While rejecting a plea by a real estate developers, the National Anti-profiteering Authority ( NAA ) has held that since flats are sold in installments without waiting for project completion, the buyers too cannot be made to wait endlessly to receive the benefit of input tax credit.
A complaint was lodged against the builders for not passing on the benefit of the profiteered amount to the applicant, buyers and the land owner along with interest at 18 percent.
The builders had contended that a project is market-driven and its pricing depended upon factors such as availability of hospitals, schools, public transport, pricing of competitors, demand and supply.
The developer also claimed that the demand for homes and the supplier had also played a significant role in determining the cost of the flats. It contends that the real estate business is market-driven and spread over a period of four to five years, and its pricing depends on a number of factors
“The real estate business may be spread over a period of four to five years but it is also a fact that the flats are sold in installments without waiting for completion of the project or the completion certificate. Hence the question of waiting endlessly to pass on the benefit of input tax credit to the buyer who has already paid the entire installments is not justified and the provisions of the above section also do not provide that such benefit should be passed on completion of the project. It may also be emphasized that most of the real estate projects are not completed within the stipulated period of time,” the NAA order said.
“The respondent has himself admitted that there has been benefit of ITC derived and the benefit has been passed on by him to all his customers with whom agreements had been entered into on or before June 30, 2017. The benefit has been computed at Rs 9 per sq ft and based on this calculation he has passed on the benefit of Rs 22 lakh to 221 flat buyers,” the order said.
The Authority has ordered the developer to reduce the prices to be realised from the buyers of the flats commensurate with the benefit of ITC received by him.
The GST council, in this year March, had permitted the real estate developers to shift to the 5 percent GST rate for residential units and 1 percent for affordable housing without the benefit of input tax credit from April 1.
For the ongoing projects, builders have been given the option to either continue in the 12 percent GST slab with ITC (8 percent for affordable housing), or opt for 5 percent GST rate (1 percent for affordable housing) without ITC and communicate to their respective jurisdictional officers the same by May 20.
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The Cochin bench of the Income Tax Appellate Tribunal (ITAT) has held that the compulsory acquisition of the urban agricultural land is eligible for tax exemption under Section 10(37) of the Income Tax Act, 1961.
The assessee along with her husband, was in possession of 47.54 Ares of land in Vizhinjam village which was subsequently acquired by the Government for the Vizhinjam International Seaport. The same was sold by executing a sale deed in favour of Vizhinjam International Seaport for a total consideration of Rs.3,22,99,490, out of this the share of the assessee is Rs.1,61,49,745.
Before the authorities, the assessee claimed that was agricultural land and was compulsorily acquired by the Government of Kerala and the assessee was entitled to the benefit of section 10(37) of the Income Tax Act. The Assessing Officer, however, held that the land transferred falls within the limit of Trivandrum Municipal Corporation and the assessee’s claim for exemption under section 10(37) of the Income Tax Act was not admissible for the reason that it was not a compulsory acquisition, but a sale through a negotiated settlement.
The appeal filed by the assessee was allowed by the Commissioner of Income Tax (Appeals). Aggrieved by the order, the revenue approached the Tribunal.
Granting relief to the assessee, the Tribunal held that “In the instant case, the entire procedure prescribed under the Land Acquisition Act was followed, the only price was fixed upon a negotiated settlement. The A.O. did not have a case that the impugned land is not agricultural land. Therefore, in view of the above judgment of the Hon’ble Apex Court (supra), we hold that the acquisition of the urban agricultural land was a compulsory acquisition and the same would be entitled to the benefit enumerated in section 10(37) of the I.T.Act. It is ordered accordingly.”
Subscribe Taxscan Premium to view the JudgmentThe Securities Appellate Tribunal ( SAT ) today stayed the SEBI’s order against journalist Prannoy Roy and his wife Radhika Roy from continuing as directors of New Delhi Television Ltd (NDTV).
On June 14th, 2019 order, SEBI has barred Prannoy Roy and his wife Radhika Roy from holding any directorship in New Delhi Television Ltd. (NDTV) for a period of two years.
The order is passed in a 2017 case filed by Quantum Securities Ltd, an NDTV shareholder, alleging that RRPR Holdings, Prannoy Roy and Radhika Roy didn’t disclose information about loan agreements entered into by them with Vishvapradhan Commercial Private Ltd (VCPL) and ICICI.
While the SEBI counsel argued that the orders were uploaded on the regulator’s website on June 14, the tribunal observed that SEBI’s duties do not end by just uploading of the orders.
The SAT bench comprising of Presiding Officer Justice Tarun Agarwala, Member Dr. C.K.G Nair and Judicial Member Justice M.T Joshi observed that, “we are of the opinion that whether the loan agreement was a sham transaction or not and whether the loan agreement, in fact, wrested control of NDTV to VCPL is a question which is required to be considered in detail”.
The bench also said that “Whether call option gives an unfettered right of controlling the company without exercising the right of call option is also required to be considered. Upon the interpretation of the loan agreement at this stage, we are of the opinion that these agreements have remained in existence for the past 10 years. The loan agreements were executed in the year 2009 and 2010. Whether there was a violation of the SEBI laws including the PFUTP Regulations are all required to be considered. At this stage, prime-facie, we are of the opinion that a listed company which is managed by the appellants holding more than 61% of the total shares cannot remain headless”.
The impugned order has been passed restraining the appellants, Dr Prannoy Roy and Ms. Radhika Roy from occupying a position as a Director or in any Key Managerial personnel in NDTV for a period of two years. Such orders prima facie would not be in the interest of the shareholders of the NDTV or for that matter the investors at this stage.
While granting the stay for three months, “We would also like to point out that it is essential for SEBI to supply a copy of the impugned order to the aggrieved party, namely, the appellants. An adjudication proceeding had been initiated by SEBI by the issuance of the show cause notice. The appellants thus have the first right to be supplied a copy of the impugned order from SEBI. It is the onerous duty of SEBI to supply a copy of the impugned order to them so that the directions are made effective”.
The bench also criticised the SEBI and said that “the whole world knows about the impugned order except the appellants. Till date, they have not been supplied a copy of the impugned order in spite of the oral direction given by this Tribunal yesterday. We are constrained to observe that the system undertaken by SEBI needs a revisit. Their liability and their onerous duty do not end the moment they upload the order on their website. The first duty is to supply a copy of the impugned order to the aggrieved party which in the instant case has not been done till date. We accordingly, direct the appellants to apply for a certified copy of the impugned order. If such an application is made, SEBI will provide a certified copy of the impugned order within five working days”.
Subscribe Taxscan Premium to view the JudgmentThe Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that an assessment cannot be re-opened without the approval of the designated authority under the Income Tax Act, 1961.
The Assessing Officer initiated re-assessment proceedings against the assessee in the year 2014 by recording reasons and satisfaction that income has escaped assessment within the meaning of Section 147 of the Income Tax Act based on the evidence contained in the report of Investigation Wing and after taking necessary approval from the competent authority. The Assessing Officer on the basis of the same made the addition under section 68 in respect of share capital amounting to Rs. 70,00,000/-.
On appeal, the first appellate authority allowed the assessee’s claim and ordered in favour of the assessee.
Upholding the order of the Commissioner of Income Tax (Appeals), the Tribunal held that “it can be clearly seen that the notice has been issued prior to the approval. Thus, reopening u/s 148 is without the approval of the designated authority and as such reassessment itself is bad and without any jurisdiction. The mandatory conditions of Section 148 have not at all followed by Revenue. Therefore, the re-opening itself is void ab initio and does not survive. Thus, the Cross objection filed by the assessee is allowed. Since the inception of the challenge of the order of CIT(A) in Revenue’s appeal itself is void ab initio, the Revenue’s appeal is dismissed.”
Subscribe Taxscan Premium to view the JudgmentThe Competition Commission of India (CCI) is conducting a Market Study on E-commerce in India. In view of the rapid growth of E-Commerce and the rising importance of online trade in a large number of goods and services in India, the study will allow the CCI to develop a better understanding of the functioning of e-commerce in the country and its implications for markets and competition.
The preliminary findings of the study will be presented at a Workshop to be held at the end of August 2019. All relevant stakeholders will be invited to share their views and deliberate on identified issues at this workshop. The final study report is expected to be published in the third quarter of 2019-20.
The e-commerce study is 20th in the series of market studies that have been conducted by the CCI to date. Market studies contribute significantly to the capacity of competition authorities in appreciating competitive dynamics in markets and can also form a useful basis for competition advocacy. The e-commerce study does not form part of any investigation and/or inquiry in any of the proceedings pending before the CCI. The study of e-commerce is necessary given the novel issues and challenges that digital markets bring forth for competition regulation.
The objectives of the study on e-commerce in India are:
The study is a combination of desk research, market survey and stakeholder consultation. Qualitative and quantitative information is being collected from secondary and primary sources. Designed by a market study team at the CCI, it is being implemented by an external agency that has been engaged for the purpose. The study team is holding consultation meetings with enterprises and industry associations followed by a questionnaire survey amongst a range of stakeholders throughout the country.
The enterprises concerned include e-commerce platforms, manufacturers, wholesalers/ retailers, hotels, restaurants and payment systems. The study intends to cover such products where the growth of online commerce has been the most significant, including both goods (such as electronics, mobiles, lifestyle etc.) and services (travel & hospitality, food delivery). The focus areas of the study include the emerging trends in business models and distribution mechanisms, market structure and business practices including contractual provisions and vertical restraints.
The Central Government has ordered compulsory retirement of fifteen Senior Indirect Tax Officers for charges of Corruption, Criminal Conspiracy, Disproportionate Assets Case etc.
The government compulsorily retired CBIC Principal Commissioner Anup Srivastava (1984-batch IRS), as well as commissioners Atul Dikshit (1988-batch IRS), Sansar Chand (1986-batch IRS), G Shree Harsha (1991-batch IRS), and Vinay Brij (1995-batch IRS).
Other officials who faced the music included CBIC additional commissioners Ashok R Mahida (1990-batch IRS) and Virendra Kumar Agarwal (1990-batch IRS), along with Deputy Commissioner Amresh Jain (1992-batch IRS), Joint Commissioner Nalin Kumar (2005-batch IRS), assistant commissioners SS Pabana (2014-batch IRS), SS Bisht (2014-batch IRS) and Vinod Kumar Sanga (2014-batch IRS).
Additional Commissioner Raju Sekar (1992-batch IRS), Deputy Commissioner Ashok Kumar Aswal (2003-batch IRS) and Assistant Commissioner Mohammad Altaf (2009-batch IRS) have also been compulsorily retired.
The Rule 56(j) of Central Civil Services (Pension) Rules, 1972 provides for periodical review of the performance of government servants with a view to ascertain whether they should be retained in service or retired from service in public interest.
Subscribe Taxscan Premium to view the JudgmentThe GST Council is likely to extend the tenure of the National Anti-profiteering Authority (NAA) till 30 November 2020, which dealt with customer complaints regarding not receiving tax cut benefits.
The Council at its 35th meeting is scheduled on June 21st, under new Finance Minister Nirmala Sitharaman, is also likely to consider a proposal to set up one appellate tribunal for north-eastern states, and another one for all Union Territories.
The Finance Ministry is of the view that NAA should be given an extension of one year till November 30, 2020, as the authority continues to receive complaints of profiteering by companies, the official reportedly said.
The NAA came into existence on 30 November 2017, after its Chairman BN Sharma assumed charge. So far, the NAA has passed 67 orders in various cases.
The National Anti-Profiteering Authority (NAA) has been constituted under Section 171 of the Central Goods and Services Tax Act, 2017 to ensure that the reduction in the rate of tax or the benefit of the input tax credit is passed on to the recipient by way of commensurate reduction in prices.
National Anti-profiteering Authority (NAA) is therefore primarily constituted by the central government to analyse whether input tax credits availed by any registered person or the reduction in the tax is passed onto the consumer and he/she is protected from the random price increase for self-interests in the name of GST.
The Central Board of Indirect Taxes and Customs (CBIC) has introduced a mechanism to verify the IGST payments for goods exported out of India. A circular issued by the Board in this regard on Monday amended the existing norms for claiming IGST refunds is fully automated as provided under Instruction 15/2017-Cus dated 09.10.2017.
The circular empowers the Customs Officers to conduct a thorough enquiry on all the risky or suspicious refund claims of exporters and to reject such claims of exporters who are adopting malpractices.
“It has come to the notice of the Board that instances of availment of IGST refund using fraudulent ITC claims by some exporters have been observed by various authorities. Exporters have availed ITC on the basis of ineligible documents or fraudulently and utilized that credit for payment of IGST on goods exported out of India. It has also been observed in several cases that there is huge variation between the FOB value declared in the Shipping Bill and the Taxable value declared in GST Return apparently to effect higher IGST payout leading to encashment of credit,” the Board said in the circular.
The amended procedure includes guidelines for identification of suspicious cases, inserting Alert in the System, Examination of the export goods, Suspension of IGST refunds, Verification by GST formations and Action to be taken by customs formations on receipt of verification report from GST formations.
As per the circular, the DG (Systems) shall work out the suitable criteria to identify risky exporters at the national level and forward the list of said risky exporters to Risk Management Centre for Customs (RMCC) and respective Chief Commissioners of Central Tax. DG (Systems) shall inform the respective Chief Commissioner of Central Tax about the past IGST refunds granted to such risky exporters (along with details of bank accounts in which such refund has been disbursed).
Subscribe Taxscan Premium to view the JudgmentIn an interim order, Jharkhand High Court has directed to maintain status quo on Service Tax Enquiry / Audit against the assessee post implementation of Goods and Services Tax ( GST ).
The Petitioner submitted that We find from the text of the said notice that this was in relation to an enquiry or audit as envisaged in Rule 5A of the Service Tax Rules, 1994. The specific provision under which the aforesaid notice was issued, however, has not been spelt out therein.
The said notice has been followed by other reminders and summons. Advocate J.K. Mittal, learned counsel appearing for the petitioner, that the officers appointed under the 2017 Act have already visited the premises of the writ petitioner on 23rd March 2019 and have collected several documents. The legality of such notices and summons, as well as the visit of the said officers in the premises of the writ petitioner, have been questioned in the writ petition. The main ground on which the writ petition is founded is that the saving clause which we have reproduced above does not protect the Service Tax Rules and hence any action taken in pursuance of the said Rules would be without the authority of law. On this count, a Constitutional Bench judgment of the Hon’ble Supreme Court in the case of Kolhapur Canesugar Works Ltd. and another Vs. Union of India and others reported in (2000) 2 SCC 536 has been relied upon by Mr. Mittal. The other authority on the same point relied upon by him is an earlier judgment of the Hon’ble Supreme Court in the case of Air India Vs. Union of India and others reported in (1995) 4 SCC 734.
The division bench comprising of Chief Justice Anirudha Bose and Justice Ratnaker Bhengra said that, “At the interim stage, we have to examine if any fresh proceeding under the 1994 Act for scrutiny, inspection or audit, if commenced after omission of the said Act is primafacie legally valid or not. Though Mr. Mittal has submitted that the action complained against in this writ petition has been undertaken in pursuance of the power under Rule 5A of the 1994 Rules, as we have already observed, the legality of the instruments challenged in this writ petition do not specify the provisions under which such actions have been taken by the revenue authorities. The saving clause itself after omission of the statute does not refer to any particular provision of the Rules. Sub-clause (e) which we have quoted in the preceding part of this order gives a list of actions which are saved
The Court also observed that, “In our prima facie view, the expression “instituted” in sub-clause(e) would imply the proceeding which stood already instituted at the time of repeal or omission of the 1994 Act. In such circumstances, we choose to follow the course taken by the Hon’ble High Courts of Gujarat and Delhi and direct status quo to be maintained till the next date of hearing so far as the proceeding which form the subject matter of the present writ petition is concerned”.
Subscribe Taxscan Premium to view the JudgmentThe Kerala State Assembly has passed a resolution against the Central Government’s move to impose uniform tax rate on the State-run lotteries and other State lotteries. The resolution adopted by the Assembly urged the Centre to desist from the move and to continue the status-quo.
The monsoon session of the Assembly, on Monday passed the resolution moved by Finance Minister T M Thomas Isaac after a discussion over it on the floor of the House.
Currently, 12 per cent tax is levied on the State-run lotteries and 28 percent on the other State lotteries. Recently, the Group of Ministers (GoM) suggested to bring a uniform GST rate for the both kind of lotteries. While the GST rate on other state lotteries would be retained at 28 per cent or brought down to 18 per cent.
The uniform rate for both state-run and other state lotteries will adversely affect the interest of the state and the Centre is bringing the move with a clear motive of helping the lottery mafias operational in the country. In the case of Kerala, the state-run lottery is the only mainstay of around 1.25 lakh families. The money collected through the state-run lottery is funding the social welfare programmes of the state.
Earlier, the Calcutta High Court had upheld the two different GST rate slabs for the state-run and other lotteries, the lottery mafias were requested the GST Council to bring the proposal of unifying the tax rate for both lotteries to bypass the court order.
This is hundred per cent against the interest of various states in the country and even the Centre will lose a substantial amount of tax along with states if this decision is introduced.
The Ludhiana bench of the ITAT has held that the one-time settlement of debt by the bank cannot be treated as perquisite from the business under section 28(iv) of the Income Tax Act, 1961 if such loan granted to the assessee was a separate transaction.
Assessee is a Proprietor of M/s Mack Hosiery, which concern was earlier a Partnership firm constituted in the year 1988 and dissolved on 30.09.2002, which was taken over by the assessee as his proprietorship concern along with assets and liabilities whatsoever. The loan to the firm taken from M/s Punjab National Bank (PNB) was also owed up / taken over by the assessee in his proprietorship concern. During the year under consideration, the assessee claimed the expenditure on interest on loan that was waived by Bank.
Before the Tribunal, the assessee claimed that neither the provisions of section 28 (iv) and 41(1) nor of section 56(2)(vi) of the Income Tax Act were applicable to the facts of the present case. It was also submitted that the assessee was not in a business of taking / lending of the loan and, hence, the amount of loan received by the assessee for the business of hosiery was not part of the trading activity of the assessee.
The Tribunal observed that the very language of the section speaks about the value of any benefit or perquisite arising from business or exercise of a profession. “Now considering the facts and circumstances of the case, though, the loan was taken for the purpose of the business but the same was never taken in the course of business or to say that the loan sourced was not linked to the trading receipts or the like. Similarly, the waiver of the loan amount was not in the course of business or in the exercise of a profession. A part of the amount was waived by the bank in a one-time settlement because there were little chances of recovery of the entire amount. This one-time settlement was not done as part of the business activity of the assessee, rather, the transaction of the loan and waiver was a separate transaction. Under the circumstances, the waiver of a part of the loan amount cannot be said to be a benefit or perquisite arising from business or profession to the assessee.”
“Though the grant of loan on interest may be the part of the banking business of the Lender Bank, to take a loan is not the business activity of the assessee. So far as the assessee is concerned, the loan in question was not the trading liability of the assessee and, hence, the bank has not waived any loss/expenditure of trading liability of the assessee. What has been waived is a part of the loan amount in the one-time settlement as the loan asset has been declared as NPA and there were little chances of the recovery of the loan. Moreover, the assessee did not take any benefit in the shape of allowance or deduction in earlier years of such principal loan amount which has been waived. Under the circumstances, the provisions of Section 41(1)of the Act are not applicable to the facts and circumstances of the case,” the Tribunal said.
Subscribe Taxscan Premium to view the JudgmentThe Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that service tax cannot be levied on recharge coupons received from DTH operators.
The appellants are engaged in activities of rendering services to DTH broadcasting service providers such as, Sun Direct Private Ltd. Appellant installs the DTH instruments including cards therein and activates the same for which they receive service charges and pay applicable service tax on such charges. In addition, they also sell recharge coupon vouchers received from DTH operators for which they were paid a certain amount as commission. The recharge coupon vouchers carry a maximum retail price inclusive of all taxes and on such price the DTH operator was already discharging service tax.
The department demanded tax from the appellants by holding that the commission received by the appellants from the DTH operators towards the sale of recharge coupons is taxable under the head “Business Auxiliary Service”.
On the second appeal, the Tribunal observed that once the service tax has been paid on the M.R.P no service tax needs to be paid on the commission received by the distributor because it is a part of the M.R.P.
“If tax is so levied, it amounts to double taxation. This view held by the Tribunal has been upheld by the Hon‟ble High Court of Allahabad and subsequently followed by the Hon’ble High Court of Madras. The present case, though it pertains to DTH operators, stands on the same footing and the logic, in our opinion, should be applied to these cases as well. It is true that the appellant is providing services to the DTH operators and is getting a commission for such services. If the appellant had paid service tax on such commission, the main DTH operator could have availed cenvat credit of the same thereby proportionately reducing the amount paid in cash by the DTH operator. Therefore, the entire exercise is also revenue-neutral. In view of the above, we find that the issue is no longer res integra. On the SIM cards, recharge coupons etc., where the service tax has been paid on the M.R.P by the main operator the commission agent/distributor need not pay service tax on the commission received by him because commission also forms part of the M.R.P. on which service tax has already been discharged,” the Tribunal said.
Subscribe Taxscan Premium to view the JudgmentThe Kerala High Court last week dismissed a petition by the Commissioner of Income Tax (Appeals) wherein the officer pleaded to nullify the order of the Ernakulam Central Administrative Tribunal initiating misconduct proceedings against him on the ground of misconduct.
The charges against him were that while functioning as Additional Director of Income Tax at the Directorate General of Income Tax (Investigation) in Mumbai during the period between November 2009 and May 2010, he had abused his official position and committed serious misconduct and showed lack of integrity by unauthorisedly sharing the contents of an informant’s letter with an assessee, besides taking away confidential documents kept in the file of the Air Intelligence Unit of Mumbai concerning Davinder Ahuja who was intercepted at the Mumbai airport in 2009.
Terming that the charges made against the petitioner are very serious, the division bench of the High Court dismissed the petition and held that there was no inordinate or unexplained delay in the initiation of disciplinary proceedings. There were no compelling reasons to interfere with the CAT’s order.
The court, however, ordered that the disciplinary proceedings be completed within six months.
Subscribe Taxscan Premium to view the JudgmentThe Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai bench has held that the Swachh Bharat Cess paid on input services has to be available as Cenvat Credit and the same can be discharged by utilising Cenvat Credit.
The question before the Court was that whether the appellant is entitled for refund of Swatchh Bharat Cess (SBC) paid on the input services used for providing export service.
The appellants’ claim for refund claims of the said Cess was rejected by the Adjudicating Authority on the ground that there is no provision for refund of Swatchh Bharat Cess paid on the input services used for providing export service.
The first appellate authority also rejected the claim of the appellant.
The Tribunal noticed the decision in the case of State Street Syntel Services Pvt Ltd vs. Commissioner of Central GST & Central Excise, Mumbai wherein the issue was concluded in favour of the assessee.
In that case, the Tribunal had held that “A tax recovered by the government goes into the Consolidated Fund of India which is utilised for all public purposes and no money out of the Consolidated Fund of India shall be appropriated except in accordance with law and for the purposes and in the manner provided in the Constitution. Whereas a cess or fee does not become part of the Consolidated fund and are earmarked for the purpose of services for which it is levied. A Cess can never become part of the Consolidated Fund. It should be earmarked and set apart for the purpose for which it is levied. As per Section 119(4) ibid the proceeds of Swachh Bharat Cess shall first be credited to the Consolidated Fund of India. Swachh Bharat Cess may be considered as separate levies from the Service Tax but the same legal framework as applied for service tax are to be applied for levy and collection of Swachh Bharat Cess since the provisions of Chapter V of the Finance Act, 1994 and the rules made thereunder are applicable to Swachh Bharat Cess. As per Section 119(5) of the Finance Act, 2015, rules notified under the Finance Act, 1994, which include Cenvat Credit Rules, 2004 also, shall be applicable for Swachh Bharat Cess as they apply to Service Tax. Therefore, Swachh Bharat Cess paid on input services has to be available as Cenvat Credit and the same can be discharged by utilising Cenvat Credit and the appellant is therefore entitle for the refund of it. So far as filing of two separate claims are concerned, it is only a procedural lapse and due to the same substantial benefit of refund cannot be denied to the Appellant.”
Following the decision, the Tribunal held in favour of the assessee.
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The price for movie tickets in the Kerala State to become expensive from today as the Government allowed the local bodies to collect entertainment tax on the same in addition to GST. Though a government order in this regard was issued a few days ago, the local bodies were not able to impose the same till June 16, as a High Court stay was in force.
With the implementation of GST in 2017, local bodies had stopped collecting entertainment tax.
Later, the state government decided that local bodies can continue to collect the same as it’s a major source of revenue for them.
A government order with immediate effect was issued on 10th June. However, the same could not implemented due to the existing High Court order that had stayed local self-government bodies from collecting the tax on top of GST.
The decision to impose 10 pc tax was made after the GST on film tickets was reduced to 18 per cent from 28 per cent.
Under the old tax regime, the entertainment tax had been collected by the local bodies. Post GST rollout, the same continued to be levied as per the provisions of Section 3 of the Kerala Local Authorities Entertainment Tax Act.
Now the act has been amended to fix the entertainment tax at 10 per cent. A notification has been sent to all panchayat, municipality and corporation secretaries and theatre owners about the same. This is aimed at reducing the income loss faced by local self-government bodies.
“We had stopped entertainment tax collection after the implementation of GST. However, Tamil Nadu had been collecting the tax even after GST implementation. The entertainment tax will be a boost to local bodies. We are deducting the same percentage which was deducted as GST, except that the share will now go to local self-government bodies,” said BS Thirumeni, Panchayat Director. Now, Kerala is following TN in charging both GST and entertainment tax.
The Institute of Chartered Accountants of India ( ICAI ) has postponed CA exams on account of the cyclone at some centres to be held on 24th June 2019. It was earlier scheduled on 13th June 2019.
In a statement issued by ICAI said that, It is hereby informed that the exams in respect of the following papers scheduled on 13th June 2019 at Bhuj, Bhavnagar, Gandhidham, Jamnagar, Junagadh and Rajkot which were earlier postponed, on account of the cyclone, will now be held on 24th June 2019 at the same venue(s) and at the same time.
The ICAI also said that, Admit cards already issued will remain valid for admission to the exam on 24th June 2019.
The Bombay High Court has allowed Deduction under Section 80IA of the Income Tax Act for Container Freight Station run by Logistic Park.
The division bench comprising of Justice S.J Kathawalla and Justice Akil Qureshi was considering the question “Whether on the facts and in the circumstances of the case and in law, the Income Tax Appellate Tribunal was justified in allowing the assessee’s claim of deduction under Section 80-IA(4) of Rs. 4,78,56,228/- without appreciating the fact that the assessee did not fulfil the required conditions as prescribed for claiming deduction u/S. 80-IA(4), as the inland container depot/container freight station is not included in inland ports as ports on rivers or canals?
While dismissing the appeal filed by Income Tax Department, the Court observed that “The impugned order of the Tribunal dismissed the Revenue’s Appeal before it by holding that the Container Freight Station (CFS) run by the assessee is eligible for deduction under Section 80IA of the Act as an infrastructure facility”.
Relying on a precedent of following the decisions of the Special Bench of the Tribunal in M/s. All Cargo Global Logistics Ltd. Vs. DCIT (ITA No.5018 to 5022 and 5059) rendered on 6th July, 2012 and the decision of the Regular Bench of the Tribunal in the case of Continental Warehousing Corporation (Nhava Sheva) Vs. ACIT (ITA No. 7055/Mum/2011) dated 31st August, 2012, the Court also observed that, “The submission of the Revenue that as Appeals have been filed against the aforesaid two decisions of the Tribunal, before this Court, the Revenue’s Appeal be allowed, was not accepted by the Tribunal. In the meantime, the above two Tribunal decisions in case of All Cargo Global Logistics Ltd. (supra) and Continental Warehousing Corporation (Nhava Sheva) (supra) have been upheld by this Court in Commissioner of Income-Tax v. 1. Continental Warehousing Corporation (Nhava Sheva) Ltd. and anr. [2015] 374 ITR 645 (Bom).
Subscribe Taxscan Premium to view the JudgmentThe Tamil Nadu Chamber of Commerce has sought abolition of the higher slab of 28% Goods and Services Tax ( GST ) under the new tax regime.
The Chamber suggested that the 28% slab must be applied only on sin or luxury items. In a press statement issued here, the Chamber said the highest tax levied should be restricted to 18% as it would improve compliance and augment tax collection.
In the pre-Budget memorandum send to the Union Finance Minister Nirmala Sitharaman, the Chamber suggested that “For other goods barring the exempted category, there should be only three other GST rates: 15%, 12% and 5% based on their necessity and need,” said senior president of the Chamber S. Rethinavelu.
He said the Centre should take efforts to ensure that invoices were generated through a portal in Goods and Services Tax Network (GSTN).
“Currently, we are generating our own invoices and uploading them on GSTN. We have to dedicate manpower to ensure that invoices are properly uploaded and have no choice but to do it twice a month. We have no choice but to recruit an auditor,” he said.
Small business establishments, which could not afford to engage auditors, will eventually move away from business, he said.
The Income Tax Appellate Tribunal (ITAT) Delhi bench has held that the capital gain exemption under section 54 of the Income Tax Act, 1961 should be given to more than one houses when the property of an HUF is sold.
Before the Tribunal, the assessee contended that the explanation “a” residential house used in the section should be understood in a sense that the building should be of residential in nature and “a” should not be understood to indicate a single number. It was contended that as long as the assessee acquires a building which may be constructed in such a manner as to consists of several units which can, if the need arises, be conveniently and independently used as an independent residence, the requirement of section should be taken to have been satisfied.
The Tribunal noted the decision of the Karnataka High Court wherein it was held that the contention of the Revenue is that the phrase “a” residential house would mean one residential house and it does not appear to the correct understanding.
“The expression “a” residential house should be understood in a sense that building should be of residential in nature and “a” should not be understood to indicate a singular number. The combined reading of sections 54(1) and 54F of the IT Act discloses that, a non-residential building can be sold, the capital gain of which can be invested in a residential building to seek exemption of capital gain tax. However, the proviso to s. 54 of the IT Act, lays down that if the assessee has already one residential building, he is not entitled to exemption of capital gains tax, when he invests the capital gain in purchase of additional residential building. When an HUF’s residential house is sold, the capital gain should be invested for the purchase of only one residential house is an incorrect proposition. After all, the HUF property is held by the members as joint tenants. The members keeping in view the future needs in event of separation, purchase more than one residential building, it cannot be said that the benefit of exemption is to be denied under s. 54(1) of the IT Act,” the Tribunal said.
On facts, it is shown by the assessee that the apartments are situated side by side. The builder has also stated that he has effected modification of the flats to make it as one unit by opening the door in between two apartments. The fact that at the time when the Inspector inspected the premises, the flats were occupied by two different tenants is not the ground to hold that the apartment is not a one residential unit. The fact that the assessee could have purchased both the flats in one single sale deed or could have narrated the purchase of two premises as one unit in the sale deed is not the ground to hold that the assessee had no intention to purchase the two flats as one unit.
Hence, keeping in view the fact that primarily the assessee is eligible for deduction u/s. 54F and purchased the plots and constructed residential dwellings on those plots, we hereby hold that the assessee is eligible for the deduction and confirm the order of the ld. CIT(A) to that extent.
Subscribe Taxscan Premium to view the JudgmentTax practitioners from Gujarat requested the State and the Central Governments to further extend the due date for filing annual returns under the Goods and Services Tax (GST) regime.
According to them, it is not possible to file GSTR-9, the annual return of GST within the set deadline of June 30 and so the deadline for filing the return should be extended.
There are close to 6.7 lakh registered traders in Gujarat, of which only a handful of them have filed returns and the rest are not able to file returns because the auto-computation leads to erroneous entries, leading to over taxation of the dealers.
The letter sent by the Gujarat Sales Tax Bar Association to the finance minister Nirmala Sitharaman and as well as to authorities of Central GST (CGST) and State GST (SGST), said that the utility for filing of the return was available just about a month ago and it is not possible for the businessmen or the tax practitioners to get used to it.
GSTBA president Urvish Patel told DNA that the annual returns get feeds from previous returns filed by the buyer and the seller. If there is mismatch, there will be error in filing of returns. “Businesses are concerned. They will end up paying much more tax than what they are required to. There is no provision to rectify or revise the return filed. There is an unfair provision that a businessmen are not able to claim the Input Tax Credit (ITC), which they did not claim on earlier occasion, but there is a provision of paying tax if the credit has been falsely claimed earlier,” said Patel.
Further, dealers from Amritsar also asked for a relief on annual return due date. Under the annual return, one has to fill GSTR form nine, nine-A and nine-C.
The Bombay High Court has directed the Commissioner to pass a reasoned order within 2 weeks on why the C forms are not being issued despite withdrawal of the circular.
Earlier, the Commissioner of Maharashtra State had issued Circular 47T of 2018 saying that C form cannot be issued for post GST period due to change in definition of “goods”. Subsequently the circular was withdrawn on 14.2.2019.
However, the Department was not issuing C forms even after 14.2.2019 and has not been replying to any representations.
Before the High Court, the petitioner alleged that the department is not issuing Form C in respect of its purchase of natural gas from Gujrat which is used in the manufacture of polyester staple fibre. They claimed that the action is unjustified.
The bench comprising Justice M S Sanklecha and M S Sonak held that “This notwithstanding the change in the definition of “goods” under section 2(d) of the Central Sales Tax Act, 1956, being limited as six items enumerated therein, the same would not govern the meaning of the word ‘goods’ under section 8(3) of the Central Sales Tax Act, 1956. However, we are of the view after the withdrawal of the impugned Trade Circular No. 47T of 2017 dated 11th July, 2017, the officers of the sales tax would not be constrained by the above circular in interpreting sections 2(d) and 8(3) of the Central Sales Tax Act, 1956.”
“In view of the above, it would be appropriate that the Petitioner make a representation to Respondent No. 2 – Commissioner of State tax with copy to its assessing officer being Dy. Commissioner of State (E635) setting out its case/claim for the issuance of “C” Form on purchase of natural gas from Gujrat. This representation would be made by the Petitioner on or before 18th June, 2019,” the bench said.
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