Direct Tax
CBDT amends the provisions of income-tax rules, 1962 for prescribing fees under Section 234H of the ITA 1961
[Notification No. 17/2022 dated 29 March 2022 & Circular No. 7/2022 dated on 30 March 2022]
In order to mitigate the inconvenience to the taxpayers, a window of opportunity has been provided to the taxpayers up to 31 March 2023 to intimate their Aadhaar to the prescribed authority for Aadhaar-PAN linking without facing negative repercussions with payment of some fees as follows:
- If the taxpayer intimates Aadhaar within three months from April 2022, the applicable fees will be INR 500
- After three months from the month of April 2022 upto 31 March 2023, the applicable fees will be INR 1,000.
However, till 31 March 2023 the PAN of the taxpayers who have not intimated their Aadhaar will continue to be functional for the procedures under the Act, like furnishing of return of income, processing of refunds, etc. After 31 March 2023, the PAN of taxpayers who fail to intimate their Aadhaar, as required, shall become inoperative, and all the consequences under the Act for not furnishing, intimating, or quoting the PAN shall apply to such taxpayers.
CBDT relaxes provisions of TCS under Section 206C (1G) of the ITA, 1961 in respect of non-resident individuals visiting India
[Notification No. 20/2022 dated 30 March 2022]
Section 206C (1G) of the ITA, 1961, asks the seller of an overseas tour program package to collect tax at the rate of 5% from the buyer of the package. Various issues were faced by the seller while providing such services to non-resident buyers visiting India.
In order to remove such difficulties, the CBDT has specified that the provisions of the said section shall not apply to a buyer being an individual who is not a resident in India in terms of clause (1) and clause (1A) of Section 6 of the Act and who is visiting India.
Hence, a domestic tour operator is not required to collect tax on the sale of overseas tour packages to non-resident individuals visiting India.
CBDT extends the last date for filing form no. 10AB for seeking registration or approval under Section 10(23C), 12A or 80G of the ITA, 1961
[Circular No. 8/2022 dated 31 March 2022]
In light of the difficulties in filing Form 10AB, CBDT has extended the last date for electronic filling of Form 10AB. The taxpayers seeking approval under Section 10(23C), 12A or 80G of the Act in Form 10AB, for which the last date for filing falls on or before 29 September 2022, has now been extended to 30 September 2022.
CBDT makes faceless inquiry or valuation scheme, 2022
[Notification No. 19/2022 dated 30 March 2022]
CBDT has notified the Faceless Inquiry or Valuation Scheme 2022, for the purpose of the said Scheme, the below tasks shall be conducted in a faceless manner:
- Issuing notice under sub-section (1) of Section 142 of the Act.
- Making inquiry before assessment under Section 142(2) of the Act.
- Directing the taxpayer to get his accounts audited under Section 142(2A) Act.
- Estimating the value of any asset, property or investment by a Valuation Officer under Section 142A of the Act.
CBDT notifies E-dispute Resolution Scheme, 2022
[Circular No. 27/2022 dated 5 April 2022]
The dispute resolution under this Scheme shall be made by the Dispute Resolution Committee on applications made for dispute resolution under Section 245MA of the Act in respect of a dispute arising from any variation in the specified order under such section.
The Scheme provides the procedures to be followed and the manner in which the process shall be carried out at the time of when the application of dispute resolution is received, Screening of application, Procedure to be followed by Dispute Resolution Committee, Powers of the Dispute Resolution Committee, etc.
Transfer Pricing
Central Board of Direct Taxes signs 62 Advance Pricing Agreements in Financial Year 2021-22
The Advance Pricing Agreement (APA) program in India was launched in 2012 vide the Finance Act, 2012 through the insertion of Sections 92CC and 92CD in the Income-tax Act, 1961. These statutory provisions, effective from 1 July 2012, provided the legal basis for the Central Board of Direct Taxes (CBDT) to enter into APAs with taxpayers for a maximum period of 5 years in respect of international transactions between Associated Enterprises (AEs) to determine the ALP or to specify the manner in which the ALP is to be determined.
Despite the severe economic and social disruption caused by the COVID-19 pandemic in the first part of the financial year, the number of APAs signed compares very well with the APAs signed in the preceding two years. A statistical snapshot of the APAs signed is tabulated as under:
| Financial Year | Unilateral APA signed | Bilateral APA signed | Total APA signed |
|---|---|---|---|
| 2021-229 | 49 | 13 | 62 |
| 2020-21 | * | * | 31 |
| 2019-20 | * | * | 57 |
| 2018-1910 | 41 | 11 | 52 |
| 2017-18 | 58 | 9 | 67 |
| 2016-17 | 80 | 8 | 88 |
| 2015-16 | 53 | 2 | 55 |
| 2014-15 | 3 | 1 | 4 |
| 2013-14 | 5 | 0 | 5 |
| Total APAs signed till date | 421 | ||
*The classification of the number of UAPA and BAPA signed for FY 2019-20 and FY 2020-21 is not available in the public domain as yet
The Indian APA program has matured over the years since its commencement in July 2012. The number of applications getting filed and Agreements getting signed bear testimony to that. The complex TP issues, which were prone to long-drawn litigation, are being increasingly resolved through APAs. The resolutions have been to the satisfaction of both taxpayers and the government. The government is aware of the program’s benefits and how it is helping to create a positive environment for global corporate giants to do business in India. The government is committed to strengthening the program by providing it with adequate human and physical resources.
The above statistics show that filing and signing for APA application have not been impacted by the pandemic and is gaining momentum. With frequent changes in the tax laws and the litigative nature of the TP issues, it would be beneficial for the taxpayers to opt for APA’s wherever applicable.
9. Press-Release-Signing-of-62-Advance-Pricing-Agreements-by-CBDT-in-FY-2021-22-dated-31-03-2022.pdf (incometaxindia.gov.in)
10. FINAL_ANNUAL_REPORT_29_11_19.pdf (incometaxindia.gov.in)
Indirect Tax
Maharashtra State Tax Department announces 'Amnesty Scheme' allowing waiver up to 80% of erstwhile tax arrears
[The Maharashtra Settlement of Arrears and Tax, Interest, Penalty or Late Fee Act, 2022 and Trade Circular No. 01T of 2022 dated 20 April 2022]
- The amnesty/settlement scheme covers inter alia arrears of VAT, CST, Entry Tax, Luxury Tax, Purchase Tax, and Professional Tax, etc., along with interest, penalty and late fee thereon.
- Arrears outstanding on 1 April 2022 as per any statutory order for the periods ending on 30 June 2017 or arrears as per any statutory order passed during the period 1 April 2022 to 30 September 2022 for the periods ending on 30 June 2017 shall be eligible for settlement.
- Similarly, return dues outstanding as of 1 April 2022, as well as arrears outstanding as per the auditor’s recommendation in an audit report, are also covered under the scheme.
- On the other hand, dues up to INR 10,000 per financial year would be written off suo moto by the Department.
- For arrears of INR 1 million or less, the scheme provides an option to pay a lump sum of 20% of arrears while the Department would waive the balance 80% off.
- The scheme also provides for a one-time payment option that grants proportionate benefits to undisputed dues, disputed dues, interest, and penalties. Furthermore, for arrears more than INR 5 million, the dealer can avail of an installment option requiring payment of a minimum 25% of arrears between 1 April 2022 and 30 September 2022, while the remaining amount would be payable in 3 equal quarterly installments starting from the date of application.
- In case of Entry Tax arrears, the amount to be paid shall be equal to the tax payable as per statutory order or the amount of set-off reduced or denied, whichever is less.
- Application to be filed along with payment of requisite amount before 14 October 2022 or as may be applicable for an installment option.
- Appeals filed against the statutory orders, if any, should be compulsorily withdrawn before applying for the scheme.
Introduction of new GST rates structure for building bricks
[Notification Nos. 03/2022-Central Tax, 04/2022-Central Tax, 01/2022-Central Tax (Rate) and 02/2022-Central Tax (Rate) dated 31 March 2022]
Pursuant to the recommendations made in the 45th GST Council Meeting, the government has notified a revised tax structure for manufacturers and traders of brick and kiln, effective 1 April 2022. The new GST rates for building bricks, earthen or roofing tiles, fly ash bricks and blocks, and bricks of fossil meals have increased from 5% to 12% with ITC and from 1% to 6% without ITC. Further to this, the threshold limit for GST registration for these suppliers has also been reduced from INR 4 million to INR 2 million.
Expectations from the 47th GST Council Meeting
[Excerpts from various sources]
The 47th GST Council Meeting, which was expected to be conducted in April 2022, will now be held in May 2022. A few expectations from the meeting are listed below:
- Extension of GST compensation cess before the five-year period ends in July 2022.
- Focus on GST rate restructuring, with a new GST rate of 8% by merging the 5% and 12% GST rates to arrive at a revenue-neutral rate.
- Reclassification of certain items from the GST rate of 12% to 18%.
- Rise in tax rates on textile products, petrol, diesel, natural gas, and crude oil, which were put on hold in the previous Council meetings, could also be discussed.