CORPORATE AND PROFESSIONAL UPDATE SEPTEMBER 23rd 2017

DIRECT TAX:

  • Delhi ITAT allows deduction u/s 10B to assessee [(operating an Export Oriented Unit (EOU)] for AY 2010-11 and AY 2011-12 in respect of duty drawback receipts forming part of EOU’s profits, ITAT holds that manner of computing profits u/s 10B(4) does not require direct nexus with business unlike Sec 80(IB).  TS-408-ITAT-2017(DEL)
  • Mumbai ITAT treats interest earned by assessee company on fixed deposit as capital receipt for AY 2012-13, being inextricably linked with setting up of power project, directs set-off against pre-operative expenditure. [TS-409-ITAT-2017(Mum)

INDIRECT TAX:

  • CBEC made amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No.11/2017- Central Tax (Rate), dated the 28thJune, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 690(E), dated the 28thJune, 2017. Vide notification no 24/2017, dated 21th September 2017
  • Income Tax Department at the time of login asking for Residential Status, Mobile and Email, Bank details and at last Mobile and E-mail OTP. Otherwise Login is not allowed. Also, one Mobile and E-mail address cannot be used for more than 3 Assessee.
  • CBDT via Notification No. 9 dated. 19.09.2017 notifies procedure for filing Statement of Income to avail foreign tax credit as per Rule 128 of Income Tax Rules 2016.
  • CBEC exempts intra state supply of heavy water and nuclear fuels falling in Chapter 28 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) by the Department of Atomic Energy to the Nuclear Power Corporation of India Ltd from the whole of the central tax leviable thereon under section 9 of the Central Good and Services Tax Act, 2017. Vide notification no 26/2017, dated 21thSeptember 2017.

GST UPDATE:

  • Extension of last date for filing TRAN-1 to 10.2017. Now original TRAN1 can be filed and revised once till 31.10.2017.  [Order 03/2017-GST of 21.9.2017.]
  • As many as 2.97 million assessees have filed the summary input-output return under the GST for the month of August (‘GSTR 3B’), much less than the 4.6 million that came for the month of July.

FAQ on GST:

Query: I have a registration as an Input Service Distributor. Am I required to raise invoices even though no taxable supplies are made from this registration number?

Answer: Yes. An Input Service Distributor (ISD) should issue a tax invoice being an ‘ISD invoice’ for distributing credits to the GST registrations that have the same PAN as that of the ISD. Such invoice will be different from invoices reflecting supply of goods or services (refer Invoice Rules). This is a document required under Section 20 of the Act.

MCA UPDATE:

  • MCA made amendments in companies Act, 2013. These rules may be called the Companies (Restriction on number of layers) Rules, 2017 which shall come into force on the date of their publication in the official Gazette. Vide notification no 01/1312013 CL-V (Vol.IIl), dated 20.09.2017.
  • The last date for submission of research proposal for “Funding of Research Studies and Workshops conference, etc. under the CDM plan Scheme” is now extended up to 29th September, 2017.

OTHER UPADATE:

  • SEBI has empowered stock exchanges to conduct forensic audits on listed companies which seem dubious, being suspected of  use as conduits for illicit fund flow.

KEY DATES:

  • Return of input service distributer for August: 23/09/2017

WORD OF WISDOM:

  • To be successful, you must decide exactly what you want to accomplish, then resolve to pay the price to get it.
  • “There is only one corner of the universe you can be certain of improving, and that’s your own self”

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Amendments vide Finance Bill, 2016 applicable wef. 1st April. 2016

Amendments vide Finance Bill, 2016 applicable wef. 1st April. 2016

finance-bill-2016-expenses-subsistence

The Finance Bill, 2016 which was brought into by the Union Budget, 2016-17 come out with no. of amendments applicable from varied dates. Changes which were effective from the 1st day of April, stands imbibed are listed as follows:-

Change relating to Mega Exemption Notification 

Exemptions Withdrawn

  • Exemption in respect of Services provided by a senior advocate to an advocate or partnership firm of advocates withdrawn
  • Services of transport of passengers by ropeway, cable car or aerial tramway withdrawn

Exemptions Introduced

  • Services of assessing bodies empanelled centrally by Directorate General of Training, Ministry of Skill Development & Entrepreneurship
  • Services provided by way of skill/vocational training by Deen Dayal Upadhyay Grameen Kaushalya Yojana training partners
  • The threshold exemption limit of consideration charged for services provided by a performing artist in folk or classical art forms of music, dance or theatre, increased from Rs 1 lakh to Rs 1.5 lakh per performance.
  • Services of life insurance business provided by way of annuity under the National Pension System (NPS) regulated by Pension Fund Regulatory and Development Authority (PFRDA) of India
  • Services of general insurance business provided under “Niramaya” Health Insurance scheme launched by National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disability in collaboration with private/public insurance companies.
  • Services provided by Employees’ Provident Fund Organisation (EPFO) to employees.
  • Services provided by Insurance Regulatory and Development Authority (IRDA) of India.
  • Services provided by Securities and Exchange Board of India (SEBI) set up under SEBI Act, 1992, by way of protecting the interests of investors in securities and to promote the development of, and to regulate, the securities market.
  • Services provided by National Centre for Cold Chain Development under Department of Agriculture, Cooperation and Farmer’s Welfare, Government of India, by way of knowledge dissemination
  • Services provided by Biotechnology Industry Research Assistance Council (BIRAC) approved biotechnology incubators to the incubatees.

Changes wrt. Reverse Charge mechanism

  • Liability to pay service tax on any service provided by Government or a local authority to business entities shall be on the service recipient.
  • Services by Mutual Fund Agents to Asset Management Co. put under reverse charge

Amendments wrt. Abatement Notification no. 26/2012-ST vide Notification no. 08/2016-ST dt. 01.03.2016

  • Construction of a complex, building, civil structure or a part thereof:- Uniform abatement @ 70% is now being prescribed, subject to fulfillment of the existing conditions.
  • Services by a tour operator:- Only two abatement rates introduced @ 90% and 70% for the purposes of booking accommodation & for other services, respectively. Definition of package Tour deleted
  • Transport of goods in a vessel:- Credit of input services could be availed now
  • Transport of Passengers, with or without accompanied belongings, by-
    – a stage carriage: Added now, earlier not existed in this abated entry
  • Services provided by a foreman of chit fund in relation to chit:- Newly inserted entry, however, earlier said entry existed which was omitted wef. 1st April, 2015; abatement @ 30% without availment of any credit
  • Services of goods transport agency in relation to transportation of used household goods:- Newly Inserted; abatement @ 60 % without allowing any credit
  • Services of goods transport agency in relation to transportation of goods other than used household goods:- Substituted for “Services of goods transport agency in relation to transportation of goods”.
  • Transport of passengers, with or without accompanied belongings by rail: CENVAT credit of input services being allowed now
  • Transport of goods in containers by rail by any person other than Indian Railways:- Newly introduced; abatement @ 60% ; Credit allowed for input services
  • Transport of Goods by Rail:- No change in Rates ; CENVAT Credit wrt. Input service now being allowed

Changes to Service tax Rules, 1994

  • Service tax liability on single premium annuity (insurance) policies is being rationalized and the effective alternate service tax rate (composition rate) now being prescribed at 1.4% of the total premium charged
  • Benefit of (a) quarterly payment of service tax being extended to OPC and HUF and (b) payment on receipt basis being extended to OPC.

Changes in CENVAT Credit Rules, 2004

  • Change in the definition of Capital Goods:- Wagons of sub heading 8606 92 of the Central Excise Tariff and equipment and appliance used in an office located within a factory are being included
  • CENVAT credit on inputs and capital goods used for pumping of water, for captive use in the factory, is being allowed
  • Capital goods having value up to Rs. ten thousand per piece are being included in the definition of inputs
  • Service by way of transportation of goods by a vessel from customs station of clearance in India to a place outside India is being excluded from the definition of, “exempted service CENVAT Credit for radio-frequency spectrum, mines etc.
  • Provisions related to calculation of CENVAT Credit attributable to exempted services has been redrafted
  • Change in manner of distribution of CENVAT Credit by Input Service Distributor (ISD) Insertion of new Rule 7B for multiple manufacturing units to maintain a common warehouse for inputs.
  • Change in method for determining whether a particular credit has been utilized vide Rule 14(2) of CCR, 2004
  • Annual Return prescribed for manufacturer of final products or provider of output services vide Rule 9A

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