The twenty third issue of our monthly tax newsletter – Tax Inform, is out. Through these newsletters, we provide a compilation of key tax-related case laws, circulars, notifications, etc. issued by the authorities in the previous month, impacting entities and individuals operating in India.
The highlights of the current issue are:
Direct Tax –
Domestic Tax Rulings:
- Hon’ble Supreme Court held that the moment employees undertake travel with a foreign leg, it is not a travel within India and hence not eligible for the LTC exemption.
- Hon’ble Supreme Court interprets the term “general public utility” appearing in section 2(15) of the Act.
- The Supreme Court interprets ‘solely’ appearing under section 10(23C) strictly & prospectively for educational institutions; Overrules its earlier decision in case of Queens Education Society.
- ‘Constructive Gift’ from paternal uncle is tax exempt u/s 56(2)(vii), even though the amount was not directly transferred from his bank account.
- Disallowance u/s 36(1)(ii) of bonus/commission paid “in lieu of profit or dividend” applies only to employees who are Partners/shareholders.
International Tax Rulings:
- Pre & post sale services for Software Solutions requires technical expertise and qualifies as FTS.
- UK law-firm eligible for treaty benefits prior to amended Protocol; Relies on Linklaters ruling.
- ESOP cross-charges paid to foreign-parent is an allowable expenditure.
Circulars and Notifications:
- Circular No. 22/2022/F. 197/93/2022-ITA-1, dated 01-11-2022
- Circular No. 23/2022/F. 370142/48/2022-TPL, dated 03-11-2022
- Draft common Income Tax Return: Request for inputs from stakeholders [F. 370133/16/2022-TPL, dated 01-11-2022]
- Instruction No. 1/2022/F. 404/1/2022-ITCC, dated 03-11-2022
- FAQs for Form 3CEB
Indirect Tax –
Goods & Services Tax
- AAR held that ‘healthcare services’ included services availed by patients at their residence.
- AAR held that input services and capital goods are eligible to be claimed as a tax credit by a used car dealer opting for Marginal Scheme.
- AAR held certain services to be liable under reverse charge regardless of exemption for the outward supply.
- AAR held that outboard motors that are a part of fishing vessels are taxable at the rate of 5%.
- AAR denied exemption for coaching provided to students enrolled in formal schools.