Insights

Tax INFORM- May 2022

The seventeenth 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:

  • Reassessment notice issued on or after 1st April 2021 under erstwhile section 148 shall be deemed to be issued under the new section 148A.
  • Reassessment notice received on 1st April 2021 legally valid since digitally signed & electronically issued on 31st March 2021.
  • Forex Derivative transactions non-speculative and eligible for set-off against business income since incidental to business.

International Tax Rulings:

  • No withholding tax on payment for purchase of advertisement space from non-resident.
  • Deloitte’s subscription fees received from member firms exempt since governed by principles of mutuality.
  • Lenskart not liable for TDS on advertising expenses paid to Facebook Ireland in the absence of PE in India.

Circulars and Notifications:

  • Circular No. 9 of 2022 [f. No.370142/2/2022-tpl], Dated 09-05-2022.
  • Circular F. No. 225/81/2022/Ita-Ii, Dated: 11-05-2022.
  • Circular No. 10 Of 2022 [F. No. 370133/3/2022-Tpl], Dated 17-5-2022.
  • Instruction No. 1/2022 [F.No. 279/Misc/M-51/2022-Itj], DATED 11-5-2022.
  • Notification No. 46/2022 Dated 27-04-2022.
  • Notification No. 48/2022 Dated 24-04-2022.
  • Notification No. 49/2022 Dated 05-05-2022.
  • Notification No. 50/2022 Dated 06-05-2022.
  • Notification No. 51/2022 Dated 9-05-2022.
  • Notification No. 53/2022 Dated 10-05-2022.

 

Indirect Tax – 

Goods & Services Tax

Case Laws:
  • High Court orders restoration of credit wrongly utilized for IGST payment on exports.
  • AAR held that “business support services” includes providing storage space in buses for GTAs for carrying delivery packages.
  • AAR held that a GST at the rate of 18% is applicable for liquidated damages/penalties received due to contractual breach.
  • AAR held that the merging of two entities having separate GST registrations constitutes “supply of goods”.
  • AAR held that employees receiving canteen services do not amount to supply.
  • AAR held that “Export of services” does not include marketing support services provided to a Foreign Entity.
  • AAR held that services provided for the conduct of an examination to educational boards was exempt.
  • AAR held that the target incentive achieved by the seller amount to “supply” and not a “trade discount”.

Service Tax

Case Laws:
    • Tribunal held that taxable supply does not include compensation received for financial damages.