DIRECT TAXES UPDATES

Recent circulars/ notifications/ rules/ clarifications/News

♦ CBDT Notified Income Tax Rule 8AC so as to provide for computation of short term capital gains and written down value u/s 50 where depreciation on goodwill is received.  (Notification No. 77/2021-Income Tax [G.S.R. 472(E)]qvc)

♦ CBDT further extends the timeline for e-filing of Form 15CA/ 15CB upto 15/08/2021 in view of difficulties being reported by taxpayers in electronic filing of these forms. Accordingly, CBDT has now allowed manual submission of Forms 15CA/ 15CB by the taxpayers to the authorized dealers till 15/08/2021 (earlier extended upto 15/07/2021 & 30/06/2021).Release ID: 1732843 Dt 05/07/2021,PRID -1737217 Dt 20/07/2021

♦ CBDT Notified (Rule 130) omission of certain rules and Forms and savings. It further inserted Rule 131 related to Electronic furnishing of Forms, Statements, Returns Reports, orders etc. Notification No. 83/2021- [G.S.R.514 (E)] Dt 29/07/2021.

♦ CBDT notifies the Income-tax (20th Amendment) Rules (Rule 12) ,2021 related to ITR filling.  Notification No. 82/2021-Income Tax/[G.S.R. 509(E)] Dt 27/07/2021.

National Faceless Assessment Centre (NaFAC) Issues SOP for Handling Writ Petitions in Faceless assessments. Notification No. N.A.F.A.C-1/58/2021-22/333 Dt 26/07/2021.

Income Tax Compliance calendar – August 2021

Things to remember
Due Date Particulars
7th August 2021 Due date for deposit of Tax deducted / Collected for the month of July 2021. All the transaction   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.
14th August 2021
  • Due date for issue of TDS Certificate for tax deducted u/s 194-IA in the month of June, 2021.
  • Due date for issue of TDS Certificate for tax deducted u/s 194-IB in the month of June, 2021.
  • Due date for issue of TDS Certificate for tax deducted under section 194M in the month of June, 2021.
15th August 2021
  • 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 July, 2021.
  • Quarterly TDS certificate (in respect of tax deducted for payments other than salary) for the quarter ending June 30, 2021.
30th August 2021
  • Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194-IA for the month of July, 2021.
  • Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194-IB in the month of July, 2021.
  • Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194M in the month of July, 2021.
31th  August 2021 Payment of tax under the Direct Tax Vivad se Vishwas Act, 2020 without additional charge.

The due date for payment of tax under the Direct Tax Vivad se Vishwas Act, 2020 without additional charge has been further extended from June 30, 2021 to August 31, 2021 vide Circular no. 12/2021, dated 25-06-2021.

Important cases decided

♦ TDS not deposited by deductor- No recovery can be made against the deductee (Ashok Kumar B. Chowatia Vs JCIT (TDS) (Madras High Court))

♦ In case of absence of substantial question of law No appeal against ITAT order to be entertained. (PCIT Vs. Bell Ceramics Ltd. (Gujarat High Court)

♦ IT deduction cannot be claimed during section 153A Assessment if not claimed in original assessment proceedings. (GMR Infrastructure Limited Vs DCIT (Karnataka High Court)

♦ No TDS under section 195 on Purchase of software licenses with associated hardware from Foreign Companies. Autodesk Asia Pte Limited Vs DCIT (ITAT Bengalore)

♦ Professional and consulting expenses incurred during the acquisition of companies cannot be treated as income expenses. M/s Steer Engineering Pvt. Ltd. Vs The Addl. CIT (ITAT Bangalore)

♦ No disallowance can be made as per Section 40(a)(i) of the Act with respect to payment of commission to non-resident foreign agents / overseas agent. Carraro India Private Limited Vs DCIT (ITAT Pune)

INDIRECT TAXES UPDATES

GST

GST Compliance Calendar – Returns to be filed in the M/O August , 2021

GST Return Form Name Filing Period Due Dates in August 2021
GSTR-1 (Outward return) Monthly (July ’2021)      11th  August  2021
GSTR 3B (Tax summary return) July ‘2021 20th August 2021 ( In case Aggregate turnover more  than or equal to Rs 5 crore in the previous Year)

22nd  / 24th  August 2021 (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) July ‘2021 20th August 2021
GSTR 05 (by non-taxable resident persons ) July ‘2021 20th   August 021
GSTR 06 (ISD) July ‘2021 13th  August 2021
GSTR 07 (TDS) July ‘2021 10th   August 2021
GSTR 08 (TCS) July ‘2021 10th  August 2021

Cases Law

Cenvat Credit allowed for tax paid under reverse charge even if the same was not payable –  (Petro Carbon & Chemicals Pvt. Ltd. v. Comm. CGST&CX, 2021-VIL-304-CESTAT-KOL-ST)

Refund of tax paid under mistake of law – Section 54 of CGST Act is not applicable:  [Comsol Energy Private Limited v. State of Gujarat – 2021 VIL 477 GUJ]

ITC reversal not required under Section 17(5)(h) of CGST Act for manufacturing loss:  [ARS Steels & Alloy International Pvt. Ltd. v. The State Tax Officer & Ors. – 2021 VIL 484 MAD]

Proceedings for cancellation of registration cannot be kept hanging even when assessee filed reply late:   [Avon Udhyog v. State of Rajasthan & Ors. – 2021 VIL 511 RAJ]

Track assembly for car seats is classifiable as part of motor vehicle and not part of seat:  [In RE: Daebu Automotive Seat Indian Ltd.– 2021 TIOL 149 AAR GST]

Arranging sales of goods for overseas suppliers is not export of service:  [In RE: Teretex Trading Pvt. Ltd. – 2021 TIOL 154 AAR GST]

Customs

IGST and compensation cess leviable on re- import of goods sent for repairs: Re-import of goods sent abroad for repair are liable for IGST and compensation cess in addition to the Basic Customs Duty, on a value equal to the repair value, insurance and freight. Notifications Nos.45 and 46/2017-Cus. have been amended by Notifications Nos. 36 and 37/2021-Cus., both dated 19 July 2021, in line with the recommendations of the 43rd meeting of the GST Council. Interestingly, the CBIC Circular No. 16/2021-Cus., dated 19 July 2021 states that the amendment is ‘clarificatory’ and is without prejudice to the leviability of IGST on such imports as it stood before the amendment. The CESTAT in its decision in the case of Interglobe Aviation Limited had observed that intention of the legislation was only to impose basic customs duty on such imports and thus integrated tax and compensation cess on such goods is wholly exempt.

IEC modifications – Fees waived for modification till 31 July 2021: The Directorate General of Foreign Trade (‘DGFT’) has extended the period for updating the IEC for the year 2021- 22 till 31 July 2021. No fee shall be charged on the modifications carried out in IEC during the period up to 31 July 2021. DGFT Notification No. 11/2015-20, dated 1 July 2021, issued for this purpose, amends Para 2.05(d) of the Foreign Trade Policy 2015-20. According to the said paragraph, the IEC holder must ensure that the details in IEC are updated every year during April-June.

Covid – Specified inputs for medicines and raw materials for Covid test kits exempted: Import of certain specified active pharmaceutical ingredients/ excipients falling under Tariff Items 2923 2090 and 2906 1310 for Amphotericin B, have been exempted from Basic Customs Duty till 31 August 2021. Also, raw materials falling under any chapter of the Customs Tariff, for manufacturing Covid test kits, have been exempted from BCD till 30 September 2021. The exemption is available subject to the importer following the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017. Notification No. 35/2020-Cus., dated 12 July 2021

Cases Law

EPCG export obligation can be discharged by direct or third-party exports:  [Sri Angallamman Knit Fabrics v. Commissioner – 2021 (7) TMI 685- CESTAT Chennai]

Apple HomePod classifiable under TI 8517 6290 based on ‘essential character’ test:  [In RE: Apple India Pvt. Ltd. – 2021 TIOL 01 AAR CUS]

Excise & Service Tax

Cases Law 

Non-distribution of common credit by ISD not fatal – CESTAT reiterates revenue neutrality: [Maini Precision Products Ltd.v. Commissioner – 2021 VIL 293 CESTAT BLR CE]

Refund of service tax on export of goods – Violation of provisions of another Act by supplier of goods, not fatal:  [V.V. Minerals v. Commissioner – 2021 VIL 262 CESTAT CHE ST]

Refund of service tax on export of goods – Limitation under 41/2012-ST to be counted from first day after end of quarter: [SA Impex v. Commissioner – 2021 TIOL 382 CESTAT DEL]

Refund of unutilised Cenvat credit on exports– Reversal of credit in GSTR-3B is sufficient: [Convance Clinical Development Pvt. Ltd. v. Commissioner – 2021 VIL 284 CESTAT BLR ST]

******

With Warm Regards & Jai Hind

CMA Rakesh Bhalla | 9779010685 | [email protected]

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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