Direct Tax

CBDT issues guidelines for the removal of difficulties in the implementation of Section 194R of the income tax act

Circular No.12 of 2022

  • The government has finally provided clarifications, including valuation rules for withholding of taxes over benefits and perquisites provided to persons in the course of their business.
  • The guidelines inter alia provide that Tax Deducted at Source (TDS) is to be done even if the perquisite is entirely in cash. It has further clarified that GST will not be included for the purposes of valuation of benefit/ perquisite.
  • The Circular further clarifies that travel tickets booked by consultants and reimbursed by the client would require TDS to be done under this Section.
  • It is clarified that while calculating the threshold of INR 20,000, the value of benefit or perquisite provided during 1 April 2022 till 30 June 2022 shall also be included.

CBDT inserts Rule 44FA for filing an appeal to high court against order U/S 245(1)

Notification G.S.R. 404(E) [F.NO. 57/2022/F. No. 370142/31/2021-TPL(Part III)] dated 31-5-2022

  • For ease of filing an appeal to the High Court on a ruling pronounced or order passed by the Board for Advance Rulings under sub-section (1) of Section 245W, the CBDT introduced this rule.
  • The form and manner of filing an appeal shall be the same as provided in the applicable procedure laid down by the jurisdictional High Court for filing an appeal to the High Court.

CBDT announces cost inflation index for FY 2022-23

Notification S.O. 2735(E) [NO.62/2022/F. NO.370142/20/2022-TPL] dated 14-6-2022

  • In light of the explanation to Section 48 of the Act, CBDT published the cost inflation index for FY 2022-23.
  • The cost inflation index for FY 2022-23 will be 331.
  • It will be applicable from 1 April 2023 and shall apply accordingly to AY 23-24 and subsequent years.

Indirect Tax

Instructions on contents of refund orders, post-audit and review of refund claims

[Instruction no. 03/2022 – GST dated 14 June 2022]

Central Board of Indirect Taxes and Customs’ (CBIC) GST policy wing has issued an instruction to bring uniformity in the practice adopted by GST officers for passing sanction orders and postaudit of GST refund claims. It highlights that:

  • The proper officer should upload a ‘speaking order’ while accepting or rejecting a refund claim, covering all the contents specified in the instruction, such as details of the refund claim, documents submitted, deficiency memo, Showcause Notice (SCN), and refund findings.
  • The instruction covers specific refund scenarios, where additional details would be required to be included in the orders passed, which covers the refund of accumulated ITC, refund of tax paid on supplies being considered as ‘Deemed exports’, refund of the excess balance of cash ledger, and refunds being filed under other categories.
  • The instruction also elaborates on the procedure to be laid down for ‘post-audit’ of all the GST refund orders issued in relation to refund claims amounting to INR 0.1 million or more, which calls for:
    1. Immediate transmission of all the refund orders passed and providing access to supporting documents to the concerned officers;
    2. Establishment of post-audit within three months from the date of refund order;
    3. Completion of post-audit review within three months from the date of refund order;
    4. Completion of review of refund order at least 30 days before the expiry of the time period allowed for filing an appeal by Revenue, i.e., within six months from the date of communication of order;
    5. Provisions of supporting documents in offline mode till all documents are available on the Automation of Central Excise and Service Tax (ACES).

Extension in the time period for filing the Mega Power Project Certificate

[Notification no. 31/2022-Customs dated 7 June 2022]

The government has extended the time period for furnishing the final Mega power project certificate from 120 months to 156 months in terms of Notification no. 50/2017-Customs dated 30 June 2017. Furthermore, it has extended the period of validity of security in the form of Fixed Deposit Receipt or Bank Guarantee from 126 months to 162 months, in case of provisional mega power projects.

Restrictions on the export of sugar

[Notification no. 10/2015-20 dated 24 May 2022]

To curb the rapid rise in food prices, the government has limited the export of sugar over 10 million tonnes. This restriction has been made applicable from 1 June 2022 till 31 October 2022. To ensure price stability and domestic availability, the Indian government has prohibited sugar exports for the first time in six years.