corporate and professional updates 23th july 2018

Direct Tax :

• Delhi ITAT upholds taxation  of consideration for providing SAP/CAD software related support as FTS under Article 13(4)(a), being ancillary and subsidiary to the enjoyment of the right / property for which royalty was received by assessee (a UK co., JCBE), clarifies that ‘make available’ clause under Article 13(4)(c) is not applicable; ITAT notes that in earlier years, assessee had entered into bilateral agreement under which it used to receive royalty from JCB India (Indian subsidiary) for licensing the technology with an exclusive right to manufacture and market, however, during relevant AY, assessee entered into a Tripartite Agreement whereby the technology was sub-licensed by assessee to JCB investments, and the royalty paid by JCB India was routed through JCB Investments;[TS-389-ITAT-2018(DEL)]
• Karnataka HC dismisses Revenue’s appeal against ITAT decision in Phillips Software Centre case for AY 2003-04; Holds that ITAT’s observation that -TP-provisions were inapplicable to assessee entitled to tax holiday benefit, is “a mere obiter” which had not caused prejudice to Revenue; Observes that such finding was not a finding of fact; Sates that “Though such an obiter …appears to be made .. in ignorance of … Proviso to Sub-section (4) of Section 92C…, but we do not find any binding character of such findings or observations because as far as the computation of income of the assessee is concerned, the Assessing Authority has not given any benefit of Section 10-A … with respect to Transfer Pricing Adjustments…”; [TS-701-HC-2018(KAR)-TP]

INDIRECT TAX

• Quarterly Returns approved for taxpayers with turnover less than ₹ 5 Cr (Tax payments to continue on monthly basis).

• GST on hotel rooms would now be on actual tariff & not declares tariff.

• Goods Exempted from GST-fortified milk, Sanitary Pads, Deities made of stone, marbles or wood. Raakhis, without any precious metals,Raw material used in brooms, Commemorative Coins circulated by RBI or Govt and Saal.

• GST reduced from 12% to 5%
• Handloom dari and Fertiliser grade phosphoric acid.

• 5% GST ceiling on footwearraised from ₹ 500/- to ₹ 1000/-.

• GST reduced from 28% to 18%:
• Leather Items, Lithium-ion batteries, Vaccum cleaners, Mixers, Food grinders, Shavers, Hand dryes, hair clippers, Storage water heaters, Electric smoothing irons, Water cooler, Ice cream freezer, Television  (up to 27″), Washing Machine, Refrigerators, Cosmetics, Perfumes, Scents, Paint, Varnishes and special purpose vehicles, work truck, trailer.

• Ethanol for OMC snow at 5% vs 18% earlier.

FAQ on GST Audit:

• Query: What would be the action by the proper officer upon conclusion of the audit?
• Answer: The proper officer must without delay inform the taxable person about his findings, reasons for findings and the taxable person’s rights and obligations in respect of such findings.

Read more about: What is core Business Activity GST

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

MCA Update:

• Please be noted that MGT-7 Form version is being changed and will be made available shortly. Request you to check for the latest version before proceeding with the filing.
• MCA invites applications from CA having 2 years plus experience at all over India in compliance, Investigation and inspection related work. remuneration will be Rs. 40,000 PM + Rs. 1000/- as conveyance. may apply https://cmib.icai.org/mcaformby 28 July, 2018.

OTHER UPDATES

• Lok Sabha passed the Fugitive Economic Offenders Bill, 2018, which seeks to bring back white collar criminals, who have fled the country, to face trial in India. It seeks to target fugitives for offences exceeding `100 crore.
• Rajya Sabha passed the Prevention of Corruption (Amendment) Act, 2013. It comes at a time when bankers are facing intense scrutiny for their lending decisions with many former and current bankers arrested by investigative agencies over loans that have now turned non-performing.
• CA final Result -I group 16%, II Group-13%, Both group -13%, CPT* is 28%, Foundation is 19%.
• ICAI has arranged the ‘Tax Cloud’ software on Web based ITR & TDS Return Preparation for Practice Chartered Accountants & CA Firms of ICAI. https://taxcloudindia.com

KEY DUE DATES

• GSTR-6 (Jul’17 – Jun’18)- Jul 31st, 2018
• Quarterly return for registered persons with aggregate turnover up to Rs. 1.50 Crores- GSTR-1 (Apr-Jun, 2018)-Jul 31st, 2018.