Direct Tax

Extension of time limits of certain compliances to provide relief to taxpayers in view of a severe pandemic

[Circular No. 15, 3 August 2021]

The due date for filing of Equalisation Levy statement for FY 2020-21, statement of foreign remittances to be filed by Authorised Dealers for Q1 of FY 2021-22 have been extended to 31 August 2021. The due date for Pension Funds and Sovereign Wealth Funds for intimation of investment made in India for Q1 for FY 2021-22 have been extended to 30 September 2021.

CBDT notifies rules for computation of exempt income and income taxable at concessional rates of a Specified Fund

[Notification No. 90/2021, 9 August 2021]

Provisions of Section 10(4D)/115AD(1A) provide exemptions/ concessions to certain specified funds located in the International Financial Services Centers (IFSC). New rules 21AI and 21AJ provide the mechanism for the following:

  • Computation of exempt income under Section 10(4D) of a specified fund located in IFSC;
  • Determination of income which is taxable at concessional rates under Section 115AD of a specified fund located in IFSC

The new rules further prescribe filing of annual statement of exempt income in Form 10IG and annual statement for income taxable at concessional rates in Form 10IH.

CBDT notifies rules for computation of relief under MAT on account of APA or secondary adjustment

[Notification No. 92/2021, 10 August 2021]

Recent Union Budget had amended MAT provisions to provide relief in cases where the past year’s income is included in the current financial year due to APA or secondary adjustment provisions. The income tax department has now introduced a new rule providing detailed guidelines for the computation of such relief. The new provisions allow discretion to the taxpayer to opt-in and shall apply only where the taxpayer has not availed MAT credit in any subsequent financial year. The rule prescribes that the claim of relief, if any, has to be made in Form 3CEEA.

Finance Minister meeting with Infosys on glitches in e-filing portal of Income Tax Department

[Press Release dated 23 August 2021]

The Hon’ble Finance Minister took a meeting with Mr. Salil Parekh, MD & CEO Infosys, to convey the government and taxpayers’ deep disappointment and concerns about the continuing glitches in the e-filing portal. Hon’ble Finance Minister demanded that the issues faced by taxpayers on the current functionalities of the portal should be resolved by the team by 15 September 2021 so that taxpayers and professionals can work seamlessly on the portal.

Indirect Tax

Government notifies RoDTEP scheme guidelines and rebate rates

After nearly two years of anticipation, the scheme guidelines of the Remission of Duties or Taxes on Export Products (RoDTEP) scheme and rates for 8555 tariff items under the same have been notified.

Key aspects of RoDTEP scheme

  • The RoDTEP rates and the value cap per unit have been notified under Appendix 4R of FTP for the 8-digit export HS code. The currently notified rebate rate ranges from 0.01% to 4.3%.
  • The rebate would be available to the eligible exporters at the notified rate as a % of the FOB value of the exported product (subject to value cap per unit).
  • The e-scrips issued under this scheme can be used for payment of Basic Customs Duty only, and are expected to be freely transferrable.
  • Exporters in Special Economic Zone, 100% Export Oriented Units, exports under Advance Authorization scheme, etc., have been kept outside the purview of RoDTEP. It has been clarified that their inclusion under this scheme is still under review.

It is pertinent to note that the year-onyear RoDTEP rebate will be decided basis the budget outlay for the scheme. Currently, nearly INR 130 billion has been set aside for FY 2022 (and another INR 60 billion for Rebate of State and Central Levies and Taxes [RoSCTL]), which is nearly half the budget of its predecessor viz., MEIS.

Blocking of E-Way Bill (EWB) generation facility

In terms of Rule 138E of the CGST Rules, the taxpayers who have not filed returns in GSTR-3B for two or more consecutive tax periods up to June 2021 have now been blocked from the EWB generation facility on the EWB portal [with effect from 15 August 2021]. The government has decided to resume the blocking of EWB generation on non-filing of GST returns, which was temporarily suspended due to the pandemic.

New Functionalities made available for taxpayers on GST Portal

  • Quarterly Return Monthly Payment (QRMP) taxpayers can now file Nil GSTR-1 through SMS. They can now file it by sending a message in the specified format to 14409.
  • If the registration of a taxpayer under the QRMP Scheme is canceled, with the effective date of cancellation being any date after 1st day of Month 1 of a quarter, they would be required to file GSTR-1 for the complete quarter, as the last applicable return.
  • Taxpayers can now place a request on the GST portal for extending the due date for filing of reply or for adjourning the personal hearing after an SCN has been issued by the tax officer in a refund case and the date of personal hearing has been fixed.