DIRECT TAXES UPDATES
Recent circulars/ notifications/ rules/ clarifications/News
♦ CBDT notified the procedure for notification of Pension funds (PF) for claiming exemption under section 10(23FE) for income from Investment in Specified Infrastructure business (Notification no. 67/2020 dated 17.08.2020)
♦ CBDT notifies 34 authorities for Faceless Assessment (Notification no. 64/2020 dated 13.08.2020)
♦ CBDT notifies the Faceless Assessment Procedure (Notification no. 61/2020 & 60/2020 dated 13.08.2020)
♦ CBDT notifies prescribed authority under section 133C related to Power to call for information by Prescribed Income Tax Authority (Notification no. 60/2020 dated 13.08.2020)
♦ CBDT inserted a new provision in section 269SU instructing Banks to refund charges on account of Transactions made through Debit Card, BHIM UPI & BHIM UPI QR CODE w.e.f 01.01.2020 (Circular no. 16/2020 dated 30.08.2020)
Income Tax Compliance calendar – September 2020
| Things to remember | |
| Due Date | Particulars |
| 7th September 2020 | Due date for deposit of Tax deducted/collected for the month of August, 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 |
| 14 September 2020 |
|
| 15 September 2020 |
|
| 30 September 2020 |
|
Important cases decided
- No penalty u/s 271(c) is not leviable on any debatable issue (Piramal Healthcare Ltd. Vs DCIT (ITAT Mumbai)
- Ex parte order is not justified if notice is Served on wrong address (Vibgyor Tech Solutions (P) Ltd. Vs ITO)
- Assessment initiated on Non- existing entity considered as Void ab Initio (Atos India (P) Ltd Vs. DCIT (ITAT Mumbai)
- Marketing expense of Issuance of Handsets on Free of cost is allowed as Business Expense (Nokia India (P) Ltd Vs. ACIT (ITAT Delhi)
INDIRECT TAXES UPDATES
GST
GST Compliance Calendar – Returns to be filed in the M/O September 2020
| GST Return Form Name | Filing Period | Due Dates in September 2020 |
| GSTR-1 (Outward return) | Monthly (August 2020) | 11th September 2020 |
| GSTR 3B (Tax summary return) | August ‘2020 | 20th September 2020 ( In case Aggregate turnover more than or equal to Rs 5 crore in the previous Year)
1st /3rd October 2020 (in case Aggregate turnover less than or equal to Rs 5 crore in the previous financial year |
| GSTR 5A (online information & data access) | August ‘2020 | 20th September 2020 |
| GSTR 05 (by non-taxable resident persons ) | August ‘2020 | 20th September 2020 |
| GSTR 06 (ISD) | August ‘2020 | 13th September 2020 |
| GSTR 07 (TDS) | August ‘2020 | 10th September 2020 |
| GSTR 08 (TCS) | August ‘2020 | 10th September 2020 |
| Annual Return – Form 9 & 9C | FY 2018-19 | 30th September 2020 |
Interest on delayed payment of GST to be paid on net tax liability – Amendment in CGST Section 50 comes into force from 01-09-2020: The Central Government has appointed 01-09- 2020 as the date on which the provisions of Section 100 of the Finance (No. 2) Act, 2019 shall come into force. Section 100 inserts a proviso in Section 50 of the Central Goods and Services Tax Act, 2017, prescribing that interest in case of delayed furnishing of Section 39 return (e.g. GSTR-3B), shall be levied on that portion of tax that is paid by debiting the electronic cash ledger, i.e., after excluding input tax credit (ITC). The new proviso however excludes situation when such return is furnished after commencement of any proceedings under Section 73 or Section 74. It may be noted that the GST Council in its 39th meeting held on 14- 03-2020 has recommended that interest for delay in payment of GST is to be charged on the net cash tax liability with effect from 01-07-2017, and that the law should be amended retrospectively. (Notification No. 63/2020-Central Tax, dated 25-08-2020)
Registration – Amendments in Aadhar based authentication process: The Ministry of Finance has amended the Central Goods and Services Tax Rules, 2017 (“CGST Rules, 2017”) to revise the procedure for Aadhar based authentication process for registration under GST. According to the newly substituted sub-rule (4A) of Rule 8, if any person [other than those notified under Section 25(6D)] opts to undergo authentication of Aadhar number, the date of submission of application will be the date of authentication of the Aadhar number or 15 days from submission of application in Part B of Form GST REG-01, whichever is earlier. In case a person [other than those notified under Section 25(6D)] fails to undergo such authentication or does not opt for it, notice in Form GST REG-03 may be issued within 21 days from the date of submission of the application. Further, amendment has been made in Rule 9(4) to substitute the word “shall” by the word “may” in respect of rejection of registration application. Rule 9(5) has also been amended to revise few timelines in respect of deemed approval of application for grant of registration. (Notification No. 62/2020-Central Tax, dated 20-08-2020)
E-invoice – Increase in threshold limit and exclusion of SEZ units will be effective from 01-10-2020: Registered persons having aggregate turnover in a Financial Year exceeding INR 500 crore are only required to comply with Rule 48(4) of the Central Goods and Services Tax Rules, 2017, i.e. e-invoice provisions. The threshold limit was INR 100 crore earlier. Further, Special Economic Zone units have been excluded from complying with e- invoice provisions in addition to persons referred to in Rule 54(2), (3), (4) and (4A). (Notification No. 61/2020-Central Tax, dated 30-07-2020)
Cases Law
No detention when e-way bill did not mention tax amount: (M.S. Steel and Pipes v. Asst. State Tax Officer – Judgement dated 12- 08-2020 in W.P(C). No. 16356 of 2020, Kerala )
No detention when invoices not bearing continuous serial number: (Devices Distributors v. Assistant State Tax Officer – Judgement dated 23-07-2020 in W.P(C). No. 14969 of 2020, Kerala High Court)
Best judgement assessment can be done immediately after failure to file return despite notice: (Amani Machine Centre v. State Tax Officer – Judgement dated 30-07-2020 in WP(C). No. 2757 of 2020, Kerala High Court)
Anti-profiteering – No penalty imposable for violations before 01-01-2020: (Varun Goel v. Eldeco Infrastructure and Properties Ltd. – 2020 TIOL 43 NAA GST)
Supply of food to hospitals on outsource basis is liable to GST – Exemption available only to clinical establishments: AAR Telangana has held that GST is payable on the food supplied to hospitals on outsourcing basis. It held that exemption under Notification No. 12/2017-Central tax (Rate) was available only when the clinical establishment itself supplies food as part of health care services to in-patients. It noted that the proposition was supported by CBIC Circular No. 32/06/2018-GST, dated 12-02-2018. As regards the rate of tax, CGST and SGST @ 9% were held applicable as per Sl. No. 7(v) of Notification No. 11/2017-Central Tax (Rate) during 01-07-2017 to 26-07-2018. Further, from 27-07-2018 onwards CGST and SGST @ 2.5% were held applicable, with the condition of non-availability of input tax credit. The applicant supplied food and beverages at the canteen of various hospitals and were not getting paid by the consumers of the food and beverages, but by the hospitals on monthly basis based on the coupons collected. (Navneeth Kumar Talla – 2020 VIL 228 AAR)
Customs
Faceless assessment – 2nd phase launched with inclusion of Delhi and Mumbai: CBIC has from 03-08-2020 begun the 2nd phase of all India roll-out of faceless assessment. While Delhi and Mumbai Customs Zones have been included, the scope of faceless assessment at Chennai and Bengaluru Customs Zones have been extended. Now, while Bengaluru, Chennai and Delhi Customs Zones will cover faceless assessments for imports under Chapters 50 to 71, 84, 85, and 89 to 92, Mumbai will cover import of goods falling under Chapter 29 of the Customs Tariff Act, 1975
Gold, silver, other precious and semi precious metals and articles – Regulations notified for manufacture in special warehouse: The Ministry of Finance has notified the Manufacture and Other Operations in Special Warehouse Regulations, 2020 which have come into force from 17-08-2020. These regulations allow manufacturing and other operations in a special warehouse licensed under Section 58A of the Customs Act, 1962 with regard to warehoused goods specified in clause (1) of Notification No. 66/2016-Cus. (N.T.), i.e. gold silver, other precious metals and semi-precious metals and articles thereof. Circular No. 36/2020-Cus., dated 17-08-2020 while explaining the Regulations,specifies procedures and documentation for such warehouse in a comprehensive manner including application for seeking permission under Section 65, provision of execution of the bond and security by the licensee, receipt, storage and removal of goods, maintenance of accounts, conduct of audit, etc. Consequential amendments have also been made in Manufacture and Other Operations in Warehouse (no. 2) Regulations, 2019 and Special Warehouse (Custody and Handling of Goods) Regulations, 2016.
Import of pets or live animals – Procedure revised: In line with the Ministry of Fisheries, Animal Husbandry & Dairying, Department of Animal Husbandry & Dairying Office Memorandum dated 15-07-2020 prescribing procedure for import of live animals in general and also for import of pets (only dogs and cats) as baggage/personal imports by passengers, the CBIC has also revised the procedure to be followed for clearance of pets/live animals including dogs and cats. As per Circular No. 35/2020-Cus., dated 10-08-2020, passengers have to obtain advance NOC from Animal Quarantine and Certification Service as the airline will not lift the live animals until advance NOC from AQCS is obtained by the passenger
Colour television sets – Import Policy revised: Import Policy of colour television sets falling under ITC (HS) Code 8528 7211 to 8528 7219 has been amended to ‘restricted’ from ‘free’. Further, as per DGFT Notification No. 22/2015-20, dated 30-07-2020, amending Chapter 85 of ITC (HS), actual user condition would not be applicable for importers applying for an authorisation to import said goods.
Cases Law
Child parts used in manufacture of parts of motor vehicle seats are classifiable under Heading 9401: (Shiroki Auto Components India Pvt. Ltd. v. Commissioner – Final Order No. A/11132/2020, dated 29-07-2020, CESTAT Ahmedabad)
Digital cameras for capturing still images and videos classifiable under Tariff Item 8525 80 20: (Creative Peripherals & Distribution Ltd v. Commissioner – 2020 TIOL 1146 CESTAT MUM)
Valuation – Advertisement and sales promotion expenses incurred by importer on own account, not includible: (Indo Rubber and Plastic Works v. Commissioner – 2020 (373) ELT 250 (Tri. – Del.)
Excise & Service Tax
Foreign bank’s charges for transfer of money to settle export payments, not liable to service tax in the hands of the bank of Indian exporter: (State Bank of Bikaner & Jaipur v. Commissioner – Final Order No. 50737/2020, dated 05-08-2020, CESTAT Delhi)
Cenvat credit when portion of output service not liable to service tax: (Metlife India Insurance Company Limited v Commissioner – Final Order No. 20467/2020, dated 18-08-2020, CESTAT Bengaluru)
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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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I T COURSE FEE AND GST COURSE FEE AFTER DISCOUNT KINDLY INFORM TO MY E MAIL