In CCE, Eranakulam v. M/s Sai Service Station Ltd, a division bench of the Kerala High Court held that a dealer engaged in exchanging old cars for new ones is not liable to pay Service Tax for such activity since the same would not amount to Business Auxiliary Service” under the Finance Act, 1994.
The appellant-departments case was that the exchange of old cars for new ones amounts to business auxiliary service and the difference between the sale price for the old cars and the purchased price of the new ones has to be treated as remuneration for the service rendered by the assessees, M/s Sai Service Station Ltd and M/s Indus Motors Co.
On appeal, the Appellate Tribunal quashed the demand order finding the transaction totally a purchase and sale of old vehicles. It said that the dealer refurbishing, repairing the vehicle as its owner is not a service rendered by it to any other person.
A bench comprising Justice Antony Dominic and Justice Dama Seshadri Naidu noted that the sale of a motor vehicle is governed by the Sale of Good Act, and its use by the Motor Vehicles Act. Further, the selling price of the used car includes the cost of the used car, the refurbishment charges, the management fee, free service and warranty, besides business margin.
Aligning with the findings of the Tribunal, the bench observed that the transaction is in part exchange.
“The used-car owner gets a new car and pays the balance price. He signs Forms 29 and 39 in blank and leaves the scene for good—literally. He has no concern how the dealer repairs or refurbishes the car, he has no concern how the dealer displays his wares—the car—and he has no concern what price the used-car fetches. The dealer’s not getting the vehicle registered in his name or having the transfer of entry in the road transport registers does not sound the death knell of the transaction so long as the dealer does not intend to use the motor vehicle in “public or other place,” it said.
Read the full text of the Judgment below.
Non Resident Indians who have legitimately escaped tax using their NRI status are under income tax scanner now.
A few days ago, income-tax authorities have added a new provision in the tax return form (ITR2) which will require all non-residents to disclose details of their bank accounts outside India. Most NRIs, even those who have been away for years, file tax return in India to cover their income from stocks, properties and fixed income instruments like bank deposits and bonds.
The new clause has been incorporated amid a widely-shared perception that many Indians have moved money from jurisdictions like Switzerland to newly opened bank accounts in destinations such as Dubai, Singapore and Hong Kong.
A person who stays 182 days out of the country every year can enjoy the status of ‘non-resident’. Till now, they can successfully upload online tax return form by holding back information on foreign bank accounts.
Such a possibility is less remote now with many tax havens agreeing to share data. The government has tweaked reporting norms by adding provisions to the ITR forms that would now require Non Resident Indians to furnish details such as account numbers in overseas banks, name of the banks, countries where the bank offices are located as well as the Swift codes and International Bank Account Numbers (IBAN).
At that stage, non-disclosure of such information could even boil over from the I-T department to the Enforcement Directorate (ED) which is empowered to invoke far harsher laws that deal with money-laundering.
As per ITR2 form, an NRI would be obliged to provide all the bank accounts, and an assessing officer will have the right to ask any question therefrom which have a possible and potential tax claim in India.
As per the latest norms, only resident Indian had to share details of the offshore bank accounts with tax authorities. But now the provisions will apply to NRIs’ as well. The new clause incorporated by the government is believed to be based on the understanding that many Indians have moved money from jurisdictions like Switzerland to newly opened bank accounts in destinations such as Dubai, Singapore and Hong Kong.
However, no circular or notification has been issued by the department clarifying the change in filing norms.
A division bench of the Calcutta High Court in Smt. Sumana Bandyopadhyay & Anr v. DCIT (Int. Taxation), held that salary which became due and has accrued to a non-resident, for services rendered outside India and which is not chargeable to tax in India on the “due” or “accrual” basis, cannot be chargeable to tax on the “receipt” basis merely because the foreign employers, on the instructions of the assessee, have remitted a part of amount of salary to the assessee’s NRE bank account in India.
The appellant, a marine engineer, received salary from his two employers in his NRE Account. The department took a view that the sum so received must be included to the taxable income of the assessee since it was received by him in the NRE account directly from his employers and this constituted receipt of the said sum in India. According to them, the said sum attracts Section 5(2)(a) of the Income Tax Act.
The assessee maintained that the income constituted earning outside India while the assessee was an NRI and mere receipt of the said sum in the assessee’s NRE account would not subject to tax under the Income Tax Act.
The bench relied on the departmental circular dated 11.04.2017 clarifying that the salary of a non-resident seafarer on account of services rendered outside India in a foreign ship is not taxable in India merely for the reason that the salary has been deposited in the NRE account.
Concurring with the ratio of the decision of the Karnataka High Court in the case of Director of Income-tax (International Taxation) Vs. Prahlad Vijendra Rao, the bench allowed the appeal and said that “interpretation be given to sub Section (b) of Section 5(2) of the Act would also apply to Section 5(2)(a) of the Act. The Circular is clarificatory in nature and is applicable for construing the aforesaid provision for the relevant assessment year. In our opinion the authorities under the Income Tax Act did not properly apply the provisions of law to the case of the assessee. We are of the view that the Assessing Officer was wrong in adding the aforesaid sum to the income chargeable to tax of the assessee for the relevant assessment year.”
Read the full text of the Judgment below.
The Goods and Services Tax has launched by the Government from 1st July 2017, the GST Network, a Company incorporated to handle the IT backbone for new tax regime, has been facilitating registration of businesses.
Under GST law, businesses are required to upload on GSTN portal invoices of their trade every month.
“We plan to launch the invoice upload utility on the portal on July 24 so that businesses can come forward and start uploading the invoices on a daily or weekly basis to avoid month-end rush,” GSTN Chairman Navin Kumar told PTI.
As per the new indirect tax law, invoice is mandatory for all sales above Rs. 200. Keeping invoice records in serial number even if maintained manually, is a necessary requirement for claiming input tax credit under the GST regime.
The GSTN had last month launched an offline Excel format for businesses to keep their invoice records and from July 24 this Excel sheet can be uploaded on the portal.
Kumar said GSTN would put up a video on its portal to assist businesses in uploading invoices. Besides, a call centre help desk has been set up to assist taxpayers regarding any query they might have about the new tax regime.
“We have been reaching out to trade and industry associations telling them that those who have about 10,000 invoices a day, they should upload it on GSTN portal on a daily/weekly basis to avoid last moment rush,” Kumar said.
So far, over 69 lakh excise, VAT and Service Tax assessees have migrated to the GSTN portal and nearly five lakh new registrations have happened under GST.
While uploading invoice on the GSTN portal, a business would need to mention the invoice number and date, customer name, shipping and billing address, customer and taxpayer’s GSTIN, place of supply and HSN code.
Also, the taxable value and discounts and rates of CGST, SGST and IGST would have to be filled, along with item wise details like description, quantity and price.
The Commissioner of Sales Tax, Maharashtra, on Saturday issued advisory for traders addressing their queries in relation to migration and new registration to GST.
GST Enrollment process for the existing taxpayers of the State had been started from November 2016.
It advised the traders to use different mobile and e-mil IDs numbers for each business verticals.
The department had received complaints from some traders that when they logged in to their account using the credentials, they are diverted to some others account. “These are the cases wherein the registration or migration has been done by the same tax practitioner. This happens when a tax practitioner opens multiple enrolment/ migration cases on his/her computer,” it said.
In order to avoid such problems, the practitioners were advised to not open more than one case at a time and to clear the cache memory of the computer system after completing each case.
It further clarifies issues on change of e-mail ID and mobile number of Primary Authorized Signatory in GST Registration Database, opting for composition scheme, issue of bills of supply etc.
Read the full text of the Advisory below.
The Institute of Cost Accountants of India has submitted an undertaking to the Madras High Court that it will consider changing its acronym from ‘ICAI’ to ‘ICOAI’, and submit the compliance report before it on August 21 after a meeting of the body next month.
A writ petition was filed before the Court seeking to forbear the Institute of Cost Accountants of India (ICOAI) from using the acronym ‘ICAI’ (Institute of Chartered Accountants of India) for professional opportunities earmarked for them.
In the petition, the petitioner, Venkata Siva Kumar, a chartered accountant alleged that ICWAI is knowingly using the name of ICAI from 2012 in every press meet and other events. He contended that this makes a confusion among the students, general public and the other stakeholders.
He alleged that the Institute of Cost Accountants had usurped the goodwill of the ICAI built over 70 years, and without any legal sanction, started representing itself using the acronym ‘ICAI’.
After the petition was admitted by the Court, the counsel for the Institute of Cost Accountants recently furnished undertaking. Justice M. Duraiswamy then posted the matter to August 21.
A division bench of the Delhi High Court in CIT v. ITC Ltd, held that the payment of royalty made by the Assessee to the Airport Authority of India (AAI) for the use of lounge premises under the License Agreement would constitute ‘rent’ within the meaning of Section 194-I of the Income Tax Act and therefore, assesse is liable to deduct tax at source.
Assesse, ITC Ltd, was awarded the contract for running an Executive Lounge at the Indira Gandhi International Airport, New Delhi (‘IGI’) by the AAI. According to them, the award of the contract was preceded by a bidding process which commenced with a tender being floated by the AAI. The successful bidder had to quote the royalty amount it was prepared to pay for being granted license to operate the executive lounge. The AAI was to fix the license fee for the space to be provided to the successful bidder for operating the lounge. They said that the payment was not in the nature of rent but in the nature of royalty.
AO said that the payment was in the nature of rent. Consequently, he treated ITC Ltd as assesse-in-default on ground that it failed to deduct TDS under section 194I of the Act from the payments made by it to AAI under the License Agreement.
On appeal, the Appellate Tribunal held that the amount paid by the Assessee to the Airport Authority of India for use of lounge premises by way of royalty was not tantamount to rent within the meaning of Section 194-I of the Income Tax Act. It further noted that the interest under Section 201(1A) of the Income Tax Act cannot be charged once the payee had paid the tax. It also deleted the penalty under Section 271C of the Income Tax Act, 1961.
The bench relied on the decision in the case of Japan Airlines Co. Limited v. CIT and noted that in the present case, the payment for the use of space is inseparable from the payment of royalty for the right to operate the lounge. It therefore concluded that the payment of the sum by the Assessee to the AAI under the LA falls within the expanded definition of ‘rent’ under Section 194-I of the Act. “The certificate issued by the AAI stating that the payment of licence fee for the space is different from the payment of royalty will not make a difference to the legal position as regards Section 194 I of the Act”, it said.
With regard to the levy of penalty on the assesse, the division bench comprising of Justice S. Muralidhar and Justice Prathibha M. Singh observed that the question whether in the present case the payment of royalty for the right to operate the executive lounge is in fact ‘rent’ under Section 194-I of the Act, was a debatable issue and therefore, the benefit of s. 273 B must be given to the assesse.
Read the full text of the Judgment below.
Following the Delhi High Courts observation in J.K Mittal v. UOI, the government Today clarified that reverse charge mechanism is applicable to all legal services including representational services provided by Senior Advocates under the new Goods and Service Tax (GST) law.
There are points being raised about the applicability of GST on legal services provided by advocates – whether it is in forward charge or reverse charge. It may be mentioned that there is no change made in taxation of legal services in the GST era.
A division bench of the Delhi High Court on Wednesday had issued notice to the Central Government and the GST Council seeking for clarification on the applicability of reverse charge mechanism on legal services (not restricted to representational services) on lawyers.
In this context, the Government clarified that legal service has been defined to mean any service provided in relation to advice, consultancy or assistance in any branch of law, in any manner and includes representational services before any court, tribunal or authority.
It is further clarified that notification No. 13/2017-Central Tax (Rate) dated 28.6.2017 (Serial No. 2)specifies, inter alia,the following service under reverse charge mechanism,-
“Services supplied by an individual advocate including a senior advocate by way of representational services before any court, tribunal or authority, directly or indirectly, to any business entity located in the taxable territory, including where contract for provision of such service has been entered through another advocate or a firm of advocates, or by a firm of advocates, by way of legal services, to a business entity.”
The words “by way of legal services” are preceded and succeeded by comma. Therefore, the said words apply to an individual advocate including a senior advocate and a firm of advocates. Legal services provided by either of them are liable for payment of GST under reverse charge by the business entity.The words “by way of representational services before any court, tribunal or authority….” appear in conjunction with senior advocate without a comma and merely describe the nature and mode of representational services provided by a senior advocate to a business entity. It, therefore, follows that legal services, which includes representational services, provided by advocates are under reverse charge.
A division bench of the Gujarat High Court, recently in Pr. CIT v. M/s Veer Gems, held that mere fact that an enterprise has de facto participation in the capital, management or control over the other enterprise does not make the two enterprises “associated enterprises” so as to subject their transactions to the rigors of transfer pricing laws.
In the instant case, assessee, M/s Veer Gems has made substantial purchases from another concern, M/s. Blue Gems BVBA. The entire partnership of the assessee firm are held by family members. One of the brothers of the family had control over the entire share holding of M/s Blue Gems BVBA. AO found that M/s. Blue Ge,s BVBA is closely related with M/s. Veer Gems and falls within the parameters of sec. 92A(2) j,k and m since it is clear that both the entitites are being controlled by the same family of four brothers and their close relatives.
The Tribunal, on second appeal, concluded the matter in favour of the assessee and held that none of the provisions of Clauses j, k and l of sub-section 2 of Section 92A of the Income Tax Act would apply in the present case and therefore the assessee M/s. Veer Gems and its supplier of rough diamonds M/s. Blue Gems are not associated enterprises.
Aligning with the above findings, the Justices Akil Khureshi and Biren Vaishnav said that “Clause (i) would apply in a case where goods or articles are manufactured or transferred by one enterprise. In the present case, admittedly M/s. Blue Gems does not either manufacture or process any articles. It merely purchases rough diamonds from the international markets and supplies to the assessee. Clause (j) would apply when an enterprise is controlled by an individual. In the present case, both the enterprises are partnership firms. There is nothing to suggest that they are controlled by any individuals. Clause (l) would of course apply in a case where the enterprise is a partnership firm. However, for applicability of the said clause, there has to be an enterprise in the nature of a firm and another enterprise who holds not less than 10% interest in such firms. Such facts are also not applicable in the present case. The Tribunal in our opinion therefore committed no error in holding that the assessee and M/s. Blue Gems not being associate enterprises, the question of applying transfer pricing formula would not arise.”
Read the full text of the Judgment below.
In CIT v. M/s. Orchid Industries Pvt. Ltd, a division bench of the Bombay High Court held that share transactions cannot be treated as bogus under section 68 of the Income Tax Act when Assessee produced all the relevant documentary evidence to prove the genuineness of the transaction in order to discharge its onus.
Justices S.V Gangapurwala and A M Badar, while dismissing the departmental, said that in such a case, the AO cannot invoke section 68 merely for the reason that the shareholders never responded to the intimations sent by him and never appeared before him.
Assessee received Rs. 95 lakhs as share application money for the year under consideration. As required by the department, the assessee furnished all documents such as PAN details, Bank statements etc to prove the genuineness of the transaction. The Assessing Officer however, added the amount as unexplained credit of the assessee under section 68 of the Act on ground that the parties to whom the share certificates were issued and who had paid the share money had not appeared before the him and the summons could not be served on the addresses given as they were not traced and in respect of some of the parties who had appeared.
The Tribunal, allowed the second appeal filed by the assessee by holding that the Assessee has produced on record the documents to establish the genuineness of the party such as PAN of all the creditors along with the confirmation, their bank statements showing payment of share application money.
Concurring with the findings of the Tribunal, the bench held that “the Assessee has also produced the entire record regarding issuance of shares i.e. allotment of shares to these parties, their share application forms, allotment letters and share certificates, so also the books of account. The balance sheet and profit and loss account of these persons discloses that these persons had sufficient funds in their accounts for investing in the shares of the Assessee. In view of these voluminous documentary evidence, only because those persons had not appeared before the Assessing Officer would not negate the case of the Assessee.”
Read the full text of the Judgment below.
In a recent statement, the Central Government clarified that any registered person dealing in buying and selling of second hand goods can avail the benefit of Margin scheme subject to the conditions laid down under the Central Goods and Services Tax Rules, 2017.
Doubts have been raised regarding the applicability of the Margin Scheme under GST for dealers in second hand goods in general and for dealers in old and used empty bottles in particular.
Rule 32(5) of the Central Goods and Services Tax (CGST) Rules, 2017 provides that where a taxable supply is provided by a person dealing in buying and selling of second hand goods i.e., used goods as such or after such minor processing which does not change the nature of the goods and where no input tax credit has been availed on the purchase of such goods, the value of supply shall be the difference between the selling price and the purchase price and where the value of such supply is negative, it shall be ignored. This is known as the margin scheme.
Further, notification No.10/2017-Central Tax (Rate), dated 28.06.2017 exempts Central Tax leviable on intra-State supplies of second hand goods received by a registered person, dealing in buying and selling of second hand goods [who pays the central tax on the value of outward supply of such second hand goods as determined under sub-rule (5)] from any supplier, who is not registered. This has been done to avoid double taxation on the outward supplies made by such registered person, since such person operating under the Margin Scheme cannot avail input tax credit on the purchase of second hand goods.
Thus, Margin Scheme can be availed of by any registered person dealing in buying and selling of second hand goods [including old and used empty bottles] and who satisfies the conditions as laid down in Rule 32(5) of the CGST Rules, 2017.
The Finance Ministry today made a statement that the traders should obtain registration under the Goods and Service Tax (GST) law at the earliest without waiting for the last day. It clarified that persons who fails to take registration before July 31st would face penal actions.
The GST Laws were implemented by the Central Government on July 1st, 2017.
“As per the GST laws, one is required to take registration on or before 30th July, 2017. All traders are requested to register now without waiting for the last date,” the statement said.
“If one is carrying-out any business and have an Annual Aggregate turnover in the preceding Financial Year exceeding Rs. 20 lakh (Rs. 10 lakh in Special Category States), you need to register in all the States/Union Territories from where you are making taxable supplies. However, one need not register if one is engaged exclusively in the supply of exempted goods or services or both.”
If one is liable to take registration but does not get registered, he will not be able to take the input tax credit. Also, any registered person, purchasing from such a trader may not be able to get the input tax credit. “Not obtaining registration, though liable to do so, would also attract penalty,” the statement said.
To take the registration, a trader needs to file an online application on the portal https://www.gst.gov.in/ for which a valid PAN, email id and a mobile number is a must. Once these three details are verified, the trader will be required to furnish other details relating to the business. No physical documents need to be submitted unless a query is raised and documents are asked for. All necessary documents can be scanned and uploaded.
The trader will receive his/her registration online within three working days from submission of online application, it said. The government said that by getting registered a trader can help grow his business and also contribute to nation building.
“Prospective buyers, who are registered under GST, will prefer to buy from suppliers who are also registered under GST, as this would entitle them to the input tax credit. This also means that one is contributing his bit towards nation building, by ensuring that appropriate taxes are collected and paid to the government,” it said.
In Pr. CIT v. Sheetal International Pvt. Ltd, a division bench of the Delhi High Court held that assessment under section 153C of the Income Tax Act cannot be quashed merely on ground that AO of the searched who was also that of the Assessee, did not record a separate satisfaction note.
A bench of Justice S Muralidhar and Prathibha M Singh was hearing an appeal against the order of the ITAT wherein the Tribunal quashed the Assessment order.
The bench relied on the Courts’ recent decision in Ganpati Fincap Services Pvt Ltd. v. Commissioner of Income Tax in which the Court made an observation that “Where the AO of the searched person and the other person is the same, such a satisfaction note qua the other person has to be recorded by the AO of the searched person prior to the initiation of the proceedings against the other person. This is a sine die non for triggering the proceedings against the other person under Section 153C of the Act. There do not have to be two separate satisfaction notes prepared by the AO of the searched person even where he is also the AO of the other person. In such event, the AO need make only one satisfaction note. That satisfaction note is qua the other person. Further, it is sufficient that such satisfaction note is placed in the file of the other person by the AO in his capacity as the AO of such other person.”
In that view of the decision, the bench quashed the impugned order of the ITAT and held that the proceedings under Section 153C of the Act cannot be nullified only for the reason that the AO of the searched who was also that of the Assessee, did not record a separate satisfaction note cannot be sustained in law.
Read the Full Text of the Judgment Below
In CIT v. M/s Bhushan Steels and Strips Ltd, the Delhi High Court held that sales tax collected as incentive for setting up industries in backward areas by the Assessee-Company amount to revenue receipt and therefore, it is subject to income tax.
Assessee-Company and the Revenue approached the High Court against the order of the Income Tax Appellate Tribunal (ITAT) wherein it was held that amount received by the assessee by way of exemption of sales tax payments was capital receipt, hence, not subject to income tax.
Assessee for the year under consideration had received amount of sales tax as incentive for setting up industries in backward areas under the UP Sales Tax Act. As per the said scheme, the Assessee could retain the amount collected from the customers. Assessing officer brought the amount to tax and held that it constitute revenue receipt.
On appeal, the CIT(A) allowed the assessee’s claim. By noting that the same was an incentive granted to assessee towards establishment of the new unit and to buy machinery.
The bench of Justices Ravindra Bhatt and Najmi Waziri noted that the object of providing subsidy by way of permission to not deposit amounts collected (as sales tax liability)- which meant that the customer or servicer user concerned had to pay sales tax, but at the same time, the collector (i.e. the assessee) could retain the amount so collected, undoubtedly was to achieve the larger goal of industrialization.
Allowing the departmental appeal, it observed that “how a state frames its policy to achieve its objectives and attain larger developmental goals depends upon the experience, vision and genius of its representatives. Therefore, to say that the indication of the limit of subsidy as the capital expended, means that it replenished the capital expenditure and therefore, the subsidy is capital, would not be justified. The specific provision for capital subsidy in the main scheme and the lack of such a subsidy in the supplementary scheme (of 1991) meant that the recipient, i.e. the assessee had the flexibility of using it for any purpose. Unlike in Ponni Sugars (supra), the absence of any condition towards capital utilization meant that the policy makers envisioned greater profitability as an incentive for investors to expand units, for rapid industrialization of the state, ensuring greater employment. Clearly, the subsidy was revenue in nature.”
Read the Full Text of the Judgment Below.
In a communication to the officials under the Central Board of Excise and Customs (CBEC), the Chairman, Vanaja S Sarna requested the Commissioners & Central Excise Formations to undertake random visits to the ranges and divisions under their charge to review the working of GST Seva Kendras. The Board had given wide publicity to the facilitation trade which is expected from these Sewa Kendras.
The Chairman congratulated the Chief Commissioner, Bangalore Zone and his officials for working closely with the Chief Post Master General, Karnataka to co-release a special postal cover to commemorate the roll out of GST.
She further pointed out that in order to clarify any confusion among the traders with regard to exports under Bond/Letter of Undertaking without payment of IGST, the officials are directed to issue trade notices publicizing the contents of Circular dated 07.07.2017.
“Issues faced by the traders and common man referred to the GST Feedback Room by the Field Nodal officers (both centre and State) are collated and clarification in the way of press releases are being issued to address such concerns. The officials are directed to go through the press releases published in the official website of the Board”, Mrs. Vanaja S Sarna said.
Read the Full Text of the Letter Below
The GSTN Network today said that the small businesses with turnover of up to Rs 75 lakh can opt for composition scheme under the Goods and Services Tax regime till July 21.
“Any person who has been granted registration on a provisional basis and has turnover not exceeding Rs 75 lakh, and who wishes to opt for the composition levy, is required to electronically file an intimation, duly signed or verified through EVC, at the GST portal on or before July 21, 2017,” GSTN Chairman Navin Kumar said.
To opt for the scheme, the taxpayer needs to log into his account at the GST Portal www.gst.gov.in and select ‘Application to opt for the Composition Scheme’ under ‘Services’ menu, a GSTN statement said.
Under composition scheme, traders, manufacturers and restaurants can pay tax at one per cent, two per cent and five per cent, respectively in the new indirect tax regime.
Businesses opting for composition scheme will see a lesser compliance burden as they will have to file returns only once in a quarter as against monthly returns to be filed by other businesses.
It further clarified that taxpayers who have been given provisional IDs must complete all parts of the enrolment at the GST portal and submit the same along with the required documents with digital signature or EVC.
Around 69 lakh excise, VAT and service taxpayers have migrated to the GSTN portal for filing returns under the GST. Besides, there are over 4.5 lakh new taxpayers who have registered in the portal. These new registered taxpayers can opt for the composition scheme at the time of registration. Once the form is completed and submitted, the enrolled taxpayer will be issued the final Certificate of Registration which would mark completion of migration under GST.
The Provisional IDs would be cancelled if an enrolled taxpayer fails to submit the duly filled form with the requisite documents.
“A period of three months is allowed to complete the enrolment procedure by September 22, 2017. In the interim, they can issue tax invoice using the provisional ID already allotted to them,” Kumar said.
The Income Tax Department (ITD) has used information received under the Statement of Financial Transactions (SFT) to identify 5.56 lakh new persons in the second phase of “Operation Clean Money” (OCM). These are persons whose tax profiles were found to be inconsistent with the cash deposits made by them during the demonetization period.
Another 1.04 lakh persons who did not disclose all bank accounts during e-verification in the first phase of OCM have also been identified. In the first phase, 17.92 Lakh persons had been identified for e-verification of large cash deposits, of which 9.72 Lakh people had submitted online response.
The information in respect of the cases and accounts identified has been made available in the e-filing window of the PAN holder at the portal https://incometaxindiaefiling.gov.in. The PAN holder can view the information using the link “Cash Transactions 2016” under “Compliance” section of the portal. The taxpayer will be able to submit online explanation without any need to visit Income Tax office. All identified persons are being informed through Email and SMS for submitting response online.
The following information has been communicated to promote voluntary compliance:
The Portal of Operation Clean Money (https://www.cleanmoney.gov.in) launched on 16th May 2017 has the following features:
In Rajesh Kourani v. Union of India & Ors, a division bench of the Gujarat High Court held that the IT Department can collect a late fee even prior to the insertion of Section 234E of the Income Tax Act while processing statements of TDS under Section 200A of the Income Tax Act.
In the instant case, Assessee, an individual, aggrieved by the order of the Assessing Officer, while processing statement of TDS under s. 200A had adjusted a sum of Rs.33,123/by way of the late filing fee under section 234E of the Act.
Before the High Court, the petitioner argued that prior to amendment in section 200A, there was no mechanism provided under the Act for the collection of fee under section 234E of the Act and therefore, the Assessing Officer could not have adjusted such fee in terms of section 200A of the Act.
A bench comprising of Justices Akil Kureshi and Biren Vaishnav observed that section 200A of the Act is a machinery provision providing a mechanism for processing a statement of deduction of tax at source and for making adjustments, which are arithmetical or prima facia in nature. After the amendment in 2015, the provision specifically provides for computing the fee payable under section 234E of the Act.
“On the other hand, section 234E is a charging provision creating a charge for levying a fee for certain defaults in filing the statements. Under no circumstances, a machinery provision can override or overrule a charging provision. We are unable to see that section 200A of the Act creates any charge in any manner. It only provides a mechanism for processing a statement for a tax deduction and the method in which the same would be done. When section 234E has already created a charge for levying fee that would thereafter not been necessary to have yet another provision creating the same charge. Viewing section 200A as creating a new charge would bring about a dichotomy. In plain terms, the provision in our understanding is a machinery provision and at best provides for a mechanism for processing and computing besides other, fee payable under section 234E for late filing of the statements.”
While dismissing the petition, the bench clarified that the Revenue can collect a late fee even prior to the introduction of s. 234E in terms of s. 200A. “Section 200A would merely regulate the manner in which the computation of such a fee would be made and demand raised. In other words, we cannot subscribe to the view that without a regulatory provision being found for section 200A for computation of fee, the fee prescribed under section 234E cannot be levied. Any such view would amount to a charging section yielding to the machinery provision. If at all, the recast clause (c) of subsection (1) of section 200A would be in the nature of the clarificatory amendment. Even in absence of such provision, as noted, it was always open for the Revenue to charge the fee in terms of section 234E of the Act. By amendment, this adjustment was brought within the fold of section 200A of the Income Tax Act.”
Read the full text of the Judgment below.
The Ministry of Corporate Affairs (MCA) recently notified amendments to the Companies (Meetings of Board and its Powers) Rules, 2014.
As per the notification issued on Wednesday, a declaration by a Director who intends to participate in the meeting through electronic mode may intimate about such participation at the beginning of the calendar year and such declaration shall be valid for one year. It was clarified that such a declaration cannot debar him from participate in person in the meeting.
The Board of directors of every listed company and a company covered under rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014 shall constitute an ‘Audit Committee’ and a ‘Nomination and Remuneration Committee of the Board’ “.
Read the full text of the Notification below.
With a view to promote small transactions the State Bank of India, Country’s largest Bank, has waived charges for fund transfer of up to ₹1,000 through its Immediate Payment Service (IMPS).
IMPS is an instant interbank electronic fund transfer service through mobile phones as well as internet banking.
Bank had been charging ₹5 along with the applicable service tax for IMPS fund transfer of up to ₹1,000.
“In order to promote small ticket size transactions, SBI has waived off Immediate payment service charges for transfer up to ₹ 1,000,” the bank said while informing about the revised IMPS transfer charges under the Goods and Services Tax (GST) regime.
For Immediate payment service, charge will be ₹5 along GST for fund transfer in the range of ₹1,000 to ₹1 lakh. The charge will go up to ₹15 for transactions of ₹1-2 lakh. GST at the rate of 18 percent is applicable to all financial transactions.
Following the roll out of Goods and Service Tax (GST), the Central Board of Excise and Customs (CBEC) released revised rates of rebate of state levies on export of garments and textile made-up articles which are applicable w.e.f 1st July 2017.
The Government had implemented GST laws on July 1st.
The present circular is in connection with the Board’s earlier circulars regarding implementation of Ministry of Textiles’ (MoT) Scheme for Rebate of State Levies (RoSL) on export of garments and textile made-up articles respectively.
It is stated that “MoT has issued Notification No.14/26/2016-IT dated 27.06.2017 revising the rates of rebate in Schedules I, II and III for the ROSL Scheme effective from 1.7.2017. The revised rates are 0.39% for RoSL and 0.23% for RoSL under Advance Authorization-All Industry Rates (AA-AIR) combination respectively. This notification may be downloaded from website egazette.nic.in and perused.”
It further clarified that these revised rates on garment and textile made-up exports under ROSL Scheme are applicable to exports with Let Export Order dates from 1.7.2017 onwards. The EDI implementation of the revised ROSL Scheme rates has been completed by the Systems Directorate.
Read the Full Text of the Circular Below.
