Income-tax & GST Weekly Timelines / Due Dates, Notifications / Press Info, Case Laws, etc

We are delighted to share our 63rd E-Newsletter “Weekly Taxation Newsletter” dated 14th February, 2022 from 07th February, 2022 to 13th February, 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.

Due Dates under IT Act 1961

Sl. Compliance Particulars Due Dates 
Due date for issue of TDS Certificate for tax deducted under section 194- IA, 194-IB and 194M in the month of January, 2022. 14-02-2022 
  2 “Due date for filing of audit report under section 44AB for the assessment year 2021-22 in the case of a corporate-assessee or non- corporate assessee (who was required to submit his/its return of income on October 31, 2021).  The due date for filing of audit report for Assessment Year 2021-22 has been extended vide Circular no. 17/2021, dated 09-09-2021.  The due date for filing audit report has been further extended to February 15, 2022 vide Circular No. 01/2022, dated 11-01-2022″.   15-02-2022 
Due date of furnishing of Form 24G by an office of the Government where TDS/TCS for the month of January, 2022 has been paid without the production of a challan.  15-02-2022 
Quarterly TDS certificate (in respect of tax deducted for payments other than salary) for the quarter ending December 31, 2021. 15-02-2022 
Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194-IA, 194-IB, 194-IM, in the month of December, 2021. 15-02-2022 
  6 “Audit report under section 44AB for the assessment year 2021-22 in the case of an assessee who is also required to submit a report pertaining to international or specified domestic transactions under section 92E. The due date for filing of audit report for Assessment Year 2021-22 has been extended vide Circular no. 17/2021, dated 09-09-2021. The due date for filing audit report has been further extended to February 15, 2022 vide Circular No. 01/2022, dated 11-01-2022”.   15-02-2022 

CBDT extends due dates for filing of Income Tax Returns and various reports of audit for Assessment Year 2021-22 

Type of Compliance Requirement (AY 2021-22) Original Due Date Extension vide Circular 9/2021 Extension vide Cir. 17/2021 Extension vide Circular 1/2022 
Income Tax Return (Assessees subject to Audit): u/s 139(1) of the Income Tax Act, 1961   31/10/2021   30/11/2021   15/02/2022   15/03/2022 
Income Tax Return (Assessees subject to Transfer Pricing Report): u/s 139(1) of the Income Tax Act, 1961    30/11/2021    31/12/2021    28/02/2022   15/03/2022 
Tax Audit Report: under any Provision/ Section of the Income Tax Act, 1961   30/09/2021   31/10/2021   15/01/2022   15/02/2022 
Transfer Pricing Report: u/s 92E of the Income Tax Act, 1961   31/10/2021   30/11/2021   31/01/2022   15/02/2022 
Belated/ Revised Income Tax Return: u/s 139(4)/ 139(5) of the Income Tax Act, 1961   31/12/2021   31/01/2022   31/03/2022  No Change 31/03/2022 
  1. Filing of GSTR –3B 

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

Tax period Due Date No interest payable till Particulars 
  January, 2022   20th February, 2022   – Due Date for filling GSTR – 3B return for the month of June, 2021 for the taxpayer with Aggregate turnover exceeding INR 5 crores during previous year 
  1. Non Resident Tax Payers, ISD, TDS & TCS Taxpayers 
Form No. Compliance Particulars Timeline Due Date 
GSTR-5 & 5A Non-resident ODIAR services provider file Monthly GST Return 20th of succeeding month 20.02.2022 

C. GSTR – 1 QRMP monthly / Quarterly return 

Form No. Compliance Particulars Timeline Due Date 
Details of outward supply-IFF & GST QRMP monthly return due date for the month of January, 2022 (IFF). Applicable for taxpayers with Annual aggregate turnover up to Rs. 1.50 Crore. Summary of outward supplies by taxpayers who have opted for the QRMP scheme. 13th of succeeding month  
Summary of outward supplies by taxpayers – Monthly Return 13.02.2022 
who have opted for the QRMP scheme. Quarterly Return  

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:  

Aadhaar authentication of registered person is mandatory for filing of Refund/Revocation of cancelled registration applications w. e. from 1.1.2022. 

  • Weekly Departmental updates: Income Tax 
  1. Income Tax: Over 6.2 cr ITRs, 21 lakh audit reports filed on new e-filing portal 

More than 6.2 crore Income Tax Returns(ITRs) and about 21 lakh major Tax Audit Reports (TARs) have been filed on the new e- filing portal of the Income Tax Department till Thursday (10th February), the Ministry of Finance said on Friday. Out of 6.2 crore ITRs filed, 48% of these are ITR-1 (2.97 crore), 9% is ITR-2 (56 

lakh), 13% is ITR-3 (83 lakh), 27% are ITR-4 (1.66 crore), ITR-5 

(11.3 lakh), ITR-6 (5.2 lakh) and ITR-7 (1.41 lakh). 

Over 1.91 lakh Form 3CA-3CD and 17.26 lakh Form 3CB-3CD have been filed in FY 21-22. More than 1.84 lakh other Tax Audit Reports (Form 10B, 29B, 29C, 3CEB, 10CCB, 10 BB) have been filed till Thursday. 

Further, to assist the filers for resolution of any grievance related to e-filing, two new email ids- TAR.helpdesk@incometax.gov.in and ITR.helpdesk@incometax.gov.in have been provided. (Read more at: Click Here) 


  1. ITR filing: How to check income tax refund status online
     

Income tax refunds are sent via two modes – RTGS/NECS and paper cheque. Through RTGS/NECS mode, income tax refunds are credited directly to the bank account. 

Taxpayers who have filed income tax returns (ITRs) must check their income tax refund status. The Central Board of Direct Taxes (CBDT) has issued tax refunds of more than Rs 1,67,048 crore to over 1.87 crore taxpayers from April 1, 2021 to February 7, 2022. 

Income tax refunds are sent via two modes – RTGS/NECS and paper cheque. Through RTGS/NECS mode, income tax refunds are credited directly to the bank account. For this, the taxpayer’s bank account, MICR code/IFSC code of bank branch and correct communication address are mandatory. For paper cheques, bank account number and correct address are mandatory. Notably, ‘Refund paid’ status is also reflected in the ‘Tax Credit Statements’ on Form 26AS. 

INCOME TAX REFUND CHECK ONLINE: To check income tax refunds, you need to go to – https://tin.tin.nsdl.com/oltas/refund-status-pan.html. You need to enter details such as Permanent Account Number (PAN) and Assessment Year. You need to enter the captcha code and proceed. To read more Click Here 

  1. Rana Ayyub breaks silence on ED, Income Tax probes; says bank statements ‘deliberately misread’ 
  • ‘Smear campaign against me will not deter me from my professional commitment’ 
  • Rana Ayyub says she paid over Rs 1 crore as income tax on funds received as donations 
  • ‘PMLA proceedings were triggered by FIR registered in Ghaziabad by a member of Hindu IT Cell’ 

Rana Ayyub on Friday issued a statement in response to allegations made against her by the Enforcement Directorate (ED). A senior journalist, Rana Ayyub has been accused by the agency of misappropriating funds received as donations for relief during the Covid-19 pandemic. 

The statement issued by Rana Ayyub on Friday said, “It is abundantly clear that no part of the relief campaign fund remains unaccounted for, and there is absolutely no scope for any remote allegation of misuse of the funds for personal expenses. “Such allegations are preposterous, wholly mala fide and belied by the record, and are a deliberate misreading of my bank statements.” To read more Click Here 

  1. Over 6.2 cr ITRs, 21 lakh audit reports filed on new e-filing portal 

Over 6.2 crore income tax returns and about 21 lakh tax audit reports have been filed on the new e-filing portal since June last year. The new income tax portal was launched on June 7, 2021. 

“More than 6.2 crore Income Tax Returns (ITRs) and about 21 lakh major Tax Audit Reports (TARs) have been filed on the new e-Filing portal of the Income Tax Department as on 10th February 2022,” the tax department said in a statement. 

Out of the 6.2 crore ITRs filed for AY 2021-22, 48 per cent are ITR-1 (2.97 crore), 9 per cent ITR-2 (56 lakh), 13 per cent ITR-3 (83 lakh), and 27 per cent ITR-4 (1.66 crore), ITR-5 (11.3 lakh), ITR-6 (5.2 lakh) and ITR-7 (1.41 lakh). 

The government had in January extended till March 15 the deadline for corporates to file income tax returns for the fiscal ended March 2021, while the same for filing tax audit report and transfer pricing audit report for 2020-21 fiscal is February 15. (Read more at Click Here) 

  1. Income tax alert: Now pay more if you miss ITR filing for one year 

Non-Income Tax return (ITR) filers will have to pay higher Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) if they don’t file ITR for one year. In key direct tax proposals in Union Budget 2022, the government has proposed to make provisions related to deduction or collection at higher rates for non-filers more stringent. 

As part of measures to widen and deepen the tax base, the government has proposed to make provisions relating to deduction or collection at higher rates for non-filers more stringent by reducing the time period for which no return has been filed from two years to one year. 

Currently, if an individual did not file ITR for two years, and the TDS and TCS in each of those assessment years amount to more than Rs 50,000, then that individual is liable to pay higher rates of TDS and TCS. 

Central Board of Direct Taxes (CBDT) Chairman J B Mohapatra has said that direct tax collections are expected to breach the revised target of Rs 12.50 lakh crore and set an all-time high and “historic” record by the end of this financial year in March. (Read more Click Here) 

  • Quick Steps to filing your income-tax returns smoothly 
  1. Visit https://www.incometax.gov.in for e-filing the return of income. 
  1. Create you login Id and Password on Income tax portal. (Register Yourself). 
  1. Login to e-Filing portal by entering user ID (PAN), Password, Captcha code and click ‘Login’. 
  1. Click on the ‘e-File’ menu and then click ‘Income Tax Return’ link. 
  1. Select ‘Assessment Year’, Select ‘ITR Form Number’, Select ‘Filing Type’ as ‘Original/Revised Return, ‘Select ‘Submission Mode’ as ‘Prepare and Submit Online’ and then Continue. 
  1. Fill all the applicable and mandatory fields of the online ITR form. 
  1. Choose the appropriate Verification option in the ‘Taxes Paid and Verification’ tab. 
  1. Click on ‘Preview and Submit’ button, Verify all the data entered in the ITR. 
  1. Individuals should ensure that correct PAN, Aadhaar and TAN numbers are filed, and that the residential status is correctly determined and mentioned. They should also verify all the details filed in the ITR Form before final submission of the tax return. 
  1. ‘Submit’ the ITR after complete check. 
  1. The ITR filing process gets completed only on e-verification of ITR filed. There are various options available to e-verify tax return i.e. using Aadhaar OTP, using Net banking, using Demat account, using bank ATM, or by simply sending the signed physical copy of Form ITR-V to CPC Bangalore. 

The taxpayer must ensure that PAN and Aadhaar are linked (date for linking is currently extended to March 31, 2022) and the Indian mobile number is active to ensure smooth e-verification of returns filed. Once the e-verification is complete, tax authorities consider the return to have been filed.se one discovers any error after filing tax return, then there is the option to file a revised India tax return within a prescribed timeline. 

  • Key Point Must remember: 

Provide your valid Email ID and mobile number while Registration. On Income Tax Return Page: PAN will be auto-populated. 

Use your Form 26AS to summarise your TDS payment for all the 4 quarters of the assessment year. 

Read the instructions carefully 

  • Income tax Return: Documents needed to file ITR 
  • You need to select appropriate ITR form. 
  • Primarily you need PAN, Aadhaar card and bank statements for the financial year. 
  • You also need the Form 16 issued by the employer and Form 16 issued by any other entity. 
  • You need Form 26AS (downloadable from the income tax portal) to check how much TDS was deducted and by who. 
  • Details of income from other sources. 
  • You also need capital gains and share trading statement. 
  • You may also need investment documents such as PPF (Public Provident Fund), NSC (National Savings Certificate), life insurance, medical insurance, NPS (National Pension System), investment in other tax-saving instruments. 
  • Interest and principal repayment certificates of housing loan and donation receipt is also needed while filing ITR. 

There is no need to worry if you are among taxpayers who have not filed ITR by the due date i.e. on or before 31.12.2021, as the process can be completed by March 31, 2022 by filing Belated ITR and the last date to submit Belated ITR for AY 2021-22. 

Those who were not able to file their returns by the due date, i.e. by 31.12.2021 (extended due date) can still do so but they have to pay penalty fee for late ITR filing. From FY 21 or Assessment Year 2021-22 (AY22), the penalty amount for late filing beyond ITR filing deadline was reduced to Rs 5,000 from Rs 10,000 earlier. Due Date filing of belated ITR for AY 2021-22 is 31st March 2022. 

Sl. Particulars of the Notification(s) File No. / Circular No. Notification Link(s) 
1. Clarification regarding the Most-Favoured-Nation (MFN) clause in the Protocol to India’s DTAAs with certain countries- Reg. Circular No. 03/2022 Click Here 
2. Notification No. 11/2022 may be read as Notification No.12/2022. Notification No. 13/2022 Click Here 
3. Budget 2022-2023: Speech of Nirmala Sitharaman Budget 2022-23 Click Here 

2. GST officials bust fake tax credit racket 

Goods and Services Tax (GST) officials have bust a tax credit racket and arrested the proprietor of a metal trading firm, the finance ministry said in a statement on Wednesday. Officials of the Central GST Commissionerate in Navi Mumbai detected that the firm engaged in trading of scrap of ferrous, aluminium, copper and other metals allegedly availed of and passed on input tax credit fraudulently on the basis of bogus invoices of more than ₹60 crore. 

A team of officers held an enquiry into the firm and arrested the proprietor for alleged offences under CGST Act. He was produced before a magistrate on Wednesday and has been sent on judicial custody for 14 days, the statement said quoting Prabhat Kumar, commissioner of CGST and Central Excise at Navi Mumbai. 

The CGST Mumbai Zone is using data analytics tools to identify tax evaders. By using data analysis and network analysis, the officers of CGST Mumbai zone have booked more than 625 tax evasion cases, detected tax evasion worth ₹5,500 crore, recovered ₹630 crore and arrested about 50 persons in the last five months, the statement said. The CGST department is going to intensify its drive against the fraudsters. To read more Click Here 

  1. Finance Minister to discuss aviation fuel’s inclusion in GST regime with 

States 

Finance minister Nirmala Sitharaman recently said the Centre would take forward the industry proposal for bringing jet fuel under the goods and services tax (GST) for a discussion in the federal tax body, the GST Council. Mint takes a look at the issues involved. 

The government will take up the inclusion of Aviation Turbine Fuel (ATF) in the Goods and Services Tax (GST) system before the GST Council, Finance Minister Nirmala Sitharaman said on Sunday, noting that high global fuel prices are a cause for concern. Ms. Sitharaman was responding to a plea from Spicejet chairman Ajay Singh to lower the excise duty on fuel at least temporarily, as global crude oil prices are hovering around $90 per barrel, and pursue the inclusion of ATF in the GST regime. 

The decision to include ATF in GST, she pointed out, was not hers alone to make. “It is for the GST Council [to decide]. The next time we meet at the Council, I will put it on the table for them to discuss it,“ she said, adding that she will also discuss the aviation sector’s concerns with banks. 

“The revival of the economy is very clear… it may not be equal everywhere across the board, but yet it is observable. I would call upon Indian industry to ensure that we don’t miss the bus this time,” the Minister said at an interaction with the Federation of Indian Chambers of Commerce and Industry (FICCI), adding that the country had missed out when the “taper tantrum” after the global financial crisis was mishandled by the previous government. By contrast, the Minister said the Central bank and the government are on top of the situation this time. 

   To read more Click Here 

  1. Get Ready To Pay GST On Crypto Trading, Government Eyeing Proposal In GST Council Meet 

The government is chasing the crypto sector at full throttle. After Nirmala Sitharaman’s budget proposal to tax income from crypto trading at 30 per cent, now it is holding discussions to make trading taxable under the GST system, revenue secretary Tarun Bajaj has confirmed to Outlook Business in an exclusive interview 

The government is getting ready to bring crypto assets formally under the goods and services tax (GST) regime by levying an indirect tax on its trading. The Goods and Services Tax (GST) Council will soon take up the case of levying the indirect tax on crypto assets, revenue secretary Tarun Bajaj has told Outlook Business in an exclusive interview. “I have had a discussion with the Central Board of Indirect Taxes and Customs (CBIC) chairman. We are looking at [the possibility],” he said. 

Various government departments and the Reserve Bank of India (RBI) are rushing to formulate policies to regulate the crypto sector, whose details have started emerging after finance minister Nirmala Sitharaman made an announcement about taxing crypto assets in the Union budget. It appears that the government departments have been preparing the ground for taxing the sector for quite some time. To read more Click Here

 

  1. GoM to make recommendations to GST Council 

The second meeting of the Group of Ministers (GoM) on GST System Reforms headed by Maharashtra Deputy Chief Minister and Finance Minister Ajit Pawar has decided to make seven recommendations to the GST Council. This includes the use of biometric system to curb GST theft, physical inspection of office space of businesses, and making electricity connection number mandatory while registering for GSTN and certification of taxpayers’ bank accounts from National Payments Corporation of India (NPCI).

The measures recommended to the GST Council included forming a feedback mechanism to probe the misconduct of dubious businesses. It has also recommended physical verification of businesses at the time of registration. “The mechanism of GST system is being constantly upgraded to ensure better service ever since it was launched. While Information and Technology should be used to put an end to the tax theft, it should also be used to extend simple and non-glitchy service to the customers,” said Mr. Pawar. He added that the GoM discussed various measures to achieve this target. To read more Click Here 

Sl. No.  Particulars of the Notification(s) File No. / Circular No. Notification Link(s) 
1 Average monthly gross GST collection for third quarter of FY 2021-22 is Rs.1.30 lakh crore Press Release ID: 1796308 Click Here 
2 CGST Navi Mumbai Commissionerate busts fake ITC racket of Rs. 10.68 Crore, arrests proprietor of a steel firm Press Release ID: 1795089 Click Here 

CUSTOM / EXCISE UPDATES  

Notification No. & date of Issue Links Notification Particulars 
F.No. 401/103/2021- Cus-III  Click Here Notification of Authorised Officers under Section 25 read with Section 47 (5) of Food Safety Standards (FSS) Act, 2006 and Regulation 13 (1) of FSS (Import) Regulation, 2017 – reg. 
16/2022-Customs  Click Here Seeks to amend notification No. 48/2021-Customs and No. 49/2021 – Customs, both dated 13.10.2021, in order to rationalize the Agriculture Infrastructure and Development Cess [AIDC] on Crude Palm Oil and Lentils (Mosur), and extend the validity of the said notifications up to and inclusive of the 30th September, 2022. 
  • Income Tax 
  1. TDS not deductible on payment for time charter of ships to non-resident 

No Liability arises for Payment of Income Tax by the Non-Resident receiving payment for Time Charter: ITAT. 

  • Case Name : ITO Vs Terapanth Foods Limited (ITAT Rajkot) 
  • Appeal Number : ITA No. 330/RJT/2008 
  • Date of Judgement/Order : 04/02/2022 
  • Related Assessment Year : 2005-06 

It is pertinent to note that the CIT(A) has categorically mentioned that Section 195 of the Act would apply only if payment is made which is chargeable under Income Tax Act 1961. The Assessing Officer has not given any reason as to why the chargeability of tax under Section 172 of the Act does not cover time charter of ships for which payment is made to non-resident. The Assessing Officer totally ignored the NOCs issued by Department allowing the ship for sailing in Indian Port as the payment is for time charter. The provisions of Section 172 of the Act has not at all indicated that there is any liability to pay tax on such receipts by the non- resident recipients. In this case, the charter ship for which payment was made to non-resident. As per the charging Section 172, no liability arises for payment of tax by the non- resident receiving payment for time charter. 

The Rajkot Bench of Income Tax Appellate Tribunal (ITAT) has ruled that no liability arises for payment of Income Tax by the non- resident receiving payment for time charter. 

Subsequently, the case was selected for scrutiny assessment and statutory notice under Section 143(2) of the Act was issued. In response to the statutory notice, the Ld. A.R. of the assessee attended the proceeding and furnished the details. The Assessing Officer observed that the assessee has shown turnover of Rs.38,26,34,257/- and Net Profit of Rs.83,89,524/- as per Companies Act. The assessee got its books of accounts audited as required under Section 44AB of the Act. To read more: Click Here 

  1. The moral case for a higher share of direct taxes 

The commentary on the Union budget proposals for 2022-23 has been mostly around the theme that it is a bold and aggressive “gamble on growth”. A high tide raises all boats. If economic growth is above 8% in real terms, and above 14% in nominal terms, it would spell good news for job creation (from real expansion) and also tax collection (from nominal expansion which benefits from somewhat higher inflation). The latter would be good for some fiscal correction. As for inducing growth, the finance minister has done her bit, by ensuring that all the incremental growth in government expenditure next year is on capital items, which promote 

long-term growth. But the bulk of the growth-inducing investment spending beyond infrastructure will have to come from the private sector, including foreign investors. It is on this that the “gamble” aspect of this budget will be most watched. Are animal spirits going to be sufficiently unleashed, so that we have a multi-year private sector capex rally? The pre- conditions do exist. Banks have healthier balance sheets, and corporates are now sufficiently de-leveraged. Foreign inflows have been very strong, albeit focused on unicorn sectors. But business confidence for investment expansion will need a boost from consumer sentiment too. That, in turn, will depend on job creation and the employment outlook, which in turn depends on business expansion, completing this self-fulfilling loop. This could be either an optimism- or a pessimism-reinforcing loop. It is difficult to tell which way next year will turn out, although the weight of probability favours optimism. 

State coffers must ideally and increasingly be filled by taxing those who can best bear the tax burden. To read more: Click Here 

3. Supreme Court rules that ITAT has no power to recall its order even if submissions were filed on merits 

  • Case Details: CIT v. Reliance Telecom Ltd. 
  • Citation: [2021] 133 taxmann.com 41 (SC) 

The Supreme Court held that the order passed by the ITAT recalling its earlier order is beyond the scope and ambit of the powers under Section 254(2). In exercise of powers under Section 254(2), the ITAT may amend any order passed by it to rectify any mistake apparent from the record only. The Tribunal cannot revisit its earlier order and go into detail on merits. 

The powers under Section 254(2) are only to correct and/or rectify the mistake apparent from the record. Merely because the assessee might have filed detailed submissions, it does not confer jurisdiction upon the ITAT to pass the order de hors Section 254(2). 

In the instant case, a detailed order was already passed by the ITAT, which was held in favour of the revenue. Therefore, the said order could not have been recalled by ITAT in the exercise of powers under Section 254(2). If the assessee believed that the order passed by the ITAT was erroneous, either on facts or in law, the only remedy available was to prefer the appeal before the High Court. To read more: Click Here 

Important Case-laws 

  • GST Law: 
  1. Ease conditions for availing ITC, set up GST tribunal 

There should be a thrust on effecting amendments or providing clarifications on matters where there have been unwarranted and excessive litigation, including easing conditions for availing ITC and setting up GST tribunal. 

Since 2017, we have been evaluating and debating various GST developments and challenges and the narrative continues. Naturally, a mammoth tax reform of this size will continue to evolve and chart its course over the years. Considering the impact of the pandemic, the government issued various notifications relaxing compliance timelines and reducing interest rates and waiving late fees for belated tax payments and filings for specified periods. The government also eased annual return compliances by replacing the CA certification of GSTR 9C with self-certification, this has further intensified the need for tighter systems and processes at the taxpayer’s end, to ensure accurate and timely reporting. 

Two clarifications that need a specific mention are regarding ‘intermediary of services’ and ‘services rendered by an establishment of a company in India to another establishment located outside India’. Both the clarifications brought huge respite to the industry in the context of qualification as export of services and consequent availability of refund of unutilised ITC. 

The Apex Court may have denied the refund of ITC on input services in case of inverted duty structure, however, the observations on the anomaly in the prescribed formula may go a long way in taking up the matter before the GST council to frame a fair proposition. The Hon’ble Madras High Court in M/s. D. Y. Beathel Enterprises v. the State Tax Officer held that ITC availed by the buyer cannot be reversed for non– compliance by the seller. The first port of call for recovery should be the seller and not the buyer. But ITC Restrictions Continue to be challenging Input Tax Credit (ITC) restrictions continue to be a challenge. The most recent one is an assessee can avail ITC on the invoice or debit note only after the details of such invoice or debit note are furnished by the supplier in their statement of outward supplies and appearing in GSTR-2A/2B. Expectations in the Year Ahead. Reference: Click Here 

2. Building Owner Can Claim GST Exemption If Residential Premises Leased Out Are Used As Hostel: Karnataka High Court 

Case Title: Taghar Vasudeva Ambrish v. Appellate Authority For Advance Ruling Karnataka Case No: W.P. No.14891 OF 2020 

Citation: 2022 LiveLaw (Kar) 43 

Date of Order: 7th Day Of February 2022 

Appearance: Senior Advocate Arvind Datar, a/w advocate Nayana Tara B.G and Rahul Unnikrishnan for petitioner 

Advocate Hema Kumar, For R1 & R3 Special Counsel Jeevan J. Neeralgi, For R2 

The Karnataka High Court has held that an owner of a building can claim tax exemption under the Goods and Services Act (GST) if the residential premises leased out are used as a hostel to house students and working professionals. 

A division bench of Justice Alok Aradhe and Justice M I Arun while allowing the petition filed by one Taghar Vasudeva Ambrish said, 

“The service provided by the petitioner i.e., leasing out residential premises as hostel to students and working professionals is covered under Entry 13 of Notification No.9/2017 dated 28.09.2017 namely ‘Services by way of renting of residential dwelling for use as residence’ issued under the Act. The petitioner is held to be entitled to benefit of exemption notification.” 

This order came to be challenged before the appellate authority which upheld the order of the AAR. It also held that the property rented out by the petitioner is a hostel building which is more akin to sociable accommodation rather than what is commonly understood as residential accommodation. Therefore, the property rented out by the petitioner cannot be termed as residential dwelling. 

Court findings: The bench noted, “It is well settled rule of Statutory Interpretation of fiscal statues that the words used therein if not defined in the statute have to be interpreted in their Then it said, “Entry 13 contained in the exemption notification is unambiguous and is clear. It provides for exemption from payment of Integrated Goods and Service Tax in respect of ‘services by way of renting of residential dwelling by way of use as residence’. The burden is of course on the petitioner to show that his case comes within the parameters of the exemption notification. The expression ‘residential dwelling’ has not been defined.” 

The court then held, 

“Firstly, the residential dwelling is being rented, as the hostel to the students and working women fall within the purview of residential dwelling as the same is used by the students as well as the working women for the purposes of residence. Secondly, the residential dwelling is being used for the purposes of residence. Thus, the aforesaid questions are required to be answered in favour of the petitioner.” To read more: Click Here

  1. UAE’s Corporate Tax Is a Step Towards The Future & Global Business Credibility

The United Arab Emirates (UAE) for long had been trapped in the conventional image of an oil-lubricated economy. However, Dubai worked over the years very systematically and helped the nation unshackle to position itself as a modern state with massive investments in the areas of innovation and technology. 

The gulf nation since has been in the limelight, kicking in a series of reforms aligning itself with the global community – the latest one being the 9% federal corporate tax thus complying with the international tax standards template set by the Organization for Economic Cooperation and Development (OECD). 

A businessman with global connections and a keen observer of the Middle East region, Menon is not at all surprised by the UAE’s latest move. “The country was a signatory to the global pact last year which set a minimum tax rate of 15% for large corporates and multinationals. So, 

it is only in anticipated lines. The only surprise, if you call it a surprise, is the UAE fixing the 

tax at 9%,” he opines. 

The new corporate tax introduced by the UAE, experts have pointed out, would bring additional 

$ 13 billion revenue to the government exchequer. Even so, Menon argues, it would not affect the startups negatively since only businesses outside free zones making more than Dh.375,000 in profits come under the tax net. Read more at: (Read more at: Click Here) 

2. Does the UAE’s new corporate tax apply to freelancers? 

The UAE has recently announced introducing a federal corporate tax on business profits for the first time starting from 2023. 

While the new tax will apply to all UAE businesses and commercial activities, the UAE’s Ministry of Finance confirmed that individuals will not be subject to tax on their incomes from employment, real estate, equity investments or other personal income unrelated to a UAE trade or business. 

However, with the corporate tax applied to individuals having – or being required to obtain- a business license or permit to carry out the relevant commercial, industrial and/or professional activity in the UAE, how will this impact freelancers? 

Mohammad Al Dahbashi, Managing Partner of ADG Legal, said holders of the new freelance permit, issued under the new labour law for self-sponsored expats, should not be subject to corporate tax on their individual earnings. 

If freelancers with a business license are sponsored in a free zone and carrying out any activities to other companies, the sponsor will be subject to corporate tax. Read more at: Click Here) 

  Knowledge Bucket for NRI’s

  1. As per the I-T Act, tenants must deduct TDS @ 31.2% on rent paid to an NRI and deposit the tax with the government. 
  1. There is no minimum threshold for deduction of TDS on rent paid to NRIs. The tax must be deducted from the rent payable at the rate of 31.2%. 
  1. Note that if the tenant fails to deduct tax from the rent paid to an NRI landlord, there may be a penalty equal to the tax not deducted as per Sec 271C of I-T Act. To comply with income tax act requirements , tenants must get a TAN via NSDL website. 
  1. It is not possible for the landlord to deduct TDS under the given situation, the onus of this compliance rests on the tenant. However, it is your responsibility to ensure that your income which is taxable in India has been duly reported in your income tax return to be filed in India. 
  1. Having a student NRI account can help students and their families lead a stress-free life with regard to finances. Students can seek help from bank executives at any point, if they encounter any issue. They can put all their energies behind going after their life goals and let the bank handle all their financial matters. 

DO YOU KNOW ?

  1. Finance Minister Nirmala Sitharaman said the government will provide a one-time window to correct omissions in income tax returns (ITRs) filed. 
  1. The Finance Minister announced a new tax rule for taxpayers where a taxpayer can file an updated return on payment of taxes within two years from the end of the relevant assessment year. 
  1. In what can be considered a historic move to give a leg-up to both the start-up community, along with manufacturing companies, the surcharge on LTCG (long-term capital gains) has been capped at 15%. This is especially beneficial for long-term capital assets that previously bore the brunt of graded surcharge rates that went as high as 37%. 
  1. Any income from the transfer of any virtual digital asset shall be taxed at a flat rate of 30%.Further, no deduction will be available with respect to any expenditure or allowance incurred while computing such income except for the cost of acquisition (COA). 
  1. The Central government is all set to use blockchain technology to curb fake billing and GST claims. In the first phase, the technology will be used for warehousing and monitoring of goods movement. With the technology, the government is aiming to catch fake claims immediately, especially in cases that file a fake supply of goods on paper.

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.)