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Direct Tax

The Central Board of Direct Taxes (CBDT) refunds worth INR 1.73 trillion issued so far this fiscal: I-T Department

[Excerpts from The Economic Times, 13 January 2021]

The income tax department has stated that refunds of over INR 1.73 trillion have been issued to more than 15.7 million taxpayers in the ongoing fiscal till 11 January 2021. Out of the refunds, personal income tax refunds are worth INR 571.39 billion, while corporate tax refunds are INR 1.15 trillion. The CBDT had issued refunds of over INR 1.73139 trillion to more than 15.7 million taxpayers between 1 April 2020 to 11 January 2021. The department's aim is to encourage honest taxpayers by issuing their refunds in a timely manner.

Income Tax return: 5% more I-T returns filed this year

[Excerpts from Financial Express, 12 January 2021]

In a tweet, the tax department mentioned that over 59.5 million ITRs for AY 2020-21 were filed till 10 January 2021 as compared to 56.7 million ITRs filed for the previous AY by 10 September 2019. The total returns for 2019-20 are 3.335 million higher than the previous year as total ITRs filed stood at 56.1 million on the last date, which was 31 August 2019. A detailed ITR-wise analysis was shared by the department to compare rise of about 5% in filing of returns in the current year as compared to the previous year. The official appreciated the efforts of the taxpayers and professionals who adhered to the due dates in spite of the pandemic.

The CBDT launches e-portal for lodging complaints on tax evasion, Benami assets

[Excerpts from The Business Standard, 12 January 2021]

The CBDT has launched a dedicated e-portal to receive and process complaints on tax evasion, undisclosed foreign assets and Benami properties. The common public can now lodge complaints by accessing a link on the e-filing website. Once the complaint is filed, the income tax department will allot a unique number to each complaint. The complainant would also be able to view the status of the complaint on a real-time basis.

Government creates special unit in Income Tax department for probe into undisclosed foreign assets

[Excerpts from The Economic Times, 12 January 2021]

The Foreign Asset Investigation Units (FAIUs) have been recently created in all the 14 investigation directorates of the tax department that are primarily tasked to undertake raids and seizures and develop intelligence to check tax evasion done by various methods. The CBDT diverted a total of 69 existing posts in November for setting up this unit after the approval of the Finance Minister. The department is in receipt of a lot of information of foreign assets since more and more countries are following international protocols set up by the Organization for Economic Co-operation and Development (OECD) and the Financial Action Task Force (FATC) for tax transparency and combating situations of global money laundering and tax evasion. The FATC also covers automatic sharing of information on bank accounts as well as financial products like equities, mutual funds and insurance. Further, the ITR forms also have a separate column seeking details of foreign assets of an entity/individual that match the information received from global counterparts.

Transfer Pricing

Extension on e-filing of Income tax returns and Audit reports

Considering the hassles and hardships faced by the taxpayers, the government has once again extended the due dates for filing return of income, including the filing of the tax audit report and transfer pricing report. The CBDT vide Press Release 31 December 2020 r.w. notification No. 93/2020 has further extended the deadline for filing Income tax returns and various audit reports, including Form No. 3CEB. The revised due date for annual transfer pricing compliances for the FY 2019-20 are as follows:

Forms Erstwhile Dates
(notification No. 88/2020)
Revised Dates
Form No 3CEB 31 December 2020 15 January 2021
Master File Form No. 3CEAB 1 January 2021 16 January 2021
Master File Form No. 3CEAA 31 January 2021 15 February 2021

This move was a much-needed relief to the taxpayers who are mostly working with limited resources amidst these challenging times.

Union Budget 2021 – ITAT Goes Faceless

The Finance Act, 2020 had introduced the concept of Faceless Assessment and Appeals under the Income tax Act. Going a step ahead, the government has now proposed the introduction of Faceless proceedings before the Income Tax Appellate Tribunal.

While this is a welcome move towards transparency and impartiality, however, the appellants may face various challenges such as difficulty in justifying the claims, arguing and counter-arguing their cases merely by written submissions made electronically.

Indirect Tax

Central Board of Indirect Taxes and Customs (CBIC) has notified the Customs Authority for Advance Ruling at Mumbai and Delhi

[Notification No. 1/2021-Customs (N.T.) dated 4 January 2021]

CBIC has notified the revised procedures and regulations for the Customs Authority for Advance Rulings (CAAR). CAAR will be situated at Delhi and Mumbai and will have jurisdiction over prescribed States. The government has prescribed Form CAAR-1 for application to the Authority for Advance Ruling and Form CAAR-2 for filing appeal to the Appellate Authority for Advance Ruling.

Implementation of RoDTEP Scheme w.e.f 1 January 2021

[Press Release dated 31 December 2020 and Public Notice 01/2021 dated 1 January 2021]

The government, by way of Press Release, has introduced the RoDTEP Scheme w.e.f. 1 January 2021. Under this Scheme, the exporters of goods will be incentivized by way of refund of the embedded central, state and local taxes, which are otherwise not exempted or refunded under any other existing scheme. The refunds will be in the form of transferable duty credit/electronic scrips that shall be maintained in Ledger Account with Customs. They can be used for payment of import duties as would be notified by the CBIC. Exporters desirous of availing the benefit under the RoDTEP Scheme should declare their intention for each export item in the shipping bill or bill of export.