The second wave of COVID-19 pandemic, has transformed the socio-economic construct of the world to a considerable extent and we are gradually inching towards a new normal. What is the economic impact? How long will it stay? What is the recovery trajectory? We hope that this phase will also pass on and we overcome with this pandemic soon. American novelist Anne Lamott once optimistically wrote “Hope begins in the dark, the stubborn hope that if you just show up and try to do the right thing, the dawn will come. You wait and watch and work: You don’t give up.”

The Central Government and the State Governments continuously putting efforts to facilitate the citizens of the country by one means or other.

Generally, Section 269ST of the Income Tax Act lays down that no person shall receive an amount of Rs. 2Lakhs or more in aggregate from a person in a day; or in respect of a single transaction; or in respect of transactions relating to one event or occasion from a person, otherwise than by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed. However, the Government while observing the need for an hour relaxed the provisions of section 269ST of the Income Tax Act.

Granting relief in view of severe Covid pandemic, provisions of section 269ST of Income-tax Act, 1961 relaxed by the Central Govt. The government Allows Hospitals, Dispensaries, Nursing Homes, Covid Care Centres or similar other medical facilities providing Covid treatment to patients to receive cash payments of Rs. 2 lakh or more. Relaxation granted for the period 01.04.2021 to 31.05.2021, after obtaining PAN or AADHAAR of patient & the payer. Notification No. 56/2021 in S.O. 1803(E) dt 07.05.2021 issued.

Granting further relief and to facilitate Ease of Doing Business for MSMEs and in view of the challenges faced by taxpayers in meeting the statutory and regulatory compliances under Goods & Services Tax (GST) law due to the outbreak of the second wave of COVID-19 pandemic, the Government has issued notifications, all dated 1st May, 2021, providing various relief measures for taxpayers.

Extension in filing of GST returns and relaxation in delay payment for period of March & April 20 is as under:

  • Taxpayers having an aggregate turnover of more than rupees 5 crores in the preceding financial year (for the month of March & April 2021)

Interest rate to be levied – 9 per cent for the first 15 days from the due date and 18 per cent thereafter vide N.N 08/2021- C.T. dt. 01/05/2021

Late fee not applicable for first 15 days for non-filing of GSTR 3B N.N 09/2021- C.T. dt. 01/05/2021

  • Taxpayers having an aggregate turnover less than rupees 5 crores in the preceding financial year (for the month of March & April 2021 & quarter ending March ’21)

Interest rate to be levied – Nil for the first 15 days from the due date, 9 per cent for the next 15 days, and 18 per cent thereafter vide N.N 08/2021- C.T. dt. 01/05/2021.

Late fee not applicable for first 30 days from the due date of furnishing return, for non-filing of GSTR 3B N.N 09/2021- C.T. dt. 01/05/2021

Further to facilitate the medical infrastructure to the citizens of India the government bring IGST rate on Import of Oxygen Concentrators for personal use at par with commercial imports of the same. IGST on Import of Oxygen Concentrators for personal use has been reduced from 28 per cent to 12 per cent.

Further, on representations received from various charitable organisations, corporate entities, and other associations outside India seeking exemption from IGST on the import of COVID-19 relief material donated/received free of cost from outside India for free distribution. On 3rd May 2021, the CBIC waived Integrated GST (IGST) till June 30 vide Ad Hoc Exemption Order 4/2021-Customs on Imports of specified Covid-19 Relief Material received free of cost for free distribution for covid relief. On Such goods Custom Duty has already been exempted vide Custom Duty Notification Nos. 27/2021, 28/2021 And 29/2021. This is a move that will speed up customs clearances for such imports, including those by charitable organisations.

TAX CALENDAR

Due date Extended Due date Form/ Return/ Challan  

Reporting Period

Description
10th May 2021 31st May 2021 GSTR-8 April 2021 Due Date for TCS Return who are E-Commerce Agencies
10th May 2021 31st May 2021 GSTR-7 April 2021 Due Date for filing GST-TDS Return
13th May 2021 31st May 2021 GSTR-6 April 2021 Due Date for furnishing summary of inward and outward supplies for ISD Taxpayers
15th May 2021 Form 27EQ Jan-March 2021 Due Date for furnishing TCS Return under Income Tax
15th May 2021 NA April 2021 Due Date for ESI & PF Payment

INCOME TAX NOTIFICATIONS

CBDT notifies Income Tax rule 44DA & FORM No. 34BB

Our Comments: The Ministry of Finance, Government of India, Central Board of Direct Taxes vide Notification No. 40/2021 -Income Tax dated 30.04.2021notified that Income Tax rule 44DA and FORM No. 34BB for Exercise of option to withdraw pending application under sub-section (1) of section 245M of the Income-tax Act, 1961.

Rule 11UD Thresholds for the purposes of significant economic presence

Our Comments: The Ministry of Finance, Government of India, Central Board of Direct Taxes vide Notification No. 41/2021-Income Tax dated 03.05.2021 has notified new Income Tax Rule 11UD. Thresholds for the purposes of significant economic presence is also notified.

Amendment in income tax rules, 1962

Our Comments: The Ministry of Finance, Government of India, Central Board of Direct Taxes vide Notification No. 42/2021-Income Tax dated 04.05.2021 has has issued the Income-tax (14th Amendment) Rules, 2021 to further amended the Income-tax Rules, 1962.In Rule 144AAB under Income-tax Rules, 1962 which specifies Class or classes of person to whom provisions of section 139A shall not apply.

Central Government has specified 5 pension funds for exemption

Our Comments: The Ministry of Finance, Government of India, Central Board of Direct Taxes vide Notification No. 43/2021 to 46/2021 dated 04.05.2021 has specified five Singapore based sovereign wealth funds, namely, Bricklayers Investment Pte. Ltd., Anahera Investment Pte. Ltd., Dagenham Investment Pte. Ltd., Stretford Investment Pte. Ltd., and Chiswick Investment Pte. Ltd., for Sec. 10(23FE) exemption. Funds is eligible to claim exemption in respect of investment made in India on or before 31-03-2024 subject to prescribed conditions.

CBDT notifies rules for LTC Cash Voucher Scheme

Our Comments: The Ministry of Finance, Government of India, Central Board of Direct Taxes vide Notification No. 50/2021 dated 05.05.2021 has notified rules for LTC (Leave Travel Concession) Cash Voucher Scheme [Section 10(5)] vide which LTC Exemption of Rs. 36000 per family member For FY 2020-21 available to Employees of Both Private & Government Sector.The CBDT has amended Rule 2B to provide an exemption in respect of cash allowance received in lieu of leave travel concession (LTC). Due to the COVID-19 pandemic and the nationwide lockdown, employees who had not been able to avail of LTC in the block of 2018-21 were allowed to claim exemption in respect of cash allowance subject to fulfilment of certain conditions.

GST NOTIFICATIONS

RULE 36(4) is not applicable for APRIL 2021 and filing iff date has also been extended

Our Comments: The Ministry of Finance, Government of India, Central Board of Indirect Taxes and Customs vide Notification No. 13/2021-Central Tax dated 01.05.2021 has notified that Rule 36(4) shall not applicable for April 2021 Return. Since the relaxation is only for 1 month, it is advised to not go for this relaxation if possible. Due Date of filing IFF has been extended from 13th May 2021 to 28th May 2021. This is a welcome relaxation.

LATE FEE AND INTEREST WAIVER for late filing of gstr-3B

Our Comments: The Ministry of Finance, Government of India, Central Board of Indirect Taxes and Customs vide Notification No. 08/2021-CGST and 09/2021 dated 01.05.2021 has notified the following-

Description Waiver Up Interest Rate & Late Fee Notification No. Reporting Period
Taxpayers having aggregate turnover of More Than Rs. 5 Crores in the preceding FY

TC Comments: The relaxation would not be too beneficial. However, incase of any mistake in reporting in 3B, the notification will come in handy

9% Interest for the first 15 days from the due date and 18% thereafter

No late fees shall be charged upto 15 days from the due date of furnishing return

Notification No. 08/2021 CGST for INTEREST WAIVER

Notification No. 09/2021 CGST for LATE FEE WAIVER

March and April 2021
Taxpayers having an aggregate turnover of upto Rs. 5 Crores in the preceding financial year who are liable to furnish the return NIL for the first 15 days from the due date, 9% interest for the next 15 days and 18% thereafter

No late fees shall be charged upto 30 days from the due date of furnishing return

Notification No. 08/2021 CGST for INTEREST WAIVER

Notification No. 09/2021 CGST for LATE FEE WAIVER

March and April 2021

FEMA CIRCULAR

Exim Bank’s Government of India supported Line of Credit (LoC) of USD 7.35 million to the Government of the Republic of Nicaragua

Our Comments: The Ministry of Finance, Government of India, Reserve Bank of India vide Circular No. 03/RBI/2021-22/34 dated 06.05.2021 has provided that Export-Import Bank of India (Exim Bank) has entered into an agreement dated February 18, 2021 with the Government of the Republic of Nicaragua, for making available to the latter, Government of India supported Line of Credit (LoC) of USD 7.35 million (USD Seven million and three hundred fifty thousand only) for the purpose of replacement and equipment of the High Technology Centre of Hospital Antonio Lenin Fonseca at Managua in the Republic of Nicaragua. Under the arrangement, financing of export of eligible goods and services from India, as defined under the agreement, would be allowed subject to their being eligible for export under the Foreign Trade Policy of the Government of India and whose purchase may be agreed to be financed by the Exim Bank under this agreement. Out of the total credit by Exim Bank under the agreement, goods, works and services of the value of at least 75 per cent of the contract price shall be supplied by the seller from India, and the remaining 25 per cent of goods and services may be procured by the seller for the purpose of the eligible contract from outside India.

The Agreement under the LoC is effective from April 16, 2021. Under the LoC, the terminal utilization period is 60 months after the scheduled completion date of the project.

Shipments under the LoC shall be declared in Export Declaration Form as per instructions issued by the Reserve Bank from time to time.

No agency commission is payable for export under the above LoC. However, if required, the exporter may use his own resources or utilize balances in his Exchange Earners’ Foreign Currency Account for payment of commission in free foreign exchange. Authorised Dealer Category- I (AD Category- I) banks may allow such remittance after realization of full eligible value of export subject to compliance with the extant instructions for payment of agency commission.

CUSTOM NOTIFICATIONS

REDUCTION OF IGST ON OXYGEN CONCENTRATORS when imported for Personal use

OUR COMMENTS: The Ministry of Finance, Government of India, Central Board of Indirect Taxes and Customs vide Notification No. 30/2021-Customs dated 01.05.2021 has notified that seeks to reduce IGST on Oxygen Concentrators when imported for personal use.

EXEMPTION Of IGST on imports of specified COVID-19 relief material donated from abroad

OUR COMMENTS: The Ministry of Finance, Government of India, Central Board of Indirect Taxes and Customs vide Notification No. Ad hoc Exemption Order No. 4/2021-Customs dated 03.05.2021 hasnotified that seeks to exempt IGST on imports of specified COVID-19 relief material donated from abroad, up to 30th June, 2021.

EXCHANGE RATE NOTIFICATION of foreign currency

OUR COMMENTS: The Ministry of Finance, Government of India, Central Board of Indirect Taxes and Customs vide Notification No. 46/2021-Customs (N.T.) dated 06.05.2021 has notified exchange rate of each of the foreign currencies relating to imported and export goods.

CHANDRASEGARAM VIJAYASUNDARAM, RAVEENDHIRAN SHANTHADEVI, CHANDRASEGARAM RAJALUXMI, VIJAYASUNDARAM MAHALAKSHMI, SOMASUNDARAM CHANDRASEGARAM VERSUS PRINCIPAL CIT, JCIT, ACIT, PRINCIPAL COMMISSIONER (REVISION APPLICATION)-2021 [MADRAS high court]

Brief: Refund of the redemption fine and penalty remitted – Department application for revision is pending but no stay / interim protection sought against the order of Commissioner (appeals)

OUR COMMENTS: In the Present case, Madras High Court held that admittedly, no interim protection has been obtained by the respondents. Though the provisions of Section 129DD do not expressly provide for seeking or grant of interim protection, such provision for interim protection is implicit in any provision for appeal or revision and this is a position settled by several decisions including a decision of this Court in the context of the Income Tax Act 1961, in the case of Paulsons Litho Works vs. Income-Tax Officer [1993 (11) TMI 50 – MADRAS HIGH COURT]. Thus, in cases where the Customs Department takes re-course to revision before the Government, it is incumbent upon them to also seek interim protection for retention of the assets seized by them at the original instance, if they so desire. Failure to do so would entitle the assessee in the respective cases to seek return/refund of the assets seized. Hence, the petition is disposed off in favour of the petitioner.

[In favour of the Petitioner]

DGFT NOTIFICATION/CASE LAW

EXTENSION OF Date of importation of urad dal

Our Comments: The Ministry of Finance, Government of India, Central Board of Indirect Taxes and Customs vide Notification No. S.O.1796(E ) dated 07.05.2021 has extended last date for import of 1.5 Lakh MT of Uradfrom 30th April, 2021 to 15th May, 2021.

M/s. YSI Automotive India Pvt. Ltd. Versus Commissioner Of Customs, Assistant Commissioner Of Customs, Export Promotion Capital Goods (EPCG) Committee, DGFT-2021 [Madras High Court]

Brief: EPCG Scheme – Amendment in Shipping Bills – mention of the EPCG licence number on the shipping bill, mandatory or not – right to seek to explain, by virtue of other contemporaneous and supporting evidences, the factum of export

Our Comments: In the present case, Madras High Court held that no doubt requires the mention of both the name of the supporting manufacturer as well as the EPCG authorization number on the shipping bill and in this case both are absent. However, the requirements, though mandatory, are capable of being satisfied constructively as well and non-mention is not fatal to the claim of concessional rate of duty. The provisions of Section 149 of the Customs Act provides a forum to the petitioner to establish this by way of contemporaneous records. Thus, an opportunity must be extended to the petitioner to prove the factum of export through Glovis by way of supporting materials. The burden is, no doubt, heavy and it is for the petitioner to produce material before the authorities to discharge such burden. However, such opportunity should be read into the provisions of para 5.7.1 to ensure that genuine and bonafide cases of supporting manufacturers are not denied the benefit of concessional duty.

The impugned order is a non-speaking order that has not adverted to the justification put forth by the petitioner and is hence set aside. Hence, Petition is allowed.

[In favour of the petitioner]

****

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Qualification: LL.B / Advocate
Company: Tax Connect Advisory Services LLP
Location: MUMBAI, Maharashtra, IN
Member Since: 10 Jan 2019 | Total Posts: 39
Mr. Vivek Jalan is a Fellow Member of the Institute Of Chartered Accountants of India (ICAI) & a qualified LL.B. He is the member of The CII- Economic Affairs & Taxation Committee. He is the Co Chairman of The Indirect Tax Committee of The Bengal Chamber of Commerce and Industry. He is also View Full Profile

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