Tax Due Date – May 2022.

Sr No	Due Date	Related to	Compliance to be made
1	10.05.2022	GST	Filing of GST 1 for the month of April, 2022
2	20.05.2022	GST	Payment of GST for the month of April, 2022 Filing of GSTR 3B for the month of April, 2022
3	07.05.2022	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 April 2022. Deposit TDS from Salaries deducted during the month of April 2022 Deposit TCS for collections made under section 206C including sale of scrap during the month of April 2022, if any
4	31.05.2022	TDS/TCS (Income Tax)	Furnish quarterly statement of tax deducted at source (TDS) and tax collected at source (TCS) for the quarter ended Jan-March 2022 in Form 24Q / 26Q / 27Q / 27EQ.
5	31.05.2022	Income Tax	Filing of Annual Information Return u/s 285BA

Supreme Court allows deduction of foreign exchange loss on loan utilized for asset leasing business

This Tax Alert summarizes a recent Supreme Court (SC) ruling, of three-judge bench dated 12 April 2022, in the case of Wipro Finance Ltd. (Taxpayer), where the issue before the SC was deductibility of the foreign exchange (forex) loss incurred on loan borrowed for financing Indian enterprises for procurement of capital equipment on hire purchase or lease basis.

The principal issue before the SC was whether such forex loss was capital or revenue in nature. The SC held that the borrowing was necessary for carrying on the Taxpayer’s business of financing. However, it was certainly not for creation of the Taxpayer’s asset as such or acquisition from a country outside India for purpose of the Taxpayer’s business. In such a scenario, the Taxpayer would be justified in availing deduction of entire forex loss incurred by it on the said loan as revenue expenditure since it is incurred wholly and exclusively for the Taxpayer’s business of financing the existing Indian enterprises, which in turn, had to acquire plant, machinery and equipment to be used by them although they acquired them under lease or hire purchase from the Taxpayer.

Condonation of Form 10-IC.

CBDT has issued Circular for condonation of delay under section 119(2)(b) of the Income-tax Act, 1961 in filing of Form 10-IC for AY 2020-21 required to be submitted on or before the due date of filing of return under section 139(1) for availment of tax benefit by a Domestic Company under section 115BAA of Income Tax Act at a concessional rate of 22%.

The Central Board of Direct Taxes, in exercise of the powers conferred under section 119(2)(b) of the Act, directs that the delay in filing of Form 10-IC as per rule 21AE of the Income Tax Rules, 1962 for the Assessment Year 2020-21 is condoned in cases where the following conditions are satisfied:
The return of income for AY 2020-21 has been filed on or before the due date specified under section 39(1) of the Act;

The assesse company has opted for taxation u/s 115BAA of the Act in (e) of “Filing status” in “Part A-GEN” of the Form of Return of Income ITR-6; and
Form 10-IC is filed electronically on or before 30.06.2022 or 3 months from the end of the month of Issue of Circular, whichever is later.

CBDT undertook the action with a view to avoid genuine hardship to domestic companies to exercise option under section 115BAA owing to representations stating the non-submission of Form 10-IC under Rule 21AE of the Income Tax Rules, 1962 due to first year of filing this form

Appeal is maintainable before the High Court since the issue pertains to exemption and not the rate of duty – SC

Summary

The Supreme Court (SC) has opined that a dispute regarding exemption cannot be equated with dispute in relation to rate of duty. These are distinct and mutually exclusive. The SC has upheld the view of Kerala High Court (HC) that the principal issue in given case is determining whether the vessel is a foreign going vessel (FGV) or not and it is not in relation to rate of duty. The SC observed that the appeal is maintainable before the HC since it pertains to availability of exemption and hence, agreed with the view taken by the HC.

Our comments

In the present case, the petitioner has misinterpreted the issue of exemption with rate of duty. However, both disputes are mutually exclusive and different. Accordingly, the Supreme Court in this ruling approbated the view of High Court that appeal filed in relation to exemption shall be entertained by High Court. If the dispute relates to rate of duty, then appeal shall lie before the Supreme Court.

It is pertinent to note that the question relating to rate of duty is specifically excluded for preferring appeal at High Court under the Customs law and same shall lie before the Supreme Court. 

Similarly, the Apex Court in case of Motorola India Limited and Madras High Court in case of BMW India Private Limited had held that appeals having question related to the rate of duty or value of goods for the purpose of assessment would only lie before the Supreme Court and rest all cases shall lie before High Court. However, it is interesting to note that such an exception related to filing of appeal in relation to the rate of duty or value of goods before High Court is not provided under the Goods and Services Tax (GST) regime.

Central Board of Indirect Taxes and Customs issues Customs (Electronic Cash Ledger) Regulations, 2022

The Central Board of Indirect Taxes and Customs (CBIC) has notified the Customs (Electronic Cash Ledger) Regulations, 2022, which shall come into force w.e.f. 1 June 2022.

Manner of maintaining Electronic Cash Ledger (ECL)

• The ECL shall be maintained in Form ECL-1 on the common portal for each person in respect of every deposit towards tax, interest, penalty, fee or any other amount as prescribed under the Customs Laws. Such deposit shall be made by generating a deposit challan in Form ECL-2 having validity of 15 days.
• No interest shall be accrued on deposits made in the ECL.
• A unique identification number shall be generated for each entry which shall be indicated in relevant customs declaration.
• Authorised modes of deposits
  • Internet banking through an authorised bank
  • National Electronic Fund Transfer (NEFT) or Real Time Gross Settlement (RTGS) from any bank
  • Over the counter payment (not more than INR 10,000 per day) through an authorised bank

Note: Commission payable to bank in respect of payments shall be borne by person making such deposit.

• In case of deposits made through authorised mode other than internet banking, a mandate form shall be generated along with deposit challan which shall be deposited to the bank. Such mandate form shall be valid for 15 days from generation date of deposit challan.
• Upon successful credit of deposit, a Challan Identification Number (CIN) is generated by collecting bank and shall be indicated in the deposit challan. Upon receipt of such number, the amount shall be credited in the ECL.
• In case where no CIN is generated or generated but not communicated, the person may represent electronically through the common portal to the bank or electronic payment gateway.

Manner of payment from ECL

• A person may make payment through payment challan in Form ECL-3 generated by the customs automated system or by the person on his own ascertainment of duty.
• The amount as indicated in the payment challan shall be automatically debited from ECL by the customs automated system in case the person has given consent for auto debit and sufficient amount is available in the ECL for payment.
• The successful debit shall be visible on electronic cash ledger and the credit shall be shown in the Electronic Duty Payment Ledger (Cash) maintained in Form ECL-4.

Refund

• Refund may be applied for the balance amount lying in the ECL after payment under the Customs Law on the portal in Form ECL-5.
• Once application for refund has been filed, the amount cannot be used by the person and refund shall be decided within 30 days from the date of application.

In case of any discrepancy in the ECL, the person shall communicate it on the common portal.