In this Volume of GST & Corporate Tax Weekly Newsletter dated 17.07.2021, I bring to you highlights of recent updates, important judgments of last week &Compliance Calendar for the upcoming week in the field of indirect taxation and direct taxation to keep you abreast of all the latest happenings.

1. GST Updates

  • CBIC clarifies on Hon’ble Supreme Court’s Extension of limitation period in the context of GST Law vide Circular No. 157/13/2021-GST dated July 20, 2021
  • Reimbursement of additional discount to distributor will attract GST: Kerala AAAR
  • Private coaching for CA, CS, CMA etc. are not “educational institution”; liable to pay GST : Kerala AAR
  • GST intelligence unearths ₹338 crore fake invoicing racket in Assam
  • GSTN issues Advisory on filing of annual returns by composition taxpayers in case of negative liability in GSTR-4
  • The Centre has begun acomprehensive review of the GST law to provide clarity on issues that have cropped up since it was rolled out in July 2017: Economic Times
  • No recommendations by GST Council for the inclusion of petrol and diesel under GST: Finance Ministry to Rajya Sabha

2. Customs & DGFT

3. Income Tax

  • CBDT grants further relaxation in filing of Income Tax Forms 15CA/15CB to August 15, 2021
  • Finance Ministry expects new income tax portal to function normally from first week of August
  • Glitches continue to hit income tax portal functioning; IT returns for 2021-22 cannot be filed through any software or directly by uploading JASON file because its functionality has not been enabled at the Income Tax Department portal.
  • Income Tax department asks cryptocurrency exchanges for information on trades

4. Other Updates

  • Kerala Government: No Flood Cess from August 1, 2021
  • Indian Association of Tour Operators (IATO) meets Hon’ble Finance Minister to seek relief measures for revival of tourism
  • Bad Bank launched for stressed assets as a measure to clean up bank books
  • India emerges as 5th largest forex reserves holder in the world with $608.99 billion

5. Important Judgements of the week

a) CBI enquiry initiated against action of Revenue Department w.r.t. grant of adjournment and passing of assessment order:

The Hon’ble Delhi High Court in Three C Homes Pvt. Ltd. v. Assistant Commissioner of Income-Tax [W.P.(C) 5912/2021 dated July 16, 2021] directed CBI enquiry on doubtful Income Tax Department’s action with regard to sending of an e-mail in e-proceedings that granted adjournment and extension of time to submit reply, in a matter challenging the validity of assessment order passed by the Revenue Department in response to the Petitioner’s request for adjournment, which as per the Respondent is forged and fabricated by the Petitioner.

b) Interest on late payment of service tax is compensatory in nature and shall be treated as a permissible deduction:

The Hon’ble ITAT, New Delhi in DCIT v. Planman HR Pvt. Ltd. [ITA No.5152/Del/2017,dated July 15, 2021] disposed off the appeal filed by the Revenue Department and upheld the order passed by the Commissioner of Income Tax (Appeals) deleting the disallowance being interest on late payment of service tax and held that the same is compensatory in nature.

c) No penalty leviable unless the conduct of the assessee is found to be contumacious:

The Hon’ble ITAT, Mumbai in In M/s. Aanya Real Estate Pvt. Ltd. v. Deputy CIT [ITA No. 115/Mum/2020 decided on July 20, 2021] held that the Appellant’s claim of payment being revenue expenditure instead of capital expenditure, by no stretch of imagination can be said to be ex-facie bogus. Thus, a disallowance of the same cannot lead to the conclusion that the Appellant is guilty of furnishing of inaccurate particulars of income or concealment of income. Further, stated that an authority may not levy penalty unless the conduct of the Appellant is found to be contumacious.

d) Order dismissing appeal without assigning necessary reasons not sustainable and is cryptic in nature:

The Hon’ble Patna High Court in Pankaj Sharma vs. UOI & Ors. [Civil Writ Jurisdiction Case No. 7431 dated June 01, 2021] set aside the order dismissing the appeal of the assessee passed by the Revenue Department, on the ground that the same is cryptic in nature as it does not contain the reasons necessarily required for making the order self-explainable and/or comprehensible. Held that, the Appellate Authority, summarily dismissed the appeal without assigning any cogent reason, which is seriously prejudicing the assessee’s cause and case.

e) Merely exercising option under composite scheme cannot prevent Revenue from demanding recovery of GST:

The Hon’ble Andhra Pradesh High Court in Godway Furnicrafts vs. the State of AP [WP No.10350 of 2020, dated November 11, 2020] confirmed the demand for recovery of GST by Revenue Department and held that merely because the assessee has exercised an option under the composite scheme and that it took time for the Revenue Authorities to verify the genuineness, it cannot prevent them from directing the assessee to pay tax, if the option exercised was found to be incorrect.

6. Compliance Calendar for upcoming week:

Date Compliance
24-07-2021 Quarterly GSTR-3B (QRMP) for Q1 of 2021
25-07-2021 ITC-04 (Details of Goods/Capital Goods for Job Work) for Q1 of 2021
Last day for reduced 9% interest benefit for May’21 QRMP Payment
30-07-2021 Quarterly TCS certificate forQ1 of 2021
31-07-2021 Quarterly TDS Return for Q1 of 2021
GSTR-4 (Composition Taxpayer) for FY 2020-21


Disclaimer: The contents of this article are solely for informational purpose. It does not constitute professional advice. Neither the author accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.

The author can be reached at [email protected]

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