Tax INFORM- October 2022

The twenty 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:

  • Deduction of Employees’ contribution to PF and other funds can be claimed only when it is deposited within the due dates defined by the respective statutes.
  • High Court defines procedure to grant refund to assessee having foreign bank account.
  • Indexation shall be allowed on total cost from the date of allotment even if payments are made in instalments at a later period of time.
  • Compulsory contribution received as a part of sale, at the rate fixed by the assessee trust cannot be considered as ‘’voluntary contribution’’ to claim exemption u/s 11 of the Act.

International Tax Rulings:

  • Centrica ruling inapplicable as Boeing’s seconded employees’ real employer is Indian entity.
  • Extended warranty bought from an overseas entity and sold to customers in India at independently negotiated price did not constitute a Dependent Agent Permanent Establishment [DAPE] of such overseas entity.
  • No Equalisation Levy applicable on Google Ads where the advertiser and target audience are both located overseas.
  • DTAA provisions are to be read with the Protocol even without specific notification to give effect.
  • Allows Foreign Tax Credit despite a delay in filing Form 67.
  • Payment made to Mexico-based entity for clinical trials is FTS, in absence of make available clause in India-Mexico DTAA.
  • New Zealand Supreme Court applies GAAR provisions to treat interest under a convertible loan and forward purchase arrangement as mostly principal.

Circulars and Notifications:

  • Notification No. 110/2022/F.No. 370142/41/2022-TPL.
  • Notification No. 111/2022/F.No. 370142/32/2022-TPL.
  • Notification No. 112/2022/F.No. 370142/43/2022-TPL.
  • Circular No. 19/2022/F.No. 225/49/2021/ITA-II.
  • Circular No. 20/2022/F.No. 225/49/2021/ITA-II.
  • Circular No. 21/2022/F.No. 275/25/2022-IT(B).

Indirect Tax – 

Goods & Services Tax

Case Laws:
  • HC overruled the AAAR judgement of taxing Mango Pulp at 18% and restored it to 12%.
  • HC held that dwellings used for residence and not for business purposes are ‘exempt’.
  • HC provided for payment of pre-deposit for appeal filing by way of utilizing credit in EcrL.
  • Notification No.19/2022 – Central Tax.
  • Notification No.18/2022 – Central Tax.