The twelfth 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:
- Section 254(2) of the Income Tax Act, 1961 does not empower the Tribunal to recall its earlier order and re-hear the matter on merits.
- Education cess cannot be allowed as a deduction while computing taxable business income.
- Delhi High Court quashes 1346 re-assessment notices issued after 1 April 2021 under old regime of reassessment.
- Difference between sales consideration and stamp duty value cannot be attributed to gift, on invocation of section 50C of the Act.
International Tax Rulings:
- Unexplained investment in India made by a non-resident with no economic/income generation activities in India, cannot be taxed u/s section 69 of the Act.
- Filing of Form 67 for claim of Foreign Tax Credit (FTC) is not mandatory but directory in nature; allows the claim of FTC to the assessee.
- Fees for professional services is different from fees for technical services; no disallowance could be made under section 40(a)(i) for non-deduction of tax on payment of legal fees to non-resident lawyers.
- Central Board of Direct Taxes (CBDT) issues additional guidelines on TDS/TCS under Sections 194-O, 194Q & 206C(1H) of the Act.
- OECD releases Model GloBE Rules under Pillar Two
Indirect Tax –
Goods & Services Tax
- High Court sets aside Revenue’s Orders deciding allegations pending before it in writ petition.
- Taxability of assessment programme’ clarified
- Classification of Fusible Interlining Fabrics of Cotton’ clarified
- No GST on part recovery of transportation charges from employees
- No ITC on renting car with driver to corporate customers for staff transport under agreement.
- Rate of Tax on Diagnostic kits and laboratory reagents clarified.
- Electricity/Water Charges collected by Landlord held as consideration.
- The Central Board of Indirect Taxes and Customs, vide Circular No.167/23/2021-GST dated December 17, 2021, issued a clarification with respect to GST on services by restaurants through e-commerce operators.