Gujarat High Court Rules on Deloitte’s Challenge to Income Tax Reassessment Notice
Key Highlights:
Petitioner: M/s. Deloitte Haskins & Sells
Issue: Challenge to Section 148 notice under Income Tax Act, 1961
Allegation: Escaped income from foreign entities (Spain & Japan)
Claim: Reassessment initiated without new tangible material
Court’s View: Reassessment cannot be based on a mere “change of opinion”
Gujarat High Court is reviewing whether the Income Tax Department’s actions violated principles of natural justice.
The Gujarat High Court recently addressed a *writ petition filed under Article 226 of the Constitution by “M/s. Deloitte Haskins & Sells,”* a partnership firm practicing as chartered accountants. The firm challenged a notice issued under Section 148 of the Income Tax Act, 1961, seeking its quashing and an injunction against further proceedings by the Income Tax Department. The case centered on alleged escaped income from foreign entities, including payments received from Spain and Japan, and the department’s failure to address the petitioner’s objections before proceeding with reassessment.
*Key Points:*
*1. Challenge to Section 148 Notice:*
The petitioner contested the validity of the notice issued under Section 148, arguing that the reassessment was initiated based on a mere “change of opinion” without any new tangible material. The Gujarat High Court has previously held that reassessment cannot be initiated on a mere change of opinion for material already scrutinized in previous assessments.
*2. Alleged Escaped Income:*
The reassessment pertained to alleged escaped income from foreign entities, including payments received from Spain and Japan. The petitioner maintained that all relevant details were furnished during the original assessment, and no new information had surfaced to justify the reassessment.
*3. Non-Consideration of Objections:*
The petitioner asserted that the Income Tax Department proceeded with the reassessment without addressing the objections raised, violating principles of natural justice. The Gujarat High Court has previously invalidated assessment orders due to violations of procedural requirements under Section 144B, emphasizing the necessity of considering taxpayers’ objections.
*Court’s Decision:*
While the specific outcome of this particular case is not detailed in the available sources, the Gujarat High Court has consistently ruled that:
*Reassessment notices under Section 148 cannot be issued based on a mere change of opinion for material already scrutinized in previous assessments.*
*Procedural lapses, such as failing to consider taxpayers’ objections, can render assessment orders invalid.*
*These precedents suggest that the court may favor the petitioner’s stance if similar circumstances apply.*
The GST Network (GSTN) has introduced a new facility allowing certain Promoters/Directors of businesses to complete their Biometric Authentication at any GST Suvidha Kendra (GSK) in their Home State, instead of only at the jurisdictional GSK.
Who Can Avail This?
Applicable to Promoters/Directors listed in the Promoter/Partner tab for the following businesses:
Public Limited Company
Private Limited Company
Unlimited Company
Foreign Company
Key Highlights:
1. If selected for Biometric Authentication, an intimation email will be sent to the applicant, providing the option to choose a GSK in their Home State.
2. This is a one-time selection and cannot be changed after confirmation.
3. Currently available in 33 States/UTs; will soon extend to Uttar Pradesh, Assam, and Sikkim.
4. Upon selection, a confirmation email with a slot booking link will be sent.
5. The biometric process, including photo capture and authentication, must be completed at the chosen GSK.
6. If Biometric Authentication has already been completed, re-verification is not required.
7. If the Promoter/Director and Primary Authorized Signatory (PAS) are the same person, the home-state option is not available—they must visit the designated jurisdictional GSK instead.
8. This facility is optional; Promoters/Directors may still visit their jurisdictional GSK if preferred.
Taxpayers are advised to follow these guidelines for a smooth GST registration process.
After successful implementation of Phase-I & Phase-II now :
👉Phase-III regarding Table 12 of GSTR-1 & 1A is being implemented, from return period January 2025.
👉Manual entry of HSN has been replaced by choosing correct HSN from given Drop down.
👉Table-12 has been bifurcated into two tabs namely B2B and B2C, to report these supplies separately.
👉Validation regarding values of the supplies and tax amounts involved in the same, have also been introduced for both the tabs of Table-12.
👉In initial period these validations have been kept in warning mode only, which means failing the validation will not be a blocker for filling of GSTR-1& 1A.
Prime Minister Internship Scheme Launched to Provide 1 Crore Internships in Top Companies Over Five Years
Successful Migration of MCA21 from Version 2 to Version 3 for Streamlined Compliance
Jan Vishwas Initiatives Simplify Share Transmission and Lost Share Certificate Processes, Eliminates Surety Requirements for Duplicate Physical Security Certificates
IEPFA Launches Enhanced Grievance Redressal Mechanism with Multilingual IVRS Facility
Integrated Technology Platform Proposed Under Insolvency and Bankruptcy Code for Better Efficiency
IBC Resolves Rs. 10.22 Lakh Crore Default Cases Pre-Admission with Record Resolution Rates
Competition Commission of India (CCI) Disposes 99% of Combination Cases by September 2024
Central Processing Centre (CPC) Launched for Nationwide E-Form Processing
CPACE Reduces Corporate Exit Processing Time to 90 Days
Amendments Introduced in Indian Accounting Standards (Ind AS 116 and Ind AS 117)
Faceless Adjudication Mechanism Introduced for Decriminalized Corporate Defaults
The major initiatives and achievements of the Ministry of Corporate Affairs during the Year 2024 are as follows:
Prime Minister’s Internship Scheme – Pilot Project
The Prime Minister’s Internship Scheme in Top Companies has been announced in the Budget 2024 aiming to provide internship opportunities to one crore youth in top 500 companies over five years. Through this Scheme, youth will gain exposure to real-life business environment, across varied professions and employment opportunities. The interns will be provided with financial assistance of Rs. 5,000 per month, of which Rs. 4500 would be disbursed by the union government, and Rs. 500 per month would be paid by the company from its CSR funds. Additionally, a one-time grant of Rs. 6,000 for incidentals would be disbursed by Ministry of Corporate Affairs (MCA) to each intern, upon joining the place of internship. Duration of the internship under the PM Internship Scheme is of 12 months. A Pilot Project of the Scheme, targeted at providing 1.25 lakh internship opportunities during FY 2024-25, has been launched on 3rd October 2024 through an online portal, accessible at http://www.pminternship.mca.gov.in. Partner companies have posted approximately 1.27 lakh internship opportunities on the portal. Approximately 4.87 lakh youths have completed their KYC and registered themselves on the portal. Approximately 6.21 lakh applications have been received against 1.27 lakh Internship Opportunities. The selection process for internship is ongoing.
Migration of MCA V2 to V3: Enhancing Efficiency and Compliance
IEPFA has successfully migrated forms from MCA 21 Version 2 to Version 3, introducing significant improvement to streamline the compliance process. The number of compliance forms has been reduced from 5 to 3, simplifying submission requirements for companies. Additionally, the process of transferring funds has been made fully online, with all company forms now integrated into a Straight Through Process (STP), eliminating the need for manual intervention. To further facilitate this change, a dedicated dashboard has been implemented for Nodal Officers, allowing them to easily track and file verification reports for claims.
Major Initiative Under Jan Vishwas
(1)-Recognition of Legal Heirship Certificate for Share Transmission
The legal heirship certificate has been officially recognized as a valid instrument for registering the transmission of shares. This important development, applicable to shares transferred to the IEPF by companies under Section 124(6) of the Companies Act, 2013, eliminates the need for a monetary threshold. This reform significantly reduces the burdens on individuals by removing the requirement to obtain a succession certificate, letter of administration, or probate of a will. As a result, beneficiaries can save both time and costs that were previously associated with civil court procedures. This initiative not only simplifies the transmission process for shares but also enhances accessibility and efficiency for families experiencing complexities of inheritance.
(2)Simplification of Processes for Lost Share Certificates
In a progressive move aimed at claimants, the requirement to file an FIR for the loss of physical share certificates for securities valued up to Rs. 5 lakhs have been eliminated. This change streamlines the process for individuals who may have lost their share certificates, reducing the bureaucratic hurdles they face.
(3)Elimination of Surety Requirements for Duplicate Physical Security Certificates
In a significant reform, the requirement for sureties when applying for duplicate physical security certificates has been eliminated for all values. This crucial change aims to simplify the process for claimants who may need to replace lost or damaged certificates, thus removing unnecessary barriers and enhancing accessibility.
Enhanced Grievance Redressal Mechanism
IEPFA has augmented its grievance redressal mechanism to provide a more effective and user-friendly experience for stakeholders. The Authority has introduced an intuitive call centre solution equipped with Interactive Voice Response System (IVRS) facilities available in six languages, ensuring accessibility for a diverse audience. Additionally, the call centre operates through a convenient five-digit short code – 14453, simplifying the process for users to seek assistance and address their concerns. This enhancement reflects IEPFA’s commitment to improving communication and support for claimants, ensuring that their grievances are addressed swiftly and efficiently.
To enhance accessibility, increase interactivesness; bring financial inclusiveness and engagement with stakeholders, IEPFA successfully conducted
Niveshak Sunwai Initiatives in Mumbai and Ahmedabad; Niveshak Panchayat: Bridging the Gap Between Claimants and IEPFA; Niveshak Didi: Empowering Women through Financial Literacy; Niveshak Saarthi: Embracing Financial Inclusivity.
Setting of an Integrated Technology Platform under the IBC:
The Government is considering setting up an Integrated Technology Platform under the Insolvency and Bankruptcy Code, 2016. It may provide for an integrated case management system for processes under the IBC, automated processes to file applications with the Adjudicating Authority, delivery of notices, enable interaction of Insolvency Professions with stakeholders, storage of records of the corporate debtor, and incentivise effective participation of stakeholders. The Integrate Technology Platform would lead to better transparency, minimisation of delays, effective decision making and better oversight of the processes by the authorities.
Achievements/performance of the Insolvency and Bankruptcy Code, 2016:
The IBC has introduced a new era of transparency and fairness in insolvency resolutions. It ensures equitable treatment of all stakeholders, with a clear and predictable resolution process. Till March 2024, 28,818 applications for initiation of CIRPs, having underlying default of Rs. 10.22 lakh crore were resolved before their admission. This is attributed to the behavioural change in debtor creditor relationship effectuated by the Code. Till September 2024, 1068 CIRPs have culminated in resolution plans, achieving on average 86.13% of the fair value of the Corporate Debtor (CD). Creditors have realised Rs. 3.55 lakh crore under the said resolution plans. By June 2024, the IBC successfully navigated 3,409 CDs through the insolvency process, with 1068 achieving resolutions through plans and the remainder through appeals, reviews, settlements, or withdrawals. The resolution of these CDs has led to a realization rate of over 161% against liquidation value. The average expense incurred in the resolution processes is remarkably low, standing at only 1.37% of the liquidation value and 0.83% of the resolution value.
Competition Commission of India (CCI) achievements:
Since its inception, the Competition Commission of India (CCI) has received 1289 antitrust matters (Sections 3 & 4) and has disposed of 1157 (90% approx.) cases till September, 2024. Further, from January 2024 to September 2024, the Commission received 30 new cases and disposed 30 cases (including carry forward cases from previous year). The Commission considered and approved mergers and acquisitions relating to various sectors of the economy such as Financial Markets, Power & Power Generation, Pharmaceuticals & Healthcare, and Digital Markets. Since its inception, the Commission has received 1191 combination matters (Sections 5 & 6) and has disposed of 1179 (99 % approx.). Further, from January 2024 to September 2024, the Commission received 91 new cases and disposed 101 cases (including carry forward cases from previous year). Seventeen (17) letters were issued to the parties out of Two hundred and ninety-one (291) transactions seen in Media scanning.
CCI initiated a Study on “Competition Issues in Renewable Energy Sector across BRICS Nations”.
The study report is being prepared based on inputs received from the competition authorities of BRICS nations.
Increased Compliance and Filing Rates:
Over the past two years, the Ministry has significantly improved compliance with Section 148 of the Companies Act, 2013. This progress is evident from a substantial increase in the filings of e-Form CRA-2(Intimation of Appointment of Cost Auditor) and e-Form CRA-4 (Filing of Cost Audit Report). Specifically, there has been a 35% increase in e-Form CRA-2 filings and a 36% rise in e-Form CRA-4 filings in the fiscal year 2023-24 compared to2021-22.
Proactive Advisory Initiatives:
From the financial year 2023-24, the Ministry has proactively issued regular advisories to companies, emphasizing the importance of adhering to the prescribed timelines for filing Cost Audit Reports. This initiative has led to a 14% increase in the timely submission of Cost Audit Reports during 2023-24 compared to the previous year.
Examination of Existing Framework of Cost Audit and its Rules:
To review the existing framework of Cost Records and Cost Audit and to improve the usefulness of the Cost Audit Reports in various sectors of the economy, a Committee was constituted in October, 2023 by MCA. The Committee’s report has been placed on the website of MCA inviting comments from the stakeholders. Based on the stakeholders comments, recommendations of the Committee will be examined and framework governing Cost Record and Audit will be amended.
Newly established office i.e., Central Processing Centre (CPC) in the year 2024.
The Central Processing Centre (CPC) was launched in 2024. CPC was established for discharging or carrying out the function of processing and disposal of such e-forms, as may be prescribed under the provisions of the Companies Act, 2013. The CPC shall also exercise functional jurisdiction of processing and disposal of e-forms and all related matters pertaining to statutory compliances under the Companies Act, 2013 having territorial jurisdiction all over India and any other e-forms as may be notified by the Central Government, filed along with the prescribed fee as provided in the Companies (Registration of Offices and Fees) Rules, 2014″.
Empowering the Regional Directors
Rule 25A of Companies and (Compromises, Arrangements Amalgamations) Rules, 2016 [CAA Rules] has been amended on 9th Sep. 2024 (effective from 17.9.2024) empowering the Regional Directors (RDs) to approve petitions for mergers between a holding company incorporated outside India with a wholly owned subsidiary incorporated in India in a time bound manner, instead of NCLT. The Ministry has also issued Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024 on 24th January, 2024 to allow Indian companies to list their equity shares on Gift IFSC International stock exchanges. The “Direct Listing of Equity Shares of Companies Incorporated in India on International Exchanges Scheme” has also been issued by D/o Economic Affairs.
Amendment in Companies (Indian Accounting Standards) Rules, 2015 has been effected to bring changes in Ind AS 116 and introduction of Ind AS 117 as follows:
Ind AS 116: Amendment in Ind AS 116 has been made vide G.S.R. 554(E) dated 09.09.2024, which involves the treatment of leaseback transactions. A new paragraph, 102A, has been added to Ind AS 116, for right-of-use assets and lease liabilities arising from sale and leaseback transactions. Ind AS 117: Vide the notification no. G.S.R. 492 (E) dated 12th August 2024, the Indian Accounting Standard (Ind AS) 117 has been introduced, in respect of insurance contracts.
Centre established for Processing Accelerated Corporate Exit (CPACE)
Fulfilling budget and announcement (2022-23), a Centre established for Processing Accelerated Corporate Exit (CPACE) for expeditious processing of applications filed for voluntary closure of companies, with an aim of bringing down the number of days taken for such closure from about 2 years to less than 6 months. Since commencement of C-PACE on 01.05.2021, the average number of days for closure has reduced to about 90 days during the FY 2023-24. It is now centralized and the applications filed for voluntary closure of L.L.Ps are also with C-PACE to ensure their expeditious processing as well. The CPACE for processing closure applications of LLPs was notified on 05th August, 2024 effective from 27th August, 2024.Since inception on 27th August, 2024 and upto 7th December, 2024, 4640 applications of LLP closure have been disposed of by the CPACE.
Amendments in Companies Act, 2013, and L.L.P Act 2008,
Through gradual amendments in Companies Act, 2013, and L.L.P Act 2008, 63 provisions have been decriminalized bringing defaults under such provisions under in-house adjudication mechanism. At present, Registrar of Companies (RoC) are adjudicating cases of defaults, wherein representatives of corporates have to attend hearings ‘in person’. The adjudication mechanism has been made electronic and faceless to eliminate interactions in person during adjudicatory process at RoC level. ****
CBDT notifies Tolerance Range for Transfer Pricing for A.Y 2024-25 as per proviso to sub-rule (7) of rule 10CA of the Income-tax Rules, 1962
Notification of tolerance range shall provide certainty to taxpayers and reduce the risk perception associated with pricing of a transaction in transfer pricing
The Central Board of Direct Taxes (CBDT) has issued notification no. 116/2024 dated October 18, 2024 notifying the tolerance range for AY 2024-25. The notification of tolerance range shall provide certainty to taxpayers and reduce the risk perception associated with pricing of a transaction in transfer pricing.
Proviso to sub-rule(7) of rule 10CA sub-rule(7) provides that, “if the variation between the arm’s length price so determined at which the international transaction or specified domestic transaction has actually been undertaken does not exceed such percentage not exceeding three percent of the latter, as may be notified by the Central Government in the Official Gazette in this behalf, the price at which the international transaction or specified domestic transaction has actually been undertaken shall be deemed to be the arm’s length price.”
The tolerance range for transfer pricing is as follows:
The tolerance range for transfer pricing is as follows:
1. The tolerance ranges shall be 1% for transactions in the nature of “wholesale trading” and 3% for others, respectively, as notified last year and 2. The term ‘wholesale trading’, shall be defined as an international transaction or specified domestic transaction of trading in goods which fulfil all the following conditions:
1. Purchase cost of finished goods is 80% or more of the total cost pertaining to such trading activities; and 2. Average monthly closing inventory of goods is 10% or less of sales pertaining to such trading activities.
Central Board of Direct Taxes (CBDT) has notified amendments in income-tax rules for ease in claiming credit for TCS collected/TDS deducted for salaried employees and enabling claiming TCS credit of minors in the hands of parents. Sub-section (2B) of Section 192 of the Income-tax Act, 1961 (‘the Act’) was amended vide the Finance (No. 2) Act, 2024 (FA (No. 2)) to include any tax deducted or collected at source under the provisions of Chapter XVII-B or Chapter XVII-BB, as applicable, for the purpose of making tax deductions in the case of salaried employees.
Vide CBDT Notification No. 112/2024 dated 15.10.2024, the Income-tax Rules, 1962 (‘the Rules’) have been amended, introducing Form No. 12BAA as the prescribed statement of particulars required under sub-section (2B) of Section 192 of the Act. Employees must provide these particulars to their employers, who are responsible for making payments under sub-section (1) of Section 192. The employer, in turn, shall deduct TDS on salary after taking into account the furnished particulars.
Further, sub-section (4) of Section 206C of the Act was amended vide FA (No. 2) to allow the credit of TCS to a person other than the collectee—such as a parent in the case of a minor collectee—when the minor’s income is clubbed with that of the parent. Accordingly Vide CBDT Notification No. 114/2024 dated 16.10.2024 Rule 37-I of the Rules has been amended to allow credit of tax collected at Source to a person other than the collectee, in whose hands the income of the collectee is assessable.
———————————————— 🌟 *H A P P Y* 🌟 🌟 *J A N A M A S H T A M I* 🌟 ————————————————
Today marks the most anticipated day of the year, a rare opportunity to wholeheartedly glorify the most merciful Lord Krishna.
🤔 _Why is this day so significant_❓
•••> Janmashtami is an annual celebration of Lord Krishna’s appearance on Earth. Its importance lies in commemorating the divine descent of Lord Krishna, who came to alleviate suffering, protect the righteous, and reestablish the principles of righteousness or “dharma.”
•••> This celebration goes beyond mere cultural and religious observance; it’s a time for deep spiritual reflection and devotion. Janmashtami reminds us of the timeless teachings of Lord Krishna and His divine playfulness, inspiring us to cultivate virtues such as love, compassion, and righteousness in our lives.
🤔 _How can we make this day special for Him_❓
Krishna is the provider and sustainer of all living beings, showing boundless love to each without discrimination. Instead of offering something which already belongs to him, let us give the gift of our love.
*Krishna only wants our love.* _Therefore on this day we have to express as much love as possible._
📌 On this auspicious day our aim should be to always remember Krishna and never forget him.
📖 Lord Krishna, in the Bhagavad Gita, emphasizes that Gyan, Dhyan, Tapasya alone cannot lead us to Him. _The path to Him lies in the recommended process of devotional service._
✨ _*BHAKTI IS NOTHING BUT DEVELOPING LOVE FOR KRSNA!*_ ✨
🌻 Krishna is our ultimate well-wisher, providing everything for us, loving us unconditionally, and giving protection that surpasses everything else. Therefore, it is only fitting that we reciprocate this love.
*”Krishna is a possessive lover; He desires to be the sole attraction in our hearts.”*
🌺 In this material world, everything belongs to Him, but the one thing we can genuinely offer is our _devotion_ and our _minds._
🪷 We eternally belong to Krishna, and on Janmashtami, let us rekindle that sense of belongingness, drawing closer to our beloved: Krishna, our friend, father, mother, brother, and master. 🪷
🌸 To regain that belongingness we must engage ourselves in knowing about him by listening from great devotees who have already tied krishna with the ropes of their love. Reading his pastimes chanting his name, honouring his Prasadam will also drag us closer to Krsna.
So with all excitement and enthusiasm, Let us pray that may He guides us out of the illusions of Maya and shelters us under the soothing shade of His lotus feet.
Wishing everyone a blessed and spiritually enriching Janmashtami celebration! 🙏🌼
Q1. What are the major changes brought about in the taxation of capital gains by the Finance (No.2) Bill, 2024?
Ans. The taxation of capital gains has been rationalised and simplified. There are 5 broad parameters to this rationalisation and simplification, namely:-
-Holding period has been simplified. There are only two holding periods now, viz. 1 year and 2 year.
-Rates have been rationalised and made uniform for majority of assets.
-Indexation has been done away with for ease of computation with simultaneous reduction of rate from 20% to 12.5%.
-Parity between Resident and Non-resident.
-No change in roll over benefits.
Q2. What is the date when the new taxation provisions comes into force?
Ans. The new provisions for taxation of capital gains come into force from 23.7.2024 and shall apply to any transfer made on or after 23.7.2024.
Q3. How has the holding period been simplified?
Ans. Earlier there were three holding period for considering an asset to be a long- term capital asset. Now the holding period has been simplified. There are only two holding periods,- for listed securities, it is one year, for all other assets, it is two years.
Q4. Who will benefit from the change in holding period?
Ans. The holding period of all listed assets will be now one year. Therefore, for listed units of business trusts (ReITs, InVITs) holding period is reduced from 36 months to 12 months. The holding period of gold, unlisted securities (other than unlisted shares) is also reduced from 36 months to 24 months.
Q5. What about the holding period of immovable property and unlisted shares?
Ans. The holding period of immovable property and unlisted shares remains the same as earlier i.e. 24 months.
Q6. Please elaborate on change in the rate structure for STT paid capital assets?
Ans. Rate for short-term STT paid listed equity, Equity oriented mutual fund and units of business trust (Section 111A) has increased from 15 to 20%. Similarly the rate for these assets for long-term (S. 112A) has increased from 10 to 12.5%.
Q7. Is there any change in the exemption limit for long-term capital gains under section 112A which was earlier one lakh Rs.?
Ans. Yes. The exemption limit of 1 lakh for LTCG on these assets has also increased to 1.25 lakh Rs. This increased exemption limit will apply for FY 2024-25 and subsequent years.
Q8. Please elaborate on change in the rate structure for other long-term capital gains?
Ans. The rate for other long-term capital gains on all assets has been rationalized to 12.5% without indexation (Section 112). This rate was earlier 20% with indexation. This will ease in simplifying the taxation of capital gains and their easy computation.
Q9. Who will benefit by change in rate from 20% (with indexation) to 12.5% (without indexation)?
Ans. The reduction in the rate will benefit all category of assets. In most of the cases, the taxpayers will benefit substantially. But where the gain is limited vis-a vis inflation, the benefit will also be limited or absent in a few cases.
Q10. Can the taxpayer continue to avail the roll over benefits on capital gains?
Ans. Yes. The roll over benefits remain the same as earlier. There is no change in roll over benefits already available under the IT Act. Therefore, taxpayers who want to save on LTCG tax even with low rates, can continue to avail the roll over benefits on fulfillment of conditions as applicable.
Q11. In which assets, can the long-term capital gains be invested for roll over benefits?
Ans. For roll over benefits, taxpayers can invest their gains in house under section 54 or section 54F or in certain bonds under section 54EC. For complete details of all roll over benefits, please refer section 54, 54B, 54D, 54EC 54F, 54G of the IT Act.
Q12. What is amount upto which roll over benefit is available?
Ans. Investment of capital gain in 54EC bonds (up to Rs. 50 lakh) and in other cases, the capital gain is exempt from tax, subject to certain specified conditions.
Q13. What is the overall rationale for changes?
Ans. Simplification of any tax structure has benefits of ease of compliance viz computation, filing, maintenance of records. This also removes the differential rates for various classes of assets.
Press Release dated 24 July 2024 Release Id :-2036604
In our continuous endeavour to serve you better, the Ministry of Corporate Affairs is launching third set of Company Forms covering 9 forms [MSME, BEN-2, MGT-6, IEPF-1, IEPF-1A, IEPF-2, IEPF-4, IEPF-5, IEPF-5 e-verification report] on 15th July 2024 at 12:00 AM. To facilitate implementation of these forms in V3 MCA21 portal, stakeholders are advised to note the following points:
(1) Company e-Filings on V2 portal will be disabled from 04th July 2024 12:00AM.
(2) All stakeholders are advised to ensure that there are no SRNs in pending payment/pending for investor details upload/Resubmission status.
(3) Offline payments for the above 9 forms in V2 using Pay later option would be stopped from 01st July 2024 12:00 AM. You are requested to make payments for these forms in V2 through online mode (Credit/Debit Card and Net Banking).
(4) In view of the upcoming launch of 9 Company forms, V3 portal will not be available from 13th July 20204 12:00 AM to 14th July 2024 11:59 pm.
(5) V2 Portal for company filing will remain available for all the V2 forms excluding above mentioned 9 forms.
GST Council recommends waiving interest and penalties for demand notices issued under Section 73 of the CGST Act (i.e. the cases not involving fraud, suppression or wilful misstatement, etc.) for the fiscal years 2017-18, 2018-19 and 2019-20, if the full tax demanded is paid upto 31.03.2025.
GST Council recommends the time limit to avail input tax credit w.r.t. any invoice or debit note under Section 16(4) of CGST Act, through any GSTR 3B return filed upto 30.11.2021 for FY 2017-18, 2018-19, 2019-20 and 2020-21, may be deemed to be 30.11.2021
Council has recommends monetary limit of Rs. 20 lakh for GST Appellate Tribunal, Rs. 1 crore for High Court and Rs. 2 crore for Supreme Court, for filing of appeals by the Department, to reduce litigation
GST Council recommends reduction of the quantum of pre-deposit required to be paid for filing of appeals under GST
GST Council recommends amending provisions of CGST Act to provide that the three-month period for filing appeals in GST Appellate Tribunal will start from a date to be notified by the Government
To ease the interest burden of the taxpayers, GST Council recommends to not levy interest u/s 50 of CGST Act in case of delayed filing of return, on the amount which is available in Electronic Cash Ledger (ECL) on the due date of filing of the said return
GST Council recommends sunset clause from April 1st, 2025 for receipt of any new application for Anti-profiteering
GST Council recommends exemption from Compensation Cess leviable on the imports in SEZ by SEZ Unit/developer for authorised operations from 1st July, 2017
GST Council recommends 12% GST on milk cans (steel, iron, aluminum) irrespective of use; Carton, Boxes And Cases of both corrugated and non-corrugated paper or paper-board; Solar cookers whether single or dual energy source; and sprinklers including fire water sprinklers.
GST Council recommends exemption of certain services provided by Indian Railways to common man and also intra railway supplies
GST Council recommends certain exemptions related to accommodation services, providing relief to students and working professionals
GST Council recommends to roll-out the biometric-based Aadhaar authentication of registration applicants on pan-India basis in a phased manner
The 53rd GST Council met under the Chairpersonship of Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman in New Delhi today. The meeting was also attended by Union Minister of State for Finance Shri Pankaj Chaudhary, Chief Ministers of Goa and Meghalaya; Deputy Chief Ministers of Bihar, Haryana, Madhya Pradesh, and Odisha; besides Finance Ministers of States & UTs (with legislature) and senior officers of the Ministry of Finance & States/ UTs.
The GST Council inter alia made the following recommendations relating to changes in GST tax rates, measures for facilitation of trade and measures for streamlining compliances in GST.
Changes in GST Tax Rates:
I. Recommendations relating to GST rates on Goods
A. Changes in GST rates of goods
A uniform rate of 5% IGST will apply to imports of ‘Parts, components, testing equipment, tools and tool-kits of aircrafts, irrespective of their HS classification to provide a fillip to MRO activities subject to specified conditions.
All milk cans (of steel, iron and aluminium) irrespective of their use will attract 12% GST.
GST rate on ‘carton, boxes and cases of both corrugated and non-corrugated paper or paper-board’ (HS 4819 10; 4819 20) to be reduced from 18% to 12%.
All solar cookers whether single or dual energy source, will attract 12% GST.
To amend existing entry covering Poultry keeping Machinery attracting 12% GST to specifically incorporate “parts of Poultry keeping Machinery” and to regularise past practice on ‘as is where is’ basis in view of genuine interpretational issues.
To clarify that all types of sprinklers including fire water sprinklers will attract 12% GST and to regularise the past practice on ‘as is where is’ basis in view of genuine interpretational issues.
To extend IGST exemption on imports of specified items for defence forces for a further period of five years till 30th June, 2029.
To extend IGST exemption on imports of research equipment/buoys imported under the Research Moored Array for African-Asian-Australian Monsoon Analysis and Prediction (RAMA) programme subject to specified conditions.
To exempt Compensation Cess on the imports in SEZ by SEZ Unit/developers for authorised operations w.e.f. 01.07.2017.
Other Miscellaneous Changes
To exempt Compensation cess on supply of aerated beverages and energy drinks to authorised customers by Unit Run Canteens under Ministry of Defence.
To provide Adhoc IGST exemption on imports of technical documentation for AK-203 rifle kits imported for Indian Defence forces.
II. Recommendations relating to GST rates on services
To exempt the services provided by Indian Railways to general public, namely, sale of platform tickets, facility of retiring rooms/waiting rooms, cloak room services and battery-operated car services and to also exempt the Intra-Railway transactions. The issue for the past period will be regularized from 20.10.2023 to the date of issue of exemption notification in this regard.
To exempt GST on the services provided by Special Purpose Vehicles (SPV) to Indian Railway by way of allowing Indian Railway to use infrastructure built & owned by SPV during the concession period and maintenance services supplied by Indian Railways to SPV. The issue for the past will be regularized on ‘as is where is’ basis for the period from 01.07.2017 till the date of issue of exemption notification in this regard.
To create a separate entry in notification No. 12/2017- CTR 28.06.2017 under heading 9963 to exempt accommodation services having value of supply of accommodation up to Rs. 20,000/- per month per person subject to the condition that the accommodation service is supplied for a minimum continuous period of 90 days. To extend similar benefit for past cases.
Other changes relating to Services
Co-insurance premium apportioned by lead insurer to the co-insurer for the supply of insurance service by lead and co-insurer to the insured in coinsurance agreements, may be declared as no supply under Schedule III of the CGST Act, 2017 and past cases may be regularized on ‘as is where is’ basis.
Transaction of ceding commission/re-insurance commission between insurer and re-insurer may be declared as no supply under Schedule III of CGST Act, 2017 and past cases may be regularized on ‘as is where is’ basis.
GST liability on reinsurance services of specified insurance schemes covered by Sr. Nos. 35 & 36 of notification No. 12/2017-CT (Rate) dated 28.06.2017 may be regularized on ‘as is where is’ basis for the period from 01.07.2017 to 24.01.2018.
GST liability on reinsurance services of the insurance schemes for which total premium is paid by the Government that are covered under Sr. No. 40 of notification No. 12/2017-CTR dated 28.06.2017 may be regularized on ‘as is where is’ basis for the period from 01.07.2017 to 26.07.2018.
To issue clarification that retrocession is ‘re-insurance of re-insurance’ and therefore, eligible for the exemption under Sl. No. 36A of the notification No. 12/2017-CTR dated 28.06.2017.
To issue clarification that statutory collections made by Real Estate Regulatory Authority (RERA) are exempt from GST as they fall within the scope of entry 4 of No.12/2017-CTR dated 28.06.2017.
To issue clarification that further sharing of the incentive by acquiring bank with other stakeholders, where the sharing of such incentive is clearly defined under Incentive scheme for promotion of RuPay Debit Cards and low value BHIM-UPI transactions and is decided in the proportion and manner by NPCI in consultation with the participating banks is not taxable.
B. Measures for facilitation of trade:
Insertion of Section 128A in CGST Act, to provide for conditional waiver of interest or penalty or both, relating to demands raised under Section 73, for FY 2017-18 to FY 2019-20 : Considering the difficulties faced by the taxpayers, during the initial years of implementation of GST, the GST Council recommended, waiving interest and penalties for demand notices issued under Section 73 of the CGST Act for the fiscal years 2017-18, 2018-19 and 2019-20, in cases where the taxpayer pays the full amount of tax demanded in the notice upto 31.03.2025. The waiver does not cover demand of erroneous refunds. To implement this, the GST Council has recommended insertion of Section 128A in CGST Act, 2017.
2.Reduction of Government Litigation by Fixing monetary limits for filing appeals under GST: The Council recommended to prescribe monetary limits, subject to certain exclusions, for filing of appeals in GST by the department before GST Appellate Tribunal, High Court, and Supreme Court, to reduce government litigation. The following monetary limits have been recommended by the Council:
GSTAT: Rs. 20 lakhs
High Court: Rs. 1 crore
Supreme Court: Rs. 2 crores
3.Amendment in Section 107 and Section 112 of CGST Act for reducing the amount of pre-deposit required to be paid for filing of appeals under GST: The GST Council recommended reducing the amount of pre-deposit for filing of appeals under GST to ease cash flow and working capital blockage for the taxpayers. The maximum amount for filing appeal with the appellate authority has been reduced from Rs. 25 crores CGST and Rs. 25 crores SGST to Rs. 20 crores CGST and Rs. 20 crores SGST. Further, the amount of pre-deposit for filing appeal with the Appellate Tribunal has been reduced from 20% with a maximum amount of Rs. 50 crores CGST and Rs. 50 crores SGST to 10 % with a maximum of Rs. 20 crores CGST and Rs. 20 crores SGST.
4.Applicability of Goods and Services Tax on Extra Neutral Alcohol (ENA) Taxation of ENA under GST: The GST Council, in its 52nd meeting, had recommended to amend GST Law to explicitly exclude rectified spirit/Extra Neutral Alcohol (ENA) from the scope of GST when supplied for manufacturing alcoholic liquors for human consumption. The GST Council now recommended amendment in sub-section (1) of Section 9 of the CGST Act, 2017 for not levying GST on Extra Neutral Alcohol used for manufacture of alcoholic liquor for human consumption.
5.Reduction in rate of TCS to be collected by the ECOs for supplies being made through them: Electronic Commerce Operators (ECOs) are required to collect Tax Collected at Source (TCS) on net taxable supplies under Section 52(1) of the CGST Act. The GST Council has recommended to reduce the TCS rate from present 1% (0.5% CGST + 0.5% SGST/ UTGST, or 1% IGST) to 0.5 % (0.25% CGST + 0.25% SGST/UTGST, or 0.5% IGST), to ease the financial burden on the suppliers making supplies through such ECOs.
6. Time for filing appeals in GST Appellate Tribunal: The GST Council recommended amending Section 112 of the CGST Act, 2017 to allow the three-month period for filing appeals before the Appellate Tribunal to start from a date to be notified by the Government in respect of appeal/ revision orders passed before the date of said notification. This will give sufficient time to the taxpayers to file appeal before the Appellate Tribunal in the pending cases.
7.Relaxation in condition of section 16(4) of the CGST Act:
a) In respect of initial years of implementation of GST, i.e., financial years 2017-18, 2018-19, 2019-20 and 2020-21:
The GST Councilrecommended that the time limit to avail input tax credit in respect of any invoice or debit note under Section 16(4) of CGST Act, through any return in FORM GSTR 3B filed upto 30.11.2021 for the financial years 2017-18, 2018-19, 2019-20 and 2020-21, may be deemed to be 30.11.2021. For the same, requisite amendment in section 16(4) of CGST Act, retrospectively, w.e.f. 01.07.2017, has been recommended by the Council.
b) with respect to cases where returns have been filed after revocation:
The GST Councilrecommended retrospective amendment in Section 16(4) of CGST Act, to be made effective from July 1st, 2017, to conditionally relax the provisions of section 16(4) of CGST Act in cases where returns for the period from the date of cancellation of registration/ effective date of cancellation of registration till the date of revocation of cancellation of the registration, are filed by the registered person within thirty days of the order of revocation.
8.Change in due date for filing of return in FORM GSTR-4 for composition taxpayers from 30th April to 30th June: The GST Council recommended an amendment in clause (ii) of sub-rule (1) of Rule 62 of CGST Rules, 2017 and FORM GSTR-4 to extend the due date for filing of return in FORM GSTR-4 for composition taxpayers from 30th April to 30th June following the end of the financial year. This will apply for returns for the financial year 2024-25 onwards. The same would give more time to the taxpayers who opt to pay tax under composition levy to furnish the said return.
9.Amendment of Rule 88B of CGST Rules, 2017 in respect of interest under Section 50 of CGST Act on delayed filing of returns, in cases where the credit is available in Electronic Cash Ledger (ECL) on the due date of filing the said return: The GST Council recommended amendment in rule 88B of CGST Rules to provide that an amount, which is available in the Electronic Cash Ledger on the due date of filing of return in FORM GSTR-3B, and is debited while filing the said return, shall not be included while calculating interest under section 50 of the CGST Act in respect of delayed filing of the said return.
10.Insertion of Section 11A in CGST Act for granting power not to recover duties not levied or short-levied as a result of general practice under GST Acts: The GST Council recommended inserting a new Section 11A in CGST Act to give powers to the Government, on the recommendations of the Council, to allow regularization of non-levy or short levy of GST, where tax was being short paid or not paid due to common trade practices.
11. Refund of additional Integrated Tax (IGST) paid on account of upward revision in price of the goods subsequent to export: The GST Council recommended to prescribe a mechanism for claiming refund of additional IGST paid on account of upward revision in price of the goods subsequent to their export. This will facilitate a large number of taxpayers, who are required to pay additional IGST on account of upward revision in price of the goods subsequent to export, in claiming refund of such additional IGST.
Clarification regarding valuation of supply of import of services by a related person where recipient is eligible to full input tax credit: The Council recommended to clarify that in cases where the foreign affiliate is providing certain services to the related domestic entity, for which full input tax credit is available to the said related domestic entity, the value of such supply of services declared in the invoice by the said related domestic entity may be deemed as open market value in terms of second proviso to rule 28(1) of CGST Rules. Further, in cases where full input tax credit is available to the recipient, if the invoice is not issued by the related domestic entity with respect to any service provided by the foreign affiliate to it, the value of such services may be deemed to be declared as Nil, and may be deemed as open market value in terms of second proviso to rule 28(1) of CGST Rules.
Clarification regarding availability of Input Tax Credit (ITC) on ducts and manholes used in the network of Optical Fiber Cables (OFCs): The Council recommended to clarify that input tax credit is not restricted in respect of ducts and manhole used in network of optical fiber cables (OFCs), under clause (c) or under clause (d) of sub-section (5) of section 17 of CGST Act.
Clarification on the place of supply applicable for custodial services provided by banks: The Council recommended to clarify that place of supply of Custodial services supplied by Indian Banks to Foreign Portfolio Investors is determinable as per Section 13(2) of the IGST Act, 2017.
Clarification on valuation of corporate guarantee provided between related persons after insertion of Rule 28(2) of CGST Rules, 2017: GST Council recommended amendment of rule 28(2) of CGST Rules retrospectively with effect from 26.10.2023 and issuance of a circular to clarify various issues regarding valuation of services of providing corporate guarantees between related parties. It is inter alia being clarified that valuation under rule 28(2) of CGST Rules would not be applicable in case of export of such services and also where the recipient is eligible for full input tax credit.
Clarification regarding applicability of provisions of Section 16 (4) of CGST Act, 2017, in respect of invoices issued by the recipient under Reverse Charge Mechanism (RCM): The Council recommended to clarify that in cases of supplies received from unregistered suppliers, where tax has to be paid by the recipient under reverse charge mechanism (RCM) and invoice is to be issued by the recipient only, the relevant financial year for calculation of time limit for availment of input tax credit under the provisions of section 16(4) of CGST Act is the financial year in which the invoice has been issued by the recipient.
17.Clarification on following issues to provide clarity to trade and tax officers and to reduce litigation:
Clarification on taxability of re-imbursement of securities/shares as ESOP/ESPP/RSU provided by a company to its employees
Clarification on requirement of reversal of input tax credit in respect of amount of premium in Life Insurance services, which is not included in the taxable value as per Rule 32(4) of CGST Rules.
Clarification on taxability of wreck and salvage values in motor insurance claims
Clarification in respect of Warranty/ Extended Warranty provided by Manufacturers to the end customers
Clarification regarding availability of input tax credit on repair expenses incurred by the insurance companies in case of reimbursement mode of settlement of motor vehicle insurance claims.
Clarification on taxability of loans granted between related person or between group companies.
Clarification on time of supply on Annuity Payments under HAM Projects.
Clarification regarding time of supply in respect of allotment of Spectrum to Telecom companies in cases where payment of licence fee and Spectrum usage charges is to be made in instalments.
Clarification relating to place of supply of goods supplied to unregistered persons, where delivery address is different from the billing address
Clarification on mechanism for providing evidence by the suppliers for compliance of the conditions of Section 15(3)(b)(ii) of CGST Act, 2017 in respect of post-sale discounts, to the effect that input tax credit has been reversed by the recipient on the said amount.
Clarifications on various issues pertaining to special procedure for the manufacturers of the specified commodities, like pan masala, tobacco etc.
18. The Council recommended amendment in section 140(7) of CGST Act retrospectively w.e.f. 01.07.2017 to provide for transitional credit in respect of invoices pertaining to services provided before appointed date, and where invoices were received by Input Service Distributor (ISD) before the appointed date.
19. The Council recommended providing a new optional facility by way of FORM GSTR-1A to facilitate the taxpayers to amend the details in FORM GSTR-1 for a tax period and/ or to declare additional details, if any, before filing of return in FORM GSTR-3B for the said tax period. This will facilitate taxpayer to add any particulars of supply of the current tax period missed out in reporting in FORM GSTR-1 of the said tax period or to amend any particulars already declared in FORM GSTR-1 of the current tax period (including those declared in IFF, for the first and second months of a quarter, if any, for quarterly taxpayers), to ensure that correct liability is auto-populated in FORM GSTR-3B.
20. The Council recommended that filing of annual return in FORM GSTR-9/9A for the FY 2023-24 may be exempted for taxpayers having aggregate annual turnover upto two crore rupees.
21. Amendment was recommended to be made in section 122(1B) of CGST Act retrospectively w.e.f. 01.10.2023, so as to clarify that the said penal provision is applicable only for those e-commerce operators, who are required to collect tax under section 52 of CGST Act, and not for other e-commerce operators.
22. The Council recommended amendment in rule 142 of CGST Rules and issuance of a circular to prescribe a mechanism for adjustment of an amount paid in respect of a demand through FORM GST DRC-03 against the amount to be paid as pre-deposit for filing appeal.
Other measures pertaining to Law and Procedures
23.Rolling out of bio-metric based Aadhaar authentication on All-India basis: The GST Council recommended to roll-out the biometric-based Aadhaar authentication of registration applicants on pan-India basis in a phased manner. This will strengthen the registration process in GST and will help in combating fraudulent input tax credit (ITC) claims made through fake invoices.
24.Amendments in Section 73 and Section 74 of CGST Act, 2017 and insertion of a new Section 74A in CGST Act, to provide for common time limit for issuance of demand notices and orders irrespective of whether case involves fraud, suppression, willful misstatement etc., or not: Presently, there is a different time limit for issuing demand notices and demand orders, in cases where charges of fraud, suppression, willful misstatement etc., are not involved, and in cases where those charges are involved. In order to simplify the implementation of those provisions, the GST Council recommended to provide for a common time limit for issuance of demand notices and orders in respect of demands for FY 2024-25 onwards, in cases involving charges of fraud or willful misstatement and not involving the charges of fraud or willful misstatement etc. Also, the time limit for the taxpayers to avail the benefit of reduced penalty, by paying the tax demanded along with interest, has been recommended to be increased from 30 days to 60 days.
25. The Council recommended amendment in section 171 and section 109 of CGST Act, 2017 to provide asunset clause for anti-profiteering under GST and to provide for handling of anti-profiteering cases by Principal bench of GST Appellate Tribunal (GSTAT). Council has also recommended the sun-set date of 01.04.2025 for receipt of any new application regarding anti-profiteering.
26.Amendment in Section 16 of IGST Act and section 54 of CGST Act to curtail refund of IGST in cases where export duty is payable: The Council recommended amendments in section 16 of IGST Act and section 54 of CGST Act to provide that the refund in respect of goods, which are subjected to export duty, is restricted, irrespective of whether the said goods are exported without payment of taxes or with payment of taxes, and such restrictions should also be applicable, if such goods are supplied to a SEZ developer or a SEZ unit for authorized operations.
27. The threshold for reporting of B2C inter-State supplies invoice-wise in Table 5 of FORM GSTR-1 was recommended to be reduced from Rs 2.5 Lakh to Rs 1 Lakh.
28. The Council recommended that return in FORM GSTR-7, to be filed by the registered persons who are required to deduct tax at source under section 51 of CGST Act, is to be filed every month irrespective of whether any tax has been deducted during the said month or not. It has also been recommended that no late fee may be payable for delayed filing of Nil FORM GSTR-7 return. Further, it has been recommended that invoice-wise details may be required to be furnished in the said FORM GSTR-7 return.
Note: The recommendations of the GST Council have been presented in this release containing major item of decisions in simple language for information of the stakeholders. The same would be given effect through the relevant circulars/ notifications/ law amendments which alone shall have the force of law.
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