Direct Tax

E-verification scheme: a major step towards voluntary tax compliance

Press Release

  • The Income Tax Department had notified the e-Verification Scheme, 2021, to facilitate a transparent and non-intrusive tax administration.
  • The Scheme aims to share and verify such financial transaction information with the taxpayer, which is either unreported or under-reported in the ITR.
  • To effectively utilize the data collected from various sources, the entire information is now displayed to the taxpayer through the Annual Information Statement (AIS), which provides a facility for the taxpayer to object if the source has misreported any such information.
  • The Department confirms the said information with the source and if no error is stated, such information is subject to risk assessment for e-Verification.
  • The entire process of e-Verification is digital and is beneficial since it enables the taxpayer to explain financial transactions with evidence and helps in data correction, thereby preventing unnecessary proceedings on misreported information.
  • Furthermore, since the information pertaining to the financial transactions is shared with the taxpayer, it provides an opportunity to correct/update income that may not have been appropriately reported in the ITR filed by the taxpayer.
  • As the Scheme has provided an opportunity for taxpayers to accept the mismatch of information compared to the original ITR filed, it has been found that many taxpayers have filed updated returns on income under Section 139(8A) of the Income-tax Act.

Extension of partial relaxation with respect to electronic submission of form 10F by select category of taxpayers

F. No. DGIT(S)-ADS(S)-3/e-Filing Notification/Forms/2023/13420

  • Notification No. 3/2022, dated 16 July 2022, mandated the furnishing of Form 10F electronically. However, on consideration of genuine hardships faced in making compliance as per the above notification by non-resident taxpayers who were neither had PAN and nor required to have PAN were exempted from mandatory filing of Form 10F till 31 March 2023.
  • Given the continued challenges and to mitigate the hardships being faced by such a category of taxpayers, it has been decided to extend the above-mentioned partial relaxation until 30 September 2023.
  • Such taxpayers may make statutory compliance by filing Form 10F in manual form till the notified date.

Indirect Tax

Goods and Services Tax (GST)

GST rate changes notified pursuant to GST Council’s 49th meeting

Notification Nos. 1 to 4/2023-Central Tax (Rate) dated 28 February 2023

The Central Board of Indirect Taxes and Customs (CBIC) has notified the rate changes for goods and services pursuant to recommendations of the GST Council during its 49th meeting in February 2023. The revised rates have come into effect from 1 March 2023.

Time limit extended for passing adjudication order for FY 2017-18 to FY 2019-20

Notification No. 9/2023-Central Tax dated 31 March 2023

CBIC has extended the timeline for issuance of order under Section 73 of CGST Act, 2017 as follows: (a) for FY 2017-18, up to 31 December 2023, (b) for FY 2018-18, up to 31 March 2024, and (c) for FY 2019-20, up to 30 June 2024.

Amnesty schemes notified for GSTR-4, GSTR-9, and GSTR-10 non-filers; Annual Return late fee rationalized from FY 2022-23 onwards

Notification Nos. 2/2023-Central Tax, 7/2023-Central Tax, and 8/2023-Central Tax dated 31 March 2023

Pursuant to GST Council recommendations, the CBIC has notified waiver of late fee, subject to furnishing of relevant returns between 1 April to 30 June 2023 as follows:

  • In excess of INR 500 for registered persons who have failed to furnish the final return in GSTR-10 by the due date.
  • In excess of INR 250 (and shall stand fully waived where total CGST payable is nil) for composition dealers who have failed to furnish a return in GSTR-4 for the quarters from July 2017 to March 2019 or for FY 2019-20 to FY 2021-22 by the due date.
  • In excess of INR 10,000 for registered persons who have failed to furnish Annual Return in GSTR-9 for FY 2017- 18, FY 2018-19, FY 2019-20, FY 2020- 21, or FY 2021-22 by the due date.

Furthermore, the late fee payable on delayed filing of GSTR-9 has been rationalized as under:

Sr. No. Class of registered persons Amount
1 Having an aggregate turnover of up to INR 50 million in the relevant financial year INR 25 per day, subject to a maximum of 0.02% of turnover in the State/UT
2 Having aggregate turnover between INR 50 million to INR 250 million in the relevant financial year INR 50 per day, subject to a maximum of 0.02% of turnover in the State/UT

Time limit to apply for revocation of registration cancellation extended up to 30 June 2023

Notification No. 3/2023-Central Tax dated 31 March 2023

CBIC has notified special procedure in respect of revocation of GST registration cancellation done before 31 December 2022. The registered persons, who had hitherto failed to apply for revocation, can do so up to 30 June 2023 only after furnishing the returns due up to the effective date of registration cancellation along with payment of tax dues, interest, penalty and late fees. No further extension shall be available in such cases.

Customs

Phased implementation of Electronic Cash Ledger in Customs

Circular No. 9/2023-Customs dated 30 March 2023

The CBIC has decided to enable the Electronic Cash Ledger functionality as envisaged in Section 51A of the Customs Act, in phases from 1 April 2023. In the first phase, from 1 to 30 April, the exemption from the provisions of Section 51A shall be restricted to deposits w.r.t.:

  • Goods imported or exported in Customs stations where an automated system is not in place.
  • Accompanied baggage.
  • Goods imported or exported at International Courier Terminals.
  • Deposits other than those used for making electronic payment of:
    • any customs duty, including cesses and surcharges
    • IGST
    • GST Compensation Cess
    • Interest, penalty, fees, or any other fee payable under Customs Act or Customs Tariff Act

Given the above, payments through TR-6 challan for various purposes through authorized bank counter at the Customs locations would be exempted from Section 51A provisions.

Accordingly, importers/exporters (Import Export Codes), the customs brokers, and couriers who are making payments on behalf of the importers/exporters, should get registered at the ICEGATE portal and create Electronic Cash Ledger Account.

Extension of Health Cess exemption on import of goods for X-ray machines manufacture

Notification No. 18/2023-Customs dated 29 March 2023

CBIC has continued/provided health cess exemption on import of specified goods such as static user interface, x-ray diagnostic table, x-ray grid, medical grade monitor, etc. for use in the manufacture of X-ray machines w.e.f. 1 April 2023. The exemption is subject to the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022 Notification No. 8/2020-Customs has, accordingly, been amended.

Extension of BCD exemption on import of specific textile machineries, goods for X-ray machines manufacture

Notification No. 17/2023-Customs dated 29 March 2023

CBIC has continued/provided a Basic Customs Duty (BCD) exemption on the import of specific machineries (other than old and used) for use in the textile industry. Similar exemption has been extended to flat panel detectors, x-ray tubes, and medical grade monitors of use in the manufacture of X-ray machines. Accordingly, Notification No. 50/2017-Customs stands amended w.e.f. 1 April 2023.

2nd tranche of concessions under India-UAE CEPA and 3rd tranche under India-Mauritius CECPA notified

Notification Nos. 19/2023-Customs and 20/2023-Customs dated 31 March 2023

W.e.f. 1 April 2023, the 2nd tranche of customs duty concessions under India-UAE CEPA and 3rd tranche under India-Mauritius CECPA have been notified.

Tax Street March 2023