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    Income from Other Sources

    (Section 56)

    Introduction:

    • Income that is taxable under the Income Tax Act 1961 (“Act”) shall fall under the Head “Income from Other Source” if it is not chargeable under any other heads of income.
    • Heads of Income covered under the act are as below:

     Income from:

    • Salaries (Sec. 15)
    • House Property (Sec. 22)
    • Profits and Gains of Business or Profession (Sec. 28)
    • Capital Gains (Sec. 45)
    • Income from Other sources (Sec. 56)

    From the above, it was clear that incomes not falling under first four heads as above shall b be charged under the head “Income from Other Sources”.

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    SA 701 Communicating Key Audit matters in the independent Auditor’s report

    This article aims to explain the concept of Key Audit matters that are part of new Auditor’s report.

                    SA 701 deals with the Auditor’s responsibility to communicate key Audit matters in the Auditor’s report. It is intended for addressing both the judgement of an Auditor as to what is required to be communicated in Audit report and the content and form of such communication. The purpose of communicating key audit matters is to enhance the communicative value of the auditor’s report.

    This SA applies to audits of complete sets of general purpose financial statements of listed entities and circumstances when the auditor otherwise decides to communicate key audit matters in the auditor’s report. This SA also applies when the auditor is required by law or regulation to communicate key audit matters in the auditor’s report.

    This SA is effective for audits of financial statements for periods beginning on or after April 1, 2018

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    • General:

    Rule 27(1) of Special Economic Zone Rules, 2006 (herein after referred as SEZ Rules) allows the Developer of SEZ and Units in SEZ to import[1] all types of goods, including capital goods (new or second hand), raw materials, semi-finished goods (including semi-finished Jewellery), component, consumables, spares goods and materials for making capital goods without payment of duty, taxes or cess, required for the purpose of authorised operations except the goods which are prohibited for import under Indian Tariff Classification (Harmonised System) for Import and Export.

                From the above it is evident that in order to import the goods duty free, following two criteria should primarily be satisfied:

    • Goods imported or procured must be covered under the authorised operations of SEZ Developer/Unit and
    • Such goods should not be prohibited for import under Indian Tariff Classification (Harmonised System) for Import and Export.

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    INTRODUCTION:

    1. On 01.02.2019, the amendments made to Goods & Services Tax (GST) laws vide Central Goods and Services Tax (Amendment) Act, 2018 are made effective. One of the amendment  relates to determination of place of supply for transportation of goods. Though, it was clarified that the purpose of this amendment is to grant relief to taxpayers, the manner in which the amendment was brought in does not legally assure such relief.  In this article, we are going to discuss this issue.

    LEGAL POSITION:

    Pre-Amendment Position:

    1. Section 5 of Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as ‘IT Act’) provides for levy and collection of Integrated tax (IT) on all the inter-state supplies, that takes place in case of goods or services or both, whether by way of forward charge or reverse charge. Similarly, with respect to intra-state supplies, section 9 of Central Goods and Services Tax Act, 2017 (hereinafter referred to as ‘CT Act’) read with section 9 of respective State Goods and Services Tax Act, 2017 (hereinafter referred to as ‘ST Act’) shall provide for payment of Central Tax (CT) and State Tax (ST) for intra-state supply of goods or services or both whether by way of forward charge or reverse charge. 

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    In this edition, we bring to you certain important articles on various aspects.

    We have penned an article on ‘Interesting Issues in Arrest and Interplay of GST laws, IPC and PMLA’, which deals with the question whether completion of assessment is mandatory to initiate prosecution under GST laws, for which the Supreme Court has answered in negative. This judgment is important as it gives wide powers to the taxation authorities to tackle with the economic frauds. Further, in the article, we also discussed the interplay between GST laws, IPC and PMLA for the trending offence of circular trading.

    We have also brought an article, which deals with the recent amendments made to Foreign Contribution Regulation Act and rules made thereunder. I request everyone to read the same to keep yourself updated with the changes which effect your businesses.

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