ICAI to conduct 51st Campus Placement Program in the month of Feb-March, 2020

The Institute of Chartered Accountants of India (ICAI) will be conducting the 51st Campus placement program for Newly Qualified Chartered Accountants (CAs) in the month of February-March, 2020.

The Committee for Members in Industry & Business (CMI&B) of the Institute of Chartered Accountants of India (ICAI) is an initiative to that effect remains the Campus Placement Program (held twice a year) that provides a platform to both the NQCAS and the organizations looking to hire the best available talent to fulfill their human resource requirement. ICAI simply acts as a facilitator to bring the recruiter and NQCAs together.

Invitation to Organizations:  Any corporation, irrespective of its size, standing in the market and boundary of its business, can take part in this placement program being held in several centers across the country during February – March 2020.

Invitation to Candidates: The above Campus Placement Program is meant for the candidates, who would be passing the CA Final examination held in Nov 2019 and also the others who have qualified earlier and fulfilling the criteria mentioned in the Announcement.

No denial of Credits to recipient even If the Duty was Legally not payable by Supplier: CESTAT [Read Order]

The Customs Excise and Service Tax Appellate Tribunal (CESTAT) held that Input tax credits cannot be denied to the recipient even if the duty was legally not payable by the supplier

The appellant is engaged in the manufacture of M. S. Ingots and M. S. Billets on which central excise duty is being paid. The appellant procured parts of the induction furnace on payment of central excise duty on which credits were availed. This has been disputed by the department.

The department contended that the goods on which credits have been availed were supplied by one, M/s. Inductotherm (I) Pvt Ltd, Ahmedabad, which was cleared ‘as such’ at a value higher than the value at which the said goods were procured by the supplier. It was also contended that the said goods were not manufactured by the supplier but were cleared ‘as such’. Show Cause Notice was issued.

The Tribunal is comprising of Judicial Member, P.K Choudhary pronounced the Order on an application filed by M/s Jai Balaji Industries Ltd.

The Tribunal observed that, in view of the specific provisions contained in Rule 3(5) and 3(6) aforesaid, the appellant company receiving input from the supplier who has removed the said goods ‘as such’ (being bought out goods) is legally entitled to credit even if the said goods have not been manufactured by the supplier.

The Tribunal further stated that the appellant is legally entitled to avail credit on inputs which though not manufactured by the supplier, has been removed by the supplier on the strength of duty paid excise invoice particularly that goods have been physically received by the appellant for use in manufacture.

While relying on the judgment by Punjab and Haryana High Court in the case of CCE, Chandigarh vs. Ranbaxy Labs held that even if duty was legally not payable, credit cannot be denied to the recipient of goods when admittedly duty has been collected by the Revenue.

Allowing the appeal Tribunal also noted that in the entire proceedings against the appellant for denial of credit, there is no allegation or finding that the appellant has intentionally availed irregular credit with ulterior motive or that the credit has been availed wrongly in collusion with the supplier.

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ITAT deletes Addition since Transaction of Rendering Marketing Services of Channel Placement Rights with Broadcasters was Deductible under Domestic Transfer Pricing provisions [Read Order]

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) in the case of Hathway Cable and Datacom Ltd v DCIT deletes addition on the ground that transaction of rendering marketing services of channel placement rights with broadcasters was deductible under Domestic Transfer pricing provisions

Assessee company operates as a ‘multi-system operator’ in the distribution of television channels through analog and digital cable distribution networks and internet services through cable. The assessee company operates as last-mile cable operator for certain territories of the country. These entities fall within the meaning of related parties (RPs) as defined in Section 40A(2)(b) of the Act. The assessee company has adopted a ‘Pooled Model’ under which it negotiates and settles with the broadcasters for their channels or bouquets of channels. The amount paid by broadcasters for placing their channels at preferred positions is placement charges. Such revenue is shared by the assessee with the RPs on the basis of their subscriber base. However, the assessee company being the principal negotiator is in a position to bargain for a significantly higher amount of placement charges in comparison to what the company and each related party would have got.

The issue in the present case is the decision of DRP for upholding 10% of the ad hoc addition made on account of income distribution for the marketing services rendered for the marketing services of channel placement rights.

During the year under consideration, the assessee got aggregate placement charges from all the broadcasters amounting to Rs.314 crores and after retaining the amount attributable to the direct subscriber base of the company, distributed the balance amount of Rs.69.60 crores among the RPs according to their respective entitlements worked out on the basis of their subscribers.

TPO rejected the system of proportional allocation of the total placement revenue for the reason that the benchmarking is ad-hoc in nature and does not justify the allocation of total revenues proportionately. As per the TPO when 78% of the customer base was of the company itself whereas the customer base of individual RPs is only 5% to 7% of the total base, then the RPs cannot be treated par with the assessee company in the matter of sharing the placement revenue. According to the TPO, since the risk involved is of that of the assessee, the contract executed is with assessee only. He held that the entire revenue shared with RPs on the basis of the subscriber base and the benchmarking does not result in arms-length pricing and determined the said amount.

Addition by TPO was made not in respect of any expenditure having been incurred but with respect to income derived by the assessee (was also distributed to RPs). The DRP directed the TPO to retain the adjustment to the extent of 10% or allocated amount.

The Bench constituting of R.C. Sharma and Vikas Awasthy as Accountant Member and Judicial Member held against the 10% transfer pricing adjustment upheld by the DRP.

The Tribunal observed that the assessee has distributed income on the basis of actual subscribers being commanded by the RPs and the allocation made by the assessee in respect of Total placement Charges is fair and proper. The same is evident by the fact that the assessee has performed more functions that include making efforts to consolidate the RPs presenting their position and negotiating on behalf od RPs

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Activity of Fabrication of Body Building on Tippers, Trailers attracts 18% GST: AAR [Read Order]

The Authority for Advance Ruling (AAR) in Karnataka on the filing of an application by the M/s SLN Tech-Fabs (Bengaluru) Pvt. Ltd. ordered that activity of fabrication of Body Building on Tippers, Trailers attracts 18% GST.

In the application the assessee who is M/s SLN Tech-Fabs (Bengaluru) Pvt. Ltd., engaged in the activity of providing services of Transport solutions, in the field of truck body and fabrication of transport equipment such as tippers, trailers, containers, etc. The applicant is charging a total of 28% of Goods and Service Tax (GST) wherein the total tax was the aggregate of 14% Central Goods and Service Tax (CGST) and 14% Karnataka Goods and Service Tax (KGST). However, the applicant filed an application asking that can the rate of Goods and Service Tax can be reduced to 18%.

The AAR was considering whether the applicant can reduce the Goods and Service Tax (GST) from 28% to 18% or not?

The AAR bench comprising of Dr. Ravi Prasad M.P., a Member of State Tax and Sri Mashhood ur Rehman Farooqui, Member at central tax held that 28% of Goods and Service Tax (GST) is applicable on all the activities which are considered to be the ‘supply of goods’.

Further, they also held that the applicant is engaged in the business which is covered under the ambit of activity of fabrication of Body Building on Tippers, Trailers attracts which attracts 18% of GST.

The AAR also observed that, all the activities which are covered under the ambit of supply of goods will be charged at the rate of 28% of the Goods and Service Tax (GST) and not less than 28%. However, the Activity of the fabrication of Body Building on Tippers, Trailers attracts 18% GST.

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Goods Imported as Gifts can be allowed Import Free on payment of Full Applicable Fees: DGFT [Read Circular]

The Directorate General of Foreign Trade (DGFT) clarified that the goods imported as gifts can be allowed import free (i.e. without prohibition) on payment of full applicable duties. Since the goods imported as gifts would be personal imports, the full applicable duties will be as follows

 (a) Basic Customs Duty at the applicable tariff rate as per the First Schedule of the Customs Tariff Act for the heading 9804 which is 35% at present.

(b) IGST at the rate specified for the heading 9804 (Si. No. 227 schedule IV) in Notification No. 1/2017 –Integrated Tax (Rate) dated 28th June 2017 for IGST which is at present 28%.

A Circular issued by DGFT also said that Import of goods, including those purchased from e-commerce portals, through post or courier, where customs clearance is sought as gifts, is prohibited except for life-saving drugs/ medicines and Rakhi (but not gifts related to Rakhi,)

Explanation: 1. Rakhi (but not gifts related to Rakhi) will be covered under Section 25(6) of Customs Act, 1962 that reads “… no duty shall be collected if the amount of duty leviable is equal to or less than Rs. 100/, 2. Import of goods as gifts with payment of full applicable duties is allowed.

The DGFT also directed to ensure that there is no undervaluation by unscrupulous importers, officers may be advised to strictly follow the provisions of Section 14 of the Customs Act, 1962 read with Customs Valuation (Determination of Value of Imported Goods) Rules, 2017 for valuation of imports through courier and posts.

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KPMG hiring CA Fresher for Audit Executive

The KPMG Global Services Private Limited has invited applications from qualified Chartered Accountant (CA) for the post of Audit Executive.

Job description

KPMG are recruiting for an Executive in the Audit team. Working as an Executive in this team, your responsibilities will include:

Education / professional qualifications

Professional Chartered Accountancy qualification (e.g. ICAI or ACCA)

Prior Experience:

0-1 year experience in relevant field

Technical skills:

Experience in external/internal audit & knowledge of UK/US GAAP, IFRS would be an added advantage.

Behavioral/team skills

For More Information Click here.

No ITC available for Supply of Goods and Services carrying out for Civil Work and External Development Work: AAR

The Authority for Advance Ruling(AAR), Rajasthan held that Input Tax Credit (ITC) is not available for supply of goods and services which are used for carrying out civil work and external development work.

The Applicant M/s Indag Rubber Limited manufactures pre-cured tread rubber, un-vulcanized rubber strip gum, universal spray cement and tire envelopes for the tire retreading industry. The Applicant has entered into an agreement with M/s Elcom Systems Pvt. Ltd for providing on lease a Maintenance Repair and Overhaul facility (MRO). That, the applicant further engaged M / s Akanksha Contracts Pvt. Ltd. for supplying various goods and services for setting up the MRO facility on its land.

The applicant contended that he is eligible to claim input tax credit (ITC) in respect of goods and services supplied by M/s Akanksha Contracts Pvt. for carrying out the activities of Civil Work and External Development Works for setting up of MRO facility which will be further leased to M/s Elcom Systems Pvt. Ltd.

The Authority comprising of J.P.Meena, Addl commissioner and Hemant Jain, Joint commissioner has ruled that the applicant is not eligible to claim credit of the GST charged by the vendor for supply of goods and services to it, which are used for carrying out the activities (Civil Work and External Developmental Works) for setting up of MR0 facility.

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Facility of Beneficiary Uploading Documents through e-SANCHIT will be deactivated from Jan 31st: CBIC

The Central Board of Indirect Taxes and Customs (CBIC) said that the facility of beneficiary uploading these documents through e-SANCHIT will be deactivated from 31.01.2020.

‘e-SANCHIT’ application is successfully in operation since 01.04.2018. The objective of the application is to further reduce the physical interface between Customs/regulatory agencies and the trade and also to increase the speed of clearance in both imports & exports.

The facility to upload digitally signed Licenses/Permits/Certificates/Other Authorizations (LPCOs) by Participating Government Agencies (PGAs) one-SANCHIT at all ICES (Indian Customs EDI System) locations across India was introduced from 16.11.2018 vide Circular No. 44/2018-Cus. dated 13.11.2018.

The CBIC said that the facility to upload the LPCOs is now being fully made available to these 4 new PGAs, the beneficiaries i.e. importer/exporters/customs brokers would not be allowed to upload the previously issued LPCOs on e-SANCHIT w.e.f 31/01/2020.

Further, to facilitate the members of the trade (beneficiaries), the PGAs are required to upload the LPCOs issued by them during the last 15 days from the above cut-off date. Any LPCOs issued on a prior date may also be uploaded by the PGAs on e-SANCHIT, in order to enable the beneficiary to utilize the same.

The CBIC also reiterated that the PGAs will be communicating with the beneficiaries through the e-mail addresses registered in the ICEGATE. Board had already introduced a simplified auto-registration process in ICEGATE based on email IDs already provided by them for registration under GST without the use of digital signatures for limited purposes of eSANCHIT (communication and viewing) and the IRNs will be communicated to such email IDs.

The board also directed to all Chief Commissioners of Customs to reach out to the beneficiaries to ensure that correct email addresses are reflected in the ICEGATE.

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Madras HC stays Special Court hearing in Tax Evasion case against Karti Chidambaram, wife

The Madras High Court has stayed the Special Court hearing in the Tax Evasion case against Karti Chidambaram and his wife Srinidhi Karti Chidambaram.

The Court on Tuesday stayed all further proceedings in an alleged tax evasion case prosecuted by the Income Tax department.

The issue was related to payment of tax following the sale of a 1.16-acre property at Muttukadu in March 2015. Income Tax officials had claimed that receipt of a cheque for ₹3.65 crores alone was shown as sale consideration, and tax was not paid for cash receipt of another ₹1.35 crore.

Initially, the Income Tax department had initiated prosecution before an Additional Chief Metropolitan Magistrate court, designated to hear cases related to economic offenses, at Egmore here. However, after Mr. Karti Chidambaram became an MP in May 2019, the High Court Registry transferred the case to the special court for legislators.

Challenging such transfer, the petitioners claimed that it was impermissible in law to transfer a case from a Magistrate court to a Court of Sessions.

A Single Judge bench of Justice M. Sundar granted the interim stay till January 27 when he would take up for final hearing a couple of petitions filed by the MP and his wife in August last questioning the jurisdiction of the special court to conduct trial and also two other petitions filed recently to quash the entire I-T proceedings.

Collection of VAT in Hotels, Restaurants and Event Centres is Unconstitutional: Nigerian Federal Court

The Nigerian Federal Court held that it is unconstitutional in the perspective of the Constitution of the Federal Republic of Nigeria to collect Value-Added Tax (VAT) in hotels, restaurants and event centres.

Trustees of Hotel Owners and Managers Association of Lagos approached the court with an issue regarding the provision of the Value-Added Tax (VAT) Act covering the goods and services including the goods and services consumed in hotels, restaurants and event centres in Lagos State and also whether the provisions of Hotel Occupancy and Restaurant Consumption Regulations 2017 about the same are inoperative. They argued that consumption tax imposed by Lagos State Internal Revenue Service (LIRS) and VAT should not be enforced at the same time.

The Attorney General of Lagos State claimed in opposition that the matters involved is a residual matter lying within the scope of the State House of Assembly and the Constitution does not make any provision regarding the same.

The Nigerian Federal Court affirmed that the imposition of tax as per VATA on goods and services consumed in hotels, restaurants and event centres are unconstitutional and only LIRS is entitled by the constitution to impose and collect taxes for goods and services consumed in hotels, restaurants and event centres.

Central Government Notifies National Startup Advisory Council

The Central Government has notified the structure of the National Startup Advisory Council to advise the Government on measures needed to build a strong ecosystem for nurturing innovation and startups in the country to drive sustainable economic growth and generate large scale employment opportunities. The individual names will be notified later.

The Council will suggest measures to foster a culture of innovation amongst citizens and students, in particular, promote innovation in all sectors of economy across the country, including semi-urban and rural areas, support creative and innovative ideas through incubation and research and development to transform them into valuable products, processes or solutions to improve productivity and efficiency and create an environment of absorption of innovation in industry. It will also suggest measures to facilitate public organizations to assimilate innovation with a view to improving public service delivery, promote creation, protection, and commercialization of intellectual property rights, make it easier to start, operate, grow and exit businesses by reducing regulatory compliances and costs, promote ease of access to capital for startups, incentivize domestic capital for investments into startups, mobilize global capital for investments in Indian startups, keep control of startups with original promoters and provide access to global markets for Indian startups.

The National Startup Advisory Council will be chaired by Minister for Commerce & Industry. The Council will consist of the non-official members, to be nominated by Central Government, from various categories like founders of successful startups, veterans who have grown and scaled companies in India, persons capable of representing interests of investors into startups, persons capable of representing interests of incubators and accelerators and representatives of associations of stakeholders of startups and representatives of industry associations. The term of the non-official members of the Startup Advisory Council will be for a period of two years.

The nominees of the concerned Ministries/Departments/Organisations, not below the rank of Joint Secretary to the Government of India, will be ex-officio members of the Council.  Joint Secretary, Department for Promotion of Industry and Internal Trade will be the Convener of the Council.

Petition in Calcutta HC challenges denial of ITC to buyer for default of Supplier of Goods or Services [Read Petition]

A Petition has been filed in the Calcutta High Court has challenged the constitutional validity of Section 16(2)(c) of the CGST Act/WBGST Act, which seeks to deny ITC to a buyer of goods or services, if the tax charged in respect of supply of goods or services has not been actually paid to the Government by the supplier of goods or services.

The Petition has been filed by LGW Industries Ltd has also challenged the demand of reversal of ITC along with interest only on the basis of allegation that registration has been obtained by some of the suppliers of goods on the basis of fake identity proofs and that none of the suppliers is found in their Principal Place of business.

The Petitioner was represented by Advocate Vinay Shraff with Advocate Rajarshi Chatterjee and Advocate Himangshu Ray submitted that denying ITC to a buyer of goods and services would tantamount to treating both the ‘guilty purchasers’ and the ‘innocent purchasers’ at par whereas they constitute two different classes.

The petition reads stated that denying ITC to a buyer of goods or services for default of the supplier of goods or services would tantamount to shifting the incidence of tax from the supplier to the buyer, over whom it has no control whatsoever, is arbitrary and irrational & therefore violative of the Article 14, Article 19(1)(g) and Article 300A of the Constitution of India. It would also clearly frustrate the underlying objective of removal of the cascading effect of tax as stated in the Statement of object and reasons of the Constitution (One Hundred And Twenty-Second Amendment) Bill, 2014.

The petition also reads that, in the absence of any finding of petitioners mala fide intention, connivance or wrongful association with the suppliers, no liability can be imposed on it on the principle of vicarious liability on account of fraudulent conduct of the suppliers, who have obtained registration on the basis of fictitious documents.

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Pharmaceutical Reference Standards is not a Diagonostic Reagent, attracts 18% IGST: AAR [Read Order]

The Authority on Advance Ruling (AAR) Karnataka, ruled that Pharmaceutical Reference Standards (PRS) is not a diagnostic reagent and attracts 18% of IGST.

The applicant states that they are a science-based organization conceptualized to cater to the growing analytical and regulatory requirements of the Pharmaceutical Industries and to provide solutions to the new challenges in separations and purifications faced in the Pharmaceutical and Research Institutions worldwide.

The applicant inter-alia imports Pharmaceutical Reference Standards (PRS) from various official pharmacopoeias like US Pharmacopoeia (USP), European Pharmacopoeia (EDQM), British Pharmacopoeia (BP) and supplies them to all major pharmaceutical companies in India like Sun Pharmaceuticals Ltd., Torrent Pharmaceuticals Ltd., Lupin Ltd., Matrix Laboratories Ltd., Ranbaxy Ltd., Dr.Reddy’s, Aurobindo Pharmaceuticals Ltd., etc.

PRS is in the nature of Prepared Laboratory Reagent and is a substance of known purity which is intended to be used exclusively for a specified analytical calibrating and referencing purposes. PRS is not used for detection or diagnosis and is not to be used as a drug as clearly stated on the label or accompanying certificate or literature.

The drug manufacturing companies use these PRS in their laboratory tests on all drug substances for determining the purity of medicine and identification and quantification of pharmaceutical impurities applied

The ruling was made by Additional and Joint Commissioner, Harish Dharnia and Ravi Prasad on an application filed by M/s Chrochemie Laboratory PVT ltd.

The Authority observed that goods of HSN 3822 other than “diagnostic kits” or “diagnostic reagents” are  but covered under schedule III and entry 453  because not covered under any specific entry of Schedule I or Schedule II schedule IV or Schedule V or Schedule VI

The  Authority ruled that Prepared Laboratory Reagents or Pharmaceutical Reference standards are not diagnostic reagents are not covered under Entry No.80 of Schedule II Integrated Tax and is covered under entry no.453 of Schedule III of Integrated Tax (Rate)  and attracts IOST at 18%.

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Activity in relation to any function entrusted to a Panchayat or Municipality are Exempted from GST: AAR [Read Order]

The Authority for Advance Ruling (AAR) in Goa held that activities in relation to any function entrusted to a Panchayat or Municipality are exempted from Central Goods and Services Tax (CGST) Act.

The applicant shall be responsible for the overall management of all components of the project on technical, financial and contractual matters during the implementation of the sewerage projects. The services shall include the deployment of a team of experts, engineers, and other support staff which shall remain involved until the execution of the projects. The scope would broadly include appointments of contractors and consultants, review and finalization of contractor’s and consultant’s submissions in relation to project planning and execution, periodic review of progress report, rendering advice on countermeasures/corrective actions required for overcoming bottlenecks/problems encountered during the execution of the project.

The nature of services provided by the applicant falls under the 12th Schedule, Article 243W of the Indian Constitution, the activities listed under the 12th Schedule are enumerated as under Public health, sanitation conservancy, and solid waste management. The services provided by the applicant appear to fall in the list of services enumerated under serial no. 6 of the 12th Schedule of Article 243W of the Indian Constitution, thus qualifying the admissibility criteria.

The Authority noted that “Pure Services” are provided to a Governmental Authority by way of any activity in relation to any function entrusted to a Panchayat or Municipality under Article 243G or Article 243W of Constitution of India.

Government with 90 percent or more participation by way of equity or control to carry out any function entrusted to a Panchayat or Municipality under Article 243G or Article 243W of the Constitution of India, then the same is exempted.

The AAR observed that the services provided by the applicant appear to fall in the list of services enumerated under serial no. 6 of the 12th Schedule of Article 243W of the Indian Constitution, thus qualifying the admissibility criteria.

The AAR also said that Supervision fees received towards such services provided by the applicant qualify as “Pure services” provided to a Governmental Authority by way of any activity in relation to any function entrusted to a Panchayat or Municipality under Article 243G or Article 243W of the Constitution of India and are exempted from CGST.

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Dealers eligible for ITC on Demo Cars: AAR [Read Order]

The Maharashtra Authority for Advance Ruling (AAR) held that Input tax credit (ITC) charged on inward supply of demo cars which is used for Demonstration purpose in the course of business of supply of Motor Vehicle as an input tax credit (ITC) on capital goods and the same can be utilized for payment of output tax payable under this Act.

The Applicant is an authorized dealer for Maruti Suzuki India Limited for the supply of motor vehicles and spares and for servicing as also for some other commercial vehicle manufacturers. The Applicant has made purchases of motor vehicles against tax invoice which are reflecting in the books of accounts of the Applicant as capital goods. The vehicles are used as demo cars for providing trial run to customers to understand the features of the vehicle. This is an essential part of marketing and sales promotion to facilitate the supply of cars.

As per the dealership norms with Maruti Suzuki India Limited, the applicant is required to maintain at least one Demo vehicle of each model per location. The Applicant purchases these Demo vehicles against a tax invoice. The said Demo vehicles are capital goods accounted under Fixed Assets of the Company excluding the GST component. The applicant has not claimed depreciation on the tax component of the said demo cars nor claimed as business expenditure.

Every model of demo cars is used for demonstration for a limited period. They are replaced every two years or 40,000 Kms whichever is earlier. Secondly, the vehicle keeps on changing due to competition in the market and changing demands. The customers always demand for the brand new model of cars for a test drive. Hence, it mandatory for the Applicant to buy a new Demo vehicle on the launch of the new model. The Demo vehicles are sold after paying the applicable taxes on sale value at that point in time.

  Thereafter, the said vehicles are sold after paying the applicable taxes on sale value at that point in time. Since the applicant will be making further supplies of the Demo vehicles, and there is no time limit prescribed in the GST Act for making such further supplies.

The bench constituting of Vineetha Sekar and A.A Chahure ruled on an application filed by chowgule Industries private limited.

The ITC availed by them on capital goods can be utilized for payment of output tax payable under this Act. The manner of utilization of ITC is provided as per provisions of Section 49 of the COST Act. Section 18 of the COST Act deals with the availability of credit in special circumstances. As per Section 18(6) of the COST Act, when there is a supply of capital goods on which ITC has been taken, as in the subject case then the applicant shall pay an amount equal to the ITC taken on the said Demo Vehicles reduced by such percentage points as may be prescribed or the tax on the transaction value of such Demo Vehicles, whichever is higher.

The applicant is entitled to avail Input tax credit (ITC) charged on inward supply of Motor Vehicle which is used for Demonstration purpose in the course of business of supply of Motor Vehicle as an input tax credit (ITC) on capital goods and the same can be utilized for payment of output tax payable under this Act.

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Normal Business Advances which are not in the nature of ‘Loan’ is not Deemed Dividend: ITAT

The Income Tax Appellate Tribunal (ITAT) of Delhi bench held that the transaction where received in advance in the normal course of business and which is not taken as a loan cannot be considered as Deemed Dividend.

The order of the ld. CIT(A), the record of the revenue and the paper book filed. The AO, in the assessment order, has highlighted the fact that the assessee was holding 86.67% shares in M/s Apra Auto India P. Ltd and had been in receipt of amount running into Rs.10.57 crores from the account of M/s Apra auto India P. Ltd. Keeping in view the fact, that the said company that is M/s. Apra Auto India p. Ltd. was also having accumulated profits of Rs. 21.65 crore, the amount so received by the assessee has been treated as deemed dividend as per Section 2(22)(e) of the Income Tax Act, 1961.

The Order was given by Judicial Member, S. Sidhu, and Accountant Member, B. R. R. Kumar on an issue raised by CIT on the ground that CIT has erred in law in deleting the additions of Rs.10,57,01,194/- made u/s 2(22)(e) of the I.T Act on account of deemed dividends.

Section 2(22)(e) elaborates  as, when a company in which the public are not substantially interested*, extends a loan or an advance to:

  1. any of its shareholders who has more than 10% voting power in the company or
  2. to any concern in which such shareholder is substantially interested or
  3. for the individual benefit of such shareholder or
  4. on behalf of such shareholder

to the extent the company has accumulated profits, such payment would be deemed as a dividend under Section 2(22)(e).

While dismissing the appeal, the Tribunal noted that the advance received from the company by the assessee is in the nature of trade advance against the booking of commercial place being built by the assessee and cannot be considered as deemed dividend under section 2(22) (e).

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No Input Tax Restriction for Real Estate Limited Partnership Fund: UK Tribunal

The UK Tribunal has allowed the appeal by the general partner of Melford Special Situations LP (the Fund), concerning the recovery of input tax. The case was regarding the full deduction of VAT on Set-up Costs and the Operating Costs as input tax by the appellant. The appellant holds shares in Hyde Park Hayes Ltd (HPH). HPH, in turn, has shares in a number of companies or special purpose vehicles (SPV’s) and both hold the separate underlying assets.

The appellant argued that the activities of the appellant, including those of the Fund and LLP should be treated as activities of a group for VAT purposes. In addition to this, it was also stated that members of a VAT group are treated as a single taxable person as per the section 44 VATA 1994 and Article 11, Directive 2006/112 with cite to case C-7/13 Skandia America Corporation v Skatteverket.

In opposition, HMRC said that the recovery of input tax by the group should be restricted as the taxable services provided included non-economic activities. Since the UK Tribunal did not find that separate economic and non-economic activities are undertaken, the recovery of costs is allowed in full.

Compensation Paid for setting up of SEZ will be considered as ‘Supply of Services’, GST payable: AAR [Read Order]

The Goa Authority for Advance Ruling (AAR) held that compensation paid for setting up of Special Economic Zone (SEZ) unit will be considered as a ‘supply of services’ under Goods and Service Tax (GST) Act and GST will be payable.

The applicant, in this case, is the M/s Goa Industrial Development Corporation (GIDC), which in turn is a government undertaking. The corporation undertook the contracts where it leased the lands to the parties in order to make the particular area Special Economic Zone (SEZ) unit. However, there was a mass protest against this project and the project failed. And in the consequence of the failure, all the leaseholders asked the government undertaking i.e. M/s Goa Industrial Development Corporation (GIDC) to compensate all the losses which are incurred by the parties to the lease agreement. Earlier it denied but later on, it had to compensate at the rate of 8.25% to the parties to the lease agreement as per the orders of the Supreme court.

However, the issue raised in this context was whether the compensation paid for setting up Special Economic Zone (SEZ) which will be paid to the parties of the lease agreement would be considered as a ‘Supply of Services’ under the GST  payable Act or not?

Wherefore, the bench comprising of J.K. Meena, a member and Sartia S. Gadgil affirmed in this case that the compensation paid to all the parties by the M/s Goa Industrial Development Corporation (GIDC) will be considered to be the ‘Supply of Service’ under Goods and Service Tax (GST) Act. Therefore, the applicant which is a government undertaking is liable to pay tax on all the compensation which will be given to the parties to the agreement.

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18% GST applicable on Entry Fee and Amusement Facility in Public Park: AAR [Read Order]

The Rajasthan Authority for Advance Ruling (AAR) ruled that 18% of GST applicable to the entry fee and amusement facility in the public park.

The applicant was a contractor, who was given a contract for the purpose of operation, maintenance, and management of a park named Subhash Udhyan which was a Municipal Park situated in the city of Ajmer. The municipal park also provided for the amusement facilities such as a toy train, pedal boat, etc. Further, the applicant is of the view that there is no Goods and Service Tax (GST) applicable to the contractor if the charges of the ticket of the park and amusement facilities are less than Rs. 250/- per person.

Therefore, the issues raised were that at what rate of GST must be applied on the entry fee and on the amusement facility of the pedal boat and toy train will be applicable to the contractor?

The bench comprising of J.P. Meena, Member of Central Tax and Hemant Jain, Member of State Tax held that on the entry fee and amusement facilities such as toy train and pedal boat total of 18% of Goods and Service Tax (GST) is applicable. Further, the bench divided 18% of GST and state that 9% of State Goods and Service Tax (SGST) is applicable and 9% of Central Goods and Service Tax (CGST) is applicable, which makes a total of 18% of the GST.

The bench while elaborating stated that the provisions of the Rajasthan Goods and Service Tax (RGST) Act are similar to those of Central Goods and Service Tax (CGST). If in case any provision would differ it will be specifically mentioned.

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Printing process for Budget 2020 commences with Halwa Ceremony

The Halwa ceremony, marking the commencement of the Budget printing process for Union General Budget 2020-21, was held here in North Block today morning in the presence of the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman.

Union General Budget 2020-21 is to be presented on 1st February 2020. To maintain the secrecy of Budget, there is a “lock-in” of the officials involved in making the Budget. Budget Press, situated inside North Block, houses all officials in the period leading up to the presentation of the Union Budget. These officers and staff will come in contact with their near and dear ones only after the Budget is presented by the Union Finance Minister in Parliament.

At the Halwa Ceremony, Smt. Sitharaman was accompanied by Union Minister of State for Finance & Corporate Affairs Shri Anurag Singh Thakur; Shri Rajeev Kumar, Finance Secretary; Shri Atanu Chakraborty, Secretary, DEA; Dr A.B. Pandey, Revenue Secretary; Shri Tuhin Kanta Pandey, Secretary, DIPAM; Shri T.V. Somanathan, Secretary, Expenditure among other officers of the Ministry of Finance.

Shri P.C. Mody, Chairman, CBDT; Shri John Joseph, Chairman, CBIC; Members of CBDT & CBIC; Shri Rajat Mishra, Joint Secretary (Budget), besides others officers and staff of the Ministry of Finance, involved in the Budget preparation and printing process were also present on the occasion. Later, the Finance Minister took a round of the Press and acquainted herself with the Budget printing process.

Chartered Accountant vacancy in Intel

The Intel Business Group has invited applications for the post of Senior Accountant/Senior Finance Analyst from qualified or semi-qualified Chartered Accountants.

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Job Description

Qualifications

Candidate should hold a bachelor’s degree in commerce; possess good communication skills; qualified or semi-qualified CA preferred. Candidates should have a minimum of 5+ years of Accounting and audit experience, a strong work ethic based on a strong desire to drive process improvements; strong interpersonal skills, the ability to multitask and self-motivated and should be a great team player. Should have strong financial reporting & analytical capabilities, acts independently to lead and complete projects with complex objectives. Should possess strong project/process management skills, ability to work independently to help identify the root cause of problems and solve issues independently and drive to closure. Should have an independent mind to challenge the status quo and initiate activities necessary to strengthen the accounting process where required. It should effectively communicate across different levels of the organization including Cross-functional and Cross Geo. Experience & knowledge in US GAAP, IFRS & local statutory filing and tax compliance activities will be preferable. Project experience in automation of accounting or finance activities, certifications in programming or automation will an added advantage. Candidate must act as full partners in making and supporting business decisions that are aimed at maximizing shareholder value.

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