Now days Online casinos like Woo Casino site are very popular in the Age group between 20 to 40 in India. A casino is a public room where gambling is being held.
In India, the Public Gambling Act of 1867 prohibits running or being in charge of a public gaming house or a ‘Casino’. The penalty for breaking this specific law is a fine of up to Rs.200 or imprisonment of up to 3 months. Additionally, this Act prohibits visiting gambling houses. The penalty for visiting a gambling house is a fine of Rs.100 or imprisonment of up to one month. Out of 29 states and 7 UT, only 3 states allow casinos as legal, Goa, Daman & Diu and Sikkim. There are many online casinos in India working from allowable states and also from abroad.
Why govt. make limitations on casino gambling is a question, gambling is a game of possibility. If he wins the game he gets money but that is a possibility if he loses all his money will lose. Sometimes people don’t realize their bets and risks. They always think that they are doing it as leisure. The fun of the games never leaves the person. No person can always win in a casino, that is why it ultimately drains the people’s savings to land in the hands of a few owners. From govt. point view, Casino gambling involves too much money usage at a place thereby increasing the risk of crime, blackmailing, the formation of underworld gangs, extortions, which is not good for the law and order of the area. It is very expensive. The casino makes economic imbalance in society. It makes some people rich and some people poor.
The tax laws regarding casinos in India are uncertain, they are comprehensive gambling laws. Now the law allows in some states, and only one state has launched online casinos. And there is no special mention about online casinos in laws. Taxes are applied to casino winnings. Tax laws levy a tax rate of 30% on any winnings from casinos, lotteries, crossword puzzles, races, card games and more (basically, any form of gambling or betting). Offshore casino operators are supposed to withhold tax of 30% when making payments to winners if the winnings exceed INR 10,000 (which equates to GBP 115).
In July 2017, GST introduced. This is indirect taxation system. That brings change in casinos also. The imposed tax bracket is intended to have multiple benefits, including uniformity of rates, ease of implementation and higher revenue efficiency. Taxes on lottery, betting and gambling winnings are being subsumed on the state level.
The GST system has several levels in place. Casinos and betting operators are at the highest level—28%. Government officials believe it is only fair that casinos are part of the most expensive tax bracket, as entertainment and luxury taxes are merged with service taxes under the GST. There is another category of casinos, online casinos. The online casinos are not part of this. Online casinos are under, “all other services not specified elsewhere”, and any such activity that falls within this category is subject to an 18% rate.
Still, the tax system is not correct about this, whatever 28% is the tax which is levied on the casinos. Online casinos levied by the same.
The Supreme Court has directed the government to look into money deducted from motor accident compensation awards as TDS lying as unclaimed refunds with respect to claimants who are not Income Tax assesses. In the matter of Bajaj Allianz General Insurance Company Private Ltd. vs. Union of India, the court was considering guidelines to streamline…
The Income Tax Appellate Tribunal (Delhi), while considering an appeal filed by the ICMAI Registered Valuers Organisation, asked the income tax department to re-consider the application to allow registration under section 12AA of the Income Tax Act, 1961 to the organization in order to get the benefits of the exemption. The main activities of the…
The National Company Law Appellate Tribunal (NCLAT) has directed the Unitech Limited to repay the amount to its deposit holders with the interest rates.
Unitech Limited, which is one of India’s second-largest real estate investment company has directed the company to repay the amount to its deposit holders pendent lite along with the future interest @12.5% per annum from the date of maturity of the FDRs. The National Company Law Appellate Tribunal (NCLAT) has apart from imposing the tax rate, also imposed the cost of INR 50,000/- to each of the deposit holders.
The respondent company defaulted in the payment of various deposit holders. For instance, Ms. Sunita Bansal bought FDRs from the respondent company for the time period of three years and its maturity date was in 2016. The company defaulted in various such payments and as a consequence, the deposit holders aggrieved by the act of the respondent company filed a petition in National Company Law Tribunal (NCLT) and the tribunal ordered in the favor of the company. Aggrieved by such order the deposit holders knocked the doors of National Company Law Appellate Tribunal (NCLAT).
The issue raised in this case was whether the deposit holders were eligible for the repayment or not?
The National Company Law Appellate Tribunal (NCLAT) comprising of the Judicial Member, Justice Jarat Kumar Jain; Technical Member, Mr. Balvinder Singh, and Dr. Ashok Kumar Mishra were of the opinion that the primary object of law is to protect the interest of the deposit holders and while upholding the principle of justice and equity directed the company to repay the amount to its deposit holders pendent lite along with the future interest @12.5% per annum from the date of maturity of the FDRs. The National Company Law Appellate Tribunal (NCLAT) has apart from imposing the tax rate, also imposed the cost of INR 50,000/- to each of the deposit holders.
Subscribe Taxscan Premium to view the JudgmentThe Income Tax Appellate Tribunal (ITAT), Pune bench has held that the amount of compensation received under an option agreement cannot be brought to tax under the head “Income from House Property” under the provisions of Income Tax Act, 1961. The Tribunal further noted that the same is taxable as income from other sources.
Coming to the facts of the case, the assessee received an amount under an option agreement. An option agreement is a contract between two parties that grants one party the right, but not the obligation, to purchase an asset from, or sell an asset to, the other party. It outlines the agreed-upon price and a future date for the transaction. As per the agreement, the assessee has given an option to the existing tenant of unit No.3 & 4 to take on rent unit No.1 and 2 within a period of 9 months on a mutually agreed rate of rent.
During the assessment year, the Assessing Officer observed that the above receipt is taxable under the head “Income from House Property.”
The Tribunal noted that if any income is assessable under the head income from house property, it should be out of property let out or deemed to be let out for the relevant period. In this case, the property is neither let out nor vacant.
“Therefore, the receipt by way of an option agreement cannot be assessed under the head income from house property. Further, once said receipt is not assessable under the head income from house property, and then obviously, it has to be considered under any other head of income, including income from other sources. In this case, the assessee has offered compensation received in pursuance of option agreement under the head from other sources. As we noted in the earlier paragraph, the amount received by the assessee is in the nature of compensation for not letting out the property to any third party for a specified period. The meaning thereby is that by entering into an option agreement, the assessee had renounced its right to market unit No.1 and 2 for a period of 9 months from the date of the option agreement and, because of covenant by way of an option agreement with the party and hence, any amount received in pursuance of said agreement is in the nature of compensation which is assessable under the head income from other sources as rightly considered by the assessee.”
Subscribe Taxscan Premium to view the JudgmentThe Delhi bench of the Income Tax Appellate Tribunal (ITAT), has held that the unsigned balance sheets by Auditor or the Director of Company cannot be treated as reliable evidence.
The Assessing Officer, during the assessment proceedings, noted that in the balance-sheet of the assessee-Company, as on 31/03/2011, the amount of general reserve was increased by ₹ 2,02,27,914/- by transferring the amount from the ‘trade payables’ to general reserve. He also found that an advance of ₹ 45,00,000/- (which was offered as an advance in earlier years by the assessee) was adjusted with the ‘trade payables’ resulting into a net increase of ₹ 2,02,27,914/- to the general reserve.
While concluding the assessment proceedings, the AO treated the above amount as income in terms of section 41(1) of the Act.
In support of their contentions, the assessee-Company submitted its balance sheet for various assessment years.
The Tribunal noted that all these are unsigned balance sheets, i.e., not signed either by the Auditor or by the Director of the company. The assessee has also filed a financial statement for the financial year 2010-11 relevant to assessment at 2011-12 but the notes to accounts have not been appended.
“We find that various balance-sheets filed by the assessee are neither signed by the Auditor nor by the Director and, therefore, the same are not reliable. The assessee has failed to produce any confirmation to the effect that the assessee received payment from M/s. Omax as an interest-free unsecured loan. The assessee has neither filed an agreement for obtaining an unsecured loan from said party. In the facts and circumstances of the case and in the substantial interest of the justice, we feel it appropriate to restore this matter to the file of the Assessing Officer with the direction to the assessee to produce following documents and direction to the Assessing Officer to carry out inquiries deemed fit and then decide whether the remission of the liability in question is liable to be income under Section 41(1) of the Income Tax Act,” the Tribunal said.
Subscribe Taxscan Premium to view the JudgmentThe Rajasthan Budget 2020 has proposed many changes in Motor Vehicles Tax. The Budget was presented on February 20th in the states assembly by Chief Minister Ashok Gehlot, who also holds the finance portfolio.
He did not propose any imposition of new taxes in the budget but there were certain changes in existing taxes. Such changes in taxes in relation to the tax department are:
The proposed decreased rate of taxes is a welcoming move aimed at improving the consumption behavior of the consumers and is seen as a welcoming move.
The Income Tax Appellate Tribunal (ITAT), Ahmedabad held that expenses on account of interest payment on loans could not be added while computing book profit.
On verification of the balance sheet, it was found that the assessee company has made an investment in shares and having some exempt income. The assessee has claimed expenditure on account of interest payment on loans as also reflecting from the Profit and Loss Account of the assessee as observed in the order passed by the Learned AO.
The assessee since not identified any expense in relation to the exempt income not included in the total income of the assessee a notice was issued by the revenue asking the assessee to explain as to why the provision of Section 14A of the I.T. Act read with Rule 8D of the I.T Rules are not be applicable in the instant case.
The assessee replied that when there is no exempt income earned by the assessee, the question of application of Section 14A read with rule 8D of the I.T. Rule does not arise. However, the explanation of the assessee was not found acceptable by the AO.
The AO, therefore, made an addition of Rs.2,00,390/- against the assessee which was deleted by the Learned CIT(A). Hence the instant appeal filed before the Tribunal.
The Tribunal comprising of Judicial Member, Madhumita Roy, and Accountant Member, Waseem Ahmed pronounced the judgment on an appeal filed against M/s. Adani Logistics Ltd.
Relying upon the judgment of the relevant materials available on records including the order passed by the Special Bench of the Tribunal in the case of ACIT Vs. Vireet Investments P.Ltd. held that computation for the purpose of clause (f) of Explanation 1 to Section 115JB(2) is to be made without resorting to the computation as contemplated under section 14A r.w. rule 8D.
While allowing the appeal the tribunal directs the AO not to make adjustments in book profit for the purpose of MAT liability on the basis of calculations made with Rule 8D of the Income Tax Rules.
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The Securities and Exchange Board of India (SEBI) set guidelines to facilitate the appointment of Insolvency Professionals (IPs) as Administrators for the purposes specified. The IBBI and the SEBI have mutually agreed upon to use a Panel of IPs for appointment as Administrators for effective implementation of the Regulations.
The IBBI shall prepare a Panel of IPs keeping in view the requirements of SEBI guidelines and the Regulations and the SEBI shall appoint the IPs from the Panel as Administrators, as per its requirement in accordance with the Regulations. A Panel shall be valid for six months and a new Panel will replace the earlier Panel every six months.
An IP will be eligible to be included in the Panel of the IPs if :
The IBBI shall invite expression of interest from IPs in Form A to act as Administrator by sending an e-mail to IPs at their email addresses registered with it and hosting the guidelines on its website. The expression of interest must be received by the IBBI in Form A by the specified date.
It must be explicitly understood that an IP, who is included in the Panel based on his expression of interest, must not withdraw his interest to act Administrator or decline to act as Administrator, if appointed by SEBI or surrender his registration to the IBBI or membership or AFA to his IPA during the validity of the Panel.
It must also be explicitly understood that an IP in the Panel will be appointed as Administrator, at the sole discretion of SEBI guidelines and the submission of expression of interest is an unconditional consent by the IP to act as Administrator in accordance with the Regulations and an IP who declines to act as Administrator, on being appointed by SEBI, shall not be included in the Panel for the next five years, without prejudice to any other action that may be taken by the IBBI.
The IBBI shall include the IPs, who have expressed their interest, in the Panel based on the three parameters the weights of which are as under number of Ongoing Processes is 40% and Number of Completed Processes as IRP/RP is 20% and the number of Completed Processes as Liquidator / Bankruptcy Trustee is 40%.
The IP, who has the lowest volume of ongoing processes, will get a score of 100. The IP who has the highest volume of ongoing processes will get a score of 0. The difference between the highest volume and the lowest volume will be equated to 100 and other IPs will get scores between 0 and 100 depending on the volume of their ongoing processes.
The IP, who has the highest experience of the resolution, will get a score of 100. The IP who has the least experience will get a score of 0. The difference between the highest and the lowest experience will be equated to 100 and other IPs will get scores between 0 and 100 depending on their experience.
The IP, who has the highest experience of liquidation and bankruptcy, will get a score of 100. The IP, who has the least experience, will get a score of 0. The difference between the highest and the lowest experience will be equated to 100 and other IPs will get a score between 0 and 100 depending on their experience.
The IP with a higher score will be placed above the IP securing a lower score. Further. where two or more IPs get the same score, they will be placed in the Panel in order of the date of their registration with the IBBI. The IP registered earlier will be placed above the IP registered later.
The SEBI Guidelines shall come into effect for appointments as Administrator with effect from 1st April 2020.
Subscribe Taxscan Premium to view the JudgmentThe Patiala House Court, New Delhi has dismissed the Application of Bail, wherein the applicant was allegedly involved in the creation of fake Goods and Service Tax (GST) invoices to avail Input Tax Credit (ITC), which is illegal in the eye of law.
In the case of Shri. Naveen Mutreja vs. Central Goods and Service Tax (CGST), the applicant filed an anticipatory bail on the alleged offence of creating the fake Goods and Service Tax (GST) invoices to avail Input Tax Credit (ITC) also stated that the statement which was taken from him during the investigation was under coercion, he had no option but to accept the offence which he has not committed because of the force.
The applicant namely Naveen Mutreja was found in the procession of fake Goods and Service Tax (GST) invoices of the company. In this regard, an enquiry was conducted and the summons under Section 70 of the Central Goods and Service Tax (CGST) Act, 2017 was issued to the applicant. However, the applicant did not appear before the concerned department of income tax and as a consequence, a complaint was registered against him.
The applicant contended that the summons served by the department did not consist of Document Identification Number (DIN) and the applicant also contended that the statement, which was taken from him during the investigation, was under coercion.
The issue raised was how could the applicant be coerced when he has appeared under the protection of the court?
The Patiala House Court, New Delhi comprised of Praveen Singh, Judge dismissed the application of anticipatory bail on the grounds that the applicant was given time for investigation, he was at the same time given protection by the court, so it is impossible to believe that a person who is given a protection can be threatened orally or made to be given inculpatory statement.
Subscribe Taxscan Premium to view the JudgmentThe National Law Company Law Appellate Tribunal (NCLAT) releases Flipkart India from the corporate insolvency proceedings.
A three-member bench of the National Law Company Law Appellate Tribunal (NCLAT) has directed the Interim Resolution Professional (IRP), which was appointed by the Bengaluru Bench of the National Company Law Tribunal (NCLT) to hand over the records and the assets of the company back to its promoter as soon as possible.
An operation creditor of Flipkart namely Cloudwalker Streaming Technologies Pvt. Ltd. which used to supply gigantic e-commerce i.e. Flipkart with major imported LED TVs. The operational creditor has filed a petition against Flipkart in the National Company Law Tribunal (NCLT) stating that Flipkart defaulted for an amount of INR 26.95 crores.
Flipkart India contended that it received delivery of the first few batches but after that, it did not take the delivery of the LED TVs because of the reason for lack of warehouse space.
The issue raised in this case was whether the order passed by National Company Law Tribunal (NCLT) was just or not?
The three-member bench of the National Law Company Law Appellate Tribunal (NCLAT) has directed the Interim Resolution Professional (IRP), which was appointed by the Bengaluru Bench of the National Company Law Tribunal (NCLT) to hand over the records and the assets of the company back to its promoter as soon as possible.
The burden of proof lied on the operational creditor to prove the allegations on Flipkart. However, the operational creditor failed to submit to the court the documentary evidence so as to prove the default on the part Flipkart.
It was of the view that the order of the lower court saying the demand notice delivered under Section 8(1) of the Insolvency & Bankruptcy Code (IBC) was not in accordance with law as it was improper and was also incomplete.
Subscribe Taxscan Premium to view the JudgmentThe Government of India has prohibited the export of Personal Protection Equipment and masks as per the notification dated 25th February 2020 of the Ministry of Commerce and Industry. These include NBR Gloves. Medical googles, N-95 masks, and coveralls (class 2/3/4)
However, the government has exempted Surgical Masks/ Disposable Masks (2/3 Ply), all gloves, all Ophthalmic instruments and appliances, surgical blades, bon-woven shoe covers (disposable), breathing appliances used by Airmen, Divers, mountaineers or Firemen, gas masks (with chemical absorbent for filtration against poisonous vapor, smoke, and gases), HDPE Tarpaulin/Plastic Tarpaulin, PVC conveyor belt, and Biopsy Punch.
Subscribe Taxscan Premium to view the JudgmentThe Mumbai bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that Tyre Bullock Carts without bullocks and driver, provided by the appellant on rent for the purposes relating to agriculture/agricultural produce without having any right of possession or effective will not fall under Supply of Tangible Goods Service.
The appellants are engaged in the manufacture of sugar and molasses. They are also providing bullock carts on rent basis to the farmers for transportation of sugar cane to its sugar factory. The period involved is 21.1.2015 to 31.3.2016 i.e. post negative list.
According to the department, during the disputed period the appellants have received a gross billed amount of Rs.31,74,620/- towards rent of Tyre Bullock carts and are liable to pay service tax of Rs.4,30,383/- which the Appellants failed to pay. Accordingly, a show-cause notice dated 13.7.2017 was issued u/s. 73(1) of the Finance Act, 1994 demanding the duty along with interest and penalty.
The said show cause notice culminated into the Order-in-Original by which the Adjudicating Authority confirmed the demand along with interest and penalty. Commissioner (Appeals), vide order impugned order affirmed the aforesaid order by rejecting the appeal filed by the Appellants.
The Judicial Member, Ajay Sharma pronounced the order based on an appeal filed by M/s Bhaurao Chavan SSK Ltd.
The CESTAT observed that the appellant has supplied the Tyre Bullock Carts without bullocks or driver to the recipient of service i.e. farmers. The farmers have to engage their own bullocks and drivers for utilising the bullock carts. If the bullocks are of the farms and the drivers are also appointed by them then the right of possession and effective control cannot be said to be rest with the Appellants.
The bench also observed that merely because in the agreement some route has been suggested by the Appellants which the farmers have to follow or that if during the temporary stoppage of work in the sugar factory, the employee or the labourer of the contractor/farmer are not permitted to engage in any other work or are not paid remuneration for that day, does not make them under the effective control of the Appellants.
Section 66D (d)(iv) ibid would make it clear that the services relating to agricultural or agricultural produce by way of renting or leasing of agro machinery are outside the purview of Service Tax and also sugarcane is an agricultural produce and as per various dictionary meanings, tyre bullock cart very well falls within the definition of agro or agricultural machinery.
While allowing the appeal, the bench also said that the remuneration to them has to be paid by their contractor/farmer only and they cannot claim it from the appellants. Therefore from the facts on record, it is clear that the appellant has delivered the effective possession and control of the Tyre Bullock carts to the farmers/contractors.
Subscribe Taxscan Premium to view the JudgmentThe Gujarat High Court has permitted the petitioner to file the refund application as chilling and packaging of milk is exempted under Goods and Service Tax (GST).
In the case of M/s Gujarat Co-Operative Milk Marketing on Ltd. vs. Union of India, the court observed that the activities of chilling and packaging services of milk which is provided by the contractors to the petitioners are exempted by the virtue of Serial No. 24 of the table to the Notification No. 11/2017.
The petitioner namely M/s Gujarat Co-Operative Milk Marketing in Ltd. is engaged in the marketing of milk and milk products which is produced by various District Co-Operative Milk Producers Unions which are basically the Co-operative societies of agriculturalists and farmers of various districts. One of the dairies engaged in the chilling and packaging of milk and the dairies were paying milk chilling charges and packaging charges to the service providers as per the rates agreed between the parties and as a consequence the invoices were made which included the taxes also.
The issue raised in this case was whether the petitioner is liable to pay Goods and Service Tax (GST) chilling and packaging charges or not?
The division bench of the High Court of Gujarat comprising of Justice Harsha Devani and Justice Sangeeta K. Vishen has held that the activities of chilling and packaging services of milk which is provided by the contractors to the petitioners are exempted by the virtue of Serial No. 24 of the table to the Notification No. 11/2017. And as a consequence guided the petitioner to file the refund application as chilling and packaging of milk is exempted under Goods and Service Tax (GST).
Subscribe Taxscan Premium to view the JudgmentRajasthan Budget has proposed to constitute a GST Audit Authority and Business Intelligent Unit for efficient management of commercial taxes. The Commercial Taxes Department is also set to be reorganized in the interest of the taxpayers.
Rajasthan budget also aims to bring uniformity in administrative structure, the designation of Officers of Commercial Taxes Department will be made equivalent to the officers of the Government of India. It has also proposed to facilitate the movement of goods and to check economic offenses, Radio Frequency Identification Device (RFID) and Automatic Number Plate Recognition (ANPR) network-based pilot project will be started on main routes of the State.
Recently a businessman was arrested for GST evasion of nearly Rs.21 Crore. A top tax official had also been sacked in by the Rajasthan Anti-Corruption Bureau for accepting a bribe of Rs.1.15 lakh in return for tax refunds. This move will help in alerting the authorities promptly about tax evasions and also to curb such malpractices.
The Central government also plans to introduce AI and data analytics to aid the process of tracking down tax evaders and to augment revenue. This will prevent fraud and fake-invoicing and ensure that genuine taxpayers are not harassed. These, in succession, will help secure compliance with the GST Audit Authority significantly.
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) Mumbai has ruled that Sahara India TV Network is entitled to utilize Cenvat credit for payment of service tax on reverse charge basis on services rendered as output services.
The appellant, Sahara India TV Network, is a provider of Broadcasting services, Business Auxiliary Service, renting of immovable Property, Erection Commissioning, and Installation Service and Sound recording services. During the course of an audit, it was revealed that the appellant had incurred expenditure in foreign currency towards the services received from various foreign-based service providers and had paid the service tax by way of the utilization of Cenvat credit. Therefore, a show-cause notice was issued to them proposing to demand and recover Service Tax amounting to Rs. 5,36,752/- for the period 2008-09 to 2010-11. The Adjudicating Authority confirmed the demand of Rs. 5,36,752/- along with interest under Section 75 and appropriated the amount of Rs. 86,111/- and imposed an equal penalty under Section 78 and also imposed a penalty of Rs. 5,000/- under Section 77 of the Finance Act, 1994.
The Chartered Accountant (CA) who appeared on behalf of Appellant submitted that in terms of Rule 3(4) of CCR, 2004, Cenvat Credit can be utilized for payment of tax on output services and explanation to Rule 2(p) ibid clarified that if a person liable for paying service tax did not provide any taxable service or did not manufacture final products, then the service to which he was liable to pay service tax should be deemed to be the output service and there was no specific restriction on utilization of credit by the person liable.
In view of the above decisions, it is settled that once the assessee in terms of Rule 2(q) r/w Rule 2(1)(d)(iv) ibid, is liable to pay service tax then he also becomes a provider of taxable service under Rule 2(r) and consequently becomes a provider of output service under Rule 2(p) ibid and becomes entitle to utilize the Cenvat credit for payment of service tax on reverse charge basis. Rule 5 of the Taxation of Service (Provided from Outside India and Received in India) Rules, 2006 prohibits only for availing of Cenvat credit and not for utilizing the Cenvat credit to discharge its service tax obligation on reverse charge basis. The period involved in this Appeal is from April 2008 to March 2011 whereas the prohibition as per the notification dated 20.6.2012 regarding the utilization of the Cenvat credit by way of amendment in Rule 3(4) ibid, is effected from 1.7.2012 only, therefore during the period in issue the Appellants i.e. the service recipient were very well within their rights to discharge the service tax liability on reverse charge basis by utilizing the Cenvat Credit. There is no need for me to take up the issues of limitation or penalty since on merits I am convinced and am allowing the Appeal.
Subscribe Taxscan Premium to view the JudgmentThe Rajasthan State Budget has proposed setting up of 48 New Courts in the different part of the state for the Financial Year 2020-21.
Taking into account the increase in the number of pending cases, the Rajasthan Budget 2020 has proposed the establishment of 48 new Courts in the state.
Currently, there are 36 courts of District and Sessions in Rajasthan. A Times of India report from 2017 revealed that pending cases in High Court were around 2,54,131 and in the same year, as many as 1,19,086 new cases were filed.
Almost half of these cases pertain to civil nature. As of February 2019, Rajasthan High Court and Allahabad High Court jointly have around 15 lakh pending cases out of the total 50 lakh.
Along with this, the shortage of judges in the lower courts against the sanctioned strength has also led to this unprecedented increase. To tackle this impediment and to make the state’s judicial administration more efficient, the state budget has allocated funds for establishing 48 new courts.
The Haryana GST department has extended the time limit for submitting the declaration in FORM GST TRAN-1 under rule 117(1A) of the Haryana Goods & Service Tax (GST) Rules, 2017.
In exercise of the powers conferred by sub-rule (1A) of rule 117 of the Haryana Goods and Services Tax (GST) Rules, 2017 read with section 168 of the Haryana Goods and Services Tax (GST) Act, 2017, on the recommendations of the Council, and in supersession of Order issued vide no. 306/GST-II, dated 01.02.2019, except as respects things done or omitted to be done before such supersession.
The Commissioner of State Tax, Shekhar Vidhyarthi extended the period for submitting the declaration in FORM GST TRAN-1 till 31st March 2020, for the class of registered persons who could not submit the said declaration by the due date on account of technical difficulties on the common portal and whose cases have been recommended by the Council.
Subscribe Taxscan Premium to view the JudgmentThe Haryana GST Department has issued guidelines to be complied before authorizing for conducting Inspection, Search and Seizure under the Haryana Goods and Service Tax (GST) Act.
The notice was issued in the name of Joint Excise and Taxation Commissioner (GST) and it was addressed to all the Joint Excise and Taxation Commissioner (Range/ Appeal) and all the Deputy Excise And Taxation Commissioner.
The subject matter of the notice directs the department to frame certain guidelines in order to assist the taxation authority while discharging their duty of conducting Inspection, Search and Seizure under the Haryana Goods and Service Tax (GST) Act so that the provisions become more effective.
It was also stated in the circular that the officer should not be lower than the rank of Joint Commissioner needs to authorize in writing other officers of the State Tax to conduct the business premises if there are reasons for him to believe that the taxpayer, who may commit the following offence namely:
The Security and Exchange Board of India (SEBI) has issued a circular and tighten the norms to prevent the misuse of clients’ securities available with the intermediaries.
The circular was issued on February 25, 2020, in the name of D. Rajesh Kumar, General Manager in order to prevent the misuse of securities, the Market Regulator, Security, and Exchange Board of India (SEBI) had consultation with Stock Exchange, Clearing Corporation and Depositories and industries representative of Trading Members, Depository Participants to devise a framework that mitigates the risk of misappropriation or misuse of client’s securities available with intermediaries.
The circular was addressed to all the recognized Stock Exchanges, recognized clearing corporations and all depositories. The regulations will take effect from June 01, 2020. This circular prohibited the transfer of securities to the Demat Account of the Trading Members (TM) or Clearing Member (CM) for the margin purposes i.e title transfer collateral agreements.
The circular also stated that in case, a client has given a power of attorney in favor of a TM / CM, such holding of power of attorney shall not be considered as equivalent to the collection of margin by the TM / CM in respect of securities held in the Demat account of the client.
Thus SEBI banned the transfer of clients’ securities to Demat accounts of trading and clearing members. This was the step taken against the backdrop of Karvy Stock Broking Ltd (KSBL) incident wherein in the month of November the KSBL from taking new brokerage clients after it was found that the brokerage firm had allegedly misused client’s securities to the tune of more than Rs 2,000 crore, the watchdog has now put in place by passing stringent norms to prevent misuse of clients’ securities that are available with trading and clearing members and depository participants.
Subscribe Taxscan Premium to view the JudgmentThe Income Tax Appellate Tribunal (ITAT), Mumbai has ruled that, Income From Cloud Hosting Services not Taxable under the head ‘Royalty’.
Rackspace, US Inc., the assessee, is a company incorporated in and a tax resident of the USA, involved in cloud hosting. It is alleged that they had failed to file the return of income for AY 2010-11 and certain transactions seen in the network management system database led to believe that the income has skipped taxation in accordance with provisions of Section 147 of the Income Tax Act.
The assessee had filed the return of income and the notes stating that the cloud hosting services was not taxable as ‘royalties’ under Article 12 of the India-US tax treaty as the customers do not operate the equipment or have physical access to or control over the equipment used by the assessee to provide cloud support services and do not make available technical knowledge, experience, skill, know-how, etc., to its Indian Customers. And the cloud support services are not in the nature of managerial, technical or consultancy services and consequently same do not constitute fees for included services within the meaning of Article 12 of the India-USA Double Tax Avoidance Agreement (DTAA). The assessee claimed that revenues earned on account of cloud hosting services constitute business profits and since it did not have Permanent Establishment (PE) in India under Article 5 of the DTAA, the same would not be subject to tax in India under the provisions of Article 7(1) of the DTAA. There was a mismatch of receipts as per 26AS and as per party-wise receipts furnished by the assessee, therefore, the notice was also issued. After the reply of the assessee and in accordance with the direction of the DRP, the receipt in the sum of Rs.17,12,52,670/- was considered as ‘Royalty’ and held to be taxable @ 10% as per India-USA DTAA prescribed taxation rate. Aggrieved, the assessee filed the present appeal before the ITAT.
The ITAT bench comprising of Judicial member Amarjit Singh and Accountant member M.Balaganesh while allowing the appeal held that, “the assessee and its customer is for providing hosting and other ancillary services to the customer and not for the use of / leasing of any equipment. The Data Centre and the Infrastructure therein is used to provide these services belong to the assessee. The customers do not have physical control or possession over the servers and right to operate and manage this infrastructure/servers vest solely with the assessee. The agreements entered into the service level agreements. The agreement is to provide hosting services simpliciter and is not for the purpose of giving the underlying equipment on higher or lease. The customer is not even aware of the specific location of the server in the Data Centre where the customer application, webmail, websites etc. In view of these facts, we are of the view that income from cloud hosting services has erroneously held as royalty within the meaning of explanation (2) to section 9(1)(vi) of the Act as well as Article 12(3)(b) of the Indo-USA DTAA by the AO and DRP. Even otherwise, there is no PE of the assessee in India and hence, no income can be taxed in India in terms of Indo-US DTAA.
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