Insights

Tax INFORM- April 2022

The sixteenth 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 & individuals operating in India.

The highlights of the current issue are:

Direct Tax – 

Domestic Tax Rulings:

  • Exchange fluctuation loss on repayment of loan taken in foreign currency for business expansion allowable as revenue expenditure.
  • TDS applicable on year-end provisions; default can lead to proceedings u/s 201.

International Tax Rulings:

  • Payment for accessing online database would not constitute Royalty under India-US DTAA.
  • Tax rate computed on a presumptive basis u/s 44BBB with a bonafide belief of non -existence of PE would not attract penalty.
  • Payment made to non-resident for rendering centralised marketing services not liable for withholding tax.

Individual Tax Rulings:

  • Funds which are originated outside India and invested by non-resident in India are not taxable as unexplained investment of non-resident.
  • TDS on life insurance maturity benefit to be deducted only on the non-exempt portion of net proceeds and not on the entire amount.

Circulars and Notifications:

  • Notification No 18 dated 29th March 2022.
  • Notification No 19 dated 30th March 2022.
  • Notification No 20 dated 30th March 2022.
  • Notification No 22 dated 30th March 2022.
  • Notification No 24 dated 4th April 2022.
  • Notification No 26 dated 5th April 2022.
  • Notification No 37 dated 21st April 2022.
  • EPFO circular dated 6th April 2022.

 

Indirect Tax – 

Goods & Services Tax

Case Laws:
  • AAAR held that IGST is applicable on a reverse charge basis for the supply of e-goods from foreign suppliers.
  • Ancillary activities to Environmental projects performed for consideration are not
    considered as “charitable”.
  •  Retailers receiving rewards under sales promotion scheme are not eligible for ITC.
  • AAAR held that Preferential Location Service charges are taxable at the rate of 18%.
  • AAAR held that GST is not applicable on coupons distributed to employees.
  • Provisions of Schedule III of the CGST Act, 2017 are not applicable to Educational &
    Training Services.
  • Retail packages of “ready to eat popcorn” are taxable at 18%.