DIRECT TAXES UPDATES
Recent circulars/ notifications/ rules/ clarifications/News
♦ The Lok Sabha on 23rd March 2021 passed the Finance Bill, 2021 to give effect to the financial proposals of the Central Government for the financial year 2021-2022. (The Finance ACT, 2021 NO. 13 OF 2021 dated 28th March, 2021)
♦ CBDT revises Form No. 12BA (statement showing particulars of perquisites , other fringe benefits or amenities and profits in lieu of salary with value thereof) , Part B to Form 16 (Detail of salary paid and any other income and tax deducted) and Annexure II to Form No. 24Q (Notification No. 15/2021-Income Tax [G .S. R. 170(E)] dated 11/03/2021
♦ TDS on Cash Withdrawal above 20 Lakh by an account holder under section 194N of Income Tax Act 1961. TDS @ 2% on aggregate cash withdrawals in excess of Rs. 20 Lakh in a year. TDS @ 5% on aggregate cash withdrawals in excess of Rs. 1 Crores in a year.
(Notification No. SB Order No. 05/2021 Dated 09/03/2021)
♦ The Central Board of Direct Taxes (CBDT) deferred the Tax Audit Clause 30C and 44 till 31st Mar 2022 due to COVID-19. Circular No. 05/2021 , Dated 25th March, 2021
♦ CBDT notifies reporting of Capital Gain, Dividend, Interest Income in Statement of financial transaction (Notification No. 16/2021-Income Tax/G.S.R 175(E) dated 12/03/2021)
Income Tax Compliance calendar – April 2021
|Things to remember|
|7th April 2021||Payment of TDS/TCS deducted /collected by an office of the government in March 2021.|
|30st April 2021||-Payment of TDS/TCS deducted by an assesse other than an office of the government in March 2021.
-Uploading declarations received from recipients / assesses in Form. 15G/15H during the quarter ending March, 2021.
-E-filing of a declaration in Form No. 61 containing particulars of Form No. 60 received during the period October 1, 2020 to March 31, 2021
Important cases decided
♦ ITAT allows depreciation on Goodwill under section 32 of income tax Act 1961. (Geodis Overseas Pvt. Ltd. Vs DCIT (ITAT Delhi))
♦ ITAT directs AO to consider allow ability of additional depreciation claimed during assessment proceedings (Lord Krishna Rice Mills Vs ITO (ITAT Delhi))
♦ Indexed Long-Term Capital Loss from Sale of Government Securities allowable ( Peerless General Finance & Investment Company Limited Vs DCIT (ITAT Kolkata)
♦ Face of foreign cab aggregator in India not liable to deduct tax under Section 194C for payments made to driver partners- . Uber India Systems (P) Limited v. JCIT –  125 taxmann.com 185 (Tri-Mumbai)
♦ Booking of flat and payment of consideration within stipulated time will suffice for exemption under Section 54- (Harminder Kaur v. ITO – TS-74-ITAT-2021 (Del)
INDIRECT TAXES UPDATES
GST Compliance Calendar – Returns to be filed in the M/O April 2021
|GST Return Form Name||Filing Period||Due Dates in April 2021|
|GSTR-1 (Outward return)||Monthly (March 2021)||11th April 2021|
|GSTR 3B (Tax summary return)||March 2021||20th April 2021 ( In case Aggregate turnover more than or equal to Rs 5 crore in the previous Year)
22nd / 24th April 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)||March 2021||20th April 2021|
|GSTR 05 (by non-taxable resident persons)||March 2021||20th April 2021|
|GSTR 06 (ISD)||March 2021||13th April 2021|
|GSTR 07 (TDS)||March 2021||10th April’2021|
|GSTR 08 (TCS)||March 2021||10th April’2021|
E-invoicing mandatory for taxpayers having aggregate turnover exceeding INR 50 crore: A registered person (except specified person) having an aggregate turnover in a financial year exceeding INR 50 crore in any preceding financial year from 2017-18 onwards will be required to comply with Rule 48(4) of the CGST Rules, 2017 with effect from 1 April 2021. Rule 48(4) provides for preparation of invoice after obtaining an Invoice Reference Number by uploading information on the Common GST Electronic Portal. It may be noted that at present taxpayers whose aggregate turnover exceeds INR 100 crore are only liable to comply with said provisions. (Notification No. 5/2021-Central Tax, dated 8 March 2021 will amend Notification No. 13/2020-Central Tax)
Refund on exports/deemed exports clarified: Observing that there is no restriction under Rule 89(1) of the CGST Rules, 2017 on recipient of deemed export supply, claiming refund of tax paid on such deemed export supply, on availment of ITC on the tax paid on such supply, the Central Board of Indirect Taxes and Customs (‘CBIC’) has amended its earlier Circular No. 125/44/2019-GST, dated 18 November 2019 which provided for such restrictions. Further, the 2019 circular has been amended to extend the relaxation provided for filing refund claims where the taxpayer has inadvertently entered the details of export of services or zero-rated supplies to a Special Economic Zone Unit/Developer in table 3.1(a) instead of table 3.1(b) of Form GSTR-3B till 31 March 2021. The relaxation was earlier available only till 30 June 2019. (Circular No. 147/03/2021-GST, dated 12 March 2021)
Refund cannot be withheld without assigning reasons as prescribed in Section 54(11) and Rule 92: (Bushrah Export House v. UOI & Ors – 2021 VIL 134 ALH)
Input tax credit not deniable on account of mismatch in GSTIN when forms yet to be notified: (Pentacle Plant Machineries Pvt. Ltd. v. Office of the GST Council & Ors – 2021 TIOL 604 HC MAD GST)
Transition of accumulated credit of Tax Deducted at Source under VAT: (DMR Constructionsv. Assistant Commissioner 2021 VIL 208 MAD)
Jurisdiction can be Challenged before the Court/Tribunal If not Questioned before- Quantum Coal Energy (P) Ltd. v. CC, 2021-VIL-229-MD-CU, High Court
Supreme Court Allows C Forms on Petrol, Diesel etc. Post GST- Please note that the Finance Bill 2021 has proposed an amendment to Central Sales Tax Act, 1956 to disallow the issuance of C Forms. Ramco Cements Ltd., 2021-VIL-42-SC, the Larger Bench of Hon’ble Supreme Court
DRI investigated cases – Jurisdictional Commission rates to issue SCNs under Section 28: The CBIC has clarified that all the fresh SCNs under Section 28 of the Customs Act, 1962 in respect of cases presently being investigated by DRI are required to be issued by jurisdictional Commissionerates fromwhere imports have taken place. Instruction No. 4/2021- Cus, dated 17 March 2021 clarifying so, also states that the implications of the Supreme Court judgement in the case of Canon India are under active examination in the Board. It may be noted that the Apex Court in the said judgement has held that DRI officer is not the proper officer to issue SCN under Section 28(4).
Import authorisations for restricted goods – Applications to be filed online: The DGFT has introduced a new online module for filing of electronic, paperless applications for import authorisations with effect from 22 March 2021. Accordingly, all applications for import authorisations will need to be submitted online and authorisations will be issued by DGFT Headquarters. Applications for revalidation or amendment of authorisations issued after said cut off date will also be required to be submitted electronically to the DGFT HQ. Trade Notice No. 47/2020-21, dated 23 March 2021, issued for the purpose, also clarifies that applications for revalidation or amendment of import authorisations issued prior to 22 March may be submitted to the concerned RA who may amend such authorisation manually as per the earlier procedure.
SEIS – DGFT Policy Circulars restricting benefit only to net foreign exchange are ultra vires FTP 2015-20: (Atlantic Shipping Pvt. Ltd. v. Union of India – 2021 TIOL 582 HC MUM CUS)
Excise & Service Tax
Relays used only for railway signalling equipment classifiable under Heading 8608 – Supreme Court relies on ‘sole or principal user test’: (Westinghouse Saxby Farmer Ltd. v. Commissioner – Judgement dated 8 March 2021 in Civil Appeal No. 37 of 2009, Supreme Court)
Sabka Vishwas (LDR) Scheme – Initiation of enquiry after 30 June 2019 not fatal for filing declaration under voluntary disclosure category: (New India Civil Erectors Pvt. Ltd. v. Union of India – 2021 TIOL 618 HC MUM )
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.