Direct tax 

Circulars / Notifications / Press Release 

Relief to Tax deductors in case of inoperative PAN: CBDT vide Circular No 6 

– In case of inoperative PAN due to non-linkage of PAN with Aadhar, tax deductor/collector were required to collect/deduct tax at double the normal rate.  

– CBDT has provided relief that Tax deductor/collector will not be treated as in default for Tax deducted/collected at normal rates for transactions entered up to 31st March 2024 if the PAN of deductee becomes operative on or before 31st May 2024.  

– In such cases, tax deductors/collector will not be required to deduct/collect tax at double the normal rate because of inoperative PAN. 

Case Laws

Non-acceptance of Video conferencing request is against the principles of Natural justice: Delhi ITAT 

– Assessee a private limited company received a notice and case was picked by Assessment unit, National faceless assessment Centre. Assessee received various notices with a very short deadline to reply. 

– Since a very short time was provided, Assessee has made a request for video conferencing if assessing officer opines contrary to the submission made. 

– Subsequently the order passed was against the interest of assessee. 

– Assessee challenged that since assessee made a request for video conferencing hearing, and no update was there on portal for video conferencing request, the order passed by assessment unit is impunged and is against the principles of justice as indicated in section 144B(6(viii) of the Income tax act and the same was upheld by tribunal. 

GST Update


SEZ units not liable to pay GST under RCM – Gujarat AAR 

The Applicant, M/s Abans Alternative Fund Manager (LLP), an SEZ unit, sought an advance ruling to determine the liability for tax payment under the Reverse Charge Mechanism (RCM) for legal services acquired from advocates. 

The AAR observed that Notification No. 18/2017-Integrated Tax (Rate) provides an exemption for services imported by SEZ units for authorized operations. Additionally, Section 7 of the SEZ Act, 2005, grants SEZ units exemption from duties, taxes, or cesses when procuring goods or services from the Domestic Tariff Area (DTA). Furthermore, the AAR noted that Section 51 of the SEZ Act, 2005, acts as a non-obstante clause, affirming the supremacy of SEZ Act provisions over any conflicting laws. The AAR also considered a clarification issued by the Tax Research Unit, CBIC, confirming that SEZ units can procure the services for authorized operations without IGST payment, provided they furnish a Letter of Undertaking (LUT). 

Based on the above, the AAR ruled that the applicant is not obligated to pay GST under RCM, subject to the furnishing of an LUT. 


Delay in filing of GST return, interest is payable even on GST paid through input tax credit balance – Patna High Court 

The applicant, Sincon Infrastructure Pvt. Ltd., aggrieved with the demand and recovery proceedings regarding interest for delayed filing of GST returns despite sufficient balance in their Electronic Credit Ledger, filed a writ petition before the Hon’ble Patna High Court. The applicant highlighted the proviso to Section 50(1) of the CGST Act, 2017, which specifies that interest liability shall be payable only on the portion of tax paid by debiting the Electronic Cash Ledger, arguing that demanding interest on tax payment via the Electronic Credit Ledger for delayed returns is legally flawed. 

After examining various legal provisions and judicial precedents from the Madras High Court and Jharkhand High Court, the Patna High Court ruled that payment of GST occurs only when the GST return is filed and a debit entry is recorded in the electronic cash ledger and electronic credit ledger. Mere depositing funds into the electronic cash ledger does not constitute GST payment. Similarly, the mere availability of a balance in the electronic credit ledger does not absolve the taxpayer from interest liability. 

The Court clarified that the proviso to Section 50(1) of the CGST Act, 2017, is merely clarificatory in nature. It provides that in the case of delayed filing of GST returns, interest will be applicable even on the balance available in the electronic cash ledger. However, the proviso itself does not prohibit the levy of interest on GST paid through the balance available in the electronic credit ledger. Therefore, interest is payable even on GST paid through the electronic credit ledger balance in case of delayed filing of GST returns. 

Singapore Updates

Monetary Authority of Singapore

MAS Expands Scope of Regulated Payment Services; Introduces User Protection Requirements for Digital Payment Token Service Providers 

On 2nd April 2024, The Monetary Authority of Singapore (MAS) introduced amendments to the Payment Services Act (PS Act) and its subsidiary legislation to expand the scope of payment services regulated by MAS, and to impose user protection and financial stability-related requirements on digital payment token (DPT) service providers. These amendments will take effect in stages from 4 th April 2024. 

 The amendments will bring the following activities within the scope of regulation under the PS Act:  

– Provision of custodial services for DPTs; 

– Facilitation of the transmission of DPTs between accounts and facilitation of the exchange of DPTs, even where the service provider does not come into possession of the moneys or DPTs; and 

Facilitation of cross-border money transfer between different countries, even where moneys are not accepted or received in Singapore. 

 The amendments will empower MAS to impose requirements relating to anti-money laundering and countering the financing of terrorism, user protection and financial stability on DPT service providers. 

 Transitional arrangements will be provided for entities currently conducting activities under the PS Act’s expanded scope. Such entities must notify MAS within 30 days, and submit a licence application within six months from 4 th April 2024, if they wish to continue the activities on a temporary basis while MAS reviews their licence applications. The licence application must be accompanied by an attestation report of the entity’s business activities and compliance with anti-money laundering and countering the financing of terrorism requirements, duly completed by a qualified external auditor, within nine months from 4 th April 2024. 

Entities that do not fulfil the requirements above are required to cease the activities when the amendments come into effect.  

The measures on protecting the assets of the customers of DPT service providers, including placing the assets in a trust account for the benefit of customers, maintaining proper books and records, as well as ensuring that effective systems and controls are in place to protect the asset integrity and security, will take effect six months from April 4th. 



Inland Revenue Authority of Singapore

Implementation of InvoiceNow for GST-Registered Businesses and Free InvoiceNow Services for Newly Incorporated Businesses 


The Inland Revenue Authority of Singapore (IRAS) will implement a phased adoption of InvoiceNow for GST-registered businesses (“GST InvoiceNow Requirement”), starting from November 2025. This initiative, starting with newly incorporated businesses that voluntarily register for GST, will require GST-registered businesses to use InvoiceNow solutions to transmit invoice data to IRAS for tax administration purposes. The Infocomm Media Development Authority (IMDA) will also be extending the benefits of InvoiceNow to newly incorporated businesses under its InvoiceNow Accelerate programme from this month. The push to onboard businesses on the InvoiceNow network is a concerted effort by both agencies to increase the adoption of InvoiceNow and help businesses improve efficiency and with their tax compliance. 


Launched in 2019, InvoiceNow is based on the international Peppol standard for the exchange of invoices in a structured digital format between suppliers and buyers. This enables businesses to improve productivity in invoice processing, achieve fast payment cycles, and go green by reducing the usage of paper. There are over 60,000 businesses on the InvoiceNow network utilising a variety of InvoiceNow services offered by the service providers. The services range from free e-invoicing portals to accounting solutions and customised systems. 


GST-registered businesses will be required to use InvoiceNow solutions to transmit the invoice data directly to IRAS for tax administration. This will be done in phases, starting with voluntary early adoption from May 2025. The transmission of invoice data to IRAS will be done seamlessly through Access Point providers (AP) via Application Programming Interface (API) technology.   


To allow businesses sufficient lead time to prepare, the GST InvoiceNow Requirement will be implemented progressively as follows: 


– From 1 st May 2025, for voluntary early adoption by GST-registered businesses, as a soft launch. 


– From 1 st November 2025, for newly incorporated companies[1] that register for GST voluntarily. 


– From 1 st April 2026, for all new voluntary GST-registrants. 


Adopting InvoiceNow will help businesses better fulfil their responsibilities as GST-registered businesses, by facilitating record-keeping, billing, and payment processes. In particular, it supports new GST-registered businesses to get it right from the start. 


By transmitting invoice data directly to IRAS via the InvoiceNow network, GST- registered businesses can streamline their compliance processes, reduce data preparation efforts for their submissions to IRAS and enjoy faster GST refunds. Businesses can also use features within InvoiceNow solutions, like receiving alerts for wrongful GST charges from non-GST registered suppliers. 


The phased adoption of InvoiceNow for GST-registered businesses follows a pilot conducted with a group of businesses and service providers between September 2020 and June 2023. Supermarket chain, Sheng Siong Group Ltd, and retail and office supplier, Evergreen Group Pte Ltd, were among the pilot users who submitted their invoice data to IRAS via the InvoiceNow network. 




Legal Updates

Notification relating to the Competition Act, 2002: 

a) The Ministry of Corporate Affairs has issued a notification under sub-section (3) of Section 20 [Inquiry into combination by commission] of the Competition Act, 2002 (“Act”) dated 07 March 2024 (hereinafter referred to as “Notification”). Section 20 of the Act deals with the right of the Commission to inquire into combinations under Section 5 and if such combinations have caused or are likely to cause an appreciable adverse effect on competition in India.

b) As per Section 5 [Combination] of the Act, an acquisition of one or more enterprises by one or more persons or a merger or amalgamation of enterprises shall be a combination if it fulfils certain criteria. Amongst other criteria, if the acquisition, whether in India or outside India, is in aggregate of the asset value of more than $500 Million, including at least INR 500 Crores in India, or turnover of more than $1500 Million, including at least INR 1,500 Crores in India, will constitute a combination. The Notification has the acquisition and turnover enhanced the thresholds by 150% on the basis of the wholesale price index and exchange rate of rupee.

c) The Ministry of Corporate Affairs has issued a notification under clause (a) of Section 54 [Power to exempt] of the Act on 07 March 2024. As per Section 54 of the Act, the Commission has a right to exempt any class of enterprises from the applicability of the provisions of the Act. By way of this notification, the Central Government exempts certain enterprises that are parties to; any acquisition under Section 5(a), acquiring of control by a person over an enterprise under Section 5(b), any merger or amalgamation under Section 5(c). For the purpose of this amendment, the thresholds are: (i) value of assets being acquired, taken control of, merged or amalgamated is not more than INR 450 Crores in India; or (ii) turnover not more than INR 1,250 Crores in India for a period of 2 years from the date of publication of the Notification.

Notification relating to the Competition (Amendment) Act, 2023:

a) The Ministry of Corporate Affairs has issued a notification under the Competition (Amendment) Act, 2023, on 05 March 2024 (hereinafter referred to as “Notification”). This Notification states that the provisions of Sections 20, 35 and 40 of the Competition (Amendment) Act, 2023 (“Amendment Act”), shall come into force from 06 March 2024.

b) Section 20 of the Amendment Act has substituted Clause (b) of Section 27 [Orders by Commission after inquiry into agreements or abuse of dominant position] of the Competition Act, 2002 (“Principal Act”). Section 27(b) of the Principal Act allows the Commission to impose penalty up to 10% of the average turnover for the last 3 preceding financial years on entities that are parties to anti-competitive agreements or are involved in the abuse of dominant As per the Amendment Act, for computation of the penalty up to 10%, either an average of turnover or income will be considered. Further, in case any anti-competitive agreement has been entered into by a cartel, the Commission may impose upon each producer, seller, distributor, trader or service provider included in that cartel, a penalty of up to 3 times of its profit for each year of the continuance of such agreement or 10% of its turnover or income, for each year of the continuance of such agreement, whichever is higher. The Amendment Act has provided, by way of an explanation, the definition of

“turnover” to mean global turnover derived from all the products and services by a person or an enterprise. 

c) Section 35 of the Amendment Act has substituted Section 48 [Contravention by companies] of the Principal Act. Section 48 of the Principal Act specified how the companies contravening the provisions of the Principal Act will be dealt with. The Amendment Act has further specified the quantum of penalty that can be imposed by the Commission in case of contravention of provisions by an individual or a company. In case any anti-competitive agreement has been entered into by a cartel, the Commission may impose a penalty up to 10% of the income of such individual for each year of the continuance of such agreement and in case of a company, 10% of the average income for the last 3 preceding financial years. The Amendment Act has inserted Section 48A [Settlement], 48B [Commitment] and 48C [Revocation of the settlement or commitment order and penalty] for determining the procedure for settlement, offering commitment and revocation of such settlement or commitment in case of failure to comply with such order, respectively.

d) Section 40 of the Amendment Act has substituted certain clauses under Section 53N [Awarding Compensation] of the Principal Act. Section 53N of the Principal Act deals with the authority responsible for adjudication of compensation. As per the amendment, the adjudication of claim for compensation will also be made against the orders passed by the Supreme Court, Settlement Commission [Section 48A], and recovery orders for compensation from an enterprise.

Notification relating to the Information Technology Act, 2000:

The Ministry of Home Affairs has issued a notification under clause (b) of sub-section (3) of Section 79 [Exemption from liability of intermediary in certain cases] of the Information Technology Act, 2000 (“IT Act”) dated 13 March 2024 (hereinafter referred to as “Notification”). As per Section 79 of the IT Act, an intermediary shall not be liable for any third-party information, data, or communication link made available or hosted by him if he fulfils certain conditions. However, the protection shall cease to apply if the intermediary is notified by the appropriate Government or its agency that the information connected with the computer resource, controlled by the intermediary, is being used to commit an unlawful act and such intermediary fails to disable the access to such information [Section 79(3)(b)]. 

The Notification has designated the Indian Cyber Crime Coordination Centre (I4C), to be the agency of the Ministry of Home Affairs to perform the functions under Section 79(3)(b).

Notification relating to the Patent Rules, 2024:

The Ministry of Commerce and Industry has issued a notification dated 16 March 2024, vide the powers conferred under the Patents Act, 1970 to further amend the Patent Rules, 2003 (“Principal Rules”) by way of Patents (Second Amendment) Rules, 2024 (“Amendment Rules”). 

The Amendment Rules have inserted chapters in the Principal Rules after Rule 107 providing the process of adjudication of penalties and appeals including the process of filing a complaint in Form 31 under Rule 107B, holding an inquiry under Rule 107C, and provisions for filing an appeal in Form 32 against the order passed by the Adjudicating Officer under Rule 107D. 


Notification on Information Technology Act, 2000 

Patents (Second Amendment) Rules, 2024 

Section 5 of Competition Act, 2005 

Section 20, 35 & 40 of Competition (Amendment) Act, 2023 

Section 54 of Competition Act, 2002