Daily Tax & Corporate Law Digest
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Today’s newsletter analytically summarizes today’s top Tax & Corporate Law stories reported at?taxmann.com , in a unique section-wise format.
INCOME TAX
SECTION 9 OF THE INCOME-TAX ACT, 1961 - INCOME - DEEMED TO ACCRUE OR ARISE IN INDIA
Permanent establishment - Mine PE: Where the assessee-Australian company had no right on gas or oil well which belonged to BG, an Indian company, and the only activity of the assessee was part of the installation of platforms of oil well, the assessee had no PE in terms of article 5(2)(f) - Deputy Commissioner of Income-tax, (International Taxation) v. Clough Projects International Pty. Ltd. - [2022] 145 taxmann.com 613 (Mumbai - Trib.)
Elimination of double taxation - overriding effect of DTAA: TDS provisions in Act have to be read along with DTAA for computing tax liability on sum in question and therefore when the recipient is eligible for benefit of DTAA then there is no scope for deduction of tax at rate of 20 per cent under section, rate of taxation would be as dictated by provisions of the treaty. As per DTAA, the maximum deduction shall not exceed 10 per cent which the assessee has deducted - Commissioner of Income tax, International Taxation v. Wipro Ltd. - [2023] 146 taxmann.com 129 (Karnataka)
SECTION 37(1) OF THE INCOME-TAX ACT, 1961 - BUSINESS EXPENDITURE - ALLOWABILITY OF
Warranty expenses: Where assessee company had exported customer-designed pressure cookers and kitchenware to a new market in the UK and had made provision towards warranty and replacement expenses of 1 per cent of sales value since expenses towards warranty claims during relevant financial years were in excess of provision made for warranty and assessee made said provision based on its past experience, said provision was to be allowed as a deduction - TTK Prestige Ltd. v. Deputy Commissioner of Income-tax - [2023] 146 taxmann.com 33 (Karnataka)
SECTION 44BB OF THE INCOME-TAX ACT, 1961 - NON-RESIDENT - BUSINESS FOR PROSPECTING/EXPLORATION, MINERAL OIL, ETC.
Installation PE - Offshore Supplies: Where the assessee-Australian company entered into an agreement with an Indian company for engineering, procurement, installation and commissioning of 3 wellhead platforms, since sales were directly billed to Indian company BG and material was purchased outside India and PE came into existence only after oil well platforms were delivered to PE in India, it could not be said that receipts were attributable to operations by PE which was an installation PE and, thus, receipts of offshore supply could not be taxed in India by invoking section 44BB - Deputy Commissioner of Income-tax, (International Taxation) v. Clough Projects International Pty. Ltd. - [2022] 145 taxmann.com 613 (Mumbai - Trib.)
GOODS AND SERVICES TAX LAWS
SECTION 7 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - SUPPLY - SCOPE OF
GST is not payable on employees' portion of canteen charges collected by the employer and paid to the canteen service provider as canteen service is provided as per contractual agreement - Troikaa Pharmaceuticals Ltd., In re - [2023] 146 taxmann.com 128 (AAR - GUJARAT)
Amount collected from contractual workers and paid to the canteen service provider is subject to levy of GST as an employer and contractual workers do not fall under the ambit of employer-employee relationship - Troikaa Pharmaceuticals Ltd., In re - [2023] 146 taxmann.com 128 (AAR - GUJARAT)
SECTION 17 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - INPUT TAX CREDIT - CREDIT AND BLOCKED CREDITS, APPORTIONMENT OF
Input tax credit of GST paid on canteen charges is available as an employer is under obligation to provide such facility as per Factories Act - Troikaa Pharmaceuticals Ltd., In re - [2023] 146 taxmann.com 128 (AAR - GUJARAT)
Input tax credit of GST paid on canteen services provided to the contractual worker cannot be availed as employer/applicant and such workers will not fall under the ambit of an employer-employee relationship and the employer is not under a legal obligation to provide such facility to such workers - Troikaa Pharmaceuticals Ltd., In re - [2023] 146 taxmann.com 128 (AAR - GUJARAT)
SECTION 54 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - REFUND - TAX, REFUND OF
Refund claim for the period April to August 2019 was filed on 20-9-2021 i.e. beyond the limitation period of 2 years was to be considered in view of the decision of the Supreme Court by which the limitation period was extended due to the outbreak of the COVID-19 pandemic - Logicvalley Technologies (P.) Ltd. v. Assistant Commissioner - [2023] 146 taxmann.com 124 (Madras)
SECTION 100 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - ADVANCE RULING - APPELLATE AUTHORITY - APPEAL TO
Transaction of transfer of right to do integration testing, installation and marketing of software from the e-vehicle manufacturing unit, i.e., Tamil Nadu Cost Centre to Karnataka Cost Center on behest of end-users shall be leviable to GST as said transfer amounts to supply between two distinct persons - OLA Electric Technologies (P.) Ltd., In re - [2023] 146 taxmann.com 126 (AAR - TAMILNADU)
Where performance upgrade software is only sold by Karnataka Cost Center to end user and transfer of right to do integration testing, installation and marketing software from e-vehicle manufacturing unit, i.e. Tamil Nadu Cost Centre to Karnataka Cost Center amount to supply of service - OLA Electric Technologies (P.) Ltd., In re - [2023] 146 taxmann.com 126 (AAR - TAMILNADU)
COMPANY AND SEBI LAWS
CIRCULAR NO. SEBI/HO/DDHS/DDHS-RACPOD2/P/CIR/2023/6, DATED 06-01-2023
SEBI issues Operational Circular for CRAs compiling all existing circulars/directions at one place
Editorial Note: The SEBI had issued multiple circular over the years, covering the operational and procedural aspects of Credit Rating Agencies (CRAs). In order to enable the industry and other users to access all the applicable circulars/ directions at one place, Operational Circular for CRAs has been prepared. Operational Circular is a compilation of the existing circulars as on Dec 31st, 2022. The circular w.e.f 01-02-2023.
领英推荐
CIRCULAR NO. SEBI/HO/IMD/IMD-POD1/P/CIR/2023/005, DATED 06-01-2023
Now AMCs are allowed to provide management and advisory services to all FPIs operating from IFSCs: SEBI
Editorial Note: Earlier, SEBI vide circular dated December 16, 2019 had specified certain categories of Foreign Portfolio Investors (FPIs) to which Asset Management Companies (AMCs) can provide management & advisory services in terms of Regulation 24(b) of SEBI (Mutual Funds) Regulations, 1996. Now, SEBI has permitted AMCs to provide management and advisory services to all Foreign Portfolio Investors operating from International Financial Services Centres (IFSCs) subject to certain conditions.
FEMA BANKING AND INSURANCE LAWS
SECTION 18 OF THE SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002 - APPEAL TO APPELLATE TRIBUNAL
SC interprets the provisions of section 18 of the SARFAESI Act relating to the computation of pre-deposit required from the borrower for filing an appeal against DRT's order - Sidha Neelkanth Paper Industries (P.) Ltd. v. Prudent ARC Ltd. - [2023] 146 taxmann.com 127 (SC)
INSOLVENCY AND BANKRUPTCY CODE
SECTION 10A OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE INSOLVENCY RESOLUTION PROCESS - SUSPENSION OF INITIATION OF
Where application filed by an operational creditor under section 9 with the date of default as 31-3-2021 was dismissed as withdrawn by NCLT as being hit by section 10A, however, on basis of an alleged acknowledgement letter dated 3-6-2021 given by corporate debtor NCLT by impugned order initiated CIRP, mere fact that acknowledgement had been given by corporate debtor on 3-6-2021 accepting debt, could not change the date of default and, thus, the impugned order passed by NCLT was to be set aside - SLB Welfare Association v. PSA IMPEX (P.) Ltd. - [2023] 146 taxmann.com 93 (NCLAT- New Delhi)
SECTION 30 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE INSOLVENCY RESOLUTION PROCESS - RESOLUTION PLAN - SUBMISSION OF
Where during CIRP of the corporate debtor, the resolution plan submitted by resolution applicant 'JFC' was approved by NCLT, in view of the fact that said resolution plan had become a conditional resolution plan subject to obtaining statutory approvals, which were imperative to be fulfilled in order to ensure the successful revival of the corporate debtor, such condition precedent could not be said to be any hindrance in approval of a plan by NCLT - Jet Aircraft Maintenance Engineers Welfare Association v. Ashish Chhawchharia, Resolution Professional of Jet Airways (India) Ltd. - [2023] 146 taxmann.com 31 (NCLAT- New Delhi)
SECTION 36 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE LIQUIDATION PROCESS - LIQUIDATION ESTATE
Workmen and employees are entitled to payment of a full amount of provident fund and gratuity till the date of commencement of insolvency, which amount is to be paid by the successful resolution applicant consequent to the approval of the resolution plan in addition to 24 months of workmen dues as workmen are entitled to under section 53(1)(b) - Jet Aircraft Maintenance Engineers Welfare Association v. Ashish Chhawchharia, Resolution Professional of Jet Airways (India) Ltd. - [2023] 146 taxmann.com 31 (NCLAT- New Delhi)
Employees demerged from the corporate debtor are not terminated from services and, therefore, are not entitled to gratuity or leave encashment - Jet Aircraft Maintenance Engineers Welfare Association v. Ashish Chhawchharia, Resolution Professional of Jet Airways (India) Ltd. - [2023] 146 taxmann.com 31 (NCLAT- New Delhi)
SECTION 61 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE PERSON'S ADJUDICATING AUTHORITIES - APPEALS AND APPELLATE AUTHORITY
Where NCLT passed an order approving the resolution plan submitted by the successful resolution applicant, however, an application filed by the appellant financial creditor to reinstate its 'admitted claim' was not adjudicated by NCLT while passing the impugned order, in view of the fact that prayer of the appellant was only to accept an entire admitted claim and direct for distribution of assets under the plan, appellant was entitled to relief as prayed for and it was not necessary to issue any direction for modifying resolution plan or modifying an order of NCLT approving resolution plan - Punjab National Bank v. Ashish Chhawchharia Resolution Professional (Erstwhile) Jet Airways (India) Ltd. - [2023] 146 taxmann.com 79 (NCLAT- New Delhi)
ACCOUNTS AND AUDIT
Checklist on Disclosure as per AS 4: Contingencies and Events Occurring After the Balance Sheet Date
Editorial Note: AS 4 deals with the treatment in financial statements of contingencies, and events occurring after the balance sheet date. However, contingencies due to subjects like (a) liabilities of life assurance and general insurance enterprises arising from policies issued; (b) obligations under retirement benefit plans; and (c) commitments arising from long-term lease contracts are excluded from the scope of this standard.
OPINIONS
AO has the power to drop reopening even after Section 148A(d) order - Gopal Nathani, CA - [2023] 146 taxmann.com 139 (Article)
That’s it from us for today! Stay Tuned for more updates from?Taxmann.com
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