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
- 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 &
- Retail packages of “ready to eat popcorn” are taxable at 18%.