E-Newsletter “Weekly Taxation Newsletter”

Dear Readers,

We are delighted to share our 85th E-Newsletter “Weekly Taxation Newsletter” dated 03rd August, 2022 from 27th July, 2022 to 03rd August, 2022 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.

                                                                                                                                                                                                                                                                   Stay updated, Stay connected

  • Due Dates under IT Act 1961
 

 

Sl.

 

Compliance Particulars

 

Due Dates

1

Due date of depositing TDS/TCS liabilities under Income Tax Act, 1961 for the previous month (July, 2022).

07.08.2022

2.

Due date for issue of TDS Certificate for tax deducted under section 194- IA, 194-IB, and 194M in the month of June 2022.

14.08.2022

Under the GST, 2017

A.  Filing Form GSTR-1:

Tax period

 

Due Date

Remarks

Monthly return (June, 2022)

11.08.2022

1.  GST Filing of returns by registered person with aggregate turnover exceeding INR 5 Crores during preceding year.

2.   Registered person, with aggregate turnover of less then INR 5 Crores during preceeding year,

opted for monthly filing of return under QRMP.

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

Form No.

 

Compliance Particulars

Timeline

Due Date

 

GSTR -6

Every Input Service Distributor (ISD)

 

13th of succeeding month

 

13.08.2022

 

GSTR -7

Return for Tax Deducted at source to be filed by Tax Deductor

 

10th of succeeding month

 

10.08.2022

 

GSTR -8

E-Commerce operator registered under GST liable to TCS

10th of succeeding month

10.08.2022

C.  GSTR – 1 QRMP monthly / Quarterly return

Form No.

Compliance Particulars

Timeline

Due Date

 

Details of outward supply-IFF &

 

Summary of outward supplies by taxpayers who have opted for the QRMP scheme.

a)        GST QRMP monthly return due date for the month of April, 2022 (IFF). Applicable for taxpayers with Annual aggregate turnover up to Rs. 1.50 Crore.

 

b)       Summary of outward supplies by taxpayers who have opted for the QRMP scheme.

 

 

13th of succeeding month – Monthly

 

Quarterly Return

 

 

 

13.08.2022

D. GST Refund

Form No.

 

Compliance Particulars

Due Date

RFD -10

Refund of Tax to Certain Persons

18 Months after the end of quarter for which refund is to be claimed

  • Major Update:

Attention: Attention: Taxpayers with AATO in excess of Rs 20 Crore are also required to generate e-invoice for their outward supplies w.e.f. 1st April, 2022.

  • Weekly Departmental Updates: Income Tax
1.   BIG update on ITR Filing! Time limit for ITR e- verification reduced from 120 days to 30 days

 The CBDT said that E-verified/ITR-V submitted after 30 days, will be considered as ‘Delayed filing’ and not Invalid ITR. CBDT said that in respect of any electronic transmission of return data on or after the date of the notification coming to effect, the time limit for e-verification or submission of ITR-V shall be now 30 days from the date of transmitting/uploading the data of return of income electronically.

However, the CBDT said that ITR e-verified beyond 30 days will treated as ITR filed on the date of e-verification and all consequences of late filing under the Act shall follow.

2. ITR Due Date Extension: Taxpayers may get more time after problem in ITR-2 reported to CBDT

After extending the due date of filing Income Tax Return (ITR) by months in the last two assessment years – mainly due to the COVID-19 pandemic – the Income Tax Department this time is trying to put the things in place by sticking to the original due date of July 31, 2022, even as the Central Board of Direct Taxes (CBDT) is closely monitoring the ground situation before taking any decision on ITR due date extension.

While the CBDT has found no merit in the argument that a section of taxpayers are confused as the due date of filing return for the current Assessment Year (AY 2022-23) comes within seven months of the extended due date of the last year (AY 2021-22), which was extended till December 31, 2021, the Department may consider a date extension after a problem in ITR-2 has been reported to it.

The problem surfaced when the attempts to validate ITR-2 of a senior citizen taxpayer – drawing regular income through systematic withdrawal plan (SWP) in debt-oriented mutual fund (MF) schemes along with investments in senior citizen schemes – failed before submission of the return online on the income tax portal on July 30, 2022.

3.    How to file Belated Income Tax Return for FY 2021 -22, check here

The last date to file the income tax return for FY (Financial Year) 2021-22 was July 31, 2022. The Central Board of Direct Taxes (CBDT) has said that the filing of the belated income tax return under sub-section (4) and revised return under sub-section (5) of Section 139 of the Income Tax Act, 1961, for the assessment year 2022-23 is December 31, 2022.

HERE IS HOW TO FILE AN INCOME TAX RETURN AFTER THE DUE DATE:

The process of filing a belated return is the same as filing the return on or before the due date. If a belated return is filed after the income tax due date, the taxpayer would be liable to pay the tax along with interest of @ 1% per month (simple interest) under Section 234A.

If you are filing a belated return for FY2021-22, then you need to fill in the applicable ITRs as notified for this FY, and not for any previous or later FY. The relevant assessment year for a financial year is the immediately succeeding financial year. This means that you can file a belated return for FY2021-22 by December 31, 2022, i.e., before the end of the assessment year (AY) 2022-23. Now the last date to file the belated ITR for the assessment year 2021-22 has been extended to December 31, 2022.

4.  ITR AY 22-23: Income Below Exemption Limit? Filing Income Tax Return is Must in these Cases

ITR Filing AY 2022-23: The last date of filing income tax return (ITR) for the assessment year 2022-23 or financial year 2021-22 is July 31, 2022. Do you have to file an income tax return

even if you earn less than Rs 2.5 lakh a year? Every salaried individual must file the return of income, even if his or her taxable income falls below the threshold level from which income tax is levied.

Under the old income tax regime, the basic tax exemption limit has been fixed at Rs 2.5 lakh for taxpayers below 60 years of age. For senior citizens or those between 60 and 80 years of age, the basic exemption limit will be at Rs 3 lakh. For those who are 80 years of age and above, the exemption limit of Rs 5 lakh. Under the new concessional income tax regime, the basic tax exemption celing has been fixed at Rs 2.5 lakh, irrespective of the age of the taxpayers. However, experts suggest all taxpayers to file their income tax returns for various reasons.

Income Tax Return Filing Must in these Four Conditions

  • An individual has to file income tax return if his total sales, turnover, or gross receipts in the business exceeds Rs 60 lakh during the previous year
  • If total gross receipts in profession exceed Rs 10 lakh during the previous year, the person needs to file
  • If TDS or TCS during the year is Rs 25,000 or more, it is mandatory to file a return of income tax. For senior citizens, this rule will be applicable if the individuals aggregate TDS or TCS is Rs 50,000 or more a financial year.
  • The deposit in one or more savings bank accounts of the person, in aggregate, is Rs 50 lakh or more during the previous year, it is a must to furnish income tax return.

These new rules will be applicable for filing of income tax return for the financial year 2021- 22 or assessment year 2022-23.

  • Source: Read full at Click Here
  • Important Circulars and Notifications:
Sl.

 

Particulars of the Notification(s)

File No. /

Circular No.

Notification

Link(s)

 

1

Procedure of PAN application & allotment through Simplified Proforma for incorporating Limited Liability Partnerships (LLPs) electronically Form FiLLiP of Ministry of Corporate Affairs.

 

Notification No. 04/2022

 

Click Here

 

2

Order   authorizing    ‘Prescribed    Authority’   for   the purpose of e-Verification Scheme, 2021

F.No.282/04/2 022

Click Here

 

3

Order under Section 119(1) of the Income Tax Act, 1961 – ASK Centers throughout India shall remain open on 31st July 2022 during normal office hours.

F. No. 225/125/2022-

ITA.II

 

Click Here

Weekly Departmental updates:  

GST Updates

1. GST collection in July jumps by 28% to ₹1.49 lakh crore.

 July’s GST collection is 28% higher than the same month last year;

second-highest monthly collection since launch of GST regime

The Goods and Services Tax (GST) yielded ₹1,48,995 crore in revenues during the month of July, the second-highest monthly collections since the launch of the GST regime and the highest in three months. July’s GST kitty is 28% higher than the same month last year, driven by a 48% surge in revenues from import of goods, while revenues from domestic transactions, including import of services are 22% higher than a year ago.

About a dozen States recorded higher revenue growth than the 22% overall rise in revenues from domestic transactions, including Karnataka (45%), Tamil Nadu (34%), Kerala (29%), West Bengal (28%), Haryana (27%), Telangana (26%), and Andhra Pradesh (25%).

2.   Mandatory GST e-invoicing for firms with Rs 10-crore sales from October

 The goods and services tax (GST) e-invoicing will be mandatory for firms with a turnover of over Rs 10 crore from October 1, down from the current threshold of Rs 20 crore to further plug leakages and ensure better compliance.

A notification in this regard was issued by the Central Board of Indirect Taxes and Customs.

E-invoicing for business-to-business (B2B) transactions started with a very high threshold from October 1, 2020, when firms with a turnover of over Rs 500 crore came under its ambit. In the second phase, businesses with a turnover exceeding Rs 100 crore were mandated to issue e- invoices from January 1, 2021. In the third phase, firms with a turnover of over Rs 50 crore had to generate e-invoices from April 1, 2021. It has been extended to firms with a turnover between Rs 20 crore to Rs 50 crore from April 1, 2022.

E-invoicing for business-to-business (B2B) transactions started with a very high threshold from October 1, 2020, when firms with a turnover of over Rs 500 crore came under its ambit. In the second phase, businesses with a turnover exceeding Rs 100 crore were mandated to issue e- invoices from January 1, 2021.

In the third phase, firms with a turnover of over Rs 50 crore had to generate e-invoices from April 1, 2021. It has been extended to firms with a turnover between Rs 20 crore to Rs 50 crore from April 1, 2022.

3.    GST levies on food items won’t burden poor, says Nirmala Sitharaman

Finance Minister says GST Council is a constitutional body where Modi  doesn’t take

decisions, but State Finance Ministers take them.

 Union Finance Minister Nirmala Sitharaman on August 1, 2022 asserted that the Goods and Services Tax (GST) levies on food items such as curd, lassi and wheat would not burden poor households, and took on States and the Opposition parties for seeking to suggest that the taxes were driven by the Narendra Modi administration when it was a decision taken by the GST Council with all States on board.

Replying to the debate on price rise in the Lok Sabha, Ms. Sitharaman remarked that members’ discussion dwelled on the political angles of price rise rather than actual data-driven concerns so her response would also be slightly political.

Stressing that the government had held inflation at 7% or lower despite multiple headwinds such as the COVID-19 pandemic and its multiple waves, the Ukraine-Russia conflict and supply chain disruptions that persist due to lockdowns in parts of China, the Finance Minister said the government was working to reduce price rise further.

Taking on criticism that the GST levies on milk and other items were ‘anti-poor’, Ms. Sitharaman said the decision was taken by the GST Council with full consensus of all States. “The GST Council decisions are not the Central government’s decisions… It has all States’ Ministers. But when it is to be criticised, that is imposed on the Centre and Modi

4.    No GST on funeral, cremation, burial, or mortuary services: FM Nirmala Sitharaman clarifies in Lok Sabha

Finance Minister Nirmala Sitharaman on Monday told the Lok Sabha that there is no GST on funeral, cremation, burial, or mortuary services. The opposition has alleged that the price hike has led to the people’s anger.

Finance Minister Nirmala Sitharaman on Monday told the Lok Sabha that there is no GST on funeral, cremation, burial, or mortuary services. The opposition has alleged that the price hike has led to the people’s anger.

Clarifying her stand during the monsoon session of the Parliament, FM Sitharaman assured the Lok Sabha that the above services are fully exempt from GST. the raw material needed for construction of a new crematorium and the equipment needed there is taxed, otherwise, people manufacturing the raw material will suffer losses, she said.

From July 18, the prices of several essential commodities and services were increased. The decision was taken at the 47th GST meeting chaired by FM Nirmala Sitharaman that GST rates will increase on some household products and services from July 18, 2022.

Prices of agricultural commodities including pre-packaged labels like cheese, lassi, butter milk, packaged curd, wheat flour, other grains, honey, papad, cereals, meat and fish (excluding freezing), mudi and jaggery are set to go up from July 18. Taxes on these products have been

increased. Currently, 5 per cent GST is levied on branded and packaged food items. Products without packs and unlabeled are tax free.

5.    To tax at 18% or 28%? The GST Conundrum for skill gaming sector

In August 2022 the Group of Ministers (GoM) will suggest a GST regime for lottery, casino, and gaming businesses. In this article, we discuss the possible approach for the GST regime for the skill gaming industry. The Indian gaming industry has grown substantially and is now in the top five mobile gaming markets in the world.

The market value of the Indian skill gaming sector is around Rs 79 billion in the financial year (FY) 2021-22 and may reach Rs 150 billion in FY 2023-24. The sector contributed Rs 15 to 20 billion in 2020 to the government exchequer and the same is expected to reach Rs 35 to 50 billion by 2025.

Recognizing the vast potential of the Indian gaming industry, Prime Minister Modi applauded the contributions of Indian innovators and application developers. Recently, the Minister of State, MeiTy indicated support for the skill gaming industry.

For context, in India, historically, the gambling laws provided an exception from their application to games of skill. The Supreme Court of India and High Courts have repeatedly adjudicated that skill-based games must not be treated the same way as lottery /betting. Lottery is considered as gambling requiring no skill, hence, becoming res commercium. Whereas skill gaming has been held to be a constitutionally protected activity.

This is in line with global best practices. Tax rates in countries such as the USA, UK, Germany, and Australia, range between 15% to 20% on either fees (UK) or GGR (USA/ Germany) or margin between money received and money paid out (Australia).

  • (Read more at Click Here)
  • Important Notifications under  Excise / Custom/ GST:

GST UPDATES

Sl.

 

No.

Particulars of the Notification(s)

File No. / Circular No.

Notification Link(s)

1

Seeks to implement e-invoicing for the taxpayers having aggregate turnover exceeding Rs. 10 Cr from 01st October, 2022.

17/2022-Central Tax

Click Here

2

Authorisation under clause (c) of sub-rule (4) of rule 96 of the Central Goods and Services Tax Rules, 2017

GSTN Cir. 549

Click Here

CUSTOM / EXCISE UPDATES

Links

 

Notification Particulars

 

Click Here

Seeks to amend notification No. 49/2021 – Customs, dated 13.10.2021, in order to extend the concessional Agriculture Infrastructure and Development Cess [AIDC] of Nil on Lentils (Mosur) up to and inclusive of the 31st March, 2023.

Click Here

Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver- Reg.

Click Here

Extension of Customs clearances beyond normal working hours in Inland Container Depot(s)- reg.

Click Here

Clarification on Electro-Chemiluminescence Immunoassay kits-reg

Important Case-laws

Income Tax

1. Citation: [2021] 128 taxmann.com 180 (Bombay)

 Assessee can raise contention before ITAT without filing cross-objections on issues related to question of law: HC

The Bombay High Court held that the Tribunal should not have stopped the assessee from raising the issue in appeals instituted by revenue without the necessity of filing any cross objections when it concluded that issues raised in cross-objection were legal issues.

Tribunal had not focused on the issue of whether there was sufficient cause for explaining 248 days delay in instituting cross-objections but rather had faulted assessees for not raising the issue of non-compliance with jurisdictional parameters. These were not relevant considerations when deciding whether sufficient cause was shown to explain 248 days delay in instituting cross-objections.

Therefore, the matter was to be remanded to Tribunal for fresh consideration of appeals instituted by revenue after permitting assessees to raise the issue of non-compliance within jurisdictional parameters of Section 153C.

2. Case Details: Ashok Kumar B. Chowatia v. JCIT

Citation: [2021] 128 taxmann.com 230 (Madras)

 AO can’t recover taxes from assessee if tax deducted on his income wasn’t deposited by

deductor

The Madras High Court held that to the extent tax was deducted by the deductor and not remitted by him to the Income-tax Department, recovery can be only directed against deductor as he was the assessee-in-default. Deductee couldn’t be made to pay tax two times on same income, and recovery of such tax deducted but not remitted by deductor has to be recovered from him only.

Accordingly, the Madras High Court quashed the demand notices issued against the assessee. Further, it was made clear that to the extent tax was deducted but not remitted, no demand shall be made against the assessee. If the deductor had failed to remit the tax so deducted, it was open to the department to recover the same from the deductor in the manner known to law. Balance of tax, if any, which had escaped payment alone could be recovered from the assessee by issuing a suitable notice under the provisions of the Income-tax Act, 1961.

Important Case-laws

GST Cases:

 1. Food on train, platform will face uniform 5% GST: AAAR

The Delhi Appellate Authority for Advance Rulings (AAAR) has held that goods and services tax (GST) at a uniform rate of 5% will apply on food served in trains or on railway platforms. Putting an end to an ongoing controversy, it said this rate would be applicable irrespective of whether the food is served by a railways-licensed caterer or not.

The AAAR bench also added that the supply of newspapers in trains would be exempt from GST. Earlier, the Authority for Advance Rulings (AAR) had held that GST shall be charged on individual items at their applicable rates. Further, there could have been different GST rates applicable based on whether the service was in trains or on platforms.

It brought to the attention of the AAAR bench a clarification made by the Central Board of Indirect Taxes and Customs (CBIC) on March 31, 2018 at the behest of the railways ministry.

The AAAR also noted a subsequent notification dated July 26, 2018, which provided that supply of food/drink items by the Indian Railways, the Indian Railways Catering and Tourism Corporation (IRCTC) or their licensees — whether in trains or on platforms — would be subject to GST at 5% without input tax credit. Reference: Click Here

2. Sale Of Online Space For Advertisement To Attract 18% GST: AAR

E-commerce portal Myntra Designs Pvt Ltd had approached the AAR seeking a ruling on whether providing advertisement space on its portal to foreign entity Lenzing Singapore Pte Ltd was liable to GST.

Sale of advertisement space on internet would be liable to 18 per cent Goods and Services Tax, the Karnataka bench of Authority for Advance Ruling has said.

E-commerce portal Myntra Designs Pvt Ltd had approached the AAR seeking a ruling on whether providing advertisement space on its portal to foreign entity Lenzing Singapore Pte Ltd was liable to GST.

The AAR said Myntra is only leasing the advertisement space to its customer and the advertiser (Lenzing) is providing advertisement services to its customer. The service provided by Myntra to Lenzing is that of rendering ‘sale of internet advertising space (except on commission)’ and is charging a fixed rate and not a commission for providing such space. Hence, the same will be classified under ‘other professional, technical and business services’ under GST law and is liable to GST at 18 per cent. To read more: Click Here

  • International Taxation Corner (ITC)

1. Israel limits cash payments to fight financial crimes, tax evasion

Israel limits cash payments in one business transaction to 6,000 new shekels ($1,785), as the country works to combat organised crime, money laundering and tax evasion.

An Israeli law that goes into effect on Monday limits cash payments in one business transaction to 6,000 new shekels ($1,785), as the country works to combat organised crime, money laundering and tax evasion.

The law, which was introduced by the Israel Tax Authority last week, requires that any payment to a business over 6,000 shekels must be made through other means such as digital transfer or a debit card. Individuals who are not listed as business owners can use up to 15,000 shekels in cash when it comes to trading, Xinhua news agency reported.

Previously, the maximum amount of cash that can be used in one business transaction is 11,000 shekels. According to a statement issued by the Israel Tax Authority, restrictions on cash use do not apply to money transfers between family members, with the exception of rent payments for which the maximum amount has been reduced from 50,000 shekels to 15,000 shekels.

Heavy fines are imposed for violators of the law, starting at 15 per cent of the cash payments of fewer than 25,000 shekels, rising to 20 per cent for payments of 25,000 to 50,000 shekels, and reaching 30 per cent for bigger payments, according to the Israel Tax Authority.

2. VAT: Incurring a financial loss by forgoing input credits?

Businesses often forgo input VAT credit if the purchase/expense invoice is more than 6 months old (or, 2 months in the case of monthly tax periods). Needless to say, such a tax position results in a financial loss to the business. Alternatively, the buyers could strain the business relations with the suppliers by asking to reissue a current dated invoice.

Such a practice to forgo credit is not just incorrect but also contrary to the specific clarifications issued by the Federal Tax Authority (FTA).

Concept of two tax-periods and the error

 Input VAT credit may be recovered by a recipient/buyer in the VAT return of the tax period in which both of the following conditions are satisfied:

  1. the buyer receives and keeps the valid tax invoices; and
  2. the buyer pays for the supply, or intends to make the payment within 6 months from the due date of the payment.

If the buyer fails to recover the input tax credit in the first relevant tax period then the credit can be recovered in the subsequent tax period. FTA has also clarified that input tax is only recoverable during the first two periods once the aforesaid two conditions are satisfied.

Importance of intention to pay

 The second condition requires that the customer should pay for the invoice or has the intention to pay within 6 months from the due date of the payment.

FTA understands the practicality of business processes. A company may receive a tax invoice but may not have an intention to make the payment until the internal approval process for the invoice is completed.

In the public clarification VATP017, FTA has clarified that the second conditions will only be met when the buyer completes the internal approval process and forms an intention to make the payment within the prescribed period. To read more Click Here

      Knowledge Bucket for NRI’s              

  • TDS is deducted on long-term capital gains and short-term capital gains earned by NRIs on both debt and equity mutual funds.
  • The rules for taxation of LTCG from the sale of a house property situated in India are the same for NRIs and resident Since the property is situated in India, the gains will be taxable in India.
  • The CBDT has also notified Rule 21AAA and Form 10-EE for non-resident Indians (NRIs) to claim the relief under Section 89A related to the income from foreign retirement benefit accounts.
  • Examples of income made in India include salaries received or money received for services rendered in India, income from house property in India, capital gains on the sale of an asset within India, income from fixed deposits, and interest on a savings bank An NRI must pay taxes on these earnings.
  • You need to file an ITR if your income from all these sources exceeds Rs. 2.5 lakhs in a financial year.

 DO YOU KNOW ??                                                      

  1. Long-term capital gains on equity were tax-free up until 2018. In the 2018 Union Budget, they were rendered taxable but with an Long-term capital gains on equities up to ₹1 lakh in a fiscal year are exempt from taxes.
  2. In case you do not have any tax payable, you are allowed to claim a refund of the TDS
  3. As per earlier ITR forms, a non-resident was required to report foreign assets and liabilities only if it was held outside India at any time during the relevant accounting period under Schedule FA (Foreign Assets) of the income tax return (ITR). The accounting period remained undefined, though.
  4. It needs to be noted that the notified countries for Section 89A of the ITA include the US, the UK, Canada, and Northern Ireland, as per the Central Board of Direct Taxes (CBDT).
  5. Under the current regulation, the investor or shareholder is responsible for paying taxes on any dividend received on or after 1 April 2020 as per their income tax slab. TDS is typically applied at a rate of 10% on dividend income received from a firm or mutual fund above 5,000.

  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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