In terms of Companies (Management and Administration) Amendment Rules, 2021, a new format of Annual Return is being introduced for One Person Company and Small Companies with effect from 2020-21.
As per MCA notification dated 18 March 2021, the Central Government will establish a Central Scrutiny Centre for carrying out the scrutiny of Straight Through Process (STP) forms.
Schedule III to the Companies Act, 2013 which provides for format of Balance Sheet and Profit and Loss Account of a Company is amended to include more detailed disclosures and shall be effective from 1 April 2021.
In terms of Companies (Accounts) Amendment Rules, 2021 which will be effective from 1 April 2021, every Company maintaining its accounts in electronic form shall have software having feature of Audit trail of each and every transaction which shall create an edit log of each change made in the books of accounts along with the date to reflect when changes were made.
Instructions regarding selection of potential cases for issue of notice u/s 148 by International Taxation charge i.e. where income has escaped assessment for the remittances before 31 March 2017.
♦ Cases of information from any other Government agency.
♦ Cases of information arising out of field survey action.
♦ Cases where information has been received any IT Authority including AO.
♦ Cases of non-filer management systems.
♦ Reports of Directorate of Income tax (Investigation), Directorate of Intelligence and Criminal investigation
♦ Cases of information arising out of FT and TR references
♦ Cases of information received from central charges after April 01, 2019, if not uploaded onto ‘VRU/CRIU functionality’ and flagged to jurisdictional authorities
Ahmedabad ITAT allows assessee’s appeal to affirm TDS @10% as per DTAA to be correct
Facts of the case:
Bangalore ITAT defends revenue in re-characterising reimbursement as intra-group service
Facts of the case:
Bangalore ITAT rules on comparable selection in respect of assessee’s software development services (SWD) segment and marketing and sales support services (MSS) segment and remits the issue back for TP adjustment on account of interest on outstanding receivables.
Facts of the case:
Chennai ITAT deletes disallowance w.r.t. legal and professional fees paid to non-resident without TDS u/s 195 holding them as non-taxable as FTS or business income
Facts of the case:
Pune ITAT lays twin conditions to classify payment as ‘reimbursement’, for TDS u/s 195
Facts of the case:
Delhi ITAT holds that provision for CSR expenditure made by assessee is an unascertained liability, liable to be added back for computation of book profits u/s 115JB
Facts of the case:
The Income Tax Department carried out searches on a closely-held Group in Jharkhand on 17 March 2021 and concluded the same on 20 March 2021. Search and survey was carried out at more than 20 premises.
With all the efforts the Department succeeded to spill the beans by uncovering:
With effect from 1 December 2020, B2C invoices issued by taxpayers having turnover more than INR 500 crores shall have Dynamic QR code. On 29 November 2020, Government issued a notification stating waiver of penalty under Section 125 of the Central GST Act for non-compliance with the said provision for the period from 1 December 2020 to 31 March 2021 subject to the condition that registered person complies with this requirement from 1 April 2021. Now vide Notification number 06/2021-Central Tax dated 30 March 2021 the Government has further extended this relaxation by 3 months up to 30 June 2021 subject to the condition that registered person complies with this requirement from 1 July 2021.
Before we discuss this Ruling, it would be apposite to understand first the legal background around the issue. Supply of notified goods to public funded educational/research institutions enjoys concessional rate of GST at 5%. “Computer software” is one of the notified goods for this 5% tax benefit. The Applicant in this case M/s SPSS South Asia Pvt Ltd is an authorized reseller of IBM SPSS software in India. Applicant provides various statistical modelling software to various publicly funded research entities. Applicant provides software download link to its customer which also contains software license code. The applicant also provides a physical backup CD containing the software. The Backup copy of software is for Customers’ convenience only. At certain times, due fluctuation in bandwidth or any other technical reason, customers face difficulties in downloading the software and in that case, they can use the CD provided. Furthermore, in Government institutions and certain institutions, they prefer a CD for inventory record purpose. In terms of entry 5(c) of Schedule II to the CGST Act, 2017 viz. “temporary transfer or permitting the use or enjoyment of any intellectual property right” the Applicant classifies their supply of software license as “service” with HSN code 997331. So, they posed a question before AAR whether concessional rate of 5% GST would be applicable to their supply of software license as “service” with HSN code 997331.
The Karnataka AAR held that the supply made by the Applicant cannot be classified as “services” but the same is “supply of goods” with HSN code 8523. In arriving at this conclusion, the AAR observed that the software supplied by the Applicant is a pre-developed or pre-designed software and made available through the use of encryption keys and hence it satisfies all the conditions to cover them under the definition of “goods”. Further the Explanatory Notes to the Scheme of Classification of Services stipulates that the services of limited end-user license as part of packaged software are excluded from the SAC 997331. Hence, the Applicant’s supply is classifiable as “supply of goods” under HSN 8523 and is also eligible for concessional rate of 5% GST when supplied to research/educational institutions.
Gujarat AAR classifies supply of ‘Occupational Health Check-up service’ (OHC) / Corporate Health Check-up Schemes i.e., nursing staff, doctors, paramedical staff on hospital’s payroll working in different corporate for providing health check-up service, ambulance facility, and allied medical services to their employees as “Human health and social care services”, in terms of Sl. No. 31 of the Notification No.11/2017- C.T.(Rate) dated 28 June 2017, and hence taxable at the rate 18%.
However, supply of medicines, surgical items, implants, consumables, and other allied items provided by the hospital through in house pharmacy & supply of food, room on rent, other services to admitted patients is a ‘composite supply’ of ‘In-Patient Healthcare Service’, which is exempted from CGST as per Notification No.12/2017-C.T. (Rate) dated 28 June 2017. Held that the hospital cannot provide health services including diagnostic, treatment surgery etc. without the help of medicines to be taken during treatment, implants and consumables used during their stay in the hospital. Only on using these medicines, consumable and implants as required and prescribed by the doctors and administered during their stay will the treatment be complete. Hence, supply of medicines, implants and consumables are natural bundled with the supply of health services.
Maharashtra AAR rules that No GST is chargeable on accounting entries made for the purpose of Indian Accounting requirements in books of Project Office for salary cost of Expat Employees since Project Office established in India, is an extension of the Foreign Head Office, and thus the expat employees working in Project Office are employees of the employer i.e., the Head Office. There is a relation of employer and employee between the Project Office (extension of Foreign Head Office) and the expat employees and thus the provisions of Schedule III of the CGST Act comes into play as per which services by an employee to the employer in the course of or in relation to his employment will not be considered as a supply and therefore will not attract GST.
UP AAR rules that recovery of premium amount from employees by the employer and subsequent deposit of same with insurance company cannot be treated as supply of service in the course of furtherance of business. Providing insurance facility to employees’ parents is nowhere connected with the business of the applicant in as much facilitating insurance services for employees’ parents is not an activity which is incidental or ancillary to the business activity of the applicant.
UP AAR rules that providing transport facility to the employees by the employer cannot be said to be in course or furtherance of business. Arranging of transport facility for the employees and recovery from employees towards such transport facility, under the terms of the employment contract, cannot be considered as supply of service in the course of furtherance of business nor an activity which is incidental or ancillary to the business activity of the applicant. Rather, this is a facility provided to the employees under the obligation of Law of the Land. Moreover, this activity is not integrally connected to the functioning of the applicant’s business in as much the said activity is not a factor which will take their business activity forward.
The eligibility of ITC on frees supplies given as a part of CSR activity remained a burning topic unless the UP AAR ruled that ITC in such a case is not a restricted ITC and hence can be claimed by the taxable person as an eligible ITC. It stated that CSR activities is as an essential part of the business process and thus the said are to be treated as incurred “in the course of business”.
Analyzing, the provisions as contained in section 17(5)(h) of the CGST Act, 2017, the AAR holds that the section restricts credit of the goods which were written off or disposed off by way of gift or free samples. However, free supplies given as a part of CSR activity cannot be held as a gift because the term ‘GIFT’ in common parlance would mean something which is provided to someone occasionally, without consideration and which is voluntary in nature. Free supplies made under CSR expenditure are not voluntary but obligatory as mandated under the Companies Act, 2013.
Further, the AAR also held that ITC shall not be restricted in case of goods and services being used for construction of school building which is not capitalized in the books of accounts of the taxable person.
The issue considered by the Hon’ble Supreme Court in this case was whether the Directorate of Revenue Intelligence had authority in law to issue a show cause notice under Section 28(4) of the Act for recovery of duties allegedly not levied or paid when the goods have been cleared for import by a Deputy Commissioner of Customs who decided that the goods are exempted. In this case, a show cause notice was issued under Section 28 (4) to Canon India Private Limited alleging that the Customs Authorities had been induced to clear the cameras by willful mis-statement and suppression of facts about the cameras.
The Supreme Court has held that the officers of Directorate of Revenue Intelligence (DRI) are not ‘proper officers’ within the meaning of Section 28(4) of the Customs Act, who are empowered to undertake process or recovery of duties.
The Court observed that only an officer who did the assessment, can undertake re-assessment under Section 28 (4) of the Customs Act
The Larger Bench of CESTAT in a recent landmark decision in the case of Kafila Hospitality & Travels Pvt. Ltd., has held that the target incentives / Performance Linked Bonus (PLB) Commission received by air travel agents from the airlines and commission received from CRS companies is not subject to service tax under the category of Business Auxiliary Services
The Hon’ble CESTAT also held that incentives received by an assessee would not qualify as consideration towards a service as these incentives would be in relation to all supplies of an assessee, and not in relation to a particular supply. It was held that a direct correlation should be established between incentives and the activity undertaken.
Foreign Trade Policy 2015-2020 was originally valid for five years up to 31 March 2020. Last year, its validity was extended by one more year up to 31 March 2021. Vide Notification number 60/2015-2020 dated 31 March 2021, the Government has further extended the validity of Foreign Trade Policy 2015-2020 by another six months till 30 September 2021. FTP inter alia provides various export promotion/incentive schemes such as EPCG, Advance Authorization, EOU, STP etc. Such schemes now would continue to operate in their present form up to 30 September 2021.
Readers may be aware that, last month the DGFT made it mandatory to update IEC details online every year during April-June period. Even in case there are no changes in IEC details, IEC holders are required to confirm the same online. IEC may be deactivated temporarily if it is not updated in a timely manner. Now, the DGFT has notified that no fees will be charged for annual amendment of IEC between the period April to June.
IGST and compensation cess exemption on imports available to EPCG, Advance Authorization holders, EOUs/STP units has been extended by the Government for another year up to March 31, 2022.
Government has notified new e-customs portal: https://www.icegate.gov.in to facilitate electronic filing of import export documentation, amendments to documents etc. Soon all orders, decisions, summons or notices will be uploaded on this portal.
Government has made various changes in time limit to file bill of entry for home consumption or warehousing. The same are tabulated below for easy understanding. It is also worthwhile to note that importers can file their bill of entry up to 30 days in advance of expected arrival of the aircraft or vessel or vehicle. Importers are advised to file bill of entry within time to avoid late filing charges.
Customs sea port
Customs sea port
Inland Container Depot (ICD) or Air Fright Station (AFS)
Land Customs Station (LCS)
Bangladesh, Maldives, Myanmar, Pakistan, Sri Lanka
All countries except above
T denotes day of arrival of vessel or aircraft or vehicle carrying the goods at customs sea port, airport, inland container depot, land customs station
From 1 May 2021, companies required to file financial statements in XBRL format must apply the revised XBRL filing requirements.
Under the revised filing requirements, non-publicly accountable companies with revenue and total assets of up to $500k can file using the Simplified XBRL template. The other companies must file using the Full XBRL template.
Companies may voluntarily file their financial statements by applying the revised XBRL filing requirements.
On 9 March 2021, the Minister for Trade and Industry of Singapore Chun Chun Sing and Indonesia’s Minister for Foreign Affairs Retno Marsudi (“Ministers”) jointly announced the entry into force of the Singapore -Indonesia Bilateral Investment Treaty (“BIT”) at a virtual Meeting.
The press release issued by Singapore’s Minister for Trade and Industry(“MTI”) notes that the entry into force of the BIT is an important milestone in Countries’ longstanding economic relationship. The BIT would offer greater protection for Singapore investors into the Indonesian market and vice versa, safeguarding investments and boosting investor’s confidence.
Despite the COVID-19 pandemic, Singapore continued to be Indonesia’s top source of foreign direct investment in 2020, with investment totaling US$9.8 billion, an increase from previous year. Similarly, Indonesia remained one of Singapore’s top trading partners in 2020, with bilateral trade reaching US$ 48.8 billion. The Ministers believe that the BIT could increase the bilateral investment by 18-22% over the next five years.
On 16 March 2021, Singapore Exchange Regulation (“SGX RegCo”) announced that it has, in consultation with the Monetary Authority of Singapore, extended the availability of the provisional measure enabling Mainboard issuers to seek a general mandate for an issue of pro-rata shares and convertible securities of up to 100% of their share capital (excluding treasury shares and subsidiary holdings in each class) (“Enhanced Share Issue Limit”) as compared to the previous limit of 50%.
SGX RegCo previously announced on 8 April 2020 that the Enhanced Share Issue Limit would be in force until 31 December 2020. With SGX RegCo’s latest announcement, the expiry date of Enhanced Share Issue Limit has been extended. Issuers will have up to 31 December 2021 to seek or renew a general mandate for the Enhanced Share Issue Limit, which will expire at the conclusion of the next annual general meeting or on the date by which the next annual general meeting is required by law or the SGX-ST Mainboard Listing Manual to be held, whichever is the earliest.
Form C-S/C for the FY 2020 -30-November-2021
Estimated Chargeable Income (ECI) (Mar year-end)- 30-Jun-2021
GST Return January – March 2021 – 30- April-2021