| Sl No | Due Date | Related to | Compliance to be made |
| 1 | 11.08.2021 | GST | Filing of GSTR – 1 for the month of July 2021 |
| 2 | 20.08.2021 | GST | – Payment & filing of GST return for the Month of July 2021- Form GSTR 3B |
| 5 | 07.08.2021 | TDS/TCS (Income Tax) | · Deposit TDS for payments of Salary, Interest, Commission or Brokerage, Rent, Professional fee, payment to Contractors, etc. during the month of July 2021. · Deposit TDS from Salaries deducted during the month of July 2021 • Deposit TCS for collections made under section 206C including sale of scrap during the month of July 2021, if any • Deliver a copy of Form 15G/15H, if any to CCIT or CIT for declarations received in the month of July 2021, if any |
Introduction of online module for filing applications in case of deemed exports
The Directorate General of Foreign Trade (DGFT) has introduced an online module for filing applications in case of deemed exports on the DGFT website. The application can be filed in e-TED/DBK module by following the navigation path: https://dgft.gov.in> Deemed Exports to access the new e-module.
Types of applications that can be filed under the new module are as under:
- Refund of Terminal Excise Duty (TED)
- Duty Drawback as per All Industry Rates (AIR)
- Fixation of brand rate for Duty drawback
The DGFT has further informed that the new module will be applicable for new applications to be filed. The applications submitted earlier will continue to be processed manually by the concerned Regional Authority (RA).
The detailed steps to be followed for submission of the online application have been provided in the attached notice issued by DGFT.
CBIC clarifies applicability of SC order on extension of limitation period under GST
This Tax Alert summarizes a recent circular [1] issued by the Central Board of Indirect Taxes and Customs (CBIC). Circular clarifies on extension of limitation period under Goods and Services Tax (GST) in terms of the Supreme Court (SC) order.
Taking suo moto cognizance of the situation arising due to Covid-19 pandemic, SC, restoring its order dated 23 March 2020 and in continuation of order dated 8 March 2021, had extended the limitation period (prescribed under general or special law) in respect of judicial and quasi-judicial proceedings until further orders.[2]
The key clarifications are:
- The extension applies only to quasi-judicial and judicial matters relating to petitions, applications, suits, appeals and all other proceedings of similar nature.
- SC Order will also cover revision or rectification of any order but not any original adjudication or other proceedings under the Central Goods and Services Tax (CGST) Act.
- Extension granted by SC will not be applicable to proceedings initiated or compliances done by the taxpayer.
- Actions of tax authorities of hearing and disposing the matters as quasi-judicial authority, will be governed by the extensions granted by the statutes or notifications.
Circular summarizes that the extension granted by SC covers appeals to be filed and the proceedings to be undertaken for revision and rectification.
Comments
- While the Circular restricts the extended period for filing refund applications, it also clarifies that the extension is not applicable in respect of first level adjudication proceedings like issuance of SCN, passing orders etc.
- It is relevant to note that Commercial Taxes Department, Chennai had earlier issued an internal instruction elucidating that SC order is applicable for revocation of cancellation of GST registration. Even under IP laws, Delhi HC held that the extension is applicable for undertaking various compliances by the industry.
- Though the period for filing appeal before any quasi-judicial authority is covered by the SC order, the circular seems to clarify that the time limit for disposal of the same is not covered by the said order.
In light of the Circular, one can analyse the impact on timelines applicable to similar proceedings under the Income tax Act.
Is Limitation period under section 54 of CGST Act, 2017 applicable where the levy of GST on a particular activity has been held as unconstitutional?
In this regard, it is important to refer to the verdict of Hon’ble Gujarat High Court in the case of Comsol Energy (P.) Ltd. vs. State of Gujarat [2021] 127 taxmann.com 736 (Gujarat)[21-12-2020] wherein in its own case before the same Court it was held that levy of IGST on Ocean Freight in case of CIF consignments as unconstitutional but respondent-authority issued Deficiency Memo on an erroneous premise that refund claim was not filed within statutory time limit as provided under section 54, wherein it is held that since section 54 is applicable only for claiming refund of any ‘tax’ paid under provisions of CGST Act and/or GGST Act and amount collected by revenue without authority of law is ‘not considered as tax’ collected by them, section 54 is not applicable and thus, deficiency memo was to be quashed and set aside.
The judgement seems to have far reaching impact if the levy is held as unconstitutional even after years. It would not impact the refunds of the same based on section 54 limitation period as it does not seems to ring-fence amount which is ‘not considered as tax’ within its limitation period.
CBIC clarifies re-import of goods sent for repairs attract IGST on value of repair, freight and insurance
This Tax Alert summarizes the recent notifications and circular[1] issued by the Central Board of Indirect Taxes and Customs (CBIC).
Notification nos. 45 and 46/2017-Customs dated 30 June 2017 grants concession from payment of Basic Customs Duty (BCD), Integrated tax (IGST) and Compensation cess (cess) on re-import of goods subject to specified conditions.
As per Entry 2 of the notifications, in case of re-import of goods exported for repairs, duty of customs shall be levied on value of repairs, insurance and freight. Similarly, as per Entry 3, for cut and polished precious and semi-precious stones exported for treatment, duty of customs at the time of re-import is leviable on the cost of treatment, insurance and freight.
Delhi Tribunal, in one of its ruling, had held that duty of customs does not include integrated tax and thus, the taxpayer is entitled to full exemption from payment of IGST on re-import of goods exported for repairs.[2]
GST Council, in the 43rd meeting, deliberated on this issue and recommended clarificatory amendment to levy IGST on repair value of goods re-imported.[3]
Vide present notifications, the words “duty of customs” in Entry 2 and 3 is substituted with “said duty, tax or cess”.
An Explanation is also inserted to clarify that re-import of goods sent abroad for repairs/ treatment attract IGST and cess, besides basic customs duty, on the repair, insurance and freight value.
A circular has also been issued in this regard.
Comments
a. Since the circular indicates that the amendment is clarificatory in nature, one may need to analyse its retrospective applicability.
b. In light of amendment, apart from paying IGST under reverse charge on import of repair service, the taxpayer will also be required to pay IGST as a part of customs duty. This may lead to double taxation.
c. It is relevant to note that the Revenue’s appeal to SC against the Delhi Tribunal’s judgment in the matter is pending disposal. Circular may have a bearing on the outcome of the decision.
Imp Judgements.
Laureate Buildwell Private Limited Vs Charanjeet Singh (Supreme Court)
Whether a subsequent purchaser of an apartment from the original allottee in an under construction project stands on the same footing as the original purchaser and are entitled to the same relief. The court was guided of the precarious position in which the purchasers of the flat are put to in case the flat is not delivered and finally taking into account the object of the legislation Consumer Protection Act to address complaints of consumers (an expression defined and interpreted widely) and provide a forum for their quick redressal, and, furthermore, wherever third parties have claimed relief, technicalities have been brushed aside consistently, by this court
Prakash Gupta Vs SEBI (Supreme Court)
Whether consent of SEBI has to be read in Section 24A of SEBI Act 1992 dealing with compounding of offences, even though the section doesn’t provide for such consent. Supreme Court deals with the entire jurisprudence on the compounding of an offence.
KONE ELEVATORS (INDIA) P LTD VS ACIT (Madras High Court)
After 4years from the end of the assessment year, a scrutiny assessment allowing deduction u/s. 10B can’t be re-opened for the reason that the approval by the Industries Department has not been ratified by the board.
ACIT vs. Sur Buildcon Pvt. Ltd (ITAT Delhi)
The A.O.,by failing to confront the assessees with the evidence he had gathered u/s 142(2) Act, has, therefore, erroneously skipped the mandatory intermediary step prescribed u/s 142(3) of the Act. Thus, when the A.O. has directly gone on to pass the Assessment Orders u/s 147/143(3) of the Act to make the impugned additions u/s 68, the same is in direct violation of the procedure of enquiry prescribed in the Statute that inherently encompasses the Principle(s) of Natural Justice.
Singapore – Taxation on work from home.
In a welcome step, the Singapore revenue has recently issued tax guidance delving around the permanent residents of Singapore exercising overseas employment but working remotely from Singapore due to COVID-19 restrictions, to be considered as “not exercising employment in Singapore”, subject to fulfilment of certain conditions. Typically the relaxation (which is basically a tax shelter) applies for employees who are on work from Home and were erstwhile (pre COVID) employed outside Singapore. To avoid hardships, the authority has requested them to avail the tax shelter by fulfilment of certain conditions such as (i) no change in contractual terms governing overseas employment before and after return to Singapore, (ii) remote working to be temporary arrangement in view of COVID-19 (iii) demonstrate that work performed remotely would otherwise have been performed overseas but for travel restrictions, (iv) Individual to leave Singapore as soon as feasible or before Jun 30, 2021 and (v) employment income earned during the stay in Singapore from Jan 1, 2021 to Jun 30, 2021 is taxable in the country of employment, in order for his employment income for the stipulated period of stay, to not be taxable in Singapore. Additionally, the IRAS has also advised to retain all relevant supporting documents to substantiate that the aforementioned qualifying conditions are met and the same are provided upon IRAS’ request. Given that Indian expats are also facing severe travel restrictions, its expected that the government issues detailed guidelines for Indian ‘regular Non Resident’ expats, in order to help them to retain their Non Resident tax position.
Additional depreciation claims due to forex losses
Carraro India Pvt Ltd vs Dy. CIT
The assessee is engaged in the business of manufacturing of mechanical transmissions, clutches, hydraulic lifts, planetary drives, axles for agricultural tractors and industrial and construction applications including component parts and spares.
Assessee filed return of income declaring loss of Rs.3.52 crore.
In ground no.6, revenue appealed against allowing additional depreciation claimed by the assessee. The assessee claimed additional depreciation on foreign exchange fluctuation loss amounting to more than 1.8 crores on repayment of loans, which were taken for purchase of capital assets in the years 2002 and 2007. The loss was capitalized by the assessee on which additional depreciation of INR 27+ Lakhs u/s.32(1)(iia) was claimed.
The AO held that the additional depreciation was admissible only on `new plant and machinery’ acquired and installed after 31 st day of March 2005 by an assessee engaged in the manufacturing or production of any article or thing etc. The claim of the assessee was thus jettisoned. The ld. CIT(A) overturned the assessment order on this point.
The ITAT observed that the assessee took loans in the calendar years 2002 and 2007 for purchase of certain new plant and machinery items in the same financial year or subsequent years. It was during the year under consideration that the assessee made repayment of such loans which resulted in excess payment of Rs.1.82 crore towards foreign exchange fluctuation rate difference. The assessee capitalized the same and also claimed additional depreciation on such amount.
Section 43A opens with a non obstante clause and provides that where an assessee has acquired any asset in any previous year from a country outside India for the purposes of his business or profession and in consequence of a change in the rate of exchange there is an increase or reduction in the liability of the assessee as expressed in the Indian currency at the time of making payment, then the amount by which the liability has so increased or reduced shall be taken into account at the time of making payment and shall be added to or as the case may be reduced or deducted from the actual cost of the asset u/s.43(1) of the Act. Thus, it is ostensible that section 43A requires increase or decrease in the actual cost of asset with foreign exchange fluctuation at the time of repayment of loan.
The AO had not denied that the assessee repaid loans in this year on which additional liability of Rs.1.82 crore was incurred and discharged.
The prescription of section 32(1)(iia) fairly indicates that the additional depreciation will be allowed where a new machinery or plant is acquired/installed after 31st March, 2005. The assessee availed two loans, viz., first in the year 2002 and second in 2007 and repaid the same in the year under consideration resulting in incurring foreign exchange fluctuation loss. Such a loss is required to be capitalized in terms of section 43(1) read with section 43A. As regards the question of additional depreciation, the same is admissible in respect of assets acquired on or after 1.4.2005. Patently, no additional depreciation can be allowed to the assessee in respect of loan taken in the year 2002 and the claim will be valid for the loan taken in foreign currency for the purchase of asset in the year 2007. There is no discussion in the assessment order or the impugned order about the bifurcation of the amount of liability discharged by the assessee on account of foreign exchange fluctuation rate difference.
ITAT agreed with the Revenue, and therefore, set-aside the impugned order and remitted the matter to the file of the AO for examining the detail of Rs.1.82 crore and allow additional depreciation on forex loss only in respect of repayment of loan taken in the year 2007.In other words, no additional depreciation would be allowed in respect of new asset purchased by the assessee against the loan taken in the year 2002 which got discharged during the year under consideration resulting in foreign exchange fluctuation loss
HC holds GST on members contribution in housing society to be computed on the amount in excess of INR 7500
This Tax Alert summarizes a recent ruling[1] of the Madras High Court (HC). The issue involved in the writ petition was whether GST was payable on the entire contribution or only the incremental amount in excess of INR 7,500, where per member contribution to Residential Welfare Association (RWA) exceeds INR 7,500.
As per Notification No. 12/2017-Central Tax (Rate) dated 28 June 2017, contribution made by a member to RWA up to an amount of INR 7,500 per month is exempt.
Tamil Nadu Authority for Advance Ruling (AAR) in case of TVH Lumbini Square Owners Association[2] had held that if the per member contribution exceeds the specified limit, the entire amount is taxable. Circular No. 109/28/2019-GST dated 22 July 2019 also confirmed the said view.
The key observations of the HC are:
- Where the legislature intended that exemption shall apply only to cases where the amount does not exceed specified limit, the same is specifically stated.
- The term ‘up to’ is interchangeable with the term ‘till’ and means any amount till the ceiling of INR 7,500 would be exempt.
- The conclusion of AAR and Circular, to the effect that any contribution above INR 7,500 would disentitle the RWA to exemption, is contrary to the express language of the exemption entry.
Thus, HC quashed the Circular and advance ruling and held that contributions to RWA only in excess of INR 7,500 would be taxable.
Comments
- The ruling is likely to benefit cases where taxable monthly contribution by housing society members exceed INR 7,500. However, it may entail proportionate reversal of the input tax credit.
- Applicability of the HC judgment to other exemption provisions under GST having similar language may need to be analyzed.
- Even under service tax, there was a circular clarifying taxability of entire amount in cases where the contribution exceeded the specified limit. Considering the ruling, the service tax circular may also lose its relevance.
Date extended for Physical filing of form 15CA-CB.
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi, 20th July, 2021
PRESS RELEASE
CBDT grants further relaxation in electronic filing of Income Tax Forms 15CA/15CB
As per the Income-tax Act, 1961, there is a requirement to furnish Form 15CA/15CB electronically. Presently, taxpayers upload the Form 15CA, along with the Chartered Accountant Certificate in Form 15CB, wherever applicable, on the e-filing portal, before submitting the copy to the authorized dealer for any foreign remittance.
In view of the difficulties reported by taxpayers in electronic filing of Income Tax Forms 15CA/15CB on the portal http://www.incometax.gov.in, it had earlier been decided by CBDT that taxpayers could submit Forms 15CA/15CB in manual format to the authorized dealer till 15th July, 2021.
It has now been decided to extend the aforesaid date to 15th August, 2021. In view thereof, taxpayers can now submit the said Forms in manual format to the authorized dealers till 15th August, 2021. Authorized dealers are advised to accept such Forms till 15th August, 2021 for the purpose of foreign remittances. A facility will be provided on the new e-filing portal to upload these forms at a later date for the purpose of generation of the Document Identification Number.
(Surabhi Ahluwalia)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT
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