Corporate and Professional Updates 14th may 2018

Direct Tax:

• ITAT rules on selection of comparables in respect of assessee rendering ITeS to AE for AY 2010-11; Follows co-ordinate bench ruling in Rampgreen Solutions considering the similar functional profile of the assessee and that of the Rampgreen and even the same subject AY involved; Excludes 3 comparables (Accentia Technologies, I-gate Global and Infosys BPO) on the grounds of extraordinary events such as amalgamation, acquisition; Also excludes TCS E-Serve International Limited being engaged in provision of software development services and thus not functionally comparable; However, ITAT remits the comparability of TCS E-Serve Ltd back to the AO/TPO after considering assessee’s submission regarding its substantial related party transactions : Delhi ITAT [TS-330-ITAT-2018(DEL)-TP]
• SC dismisses Revenue SLP against Rajasthan HC decision that had upheld ITAT-order deleting Rs.2.07cr TP-adjustment; ITAT had upheld non-applicability of CUP-method on royalty payment to AE; HC had relied on earlier order in assessee’s own case for deleting the adjustment : SC [TS-326-SC-2018-TP]
• Tax Recovery Officer could not declare a transaction of transfer as void under section 281 and if revenue wants to have transaction nullified under section 281, it must go to civil court to seek declaration to that effect- Madras HC
• Estimating expenditure incurred on labour & wages in new units merely on basis of comparision with expenditure incurred in old units and made addition on account of unexplained expenditure, such addition was unjustified – HC.
• If assessee claimed rice packing expenditure as assessee procured paddy from farmers in bags and old bags leftover were utilized in new unit to pack rice but failed to support said explanation by any inventory detail in respect of utilization of old bags in new unit, addition under section 69C in respect of packing expenditure was justified.

Indirect Tax:

• AAR holds that supply of power / electricity by applicant to related entity for latter’s captive consumption, would tantamount to ‘supply of goods’ liable to GST even if made without consideration; Notes that under the proposed arrangement, applicant would receive coal or any other inputs from such related entity and after processing thereof, electricity shall be supplied as an output; Rejects applicant’s stand that said activity results in ‘job work’.  [TS-166-AAR-2018-NT]
• Central Board of Indirect Taxes and Customs (CBIC) wrote to officials for proactive approach in facilitating the enrolment and helping the applicants in case they have committed any bona fide mistakes while making the application will only further our cause of achieving a trade-friendly image.
• The Authority for advance ruling under the GST Law has recently given a ruling treating EPC contracts for construction of solar power plants as works contract.
• Interest charged by Del Credere agent on short term loan exempt from GST.
• SLP granted for taxability of allotment fee on let-out shops under ‘Renting of immovable property service’.
• Temporary transfer of copyrighted programme couldn’t be taxed under ‘Programme producer service’.
• E-rickshaw Tyres classifiable as new pneumatic tyres of rubber, Taxable at 28% GST-AAR.
• GST Applicable on Supply of motor vehicles as scrap after its usage in business- AAR.

Read our articles:

• E-Invoice Mechanism under the GST
• Blocking/Unblocking the E-Way Bill creation system if fails to file GSTR-3B: GSTN
• Reasons for the Movement of Goods under the GST

FAQ on E-WAY BILLS:

• Query: How does the taxpayer or recipient come to know about the e-way bills generated on his GSTIN by other person/party?
• Answer: As per rules, the taxpayer or recipient can reject the e-way bill generated on his GSTIN by other parties. The following options are available for him to see the list of e-way bills.
• He can see on the dashboard, once he logs into the system.
• He will get one SMS everyday indicating the total e-way bill activities on his GSTIN.
• He can go to reject option and select date and see the e-way bills. Here, system shows the list of e-way bills generated on his GSTIN by others.
• He can go to report and see the ‘EWBs by other parties’.

MCA Update:

• MCA informs that  Forms AOC4-XBRL and PAS-3 are likely to be revised on MCA21 Company Forms Download page w.e.f 15th MAY 2018. Stakeholders are advised to check the latest version before filing.
• Auditor to hold office till 6th AGM without Ratification. MCA withdraws Ratification requirement. The Companies (Audit & Auditors) Rules, 2018.
• MCA notifies Sec. 8 of The Companies Act, 2013 alongwith other sections and sub-sections of The Act. Commencement Notification of MCA dated 07.05.2018.
• If Quorum is present in physical presence of Director(s), other director(s) may participate through video conference in Board Meeting to decide on specified matters. MCA Ntfcn of 07.05.18.

SEBI updates

• SEBI vide notification dated May 9, 2018 has notified Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 amending Listing Regulations for suitably incorporating the recommendations.

Key dates:

• Return of TDS/TCS collected in March: 31.05.2018
• Due date for filling of GSTR-6- 31 . may . 2018
• Due date for filling GST TRAN-2- 30.06.2018