CORPORATE AND PROFESSIONAL UPDATE May 1, 2017  

Professional Update for the day:

IDS

 

Direct Tax:

ITAT Delhi has held that right to receive a property is a valuable and a transferable right and falls within the ambit of “capital asset” and hence profit earned on sale of allotment right (without physical possession of the property) is taxable as Capital Gains and not as Income from other sources.[Satnam Overseas Exports Vs DCIT]

Indirect Tax:

  • Extension to 15.05.17 of last date to file DVAT-16, DVAT-17 & DVAT-48 for Q4 of 2016-17. CIRCULAR NO.2 of 2016-17.
  • Supreme Court and jurisdictional High Courts gave the rulings that reversal of Cenvat credit will amount to not taking Cenvat credit and accordingly benefit of relevant exemption notifications was held to be available to such assessees who reverse Cenvat credit earlier taken.[C.C.E. & S.T., Surat II Vs Shri Rakesh M. Shah]

 

  • SC held that It would neither be a case of discrimination nor it can be said that the appellants have any right under Article 14 or Article 19(1)(g) of the Constitution which has been violated by non-issuance of notification under Section 11C of the Act. Once the appellant accepts that in law it was liable to pay the duty, even if some of the units have been able to escape payment of duty for certain reasons, the appellant cannot say that no duty should be recovered from it by invoking Article 14 of the Constitution. It is well established that the equality clause enshrined in Article 14 of the Constitution is a positive concept and cannot be applied in the negative

GST Update

Under GST Law IGST, CGST, SGST deposited cannot be adjusted against each other. Only IGST, CGST & SGST input tax credit can be adjusted in specified order.

FAQ on GST

How will GST benefit the exporters?

Answer: The subsuming of major Central and State taxes in GST, complete and comprehensive setoff of input goods and services and phasing out of Central Sales Tax (CST) would reduce the cost of locally manufactured goods and services. This will increase the competitiveness of Indian goods and services in the international market and give boost to Indian exports. The uniformity in tax rates and procedures across the country will also go a long way in reducing the compliance cost.

Why is Dual GST required?

Answer: India is a federal country where both the Centre and the States have been assigned the powers to levy and collect taxes through appropriate legislation. Both the levels of Government have distinct responsibilities to perform according to the division of powers prescribed in the Constitution for which they need to raise resources. A dual GST will, therefore, be in keeping with the Constitutional requirement of fiscal federalism.

Corporate Law:

Bogus share capital: Source of source relevant even for period before amendment to section 68 of the Income Tax Act. Pragati Financial Management Pvt. Ltd Vs CIT (Calcutta High Court).

Other Updates

  • ICAI is organizing 3 CPE hrs National Live Webcast on Overview, Application and Implications of ICDS, Thursday ,4th  May, 5 to 8 pm http://estv.in/icai/04052017/
  • Real Estate (Regulation and Development) Act, 2016 which seeks to protect home-buyers as well as to boost investments in the real estate industry, will come into force across the country from 1st May, 2017. Under the Act, all the States will constitute a Real Estate Regulatory Authority (RERA).
  • RBI has said banks cannot refuse to accept faded notes or those with scribbles. Such banknotes had to be treated as “soiled notes“ and dealt with according to the RBI’s “clean note policy“.

 Quotes of the Day:

 “Go after your dreams how unattainable others think it is.”

“You have to expect things from yourself before you can do them.”

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