Tax INFORM- December 2022

The twenty fourth 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:

• Special Court for Economic Offences acquits salaried person of ITR non-filing over belief that Form-16 & TDS provide adequate compliance.
• VsV Act being a beneficial law, the Court holds that an unintentional delay in payment was condonable and justifiable.
• Following amalgamation, the successor assumes the predecessor’s role. Allows set-off of long-term capital loss and carrying forward of MAT credit in the scheme Of amalgamation.
• Delayed deposit of employees’ PF ‘indicated’ in the audit report, sufficient for Sec.143(1) adjustment.
• TDS on FCCB premiums borne by Assessee and capitalised are eligible for depreciation.
• Centralised services to Indian hotels, including marketing & sales, not FTS; follows Sheraton International’s ruling.

International Tax Rulings:

• Business profits embedded in reinsurance premiums are not taxable in the absence of Fixed Place PE.
• Benefit of Article 13(4) of the DTAA is available to the assessee before the setting-off of brought forward short/long term capital gains.
• Under the India-US DTAA, online auction income from Indian subsidiaries is not subject to royalty.

Circulars and Notifications

• Circular No. 24/2022 dated 07-12-2022
• No. DGIT(S)-ADG(S)-3/e-Filing Notification/Forms/2022/9227

Indirect Tax – 

Goods & Services Tax

Case Laws:

• High Court allows a one-time revision of Form TRAN-1.
• HC condones the delay in an appeal for registration, considering financial hardship and COVID-19 as genuine reasons.
• AAR denies ITC on the canteen facility provided in the factory to employees.
• AAR held that GTA valuation includes the value of free fuel filled by the service recipient.
• AAR held that a tax rate of 18% was applicable to the cost of diesel incurred for running the Diesel Generator.

Circulars and Notifications:

• Notification No.23/22 dated 23rd November 2022
• Notification No.25/22 dated 13th November 2022