GSTPAM News Bulletin February 2022

Litigation Seminar Series on GST

GSTPAM Seminar and Workshop Committee is pleased to announce its Litigation Seminar Series on GST.

The Schedule is as under:

Session 1: 26/2/22 Saturday 10am to 12pm – GST Audit by Department: CA Vishal Poddar
Session 2: 26/2/22 Saturday 4pm to 6pm – SCN & Adjudication: CA Atul Gupta
Session 3: 5/3/22 Saturday 10am to 12pm – Inspection, Survey, Search, Seizure under GST: CA Jatin Christopher;
Session 4: 5/3/22 Saturday 4pm to 6pm – Summons, Statement, Arrest, Prosecution: Adv Nishant Shah;
Session 5: 19/3/22 Saturday 10am to 12pm – Appeals (incl delay condonation, Pre-deposit, Stay, drafting & submissions, PH, FH, etc) : Adv Bharat Raichandani;

Registration Fees INR 1180/- (Fees 1000+ GST 180) for members and INR 1416/- (Fees 1200 + GST) Link for Registration and payment: https://www.gstpam.org/event/litigation-seminar-series-on-gst/

Aalok Mehta

GSTPAM
President

Deepak Thakkar
Chairman

Umang Talati, Jatin Chheda, Sejal Shah
Jt. Convenors

Email the payment details on [email protected] along with Name, Whatsapp Number and email id for registration.

CIRCULAR FOR RENEWAL OF MEMBERSHIP/SUBSCRIPTION CHARGES FOR THE F.Y. 2021-22

Dear Members,

RENEWAL OF MEMBERSHIP FOR F.Y. 2021-22

The Membership Fees for the year 2021-22 are due for renewal on 01.04.2021. We appreciate your Continuing support and participation in the activities of our Association.

The timely Renewal of Membership will enable the members to continuously receive the updates on various activities of GSTPAM along with the GST Review, News Bulletin, Circulars, Messages, Webinars and online access to the website
www.gstpam.org. The Life Members only need to renew the subscription charges for the GST Review. The members can also avail the benefit of discount by paying advance for subsequent two years membership fees /subscription charges.

The Membership Renewal Fees received after 30th April, 2021 will be subject to approval of the Managing Committee. If the Renewal fees for a particular year are not paid, then the member is liable to pay Admission Fees again for Renewal in the subsequent year.

Delayed Renewal Members will be provided Pre Renewal GST Review subject to availability upon payment of such additional courier charges.

The details of Membership/Subscription Fees are given below for your ready reference:

Type of Membership	Membership Fees incl. GST	Admission Fees Incl. GST	Subscription Charges for GST Review	Total
New Membership Application
Donor Member	24,780.00	–	600.00	25,380.00
Patron Member	17,700.00	–	600.00	18,300.00
Life Member	11,800.00	944.00	600.00	13,344.00
Life Member (Conversion from Ordinary)	11,800.00	590.00	600.00	12,990.00
Ordinary Local Member	1,770.00	590.00	–	2,360.00
Ordinary Outstation Member	1,475.00	590.00	–	2,065.00
New Membership Application (Firm/LLP)
Ordinary Local Member	1,770.00	944.00	0	2,714.00
Ordinary Outstation Member	1,475.00	944.00	0	2,419.00
Patron Member	17,700.00	0	600.00	18,300.00
Donor Member	24,780.00	0	600.00	25,380.00
Advance Membership/ Subscription charges for subsequent two years 2022-23 & 2023-24 (Non-Refundable)
Ordinary Local Member	3,186.00	–	–	3,186.00
Ordinary Outstation Member	2,655.00	–	–	2,655.00
Life Member (Individual/Firm/LLP)	0	–	1,200.00	1,200.00
Patron Member	0	–	1,200.00	1,200.00
Donor Member	0	–	1,200.00	1,200.00
Subscription for GST Review for F.Y. 2021-22 by Non-Members
Subscription fees for GST	–	–	1,000.00	1,000.00
Advance Membership / Subscription charges for subsequent two years 2022-23 & 2023-24 (Non-Refundable)
Subscription Fees -GST	0	–	2,000.00	2,000.00

MEMBERSHIP FEES RENEWAL FORM

Link for CIRCULAR FOR RENEWAL OF MEMBERSHIP/SUBSCRIPTION CHARGES

https://www.stpam.org/sites/default/files/4.gstpam_membership_form_0.pdf

SUBSCRIPTION OF GST REVIEW FORM

Link for GST Review

https://www.stpam.org/sites/default/files/1614317239625_1614317015557_subscription_renewal_form_.pdf

Modes of Payment:-

Cheque	A/c Payee Cheque drawn in favor of “The Goods & Services Tax Practitioners’ Association of Maharashtra” payable at Mumbai.
NEFT Details	The Goods & Services Tax Practitioners’ Association of Maharashtra Bank of India, Mazgaon Branch Current Account No. 007020100001816, IFSC Code – BKID0000070. Online generated transaction Acknowledgment should be sent by email on [email protected] along with membership and payment details Members are requested to send their physical form to the association for Approval, Issuance and Office record.
Cash	Renewal form along with requisite amount will be accepted between 10.30 a.m. and 5.30 p.m. on all working days except Saturday at our Office at Mazgaon Library – Mazgoan: 1st Floor, 104, GST Bhavan, Mazgaon, Mumbai – 400 010 Or Bandra Library – GST Bhavan, Ground Floor, A Wing, Bandra Kurla Complex, Bandra (East), Mumbai – 400 051. Or Mazgaon Tower-8 & 9, Mazgaon Tower, 21, Mhatar Pakhadi Road, Mazgaon, Mumbai – 400 010.
Identity (New Members)	New Members should provide the following as Identity Proof : PAN, Aadhar Card, Constitution Document. Address Proof(any one) : Electricity Bill / Passport/ Aadhar Card / Driving License/ Voter id/ Ration Card along with Membership Form
Identity Card (For Renewals)	Ordinary Local/Outstation Members should provide Two Photographs along with the Renewal Form for issue of I-cards.
Online Payment Link	Members can make online payment on our website www.gstpam.org. Members are requested to download Members Renewal form from website. Update the latest details in the form, scan it and mail at email [email protected] Payment Link : https://www.stpam.org/payonline/845

We value your continuation of the membership and look forward to your renewal to this effect.

Mahesh Madkholkar
Parth Badheka
Hon. Jt. Secretary

Dated:- 04.08.2021

ORDER FORM FOR GSTPAM REFERENCER 2021-22

(Members are requested to take out the photocopy of the Order Form for booking)

For Office Use Only

Date	Receipt No.	Coupon No.	Amount

To
The Convenor,
GSTPAM Referencer Committee
The Goods & Services Tax Practitioners’ Association of Maharashtra
Room No. 8 & 9, Mazgaon Tower, Mhatar Pakhadi Road,
Mazgaon, Mumbai Dear Sir,

Please book my/our order of GSTPAM Referencer for the year 2021-22 as given below.

Sr.	Particulars	Price per copy if booked prior to 31st May 2021	Price per copy if booked after 31st May 2021	Qty	Total Rs.
1	GSTPAM Referencer 2021-22 Part I & II (GST, VAT & Allied Law Referencer)	650	700
2	Courier Charges (For Outstation members only) (per set)	100	100
	Grand Total

Note :

Referencer will be published in Part I & II (for GST, VAT & Allied Laws Referencer).
The members, who subscribe for the Referencer, can also view the same online. Along with the referencer a complimentary E-compilation of GST Act, Notifications, Circulars and Press Releases will also be provided to the subscribers on our website
www.gstpam.org.

The viewing will be password protected.
Applicants requiring more than 5 copies of the Referencer are required to give a request on their letter head along with the order form. Tax Practitioner’s Associations can place order in bulk quantity by making request on their letterhead signed by the Association’s President and Secretary.
Applicants will be issued receipt and delivery card at time of placing of their order. Applicants are requested to bring receipt and delivery card together at the time of taking the delivery of the Referencer. No delivery of the Referencer shall be given, unless the receipt for payment along with the delivery cards is submitted at the counter. If the receipt for payment or the delivery cards is lost, than no delivery of the Referencer shall be given.

Link For Referencer order form.

https://gstpam.org/sites/default/files/referencer_order_and_circular_form_21-22_0.pdf

GST, MVAT & ALLIED LAW UPDATES

Compiled by
Adv. Pravin Shinde

Notification under Maharashtra Goods and Services Tax Act, 2017 (MGST)
Notification No.	Date of Issue	Subject
Notification No. 40/2021-State Tax, EO No. 8, Dt. 11.01.2022	11.01.2022	MGST (Tenth Amendment) Rules, 2021
21-2021 State tax Rate	11.01.2022	Seeks to supersede Notification 14/2021-ST (‘R) dated 18.11.2021 and amend Notification No 1/2017 State Tax Rate dated 28.06.2017
22-2021 State Tax Rate	11.01.2022	Seeks to supersede Notification 15/2021-ST (‘R) dated 18.11.2021 and amend Notification No 11/2017 State Tax Rate dated 28.06.2017

RECENT ADVANCE RULINGS UNDER GST

Brief Analysis by CA Aditya Surte

Whether a co-operative housing society can claim the ITC of GST charged by the contractor on major repairs to the building?

Applicant is a co-operative housing society registered under the Maharashtra Co-operative Housing Societies Act, 1960, formed by its members who are shareholders of the society, with the object of managing, maintaining and administering the property of the society for which, it raises funds by collecting contributions/charges from its members which include property taxes, contribution to repairs and maintenance funds, contribution to sinking fund, etc. Applicant society appointed a contractor for carrying out major repairs, renovations and rehabilitation works for the society. The said contractor is charging service charges along with GST for carrying out the works contract service.

Applicant contended that it shall be eligible to claim the ITC of GST charged by the contractor in view of the provisions of sec. 16(1) of the CGST Act. Applicant further contended that the denial of ITC can be only if there is blockage of credit under sec. 17(5) of the CGST Act. From a reading of the provisions of sec. 17(5)(c) and (d), it is clear that no ITC shall be available of works contract service unless it is used for providing output works contract service. Further, the restriction does not apply to plant and machinery. With this background the Applicant made the following contentions:

That the society is further providing the works contract service of repairs, renovations and rehabilitation received from the contractor to its members. Therefore, the society shall be eligible to claim the ITC on the input works contract service as the same is used for providing output works contract service.
That as far as the members are concerned, the society is the main contractor and the contractor is a sub-contractor. The society has stepped into the shoes of the main contractor for providing the works contract services to its members.
In the alternative and without prejudice to the above, the Applicant contended that the said repairs, renovations and rehabilitation is for plant and machinery of the society and, therefore, ITC shall not be blocked.

The Authority observed that a housing society is a collective body of persons, who stay in a residential society and the collective body supplies certain services to its members, like collecting statutory dues to be remitted to statutory authorities or maintenance of the building, etc. As per sec. 2(17)(e) of the CGST Act, provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members is deemed to be a business. Thus, a housing society may be seen to be providing club and association services to its members but does not provide works contract service to its members.

The Authority, therefore, held that the Applicant (society) is not eligible for ITC in the subject case where the contractor has provided works contract service for repairs, renovations and rehabilitation works.

(Maharashtra AAR Order No. GST-ARA-19/2021-22/B-94 dated 10/11/2021 in the case of Mahavir Nagar Shiv Srushti Co-operative Housing Society Ltd.)

Whether provision of facilitation services by the Head Office (HO) to its branches by way of availment of common input services by the HO on behalf of its branches is a supply liable to GST?

Whether the HO is eligible to claim the credit of the taxes paid on availment of the common input services on behalf of its branches?

Whether the HO can distribute such credit as a regular supplier instead of taking registration as an Input Service Distributor? (Cross charge v/s ISD)

Whether the allocation of the cost of employees’ salary by the HO / Corporate Office to the branch offices would attract levy of GST?

The Appellant is engaged in manufacture and sale of a variety of diesel engines, parts thereof, and related services. It has presence across various States in India through its manufacturing/ service/sales units. These units, being located in different States, are treated as ‘distinct persons’ and are duly registered separately under the GST Act of each State. Certain common input services are availed by the Head Office (HO) located in Pune, Maharashtra. The units located in different States may also avail common services. Accordingly, the HO or the respective units avail ITC of the GST paid on such common input supplies subject to provisions of section 17 of the CGST Act. The costs incurred by the HO/units for procurement of such common input services, is booked by such HO/unit in its own books of account. Such cost is then allocated and recovered proportionately from each of the recipient units to determine the office/plant-wise profitability.

The Appellant had preferred an application to seek a ruling of the Maharashtra Authority for Advance Rulings (MAAR) on the issue relating to levy of GST on facilitation of common input services, necessity of registering as an Input Service Distributor (ISD) and determination of assessable value. The MAAR ruled that the availment of ITC on common input services on behalf of other units registered as distinct persons qualifies as supply and attracts GST. MAAR further ruled that the assessable value shall be arrived in terms of rule 30 of the CGST Rules, i.e., 110% of the cost of provision of such services and that the company was required to obtain registration as ISD.

Being aggrieved by a part of the order of the MAAR, the Appellant preferred an appeal with the Maharashtra Appellate Authority for Advance Rulings (MAAAR) on the ground that the order of the MAAR failed to clarify the inapplicability of GST relating to functions of an employee from one distinct unit for another distinct unit, which cannot be treated as a supply in as much as services of an employee are excluded from the definition of supply under Schedule III to the CGST Act. Further, the ruling of the MAAR relating to assessable value and requirement for registration as ISD was also challenged in appeal.

Appellant contended as follows:

The facility of registering as ISD is an option provided by the statute and there is no compulsion for the taxable person to register itself as ISD. HO may continue to avail services on behalf of other units and raise invoices for facilitation services on the said units by levying GST and discharge the said GST liability by utilising the ITC availed by the HO.
The determination of assessable value based on 110% of the cost of provision of service is unsustainable in law, since second proviso to rule 28 provides that where recipient is eligible for full ITC, the value declared in the invoice shall be deemed to be the open market value.
The cost of employee’s salary as may be recovered by one distinct unit from another distinct unit may be excluded from the levy of GST. Legal relationship of employment is between employee and the company as a whole encompassing all its establishments. Therefore, functions performed by the employee from one distinct unit for another distinct unit continue to be covered by the employer-employee relationship, which is explicitly excluded from the levy of GST vide entry No. 1 of Schedule III to the CGST Act.

The MAAAR discussed the issues serially as under:

Issue 1: Whether the Appellant’s activities of providing facilitation services to their branch offices/units by way of procurement of common input services from third party vendors on behalf of their branch offices, wherein the tax invoices for the common input services were raised in the name of the HO and expenses for the same were incurred by the HO itself, and subsequently the entire expenses incurred by it including the cost of common input services and other administrative expenses like employee salary cost, etc., were collected, will be considered as supply and whether the same would attract GST?

The MAAAR, by referring to the scope of supply u/s 7(1) of the CGST Act, definition of services u/s 2(102) of the CGST Act and Entry No. 2 of Schedule I to the CGST Act observed that in view of the wide scope and coverage of the term “services”, the impugned activities of providing facilitation services to their branch offices/units by availment of common input services by the HO on behalf of its branches would be covered under services and the scope of supply u/s 7(1) (a) of the CGST Act, as the said services are provided by the HO to its branch offices/units for a consideration in the course of its business.

However, the cost of the said common input services availed at the behest of the branch offices/ units by the HO will not attract the levy of GST as the said costs have been incurred by the HO in the capacity of a pure agent of the branch offices/units, and as such, the said cost incurred by the HO shall be excluded from the value of supply of facilitation services.

Issue 2: Whether the Appellant is eligible to utilise the credit of tax paid for the common input services received on behalf of its branch offices/units?

Examining the provisions of sec. 16 of the CGST Act, the MAAAR observed that common input services received by the HO are being used or consumed by the branch offices/units in the course or furtherance of their business, and not by the HO, as the HO receives these services on behalf of the branches. Therefore, HO is not entitled to avail and utilise the credit of tax paid on the common input services received by it on behalf of the branch offices/units.

Issue 3: Whether the Appellant has to be compulsorily registered as an ISD in accordance with sec. 24(viii) of the CGST Act under the circumstances stated above?

The MAAAR observed that any ISD, which intends to distribute the credit of the tax paid on the common input services received by it on behalf of its branches/units, must mandatorily register itself as an ISD. In the instant case, there is no doubt regarding the Appellant’s HO as being in the nature of an ISD as per the definition provided u/s 2(61) of the CGST Act. Regarding the contention of the Appellant that since it does not intend to issue any prescribed document for the distribution of ITC, it does not require to take registration as ISD, as the HO themselves intend to avail the ITC of the tax paid on common input services and utilise the same for setting off their liability as a normal supplier which would arise as a result of the impugned facilitation services provided by them, the MAAAR opined that since the HO is not entitled to avail or utilise the ITC of the tax paid on common input services as stated above, their contention is not tenable. MAAAR further stated that ISD is the only option available to the Appellant to pass on the credit of the tax paid by the HO on the availment of the common input services received from third parties vendors on behalf of their branch offices/units.

Issue 4: What will be the valuation of services provided by the HO to its branches, and whether the allocation of the cost of employees’ salary by the HO / Corporate Office to the branch offices would attract levy of GST?

Regarding the valuation aspect, the MAAAR agreed with the Appellant’s contention that since the recipient branch offices/units are entitled for taking full ITC of the GST paid on the facilitation services provided by the HO, the value declared in the invoice shall be deemed to be the open market value of the services under question.

Regarding the issue of levy of GST on allocation of the cost of employees’ salary by the HO to branch offices, the MAAAR observed that the employees of the HO are working at the behest of the HO and not at the behest of the branches. Since the HO is using all its human resources to facilitate the operational requirements of the branches by way of procuring common input services on behalf of the branches, thereby, providing the impugned facilitation services, therefore, allocation and recovery of any amount including its employees’ salary cost from the branch offices will be subject to GST. The Appellant’s contention regarding inapplicability of GST on the allocation and recovery of salary cost of the HO’s employees owing to entry 1 of Schedule III to the CGST Act is misplaced and erroneous, in as much as the impugned transaction of facilitation services is not effected between the employees and the employer, but between the HO and branch offices, which are distinct units in terms of sec. 25(4) of the CGST Act, and the same is clearly taxable in terms of sec. 7 of the CGST Act.

(Maharashtra AAAR Order No. MAH/AAAR/AM-RM/01/2021-22dated 21/12/2021 in the case of Cummins India Ltd.)

INCOME TAX UPDATES

By CA. Ajay Talreja

The new Annual Information System (AIS)

The Income Tax Department had rolled out a new Annual Information System (AIS), a comprehensive statement containing details of all the financial transactions undertaken during a financial year and are at present available with the Income Tax Department, even broader than Form 26AS. At present, Form 26AS is detailed by the Tax Department, which is a consolidated annual tax statement that includes information on tax deducted/collected at source, advance tax, and self-assessment that is available on the Income-Tax website against a taxpayer’s Permanent Account Number (PAN). The revised Annual Information Statement (AIS) includes additional categories of information of interest, dividend, securities transactions, mutual fund transactions, and remittances from abroad, along with information on many other transactions that are at present available with the Income Tax Department. Salient Features of AIS: Includes new information- Interest, dividend, securities transactions, mutual fund transactions, foreign remittance information etc. Summary of information and generation of a simplified Taxpayer Information Summary (TIS) for ease of filing return (pre-filling will be enabled in a phased manner). Taxpayer will be able to submit online feedback on the information displayed in AIS and also download information in PDF, JSON, CSV file formats. AIS Utility will enable taxpayer to view AIS and upload feedback in offline manner. Ease of reporting errors in AIS through feedback mechanism. Accessing AIS on Portal: Step 1: Login to the Income Tax e-filing Website by using the URL https://www.incometax.gov.in/. Step 2: Click on “Annual Information Statement (AIS)” under “Services” tab from the e-filing portal after successful login on e-filing portal. Step 3: Navigate to AIS Homepage. View Taxpayer Information summary (TIS) and Annual Information Statement (AIS) Step 4: Select the relevant FY and click on AIS tile to view the Annual Information Statement. Report this ad Under the AIS option on the Income tax portal, there are two tabs – Annual Information statement (AIS) and Taxpayer Information Summary (TIS).

Annual Information System (AIS) Taxpayer Information Summary (TIS) Provides comprehensive view of information: a. TDS/TCS b. Bank Interest, Dividend c. Mutual Fund Transaction d. Foreign Remittances Provides aggregated view of TDS, TCS, Mutual Fund Transaction AIS provides more information than Form 26AS. However, Form 26AS will continue to be available until the new AIS is validated and completely operational. It will help the taxpayer in filing tax returns.

In case there is variation between the TDS/TCS information relating to tax payment as shown in the AIS on Compliance Portal and Form 26AS on TRACES, then the taxpayer can rely on the information present on the TRACES portal for filing of ITR and other tax compliance purposes If the taxpayer feels that the information is incorrect, relates to another person/year, is a duplicate etc., a facility has been provided to submit feedback online. Feedback can also be furnished by submitting multiple information in bulk. An AIS Utility has also been provided for taxpayers to view AIS and upload feedback in offline manner. The reported value and value after feedback will be shown separately in the AIS. In case the information is modified/denied, the information source may be contacted for confirmation.

RECENT CASE LAWS :

Sunil Mathur Vs ITO (ITAT Jaipur)

The issue under consideration relates to source of cash deposits during the year in the two bank accounts maintained by the assessee amounting to Rs 13.5 lacs. In this regard, firstly, it is noted that during the year under consideration, the assessee has sold a property and consideration thereof amounting to Rs 43.50 lacs has been received through banking channels and there is no allegation by the AO in terms of any on-money received by the assessee in cash over and above the declared sale consideration. It has been explained by the assessee that the source of cash deposits during the year is out of earlier two years withdrawals and cash in hand at the beginning of the year. In support of his contention, the assessee has submitted cash book and cash flow statement for previous two financial years depicting the individual transactions of receipts and payments/withdrawals. We have gone through these cash flow statements and find that the assessee has sufficiently explained the source of deposits in form of salary and other retirement benefits which have been duly declared and withdrawals towards household expenses which are partly funded by him and partly by his wife and therefore, availability of cash in hand at the beginning of the year has been sufficiently explained. In the result, considering the entirety of facts and circumstances of the present case, we hereby direct the Assessing officer to delete the addition so made in the hands of the assessee towards unexplained cash deposits and ground no. 2 of assessee’s appeal is allowed.

Dashratbhai Gopalbhai Patel vs ITO (ITAT Ahmedabad)

We find that the assessee has successfully demonstrated that the land parcels situated as Adalaj does not fall within the meaning of expression ‘Municipality’ or ‘Municipal Corporation’ and therefore falls in exception provided in sub-clause (a) to Section 2(14)(iii) of the Act. As stated on behalf of assessee, the development authority i.e. GUDA is a creation of statute. It cannot be equated with Municipal Corporation in the light of the ratio of decisions of Hon’ble Kerala High Court in the case of Murali Ldge (supra) and T. Urmila (supra) as rightly pointed out on behalf of the assessee. The provisions regarding aerial measurement of distance is applicable prospectively after the amendment by way of Finance Act, 2013. We also take affirmative note of the significant plea on behalf of the assessee that distance of 8 kms. from the Municipality has to be seen from the date of notification dated 06.11.1994 in the light of judicial pronouncements quoted above. Hence, on objective analysis of the facts and law enunciated by the judicial pronouncements, we find that impugned land falls outside the ambit of definition of capital asset provided in Section 2(14) of the Act. Consequently, the capital gains arising on sale of agricultural land which is not a capital asset cannot be brought to charge under s.45 of the Act.

TDS liability in case of ESOP

ESOPs have been a significant component of the compensation for the employees of start-ups, as it allows the founders and start-ups to employ highly talented employees at a relatively low salary amount with balance being made up via ESOPs. Currently ESOPs are taxed as perquisites under section 17(2) of the Act read with Rule 3(8)(iii) of the Rules. The taxation of ESOPs is split into two components: i. Tax on perquisite as income from salary at the time of exercise. ii. Tax on income from capital gain at the time of sale. The tax on perquisite is required to be paid at the time of exercising of option which may lead to cash flow problem as this benefit of ESOP is in kind. Report this ad In order to ease the burden on the employees of the eligible start-ups (herein referred to as company), section 192 of the Income-tax Act has been amended, with insertion of new subsection i.e 192(1C)

When to deduct tax? Eligible start-up is require to deduct tax on issue of ESOP, within 14 days from:

(i) after the expiry of forty eight months from the end of the relevant assessment year; or (ii) from the date of the sale of such specified security or sweat equity share by the employee; or (iii) from the date of which the assessee ceases to be the employee of the company; whichever is the earlier Rate of TDS Rate of TDS shall be rate in force for financial year in which such shares are allotted to employee.

INCOME TAX CIRCULARS & NOTIFICATIONS

Compiled by
CA. Aloke R. Singh

Income Tax Circulars
Circular No	Date of Issue	Subject
01/2022	11/01/2022	Extension of timelines for filing of Income-tax returns and various reports of audit for the Assessment Year 2021-22
02/2022	19/01/2022	Guidelines under clause (10D) section 10 of the Income-tax Act, 1961
03/2022	03/02/2022	Clarification regarding the Most-Favoured-Nation (MFN) clause in the Protocol to India’s DTAAs with certain countries

Income Tax Notifications
Notification No.	Date of Issue	Subject
01/2022	03.01.2022	For the purposes of clause 10(46) of the Income Tax Act, 1961, the Central Government hereby notifies ‘Regional Air Connectivity Fund Trust (PAN AADTR1130P), a trust constituted by the Central Government, in respect of the income arising to that trust, as specified in this notification.
02/2022	07.01.2022	Corrigendum to Notification no. 139/2021 dt. 28.12.2021 regarding Faceless Appeals Scheme, 2021.
03/2022	11.01.2022	For the purposes of clause 10(46) of the Income Tax Act, 1961, the Central Government hereby notifies ‘International Financial Services Centres Authority’, Gandhinagar, Gujarat (PAN AAAGI0596L), an authority constituted under sub-sections (1) and (3) of section 4 of the International Financial Services Centres Authority, Act, 2019, in respect of the income arising to that Authority, as specified in this notification.
04/2022	13.01.2022	Corrigendum to Notification no. 142/2021 dt. 31.12.2021
05/2022	13.01.2022	For the purposes of clause 10(46) of the Income Tax Act, 1961, the Central Government hereby notifies ‘Assam Electricity Regulatory Commission’ (PAN:AAAJA1243K), constituted by the Government of Assam, in respect of the income arising to that Commission, as specified in this notification.
06/2022	14.01.2022	Income-tax (1st Amendment) Rules, 2022, notified. Rule 21AJA inserted after the Rule 21AJ w.e.f. 01.04.2022.
07/2022	14.01.2022	“E-Advance Rulings Scheme, 2022” notified.
08/2022	18.01.2022	Income-tax (2nd Amendment) Rules, 2022, notified. Rule 8AD inserted after the Rule 8AC.
09/2022	18.01.2022	Securities Transaction Tax (1st Amendment) Rules, 2022, notified.

Income Tax Notifications
Notification No.	Date of Issue	Subject
10/2022	21.01.2022	For the purposes of clause 10(46) of the Income Tax Act, 1961, the Central Government hereby notifies National Skill Development Corporation, a body constituted by Central Government, in respect of the income arising to that Corporation, as specified in this notification.
11/2022	25.01.2022	Amendment to Notification no. 89/2020 dated 02.11.2020
11/2022	27.01.2022	For the purposes of clause 10(46) of the Income Tax Act, 1961, the Central Government hereby notifies ‘West Bengal Electricity Regulatory Commission’, Kolkata (PAN: AAAGW0011J), a Commission constituted by the State Government of West Bengal, in respect of the income arising to that Commission, as specified in this notification.

DGFT & CUSTOMS UPDATE

By CA. Ashit Shah

Exemptions from Basic Custom Duty and IGST

Goods i.e. (i) Kelme Referee kits, ball boy uniform and match-day bibs;(ii) Competitions goods shipped using Aramex;(iii) Molten official match balls;(iv)Kelme AFC delegations / volunteers attire;(v) Country Flags;(vi) Sleeves Badges; and (vii) WAC mini Trophy, when imported into India by All India Football Federation for the purpose of organising the AFC Women’s Asian Cup India, 2022, from the whole of the duty of customs and IGST leviable under Section 7 (3) of Customs Tariff Act, subject to the conditions specified in the notification.

[N. No. 01/2022 – Customs, dated 18-01-2022]
Revoking Anti-dumping Duty on Tetrafluoroethane

Anti-dumping Duty (ADD) was imposed on import of “1,1,1,2-Tetrafluoroethane or R-134a”, originating in or exported from China PR, and imported into India vide N. No. 30/2016 – Customs (ADD) dated 11-07-2016. ADD is now revoked and hence this notification is rescinds.

[N. No. 1/2022 – Customs (ADD), dated 06-01-2022]
Revoking Anti-dumping Duty on Colour Coated flat product of alloy

Anti-dumping Duty (ADD) was levied on “Colour coated / pre-painted flat products of alloy or non-alloy steel originating in or exported from China PR and European Union vide N. No. 49/2017 – Customs (ADD) dated 17-10-2017. ADD is now revoked and hence this notification is rescinds.

[N. No. 2/2022 – Customs (ADD), dated 13-01-2022]
Revoking Anti-dumping Duty on PVC Flex Films

Anti-dumping Duty (ADD) was levied on “PVC Flex Films”, falling under Chapter 39 of the First Schedule to the said Act, originating in or exported from China PR and imported into Indiavide No. 42/2016 – Customs, dated 24-01-2022. ADD is now revoked and hence this notification
is rescinds.

[N. No. 3/2022 – Customs (ADD), dated 24-01-2022]
Anti-dumping Duty on ‘Axles for Trailers’:

Anti-dumping Duty (ADD) is levied on “‘Axles for Trailers’, falling under tariff items8716 90 10 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) including Axle for Trailers in Semi Knocked Down / Completely Knocked Down conditions i.e. in an un-assembled, un- finished or incomplete form, originating in or exported from the People’s of Republic of China and imported into India shall be effective for a period of 5 years.

[N. No. 4/2022 – Customs (ADD), dated 24-01-2022]
Highlights of the important changes in Customs vide Union Budget 2022:
- A comprehensive review of Customs duty exemptions has been undertaken through a process involving crowd sourcing and inputs from various ministries. In this context, about 350 exemptions are being withdrawn.
- Further, after a detailed review of customs duty exemptions on capital goods and project imports, more than 40 exemptions relating thereto are proposed to be gradually phased out.
- Certain exemptions are being introduced for duty free import of specified goods by bonafide exporter of items like handicraft, apparel, leather goods. The value added export goods shall be exported in six months and exporter shall follow IGCR Rules.
- Custom tariff structure is being simplified by moving the unconditional concessional rates from existing exemption notifications to the First Schedule of Customs Tariff Act. In this process, certain tariff lines and rates have also been rationalised. As a result, applicable BCD rates on sectors such as textiles, chemicals, metals etc. will operate almost entirely through tariff.
- Sunset date is being stipulated as per section 25(4A) of the Customs Act, 1962 in respect of conditional exemption entries in respective notifications. This section, as brought in last year, prescribes validity period of conditional exemptions. Certain exemptions, like international commitments such as FTA, ITA, concessions emanating from FTP like Advance Authorisation, and concessions under Phased Manufacturing Programmes (PMP) have been excluded from the purview of automatic expiry.
- Graded import duty rate structure is being notified to operationalise Phased Manufacturing Plan for wearables, hearables and smart meters.
- Significant legislative changes in the Customs Act are being made, particularly as regards to specifying class of officers and assignment of function and jurisdiction of the proper officers. Certain actions by such officers of Customs, taken in past, are being validated through the Finance Bill, 2022.
- Revised IGCR Rules is being notified to make the entire process digital and transparent.

CHARITABLE TRUSTS UPDATES

By Adv. Hemant Gandhi & CA Premal Gandhi

Amendments related to Charitable Trust and Institutions covered under Section 10(23C) and Section 12AA or 12AB

Sr. No.	Description of provision	Existing provisions		Amendments (Effective from 1st April, 2023)	Amended provisions
Sr. No.	Description of provision	U/s 10(23C) (First regime)	U/s 12AA or 12AB (Second regime)	Amendments (Effective from 1st April, 2023)	U/s 10(23C) (First regime)	U/s 12AA or 12AB (Second regime)
1	Maintenance of Books of Accounts by the trusts or institutions	✖	✔	Applicable to trusts or institutions having taxable income above the basic exemption limit	✔	✔
2	Accumul ati on or Setting Apart for 5 Years in case the Trust or Institution is not able to spend – Taxation	✖	✔	Amount accumulated or set apart which is not utilised for the purpose for which it is accumulated or set apart shall be deemed to be the income of such person of the previous year being the last previous year of the period i.e it shall be taxed in the 5th year instead of the 6th year.	✔	✔
				Subject to the following conditions: –
				a) Amount of income accumulated or set apart is applied for the purposes other than wholly and exclusively to the objects for which the trust or institution is established or ceases to be accumulated or set apart for application thereto, or b) Amount of income ceases to remain invested or deposited in any forms or modes specified in sub section (5) of section 11, or c) Amount of income not utilised for which it is so accumulated or set apart during the period referred to in clause (a) of the proposed Furthermore, it is proposed to insert new section 115BBI in the Act providing that where the total income of any assessee being a trust under the first or second regime, includes any income by way of any specified income, the income-tax payable shall be the aggregate of— 1. the amount of income- tax calculated at the rate of thirty per cent on the aggregate of specified income; and 2. the amount of income-tax with which the assessee would have been chargeable had the total income of the assessee been reduced by the aggregate of specified income referred to in clause (i).
3	Keeping funds in the specified modes	✔	✖	For the trusts or institutions under the second regime, clause (d) of sub-section (1) of section 13 of the Act provides that the exemption shall be denied to the trust irrespective of the amount of investment in non-specified modes and that part of income which has been invested in violation to the provisions of the said clause shall be liable to be included in total income	✔	✔
4	Clarifying that application will be allowed only when its actually paid.	✖	✖	Any sum payable by any trust under the first or second regime shall be considered as application of income in the previous year in which such sum is actually paid by it. (This amendment will be applicable from assessment year 2022- 23)	✔	✔
5	Any payment made to a specified person directly or indirectly.	✖	✔	Now any income or part of income or property of any trust or institution under the first regime, has been applied directly or indirectly for the benefit of any specified person, it shall be deemed to be income of such person of the previous year in which it is so applied.	✔	✔
6	Passing on any u n r e a so n a ble benefit to the trustee or any other specified person	✖	✔	For trusts or institutions under the first regime, the entire exemption shall be denied to the trust irrespective of the amount of benefit passed on to the Trustee or any specified persons in the amended clause.	✔	✔
7	Provision of section 115TD, 115TE & 115TF to apply to any trust or institution under the first regime	✖	✔	Under the existing provisions, a society or a company or a trust or institution carrying on charitable activity may voluntarily wind-up activities and dissolve or may also merge with any other charitable or non- charitable institution, or it may convert into a non- charitable organization. It will attract a levy in nature of an exit tax after it is converted into a non- charitable organisation or gets merged with a non- charitable organisation or a charitable organisation with dissimilar objects or does not transfer the assets to another charitable organisation. The same sections are being amended to include any Trust of Institution under the first regime also.	✔	✔
8	Filing of return by person claiming exemption	✖	✔	The trust or institution claiming exemption under section 10(23C) is required to furnish the return of income for the previous year within the time allowed under section 139 of the Act.	✔	✔
9	Conditions for allowing certain expenditure in case of denial of exemption (Amount of expenditure will be computed as it is computed under the head “Profits and gains of business or profession”)	✖	✖	Income chargeable to tax shall be computed after allowing deduction for the expenditure (other than capital expenditure) incurred in India, for the objects of such trust or institution, will now be allowed subject to fulfilment of the following conditions: 1. such expenditure is not from the corpus standing to the credit of such trust or institution as on the last day of the financial year immediately preceding the previous year relevant to the assessment year for which the income is being computed; 2. such expenditure is not from any loan or borrowing; 3. claim of depreciation is not in respect of an asset, acquisition of which has been claimed as application of income in the same or any other previous year; and 4. such expenditure is not in the form of any contribution or donation to any person. This shall apply to Trust or Institution covered under both the regimes.	✔	✔
10	Penalty for passing on u n r e a so n a ble benefits to trustee or specified persons	✖	✔	Amount of penalty 1. is equal to the aggregate amount of income applied, directly or indirectly, by such person in case of first time and ; 2. a sum equal to two hundred percent of the aggregate amount of income of such person applied, directly or indirectly in the subsequent year as per section 271AAE.	✔	✔
11	Reference to the Principal Commissioner or Com m issione r (PCIT/CIT) for the cancellation of registration/ approval	✖	✖	The Assessing Officer is satisfied that any trust or institution under first or second regime has committed any specified violation, as defined under the Act. He shall, send a reference to the Principal Commissioner or Commissioner to withdraw the approval or registration of the said Trust or Institution.	✔	✔
12	Voluntary Contributions for the renovation and repair of temples, mosques , gurudwaras, churches etc notified under clause (b) of sub- section (2) of section 80G	✖	✔	The sub-section (2) of section 80G is being amended to state, any sum received by any temple, mosque, gurdwara, church or other place notified as a voluntary contribution for the purpose of renovation or repair of such temple, mosque, gurdwara, church or other place, may, at its option, be treated by such trust or institution as forming part of its corpus, subject to the condition that the trust or the institution, 1. applies such corpus only for the purpose for which the voluntary contribution was made; 2. does not apply such corpus for making contribution or donation to any specified person; 3. maintains such corpus as separately identifiable; d) invests or deposits such corpus in the forms and modes specified under sub- section (5)of section 11. These amendments will take effect retrospectively from the assessment year 2021-22 onwards.	✔	✔
13	Amendment to sub-section (1A) of section 35 for filing form 10BD on or before 31st May of the Subsequent Year.	✖	✔	Deduction claimed by the donor with respect to the donation given to any research association, university, college or other institution shall be disallowed unless such research association, university, college or other institution or company files the statement of donations.	✔	✔

All the amendments are applicable from A.Y. 2023-24

DO’S FOR FINANCIAL WELL BEING

By Mr. Tushar P. Joshi

We all work hard and wish to be financially tension free.

We dream for best home in high rise tower in best locality with best amenities, Best Luxury Car and family vacations at different destinations.

But do you think these are really the signs of a financially healthy person? Just by seeing his Luxury Car we should not assume he is financially wealthy person. Possibly he might have bought the same on Loan.

To judge a person’s financial health, we can check the following parameters.

SAVING HABITS

It is rightly said “MONEY SAVED IS MONEY EARNED”. Our saving habits make us wealthy. Let us take an example.

There are two friends Mr. Jay and Mr. Veeru. Mr. Jay is drawing salary of Rs. 2 Lakh per month and Mr. Veeru is drawing Rs. 1 Lakh per month. Obviously apparently we feel that Mr. Jay is more richer.

But on further detailed enquiry it is noticed that Mr. Jay is spending almost Rs. 1,95,000/- per month on his Life Style expenses because of his high standard of living and saves only Rs. 5000/- per month. Whereas Mr. Veeru is spending only, Rs. 20000/- for his monthly out go because of his simple standard of living and save Rs. 30000/- p.m.

Though Mr. Jay’s income is more, his savings are much lower then Mr. Veeru. So Mr.Veeru will soon be wealthier then Mr. Jay because of his saving habits. Hence it is not your Income that determines your financial NETWORTH but your saving habits.

INVESTMENT IN LIQUID ASSETS

There are two types of Assets.

PERSONAL: Which includes your Residence, Car, Jewellery etc.
INVESTMENT ASSETS: These include your investment i.e. additional property, stocks, bonds etc.

Many people are under the illusion that their biggest asset is their Residential House. Yes, house without any loan is definitely a great thing but according to me it is not an Investment because we use it for our personal purpose only. We don’t earn anything out of it except mental satisfaction.

I am not of the opinion that one should not have Luxurious Residential house but he also should have investments in Bonds, stocks and other assets which will yield regular Income and appreciation. In emergency, you can dispose them off without affecting your own Lifestyle. Hence one should buy a house as per his budget without comparing with others and try to invest more savings in investment Assets.

NO TO LOAN

Loans are not bad option but having too many debts will create havoc and also affects health due to tension of repayment.

Young generation believes in “BUY NOW PAY LATER.” And also excessive use of Plastic Money. i.e. credit card, E.M.I which will end up in debt Trap. It will be a vicious circle like “AbhimayuKothaChakravyuh” so try and avoid too many Loans.

GOAL BASED PLAN

In life, we should start saving for different goals dedicate like Child Education, Daughter’s Marriage, Retirement etc.

Suppose person has 1 crore worth of Investments and he may feel, he need not do anything more. But in Daughter’s wedding, he spent over 90 lakhs and utilities his Retirement corpus. Which will create problem for him in future. But if he had planned from the beginning, when daughter was born, and at 24year, she will need funds for her marriage, so to start from the beginning for her future will avoid using retirement corpus. It is rightly said “TIME FLYS.” So avoid delay in investment’s planning.

FINANCIAL CUSHIONS

During covid time, we have realised the healthiest persons were also not left behind and were affected. Same applies to your financial health.

During same covid time, many people have lost their job or as mentioned above, for medical unexpected emergency funds were utilised.

Say suppose you have backache, we always use extra pillow as cushion to support, similarly for our financial emergency we have to keep some funds for contingency. Also you should have adequate Life Insurance, property Insurance and Health Insurance.

So friends STAYSAFE AND SAVE FOR YOUR FUTURE.

UPDATES ON FINANCE

Compiled by
CA. Pratik B. Satyuga

Highest 1 Year FD Rates (As on 01st February 2022) < Rs 2 Crore

Institution	1 Year FD Rate
Equitas Small Finance Bank	6.35%
Yes Bank	6.25%
Jana Small Finance Bank Bank	6.25%
RBL Finance Bank	6.10%
Indusind Bank	6.00%

Note : Senior Citizens would generally get 0.50% more than the above mentioned rates.

Post Office Deposit Rates (As on 01st February 2022)

Particulars	Rate of Interest	Maximum Deposit (Rs)
Post Office Saving Account	4.00% p.a.	No Limit
National Saving Recurring Deposit Account	5.8% p.a. (QuarterlyCompounded)	No Limit
National Saving Time Deposit Account	5.5% p.a. (Upto 3 Yrs)	No Limit
Senior Citizen Saving Scheme Account (SCSS)	7.40% p.a.	15,00,000/- p.a.
Public Provident Fund (PPF)	7.1% p.a. (Annually Compounded)	1,50,000/- p.a.
National Savings Certificates (NSC)	6.8% p.a. (Annually Compounded)	No Limit
Kisan Vikas Patra (KVP)	6.9% p.a. (Annually Compounded)	No Limit
Sukanya Samriddhi Accounts	7.6% p.a. (Annually Compounded)	1,50,000/- p.a.

Lowest Home loan Rates for Self Employed Professionals (As on 01st February 2022).

Institution	Rate
Union Bank of India	6.40% onwards
Kotak Mahindra Bank	6.50% onwards
Saraswat Co-op Bank	6.45% onwards
HDFC Bank	6.75% onwards
HSBC Bank	6.80% onwards

Top Performing Mutual Funds (As on 01st February 2022).

Fund Name	Current NAV	1 Year Returns
Invesco India Infra – Direct (G)	31.89	59.8%
Axis Small Cap Fund – Direct (G)	69.72	63.6%
Invesco India Infra –(G)	31.80	59.7%
Axis Small Cap Fund (G)	62.86	62.5%

Major Currency Rates (As on 01st February 2021)

Country	In Rs. on 01/04/21	In Rs. on 01/01/22	In Rs. on 01/02/22	Change MoM (Rs)	YTD Returns
United States of America (USA) – USD($)	73.13	74.40	74.55	0.20%	1.94%
United Kingdom (UK) – GBP (₤)	101.34	100.32	100.25	-0.07%	-1.07%
European Union (EU) – Euro (€)	86.30	84.75	83.78	-1.14%	-2.92%

Major Commodity Rates (As on 01st February 2022)

Commodity	Rate on 01/04/21	Rate on 01/01/22	Rate on 01/02/22	Change MoM	YTD Returns
Gold (MCX) – 10 Gms	45,420.00	47,908.00	47,705.00	-0.42%	5.03%
Silver (MCX) – 1 Kg	65,092.00	62,144.00	61,643.00	-0.81%	-5.29%
Crude Oil (MCX) – 1 Unit (BBL)	4,515.00	5,681.00	6,567.00	15.60%	45.45%

Indian Indices

Index	1st April 2021	1st January 2022	1st February 2022	MoM Returns	YTD Returns
Sensex (BSE)	50,029.83	59,183.22	58,862.57	-0.54%	17.65%
Nifty 50 (NSE)	14,867.35	17,625.70	17,576.85	-0.27%	18.22%
Bank Nifty	33,858.00	36,421.90	38,450.50	5.56%	13.56%

Global Indices

Index	1st April 2021	1st January 2022	1st February 2022	MoM Returns	YTD Returns
Dow Jones (USA)	33,153.21	36,585.06	35,405.24	-3.23%	6.79%
Nasdaq (USA)	13,480.11	15,832.80	14,346.00	-9.39%	6.42%

Disclaimer : Utmost care has been taken to present accurate figures. However, the reader is advised to verify the same and consult a Financial Advisor before taking any financial decision.

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GSTPAM News Bulletin Committee for Year 2021-22

Parth Badheka
Chairman

Jatin N. Chheda
Jt. Convenor

Aloke R. Singh
Jt. Convenor

This News Bulletin is available on GSTPAM website www.gstpam.org/news