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    Introduction:

       Board of directors are the key persons of a company who are appointed to act on behalf of shareholders to run day to day affairs of the business. The board are directly accountable to shareholders and each year the company will hold an Annual General meeting (AGM) at which the directors must provide a report to shareholders on the performance of the company, its future plans and strategies. Board of directors discharges the dual functions. They are:

    • Running Business
    • Internal controls

    In case of internal controls the board creates a sub group of the directors which is called Audit Committee.

    The short question that is tried to be answered in this note is ‘whether the provisions of Section 44ADA shall be applicable to the remuneration and other receipts by a partner from a professional services firm? 

    Before going into specifics, it is important to understand the modus operandi of the partner and professional services firm and the provisions of Section 44ADA in light of such modus operandi. 

    RATIONALISING THE RESTRICTIONS TO CLAIM REFUND OF IGST PAID ON EXPORTS WHEN GOODS ARE IMPORTED UNDER EOU OR EPCG SCHEME:

    Rule 96 of CGST Rules, 2017 prescribes for refund of IGST paid on export of goods. Sub-rule (10) of the said rule prescribed a condition that the exporter of goods should not have procured the goods from a supplier who is availing deemed export benefit or procuring goods at a concessional rate of 0.1% as applicable to a merchant exporter or importing goods under EOU or EPCG scheme. In such cases, the Exporter must compulsorily export the goods under bond or LUT and can claim refund of accumulated ITC on actual basis to the extent of inputs used for exports under Rule 89(4B). Vide Circular No. 45/19/2018-GST dated 30.05.2018, it has been clarified by CBIC that the said restriction is only applicable to those exporters who are receiving goods from those suppliers availing the above said benefits. The restriction is not applicable to exporters who are directly importing the goods under EOU or EPCG scheme. Notification 39/2018-Central Tax dated 04.09.2018 has been issued to apply the said restriction retrospectively to exporter of goods who are importing the goods directly on their own under EOU or EPCG scheme.

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