Adjustment of GST in Property Value Not Covered Under Section 56(2)(x)
– The assessee booked an under-construction property during FY 2016-17. Due to an increase in the GST rates from 5.5% to 12% effective from 01/07/2017, the builder reduced the property’s agreement value from ₹2.63 crore to ₹2.55 crore to pass on the benefit of the GST adjustment.
– The Assessing Officer (AO) treated the reduction in agreement value as an underreporting of the property value and added the difference under section 56(2)(x) of the Income Tax Act, considering it as a gift.
– Commissioner (Appeals): The Commissioner (Appeals) upheld the AO’s decision, dismissing the assessee’s argument that the reduction was due to GST adjustments.
– ITAT’s Ruling: The ITAT noted that the difference between the originally agreed price and the registered price was only 1.5%, which is below the permissible 3% variation under section 56(2)(x) for the assessment year.
– It was observed that the builder had reduced the sale price due to GST adjustments, and such adjustments did not fall under the ambit of section 56(2)(x) as they were bona fide and intended to pass on the benefit of GST to the buyer.
– The ITAT also cited CBDT Circular No. 8/2018, explaining that bona fide variations due to rationalization (like GST changes) should not be considered as gifts.
– Consequently, the ITAT ruled that the addition made by the authorities could not be upheld.
– The appeal was allowed in favor of the assessee, and the addition made under section 56(2)(x) was set aside.
MAS and ABS to Establish New Payments Entity to Position National Payment Schemes for Next Stage of Growth
On 12th February 2025, the Monetary Authority of Singapore (“MAS”) and the Association of Banks in Singapore (ABS) announced that a new entity will be established to consolidate the administration and governance of Singapore’s national payment schemes to position these schemes for the next stage of growth. The entity will also collaborate with MAS on the development of Singapore’s national payments strategy, ensuring a safe, efficient and innovative payments infrastructure.
Currently Singapore’s national payment schemes, such as Fast and Secure Transfers (FAST), Inter-bank GIRO System, PayNow and Singapore Quick Response Code (SGQR), are widely used by consumers and businesses in their daily activities, offering a broad range of options for domestic and cross-border payments. These schemes are administered and governed by specific scheme administrators, namely, Singapore Clearing House Association (SCHA), ABS, MAS and Info-communications Media Development Authority (IMDA). The consolidation of the administration and governance of these schemes under a single entity will enhance coordination and decision-making across national payment schemes, enabling financial institutions and payment service providers to better harness opportunities in global payments and spur further growth and innovation in Singapore’s payments sector.
The new entity will be governed by senior representatives from MAS and the financial services industry, who will provide strategic direction to the entity’s management team. Additionally, industry committees will be formed under the new entity to engage banks, payment services providers and key user groups such as industry and business associations to support strategy development. There will be no changes to the operations and scheme rules of the national payment schemes as they are consolidated to the new entity.
https://www.mas.gov.sg/news/media-releases/2025/mas-and-abs-to-establish-new-payments-entity
A comprehensive set of measures to strengthen Singapore’s equities market
On 21st February 2025, The Equities Market Review Group has announced its first set of measures to strengthen the competitiveness of Singapore’s equities market. These measures encompass demand initiatives to increase investor interest and deepen liquidity in Singapore’s equities market, paired with supply initiatives to facilitate the pipeline of quality listings in Singapore. The demand and supply initiatives will be complemented with regulatory initiatives to move decisively towards a more- disclosure-based listing regime.
The first set of measures proposed by the Review Group focuses on three main pillars:
– Increasing investor interest (Demand)
– Improving attractiveness to quality listings (Supply)
– Pro-enterprise regulatory stance and measures to strengthen investor confidence.
Increasing investor interest (Demand)
– The Equity Market Development Programme (EQDP) will be launched with a $5bn investment to strengthen the local fund management ecosystem. The EQDP will initially invest in various funds managed by fund managers. Eligible fund strategies include those that invest into Singapore equities. This programme aims to incentivise fund managers to attract greater retail and institutional investor interest, thereby deepening trading liquidity and improving price discovery.
– Tax exemptions will be introduced for fund managers who invest substantially in Singapore-listed equities.
– Adjustments to the Global Investor Programme (GIP) will be made to support more capital inflows to Singapore’s equities market.
– The Grant for Equity Market Singapore (GEMS) scheme will be expanded to include research coverage on pre-Initial Public Offering (IPO) companies and mid- and small-cap enterprises.
The second set of measures is under further consideration and is summarized below:
– Review various trading boards of SGX, including the Catalist board.
– Strengthen investor protection by enhancing investor recourse avenues.
– Introduce incentive programmes to uplift listed companies’ shareholder engagement capabilities and sharpen their focus on shareholder value.
– Review issue manager’s due diligence requirements and guidelines.
– Improve collaborations with overseas exchanges.
– Enhance efficiency of trading and post-trade custody.
– Review the Complex Products Framework.
Beyond these measures, additional efforts that could further enhance Singapore’s capital markets may include:
– Digitalising the listing process and leveraging technology for regulatory review to enhance the efficiency of the IPO process.
– Introduce sector-focused measures, such as tailored incentives to attract listing, targeting high-growth industries such as biotech, fintech and green energy.
– Strengthening partnerships with regional bourses to facilitate dual listing and attract international investors.
– Providing post-IPO support with expanded research coverage on smaller and mid-cap companies and assisting these companies with investor outreach.
