CORPORATE AND PROFESSIONAL UPDATES 2ND MAY 2018

Direct Tax:

• HC allows assessee’s [engaged in the business of golf equipment, packaged kits and accessories etc.] appeal against ITAT’s remand of Advertising, Marketing and Promotion (AMP) adjustment back to TPO/AO; Notes that TPO had made an adjustment on account of assessee’s AMP expenses by applying bright line test and in appeal ITAT had remanded the matter for TPO/AO’s re-examination; HC observes that both TPO/ DRP had applied the reasoning of Sony Ericsson Mobile Communication HC ruling and the subsequent decisions while confirming the AMP adjustment; Further, notes that co-ordinate bench in Sony ruling had overruled the Tribunal’s Full Bench decision in LG Electronics case regarding the applicability of bright line test and dealt specifically with the AMP issue; Thus, opines that “the remission to the TPO/AO, in the facts of this case, was unnecessary instead the ITAT itself ought to have addressed the issue, especially the Court’s findings, as to whether the reasoning in the case of ‘Sony Ericsson Mobile Communication India (P.) Ltd.’ (supra), was correctly applied in the facts of this case”; Thus, directs ITAT to consider the matter afresh and return its findings on the merits.[TS-300-HC-2018(DEL)- TP]

• HC admits assessee’s legal questions for AY 2007-08 – “Whether on the facts and circumstances of the case and in law, the corporate guarantee given by the Appellant with respect to the loans given by the subsidiary comes within the ambit of Section 92 of the Act?” and “Whether on the facts and in the circumstances of the case and in law, the corporate guarantee by the Appellant with respect to the loans taken by the subsidiary company is an international transaction under Section 92B of the Act?” : Bombay HC[TS-302-HC-2018(BOM)-TP]

• Supreme Court of India held that if the share application money that is received is deposited in the bank in light of the statutory mandatory requirement then the accrued interest is not liable to be taxed and is eligible for deduction against the public issue expenses. It further held that The common rationale followed in all these judgment is that if there is any surplus money which is lying idle and it has been deposited in the bank for the purpose of earning interest then it is liable to be taxed as income from other sources but if the income accrued is merely incidental and not the prime purpose of doing the act in question which resulted into accrual of some additional income then the income is not liable to be assessed and is eligible to be claimed as deduction.  [The Commissioner of Income Tax Vs M/s. Shree Rama Multi Tech Ltd (Supreme Court of India)]

• ITAT Mumbai held that Additional depreciation eligible on wind turbine generators used for generation of electricity. It Further says that When the generation of electricity by harnessing wind energy by the assessee could safely and rather inescapably be characterized as manufacturing or production of any article or thing, therefore, there was no reason to hold that the assessee, despite having satisfied all the requisite conditions contemplated in section 32(1)(iia), would, however still stand dis entitled and deprived of its claim of additional depreciation. [Wind World India Infrastructure (P) Ltd. Vs. Pr. CIT (ITAT Mumbai)]
• Income Tax Deptt drive towards higher compliance has additional Rs 1.5 lakh crore in direct taxes during 2017-18 and get a record number of new filers. Now it’s chasing 65 lakh people who it suspects did not file returns last year as it hopes to expand the taxpayer base to over 9.3 crore.
• Interest income from share application money received by a company is liable to be set off against public issue expenses”CIT Vs. M/s. Shree Rama Multi Tech Ltd., Supreme Court of India.

Indirect Tax:

• CESTAT Mumbai held that there is No Service Tax on Sale of Prospectus not as its not a Part of Commercial Training or Coaching Services. [True Education Institute Pvt. Ltd. Vs. Commissioner of Service Tax, (CESTAT Mumbai)]
• Madras High Court held that Since CGST Act, 2017 came in force with effect from 1-7-2017, contract work for which agreements were executed prior to 1-7-2017, GST would not be imposed on same and 2 per cent VAT alone was applicable. [ Coimbatore Corporation Contractors Welfare Association v. State of Tamil Nadu (Madras High Court)]
• With the GST stabilising, TDS TCS provisions that had been put on hold till June 30 may be rolled out from July 1, 2018.
• Circular No. 10/2018 – Customs issued by CBIC clarifying on the procedure to be followed by EOUs for importing goods without payment of duty
• GST: Time period for filing GSTR-2 & GSTR-3 for July 2017 – March 2018 will be subsequently notified.

more updates for related blogs are:

• GST Return compliances calendar- Nov 2020
• SALIENT FEATURES OF NEW GST SYSTEM IN INDIA
• Key points of 42nd GST council Meeting headed By FM N. Sitharaman
• GSTN enable auto-populated in the E-invoice information into GST Return -1
• Delayed in payment of GST then Intt to be paid on net GST liability from Sep 1, 2020.
• Effect of GST on Advertisement and Cinema Industry
• GST Impact on Import and Export
• GST Impact on Real Estate

FAQ on E-WAY BILLS:

• Query: Can the e-way bill be deleted or cancelled?

• Answer: The e-way bill once generated cannot be deleted. However, it can be cancelled by the generator within 24 hours of generation. If it has been verified by any proper officer, then it cannot be cancelled. Further, e-way bill can be cancelledif either goods are not transported or are not transported as per the details furnished in the e-way bill.

 MCA UPDATE: 

• MCA gives relaxation of additional fees and extension of last date of filling AOC-4 XBRL E-Forms using Ind AS under the companies Act, 2013-reg.
• Extension to 31.05.2018 of last date to file AOC-4 XBRL e-Forms using Ind AS. MCA General Circular No. 04/2018.
• Companies Act: 01-05-2018 – Condonation of Delay Scheme 2018  [CODS-2018] allows Defaulting Companies to file its overdue documents which were due for filing.

Other updates

• EPFO will now inform employees whose contributions have not been deposited by the employer for a given month in due time. Currently, EPFO only sends messages to employees whose contributions are credited into their EPF accounts

Key dates:

• GSTR-1 for the taxpayers with annual turnover more than Rs 1.5 cr for the March on monthly  basis: 10.05.2018
• 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