of time during which the motor vehicle shall be at the disposal of the body corporate, the service would fall under Heading 9966. The corporate body is required to pay GST under RCM. As can be seen, reverse charge would apply to the act of a body corporate renting vehicles. It is for the body corporate to use in the manner it likes, subject to agreement with the person providing the vehicle on rent.
However, if the body corporate uses a passenger transport service for specific journeys or voyages, the service falls under Heading 9964 and the body corporate is not required to pay GST under RCM.
GST exemption on passenger transportation services by non-air-conditioned contract carriages:
The council clarified that the exemption would apply to passenger transportation services by non-air-conditioned contract carriages falling under Heading 9964, where, according to explanatory notes, transportation takes place over a predetermined route on a predetermined schedule. The exemption shall not apply where contract carriage is hired for a period of time during which the contract carriage is at the service recipient's disposal and the recipient is thus free to decide the manner of usage subject to the terms of the agreement entered into with the service provider.
15/08/2022
Various new functionalities are implemented on the GST Portal, from time to time, for stakeholders. In the month of July 2022, the following changes are made:
1. Registration:
i. Allow taxpayers to enter multiple trade names
ii. Mandating mobile number for applying for persons applying for Temp ID for Advance Ruling
2. Return:
i. Addition of new GST Rate slab of 6%
ii. Auto population of data in Form GSTR-4 from Form GSTR-1 in Table 4A & 4B
3. Refund: Option in Form RFD-01 to get refund arising out of excess payment in GSTR 4, for Taxpayer under Composition levy
4. Advance Ruling: Functionality to search and view Advance Ruling Orders
5. Payments:
i. The limit of cash payment in Over the Counter (OTC) mode has is now restricted to Rs 10,000
ii. Updated generic messages on GST PMT-06 challan page
14/08/2022
Billionaire investor Rakesh Jhunjhunwala passed away on early on Sunday morning because of kidney ailments, according to sources. The 62-year-old business magnate is worth $5 billion. He is survived by his widow, two sons and a daughter. Jhunjhunwala was also the promoter of Akasa Air and Star Health & Allied Insurance.
Mca has restricted filing of Nine forms between 15.08.2022 to 31.08.2022 as mca is coming with V-3 portal only for the nine forms. The forms are Dir3 Web, Dir-3 E form, DPT-3, DPT-4, CHG-1, CHG-4, CHG-6, CHG-8, CHG-9.
Cryptocurrencies traded in the green early on August 14. The global crypto market cap stood at $1.18 trillion, a 0.73 percent increase over yesterday. The total crypto market volume over the last 24 hours reached $56.85 billion, down 13.01 percent. The total volume in DeFi stood at $5.09 billion, 8.96 percent of the total crypto market 24-hour volume. The volume of all stable coins is now $52.02 billion, which is 91.50 percent of the total crypto market 24-hour volume. The price of Bitcoin is currently Rs 18.55 lakh, with a dominance of 39.88 percent. This was a 0.29 percent decrease over the day, according to data from CoinMarketCap. The US sanctions announced on Monday followed allegations that Tornado Cash was helping conceal billions in capital flows, including for North Korean hackers. By mixing cryptocurrencies, the online service makes it possible to conceal the origin or destination of digital payments, increasing their anonymity.
13/08/2022
The Enforcement Directorate (ED) has frozen rs370 crore in the bank accounts of a cryptocurrency exchange, which is under its scanner for alleged laundering of proceeds by companies accused of operating illegal loan apps, said officials in the know of matter. The officials did not disclose the name of the exchange. This is the second instance this month when the central agency has frozen the bank accounts of a crypto exchange. In a press release in last week, the ED said that it recently conducted searches on one of the directors of Zanmai Labs, which owns the popular crypto exchange WazirX, and issued an order to freeze bank balances to talling ?64.67 crore. The agency is probing at least ten cryptocurrency exchanges for allegedly laundering more than rs1,000 crore identified as proceeds of crime from the firms accused in the instant loan-app case, people aware of the matter said.
Section 16(2)(C) of CGST act vires challenged in Bombay High Court.
Section 16(4) of CGST act vires challenged in Chhattisgarh High Court
12/08/2022
Around ? 390 crore of "benami" property or "unaccounted" assets was seized by the Income Tax Department during raids at multiple locations linked to some business groups in Maharashtra's Jalna over tax evasion, officials have said. The seized assets included Rs 56 crore in cash and 32 kilograms of gold, pearls and diamonds worth ? 14 crore. Officials also recovered some property documents and digital data during the raids. The raids were conducted between August 1 and 8 at the residential and official premises linked to two business groups dealing in steel, clothing, and real estate. It took the officials about 13 hours to count the exact amount of cash seized during the raids. After receiving inputs about alleged tax evasion by these business groups, the Income Tax Department had formed five teams disguised as baraatis, comprising 260 officials from across the state for the search operation. 120 vehicles were deployed in the operation.
With its new Passenger Name Record Information Regulations, 2022, the Central Board of Indirect Taxes and Customs (CBIC) has asked airlines to mandatorily share PNR (passenger name record) details of all international passengers with the National Customs Targeting Centre-Passenger, 24 hours prior to departure of flights. The regulations are aimed at “risk analysis” of passengers to prevent economic and other offenders from fleeing the country, as well as check any illicit trade, such as smuggling. With this, India joins a list of over 60 countries that have regulations on sharing of advanced passenger information with Customs and border control authorities.
In the second quarter of 2022, business insolvencies climbed 30.9 per cent compared to the same time last year, and they’re up 26.3 per cent from the first six months of 2022, The Canadian Association of Insolvency and Restructuring Professionals (CAIRP) said. Consumers are also under pressure. CAIRP’s data show there were 25,266 insolvencies in Q2, up 10.5 per cent compared to the same time last year, and up 9.2 per cent from the previous quarter, in what is the “highest volume” in two years. They are up 32 per cent compared to 2020.
11/08/2022
Ministry of Finance issued a notification dated 10.08.2022 that under Atal Pension Yojna- From 1st October,2022, any citizen who is or has been an income-tax payer, shall not be eligible to join Atal Pension Yojana (APY). Income tax payer shall mean a person who is liable to pay income tax in accordance with the Income Tax Act. Any subscriber joining on or after 01.10.2022, and is subsequently found to have been income tax payer, the APY account shall be closed and the accumulated pension wealth would be given to the subscriber.
The Reserve Bank of India's first set of guidelines for digital lending, issued Wednesday, largely addresses concerns consumers had raised with regard to digital lending platforms. While one industry expert called the guidelines "a culmination of months of listening to consumer grievances and inputs on the operations of the digital lending sector", others said it hit all the right spots in defining best-in-class industry practices.
Broadly, the notification focusses on three main things:
A. Regulating the lending chain
To ensure that the central bank has visibility on the movement of money through the lending chain, RBI has stipulated that all loan disbursements always be made into the bank account of the borrower, and repayments be executed directly in the bank accounts of regulated entities (banks/NBFCs/microfinance institutions). No money should flow or pass through any third-party pool accounts, RBI says.
B. Providing transparency to borrowers
The framework asks for regulated entities to disclose, in easy-to-understand language, everything about the loan that a borrower is signing up for, including:
1. Total annual percentage rate (APR)
2. The Key Fact Statement (KFS)
3. Details of the grievance redressal officers
4. All fees and service charges
5. Terms and conditions of the loan recovery mechanism
C. Enhanced Privacy practices
In this 'data-is-the-new-oil' age where everything one puts on the internet is "sellable" or "monetisable", RBI has put together stringent data privacy practices that preclude regulated entities, lending service providers, digital lending applications, and any other platforms involved in the lending equation from using a borrower's data for anything but the specific function it was meant for by following some privacy practices:
1. conduct due diligence around their LSP/DLA partners' data privacy and storage policies
2. do not store borrowers' personal data, except basic information such as name, address, contact details, etc
3. Any collection of data has to be need-based, auditable, trackable by the RBI, and with the prior, explicit consent of the borrower
4. Lenders cannot access borrowers' mobile phone resources
5. One-time permission to access a borrower's camera, microphone, and location, among other necessary facilities, can be taken, but only for the purpose of onboarding and KYC requirements
6. Borrowers should be given the option to deny consent for use of specific data, revoke consent already granted, and, if required, make the app delete or forget his/her data
7. The purpose for obtaining and accessing a borrower's data has to be disclosed at each stage to the borrower
Some important observations about Hawala transactions:
A. The term HAWALA:
Hawala" is an Arabic term used for the word 'trust'. Hawala works like a parallel remittance system for transfer of money obtained through unlawful activities and aids money laundering also called Underground Banking.
B. Modus Operandi:
The Hawaldar who took up the responsibility of money transfer for a pre-agreed commission, gets in touch with another Hawaldar in the area where the money is required to be delivered. To receive or collect the money, at the other end, a currency note number or a codeword/password is communicated to the transferee as well as to the Hawaldar located at the recipient place by the sender of the monies. For delivery of cash, the code word/password or the currency note number need to be disclosed by the recipient for delivering the money. These days, the prevailing trend is, mobile number of the receiver is given to the hawala operator, whose persons will contact the mobile holder, verify the codeword/password and then deliver the amounts. Thus, this system relies solely on mutual trust only.
C. Legality:
Hawala transactions are illegal in India and are prohibited under Section 3 of the Foreign Exchange Management Act, 2000 and also under the Prevention of Money Laundering Act, 2002 as these transactions may involve transfer of criminal proceeds also.
D. Types or Prevalent Practices of Hawala transfers:
1. Money mules are people who are used to transfer "proceeds of crime", either by laundering stolen money or physically transporting goods.
2. Use of Cash Deposit Machines at ATM's.
3. Use of Avalanche Network- Avalanche was a hosting platform composed of a worldwide network of servers that was controlled via a highly organized central system. This cyber network hosted more than two dozen of the world's most pernicious types of malware and several large scale Money Laundering campaigns.
4. Laundering Proceeds from Dark Web Drug Stores. Investigators found that sale of drugs is taking place via the Dark Web. It offered payment option to the customers to pay and transfer funds for their order either by an indicated e-wallet, held in fiat currency, or to a Bitcoin address.
5. Trade Based Money Laundering (TBML) is a process of disguising the 'proceeds of crime' and moving value through the use of trade transactions in an attempt to legitimize their illicit origin.
10/08/2022
WhatsApp on Tuesday announced new privacy features, following which users of the instant messaging service will now be able to leave groups silently as well as choose and control who can see when they are online. WhatsApp will also block taking screenshots for ‘view once’ messages.
CAG flags large scale round tripping in gems and jewellery and asks for a detailed investigation by tax authorities:
1. The Customs Receipt Audit unit of the Comptroller and Auditor General of India (CAG) as well as the Directorate of Revenue Intelligence had pointed out irregularities including large scale round tripping of gold jewellery and exports of machine made crude to artificially increase the turnover to take status certificate and to enhance credit limits and financing from banks.
2. Audit observed that, shockingly, India’s import of pearls during 2013-14 to 2017-18 was *3-10 times more than the average annual value of global pearl production*, implying that a large portion of the turnover was fictitious and on account of round tripping of funds and over invoicing. The imports of pearls primarily being made from UAE, Hong Kong and Thailand, whose contribution in global pearl production was negligible.
3. Audit also observed that, in seven out of 84 scrutiny cases that Income Tax Department allowed aggregate deductions of Rs 115.45 crore under section 10AA against total export turnover of Rs 5,654.39 crore even though a major part of export proceeds (ranging from 40-100% of the total export turnover) amounting to Rs 3,878.95 crore was outstanding for more than six months.
4. So the CAG has asked the CBDT to consider specifying a time limit for remittance of export proceeds by special economic zone (SEZ) Units for claiming deduction under section 10AA.
5. CAG also recommended the CBDT to consider selecting cases with significantly high imports and exports with negligible value addition as one of the criteria for detailed scrutiny as it observed from sampled cases checked in audit that the assessments were completed based on disclosures in the Tax Audit Reports and submission made by the assessee.
09/08/2022
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.
08/08/2022
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.
07/08/2022
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.
06/08/2022
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".
05/08/2022
NOTABLE FINDINGS
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.
04/08/2022
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.
03/08/2022
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 - [2022] 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
02/08/2022
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.
01/08/2022
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.
31/07/2022
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.
30/07/2022
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)
Facts:
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.
29/07/2022
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)
28/07/2022
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.
27/07/2022
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.
26/07/2022
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.
22/07/2022
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.
21/07/2022
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.
20/07/2022
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.
19/07/2022
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.
18/07/2022
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).
17/07/2022
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)
15/07/2022
MCA updates:
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.
14/07/2022
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.
13/07/2022
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.
12/07/2022
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.
11/07/2022
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.
10/07/2022
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.
09/07/2022
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.
07/07/2022
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.
06/07/2022
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.
05/07/2022
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.
04/07/2022
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.
03/07/2022
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.
4. Investments-
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.
5. Health-
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.
02/07/2022
Update from Ministry of Finance
Taxpayers will be offered a wide range of modes for payment of taxes
Net Banking,
Debit Card,
Credit Card,
Pay at Bank Counter (Over the Counter),
RTGS/NEFT and
UPI
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.
https://www.incometaxindia.gov.in/communications/circular/circular-14-2022.pdf
01/07/2022
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.
28/06/2022
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.
27/06/2022
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 - [2022] 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.
26/06/2022
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.
25/06/2022
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.
24/06/2022
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.
23/06/2022
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.
Source CBSNews
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.
22/06/2022
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.
Source: Deccanherald.com
21/06/2022
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
IndiaMart 60%
One97 64%
Alibaba 65%
Xiaomi 65%
Bitcoin 72%
Lupin 72%
PayPal 77%
Shopify 81%
Zoom 81%
Cloudflare 81%
Robinhood 87%
Peloton 94%
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.
20/06/2022
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.
19/06/2022
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
4.Candy sticks
5.Ice cream sticks
6.Polystyrene (Thermocol) for decoration
7.Plates
8.Cups
9.Glasses
10.Forks
11.Spoons
12.Knives
13.Straws
14.Trays
15.Wrapping/ packing films around sweet boxes 16.Invitation cards
16.Cigarette packets
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].
18/06/2022
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.
17/06/2022
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.
16/06/2022
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.
15/06/2022
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.
14/06/2022
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.
13/06/2022
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 related intellectual property rights (TRIPS) on COVID-19 vaccines or extend the same to other diseases such as dengue too. India has been strongly reiterating, that due to the pandemic, patent rules need to be eased for wider manufacturing of vaccines and not just limited to COVID, to help poor nations tackle the pandemic.
3. Limiting subsidies on illegal fishing: The draft text on fisheries aims to limit government subsidies - such as for fuel - to fishing boats or workers who take part in "illegal, unreported and unreported" fishing, or national subsidies that contribute to "overcapacity or overfishing. India, however, is set to emphasise that no discipline will be accepted in territorial waters.
Trivia: WTO members have only ever agreed one global deal, the red-tape cutting Trade Facilitation Agreement, in 2013.
Ist instalment of advance tax for the financial year 2022-23 is due on 15th June 2022. Pls pay 15% of the estimated advance tax for the year 2022-23 before 15th June to avoid interest on late/ delayed payment.
12/06/2022
The income-tax department has asked Infosys to look technical glitches reported by some user, including malfunctioning of search function in the income-tax portal, during e-filing of tax returns. Many users complained that while accessing the I-T portal, the search option is not coming. Some users also said their account details are not correct, after which the department issued a clarification. “Issue relating to search functionality of the e-filing website has come to our notice. The I-T department is seized of the matter. @Infosys has been directed to look into it & @Infosys has confirmed that they are resolving the issue on priority,” the I-T department tweeted while tagging Infosys chief executive Salil Parekh. Interestingly, the glitch has come exactly a year after its launch. The new e-filing portal went live on June 7, 2021.
Several companies, including builders, are turning to dubious consultants to generate unaccounted cash by creating fake bills that provide input tax credit against payment of Goods and Services Tax (GST). These entities have now come under the scanner of the Central GST (CGST) department and income tax authorities for malpractices. A few corporate houses have even paid penalties when faced with scrutiny on fictitious transactions. In the past few months, CGST officials have arrested 67 suspects, mainly book-entry operators who call themselves “tax consultants”, in the Mumbai zone after detecting Rs 7,400 crore worth tax evasion involving fake or inflated invoices. Authorities have used customised software to detect such fraudulent transactions. These consultants, who control shell companies, enable layered transactions for businesses houses. They collect cheque payments in the name of the companies they run against fake bills. A part of the money is used to pay 18% GST on the total worth of the fictitious goods and services mentioned in their bills. By paying GST, the consultant is able to generate input tax credit (ITC) of an equivalent amount. The consultant passes the generated ITC along with the balance sum from the cheque back to the business house in cash after deducting their commission. The “consultants” charge between 3-5% as commission for their services. Most of the time representatives of corporate houses claim that they need cash for their business activities but they are unable to explain the purpose of the payment,” said a senior GST officer. He cited the instance of a well known engineering company that would generate Rs 100 crore worth unaccounted cash every month through fictitious transactions until the practice was exposed last year. Sources said they have come across instances where corporates themselves commit the fraud by creating shell companies to do fictitious transactions. In other instances, they generate unaccounted cash through over-invoicing. In such cases, they pay vendors more than the actual worth of the goods and services with a prior understanding. The vendor inflates bills and generates ITC after paying GST on it. The excess amount is then returned in cash along with the generated tax credit.
11/06/2022
The Enforcement Directorate has provisionally attached a Cessna aircraft belonging to a company owned by Sanjay Singal, former managing director of Bhushan power & steel Ltd(BPSL), as alleged proceeds of crime in a money laundering case against BPSL and others. The federal agency on Thursday said it has attached the 525 ACJ 2+ aircraft valued at ?30.91 crore from Bhushan Airways Services Pvt Ltd, owned and controlled by Singal. Earlier, ED has attached various immovable and movable assets valued at ?4,423.36 crore- including residential and commercial properties in London, Mumbai and Delhi. Total attachments in connections with this case so far is valued approx. ?4,524.27 crore. ED had initiated the money laundering investigation based on an FIR registered by the CBI in April 2019.
The Income tax (I-T) Department on Wednesday clarified that there is no change in the provision of 1% tax deducted at source (TDS) on virtual assets from July 1, after some media reports that TDS had been slashed to 0.1%. “Some media reports have come to notice of CBDT claiming that the rate of TDS on virtual digital assets (VDA) has been reduced to 0.1%. It is hereby classified that there is no change in the rate of TDS on VDA, which continues to be 1% @FinMinIndia,” the department said in a Twitter post. There was confusion after some users said the I-T Department portal on Wednesday mentioned 0.1% tax deducted at source instead of 1% TDS, as proposed in the budget. From July1,2022, when the department will start deducting 1% TDS on crypto transactions it will become easier for the department to track crypto transactions.
10/06/2022
High house prices and debt loads associated with them are a major vulnerability to Canada's economy, the Bank of Canada said Thursday, warning buyers who bought during the pandemic that the impact of even slightly higher mortgage rates could be dramatic. In its Financial System Review, the central bank said that while the country's financial system is strong and weathered the pandemic well, the economy remains vulnerable because of elevated debt levels tied to the country's increasingly expensive housing market. Even as the average household is in better financial shape, more Canadians have stretched to buy a house during the pandemic," Bank of Canada Governor Tiff Macklem said Thursday. "And these households are more exposed to higher interest rates and the potential for housing prices to decline."
It is mandatory to update your IEC before 30th June every year, even if no change is there, else deactivation of IEC by DGFT.
09/06/2022
RBI increases Repo rate by 50 bps
1. The Reserve Bank of India on Wednesday increased the repo rate by 50 basis points to 4.90%.
2. The current repo rate is 4.40% after the rates were increased by 40 basis points at an off-cycle meeting of the Monetary Policy Committee. The repo rate remains still below the pre-pandemic level.
3. The central bank has also decided to raise MSF Rate and Bank rate to 5.15% from 4.65%.
4. The real GDP growth has been retained at 7.2%. Inflation has been projected at 6.7% for the current year, Das said. Earlier it was projected at 5.7%.
Investors, bankers, and entrepreneurs have been discussing the chances of a coming recession for months. Now the world’s premier international credit institution is joining the chorus that a recession is likely, and warns that something even worse might be on the horizon. Global economic growth is expected to slow down before the end of the year, and most countries should begin preparing for a recession, according to the World Bank’s latest global economic forecast released on Tuesday. The rate of global growth is expected to slow from 5.7% in 2021 to 2.9% this year, according to the report. The World Bank, which acts as an international lending body for developing economies, had forecasted 4.1% growth for 2022 last January. Stagflation occurs when economic growth goes through a significant slowdown, but inflation and high prices persist. The last time the world went through a stagflationary period was during the 1970s oil shocks, when high oil prices caused high inflation worldwide and a recession in countries that imported large oil volumes from the Middle East.
Sparked by the Covid pandemic, The Great Resignation -- which has already been happening in India for the last two years -- is likely to continue in 2022 with a whopping 86 per cent of employees planning to resign in the next six months, recruitment agency Michael Page stated in a report. Their findings suggest that 61 per cent of employees in India are willing to accept a lower salary or forgo a pay rise and/or a promotion for better work-life balance, overall well-being and happiness. It also found that among the 12 countries surveyed, the percentage of employees planning to quit their current jobs was the maximum in India, followed by Indonesia, Philippines and Malaysia.
The Arvind Kejriwal-led Delhi government has asked all departments to switch over to e-office completely by June 30, and directed that the required infrastructure should be put in place by June 20 for the timely rollout of the AAP dispensation's ambitious project. According to a circular issued on June 3 by the Department of Information Technology, every department is required to set up a central record unit, equipped with high-speed scanners, computers and internet connectivity for scanning of records for uploading in the e-office. "All departments must ensure to put in place requisite infrastructure by June 20, positively so as to enable the timely rollout of the e-office project," read the circular. In another circular issued on June 3, the department said that the nodal officer of the e-office project has approved the migration of the old version of e-office to the new version. The Delhi Cabinet had approved the implementation of e-office in all departments, autonomous and local bodies of Delhi government in 2015 and following the decision, various circulars were issued by the IT department. Some departments implemented it, but the new order has said that all departments will have to make the switchover.
08/06/2022
CBDCs Might Be Cryptocurrency’s End, Says Reserve Bank of India Deputy Governor. Rabi Sankar proposed in his speech that just because private cryptocurrencies are backed by hi-tech, they should not be permitted. He highlighted that no matter what the technology might be, it is a tool that can certainly be put to the wrong use. Most cryptocurrencies have an equilibrium value of exactly zero, but they are still priced sometimes at fantastical levels. But even where cryptocurrencies do have value, for example, stablecoins that are pegged to a particular currency, their unquestioned acceptance seems puzzling to me.
Black Money Act order against Anil Ambani: offshore assets Rs 800 crore. The order lists offshore entities and details of transactions in linked bank accounts adding up to over Rs 800 crore. This figure, sources said, was calculated on the basis of the current rupee-dollar exchange rate. Alleging detection of undeclared offshore assets and investments, the Mumbai unit of the Income Tax Investigation Wing passed a final order in March 2022 against Anil Ambani, Chairman of the Reliance (ADA) Group, under the 2015 Black Money Act (BMA).
More than Rs 2 crore cash and gold weighing 1.8 kg have been seized during searches by the Enforcement Directorate (ED) in a money laundering case linked to Delhi Minister Satyendar Jain. The searches were carried out on Monday. Rs 2.23 crore was seized from the premises of M/s Ram Prakash Jewellers Ltd, said the probe agency, which probes financial crimes. The agency said Vaibhav Jain, Ankush Jain, Naveen Jain are the Directors of Ram Prakash Jewellers Ltd and they "directly or indirectly assisted Satyendra Jain in money laundering". The Delhi Minister has been in the ED custody since June 1. The probe agency claims Mr Jain floated or bought several shell companies in Delhi and laundered black money worth Rs 16.39 crore through them.
07/06/2022
Gautam Adani's meteoric rise to the world's ninth-richest person began with a port on India's west coast in the 1990s and an abiding friendship with a politician who's now prime minister. The rest has been all about finding the next industry that will make his debt-fueled empire a little bigger.
The port brought in coal, liquefied gas and palm oil - and so Adani got into them and adjacent businesses. For example, once he had begun supplying coal to power plants, he entered mining - in India, Indonesia and Australia - and his own electricity generation and distribution. He supplied piped gas to Indian cities, and set out to harvest solar and wind power. Extending his dominance in logistics to owning airports, grain silos and data centers was only logical; as was selling a cooking medium to Indians to fry their samosas: He just had to refine the Indonesian palm-oil landing at Indian ports, of which he now owns 13.
RBI rejects claims of replacing Gandhi's face with Tagore, Kalam in banknotes. Several reports claimed that the Union finance ministry and the RBI were contemplating to replace the face of Mahatma Gandhi with other prominent Indians such as Rabindranath Tagore and APJ Abdul Kalam on the banknotes of certain denominations. The RBI first released one rupee notes with Gandhi's photo on it to commemorate the hundredth birth anniversary of the ‘Father of the Nation’ in 1969, according to a report by Entrepreneur India. In 1987, ?500 notes were re-introduced with Gandhi's picture on it.
06/06/2022
The Indian economy has been going through the same pains as the rest of the world — high inflation, rising interest rates and a doubtful recovery. Yet, the country’s billionaires do not seem to have been affected by it. In fact, they got away with a minimum loss of wealth in 2022 – while the rest of the world lost over a trillion dollars.
1. Indian billionaires retained 99% of their wealth in 2022 when billionaires around the world have seen a decline of up to 83% in their wealth.
2. Indian billionaires retained $410 billion out of $415 billion at the start of 2022
3. Gautam Adani added the most to his wealth in the world, while Mukesh Ambani was a close third.
4. Overall, billionaires around the world lost over a trillion dollars in wealth in 2022 so far.
5. Switzerland was the only country in the list with a net gain of $12 billion.
6. US and Chinese billionaires lost $6 billion out of every $10 billion.
7. Canadian billionaire Changpeng Zhao lost a whopping $80 billion in 2022, which is more than the total billionaire wealth of most other countries. Zhao is the co-founder of Binance, the world’s largest cryptocurrency exchange.
8. The meltdown in US stocks caused Mark Zuckerberg, Elon Musk and Jeff Bezos to lose $138 billion between the three of them.
9. In terms of total wealth of billionaires, India rose the ranks to come in at the third place, leaving France behind by a comfortable margin.
10. The US’ lead is so massive that its billionaires account for $43 billion out of every $100 billion wealth. In contrast, Chinese and Indian billionaires account for only $12 billion and $6 billion, respectively.
11. Despite having the third highest billionaire wealth in the world, India has only the fifth most number of billionaires in the world.
Source: Business Insider India
05/06/2022
New Guidelines for Central Sector Scheme "Promotion of MSMEs in North Eastern Region and Sikkim". The Central Government has approved new guidelines of central sector scheme “Promotion of MSMEs in North Eastern Region and Sikkim”. The scheme will be implemented during the 15th Finance Commission Cycle (2021-22 to 2025-26).
Components of the scheme:
1. Setting up of new and modernization of existing Mini Technology Centres:
The Scheme envisages financial assistance to State Governments for setting up new and modernization of existing Mini Technology Centres. The financial assistance of the Central Government will be 90%. The projects with a total project cost of more than Rs. 15.00 crore will also be considered but maximum assistance shall be limited to Rs. 13.50 crore.
2. Development of new and existing Industrial Estates:
Central Government financial assistance will be provided for the development of new and existing Industrial Estates and Flatted Factory Complexes. The financial assistance of the Government will be 90%. The maximum project cost for calculation of assistance shall be Rs.15.00 Crore for the development of a new industrial estate whereas Rs.10.00 crore for the development of an existing Industrial Estate. The projects with a total project cost of more than Rs.10.00/15.00 crore, will also be considered but maximum assistance shall be limited to Rs. 9.00/13.50 crore as the case may be.
3. Development of Tourism Sector:
The projects for the creation of common services such as kitchen, bakery, laundry & dry cleaning, refrigeration and cold storage, IT infra, potable water, display centre for local products, centre for cultural activities etc. in a cluster of homestays may be considered under the scheme. There have to be linkages of projects with local MSEs. The financial assistance of the Central Government will be 90% for projects with maximum assistance limited to Rs. 4.50 crore.
04/06/2022
Undisclosed Foreign Income and Assets (UFIA) in the case of Black Money Act (BMA):
(a) The UFIA includes any asset including financial interest in any entity as located outside India and also held by the taxpayers in their own names or in other’s names where the taxpayer is a beneficial owner. The taxpayer has no explanation for the source of investment in the assets or the explanation given by the taxpayer to the assessing officer (AO) is unsatisfactory.
(b) The UFIA is an undisclosed income of the taxpayer from a source as located outside India and actual value of the undisclosed assets is also located at outside India.
(c) Financial interest outside India: Where taxpayers are owner on record or holder of legal title of any financial account besides that taxpayer is ultimate beneficiary or not ultimate beneficiary.
(d) BMA is applicable where computed totals of all credit entries in the all bank accounts outside India are exceeding INR 5 Lac in 1 year or more.
(e) BMA could be applicable where the assessee, though not a resident of India when the foreign assets were acquired, was a resident when it comes to the notice of the Officer.
Amendments in FCRA made in 2020:
Amendments were made in the FCRA Regulations and Foreign Contribution (Regulation) Amendment Act, 2020 was passed in 2020. Some of the major amendments are as follows:
1. Section 7 of the FCRA was amended to prohibit “sub-transfers” – i.e., the transfer of funds from an FCRA-registered NGO to any other body or person (notably, this included transfers to other FCRA-registered bodies as well).
2. Section 8 of the FCRA was amended to prohibit more than 20% of donated funds being used for administrative activities (the earlier cap was 50%).
3. Sections 12 and 17A of the FCRA were amended to stipulate that FCRA funds could only be received in one branch of the State Bank of India at New Delhi.
4. Section 12 was also amended to stipulate that those applying for an FCRA registration or renewal may be required to produce their Aadhaar number as proof of identification.
5. It is pertinent to note that most of the challenges to these amendments have been struck down by the SC. The SC in its landmark judgment in the case of NOEL HARPER & ORS.(WP NO. 566 OF 2021) has held that
“There is no fundamental right vested in anyone to receive foreign contribution (donation) or foreign exchange; and that the purport of the Principal Act and the impugned amendments are only to provide a regulatory framework and not one of complete prohibition.”
02/06/2022
In a first, the income tax (I-T) department has taken physical control of immovable assets worth over ?150 crore owned by fugitive diamantine Mehul Choksi under the Benami transactions (Prohibition) Amendment Act (BTPA) which came into effect from November 1, 2016. “On 27 May, 2022, a team from the Benami Unit went to Balwantnagar and Mundhegon, Igatpuri for taking possession of several plots of lands held in the name of benamidar Nashik Multi Service SEZ Ltd, wherein M/s Geetanjali Gems is held as beneficial owner. Signboards were placed at place identified by the land surveyor in the presence of Tehsil official and independent witnesses. Possession was taken over of total 52 plots identified and confirmed during panchnama proceeding.
31/05/2022
States have room to cut value added tax (VAT) on petrol and diesel as they gained Rs 49,229 crore from VAT revenue on fuel when oil prices were increasing and will forego Rs 15,021 crore now that retail prices have been downwardly adjusted through excise cut, State Bank of India Research said in a report on Monday. The VAT charged by states is ad-valorem, which means their VAT collections rise when petrol and diesel prices increase and get reduced automatically when the Centre cuts excise duty. This implies that gains still outstrip the revenue forgone by Rs 34,208 crore and hence states can further cut the oil prices. Maharashtra has gained the most, followed by Gujarat and Telangana,” said SBI’s Chief Economic Advisor Soumya Kanti Ghosh in the report.
The DGFT vide Trade Notice 12/2022-23 dated May 30, 2022 has issued guidelines w.r.t. uploading of Electronic Bank Realization Certificate (“e-BRC”) on the DGFT server by July 15, 2022 by the Exporters, for shipping bills on which Rebate of State & Central Taxes and Levies (“RoSCTL”) scrip has been availed upto December 31, 2021. As per RBI guidelines, it is expected that all shipping bills upto December 31, 2020 would have their export proceeds realized by now. Accordingly, all exporting firms, who have been issued scrips under RoSCTL for exports / shipping bills upto December 31, 2020, are requested to get the relevant e-BRCs uploaded in the DGFT server by their AD banks latest by July 15, 2022, failing which action as per para 4.96 of HBP, as notified vide PN 58 dated January 29, 2020 would be initiated by the jurisdictional RAS.
Dr SB Deepak Kumar has been appointed Commissioner (Trade & Tax) with immediate effect vide order dated 30.05.2022 in place of Mr Ankur Garg.
Rs 500 fake currency notes surge 102% in FY22, says RBI annual report:
1. Counterfeit notes of rs 500 denomination recorded a 101.9% jump in the financial year 2021-22, the Reserve Bank of India's annual report for 2021-22 shows.
2. Fake notes of rs 2,000 denomination surged 54.6% year-on-year in FY22, while there was an increase of 16.4%, 16.5%, and 11.7% in the counterfeit notes detected in the denominations of rs 10, rs 20, and rs 200 respectively, the central bank says.
3. The fake Indian currency notes detected in the denominations of rs 50 and rs 100 declined by 28.7% and 16.7% respectively.
4. During the fiscal year 2022, out of the total fake Indian currency notes detected in the banking sector, 6.9% were detected at the RBI and 93.1% by other banks, the report shows.
5. According to the National Crime Records Bureau, fake currency totalling 287,404 notes worth rs 25.3 crore was seized in 2019 — an increase of 11.7% over the previous year.
6. According to the report, the amount of cash has increased by 5% during 2021-22.
7. In 2011, the International Narcotics Control Strategy Report of the US State Department confirmed the flow of counterfeit currency produced in Pakistan to India and that terrorist and criminal networks used this money to finance their activities in the country.
CBDT notifies amendment in Faceless penalty scheme, allowing mandatory personal hearing
1. The Central Board of Direct Taxes (CBDT) has notified the amendment in the faceless penalty scheme, allowing mandatory personal hearing through electronic mode to any taxpayer who has sought a hearing.
2. The amendment has omitted the Regional Faceless Penalty Centre from the Faceless Penalty Scheme and provides that electronic records shall be authenticated by the National Faceless Penalty Centre and even hearing should be done via them and not regional faceless penalty centre.
3. The Faceless Penalty (Amendment) Scheme, 2022, notified on Friday says that such hearing will be held exclusively through video conferencing or video telephony, including use of any telecommunication application software which supports video conferencing or video telephony.
4. The amendment says that cases where a request for personal hearing has been received, the income-tax authority of the relevant unit shall allow such a hearing through the National Faceless Penalty Centre and not regional faceless authority centres.
5. Even the processing of penalty or dropping of penalty will be done via national faceless penalty centre and not regional faceless penalty centre.
6. The notification gives effect to the changes proposed in the Finance Act 2022 to section 144B of the Income Tax Act, as per the order.
30/05/2022
The Delhi bench of the Income Tax Appellate Tribunal (ITAT), Delhi bench has held that TDS under section 194C of the Income Tax Act, 1961 is not leviable on payment of External Development Charges to Haryana Urban Development Authority (HUDA). According to the Section 194C of the Income Tax Act, any individual making a fee to a residential individual, who carries out ‘work’ as a contract between the ‘specified individual’ and the ‘resident contractor,’ is obliged and required to deduct TDS. Judgement quoted/ relied on being Perfect Constech Pvt. Ltd. vs. Additional Commissioner of Income Tax in ITA No.6907/Del/2019 order dated 29.12.2020 wherein Co-ordinate Bench found that the provisions of Section 194C are not applicable on payments to agencies like HUDA on behalf of the State Government.
Shakira loses appeal to avoid trial in Spanish tax fraud case
1. A Spanish court has held Columbian singer Shakira guilty of failing to pay up to 14.5 million euros ($15.54 million) in tax on income earned between 2012 and 2014, under the pretext that she was not a resident of Spain.
2. The court has held that Shakira was living in more than half the year and a day each year between 2012 and 2014 in the Spanish northern region of Catalonia during those years though the Shakira’s representatives have said she moved to Spain only in 2015.
3. The court said that the evidence suggests Shakira was “a habitual resident in Spain,” adding that documentation failed to substantiate her residence for tax purposes in another country, namely Bahamas, which is her official residence.
4. The new decision is a ratification of a prior court ruling issued in July 2021. The court still has to formally send her to stand trial and set a date.
5. The singer faces a possible fine and a prison sentence, if found guilty of tax evasion. However, a judge can waive prison time for first-time offenders if they are sentenced to less than two years behind bars.
29/05/2022
Clarification on Aadhaar sharing issue by UIDAI on 29.05.2022
This is in pursuant of the Press Release dated 27 May 2022 by the Bengaluru Regional Office, UIDAI.
It is learnt that it was issued by them in the context of an attempt to misuse a photoshopped Aadhaar card. The release advised the people to not to share photocopy of their Aadhaar with any organization because it can be misused. Alternatively, a masked Aadhaar which displays only the last 4 digits of Aadhaar number, can be used. However, in view of the possibility of the misinterpretation of the Press Release, the same stands withdrawn with immediate effect. UIDAI issued Aadhaar card holders are only advised to exercise normal prudence in using and sharing their UIDAI Aadhaar numbers. Aadhaar Identity Authentication ecosystem has provided adequate features for protecting and safeguarding the identity and privacy of the Aadhaar holder.
Below is the Press Release dated 27.05.2022
UIDAI cautions of sharing photocopy of Aadhar vide PR on 27.05.2022
Unique Identification Authority of India (UIDAI) has warned the general public not to share photocopy of one’s Aadhaar with any organizations because it can be misused. Alternatively, a masked Aadhaar which displays only the last 4 digits of your Aadhaar number can be used for the purpose. It can be downloaded from UIDAI official website https://myaadhaar.uidai.gov.in. Select the option “Do you want a masked Aadhaar” and proceed to download.
The existence of any Aadhaar number can be verified at https://myaadhaar.uidai.gov.in/verifyAadhaar. To verify offline, you can scan the QR code on e-Aadhaar or Aadhaar letter or Aadhaar PVC card using QR code scanner in the mAadhaar mobile application.
UIDAI has also asked the public to avoid using a public computer at an internet café/kiosk to download e-Aadhaar. However if one does so, it should be ensured that all the downloaded copies of e-Aadhaar permanently deleted from that computer.
Only those organizations that have obtained a User License from the UIDAI can use Aadhaar for establishing the identity of a person. Unlicensed private entities like hotels or film halls are not permitted to collect or keep copies of Aadhaar card. It is an offence under the Aadhaar Act 2016. If a private entity demands to see your Aadhaar card, or seeks a photocopy of your Aadhaar card, please verify that they have valid User License from the UIDAI.
CARO 2020:
1. CARO 2020 has increased the responsibility of the auditor all the more. One may refer to Para 3(ii)(b) of CARO, 2020 which now requires the auditor to report as to whether the quarterly returns or statements filed by the company with such banks or financial institutions are in agreement with the books of account of the Company, if not, give details.
2. From FY 2021-22, Companies with Turnover upto Rs. 20 crores and Paid-up Capital upto Rs. 2 crores are considered as Small Company. Also, all Small Companies are exempted from CARO, 2020 compliance.
Hence, even if the separate applicable limits given in CARO, 2020 for private companies (i.e. Paid-up capital and reserves of > Rs. 1 crore; or Borrowings of > Rs. 1 crore; or Turnover of > Rs. 10 crores) trigger in any Company, it will still enjoy CARO, 2020 exemption if it still falls under Small Company definition.
28/05/2022
Donee Trust is required to furnish Form 10BD. On submission of Form 10BD, a certificate in Form 10BE shall be generated by the system to be furnished to the donee. Form no. 26AS will also include information about such donations in case of donors. As required under clause (viii) of section 80G and under clause (i) to sub-section (1A) of section 35.
ICAI issued Handbook on Statement of Donations Received…
https://resource.cdn.icai.org/70498dtc56444.pdf
Important points related to the filing of Form 10BD:
1. Form 10BD is required to be filed by such charitable institution which has received donation during any financial year (Applicable from FY 21-22 onwards).
2. One form can be filed against the multiple donors.
3. Form 10BD is like a SFT Form, it will pre-fill ITR for
deduction u/s 80G. It may also reflect in AIS.
4. This form can be revised and corrected in case of erroneous details filed earlier.
5. Form 10BE (Donation Receipt) must be shared to the donors.
6. In case of delay in filing Form 10BD, late fee of Rs. 200 per day shall be charged max. to the donation amount u/s 234G. Penalty of Rs. 10,000 shall be charged in case of non-filing u/s 271K.
27/05/2022
Gst Extensions:
1. CBIC has extended the due date of GSTR-4 (Annual Return for Composition taxpayers) for FY 2021-22 till 30.06.2022 (earlier it was 30.04.2022). The department has extended the due date on 26.05.2022 (extension is given after passing 25 days of the due date). No refund of late fees already paid.
2. CBIC has issued instruction no. 01/2022-23 on dated 25.05.2022, where it has been clarified that taxpayers can pay GST in DRC-03 voluntarily before issuing show cause notice (SCN) of recovery during the course of search to save the penalty imposable due to search but GST officers cannot force to pay GST during search or inspection or investigation.
MCA has extended the due date of Form 11 (Annual Return of LLP) till 30th June, 2022 for the FY 2021-22 due to technical glitches at MCA portal in transition of MCA21 Version 2 to Version 3 (earlier the due date was 30th May, 2022).
The election commission has delisted 87 registered unrecognized political parties and sought action against 2,174 more for failing to submit their list of donors, It has also put under scrutiny donations totaling over 1,000 crore made to such parties EC has initiated action against several registered unrecognized political parties under Sections 29A and 29C of the Representation of people Act.1951, for claiming tax exemptions without fulfilling mandatory requirements EC has alleged three of the parties committed financial fraud. As per Central Board of direct Taxes. 199 parties claimed 445 crore tax exemptions in 2018-19, and 219 in 2019-20 claimed 608 crore exemption Sixty-six registered unrecognized parties which claimed total tax exemption of 385 crore in 2019-20 did not submit mandatory contribution reports and claimed exemption without complying with statutory requirements. A few claimed tax exemption 0f 100 crore to 150 crore each, the election commission said in a news release in New Delhi on Wednesday.
26/05/2022
A flurry of summons from the Income tax investigation wing and the Enforcement Directorate (ED) over the past fortnight has come as a rude reminder to many that despite paying tax they may have a brush with the law. Thousands of recipients of such letters have been caught in a stern, yet often ignored, provision of the statute that requires a mandatory disclosure of all foreign assets like ownership in a company, properties, and accounts with overseas banks, there is a stiff cost to such non-disclosures, as many are discovering: a penalty of 10 lakh a year under Black Money Act (BMA) - so, if a bank account was opened five years ago and has remained a 'secret' since then, the basic fine will be 50 lakh if the assesse is unable to convince tax authorities.
No Disallowance Can Be Made For Cash Payments If Transaction is Genuine And Identity Of Payee is Known: ITAT Jaipur In the case of M/s A Daga Royal Arts vs. ITO,Sec 40A(3) Rule 6DD.
As a major relief to importers, the Supreme Court in the case of UOI & Anr. vs. Mohit Minerals Pvt. Ltd., Civil Appeal No. 1390 of 2022, struck down the levy of GST on ocean freight under reverse charge in case of CIF imports.
China’s plans to build a $14 billion colony in Sri Lanka called the Port City of Colombo (PCC) are facing a major backlash. Companies are not ready to invest in the troubled country and therefore the project might fail to attract enough investments. Meanwhile, Colombo itself is looking to take New Delhi’s assistance in a bid to kick Beijing out of the project. In either case, it is China that stands to lose out.
25/05/2022
Case Title: Assistant Commissioner Versus Ashok Kumar Sureka
Dated: 12.05.2022 pronounced by Calcutta HC.
The GST Department can no longer detain vehicles carrying goods seeking second e-way bill while the first one was valid during transit. This has come as a relief to both the transporters and the suppliers apart from the entire business community as a whole. the Calcutta High Court ruled that the tax authorities at Durgapur had no right to detain the vehicle for not producing the second e-way bill when the first e-way bill was valid up to September 9.
SBI has been designated by the RBI as one among the domestic systemically important banks (D-SIBs). The Ministry of External Affairs (MEA) on March 17 had announced that State Bank of India (SBI) would extend a term loan of $1 billion to Sri Lanka, fully guaranteed by the Indian government, and this was part of India’s financial aid to the troubled island nation.
More than 1,000 homebuyers, who had invested in the Mahira Homes project in Sector 68, Gurugram, have been left in the lurch after the town and country planning department (DTCP) canceled the license of the project and lodged an FIR against the developer ‘for submitting forged documents and fabricated bank guarantees’ earlier this month. Most of them have paid 100 percent of the amount to the developer and are awaiting possession. More than 100 homebuyers met RS Batth, district town planner (enforcement), as well as Haryana RERA chairman KK Khandelwal on May 23 and submitted their representation seeking an early resolution. The buyers also staged a protest at the HARERA office. The DTCP has agreed to meet the buyers to discuss the issue on May 27. Homebuyers have questioned the government’s move to cancel the developer’s license at the last moment especially when possession was to be granted in August this year.
24/05/2022
Startups have also resorted to shutting down non-core verticals, rationalising marketing and advertising spends and have gone on a hiring freeze, as they enter a bleak period, after a blockbuster funding party that lasted for nearly two years.
1. According to data compiled by Moneycontrol, startups have fired over 5,000 employees so far this year.
2. Anand Lunia of venture capital firm India Quotient expects more heads to roll this year as startups look to cut costs. Employees should realise that if startups are raising funds so aggressively, then they are also burning cash aggressively.
3. A spike in inflation and hike in interest rates after the abundant liquidity last year has had a knock-on effect on startup funding, as investors cut down on investments to public and private markets, allocating their money to bonds instead.
4. Lockdowns across the world have also impacted supply chains.
5. Add to this the Russia-Ukraine war, which has pushed up fuel prices and consequently transport costs.
6. All around, the sentiment has turned bleak, a stark contrast to the euphoria in 2021, where India minted a new unicorn almost every week.
7. According to data shared by market intelligence firm CB Insights, venture funding to India-based startups dropped to $3.6 billion in the second quarter of 2022 so far from $8 billion in the January-March quarter and over $10 billion a year back.
8. In 2022, the five largest deals by startups, which account for a fifth of the total venture funding in India, have been led by sovereign wealth funds and pension funds such as Ontario Teachers Pension Plan, Canada Pension Plan Investment Board and Qatar Investment Authority with private equity and venture capital firms taking a backseat.
9. In 2021, the top five deals were led by late-stage private equity and venture capital firms like Footpath Ventures, GSV Ventures, Redbird Capital Partners, Alpha Wave Global and Prosus Ventures.
10. Most investors who can lead rounds of $40 million or more are based outside India.
11. SoftBank, which has been an aggressive investor in India over the last five years, said it will cut its investments to a fourth globally in 2022, compared to 2021.
12. Tiger Global said it will back more early stage companies this year, in what is a shift for the late-and mid-stage investor. Tiger Global also marked its first seed-level investment in India this year.
13. SoftBank’s $1.4-billion investment in Paytm, has a fair value of around $800 million, while the Japanese conglomerate’s $400 million investment in PB Fintech has a fair value of around $100 million.
14. Unicorns such as Meesho, Slice, Cred, Unacademy and Groww are taking an unusually long time to close their next funding round.
15. Indian startups need $10-$15 billion in the next 6 months, but the availability is only $2-$4 billion.
16. According to data compiled by Moneycontrol, investors have minted only 1 unicorn in April and May this year compared to 15 unicorns in the same period last year.
17. Interestingly, this year, many rounds have happened at valuations between $800-950 million, showing reluctance by investors to value startups at north of $1 billion.
18. The much-talked about fundraise by quick commerce company Zepto, happened at a valuation of $900 million. Agritech startup Ninjacart raised $145 million at a valuation of $815 million.
Airbnb is closing down its business inside China indefinitely, as the country’s zero-Covid policy, lockdowns and travel restrictions continue. On Tuesday Airbnb told its China-based users it would cease taking all bookings for accommodation and experiences in China from 30 July. The ability to book for dates beyond 29 July was suspended on Tuesday morning, according to screenshots of the Airbnb notice shared across Chinese social media.
23/05/2022
Over the next two decades, the United States will experience an unprecedented shift of demographics and finances that will likely be felt by every American. Baby Boomers, the generation of people born between 1944 and 1964, are expected to transfer $30 trillion in wealth to younger generations over the next many years. This jaw-dropping amount has led many journalists and financial experts to refer to the gradual event as the “great wealth transfer.”
After decades of prosperity and economic growth, this generation amassed significant financial wealth and control roughly 70% of all disposable income, according to a 2015 report by US News & World Report.
The Department of consumer Affairs (DoCA) has slammed restaurants for levying service charge, following complaints by consumers, and set up a meeting with restaurant owners on June 2 to discuss the issue. Consumers are being falsely misled on the legality of such charges and harassed by restaurants on making a request to remove such charges from the bill amounts, said a senior official from the consumer affairs, food and public distribution. The collection of any such charge is at the discretion of consumers and not mandatory as per law.
As per the Companies (Acceptance of Deposits) Amendment Rules, Companies having deposits or other than deposits have to compulsorily file the deposit return in E-form DPT-3 within 90 days from the end of Financial Year 2021-22. Last date is 30th June 2022.
22/05/2022
12 years ago today, history was made when Laszlo Hanzecz bought 2 pizzas with 10,000 bitcoins. First-ever item purchased with decentralized digital currency.
Today May 22, 2022 crypto lovers are celebrating Bitcoin pizza day. Our 12th anniversary. Previously cryptos were not accepted as a payment method, but after a man from Florida bought a meal using Bitcoin, that was all people could talk about. On 22 May 2010, Laszlo Hanyecz, a programmer and BTC miner from Florida, used the crypto to purchase two pizzas from Papa John’s. It is the first physical item purchased with the first decentralized digital currency.
Why has RBI paid a lower dividend in 21-22?
1. The Reserve Bank of India board on Friday approved a dividend of Rs 30,307 crore to the government for 2021-22, marking a nearly 70% decline in the payout from last year’s Rs 99,122 crore.
2. One of the reasons for the lower dividend this fiscal could be that the RBI paid a higher interest on its variable reverse repo auctions last year. The central bank had conducted VRRRs to suck out excess liquidity that it had infused into the banking system following the onset of the pandemic in March 2020. While RBI paid a fixed interest of 3.35% on the reverse repo window, it paid a higher interest of 3.55-3.9% on VRRR auctions.
3. The RBI has also taken a hit on its foreign investment as the value of debt securities fell due to the rise in interest rates.
4. It has also had to spend over $40 billion of its reserves to stem volatility in the market and will need to set aside more money to replenish reserves.
Is Black Money Act at odds with Article 20 of the Constitution?
1. Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (Black Money Act) came into force on 1st April, 2016, with an aim to tax undisclosed foreign income and foreign asset acquired from such undisclosed foreign income and to punish the person indulging in illegitimate means of generating money and causing loss to the revenue.
2. Article 20(1) of the Constitution of India provides that no person shall be convicted of any offence except for violation of a law in force at the time of the commission of the Act charged as an offence. Hon’ble Supreme Court in the case of Rao Shiv Bahadur Singh and Ors. vs. The State of Vindhya Pradesh reported in AIR 1953 SC 394 has held that ex post facto laws which retrospectively create offences and punish them are bad being highly inequitable and unjust.
3. Section 72(c) of the Black Money Act undisclosed foreign assets are liable to be taxed in the year when it comes to the notice of the Assessing Officer
4. Thus, what Sec 72(c) essentially says is that irrespective of the year of purchase of a foreign asset, it would be taxed when it comes to the notice of the AO. For eg: If Mr X has purchased a villa in a Spanish Island in 2001 but it has come to the notice of the AO in 2021-22, it would be taxed in 2021-22 even though the Black Money Act came into force in 2016.
5. The constitutional validity of the retrospective application of Sec 72(c) and as a consequence, taxation of assets purchased before the Act came into force, could thus be challenged in the courts.
21/05/2022
Case Title: Souvenir Developers (I) Pvt. Ltd. versus Union of India Dated: 06.05.2022 (Bombay High Court)
The Bombay High Court has ruled that transactions in respect of trading in derivatives carried out in a recognized stock exchange are excluded from the definition of "speculation transaction" under the Income Tax Act, 1961. The Bench, consisting of Justices R.D. Dhanuka and S.G. Mehare, held that an assessee is thus entitled to claim set off of the loss suffered by it in the said transactions in derivatives against its business income.
1. The Court added that the explanatory notes on the provisions of the Finance Act, 2005, clearly indicate that an eligible transaction in respect of trading in derivatives of securities, carried out on a recognized stock exchange, shall not be deemed as a speculative transaction.
2. Section 43 (5) of the Income Tax Act defines "speculative transaction" as a transaction in which a contract for the purchase or sale of any commodity,
including stocks and shares, is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrips.
3. The proviso (d) to Section 43(5) provides that an eligible transaction in respect of trading in derivatives, referred to in Clause (ac) of Section 2 of Securities Contracts (Regulation) Act, 1956, and carried out in a recognised stock exchange shall not be deemed to be a speculative transaction.
4. Section 73 (1) provides that any loss with respect to a speculation business carried on by the assessee shall be set off only against the profits and and gains of another speculation business.
5. The explanation to Section 73 provides that where any part of the business of a company, other than the exceptions carved out therein, consist in the purchase and sale of shares of other companies, such companies shall, for the purpose of Section 73, be
deemed to be carrying on a speculation business to the extent to which the business consists of the purchase and sale of shares.
6. The High Court ruled that none of the authorities had considered and dealt with the effect of insertion of proviso (d) to Section 43(5) of the Income Tax Act, which was inserted vide the Finance Act, 2005.
7. The Court noted that the appellant had claimed set-off of the loss suffered in respect of the transactions in derivatives. The Court observed that the Finance Act, 2005 carved out transactions in derivative as an exception in the definition of speculative transaction.
8. The Court held that the appellant was entitled to claim set off of the loss suffered by it in the said transactions in derivatives against the business income of the appellant under the Income Tax Act.
JP Morgan has downgraded the Indian information technology sector to ‘underweight’ as it believes the heydays of the sector are over. Rising margin headwinds in the near-term and the revenue headwinds in the medium-term from a potential macro slowdown, Ankur Rudra and Bhavik Mehta of JP Morgan said in the report, will mean that the sector’s earnings upgrade cycle is behind. We see peak revenue growth behind us and earnings before interest and taxes (EBIT) margins trending down from inflation, mean revision. While the bottom-up outlook remains for most Services, Software, and SaaS names YTD, and the tech spending cycle remains buoyant structurally, we feel there are more downside risks to the current earnings assumptions. This leads us to downgrade our sector stance to underweight and target multiples by 10 – 20 per cent driving TCS, Wipro, HCL Tech, L&T Technology to underweight from neutral,” the JP Morgan analysts wrote.
Canadian business insolvencies are back after being quiet over the past few years. Data from the Office of the Superintendent of Bankruptcy Canada (OSB) shows business insolvencies jumped in Q1 2022. High inflation and withdrawal of support drove filings back to early 2020 levels.
1. Canadian Business Insolvencies Are Up 33.8% From Record Lows.
2. Canadian Businesses Hit By Inflation, Withdrawal of Gov Support.
3. Canadian businesses are getting hit from all sides — inflation, real estate, and rising rates.
20/05/2022
The DGFT vide Trade Notice No. 08/2022-23 dated May 17, 2022 has initiated the online submission of the application for registration of the Irrevocable Letter of Credit (“ICLC”). Reference is invited to Notification No. 06/2015-2020 dated May 13, 2022 amending the export policy of wheat under S.No.59 of Chapter 10 of Schedule – 2 of the ITC (HS) Export Policy from ‘Free’ to ‘Prohibited’ with immediate effect read with Trade Notice No. 06/2022 2023 dated May 14, 2022 and Trade Notice No.07/2022-2023 dated May 17, 2022. In this regard it is informed that in order to facilitate registration of Irrevocable Letter of Credit (ICLC), which have been opened on or before May 13, 2022, with the jurisdictional Regional Authorities of DGFT, as per provisions under Para 1.05 (b) of Foreign Trade Policy, 2015-2020, DGFT has initiated online submission module of such applications.
On 20th May, 2017; five years ago today, Bitcoin hit $2,000 for the first time. One may think to take this opportunity to reinvest considering the bottom levels or one may think to exit considering the worst yet to come; depending upon the risk appetite of oneself.
19/05/2022
SC observations and comments on the issue of Gst in the matter of Mohit Minerals
1. The exclusive powers held by state and centre on taxation was an imp legislative part. according to article 246A both parliament and state legislature has equal power to legislate on matters of taxation.
2. There are 2 significant part of GST council voting structure. union has 1/3 td vote share and 2/3 for states. GST council is an area of political contestations as well. it impacts federalism.
3. 246A treats state and centre as equal. Article 279 says state and centre cannot act independent of each other. This also points towards competitive federalism.
4. Dual layer federalism is known as layer cake federalism and multi layer federalism is like marble cake federalism. When constitution is read as whole union has been granted more power.
5. The Union and states have simultaneous powers to legislate on GST and constitution does not envisage a repugnancy provision and GST council must work in harmonious manner to achieve workable solution.
6. Democracy and federalism is interdependent on each other. the Indian Constitution though necessarily federal provides union higher share of power to avoid chaos but relation between 2 constitutional units may not always be collaborative. Indian federalism is a dialogue in which state and centre always engages in a dialogue.
7. Recommendation of GST council is not binding on states and centre. It is because parliament intended the council to have a persuasive value. Neither 279A begins with non obstante clause. 246A does not envisage a repugnancy provision. State and Centre can equally legislate on matters of GST.
8. In nutshell, SC dismisses Revenue’s SLP challenging Gujarat HC decision in case of Mohit Minerals which struck down levy of IGST on ‘Ocean Freight’ on transportation of goods by vessel from a place outside India to a place in India
Celebrities should be “circumspect” while featuring in cryptocurrency-related advertising, since crypto is an unregulated product in India, the (ASCI) said. ASCI is a self-regulatory body, and its guidelines are not legally binding. In case of a breach, the standards body has in the past published the names of those who have not adhered to the guidelines. It also escalates such case to the relevant government regulator. “We have always maintained that celebrities need to do their due diligence on the claims they endorse. The Consumer Protection Act, too, lays down penalties for endorsers in case the ad feautured in is found misleading, and if they have done no due diligence,” said Manisha Kapoor, CEO of ASCI. “Since this (virtual digital asset or VDA) is a risky category, celebrities or prominent personalities who appear in such advertisements must take special care to ensure that they have done their due diligence about the statement and claims made in the advertisement so as not to mislead consumers.,” Kapoor added. The statement comes after a newspaper reported that the Securities and Exchanges Board of India (Sebi) had recommended to the Parliamentary Standing Committee on Finance that celebrities should not be allowed to endorse VDAs. The guidelines kicked in from April 1, mandate that all VDA products and service should carry the disclaimer. “Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.” Cryptocurrency platform CoinDCX and CoinSwitch Kuber last year roped in Bollywood stars Ayushmann Khurrana and Ranveer Singh for ad camping’s during the ICC World Cup.
China’s main bond trading platform for foreign investors has quietly stopped providing data on their transactions, a move that may heighten concerns about transparency in the nation’s $20 trillion debt market after record outflows. Daily trades by overseas investors were last provided for May 11 by the China Foreign Exchange Trade System, according to people familiar with the matter, who asked not to be identified discussing private information. The data showed sizable net foreign outflows that day, with some selling also seen for most days in April, the people said. It’s unclear why CFETS stopped publishing the figures, which are typically updated one day later, the people said. There was also no indication of whether the move was temporary or related to the lockdown of Shanghai, the nation’s onshore financial capital.
If you have not filed the Income tax return for fiscal 2020-21, then you will be on the list of non-tax filers and have to face higher tax deduction at source from this financial year. The Central Board of Direct Taxes (CBDT) has issued a circular to determine the non-filers, or “specified person” that is subject to higher tax withholding or collection for FY 2022-23, while relaxing some of the guidelines. According to the circular, if the ITR was not filed for the relevant previous fiscal year and the aggregate TDS and tax collected at source exceed ?50,000 that year, it would attract a high TDS. Banks will be required to check if an individual has met both conditions to attract a higher TDS. During FY23, no new names were added to the list of specified persons, to reduce the burden on tax deduct or and collector, it said. If any specified person files a valid return of income (filed & verified) for the assessment year 2021-22 during FY23, his name would be removed from the list of specified persons. This would be done on the date of filing of the valid return of income. Also, the provisions of Section 206AB will not apply in case of deduction of tax on transfer of virtual digital asset (VDA) under Section 1948 of the Act to a taxpayer being an individual or Hindu undivided family. This applies if the sales, gross receipts or turnover does not exceed ?1 crore ?50 lakh in case of profession, during the financial year immediately preceding the year in which such VDA was transferred or if such person does not have any income under the head “ profit ad gains of business or profession “. The circular said as per the provisions of Section 206AB & 206CCA, the specified persons shall not include a non-resident who does not have a permanent establishment in India. The GST Council had set up a group of ministers (GoM), led by Odisha finance minister Niranjan Pujari, to examine the feasibility of levying GST on products such as pan masala and gutkha, on the basis of the installed capacity, rather than actual production. This was in view of large-scale tax evasion detected by under-reporting of output by the units.
Negotiable Instrument Act Section 138: Director not liable if Company is not accused. Case Name : Geeta Singh Vs Pradeep Singh (Delhi High Court) Appeal Number : CRL.M.C. 5124/2017.
Education Loan cannot be denied merely for Low CIBIL Score of Co-Borrowers. Case Name : Kiran David Vs Assistant General Manager State Bank of India (Kerala High Court) Appeal Number : WP(C) No. 3646 of 2022.
18/05/2022
Supreme Court in the case of New Okhla Industrial Development Authority versus Anand Sonbhadra held that the NOIDA is an operational Creditor under IBC and cannot be considered as a Financial Creditor of the Corporate Debtor under the provisions of the Code.
The Supreme Court made a roving inquiry into the various rules of the Indian Accounting Standards which define the characteristics of a financial Lease. Supreme Court referred to Rule 63 of the IAS which states that a lease will be a financial lease if the term of the lease is for the major part of the economic life of the underlying assets, even if the title is not transferred. The Supreme Court held that the lease in question is for a period of ninety years and the principle of the economic life of the underlying asset which is the "land" is inapposite in the present case. The economic life of land is not limited. The principle in the said situation is predicated with reference to measuring the economic life of an asset.
Both these concepts are inapposite and even inapplicable with regard to land. Land does not depreciate with the passage of time. Ordinarily, the price of land would only increase, unlike other assets" (Para 68 of Judgement). Therefore, we cannot accept the argument of the appellant that after 90 years appellant would not get the empty parcel of land and the land would not be of any commercial use to the appellant after the expiry of the lease." (Para 73 of Judgement)
CAIT urges Minister of Health and Family Welfare, Nirman Bhawan, Delhi to issue urgent directions to prohibit all e-pharmacy marketplaces from operating in India so that the Indian consumer is not exposed to any more harm to his health and safety. E-pharmacy marketplaces are not only operating without valid pharmacy licenses but have also been failing to undertake reasonable due diligence gravely compromising consumer safety and health. It must also be noted that e-pharmacy marketplaces often hide behind intermediary protection provisions like Section 79 of the Information Technology Act. 2000 in the event of an adverse incident where the consumer receives a counterfeit or adulterated or spurious or incorrect drug. This is similar to how e-commerce marketplace entities dodge liability by claiming intermediary protection in e-commerce.
The anti-evasion wing of the CGST Thane Commissionerate launched a probe into M/s. J. J. Lime Depot, which deals in building material trading, based on a specific information from the Central Intelligence Unit of the CGST Mumbai zone. This company had falsely claimed an input tax credit of Rs. 8.05 crore in its financial documents, according to the investigation. This firm had also generated false invoices totaling more than Rs. 40 crore for the transfer of this tax credit, despite the fact that no products had been supplied.
The Indian government has issued a directive mandating VPN service providers to retain user data. India currently has over 270 million VPN users, a majority of whom use it to connect to their company network. VPN service providers may leave India as it’s not possible to comply with the government’s directive. The Indian government released new guidelines on April 28 directing companies offering virtual private network (VPN) services in the country to record and store the details of their users. The directive was issued by the country’s cyber watchdog - the Indian Computer Emergency Response Team (CERT-In). The new guidelines come into effect after 60 days of issue, which is around June end. Following data to be maintained as part of the know your customer (KYC) policy for a period of five years –
1. Validated name of subscribers/customers
2. Period of hire
3. IPs allotted to the user
4. Email address, IP address and time stamp used at the time of registration.
5.Purpose of hiring services
6. Validated address and contact numbers
7. Ownership pattern of the subscribers
17/05/2022
The Adani group continues to use debt financing to grow its existing businesses and enter new industries. The combined gross debt of the group companies reached a new high of Rs 2.22 trillion at the end of March this year, up 42 per cent from Rs 1.57 trillion a year ago, according to data from Capitaline. As a result, the group’s gross debt-to-equity ratio was at a four-year high of 2.36 at the end of March, up from 2.02 a year ago and a low of 1.98 at the end of FY19.
What is Terra crypto, which had crashed 99% and how is it different from other stablecoins?
1. The Terra (LUNA) crypto token first crashed from $120 to $0.02, a 99.9% correction, of which 99% was within 48 hours of a black swan event on May 11th – 12th.
2. Typically, stablecoins are backed one-for-one with dollar-based-reserves.
3. Terra USD is a stablecoin pegged to the US dollar, like Tether (USDT). However, Unlike USDT, Terra is backed by an algorithm linked to its sister-token, luna, to keep its dollar peg in check.
4. The idea was to create an ‘algorithmic stablecoin’ where LUNA could be burnt in order to ‘mint’ UST to stabilize it whenever it loses its 1:1 peg to the dollar, and vice versa, is different to how other stable coins like Tether (USDT) and USD Coin (USDC) function. For example if UST hit 0.99, a small amount of LUNA would be burnt, and if it hit 1.01, a small amount of UST would be burnt.
5. Both Terra (LUNA) and TerraUSD (UST) were created by Terraform Labs, founded in 2018 and located in Seoul, South Korea.
6. Analysts have warned investors about the unstable algorithms of such stablecoin projects.
16/05/2022
India's biggest retailer Reliance will acquire dozens of small grocery and non-food brands as it targets building its own $6.5 billion consumer goods business to challenge foreign giants like Unilever. Reliance is in final stages of negotiations with around 30 popular niche local consumer brands to fully acquire them or form joint venture partnerships for sales, said the first source familiar with its business planning.
RBI officials said these currencies ‘can replace a part of monetary system it will also undermine the RBI’s capacity to regulate the flow of money in the system. A member of the panel quoted RBI officials as saying: 'It will seriously undermine the RBI's capacity to determine monetary policy and regulate the monetary system of the country. cryptos can lead to "dollarisation" of a part of the economy, which would be against the country's sovereign interest.
Case Title: Bank of Maharashtra & Ors v Mohanlal Patidar| Special Leave to Appeal (C) No(s).8088-8089/2022
SC Court held :
1. Go after bigger fish. Such a litigation in Supreme Court will spoil the families of farmers financially," the bench of Justices DY Chandrachud and Surya Kant remarked while dismissing the plea assailing Madhya Pradesh High Court's order dated February 21, 2022.
2. The Supreme Court on Friday pulled up the Bank of Maharashtra for challenging a High Court's order of directing the bank to accept the OTS proposal given by a farmer who had availed a loan from the bank.
3. You don't file cases against the ones who loot 1000s of crores but whole law comes into place when a matter of farmers comes. You accepted the Down Payment also", the bench orally remarked. In the present matter, the respondent had obtained a loan and intended to pay it in terms of a One Time Settlement which was quantified as Rs 3650000/-. in furtherance thereof the respondent had deposited Rs 35,00,000 with the bank.
The Supreme Court observed that conveyance allowance paid to employees is not part of 'wages' for the purpose of computation of ESI Contribution. In this case, the ESI Court held that the "conveyance allowance" paid to the employees is not included in the definition of "wages" under Section 2(22) of the Employees' State Insurance Act, 1948. The Madras High Court set aside the said order.
The Supreme Court recently held that mere suppression of information regarding pending criminal cases does not mean that employers can arbitrarily terminate the service of the concerned employee [Pawan Kumar v. Union of India and Another]. The Bench clarified that while such an employee has no unfettered right to remain in service, they do have the right to not be dealt with arbitrarily.
15/05/2022
To curb fake invoicing and tax evasion, Gst council may recommend filing of Annual Stock Statements on Gst portal-by Registered Tax Payers.
During 2021 and 2022, Following States have introduced VAT Settlement Schemes-
1. Maharastra
2. Karnataka
3. Kerala
4. Bihar
5. West Bengal
6. Telangana
7. Rajasthan
The Tamilnadu, Commercial Taxes Department has identified 3.26 lakh dealers as not having paid a single rupee as GST during the year 2021-2022. Similarly, about 1.94 lakh dealers have paid less than Rs.1000 as GST for the entire year. Department has sent mails to all these dealers, requesting them to verify their accounts and pay any tax due for all the years. It was also warned that, should the department find tax evasion, not only tax due, but also penalty and interest will be levied and collected. All the dealers are therefore requested to set right their tax payment account within one month.
SEBI grants relaxation from sending hard copies of annual reports:
The SEBI has relaxed compliance of sending hard copies of annual reports (as per Regulation 36 (1) (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”)) to align with MCA Circular dated 5th May, 2022 in which MCA has given relaxation to the listed companies for sending hard copies of for the Financial Statements/annual report to the shareholders for the year 2022 till 31st December,2022. (Circular No. SEBI/HO/CFD/CMD2/CIR/P/2022/62)
MCA vide Circular dated May 05, 2022 has extended the relaxations from dispatching of physical copies of financial statements for the year 2022 (i.e. till December 31, 2022).
Sri Lankan Economic Crisis Decoded:
1. The civil unrest in Sri Lanka has escalated to unprecedented levels over the past few days as the protests against the country’s government over the economic crisis continue.
2. People in Sri Lanka have been queuing up outside fuel pumps and grocery stores to buy essentials, which are in scarcity in the country. Blackouts round the clock and deadly fights over essentials have become a norm lately.
3. The incumbent Finance Minister Ali Sabry told parliament in early May, that it may take two years for the country to emerge from the crisis, which leaves people in prolonged uncertainty.
Reasons for the worst economic crisis since independence?
1. Sri Lanka is a classic twin deficits economy, said a 2019 Asian Development Bank working paper. Twin deficits signal that a country’s national expenditure exceeds its national income, and that its production of tradable goods and services is inadequate. Trade deficit is $10 billion.
2. The government’s decision to ban all chemical fertilisers in 2021, a move that was later reversed, hit the country’s farm sector badly. For an island nation, dependent on agri-exports, and with more than 60 per cent population directly or indirectly dependent on farming, the move was economically suicidal.
3. The country’s lucrative tourism industry and foreign workers’ remittances were sapped by the pandemic. The credit ratings agencies moved to downgrade Sri Lanka and effectively locked it out of international capital markets.
4. Deep tax cuts promised by Rajapaksa during a 2019 election campaign were enacted months before the onset of COVID 19. Taxes were brought down to just 8% of GDP.
5. For a nation largely reliant on imports of energy supplies, food grains, essential commodities, and medications, having a foreign reserve of just $2.31 billion (Jan 2022) is a financial nightmare for the government.
6. The country's inability to pay for basic necessity items on account of a lack of foreign exchange, lead to acute shortages and pushed up prices to record highs.
7. The country’s foreign reserves have now dropped below $50 million. This has forced the government to suspend payments on $7 billion in foreign debt due this year, with nearly $25 billion due by 2026 out of a total of $51 billion.
14/05/2022
Indian Crypto exchanges and custodian wallet providers must maintain KYC data and records of financial transactions for 5 years vide instructions dated 28.04.2022:
Data Centres, Virtual Private Server (VPS) providers, Cloud Service providers and Virtual Private Network Service (VPN Service) providers, shall be required to register the following accurate information which must be maintained by them for a period of 5 years or longer duration as mandated by the law after any cancellation or withdrawal of the registration as the case may be:
1. Validated names of subscribers/customers hiring the services
2. Period of hire including dates
3. IPs allotted to / being used by the members
4. Email address and IP address and time stamp used at the time of registration / on-boarding
5. Purpose for hiring services
6. Validated address and contact numbers
7. Ownership pattern of the subscribers / customers hiring services
The virtual asset service providers, virtual asset exchange providers and custodian wallet providers (as defined by Ministry of Finance from time to time) shall mandatorily maintain all information obtained as part of Know Your Customer (KYC) and records of financial transactions for a period of five years so as to ensure cyber security in the area of payments and financial markets for citizens while protecting their data, fundamental rights and economic freedom in view of the growth of virtual assets.
Nasdaq market cap erased. Nasdaq lost more value than dot com and 2008 crash combined. The losses of Nasdaq are:
1. Dot.com bubble $4.6 trillion
2. Global financial crisis of 2008 $2.3 trillion
3. Covid 19 sell off $4.4 trillion
4. Current decline $7.6 trillion
A massive sell-off in cryptocurrencies wiped over $200 billion of wealth from the market in just 24 hours. Bitcoin plunged by as much as 10% in the last day to its lowest level since Dec. 2020, while Ethereum dropped as much as 16%. As central banks across the world move to aggressively tighten monetary policy to fight inflation, digital tokens have faced selling pressure.
Maruti Suzuki has completed the process of allotment of an 800-acre site at IMT Kharkhoda in the Sonipat district with the Haryana State Industrial and Infrastructure Development Corporation Limited (HSIIDC). The company confirmed that the first manufacturing facility at the site will have a production capacity of 250,000 vehicles per annum. It is expected to be commissioned by 2025, subject to administrative approvals. The first phase will see the Indian auto giant invest about Rs. 11,000 crore for building the manufacturing facility. The land site will have space for capacity expansion and will include more production plants in the future, the company said in a regulatory filing.
Over 800 WhiteHat Jr employees have resigned from the kids online coding learning edtech start-up in the last two months after being asked to work from office. This comes after WhiteHat Jr, a platform which was acquired by BYJU’S in 2020, asked its employees to return to office within a month’s time.
13/05/2022
Directorate of Revenue Intelligence (DRI) has unearthed yet another novel modus operandi and affected seizure of 62 kg Heroin on 10.05.2022 after interdicting an air cargo consignment. This is one of the biggest seizures of Heroin till date through courier/ cargo/ air passenger modes in India. The value of the 62 kgs seized heroin is estimated at Rs 434 crore in the illicit market. While the import consignment had 330 trolley bags, the seized heroin was found to have been ingeniously concealed inside the hollow metal tubes of 126 trolley bags, which was extremely difficult to detect.
In a covert intelligence operation code-named “Golden Tap”, the officers of the Directorate of Revenue Intelligence (DRI) intercepted an air cargo consignment on 11th May 2022 at Delhi Air Cargo Complex, on the suspicion that it might have smuggled gold concealed therein. The consignment declared to contain Triangle Valves, had originated from Guangzhou, China, and had arrived at Indira Gandhi International (IGI) Airport by a Japan Airlines flight. After an intensive examination, the officers of DRI were able to recover 61.5 kilograms of gold having a market value of Rs. 32.5 crore from the consignment. The recovered gold, found to be of 99 percent purity, has been seized.
In a major crackdown, the Central Bureau of Investigation (CBI) on Tuesday carried out raids at around 40 location linked to representatives of non- governmental organizations (NGOs), their alleged middlemen and officials of Ministry of Home Affairs (MHA) for allegedly facilitating violation of foreign funding rules, said people in the know. The agency said that hawala transaction worth 2 crores have been detected so far in the raids. Some individuals have also been nabbed accepting illegal gratification, people quoted above added. They said that preliminary investigation has revealed that several public officials from the MHA, representatives of certain NGOs and alleged middlemen conspired together to extract illegal gratification in lie of facilitations of foreign donations in blatant violation FCRA, 2010 the agency has arrested nearly half a dozen public servants including officials on the FCRA division of MHA.
Indian investors who jumped on to the Cryptocurrency bandwagon in droves in 2021 are registering paper losses in the continuing meltdown in digital currencies as the bears tighten their grip on the market At 5 pm IST on Coin market cap, the global crypto market cap stood at 1.45 trillion, a 3.56% decrease over the last 24 hours. The world’s most dominant cryptocurrency, Bitcoin, even dropped below 30,000 and touched a 52- week low before recovering to 31,350. It has been dropping ever since it touched an all time high of 68,789.63 in November. Similarly, altcoins popular with Indian investors declined sharply. In the last 7 days Ethereum has dropped 16.15 percent (3272.45), Binance Coin slid 17.24% (320.55), Solana dipped 20.73 percent (69.33) and Cardano dropped 50.69% in the last 24 hours (32.70) and 64.315% in the last 7 days.
12/05/2022
PAN or Aadhaar is made mandatory for cash deposits or withdrawals above Rs 20 lakh. In a notification issued on May 10, 2022, the government has come out with new rules especially pertaining to those making financial transactions without a PAN or Aadhaar. The Central Board of Direct Taxes has made new rules, called the Income–tax (Fifteenth Amendment) Rules, 2022.
Companies AGMs / EGMs due in 2022 can be held upto 31.12.22 through Video Conference (VC) or Other Audio Visual Means (OAVM). General Circulars 2&3 of 5.5.22.
CBDT, vide Notification No. 51 of 2022 dated 09.05.2022, notifies changes in Forms 3CF, 10A, 10AB, 10BD & 10BE; The changes are notified in exercise of the powers conferred under: (1) clauses (i) to (iv) of first proviso to Section 10(23C), (2) ninth proviso to Section 10(23C), (3) clauses (i) to (vi) of Section 12A(1)(ac), (4) Section 12AB(3), (5) first and fifth proviso Section 35(1), (6) Section 35(1A), (7) clauses (i) to (iv) of first proviso to Section 80G(5), (8) third proviso to Section 80G(5) and (9) clauses (viii) and (ix) of Section 80G(5).
Crypto industry’s tax woes in India may get worse as the government looks to expand indirect taxes on the space in the coming days. The country is formulating methods to expand the ambit of these indirect taxes, specifically the goods and services tax, to cover a larger section of the crypto space.
11/05/2022
Ministry of MSME vide Notification No. S.O. 2134(E) dated May 6, 2022 has issued amendments in notification no. 2119 to further extend the validity of the registration of existing enterprises prior to June 30, 2020, till June 30, 2022.
Earlier the Ministry of MSME vide Notification No. S.O. 278(E) dated January 19, 2022 issued amendments in its earlier issued Notification No. S.O. 2119 (E), dated June 26, 2020 (“N/N 2119”). Notification No. S.O. 2119 (E), dated June 26, 2020 (“N/N 2119”) notified the criteria for classifying the enterprises as Micro, Small and Medium Enterprises (“MSME”).
SEBI is believed to have put a temporary freeze on initial public offers (IPOs) as it reviews the public issue process amid concerns that the current framework allows applicants in the institutional and high net worth individuals categories to put in bids only to be rejected later due to lack of funds.
10/05/2022
GSTN introduced 6% slab on certain goods on the GST portal to include in GSTR-1. Temporary solution for Brick Kilns Sector. As 6% GST rate is not available for reporting on GST Portal,
1. Select 5% Rate
2. Then increase the system computed tax value in the amount of tax column with the values calculated @ 6%.
The initial public offering (IPO) of the Life Insurance Corporation of India has created another record, with the number of application for the stock of the country’s insurance behemoth crossing 5.9 million on Sunday. The previous record for India’s capital markets was the 2008 IPO of Anil listing that saw 4.8 million applications. The mega IPO of LIC is opening a new chapter in Indian retail equity investing set to eventually cross 6 million, the highest ever, and a potential 42.63 million investor in the future, the unique Permanent Account Number linked to LIC policies totaled 42.6 million. Application has come in from across the country, with Maharashtra, Gujrat and Rajasthan, forming the lion’s share. Last year, the ?1,514-crore IPO of Glen market Life Science received more than 3.9 million applications, then the Second-highest in India’s history after Reliance Power.
09/05/2022
The Central Board of Direct Taxes (CBDT) has issued the Income-tax Amendment (Thirteenth Amendment) Rules, 2022 w.e.f. May 06, 2022. It has introduced a new rule for the computation of minimum investment and exempt income and modified Form No. 10BBB which is an intimation by the pension fund of investment, Form No. 10BBC which is a certificate of accountant in respect of compliance to the provisions by the notified pension fund and inserted a new Form No. 10BBD which is a statement of eligible investment received.
The Central Board of Direct Taxes (CBDT) has issued Income-tax (Twelfth Amendment) Rules, 2022, which shall be effective from May 05, 2022. The amendment has revised Form No. 34C, Form No. 34D, Form No. 34DA, Form No. 34E and Form No. 34EA. These are the forms of application filed by the applicants for obtaining the advance ruling.
The Government of National Capital Territory of Delhi has issued a clarification vide Not No.20 dtd 27.04.2022 released on 02.05.2022; regarding applicable GST rates on the following activities:
1. Services by cloud kitchens/central kitchens
2. Supply of ice cream by ice cream parlors
3. Coaching services to students provided by coaching institutions and NGOs under the central sector scheme of "Scholarships for students with Disabilities"
4. Satellite launch services provided by NSIL
5. Overloading charges at toll plaza
6. Renting of vehicles by state transport undertakings and local authorities
7. Services by way of grant of mineral exploration and mining rights attracted GST
8. Admission to amusement parks having rides
9. Services supplied by contract manufacture to brand owners or others for manufacture of alcoholic liquor for human consumption.
The Central Board of Indirect Taxes and Customs (CBIC) has exempted all goods from the custom duty that is in excess of the amount calculated at the specified rate, when imported into Republic of India from the United Arab Emirates subject to the condition that the exemption shall be available only if importer proves to the satisfaction of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, that the goods in respect of which the benefit of this exemption is claimed are of the origin of the United Arab Emirates, in terms of rules as may be notified in this regard by the Central Government by publication in the Official Gazette of India read with Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020. This notification shall be effective from May 01, 2022.
The Ministry of Micro, Small and Medium Enterprises has notified that the existing enterprises registered prior to 30th June, 2020, shall continue to be valid up to 30th June, 2022 in place of 31st March, 2022 as was notified earlier on Udyam Registration vide notification (No.- S.O. 2119(E)) dated: 26th June, 2020.
The Ministry of Corporate Affairs has decided to allow companies to conduct their Extraordinary General Meetings through Video Conferencing (VC) or Other Audio Visual Means (OAVM) or transact items through Postal Ballot in accordance with framework provided in earlier circulars up to December 31, 2022.
The Ministry of Corporate Affairs has allowed the Companies whose Annual General Meetings (AGMs) are due in the Year 2022 to conduct their Annual General Meeting (AGMs) on or before December 31, 2022 in accordance with the requirements laid down by earlier circular (Ref: 20/2020, dated: May 05, 2020) issued by the Ministry.
2. The Ministry has also clarified that there has not been any extension of time for holding of Annual General Meeting (AGM) under the Companies Act, 2013 and the companies not adhering the relevant timelines shall be liable for approriate legal action as per the extant provisions of the Act.
The Food Safety and Standards Authority of India has decided that manufacturers-exporters will be required to submit a Quarterly Return for their food business activities under the Food Safety and Standards (Licensing and Registration of Food Businesses) Regulations, 2011, replacing the existing practice of annual returns. The last date for submission of the Annual Return for FY 2021-22 is May 31, 2022, through the FoSCoS Portal.
08/05/2022
RIL is the first Indian company to cross $100 billion annual revenue
1. The FY22 gross revenue of Reliance Industries Ltd crossed $100 billion-mark becoming the first Indian company to achieve this feat.
2. The company posted gross revenue of Rs 792,756 crore ($104.6 billion), as compared to Rs 539,238 crore in the previous year.
3. It announced a dividend of Rs 8 per fully paid up equity share of Rs 10 each for the financial year ended March 31, 2022.
4. Reliance Industries Ltd. posted 22% growth in consolidated net profit at ?16,203 crore for the three months ended 31 March.
5. The operating margin for the quarter came in at 10.1 per cent, compared with 10.6 per cent in the December quarter and 9.5 per cent in the year-ago quarter.
6. Reliance retail has opened 793 new stores during the quarter, taking the total count to 15,196.
RBI has hiked repo rate by 40 bps:
1. The RBI has hiked the repo rate by 40 basis points up to 4.40% from 4% earlier. The last time repo rate was cut was in May 2020 and has been kept unchanged since then.
2. The Cash Reserve Ratio (CRR) has been hiked by 50 bps which will exert further upward pressure on interest rates.
3. Consequently, the standing deposit facility (SDF) rate, which is 25 basis points lower than the Repo stands adjusted to 4.15 per cent; and the marginal standing facility (MSF) rate, which is 50 basis points higher than the SDF, is adjusted to 4.65 per cent.
4. US Federal Reserve has also increased the benchmark lending rates by 50 basis points, which is the sharpest increase in the last two decades. The Fed also announced that it will start reducing its huge $9 trillion balance sheet, which consists mainly of Treasury and mortgage bonds.
5. UK's central bank Bank of England is also expected to raise interest rates on Thursday.
07/05/2022
Supreme Court upholds the validity of notices issued under Old Sec 148 after 31st Mar 2021:
Union of India & Ors. Versus Ashish Agarwal (CIVIL APPEAL NO. 3005/2022)
Background:
1. Several High Courts had allowed the writ petitions and had quashed several reassessment notices issued by the Revenue, issued under old section 148 of the Income Tax Act, 1961, on the ground that the same are bad in law in view of the amendment by the Finance Act, 2021 which had amended Income Tax Act by introducing new provisions i.e. sections 147 to 151 w.e.f. 1st April, 2021.
Following is the procedure laid down by the Hon SC in respect of such notices issued under old Sec 148:
1. Such notices shall be deemed to have been issued under section 148A of the IT Act as substituted by the Finance Act, 2021 and construed or treated to be showcause notices in terms of section 148A(b).
2. The assessing officer shall, within thirty days from today provide to the respective assessees information and material relied upon by the Revenue, so that the assesees can reply to the showcause notices within two weeks thereafter.
3. All defences which may be available to the assesses including those available under section 149 of the IT Act and all rights and contentions which may be available to the concerned assessees and Revenue under the Finance Act, 2021 and in law shall continue to be available.
Following are the observations of the Hon SC:
1. The judgments of the several High Courts would result in no reassessment proceedings at all, even if the same are permissible under the Finance Act, 2021 and as per substituted sections 147 to 151 of the IT Act. The Revenue cannot be made remediless and the object and purpose of reassessment proceedings cannot be frustrated.
2. The present order shall be applicable PAN INDIA and all judgments and orders passed by different High Courts on the issue
3. The present order is passed in exercise of powers under Article 142 of the Constitution of India with a view not to burden this Court with approximately 9000 appeals.
Note: Article 142 of the Constitution: The Supreme Court in the exercise of its jurisdiction may pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it, and any decree so passed or orders so made shall be enforceable throughout the territory of India in such manner as may be prescribed by or under any law made by Parliament and, until provision in that behalf is so made, in such manner as the President may by order prescribe.
Tata Steel Q4 net jumps 37% to Rs 9,835 crore
1. Tata Steel Ltd on May 3 reported a consolidated net profit of Rs 9,835.12 crore for the quarter ended March 2022, registered a 37.3 percent growth over Rs 7,162 crore profit logged in the year-ago quarter.
2. It reported 39 percent year-on-year (YoY) growth in consolidated revenue at Rs 69,323.50 crore during the fourth quarter, with Tata Steel India showing a 34 percent growth YoY at Rs 36,681 crore and Tata Steel Europe clocking a massive 53 percent growth at Rs 26,389 crore in the same period.
3. Net debt declined to Rs 51,049 crore, and net debt to EBITDA improved to 0.80x. It clocked the highest ever consolidated EBITDA of Rs 63,830 crore.
4. It has announced a dividend of Rs 51 per share and Rs 12.75 per partly paid equity share. Splitting of the shares to Re 1 per share face value in a 10:1 split is also recommended
5. In the full year, consolidated profit surged 410 percent to Rs 41,749 crore and revenue grew by 56 percent to Rs 2.44 lakh crore compared to the previous year.
6. Tata Steel India in FY22 clocked a 53 percent growth in revenue at Rs 1.29 lakh crore and Tata Steel Europe registered a 61 percent increase at Rs 90,023 crore compared to the previous year.
06/05/2022
Case title-V.M.Jose V/s The Secretary to Government, Department of Finance, Union of India, New Delhi.: Madras High court fines petitioner of Rs. 50,000/- for filing PIL against organizing CBIC conference in 7 star hotel. Held that: The court held that this petition, even remotely cannot be said to be in public interest.
Gujarat HC held that mandatory 1/3rd deduction of land as ultra vires:
In our considered view, while maintaining the mandatory deduction of 1/3rd for value of land is not sustainable in cases where the value of land is clearly ascertainable or where the value of construction service can be derived with the aid of valuation rules, such deduction can be permitted at the option of a taxable person particularly in cases where the value of land or undivided share of land is not ascertainable.
Application of such mandatory uniform rate of deduction is discriminatory, arbitrary and violative of Article 14 of the Constitution of India.
05/05/2022
The Federal Reserve moved to tamp down soaring inflation in the US on Wednesday, announcing the sharpest rise in interest rates in over 20 years. The Fed’s benchmark interest rate was raised by 0.5 percentage points to a target rate range of between 0.75% and 1%. The hike is the largest since 2000 and follows a 0.25 percentage point increase in March, the first increase since December 2018. The impact of the Fed’s policy is already being felt in the wider economy. Since the start of the year, mortgage rates have climbed at their fastest pace in decades, rising nearly two percentage points. Some hot property markets have started to cool as a result. The impact of tighter monetary policy has also triggered selloffs in the stock markets.
India’s Services exports set a new record of USD 254.4 Billion in FY 2021-2022, beats previous high of USD 213.2 Billion in 2019-20 Services exports hit an all-time monthly high of USD 26.9 Billion in March 2022 Telecommunications, computer, and information services, other business services and Transport top contributors in Services exports.
On Wednesday, Life Insurance Corporation (LIC) of India opened its much-anticipated $2.7 billion initial public offering (IPO) for subscription, following strong demand from domestic mutual funds who have been allocated 71.12 percent of the total book. Conscripted to be India's biggest IPO to date, LIC is reportedly commanding a premium of Rs 60-65 apiece for its shares in the grey market - nearly 7 percent higher than the upper end of the IPO price-band of Rs 902 to Rs 949 apiece.
The Government of India, in order to facilitate bidding for LIC IPO, has requested that all bank branches designated to process ASBA (Application Supported by Blocked Amount) applications may be kept open for public on May 8, 2022 (Sunday). The matter has been examined by RBI and it has been decided that banks may keep all their ASBA designated branches open on May 8, 2022 (Sunday) for the above purpose.
In 2021, venture capital firms invested $28 billion into the cryptoverse . In the first three months of 2022, they have already invested $10 billion in the sector, the largest quarterly amount to date.
Online trading platform Upstox says it has crossed 10 million customers , doubling from 5 million around six months ago.
04/05/2022
RBI Governor Shaktikanta Das on Wednesday said that the Monetary Policy Committee (MPC) of the Reserve Bank of India in an off-cycle meeting held between May 2-4 hiked the repo rate by 40 basis points (bps) to 4.40 per cent with immediate effect in a bid to contain inflation. Addressing the media, Das said that the MPC has unanimously decided to hike the interest rate by 40 bps to 4.40 per cent. He said that the RBI MPC met off-cycle to assess the global growth. Additionally, Das announced that the RBI hiked the cash reserve ratio (CRR) by 50 basis points to 4.50 per cent effective May 21.
It appears that borrowers should prepare for an increasing EMI burden and FD investors can hope for better returns on new FDs.
India is trying to get deeper discounts on Russian oil to compensate for the risk of dealing with the OPEC+ producer as other buyers turn away, according to people with knowledge of the matter. India is seeking Russian cargoes at less than $70 a barrel on a delivered basis to compensate for additional hurdles such as securing financing for purchases in high level talks between the two countries, said the people, asking not to be identified as discussions are confidential. Global benchmark Brent is currently trading near $105 a barrel.
Adani Wilmar beats HUL to become the largest FMCG company in India
At Rs 54,214 crore AWL's sales pipped HUL's Rs 51,468 crore in FY22, snatching the top spot in the sector. With this jump in its revenue, from Rs 37,090 crore in the previous year, the consumer goods company from billionaire Gautam Adani's stable has dislodged Hindustan Unilever (HUL) from the top spot in the local fast moving consumer goods (FMCG) market. HUL, which has been holding the top spot, in terms of yearly revenue, for years, reported Rs 51,468 crore sales for FY2021-22.
03/05/2022
No one can be forced to take the vaccine, the Supreme Court said today in a landmark decision on India's Covid vaccine policy, also directing the central government to publish reports on the adverse effects of vaccination.
"Bodily integrity is protected under the law and nobody can be forced to be vaccinated," the Supreme Court said. The court asserted, however, that "certain limitations on individual rights" could be imposed in the interest of community health. Barring Covid-appropriate behaviour, we suggest no curbs on unvaccinated individuals in access to public places, services and resources if cases are low," the Supreme Court said.
Payer of income is required to verify whether the recipient/ deductee (purchaser/buyer) has filed the income tax return or not. The higher Rate of TDS / TCS has been provided for Non-Filers of Income Tax Return under section 206AB & Section 206CCA.
A person who has not filed its return of income for one preceding year & if the amount of TCS / TDS is Rs. 50,000 or more in the said previous year then such person would be subject to higher rate of TDS/TCS. Now, the taxpayer would be required to ensure the filing of income tax return within the due date u/s 139(1) so as to avoid higher rate of TDS/TCS. TDS rate in cases of such non-filers shall be the higher of the following:
(a) At twice the rate specified in the relevant provision of the Act; or
(b) At twice the rate or rates in force; or
(c) At the rate of 5%.
[It may be noted that a higher rate of TDS @ 20% is there if the PAN is not provided by the deductee to the deductor. The provisions of section 206AB are presently not applicable in relation to transactions on which TDS is to be done u/s 192, 192A, 194B, 194BB, 194LBC, or 194N. This provision is not applicable on payment to a non-resident who does not have a permanent PE in India. Further, to reduce the compliance burden on individuals or HUF liable to do TDS without TAN, an amendment has been done in section 206AB to provide that TDS at higher rates u/s 206AB shall not be applicable in the case of section 194-IA (TDS on property), 194-IB (TDS on Rent), and 194M (TDS on payment to contractor/ professional for personal expenses)].
02/05/2022
SC: Insurance company must inform insurance policy details to policyholder. In the matter of Anju Kalsi Vs HDFC Ergo GIC Ltd pronounced on 21.02.2022.
The insurance cover was governed by a policy between the first and the second respondents. The terms of the insurance cover had to be specifically communicated to the account holder. The account holder had to be put on notice that the insurance cover would become available only after a transaction took place of the nature spelt out in the special conditions of the insurance policy. Insistence on communication to the account holder is necessary because the policy was issued to the bank by the insurer. The account holders are beneficiaries of the policy.
Anti-Evasion Unit of Mumbai South CGST Commissionerate has arrested the co-conspirator in a case of M/s New Laxmilal & Co. (GSTIN 27ACAPS6257K1ZS) involving fake ITC of Rs. 11.07 Cr on the strength of bogus invoices of Rs 62.90 Cr, without actual movement of goods. This case is a part of Anti-Evasion drive launched by CGST, Mumbai Zone against the tax evaders. The accused has accepted that he supplied bogus invoices to M/s New Laxmilal & Co. involving network of seven non-existent entities.
01/05/2022
Mrs Sangeeta Singh, Member, CBDT shall hold additional charge as CBDT chairman for a period of 3 months consequent upon superannuation of Sh JB Mohapatra.
The gross GST revenue collected in the month of April, 2022 is Rs 1,67,540 crore of which CGST is Rs 33,159 crore, SGST is Rs 41,793 crore, IGST is Rs 81,939 crore (including Rs 36,705 crore collected on import of goods) and cess is Rs 10,649 crore (including Rs 857 crore collected on import of goods).
1. The gross GST collection in April 2022 is all time high, Rs 25,000 crore more that the next highest collection of Rs. 1,42,095 crore, just last month.
2. The government has settled Rs 33,423 crore to CGST and Rs 26962 crore to SGST from IGST. The total revenue of Centre and the States in the month of April 2022 after regular settlement is Rs 66,582 crore for CGST and Rs 68,755 crore for the SGST.
3. The revenues for the month of April 2022 are 20% higher than the GST revenues in the same month last year. During the month, revenues from import of goods was 30% higher and the revenues from domestic transaction (including import of services) are 17% higher than the revenues from these sources during the same month last year.
4. For the first time gross GST collection has crossed Rs 1.5 lakh crore mark.
5. Total number of e-way bills generated in the month of March 2022 was 7.7 crore, which is 13% higher than 6.8 crore e-way bills generated in the month of February 2022, which reflects recovery of business activity at faster pace.
6. Month of April 2022 saw the highest ever tax collection in a single day on April 20, 2022 and highest collection during an hour, during 4 PM to 5PM on that day. On April 20, 2022, Rs 57,847 crore was paid through 9.58 lakh transactions and during 4-5 PM, almost Rs 8,000 crore was paid through 88,000 transactions.
7. The highest single day payment last year (on the same date) was Rs 48,000 crore through 7.22 lakh transactions and highest one hour collection (2-3PM on the same date last year) was Rs 6,400 crore through 65,000 transactions.
Updated returns have to be filed vide Form ITR- U
1. The CBDT has issued Income-tax (Eleventh Amendment) Rules, 2022 vide Notification No. 48/2022 dated April 29, 2022 to insert Rule 12AC of the Income Tax Rules, for updated return of Income i.e., Form ITR-U under Section 139(8A) of the Income Tax Act, 1961.
2. The Finance Act, 2022 has introduced a new concept of updated return, wherein it allows up to 24 months to file the return of income. The CBDT has notified a new Rule 12AC and new Form ITR-U for filing of such updated return of income
3. Rule 12AC of the IT Rules states that updated return under Section 139(8A), relating to the assessment year commencing on April 01, 2020 and subsequent assessment years, shall be in the Form ITR-U and be verified in the manner indicated therein.
4. ITR U requires the following to be filled up:
a. The reasons for updating the income whereby the eligible person has to choose from the options provided;
b. The disclosure whether the updated return is being filed during the period upto 12 months from the end of the relevant AY or between 12 to 24 months from the end of the relevant assessment year;
c. The person filing the updated return is also required to affirm that eligibility criteria as per the conditions laid out in first, second and third provisos to Section 139(8A) are met;
d. A disclosure whether the updated return is leading to reduction in c/f loss or unabsorbed depreciation or tax credit and if so the assessee is also required to specify the AYs getting affected due to the updated return.
30/04/2022
Hounded by the media and quizzed by regulatory officials and government sleuths for offence committed years ago, the National stock Exchange (NSE) has asked senior executive to refrain from leaking out damaging. And often unsubstantiated, information. The country’s largest stock exchange is also willing to put in place a new mechanism, over and above what currently exists, to address grievances that angry insiders may like to air. However, employees who like to air. However, employees who spread malicious information, disregarding the interest of the organization, will be pulled up. The message, conveyed in the course of a pep talk after weeks of bad press and Covid-19 disruptions, was sent out by the chairman of the bourse Girish Chandra Chaturvedi, a former senior bureaucrat, at a meeting this week close to 40 executives- mostly in the ranks of vice-president (VP) and senior VP. “
The Ministry of corporate Affairs (MCA) has registered over 700 cause across the country against companies with Chinese’s nationals as promoters and directors which recorded ‘ suspicious transaction ‘or dubious credentials’ the move followed intelligence inputs shared by the home Ministry that the firms were’ misused’ for various purposes, including’ evasion of taxes’ and ‘ money laundering’ according to government insiders. The cases have been registered by the Registrar of Companies (ROC) at local polies stations under various sections of the Indian Penal Code and the Information Technology Act. Maximum cases were registered in Delhi followed by Bengaluru and Mumbai.” While around 300 cases were registered in Delhi, over 200 were lodged in Bengaluru and 34 in Mumbai.
Fintech Companies under scanner:
In one of the probes, ED found fintech companies allegedly utilised own funds received from abroad, mainly from China, for giving loans at usurious rate of interest to unemployed youth and vulnerable security deposits equivalent to loan amounts granted by NBFCs to borrowers. On Wednesday, ED Provisionally attached assets worth 6.17 Crore deposited in various accounts/ merchant IDS of various fintech companies/ associated per sons maintained with various banks/ payments gateways, under the prevention of Money Laundering Act,2002.An ED Insider said the accused along with Chinese nationals allegedly opened companies in the name of various persons for illegal transactions, issuing loans and raising investments through mobile Apps like Cash Master Crazy Rupee, Cashing, Rupee Menu etc.”
29/04/2022
Real-time payments expected to boost India's GDP by $45.9 bn in 2026
1. Real-time payments are forecast to boost India's GDP by $45.9 billion in 2026 as real-time payments transaction volumes are set to exceed 206 billion by that time. The boost in GDP would be equivalent to 1.12 per cent of the country's forecasted GDP.
2. With consumers increasingly shifting from cash to mobile-based real-time payments, skipping payment cards, the real-time payments' share of the total payments volume is likely to rise to over 70 per cent in 2026.
3. In 2021, India accounted for the largest number of real-time transactions at 48.6 billion, almost threefold that of China (18 billion transactions) and almost seven times greater than the combined real-time payments volume of US, Canada, the UK, France and Germany (7.5 billion).
4. The real-time payments helped India unlock $16.4 billion of additional economic output in 2021, equivalent to 0.56 per cent of formal GDP.
Source: ACI Worldwide
28/04/2022
Labelling a cheque as a security does not obviate its character: Supreme Court
Sunil Todi & Ors. Vs State of Gujarat & Anr.
(Criminal Appeal No. 1446/2021)
Facts:
1. The Company issued a post-dated cheque dated 28th August 2017, for an amount of Rs. 2,67,84,000/- with an endorsement “to be deposited after confirmation only for security purpose”
2. The company later on failed to discharge its debt in terms of the power supply agreement with the Respondent no. 2.
3. The cheque was dishonoured and Respondent No. 2 issued a legal notice to the Appellants, alleging that they had committed offences under Section 138 of the Negotiable Instruments Act, 1881
4. The Appellants filed petitions under Section 482 of the Code of Criminal Procedure, 1973, for quashing of the criminal complaint.
Hon. SC held as follows:
1. The term debt included a sum of money promised to be paid at a future date by reason of a present obligation. A post-dated cheque issued after the debt had been incurred would be covered by the definition of ‘debt’.
2. Merely labelling the said Cheque as a security would not obviate its character as an instrument designed to meet a legally enforceable debt or liability.
Brian Armstrong the cofounder and chief executive of Nasdaq-listed cryptocurrency exchange Coinbase, has questioned the informal restrictions on crypto trading by the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI), saying they may be violative of a Supreme Court ruling. The apex court had, in an order in 2020, set aside a 2018 RBI circular that had prevented banks from letting customers use their accounts to send or receive funds for trading in cryptocurrencies.
26/04/2022
Yes Bank co-founder Rana Kapoor has told Enforcement Directorate he was "forced" to buy an MF Husain painting from Priyanka Gandhi for 32 crore. He added that the sale proceeds were utilised by Gandhi family for the medical treatment of Congress President Sonia Gandhi in New York. It was revealed in the chargesheet filed by ED in a special court.
It has been noted that a section of the media has reported that feedback has been sought from States regarding a suggestion for raising Good & Services Tax (GST) rates on 143 items. Some reports have even carried the number and description of items. It is clarified that no feedback from States has been sought on the GST rates for any specific items or specific proposals to restructure the rates and the reports regarding the same are purely speculative without any basis in fact.
The high court of Rajasthan on April 8 said that “entitlement of representation through an authorised representative for any summons by GST authorities” should be allowed. An authorised representative can appear before a taxman while responding to a summons issued by tax authorities, offering respite to many senior executives, including directors and chief financial officers (CFOs), who were being forced to respond to tax department notices. There are many cases where the tax department has sent notices and summonses, as well as demanded that top executives respond to them in person. Insiders point out that often these summons are issued by different state and central authorities, and it becomes difficult for top executives to appear before the taxman, especially if the tax demand is not too big or it involves a technically sound person to put across a point.
25/04/2022
Reliance calls off Rs 24,731 crores deal with Future Retail:
1. Reliance Industries Ltd (RIL) has called off a proposed transaction with Future Retail Ltd (FRL) following opposition from FRL’s secured creditors.
2. The shareholders and unsecured creditors of Future Retail Limited (FRL)have voted in favour of the scheme, but the secured creditors of FRL have voted against the scheme.
3. On August 29, 2020, Reliance had intimated to the stock exchanges about a scheme of arrangement for the transfer of retail and wholesale business and the logistics and warehousing business of Future Group to Reliance Retail Ventures Ltd its subsidiary, and Reliance Retail, a wholly-owned subsidiary of RRVL and Fashion Lifestyle Ltd,.
4. Amazon Inc., which had earlier invested in Future Coupons, had fiercely contested this deal and challenged it in the Supreme Court of India. It had also secured an injunction from Singapore Arbitration Tribunal.
5. Bank of India has also filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 before the National Company Law Tribunal, Mumbai Bench, seeking initiation of Corporate Insolvency Resolution Process against FRL.
24/04/2022
The Income Tax Department seized cash worth Rs 9.78 crore and 19 kg of silver hidden in floor and wall cavities from the office of a bullion trader in Mumbai’s Zaveri Bazar. The department noticed a sudden spike of gross turnover of M/s Chamunda Bullion from Rs 22.83 lakh in the financial year 2019-20 to Rs 652 crore in the financial year 2020-21. A similar trend was observed in the next financial year, which is 2021-22, wherein the gross turnover reached Rs 1764 crore. Thereafter, an investigation visit was conducted at various business premises of M/s Chamunda Bullion in Zaveri bazaar on April 16 by the team of Maharashtra State GST, Investigation-B, Mumbai. Most of the places were not disclosed as place of business in registration with the GST department.
After Goods and Services Tax (GST) department’s crackdown against bogus billing, income tax department too has started tightening its noose around the accused. After analysing the data of bogus sales and purchases and bank entries, I-T department too is regularly issuing notices to the people involved in bogus billing to pay income tax. The I-T sleuths are also keeping close watch on the cases of bogus billing and availing input tax credit (ITC) fraudulently, which was busted by GST authorities, so they too can act against the accused according to the rules and regulations under the Income Tax Act. Notices can be sent to such persons on several grounds about the source of the cash and bank transfers into the account, about the legitimacy of the cash. So people whose PAN cards, Adhaar and bank accounts have been used in bogus billing are going to face heat from I-T department.
The Appellate Authority for Advance Rulings (AAAR) of Haryana has said preferential location service (PLS) is different from construction and will attract GST at the rate of 18 per cent. PLS collected along with consideration for sale of properties attracts GST rate of 18 per cent where sale/transfer of constructed property has taken place before issuance of completion/occupation certificate (CC/OC),” the AAAR said while disposing an appeal application filed by realty major DLF. In 2019, the AAAR of West Bengal held that the very transaction mechanism of PLS is that the builder charges a separate consideration from the buyer for choosing a particular floor/location advantage. Thus, the abatement, which is allowed on construction service with respect to land on which construction is done, cannot be extended to PLS as it is altogether a separate service having no association with land. This ruling was quoted by AAAR of Haryana, though it differed on the exact classification and said PLS will attract GST at the rate of 18 per cent.
The Enforcement Directorate has conducted searches on JSPL premises over allegations of FEMA violations, officials said on April 21. They said the agency officials visited office premises of Jindal Steel and Power Limited (JSPL) in Delhi and neighbouring Gurugram as part of the investigation being conducted under provisions of the Foreign Exchange Management Act (FEMA).
The Telangana Authority of Advance Ruling has ruled that 12 percent GST payable on pharmaceutical pellets, and granules except Orslitat Pellet as obesity is not a disease. The AAR has observed that obesity is not a disease and hence reduction of weight cannot be seen as a treatment against a disease, thus except Orlistat which does not come within the definition of medicaments, pharmaceutical pellets and granules are liable to be taxed at the rate of 12 percent.
23/04/2022
The Modi government is looking to implement the revised Labor laws from 1 July. On implementation, the Salient features would be as below:
1. The working hours of employees may increase from 8 to 9 hours to 12 hours. From July 1, office working hours may increase.
2. The Modi government plans to implement the rules of the Labor Code as soon as possible. The four Labor Code rules will encourage investment in the country and employment opportunities will increase.
3. Labor law is an important part of the country’s constitution. So far 23 states have made rules for labor code rules. Now according to the new rules of the Labor Code, only seven states have not been able to make rules.
4. 29 Central Labor Laws in India are divided into 4 codes. The rules of the code include 4 labor codes like wages, social security, industrial relations and occupation safety and health and working conditions etc.
5. According to the new draft rule, the basic salary should be 50% or more of the total salary. This will change the salary structure of most of the employees, due to increase in basic salary.
6. PF and gratuity money will be deducted more than before. PF is based on basic salary.
7. Companion companies will have the right to increase the working hours to 12 hours in a day but then one day more leave will be available. That is, employees will be able to get leave for 3 days.
8. The money received after retirement will increase. This will make it easier for the employees to lead a better life after retirement.
9. The increase in PF and gratuity will also increase the cost for the companies as they will also have to contribute more to the PF for the employees. This will have a direct impact on their balance sheet.
The government may opt for a smallest initial public offer(IPO) For life insurance corp. of India (LIC) than earlier planned. Concerned about the investor response given market volatility and portfolio outflows, said people with knowledge of the matter. There is no plant to delay the offer though as it sees strong domestic appetite for the country’s biggest life insurance company. It could seek special exemption from the market regulator for a sale of less than the 5% stake proposed in the draft offer document and required under the rules, they said.” We will take a balanced call. There are headwinds… but the thinking emerging is that the offer should be launched with a less ambitious raising,” a senior government official told ET.
Indian tax authorities are alerting overseas gaming, fintech and content services providers in distant jurisdictions like the Us, Malta, and curacao about the goods and services tax(GST) law to spare these offshore firms of nasty surprises later. An email, in the nature of an information flyer, is beings sent to these offshore business-to customer(B2C) entities by the Bengaluru nodal office of central Boards of Indirect taxes and customer which administers the common indirect tax which came into effect on july 1,2017. Several companies whose plat forms are being used by Indian residents for entertainment, trading as well as educational purposes have so far received the communique from the tax office. While the Indian revenue is educating foreign online services providers on the mandated compliances, it is equally important to incentivize these foreign corporations to carry out compliances providing amnesty for the past taxes along with interest and penalties would go a long way in enabling these corporations to commence compliances in India.
CBDT has notified additional conditions under the seventh provision to section 139(1) whereby return filing is made mandatory in case
i) turnover from business or gross receipt from profession exceeds Rs. 60 lakh or Rs. 10 lakh, respectively.
ii) Further, return filing shall be mandatory if the amount of tax deducted and collected in case of a person exceeds Rs. 25,000 or
iii) deposit in savings bank account(s) is Rs. 50 lakh or more.
22/04/2022
CBDT designates a Special Court in Kerala under Black Money Act. Notification No. 34/2022-Dated: 19.04.2022 CBDT designates Court in the State of Kerala as the Special Court for the purposes of section 280A(1) of Income-tax Act, 1961 and section 84 of Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
Bombay High Court in the case of Vodafone Idea Ltd. Vs ACIT [Appeal Number: WP No. 3560 of 2019, Order Dated 03/01/2022] has made an observation which has far reaching impact that if Material available with the Assessing Officer during the course of original assessment – No reassessment permissible u/s 147.
21/04/2022
Since the GST law does not provide any action against the FEW / corrupt/ erring officers, the Court has stepped in. [TS-151-HC(GUJ)-2022-GST]. Gujarat High Court strikes down order canceling Assessee’s GST registration, comes down heavily on State Tax Officer for passing absurd order in pursuance of vague SCN; Strictly quotes that “henceforth if this court comes across any such vague order or SCN duly signed by him, then that will be his last day in the office”; Maybe this is the only way.
India has pitched for a global framework to regulate cryptocurrencies, flagging their use in money laundering and terror financing as the biggest risk facing nations. “I think the biggest risk for all countries across the board will be the money laundering aspect and the aspect of currency being used for financing terror,” finance minister Nirmala Sitharaman said during a discussion on ‘Monday at a Crossroad,’ hosted by the International Monetary Fund (IMF) in Washington, DC. The minister the spring meeting of the IMF and the World Bank. Sitharaman added that there can only be regulation when countries are on board together.
Industry associations India Tech.org, ADIF and Nasscom have urged the government to reduce the GST compliance burden on small online sellers. They have said that many micros, small and medium enterprises (MSMEs) hesitate to transition to online marketplace due to cumbersome tax compliances under the goods and Services Tax (GST) law. This, they have argued, discourages MSMEs from exploring online marketplaces and slow India’s vision of a digital powered economy.
20/04/2022
Last fiscal, India created the least number of companies in four years, at 96,657, though the impact of the economy’s reopening was evident in the ostensibly modest data set. Sector benefiting from the end to mobility and operational curbs – such as agriculture and allied activates, transport activities and travel agencies, hotels and restaurants, constructions, and machinery and equipment – led the list of segments opening new establishments in FY22.
The CBI has taken over the probe into the case of coins worth Rs 11 crore going missing from the vaults of the SBI branch in Mehandipur Balaji in Rajasthan, officials said on Monday. State Bank of India (SBI) had approached the Rajasthan High Court seeking a CBI probe into the matter as the missing amount was higher than Rs 3 crore, the threshold for seeking a probe by the agency.
Ahead of the Global Ayush Investment and Innovation Summit 2022 beginning in Gandhinagar on April 20, Rajesh Kotecha, Secretary, Ministry of Ayush, said the market size of AYUSH — Ayurveda, Yoga, Naturopathy, Unani, Siddha, and Homeopathy, the six Indian systems of medicine — grew to $18.1 billion between 2014 and 2020. The Government of India created a full-fledged Ministry of Ayush on November 9, 2014 with a mandate to promote and propagate Indian systems of medicine and homoeopathy. The Ministry of Ayush and AIIMS together established The Department of Integrative Medicine at AIIMS, which is a remarkable initiative under the Centre of Excellence scheme of the Ministry of Ayush.
19/04/2022
Presidential assent given on 18.4.2022 enacting The Delhi Municipal Corporation (Amendment) Act 2022 with transitional sailent features as :
(a) MCD subsumes NDMC, SDMC, EDMC --
the North Delhi Municipal Corporation, the South Delhi Municipal Corporation and the East Delhi Municipal Corporation (hereafter referred to as the erstwhile Corporations) shall be subsumed with, and become part of the Municipal Corporation of Delhi;
(b) MCD reference to the previous references:
any reference to the erstwhile Corporations in any contract or other instrument shall be deemed as a reference to the Municipal Corporation of Delhi;
(c) Properties to vest in MCD:
all properties, movable and immovable, of or belonging to the erstwhile Corporations shall vest in the Municipal Corporation of Delhi;
(d) Transfer of all rights & Liabilities to MCD:
all the rights and liabilities of the erstwhile Corporations shall be transferred to, and be the rights and liabilities of, the Municipal Corporation of Delhi;
(e) Previous pending proceedings continues against MCD:
any pending proceedings, including any disciplinary, arbitration, appeal or other legal proceedings, of whatever nature, by or against the erstwhile Corporations shall be continued or enforced by or against the Municipal Corporation of Delhi;
The Government has decided to exempt all customs duty on the import of cotton to lower the price of cotton in the public interest. This exemption would benefit the textile chain- yarn, fabric, garments, and made ups and provide relief to the textile industry and consumers. The industry has been demanding for the removal of 5% Basic Customs Duty (BCD) and 5% Agriculture Infrastructure and Development Cess (AIDC) on raw cotton. The Central Board of Indirect Taxes and Customs (CBIC) notified the exemption from Customs duty and Agriculture Infrastructure development Cess for import of cotton. This notification shall come into effect from April 14, 2022 and will remain in force upto and inclusive of September 30, 2022.
The CBIC has enabled the Shipping Bill amendment facility on ICEGATE. Users can file Shipping Bill amendments using CACHE01_A message.
The Central Board of Indirect Taxes & Customs (CBIC) has enabled a new feature, now SEZ units can check the status of integration of their Bills of Entry (DTA Sale) with GSTN, on ICEGATE.
GST Council’s 47th meeting is likely to be held next month as Finance Minister Nirmala Sitharaman is going for a 10-day trip to the US for World Bank-IMF meet this month, as per sources in the know. Earlier, the meeting was scheduled for this month but due to FM’s other commitments, the meeting had to be postponed to next month. According to the sources, the meeting will likely take place in Shillong, Meghalaya as planned earlier.
18/04/2022
Post Facto inclusion of address allowed by Madras HC:
Madras HC In the matter of Algae Labs Pvt. Ltd. Versus State Tax Officer-I Citation: Writ Petition (MD) No.4958 of 2022 and W.M.P.(MD)No.4073 of 2022 Dated: 04.04.2022
The penalty imposed for mismatch of address in invoice and RC was quashed by the Madras High Court bench of Justice C. Saravanan on the grounds that that there was a post facto alteration in GST registration.
1. The petitioner submitted that it has entered into a rental agreement with one of the directors of the petitioner company, who is running a proprietary concern at the said premises called "Tvl.Pinnacle Biosciences," and that the premise has been taken on rent by the petitioner. Post facto, the petitioner has also amended the GST Registration by including the address of the consignee in the GST Registration.
2. The petitioner submitted that there was no violation of Section 129 of the GST enactments as the transportation by the supplier from Gujarat was accompanied by not only a tax invoice, but also an E-way Bill showing sufferance of tax on the goods transported from Gujarat to the petitioner. The order was not sustainable.
3. Thus, there is a post facto inclusion of the address, which was mentioned in the tax invoice raised by the supplier and in the E-way Bill.
Current account deficit could cross 5% in 2022 if crude hits $150/barrel.
1. India’s current account deficit (CAD) could shoot up above 5 per cent of gross domestic product (GDP) in 2022 if the global crude oil price touches $150 per barrel.
2. This would make the country vulnerable to capital flight, S&P Global Ratings said in a report.
3. The Report says that “We calculate what the 2022 current account balance would be if the only change this year is the world oil price of $150 per barrel. In this simple scenario, the 2022 current account deficit would be above 5 per cent in India, the Philippines and Thailand — putting these nations at risk of capital flight.”
4. India’s current account deficit expanded to 2.7% in the December quarter from 1.3% in September quarter on account of rising fuel prices.
5. India’s current account deficit is seen at 2.3 per cent of GDP in the current financial year, as per BOB.
17/04/2022
India's FX reserves fell by $2.47 billion in the week that ended on April 8, taking the total to $600.004 billion, according to the central bank data. Foreign exchange reserves fell for the fifth consecutive week as the dollar reigns supreme on expectations of an aggressive US Federal Reserve monetary policy tightening path, even as the Reserve Bank of India shifts focus toward inflation and away from growth. The rise in global crude prices has pushed the country's import bill because India depends on imports for almost 85 per cent of its oil needs.
Conditions For Offence For Cheque Bouncing:
Section 138 of the NI Act is a penal provision that deals with the punishment of dishonour of cheque. Dishonour of cheque is not an offence in itself but to become an offence, the following ingredients should be there:
1. There should be a drawer that draws the cheque.
2. The cheque drawn should be in discharge of some liability.
3. Presentation of the cheque to the drawee bank.
4. The cheque returned by the bank unpaid on account of insufficient funds.
5. The cheque should be presented within six months from the date on which it was drawn or within the period of its validity, whichever is earlier.
6.Within thirty days of receiving a memo of return from the bank, a notice should be served to demand the payment of the said money.
7. The drawer fails to pay the said money within 15 days of the receipt of the said notice.
It is to be noted here that if the drawer pays the debt within 15 days, there would be no offence. The offence is said to be committed under Section 138 of the NI Act, only when he fails to pay the debt within 15 days and such person shall be punishable with imprisonment for a term which may be extended to two years, or with a fine which may extend to twice the amount of the cheque, or with both.
File Form 10BD by 15th May 2022
The charitable trust having Section 80G registration will be required to file the list of the Donor. This is required to be filed in Form No. 10BD. This has to be filed in electronic mode. The due date of filing Form No. 10BD is 15th May 2022. It may be noted that the donee will not be able to get the deduction u/s 80G unless and until the charitable trust file the statement of Donor. Multiple form 10BD may be filed by the same reporting person, as per the procedures laid down.
The following details need to be filed:
1. Name of donor.
2. Address of donor.
3. Nature of donation.
4. Mode of receipt.
5. Amount of the donation.
6. Section code under which donation was received.
7. PAN no. /Aadhar no./Tax Identification no. of the donor.
After uploading Form 10BD, Form 10BE is required to be to be download and this Certificate of Donation is to be issued to Donor before 31st May of every year. Form No. 10BE contains the following details:
1) Name of Charitable Organization.
2) PAN
3) Aadhar
4) Approval number u/s 80G
Following Significant Financial Transactions (SFTs) shall be reported in Form 61A on or before 31st May, 2022 for FY 2021-22:
Type of Transaction
1. Receipt of Rs. 10 lakh or more in a FY for acquiring bonds or debentures issued
SFT By The Company
2. Receipt of Rs. 10 lakh or more in a FY for acquiring shares (including share application)
SFT By The Company
3. Receipt of cash payment exceeding Rs. 2 lakh for sale of goods or services
SFT By Any person who is liable for Audit u/s 44AB
4. File Form 1 for equalisation levy by 30th June 2022
SFT By the company
16/04/2022
CBIC has initiated scrutiny of first tranche of about 50,000 GSTN identified using AI and risk assessment for alleged lapses in FY 17-18. The assessment of returns is being carried out using uniform model of scrutiny to bring in more transparency and enhance compliance. CBIC to soon introduce mandatory quarterly scrutiny of GST returns. Scrutiny exercise is aimed at better compliance and enhancement of GST collections as tax evasion of Rs. 52,000 crore was detected in the period between July, 2017 to March 2021.
Non Filing of GST Returns and cancellation of GST Registration by the Department: Madras HC restored with the remark “ No useful purpose will be served by keeping such assessee out of the Goods and Services Tax regime”. Madras High court in the case of Tvl. Alamelu Contracts Vs Commissioner of Commercial Taxes has restored the GST registration certificate of the petitioner in a writ file against its cancellation by the department.
15/04/2022
The Enforcement directorate has summoned officials of Chinese telecom companies One Plus and Xiaomi for suspected forex violations, sources in the know told ET. The ED action follows investigations by the income tax (I-T) department, which had raided these companies – and also Oppo – last year, people familiar with the developments told ET. Tax sleuths claimed to have seized data allegedly corroborating charged of tax evasion during searches. In the case of Xiaomi, the ED is probing alleged foreign remittances of more than Rs 1,000 crore, said people in the know. These remittances include transfers by the company – in the nature of royalty – to and on behalf of its group companies based abroad.
The Central Bureau of Investigation on Tuesday arrested Subhash Parab, a former employee of Nirav Modi who is key accused in the over Rs 20,000 crore Punjab National Bank fraud case. Parab who fled to Dubai on January 1, 2018, the same day Nirav Modi also left the country, was detained at Cairo last Week based on a red corner notice (RCN) issued against him. “He was trying to flee to Dubai, but he was detained at the Cairo airport on the power of the RCN is sued against him. The CBI was informed about the same and he was brought back to Mumbai and arrested at the airport on Tuesday.” Said an official privy to the development.
India’s black money law, the statute that arms the tax office to go after citizens with secret foreign bank accounts and assets, will be tested before Swiss courts this year. About half a dozen appeals are coming up for hearing to stop Swiss authorities from sharing information with India on the grounds that not only can the harsh law be applied ‘retroactively’, also be used to impose stricter ‘criminal’ sanctions than those that would have been possible at the time the offences were committed – feature which are incompatible with the Swiss legal system and values. The I-T Act can be used to claim tax on 11-yerar-old undisclosed income, but the Black Money Act empowers the tax department to question asset acquired ago but discovers now. Dertake steps that are at variance with their local laws. In the present case, if the Swiss were to share information knowing that the end use could be invocations of a criminal law with retrospectives applicability, this participation could be viewed as a violation of their pub.
14/04/2022
Trading in markets regulated by the RBI will start from 9 AM onwards from April 18, with the restoration of pre-pandemic trading timings. Currently, the markets open at 10 AM. The trading hours for various markets regulated by RBI were changed on April 7, 2020 in the wake of the coronavirus pandemic.
Last date of payment of ESIC for the month of March 2022 is extended from 15.4.22 to 30.4.22 & ESI return for Oct21-March22 is also extended from 11.5.22 to 26.5.22.
Tesla and Space XCEO Elon Musk is continuing to grow his status as the world’s richest man as his net worth is sky rocketing over the rest of the top earners in 2022. In the latest Forbes list, Musk’s net worth increases to $282 billion, which is about $100 billion more than that of Amazon founder Jeff Bezos at $183.6 billion, reports the Daily Mail. Musk Was one of the biggest beneficiaries from the Covid-19 pandemic, as his net worth sat at just $26.6 billion at the beginning of 2020. In 2020 Musk’s wealth grew by over $110 billion, which is the record for anyone in the history of Forbes tracking such numbers. The report mentioned that Musk gained another $90 billion in 2021, as he knocked Bezos off the top the Forbes rich list to begin the year. Musk is now $115 billion richer than LVMH CEO Barnard Arnault, the third richest man in the world with a net worth of $167.4 billion, the report said He is also well past the numbers for Microsoft founders Bill Gates ($134.2 billion) and Steve Ballmer ($97 billion), it added. Recently, Twitter CEO Parag Agrawal has said that micro-blogging platform has appointed Musk to its board of directors
13/04/2022
War in Ukraine to curb trade and economic growth this year, says WTO
1. The World Trade Organisation has predicted that trade in goods will grow much less than previously expected this year, saying prospects for the global economy have darkened since the onset of Russia's war in Ukraine.
2. The world merchandise trade volume is expected to grow 3 per cent this year, down from a forecast of 4.7 per cent before the war began. For 2023, it's expected to increase 3.4 per cent.
3. The trade body also projects that global gross domestic product at market exchange rates will grow by 2.8 per cent this year, down from the 4.1 per cent previously anticipated.
What is SDF, the RBI’s new tool to absorb excess liquidity to control inflation?
1. In 2018, the amended Section 17 of the RBI Act empowered the Reserve Bank to introduce the Standing Deposit Facility (SDF) – an additional tool for absorbing liquidity without any collateral.
2. When the central bank has to absorb a tremendous amount of money from the banking system through the reverse repo window, it becomes difficult for it to provide the required volume of government securities in return. This happened during the time of demonetisation.
3. The SDF endeavours to replace the fixed rate reverse repo (FRRR) as the floor of the liquidity adjustment facility corridor.
4. Thus, SDF is an arrangement, wherein, RBI need not give collateral for liquidity absorption.
5. The idea of an SDF was first mooted in the Urjit Patel Monetary Policy Committee report in 2014.
6. On Friday, Governor Shaktikanta Das said that the SDF will be at 3.75 percent, 0.25 percentage points below the repo rate, and 0.50 percentage points lower than the marginal standing facility (MSF) which helps banks with funds when required.
12/04/2022
Central Board of Indirect Taxes and Customs (CBIC) has proposed mandatory Goods and Service Tax (GST) scrutiny on a quarterly basis to enhance compliance through effective and standardised scrutiny of returns.
MCA Update form INC-20A_Amendments are carried out in Rule 12 of the Companies (Incorporation) Rules, 2014 to insert a new proviso to provide that in case of a Company being incorporated as a Nidhi, the declaration by the Central Government under Section 406 of the Act shall be obtained by the Nidhi before commencing the business and a declaration in this behalf shall be submitted at the stage of incorporation by the company. Through this amendment Form INC – 20A is also revised to specifically capture the notification declaration as a Nidhi Company as one of the mandatory attachments.
https://egazette.nic.in/WriteReadData/2022/234994.pdf
11/04/2022
Deutsche Bank has said it expects the US to fall into recession in 2023 as the Fed jacks up rates. It became the first major bank to predict a US recession, arguing that such as event is necessary to tame inflation. Deutsche said the inversion of the bond yield curve is a reliable sign that a recession is coming in the next two years. Inflation has soared to a 40-year high in the US as demand has rebounded from coronavirus lockdowns, aided by government stimulus, but supply chains have remained snarled. The Fed has already raised interest rates by 25 basis points as it tries to cool borrowing and spending. But analysts say the hiking cycle has a long way to go, raising fears about economic growth. Deutsche expects the Fed to raise the federal funds rate by 50 basis points at each of the next three meetings, and thinks the rate will go above 3.5% next year.
10/04/2022
While announcing the monetary policy on Friday, the Reserve Bank of India (RBI) Governor Shaktikanta Das said RBI has proposed to make card-less cash withdrawal facility available across all banks and ATM networks using the Unified Payments Interface (UPI). RBI Governor said the absence of need for a card to initiate cash withdrawal transactions would help in containing frauds like card skimming, card cloning, etc. However, Governor Shaktikanta Das clarified credit & debit cards will be continued. Under the cardless cash withdrawal facility, individuals can withdraw cash without using any debit card at Automated teller machines (ATMs). The cardless withdrawal request can be initiated for a minimum of Rs 100 per transaction and up to a maximum of Rs 10,000 per day or Rs 25,000 per month for a beneficiary while the limits are subject to change as per regulatory guidelines.
09/04/2022
The Central Board of Direct Taxes (CBDT) on Wednesday notified the e-Dispute Resolution Scheme 2022, to settle tax disputes involving small tax payers. Taxpayers having total returned income up to Rs 50 lakh having income tax disputes not exceeding Rs 10 lakh will be able to avail the scheme. Taxpayers will not be required to appear before tax officials either personally or through an authorized representative in connection with any proceedings under the entire communication will be in electronic mode. The CBDT also notified constitution of a dispute resolution committee, which shall consist of three members, including two retired officers from the Indian Revenue Service who have held the post of commissioner of income tax or higher post for five years and one serving officer not below the rank of principal commissioner of income-tax. Members will have a tenure of three years.
The Employees Provident Fund Organisation (EPFO) hasn’t yet been able to split subscriber accounts into two for members who contributed more than Rs 2.5 Lakh last fiscal, which may create tax complications and filling issues. The EPFO is likely to split accounts only at the time of crediting the interest for FY22, which generally happens between September and December of the following fiscal year, as per few. The EPFO had declared an interest rate of 8.1 % for FY22 at its central board of trustees meeting last month. The budget for FY21 had imposed income tax on interest earned on subscriber contributions of more than Rs 2.5 lakh a year. Since income tax returns are required to be filled by July 31, this may create issues if taxpayers are not aware of the taxable interest earned on provident contributions. As per the plan, existing provident fund (PF) accounts with an employee contribution of over Rs 2.5 lakh were to be split into two from April 1, 2022. The Central Board of Direct Taxes (CBDT) had inserted Rule 9D in the Income Tax Rules, 1962, which specified that two separate accounts within the PF account shall be maintained to segregate the taxable and non-taxable contributions to PF along with the interest paid.
Income tax filing portal will not be accessible due to scheduled maintenance from 09.04.2022 (Saturday) 8 PM to 10.04.2022 (Sunday) 10 AM.
GSTN has enabled following new functionalities on the GST Portal:
1. Earlier, restaurant service provider were being prevented to file CMP-08 if their turnover exceeded Rs. 50 lakh, even though they were eligible for Composition scheme upto the turnover of Rs. 1.5 crore. Now, this has been resolved.
2. A link has been provided at the page of period selection to view/file the return, where MSME taxpayers can give their consent for availing Mudra Loan upto Rs. 10 Lakhs or MSME Loan upto Rs. 5 Crore.
3. ITC table of GSTR-3B will give the warning message, if the ITC has been claimed in excess of GSTR-2B (Earlier, 5% tolerable range was there which is removed now).
4. A functionality has been enabled to display liability payment ratio and its computation details to taxpayer. Ratio of auto-populated liability and the liability actually paid by taxpayer would indicate the compliance behaviour of taxpayer. This ratio can be seen at the page of tax liability and ITC comparison.
5. Now, the circular issued under the GST is also showing on the portal of taxinformation.cbic.gov.in (Earlier circulars were showing on CBIC portal only).
MCA Updates :
1. MCA has made mandatory to file INC-20A (Declaration for Commencement of business) at the stage of incorporation by the NIDHI Company. Nidhi Company will not commence the business until the approval of INC-20A has been received.
2. MCA has notified that the following particulars of the register of member of a company shall not be made available for inspection or for taking extracts or copies u/s 94 to any member/ others:
- Address or registered address (In case of body corporate)
- E-mail ID
- Unique Identification Number (UIN)
- PAN Number
3. CARO is not applicable on following companies:
Private Companies (other than Small Companies):
Share capital + reserves and surplus <= Rs. 1 crore; & Borrowings <= Rs. 1 Crore; & Revenue <= Rs. 10 crore
Banking Company, Insurance Company, One Person Company (OPC), Section 8 Company, SMALL Company.
08/04/2022
On the gst tax invoice,
HSN/ SAC code is mandatory to be mentioned at 4 digits level (taxpayers with turnover <= INR 5 cr.) and at 6 digits level (taxpayers with turnover > INR 5 cr.).
Consolidated invoice at the end of the day can be raised in relation to all such single sales value invoices of less than Rs. 200 if customer don’t demand invoice.
The CBIC vide Notification No. 19/2022-Customs dated March 31, 2022 has issued amendments in Notification No. 16/2015-Customs, dated April 1, 2015, Notification No. 18/2015-Customs, dated April 1, 2015, Notification No. 20/2015-Customs, dated April 1, 2015, Notification No. 22/2015-Customs, dated April 1, 2015 and Notification No. 45/2016-Customs, dated August 13, 2016 in order to extended the date of exemption of Integrated Goods and Services Tax (“IGST”) and the Goods and Services Tax Compensation Cess on certain goods under Foreign Trade Policy 2015-2020 (“FTP”) imported in India under the Export Promotion Capital Goods Scheme (“EPCG Scheme”), Advance Authorisation Scheme, materials imported into India under Advance Authorisation for annual requirement, materials imported into India under Advance Authorisation for export of a prohibited goods, and fabrics imported into India under Special Advance Authorisation respectively, from March 31, 2022 to June 30 2022.
07/04/2022
Tax Relief to income arising from retirement funds:
1. Some countries tax income from such foreign retirement benefits accounts on receipt basis. However, the amount withdrawn from such account is chargeable to tax in India on the accrual basis. Due to the mismatch in the year of taxability, the taxpayers face difficulties in claiming the foreign tax credit.
2. Finance Act 2021 has introduced Section 89A, which provides that the income of a specified person from the specified account shall be taxed in the manner and in the year as prescribed by the Central Government. A specified person means a resident person who opened a specified account in a notified country while being non-resident and resident in that country.
3. Rule 21AAA has been notified prescribing manner for taxation of income from retirement benefits account maintained in a notified country. The rule provides that if a specified person has accrued any income in the retirement benefits account, then the same shall be included in his total income of the previous year, in which such income is taxed in the country wherein such account is maintained.
4. To exercise this option, the specified person is required to e-file Form No. 10-EE on or before furnishing return of income. Further, once this option is exercised, it will apply to all subsequent previous years and cannot be withdrawn.
5. However, if the specified person has become non-resident after exercising the option, then it shall be deemed that he has never exercised the option and income accrued in the specified account from the previous year in which such option was exercised shall be taxable in his hand.
(Notification No. 24/2022, dated 04-04-2022)
Digital currency planned by RBI may not be interest bearing: The digital currency planned by the Reserve Bank of India (RBI) is unlikely to be interest-bearing since the sovereign currency it would be based on does not pay interest, said deputy governor T Rabi Sankar on Thursday.
06/04/2022
In a major relief for Alibaba, the Bombay High Court (HC) has directed the state to defreeze the accounts of two of the ecommerce giant’s firms in connection with a cheating case. These two companies include Alibaba Cloud (India) and Alibaba Ecommerce India. The verdict comes weeks after Alibaba approached the HC seeking relief in the matter. A High Court bench comprising Justices Prasanna Varale and SM Modak also directed the companies to furnish all available IP addresses related to the matter. This came after public prosecution raised the demand saying the details would help in the investigation. Retorting back, Alibaba, through its counsel, Ashwin Thool, called for quashing such a demand. Thool said that IP addresses were not relevant to the probe. But, the Court rejected the plea and instead directed the ecommerce player to cooperate.
CGST Commissionerate, Navi Mumbai has busted a fake ITC racket of Rs. 19.84 Crore and arrested the Director of M/s Fortune Global Trade Private Limited on 30th March 2022. This Vikhroli based private limited company, which was dealing in trade of synthetic rubber, had engaged in availing and utilization of fake GST Input Tax Credit (ITC) on the basis of bogus invoices of Rs. 110 Crore. Acting on a tip off received from Central Intelligence Unit of Principal Chief Commissioner CGST Mumbai Zone, a team of officers of Anti-Evasion section of CGST Commissionerate, Navi Mumbai had conducted an enquiry against the aforesaid company. The said company had availed fake ITC of Rs. 9.92 Crore from 8 non existing entities and had passed on the same to various entities, without actual supply of goods or services.
05/04/2022
Black money provisions cannot be invoked for minor breach of law: Mumbai ITAT
Facts:
1. The AO had imposed penalty under Sec 43 of The Black Money (Undisclosed Foreign Income & Assets) and Imposition of Tax Act 2015
2. This penalty was imposed for not disclosing, in the income tax returns filed by the assessee under section 139 of the IT Act, a foreign bank account in which she was a signatory for her late mother, even though the money held therein did not belong to, and were not beneficially owned by, the taxpayer and that position is accepted by the authorities and has attained finality as such.
3. The money held in the said account was eventually donated to a charity in deference to the wishes of the assessee’s late mother and it was brought to tax in the hands of the late mother’s legal representative, and that, at no stage, assessee used the said money in any manner whatsoever.
Mumbai ITAT held as below:
1. The well-intended harsh laws meant for checking the economic offenders, stashing their ill-gotten monies abroad, must not be invoked for punishing a venial breach of the law by a bonafide businessperson.
2. Unless there are sufficient prima facie reasons to at least doubt bonafides well demonstrated by the assessee, an assessee cannot be visited with penal consequences.
Few important changes applicable from 01.04.2022:
1. Filing of an Updated Return:
The concept of “Updated Return” has been made effective from 1st April 2022. In last minute return filing exercises, various errors or omissions are often committed. Taxpayers now can rectify the return for the FY 2019-20 & 2020-21 by filing the “Updated Return” if there is any omission or error at the time of filing earlier returns. However, this updated return would be subject to the payment of additional tax of 25% or 50% along with interest.
2. Taxation of Interest of EPF account:
With a view to tax High-Net worth Individual (HNI), the cap of Rs. 2.50 lakh has been imposed for contribution in the Employee Provident Fund (EPF) account. Now, interest on Employee provident fund will be subject to income tax if the contribution in the EPF Account exceeds the ceiling of Rs. 2.50 Lakh p.a. As per the new Rule 9D, the existing EPF account shall be divided into two parts for taxation purposes. In one account, the entire interest will be tax free if the contribution is not exceeding Rs 2.50 lakh p.a. In another account, the contribution of more than Rs 2.50 Lakh p.a. will be reflected and the interest of such an account will be taxable. In case of Government employees, the tax-free GPF contributions shall be Rs 5 lakh p.a. and not Rs. 2.50 Lakh. It may be noted that only the interest amount on the excess contribution will be considered for tax calculation, and not the contribution amount.
3. Taxation of Crypto-Currency [Section 115BBH]:
a) All income from investment or trading in Crypto currency (virtual digital assets-VDA) will be taxable at a flat rate of 30% without any deduction towards any expenditure or allowance incurred for earning such income except for the cost of acquisition (COA).
b) At the time of passing the Finance Bill- 2022, it has been categorically provided that the loss incurred in a particular digital asset cannot be set off against income from another version of a crypto asset.
c) Further, Loss from the transfer of any other digital asset will not be allowed to be set off against any other income. In short, taxpayers cannot set off gains and losses on cryptocurrency against gains and losses in other assets like shares, real estate, or other commodities. Further, losses from virtual digital asset transactions can’t be carried forward.
d) It has also been provided that if any virtual digital asset is provided as a gift, it will be taxed in the hands of the recipient.
e) Further, it is also now specifically provided that no deduction towards infrastructure costs or other expenses during the mining crypto assets shall be available.
f) TDS mechanism is also provided on crypto transaction U/s 194S. The threshold limit is Rs. 50,000 in the case of specified persons and Rs. 10,000 in case of non-specified persons. The TDS rate shall be 1% & will be effective from July 1, 2022.
4. Extension of the Benefits to Start-ups:
The tax benefit to start up has been extended by one more year. Earlier, Start-ups established before 31.03.2022 were eligible for 100% tax exemption for 3 consecutive years out of ten years from incorporation. This period of incorporation of eligible start-ups has now been extended by one more year i.e., till 31.03.2023, for availing of such tax benefits. It means all startups established between 01.04.2022 to 31.03.2023 will be eligible for tax exemption.
5. TDS On Benefit or Perquisite in the course of Business:
Now, TDS will be applicable on any benefit or perquisite which is provided in cash or kind if such value exceeds Rs. 20,000/- in a year. In short, various schemes like Gold coin, Gift, etc by the business houses (which may be insurance companies, Home appliances companies, etc) will be subject to TDS @ 1% w.e.f. 1st July 2022.
6. No extra relief to homebuyers:
There was an additional deduction U/s 80EEA up to Rs. 1.50 Lakh in respect of housing loan sanctioned between 01.04.2019 to 31.03.2022. The period of deduction has not been extended. In short, any taxpayers who have been sanctioned the housing loan after 01.04.2022 will not be able to avail the addition up to Rs. 1.50 Lakh.
7. Tax relief on Covid-19 treatment expenses and compensation:
No income tax shall be payable if the salaried taxpayers has received any money for Covid medical treatment. Similarly, any money received by the family members on the death of the employee due to Covid will be exempt up to Rs. 10 lakhs if such payment is received within 12 months from the date of death. This amendment has been made effective retrospectively from April 1, 2020.
8. Widening the scope of the e-invoice in GST:
The scope of E-invoicing has been widened w.e.f. 01.04.2022. The limit of turnover for issuance of e-invoice (e-invoice) under the GST has been reduced from the earlier fixed limit of Rs 50 crore to 20 crore w.e.f. April 1, 2022.
9. NPS deduction to State government employees:
Starting from 01.04.2022, State government employees will be able to claim deduction under Section 80CCD(2) for NPS contribution by the employer up to 14% of their basic salary and dearness allowance, which is in line with the deduction available to the Central government employees under the said section. Earlier, this was capped at 10%.
10. Tax Relief for person with disability:
Earlier, Section 80DD was providing for deduction towards any insurance policy taken out for a disabled dependent only if the lump-sum payment or annuity is available to the disabled person on the death of the taxpayer. W.e.f. 01.04.2022, the scope has been extended by providing that the benefit would be available if the lump-sum or annuity is receivable by the taxpayer upon attaining age of sixty years.
04/04/2022
Patriarchs of many business families living abroad and person of Indian origin (PIO) are housing their funds, properties and other income generating assets here in local trusts to escape the tag of RNOR (resident but not ordinary resident), spend more time in India, and address a lurking fear that the government could change the law in the near future to make them disclose their assets across the world. At last 10 Indian families from the US, Africa and UK have set up irrevocable, discretionary trusts in Indian since the residency law was changed two year ago, said persons who have advised them. The status of an RNOR lies in between that of a non-resident Indian who stays more than 181 days in the country and a regular resident Indian. Under the new law, a non-resident visiting Indian and spending more than 120 days (but less than 182 days) is treated as RNOR if the person’s income from assets in Indian is ?15lakh or more. Such a person has to fork out higher tax (like a resident Indian) – un like an NRI who pays a much lower pays a much lower tax a (of 12.5% to 15%) in accordance with the respective tax treaty between Indian and the country where she is based. But more than tax impact, the fear that this may be the first step towards a mandatory disclosure off all overseas assets has unnerved many. Currency, only resident Indians have to spell out their foreign assets in the Income Tax (I-T) return forms while NRIs and RNORs do have make any such disclosure. This, they fear, many changes for RNORs. “Most of them are in the autumn of their lives, having spent decades abroad and amassing wealth. But they have deep bonds with India, miss their motherland and want to spend five to six months every year to handhold and guide local entrepreneurs and participate in entrepreneurs and participate in philanthropy. Some also fear that a change in the RNORs status could be a precursor to a change in disclose sure regulations on their overseas assets – some high they are not comfortable with they are not comfortable with. So a combination of factors is going in the formation of the trusts despite the fact there is absolutely no tax advantage,” said Bijal Ajinkya, partner at the law firm Khaitan & Co. The head of the trust family acts as the settlor of the trust, professionals are invited as trustees while children and grandchildren are named as beneficiaries of the trust. “Several non-residents have business interests in Indian and need to be present here for managing the business. This necessitates their presence in Indian beyond 120 days but for less than 182 days. They do consider settling their assets into trusts of which they are not the beneficiaries – thereby, reducing their income in Indian below ?15lakh. This, of course, has larger asset divestment issues; but it could act as a means of permitting stay in Indian beyond 120 days and up to 182 days, “said Dinesh Kanabar, founder and CEO of Dhruva Advisors, one of the large tax and regulatory boutiques.
Transferring assets to trusts does not help in lowering tax as the income earned by the domestic trust is taxed at the same rate as applicable to a resident, which could be as high as 43%. However, the advantage is that since the income of ?15lakh (or more) is earned by trust and not by the PIO, the person is not categorized as RNOR. An RNOR who wishes to lower his tax outgo to the level of an NRI has to demonstrate that his economic and personal ties in the foreign country are deeper than those in Indian under the tie-breaker test allowed under tax treaty. But convincing the tax office isn’t easy. A non – resident can slip into an RNOR status even if she doesn’t visit for a days as long as her income from India is ?15lakh or more and is ‘not liable to pay tax’ in the country where she resides thanks to another provision introduced in the law. This has impacted many senior professionals working in the UAE and Gulf countries having no income tax on individuals. “Some of them are also in the process of forming trust in which the income earned in Indian is booked, “said Ajinkya. NRI business families in Dubai, however, have found a workaround after the UAE introduced a 9% tax this year on ‘business income’ above Dirham 375,000. “They show a small part of their income as business income, and pay tax on it to avoid the RNOR status. Once they are taxed, no matter how little the amount, they can no longer be described as those ‘not liable to pay tax’.” Tax said an UAE consultant The provision was introduced to catch the proverbial to catch the provision was introduced to catch the proverbial ‘tax travelers’ who reside in zero – tax jurisdictions, avoids tax on overseas income and pays very little tax in India. “They had lobbied with the UAE after the RNOR rule was changed in India. That has paid off with the UAE introducing a nominal tax. But unfortunately, the well-paid salaried NRIs in India are impacted as they can’t show any part of their earnings as business income and paying a small tax,” he said
03/04/2022
NHAI not to issue Section 54EC bonds
1. The ongoing 54 bond issue of NHAI shall be closed from 31st March 2022.
2. The Government of India in IEBR for FY 2022-23 have not mandated NHAI to raise funds from the market. Therefore. NHAI shall not issue 54 EC Bonds and any other debt instruments/Bonds etc. w.e.f. 01.04.2022.
3. All are requested to please take a note of It and advise all your associates/brokers not to accept any fresh application and application money intended for allotment w.e.f. 01.4.2022 onwards.
The rate of interest on various Small Savings Schemes for the first quarter of financial year 2022-23 starting from 1st April, 2022 and ending on 30th June. 2022 shall remain unchanged from the current rates applicable for the fourth quarter (1St January, 2022 to 31st March. 2022) of FY 2021-22.
The income tax (IT) department has closed its investigation against the family members of Reliance Industries Ltd chairman Mukesh Ambani regarding alleged evasion of taxes on foreign income for want of evidence and the issue falling under the realm of “double jeopardy”, people in the know told ET. These sources added that the probe initiated in 2019 under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax or BM (UFI&A) IT Act was closed with the probe officer concluding “…an internal noting of a bank official is not sufficient proof to indict an assessee as the owner of a foreign asset under the said Act”, an official told ET quoting the findings. These source added the department also found that since the same foreign assets were under investigation in the Swiss bank leaks (HSBC list) linked to a company, Motech Software Pvt Ltd, the probe on the four assessees will amount to be a case of double jeopardy under the law. Motech Software is being probed by IT under the Swiss bank case. “Based on the observation that internal nothing of a bank official is not sufficient enough and that action under IT Act on the same foreign asset has already been taken in the case of Motech Software by the department, the case was deemed fit to be closed,” explained another official. “Also communiques sent to different countries either remained unanswered or were replied partially, which didn’t help the IT’s case,” said one of the persons quoted above.
02/04/2022
Goods and service tax (GST) collections touched an all-time high of over Rs 1.42 lakh crore in March, boosted by improved economic activity as the Omicron wave waned as well as anti-evasion measures and rate rationalization. Separately released achieved the highest ever loading in a month during March at 139.25 million tonnes (MT), providing more evidence of economic recovery Data released on Thursday showed core sector growth at a four-month high of 5.8% in February.
5,200 firms with credit exposure of over Rs 5 cr declared as NPAs till Dec 2021: FinMin
1. Over 5,200 companies having credit exposure of Rs 5 crore or above were categorised as non-performing assets (NPAs) or bad loans on the banks' books as of December 31, 2021, Minister of State for Finance Bhagwat Karad said in Parliament.
2. The number of unique borrowers having aggregate credit exposure of Rs 5 crore or more as companies and classified as NPA was 5,623 as of March 31, 2021, and 5,231 as of December 31, 2021.
3. Scheduled commercial banks (SCBs) and All Indian Financial Institutions report certain credit information of all borrowers having aggregate credit exposure of ?5 crore and above to the RBI, under its Central Repository of Information on Large Credit (CRILC) database, since the quarter ended June 2014.
Important Case Laws on Income Tax:
Income from granting access to data base is not Royalty under India-USA DTAA: ITAT; Tax Payer : OVID Technologies Inc.
Citation Number : TS-186-ITAT-2022(DEL)
Facts:
1. The appellant is an entity incorporated in USA. Transaction under consideration is granting of access to online data base of text journals of the appellant.
2. The Assessing Officer/CIT(A) were of the firm belief that the assessee has granted license to access online data base which falls within the definition of ‘Royalty’ as per Article 12 of the DTAA between India and USA.
3. Note: Article 12 of the Tax Treaty brings within the ambit of the definition of royalty, a payment made for the use of or the right to use a copyright of a literary, artistic or scientific work. Thus, only those payments that allow a payer to use / acquire a right to use a copyright in a literary, artistic or scientific work arc covered within the definition of royalty.
ITAT Delhi held as follows:
1. The revenue derived by the assessee from granting limited access to its data base is akin to sale of book, wherein purchaser does not acquire any right to exploit the underlying copyright.
2. When the purchaser reads the book, he only enjoys the content. Similarly, user of the data base does not receive the right to exploit the copyright in the database, he only enjoys the product.
3. In our considered view, the payments made for acquiring right to use product itself, without allowing any right to use the copy right in the product are not covered with the scope of ‘Royalty’.
Sec 68 is applicable in respect of unexplained credit found in the books of the assessee only:
1. Section 68 of the Income Tax Act is applicable and can only be invoked when assesse is maintaining books of account and there is any sum which is found credited in the books of an assesse maintained for any previous year and assesse offers no explanation with regard to such cash credits or explanation offered by assesse was not satisfactory.
2. All credit entries appearing only in the books of accounts of the assesse are covered under this section. Reliance can be placed Smt. Shanta Devi Vs. CIT [ 1988] 171 ITR 532 ( Punjab & Harayana High Court ).
3. In the abovementioned Case Law, it was held that on perusal of section 68 of the act shows that in relation to the expression ‘Books’ the emphasis is on the word ‘ assesse’ meaning thereby that such books have to be the books of the assesse himself and not of any other assesse.
Bombay HC imposes a cost of Rs 5000 on the AO for ignoring the assessee’s reply in the order Goregaon Sports Club (WRIT PETITION (L) NO.25507 OF 2021)
Facts:
1. In the assessment order, the Assessing Officer (AO) is referring to a show cause notice by which the AO proposed modification in returned income and petitioner's initial reply seeking an adjournment of the hearing but conveniently chooses to ignore the reply filed by petitioner on 23rd April 2021 showing cause as to why the modification in returned income should not be made.
2. The Assessing Officer in his order disregarding the reply said that "As assessee has not submitted any reply till the date of passing the order ............ and limitation of time barring date assessment is completed as per DAO sent alongwith SCN".
The Bombay HC held as below:
1. If the Assessing Officer had only considered the file properly and dealt with the reply dated 23 rd April 2021, then the need for petitioner to approach this Court would not have arisen.
2. Ignoring the reply and forcing petitioner to approach this Court is again adding to the docket of the already overburdened Court.
3. Hence, it is fit case, in our view, to impose cost on the concerned assessing officer, who shall pay a sum of Rs.5,000/- as donation from his / her personal account to P. M. Cares Fund.
01/04/2022
Section 206C (1G) of the Income-tax Act, 1961 (“the Act”) provides for collection of tax by a seller of an overseas tour programme package from a buyer, being a person purchasing such package, at the rate of 5% of the amount of the package. Representations were received from domestic tour operators who were facing difficulties in collection of tax from non-resident individuals visiting India who were booking overseas tour package from such domestic tour operators. Since such persons may not have a PAN, tax is required to be collected at higher rates. Further, such non-residents may find it difficult to furnish their ITR and claim refunds. In order to remove such difficulties, the Central Government, in exercise of powers conferred under section 206C(1G) of the Act, has specified that the provisions of the said section shall not apply to a buyer being an individual who is not a resident in India in terms of clause (1) and clause (1A) of section 6 of the Act and who is visiting India. Hence, a domestic tour operator is not required to collect tax on sale of overseas tour package to non-resident individuals visiting India. Notification No. 20 of 2022 dated 30.03.2022.
ITR forms notified for Asstt year 2022-23 vide CBDT notification dated 30.03.2022.
CBDT issues circular no. 8/2022 dated 31.3.2022 to extend date for filing Form 10AB u/s 10(23C), 12A and 80G up to 30.9.2022.
MCA notification dated 31.3.2022 extends
1. Applicability of Audit Trail by another year to accounting period commencing on or after 1.4.2023
2. Filing of Form CSR 2 for FY 2020-21 to 31.5.2022
E Invoicing applicable from 01st April 2022 onwards on certain class of Gst Registered tax payers
Brief Write Up Gst E invoicing.. Part II..
http://cajatinminocha.com/Image/E_Invoicing_Part_II.pdf
Part I…
http://cajatinminocha.com/Image/GST_E_Invoicing.pdf
On 31st March 2022 two Notifications Central tax (Rate) 1/2022 and 2/2022 were issued. Both the notifications are applicable from 1st April 2022
GST Rate Increased from 5% to 12% with ITC as per NN.01/2022 and 6% without ITC as per NN 02/2022 of below items
1-Fly ash bricks or fly ash aggregate with 90 % or more fly ash content; Fly ash blocks
2-Bricks of fossil meals or similar siliceous earths
3-Building bricks
4-Earthen or roofing tiles
Amendments applicable from 30th March 2022 as on date of enactment of the Finance Act 2022.
I. Reduction in rate of Interest:
An amendment was proposed to be brought in Notification No. 13/2017 - Central Tax dated 28 June 2017 by way of reducing rate of Interest from 24% to 18% under sub-section (3). Similar amendment was brought in Notification No. 06/2017 – Integrated Tax dated 28 June 2017 and Notification No. 10/2017 – Union Territory Tax dated 30 June 2017. Hence, Notification No. 13/2017 – Central Tax, dated the 28th June, 2017, is being amended retrospectively, with effect from the 1st day of July, 2017, so as to notify rate of interest under subsection (3) of section 50 of the CGST Act as 18%.
II. Retrospective exemption to certain activities
1. Retrospective exemption was proposed to be granted to ‘supply of unintended waste generated during the production of fish meal (falling under heading 2301), except for fish oil’, during the period 01 July 2017 to 30 September 2019. However, it has been provided that no refund of tax already paid on such supply shall be granted. Therefore, such exemption is brought for such cases wherein no tax is paid by a taxpayer on such supply during 01 July 2017 to 30 September 2019.
2. By way of Notification No. 25/2019 – Central Tax (Rate) dated 30 September 2019, it was notified that “service by way of grant of alcoholic liquor license, against consideration in the form of license fee or application fee or by whatever name it is called by the State Governments” shall be treated neither as supply or goods nor supply of services. This notification (and corresponding Notifications under IGST Act & UTGST Act) is proposed to be given retrospective effect from 01 July 2017. However, it has again been provided that no refund of tax already paid on such supply shall be granted. Therefore, such effect is brought for such cases wherein no tax is paid by a taxpayer on such supply during 01 July 2017 to 30 September 2019.
III. www.gst.gov.in notified as common portal:
As per Section 146 of the CGST Act, 2017, the Government may notify the Common Goods and Services Tax Electronic Portal for –
a. facilitating registration,
b. payment of tax,
c. furnishing of returns,
d. computation and settlement of integrated tax,
e. electronic way bill, and
f. for carrying out such other functions and for such purposes as may be prescribed.
For point no. (a) to (d), Government has already notified www.gst.gov.in as the Common GST Electronic Portal and for point no. (e), Government has notified www.ewaybillgst.gov.in as the Common GST Electronic Portal (NN 9/2018-CT dated 23.01.2018). Further, for generation of e-invoices also, Common GST Electronic Portal has been notified vide NN 69/2019-CT dated 13.12.2019.
NN 9/2018 – CT dated 23.01.2018, was proposed to be amended so as to notify www.gst.gov.in, retrospectively, with effect from 22nd June, 2017, as the Common GST Electronic Portal, for all functions provided under Central Goods and Services Tax Rules, 2017, other than those provided for e-way bill and for generation of invoices under sub-rule (4) of rule 48 of the CGST Rules.
The Securities and Exchange Board of India (Sebi) on Wednesday clarified on the new norms governing related party transactions that will come into effect April 1. The regulator said listed companies need not seek fresh approval from the shareholders for a related party transaction (RPT) That has been approved by the committee and shareholders till March 31. “Based on the representations received from listed entities and industry bodies, it has been decided to provide clarifications and guidance for smooth implementation of the amended Regulation,” Sebi said in a circular. Sebi rules define a related party transaction as any transfer of resources, services or obligations between a listed entity and a related party regardless of whether a price is charged or not. The regulator said all existing material related party contracts or arrangements entered into prior to April 1 should be placed for approval of the shareholders in the first general meeting after the deadline.
31/03/2022
SEBI has decided to enhance the net worth criteria and track record requirements for entities managing collective schemes. The regulator has also approved changes to listing obligations and disclosure requirement regulations for simplification of procedure for transmission of securities.
Government has received a total of 239 applications under the Production Linked Incentive (PLI) scheme for bulk drugs and 49 of them have been approved till now, the Rajya Sabha was informed.
CBDT Clarifies that in case of failure to intimate the Aadhaar Number by the last extended notified date i.e. 31.03.2022, the PAN allotted to the person shall be made inoperative in accordance with the provisions of the Act. Penalty u/s 234H for not linking PAN with Aadhaar reduced to Rs.500 from Rs.1000.
CBDT extends time line under Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) vide Notification No. 16/2022 Income Tax, [S.O. 1440(E)] dated: 28th March, 2022 MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAXES) New Delhi, the 28th March, 2022 Notification No. 16/2022 Income Tax S.O. 1440(E).
Update Name, PAN, Address, Mobile No., E-mail id & Income Range in Demat & Trading Accounts by 31.3.22 & avoid Accounts to be made inactive.
30/03/2022
According to reports, the Covid caller tune will now cease to exist and netizens can't be any happier. It was tough for a person to make an emergency call without listening to the caller tune. With a growing resentment regarding the caller tune, a report by news agency ANI has now indicated that the Covid caller tune will now be gone for good.
In one of the biggest seizures in the recent past, Customs officers on Monday seized gold worth ? 7.5 crore at the international airport in Delhi from two Kenyan men, officials said.
The accused were intercepted after they arrived from Nairobi via Addis Ababa on Monday morning, and a search resulted in the recovery of 19 gold bars collectively weighing 15.57 kg concealed in specially made pockets, they said. The tariff value of the seized gold is around ? 7.5 crore, an official said.
UK introducing polymer currency notes:
Millions of the old-style paper £20 and £50 notes remain in circulation but the Bank of England is withdrawing them later this year in favour of those with a more plastic-like feel which are harder to copy. With just six months to go until the paper notes won't any longer be valid on the high street and accepted as legal tender, people are being encouraged to spend or deposit them as soon as possible. When the plans were first announced last October there were estimated to be around £9 billion worth of paper £20 and £15 billion worth of paper £50 notes still in circulation. Notes are being returned steadily to the Bank of England as they are replaced with the new polymer notes, which allow for more security features that make them harder to counterfeit.
Income tax changes effective from 01st April 2022:
1) Crypto Tax
The crypto asset tax regime in India will gradually roll out in the financial year starting April 1. Provisions on the 30% tax will be effective at the start of the fiscal year while those related to the 1% TDS will come into effect from July 1, 2022. The 2022-23 Budget has brought in clarity concerning the levy of income tax on crypto assets. The threshold limit for TDS would be ?50,000 a year for specified persons, which include individuals/HUFs who are required to get their accounts audited under the I-T Act.
2) Crypto losses cannot be set off against crypto gains or other assets
The Indian government has tightened norms for crypto by disallowing losses incurred in a particular digital asset to be set off against income from another version of a crypto holding. The government won’t allow tax breaks on infrastructure costs incurred while mining crypto assets as it won’t be treated as the cost of acquisition. For instance, if you make a ?1000 gain on bitcoin and a ?700 loss on Ethereum, you have to pay tax on ?1000 and not on your net profit of ?300. Similarly, you cannot set off gains and losses on cryptocurrency against gains and losses in other assets like stocks, mutual funds or real estate.
3) Filing of updated IT Return
A new provision is inserted that allows the taxpayers to file an updated return for errors or mistakes done in income tax returns. Taxpayers can now file an updated return within two years from the end of the relevant assessment year.
4) NPS deduction to State government employees
The State government employees will now be able to claim deduction under Section 80CCD(2) for NPS contribution by the employer up to 14% of their basic salary and dearness allowance, which is in line with the deduction available to the Central government employees under the said section.
5) Tax on PF account
The Central Board of Direct Taxes (CBDT) has decided to implement Income-tax (25th Amendment) Rule 2021 from April 1. It means that a cap of tax-free contributions up to ?2.5 lakh is being imposed on the Employee Provident Fund (EPF) account. If the contribution is made above this, then the interest income will be taxed.
6) Tax relief on Covid-19 treatment expenses
As per the Press Release on June 2021, tax exemption has been provided to persons who have received money for Covid medical treatment. Likewise, money received by family members on the death of a person due to Covid will be exempt up to Rs. 10 lakhs for family members if such payment is received within 12 months from the date of death. This amendment will be effective retrospectively from April 1, 2020.
7) Tax relief to persons with disability
The parent or guardian of a differently-abled person can take an insurance scheme for such a person.
29/03/2022
The Enforcement Directorate has informed the Supreme Court that while probing a money laundering case involving 80,000 Bitcoins, it found a well-planned conspiracy hatched by a Singapore-based firm owned by Indians who have footprints in United Arab Emirates and China.
A report by an international organisation on global inequality that termed India as a "poor and very unequal" country has been dismissed as based on "flawed and questionable methodology" by Finance Minister Nirmala Sitharaman. India stood out as a "poor and very unequal" country, with the top 1 per cent of the population holding more than one-fifth of the total national income in 2021 and the bottom half just 13 per cent, the report by the World Inequality Lab had said in December last year. It was authored by Lucas Chancel, co-director of the World Inequality Lab, and coordinated by several experts, including French economist Thomas Piketty. The report had claimed that the average national income of the Indian adult population is ? 2,04,200; the bottom 50 per cent earns ? 53,610, and the top 10 per cent earns more than 20 times or ? 11,66,520. The World Inequality Report terming India as 'poor and very unequal country' is flawed, and it is based on questionable methodology," Ms Sitharaman said in parliament today.
The I-T Department made the revelations following raids at the offices and residential premises of promoters of Hero MotoCorp last week. The search included the residential and official premises of Pawan Munjal. Munjal purchased a farmhouse in Chhattarpur where the market price of farm house was manipulated to save tax and used black money to pay cash more than Rs 100 crore which is a violation of section 269 SS of IT Act. The evidence collected revealed the two-wheeler manufacturer booked bogus purchases, made huge unaccounted cash expenditures and obtained accommodation entries amounting to Rs 1,000 crore.
Travelling on highway roads is set to get more expensive April 1 onwards. According to reports, the National Highways Authority of India is set to increase the toll tax on highways by 65 per cent. Revised rates have been issued for all kinds of vehicles plying on highways. Commercial vehicles will now have to pay an extra Rs 65 for toll tax whereas private vehicles need to shell out an extra Rs 10 for one-way travel. According to NHAI, the annual toll collection potential on the expressway is estimated to be about Rs 111.39 crore, with cars/jeeps/light motor vehicles accounting for about 82 per cent of the traffic and bus/trucks accounting for 14 per cent.
28/03/2022
E-Way Bill limit extended to 2 Lac in Rajasthan wef 1st April 2022, Where the Goods movement commence and terminates within the area of same city without crossing the area of the city. This is not applicable on tobacco, tobacco products, pan masala, wood, iron and steel.
(Chapter 24, 2106, Chapter 44, Chapter 72)
Notification:-
http://rajtax.gov.in/vatweb/download/gst/ARNR/notification7713.pdf
Guidelines issued by Commercial Taxes Rajasthan for Compensation of GST deposited by Hotels and Tour Operators in Rajasthan
Notification
http://rajtax.gov.in/vatweb/download/gst/ARNR/notification_7712.pdf
Confederation of Central Govt employees and workers Delhi State (including Income tax deptt employees) are on strike on 28th and 29th March 2022. A joint forum of central trade unions, supported by the All India Bank Employees Association, has called for a nationwide strike today (March 28) and tomorrow (March 29) against the Central government's policies affecting workers, farmers, and people in general.
Leading film exhibition players PVR and Inox Leisure on Sunday announced a merger deal to create the largest multiplex chain in the country with a network of more than 1,500 screens.
Prime Minister Narendra Modi on Sunday said India achieving its export target of $400 billion this fiscal shows that the demand for its items is increasing all over the world , and asserted that when every Indian gets 'vocal for local', it does not take much time for the "local to become global".
Banks share in industrial credit plunges to 34%:
1. Domestic banks' share in the overall commercial credit has plunged to a low of 34 per cent in FY2021 from 56 per cent in FY2011 partly due to the pandemic and more because companies are moving away from banks for funds, says a study.
2. The share of non-banks in the commercial credit has more than doubled to 44 per cent while that of foreign banks' rose to 22 per cent in FY21, taking the total non-bank credit flow to two-thirds of the total, the report highlighted.
3. Similarly, 22 per cent of total credit to the commercial sector was channelled via foreign sources which include ECBs/FCCBs, short-term credit from abroad, FDI and ADR/GDR issues excluding banks and financial institutions, in FY21, when FDI alone touched a record Rs 4 lakh crore. But so far this fiscal, FDI inflows have been slow.
Source: BofA Global Research
27/03/2022
IDFC First Bank, a private sector lender, has increased the interest rate on savings accounts. Customers can now earn up to 6% (which was earlier 5%) interest on their savings accounts as of April 1, 2022. According to Reserve Bank of India guidelines, interest on savings bank accounts will be determined on daily end-of-day balances at the rate of interest established by IDFC FIRST Bank, and interest will be paid on a monthly basis.
NASDAQ-listed online travel booking website Yatra Online Inc filed for an initial public offering (IPO) for its Indian unit, Yatra Online Ltd, with market regulator SEBI to raise Rs 750 crore via the sale of primary and secondary shares.
Reliance Group Chairman Anil Ambani resigned as the Director of Reliance Power and Reliance Infrastructure , following market regulator the Securities and Exchange Board of India's (SEBI) order restraining him from associating with any listed company.
26/03/2022
?Tesla? CEO Elon Musk could become the world's first trillionaire by 2024 , a new report by Tipalti Approve says, growing his net worth from more than $250 billion to $1 trillion over the next two years.
Russia wants gas payments in Euros (€) from India. Russia's Gazprom (GAZP) wants India's largest gas transmitter GAIL India (GAIL) to pay in € and not in $ for buying gas. Putin is continuing his aim for de-dollarization. And it won't be difficult for India as Europe is also paying in € to buy gas from Russia. US and EU banned Russian fiat currency Ruble. EU depends heavily on Russian Oil/Gas. Putin says we will only sell oil/gas for Rubles. West is now trying very hard to get Rubles (which they themselves banned)
Since 1800, 51 out of 52 times a country’s Debt-to-GDP ratio reached 130%, the country eventually defaulted (through high inflation, restructuring, devaluation, or straight default). India's Debt-to-GDP ratio is now at around 90% and USA at 136%. Sri Lanka currently has $2 Billion in reserves
$7 Billion of debt. No country, IMF or World Bank wants to give them loan anymore; except China.
25/03/2022
Lok Sabha passed the Finance Bill 2022 on March 25, 2022. The Bill has been passed with more than 35 changes in the Finance Bill as introduced on February 01, 2022. New amendments have been made, and some proposed amendments have been removed or modified.
For the month of March, Reserve Bank of India (RBI) added 0.9 tonnes to its gold reserves till 11th March 2022. Indian Central Bank's gold reserves now stand at 758.9 tonnes. Though, most of the physical gold is in London's bunkers & not inside India.
Real estate developer Supertech was declared bankrupt by the National Company Law Tribunal (NCLT) on Friday in a move that could have an effect on 25,000 home buyers. The company law tribunal took the decision in response to a petition filed by the Union Bank of India (UBI) for non-payment of dues. A NCLT bench allowed the plea filed by UBI, a financial creditor, claiming default against Supertech, and appointed an interim resolution professional superseding the board of the company. In response, the developer stated that it will file an appeal with the National Company Law Appellate Tribunal (NCLAT) against the NCLT move. The NCLT order will not impact the construction at all ongoing projects or operation of the company and we are committed to give delivery of units to allottees. We have a strong record of delivering more than 40,000 flats during the last 7 years and we shall continue to give delivery to our buyers. It further stated that the decision will not have any impact on Supernova, ORB, Golf Country, HUES, Azaila, Esquire, Valley, Basera, Metropolis mall, Pentagon Mall and Hotels. Earlier this month, officials announced that Supertech's twin towers in Noida will be demolished on May 22 following a Supreme Court order. The top court had ordered the demolition of Supertech's Apex (100 metre) and Ceyane (97 metre) on August 31 last year as the twin towers had come up in violation of building norms.
Mobile phone exports from India will increase by 75 per cent from $3.16 billion in 2020-21 to over $5.5 billion in the current fiscal. The primary driver of this outstanding performance is the smartphone PLI Scheme launched on April 1, 2020, aimed at shifting GVCs to India and increasing India's share in global exports.
24/03/2022
India’s Finance Bill, the legislation that includes proposed rules on crypto taxation, is scheduled to be passed in parliament By today Thursday evening. Any easing of the government's stance will be contained in amendments to the bill, which will be introduced to the lower house and followed by voting on each of the amendments, according to people familiar with parliamentary proceedings. The bill was sent to the upper house for consideration. As a money bill, the role of the upper house is minimal. Suggestions of the upper house may or may not be considered by the lower house. Discussions have already taken place with members of the lower house. The bill is expected to be passed by the lower house by the end of the day.
In 2021, Canada set a record by welcoming more than 4,05,000 permanent residents, and it is aiming to achieve higher targets now. As per data collected by Immigration, Refugees and Citizenship Canada (IRCC), from January to October 2021, 97.5 per cent of international graduates who applied for permanent residency in Canada have been successful and have been awarded legal permission to stay and work in the country. For all other permanent residency applicants, that rate was 91.5 per cent. The number of Indian students studying in Canada grew by nearly 350 per cent between the 2015-16 and 2019-20 academic years. Similarly, from January to November 2021, nearly 1,30,000 Indian students were approved to study in Canada.
The Income Tax Department is conducting raids on multiple premises of Hero Motorcorp as part of a tax evasion investigation against the country’s largest two-wheeler automobile company, officials said Wednesday morning. Offices and residential premises of the promoters including chairman and CEO of the group Pawan Munjal in Gurugram, Haryana, Delhi and few other locations are being covered, they said. A team of officials of the department are looking at financial documents and other business transactions of the company and the promoters The Centre on Tuesday clarified in the Supreme Court that it has not made COVID-19 vaccines mandatory and has only said that the vaccination should be 100 per cent. The clarification from Solicitor General Tushar Mehta, appearing for the Centre, came after Additional Advocate General for Tamil Nadu Amit Anand Tiwari told a bench of Justices L Nageswara Rao and B R Gavai that the union government had issued a mandate to us that 100 per cent people should be vaccinated.
23/03/2022
DGGI Hyderabad Zonal unit
21.03.2022
Taxpayer : Shri. *Amitabh Harivanshrai Bachchan*
GSTIN : 27AACPB9226B1Z8
Issue: Non-payment of GST on supply of Non-Fungible Tokens (NFTs)
Detection : Rs.1.09 Cr
Recovery : Rs.1.09 Cr.( by debiting the cash ledger)
A follow up action against M/s. Appstar Applications Private Limited, Chennai ( M/s. Appstar) and further Intelligence gathered by the officers of DGGI, HZU unit revealed that GST was not discharged by Shri. Amitabh Bachchan on the Non-Fungible Tokens sold through auction mode.
As the name suggests Non-fungible means Non-replaceable, non-comparable or unique. A non-fungible token (NFT) is a non-interchangeable unit of data stored on a blockchain, a form of digital ledger, that can be sold and traded. Types of NFT data units may be associated with digital files such as photos, videos, and audio. Because each token is uniquely identifiable, NFTs differ from blockchain cryptocurrencies, such as Bitcoin. These NFTs are generally sold through auction mode in initial phase.
Investment in these type of NFTs is gaining momentum all over the world and the market has witnessed a rapid growth in the recent past. When a photo, art (content) is uploaded into crypto blockchain, it is turned into an NFT, meaning that the piece of art is embedded into the blockchain, and cannot be replicated. It is noteworthy here to mention that the Finance Bill 2022 proposes an amendment in IT act which recognizes NFTs as a Virtual Digital Asset.
Intelligence gathered has suggested that Shri Amitabh Bachchan has entered into an agreement with Rhiti Entertainment Pte. Ltd. , Singapore for conversion of his content into NFTS and to market, promote and sale of the same through an auction platform.
The NFTs offered for auction include the following digital assets of Shri Amitabh Bachchan:
• Madhushala NFT Collection: Madhushala is a popular Hindi poem that was written by Harivansh Rai Bachchan, father of Mr.Amitabh Bachchan. This literary classic was recited by Amitabh in his own voice and converted it to an NFT, in Hindi and English .
• Iconic Vintage Posters NFT : This NFT is having seven autographed posters of Shri Amitabh.
• BigB Punk : These are digital images created keeping the Amitabh unique styles into consideration.
During this process, Rhiti Entertainment Pte. Ltd. has an internal arrangement with Guardian Blockchain Labs Pte. Ltd. and the both have entered into a tri-party agreement with M/s. Appstar Applications Private Limited, Chennai( M/s. Appstar) as per which M/s. Appstar would act as the collection arm in India whose responsibility is to collect the auction proceedings and disburse the same to all the concerned including Shri Amitabh Bachchan.
During the investigation, the said liability was admitted and the same was paid by debiting the cash ledger. The taxpayer has considered sale of NFT as supply of Goods and has classified it in terms of Sr. No. 453 of schedule III of Notification No.1/2017-Integrated Tax (Rate) dated 28.06.2017 which mentions that Goods which are not specified in Schedule I, II, IV, V or VI and falling under any chapter will attract 18% of IGST. As per the information available, the auction of NFTs fetched an amount of Rs.7,15,70,524/- inclusive of GST and the tax payable on the same works out to Rs. 1,09,17,538/-. The liability stands discharged accordingly.
Further investigation in the issue is in progress.
22/03/2022
The Central Government has clarified that losses from one type of crypto or virtual digital asset cannot be set off against gains from other crypto assets while calculating Income Tax.
1. For example, if you make loss in Ethereum and gain in Bitcoin, you won’t be able to set off the loss against the gain while computing 30% tax, according to the Government.
2. The clarification was given by Union Minister of State for Finance Pankaj Chaudhary in a written reply to a query on Monday (March 21, 2022). 3. He said that loss from the transfer of VDA will not be allowed to be set off against the income arising from the transfer of another VDA.
4. The minister also said that while computing the income from transfer of VDA, no deduction in respect of any expenditure (other than the cost of acquisition) or allowance is allowed.
Income tax Department has issued circular no. 6/2022 to condone the delay in filing of form 10-IC for AY 2020- 21 (FY 2019-20) for such assessees who have opted for such scheme in their ITR for the said year but have failed to file Form 10-IC till the specified time limit. It can be filed by the assessee till 30.06.2022. Note: If the company has filed belated return, in that case this condonation shall not be allowed.
Income tax department has issued circular No. 4/2022 to detail the guidelines and procedures for the purpose of deduction of TDS on Salary Income for FY 2021-22.
Course in Harvard by a director of the assessee is an allowable expense: ITAT Delhi: Incom Cables Pvt. Ltd. (I.T.A. No. 03/DEL/2018 (A.Y 2014-15)
Facts:
1. A sum of Rs. 19,76,700/- has been debited from assessee Company as ‘Staff Training Expenses’ in P & L account, which has been paid to Hardward Business School and Management for a course of assessee’s Director, who was looking after the management of the assessee.
2. Further, it submitted that, the said course undergone by the director has contributed to the development of the business. Therefore the assessee contended that the said amount is allowable expenses of the assessee under ‘Staff Training Expenses’.
3. AO maintained that the fees are personal expenses and no nexus has been built with the business of the assessee.
ITAT Delhi held as below:
1. Since the said director who was looking after the management of the Assessee, such Management program course will result in improvement of the management skill of the director and the such skill and experte acquired by the Director in the said course will ultimately of the use and benefit in day to day business of the assessee.
2. The assessee is engaged in business of manufacturing cables, using such skill and experte acquired by the Director in the said course will ultimately improves the efficiency and productivity of assessee.
3. Therefore, in our opinion the said amount of Rs.19,76,700/- is allowable expenses under the provisions of the Act.
21/03/2022
The Centre has planned to tax Employees Provident Fund (EPF) contributions exceeding Rs 2.50 lakh yearly.
1. For government employees, the limit has been set at a higher end of Rs 5 lakh.
2. Under the set of new Income Tax (I-T) Rules, PF accounts are likely to be divided into two parts -- taxable and non-taxable contribution accounts from April 1, 2022.
3. This comes at a time when retirement body EPFO has reduced interest rates to the lowest in more than 40 years for the ongoing financial year 2021-22 (FY 22).
4. For instance, a non-government employee puts Rs 5 lakh in PF account, Rs 2.50 Lakh will be subject to tax; and if a government worker, puts Rs 6 lakh in PF, Rs 1 lakh will be subject to tax.
5. Government employees contribute to the General PF or GPF, where just employees make PF contributions.
6. With the new rules, the Centre aims to prevent high earning people from taking advantage of government welfare schemes.
7. Previously, the government had mentioned that the move would impact less than 1 per cent of taxpayers.
8. A new Section 9D has been included under the Income Tax Rules, 1962, according to a notification issued by the Central Board of Direct Taxes.
9. All contributions until March 31, 2021, will be treated as non-taxable contributions.
10. Contributions for the current financial year (April 1, 2021, to March 31, 2022) will be handled as taxable contributions.
11. EPF accounts are mandatory for employees earning up to ? 15,000 per month in any firm with over 20 workers.
The income tax department said on Sunday it has found evidence that a startup based in Pune and Thane has not disclosed Rs 224 crore of income. While the I-T department didn’t name the company, it is believed to be referring to Infra, Market, the construction materials startup that its officials raided last week. In its Sunday statement, the I-t department said the company appeared to have booked bogus purchases, made huge unaccounted cash expenditures, and obtained accommodation entries totalling over Rs 44 crore. During the search operations, Rs 1 crore in unaccounted cash and jewelry worth Rs 22 lakh were also seized, the department said. Further, the tax authority said that when confronted of the group, “admitted under oath this modus operandi, disclosed additional income of than Rs 224 crore in various assessment years. And offered to pay their due tax liability,” said in the press release. The I-T department said it is investigating how the company obtained huge foreign funding via Mauritius by issuing shares at an “exorbitantly” high premium. These funds were routed through a hawala network involving shell companies in Mumbai and Thane, it said. These shell companies exist (only) on paper and were created only for the purpose of purpose of providing accommodation entries. Preliminary analysis has revealed that the total quantum of accommodation entries provided by these shell entities exceeds Rs 15,500 crore,” the department said.
India’s foreign exchange reserves fell by $9.64 billion to $622.275 billion during the week ending March 11, 2022, as the rupee depreciated against the US dollar amid the rise in crude oil prices and capital outflows due to sustained selling by foreign portfolio investors (FPIs).
1. This is the biggest fall in reserves in nearly two years after it plunged by $11.98 billion during the week ending March 20, 2020, when the Covid-19 pandemic hit India and FPIs pulled out funds.
2. The RBI sold $5.135 billion to banks on March 8 and simultaneously agreed to buy back the dollars at the end of the swap-settlement period. 3. When the central bank sells dollars, it takes out an equivalent amount in rupees, thus reducing the rupee liquidity in the system.
4. Dollar inflow into the market strengthened the rupee which hit the 77-mark against the dollar on March 8.
5. On March 17, the rupee spurted by 41 paise to close at 75.80/81 against the US dollar on Thursday (March 17).
6. foreign investors withdrew Rs 41,617 crore in March. This outflow has come after withdrawals of Rs 45,720 crore in February and Rs 41,346 crore in January.
7. With this, FPIs have pulled out Rs 225,649 crore (excluding FPI investments in IPOs) since October 1, 2021, mainly anticipating an interest rate hike by the US Federal Reserve.
20/03/2022
The Centre is considering on classification of cryptocurrency under the GST law so that tax can be levied on the entire value of the transaction.
1. At present, 18% Goods and Services Tax (GST) is levied only on services provided by crypto exchanges and is categorised as financial services.
2. The GST has not clearly made a classification of cryptocurrency. In the absence of a law regulating such virtual digital currencies, the classification has to take into account whether the law classifies it as an actionable claim.
3. An actionable claim is a claim which can be made by a creditor, for any type of debt other than a debt secured by a mortgage of immovable property.
4. The 2022-23 Budget has brought in clarity with regard to the levy of income tax on crypto assets.
5. From April 1, a 30% I-T plus cess and surcharges, will be levied on such transactions in the same manner as it treats gambling, lottery, and other speculative transactions.
6. The Budget 2022-23 also proposed a 1% TDS on payments towards virtual currencies beyond ?10,000 in a year and taxation of such gifts in the hands of the recipient. 7. The threshold limit for TDS would be ?50,000 a year for specified persons, which includes individuals/HUFs who are required to get their accounts audited under the I-T Act.
8. The provisions related to 1% TDS will come into effect from July 1, 2022, while the gains will be taxed effective April 1.
19/03/2022
No more pricing caps on Micro finance loans:
1. In revised guidelines for microfinance loans by micro finance institutions (MFIs), which will take effect from April 1, 2022, the RBI has revised the definition of a microfinance loan to indicate a collateral-free loan given to a household having annual income of up to Rs3 lakhs. Earlier, the upper limits were Rs 1.2 lakhs for rural borrowers and Rs 2 lakhs for urban borrowers.
2. Central bank has now removed the ceiling on interest rates on microfinance loans. The MFIs have been given the freedom to set interest rates they charge borrowers, with a caveat that the rates should not be usurious.
3. Any fees to be charged to the microfinance borrower by the RE and/ or its partner/ agent shall be explicitly disclosed in the factsheet. The borrower shall not be charged any amount which is not explicitly mentioned in the factsheet.
Haryana Appellate Authority for Advanced Ruling (AAAR) has stated that pizza topping is not pizza and thus should be classified differently for GST purposes. The authority stated on 10 March that the preparation method of pizza toppings is different from pizza, and thus should be taxed at 18% in the category of 'food preparation'. This could complicate the taxation process for many popular food chains and eateries selling pizzas through dine out or takeaway modes. Thus pizzas prepared and sold at restaurants attract 5% GST, pizza that is home-delivered will attract 18% GST. Pizza base bought separately, however, is taxable at the rate of 12%.
US Fed increases interest rates by 25 basis points:
1. The US Federal Reserve raised interest rates by a quarter percentage point and signaled hikes at all six remaining meetings this year, launching a campaign to tackle the fastest inflation in four decades.
2. The Fed also projected that its policy rate would hit a range between 1.75 per cent and 2 per cent by year’s end, arguing that the ongoing increases will be appropriate to curb inflation, the highest in 40 years at 7.9 per cent in February.
3. We have to see as to what would be the impact of the Fed decision on RBI’s monetary policy.
18/03/2022
DTAA benefits could be available to interest on income tax refund: ITAT
Baker Hughes Singapore Pte (CO No. 165/Del/2018)
Facts:
1. The appellant, a tax resident of USA, has received interest income of Rs. 21,416,478/- on income tax refund in the relevant year under consideration.
2. The Assessing Officer has held that the interest income received by the appellant on account of income tax refund is taxable at Maximum Marginal Rate of 40 per cent.
3. While the assessee pleaded that it should be taxed @15% in terms of Article 11 of Indo-USA DTAA. It was also argued that the interest income cannot be said to be effectively connected with the business carried on by the PE.
ITAT Dehradun held as follows:
1. It can be concluded that interest on income tax refund is not effectively connected with the PE either on the basis of asset-test or activity-test.
2. Hence, it is taxable as per the provisions in the Para No. 2 of Article 11 of Indo-US DTAA ie @ 15%.
NCLAT orders full payment for PF dues for a company under insolvency proceedings:
Sikander Singh Jamuwal vs Vinay Talwar, Resolution Professional
(Company Appeal(AT) (Ins)No. 483 of 2019)
1. An appeal was filed u/s 61 of the IBC by the Appellant, who worked as a 'Supervisor' with the Corporate Debtor in CIRP, seeking to set aside the resolution plan under which did not consider payment of full Provident Fund dues, due to him under the Employees Provident Fund and Miscellaneous Provisions Act, 1952.
2. The court relied on the Supreme Court judgement in State of Jharkhand and Ors. Vs. Jiterdra Kumar Srivastava and Anr wherein it was held that-
"It is thus hard earned benefit which accrues to an employee and is in the nature of "property". This right to property cannot be taken away without the due process of law as per the provisions of Article 300 A of the Constitution of India."
3. Since there is no conflict between the provisions of the PF Act and the IBC, the question of applicability of Section 238 does not arise.
4. Tribunal also relied on the judgment of the NCLAT in Tourism Finance Corporation of India Ltd. Vs. Rainbow Papers Ltd. & Ors. in this regard. It was also held that provident fund dues are not considered to be assets of the Corporate Debtor, as has been clarified by the provisions of Section 36(4)(a)(iii) of the IBC.
17/03/2022
Amazon has closed its $8.5 billion acquisition of MGM, the companies said Thursday. The pact was first announced in May and has been winding its way through the regulatory process. Per Amazon, “The storied, nearly century-old studio — with more than 4,000 film titles, 17,000 TV episodes, 180 Academy Awards, and 100 Emmy Awards — will complement Prime Video and Amazon Studios’ work in delivering a diverse offering of entertainment choices to customers.” The completion of the transaction comes two days after the Amazon-MGM deal received clearance from the European Union’s antitrust regulator, which “unconditionally” approved Amazon’s proposed acquisition of MGM, in part because “MGM’s content cannot be considered as must-have.” The European Commission, in its antitrust review, found that the overlaps between the Amazon and MGM businesses are “limited.”
16/03/2022
The Emirate of Dubai has adopted its first crypto law and formed a regulatory body for virtual assets. This, as the emirate tries to position itself as a world leader in terms of emerging technologies like cryptocurrency and blockchain. The emirate within the United Arab Emirates (UAE) has set up the Dubai Virtual Assets Regulatory Authority, which will be working with all related entities to promote security and transparency for crypto investors. The announcement was made by Sheikh Mohammed bin Rashid Al Maktoum, the Ruler of the Emirate of Dubai as well as the Vice President, Prime Minister and Minister of Defence of the United Arab Emirates. The law is expected to go into effect across the emirate with the exception of the Dubai International Financial Centre (DIFC), which is a special economic zone under the ambit of the Dubai Financial Services Authority (DFSA).
Gautam Adani added $49 billion to his wealth last year - more than the net addition of wealth by Elon Musk, Jeff Bezos and Bernard Arnault, the 2022 M3M Hurun Global Rich List said on Wednesday. Mukesh Ambani, who runs the oil-to-retail conglomerate Reliance Industries, continues to be the richest Indian with a wealth of $103 billion, a 24 per cent rise year on year. Adani, the head of the ports-to-energy conglomerate Adani Group, is a close second, with his wealth surging 153 per cent to $81 billion. In the last 10 years, while Ambani's wealth has grown 400 per cent, Adani has seen a 1,830 per cent increase, the list said. HCL's Shiv Nadar is ranked third with USD 28 billion wealth, followed by Serum Institute's Cyrus Poonawalla (USD 26 billion) and steel magnate Lakshmi N Mittal ($25 billion).
Indian Oil Corporation (IOC), the nation’s top oil firm, has bought as much as 3 million barrels of crude oil that Russia had offered at steep discount to prevailing international rates, sources said. The purchase, made through a trader, is the first since Russia’s February 24 invasion of Ukraine that brought international pressure for isolating Putin administration. Sources aware of the matter said IOC bought Urals crude for May delivery at a discount of USD 20-25 a barrel to dated Brent. Unlike the sanctions the US imposed on Iran over its controversial nuclear programme, oil and energy trade with Russia has not been banned. This means international payment systems are available to settle any purchase made from Russia. India buys just 1.3 per cent of all its oil needs from Russia.
15/03/2022
The Central Board of Trustees, EPF, has recommended an 8.10% annual rate of interest credited on EPF accumulations in members’ accounts for the financial year 2021-22. This is the lowest interest rate in at least four decades.
Shares of fintech major Paytm plunged over 13 per cent to hit an all-time low of Rs 672.10 after Reserve Bank of India (RBI) asked Paytm Payments Bank to immediately stop opening new accounts amid "material supervisory concerns" observed in the bank. Currently, the stock is trading 65 per cent down from its all-time high of Rs 1,961.05. It opened 12 per cent down at Rs 684 against the previous close of Rs 774.80 on the BSE. The market cap of the company slipped below Rs 45,000 crore on the BSE during early trade hours. The stock has been on a downward trend and has tanked over 49 per cent on a year-to-date basis. The shares are trading lower than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. Paytm Payments Bank had 64 million savings accounts as of March 31, 2021 and over Rs 5,200 crore in deposits. It was also the largest Unified Payments Interface beneficiary bank.
14/03/2022
Government of India has approved the extension of Interest Equalization Scheme for Pre and Post Shipment Rupee Export Credit ('Scheme') up to March 31, 2024 or till further review, whichever is earlier. Revised interest equalisation rates under the Scheme will now be 3 per cent for MSME manufacturer exporters exporting under any HS lines, and 2 per cent for manufacturer exporters and merchant exporters exporting under 410 HS lines.
Flipkart co-founder Sachin Bansal-led fintech company ?Navi Technologies? has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise Rs 3,350 crore from the public markets in a fresh issue of shares. The Bengaluru-based company — which started as a lending business in 2018 and has a presence in insurance, asset management, and microfinance — will issue fresh equity shares as part of its IPO (initial public offering). The company will invest Rs 2,370 crore of the proceeds into its lending business, Navi Finserv Private Limited (NFPL) and Rs 1,500 crore in its insurance subsidiary, Navi General Insurance Limited (NGIL), it said in the DRHP. Sachin Bansal, who has invested nearly Rs 4,000 crore in Navi to date, will not dilute his stakes in the company during the IPO.
HDFC Bank, the country’s largest private sector bank by assets, said the Reserve Bank of India (RBI) had lifted restrictions on the launch of new digital business-generating activities . In December 2020, the central bank had asked the lender to halt all new digital banking initiatives and stop acquiring any new credit card customers.
13/03/2022
New information incorporated in the Annual Information Statement (AIS) Version 2.0: Addition of information categories in AIS functionality:
1. GST Turnover bring Sales reported under GSTR-3B.
2. GST Purchases being Purchases reported under GSTR-1 of seller.
3. Tds u/s 194Q being business receipts for Payment of certain sums by buyer against sale of goods.
4. Income of specified senior citizen being Amount of pension and interest received or receivable by specified senior citizen (Section 194P).
5. Password for opening the PDF of AIS is now changed to lower case to bring uniformity with the password of Form 26AS
6. The first version was released in October 2021.
The Income tax department has enabled the facility to file Form 10AB on the portal under “Income tax forms”. Form 10AB is required to be filed till 31.03.2022 by such Trusts or institutions to which “provisional registrations” were given earlier and they started their activities after-wards and the time limit of 6 months for “final registration” is expired till 28.02.2022. This will enable such trusts or institutions to get the “Final registration” under Section 12A/12AB of the Income tax Act, 1961.
Changes have been made on MCA Portal due to “V3 introduction” for LLPs:
1. LLP Filing, New User Registration and DSC association is made live in V3 now on the MCA portal.
2. Majority of filings in relation to LLPs are made “web-based”.
3. A separate tab named “My Applications” have been brought-in to log-in for LLP related filings.
4. User needs to log-in separately for LLPs and Companies.
5. DSC Association is a post login service in V3. User Registration is mandatory for DSC Association. Multiple DSC Associations cannot be done using one user id.
Gst: User Interface (UI) with respect to the address fields in the Registration Application GST REG-01 has been enhanced as follows:-
1. Incorporation of a map tile along with a drag and drop facility of address pinhead on to the exact location of the applicant’s address.
2. Once selected, the details will automatically fill in the various address input fields given in the application.
3. Address fields have been linked so as to auto- fill other macro level address entry fields based on the entry in one of such fields particularly PIN Codes. For example; on entering the PIN code, the corresponding State and Districts will get auto- filled.
4. The user can also directly fill-up the address input fields which are now aided with suggestive address input dropdowns from which the user can select the appropriate/relevant address field(s). This action will reduce errors in the address texts and will also ease the filling up of the appropriate address input fields by the user.
5. The address fields have been segregated appropriately to reduce confusions while entering the relevant inputs under various address heads.
6. Based on the address entries given by the user, the Latitude/ Longitude of the address will get auto populated which is non-editable.
A communication was also received from GST, Gujarat State that a car bearing registration no. DL8CAS5941, registered in the name of one of the syndicate firm M/s Blue Water Expotrade Private Limited was intercepted by them in Ahmedabad. FastTags of Trucks were affixed on the car to create false movement of export goods from Delhi to Mundra port. The E-way bills in respect of the fake supply were issued by M/s Shree Mahaveer International. Search was conducted at residential premises of Shri Rakesh Kumar Jain, proprietor in M/s Shree Mahaveer International and Partner in M/s Gravity Enterprises on 10th March 2022. Shri Rakesh Kumar Jain in his voluntary statement admitted that bogus invoices were received and issued from these syndicate firms without actual supply of goods. It was evident that Shri Rakesh Kumar Jain was using multiple firms to avail and pass on fake ITC on bogus invoices and E-Way Bills without actual supply of goods. The quantum of GST evaded by him is more than Rs. 85 crore. Therefore, he was arrested on 10th March 2022 for committing offences specified under Section 132(1)(b)&(c) of the CGST Act, 2017 and produced before Metropolitan Magistrate Patiala House Courts, New Delhi. Investigation by CGST Delhi (East) Commissionerate so far has unearthed fake ITC racket by seven firms namely, M/s Vibe Tradex, M/s Prime Mark Expotrade Private Limited, M/s Blue Water Expotrade India Private Limited, M/s Transglobe Tradex Private Limited, M/s Tirupati Overseas, M/s Shree Mahaveer International & M/s Gravity Enterprises. Further investigation in the case is under progress.
12/03/2022
Four major financial things that need to be done before March 31:
1. Link Aadhaar-pan card:
Individuals need to link Aadhaar with PAN by March 31, 2022. If you have missed this linkage, then you should do it at the earliest. After the time limit, the PAN cards of people will be inactive for those who haven’t linked it till now.
2. Update KYC with the bank:
Even the deadline for the completion of the KYC is extended to March 31st. Therefore, the account holders need to update the KYC to avoid disruption in their transactions.
3. Advance Tax filing:
According to the Income Tax Act, assessee’s with tax liability of more than Rs 10,000 need to pay advance tax in four installments by March 15, 2022. 100% estimated tax for the financial year 2021-22; need to be paid by 15th March. If an individual is a salaried employee, the employer has to deduct the tax from their salary.
4. Invest to save tax:
To save tax, the assessee need to invest in tax saving schemes like the Public Provident Fund, National Pension Scheme, Sukanya Samriddhi yojana to get tax saving benefits under section 80C.
Dollar Rupee Swap Sale:
1. The RBI sold $5.135 billion to banks on March 8 and simultaneously agreed to buy back the dollars at the end of the swap settlement period.
2. When the central bank sells dollars, it sucks out an equivalent amount in rupees, thus reducing the rupee liquidity in the system.
3. Dollar inflow into the market will strengthen the rupee which has already hit the 77 level against the US dollar.
4. The swap auction can be done in the reverse way also when there is shortage of liquidity in the system. The RBI then buys dollars from the market and releases an equivalent amount in the rupees.
5. The RBI would have removed close to Rs 39,000 crore ($5.135 billion) at Monday’s rupee closing rate of 76.91 per dollar.
6. The major impact will be that liquidity which currently averages around Rs 7.6 lakh crore will shrink. The RBI normally brings down liquidity in the system when inflation threatens to rise sharply. 7. With crude oil prices rising sharply in the wake of the Russia-Ukraine war, inflation is set to rise in the coming days.
8. Further, foreign portfolio investors have been pulling out funds from India. They have withdrawn Rs 34,000 crore from Indian stocks in March so far, putting severe pressure on the rupee.
9. After the swap auction on Tuesday, the rupee recovered to 76.92 from 76.97 on Monday.
11/03/2022
Polymer Currency Notes:
1. 76 of the world's 195 countries are now using polymer notes.
2. Here is the region-wise breakup: Asia and Oceania (23), Latin America (16), Africa (13), Europe (11), West Asia (6), South America (4), Central Asia (2) and North America (1).
3. Australia was the first country to issue polymer banknotes in 1988.
4. RBI data says in March 2021, Rs 28.27 trillion worth of bank notes were in circulation, rising 16.8 per cent from 2020, while the volume rose 7.2 per cent, against an increase of 14.7 per cent and 6.6 per cent, respectively, seen in the previous year. 5. In March 2021, the value of coins in circulation was Rs 26,870 crore.
6. While the cost of production of polymer currency notes is far higher, their longevity justifies such a cost. Particularly, the lower denomination currency notes in India normally don't last beyond one year. If they are made of polymer, the life could be as long as five years.
7. But the paper lobby talks about the ink of polymer currency dissolving fast and that fire can destroy such notes quickly compared with paper notes.
8. The RBI has shelved its plan for polymer notes more than a decade after it invited interest from global manufacturers for one billion pieces of Rs 10 denomination polymer banknotes.
The Reserve Bank of India ( RBI ) has today, in exercise of its powers, inter alia, under section 35A of the Banking Regulation Act, 1949, directed Paytm Payments Bank Ltd to stop, with immediate effect, onboarding of new customers. The bank has also been directed to appoint an IT audit firm to conduct a comprehensive System Audit of its IT system. Onboarding of new customers by Paytm Payments Bank Ltd will be subject to specific permission to be granted by RBI after reviewing report of the IT auditors. This action is based on certain material supervisory concerns observed in the bank.
The Maharashtra Government has announced the Amnesty Scheme 2022 to settle the cases pertaining to the period for payment of the requisite amount will be from April 1st2022 to September 30th, 2022.
1. Under this Amnesty Scheme, the period for payment of the requisite amount will he from April1 2022 to September 30, 2022.
2. In order to avail the benefit of this scheme, the appeal filed by the dealers will have to be withdrawn unconditionally.
3. Arrears up to Rs. 10.000 or less per year as per any statutory order passed under the various tax laws implemented by the department are waived off completely.
4. Around 97(X)0 small cases will be benefited by this relief.
5. Dealers having arrears as on the 1st April 2022 up to Rs. 10 lakhs or less as will have the option to pay a lump sum amount of 20 per cent of the total arrears.
6. Waiver will be granted to the remaining 80 per cent of the arrears.
7. Dealers having dues above 10 lakh or who would not opt for lump sum option will have to pay 100% of the undisputed tax, 30% of the disputed tax, 10% of the interest and 5% of the penalty for the periods up to 31st March 2005.
8. For the periods from 1st April 2005 to 30th June 2017, this proportion would be 50% of the disputed tax, 15% of the interest and 5% of the penalty.
9. Upon payment as per the aforesaid proportions. the balance arrears shall be waived.
10. In order to avail the benefits of this Amnesty Scheme, one has to pay the requisite amount at one time within the stipulated period.
11. However, the dealers having arrears of more than Rs. 50 lakhs have been provided an option to pay the requisite unionist in instalments.
10/03/2022
As gold crosses Rs 53000 per 10 gm mark following the war between Russia and Ukraine, People are cancelling their orders placed with the jewellers or postponing purchases they had planned for the marriage months of April and May. Leading trade bodies said small-budget weddings are being postponed as families are waiting for gold prices to cool off. This trend is more visible in South India, where gold is an integral part of the wedding. “Gold business in Zaveri Bazaar, the largest gold hub in the country, has come to a standstill as the price of the yellow metal has gone up steeply. People are cancelling orders which is forcing the retailers to cancel the orders they have placed with jewellery manufacturers and wholesalers,” said Surendra Mehta, national secretary, India Bullion and Jewellers Association (IBJA). In the last fortnight, gold prices have gone up 7.38% from Rs 49,938 per 10 gm to Rs 53,595 per 10 gm, pinching the pockets of the consumers.
09/03/2022
The Gujarat High Court to decide the applicability of income tax on the amount of compensation received towards death of a woman in a terrorist attack. The husband of the deceased received compensation due to death of his wife during hijacking of the Mumbai to New York bound Pan American World Airways flight and killing of a woman by terrorists. A bench of Justice JB Pardiwala and Justice Nisha Thakore was hearing a case filed by Kalpesh Dalal challenging a notice issued by the income tax department for tax on the compensation. Dalal’s wife Trupti was among the 50 people killed by the terrorist of almost Rs 20 crore he received as per the order issued by a court in New York. Following a notice from the income tax department to pay tax on the compensation received towards death of kin in a terrorist attack as the same can be termed as ‘income’ and subject to tax under Income Tax Act, the petitioner approached the Court. On the request of the lawyer of the IT department, the court posted the matter for further hearing on March 14. The Income Tax department had sought to tax the compensation he received between 2012 and 2014. He first received Rs 8.11 crore in 2012-13, Rs 34.24 lakh the next year and Rs 10.15 crores in 2014-2015. The petition was filed after the IT department reopened the assessment of the income after it raised the query in 2014.
The Union Cabinet had given approval for the PLI Scheme for White Goods for manufacture of components and sub-assemblies of Air Conditioners (ACs) and LED Lights on April 07, 2022 in pursuance of Prime Minister’s clarion call for ‘Atmanirbhar Bharat’ to bring manufacturing at the center stage and emphasize its significance in driving India’s growth and creating jobs. The Scheme is to be implemented over a seven-year period, from FY 2021-22 to FY 2028-29 and has an outlay of Rs. 6,238 crore. The Scheme was notified by DPIIT on April 16, 2021. The Scheme Guidelines were published on June 04, 2021. Some modifications to the Scheme Guidelines were issued on August 16, 2021 and February 24, 2022. Applicants were given flexibility to choose the gestation period either up to March 2022 or up to March 2023. Online applications for the Scheme were invited from June 15, 2021 to September 15, 2021 through a web portal having URL as https://pliwhitegoods.ifciltd.com/. Total 52 companies had filed their application. The application window for the Scheme shall remain open for the period from March 10, 2022 to April 25, 2022 (inclusive) on the same online portal having URL as https://pliwhitegoods.ifciltd.com/. No application shall be accepted after the closure of the application window. Consolidated Scheme Guidelines are available at https://pliwhitegoods.ifciltd.com/ and the website of DPIIT having URL as https://dpiit.gov.in.
Complaints from Ireo group’s former CEO, Ramesh Sanka, investors, and homebuyers forced the ED to take action against Lalit Goyal in November 2021. Allegations range from siphoning off of funds through a web of shadow firms and side deals with land brokers. Gurugram-based real estate group, M3M India, is allegedly involved in the dealings. On November 16, 2021, the Enforcement Directorate (ED) arrested Lalit Goyal, the vice-chairman and managing director of Gurugram-based Ireo (Indian Real Estate Opportunities) group — once a promising name in the Indian real estate market and one of the biggest private equity-backed realtors in the country. Goyal was arrested on charges of money laundering and cheating investors as well as homebuyers who spent their hard-earned money.
Limited Liability Partnership (Second Amendment) Rules, 2022
Now, as part of MCA V3 initiative, LLP related compliances will have below major changes:
1. There can be 5 Desiganted partners (without having DIN) at the time of Incorporation. (Earlier 2 was allowed)
2. LLP Formation Process became web based Just like the SPICE Forms for Company formation. Further, now Latitude and longitude is compulsory to mention in Address block.
3. Directors Details can be fetched from Digi Locker Database.
4. PAN TAN of LLP will be available along with LLP Incorporation (Earlier same were to be applied saperately)
5. All Forms of LLP now became web based.
6. Each and every change in LLP Deed will have to be marked in Form 3 with precise information. (Earlier just deed was to be attached)
7. Form 8 (Statement of Solvency and Annual Return) to specifically include Contingent Liability reporting.
8. Web Based Form 9 Consent of Partners is available (earlier offline format was to be signed). Resultantly, all Designated Partners Digital Signatures will be required at the time of Incorporation of LLP, earlier only 1 DSC of any one DP was required.
9. Form 11, Penalties and Compunding of offences to report now.
10. Just like AOC-5 (In case of Companies), place of maintenance of Accounts, Form 12 in case of LLP, Place other than Registered office of LLP where service of notice can be made is notified.
https://www.mca.gov.in/bin/dms/getdocument?mds=iorXjBHYBr94XltGw2NNBA%253D%253D&type=open
08/03/2022
A two judge bench of the Allahabad High Court has held that it s the mandatory duty of the GST department to grant an opportunity of hearing to a person once an adverse order is passed against him. The petitioners, Bharat Mint And Allied Chemicals approached the Court against the assessment order creating demand of tax, interest and penalty, has been passed without affording opportunity of hearing contemplated in Section 75(4) of the Central Goods and Services Tax, 2017/ U.P. Goods and Services Tax, 2017.
While granting relief to La Mode Fashions Private Limited, the Delhi High Court has directed the VAT department to allow the dealer to amend the tax period in the challan since a bona fide error in the challan can be rectified. The Petitioner had filed its returns on 31.03.2017.
CBDT info on IT search on BMC contractors and a prominent person:
1. The Income Tax Department carried out search and seizure operations on 25.02.2022 on certain contractors executing contracts of Brihanmumbai Municipal Corporation (BMC), a prominent politician and their close associates. In all, more than 35 premises in Mumbai have been covered during the search operation.
2. As per the CBDT, particulars of about 3 dozen immovable properties, whose value could be more than Rs. 130 crore have been detected. It includes properties acquired either in their name or their associates or benamidars. Evidences of their involvement in international hawala transaction and routing of the ill-gotten money to certain foreign jurisdictions have also been recovered.
3. Loose sheets and excel files with details of unaccounted cash receipts and payments aggregating to several crores have also been found by the authorities and seized, which have not been recorded in the regular books of account.
4. The CBDT maintains that contractors indulged in over-invoicing of sub-contract expenses by claiming non-genuine expenses. Certain instances show that cash has been taken out from these entities and the same has been utilized for obtaining undue favours for awarding of contracts and also for making unaccounted payments for investments in properties.
5. The preliminary investigation indicates that these contractors have evaded income to the extent of Rs. 200 crore on account of the above malpractices, as per CBDT.
6. During the search operation, undisclosed cash of Rs. 2 crore and jewellery of Rs. 1.5 crore have been seized so far.
Source: Press Information Bureau, Delhi
India’s service PMi rises to 51.8:
1. India’s services sector output increased to 51.8 in February from 51.5 in January, pointing to a moderate rate of expansion, as per a report by IHS Markit. Greater bookings, better demand conditions and the retreat of the pandemic drove this moderate expansion.
2. Meanwhile, the composite PMI output rose to 53.5 in February from 53.0 in January, signalling a solid rate of expansion that was nonetheless below its long-run average, the IHS Markit stated.
3. Growth in the service sector failed to rebound as meaningfully as many would have hoped given that COVID-19 cases receded considerably from January's new wave and restrictions were lifted.
4. Private sector employment continued to decline but at a modest rate. Both manufacturing and services economies saw job shedding.
07/03/2022
Salient features of E Invoices auto population into Gst 1...
1. Auto-population in GSTR-1 from IRP
2. The tax-period of GSTR-1 in which the e-invoice will be auto-populated will be as per the Invoice Document Date and will be reflected in that respective month.
3. If the e invoice is generated after filing of Gst 1, such e invoice will not be auto-populated.
4. If the invoice/debit/credit note is manually entered in Gst 1, such shall not be over written and shall not be auto populated; the message regarding the same will be displayed.
5. Supplies made thru ECO shall be enabled in tile 4A(ii)
6. If a taxpayer edits the data auto-populated in GSTR-1 from e-invoices, such edited documents will be treated as if they were not autopopulated but uploaded separately by taxpayer.
7. Outward supplies details other than those reported in on the IRP have to be manually entered in GSTR-1, as earlier.
8. Documents reported earlier on the Invoice Registration Portal (IRP) can be cancelled within a specified period on the IRP. Upon cancellation, all cancelled document(s) which were appearing as saved documents in GSTR-1 are deleted from the GSTR-1.
9. An additional facility of consolidated download E-invoice data in Excel format is made available in GSTR-1 dashboard.
10. The link ‘e-invoice download history’ can be used to view the list of last five downloaded files.
Read More
http://cajatinminocha.com/Image/E-Invoice_Auto_Populated_in_GSTR-1.pdf
Properties given as dowry to be included in partition suit instituted by daughter: High Court
Case Title: Hemalatha v. Venkatesh
Case No: Writ Petition No.39982 Of 2018
Facts:
1. Petitioner Hemalatha had approached the court challenging and order dated August 8, 2018, passed by the City Civil Judge Bengaluru, allowing the application filed by the brother of the petitioner seeking to include two properties, in the partition suit filed by the petitioner, claiming that they were given in dowry at the time of her marriage.
2. Note: Section 6 of the Hindu Succession Act was amended to confer legal rights and liabilities upon daughters in the ancestral property by birth in a Hindu Undivided Family ('HUF'), equivalent to that of a son.
The Karnataka HC held as below:
1. A beneficiary under Section 6 cannot claim a benefit by way of partition as regard to joint family properties without reference to the properties already received by her at the time of marriage as dowry/gift or otherwise.
2. The properties which had been given as dowry or otherwise at the time of marriage of the daughter, would be amenable for partition and the same will have to be included in a suit for partition, instituted by the daughter.
The Delhi High Court has exempted the Lawyers from wearing Gowns practicing in the High Court with effect from March 2, 2022 till further orders. A notice in this regard was issued by the Registrar General of the High Court.
06/03/2022
The GST Council in its next meeting might raise the lowest tax slab to 8%, from 5%, according to a report by the PTI news agency, citing sources. A panel of state finance ministers is likely to submit its report by this month end to the Council suggesting various steps to raise revenue, including hiking the lowest slab and rationalising the slab. The increase in tax slab from 5% to 8% may yield an additional ?1.50 lakh crore annual revenues. GST Council is looking to create GST a 3-tier structure with revision of rates at 8%, 18%, and 28%, respectively. At present, GST is a four-tier structure attracting a tax rate of 5%, 12%, 18% and 28%, respectively. With the GST compensation regime coming to an end in June, it is imperative that states become self-sufficient and not depend on the Centre for bridging the revenue gap in GST collection.
05/03/2022
Russian Economy Update:
1. British oil company Shell (SHEL) buys Russia's Urals crude oil at a record discount. For a few days, Russian Urals Crude had no buyers. Shell is one of the largest oil & gas company in the world. Indian Oil Corp (IOC) also stopped buying due to sanctions risk.
2. Putin has passed a law today eliminating VAT tax on gold bars for individuals. Actually, Central Bank of Russia (CBR) has accumulated a lot of gold in last 10yrs, and with fiat ($, €, £) reserve frozen and sanctions on selling gold - now they are trying to sell that gold to Russian citizens to get some fiat.
3. Microsoft (MSFT) suspends new products, services sales in Russia. This means all monthly MS Office subscriptions will no longer work for Russians.
4. Russia asks fertilizer makers to halt exports. Farming will get costlier due to shortage, which means our food prices will go up too.
5. European natural gas futures rise to record 200 €/MWh. Recently, Putin stopped supplying a big portion of gas to Europe.
6. FedEx (FDX) suspends all services in Russia & Belarus. FedEx is one of the largest delivery services in the world.
7. Western countries are currently buying $700m worth of oil, gas & coal every day from Russia.
8. Turkey just reported an annual inflation of 54.4% (consumer prices) and 105.1% (producer prices). Don't forget this is 'official data', now imagine the real inflation data.
Can We Direct Putin to Stop the War, Asks Supreme Court on Ukraine Evacuation Petition. - A bench headed by Chief Justice NV Ramana took note of the submissions of a lawyer that several students are stuck near the Romanian border in freezing cold and the government is not running flights from Romania. Flights are being operated from Poland and Hungary and not from Romania. The students, including many girls, are stuck without any facility,” the lawyer told the bench.
04/03/2022
The Central Board of Indirect Taxes and Customs ( CBIC ) has cautioned the public against sharing Aadhaar and PAN details without a valid reason or for monetary gains, saying that the information could be misused by fraudsters for GST evasion. In a Communication issued by CBIC said that, Aadhaar and PAN details can be used for creating fake entities in GST for evasion of taxes and hence people should refrain from sharing these without a valid reason. Protect your personal data which may be used for creating fake entities in GST for evasion of taxes,” the CBIC said.
Gurugram-based home services marketplace ?Urban Company? has announced a Partner Stock Ownership Plan (PSOP), under which it will award stocks worth Rs 150 crore to thousands of its service partners over the next 5-7 years.
Fintech is expected to be the most active sector in raising debt followed by consumer and agritech , as per a survey conducted by ?Stride Ventures?, a leading venture debt firm in India.
03/03/2022
The South Indian Corrugated Box Manufacturers Association on Tuesday urged the Centre to reduce Goods and Services Tax on corrugated boxes to benefit the micro small and medium enterprises sector. According to the Association, the MSME sector would face various hardship if manufacturers exit due to the heavy losses caused on account of the steep input cost in the manufacturing of corrugated boxes. The Goods and Services Tax at 18 per cent on corrugated boxes causes financial stress as payment realisation to the MSME sector takes up to 60 days but payment in terms of the duty to the government is 30 days, the association said in a press release. The Association also requested the government to take necessary steps to offset the Kraft paper shortage and control the steep increase in the prices of Kraft which accounts to 85 per cent of the cost of corrugated boxes.
No Penalty on expired EWB if no malafide intention:
A single bench of the Calcutta High Court has quashed an order imposing a penalty for expiry of the e-way bill as it was proved that there was no intention to evade tax on the part of the taxpayer. Earlier, the Commissioner (Appeals) confirmed the original order passed by the adjudicating authority under section 129 of the West Bengal Goods and Services Act, 2017 for the detention of the goods in question on the grounds that the e-way bill relating to the consignment in question had expired one day before, and that the goods were detained on the grounds that the e-way bill has expired which is even less than one day and extension could not be made. The petitioner challenged the impugned order before the High Court. The counsel for the petitioner submitted that delay of a few hours even less than a day of expiry of the validity of the tenure of the e-way bill was not deliberate and willful and was due to break down of the vehicle in question and there was no intention of any evasion of tax on the part of the petitioner. The counsel for the Department could not make out a case against the petitioner that the aforesaid violation was willful and deliberate or with a specific material that the intention of the petitioner was for evading tax.
02/03/2022
Gst payable on property rented by partner to firm:
The Authority for Advance Rulings (AAR), Chennai bench has held that GST is liable to be paid in respect of the properties rented out to the partnership firm by the partner to carry out the business even if it is free of rent as the activity is in furtherance of business. The applicant is the managing partner in the partnership firm and having certain properties in his name. The firm is carrying out its business on those properties on free of rent. Applicant stated that in IT Act it is clear that when the partner uses his property for business carried out by the firm, then deemed rent does not arise. Hence approached AAR for clarity under GST law for the above scenario.
Assessment Order Without Proper Opportunity:
Andhra Pradesh High Court In the matter of GRT Hotels & Resorts (P.) Ltd.
Vs State of Andhra Pradesh: Judgment ::
1. The Competent Authority issued on assessee show cause notice to explain why tax should not be imposed granting fifteen days time to file objections and arguments.
2. The assessee did not file any objections within time stipulated.
3. Thereafter, the Competent Authority passed an order under section 74 on assessee.
4. The assessee challenged the order on the ground that an opportunity of hearing was not granted and filed writ petition.
5. The Honorable High Court observed that as per sub-section (4) of section 75 of the GST Act, an opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.
6. In the instant case, show cause notice was issued to submit objections but the notice of personal hearing, indicating the date of hearing was not served before resorting to the impugned action.
7. Since, the mandatory requirement was not complied with, the Court held that petition was allowed and matter was required to be remanded to Competent Authority for fresh consideration.
01/03/2022
Russian Ukrainian War Financial Impact
1. India's top lender will not process any transactions involving Russian entities subject to international sanctions imposed on Russia after its invasion of Ukraine, according to a letter seen by Reuters and people familiar with the matter. No transactions involving entities, banks, ports or vessels appearing" on a US, European Union or United Nations sanctions list shall be processed irrespective of the currency of the transaction, said a letter sent by State Bank of India (SBI) to certain clients.
2. Indian Oil Corporation (IOC) will no longer accept cargoes of Russian crude oil and Kazakh CPC Blend cargoes on a free-on-board (FOB) basis due to insurance risk, according to a tender notice and a source familiar with the matter. The letter was sent on Monday to traders who submit cargo offers into IOC's regular crude oil buy tenders. FOB is a term used in maritime trade parlance to indicate whether the seller or the buyer is liable for goods that are damaged or destroyed during shipping. "FOB origin" means the buyer is at risk once the seller ships the product. The purchaser pays the shipping cost from the factory and is responsible if the goods are damaged while in transit. "FOB destination" means the seller retains the risk of loss until the goods reach the buyer.
3. British oil giant BP said on Sunday that it is exiting its share in Rosneft, a state-owned Russian oil and gas company at cost of $25 billion over Ukraine invasion. BP has held a 19.75 percent stake in Rosneft since 2013. The British company also said its CEO, Bernard Looney, and former BP executive Bob Dudley will immediately resign from Rosneft's board.
4. Russia's central bank announced Monday it was raising its key interest rate to 20 per cent from 9.5 percent.
The new tax regime, which comes with lower tax rates and fewer tax benefits, was introduced in 2020 but has not found many takers yet. Most taxpayers still prefer to continue with the older regime while filing their tax returns. Revenue Secretary Tarun Bajaj on Saturday said that the old income tax regime must be disincentivised with a view to encourage more people to opt for the new income-tax regime. Bajaj mooted a shift towards a simplified taxation tax structure. The new tax regime, which comes with lower tax rates and fewer tax benefits, was introduced in 2020 but has not found many takers yet. Most taxpayers still prefer to continue with the older regime while filing their tax returns.
Circular No. 04/2022-Customs Dated February 27th, 2022. Implementation of automation in IGCR Rules, 2017 w.e.f. 01.03.2022:
Earlier, CBIC issued notification to make certain amendments in existing Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017. These changes shall come into effect from 1st March, 2022. The amendments are aimed at simplifying the procedures with a focus on automation and making the entire process contact-less. These include:
a) The individual transaction based permissions and intimations, such as -intimation of the intent to import goods at a concessional rate of duty, intimation of the receipt of goods, permission to re-export or clear goods domestically etc, are all being done away with.
b) The various forms have been standardized and notified for the purpose of electronic submission of details.
c) A monthly statement would be submitted by the importer on the common portal.
d) A procedure for inter-unit transfer of the imported goods has been provided for.
e) An electronic option for voluntary payment through the common portal is also being developed for implementation.
Now, the circular is issued to explain the procedure set out in the IGCR Rules, 2017 and the clarifications for smooth implementation. This circular also clarifies procedure to be followed by an importer.
28/02/2022
Financial Impact of Russian Ukrainian War:
1. Russian Markets aren't even open yet, banks are trying to dump their Russian fiat currency (Ruble ?) holding.
2. Russian bank Tinkoff is dumping ? to get dollars ($), even by paying 106% more than normal.
?83 = $1 (Before Sanctions)
?171 = $1 (After Sanctions)
3. Normal Russian citizens will witness their life savings evaporate in front of their own eyes.
4. Norway's Prime Minister just announced that their Sovereign Wealth Fund will sell all its Russian holdings. There are no new investors coming in, many will be trapped with their holdings.
5. One of the largest oil & gas companies in the world - British Petroleum (BP) just announced that it will sell its entire (19.75%) stake in Russian oil giant Rosneft (ROSN) after Russia's invasion of Ukraine.
6. No online fiat income. Hardly any banks, payment processor will process international payments. So no income from YouTube, Twitch & other social media platforms.
7. Some crypto income but hard to convert it into fiat.
8. Investing in Russian Stock Market makes little sense. So not much investing opportunity for Russians.
9. Less salaried jobs. As most companies will avoid setting up offices there, already most companies avoid Russia, Iran etc.
Vide RBI/2021-22/175 dated 23rd February 2022, it has been decided that NBFCs – Middle Layer and NBFCs – Upper Layer with 10 and more ’Fixed point service delivery units’1 as on October 1, 2022 shall be mandatorily required to implement ‘Core Financial Services Solution (CFSS)’, akin to the Core Banking Solution (CBS) adopted by banks.
NBFC – Middle and Upper Layers with 10 or more ‘Fixed point service delivery units’- Timeframe for implementation - On or before September 30, 2025 However, NBFC-UL shall ensure that the CFSS is implemented at least in 70 percent of ‘Fixed point service delivery units’ on or before September 30, 2024.
BFC – Base Layer and NBFC – Middle and Upper Layers with fewer than 10 ’Fixed point service delivery units’— Timeframe for implementation- Not mandatory. However, they may consider implementation of a Core Financial Services Solution for their own benefit.
27/02/2022
The founder of cryptocurrency investment platform BitConnect, an Indian national, has been indicted on charges of orchestrating a global Ponzi scheme worth USD 2.4 billion, federal prosecutors said. According to court documents, Satish Kumbhani (36) of Hemal in Gujarat misled investors about BitConnect's "Lending Program." BitConnect reached a peak market capitalisation of USD 3.4 billion, the Department of Justice said. Under the "Lending Program", Kumbhani, who is at large, and his co-conspirators touted BitConnect's purported proprietary technology, "BitConnect Trading Bot" and "Volatility Software", as being able to generate substantial profits. They guaranteed returns by using investors' money to trade on the volatility of cryptocurrency exchange markets. As alleged in the indictment, BitConnect operated as a Ponzi scheme by paying earlier BitConnect investors with money from later investors. In total, Kumbhani and his co-conspirators obtained approximately USD 2.4 billion from investors. after operating for approximately one year, Kumbhani abruptly shut down the "Lending Program". He then directed his network of promoters to fraudulently manipulate and prop up the price of BitConnect's digital currency, BitConnect Coin (BCC), to create the false appearance of legitimate market demand for it.
SC asks Centre to clarify on legality of cryptocurrency. The Supreme Court on Friday asked the Centre whether dealing with cryptocurrencies like bitcoin is legal in India. A bench presided over by Justice DY Chandrachud posed the query while hearing a plea by one of the accused in the GainBitcoin scam, Ajay Bhardwaj, seeking quashing of the charges against him. We would like you, as the Union of India, to place on record the regime as to bitcoin and cryptocurrency? Is it still an offence?”, Justice Surya Kant who was also part of the Bench told Additional Solicitor General Aishwarya Bhati who appeared for the Enforcement Directorate (ED).
The Directorate General of Foreign Trade (DGFT) on Thursday has changed the status for the import of specific components such as flat panel displays and camera modules to ‘Free’ from ‘Restricted’ with immediate effect, a roll back which will bring relief to smartphone makers who had feared large scale disruption to local manufacturing. A DGFT notification dated February 9, and effective immediately, had said that the status of specific components, which were previously classified as ‘Free’, has been changed to ‘Restricted’. This had meant that shipments of key components such as flat panel displays and camera modules for smartphones were held up by customs since February 9. Industry executives had warned that handset factories will have to suspend production in the next couple of days if they aren’t cleared.
26/02/2022
In a noteworthy decision, the Kerala High Court on Wednesday has ruled that the admin of a WhatsApp group cannot be held vicariously liable if a member of the group posts objectionable content in the group. Justice Kauser Edappagath observed that this was so because vicarious liability in criminal law can only be fastened when a statute prescribes so.
From April 01, 2022, it will be mandatory for the exporters to file Registration Cum Membership Certificate (RCMC)/ Registration Certificate (RC) applications (for issue/renewal/amendment) through the common digital portal of e-RCMC Platform. The prevailing procedure of submitting applications directly to the designated Registering Authorities will continue only till March 31, 2022. All Registering Authorities as notified under Appendix-2T are requested to ensure that they are on-boarded on e-RCMC portal before March 31, 2022.
Gst 3B interest demand only through SCN under section 73/74
RK Transport P Ltd Jharkand HC Dated 16th Feb, 2022. Interest on late filling of GSTR 3B can be demanded by way of SCN in S73/74 Route only, no direct recovery made by revenue for interest in Section 75(12) read with Section 79. Hon'ble court followed own order in case of Mahadeo Construction Co.
Non attachment of personal properties of partners without final liability determination
The Gujarat High Court bench consisting Justices J B Pardiwala and Nisha M Thakore while quashing an order of provisional attachment, held that the GST officials cannot provisionally attach personal properties of a partner of a partnership firm without final determination about the liability of the firm, which is accused of wrongly availing input tax credit (ITC). While considering a petition filed by Rajkot’s Utkarsh Ispat LLP, which is engaged in the business of procuring MS Scrap for TMT bar manufacturing, the High Court has also ruled that provisional attachment of goods, stocks, receivables can also be not approved of, when a floating charge in favour of a third party is created on it.
Searches and inspections were conducted across locations spread across Delhi, unearthing a cartel running 54 bogus firms registered in Delhi –NCR region that were engaged in fake invoicing and circular trading. Incriminating documents such as rubber stamps and letter heads of various firms, mobile phones, laptops etc. have been seized from the search premises. Preliminary enquiry conducted so far into these transactions has revealed fake invoicing of around Rs. 611 crores and tax evasion of over Rs. 38.5 crores.
The Delhi High Court has held that in the absence of an independent inquiry, the revenue authorities cannot solely rely on the opinion of property broker firms and websites to determine the adequacy of rent received for invoking section 13(2)(b) of the Income Tax Act, 1961. The Assessee Foundation received voluntary and corpus donations from Hamdard Dawakhana (Wakf) and had let out its property to the Wakf under a Lease Agreement. The Assessing Officer (AO), relying upon inquiry made from estate agents and information gathered from websites, held that the property was let out by the Assessee to the Wakf at a much lower rate than the market rate and therefore invoked the provisions of section 13(2)(b) of the Act, adding the donations to the taxable income of the Assessee.
25/02/2022
The existing limit for E- invoice reduced from Rs. 50 Crores to Rs. 20 Crores vide Notification No. 01/2022- Central Tax dated 24th Feb, 2022. If the Aggregate Turnover has exceeded Rs. 20 Crs in ANY PRECEEDING Financial year i.e. 2017-18, 2018-19, 2019-20, 2020-21 or 2021-22, then E-Invoicing would be applicable from 1st April, 2022.
Russian Ukrainian War Financial Impact
Russia Ukraine crisis to affect trade, inflation:
1. The Federation of Indian Export Organisations (FIEO) said they have asked exporters to hold their consignments to the region or goods that take the Black Sea route.
2. It also said that exporters are cautious in dealing with their trade in that region. The war will affect both movement of goods, payments and oil prices.
3. India’s main imports from Russia include fuels, mineral oils, pearls, precious or semi-precious stones, nuclear reactors, boilers, machinery and mechanical appliances; electrical machinery and equipment and fertilisers. While major export items from India to Russia include pharmaceutical products, electrical machinery and equipment, organic chemicals and vehicles.
4. The biggest threat is rising oil prices in the international market, which touched nearly $100 a barrel on February 22, the highest since 2014 which can fuel food inflation.
UK takes massive action against Russia, ahead of US.
1. UK will freeze all assets of all major Russian Banks.
2. Russian banks will not be able to access UK's fiat currency, clearing payments in UK.
3. 100 Individuals, Entities And Subsidiaries sanctioned.
4. Russian airline Aeroflot banned from landing or using UK airspace.
5. Football team Chelsea's owner Roman Abramovich banned from entering the UK. Roman Abramovich is an oligarch (Russian Billionaire) and close ally of Putin.
6. UK is pushing "very hard" for Russia to be removed from global fiat payments system (SWIFT).
7. But following countries have blocked that proposal and supported Russia:
Italy
Cyprus
Hungary
Germany
Why does Ukraine matter: This is why Ukraine matters:
1. It is the second-largest country in Europe by land volume and has a population of over 40 million - more than Poland.
2. Ukraine ranks 1st in Europe in proven recoverable reserves of uranium ores;
3. Ukraine ranks 2nd place in Europe and 10th place in the world in terms of titanium ore reserves;
4. Ukraine ranks 2nd place in the world in terms of explored reserves of manganese ores (2.3 billion tons, or 12% of the world's reserves);
5. Ukraine ranks 2nd largest iron ore reserves in the world (30 billion tons);
6. Ukraine ranks 2nd place in Europe in terms of mercury ore reserves;
7. Ukraine ranks 3rd place in Europe (13th place in the world) in shale gas reserves (22 trillion cubic meters)
8. Ukraine ranks 4th in the world by the total value of natural resources;
9. Ukraine ranks 7th place in the world in coal reserves (33.9 billion tons)
Ukraine is an important agricultural country:
1. 1st in Europe in terms of arable land area;
2. 3rd place in the world by the area of black soil (25% of world's volume);
24/02/2022
Individual traders must bring 50% of their equity derivative margin requirement in cash from February 28. This is part of Securities and Exchange Board of India’s stricter client margin rules, aimed at reducing risks to the system. Currently, traders can use the value of the shares pledged with brokers as margins for futures and options traders. In November, Sebi had postponed the implementation of this rule to February 28,2022, from December 1, 2021. Brokers are now gearing up for the implementation of the new rules. According to the new Sebi norms, brokers will have to segregate client funds in different segments like cash, F&O currently and commodities and upload the details to clearing corporations. This is a aimed at strengthening the protection mechanism of client collateral from misappropriation by the brokers. Until now, reporting and calculation of margin at brokers were happening at an aggregated level since there was no bifurcation in the funds of clients and brokers.
The government plans to sell 5% of its stake in LIC for around RS 65,000 crore in what will be the largest initial public issue in India, valuing the insurance behemoth at about Rs13 lakh crore. LIC is likely to be listed on the local stock exchanges before the end of March. The government will go ahead with the planned initial public offering of Life Insurance Corporation despite the market volatilities, FM Nirmala Sitharaman said. The government is keeping a close eye on the development due to the tension between Ukraine and Russia and would like to see a diplomatic solution to the crisis.
Madhuri Jain Grover allegedly used company funds for personal beauty treatments, buying electronic items and family trips to the US and Dubai. She also allegedly paid her personal staff out of company accounts and produced fake invoices, reported news agench Press Trust of India, quoting sources. BharatPe, which allows shop owners to make digital payments through QR codes, came under intense investor scrutiny ahead of its Initial Public Offering or IPO, after Ashneer Grover sought damages from Uday Kotak, the head of Kotak Mahindra Bank. BharatPe, which competes with apps such as SoftBank's Paytm and Google Pay in the country's booming payments market, is valued at roughly $3 billion and is hoping to file for IPO within 18 months, reported Reuters quoting sources. The company lists Tiger Global, Sequoia Capital and others as "marquee investors".
SC upholds the Muslim Personal Law to deprive a women and daughter of ancestral property:
1. An individual named Pasha had died intestate. The widow and daughter of Pasha’s eldest son Rehman Barid were not given any share in the property of Pasha because Rehman had died before Pasha.
2. Contrary to Hindu law, if a Muslim person dies without making a will (non testamentary succession), only the surviving heirs get a share in the property. Under Muslim Personal Law (Shariat) Application Act, 1937, the right of birth is not recognized. The right of succession comes into existence at the time of the death of the elder or the ancestor and if the ancestor is alive then the right of the heir does not become for any title in the property.
3. The Hon SC okayed the Muslim Personal Law sanctioned scheme of division and thus debarred the widow and daughter from any share in the property.
23/02/2022
Volatility in the market, amid rising geopolitical tensions and the ongoing pandemic, has dented the growth of startups.
1. OYO Rooms: The Indian multinational unicorn's finances have suffered amid the pandemic and the startup founded by Ritesh Agarwal incurred losses of Rs 3943.84 cores FY20-21. This means that the company lost over Rs 76,077 every minute during the previous fiscal.
2. Swiggy: The food delivery app has earned a positive reputation across the country, however, it reported a loss of Rs 1,314 crore in the last financial year. Meaning, the company lost well over Rs 25,347 per minute during the period.
3. MobiKwik: The Gurugram-based payments service startup reported a net loss of Rs 111.3 crore in FY20-21. This meant that the losses suffered by the start-up during the financial year was Rs 2,147 per minute.
4. Paytm: Founded in 2010 by Vijay Shekhar Sharma, the Noida-based multinational technology company that specializes in digital payment systems, e-commerce and financial services, suffered a loss of Rs 778.5 crore in the December quarter. This meant that the startup lost over Rs 60,069 every minute during the period.
5. PB Fintech: The parent company of insurance platform Policybazaar and credit comparison portal Paisabazaar, has lost Rs 298 crore in the December quarter. This calculates to the company losing Rs 22,995 every minute during the period.
6. Zomato: The online food aggregator reported a loss of Rs 63.2 crore in the last quarter, recording a loss of Rs 4,876 per minute.
7. CarTrade: The Navi Mumbai-based online auto classifieds platform is used by millions to sell and purchase old and new vehicles. The company incurred a loss of Rs 23.4 crore in the last quarter, losing Rs 1,802 every minute during this period.
8. LatentView: A leader in the field of data analytics, the startup earned a profit of Rs 49.9 crore in the December quarter. This in turn meant that the firm made a profit of Rs 3,852.6 per minute during the three-month period.
9. Nykaa: The e-commerce company, founded by Falguni Nayar in 2012 sells beauty, wellness and fashion products -- online and offline. The startup earned a profit of Rs 27.9 crore in the last quarter, which coverts to Rs 2,152.8 per minute.
10. MapmyIndia: The Delhi-based company that builds digital map data, telematics services, location-based SaaS and GIS AI technologies, reported a profit of Rs 18.5 crore in the third quarter of this financial year. This means, the firm earned Rs 1429.2 every minute during the period.
11. RateGain: The startup that provides technological backup to the travel and hospitality industry, recorded Rs 8.5 lakh profit in October-December quarter. Thus earning Rs 6.6 per minute.
12. FINO Payments Bank: The new-gen payments bank based in Navi Mumbai, recorded a profit of Rs 14.1 crore in the third quarter, thus earning Rs 1,088 per minute during the period.
With market regulator Sebi’s latest order on NSE for violation of securities contract rules and a subsequent probe initiated by other agencies such as income tax and Central Bureau of Investigation (CBI) against former CEO Chitra Ramkrishna, the NSE share sale is likely to be delayed by at least a year, said bankers. Sebi is unlikely to give its nod to NSE to go public at the current situation, and it may take another year or so to clean up the entire system,” said a top official at an investment bank. “More action on all those involved in the co-location scam and violation of securities contract rules is likely in the coming months from various agencies. Until then, the regulator may not consider NSE’s request to go public.”
Purchase of Immovable properties by Non Residents:
1. NRIs/OCIs are governed by provisions of FEMA 1999 and do not require prior approval of RBI for acquisition and transfer of immovable property in India, other than agricultural land/ farm house/ plantation property as per the terms and conditions laid down in Chapter IX of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, dated October 17, 2019 (as amended from time to time), issued under Section 46 of FEMA 1999.
2. NRI / PIO is permitted to purchase ‘unlimited’ in numbers a residential or commercial property ‘for investments’ purpose. However they are not permitted’ to purchase the properties ‘for trading’ purpose.
3. Foreign Citizens of Non-Indian Origin as ‘Not permanent resident of India’ are permitted to purchase immovable property under ‘general permission route’ under FEMA, 1999. However the above mentioned Foreign Citizens of ‘Non-Indian’ Origin are required to obtain permission from the state govt., if any permission is prescribed for the Foreign Citizens of Non-Indian Origin as ‘Not permanent resident of India’.
Data leak at Credit Suisse reveals that account holders were criminals, dictators:
1. German newspaper Suddeutsche Zeitung and the Organised Crime and Corruption Reporting Project (OCCRP), a network of journalists from around the world that sifted through the data, obtained leaked records on more than 18000 Credit Suisse 18 accounts, the largest leak ever from a major Swiss bank.
2. The data has found dozens of dubious characters, including an Algerian general accused of torture, the children of a brutal Azerbaijani strongman, and even a Serbian drug lord known as Misha Banana.
3. The clients included the family of an Egyptian intelligence chief who oversaw torture of terrorism suspects for the CIA; an Italian accused of laundering criminal funds for the infamous 'Ndrangheta criminal group; a German executive who bribed Nigerian officials for telecom contracts; and Jordan's King Abdullah II, who held a single account worth 230 million Swiss francs ($223 million) at its peak, even as his country raked in billions in foreign aid.
4. Venezuelan elites accused of plundering the state oil firm funneled hundreds of millions of dollars into Credit Suisse accounts. The money flowed during a period when widespread looting from government coffers precipitated an economic collapse that has prompted six million people to flee the country and driven others into near starvation. The bank kept its Venezuelan clients' accounts open even as global media exposed corruption cases against many of them.
5. Accounts identified as potentially problematic held over $8 billion in assets. Compliance experts who reviewed journalists' findings said many of these customers should not have been allowed to bank.
6. With nearly 50,000 employees and 1.5 trillion Swiss francs in assets under management for 1.5 million clients, Credit Suisse is the second-largest bank in Switzerland, a testament to how central the banking sector is to this wealthy and comfortable nation.
7. At the end of 2019, Swiss Regulator, Finma said money laundering remained one of the principal risks for Swiss banks. It said that shrinking margins in a world of low interest rates and greater transparency can cause banks to pursue risky business relationships with people, companies, governments or funds that can be involved in corruption or embezzlement of funds.
22/02/2022
The Enforcement Directorate (ED) on Monday conducted raids at offices of Indiabulls Finance Centre in Delhi and Mumbai, official sources said. The ED search is on the basis of an Enforcement Case Information Report (ECIR) registered by the ED under the Palghar police regarding a first information report against Indiabulls Housing Finance (IBHL) for allegedly siphoning off funds and for accounting irregularities committed by the promoters and directors of the company during 2014-2020. In April 2021, ED had registered a case against Indiabulls Housing Finance and its promoters.
Union Commerce and Industry Minister Shri Piyush Goyal has termed the India-UAE Comprehensive Economic Partnership Agreement, signed Friday as a landmark pact, that will open up new markets for Indian goods and services.
https://www.pib.gov.in/PressReleasePage.aspx?PRID=1799756
Ministry of Textiles has further extended the timeline for submission of applications under the PLI Scheme for Textiles till February 28, 2022. Earlier the date of submission of online application under PLI Scheme for Textiles was upto January 31, 2022 which was extended till February 14, 2022.
The Goods and Services Tax Network (“GSTN”) has enabled facility for filing Letter of Understanding (“LUT”) for FY 2022-23 on GST Portal for taxpayers. LUT application is required to be completed before March 31, 2022 or before supply for Exports and SEZ. The previous LUT is valid upto March 31, 2022 only.
The Gujarat High Court has held that taxpayers entitled to claim Input Tax Credit (ITC) and a technical glitch in GST Portal should not deprive him of such a claim. The department tried to upload the ITC – 01, but due to technical glitch in the GSTN portal, the authority concerned was unable to upload.
21/02/2022
Pushpa Movie Style in Export & Import
On 19.02.2022, Team customs Bangalore ICD under City customs commissionerste have detected Red Sanders wooden logs found concealed in plywood boxes in an export consignment declared as Furniture bound for Taiwan. The contraband weighed 4.82 tones and valued around 2.41 crores was detained. Three persons were arrested and further investigation is under process.
On 19.2.2022, Team customs LBSI airport varanasi intercepted a pax arriving from Sharjah and led to recovery of F/o gold brought in brown paste form concealed in pouch kept on shaven part of head and a wig was worn over it by the pax. Gold weighed 646.500 gms and valued at rs.32.97 lacs was seized. Further proceedings are under process.
The Gujarat High Court has recently held that the power prescribed under Rule 86A of the GST Rules 2017 to block an electronic credit ledger can be exercised only when there is availability of credit in such ledger, alleged to be ineligible. Condition precedent for exercise of power under Rule 86A of the GST Rules is the availability of credit in the electronic credit ledger which is alleged to be ineligible. If credit balance is available, then the authority may, for reasons to be recorded in writing, not allow the debit of amount equivalent to such credit. However, there is no power of negative block for credit to be availed in future,” observed Justice JB Pardiwala and Justice Nisha M. Thakore.
Pan shop seller not eligible to opt for composition scheme being manufacturing Gutka by mixing ingredients: AAAR: Authority for Advance Rulings, Madhya Pradesh Gulab Singh Chauhan, In re - [2022] 135 taxmann.com 38 (AAR - MADHYA PRADESH). The applicant was running pan shop and dealing in all types of products which would be related to pan and necessary items generally accepted in pan shop in general trade parlance. It filed an application for advance ruling to determine whether it would be eligible to opt composition scheme as turnover shall be much less than Rs. 1.5 crores. The Authority for Advance Ruling observed that as per Section 10(2)(b) of CGST Act, the benefit of composition scheme shall not be available to a person who is engaged in supply of goods that are not leviable to tax. Also, as per the Notification No. 14/2019-Central Tax, the persons who are engaged in manufacturing of the Tobacco or Pan Masala, are not eligible for composition scheme. In the instant case, one of the goods that shall be manufactured and sold from the applicant's Pan Shop is Gutka, containing Tobacco or otherwise which would be similar to Pan Masala. Thus, the preparation of Gutka at the Pan Shop for sale would be covered in the Second Proviso of Notification No. 14/2019-Central Tax. Therefore, benefit of composition scheme shall not be available to applicant.
GST – Art. 14, 19 & 21 of the Constitution of India - Intent of GST Law - Section 29(2) of the CGST Act – failure to furnish returns for a continuous period of 6 months - Cancellation of GST registration - Batch of petitions challenging order of cancellation of GST registration passed under Section 29 of the CGST Act - In some cases petitioners exercised the option by filing application under Section 30 of the CGST Act for revocation of cancellation of registration but authority rejected the same on the ground that the petitioner has not filed any reply to the notice, while in some other cases appeals before the Appellate Commissioner under Section 107 of the CGST Act were filed belatedly beyond the period prescribed for condonation of limitation – HELD – Though the Clarifications and Notifications have been issued in a staggered manner by rising to the occasions to facilitate the assessees to come back to the GST fold, gap however still continued to haunt these petitioners under the statute - The provisions of the GST enactments cannot be interpreted so as to deny the right to carry on Trade and Commerce to a citizen and subjects. The constitutional guarantee is unconditional and unequivocal and must be enforced regardless of the defect in the scheme of the GST enactments. The right to carry on trade or profession also cannot be curtailed, only reasonable restriction can be imposed – further, the provisions of the GST Act cannot be interpreted in such a manner so as to debar an assessee, either from obtaining registration or reviving the lapsed/cancelled registration as such an interpretation would be not only contrary to the Article 19(1)(g) of the Constitution but also in violation of Article 14 and Article 21 of the Constitution - the intention of the Government has been to allow the persons like the petitioners to file a fresh application and to process the application for revocation of the cancellation of registration by the officers - The purpose of GST registration is only to ensure just tax gets collected on supplies of goods or service or both and is paid to the exchequer. Keeping these petitioners outside the bounds of the GST regime is a self-defeating move - There are adequate safeguards under the GST enactments which can also be pressed against these petitioners even if their registrations are revived - While exercising jurisdiction, under Article 226 of the Constitution, the powers of the Court to do justice i.e., what is good for the society, can neither be restricted nor curtailed. This power under Article 226 can be exercised to effectuate the rule of law - power of Court under Article 226 of the Constitution of India is being exercised cautiously in favour of the petitioners as this power is conceived to serve the ends of law and not to transgress them - Notwithstanding the fact that the petitioners have shown utter disregard to the provisions of the Acts and have failed to take advantage of the amnesty scheme given to revive their registration, the Court is inclined to quash the impugned orders with grant consequential reliefs subject to terms - If required, the Central Government and the State Government may also suitably amend the Rules to levy penalty so that it acts as a deterrent on others from adopting casual approach – the writ petitions are allowed subject to certain conditions.
20/02/2022
JPMorgan is the first bank to set up a metaverse office. But it follows on the now well-trodden path of big brands, businesses, and influencers entering the metaverse. The metaverse is made up of not one, but various virtual worlds—popular ones being browser-based Decentraland; the Sandbox, owned by Hong Kong’s Animoca Brands; and Roblox, which is favored among kids and teens. Users use digital avatars to explore these virtual lands, where they can socialize, play games, purchase real estate, browse art, or go shopping. In recent months, companies have rushed to enter the metaverse. Retail and entertainment brands from Walmart and Nike to Disney and Warner Music Group all joined the rush. Warner Music, the entertainment behemoth that’s home to a star-studded artist roster including Dua Lipa and Red Hot Chili Peppers, is currently building a concert-focused theme park on metaverse platform the Sandbox. Luxury brand Gucci has purchased land on the same platform to develop a space to host “immersive experiences” and offer digital fashion items for purchase, targeted at Gen Z. The Sandbox has already cultivated over 200 partnerships with companies, brands, and individuals including rapper Snoop Dogg, sportswear firm Adidas, and Japanese gaming company Atari, says the report. The average price for a parcel of virtual land doubled in just six months last year, surging from $6,000 in June to $12,000 by December across the four main metaverse platforms, says the report.
With Ukraine’s proposed law recognizing bitcoin and other cryptocurrencies, the stage is set for the country to become a leader in the market. Ukraine is becoming the locomotive of the global Bitcoin market. The country records a massive volume of transactions with crypto assets, estimated at some $150 million per day. According to analysts, 5.5 million Ukrainians, or about every eighth Ukrainian, own cryptocurrency. The country was determined to be a top nation for cryptocurrency adoption according to a Chainalysis report in 2020. The Verkhovna Rada of Ukraine has approved the country’s proposed law "On Virtual Assets" with the recommendations of the president. Two hundred and seventy two People's Deputies voted for this decision.
19/02/2022
The Finance Bill has proposed to criminalise the illicit publication of transaction-level information provided by business entities to the customs department as such data could be misused by competing international entities and hostile countries to the disadvantage of Indian businesses, two officials aware of the development said. There have to be legal provisions against publication of the data, which can be mined by other countries to India’s disadvantage, they said. The Finance Bill presented in Parliament on February 1 proposed to insert “Section 135AA” in the Customs Act to protect import and export data submitted to customs by importers or exporters in their declarations by making the publishing of such information, unless provided by the law, as an offence. The proposed data privacy and confidentiality provisions evoked strong responses from all quarters. On one end was Congress MP Shashi Tharoor who alleged that the government was restricting availability of data for the public, on the other was FIEO director general Ajay Sahai who told media that “exporters had pitched for stringent measures to prevent commercially sensitive information being shared as they were being procured from the Customs ICEGATE and being sold for a premium”, an official said.
The highest ever exports are happing in India this fiscal, said Santosh Kumar Sarangi, Director General of Foreign Trade (DGFT), Ministry of Commerce and Industry, adding that along with a new foreign trade policy, restructuring of the organisational set up within the Department of Commerce is taking place. The country is likely to cross $400 billion worth of exports in the financial year 2021-22. Exports have grown substantially. We have seen 46 per cent of growth in exports over the previous year. The previous year, of course, had a much lower base. We are likely to achieve our highest every export from our country in achieving $400 billion of exports” said Sarangi, speaking at the Pune International Business Summit organised by the Mahratta Chamber of Commerce, Industries and Agriculture (MCCIA) on Monday.
Section 16 of the CGST Act, 2017 allows a registered person to take ITC subject to five conditions – he is in possession of a tax paying document, he has received the goods or services, he has furnished GSTR-1 returns, he has received from the GSTN the details of the supplies that the supplier has furnished in his GSTR-1 return and the supplier has paid the tax due on his outward supplies to the government. Now a sixth condition is being added as Section16 (ba) that the ITC in respect of the supplies communicated to him are not restricted under Section 38 of the CGST Act, 2017.
The Finance Bill 2022 seeks to substitute the wordings of the said Section 38 also, prescribing six new conditions. The GSTN will send to the recipient auto-generate details of supplies reported by the suppliers pointing out the supplies in respect of which he cannot take ITC such as supplies made within prescribed period after taking registration, where the supplier has defaulted in paying the taxes, where the supplier has discharged less tax liability (through GSTR-3B) than what he has reported (in his GSTR-1), where the supplier has taken more ITC than prescribed, where the supplier utilizes the ITC beyond the prescribed limit for discharging his tax liability and supplies from such other classes of suppliers as the government may notify.
18/02/2022
The Income-tax department has conducted searches at multiple premises of Chinese telecom company Huawei in the country as part of a tax evasion investigation, official sources said on Wednesday. The raids were launched at the company's premises in Delhi, Gurugram (Haryana) and Bengaluru in Karnataka on Tuesday. Sources said the officials looked at financial documents, account books and company records as part of a tax evasion investigation against the company, its Indian businesses and overseas transactions. The government has kept Huawei out of trials for 5G services.
De facto dollarization represents the situation of a foreign currency being used alongside the domestic currency as means of exchange (for transaction purposes, i.e., as currency substitution) or as means of saving in hard currency (i.e., as asset substitution). The only fully dollarized countries remain Panama and Liberia. From a United States standpoint, it is noteworthy that about two-thirds of all dollar currency is held outside the United States. China may launch digital yuan pilot zones with its trading partners, which could in turn help lift the yuan’s status as a global settlement currency. The e-CNY, as the digital currency is officially known, could set in motion a trend of de-dollarization, or emerging markets companies and governments moving away from U.S. dollar markets for external funding. If China prioritizes economies that it has trade deals with for digital yuan pilot projects, such as members of the Regional Comprehensive Economic Partnership or countries it has free trade agreements with, the e-CNY becomes suddenly a fierce competitor to the U.S. dollar.
17/02/2022
Tata Group will soon unveil its strategy to digitally reach consumers across various categories by bringing assets together, Mukesh Bansal, President of Tata Digital, said. It is building a super app, which can bring its multiple consumer-facing businesses onto a single platform.
Eric Schmidt, the former CEO of Google, is planning to invest $125 million into artificial intelligence research through his philanthropic Schmidt Futures venture . The funding, set to be administered through an initiative dubbed AI2050, will aim to support academics working on “hard problems” in AI.
In 47 days, 2022 has already seen nine Indian startups enter the unicorn club. The latest is Chennai and Palo Alto, California-headquartered Uniphore, which develops conversational AI solutions. On Wednesday, the startup announced that it has secured a whopping $400 million in its Series E round led by venture capital firm NEA. The company is now valued at $2.5 billion. Founded by Umesh Sachdev and Ravi Saraogi in 2008, Uniphore was incubated at the Indian Institute of Technology (IIT) Madras. For the last 13 years, the company has been developing conversational AI solutions that help enterprises understand their customers’ needs and enhance their offerings and experiences.
16/02/2022
Life Insurance Corporation of India (LIC) is looking to raise about Rs 654 billion ($8.7 billion) from its initial public offering (IPO), according to people with knowledge of the matter. LIC’s shares could be priced between Rs 2,000 to Rs 2,100 each , with discounts to some retail investors, the people said. The issue is slated to run March 10-14, if regulatory approvals are obtained in time, they added.
The Reserve Bank of India's deputy governor T Rabi Sankar on Monday said that banning crypto currency is perhaps the most advisable choice open to India. The RBI deputy governor even equated cryptocurrencies with ponzi schemes. We have also seen that cryptocurrencies are not amenable to definition as a currency, asset or commodity; they have no underlying cash flows, they have no intrinsic value; that they are akin to ponzi schemes, and may even be worse,” he added. Private cryptocurrencies or whatever name you call it are a threat to our macroeconomic stability and financial stability. They will undermine the RBI's ability to deal with issues of financial stability and macroeconomic stability,” Das had said.
Madras High Court has observed that extramarital affairs can cause grave mental trauma and mental health issues leading to serious consequences in the matrimony, and that in turn, would amount to mental cruelty under Section 498(A) IPC.
This ruling was passed by Justice D.Bharatha Chakravarthy while confirming Nakkeeran, alias Jeroan Pandi’s conviction by a trial court in Tiruvannamalai district in November 2011. However, the judge reduced the sentence from two years to six months of rigorous imprisonment.
15/02/2022
Some Important recent Gst rulings/ Judgements:
1. ITC eligible if legitimately lying in ECL.
The AAAR, Gujarat in the matter of M/S. Aristo Bullion Private Limited [Advance Ruling No. GUJ/GAAAR/APPEAL/2021/36 dated December 22, 2021] modified the ruling passed by the AAR, and held that, the assessee is entitled to use the Input Tax Credit (“ITC”) balance lying in its Electronic Credit Ledger (“ECL”), legitimately earned on the on Gold & Silver Dore Bars etc., for the purpose of paying GST on outward supply on Castor Oil Seeds, and it cannot be denied merely on the ground that the inputs have no nexus with outward supply.
2. Invoices issued to HO eligible for Cenvat Credit:
The CESTAT, Chennai in M/s. Godrej & Boyce Mfg. Co. Ltd. v. Commissioner of GST & Central Excise [Excise Appeal No. 40047 of 2019 & 40072 of 2021 dated January 27, 2022] set aside the order of the Revenue Department rejecting the CENVAT credit of the assessee. Held that, CENVAT credit cannot be denied due to the reason that the invoices were issued in the name of head offices with centralised registration. The purpose of taking centralized registration is to help the manufacturer for availment of credit as well as distribution of credit.
3. Gst payable on club membership:
The AAR, Maharashtra in the matter of M/S the Poona Club Limited [Advance Ruling No.GST-ARA-123/2019-20/B-12 dated January 31, 2022] held that, club of membership association and its members are distinct persons and the membership/ subscription fee, and annual fee, received from its members are consideration for supply of goods/services as a separate entity covered by the scope of the term ‘business’ and, thus, principle of mutuality is not applicable. Hence, GST would be payable on amounts received from club members.
4. No denial of Itc if supplier registration cancelled later on:
A purchasing dealer is entitled by law to rely upon the certificate of registration of the selling dealer and to act upon it. Whatever may be the effect of a retrospective cancellation upon the selling dealer, it can have no effect upon any person who has acted upon the strength of a registration certificate when the registration was current. The argument on behalf of the department that it was the duty of persons dealing with registered dealers to find our whether a state of facts exists which would justify the cancellation of registration must be rejected. To accept it would be to nullify the provisions of the statute which entitle persons dealing with registered dealers to act upon the strength of registration certificates.”
Case Laws:
a. Infinity Wholesale Limited of the Madras High Court.
of the Madras High Court.
b. M/s Vardhman Mills of the Madras HC
c. Delhi HC : Arise India Limited & Others Versus Commissioner of Trade & Taxes, Delhi and Others, W.P.(C) No.2106/2015.
d. M/s ASHA OIL TRADERS Of Rajasthan HC.
e. M/s Arvind Traders and M/s Nakoda Traders, Kota.
5. No detention of goods if tax unpaid in supply chain:
The Hon’ble Punjab and Haryana High Court in M/s. Shiv Enterprises v. State of Punjab and others [CWP-18392-2021 dated February 04, 2022] held that, GST Authorities cannot detain goods in conveyance without passing appropriate orders if goods are accompanied with the documents as prescribed and cannot proceed against the taxpayer for contravention of any provision of the Central Goods and Services Tax Act, 2017 (“the CGST Act”). Further held that it is not the liability of the taxpayer to find out that whether or not other person in the supply chain has paid the tax and is the fundamental legal principle, that the law does not compel a man to do that which he cannot possibly perform.
6. Restoration of Gst number in case of delay:
DELHI HIGH COURT
SHAKTI SHIVA MAGNETS PRIVATE LIMITED Vs
ASSISTANT COMMISSIONER & ORS. The Petitioner contended that as per Rule 21A of the Central Goods and Services Tax Rules, 2017 that describes the conditions needed to be fulfilled for suspending a registration and Rule 22(3) of the CGST Rules wherein it is provided that an assessee’s registration can be suspended only for 30 days and the cancellation proceeding has to be concluded within the same period.
The court directed the Respondent to restore the Petitioner’s GST registration. However, allowed the Respondent to issue a fresh SCN mentioning all the relevant facts and reasons within a week. Further directed the Respondent to issue a practice direction so that in future, if any SCN for cancellation of GST registration is issued, the same is not bereft of any material particulars or reasons.
7. Sec 74 procedure with No coercive measures:
The Rajasthan High court has directed the Goods and Service Tax Authority (GST) department not to Force Taxpayers to deposit GST or take Coercive Measures without adhering to the procedure provided under Section 74 of the CGST Act: M/s. Dhariwal Products
8. LEASE GIVEN TO HOSTAL IS EXEMPTED UNDER GST.
KARNATAKA HC : Taghar Vasudeva Ambrish Vs
Appellate Authority For Advance Ruling Karnataka
Case No: W.P. No.14891 OF 2020. Dated 7 February 2022.
The service provided by the petitioner i.e., leasing out residential premises as hostel to students and working professionals is covered under Entry Entry 13 of Notification No.9/2017 dated 28.09.2017 namely 'Services by way of renting of residential dwelling for use as residence' issued under the the Act. The petitioner is held to be entitled to benefit of exemption notification.
9. Itc blocking under Rule 86A:
Bombay High Court in Dee Vee Projects Ltd. Versus The Government Of Maharashtra
The Reasons to Believe for Blocking of ITC must be formed on basis of Objective Material and Reasons to be recorded before Blocking the ITC.
The Order Blocking the ITC must specify the amount of ITC fraudulently or wrongly availed and not the entire amount available. Rule 86A is drastic and all procedures to be complied with.
Non compliance of two out of five provisions for doing business can send an entrepreneur to jail. According to a report, among the 69,233 unique compliances that regulate doing business in India, as many as 26,134 have imprisonment clauses as a penalty of non-compliance. Five States have more than 1,000 imprisonment clauses in their business laws — Gujarat (1,469), Punjab (1,273), Maharashtra (1,210), Karnataka (1,175) and Tamil Nadu (1,043). Excessive compliances are especially burdensome on MSMEs; a typical MSME, having more than 150 employees, faces 500-900 compliances that cost ?12-18 lakh a year,” the report said. Further, it mentioned that such regulatory overreach impacts not just entrepreneurs running for-profits, but also not-for-profit institutions.
14/02/2022
Over 250,000 people in Delhi registered their new or existing businesses under the ambit of the Goods and Services Tax (GST) from March 2020, when the coronavirus disease (Covid-19) pandemic began, till January 2022, officials said on Sunday. Delhi recorded 140,238 new GST registrations in 2020-2021, and 114,726 new registrations in 2021-22 (till January 31, 2022). Delhi had recorded 184,502 new registrations in 2019-20, before the pandemic hit. Also, the cancellations of GSTIN number were also slightly higher during the pandemic. During 2019-2020, 46,968 GST registrations were cancelled. The number increased to 150,617 in 2020-21. In 2021-22 a total of 86,453 GST registrations were cancelled.
As on January 24, 2022, the total number of Permanent Account Numbers (PANs) linked with Aadhaar is 43,34,75,209. This was stated by Union Minister of State for Finance Shri Pankaj Chaudhary in a written reply to a question in Lok Sabha on February 07, 2022. The Minister further stated that the time-limit as extended by the Government for linking all PAN cards with Aadhaar cards is March 31, 2022.
The government will levy goods and services tax (GST) on the service fees on cryptocurrency transactions, not the digital asset’s gross value, two finance ministry officials said. However, the finance ministry has yet to work out the indirect tax treatment of certain crypto transactions that may fall into actionable claims.
ABG Shipyard case is allegedly the biggest bank fraud case in India:
1. ABG Shipyard, which was incorporated on 15 March 1985, has been under banking arrangements since 2001. It is India's largest firms engaged in shipbuilding and ship repair.
2. Company had financing arrangements with over a two dozen lenders under consortium arrangement. The leader in Consortium was ICICI Bank.
3. Due to poor performance, the account became NPA on 30/11/2013. Several efforts were made to revive the company operations but could not succeed.
4. The company's loan account was restructured under the CDR mechanism in March 2014 by all lenders.
5. After the restructuring failed, the company’s account was classified as NPA in July 2016, with backdated effect from 30th Nov. 2013.
6. E&Y was appointed as forensic auditor by lenders during April 2018 and they submitted their report on January 2019.
7. Forensic Audit revealed that between 2012 and 2017, the accused colluded together and committed illegal activities including diversion of funds, misappropriation and criminal breach of trust. Funds were also used to purchase assets for its related parties The company allegedly also invested some of those loans in its overseas subsidiary.
8. SBI had first filed a complaint with the CBI on November 8, 2019, on which the CBI had sought some clarifications on March 12, 2020. A fresh complaint was filed again in August that year. After "scrutinising" for over one and a half years, the CBI acted on the complaint filing an FIR on February 7.
9. SBI also informed the CBI that staff accountability had been dealt with and closed by the competent authority and it was found that its staff was not involved in the alleged fraud.
10. The SBI consortium of 28 banks and financial institutions have allegedly been cheated of a massive total of ?22,842 crore, which makes it the biggest alleged bank fraud case.
11. CBI has now registered an FIR against ABG Shipyard Ltd and its directors and conducted a search at its premises.
13/02/2022
CSR Reporting- CSR2:
MCA through a notification no GSR (E) dated 11th Feb 2022 has notified that every Company covered under the provision of Section 135(1) of the Companies Act, 2013 shall furnish a report on its Corporate Social Responsibility (CSR) in the form CSR -2 to the Registrar of Companies for the preceding financial year 2020-2021 and onwards as an addendum to Form AOC 4.
It seems that the Govt of India through MCA is keen to know about the CSR spending, CSR projects, CSR Implementing Agencies, Non-spending and above all the unspent CSR amount.
There are over 200,000 LLPs in the country.
1. The LLP (Amendment) Act of 2021 reduced penal provisions in the Act from 24 to 22, while decriminalising 12 other provisions. The lapses that got decriminalised were technical or procedural in nature and now there won't be any need to take these to company law tribunals for adjudication as no criminal intent is deemed to be involved in them.
2. Separately, the ministry also designated registrars of companies (RoCs) as adjudicating officers under the Act as well. This will also be effective from 1 April.
3. Appeals will be dealt with by the respective Regional Directors.
The Act authorised the Regional Director to compound offences that are punishable only with a fine.
4. It also empowered the Centre to prescribe accounting or auditing standards for certain classes of LLPs.
5. It also allowed the Centre to set up special courts for dealing with offences under this law expeditiously.
12/02/2022
RBI is going to announce bi-monthly loan policy next week. Meanwhile, good news has come out for those who earn their hard earned money in the form of Fixed Deposit (FD). HDFC has increased the interest rates on its fixed deposits by 10 basic points or 0.10 percent. Bajaj Finance has decided to increase interest rates by 30 basis points.
Gold surged after PBS reported that the U.S. believes Russian President Putin has decided to invade Ukraine and communicated those plans to the Russian military. In response to the news, gold prices surged more than $20, with the April Comex gold futures last trading at $1,857, up more than 1% on the day. The $1,850 an ounce level was a critical one to test and breach. And according to analysts, if this level holds, it could open the door to more gains. Gold could breach the $1,900 an ounce level if there is a military action. Russia holds biggest stock of gold after germany.
11/02/2022
Repo and reverse repo rate kept unchanged by RBI:
1. The current repo rate is at 4% and the reverse repo rate is at 3.35%.
2. This is the 10th time that the RBI kept the lending rates unchanged and maintained an accommodative stance amid the Covid pandemic.
3. With modest growth, Real GDP for 2021-22 stands at 9.2%. For 2022-23, RBI projects India’s Real GDP to grow at 7.8%.
4. CPI inflation for 2022-23 is projected at 4.5%, inspite of high oil prices, while inflation projection for 2021-22 was retained at 5.3%.
5. Globally, The Bank of England raised interest rates to 0.5%. In Brazil, the central bank recently increased its benchmark interest rate by 1.5% and signalled another increase at its next meeting. The European Central Bank kept its key interest rates unchanged. In the US, Federal Reserve Chairman Jerome Powell signalled last week that the US central bank would begin steadily raising interest rates in mid-March.
Finance minister Nirmala Sitharaman on Friday said the government has the sovereign right to tax profit made from cryptocurrency transactions but is yet to decide on whether to legalise crypto assets or ban them. In her reply the discussion on the Union Budget 2022-23 in the Rajya Sabha, she also said the budget stood for continuity and sought to bring stability to the pandemic-hit economy along with predictability in taxation. I am not going to legalise it (crypto assets) or ban it at this stage. Banning or not banning will come subsequently, when consultations give me input,” she said. It is a different question whether cryptocurrency is legitimate or illegitimate, she said, “but I will tax (profits from transactions) because it is a sovereign right to tax.”
10/02/2022
Revenue Secretary said Currently, a 5 per cent GST tax is levied on restaurant services, irrespective of whether it is air-conditioned or non-AC, without the benefit of the input tax credit (ITC). Also, restaurants in starred-hotels that charge Rs 7,500 or more per day room tariff will be levied 18 per cent GST but ITC is allowed for them. Those restaurants in hotels charging less than Rs 7,500 room tariff will charge five per cent GST but will not get ITC.
SEBI asked asset management companies (AMCs) to form audit committees which will be responsible for oversight of financial reporting process, audit process and compliance with laws and regulations, among others. The circular will come into force with effect from August 1, 2022.
09/02/2022
Government exploring ways to levy GST on mining of cryptocurrencies. The key issue here is whether to treat the mining as goods or service. According to Subhash Chandra Garg Committee that proposed specific actions to be taken inrelation to virtual currencies (2019), “‘Mining’ means an activity aimed atcreating a cryptocurrency and/or validating a transaction of cryptocurrency between the buyer and seller of cryptocurrency.
Electronic Credit Ledger cannot remain blocked after expiry of period of 1 year. Case Name : K. Vinodh kumar Vs Commissioner of GST and Central Excise (Madras High Court).
GST Council made rules further to amend the Jammu and Kashmir Goods and Services Tax Rules, 2017,” read a notification issued by the Finance Department. As per notification, these amended rules will comeinto force on the date of publication of corresponding notification under Central Goods and Services Tax Rules, 2017 in the Central Gazette.
08/02/2022
Income Tax Addition is unsustainable if no incriminating material found during search. Case Name : DCIT Vs Mapsa Tapes Pvt. Ltd. (ITAT Delhi) Appeal Number : ITA. No. 3539/Del/2017.
Centre will move the issue of bringing aviation turbine fuel (ATF) under the GST net for discussion in the next meeting of the GST Council, Finance Minister said, while noting that rising global fuel prices are a “concern”.
Guwahati High Court denies pre-arrest bail to person accused of carrying coals without GST. Case Name : Faruk Alam Vs State of Assam (Guwahati High Court)
MCA is preparing to launch the third version of the MCA21 portal in March, starting with the LLP module. The third version of the portal, a key platform to submit the required documents and filings under the companies law and the Limited Liability Partnership Act, will leverage analytics, artificial intelligence and machine learning.
07/02/2022
A digital currency is likely to save operational costs – of printing, distributing and storing currency notes – for the Reserve Bank of India (RBI), with a portion of the cash in circulation likely being replaced with online legal tender. For every Rs 100 note, the cost works out to be about Rs 15-17 rupee (15-17% on each tender) in its four-year life cycle, according to a market estimate. The cycle entails a chain of printing new notes and soiled notes coming back to RBI via commercial banks. Given that higher denomination notes are being pulled out and more of smaller denominations are printed, the cost savings from a digital currency could be significant. Finance Minister Nirmala Sitharaman last week announced that the RBI would soon issue a CBDC. The digital rupee is likely to see the light of the day in the new fiscal year. If the RBI takes a centralised unit approach where a customer has to open an account to use digital rupee, net cost savings should be significant given that any blockchain-backed system increases electricity charges. Last financial year that ended on March 31, the central bank printed about 4.19 lakh additional notes year-on-year as the cash in circulation rose by that much. Going by the latest available figures, currency management costs could be reduced by hundreds of crores of rupees if there is no further increase in printing legal tenders. Total cash in circulation was at Rs 28.32 lakh crore as on March 31, 2021. CBDC is the legal tender issued by a central bank in a digital form. It is exchangeable one-to-one with the fiat currency. Only its form is different. Once it is launched, citizens could convert it into physical notes as well.
The currency in circulation for the year 2020-21 is the highest the figure has been in almost a decade. This, according to the latest data released by the RBI. The numbers are surprising considering the fact that economic growth has been below par. What explains the sudden increase in demand for cash? According to the RBI, currency in circulation (CiC) as a proportion of GDP is 14.7% this year. This is up by more than 2% when compared to the previous financial year.
In real terms, this translates to a nearly Rs. 2 lakh crore increase in the value of notes in the economy. Historically, the CiC has been positively associated with GDP growth in India, which has taken a big hit as a result of the Covid pandemic. While growth has bounced back this year, it has only done so in relation to the dramatic fall witnessed the year prior. More money in the economy is a good thing, as it means that economic activity is on the rise and what’s more, people expect it to continue to rise. With India’s vaccination record now having reached satisfactory levels and the worst of the pandemic being behind us (for now), the country might be allowed to resume its normal growth trajectory.
06/02/2022
The introduction of 1% tax deducted at source (TDS) on cryptocurrency trading could fetch up to ?1,000 crore annually to the exchequer, given the current trading volumes, Central Board of Direct Taxes (CBDT) chairman J.B. Mohapatra said on Wednesday. The proposed taxation regime of virtual digital assets is prospective, and the CBDT will decide on the approach to taxation of past transactions after deliberations.
BharatPe confounder Ashner Grover has held early talks with investors to sell his 9.5% stake in the fintech startup potentially paving the way for his full exit from the company, two people in the know said. The sale discussion initiated by Grover come on the back of an ongoing investigation and an independent audit of BharatPe, which has indicated financial irregularities at the startup. The company and its founder have been embroiled in a month-long corporate saga triggered by a leaked audio clip where Grover is allegedly hurling abuses at an employee of Kotak Mahindra Bank. The secondary sale, which Grover is pushing for, signals that he could be eventually ousted from the company once final findings of the ongoing probes are submitted.
05/02/2022
The industry body representing cryptocurrency exchanges has decided to reach out to relevant policymakers to brief them about complications arising out of the government’s move to levy a 1% TDS on all crypto transactions. The issue was discussed at the meeting of the Blockchain and Crypto Assets Council (BACC) on Saturday, where the overwhelming view was that this move would dent crypto trading volumes and drive small traders towards informal person-to-person (P2P) trading and decentralized exchanges (DEX). According to the provisions of this year’s finance bill, the buyer of a cryptocurrency has to deduct 1% of the sale consideration and pay the amount as an advance tax to the government on behalf of the seller on every trade. The withholding will apply where sale consideration is more than or equal to Rs.50,000 (for specific individual payers) and Rs.10,000 for others. TDS must be deducted on both crypto-to-rupee and crypto-to-crypto swaps. To pay advance tax, the buyer needs to have details of the seller, such as name, PAN number, etc. As this information lies with the exchanges, not with the buyer, the buyer won’t be able to remit money to the government.
High-net-worth Individuals (HNIs), hedge funds, large overseas institutional investors, and family offices may have to pay more in taxes from next year on derivative profits after the budget extended the scope of ‘bonus stripping’ to disallow squaring futures- market gains with cash equity losses. In the budget, the government has proposed to include share transactions under the ambit of ‘bonus stripping’ which hither to applied only to mutual fund units. Bonus stripping is a mechanism through which an investor books loss by selling shares of companies right after bonus issuances. These capital losses in equities are then used to offset capital gains accrued in derivative trades. The strategy was popular among affluent investors since capital gains in equity are subject to 10-15% tax, depending on the holding period, while derivative trades are subject to 30% tax. From April 1, losses booked by investors due to a fail in share prices after bonus issuances can be adjusted only against capital gains accrued on the bonus shares received
04/02/2022
The interest on refund is receivable under the Income tax as per the provisions of Section 244A of the Act. The computation of interest on refund is carried out by the department as under:
Refund < 10% of the total tax determined in Intimation Order
Filing of Income tax Return On time: No Interest will be paid with refund
Belated ITR filing: No Interest will be with refund paid with refund
Refund >= 10% of the total tax determined in Intimation Order and refund is out of TDS/ TCS/ Advance tax
Filing of Income tax Return On time
Start Date: 01st April of AY
End Date: Date of intimation order
Belated ITR filing
Start Date: ITR filing date
End Date: Date of intimation order
Refund >= 10% of the total tax determined in Intimation Order and refund is out of Self-assessment tax paid
Filing of Income tax Return On time
Start Date: ITR filing date or tax payment date, whichever is later
End Date: Date of intimation order
Belated ITR filing
Start Date: ITR filing date or tax payment date, whichever is later
End Date: Date of intimation order
Interest Rate on refund: 0.5% p.m. or part thereof.
A large number of investors indulging in crypto currency transactions had not been declaring such income and the income tax department has collected enough data on such entities, Central Board of Direct Taxes chairman JB Mohapatra said. In many of the cases tax returns were not field although they invest and they trade. In many cases the returns were field, but the crypto surplus were not declared. In some cases, where surplus was shown, there were not major differences in accounting,” Mohapatra told ET. He added that the department had been keeping tab on cryptocurrency transactions since 2017. We had undertaken certain non-mild intrusive service into the 2017-18, 19-20 and 21 and there are special pilot projects being run on this theme. So we got good data,” Mohapatra said, adding that this had given good inputs to the CBDT on how to proceed with it in future. He made it clear that while the proposed taxation regime is sought to be implemented from April 1, it did not mean that there was no tax applicable for transactions before April 1.
03/02/2022
CBDC is the legal tender issued by a central bank in a digital form. It is the same as a fiat currency and is exchangeable one-to-one with the fiat currency. Only its form is different. CBDC can Affect Banks as they could cause dislocations depending on the design of the CBDC. It could reduce transaction demand for bank deposits, but they reduce settlement risks. Being risk-free, CBDC can lead to a shift away from bank deposits, cutting government guarantees on deposits. If banks lose deposits, their ability to create credit will be constrained because central banks cannot provide credit to the sector. It’s a form of digital payments - where imagine a UPI system where CBDC is transacted instead of bank balances, as if cash is handed over- the need for interbank settlement disappears. It would also enable more real- time and cost- effective globalization of payment systems. It is conceivable for an Indian importer to pay an American exporter on a real- time basis in digital dollars, without the need of an intermediary. The RBI has been examining use cases and working out a phased implementation strategy for the introduction of CBDC with little or no disruption. As per the central bank, crucial elements around the design and usage of a CBDC need to be navigated before its introduction. The central bank is working out models on retail and wholesale use of the CBDC.
Clear (formerly Clear Tax), which is backed by US- based payments major Stripe, is launching a crypto tax and portfolio management service for enterprises and retail users in India, amid confusion around crypto taxation in certain scenarios among investors and crypto exchanges. Following the Budget’s proposal on crypto taxation, including 30% tax on crypto gain and a 1% tax deduction at source, questions remain around tax implication of futures and derivatives trade, loss setoff, transactions on crypto aggregators and the definition of transfer of assets class (will it include peer-to-peer, airdrop etc.), according to experts ET spoke to. “So, from a trading perspective, there’s a lot of clarity awaited.
02/02/2022
The worldwide crypto community has lauded India’s announcement to tax cryptocurrencies and develop a Blockchain based, regulator-backed digital currency as a significant step forward toward legitimizing the asset class and encouraging innovation in Blockchain technology. This means that India recognizes the importance of crypto, digital assets and their underlying technology, Blockchain, too,” said Anndy Lian, Chairman of Singapore-based BigONE exchange. “The next crypto bull market could be led by India.”
The new regulation to tax virtual digital assets could create trouble for many multinational and companies due to the broad definition of the framework that doesn’t use the word “cryptocurrency” anywhere. The broad definition of “virtual digital assets” and “any information, code, or otherwise” in the newly announced framework could cover a large range of intellectual properties and even online assets created by multinationals. This could eventually mean that taxmen may be able to question certain assets or intellectual properties, and they could eventually be taxed at a higher rate.
Unexplained borrowings to face more tax scrutiny:
1. It is proposed to amend the provisions of section 68 of the Act so as to provide that the nature and source of any sum, whether in form of loan or borrowing, or any other liability credited in the books of an assessee shall be treated as explained only if the source of funds is also explained in the hands of the creditor or entry provider.
2. However, this additional onus of proof of satisfactorily explaining the source in the hands of the creditor, would not apply if the creditor is a well-regulated entity, i.e., it is a Venture Capital Fund, Venture Capital Company registered with SEBI.
3. Finance Act 2012 had clarified that source of fund in the hands of shareholder is required to be explained. However loans and advances in other natures were not covered under the amendment in 2012.
4. Now, non-listed firms shall have to prove genuineness/ creditworthiness of the creditor in the case of any loan or borrowing.
01/02/2022
Budget Impact on Various Items :
1. Add Protein to Your Diet
Prices of imported food items such as fruits dry fruits, dates, asafetida, millets, frozen mussels and squid will come down due to reduction in import duties. The duty cut is steep in some products – from 30% to 2.5% for cashew nuts, and from 70% to 30% for pepper and cloves.
2. ROUGH WEATHER
Umbrella to Cost More
Prices of imported umbrellas, including lower priced ones from China, will go up by 7-8% as basic custom duty is doubled to 20%.
3. MEATY DELIGHT FOR PAWS
Pet Food to Pinch Less
Buying imported pack of food for your dogs and cats will pinch less as duties are cuts to 20% from 30%.
4. CHOOSE YOUR GADGETS
Imported Ones Pricey
Prices of imported wireless headphones, earphones and portable Bluetooth speakers will go up by 3-4% while those made India will cost less. The custom duty on components for smartwatch and wireless headphones like printed circuit board assembly, speakers assembly, battery, charging cable will be zero as against 10-15% now. This will lower price of made in India products.
5. REDO HOME DÉCOR
Furnishing Gets Cheaper
Imported carpets and other textile floor coverings will cost 2-3% less with duties down from 25% to 20%. Custom duties on a wide variety of bed linen, curtains and other furnishing articles are down from 25% to 10%.
6. PHONES STAY SMART
Prices Remain Unchanged
Mobile phones prices will remain the same despite a duty cut on components since the impact on cost is marginal.
7. TOY STORY
No Child’s Play
Electronic toys made in India may cost more as customs duties on their parts go up from 15% to 25%.
8. NPS DEDUTION
Parity for State Government Staff
State government employee will be able to claim a tax benefit of 14% on NPS contribution from FY 2022-23, bringing them on par with central government employees. Until now, the tax benefit was capped at 10% for state government and private sector employees.
9. WITHHOLDING TAX
Higher TDS for non- filers
Taxpayers who haven’t filed returns for the previous assessment year will be subjected to higher TDS. 10-30% TDS is applicable on interest income from deposits, dividends, sale of property, NRI payments and rental income. It will be higher if returns have not been filed.
10. TAX EXEMPTION FOR NRIs
Promoting GIFT City
Income of NRIs from offshore derivative instruments, royalty and interest on leasing Ship, and portfolio management services based out of International Financial Services Centres or GIFT city will be exempt from tax.
This exemption is subject to conditions, the finance minister said.
11. INSURANCE
Tax Benefit for Disabled
For insurance policies bought by parents/ guardians of disable children, the payout can now be given to the dependant even if the parents is alive, if he is over 60 year. So the premium will qualify for deduction under Section 80DD even if the parent is alive and over 60. Earlier, the death of policyholder.
“Another point, which needs further clarity, is that the payout will no longer be taxable,” says Sanjay Datta, Chief, Underwriting, ICICI Lombard General Insurance.
12. LOOPHOLE PLUGGED
No Bonus Stripping
Bonus stripping in share and securities (previously allowed only in mutual funds) will not be permitted from April 1, 2022.
13. ALTERNATE MINIMUM TAX
Coop Societies Can Rejoice
The budget reduced alternate minimum tax on cooperative societies from 18.5% to 15%, at par with companies, while reducing surcharge to 7%. This will help rural and farmer communities, who are members of such societies.
14. LITIGATION MANAGEMENT
No Repetitive Appeals
Litigation management system has been introduced to a avoid repetitive appeals involving identical issues. The revenue department shall avoid filling appeal against an assessee until the substantial question of law is decided by a high court or the SC.
15. IN TAX NET
Carrying Value of Goodwill
Any carrying value of goodwill which was reduced from the block of assets would be deemed as a transfer which means that the same has to be offered for tax in FY21 and could have implications for future sale.
16. GOING RETRO
Cess Non-deductible
Cess and surcharge cannot be claimed as expenses while claiming deductions for income from business and profession, which is expected to bring an end to many long-pending disputes. The provision of this section would be retrospectively applicable from 2005.
17. TRANSFER PRICING
Taxman Gets More Powers
Companies are likely to face greater scrutiny under transfer pricing as scope of tax official’s powers has been widened. Principal commissioners have been allowed to call for and examine the record of any proceeding, if an order passed by a transfer pricing officer is seen erroneous and prejudicial to the interest of revenue.
31/01/2022
Major highlights of the Economic Survey 2022:
1. Despite a projected 9.2 per cent growth in GDP in FY22 to above pre-pandemic levels, the Indian economy continues to face a slew of structural challenges that existed prior to the pandemic and new challenges brought on by Covid-19.
2. The withdrawal of stimulus in developed economies in the upcoming fiscal is likely to affect capital flows into the country.
3. Inflation is the most important headwind.
4. The economic activity has recovered to pre-pandemic level. The economy is well placed to take on challenges in 2022-23. Robust export growth and availability of fiscal space to ramp up capital spending to support growth next fiscal.
5. The government must provide a buffer against stresses such as the uncertainty in the global environment, the cycle of liquidity withdrawal by major central banks.
6. A strong revival in revenues being 67% higher year on year in April-November 2021 indicates that the government has fiscal space to provide additional support if necessary.
7. India will retain its tag of the world’s fastest-growing major economy as GDP is expected to grow by 8-8.5% in FY 22-23.
8. Robust export growth and availability of fiscal space to ramp up capital spending to support growth next fiscal. Private sector investment to pick with financial system in good position to provide support to revival of economy.
9. India transformed from being among 'Fragile Five' nations to 4th largest forex reserve, giving policy room for manoeuvring.
10. Crop diversification towards oilseeds, pulses and horticulture needs to be given priority.
11. Climate finance will remain critical to successful climate action for India to achieve its net-zero carbon emission target by 2070.
12. Growth projections are based on oil price projection of USD 70-75 per barrel next fiscal, against current price of USD 90.
Apple stock jumps after CEO reveals it's investing in the Metaverse. Tim Cook said in an investors' call that Metaverse applications have a lot of potential and that his company is investing in AR developments on its devices. The Metaverse is an interoperable virtual universe created, in part, by users that offers socialization, gaming and even live concerts. Although it can be accessed with a browser, the experience is better with virtual reality (VR) or augmented reality (AR).
Fiscal stimulus powers U.S. economy in 2021 to its best performance since 1984:
1. The U.S. economy notched its strongest growth in nearly four decades in 2021 after the government pumped trillions of dollars in COVID-19 relief.
2. The economy grew 5.7% in 2021, the strongest since 1984, as the government provided nearly $6 trillion in pandemic relief. It contracted 3.4% in 2020, the biggest drop in 74 years and at a 6.9% annualized rate in the fourth quarter.
3. Economists polled by Reuters had forecast GDP growth rising at a 5.5% rate.
4. Inventory investment increased at a $173.5 billion rate, contributing 4.90 percentage points to GDP growth, the most since the third quarter of 2020. Businesses had been drawing down inventories since the first quarter of 2021.
5. Consumer spending, which accounts for more than two-thirds of economic activity, grew at a 3.3% rate after rising at a 2.0% pace in the third quarter.
6. Inflation increased at a 6.9% rate, the fastest since the second quarter of 1981, way above the Fed's 2% target.
7. Fed Chair Jerome Powell has said that "the economy no longer needs sustained high levels of monetary policy support," and that "it will soon be appropriate to raise" rates.
29/01/2022
There is no need to file Transfer Pricing (TP) Audit Report (Form 3CEB) in cases where the domestic transactions are there with 40A(2)(b) parties irrespective of the amount since the Income tax department has omitted this requirement many years ago. Domestic TP is applicable only in case of transactions with entities claiming “profit/ investment linked deductions” (e.g. 80-IA, 10AA etc.) and transactions carried out with new manufacturing companies claiming the benefit of “15% taxation scheme” u/s 115BAB where the aggregate of transactions with these entities exceeds INR 20 crores. International TP is applicable where person has entered into an “international transaction (aggregate value > Rs.1 crore)”
Indians who were once spotted with secret foreign bank accounts are in for the long haul, with the past returning to haunt them just when they believed their run-ins with the taxman were over for good. Several individuals – including those who were investigated, reassessed and taxed – have been asked by the Foreign Assets Investigation Unit (FAIU) to share details of offshore bank accounts since 2001, residency status for the past two decades, passport copies and names of overseas service providers. Overseas service providers are professional outfits setting up tax haven vehicles and trusts to hold the funds. FAIU is a newly- formed wing under the Income Tax (I- T) Department. The notices and summons were issued during the past to 10 days by FAIU cells in the Air India and Scindia House offices of the I-T Department in Mumbai, three persons told ET. The recipient of the notices, issued under Section 131 (IA) of the Income Tax Act, 1961, have to spell out the name of the ‘introducer’ or ‘guarantor’, if any, of the bank accounts. They also have to informed whether these accounts were disclosed in the tax returns, whether tax was paid on funds credited to the accounts, provide bank statements since the date of opening and closure of accounts and transactions made, along with source and supporting documents.
Adlabs Entertainment has approached the Bombay High Court over extension of Goods and Services Tax (GST) incentives for the period of lockdown due to the pandemic. The company, in a write petition filed with the court, said that its water and theme parks remained shut during 2020 and 2021 due to forced lockdown by the government. This period, therefore, should be exclude from the tax holiday and the exemption period extended by the number of lockdown days.
GSTN has informed that the facility of ‘Interest Calculator” is now live on the GST Portal. The system computed interest liability will be computed after filing of GSTR-3B of the related period and will be payable in the next GSTR-3B (as in case of late fees).
Note: Since, GSTR-3B is a summary return and the system cannot fetch the period to which supply declared pertains, hence a new button named “Tax Liability Break-up, As Applicable” will be enabled after making the payment of said month to furnish the details of relevant period to which supply pertains to.
Very important judgement on rejection of gst refund without recording reasons. Colgate Global Business Services Pvt. Ltd. Vs Union of India (Bombay High Court)
1. A Perusal of the impugned Order indicates that the Respondent No.3 has rejected the application for refund without recording any reasons, though the same is mandatory under Rule 92(3) of the Central Goods and Services Tax Rules, 2017.
2. Application for refund made by the Petitioner for the period July 2017 to March 2018 for the sum of Rs.4,33,03,066/- is restored to file before the Respondent No.3.
3. Rule is made absolute.
A general meeting (AGM/EGM) can be called with a shorter notice (i.e. with less than 21 clear days) where:
In case of AGM – Consent of at-least 95% of the number of members is obtained.
In case of EGM – Consent of majority of members holding at-least 95% of the paid-up share capital.
28/01/2022
The Union Budget 2022-23 is to be presented by the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman on 1st February 2022 in Paperless form. To mark the final stage of the Union Budget-making process, sweets were provided to the core staff due to undergo “lock-in” at their workplaces, instead of a customary Halwa ceremony every year in view of the prevailing pandemic situation and the need to observe health safety protocols. To maintain the secrecy of the Budget, there is a “lock-in” of the officials involved in making the Budget. Budget Press, situated inside North Block, houses all officials in the period leading up to the presentation of the Union Budget. These officers and staff will come in contact with their near and dear ones only after the Budget is presented by the Union Finance Minister in the Parliament. In a historic move, the Union Budget of 2021-22 was delivered in paperless form for the first time. A “Union Budget Mobile App” was also launched for hassle-free access of Budget documents by Members of Parliament (MPs) and the general public. The Union Budget 2022-23 would also be available on the Mobile App after the process of Budget presentation has been completed on 1st February 2022 in the Parliament.
The Institute of Chartered Accountants of India (ICAI) has raised the concerns over the CA Act amendment bill to the Parliamentary panel. The Board’s views on the provisions, including the one pertaining to the constitution of the disciplinary committee, to BJP member Jayant Sinha-led Parliamentary Standing Committee on Finance, which is looking into the bill. The ICAI President Nihar N Jambusaria said that ICAI has already submitted our memorandum to the Parliamentary Standing Committee on Finance. They are going to hear on February 3. “We are asking that the current status be maintained and they are proposing that even the presiding officer should be non-CA… we are saying that if a non-CA becomes the presiding officer, the person will not understand the nitty-gritty of accounting standards, auditing standards, ethical standards and it would be difficult for him to make a judgement in any case,” Jambusaria said.
Gautam Adani, founder, and chairman of Adani Group on Thursday replaced Reliance Industries Limited (RIL) chairman Mukesh Ambani as the richest person in India. Currently, his net worth stands at $89.5 billion whereas Mukesh Ambani’s net worth is $89.4 billion. Adani’s net worth increased significantly over the past few months due to the surge in the share prices of his companies.
The other three richest persons net worth in india are
3. Shiv Nadar $26.6B
4. Radhakishan Damani $19.9B
5. Lakshmi Mittal $18.3B
The net worth of Adani has also surpassed the net worth of the richest woman in the world, Francoise Bettencourt Meyers. Currently, Meyers’ net worth is $82.9 billion.
While governments around the planet used their central banks to devalue their currencies by printing money to fund their tyranny, the US led the way down this road to fiscal horror. Thanks to the trillions of dollars the Federal Reserve has printed over the last two years, America is currently in an inflation crisis. One need only look at the price of groceries over the last two years to realize just how bad of a crisis we are currently experiencing. As the Biden Administration blames high prices on greedy industries, this is little more than a distraction from the actual perpetrator. Nevertheless, the left continues to attribute soaring costs on businesses making “too much profit.” While these corporations are not innocent in this debacle, the role of America’s central bank is far more insidious. As government spending has skyrocketed over the last two years, they have financed their massive expenditures by stealing value from your savings by printing more money through the central bank. When you print more money it means there are more dollars chasing the same amount of goods and services, which causes prices to rise. In just the past three fiscal years, federal spending has swollen to nearly $7 trillion a year, up from about $4.4 trillion in fiscal year 2019. Spending was $6.6 trillion in 2020, and $6.8 trillion in 2021. One may look at the monetary supply at the beginning of 2020, which showed just $4.0192 trillion in circulation. By January 2021, that number had jumped up to $6.7 trillion — but this was only the beginning. By November of last year, that number climbed to $20.354 trillion dollars in circulation — meaning that since January 2020, the United States has printed nearly 80% of all US dollars in existence.
T-Series in association with HEFTY Entertainment, a division of Hungama has announced its foray into Non-Fungible Tokens (NFTs) “This industry-first foray for the global digital entertainment industry will witness the two leaders raise the bar of entertainment creation and consumption via Hefty Entertainment – A Web 3.0 initiative by Hungama,” said T-series. This has been done in partnership with Polygon – the leading platform for Ethereum scaling and infrastructure development. Hefty Metaverse will be built with the vision of fostering an ecosystem that helps to collaborate, interact and engage with flourishing web 3.0 communities that transitions consumers into the metaverse. This will see Hungama create NFTs, rare collectibles and unlock special moments from T-Series’ vast catalogue of new and existing content.
The Bombay High Court has issued notices to the Centre and the Maharashtra government over a petition that seeks to declare as unconstitutional, a provision in the GST laws which empowers the authorities to block input tax credit (ITC) on works contract services in the real estate. The petitioner, which is engaged in the business of renting and leasing out movable and immovable properties, challenged the section 17(5)(c) of the Central GST (CGST) Act and the same section in the Maharashtra GST Act. The section prohibits input tax credit to the works contract service for construction of an immovable property other than the plant and machinery except where it is an input service for further supply of works contract.
27/01/2022
PMC to be merged with Unity Small Finance Bank:
1. The Centre has sanctioned the merger of the Punjab and Maharashtra Co-operative Bank Ltd (PMC Bank) with Unity Small Finance Bank Ltd (USFBL).
2. The amalgamation will come into force with effect from the date of the notification of the scheme i.e. January 25, 2022.
3. All the branches of the PMC Bank will function as branches of Unity Small Finance Bank Ltd with effect from this date.
4. The assets and liabilities of PMC Bank, including deposits, will be take over by USFBL in terms of the provisions of the scheme.
5. All eligible depositors will get Rs 5 lakh under the deposit insurance credit guarantee scheme (DICGC) as the first round of payment. After that, the depositors will get amounts ranging from Rs 50,000 to Rs 5.5 lakh from the first to fifth year and the remaining at the end of 10 years.
6. No interest on any of the interest bearing deposits shall accrue after March 31, 2021 for a period of five years. After that, a simple interest at the rate of 2.75 % p.a. will be paid at the end of each year for the amounts remaining outstanding which shall be payable from the date after five years from the appointed date.
7. 80 % of the uninsured deposits outstanding to the credit of each institutional depositor of the transferor bank will be converted into Perpetual Non-Cumulative Preference Shares of transferee bank with dividend of 1% p.a. payable annually. These will be bought back at the end of 10th year from the sale of assets of HDIL.
Note: About 70 % of PMC’s total loan book of Rs 8,383 crore as on March 31, 2019, had been taken by real estate firm HDIL. The bank had Rs 11,600 crore in deposits.
India imported $16 billion more of its key top 100 imports from China in the last year, an increase of almost two-thirds from the previous year, an analysis of trade figures shows, underlining deepening dependencies on many crucial imports. India’s total imports from China crossed a record $97.5 billion last year, making up a large chunk of the bilateral trade that reached $125 billion, for the first time crossing the $100 billion-mark, figures released earlier this month by China’s General Administration of Customs (GAC) showed. Of the 8,455 different types of items imported from China between January and November of last year, a staggeringly diverse list covering everything from a range of chemicals and electronics to auto components and textiles, 4,591 showed an increase, according to an analysis of India’s Ministry of Commerce data. Of the former category, integrated circuits were up by 147%, laptops and personal computers by 77%, and oxygen therapy apparatus by more than fourfold. India is sourcing both finished goods for the Indian market, such as electronics, in record numbers, while also relying on China for a range of intermediate industrial products, many of which cannot be sourced from elsewhere and are not made in India in sufficient quantities. The fact that we are acquiring new intermediate goods, for instance, is probably a good development in the broader picture as it means we are emerging as a manufacturing hub and need new inputs to match the global demand for a finished Indian product.
The YouTube accounts of Indian cryptocurrency exchanges, crypto-native companies and international influencers were breached on Monday morning. The incident was revealed when an unidentified hacker posted a video promoting a crypto scam called ‘One world Cryptocurrency’ on their YouTube channels. CoinDCX, CoinSwitch Kuber, WazirX and Uno coin were among those affected.
The Indian tax office has asked several Mauritius-based private equity (PE) funds to share their minutes of board meetings, deal agreements, residency and addresses of directors, and names of ultimate beneficiaries amid suspicions that unnamed person call the shots in these funds while the boards and managements of the tax haven entities merely serve as dummies. If the income tax (I-T) department has good reasons to believe that a fund’s place of effective management’ (or POEM in tax parlance) is some-where else-where the key decision makers are located – and not Mauritius, many funds could find themselves exposed to large tax demands. A company is treated as a ‘resident’ in India if it’s an Indian company or its place of effective management (POEM) is in India. POEM, as per the tax law, means a “place where key management and commercial decisions that are necessary for the conduct of business of an entity as a whole are, in substance made. The rule, which was changed five years ago, gave more latitude to tax officers. Till then, to treat a company as a ‘resident’, tax officers had to prove that “the control and management of its affairs is situated wholly in India” – which was difficult to establish. At least seven PE funds have received notice from the international division of the Mumbai I-T office over the past two months. Till 2017, investors from Mauritius paid no capital gains tax on securities sold in India since under the treaty capital gains could be taxed only in Mauritius and the latter imposed no tax. Under the revised India-Mauritius tax protocol which changed this, April 1, 2017 was fixed as the cut-off date to introduce a grandfather provision. According to this, all shares bought prior to this date, would not attract capital gains tax irrespective of when these securities are sold in future.
26/01/2022
CBDT has notified rule 8AD for notifying the method of computation of capital gains for the amount received under specified Unit Linked Insurance Policy (ULIP) during any previous year:
1. If amount is received for the 1st time, the Capital gains shall be calculated:
Amount received (-) Aggregate of premium paid till the date of receipt
2. In case of Subsequent receipt, the capital gains shall be calculated:
Amount received (excluding the amount received in point 1) (-) Aggregate of premium paid till the date of receipt (excluding the premium taken for the calculation in point 1)
Most companies and hotels pay GST at 18% on lease rentals and claim credit under to reduce the payment of tax. The Tamil Nadu Appellate Authority for Advance Ruling (AAAR) has denied ITC to Inox Air Products (Medical gas manufacturer) on leasehold rights acquired.
Ministry of MSME has issued notification dated 26th June, 2020, where it was notified that all existing enterprises registered under EM-Part-II and UAM shall register again on the Udyam Registration Portal on or after 01.07.2020. The existing enterprises registered prior to 30.06.2020 shall continue to be valid till 31.03.2022 after extension (earlier it was 31.03.2021).
25/01/2022
Suggestions for appropriate claim of ITC –
1. The books of account shall be prepared and finalized on monthly basis and as soon as GSTR-2B is generated, reconcile the booked ITC with GSTR-2B.
2. There may be cases wherein the vendors are “QRMP filers”. So, till the time their ITC come under GSTR-2B, create “Provisional ITC ledgers” in the books of account and transfer the same in “Actual ITC ledgers” as and when such ITC come in GSTR-2B.
Nearly half of the BSE 500 stock have slipped low their 200-day moving average (DMA) after the week- long sell-off triggered by sharp foreign outflow amid rising inflation globally. There is risk- off sentiment across the globe amid fear of monetary policy tightening by the US Federal Reserve. Heavyweight HDFC Bank, Hindustan Unilever, HDFC, Kotak Mahindra Bank, Wipro, ITC, and Axis Bank are currently trading below their 200 DMA while the Nifty50 Index slipped below its 100 DMA on Monday. The 200 DMA is considered a major support level for an index or stock since it is a long- term average.
“Stock falling below their 200 DMA indicates short-term weakness and negative bias with these stock.
CBDT notifies National Skill Development Corporation eligible for IT exemptions:
1. The Central Board of Direct Taxes (CBDT) has notified the National Skill Development Corporation eligible for Income Tax Exemption.
2. The Board empowered under clause (46) of section 10 of the Income-tax Act, 1961, has notified for the purposes of the said clause, National Skill Development Corporation, a body constituted by Central Government.
3. The exemption is in respect of the following specified income arising to that Corporation, namely Amount received in the form of Government grants, Amount received in the form of grants for skill development other Government grants; Income from Accreditation Fees, Registration fees, fees from training partners and other cost recovery from its skill development activities; Administrative & Mobilisation fees from the scheme management; Income from institutions outside India for skilling, Training & Employability; Interest on loans to Institutions for skill development; Miscellaneous income, like sale of scrap, Profit on sale of assets, RTI application fees, forfeiture of Bank Guarantee, interest on income tax refund, excess provision written back; and Interest earned.
(Notification 10/2022)
24/01/2022
Merely disowning bank accounts does not exempt assessee from paying tax on unexplained credits: ITAT Delhi
Arun Duggal v. SCIT (ITA No. 3075/Del/2018)
Facts:
1. Assessee feigned ignorance about the bank accounts opened in his name with full authority and knowledge.
2. Owing to unexplained credits in the bank account, the addition of Rs 12.81 Crores was made by the Assessing Officer under Section 68 of the Act.
Note:
Where any sum is found credited in the books of the assessee for any previous year, it may be charged to Income Tax as the income of the assessee for that previous year if the explanation offered by assessee about the nature and source thereof is, in the opinion of the Assessing Officer, not satisfactory. [Vasantibai N. Shah v. CIT (Bom.) 213 ITR 805, Sreelekha Banerjee v. CIT (SC) 49 ITR 112]
ITAT held as below:
1. Addition under Section 68 was rightly made, as the assessee failed to offer any explanation with regard to nature and source of credit in his bank account and the primary burden cast upon the assessee for proving the credits has not been discharged either before AO or CIT(A) or before us.
2. So the action under Sections 147, 148 as well as the addition made under Section 68 was affirmed and the appeal of the assessee was dismissed.
MFN clause will prevail over TDS rates mentioned in DTAA: Delhi HC
Deccan Holdings B V ([2021] 133 taxmann. com 94 (Delhi))
Facts:
1. The petitioner, a Netherland based company, holds 58.39% of the shares of Deccan Fine Chemicals (India) Private Limited [DFCPL]. During the current FY i.e. 2021-22, DFCPL proposes to distribute a dividend of INR 65.68 cr. to the Petitioner.
2. Double taxation Avoidance Agreement (DTAA) between India and Netherlands prescribe a withholding tax of 10% on dividend. However the protocol to India Netherlands DTAA provides for "Most Favoured Nation" ("MFN") clause.
3. Note: According to the MFN clause, one nation commits to providing another country with tax treatment that is no less favourable than that which it provides to other or third countries. Since DTAA between India and some countries like Slovenia/ Lithuania/ Colombia provide for a lower withholding of 5% on dividend, withholding for Netherlands should also be 5% and not 10%.
4. However the AO disregarded the MFN and issued lower deduction certificate U/S 197 of 10%.
Hon. Delhi HC held as below:
1. The issues raised in the petition is squarely covered by Concentrix Services Netherlands B. V. v. ITO [2021] 127 taxmann. com 43/434 ITR 516 (Delhi)
2. Dividend paid by Netherland company to Indian resident will bear a lower withholding tax rate of 5 per cent instead of 10 per cent, in view of MFN clause in DTAA between India and Netherland.
23/01/2022
The Supreme Courts has refused to provide relief to NGOs who lost their registration to operate under the Foreign Contribution Registration Act. Recent changes in law has stipulated that NGOs can receive foreign contributions only through new FCRA accounts in the State Bank of India. Although the amended Act has been challenged in SC, adjudication would take time given pendency of cases and pandemic-induced virtual hearings which have cut into efficacy of the system. A bench of Justice AM Khanwilkar, however, asked NGOs to make a representation to the Centre for urgent relief, rejecting a plea by senior advocate Sanjay Hegde that the court allow NGOs whose registrations were valid till last September to continue to operate till a verdict in the case is reached. The court said that no interim relief would be given, and all parties would do well to await a definite adjudication on the legality of the FCRA amendments. Over 6,000 NGOs have been affected by changes introduced in the latest amendments in the Act. Many NGOs had appealed to the Centre against their de-registration.
CGST Bhiwandi Commissionerate arrests businessman for running fake ITC network The officers of Bhiwandi Commissionerate of CGST Mumbai Zone have arrested a businessman was running a Fake GST Input Tax Credit racket. Acting on an intelligence from Central Intelligence Unit of Mumbai CGST Zone, the officers initiated coordinated action at different locations in Thane, Bhiwandi, Raigad and Mumbai and detected GST evasion of Rs 11.4 crores through generation and passing of fake ITC through intricate web of bogus billing of more than 63 Crores. The search was conducted at Bhiwandi based business premises of M/s. Adarsh Scrap Traders which was indulging in bogus billing and availment and passing on of fake ITC and thus defrauding the Government exchequer of its rightful GST revenue. The initial investigation revealed that firm had fraudulently claimed and passed on Input Tax Credit (ITC) of Rs.11.4 Crores without actual supply or receipt of goods.
22/01/2022
The restaurant industry, buffeted by the pandemic-led on-again, off-again curfews and ban on dining-in, is seeking restoration of input tax credit, cheaper loans, enhancement of the government’s emergency credit scheme, and introduction of furlough schemes in the upcoming Budget. The most important thing we need right now after two years of immense plight is the restoration of input tax credit. This will enable the already beleaguered industry to keep its head above water.
CBDT has set a record for search operations against 'undisclosed income' in FY22. With two months and a week left until the end of the fiscal year, the total 'undisclosed income' as per publicly available data is about Rs 32,000 crore (Rs 320 billion), far eclipsing the level set in FY19, when it was just under Rs 18,600 crore (Rs 186 billion).
21/01/2022
Company to be treated as beneficial owner of car purchased in the name of its Directors, eligible for Depreciation held by THE ITAT AHMEDABAD BENCH 'D' in the case of Income-tax Officer Vs. Anunay Fab (P.) Ltd.
CBIC has recently enabled the new functionality on the GST portal for the taxpayer to find out contacts details of Tax Officials. This functionality will help to reduce the gap between the Tax Payer and Tax officers. Further, the said functionality shall be effective to use at the time of litigation, grievance, queries or concerns. etc.
20/01/2022
Uttarakhand High Court has stayed the operation of a Circular issued by the Revenue Authorities, to the extent it inhibits refund claims for a period of two separate (not successive) financial years and requires filing of Refund in a chronological manner. The Bench has stayed para 8 of the Circular No. 125/44//2019-GST dated 18.11.2019.
After several users complained issues with logging back to their accounts on Crypto.com after the platform was hit by a $34 million hack, its CEO Kris Marszalek has been forced to respond on social media how best they can get back their accounts. Thousands of people took to social media to complain that they could not get back into their accounts, begging for help. Leading cryptocurrency platform Crypto.com last week admitted that 483 users on its platform lost almost $34 million in various digital coins owing to a compromise in two-factor (2FA) authentication. Overall, the unauthorized withdrawals had over $15 million worth of Ethereum, $19 million worth of Bitcoin and $66,200 in “other currencies”. Marszalek said in a latest tweet: “Rest assured your funds are safe and waiting for you to log back in… with the right email.
19/01/2022
India Tech, an industry association representing consumer internet startups, has urged the government to tax games of skill differently from games of chance. In a letter to finance minister Nirmala Sitharaman ahead of the Union Budget, India Tech has proposed that Goods and Services Tax (GST) be levied only on the amount received by the platform for providing its services and not on the prize pool kept for distribution among the players. ET has reviewed parts of the letter. IndiaTech, a grouping whose members include online gaming unicorns such as Dreamll and Mobile Premier League, has requested the finance minister to ensure that Rule 31A of the CGST Rules 2017 – which apply to lottery, betting, gambling, and horse racing – will not apply to games of skill. As per Rule31A, the entire transaction value – which includes the winning amount – is taxed.
Inadequate hedging against wild currency swings has emerged as a major risk for Indian companies borrowing overseas, with a central bank –issuers and long-raisers to buy covers for more than three-fifths of their financing exposure. The ideal position would be to have at least 63% of total exposure of the External Commercial Borrowing (ECBs) hedge at the system level, a research note from a central bank economist said. Rules are, however, still evolving. All categories of borrowers are not mandated 100% hedging, though banks are.
“In times of typical high forex volatility, firms issuing ECBs may take recourse to hedging their exposure financially/naturally in the range of 63-66%, which would translate to the total cost loan, including hedging cost, proportional to nearly 9% Moreover, this strategy is likely to lead to protection against forex risk,” said a research paper by Ranjeev, assistant director at the Reserve Bank of India’s (RBI) department of statistics and information management. The study assumes significance as the rupee is expected to weaken through the course of Fed tightening and a surge in dollar demand as crude and commodity price head north.
“Hedging all FX exposures in their entirety may not be optimal in the sense that with fully hedged FX exposure, the benefit of low-cost access to foreign capital is foregone and at the same time unhedged foreign currency exposures may lead to correlated defaults in debt servicing triggering build-up of systemic risk,” the author said. ECBs at $219 billion comprise a third of India’s external debt as of September. But there are no estimates of the level of hedging as rules are sector specific or tenor specific. If foreign portfolio investors (FPI) that have sold shares worth more than Rs9,400 crore so far this month continue their selling spree this week, the biggest casualty would be the stock that have high overseas ownership, and those recently listed. To be sure, among the 132 stock with more than 20% FPI holding 61 have declined between 5% and 20% last week. All three broader indices – Sensex, BSE Mid-cap and BSE Small-cap – declined over 3.5 % last week on concerns over in flation and the US Federal Reserve’s policy tightening. FPI-heavy stocks were heavily sold. Stock with more than 20% FPI stake, such as Mcdowell Holdings, Dr. Lal PathLabs, Info Edge India, PTC India, Metropolis Healthcare, HCL Technologies, PNB Housing Finance, Tata Communications, and Granules India, declined between 10% and 20%.
Emerging-market ETFs have specific allocation ceiling for India. Those investors in risk-off mode put in redemption orders and fund managers do not have a choice but to sell, said market participants.
“Passive money is getting withdrawn from the emerging markets including India influenced by US bond yield, Fed’s tapering decision, and expected rate hikes as a result of high inflation in the US,” said Ravi Sardana, an investment banker. “FPI- heavy stocks could be under pressure if FPI outflow intensifies.” There are as many as 13 stocks where FPI hold more than 40% stake. They include HDFC, ICICI Bank Axis Bank, Zee Entertainment, Shriram Transports Finance, IndusInd Bank and Apollo Hospitals. FPIs invested more than Rs80,000 crore in the initial public offers last year. Shares of Zomato and One97 Communications, the parent of Paytm, declined 15% each last week. FPIs held 11% in Zomato and 9.36 % in Paytm. Rate Gain Travel and PB Fintech shares fell nearly 9% in the last five trading sessions. FPIs held 13% and 11% in these two stocks, respectively. During the first fortnight of January 2022, FPIs sold IT shares worth Rs3,000 crore and Rs1,900 crore worth of shares from the retail sector.
18/01/2022
Crypto Currency Updates:
1. Budget could consider levying TDS/TCS on crypto trading, make it reportable in SFT. The government could consider in the upcoming Budget levying TDS/TCS on sale and purchase of cryptocurrencies above a certain threshold and such transactions should be brought within the ambit of specified transaction for the purpose of reporting to income tax authorities. India has the highest number of crypto owners globally, at 10.07 crore and as per a report it is expected that the investment by Indians in cryptocurrency could touch USD 241 million by 2030.
2. The Centre is unlikely to introduce the much - awaited cryptocurrency bill in the upcoming budget session of Parliament as it wants to hold more discussions and build consensus on the regulatory framework. The government also wants to wait for the pilot launch of Reserve Bank of India’s digital currency, expected in a few months. “This will also involve support for exports to help India farmers establish markets for their products,” the official said. Additional transport, marketing and branding incentives for exports covering diverse farm produce are likely. Steps to strengthen the cooperative segment are also expected, with a new dedicated ministry in place.
3. Cryptocurrencies or digital assets issued to employees by crypto exchanges as incentives are set to come under the taxman’s lens. The question is whether the coins – most of them issued by Indian exchanges – can be construed as income and what could be the incomes tax applicable on the digital assets. Many exchanges have rolled out their own tokens and offered these as part of their employees’ annual income – along the lines of employees stock ownership plan or ESOP. In some cases, it was also linked to employee performance. Tax experts say while the arrangement may look similar to an ESOP; it will not be treated as one under the tax laws. “Cryptocurrency or coins given to employees are nothing but salary and shouldn’t be equated to esops as these have liberal interpretation and leeway when it comes to income tax.
Automobile dealership chain Landmark Cars plans to file a draft red herring prospectus (DRHP) in the coming weeks to raise over Rs. 800 crores through an initial public offering, said people aware of the company’s plan. Axis Capital and ICICI Securities have been appointed as the lead managers for the proposed issue, they said. TPG- backed Landmark Cars is India’s biggest seller of premium vehicles of automakers Mercedes Benz, Volkswagen, Honda and Fiat Chrysler. It is likely to be first automotive dealership company in India to float an IPO and is also the first such firm to have received private equity investment.
17/01/2022
On Monday, a Supreme Court Bench led by Chief Justice of India (CJI) NV Ramana expressed dissatisfaction with advocates who appeared for virtual hearings via mobile phones. The apex court’s first bench stated that ten cases had to be adjourned for the day because the judges couldn’t hear or see advocates appearing through their mobile phones. Justice Hima Kohli, who was also on the Bench, stated that the judges lacked the energy to hear cases in this fashion. Beginning January 3, 2022, the Supreme Court is hearing cases in virtual mode for two weeks. In light of the increasing number of COVID-19 cases, a circular to that effect was issued on January 2.
MCA has notified higher additional fees brought-in through the Companies (Amendment) Act, 2017, which are as follows:
In case of Period of Delays
Upto 15 days
(Section 139 & 157)
Additional Fees - 1 time*
Higher additional fees Nil
>15 days (Section 139 & 157) and upto 30 days
Additional Fees - 2 times*
Higher additional fees- 3 times*
>30 days and upto 60 days
Additional Fees- 4 times*
Higher additional fees- 6 times*
>60 days and upto 90 days
Additional Fees- 6 times*
Higher additional fees- 9 times*
>90 days and upto 180 days
Additional Fees- 10 times*
Higher additional fees- 15 times*
>180 days
Additional Fees- 12 times*
Higher additional fees- 18 times*
Note 1- * means Times of normal fees
Note-2- Higher additional fees shall be applicable from 01.07.2022. It shall be payable in case of delayed filing of Form INC-22 or Form PAS-3.
Note-3- Wherever higher additional fee is payable, additional fee shall not be charged.
MCA has issued notification on 24th March, 2021 that every company which uses accounting software for maintaining its books of account, shall use only such accounting software which has feature of recording audit trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.
Later this notification has been deferred till 31.03.2022, but it will be applicable from 1st April, 2022. Since most of the MSME companies are using Tally/ Busy Accounting Software and capturing the trail is built-in facility available in tally but the audit trail report cannot be extracted without having add-on feature of tally. It needs to be taken before beginning of the financial year because it needs to be reviewed by the auditor at the time of conducting the audit.
A recent ruling by the Appellate Authority for Advance Ruling (AAAR) says allocation of salary of a head office employee to a branch, and its recovery from there, will be “subject to GST.” Taxation of transactions between head office and branch office has been a contentious issue since inception of GST as the said transaction were not liable to any tax under the erstwhile regime. Cummins India had approached the AAAR with questions including whether allocation of the cost of employees’ salary by the head/corporate office to a branch would attract GST. It had also sought clarity over applicability of GST on allocation and recovery of the salary cost of head office’s employees from the branch offices. The Maharashtra AAAR ruled that both will be subject to GST. The ruling also said the head office not entitled to avail of tax credit on tax paid on common services. Input tax credit is essentially a mechanism whereby GST paid on a particular raw material or input services can be partially set off against future tax liability. Under the GST framework, companies have to take a separated registration in each state and split all expenses, for companies, there are certain expenses common to the whole organization- such as advertising, or paying lawyers or even travel expenses incurred by the CEO or other top executives. The question for several companies is how to split them and in what proportion, say tax experts. Under the GST framework, there is a mechanism called input service distribution (ISD). Companies can take this registration and distribute the cost or the tax credit across all registrations. This is the second ruling on the issue that is set tax experts.
16/01/2022
Paytm has decided to shut its app in Canada effective March 14, the digital payments company owned by One97 Communications informed its customers in the North American country. It stopped providing some of the services form Friday. Paytm had launched its Canada division, called Paytm Labs Inc, in 2014, and started offering a bill payment rewards programme for users in 2018. Paytm told ET that the decision was made to focus the efforts of Paytm Labs on opportunities in Indian and that it did not expect any job loss from this.
India will soon start issuing e-passports which will use Radio-Frequency Identification (RFID) and biometrics. Sanjay Bhattacharya, Secretary in Ministry of External Affairs, Secretary, has stated that the new e-passport will secure biometric data, and also be in line with the standards of the International Civil Aviation Organisation(ICAO). The passport jacket will contain an electronic chip which will have important security-related data encoded on it. The passport jacket will contain an electronic chip which will have important security-related data encoded on it. The passport jacket will contain an electronic chip which will have important security-related data encoded on it. The scheme is expected to boost localising the electric vehicles (EV) supply chain in India. Despite being a key component for EVs, all vehicles sold in India presently rely completely on imported cells, mainly from China.
CBDT notifies new Rule 21AJA, Rule 21AJAA & Form No. 10-IK vide Notification No. 6/2022 | Dated: 14th January, 2022-
Rule 21AJA. Computation of exempt income of specified fund, attributable to the investment division of an offshore banking unit, for the purposes of clause (4D) of section 10 of the Income Tax Act, 1961.
Rule 21AJAA. Determination of income of a specified fund attributable to the investment division of an offshore banking unit under sub-section (1B) of section 115AD of the Income Tax Act, 1961.
FORM NO. 10-IK – [see rule 21AJA and rule 21AJAA] – Annual Statement of Exempt Income under sub-rule (2) of rule 21AJA and taxable income under sub-rule (2) of rule 21AJAA.
15/01/2022
Telecom operators want the government to refund input tax credit (ITC) of around Rs 35,000 crore, reduce levies and waive GST on licence fees and spectrum usage in the upcoming Budget. According to pre-Budget recommendations of telecom industry body COAI, whose members include Vodafone Idea, Bharti Airtel and Reliance Jio, the telecom sector wants the government to suspend universal service obligation fund (USOF), which financially supports rollout of telecom services in the rural area, to reduce burden on the service providers. “Refund unutilised ITC of Rs 35,000 crore of the industry, which cannot be utilized in the near future. The current market dynamics have led to the accumulation of massive ITC. The credit would further increase with the upcoming significant capital expenditure to further enhance customer experience and achieve the vision of Digital India,” COAI said.
Annual Information System is Government New Experience introduction replacing in future Form 26 AS. Form 26 AS is Xray of Tax payers and ASI can be called MRI of Tax Payers. Many Pros and Cons are regularly being reported by the Tax Payers So Government of India in a Press Release declared that the AIS should be treated as informative now and will not be taken in Tax computation as the Data reported is by Third Party.
Delhi HC makes personal hearing mandatory in Faceless Assessment Scheme :
The requirement of giving an assessee under the Income Tax Act a reasonable opportunity of personal hearing is mandatory (if the assessee asks for it) and the provision of Faceless Assessment Scheme does not mean that no personal hearing can be granted, the Delhi High Court ruled on Friday [Bharat Aluminium Company Limited v Union of India and Ors]. A Division Bench of Justices Manmohan and Navin Chawla said that the Court failed to understand as to how grant of a personal would either frustrate or defect the concept and purpose of Faceless Assessment Scheme.
"This Court is of the opinion that a faceless assessment scheme does not mean no personal hearing. It is not understood as to how grant of personal hearing would either frustrate the concept or defeat the very purpose of Faceless Assessment Scheme," the judgment said. The Faceless Assessment Scheme was introduced by the Central government in 2020 by insertion of Section 144B via the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. The High Court held that the word “may” used in Section 144B(viii) of the Act should be read as “must” or “shall” and requirement of giving an assessee a reasonable opportunity of personal hearing is mandatory.
?Reserve Bank of India has proposed a new investment category called Fair Value through Profit and Loss Account (FVTPL) for banks as part of a overhaul of classification, valuation and operations of banks' investment portfolios.
14/01/2022
India’s overall exports (Merchandise and Services combined) in December 2021* are estimated to be USD 57.87 Billion, exhibiting a positive growth of 25.05 per cent over the same period last year and a positive growth of 23.35 per cent over December 2019. Overall imports in December 2021* are estimated to be USD 72.35 Billion, exhibiting a positive growth of 33.86 per cent over the same period last year and a positive growth of 40.30 per cent over December 2019.
Private sector Karur Vysya Bank on Tuesday said customers would be able to directly pay their customs duty through the ICEGATE platform following Central Board of Indirect Taxes and Customs recent approval to the bank to collect taxes. The Tamil Nadu-based bank said the bank customers would be able to remit their customs duty through Indian Customs Electronic Gateway (ICEGATE) portal of the Central Board for Indirect Taxes and Customs. CBIC had earlier approved the inclusion of the bank as one of the authorised bankers for collection of taxes.
The Excise and Taxation Department, Government of Haryana identified a list of 81 risky taxpayers exhibiting considerable shortfall in tax paid (25 taxpayers having GSTR 1 – GSTR 3B mismatch worth ?17.23 Crores) and mismatch in Input Tax Credit availed (56 taxpayers having GSTR 2A – GSTR 3B mismatch worth ?63.64 Crores). The list was shared with the field formations and accordingly, a drive was conducted for verification/investigation of these risky taxpayers. On verification, it was found that out of these 81 taxpayers, 40 taxpayers were found non-existent/non-functional at their Principal Place of Business. A total of ?57.64 lakhs has been recovered so far from these risky taxpayers which includes ?40.49 lakhs through Cash and ?17.15 lakhs through Input Tax Credit. As a preventive measure, Input Tax Credit (ITC) worth ?3.79 Crores of these taxpayers has been blocked. Further investigation against these taxpayers is under process.
13/01/2022
Hon’ble Allahabad High Court, in the case of Shri Surya Traders v. Union of India, Writ Tax No. 1146 of 2021, Allahabad HC (SB) has passed a detailed ruling on the issue of detention, seizure and release of goods and conveyances in transit:
1. Every transaction has to be looked at independently.
2. In case, discrepancies were found in one transaction pertaining to goods, then goods pertaining to another separate transaction could not be detained/ seized. It would have been a different thing had the sales been made made to one registered dealer.
3. Discrepancies such as goods not having batch number, packing date, expiry date, manufacturing date etc does not justify seizure under GST Act.
4. In view of the above, the Hon’ble Court quashed the impugned detention/ seizure orders and allowed the writ petition of the Petitioner.
SC limitation order applicable in case of Gst refund.
The refunds are subject to the statutory time-limit prescribed by the statute. However, in light of the Supreme Court’s order in Re Cognizance for Extension of Limitation, period starting from 15-3-2020 to 28-02-2022 needs to be excluded from the period of limitation. In light of the decision of Hon’ble Madras High Court in M/s. GNC Infra LLP v. Assistant Commissioner (Circle), Ekkatuthangal, the benefit of the said order is available in case of refund applications as well. Further, as per the Supreme Court’s order, in cases where the limitation has expired during the period between 15-03-2020 till 28-02-2022, taxpayers can still file refund within 90 days from 01-03-2022. Therefore, all the refund claims from April 2018 onwards can now be filed upto 29-05.2022.
The Gujarat High Court has held that the cash credit account of assessee cannot be provisionally attached in exercise of powers under GST. The applicant, Manish Scrap Traders has prayed for the quashing and setting aside of the order for provisional attachment of the bank account vide FORM GST DRC-22 dated 29.11.2021 issued by Respondent as the same is dehors the provisions of Section 83 of the CGST Act, 2017 and since the attachment of the cash credit account, not being the property of tax payer, is not permissible in law. Any money therefore, that the Bank may make available to the assessee would necessarily be in the nature of a loan or a cash credit facility. In either case, it would be in the nature of borrowing by the writ applicant from the Bank. In such circumstances, the Bank and the writ applicant therefore, do not have the debtor – creditor relationship.
Gujarat HC order for the removal of ITC Blocked after one year and also order that We make it clear that next time if we come across such a case, then the concerned authority would be held personally liable for the loss which the assessee might have suffered during the interregnum period.
The Customs Authority of Advance Ruling (CAAR) held that the “Parts of electronic toy car” eligible for concessional rate of Customs Duty. The applicant, M/s G.G. Enterprises intends to import some parts of electronic toy cars together in an assembled form by classifying the same under appropriate Customs Tariff Heading 9503 and to avail the benefit of ennecssional rate vide Notification No. 50/ 2017- Cus. dated 30.06.2017. The applicant has sought advance ruling on the issue Whether the description “parts of electronic toy cars” i.e. battery driven motor, on-off switch, small speakers for sound, LED indicator lights with its PCB, garari (pulley i.e. small plastic wheel with grooved rim) and plastic base to be imported and further to be assembled along with domestic manufactured parts for manufacturing of final product “electronic Toy Car” is rightly classifiable as “Parts of electronic Toy cars” under Customs tariff head 9503.
A clutch of buyers, including Qatar Insurance Company (QIC) and a few high net worth individuals and family offices, purchased stakes in Oyo in November and December last year, said people familiar with the matter. The secondary transactions were executed at a price of about Rs110 per share and included nearly 14.3 million equity shares, they said. This would work out to a valuation of about $9.56 billion, similar to the last round of funding by Microsoft for the company, whose existing investors included Softbank Vision Fund, Sequoia Capital, Lightspeed Ventures, Greenoaks Capital, Airbnb, Hindustan Media Ventures, besides a 33% holding by its founder Ritesh Agarwal. As per QIC’s website, it is the largest insurance company in the MENA region and is listed on the Qatar Exchange with a market capitalization of more than $4 billion. The purchase are secondary transaction, with the share primarily being offloaded by Oyo’s Employee Welfare Trust, which holds them on the behalf of its employees, as a part of its ESOP Programme.
12/01/2022
Cryptocurrencies or digital assets issued to employees by crypto exchanges as incentives are set to come under the taxman’s lens. The question is whether the coins—most of them issued by Indian exchanges—can be construed as income and what could be the income tax applicable on the digital assets.
The Union Budget 2022-23 is likely to be tabled on February 1, 2022 by Union Finance Minister Nirmala Sitharaman. This is the 4th Budget of the PM Narendra Modi-led NDA government in its second tenure.
1. On the Direct taxes front some key concessions have been sought to promote broader macro goals like employment. For instance there is a proposal to enhance monetary limit for deduction in respect of employment of new employees u/s 80JJAA from Rs. 25,000 per month to Rs. 1 lakh per month."
2. Changes in REITs and InvstITs taxation specifically with the objective of bringing long term capital gains treatment at par with other asset classes could also find a mention in the budget.
3. On start-ups there is a demand to level the playing field by extend concessional LTCG rate of 10% concessional rate to resident Investment."
Further, talking about Custom Duty reductions in Fiscal Balance and Budget Expectations report, HDFC Bank says:-
1. Indian manufacturers have been significantly affected by high input costs that have in part ridden on the commodity price upcycle that has ridden on the back of supply shortages and high global liquidity."
2. To counter this, industry has asked for customs duty reductions in a number of imported inputs particularly primary intermediates. This includes coking coal, ethanol, metallurgical coke and copper scrap, Duty reductions have also been sought in some specialized technology areas such as telecommunication network areas and optical fibres where current duties are high."
3. Hospitality sector: Custom duty relief for supplies and equipment used in covid-affected hospitality sector. Rationalize custom duties on procurements by the hotel industry."
"Broadly, the demand is for evolving a simplified customs structure with a single rate of all intermediates and higher rates for those that are carefully identified as final goods," the bank said in its Fiscal Balance and Budget Expectations report.
11/01/2022
The government has sought opinion from senior tax advisors on whether the income earned from trading or investing in cryptocurrencies could be treated as business income as against capital gains from this year on wards, said two people involved in the discussions. The move could substantially increase the tax burden of crypto investors. The government is looking to fine-tune the definition of income and gains specifically for crypto assets in the upcoming budget. This would mean that the income tax on returns for investors or traders could be as high as 35%to42% going ahead. The government has reached out to senior tax advisors regarding the change that will only impact crypto asset class such as equities.
Vijay Shekhar Sharma, confounder of One97 Communications, that owns Paytm, said that negative macro trends impacted the company’s initial public offering (IPO) even as the stock fell further on Wednesday. In one of his first public appearances since that company’s disastrous market debut in November last year, Sharma, in a conversation with Sequoia Capital managing director Rajan Anandan at IAMAI’S India Digital Summit 2022, said that One97 went public at a time when global markets were spooked by various factors that affected its listing performance. Globally, we probably went in at a time when QE, free money and many other parameters brought a little spook out of the market,” he said. “South American companies are over 70% down. That’s not the reason completely. That’s a macro reason.”
Gujarat Authority for Advance Ruling (AAR) has held that healthcare services, where multi-super specialty hospitals take a lump-sum amount in form of membership to provide services to their family, would not attract GST.
10/01/2022
Vodafone Idea announced Tuesday that it will accept the Indian government’s proposal to convert its spectrum and adjusted gross revenue (AGR) dues to equity, making the government the largest shareholder of the company. And, the implied cost of this conversion is ?10 a share, a 32% discount on Monday’s (January 10) closing price.
With this, the Indian government will now hold a 35.8% stake in the company. The promoters – Vodafone Plc., and Aditya Birla Group – will hold 28.5% and 17.5% stake, respectively. This is down from the current shareholding of 44.39% and 27.66%, respectively. The reason that the shares have been allotted to the government at ?10 is that the average share price on the date (August 14, 2021) was below par value (?10), the company noted in its filing. The shares may be held through the statutory undertaking of the Unit Trust of India (SUUTI) on behalf of the Government of India or by any trustee-type or other suitable arrangement,” the company said in its statement to the exchanges. SUUTI is a government investment arm that owns significant stakes in publicly listed companies like HDFC Bank, ICICI Bank, State Bank of India, among others. According to an exchange filing by the company, the net present value of the interest owed by Vodafone Idea to the government currently stands at ?16,000 crore.
At least 150 registry officials and staff members of the Supreme Court have tested positive for Covid-19, a message by the Supreme Court Bar Association (SCBA) to its members said. The SCBA, therefore, urged lawyers not to enter the high security zone of the Supreme Court. The message said that while there is no official circular or instruction from the Court barring entry of lawyers into high security zone using the proximity card, it would be advisable not to enter the high security zone of the court unless it is absolutely necessary. At least four Supreme Court judges had also tested positive for COVID-19 and the Court has already decided to function in a restricted manner from tomorrow.
At least 400 staff and security personnell working at the Parliament had tested positive for Covid-19 between Thursday and Friday (January 6 and 7) during random testing, said authorities on Saturday.
09/01/2022
Today’, 9 January 1799 is the fateful day when income tax was first introduced by William Pitt the Younger, the then Prime Minister of England and the Chancellor of the Exchequer! as a way to pay for the wars against France.
If the sun had not risen on this fateful day, we never know but we may not be discussing what we have been discussing at present!
Under the terms of the Act of 1799, a 10% levy was to be raised on all income over £60, with reductions applying on incomes of up to £200. Children could expect to pay up to 5% less on their earnings. Payments were to be made in six equal instalments from June that year. Pitt estimated the country's total taxable income at around £100m. So, with a rate of 10%, he hoped to raise in the region of £10m. It soon dawned on him that this figure was overly optimistic and he revised his figure down to £7.5m. Yet, he was still to be disappointed. Only around £6m was raised, despite the appointment of tax inspectors, or "general commissioners".
Although the income tax was abolished in 1802, it was reinstated and repealed another two times before being made permanent.
Hon’ble SC has directed the Registry to list the Misc Appl No. 21/2022 in MA 665/2021 In SMW(C) No. 3/2020 in Cognizance For Extension of Limitation on 10th January 2022.
In a bid to bring its tax structure at par with competing states and secure its revenues, the Maharashtra government is mulling to waive the stamp duty on the import of gold and silver in the state. While Maharashtra levies a 0.1 per cent stamp duty on gold imported by air, sources said that the import of gold has been shifting to other states, as they don’t impose stamp duty. As this arbitrage resulted in decline of gold imports within the state, sources said that the government has been losing hundreds of crores in goods and services tax (GST) on import of gold. They further said that the waiver of stamp duty on gold could increase state revenue. India imports nearly 800 tonne of gold, which is equivalent to almost Rs 4 lakh crore, every year by air.
“On import of Rs 4 lakh crore of gold, the GST is levied at 3 per cent, which is equivalent of Rs 12,000 crore. The IGST and SGST revenue due to this comes to Rs 6,000 crore each. Since Maharashtra levies stamp duty of 0.10 per cent, the state GST revenue is lost to the extent of Rs 6000 crores,” stated the Indian Bullion & Jewellers association. It further said that collection of just Rs 400 crore by way of stamp duty is resulting in a huge loss to the state not only in terms of GST but also in terms of custom revenue and employment opportunities. “The government should remove the stamp duty on the import of gold that will enable the state government to earn the huge revenue in form of GST,” it added.
Gstn Updates:
1. GSTN has informed that functionality of allowing to file GSTR-1, only if GSTR-3B is filed for the preceding month will be implemented shortly. (e.g.: Taxpayer will not be able to file the GSTR-1 for the month of January, 2022 if GSTR-3B for the month of December, 2021 is not filed).
2. GSTN has informed that a revamped & enhanced version of Search HSN Functionality has been launched on the GST Portal.
3. GSTN has informed about a new functionality, which will allow to enter a suspended GSTN as a recipient of taxable supplies in respective tables of GSTR-1/IFF (Earlier it was showing error message).
08/01/2022
Applicable forms required in case of different kind of Audit Report :
FORM 3CA-3CD: This form needs to be filed if tax audit is required u/s 44AB and the books are audited in any other law also. (e.g.: Companies and LLP).
Exceptions:
1. Company is incorporated between 1st January and 31st March. (Books of 3 months is not required to audit as per Companies Act).
2. LLP is incorporated between 1st October and 31st March (Books of 6 months is not be required to audit as per LLP Act).
3. Statutory Audit has not been completed/done for the financial year.
4. Company has opted different financial year approved by NCLT.
Form 3CB-3CD:
This form needs to be filed if tax audit is required u/s 44AB, the books are not required to be audited in any other law (e.g.: Individual and Partnership Firm) and the entity referred above in exceptions.
Form 3CEB: This form needs to be filed if audit is required u/s 92E relating to international transactions and specified domestic transactions.
Form 10B: This form needs to be filed if audit is required u/s 12A, in the case of charitable or religious trusts claiming exemption of Section 11.
It is a good time to incorporate the companies:
1. A company incorporated between 1st January and 31st March can enjoy 15 month financial year. Therefore, if a company is incorporating right now, in that case first financial period shall be ended on 31st March 2023.
2. Annual General Meeting (AGM) can be held till 31.12.2023.
3. Financial Statement shall be prepared and audited for 15 months for the period ended 31.03.2023.
4. Only Income tax return and ADT-1 (Appointment of Auditor) need to be filed for the transaction incurred between the incorporation date and 31.03.2022.
NSO estimates FY22 GDP growth at 9.2%
1. India’s gross domestic product (GDP) is expected to grow by 9.2% in the current financial year following last fiscal’s 7.3% contraction, the National Statistical Office (NSO) said in its first advance estimates of economic output, amid concerns over the likely impact of a third wave of the COVID pandemic.
2. The NSO, however, made clear that these were “early projections” that did not factor in actual performance of various indicators as well as measures that may be taken to contain the spread of COVID-19.
3. GDP at constant prices (2011-12) in the year 2021-22 is estimated at ?147.54 lakh crore, as against the provisional estimate of GDP for the year 2020-21 of ?135.13 lakh crore.
4. The NSO’s GVA estimates show the mining sector outpacing others with growth of 14.3% following last year’s 8.5% contraction, followed by manufacturing which is seen expanding by 12.5% after shrinking 7.2% in the previous 12-month period.
5. Agriculture sector is estimated to grow at 3.9% in FY22 (3.6%). The electricity, water supply and other utility services category is estimated to grow at 8.5% (1.9%), while construction is expected to grow 10.7% (-8.6%) and trade, hotels, transport, communication and broadcasting services are projected to grow at 11.9% against a sharp contraction of 18.2% last year.
ICRA places RBL Bank ratings under watch with developing implications. Rating agency ICRA has placed RBL Bank’s long-term rating (bonds “AA-”) and medium-term ratings (fixed deposits “AA”) on watch with developing implications. This follows events like to its Managing Director & Chief Executive Officer going on medical leave and RBI appointing its nominee director on the board. The overall share of the high yielding unsecured retail segments (mainly comprising credit cards and microfinance) remains relatively high at 31-32% of advances. The capital position is comfortable, though supported by capital raise. RBL raised equity capital of Rs 1,566 crore in Q3 FY2021 and Rs 2,701 crore in Q3 FY2020. Hence, despite the weak internal capital generation, it has been able to maintain a comfortable capital position with the Tier I of 15.54 per cent and total capital adequacy ratio of 16.33 per cent as on September 30, 2021.
Source: ICRA Website
07/01/2022
The Delhi government has extended 20% lower circle rates till June 30, 2022, in a move which will help push property sales in Delhi at a time when the Omicron variant is threatening to derail the recovery. According to an order issued by principal secretary (revenue) Sanjeev Khirwar on Thursday, the revised rate will be in effect until June 30, 2022. South Delhi and Lutyens’ Bungalow Zone registered the highest number of property registrations in three years through a Covid-19-ravaged 2020–21, with uber-rich investors buying assets in areas where demand usually outruns supply. The sector has witnessed the positive impact of slashed stamp duty charges in Maharashtra on the property markets of Mumbai and Pune, which suggests that the state government’s decisions have a direct impact on the sector.
Many companies and their advisors have reached out to the government and sought a change to existing regulations that will allow unlisted Indian companies to list abroad. The change, if carried out in the upcoming budget, will also give a push to fund raising through special purpose acquisition companies or SPAC structures, as currently, Indian companies can’t get listed on foreign exchanges directly or through an amalgamation or a merger if they aren’t listed on domestic stock exchanges. The government announced in 2020 that it would implement regulations allowing companies to list directly on foreign exchanges. The government had also created a committee that had recommended procedures for Indian companies to directly get listed abroad – but those were put on the back burner due to the Covid-19 pandemic, say people aware of the development. This time around in the budget, the government could look at allowing foreign listing along with changes in regulation that would facilitate SPACs. Under SPAC, first a company is listed on a capital market and then raise a particular sum.
The Parliamentary Standing Committee on Finance will hold its first hearing on the Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Bill on January 12.
The bill seeking to strengthen the disciplinary mechanisms in place at the respective institutes – the Institute of Chartered Accountants of India (ICAI), the Institute of Cost Accountants of India and the Institute of Company Secretaries of India – was introduced in Parliament last month and subsequently referred to the standing committee.
Cryptocurrencies including Bitcoin, Ethereum, Solana, Cardano and Terra slid sharply on Wednesday night, after the US Federal Reserve released minutes of its December meeting in which the central bank signaled it could start raising interest rates to tackle stubbornly high inflation. At 5 pm Thursday, Bitcoin was down 8.49% at $42,835. It had earlier tested the $42,500 levels, after the Fed released its minutes. Bitcoin reached an all-time high of $68,749 on November 11, 2021 and has outperformed all capital markets in terms of yearly price growth in 2021, with a 60% return. Other alt coins as well reacted strongly to the news: Ethereum, Cardano, Solano, Shiba Inu, Cardano and Binance Coin all dropped by 10% or more during the 48 hours till Thursday evening.
The Income Tax Department detected alleged stock manipulation, fudging of account books and tax evasion worth crores of rupees after it recently raided two Uttar Pradesh-based perfume manufacturing and real estate groups. While a statement issued by the Central Board of Direct Taxes (CBDT), the policy-making body for the tax department, did not name any entity, sources said they were linked to Samajwadi Party MLC Pushpraj alias Pampi Jain and another perfumer Fauzan Malik. Searches were carried out on December 31 at over 40 premises in Maharashtra, Delhi, Tamil Nadu, Gujarat and at some places in Uttar Pradesh, including Kannauj where Jain resides. CBDT said it was found that one the group was “involved in tax evasion by under-reporting sales of perfumes, stock manipulation, fudging books of account to shift profits from taxable unit to tax exempt unit, inflation of expenditure, etc. Evidence founded in the sales and main office have revealed that the group makes 35-40% of its retail sales in cash by ‘kucha’ bills and these cash receipts are not recorded in the regular books of account, running into crores of rupees,” it claimed.
The Directorate of Revenue Intelligence (DRI) has issued three show cause notices to Chinese smartphone marker Xiaomi India for demand and recovery of duty amounting to Rs. 653 crores for the period April 1, 2017 to June 30, 2020 under the provisions of the Customs Act, 1962, according to an official statement. Based upon an intelligence (tip) that M/s Xiaomi Technology India Private Limited (Xiaomi India) was evading customs duty by way of undervaluation, an investigation was initiated by the DRI against Xiaomi India and its contract manufactures,” according to a Press Information Bureau statement. During the investigation, searches were conducted by the anti-smuggling agency at the premises of Xiaomi India, which led to the recovery of incriminating documents indicating that the company was remitting royalty and license fee to Qualcomm USA and to Beijing Xiaomi Mobile Software Co under contractual obligation, as per the statement. The DRI had also searched factories of Foxconn’s India unit, Bharat FIH, and Dixon Technologies in South India. Bharat FIH and Dixon are contract manufacturers for Xiaomi.
06/01/2022
An Enforcement Directorate (ED) investigation has revealed that properties involved in the money-laundering case against promoters of Unitech are being “actively dissipated” by those who have benefitted from the alleged crime, people aware of the matter said. The agency claims to have “intelligence inputs” which suggest that there is an attempt to sell the assets by individuals who are alleged to be involved in money laundering and benefitted – directly or indirectly – from the activity. ED has recorded the statement of Yogesh Gupta, a consultant of the kore/Trikar Group, and also a close confident of the Chandra’s of Unitech. According to the agency, the Trikar/Kore Group is “beneficially owned” and controlled by the Chandra family, especially Sanjay Chandra and his wife, Preeti Chandra. According to the agency, Gupta’s examination has revealed that Sanjay Chandra’s father, Ramesh Chandra, had in January 2021 sought his assistance in selling a property maintained in an alleged benami/shell company called Sky Events Management Pvt Ltd. The property has since been sold.
Fresh trouble could be brewing for the cryptocurrency exchanges as the income tax department is now contemplating investigating them over the tax applicable to their total income. This comes after the Goods and Services Tax (GST) department conducted searches in the past week on the crypto exchanges. The direct tax department could look into the quantum of corporate tax payable for the cryptocurrency exchanges, said people aware of the development. In the last week, the Directorate General of GST Intelligence (DGGI), an investigation arm of the indirect tax department, conducted searches on several crypto exchanges and asked them to pay GST on their transaction fees or margins. The fear is that the tax department will question the way exchanges record their revenues.
The Supreme Court on Tuesday imposed an exemplary cost of Rs 25 lakh on an applicant who had made allegations against the Uttarakhand High Court and High Officials of the State Government. The applicant had sought to implead in a case related to sale of assets of Khasgi (Devi Ahilyabai Holkar Charities) Trust of Indore, Madhya Pradesh. The bench of Justices AM Khanwilkar and CT Ravikumar opined that an applicant who wants to get impleaded must show some restraint and must not make unfounded allegations as made in his application.
05/01/2022
GSTN has issued Advisory dated January 03, 2022 regarding the implementation of Rule 59(6) of the CGST Rules i.e., GSTR-1 filing-restriction for non-filing of GSTR-3B for previous one month (earlier two), on GST Portal for the taxpayers. This means that from January 01, 2022 onwards, if a monthly filer has not filed the GSTR-3B for the preceding month, then such taxpayer will not be allowed to file the GSTR-1 for the subsequent month, till the GSTR-3B for the preceding month is filed.
GSTN has issued Advisory dated January 04, 2022 regarding reporting of supplies notified under Section 9(5) /5(5) of the CGST Act by E-commerce operator (“ECO”) in GSTR-3B.
Reporting in Form GSTR-3B
1. Supplies under 9(5) reported by ECO — Table 3.1(a) of GSTR-3B
2. Registered person/Restaurant supplying through ECO— Table 3.1(c) along-with nil and exempted supply
Extension of FCRA registration certificates Renewal till 31st March 2022:
1. Central Government, in public interest, has decided to extend validity of FCRA registration certificates upto 31st March, 2022 or till the date of disposal of the renewal application, whichever is earlier (No.11/21022/23 (22)/2020-FCRA-III).
2. The entities should fulfil the following conditions:
(i) FCRA registration certificates of such entities is expiring between the period 29th September, 2020 and 31st March, 2022; and
(ii) Such entities have applied/apply for renewal on FCRA portal before expiry of certificate of registration in accordance with rule 12 of the Foreign Contribution Regulation Rules, 2011.
3. In case of refusal of the application for renewal of certificate of registration, the validity of the certificate shall be deemed to have expired on the date of refusal of the application of renewal and the association shall not be eligible either to receive the foreign contribution or utilise the foreign contribution received.
RBI instructions for bank safe deposit lockers:
In line with the SC order, RBI introduced revised instructions for Bank safe deposit lockers. These instructions are applicable from Jan 1st, 2022. Following are some of the highlights of the instructions:
1. Banks should carry out due diligence for all the customers who have applied for a locker.
2. The locker agreements with existing locker customers should be renewed by 2023. Banks have been asked to incorporate a clause in the locker agreement that the locker-hirer/s shall not keep anything illegal or any hazardous substance in the Safe Deposit locker.
3. Banks are permitted to take a ‘Term Deposit’, at the time of allotment of the locker. The ‘Term Deposit’ would cover three years’ rent and the charges for breaking open the locker in case of such eventuality. Banks cannot insist on ‘Term Deposits’ from the existing locker holders or those who have a satisfactory operative account.
4. CCTVs and ‘Access Control Systems’ should be installed for stronger security. The recordings of the CCTV camera should be preserved for 180 days. With respect to accessing the locker, banks should send an email and SMS alert to the registered email ID and mobile number of the customer before the end of the day as a positive confirmation intimating the date and time of the locker operation.
5. The claims in case of death of a customer should take place within 15 days from receipt of claim and submission of requisite documents.
6. The liability of the bank has been limited to 100 times its annual rent in case of fire, theft, frauds by employees, or building collapse. Banks should not offer any insurance product to their locker hirers for insurance of locker contents.
Withholding tax on companies exiting out of Netherlands reintroduced:
1. On 8 December 2021, amendments to the bill for imposing a dividend-equivalent withholding tax (exit tax) on companies moving their tax residence out of the Netherlands has been submitted in the Dutch parliament.
2. An initial draft was first submitted in July 2020 in response to the plans of large multinationals to move or consolidate their headquarters and management and control outside of the Netherlands, but this was not ultimately approved.
3. The latest revisions to the bill were submitted following Royal-Dutch Shell's recent announcement that it is moving its headquarters to the UK, which was approved by shareholders on 10 December 2021.
4. The tax would become due at the moment a company's residence is changed, without the possibility of any tax deferral or waiver.
5. It is also provided that in certain cases, companies established under foreign law would continue to be considered resident in the Netherlands for a period of 10 years after the transfer of their seat to another country.
6. If the revised bill is approved, it would apply retroactively from 9am on 8 December 2021.
TDS U/S 194Q on sale of certain goods:
1. TDS U/S 194Q is applicable on purchase of goods from 1st July, 2021. Goods is defined under Sale of Goods Act as every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale.
2. The definition makes it amply clear that only movable property are goods. So any immovable property such as land and building shall not be goods. So TDS U/S 194Q shall not be applicable to sale of land, building and house property.
3. CBDT circular 13/2021, dated 30th June 2021 makes it clear TDS U/S 194Q shall not be applicable to sale of shares and securities through recognised stock exchanges and clearing corporation. It also follows that unlisted shares may be subject to TDS, in case the business turnover exceeds Rs 10 Cr and transaction value (with the other party during the year) crosses Rs 50 L.
4. The above circular also mandates that TDS would be applicable to sale of electricity. Numerous judicial pronouncements have held that sale of electricity is goods. Only sale through power exchanges is exempt.
5. Motor cars are goods. However if the value of motor vehicle exceeds Rs. 10 Lakh then it may be liable for TCS. If made Liable for TCS then TDS U/s 194Q will not be applicable.
6. Similarly sale of scrap, coal and liquor may be subject to TCS and in that case TDS U/S 194Q shall not be applicable.
7. Off the shelf software have been held as goods by Supreme Court in its landmark judgement of Tata Consultancy Services [2004] 141 Taxman 132 (SC). Hence, TDS will have to be deducted U/S 194Q.
DGFT has extended the last date for submitting the applications for the following scrip-based claims from 31st December 2021 to 31st January 2022:-
1.For Merchandise Exports from India Scheme (MEIS): To promote the manufacture and export of notified goods/ products, the Government incentivise the merchandise exporters on the realised FOB value of exports in the form of Duty Credit Scrip. The last date to apply for exports made in the period 01.07.2018 to 31.12.2020 is 31st January 2022
2.For Service Exports from India Scheme (SEIS): To encourage and maximize export of notified Services from India, located in India shall be rewarded incentive under SEIS scheme. The rate of reward is calculated on the Net Foreign exchange earnings. Currently incentive is available for services rendered in FY 2018-19 & FY 2019-20 & the last date for application submission is 31st January 2022.
3.For ROSCTL: ROSCTL is a scheme to grant rebate of all embedded State and Central Taxes/levies meant for exports of made-up articles & garments. For exports made from 07.03.2019 to 31.12.2020, the last date to apply for ROSCTL is 31st January 2022.
4.For ROSL: For exports made up to 06.03.2019, RoSL can be claimed on garment exports to exports of made-up articles covered under Chapter 63 & the last date to apply for ROSL is 31st January 2022.
5.For 2% ad hoc incentive: An additional 2% incentive under MEIS was eligible for HSN Code: 85171211 – Mobile Phones, other than push button type and HSN Code: 85171219 – Mobile Phones, push button type for exports made in the period 01.01.2020 to 31.03.2020.
04/01/2022
Chinese smartphone makers Xiaomi and Oppo could be fined over Rs1000 crore for for allegedly violating laws pertaining to no-disclosure of related-party transactions. The transactions pertaining to these two companies were unearthed during raids by the income-tax department on December 21. Documents and electronic devices seized during the raids were still being assessed, the sources said, adding that the department had found that one of the companies was being managed from ‘a neighboring country.’
The goods and services tax (GST) department has recovered Rs49 crore from cryptocurrency exchange WazirX in unpaid taxes are related dues for alleged non-compliance on taxable coin sales. The amount recovered included unpaid GST exceeding Rs40 crore, interest on that amount and penalties. The indirect tax department claims that WazirX issued its own cryptocurrency, WRX coins, through Zamia Labs, but refused to pay GST on that amount. The tax department contended that GST of 18% is applicable on these coins that were sold on the exchange. The tax department said Zamia Labs was managing WazirX cryptocurrency exchange applicable in India.
The Income Tax Department has announced the roll-out of a new statement namely Annual Information Statement (AIS) which would provide you with almost all details about your financial transactions during the year. A taxpayer can submit online feedback if the information is erroneous or refers to another person/year, or is duplicate Here’s the list of Top 47 Transactions to be reported in the New Annual Information Statement.
1. Salary : Employer submits detailed breakup of salary, perquisites, profits in lieu of salary etc paid to the employee in Annexure II of the TDS statement (24Q) of the last quarter.
2. Rent Received : Tenants responsible for paying rent are liable to deduct tax at source on payment of rent.
3. Dividends : Dividend paid/declared by all companies (reporting entity) is reported under Statement of Financial Transactions (SFT).
4. Interest from savings bank :
Interest from deposit
Interest from others
Interest from income tax refund
5. Rent on plant & machinery
6. Winnings from lottery or crossword puzzle
7. Winnings from horse race
8. Receipt of accumulated balance of PF from employer u/s 111
9. Interest from infrastructure debt fund
10. Interest from specified company by a non-resident u/s 115A(1)(a)(iiaa)
11. Interest on bonds and government securities
12. Income in respect of units of non-resident u/s 115A(1)(a)(iiab)
13. Income and long-term capital gain from units by an offshore fund u/s 115AB(1)(b)
14. Income and long-term capital gain from foreign currency bonds or shares of Indian companies u/s 115AC.
15. Income of foreign institutional investors from securities u/s 115AD(1)(i)
16. Insurance commission.
17. Receipts from life insurance policy
18. Withdrawal of deposits under national savings scheme
19. Receipt of commission etc. on sale of lottery tickets
20. Income from investment in securitization trust
21. Income on account of repurchase of units by MF/UTI
22. Interest or dividend or other sums payable to government
23. Payment to non-resident sportsmen or sports association u/s 115BBA
24. Sale of land or building.
25. Receipts from transfer of immovable property
26. Sale of vehicle
27. Sale of securities and units of mutual fund
28. Off market debit transactions
29. Off market credit transactions
30. Business receipts
31. Business expenses
32. Rent payments
33. Miscellaneous payments
34. Cash deposits in Bank
35. Cash withdrawals from Bank C/A.
36. Cash payments : Information pertaining to Cash payments for goods and services is reported by the reporting entity in form 61A.
37. Outward foreign remittance/purchase of foreign currency
38. Receipt of foreign remittance
39. Foreign travel : Information is reported by deductor in TCS form 27EQ (quarterly statement).
40. Purchase of immovable property : Information relating to immovable property is reported by the Property
Registrar through SFT.
41. Purchase of vehicle: Information is reported by deductor in TCS form 27EQ (quarterly statement).
42. Purchase of time deposits
43. Purchase of securities and units of mutual funds
44. Credit/Debit card
45. Balance in account : Details of bank account other than saving and time deposits opened during the year , as reported in Form 61.
46. Income distributed by business trust
47. Income distributed by investment fund
03/01/2022
Gst Amendments Applicable from 01.01.2022
1. E- commerce operators shall be liable to pay GST on supply of restaurant services made through them. For restaurant supplies made by restaurants located at specified premises, burden to pay GST will remain with restaurant.
2. For transportation of passenger by non-airconditioned stage carriage through e-commerce operator, e-commerce operator shall be liable to collect and pay GST. It should be noted that these provisions will not be applicable to local passenger transport services provided by auto-rickshaws/cab through offline/ manual mode, which attract no taxes.
3. Gst rate increased to 18% from 5/12% in case of
a. Pure services (excluding works contract service or other composite supplies involving supply of any goods) by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution.
b. Composite supply of goods and services in which the value of supply of goods constitutes not more than 25 per cent of the value of the said composite supply by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution.
4. To implement 46th GST Council’s decision, Government has issued NN 21/2021-Central Tax (Rate) and NN 22/2021-Central Tax (Rate) both dated 31.12.2021. Consequently, the existing rates in textile sector would continue beyond 1st January, 2022 till further announcement.
5. FOOTWEAR SECTOR
Rate of GST on footwear, sale value not exceeding INR 1,000/-, shall increase from 5% to 12%.
6. Scope of supply widened to include Supply of Goods. The following shall be treated as supply of goods, namely:— Supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration.”
7. Vide NN 40/2021-Central Tax corresponding amendment has been made in rule 36(4). After this amendment no ITC shall be availed by a registered person unless invoice/debit note –
a. furnished by the supplier in the statement of outward supplies in FORM GSTR-1
b. Said details have been communicated to the registered person in FORM GSTR-2B.
8. Rules notified related to Mandatory Aadhaar authentication for GST Refund are to be effective from 1 January 2022.
Further, relaxation has been provided to UIN holders where Unique Identity Number of the applicant is not mentioned in a tax invoice. The refund of tax paid by UIN on such invoice shall be available if the copy of the invoice, duly attested by the authorized representative of the applicant, is submitted along with the refund application.
9. The powers of provisional attachment of property under Section 83 has been increased to include any proceedings under Chapter XII (Assessment), Chapter XIV (Inspection, Search, Seizure & Arrest) or Chapter XV(Demands & Recovery). Corresponding amendments has been made in CGST Rules-
a. Rule159(2) has been amended to provide that a copy of order of attachment in FORM DRC-22 shall also be sent to the person whose property is being attached under sec- tion 83.
b. Other changes in Rule 159 have been made to incorporate the changes made in Sec 83 providing for attachment of property of a person other than the taxable person i.e any person specified in sub-section (1A) of section 122.
c. Any objection to the order of provisional attachment of property is to be filed in FORM DRC-22A whose format has also been notified now.
10. AMENDMENT OF SECTION 129 ON DETENTION, SEIZURE AND RELEASE OF GOODS AND CONVEYANCES IN TRANSIT:
Revised payment of penalty under sub-section (1) is as follows:
(i) In case owner of the goods comes forward for payment of such penalty
a. In case of taxable goods – Applicable tax and penalty equal to 200% of tax payable; and,
b. In case of exempt goods – Amount equal to 2% of the value of goods or Rs. 25,000, whichever is less
(ii) In case owner of the goods does not come forward for payment of such penalty
a. In case of taxable goods – Applicable tax and penalty equal to the 50% of the value of the goods reduced by the tax amount paid thereon or 200% of tax payable, whichever is higher; and,
b. In case of exempt goods – Amount equal to 5% of the value of goods or Rs. 25,000, whichever is less.whichever is less
In addition, following amendments will also became applicable w.e.f. 1st January 2022
a. Proper officer will have to issue the order specifying the penalty amount within 7 days of issue of notice.
b. No penalty can be levied without granting the opportunity of personal hearing.
c. The person on whom penalty is levied have to pay the amount within 15 days of the receipt of order otherwise sized goods will be disposed off for recovery of penalty amount.
However, seized conveyance can be released on payment of penalty of Rs. 1 Lac or the penalty which is specified above, whichever is lesser.
11. NEW RULE 144A “RECOVERY OF PENALTY BY SALE OF GOODS OR CONVEYANCE DETAINED OR SEIZED IN TRANSIT” HAS BEEN INSERTED WITH EFFECT FROM THE 1 JAN, 2022
Where the penalty u/s 129 is not paid within 15 days from the date of receipt of order of detention, Proper officer shall proceed for sale or disposal of goods or conveyance so detained.
The said goods or conveyance shall be sold through a process of auction, including e-auc- tion, for which a notice shall be issued in FORM GST DRC-10.
Auction process shall be cancelled where the person transporting said goods or the owner of such goods pays the amount of penalty, including any expenses incurred in safe custo- dy and handling of such goods or conveyance, after the time period of 15 days but before the issuance of notice for auction.
Atleast 15 days’ notice to be given for auction.
12. GSTR-1 return filing facility will be blocked if you have not submitted the return in FORM GSTR-3B for the previous two return periods.
02/02/2022
Validity of FCRA Registration is expiring between 29.09.2020 and 31.03.2022 of those entities who have applied for renewal on FCRA Portal, shall be valid till 31.03.2022 or till the date of disposal of renewal application, whichever is earlier.
Note: In case of refusal of application for renewal of certificate of registration, the validity of certificate shall be deemed expired on the date of refusal of the application of renewal.
It is Mandatory to appoint the Internal Auditor by following class of companies:
1. EveryListedCompany
2. Everyunlistedpubliccompanyhaving:
- Deposits at any point of time => Rs. 25 crore or
- Paid up share capital => Rs. 50 crore or
- Loans at any point of time => Rs. 100 crore or
- Turnover => Rs. 200 crore
3. Everyprivatecompanyhaving:
- Loans at any point of time => Rs. 100 crore or
- Turnover => Rs. 200 crore
01/01/2022
GST revenue collected over Rs 1.29 lakh crore in December-2021.
Food aggregators to collect 5% GST beginning Jan 1. Making Costlier for Small Dhabas products.
Delhi Govt's GST Dept Unearths Rs 347-crore Fake Billing Scam.
GST Council defers hike in GST on textiles from 5% to 12%.
Cryptocurrency exchange WazirX fined Rs 49.20 crore for GST evasion. |