Dear Readers,

We are delighted to share our 169th E-Newsletter “Weekly Taxation Newsletter” dated 20th January, 2025 from 12th Jan. 2025 to 19th Jan.,  2025 with you. This E – Newsletter is a weekly reference / compilation of interesting and latest news related to tax including upcoming Timelines / Due Dates, Notifications / Press Information, Case Laws, International Taxation etc.                        

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  • Due Dates under IT Act 1961
Sl.Compliance ParticularsDue Dates
1Quarterly TCS certificate in respect of quarter ending December 31, 202430.01.2025
2Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194-IA in the month of December, 202430.01.2025
3Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194-IB in the month of December, 202430.01.2025
4Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194M in the month of December, 202430.01.2025
5Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194S (by specified person) in the month of December, 202430.01.2025
6Quarterly statement of TDS for the quarter ending December 31, 202431.01.2025
7Quarterly return of non-deduction of tax at source by a banking company from interest on time deposit in respect of the quarter ending December 31, 202431.01.2025
8Intimation by Sovereign Wealth Fund in respect of investment made in India for quarter ending December, 202431.01.2025

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  • Under the GST, 2017

A. Filing of GSTR –3B / GSTR 3B QRMP

a) Taxpayers having aggregate turnover > Rs. 5 Cr. in preceding FY

Tax periodDue DateParticulars
Dec., 202422nd January, 2025Due Date for filling GSTR – 3B return for the month of Dec., 2024 for the taxpayer with Aggregate turnover exceeding INR 5 crores during previous year.

b). Taxpayers having aggregate turnover upto Rs. 5 crores in preceding FY (Group A)

Tax periodDue Date Particulars
Dec., 202424th January, 2025 Due Date for filling GSTR – 3B return for the month of Dec., 2024 for the taxpayer with Aggregate turnover upto INR 5 crores during previous year and who has opted for Quarterly filing of GSTR-3B
Group A States: Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, Daman & Diu and Dadra & Nagar Haveli, Puducherry, Andaman and Nicobar Islands, Lakshadweep

c). Taxpayers having aggregate turnover upto Rs. 5 crores in preceding FY (Group B)

Tax periodDue Date Particulars
Dec., 202426th January, 2025 Annual Turnover Up to INR 5 Cr in Previous FY But Opted Quarterly Filing         
Group B States:  Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand, Odisha, Jammu and Kashmir, Ladakh, Chandigarh, Delhi

B. Non Resident Tax Payers, ISD, TDS & TCS Taxpayers

Form No.Compliance ParticularsTimelineDue Date
GSTR-5 & 5ANon-resident ODIAR services provider file Monthly GST Return20th of succeeding month 20.01.2025

C. GST Refund:

Form No.Compliance ParticularsDue Date
RFD -10Refund of Tax to Certain Persons: Application for Refund by any specialized agency of UN or any Multilateral Financial Institution and Organization, Consulate or Embassy of foreign countries, etc.2 years from the last day of the quarter in which supply was received

D. Monthly Payment of GST – PMT-06:

                   Compliance Particular      Due Date
Challan for deposit of goods and services tax Due Date of payment of GST for a taxpayer with Aggregate turnover up to INR 5 crores during the previous year and who has opted for Quarterly filing of return under QRMP.  25.01.2025

*As per a notification by the Central Board of Indirect Taxes and Customs (CBIC), the last date for filing GSTR-1 for December is January 13, while that for taxpayers opting for quarterly payment under the QRMP scheme for the October-December period will be January 15.

  • Weekly Departmental Updates: Income Tax

1. Government to move new income tax bill in Budget session

Finance minister Nirmala Sitharaman is set to introduce a bill for a new direct tax law in the budget session, which will focus on simplification of the provisions, doing away with the ones that are redundant and attempt to make the language more layman friendly.The committee tasked with the revision, is deciding if the new law to replace the 63-year-old Income Tax Act will be in two, if not three parts, sources told TOI.

Although govt had indicated that the draft law by the panel of officers will be released for public comments, it has decided to send a strong message at a time when it is facing flak for complicated tax laws and will introduce the bill, which can then be tweaked based on feedback from taxpayers and experts.

As a result, officials from finance ministry and PMO worked closely with the panel over the last six-eight weeks so that it is ready by the time the budget is presented.

This is at least the third attempt to rewrite the Income Tax Act since the Direct Tax Code bill was introduced in Parliament in 2010. Subsequently, the Modi govt had set up a panel of experts, whose reports were not made public and the recommendations were largely not taken on board.

Similarly, there are several sections, which have been made redundant as those clauses have been dropped from the I-T Act over the years, which are being excluded. “The language itself can be difficult to understand for the common man and the committee has been asked to make it as simple as possible,” a source said.

2. Income tax benefits of NPS under both old and new tax regime for government and private sector employees

The National Pension Scheme (NPS) is a pension scheme offered by the government to its own employees who joined after January 1, 2004. For private sector employees subscribing to NPS was opened later and is voluntary. However, both the government and private sector employees get attractive tax benefits under old and new tax regimes for investing in NPS. In this article we list out what these tax benefits are.

Income tax benefits of investing in NPS

Here are the income tax benefits of investing in NPS under the old tax regime:

Section 80CCD(1) for employee’s contribution to NPS under old tax regime.

Contributions made by employees to the NPS are eligible for tax deduction. However, such deduction would be restricted to the following:

  • 10% of salary (basic), in case of an employee
  • 20% of Gross total income in case of self – employed individuals.

The above deduction is further subject to the overall threshold limit of Rs 1.5 lakh under section 80C.

“Under the old tax regime, government and private sector employees can claim deductions of up to 10% of their salary (basic plus dearness allowance) under Section 80CCD (1) of the Income Tax Act, 1961, subject to the overall ceiling limit of Rs 1,50,000 under Section 80CCE,” said Chartered Accountant Mohit Gupta.

Additional Deduction of Rs 50,000 for pension scheme [80CCD(1B)] under old tax regime

An additional deduction [other than those provided in section 80CCD(1)] of Rs 50,000 can be claimed by the employee for their own contributions to NPS which is over and above the Rs 1.5 lakh limit.

Deduction of Employer’s Contribution to pension scheme under section [80CCD(2)]

Government or State Government, contributes to any pension scheme, the entire amount contributed is first taxable in the hands of the employee as Salary Income and thereafter it can be claimed as a tax deduction is subject to following limits –

  • In case of Central Government or State Government employers – 14% of salary
  • In case of other employers – 10% of salary

Exemption on Withdrawal from NPS Section 10(12A), 10(12B) and 10(13)

Surana says “Payment received by any taxpayer on closure of his account or on his opting out of the NPS scheme would be exempt from tax to the extent of 60% of the total amount payable to him at the time of such closure or his opting out of the scheme. Thus, such taxpayers would be liable to pay tax on the balance 40% of the amount received. In case of partial withdrawal by the employee from the NPS, the exemption would be restricted to 25% (instead of 60%).”

3. Union Budget: Space sector seeks PLI scheme, tax holidays, more use of satellite data

New Delhi, India’s space sector wants the government to spend more on space-based services, slash taxes to spur growth of start-ups and introduce a production-linked incentive scheme for them in the Union Budget. The sector has put forward its demand ahead of the Union Budget for 2025-26 on February 1.

The Indian space economy is valued at 8.4 billion dollars and the private sector has just about started making a mark by building satellites and launch systems eyeing a manifold increase over the next decade.

Satcom Industry Association (SIA-India) has demanded a substantial increase to the space budget, up to Rs 40,000-50,000 crore to help bridge the funding gap with nations such as Japan and China.

SIA-India also made a strong pitch for the establishment of a Space Economy Task Force within the Finance Ministry to ensure financial alignment with the 30-year growth plan and create fiscal incentives, including tax holidays and R&D subsidies, to boost growth.

  • Important Circulars and Notifications:
SlParticulars of the Notification(s)File No. / Circular No.Notification Link(s)
1NANA 

Weekly Departmental updates:

  • GST Updates

1. Big relief for GST taxpayers: Protection against arbitrary arrest and coercion by GST officers; CBIC changes arrest and bail guidelines under GST

Now a Goods and Service Tax (GST) proper officer can’t arbitrarily arrest a GST registered person due to a recent amendment in GST arrest instructions. Moreover, now GST proper officers have to explain to the taxpayers about the ‘grounds of arrest’ and also obtain a written acknowledgement from them about their understanding of the explanation.

The Goods and Services Tax Investigation wing has amended para 4.2.1 of its instruction dated August 17, 2022. Amended para 4.2.1 now reads as follows: “The grounds of arrest must be explained to the arrested person and also furnished to him in writing as an Annexure to the Arrest Memo. Acknowledgement of the same should be taken from the arrested person at the time of service of the Arrest Memo.” A notification intimating this amendment in guidelines for arrest and bail in relation to offences punishable under CGST Act, 2017 was published on January 13, 2025 by Central Board of Indirect Taxes and Customs (CBIC).

New arrest and bail rule will allow better defense by GST taxpayers

Jain highlights how the taxpayer who got arrested can now expect a better defence strategy from his/her lawyer since the reason for arrest has to be explained and a copy of it needs to be given at the time of arrest. “This instruction gives clarity to the taxpayer about why he is being arrested and also gives a chance to his lawyer to prepare a defence strategy before the hearing starts in the court. As per this instruction now the grounds of arrest must be explained to the arrested person and also furnished to him in writing as an Annexure to the Arrest Memo,” he says.

When can a GST registered person be arrested?

According to Patnaik, arrest under the GST legislations is only permissible where there is clear evidence of the intent to evade tax or commit acts leading to availment or utilisation of wrongful Input Tax Credit (ITC) or fraudulent claim or refund of tax.

Why GST department issued such an amendment in arrest guidelines

Chilana explains that prior to this new amendment in GST arrest guidelines the commissioner was recording reasons of arrest but the arrested person was only provided with formal reasons which did not detail out the allegations against him.

One such arrest prepared the ground for this amendment. Chilana says, “One such arrest was challenged before the Delhi High Court in Kshitij Galdiyal case wherein the High Court replying of Supreme Court judgment in Pankaj Bansal’s case held that an arrested person must be provided with the grounds of arrest which must be cursory or casual but crystallised.

2. GST new guidelines: GST officers to furnish written grounds of arrest to avoid harassment 

According to the latest guidelines issued on January 13, GST officers must now provide a clear explanation of the reasons for arresting a taxpayer for alleged tax evasion, fake invoices, fraudulent input tax credit, etc., when the value exceeds Rs 5 crore.

GST new guidelines: The Central Board of Indirect Taxes and Customs (CBIC) has issued new guidelines for GST related raids. According to the latest guidelines issued on January 13, GST officers must now provide a clear explanation of the reasons for arresting a taxpayer for alleged tax evasion, fake invoices, fraudulent input tax credit, etc., when the value exceeds Rs 5 crore.

How much tax do I have to pay? Calculate now

The guidelines also aim to prevent arbitrary arrests of individuals registered under GST by any officer and establish a clearer and more transparent procedure for arrests. The reasons for arrest must be clearly explained to the individual and provided to them in writing as an Annexure to the Arrest Memo, CBIC said.

“The grounds of arrest must be explained to the arrested person and also furnished to him in writing as an Annexure to the Arrest Memo. Acknowledgement of the same should be taken from the arrested person at the time of service of the Arrest Memo,” CBIC said.

According to the August 2022 guideline, GST officers were to provide a detailed explanation of the grounds for arrest to the individual being detained, and document this information in the arrest memo.

“The revised guidelines are poised to bring about a paradigm shift in the enforcement mechanism under the GST law. Requiring officers to substantiate arrests with detailed reasoning ensures that enforcement actions are predicated on concrete evidence and not subjective discretion,” said Tushar Kumar, Adovcate, Supreme Court of India.

3. New update on GST Amnesty Scheme waiver of penalty and interest: These taxpayers need to withdraw their appeal and then apply for the scheme

Goods and Service Tax (GST) registered taxpayers who wish to apply for the GST Amnesty Scheme 2024 under section 128A announced in Budget 2024, should note about a procedural change in filing its application. Without submitting a request for withdrawal of appeal, the taxpayer cannot apply for the GST Amnesty Scheme under section 128A. The change is applicable to certain taxpayers specified by GSTN and to be eligible for the amnesty scheme application, they must first apply to the concerned appellate authority to withdraw their existing appeal and then they can apply for the Amnesty Scheme under section 128A. For these specified taxpayers the withdrawal of appeal option is not available on the GST portal.

Who need to apply to the appellate authority to withdraw the appeal and then apply for Amnesty scheme

If a taxpayer had filed an appeal against the respective GST notice using GST APL 01 form before March 21, 2023 then the taxpayer needs to submit their request for withdrawing such an appeal to the concerned appellate authority first.

In an advisory dated January 14, 2025, GSTN said: “One of the eligible conditions for filing application under waiver scheme is to withdraw the appeal applications filed against the demand order/notice/statement for which waiver application is to be submitted.”

“In this regard, it is to inform that for the appeal applications (APL 01) filed before First Appellate authority, withdrawal option is already available in the GST portal. However, for the appeal applications (APL 01) filed before 21.03.2023, withdrawal option is not available in the GST portal. For such cases, the taxpayers are advised to submit their request for withdrawal of appeal applications to the concerned Appellate Authority.”

What is the GST Amnesty Scheme under section 128A?

According to chartered accountant Siddharth Surana, PGDM from IIM Bangalore, This scheme offers a one-time waiver of interest and penalties for certain cases raised under Section 73 of the CGST Act. “Cases involving erroneous refunds are, however, not covered. Taxpayers must deposit 100% of the tax demanded to avail of the waiver, which makes it crucial to assess if a case falls under the eligible categories,” he says.

  • Important Notifications under

Excise / Custom/ GST:

  • GST Updates
Sl. No  Particulars of the Notification(s)File No. / Circular No.Notification Link(s)
1Generation Date for Draft GSTR 2B for Dec 2024GSTN 572Click Here
2Advisory for Waiver Scheme under Section 128AGSTN 573Click Here
  3Guidelines For Arrest And Bail In Relation To Offences Punishable Under The Cgst Act, 2017 – Reg.Instruction No. 01/2025-GST  Click Here
  4eeks to amend Notification No 17/2017- Central Tax (Rate), dated 28th June, 2017 to implement the recommendations of the 55th GST Council.08/2025-Central Tax (Rate))Click Here
5Seeks to amend Notification No 13/2017-Central Tax (Rate), dated 28th June, 2017 to implement the recommendations of the 55th GST Council..07/2025-Central Tax (Rate))Click Here
6Seeks to amend Notification No 12/2017-Central Tax (Rate dated 28th June, 2017 to implement the recommendations of the 55th GST Council.06/2025-Central Tax (Rate))Click Here
7Seeks to amend Notification No 11/2017 – Central Tax (Rate) dated 28th June, 2017 to implement the recommendations of the 55th GST Council.05/2025-Central Tax (Rate))Click Here
8Seeks to amend Notification no. 08/2018- Central Tax (Rate)04/2025-Central Tax (Rate))Click Here
9Seeks to amend Notification no. 39/2017- Central Tax (Rate)03/2025-Central Tax (Rate))Click Here
10Seeks to amend Notification no. 02/2017- Central Tax (Rate)02/2025-Central Tax (Rate))Click Here
11Seeks to amend Notification no. 01/2017- Central Tax (Rate)01/2025-Central Tax (Rate))Click Here

Custom / Excise Updates

LinksNotification Particulars
Click HereSeeks to exempt imports by the inspection team of IAEA.
Click HereSeeks to amend Notification no. 19/2019- customs.
Click HereSea Cargo Manifest and Transhipment Regulations.
  • Important Case-laws
  • Income Tax
  • CIT v. Yatish Trading Co. Pvt. Ltd. (2013) 359 ITR 320 (Bom.)

In the case of an assessee, being a dealer in shares and securities, whose portfolio comprises of shares held as stock-intrade as well as shares held as investment, is it permissible under law to convert a portion of his stock-in-trade into investment and if so, what would be the tax treatment on subsequent sale of such investment?

Facts of the case:

The assessee, being a dealer in shares and securities, has a trading as well as an investment portfolio of shares and securities. On 1st April 2010 and 1st October 2012, the assessee converted certain shares and securities held as stock-in-trade into investments and thereafter, in the A.Y.2014-15, it transferred such converted shares and securities and declared income arising on such transfer under the head “Profits and gains of business or profession” and “Capital gains”. The profits and gains up to the date of conversion was offered as business income (i.e., fair market value on the date of conversion minus the cost of acquisition). The profits and gains arising after conversion up to the date of sale was offered as capital gains (i.e., sale price minus the fair market value on the date of conversion). The Assessing Officer, however, assessed the entire income arising on transfer of such converted shares and securities as business income.

  • Important Case-laws
  • GST Cases:

 

1. GST leviable on AAI-Adani concessionaire pact for Thiruvananthapuram airport: Kerala AAR

The concessionaire agreement between the AAI and Adani Thiruvananthapuram International Airport Ltd is not a ‘transfer of business’, but supply of services and hence is liable to GST, the Kerala-bench of the GST Authority for Advance Ruling (AAR) has said.

The Kerala AAR ruling is contrary to the rulings passed by the Rajasthan and Gujarat Appellate Authority for Advance Ruling (AAAR) in the case of transfer of Jaipur and Ahmedabad airports and Uttar Pradesh AAR in the case of Chaudhary Charan Singh International Airport in Lucknow. These authorities had exempted such transfers from goods and services tax (GST).

The AAI sought rulings from the AAR on a set of queries, including whether the agreement involves transfer of business and whether such a transfer would be treated as ‘supply as going concern’ and be exempt from GST.

The AAR ruled that it does not constitute ‘transfer of business’ by the applicant to the concessionaire and the transaction cannot be treated as ‘transfer as going concern’.

The concessionaire is supplying the service of developing the airport of the applicant who is providing manpower, leasing, etc, to the concessionaire and both constitute supply under Section 7 of the GST Act, the AAR said in a ruling passed on January 10.

On whether GST is leviable on transfer of existing assets, aeronautical/non-aeronautical assets and capital work in progress by M/s AAI to M/s Adani Thirunvananthapuram International Airport Ltd, the AAR said that the “assets have not been transferred” and GST is payable on the amounts received as a consideration for leasing/supply of the assets to the concessionaire.

  • International Taxation   Corner (ITC)

1. Indonesia issues regulation to implement global minimum tax

Indonesia’s finance ministry said on Thursday it had issued a regulation to implement the global minimum corporate tax at 15% effective from Jan. 1, as part of an international push to limit tax competition between countries.

The largest economy in Southeast Asia is among 140 countries which agreed on a landmark 2021 deal that allows governments to apply a top-up tax to the 15% level on any corporate profits booked in a country with a lower rate.

The tax, which is being shepherded by the Organisation for Economic Cooperation and Development (OECD), applies to multinational companies with an annual global turnover of more than 750 million euros ($770 million).

2. Canadian foreign minister warns of ‘Trump tariff tax’ on Americans as threat of 25% tariff looms

Canada’s foreign minister on Friday warned Americans they will be paying a “Trump tariff tax” if President-elect Donald Trump follows through with a threat to impose a 25% tariff on all Canadian goods.

Foreign Minister Mélanie Joly said that Canada is ready to retaliate and put maximum pressure on the United States.

“If we need to retaliate we will do so. And Americans will discover Trump’s tariff tax,” Joly said after meeting with U.S. senators in Washington.

Trump has threatened to impose sweeping 25% tariffs on Canada as well as on Mexico and other trading partners, creating a sense of uncertainty about whether this is simply a negotiating ploy or a massive restructuring of U.S. foreign relations.

By targeting America’s second largest trading partner after Mexico, Trump risks upending the markets for autos, lumber and oil — all of which could carry over quickly to consumers.

Despite Trump’s claim that the U.S. doesn’t need Canada, a quarter of the oil America consumes per day is from Canada. Read more at: Click Here

  • Knowledge Bucket for NRI’s

Fixed deposits Rules for NRI:

  • NRE and FCNR deposits: The interest on these deposits is tax-free, making it an attractive investment avenue as it is tax-effective.
  • NRO fixed deposits: The interest is taxable at 30 percent as in NRO accounts.

The other aspect that NRIs should be cautious about is the currency risk that comes with NRE and FCNR deposits as the returns are directly related to the currency fluctuation. This can be avoided with proper planning.

Mutual funds Rules:

For NRIs, investment in mutual funds in India attracts the same taxation rules as applied to resident Indians:

  • Equity-oriented funds: Long-term capital gains (LTCG) above Rs 1.25 lakh and held for more than one year are taxed at 12.5 percent. STCG attracts a tax rate of 20 percent.
  • Debt-oriented funds: The gains are added to the income and taxed accordingly irrespective of the holding period.

NRIs can consider opting for Systematic Investment Plans (SIPs) in mutual funds to invest regularly and reduce the impact of market volatility.

  • Do you know ??
  1. Parliament’s Budget Session will held from January 31 to April 4, with Finance Minister Nirmala Sitharaman set to table her eighth straight budget on February 1. In line with the convention, the session will start with President Droupadi Murmu’s address to a joint sitting of the Lok Sabha and Rajya Sabha on January 31 followed by the tabling of the economic survey.

“The Hon’ble President will address the joint sitting of both Houses on 31st January 2025 at 1100 Hrs in the Lok Sabha Chamber. Union Budget 2025-26 to be presented on 1st February, 2025 in the Lok Sabha,” Parliamentary Affairs Minister Kiren Rijiju said in a post on X.

  • The GSTN has issued an update to inform that both Forms GST SPL 01 and GST SPL 02 are available in the GST portal and the taxpayers are advised to file applications under waiver scheme. However, for the appeal applications (APL 01) filed before 21.03.2023, withdrawal option is not available in GST portal.
  • India’s fiscal deficit is expected to shrink further, on the back of growing tax revenues, according to a World Bank report. The report noted that this trend is anticipated to contribute to fiscal consolidation policies of the government.
  • In a big move to simplify India’s tax system, the government is set to introduce a new Income Tax Bill in the upcoming Parliament budget. The goal is to replace the current Income Tax Act, which has been in place since 1961, with a much simpler and easier-to-understand version.
  •    Disclaimer:

Every effort has been made to avoid errors or omissions in this material. In spite of this, errors may creep in. Any mistake, error or discrepancy noted may be brought to our notice which shall be taken care of in the next edition. In no event the author shall be liable for any direct, indirect, special or incidental damage resulting from or arising out of or in connection with the use of this information. *(We consider various sources including ET, BS, HT, Taxmann etc.)

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20.01.2025 – Vol. 169*

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He has contributed in ICAI, ICSI and MCCI and other various Newsletters. He is also a speaker at various platforms including seminars / webinars.