Key Topics:

INCOME TAX

• ACCELERATED ASSESSMENT

FEMA

• DEPOSITS ACCOUNTS OF PERSONS RESIDENT OF INDIA

In this edition, we bring you to quite a few interesting articles.

The recent decision of Supreme Court in the matter of Calcutta Club Limited dealing with principle of mutuality qua the indirect taxes has a greater impact on taxation under GST regime. Hence, we thought of analysing the said judgment and tried to apply the essence to GST regime to understand the way forward for clubs.

The next article is on the recent changes to tax rates for domestic companies. The said article captures the comparisons among different rates along with specific conditions.

The article on ‘IBC vs RERA- IBC Wins’ is another blessing from the Supreme Court on the IB Code. The Supreme Court stating that remedies under IBC and RERA will be simultaneously available for a house owner makes the position of house owner more secure and stable.

The article on ‘Ancestral Property vs Self-Acquired Property’ is also a daunting issue in the Hindu Law, which was quite a bit addressed by Supreme Court in the recent decision. 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.

I am also glad to announce that we have launched our mobile app ‘SBS Connect’ on the eve of completion of 10 years. Now, Wiki and other resources can be accessed through ‘SBS Connect’. Please use ‘SBS Connect’ to stay connected with us.

Read more: SBS Wiki E Journal Oct 2019

Background

1. Years of pending litigation in various IDE1 has become a huge burden to the Central Government, assessee and tax positions involved therein. As per the Economic Survey Report of 2019, the cases pending with CESTAT2, High Courts and Supreme Court as on 31.03.2017 are 1,00,4253. Apart from the burden on the eco-system, such huge pending litigation also effects the foreign investment, since lack of tax certainty has a significant effect on foreign investment.

2. The Honorable Finance Minister during her maiden budget speech has mentioned that more than Rs. 3.75 lakh crores were blocked in litigations under IDE. Certainly, pending litigation of the erstwhile regime has become also become baggage for Central Government and assessees which has to be offloaded to concentrate on the new legislation and way forward.

3. In order to unload the burden of huge pending litigation and to liquidate the amounts blocked in litigation, Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 is introduced in Finance (No.2) Act, 2019. The objective of the scheme is twofold. One is dispute resolution by liquidating a portion of the amounts blocked in litigations and the other one is amnesty where an opportunity is given to taxpayers to voluntarily disclose and discharge their actual tax liability. This paper broadly summarizes the scheme, the clarifications provided so far and highlights some of the important questions which are to be answered for effective implementation of the scheme. At the end of the paper, we also share the modus operandi which has to be adopted to choose among the normal route of litigation or the scheme.

Read more: Practical Note Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019

1. Rate Change – Goods

1.1 Rate Changes for Specified Goods:

NN 1/2017-CT(R) dated 28.06.2017 is amended to provide for the following rate changes:

i. The rate of tax on Marine Fuel 0.5% is reduced from 18% to 5% with effect from 01st October 2019.
ii. The rate of tax on wet grinders consisting stone as grinder has been reduced from 12% to 5% with effect from 01st October 2019.
iii. The rate of tax on railway wagons, coaches and other locomotives including maintenance or service vehicles that fall under chapter 86 has been increased from 5% to 12% with effect from 01st October 2019.
iv. Slide Fasteners falling under chapter 96 are subject to GST at 12% while their parts were subject to GST at 18%. With effect from 01st October 2019, even the parts of slide fasteners are also subject to GST at the rate of 12%.
v. Caffeinated beverages falling under chapter 22 were subject to GST at 18%. The rate of these beverages is increased to 28% with effect from 01st October 2019. In addition to this, these are subject to GST Compensation Cess at 12%. Thus, with effect from 01st October 2019, caffeinated beverages are subject to a total tax of 40%.
vi. The rate of tax on semi-precious stones falling under chapter 71 has been reduced from 3% to 0.25% with effect from 01st October 2019.

Read more: Summary of Changes 37th GST Council Meet