DIRECT TAXES UPDATES
Recent circulars/ notifications/ rules/ clarifications/News
♣ CBDT issues a circular condoning the delay in filing of form No. 10 BB (Form for furnishing the audit report of the accounts of a fund or trust or institution or any university or other educational institution or any hospital or other medical institution) for AY 2016-17 and onwards (Circular no. 19/2020 dated 03th November 2020)
♣ Income tax department issues SOPs for faceless Income Tax Assessment Scheme, 2019 (Instruction no. F. No. Pr.CCIT(NeAC)/2019-20/343 and F. No. Pr. CCIT/NeAC/SOP/2020-21 dated 19th November 2020)
Income Tax Compliance calendar – December 2020
| Things to remember | |
| Due Date | Particulars |
| 7 December 2020 | Due date for deposit of Tax deducted/collected for the month of November, 2020. However, all sum deducted/collected by an office of the government shall be paid to the credit of the Central Government on the same day where tax is paid without production of an Income-tax Challan |
| 15 December 2020 | -Due date for furnishing of Form 24G by an office of the Government where TDS/TCS for the month of November, 2020 has been paid without the production of a challan
-Third instalment of advance tax for the assessment year 2021-22 -Due date for issue of TDS Certificate for tax deducted under section 194-IA in the month of October, 2020 -Due date for issue of TDS Certificate for tax deducted under Section 194-IB in the month of October, 2020 -Due date for issue of TDS Certificate for tax deducted under Section 194M in the month of October, 2020 -Due date for furnishing statement in Form no. 3BB by a stock exchange in respect of transactions in which client codes been modified after registering in the system for the month of November, 2020 |
| 30 December 2020 | Due date for furnishing of challan-cum-statement in respect of tax deducted under Section 194-IB in the month of November, 2020
-Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194M in the month of November, 2020 -Furnishing of report in Form No. 3CEAD for a reporting accounting year (assuming reporting accounting year is January 1, 2019 to December 31, 2019) by a constituent entity, resident in India, in respect of the international group of which it is a constituent if the parent entity is not obliged to file report under section 286(2)or the parent entity is resident of a country with which India does not have an agreement for exchange of the report etc -Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194-IA in the month of November, 2020 |
| 31 December 2020 | -Return of income for the assessment year 2020-21 for all assessee other than (a) corporate-assessee or (b) non-corporate assessee (whose books of account are required to be audited) or (c) partner of a firm whose accounts are required to be audited or (d) an assessee who is required to furnish a report under section 92E.
-Due date for furnishing of various audit reports including tax audit report and report in respect of international/specified domestic transaction for the Assessment Year 2020-21 |
Important cases decided
- Section 171(3A) penalty related to Anti Profiteering cannot be levied retrospectively (Kerala State Screening Committee on Anti Profiteering Vs TTK Prestige Ltd)
- Sales against opening stock accepted by the department cannot be treated as unexplained income (PCIT Vs Akshit Kumar (Delhi High Court)
INDIRECT TAXES UPDATES
GST
GST Compliance Calendar – Returns to be filed in the M/O December 2020
| GST Return Form Name | Filing Period | Due Dates in December 2020 |
| GSTR-1 (Outward return) | Monthly (November 2020) | 11th December 2020 |
| GSTR 3B (Tax summary return) | November ‘2020 | 20th December 2020 ( In case Aggregate turnover more than or equal to Rs 5 crore in the previous Year)
22nd / 24th December 2020 (in case Aggregate turnover less than or equal to Rs 5 crore in the previous financial year registered in X /Y category respectively. |
| GSTR 5A (online information & data access) | November ‘2020 | 20th December 2020 |
| GSTR 05 (by non-taxable resident persons ) | November 2020 | 20th December 2020 |
| GSTR 06 (ISD) | November ‘2020 | 13th December 2020 |
| GSTR 07 (TDS) | November ‘2020 | 10th December 2020 |
| GSTR 08 (TCS) | November ‘2020 | 10th December 2020 |
| Note- Due Dates for the GST Annual Return i.e. GSTR 9/9A/9C of FY 2018-19 is 31st December 2020 | ||
E-invoice threshold lowered to INR 100 crore from 1 January 2021: E-invoicing provisions would be applicable, with effect from 1 January 2021, to exceeds taxpayers INR 100 whose aggregate turnover crores in any preceding Financial Year from 2017-18 onwards. It may be noted that the Government had earlier proposed to apply the said provisions in respect of such assessees with effect from 1 October 2020 but had enhanced the threshold to INR 500 crore by Notification No. 61/2020-Central Tax. It seems that the process has now stabilised after certain relaxations were introduced for the month of October 2020. The threshold will hence be lowered to the original level from 1 January 2021 (Notification No. 88/2020-Central Tax, dated 10 November 2020)
Quarterly Return Monthly Payment Scheme introduced for specified taxpayers: The CBIC has introduced an optional scheme, effective from 1 January 2020, for quarterly filing of returns (GSTR-3B) and monthly payment of tax by taxpayers with aggregate turnover up to INR 5 crores. Notifications and Circular dated 10 November 2020 have been issued for the purpose. Certain aspects of the scheme are highlighted below.
- Registered person required to furnish Form GSTR-3B and having an aggregate turnover of up to INR 5 crore in the preceding financial year, is eligible of preceding quarter to the last day of the first month of the quart
- No requirement is there to exercise the option every quarter.
- Distinct persons have the option to avail the Scheme for one or more GSTINs
- Quarterly filing of GSTR-1 but, option available for Invoice Furnishing Facility (‘IFF’), to furnish the details of outward supplies (to a registered person), for each of the first and second months of a quarter, between the 1st and 13th day of the succeeding month.
- Monthly payment of tax by 25th of next month, for first two months of the quart
- Option available to pay tax either by fixed sum method or self-assessment metho
- Form GSTR-3B to be quarterly filed by 22nd or 24th day of the month succeeding the qua
- No interest liability when system calculated amount (fixed sum method) and the entire liability for the quarter are deposited by the due dat
- Late fee will not be applicable for the delay in payment of tax in first two months of the qua
- Scheme can be opted-in and opted-out for any quarter from the first day of second month
(Notifications Nos. 81, 82, 84 and 85/2020- Central Tax and Circular No. 143/13/2020-GST, all dated 10 November 2020)
Cases Law
Show Cause Notice (‘SCN’) is not uploaded on the Goods and Services Tax (‘GST’) portal, merely e-mailing is not valid service of the Notice – (Akash Garg / Shri Shyam Baba Edible Oils v. CC, 2020-VIL-576-MP)
Interest on delayed payment – Proviso to Section 50 of CGST Act is effective from 1 July 2017: (Maansarovar Motors Private Limited and Ors. v. Assistant Commissioner – Judgment dated 29 September 2020 in W.P. Nos. 28437, 29998, 31081 of 2019 and Ors., Madras High Court)
Error in GSTR-1 not to deprive ITC to recipient, in the absence of matching mechanism: (Sun Dye Chem v. Assistant Commissioner – 2020 VIL 523 MAD)
Detention of goods during transit – Nature of contravention and presence of intention to evade are important: (Sree Rama Steels v Deputy State Tax Officer – 2020 TIOL 1899 HC TELANGANA GST )
Provisional attachment of bank account during pendency of search proceedings under Section 67 – Supreme Court stays the Gujarat High Court decision: (Union of India v. Kushal Ltd. – Order dated 16 November 2020 in SLP No. 10070/2020, Supreme Court)
Restaurant service – GST liability on supply of beverages, cigarettes to customers and free food to employees: (In Mfar Hotels & Resorts Pvt. Ltd. – 2020 VIL 296 AAR)
Customs
Manufacture and other operations in warehouse – Job work clarified: The CBIC has clarified on various issues relating to job work for the unit working under the scheme of Manufacturing and Other Operations in Warehouse (‘MOOW Scheme’) under Section 65 of the Customs Act, 1962. The CBIC Circular No. 48/2020-Cus., dated 27 October 2020 also clarifies various issues in case where the job work activity is done by a unit working under the MOOW Scheme, for other units
Job work for unit working under the MOOW
GST provisions need to be followed in respect of procedures and time lines.
- Imported goods to be first deposited in premises before sending for job w
- Only inputs can be sent out for job w
- Capital goods can be sent out for repair after permission of bond officer
- Drawings can be sent out for exclusive use by the job worker for concerned un
- For removal of goods from job worker’s premises, Regulations 14 and 15 of the Manufacture and Other Operations in Warehouse (No. 2) Regulations, 2019 to be follow Date of removal from job workers premises will deemed to be the date of removal from warehouse.
- Scrap, waste and remnants generated during job work to be either returned to
- MOOW Scheme unit or cleared from job work unit on payment of duty.
- In case of any violation, the goods will be deemed to be cleared for home consumption on the date of clearance for job work
Job work by MOOW Scheme unit
- MOOW Scheme unit, being a GST registered unit, can do job work for o
- If imported inputs are used in job work, duty is required to be paid by filing Ex-bond Bill of Entry, only when job worked goods are returned to
- No duty payable if job worked goods exported from premises of MOOW Scheme unit.
The Circular also states that MOOW Scheme unit can source capital goods and inputs from Special Economic Zones and Free Trade and Warehousing Zones. (Circular No. 48/2020-Cus., dated 27 October 2020)
Faceless assessment – CBIC introduces measures for timely assessment: Observing that prompt and timely assessment of Bills of Entry and clearance of imported consignments are key objectives of Turant Customs and the Faceless assessment, the CBIC has introduced continuous assessment of goods on Saturdays and Sundays. According to Circular No. 45/2020-Cus., dated 12 October 2020, CBIC has decided to make all Saturdays (except second Saturday) as working day for all the faceless assessment groups across the country. Further, the CBIC has requested National Assessment Centres to monitor clearance of time-sensitive/ urgent consignments along with the DG systems. It has been clarified that the statutory compliances would only be checked during the Customs Compliance Verification stage at the port of import and the Appraising Officer will not keep pending such consignments for assessment. The Circular further enlists situations where, depending on the nature of the product and the fulfilment of certain other conditions, the First Check and Second Check will be undertaken by the faceless assessment group officers. In addition, guidelines with respect to re- assessment of Bill of Entry under faceless assessment regime have also been laid down. (Circular No. 45/2020-Cus., dated 12 October 2020)
Cases Law
Integrated tax and compensation cess are not included in the phrase ‘duty of customs’ for purposes of customs notification: (Interglobe Aviation Ltd. v. Commissioner – Final Order No. 51226-51571/2020, dated 2 November 2020, CESTAT New Delhi)
TED payment by mistake – No provision for refund – Government cannot unduly retain amount: (Carlo Technical Plastics Pvt. Ltd. v. Union of India – 2020 VIL 554 KER CU)
Excise & Service Tax
Sabka Vishwas (LDR) Scheme – Rectification of mistake in declaration by assessee: (Bhawna Malhotra v. Union of India – 2020 VIL 533 DEL CE)
Sabka Vishwas (LDR) Scheme – Declarant cannot be put in worse condition: (Jyoti Plastic Works Pvt. Ltd. v. Union of India – 2020 TIOL 1874 HC MUM CX)
With Warm Regards & Jai Hind
CMA Rakesh Bhalla – 9779010685 – nancybhalla@yahoo.com
Information Source – M/s LKS, CBIC.gov.in., various internet websites including Income tax website, Dailyhunt, Deloitte, livemint.com, related links and various notifications, circulars, orders, press releases and other sources-many thanks to all.
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