Govt. issues clarification on delay in grant of refunds pertaining to IGST paid on exported goods and similarly ITC on exports; While quantum of IGST refund claims as filed through Shipping Bills during the period July to October 2017 is approximately Rs. 6,500 crore, quantum of refund of unutilized ITC, as per RFD 01A applications filed on GSTN portal, is to the tune of Rs. 30 crore; According to Govt., errors by exporters while filing their returns such as incorrect shipping bill number in GSTR-1, mismatch of invoice number and IGST amount paid, and wrong bank account are the sole reason for delay in grant of refunds, or rejection thereof; Explains that onus is on exporters to fill in all details accurately and therefore, must take due precaution to ensure that no errors creep in during filing of Table 6A of GSTR-1 of August 2017 and onwards; States that facility for filing GSTR-1 for August 2017 would be ready by December 4 whereby in case of wrong entries made in July, Table 9 of GSTR-1 of August would allow amendments to GSTR-1 of July; As far refund of unutilized ITC is concerned, Govt. states that proof of debit of Electronic Credit Ledger of exporter to the extent of claim, must be mentioned on the print-out of Form GST RFD-01A and to be submitted manually to jurisdictional officer alongwith all necessary documentary evidence; Asserts that Govt. has taken various measures to alleviate the difficulty and is fully committed to providing speedy disbursal of refunds due to exporters : Finance Ministry Press Release
Refund of balance in electronic cash ledger & of ITC on export of goods/ services enabled on GSTN portal
This is to update you that the functionality to claim ‘refund of excess balance in electronic cash ledger’ and ‘refund of ITC on export of goods and services without payment of Integrated tax’ has been enabled on the GSTN portal.
HC balances equities, grants partial respite to Google over stay plea, bank a/c attachment
Karnataka HC disposes off writ petition filed by Google India, directs tech giant to maintain in its bank account 20% of the total tax demand for AY 2013-14 (Rs. 129 Cr.) ; ITAT had in 2013-14, granted interim relief/ stay to the tune of Rs. 59 Cr. and had directed Google to deposit 55% of the total demand which it duly did; After the co-ordinate bench ruling against Google on the adwords issue ( covering AYs 2007-08 to 2012-13 ), ITAT refused to extend the interim stay pertaining to the balance demand for AY 2013-14, holding that there was no prima facie case, financial hardship or irreparable injury so as to grant any further extension of stay ; Meanwhile the Income Tax Department vide an order dated November 15, attached the bank accounts of Google India ; On hearing both sides at length, single judge bench of Karnataka HC directs expeditious disposal of Google India’s appeal for AY 2013-14, before January 31, 2018 ; Justice B.V Nagarathna observes that ” …granting of any interim order in these writ petitions and keeping the writ petitions pending before this Court would not serve any purpose particularly, when the matter is set down for final arguments before the Appellate Tribunal…. ” ; HC also restrains Income Tax Department from taking any further steps pursuant to attachment of Google India’s bank accounts
Imp Verdicts On Core Issues
DIT vs. S. R. M. B. Dairy Farming (P) Ltd (Supreme Court)
Low Tax Effect Circular: The view of the two-judge bench in Suman Dhamija & Gemini Distilleries that CBDT’s low tax Circular dated 09.02.2011 cannot be given retrospective effect cannot be followed as it is contrary to the three-judge bench verdict in Surya Herbal. A beneficial circular has to be applied retrospectively while an oppressive circular has to be applied prospectively. Circular dated 9.2.2011 has retrospective operation except for two caveats: (i) The Circular should not be applied ipso facto when the matter has cascading effect and/or (ii) where common principles are involved in subsequent group of matters or a large number of matters
Denies Sec.80-IC deduction on FD interest despite assessable as business income
Uttarakhand HC denies Sec. 80-IC deduction to assessee-undertaking (engaged in manufacturing electric meters) during AY 2009-10 with respect to interest earned on fixed deposit with bank, rules that Sec.80-IC benefit is available only on profits and gains derived by assessee from carrying on eligible business; Relies on SC ruling in Pandian Chemicals Ltd. rendered in context of Sec.80-HH, observes that in both Sections 80HH and 80-IC, the Legislature has chosen to employ the word ‘derived’ as distinguished from ‘attributable to’, remarks that “Had the Legislature used the words “attributable to”, then it would have a much wider effect and it may have encompassed within itself, the income, which is the subject matter of controversy before us.”; Rejects assessee’s stand that the fixed deposit had intrinsic and inseggregable nexus with the work undertaken, opines that the FD interest earned by assessee has nothing to do with carrying on of the business per se, namely, manufacture and sale of the articles, hence assessee would not be entitled for deduction; HC further affirms AO’s order holding that interest income qualifies as business income u/s. 28 but no deduction can be allowed; Noting that Sec. 28 (i) does not use the word ‘derive’, HC remarks that “Any income, which may be derived from carrying on the business, even if it is incidental, would qualify as business income u/s. 28, but that is not the samething as saying that it is a business income, which is derived from the said business.”:HC
HC : Grants Sec.80-IA benefit to taxpayer’s power distribution undertaking considering substantial renovation,
Kerala HC reverses ITAT order for AY 2008-09, grants Sec.80-IA benefit to assessee-company, rules that fulfilling any one of the conditions contained in clauses (a), (b) and (c) of Sec. 80-IA(4)(iv) is sufficient to claim the deduction; In March, 2005, assessee took over the business of tea estate and power distribution network from Tata Tea Limited as going concern and claimed benefit u/s 80-IA on the ground that its investment in relevant AY (of over 50% of the then existing establishment’s plant book value) led to renovation and modernization of the transmission and distribution network, thereby fulfilling clause (c) condition; Dismissing Revenue’s stand that conditions under clauses (a), (b) and (c) of sub-section (4) were cumulative, HC clarifies that these clauses are disjointed and, in fact, unconnected, remarks that, “Laying down a new network of transmission lines under clause (b) and simultaneously renovating them under clause (c) exposes a temporal impossibility and linguistic incongruity”; Cites CBDT Circular No. 5 of 2005 which clarified that Sec. 80-IA has a salutatory purpose of encouraging investment in renovation and modernization of the transmission and distribution network; With respect to Revenue’s stand that assessee’s business was not a new industrial undertaking but a case of take-over, HC relies on SC ruling in Liberty India to hold that when Section 80-IA/80-IB refers to profits derived from eligible business, it is not the ownership of that business which attracts the incentives, accepts assessee’s stand that the tax benefits are undertaking-specific, and they do not run with the undertaking’s owner:HC
HC : 1 year limitation u/s 27 inapplicable to SAD refunds; Refers to Sony India ratio
HC dismisses Revenue appeal, observes that limitation of 1 year specified u/s 27 of Customs Act, 1962 is inapplicable to claims of Special Additional Duty (SAD) refund under Notification No. 102/2007-Cus; Remarks, “purpose of imposing SAD is to protect and ensure collection of appropriate sales tax or value added tax, payable on the imported goods.. that the intent is that no double duty/tax – first, in the form of SAD and secondly, in form of sales tax or value added tax, is to be paid”; Finds issue squarely covered by earlier ruling in Sony India wherein, while examining validity of imposition of limitation period vide Notification No. 93/2008-Cus, it was observed that absent applicability of any specific provision of Section 27, time limit prescribed thereunder would not automatically apply to refunds under the Notification; Circular dated April 28, 2008 specifically contains Revenue’s view and understanding that Section 27 and time period thereunder is inapplicable to Notification and accordingly, Revenue cannot now contend and urge the contrary, states HC; States that Revenue read ruling in Riso India out of context, in which case, reference was made to Sections 27 and 27A to hold that interest would be payable on delayed SAD refund, accordingly finds no conflict between views expressed in Riso India and Sony India case : Delhi HC
TDS Credit in hands of demerged company cannot be withdrawn, if no credit of TDS was claimed in return of resulting company on demerger: ITAT
THE ISSUE BEFORE THE TRIBUNAL IS – Whether TDS Credit can be denied in the hands of demerged company, when undisputedly no credit of TDS has been claimed in the return of resulting company on demerger. NO is the answer.
Recent digital initiatives by the Provident Fund office
Recent digital initiatives by the Provident Fund office
The Employees’ Provident Fund Organisation (EPFO) has introduced multiple digital initiatives vide various circulars in the past few months to bring about ease of compliance and ease of governance and provide better services to the employers and the employees. Some of the digital initiatives introduced by the EPFO are as follows: ► Launch of a new mobile application called “Unified Mobile App for New Age Governance (UMANG)”; ► Provision of facility of online linking of Universal Account Number (UAN) with Aadhaar for individual employees; ► Provision of facility of online correction in name, date of birth and gender of employees; ► Direct UAN allotment to any employee at the Member’s portal; ► Auto transfer of accounts of an employee on change of employment; ► Provision of functionality of generation of e-Form 9
The intent of the EPFO to be an electronic paperless organization and to do away with the public interface between the Provident Fund office and the employees is manifested in the digitization of services listed above. The introduction of these digital services by the EPFO is a welcome move and yet another step in providing employer-employee friendly services
Govt. notifies post-GST rates for claiming rebate of State taxes under RoSL Scheme
Govt. notifies post-GST rates for claiming rebate of State levies / taxes under the scheme for Remission of State Levies (RoSL) on exports of readymade garments, made-ups and under Advance Authorisation – RoSL for garments w.e.f. October 1; As per the Notification, RoSL shall be understood to “comprise VAT on fuel used in transportation (raw materials, finished goods and factory workers), VAT on fuel used in generation of captive power, Mandi tax on purchase of cotton, duty on electricity used in manufacture as accumulated from stage of cotton / MMF fibre till garment / made up stage, stamp duties on export documents and SGST on inputs used in production of cotton and embedded SGST in purchases from unregistered dealers”; Post-GST rates of RoSL are upto maximum of 1.70% for cotton garments, 1.25% for MMF, Silk and Woolen garments and 1.48% for apparel of blends; Further notifies rates upto a maximum of 2.20% for cotton made-ups, 1.40% for MMF and silk made-ups and 1.80% for made-ups of blends, while rate for sacks and bags made of jute, is 0.60%; RoSL rate for garments under AA-AIR combination would be 0.66% : Ministry of Textiles Notification
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