TAX NEWSLETTER December 2021 - Tax - India
RECENT CASE LAWS
Amount received for providing software-access to EYnetwork firms not taxable as royalty
EY Global Services Limited (W.P.No. 11957 of 2016) and EYGBS(India) Private Limited (W.P.No. 12003 of 2016) (Delhi HC)
ELP Comments:
The Delhi High Court categorically observed that the scope ofthe Supreme Court judgement in EAC is not restricted to the fourcategories of facts discussed in the judgement and it goes beyondto cover cases where there is a 'transfer of a right to use thecopyright in software' without there being a 'transfer ofcopyright in the software'.
Section 197 application to be decided in 2 weeks, ontransaction covered by EAC
Alcatel Lucent International (W.P.No. 14075 of 2021) (DelhiHC)
ELP Comments:
The Citizen's Charter lists down the service deliverystandards i.e., the timelines for completion of key servicesprovided by the Department. These timelines are required to beadhered to by department to avoid unnecessary delays and ensureexpeditious disposal of applications by taxpayers.
Fees for 'using' IT Infrastructure taxable asRoyalty; Transaction not covered by EAC ruling
Bekaert Industries Private Limited (ITA No. 1003/PUN/2017)(Pune ITAT)
ELP Comments:
For relying on the decision of SC in case of EAC, it ispertinent to take note of factors like the agreement language,nature of service/ license provided, the language used in the DTAAand the nature of royalty in question.
Coursera INC (W.P.No. 46330-31 of 2021) (Delhi HC)
ELP Comments:
The newly inserted Section 10(50) of the IT Act excludes incomechargeable to Equalisation Levy from the scope of total income.Subjecting an amount to TDS which has already been subjected toEqualisation Levy would result into double taxation. It is for thispurpose that the Section 10(50) was inserted in the IT Act.
Kanoria Chemicals & Industries Ltd (ITA No.2184/Kol/2018) (Kolkata ITAT)
ELP Comments:
The issue regarding deduction of education cess under Section40(a)(ii) of the IT Act has been a subject matter of litigationover the years with various appellate authorities passing divergentrulings. The aforesaid decision of the ITAT has been contrary tothe favourable decision in Sesa Goa Limited and Chambal Fertilizers& Chemicals Ltd (Supra). Further, it may be noted that aspecial leave petition has been filed before the Hon'ble SC inthe case of Chambal Fertilizers & Chemicals Ltd (Supra) whichis currently pending before the Hon'ble SC.
Chander Mohan Lall (ITA No. 1869/Del/2019)
Harish N. Salve (ITA No. 7356/Del./2018) (DelhiITAT)
Rajeev Suresh Ghai (ITA No. 6290/Mum/2019)
| S.No. | Reference | Particulars |
| 1. | Circular No. 20 of 2021 | CBDT vide Circular No. 20 of 2021 has issuedguidelines on the scope of Section 194-O, Section 194Q and Section206C of the IT Act. Among the many clarifications, the Circularclarifies that in case of purchase of goods which are not coveredwithin the purview of GST, when tax is deducted at the time ofcredit of amount and the component of VAT/Sales tax/Excise duty/CSTis indicated separately in the invoice, tax is to be deducted underSection 194Q on the amount credited without including suchVAT/Excise duty/Sales tax/CST and in case the tax is deducted onpayment, then tax is to be deducted on the whole amount as it willnot be possible to identify the payment with VAT/Excise duty/Salestax/CST component. |
| 2. | CBDT vide order dated December 16,2021 | CBDT, vide Order dated December 16, 2021 hasmodified its earlier order (regarding extension from facelessassessments), and directed transfer of all cases, except the casesof International Taxation to the Central Charges where assessmentproceedings are pending/initiated pursuant to survey u/s 133A orwhere survey is conducted in the course of the assessmentproceedings. |
Commissioner of GST and C. Ex. v. M/s. Citibank N.A.[TS-542-SC-2021-ST]
FACTS OF THE CASE
ISSUE
JUDGEMENT (POINTS OF CONSENT)
JUDGEMENT (POINTS OF DISSENT)
| Issue | View of Hon'ble JusticeJoseph | View of Hon'ble JusticeBhat |
| Unified/separate service | Interchange fee is consideration for anindependent service of CCS provided by IB | Service provided by IB was a part of a singleunified service of settling transactions provided by both AB andIB |
| Machinery provisions | IB is liable to discharge Service tax onintercharge fee and file return including the said fee | IB is not required to pay Service tax onintercharge fee as it is a part of single service provided by ABand IB |
ELP Comments:
Meritas Hotels Pvt. Ltd. Vs. State of Maharashtra[TS-675-HC(BOM)-2021-GST]
FACTS OF THE CASE
ISSUE
JUDGEMENT
Tarun Jain vs. Directorate General of GSTIntelligence DGGI [TS-645-HC(DEL)-2021-GST]
FACTS OF THE CASE
JUDGEMENT
Tata Steel Ltd. & Anr. Vs. State of West Bengal [TS– 539-HC-2021 (CAL)-VAT]
FACTS OF THE CASE
JUDGEMENT
LGW Industries Ltd & Ors. vs. Union of India & Ors.[TS-728-HC(CAL)-2021-GST]
FACTS OF THE CASE
JUDGEMENT
Hindustan Petroleum Corporation Ltd. [TS-577-HC-2021(BOM)-EXC
FACTS OF THE CASE
JUDGEMENT
Macquarie Global Services Pvt. Ltd. [ TS-529-CESTAT-2021-ST]
FACTS OF THE CASE
JUDGEMENT
Unik Traders [ TS-548-HC-2021(MAD)-CUST ]
FACTS OF THE CASE
JUDGEMENT
In re: Premier Sales Promotion Pvt. Ltd.[TS-714-AAAR(KAR)-2021-GST]
FACTS OF THE CASE
ADVANCE RULING
In view of the above, the AAAR upheld the order passed by theAuthority for Advance Ruling and dismissed the appeal filed by theassessee.
| S.No. | Reference | Particulars |
| GST | ||
| 1. | Notification No. 18/2021-Central Tax(Rate) dated December 28, 2021 | |
| 2. | Notification No. 19/2021-Central Tax(Rate) dated December 28, 2021 | |
| 3. | Notification No. 20/2021-Central Tax(Rate) dated December 28, 2021 | |
| 4. | Notification No. 2/2021-Compensation Cess(Rate) dated December 28, 2021 | |
| 5. | Notification No. 39/2021-Central Tax datedDecember 21, 2021 | |
| 6. | Notification No. 40/2021-Central Tax datedDecember 29, 2021 | |
| 7. | Circular No. 167/23/2021-GST datedDecember 17, 2021 | |
| 8. | Circular No. 164/24/2021-GST datedDecember 30, 2021 | |
| 9. | Press Release dated31.12.2021 | |
| Customs | ||
| 1. | Notification No. 55 /2021-Customs datedDecember 29, 2021 | Amends the Customs Duty Exemption Notification– Notification No. 50/2017 – Customs dated June 30,2017 in order to align the HSN mentioned therein with the newedition of HSN 2022. |
| 2. | Notification No. 56 /2021-Customs datedDecember 29, 2021 | Amends Notification No. 82/2017 – Customsdated October 27, 2017 which prescribes rate of customs duty ontextile products, in order to align the HSN mentioned therein withthe new edition of HSN 2022. |
| 3. | Notification No. 57 /2021-Customs datedDecember 29, 2021 | Amends the following notifications exemptingspecified goods from customs duty in order to align the HSNmentioned therein with the new edition of HSN 2022: |
| 4. | Notification No. 58 /2021-Customs datedDecember 29, 2021 | Amends Notification No. 11/2018 – Customsdated February 2, 2018 which exempts certain goods from levy ofSocial Welfare Surcharge, in order to align the HSN mentionedtherein with the new edition of HSN 2022. |
| 5. | Notification No. 59 /2021-Customs datedDecember 29, 2021 | Amends Notification No. 53/2017 – Customsdated June 30, 2017 which levies additional customs duty(SAD) on certain goods imported into India, inorder to align the HSN mentioned therein with the new edition ofHSN 2022. |
| 6. | Instructions F.No. 401/85/2021-Cus-IIIdated December 01, 2021 | Import of Sajji Khar/Pappad Khar does not requireproduct approval under FSS Regulations, 2017 till standards arenotified by Food Safety and Standards Authority of India. |
| 7. | Notification No. 68/2021-Customs (ADD)dated December 06, 2021 | Imposes ADD on imports of Certain Flat rolledProducts of Aluminium from China. |
| 8. | Notification No. 69/2021-Customs (ADD)dated December 13, 2021 | Imposes ADD on imports of Axle for Trailers inCKD/SKD from China. |
| 9. | Notification No. 71/2021-Customs (ADD)dated December 17, 2021 | Imposes ADD on imports of Sodium Hydrosulphitefrom China and Korea RP. |
| 10. | Notification No. 73/2021-Customs (ADD)dated December 17, 2021 | Imposes ADD on imports of calcined gypsum powderfrom Iran, Oman, Saudi Arabia and UAE. |
| 11. | Notification No. 74/2021-Customs (ADD)dated December 21, 2021 | Imposes ADD on imports of Silicone Sealant fromChina. |
| 12. | Notification No. 75/2021-Customs (ADD)dated December 21, 2021 | Imposes ADD on imports of HFC R-32 from China |
| 13. | Notification No. 76/2021-Customs (ADD)dated December 21, 2021 | Imposes ADD on imports of Hydrofluorocarbon Blends(All blends other than 407 and 410 are excluded) from China. |
| 14. | Notification No. 77/2021-Customs (ADD)dated December 27, 2021 | Imposes ADD on imports of Décor Paper fromChina |
| 15. | Notification No. 78/2021-Customs (ADD)dated December 27, 2021 | Amends HSN provided in various notificationsimposing anti-dumping duty to align them with HSN 2022. |
| Foreign TradePolicy | ||
| 1. | Notification No. 46/2015-2020 datedDecember 20, 2021 | |
| 2. | Notification No. 47/2015-2020 datedDecember 20, 2021 | |
| 3. | Notification No. 48/2015-2020 datedDecember 31, 2021 | |
| 4. | Trade Notice No. 28/2021-22 dated December31, 2021 | |
| Central Excise | ||
| 1. | Notification No. 10/2021 dated December29, 2021 |
The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circumstances.
