CORPORATE AND PROFESSIONAL UPDATE July 26, 2017

CORPORATE AND PROFESSIONAL UPDATE July 26, 2017

Direct Tax:

• CBDT notified ‘Noida Special Economic Zone Authority, Noida’, an authority constituted under the Special Economic Zone Act, 2005 of the Government of India. Vide notification no 70 /2017, F.No.196/30/2013-ITA-I, dated 20th 2017.
• CBDT notified Assam State Biodiversity Board, a board established by the Government of Assam. This notification shall be deemed to have been applied for the financial Years 2015-16, 2016-17 and shall apply with respect to financial years 2017-18, 2018-19 and 2019-20. Vide notification no 69/2017/F. No. 300196/1/2016-ITA-I, dated 20th 2017.
• CBDT notified ‘National Biodiversity Authority’, Chennai, an authority established under the Biological Diversity Act, 2002 (18 of 2003). This notification shall be deemed to have been applied for the financial year 2016-2017 and shall apply with respect to the financial years 2017-2018, 2018-2019, 2019-2020 and 2020-2021. Vide notification no 68 /2017/F. No. 300196/01/2017-ITA-I, dated 20th July 2017.
• CBDT said that the non-resident Indians will not have to give details of their bank accounts held outside the country while filing their income tax returns, if they are not seeking refunds.
• The Income Tax department is probing over 30,000 cases of alleged tax evasion wherein the returns (ITRs) were revised by assessees post demonetization, CBDT chief Sushil Chandra said.
• HC held that where a power has been conferred upon a holder of public office, such authority cannot sit over matter for time immemorial and the person who suffers on account of inaction of authority cannot be denied a benefit which would have been admissible if approval is granted, by keeping matter pending for a long time and failing to take a decision. M/S Shrikar Hotels  Pvt. Ltd. Vs CIT (Allahabad High Court)
• No penalty when bank deposit was disclosed in revised return prior to initiation of reassessment proceedings. [2017] 79 com102 (Mumbai – Trib.)
• TPO couldn’t reject principle of aggregation accepted in earlier years without any change in circumstances.  [2017] 79 com105 (Ahmedabad – Trib.)
• Search was justified if certain records were not produced even after repeated directions: HC [2017] 79com111 (Orissa)
• No TDS liability on payment to harvesting-gang-labourers and transporters on behalf of farmers who had tax exempt agricultural income for purchase of sugarcane. [2017] 79 com88 (Visakhapatnam – Trib.)
• If the investments or deposits are made by charitable trust are in violation of section 11(5) of the Act, the benefit of exemption u/s. 11 of the Act would not be denied on the entire income of the assessee. It is only the investments or deposits made in violation of provisions of section 11(5) of the Act that would attract maximum marginal rate of tax as per the provisions of law. ito (Exemption), Vs Progressive Education Society, (ITAT Pune)
• CBDThas clarified the new provision regarding chargeability of tax on jewellery which is being introduced through Taxation Laws (Second Amend) Bill, 2016 to enhance the tax rate from 30% to 60% plus surcharge of 25% and cess thereon.
• The new software developed by the branch office in India and then transmitted to the head office situated outside India on arm’s length price will amount to export sale under Section 10A. DDIT vs. Virage Logic International, High Court of Delhi.
• The public need not worry about harassment from Income Tax officials as their discretionary powers in the scrutiny of cases are limited, the cases for scrutiny will be chosen by machines and all the procedures surrounding the income tax notices will be done through machines.
• Capital goods are goods capitalized in books of accounts of person claiming credit and used/intended to be used in course or furtherance of business.
• Bombay HC  held that the expenditure incurred on corporate advertisement and for promotion of a corporate brand as it was in the nature to maintain the brand and/or corporate image was to be allowed as revenue expenditure. [CIT v/s Asian Paints (India) Ltd.]
• Cash purchases of jewellery will attract 1 per cent tax collected at source from April 1 if the amount exceeds Rs. 2 lakh, against the current threshold of Rs. 5 lakh.

INDIRECT TAX:

• CESTAT holds that activity of spot-billing of electricity meters for Maharashtra State Electricity Distribution Company Ltd. (MSEDCL) is taxable as “business auxiliary service” under clause (vii) of Section 65(19) of Finance Act being service incidental / auxiliary to activity of sale of goods produced / provided by / belonging to client[TS-54-CESTAT-2017-ST]
• HC dismisses writ petition, holds that area based excise duty exemption under Notification No. 50/2003-CE not extendable to National Calamity Contingent Duty (NCCD) and Cesses thereon [TS-53-HC-2017(UTT)- EXC]
• Due date for filing of service tax return for the period April – June 2017 is 15th August 2017.
• Filing of certificate from the financial institution maintaining accounts of operational creditor is mandatory. Smart Timing Steel Ltd. V. National Steel & Agro Industries Ltd. [2017] 139 CLA 1 (NCLAT).

GST Update

• UP Govt. vide Circular No. KA-NI-1014/XI-9(52)/17-U.P.GST Rules-2107-order(31)-2017 dated July 22, 2017 has mandated to have E-way bill 01/ E-way bill 02/ E-way bill 03/ TDF 01 for all taxable goods whose value exceeds Rs. 5,000/- coming from outside UP to the state.
• GSTN portal has started uploading of specified particulars of outward supply invoices of businesses generated after GST rollout. If the taxpayer has limited number of invoices into GSTR-1 from July 24, 2017. This invoice upload facility is available 24×7.

Read more about: What is core Business Activity GST

Read more about: All about GST Offenses, Penalties, and Appeals

FAQ ON GST:

Query:  Whether input tax includes tax (CGST/ IGST/SGST) paid on input goods, input services and/ or capital goods?

Answer: Yes, in terms of section 2(54), 2(55) & 2(20) of the MGL respectively. It may be noted that credit of tax paid on capital goods also is permitted to be availed in one instalment.

Query:  Who will levy and administer GST ?

Answer: Centre will levy and administer CGST & IGST while respective states will levy and administer SGST.

Query: In case of switchover from taxable to exempt transactions or from Regular to composition whether input tax credit is fully restricted?

Answer: Yes. In terms of Section 18(4) of the CGST Act, an amount equal to the credit of tax paid on stock held (inputs, semi-finished goods or finished goods) and capital goods (reduced by percentage points) on the day preceding the date of opting for composition/ effecting exempt supplies will have to be paid. The same can be paid by utilization of credit/ cash payments.

MCA UPDATE:

CLT Tribunal can compound the offence even though the prosecution is pending against the applicants and prior permission is not necessary to compound the offence. NCLT Bengaluru Bench, In Re : Tejas Networks Ltd. and Ors. [2017].

Corporate Law:

• MCA specified the constitution of two review committee (s) reviewing the 10 year old and above case of different regions and in office of SFIO for withdrawal of prosecutions. Vide notification no 16/37/2017, dated 25th July 2017.
• MCA make Chrification regarding. appticability of exemption given to certain private cornpanies under section 143(3Xi) of the Companies Ac! 20.1.3. Vide notification no W2014- CL-v, dated 25th July 2017.
• Exemption to private cos. on reporting of internal financial controls by auditor applies from April 1, 2016: MCA Circular 8/2017, Dated:25th July, 2017.
• SEBI has notified stricter participatory notes (P-notes) norms stipulating a fee of $ 1,000 that will be levied on each instrument to check any misuse for channelizing black money.

SEBI AND OTHER UPDATE :

SEBI has permitted to Indian entities issuing rupee denominated bonds abroad also permit Multilateral and Regional Fi-nancial Institutions where India is a member country, to invest in rupee denominated bonds

SEBI issued guidelines for mutual fund advertisements, allowing use of celebrities to increase awareness of the Rs. 17.9 lakh crore industry. The regulator also tweaked the performance disclosure requirement.

Key Dates: Important dates for March 2017:

6   March  : Service tax monthly deposit other than Ind, HUF & P.Firm

7   March  : TDS/ TCS deposit

15 March : Deposit of PF

15 March : Payment of Advance Tax

20 March : Monthly UP VAT return & tax

21 March : Deposit of ESI

31 March : E-payment of service Tax by all assesses Monthly/ Quarterly

31 March : Filing of Belated Income Tax returns for the A/Y 15-16 & A/Y 16-17

E payment of DVAT & CST tax for Feb : 21:03:2017

Payment of ESI of Feb : 21:03:2017

Quotes of the day

“Worthy books are not companions – they are solitudes: we lose ourselves in them and all our cares.”

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