Relation between Article 5 & 25 of the DTAA.
Article 5 of a Double Taxation Avoidance Agreement (DTAA) and Article 26 are distinct provisions that pertain to different aspects of international taxation. Article 5 deals with the definition of a Permanent Establishment (PE), while Article 26 focuses on the Exchange of Information.
๐จ๐๐ ๐๐๐๐๐ ๐จ๐๐๐๐๐๐๐ ๐๐๐ ๐๐๐๐๐๐๐๐๐๐๐ ?
While Articles 5 and 26 may not be directly related, they can indirectly influence each other in certain situations. For instance:
๐๐ญ๐ญ๐ซ๐ข๐๐ฎ๐ญ๐ข๐จ๐ง ๐จ๐ ๐๐ซ๐จ๐๐ข๐ญ๐ฌ: When a multinational enterprise operates through a PE in another country (as defined under Article 5), the host country can tax the profits attributable to that PE. In cases where there might be concerns about the accuracy of profit attribution, the exchange of information under Article 26 can provide the necessary data to verify the reported profits and ensure proper taxation.
๐๐๐ญ๐๐๐ญ๐ข๐จ๐ง ๐จ๐ ๐๐๐ฑ ๐๐ฏ๐๐ฌ๐ข๐จ๐ง: If tax authorities suspect that an enterprise is using a PE to engage in aggressive tax planning or profit shifting, they can use the information obtained through the exchange of information under Article 26 to assess whether the PE’s activities are in line with the economic reality or if they are manipulated to avoid taxes.
In summary, while not directly interlinked, Article 5 and Article 26 of a DTAA both contribute to the effective taxation of cross-border activities. Article 5 defines when a PE is established and how profits are attributed, while Article 26 ensures that tax authorities have the means to share information to prevent tax evasion and ensure fair taxation of international business activities.
SALARY INCOME INCIDENCE
๐๐ฎ๐ป๐ด๐ฎ๐น๐ผ๐ฟ๐ฒ ๐๐ง๐๐ง ๐๐ฟ๐ฎ๐ป๐๐ ๐ฆ๐๐ฎ๐ ๐ผ๐ป ๐ฅ๐. ๐ญ๐ด๐ฏ๐ฏ.๐ฎ๐ฎ ๐๐ฟ๐ผ๐ฟ๐ฒ๐ ๐๐ฒ๐บ๐ฎ๐ป๐ฑ ๐ฏ๐ ๐ซ๐ถ๐ฎ๐ผ๐บ๐ถ
In a recent development, the Income Tax Appellate Tribunal (ITAT) in Bangalore has taken a significant step by granting a stay on the outstanding demand of a whopping Rs.1833.22 crores, as sought by Xiaomi Technology India Pvt. Ltd for Assessment Year 2018-19. This decision comes amidst a complex backdrop involving substantial additions and adjustments to the tax liability.
๐ Key Points:
Substantial Quantum of Assets Attached: The ITAT decision takes into account the considerable value of assets attached, leading to the grant of stay on the outstanding demand. This signals a nuanced approach to tax dispute resolution.
Assessment Addition Breakdown: The total addition of Rs.3327.98 crores included various components such as Transfer Pricing (TP) adjustments, testing and debugging expenses, and adhoc adjustments. The ITAT has meticulously examined these components before arriving at its decision.
Sec.254(2A) in Focus: The ITAT bases its decision on Sec.254(2A), explaining that a stay order can be passed for up to 180 days from the date of the order, subject to certain conditions. The Tribunal’s adherence to statutory provisions ensures a robust and lawful process.
Holistic Interpretation: The ITAT’s interpretation of the law emphasizes the interconnectedness of Sec.254(1) and Sec.254(2A), highlighting the need to avoid redundancy and maintain the integrity of the statutory framework.
Balancing Revenue Interests: Notably, the ITAT considers the overlapping attachment of assets by both the Enforcement Directorate and tax authorities. In this context, the Tribunal deems that further payment or security may not be necessary, ensuring a balanced approach.
Clarity in Role: The ITAT clarifies its role within the legal framework, underlining that it cannot grant a blanket stay if not authorized by the statute. This reaffirms the Tribunal’s commitment to maintaining the rule of law.
Forward-Looking Provision: While the ITAT decision provides a stay, it also outlines the scenario where assets’ attachment is vacated, requiring the assessee to deposit or furnish security promptly. This provision ensures a proactive approach to compliance.
How to Withdraw PF Online?
Step by Step Guide:
Detailed Steps Mentioned below as well to withdraw.
1: Visit the official portal of EPFO.
2: Use UAN and password to login into the EPF account. Enter captcha to authenticate the login.
Login into PF Account
3: Select the ‘Manage’ tab to access available options.
4: Choose ‘KYC’ to determine whether the details provided via the KYC documents are authentic and accurate.
5: Select the ‘Online Services’ tab.
6: Choose ‘Claim (Form 31, 19 & 10C): Claim Form
7: Verify the details displayed on the current page. These include KYC information and additional service details.
8: Input the last four digits of the registered bank account and click on ‘Verify’. PF Verify
9: Select ‘Yes’ for your online certificate of undertaking stating that the EPF claim amount will be credited to the bank account mentioned.
EPF Claim Online Certificate
10: Click on ‘Proceed for Online Claim”.
11: Under the ‘I Want to Apply For’ option, select Full EPF Settlement, or EPF Part Withdrawal, or Pension Withdrawal as required.
12: Choose the correct purpose under the ‘Purpose for which advance is required, option.
13: Enter the amount of advance required.
14: Upload scanned documents required for approval. The employer is also required to approve this request for withdrawal to complete.
15: The EPF withdrawal amount is expected to be. credited to an applicant’s bank account within
15-20 days from the date of application.
List of Documents:
1. UAN No
2. Bank Account Details
3. Identity Proof
4. Address Proof
5. Cancelled Cheque
If withdrawing before 5 years then additional documents required.
1. Form 19 Joint Option
2. IT Form 2 or 3 (in case withdrawal is for medical emergency)
“Digital Data Protection Bill 2023
“Digital Data Protection Bill 2023” passed in Lok Sabha: A breakdown of key points
On 7th August ,2023 , the Lok Sabha has passed the “Digital Personal Data Protection Bill- 2023 setting the stage for a full-fledged law to oversee digital processing of data of Indians. The bill aims to replace existing data protection laws, largely enforced via Section 43A of the Information Technology Act, 2000.
The legislation will establish a comprehensive framework for the protection of personal data. This framework extends its jurisdiction to personal data collected within India, both online and offline data that has been subsequently digitized. Moreover, if data processing occurs outside India but involves offering goods or services to individuals within the country, the bill’s regulations will apply.
One of the key aspects of the bill is that it defines terms such as โpersonal dataโ and โprocessingโ. The bill defines personal data as any data that can help identify an individual โby or in relationโ to such data.
On the other hand, processing has been defined as wholly or partially automated operation (collected offline but digitised), and also includes operations performed on data including collection, storage, use, and sharing.
Apart from local processing of data, the bill also covers aspects of extraterritorial user data processing if goods or services are to be sold in India.
Key highlights of this bill include:
1. Data Security: Entities dealing with user data are required to ensure the protection of personal data, even if it is stored with third-party data processors.
2. Data Breach Notification: In the event of a data breach, companies are mandated to promptly inform the Data Protection Board (DPB) and affected users.
3. Special Provisions for Children and Physically Disabled Persons: Processing data of minors and individuals with guardians must be done only with the consent of guardians.
4. Appointment of Data Protection Officer (DPO): Firms are required to appoint a Data Protection Officer and share their contact details with users.
5. Government Authority over Data Transfer: The bill empowers the central government to regulate the transfer of personal data to foreign countries or territories beyond India.
6. Appeals Mechanism: Appeals against DPB decisions will be adjudicated by the Telecom Disputes Settlement and Appellate Tribunal.
7. DPB’s Authority: The DPB has the authority to summon and examine individuals under oath, inspect documents of companies handling personal data, and recommend blocking access to intermediaries that repeatedly breach the bill’s provisions.
8. Penalties: The DPB will assess penalties based on the nature and severity of the breach, with potential fines of up to Rs 250 crore for instances of data breaches, failure to protect personal data, or failure to inform the DPB and users of a breach.
Andhra Pradesh HC upholds the validity of time limit prescribed for claiming ITC under GST
This Tax Alert summarizes a recent ruling of the Andhra Pradesh High Court (HC) upholding the validity of time limit for claiming input tax credit (ITC) prescribed under Section 16(4) of the Central Goods and Services Tax Act, 2017 (CGST Act).
Assessee in the given case commenced its business in March 2020 and filed GSTR-3B for the said month on 27 November 2020 along with late filing fees. Revenue disallowed ITC claimed in the said return since the same was filed beyond the statutory time limit for claiming ITC prescribed under Section 16(4).
Aggrieved, assessee filed a writ petition before the HC challenging Constitutional validity of the said provision and also contending that the non-obstante clause in Section 16(2) would prevail over Section 16(4).
The HC dismissed the writ petition and concluded that:
- ITC is not a statutory or constitutional right but a mere concession/rebate and therefore, imposing time limitation for availing the said concession will not amount to violation of Constitution or any statute.
- Overriding effect cannot be given over other provisions unless a clear inconsistency is established. In the present case, both Section 16(2) and Section 16(4) are two different restricting provisions having no inconsistency between them.
- Collection of late fees is only for the purpose of admitting the returns for verification. Mere acceptance of GSTR-3B return with late fee will not exonerate the delay in claiming ITC beyond the period specified under Section 16(4).
Comments
- This ruling may negatively impact the taxpayers who have claimed ITC in the returns filed beyond the time limit prescribed under Section 16(4). At present, divergent views prevail in the industry on interpretation of the said timelines regarding ITC eligibility.
- It appears from the facts in the given case that the invocation of Section 74, which deals with issuance of SCN due to fraud, misrepresentation, etc., has not been challenged. Businesses may contest applicability of the said provision in absence of any mala fide intention.
- HC has re-iterated the principle that ITC is not a constitutional right, but a concession given under a statute. Hence, legislature has the power to impose restrictions on availing the same.
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