"11 June 2020" Archive

Clarification on GST Refund – ITC populated in GSTR 2A

Clarification related to processing of GST Refund – Restricted to ITC populated in GSTR 2A The Central Board of Indirect Taxes and Customs (CBIC) had issued Master Circular on Refunds No. 125/44/2019-GST dated 18.11.2019 rescinding all earlier circulars. Recently CBIC has issued Circular No 135/05/2020 – GST dated 31st March, 2020 cla...

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Analysis of 3 recent GST Notifications dated 09.06.2020

Recently, CBIC issued three notification on 09.06.2020 which deals with extension of validity of E-Way Bill, extend the period to pass order u/s 54((7) and extend the date for transition under GST on account of merger of erstwhile Union Territories of Daman and Diu & Dadar and Nagar Haveli. NN 45/2020: The date of transition […...

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Applicability of RCM on Director Remuneration -Version 3

There has been a big controversy regarding the liability of GST on Directors Remuneration under Reverse Charge. Various conflicting Advance Rulings has been issued by Authority for Advance....

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Eligibility of input tax credit | section 17(5) | CGST Act, 2017

1) Executive Summary: As per section 17(5) of CGST Act, 2017, there are certain input services such as health services, life insurance and health insurance, renting or hiring of motor vehicles which are under the blocked category and the service recipient of these services cannot availed and utilised against set-off Output liability. Cons...

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Clarification in respect of levy of GST on Director’s remuneration

Various AAR has been issued on director remuneration under GST. Let us overview of AAR in the case of Clay Craft India Pvt Ltd [RAJ/AAR/2019‐20/33]. The appellant submission which is as under: – > Directors are also working apart from working as Board of Directors in the company at different level like procurement of raw [&hell...

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Section 194M TDS – Certain Payments Individual/HUF

♦ Introduction: Section 194M was introduced for the purpose to cover some specific high value transactions in personal nature under TDS which was previously excluded from TDS. ♦ Scope and meaning of section 194M: 1. Any person being an individual or HUF [other than those who are required to deduct income-tax as per the provisions [&he...

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Is ‘Ignorantia Juris Non Excusat’ a Valid Maxim?

(Can Ignorance of Law be an Excuse ‽) ‘Ignorantia Juris Non Excusat’, just by reading this maxim we immediately understand that one cannot defend himself by pleading his ignorance of the law. But the question, which we intend to discuss here is, is this a valid understanding? If Yes, then in what Context, & If No, then again in w...

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IBBI cancels registration of IP as criminal proceedings were pending against him

NA (11/06/2020)

The submissions made by Mr. Lebaka have been examined and it is observed that he has failed to make a required disclosure about the pendency of the criminal proceedings against him before the Hon’ble Court....

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Advisory on fake Email/Websites/Persons (DGFT/GSTN refunds)

Trade Notice No. 14/2020-2021 (11/06/2020)

Advisory on fake Email Ms/Websites/Persons claiming to be government officer/official responsible for DGFT/GSTN refunds or providing the services for issuance of MC and other services of DGFT...

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GST Implication on Income Received From Blogging

In this article we will try to understand GST implication on the income earned by the bloggers. There are different types of bloggers like Fashion, Food, Travel, Lifestyle, Music, Fitness, Sports Bloggers etc. which derives income from various services provided by them. Bloggers can earn handsome amount of money by their creative writing ...

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DGFT notifies Annual SCOMET Updates – 2020

Notification No. 10/2015-2020-DGFT (11/06/2020)

Annual SCOMET Updates - 2020 has been notified to amend Appendix 3 (SCOMET Items) to Schedule - 2 of ITC (HS) Classification of Export and Import Items, 2018....

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Accounting aspects of Taxation Laws (Amendment) Ordinance, 2019

The Taxation Laws (Amendment) Ordinance, 2019 (or ’the Ordinance’)  was passed by Lok Sabha on December 2, 2019. The Ordinance provides significant tax cuts to Domestic companies.  This article specifically enlightens the treatment of the same in Books of Account of the assessee taking benefit of the ordinance....

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Impact of Amendments in Residential Status Provisions by Finance Act 2020

Introduction Finance Act 2020, as passed in Lok Sabha, brought up some significant changes to the provisions of determining the residential status of an individual in India. Finance Minister Shree Nirmala Seetharaman tried to narrow down the means by which an individual avoids taxes in India by becoming a non-resident in India. These chan...

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Health Insurance Policy- IRDAI issues Standard Terms & Clauses

Ref. No: IRDAI/HLT/REG/CIR/152/06/2020 (11/06/2020)

The Objective of these guidelines is to standardize the general terms and clauses incorporated in indemnity based Health Insurance [excluding Personal Accident (hereinafter called as PA) and Domestic / Overseas Travel] products by simplifying the wordings of general terms and clauses of the policy contracts and ensure uniformity across...

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Health Insurance -Revised Norms on Proportionate Deductions

Ref. No: IRDAI/HLT/REG/CIR/151/06/2020 (11/06/2020)

Where as part of product design insurers propose proportionate deduction of the ‘associated medical expenses’ when a policyholder chooses a higher room category than the category that is eligible as per terms and conditions of the policy, insurers shall define ‘associate medical expenses’ in the terms and conditions of policy cont...

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Allow telemedicine as part of claim settlement of policy: IRDAI

Ref. No: IRDAI/HLT/REG/CIR/149/06/2020 (11/06/2020)

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA Ref. No: IRDAI/HLT/REG/CIR/149/06/2020 Date:11-06-2020 To All General and Health Insurers (except ECGC, AIC) Re: Guidelines on Telemedicine: 1. Medical Council of India has issued ‘Tele Medicine practice guidelines’ on 25th of March 2020, enabling registered Medical Practitioners...

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GST Payable on remuneration to directors who are not employees

Various references have been received from trade and industry seeking clarification whether the GST is leviable on Director’s remuneration paid by companies to their directors. Accordingly the same has been clarified via Circular No: 140/10/2020 – GST dated 10/06/2020 Before going directly to the clarification its better to read the f...

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Assessee can claim Section 54F deduction during Section 147 Proceedings

Pyare Lal Saini Vs ITO (ITAT Jaipur)

Whether AO is correct in rejecting the claim of assessee regarding the deduction u/s 54F, which was made first time during Reassessment Proceedings?...

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CS for banks | RBI Discussion paper on ‘Governance in Commercial Banks in India’

Press Release: 2019-2020/2485 (11/06/2020)

RBI has released a discussion paper today i.e. 12th June 2020, on ‘Governance in Commercial Banks in India’ for public comments To align the current regulatory framework with global best practices while being mindful of the context of domestic financial system. Major Key Highlights – From Company Secretary (CS) Prospective: 1. Appoi...

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Customs Valuation Rules- Invoice price cannot be rejected without cogent reasons

Guru Rajendra Metalloys India Pvt Ltd Vs C.C. (CESTAT Ahmedabad)

CESTAT are of the clear view that merely based on DGOV circular also, value cannot be enhanced which is without authority of law. It is clearly held that DGOV circular cannot override the provisions of Valuation Rules. ...

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DGOV guidelines not overrules Customs Valuation Rules

Sunland Alloys Vs C.C. (CESTAT Ahmedabad)

Sunland Alloys Vs C.C. (CESTAT Ahmedabad) The issue under consideration is whether the DGOV guidelines are over and above Customs Valuation Rules? In the present case, the appellant imported Aluminium Scrap under various Bill of Entries and the price declared in the Bill of Entry is as per the invoice of the foreign supplier. The [&hellip...

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Capital Gains of Cyprus Co not taxable in India as per DTAA prevailing at that time

DCIT Vs Narmil Infosolutions Pvt. Ltd. (ITAT Delhi)

The issue under consideration is whether the sale of shares by a Cyprus company to the assessee of an Indian company, who was holding a technology Park [immovable property] as only asset, is taxable in India in view of the Double Taxation Avoidance Agreement between India and Cyprus?...

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EPF Contribution rate reduction for May 2020 to July 2020

An Overview of announcement by honorable finance minister Nirmala Sitharaman on Wednesday 13/05/2020 regarding EPF contribution by which EPF Contribution was reduced for Employers and Employees for 3 months to 10% from 12% for all establishments covered by EPFO for next 3 months i.e. May 20, June 20 & July 20. Union finance minister N...

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MSME: All Past & Present Benefits

1. BENEFITS TO MSME 1. Central Government reserved three hundred fifty (350) items for purchase from MSMEs, under the Government Stores Purchase Programme. 2. MSE sector now has greater access to credit as a result of its classification as a priority lending sector. The banks are required to compulsorily ensure that specified percentage o...

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Section 11 | CGST Act 2017 | Power to grant exemption from tax

Section 11- Power to grant exemption from tax – Today i will discuss provisions of Section 11 in very simplified manner- Section 11 (1) – Where the Government is satisfied that it is necessary in the public interest so to do, it may, on the recommendations of the Council, by notification, exempt generally, either absolutely [&hell...

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Clarification on levy of GST on Directors’ Remuneration

Clarification by CBIC in respect of levy of GST on remuneration payable to Directors – Much confusion was created by recent Advance Ruling passed by Rajasthan Authority for Advance Ruling in the case of M/s Clay Craft India Pvt Ltd (Jaipur) (Order No RAJ/AAR/2019-20/33 dated 20th February, 2020) which held that remuneration payable ...

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GST Update – Filing of NIL Return GSTR 3B by SMS

On 8th and 9th June 2020, CBIC has issued notifications to give effect to certain changes in GST Provisions which included facility for NIL filing of GSTR 3B through SMS. The details of such notification is given below – 1. Summary of Notifications under Central Tax – S. No Notification Category Notification No and Date […]...

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Checklist for Statutory Audit of Bank Branch Audit (An Overview)

1. General – Area of Review Pre Audit a) Review of Latest available inspection reports of Internal/Concurrent/RBI/Statutory Auditors and compliance thereof. b) Review of Closing Circular issued by Head Office c) Study of Significant accounting policies of the Bank & computer system d) Study of Business mix of the Branch & determ...

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Exemption u/s 10 & 11 cannot be granted merely based on section 12AA Registration

Director of Income Tax Vs ST. ANN's Education Society (Karnataka High Court)

The issue under consideration is whether the Income Tax benefit under section 10 and 11 will be granted on the basis of registration under section 12AA?...

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Addition not justified when third party retracted the statement and Assessee not given Opportunity to Cross Examine

Asstt. CIT Vs Sabari Switch Gear (P) Ltd. (ITAT Cochin)

The issue under consideration is whether the addition under section 68 is done by AO is justified in law whenm addition was based on third party statements which were retracted by them and Assessee was not given opportunity to cross examine them and when Addition are based merely on Surmises?...

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Transponder services in India is Not in the nature of Royalty & hence Not Taxable 

DCIT (International taxation) Vs Thaicom Public Co. Ltd. (ITAT Delhi)

The issue under consideration is whether the CIT(A) is correct in holding that the payment for provision of transponder capacity is in the nature of Royalty?...

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Initiation of FMCG manufacturing business in India

Amid epidemic COVID-19 and continuous extension of Lockdown in the Country, the essential items shows business trend, which magnet the entrepreneur to take thought of initiation of FMCG manufacturing business in India....

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Addition on estimate basis – Section 271(1)(c) cannot be imposed

Samatbhai Malabhai Parmar Vs ITO (ITAT Rajkot)

It is a settled principle of law that where addition to assessee’s income is made on estimate basis penalty under section 271(1)(c) cannot be imposed....

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No TDS on harvesting charges paid on behalf of farmers as agent

Parry Sugar Industries Limited Vs DCIT (ITAT Bangalore)

The issue under consideration is whether the disallowance made u/s 40(a)(ia) of the Act for non-deduction of tax at source from the payment made towards Harvesting charges is justified in law?...

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Simplification in Incorporation process of LLP

Introduced by: LLP (Second Amendment) Rules, 2018. Relevant date : 18th September 2018 Purpose: -A initiative of ease of doing business -To simplified the procedure of the incorporation of the LLP -To launched another major reform by way of process re-engineering of Incorporation of LLP. Provisions of LLP(Second Amendment) Rules, 2018. Th...

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Book profit | Section 10A deduction | HC refers matter back to ITAT

Yokogawa India Ltd Vs DCIT (Karnataka High Court)

The tribunal has held that net profits have to be determined as per the provisions of the companies Act and thereafter, the adjustments have to be made. It has further been held that the assessee cannot adjust the books of profit except as provided under the companies Act....

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Brief about NRE Account and NRO Account

Article explains about Non- Resident (External) Rupee Account Scheme – NRE Account and Non-Resident Ordinary Rupee Account Scheme – NRO Account. Particulars Non- Resident (External) Rupee Account Scheme – NRE Account (Schedule – 1) Non-Resident Ordinary Rupee Account Scheme – NRO Account (Schedule – 3) Eligibility A. Non-resid...

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Nidhi Companies | Section 406 | Companies Act, 2013

What is Nidhi Company NIDHI COMPANY means a company which is governed by the Section 406 of the Companies Act,2013 with Nidhi rules, 2014 which is enforced by the legislation for the regulation of Nidhi Companies. NIDHI COMPANY in India is only incorporated with a single objective or purpose to cultivating the habit of thrift […]...

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Moody’s Indian credit rating: A lively discussion from history

Indian credit rating by Moody and its down graded position at negative from stable is not some thing one did not expect. As an ex banker and reader of economic situation since 1973, I have seen the downward economic condition of India, as perceived by Western credit agencies. But do I get perturbed and start […]...

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RCM on Director Remuneration – Clarification

As per the S.No. 6 of Notification No.13/2017 – Central Tax (Rate) dtd. 28.June.2017, following entry is given Category of Supply of Service: Services supplied by a director of a company or a body corporate to the said company or the body corporate. Supplier of Service: A director of a company or a body corporate […]...

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Levy of GST on Directors’ remuneration – CBIC Clarification

The question of whether GST on reverse charge is applicable on Directors’ remuneration had been in debate for some time now, with contradictory views expressed by different authorities in the process of litigation. CBIC has now issued a Clarification w.r.t. levy of GST on Directors’ remuneration. Vide this circular issued on 1...

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Valuation – An Art or science?

Tanvi Pahwa* In today’s dynamic world every organisation feels the need to know the worth of value of its assets, business or even the company.  Valuation in simple terms means the economic value or worth of a business, asset or company....

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Buy policy covering accident insurance & hospitalisation at accident insurance cost

Buy a policy which covers your accident insurance and hospitalisation at cost of an accident insurance You are really lucky if you don’t have to travel by rail or road for work. Besides escaping the daily grind of traveling in over-crowded trains and buses, you are also escaping the risk of meeting an accident or […]...

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Valuation Under Goods & Services Act

Valuation Under GST: It is important to know the how to arrive at the value on which tax is to be paid. The valuation of supply is important as the tax liability is depends upon it. In day to day business, we deal with many transactions and at that time confusion arises related to valuation […]...

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Abuse of Judicial process by the Rich & the Powerful

It is common knowledge that the rich & the powerful abuse the process of law by litigating settled issues repeatedly with the aid of leading advocates, knocking the doors of higher courts over trivial issues and against interlocutory orders. It is also prevalent to get the appeal/SLP admitted in the higher courts in important matters ...

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November 2020