Tax INFORM- August 2023

The thirty-second 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:

• Filing of belated return of income – Provisions of I-T Act presume culpable mental state under prosecution proceedings– the onus is on the Assessee to prove to the contrary: Madras HC.
• Tax Credit on notional basis upheld, India-Thailand DTAA interpreted in favour of the Assessee.
• Sale consideration is not chargeable to tax – Madhya Pradesh HC condemns Revenue for pursuing a “frivolous” case.
• Supreme Court rules that interest earned on bank deposits made by the clubs is liable to be taxed in the hands of the clubs and that the principle of mutuality would not apply.
• TDS is not deductible on payments made to non-resident telecom operators: Karnataka HC.
• Writ petition challenging the re-assessment order without DIN quashed.

Notifications/ Press Releases:

• Income Tax website updated with new features
• Valuation rules for Rent Free Accommodation notified
• CBDT sets guidelines on exemption from income tax to ‘life insurance policy’

Indirect Tax – 

Goods & Services Tax

Case Laws:

• Supreme Court denies pre-arrest protection in GST evasion case.
• Orissa HC confirms that pre-deposit payments can be made via an electronic credit ledger.
• Independent advisory to foreign entities does not constitute a supply by an intermediary: Delhi HC.
• ITC transfer availed through GSTR-3B instead of GST ITC-02 on account of the unavailability of said form on the GST portal remanded for re-evaluation.
• Supreme Court orders release of cash seized during search in respect of investigation under CGST Act.
• Canteen services not forming part of employment contract to attract GST.

Notifications:

• GST law on online gaming notified
• Procedures for e-commerce operators (ECO) notified to be operative w.e.f. October 1, 2023
• Procedure for filing GST appeal u/s 73/74 notified
• CBIC notifies exemption from return filing, etc. pursuant to GST Council’s 50th meeting