corporate and professional update july 27, 2017

Direct Tax:

S. 69A: NDTV indulged in a clear cut case of “abuse of organization form/ legal form and without reasonable business purpose” and therefore, no fault can be found with the order of the AO in charging to tax Rs. 642 crores by re-characterizing the conditions according to its economic substance and imposing the tax on the actual controlling Indian entity.
There is no doubt that the transaction used principally as a devise for the distribution/ diversion of sum to the Indian entity. The beneficial owner of the money is the assessee New Delhi Television Ltd vs. ACIT (ITAT Delhi)
S. 292C: An addition cannot be made on the basis of a handwritten loose paper which does not indicate if it pertains to the assessee and if AO has not brought on record any forensic evidence to prove the handwriting of the assessee. An addition cannot be made on the basis of suspicion and guesswork and without bringing corroborative material on record CIT vs. Praveen Juneja (No. 1) (Delhi High Court

CBDT has started accepting the ITR without linking of PAN & Aadhaar. Due to many issues in linking of Aadhaar with PAN because of Name, D.O.B., Gender etc. mismatch; However you have to mention Aadhaar Number.
CBDT notifies Principle Director General of Income-tax (system) as the ‘designated authority’ for furnishing the ‘bulk information’ on certain identified parameters to the above authority in pursuance of sub-clause (ii) of clause (a) of sub-section (1) of section 138 of the Income-tax Act, 1961. Vide notification no 74/2017, dated 26th July 2017.
CBDT made amendment in section 115JB of the Income-tax Act,1961 in order to provide the framework for computation of book profit for the purposes of levying Minimum Alternate Tax (MAT) in case of Indian Accounting Standards (Ind AS) compliant companies in the year of adoption and thereafter. Vide press release, dated 25th July 2017.

Indirect Tax:

CBEC, in order to have uniformity in approach among the field formations, issued detailed guidelines for re-testing of samples Vide Circular No. 30/2017-Cus dated 18th July, 2017.
CBEC made Clarification regarding applicability of section 16 of the IGST Act, 2017, relating to zero rated supply for the purpose of Compensation Cess on exports. Vide notification no 354/136/2017-TRU, dated 26th July 2017. .

GST Update

GST tax would be payable based on a simple return (Form GSTR-3B) containing summary of outward and inward supplies which will be submitted before 20th of the succeeding month.
Invoice-wise details in regular GSTR-1 would have to be filed for the months of July GSTR-1 from 1-5 September, GSTR-2 6-10 September and August GSTR-1 16-20 September, GSTR-2 from 21-25 September.
Facility for uploading of outward supplies for July, 2017 will be available from 15th July, 2017.No late fees and penalty would be levied for the interim period.
U.P. E-way Bill system is deferred till 15/08/17 on the request of the dealers and trade organizations
All legal services provided by the Advocates, law firms of Advocates or LLPs of Advocates will be continued to be governed by the reverse charge mechanism.
Renting of road is an Input Service-The road is used for the transportation of goods which is directly related to the manufacture of final product in the factory. 2017-TIOL-2499-CESTAT-MUM.
Resubmission or Re-upload of the documents for the rejected cases. All the members whose applications are rejected can now re-upload their documents from their login from 31st July to 6th Aug.2017 period.
Co. (A) Bill, 2016 has been passed by Lok Sabha on July 27, 2017 as Co. (A) Bill, 2017 & would be referred to Rajya Sabha for consideration and passing.

FAQ on GST

Query: Whether input tax credit is allowed on inputs which become waste and is sold as scrap?

Answer: Section 17(5) (h) specifically restricts input tax credit on goods lost, stolen, destroyed, written off or disposed by way of gift or free samples.

Therefore, if the goods have been destroyed in full, input tax credit will not be available. However, if in the process of manufacture some inputs become waste and are sold as scrap, credit shall not be denied. Further, output tax shall be payable on sale of such waste/scrap.

Query: Whether input tax credit can be availed on input services and capital goods (lying in stock) when there is an application for new registration or during voluntary registration under section 18?

Answer: No. In case of new registrations and voluntary registrations, input tax credit can be availed only on the stock held (inputs, semi-finished goods or finished goods) preceding the day when he is liable to pay tax or preceding to the date of grant of voluntary registration. Input service and capital goods lying in stock are not eligible for ITC.

Corporate Law:

Forms DIR-12, CRA-4, SPICe and INC-27 are likely to be revised on MCA21 Company Forms Download page w.e.f 29th Jul 2017. Stakeholders are advised to check the latest version before filing.
Over 6.83 lakh companies have a Permanent Account Number (PAN) but did not file income tax returns for assessment year 2016-17, Parliament was informed.
MCA issued General Circular No. 08 /2017 dated:25th July,2017 regarding clarification for applicability of exemption given to certain private companies under section 143(3)(i) of the Companies Act 2013.
MEF for the year 2017-18 is live at www.meficai.org. The last date for submission of online MEF Form for the year 2017-18 is 15th August, 2017.
The Reserve Bank of India has today notified that the foreign investment limit for investment by Foreign Institutional Investors (FIIs)/ Foreign Portfolios Investors (FPIs) in M/s Indraprastha Gas Limited has increased from 24% to 30% of its paid up capital. Vide press release 2017-2018/254, dated 26th July 2017
RBI issued a compilation of the all instructions contained in the circulars issued by RBI which are operational on Detection and Impounding of Counterfeit Notes Vide Master Circular No. RBI/2017-18/26 dated 20.07.2017

Quotes of the day

“It is better to fail in originality than to succeed in imitation.”

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corporate and professional update july 27, 2017