corporate and professional updates 1st June 2018

Direct Tax:

• Delhi ITAT rules that the wholly owned Indian subsidiary of Daikin Industries Ltd. (assessee, a Japanese company), constitutes assessee’s dependent agent PE for AY 2006-07; Holds that the entire activities of identifying customers, negotiating and finalizing prices with customers in India etc. were done by DAIPL (Indian subsidiary) not only for the products sold as distributor, but also for which assessee claimed to have made direct sales in India;[TS-274-ITAT-2018(DEL)]

• Pune ITAT  accepts assessee’s (land owner) plea that advance received from developer towards flat booking shall not be taxable in subject AY 2009-10 on receipt basis, but in subsequent AY when the project was completed and tenements / flats were handed over to the prospective buyers; [TS-271-ITAT-2018(PUN)]
• AAR holds that payment received by the Applicant (a US based technology company) from its India based group company under the  non-exclusive Reseller Agreement for sale of applicant’s content delivery solutions directly to customers in India, not taxable as FTS/FIS or Royalty under the Act or India-US DTAA; [TS-273-AAR-2018]

• AAR rules that the ‘front-end fee’ payable by a customer in India, for appraisal of loan application carried outside India, under the financing arrangement with the Applicant (a France based Financial Institution), not ‘interest’ under Article 12 of India-France DTAA, follows Bombay HC ruling in Commonwealth Development Corporation; Notes that in order to constitute interest under India-France DTAA, the income must be from debt claims, observes that there was no debt claim in existence when the ‘front-end fee’ for loan application appraisal was payable, further notes that the payment was fixed and mandatory and neither dependent upon nor connected with the loans advanced; [TS-272-AAR-2018]
• CBDT has notified that  the provisions of clause (viib) of sub-section (2) of section 56 of the Income Tax Act shall not apply to consideration received by a company for issue of shares that exceeds the face value of such shares, if the consideration has been received for issue of shares from an investor in accordance with the approval granted by the Inter-Ministerial Board of Certification under clause (i) of sub-para (3) of para 4 of the notification number G.S.R. 364(E), dated 11th April, 2018 and published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (i) dated the 11th April.

Indirect Tax

• CBEC has notified that  the National Academy of Customs, Indirect Taxes and Narcotics, Department of Revenue, Ministry of Finance, Government of India, as the authority to conduct the examination as per the rule. Vide Notification No. 24 /2018, dated 28th May 2018.
• GST Special Refund Fortnight to be organized from May 31 to June 14 in which Center and state GST officers will strive to clear all GST refund applications received on or before April 30, 2018.
• Govt. has clarified that in case of a claim for refund of balance in the electronic cash ledger filed by an ISD or a composition taxpayer and non-resident taxable person, the filing of the details in GSTR-1 and GSTR-3B is not mandatory. The filing of applicable return shall be sufficient for claiming the said refund. Further, it also clarified that LUT or bond is not required for the refund claims on account of export of non-GST and exempted goods without payment of IGST.

FAQ on E-WAY BILLS:

• Query:How does taxpayer enter Part-A details and generate e-way bill, when he is transporting goods himself?
• Answer:Sometimes, taxpayer wants to move the goods himself. E-way bill Portal expects the user to enter transporter ID or vehicle number. So if he wants to move the goods himself, he can enter his GSTIN in the transporter Id field and generate Part-A Slip. This indicates to the system that he is a transporter and he can enter details in Part-B later when transportation details are available.
• Query:What are the documents that need to be carried along with the goods being transported?
• Answer:The person in charge of a conveyance shall carry the invoice or bill of supply or delivery challan, bill of entry as the case may be and a copy of the e-way bill number generated from the common portal. Please refer relevant rules for details

Read more about: What is core Business Activity GST

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

RBI Update:

• The Reserve Bank of India (vide directive DCBR.CO.AID/D-42/12.22.218/ 2017-18 dated May 23, 2018) has extended directions issued to Rupee Co-operative Bank Ltd., Pune, Maharashtra for a further period of three months from June 01, 2018 to August 31, 2018 subject to review. Vide press release 2017-2018/3106, dated 28th May 2018.

MCA UPDATES

• MCA has issued Clarification with regard to provisions under Section 135(5) of the Companies Act, 2013 regarding spending on CSR activities.

OTHER UPDATES

• ICAI Representation submitted to CBDT by Direct Taxes Committee of ICAI – Notification No 23/2018, dated 24th May, 2018 amending Rule 11UA omitting CA ineligible to determine the FMV of unquoted equity shares as per the Discounted Free Cash Flow Method – (30-05-2018).

Key Date:

• Quarterly return for registered persons with aggregate turnover up to Rs. 1.50 Crores: GSTR-1 :-31. July 2018
• Turnover exceeding Rs. 1.5 Crores or opted to file monthly Return: GSTR-1 (may2018):-10 june 2018
• Due date for filling GST TRAN-2- 30.06.2018