corporate and professional updates 6th June 2018

Direct Tax:

• AAR rules that the Liaison office (‘LO’) of the Applicant (International Zinc Association, a Belgium based International Non-Pro
• fit Association) established in India for conducting programmes / conferences / training on importance of zinc, not liable to tax in India under the Income-tax Act or India-Belgium DTAA, holds membership fee and contribution received from Indian members as non-taxable; [TS-284-AAR-2018]
• AAR rules that Indian hotel managed and operated by Applicant (a Luxembourg based group engaged in operation and management of the hotels) would constitute its fixed place PE in India and income from the Indian hotel owner for provision of global reservation services (‘GRS’) [arising out of Centralised services agreement (‘CSA’)], would be attributable to its PE in India; Rejects applicant’s stand that since the question raised in application is only whether the income from GRS can be taxed as ‘royalty’ or FTS, AAR cannot adjudicate upon the issue of existence of PE, cites its duty as per Rule 12 of AAR Procedure Rules, 1996 to look at ‘all aspects of the questions set forth’ which would enable it to pronounce a ruling;[TS-283-AAR-2018]
• Mumbai ITAT deletes over Rs. 3,200 cr. capital gains addition made by AO invoking Explanation 5 to Sec. 9(1) [relating to indirect transfers] in case of resident company (‘assessee’) during AY 2011-12; ITAT notes that during relevant AY, Singaporean parent had infused Rs. 148.52 cr. by way of share capital subscription for funding assessee’s acquisition of two Indian entities, however, AO linked the purchasing of shares of fifth degree holding company located outside India (for Rs. 1002 cr) to arrive at the valuation for shares issued by assessee to the Singapore entity, and made alleged capital gains addition;[TS-285-ITAT-2018(Mum)]
• CBDT announced Information reward scheme under which a person can get reward up to Rs. 50 lakh for giving information to Investigation Directorates in Income Tax Department about substantial evasion of tax on income or assets in India.

INDIRECT TAX

• announced Benami Transactions Informants Reward Scheme, 2018; a person can get reward up to Rs. One crore for giving specific information to Income Tax Dept about benami properties as well as proceeds from such properties.
• GST: For refund in case of export of non-GST & exempted goods without payment of IGST, LUT/bond is not required. Circular 45/19/2018-GST of 30.5.18.
• International passengers buying goods at airport ‘duty-free’ shops will not be subject to GST and the revenue department will soon clarify on this exemption. They will have to only collect a copy of the passport from the passenger to whom it sells the goods.

FAQ on E-WAY BILLS:

• Query:How the distance has to be calculated, if the consignments are imported from or exported to other country?
• Answer:The approximate distance for movement of consignment from the source to destination has to be considered based on the distance within the country. That is, in case of export, the consignor place to the place from where the consignment is leaving the country, after customs clearance and in case of import, the place where the consignment is reached the country to the destination place and cleared by Customs.

IBBI UPDATES

• Insolvency and Bankruptcy Board of India (IBB) has issued Insolvency Professionals to act as Interim Resolution Professionals or Liquidators (Recommendation) Guidelines, 2018 to streamline the procedure for recommendation and appointment of Interim Resolution Professional (IRP) or liquidator.

OTHER UPDATES

• govt is considering merging at least four state-run banks, including Bank of Baroda, IDBI Bank Ltd, OBC and Central Bank of India.  If the plan goes through, the merged entity will become the second-largest bank in the country with combined assets of ₹16.58 trillion.

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