Income Tax Law Updates

Notification/Circular:

CBDT Notification No. 01 of 2022 dated 9-6-2022 [Directorate of Income Tax (Systems)] 

​Compliance Check Functionality for Section 206AB & 206CCA of Income-tax Act 1961: To facilitate Tax Deductors and Collectors in identification of Specified Persons as defined in sections 206AB and 206CCA, the Central Board of Direct Taxes (“CBDT”), in exercise of powers conferred under section 138(1)(aXi) of Income-tax Act, 1961 (Act), has issued Order via F.No. 225/67/2021/ITAII dated 21.06.2021 , directing that Director General of Income-tax (Systems), New Delhi shall be the specified income-tax authority for furnishing information to the “Tax Deductor/Tax Collector”, having registered in the reporting portal of the Project Insight through valid TAN, to identify the ‘Specified Persons’ for the purposes of section 206AB and 206CCA of the Act through the functionality “Compliance Check for Section 206AB& 206CCA”.

Case Laws/Judgement:

Nipika Agarwal Proprietress of S.N. Trading Vs Assistant Commissioner of State Tax (Calcutta High Court) Date of Order 09-06-2022

Hon’ble High Court held that Tax authorities are to adjudicate upon the tax liability in accordance with law. The liability to taxation in respect of assessee should not escape assessee and likewise where the assessee was not in a position to show certain evidences which impacts the tax liability, reasonable opportunity should be afforded to such assessee to bring such evidences to the notice of the tax authorities.

Goods and Services Tax Law Updates:

AAR/Case Laws/Judgement:

In re Patle Eduskills Foundation (GST AAR Maharashtra) Order No. GST-ARA-53/ 2020-21/ B-78 Date of Order 08-06-2022 

The reimbursement by Industry Partner to the applicant, of the stipend paid to the trainees, does not attract tax under the GST Acts. The Applicant, in the capacity of being a NEEM facilitator, acts as a ‘Pure Agent’ while receiving reimbursement of stipend amounts from the various Trainer Institutes and remitting the same to the trainees.

In re Jayabheri orange county owners association (GST AAR Telangana) Date of Order 03-06-2022

GST is NOT applicable on monthly collection not exceeding Rs.7500 per member as total collection of the society (Resident Welfare Association) is more than Rs.20 lakhs a year.

In re Hyderabad Metropolitan Water Supply And Sewerage Board (GST AAR Telangana) Date of Order 03-06-2022

Medical insurance premium taken to provide health Insurance to the employees, pensioners and their family members, is NOT eligible for exemption as mentioned in Entry No. 3 of the Notification Number 12/2017 – Central Tax (Rate), dt. 28th June, 2017.

In re Singareni Collieries Company Limited (GST AAR Telangana) TSAAR Order No. 31/2022 Date of Order 07/06/2022

Contributions made to District Mineral Foundation (DMF) and National Mineral Exploration Trust (NMET) as per MMDR Act, 1957. Both these amounts are paid in addition to the royalty payable and in a proportion to the royalty paid for extracting minerals from a contract of mining lease. Therefore, they are considered for the service of right to use minerals including its exploration and evaluation which is enumerated as tariff item ‘997337’, this is same as royalty and hence attract tax at the rate of 9% CGST & SGST each.

In re Singareni Collieries Company Limited (GST AAR Telangana) Appeal Number : TSAAR Order No. 30/2022 Date of Order 07/06/2022

AAR Ruling: The Applicant is obliged to pay GST on the forest permit fee paid by it under reverse charge mechanism. The supply is to be clarified as tolerating to do an act as discussed above and is to be treated as service as per entry 5(e) of the schedule II to the CGST Act, 2017.

Updates from Other Laws:

RBI/2022-23/69 A.P. (DIR Series) Circular No. 05 dated 09-06-2022

Discontinuation of Return under Foreign Exchange Management Act, 1999: The return “Details of guarantee availed and invoked from non-resident entities” will discontinue with effect from the quarter ending June 2022.