DIRECT TAXES UPDATES
Recent circulars/ notifications/ rules/ clarifications/News
- CBDT issues notification extending the due dates for Income Tax Returns & Tax Audit Reports, as follows (Notification no. 88/2020 dated 29.10.2020)
-Without tax audit- 31.12.2020
-Transfer pricing and tax audit- 31.01.2021
-Income Tax return FY 2018-19 -30.11.2020
- CBDT notifies Equalisation Levy (Amendment) rules, 2020 & related forms (Notification no. 87/2020 dated 28.10.2020)
- notifies the extension of Cut-off/ payment due dates under Vivad se Vishwas Scheme (Notification no. 85/2020 dated 27.10.2020)
-31st December 2020- Last date for filing the declaration
-31st March 2021- Last date for paying the amount payable as per the third column of the table to section 3
-1st April 2021- Last date for paying the amount payable as per the fourth column of the table to section 3
- CBDT notifies the tolerance range as per section 92C i.e.w.r.t. the variation in the transaction value and arm length price (Notification no. 83/2020 dated 19.10.2020)-Whole trade- 1% & on other cases 3%
- CBDT amends form 3CD, Form 3CEB, ITR6 and other related forms (Notification no. 82/2020 dated 01.10.2020)
Income Tax Compliance calendar – November 2020
| Things to remember | |
| Due Date | Particulars |
| 7th November | – Due date for deposit of Tax deducted/collected for the month of October, 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 |
| 14th November | Due date for issue of TDS Certificate for tax deducted under section 194-IA in the month of September, 2020
– Due date for issue of TDS Certificate for tax deducted under Section 194-IB in the month of September, 2020 – Due date for issue of TDS Certificate for tax deducted under Section 194M in the month of September, 2020 |
| 15th November | Quarterly TDS certificate (in respect of tax deducted for payments other than salary) for the quarter ending September 30, 2020 – Due date for furnishing of Form 24G by an office of the Government where TDS/TCS for the month of October, 2020 has been paid without the production of a challan – 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 October, 2020 |
| 30th November | -Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194-IA in the month of October, 2020
-Due date for furnishing of challan-cum-statement in respect of tax deducted under Section 194-IB in the month of October, 2020 -Due date for furnishing of challan-cum-statement in respect of tax deducted under Section 194M in the month of October, 2020 -Report in Form No. 3CEAA by a constituent entity of an international group for the accounting year 2019-20 -Statement of income distribution by Venture Capital Company or venture capital fund in respect of income distributed during previous Year 2019-20 (Form No. 64) -Statement to be furnished in Form No. 64D by Alternative Investment Fund (AIF) to Principal CIT or CIT in respect of income distributed (during previous year 2019-20) to units holders -Due date to exercise option of safe harbour rules for international transaction by furnishing Form 3CEFA -Due date to exercise option of safe harbour rules for specified domestic transaction by furnishing Form 3CEFB -Due date for filing of statement of income distributed by business trust to unit holders during the financial year 2019-20. This statement is required to be filed electronically to Principal CIT or CIT in form No. 64A -Application in Form 9A for exercising the option available under Explanation to section 11(1) to apply income of previous year in the next year or in future (if the assessee is required to submit return of income on November 30, 2020) -Statement in Form no. 10 to be furnished to accumulate income for future application under section 10(21) or 11(1) (if the assessee is required to submit return of income on November 30, 2020) -Submit copy of audit of accounts to the Secretary, Department of Scientific and Industrial Research in case company is eligible for weighted deduction under section 35(2AB) [if company has any international/specified domestic transaction] -Statement by scientific research association, university, college or other association or Indian scientific research company as required by rules 5D, 5E and 5F (if due date of submission of return of income is November 30, 2020) -Due date for claiming foreign tax credit, upload statement of foreign income offered for tax for the previous year 2019-20 and of foreign tax deducted or paid on such income in Form no. 67. (if due date of submission of return of income is November 30, 2020). |
Important cases decided
- Section 153C notice without recording satisfaction note is unjustified (ACIT vs Rangoli Buildtech (P) Ltd)
- Section 14A disallowance not applicable to Insurance Companies (DCIT Vs Edelweiss Tokio Life Insurance Ltd. (ITAT Mumbai))
- ITAT allows deduction u/s 80HH, 80I & 80IA on processed Natural Gas Supply (Gail(India) Ltd vs DCIT)
- Section 263 revision not sustainable for mere inadequacy of Enquiry/ Insufficiency of Material on record (CIT vs Cyber Park Development & Construction Ltd)
INDIRECT TAXES UPDATES
GST
GST Compliance Calendar – Returns to be filed in the M/O November 2020
| GST Return Form Name | Filing Period | Due Dates in November 2020 |
| GSTR-1 (Outward return) | Monthly (October 2020) | 11th November 2020 |
| GSTR 3B (Tax summary return) | October 2020 | 20th November 2020 (In case Aggregate turnover more than or equal to Rs 5 crore in the previous Year)
22nd/24th November 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) | October 2020 | 20th November 2020 |
| GSTR 05 (by non-taxable resident persons ) | October 2020 | 20th November 2020 |
| GSTR 06 (ISD) | October 2020 | 13th November 2020 |
| GSTR 07 (TDS) | October 2020 | 10th November 2020 |
| GSTR 08 (TCS) | October 2020 | 10th November 2020 |
Goods & Services Tax (GST) assesses will have some relief as the Finance Ministry on Saturday had again extended the date for filing annual return and reconciliation statement for financial year 2018-19 to December 31. Earlier, it was October 31– The Government has been receiving a number of representations regarding need to extend due date for filing Annual Return (FORM GSTR-9) and Reconciliation Statement (FORM GSTR-9C) for 2018-19 on the grounds that on account of the COVID-19 pandemic related lockdown and restrictions, normal operation of businesses has still not been possible in several parts of the country. It has been requested that the due dates for the same be extended beyond 31st October 2020 to enable the businesses and auditors to comply in this regard,” statement in Press release dated 24th October 2020)
GSTR-1 and GSTR-3B – Due dates prescribed for period October 2020 to March 2021: CBIC has prescribed the due dates for submission of Forms GSTR-1 and GSTR-3B for the period from October 2020 till March 2021. Accordingly,
- Registered persons having aggregate turnover of more than INR 5 crore will be required to furnish monthly GSTR-1 by 11th of the succeeding month, those with turnover up to INR 1.5 crore will have to furnish the said return quarterly by 13th of the month succeeding the quarter.
- GSTR-3B must be furnished by 20th of succeeding month by taxpayers having turnover more than INR 5 Taxpayers having turnover up to INR 5 crore will have to furnish GSTR-3B by 22nd of next month if they are in western, central and southern India. Those located in northern and eastern India can furnish the said return by 24th of next month. (Notification No. 75 & 76/2020- Central Tax, dated 15-10-2020)
Cumulative reconciliation of ITC under Rule 36(4) clarified: CBIC has issued clarifications in respect of implementation of provisions of Rule 36(4) of the Central Goods and Services Tax Rules, 2017 (‘CGST Rules, 2017’) for the months of February to August 2020. According to Circular No. 142/12/2020-GST, dated 09-10-2020, the cumulative amount of Input Tax Credit (‘ITC’) availed for the said months in Form GSTR-3B should not exceed 110% of the cumulative value of the eligible credit available in respect of invoices or debit notes, the details of which have been uploaded by the suppliers, till the due date of furnishing of the statements in Form GSTR-1 for the month of September, 2020. The Circular also notes that availability of 110% of the cumulative value of the eligible credit available does not mean that total credit can exceed the tax amount as reflected in the total invoices Further, the Circular explains by way of illustration the manner of cumulative reconciliation for the said months in terms of the provisions. (Circular No. 142/12/2020-GST, dated 09-10-2020)
Number of digits of HSN Codes required in invoices increased: As recommended by the GST Council in its 42nd meeting, the CBIC has increased number of digits of HSN Code that would be required to be mentioned in invoices by taxpayers. With effect from 01-04-2021, the taxpayers with aggregate turnover more than INR 5 crore will be required to mention 6 digits of the HSN Code in the tax invoice. It may be noted that those with up to INR 5 crore turnover while required to mention 4 digits of the Code for supplies to registered person, will be exempted from such requirement when supplying to unregistered persons. (Notification No. 78/2020- Central Tax, dated 15-10-2020)
Cases Law
Transition of Cenvat credit of Education Cesses and Krishi Kalyan Cess in GST regime not available: (Assistant Commissioner v. Sutherland Global Services Private Limited – Judgement dated 16-10-2020 in Writ Appeal No. 53 of 2020, Madras High Court)
Payment of tax in installments during COVID- 19 situation: (Malayalam Motors Pvt. Ltd. v. The Assistant State Tax officer – 2020 VIL 496 Ker)
Transportation of goods to different place of business in same State other than the address mentioned in invoice and e-way bill does not automatically attract GST and penalty: (Same Deutzfahir India P. Ltd. v. State of Telangana – 2020 VIL 467 TEL)
Reclaiming reusable sand from waste sand is manufacture and not job-work: (Kolhapur Foundry and Engineering Cluster – 2020 TIOL 263 AAR GST )
Sale of Transferable Development Rights liable to GST under Real Estate services: (Vilas Chandanmal Gandhi – 2020 VIL 55 AAAR)
Customs
Advance authorisations – Date of submission of documents for EO fulfilment extended: The Directorate General of Foreign Trade (‘DGFT’) has extended the last date for submission of documents for Export Obligation (‘EO’) fulfilment to 31-12-2020 in cases where the EO fulfilment period is expiring or has expired between 01-02-2020 and 31-10-2020. A new Para 4.44(g) has been inserted in Handbook of Procedures 2015-20, for this purpose, by DGFT Public Notice No. 26/2015-20, dated 16-10-2020.
Deemed exports – Duty drawback on steel supplied through distributors/dealers: Steel manufacturers can now claim duty drawback in respect of supplies against Advance Authorisation, on steel supplied through service centres/distributors/dealers/stock yards. Sub-para 7.07(iv) has been inserted in Chapter 7 of the Foreign Trade Policy 2015-20 by Notification No. 35/2015-20, dated 01-10-2020.
Steel Import Monitoring System – Compulsory registration of all goods falling under Chapters 72, 73 and 86 of ITC (HS): Import under all HS Codes of Chapters 72, 73 and 86 of ITC (HS), 2017 shall now require compulsory registration under Steel Import Monitoring System (‘SIMS’). DGFT Notification No. 33/2015-20, dated 28-09-2020 amends Policy Condition in Chapters 72, 73 and 86 of the Schedule-I to the ITC (HS), for this purpose. Further, according to DGFT Public Notice No. 19/2015-20, also dated 28-09-2020, implementation date in respect of the additional Codes now covered under SIMS by this notification, is 16-10-2020. It may be noted that vide DGFT Notification No. 17/2015-20, dated 05-09-2019 the import policy of some 284 specified Codes under said Chapters of the ITC (HS) was already changed from ‘free’ to ‘free subject to compulsory registration under SIMS’. The latest notification now extends the SIMS requirement to import of all other goods under these Chapters.
Rebate of State Levies on export of garments and made-ups Scheme notified under scrip mechanism: The DGFT has notified the procedure for application and issuance of scrips under the Scheme for Rebate of State Levies (‘RoSL’). The RoSL scrips would be available for export of garments and made-ups exported by shipping bills prior to 07-03-2019 which have been transmitted from the ICEGATE server to DGFT server and for which the exporters have not received any RoSL amount. DGFT Public Notice No. 25/2015-20, dated 13-10-2020 inserted Para 4.97 and 4.98 in the Handbook of Procedures for this purpose. Consequently, the CBIC has also issued Notifications Nos. 38/2020-Cus. and 07/2020-C.E., both dated 21-10-2020, for conditional exemption from whole of Customs duty including additional duty and Central Excise duty, respectively, when such scrips are used.
Cases Law
Prohibited goods can be provisionally released under Customs Section 110A: (Sidharth Vijay Shah Vs Union of India and others (Bombay High Court))
Jt. DGFT has no power to review his own orders under FTDR Section 16 – Limitation of 2 years for review notice to start from date of order to be reviewed: (Simplex Infrastructures Ltd. v. Union of India and Ors. – 2020 VIL 446 MAD CU)
Valuation – Procedure for rejection of transaction value: (Champion Photostat Industrial Corporation v. Commissioner – 2020 (9) TMI 661)
Excise & Service Tax
Sabka Vishwas Scheme – Amount in arrears – Deposits to be adjusted after determination of amount payable: (Solamalai Automobiles Pvt. Ltd. v. The Designated Committee – WP (MD) No. 8227 of 2020, decided on 14-09-2020, Madras High Court)
BAS – Trade discount not liable to service tax even if named as ‘commission’: (Laxmi Exports v. Commissioner – Final Order No. A/11247-11251/2020, dated 22-09-2020, CESTAT Ahmedabad)
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.
Author Bio
The correct heading should be ‘NOVEMBER’ instead of October; please correct.