GST on Director Remuneration – Way forward.

The way forward pursuant a recent advance ruling holding that remuneration paid to directors is taxable under GST, on reverse charge basis, in the hands of the Company:

New labor codes, provident fund and other employment related updates on account of COVID-19

This Alert summarizes various new proposed labor codes, provident fund and other employment related updates on account of COVID-19.

CBIC issues instructions to expedite processing and disposal of all pending refund and drawback claims

This Tax Alert summarizes recent instructions issued by Central Board of Indirect Taxes and Customs (CBIC) regarding processing and disposal of all pending refund and drawback claims.

 

CBDT permits employers to consider new optional concessional tax regime for salary withholding

Background:

• The Finance Act, 2020 (FA 2020) introduced a new concessional tax rate (CTR) regime for individuals and Hindu Undivided Family (HUF) wherein such taxpayers can offer their total income at lower slab rate prescribed under the regime provided they forgo certain specified deductions, exemptions, brought forward losses and unabsorbed depreciation (new CTR regime).
• New CTR regime is optional for the taxpayers and the option can be exercised in every tax year where the taxpayer does not have business or professional income. Such taxpayers need to exercise the option along with the filing of return of income on or before the due date provided under the provisions of the Income-tax Act, 1961.
• In other cases, the option once exercised is irrevocable until business/profession ceases and if opted out in any year, such taxpayer cannot opt in again till the business/profession ceases. For such taxpayers, the Central Board of Direct Taxes ^[1] (CBDT) shall prescribe the form and manner of exercise of option under new CTR regime.
• While FA 2020 enabled taxpayers desiring to opt for new CTR regime to pay advance tax as per new CTR regime, there was ambiguity whether the employer can consider new CTR regime for salary withholding purposes if the employee desires to opt for CTR.

Deferment of GSTR 2A reconciliation for availing Input Tax Credit

BACKGROUND:

The Finance Ministry in view of the COVID-19 outbreak announced various reliefs relating to statutory and compliance matters under Indirect Tax. One of the major relief given to the taxpayers is w.r.t. availing of Input Tax Credit [“ITC”] under the Goods and Service Tax [“GST”] law.

Registration of Corporate Debtors under IBC.

 

Taxpayers (“Corporate Debtor”) undergoing the Corporate Insolvency Resolution Process (“CIRP”) under the Insolvency and Bankruptcy Code, 2016 (“IBC”) have been facing difficulties due to the inconsistencies between the provisions of the Central Goods and Services Tax Act, 2017 (“CGST Act”) and the IBC.

CBDT issues clarifications on relaxation for lower withholding certificates for tax years 2020-21 and 2019-20

Income-tax laws (ITL) empower the Tax Authority to give a certificate of lower withholding/deduction or collection of taxes (LDC) if the Tax Authority is satisfied that the total income of the recipient or payer, as the case may be, justifies withholding/ collection of taxes at a lower or nil rate^[2]. For obtaining such LDC, the taxpayer is required to make an application before the Tax Authority in prescribed form^[3] through TRACES portal^[4] with digital signature or electronic verification code. The Central Board of Direct Taxes^[5] (CBDT) is authorized to prescribe the conditions, procedure and mode under which an application can be made and conditions subject to which LDC may be granted to the taxpayer.

COVID-19: Impact on Transfer Pricing Benchmarking

COVID-19 presents an unprecedented /extraordinary situation impacting the economic environment, which needs to be factored, while undertaking transfer pricing analysis of transactions effected during FY 2019-2020 and also in the next financial year. India is known to be one of the most aggressive Transfer Pricing (TP) jurisdiction. TP Team at Vaish Associates Advocates has noted the following issues, which would arise in TP arena, in the aftermath of COVID-19:

FAQ’s – IMPACT OF COVID-19 ON LABOUR AND WORKFORCE

1.             Whether compliance with the lockdown pursuant to COVID-19 is mandatory for all establishments irrespective of the nature of work performed by the establishment?

 

FOREIGN TRADE POLICY EXTENDED DUE TO PANDEMIC COVID-19 BY ANOTHER ONE YEAR i.e. UP TO 31ST MARCH 2021.

 

In view of the unprecedented current situation arising out of the pandemic Novel COVID-19, the Ministry of Commerce and Industry issued a Press Release on March 31, 2020 announcing changes in the current Foreign Trade Policy (“FTP”) of the Government of India.