ICAI issues Exposure Draft of Multiple Engagement and Quality Control Standards, for public comments from various stakeholders to be received by 25-8-2023.
Key points from 50th GST Council Meeting dated 11-7-2023:
– Proposal that Casino, Horse Racing and Online Gaming to be taxed at uniform rate of 28% on full face value.
– Proposal to amend Entry 52B in Compensation Cess Notification (22% Compensation Cess) to include all categories of motor vehicles by whatever name called so long as they fulfil three conditions namely length exceeding 4000 mm and engine capacity above 1500 cc and ground clearance (in unladen state) of 170 mm and above.
– Proposal to issue notification of GST Appellate Tribunals by 1-8-2023.
– Proposal to provide exemption for cancer related drugs, medicines for rare diseases and food products for special medical purposes from GST.
– Clarification that supply of food & beverage over the counter in a Cinema Hall to be liable to GST @ 5% (without input tax credit) as supply of restaurant services. Where food & beverage is supplied as a bundled service along with movie ticket, then such supply will be a composite supply, principal supply being movie ticket.
– Proposal to come up with capacity based taxation and special compensation scheme for sin goods such as pan masala, tobacco & other similar items in line with with erstwhile excise regime. Proposal to restrict IGST refund on export of such goods.
– Proposal to issue a circular to clarify ISD mechanism for transfer of common credits, ISD mechanism to be made mandatory prospectively.
– Clarification that GST not payable on FOC replacement of goods by a manufacturer to its dealers for undertaking repairs under warranty arrangement. Manufacturers not to reverse their input tax credit on such FOC replacement.
– Clarification that interest in case of wrong availment and utilisation of IGST is to be computed after taking into consideration credit balances available in electronic credit ledgers under all heads i.e. IGST, CGST and SGST.
– Circular to be issued to clarify refund related issues.
– Circular to be issued to provide clarifications regarding TCS liability in cases where multiple E-commerce Operators are involved in a single supply of goods or services or both.
Govt. includes ‘Goods and Services Tax Network’ under PMLA to enable sharing of data with ED.
Notification No. G.S.R. 491(E), dated 7-7-2023.
Geocoding functionality for principle place of business address is now live for State and Union Territories.
GSTN Advisory
Penalty – Since once error was pointed out and assessee made a course correction before assessment order was passed, in said circumstances, AO could not impose penalty upon assessee u/s 271(1)(c).
PCIT v. National Textile Corporation Ltd. – [2023] 151 taxmann.com 512 (Delhi).
Income Declaration Scheme, 2016 – SLP dismissed against impugned order of HC that where assessee availed benefit of Declaration of Income Scheme, 2016 and submitted a declaration with respect to undisclosed income of relevant assessment year, AO would have no jurisdiction to assess income for which declaration was made and thus, reopening notice was to be set aside.
ACIT v. Kamla Chandrasingh Kabali – [2023] 151 taxmann.com 436 (SC).
Sec. 72 – Amalgamation – SLP dismissed against impugned order of HC that once a scheme is sanctioned, same would relate back to appointed date of amalgamation and that for all purposes including for recognising benefits of unabsorbed depreciation and losses of a merging company with those of principal company, would be available from such date.
PCIT v. Intas Pharmaceuticals Ltd. – [2023] 151 taxmann.com 448 (SC).
Sec. 124 – Where HC set aside notice issued u/s 143(2) in case of assessee on ground that jurisdictional officer had not adjudicated upon returns as jurisdiction had been changed after returns were filed, since records revealed that assessee had participated in proceedings pursuant to a notice issued u/s 142(1) and had not questioned the jurisdiction of AO, in such case order of HC could not be sustained.
DCIT(E) v. Kalinga Institute of Industrial Technology – [2023] 151 taxmann.com 434 (SC).
Sec. 36(1)(vii) – SLP dismissed against order of the HC that where assessee had entered into agreements with a company for takeover and assignment of certain book debts and wrote off certain debts from certain parties as bad debts, since Memorandum and Article of Association permitted assessee to carry on business of money lending and transactions in question had been held to be in realm of business activity, assesses claim of bad debts was to be allowed.
CIT v. Elgi Equipments Ltd. – [2023] 151 taxmann.com 428(SC).