The fourteenth 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:
- High Court quashes re-assessment notice issued on the basis of material already available on record during the course of original assessment proceedings.
- Expenses incurred to defend promoters of a company against criminal prosecution, in which the assessee has huge financial investment, allowed u/s 37(1) of the Act.
- TDS proceedings u/s 201(1) and 201(1A) for payments made to non-residents need to be made in a reasonable period of time. Proceedings beyond a period of 4 years from the end of the AY, to be deemed as ‘time barred’.
International Tax Rulings:
- Interest on income tax refund taxable at concessional rate as per treaty and not as business income, presence of PE for taxation of interest income as business income is irrelevant.
- Delhi HC, as an interim measure, permits withholding tax at 8% instead of 10%, till the resolution of the dispute over the interplay of Equalisation Levy (EL) & Royalty/FTS.
- CBDT Circular on MFN clause transgresses Section 90(1) and is not binding on Tribunal/ Assessee.
- CBDT issues clarification regarding MFN Clause.
Indirect Tax –
GOODS AND SERVICES TAX
- Supreme Court denies Assessee’s claim for exemption of contract labour as job-work.
- High Court quashes summons issued because allegation of ‘co-operative behavior’ was absent
- High Court widens the scope of exemption of residential premises; shall include leasing of premises used as “hostel”.
- AAAR held that “export “does not include sharing of the report of Technical Testing Services performed in India for overseas customers.
- Goa AAR held that sub-dividing land into smaller plots for sale is not a “supply”.
- AAR held that GST is not applicable on money recovered from employees towards Notice Pay and Parental Insurance.
- AAR held that fees collected by clubs are liable to GST.
- AAR held that GST paid on RCM for hiring bus for employee transportation is eligible for ITC for a manpower service-provider.
- AAR held that “export of services” does not include inspection service performed on goods that are sold to a foreign buyer.
- Tribunal held that taxes wrongly paid due to misconception of law shall to be refunded to the Assessee.
- Tribunal quashed Revenue’s demand for reversal of CENVAT credit wrongfully availed.
- Tribunal held that a mutually beneficial agreement cannot make parties related.
- Tribunal upholds levying Anti-Dumping Duty on imports notified before clearance from the warehouse.
- The Central Government vide Circular No.3/2022 clarified that SWS is not required to be calculated on a notional customs duty.