[Excerpts from Business Standard, 27 April 2021]
As per the recent Supreme Court ruling, companies that distribute software of overseas entities in India are not liable to withhold tax as the money being paid is not payment of royalty for the user of the copyright in computer software. As per the recent regulatory filings made by Microsoft, it recorded an income tax benefit of USD 620 million in the March quarter based on the principle laid by the Supreme Court in the above ruling.
[Excerpts from Live Mint, 19 May 2021]
The fiscal deficit predicted in the budget of FY21 may lesser than 9.5% of GDP, with revenue and expenditure both expected to increase.
[Excerpts from Bloomberg Tax, 29 April 2021]
The United States Trade Representative (USTR) has proposed to impose tariffs to retaliate on digital taxes. 41 Indian products, including 17 items in the gem and jewelry category, have been identified for the imposition of tariffs. As per the industry specialist in Rajasthan, many products made or processed in Rajasthan like semiprecious stones, silver jewelry, gold necklaces, and base metal chains clad with gold form part of the mentioned.
[Excerpts from The Economic Times, 5 May 2021]
As per the recent data released by the income-tax department, Income-tax refunds of over INR 154.38 billion were issued to 1.173 million taxpayers in the last month. Out of this, personal income tax refunds were INR 50.47 billion in 1.151 million cases and corporate tax refunds were INR 103.92 billion to 21,487 taxpayers.
[Excerpts from Live Mint, 8 May 2021]
Vide a recent notification, the Ministry of Finance announced relaxation for the COVID-19 care hospitals under Section 269ST of the Income-tax Act, 1961. The central government has eased income tax norms for the COVID-19 care hospitals, dispensaries, nursing homes and COVID-19 care centers of similar facilities for receiving cash of INR 0.2 million or above from the patients.
[Notification No. 15 /2021–Central Tax dated 18 May 2021]
Additional Commissioner granted powers to extend the time limit for filing of the application for revocation of cancellation of registration
Power has been granted to the Additional/Joint Commissioner to extend the time limit available for filing an application for revocation of cancellation of registration in terms of proviso to Section 30(1) of CGST Act, 2017.
Refund related amendments
A refund application is required to be filed within a period of 2 years from the relevant date. Through this notification, the time limitation of the said period of 2 years has been amended to exclude the period from the date of filing of refund claim till the date of communication of the deficiencies by the officer.
Further, the applicant is now allowed to withdraw his application for refund by filing an application in FORM GST RFD- 01W any time before the issuance of provisional refund sanction order or final refund sanction order or payment order or refund withhold order. Once the said application for withdrawal is submitted, the amount which was debited from the electronic credit/cash ledger at the time of filing the refund application shall be credited back to the ledger from which such debit was made.
The key decisions of the 43rd GST Council meeting have been captured below:
Wider ambit of IGST exemption on import of key medical supplies
- Hitherto, IGST exemption was granted to ‘free of cost’ imports of essential medical items such as medical oxygen, oxygen concentrators, and other oxygen storage and transportation equipment, certain diagnostic markers test kits, and COVID-19 vaccines, etc., for free distribution. This exemption has now been extended till 31 August 2021.
- It has been further decided to grant the IGST exemption on imports of these products even if made on a ‘payment’ basis up to 31 August 2021, provided such imports are for donating to the government or on the recommendation of state authority to any relief agency.
- The aforesaid IGST exemptions have also been extended to the import of Amphotericin B [a drug used in the treatment of Black Fungus].
Amnesty scheme by capping late fee in case of delayed filing of old returns, and rationalization of late fee under CGST Act
- To provide relief to the taxpayers, an amnesty scheme has been announced whereby the late fee has been reduced for pending GST returns of the period from July 2017 to April 2021, provided if GSTR-3B returns for these tax periods are furnished between 1 June 2021 to 31 August 2021.
- To reduce the burden of late fee on smaller taxpayers, the upper cap of late fee is being rationalized to align the late fee with the tax liability/ turnover of the taxpayers on a prospective basis.
Announcements in relation to GSTR-9 and GSTR-9C for FY 2020-21
- The filing of GSTR-9 (annual return) for FY 2020-21 shall be optional for taxpayers having aggregate annual turnover up to INR 20 million. GSTR- 9C (reconciliation statement) for FY 2020-21 will be mandatory only for taxpayers with annual aggregate turnover above INR 50 million.
- Further, the requirement to self-certify GSTR-9C (instead of certification from a Chartered Accountant) would be made applicable from FY 2020-21.
Extension in compliance due dates and other measures
- In view of the COVID-19 pandemic, in addition to the extension in compliance with due dates notified earlier, further extensions have been granted to the taxpayers (especially small taxpayers).
- Rule 36(4) for availing ITC for tax periods April, May and June 2021 will be applied cumulatively in return for the period June 2021.
- Companies will be allowed to file returns using Electronic Verification Code (EVC), instead of Digital Signature Certificate (DSC) till 31 August 2021.
- The time limit for completion of various actions by any authority or by any person, under the GST Act, which falls during the period from 15 April 2021 to 29 June 2021, to be extended up to 30 June 2021 subject to some exceptions. [Wherever the timelines for actions have been extended by the Hon’ble Supreme Court, the same would apply].