Introduction:

Sources[1] say that 535 cases involving fraudulent input tax credit (ITC) of Rs 2,565 Crores have been booked so far in the previous financial year. For Financial Year (FY) 2018-19, the statistics were even more staggering with 1,620 cases involving fraudulent ITC claims of Rs 11,251 crore.

Thus, fake invoicing turned out to be a menace in GST implementation and is affecting the GST collections. Government is looking at e-invoicing as effective tool to curb this menace. It has been introduced w.e.f. 01.01.2020 on voluntary basis and is mandatory w.e.f. 01.04.2020. However, the same was relaxed till 30.09.2020 due to myriad reasons. As on date, the Government has implemented the e-invoicing with effect from 01.10.2020.  

Read more: All About e-Invoice

In this edition, we bring you an article on e-invoicing, which is made mandatory for business with turnover more than 100 Crores with effective from Jan 2021. The said article covers all the finer aspects pertaining to e-invoicing. The next article deals with the recent announcement by CBIC in relation to GST filings. The QRMP scheme would relieve the small taxpayers from monthly filing of returns since the returns are now being shifted to quarterly basis. The article covers the background, the modus operandi and other compliances in relation to QRMP scheme.

The next article is on the prevention of abusive strategy of thin capitalisation. In order to prevent such abusive strategy, Section 94B has been introduced in the Income Tax Act. However, there is a deficiency of language in the said section, which will create huge litigation issues. Taking such potential litigation issues, we have contemplated to cover such issues in multiple parts. This edition has the first part in the series.

I hope that you will have good time reading this edition and please do share your feedback. I will also urge clients to mail us topics or issues on which you want us to deliberate in our future editions, so that we can contribute to the same.

Read more: SBS Wiki E Journal Dec 2020

This is one of the finest budgets this country has witnessed. The budget aligns with the macro economic scenario and takes care of the impact of COVID. In this budget edition, we discuss the various proposals segment and tax wise. Hope this effort of ours is useful for understanding the proposals. Let me also allow to summarise the various proposals before our detailed analysis. 

On the direct tax front, there are certain amendments which have tried to put an end to decade long litigations. Hope they do not open a new round of litigation. The changes in partnership taxation trying to put an end to abusive strategies and the removal of goodwill from the block of assets to put end to settled views are two extreme hues of the budget.

Undoubtedly, the tax avenues (leakages looked from the perspective of tax authorities) available high networth individuals are being closed budget by budget. The taxation of ULIPs and interest on provident fund contributions exceeding certain limits are steps in the above direction. The introduction of safe harbour for sale of residential units considering the COVID periods is a thoughtful move putting an end to litigation on this front. Finally, the definition of ‘liable to tax’ has been brought into the domestic tax provisions putting concrete end to so many aspects. The clarification of the dis-allowability on employee share in a way puts end to disputes but a bit harsher on the employer.

Read more: SBS Wiki Budget Special Edition 2021

Introduction:

Residency is one of the important issues which has to be fixed before proceeding with determination of tax liability. Unless the residency of an individual or company or any entity for that matter is not fixed, there cannot be a way to determine the tax liability. Apart from the tax liability, the residency also gives a person a right to seek various reliefs. Till this point of time, we have seen instances where an individual was treated as a resident in more than one country and tried to resolve such issues by opting various measures namely by applying tie-breaker rules and place of effective management. However, the Finance Act, 2020 has opened up doors for new breed of resident, which is the subject matter of this article. The Finance Act, 2020 has amended Section 6 of Income Tax Act, 1961 (‘ITA’/’Act’) inserting a new sub-section to deal with residency of an individual, who is nowhere a resident. Let us understand the said concept and issues surrounding thereof. 

Read more: Deemed Residency - Concept and Issues Thereof