Tax Flash news - Archive 2021

List of Tax Flash News

01 January 2021 to 20 December 2021

Date

Title

Citations

12/20/2021 India Tax Konnect - December 2021 CBDT Notification No. 137/2021, dated 13 December 2021
12/20/2021 OECD Release of GloBE Model Legislation -
12/15/2021 CBDT prescribes conditions for exemption of income earned by a non-resident on transfer of non-deliverable forward contracts entered into with an offshore banking unit located in IFSC CBDT Notification No. 136/2021, dated 10 December 2021
12/14/2021 CBDT notifies e-Verification Scheme, 2021 for faceless collection of information Faceless collection of information 
12/14/2021 Income from providing access to computer software is not taxable as royalty dated 10 August 2016  
12/09/2021 Karnataka High Court’s decision on the applicability of TDS provisions on the year-end provision   ACIT v. Motor Industries Co. [2001] 249 ITR 141 (Kar)
12/06/2021 Delhi High Court’s directions and tax department’s report on standard operating system on refunds Dated 27 October 2021
12/03/2021 Employee will get credit of tax withheld even though employer has not deposited such tax with the government Om Prakash Gattani v. ACIT [1996] 222 ITR 489 (Gau)
12/01/2021 India Tax Konnect - November 2021 Under Section 160
11/29/2021 CBDT issues guidelines on the applicability of TDS provisions on purchase of goods, on e-commerce operators and TCS provisions on certain payments CBDT Circular No. 20/2021, dated 25 November 2021
11/25/2021 India and US agree on a transitional approach on Equalisation Levy 2020 Press release issued by the Ministry of Finance of India, dated 24 November 2021
11/18/2021 Application Form for PLI scheme for Automobile and Auto Components notified Notification S.O. 3946 (E) dated 23 September 2021, Ministry of Heavy Industries
11/17/2021 Employees’ Provident Fund Organisation directs its field offices to pay Provident Fund withdrawal benefit to Singapore nationals on the date of leaving service in India Notification GSR 706 (E) dated 01 October 2008 - Notified in the Gazette of India
11/15/2021 Government of India declares 8.5 per cent interest rate on Employees’ Provident Funds Scheme for Financial Year 2020-21 EPFO Circular No: NV-11/1/2020-INV - dated 30 October 2021 Accessed on 15 November 2021 
11/10/2021 Even though UAE based subsidiary was a paper/shell company, its profits are not taxable in India because it did not violate any provisions of the law AY 2007-08 
11/08/2021 G20 Leaders approve BEPS 2.0 -
11/08/2021 Supreme Court affirms GST common portal is only a facilitator to feed or retrieve information and need not be the primary source for doing self-assessment Union of India vs Bharti Airtel Ltd & Ors. [2021-VIL-87-SC]
11/03/2021 CBDT notifies e-Settlement Scheme, 2021 Section 245D(11) of the Act
11/03/2021 India Tax Konnect - October 2021 Source - www.OECD.org.in
11/03/2021 Income tax department rolls out new AIS for taxpayers Section 285BB in the Income Tax Act, 1961 (the Act)
11/03/2021 The impact of BEPS on tax incentives in ASPAC India  -
11/02/2021 Income from Indian investment by UAE based settlor through a Jersey based Trust is not taxable under the India-UAE tax treaty Under Section 160
10/30/2021 CBDT guidelines on borrowed funds invested in India by sovereign wealth funds and pension funds  CBDT Circular No. 19 of 2021, dated 26 October 2021
10/28/2021 Subscription fees for online databases and journals are not taxable as royalty under the India-USA tax treaty as well as under the Income-tax Act American Chemical Society v. ACIT (ITA No. 1030/Mum/2021) - Taxsutra.com
10/28/2021 CBDT prescribes more information to be uploaded in Form 26AS CBDT Order F.No.22S/1SS/2020/ITA-II, dated 26 October 2021
10/26/2021 Taxpayer is eligible for Foreign Tax Credit relating to exempt income in India under the India-Japan tax treaty HCL Comet (ITA No. 5555/Del/2014, 6162/Del/2013)
10/25/2021 Export commission is not taxable as FTS by invoking MFN clause under the India-France tax treaty Steria India Ltd v. DCIT [2018] 255 Taxman 110 (Del)
10/21/2021

IT support services provided by foreign entities are standard automated services, not taxable as FTS under the Income-tax Act

CIT v. Kotak Securities Ltd. [2016] 383 ITR 1 (SC)
10/21/2021 India Tax Konnect - September 2021 CBDT Press Release, dated 9 September 2021
10/14/2021 Pre-deposit for an appeal can be paid only through Electronic Cash Ledger Jyoti Construction vs Deputy Commissioner of CT & GST, Barbil Circle, Jajpur And Another [2021-VIL-715-ORI]
10/14/2021 SEZ allowed to claim refund of GST paid on inputs and input services Platinum Holdings Private Limited v. (1) Additional commissioner of GST & Central Excise (Appeals-II), Chennai (2) Assistant Commissioner of GST & Central Excise Tambaram Division, Chennai [2021-VIL-719-MAD]
10/12/2021 Unutilised foreign tax credit is not allowed as business expenditure CIT v. B R Constructions [1979] 222 ITR 202 (AP)
10/11/2021 Management support services are not taxable as FTS under the India-Singapore tax treaty CBDT v. Obreroi Hotels (India) Pvt. Ltd. [1998] 97 Taxman 453 (SC)
10/11/2021 OECD/G20 Inclusive Framework agreement on BEPS 2.0
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10/09/2021 CBDT issues final rules for implementing the withdrawal of retrospective application of 'indirect transfer' related provisions CBDT press release, dated 28 August 2021
10/01/2021 Depreciation is allowed on the WDV of the block of machinery at the gross value without reducing the waiver of loan Steelco Gujarat Ltd. v. ACIT [2009] 33 SOT 437 (Ahd)
09/16/2021 No disallowance under Section 14A where investments are made out of common funds and interest-free funds are higher than the amount invested in tax-free securities S.A Builders v. CIT [(2007) 1 SCC 781] 
09/03/2021 Service tax is not payable on the portion of TDS borne by recipient T.V.S. Motor Company Limited vs. The Commissioner Of Central Excise & Service Tax, Chennai- [2021-VIL-412-CESTAT-CHE-ST]
09/02/2021 India Tax Konnect - August 2021 CBDT press release dated 28 August 2021
09/02/2021 Computation of taxable interest on employee’s contribution to their Provident Fund account in excess of specified limit Section 10(11) and 10(12) of the Act
08/31/2021 CBDT issues draft rules for implementing the withdrawal of retrospective application of 'indirect transfer' related provisions Indirect Transfer related provisions
08/31/2021 CBDT extends due dates for electronic filing of various forms under the Income-tax Act Circular No. 16/2021, dated 29 August 2021
08/26/2021 Draft Rules and Regulations for rationalisation of Overseas Investment Regulations under FEMA, 1999 -
08/20/2021 Delay in furnishing a Tax Residency Certificate cannot be a ground to reject a tax treaty benefit Sub-sections (4) and (5) of Section 90 of the Income-tax Act, 1961
08/20/2021 Payments for online advertising, marketing and IT facilities to non-resident entities are not taxable as royalty ITO v. Right Florists [2013] 32 taxmann.com 99 (Kol)
08/19/2021 Debentures issued in lieu of outstanding interest liability amounts to ‘actual payment’ and is deductible under the Income-tax Act  K.P. Varghese v. ITO [1981] 131 ITR 597 (SC)
08/18/2021 RoDTEP scheme guidelines and rates notified Ministry of Commerce and Industry, Notification No. 19/2015-2020 dated 17 August 2021
08/17/2021 Time spent on interconnected services under a unified agreement is to be aggregated to determine a Permanent Establishment in India Telenor ASA v. DCIT (ITA No. 1307/Del/2015) - Taxsutra.com
08/17/2021 Revised guidelines issued for continuation and implementation of RoSCTL scheme Ministry of Textiles Press Release dated 14 July 2021
08/13/2021 CBDT prescribes a methodology to compute income of specified funds covered under Section 10(4D) and Section 115AD of the Income-tax Act Notification No. 90/2021, dated 9 August 2021
08/13/2021 CBDT notifies rule for computation of tax relief when there is an increase in book profits due to Advance Pricing Adjustment / secondary adjustments CBDT Notification No. 92/2021, dated 10 August 2021
08/11/2021 Re-domiciliation of the company does not affect tax treaty entitlement. A foreign telecasting company earning revenue from advertising time and subscription through its Indian agents does not constitute a PE in India Motorola Inc. v. DCIT [2005] 95 ITD SB 269 (Del)
08/05/2021 Government proposes to withdraw the retrospective application of 'indirect transfer' related provisions and make it prospective in nature  Under Section 143, Section 144, Section 147 or Section 153A or Section 153C
08/04/2021 India Tax Konnect - July 2021 CBDT Circular No. 11 of 2021, dated 21 June 2021
08/04/2021 CBDT extends due dates for electronic filing of certain Income Tax forms CBDT Press Release, dated 3 August 2021
08/03/2021 Auto-renewal for AEO-T1 entities subject to submission of annual declaration CBIC Circular No. 18/2021-Customs dated 31 July 2021
07/29/2021 Sale of shares of an Indian company by a foreign company is not a sham transaction and therefore long term capital loss on such transaction is eligible to set off and carry forward  Financial Year 2017-18 
07/20/2021 GST applicable on reimbursement of discount / rebate by supplier to distributor Santhosh Distributors [2021-VIL-32-AAAR] 
07/16/2021 Society and members are distinct persons and will fall under the ambit of GST  Emerald Court Co-Operative Housing Society Limited [2021-VIL-264-AAR]
07/16/2021 Supreme Court affirms that activity of advertisement and sales promotion is a post import activity incurred suo-motu by the importer and thus not liable to be included in assessable value of imports The Commissioner of Customs Vs M/s Indo Rubber And Plastic Works [2021-VIL-68-SC-CU]
07/15/2021 India Tax Konnect - June 2021 Notification 74 and 75 of 2021
07/14/2021 Contribution to Resident Welfare Associations (RWA) in excess of INR 7,500 would only be taxable under GST Greenwood Owners Association, Oceanic Owners Association, M/S TVH Lumbini Square Owners Association, Sanjay Kumar Gupta v.The Union Of India And Others [2021-TIOL-1505-HC-MAD-GST]
07/07/2021 CBDT issues guidelines on the taxability of transfer of assets by a partnership firm to its partners on its dissolution or reconstitution  CBDT Circular No. 14/2021, dated 2 July 2021
07/07/2021 CBDT further extends time limit for filing Forms 15CA/15CB manually CBDT Press Release, dated 5 July 2021
07/02/2021 CBDT issues guidelines on the applicability of TDS provisions under Section 194Q on purchase of goods CBDT Circular N0. 13 of 2021, dated 30 June 2021
06/28/2021 Set-off of brought forward business loss of earlier years is allowed against income from capital gains CIT vs. Chugandas [1965] 55 ITR 17 (SC)
06/28/2021 CBDT further extends certain timelines to provide relief to taxpayers in view of COVID-19 pandemic CBDT Press Release, dated 25 June 2021
06/26/2021 The Mumbai Tribunal refers an issue of eligibility of lower tax treaty rate on dividend over DDT rate to the Special Bench Union of India v. Paras Laminates Pvt. Ltd [1990] 186 ITR 722 (SC)
06/25/2021 CBDT introduces functionality to ascertain specified persons for the applicability of higher rates of TDS/TCS for non-filing of tax returns CBDT introduces functionality to ascertain specified persons for the applicability of higher rates of TDS/TCS for non-filing of tax returns CBDT Circular No. 11/2021, dated 21 June 2021
06/24/2021
Write-off of investment in loss making overseas subsidiaries is allowed as business loss 
APS Stare Industries Limited v. DCIT [2003] 86 ITD 182 (Ahd)
06/21/2021 India notifies Cyprus as an eligible country for Category I FPI license

Under the existing regulations, Category I FPI includes:

  • Entities from FATF member countries or any other country thar is notified by the Central Government, which are appropriately regulated;

-unregulated but whose investment manager is appropriately regulated and registered as a Category I FPI;

-university related endowments of such universities that have been in existence for more than five years.

06/15/2021 Foreign employees deputed to the Indian associated enterprise do not constitute agency PE in India  Lubrizol Advanced Materials Inc. v. DCIT [ITA No. 2455/Ahd/2018]
06/11/2021 India Tax Konnect - May 2021 CBDT Notification No. 38 of 2021 and Notification No. 39 0f 2021, dated 27 April 2021
06/11/2021 EPFO makes Aadhaar seeding mandatory for filing ECR with effect from 1 June 2021

EPFO Twitter - https://twitter.com/socialepfo/status/14026266056340480
09?s=20 dated 9 June 2021 

Accessed on 11 June 2021

06/09/2021 True up payments received to cover losses in India and marketing/advertisement expenses incurred for own business interest, do not influence transaction value of imports – CESTAT, New Delhi  TS-217-CESTAT-2021-CUST
06/07/2021 Visas of foreign nationals stranded in India due to Covid extended till 31 Aug

For details, refer:

Indian visa or stay stipulation period of foreign nationals stranded in India due to COVID-19 pandemic to be considered as deemed to be valid till 31.08.2021, PIB Delhi, June 2021

06/04/2021 EPFO allows its members to avail second COVID-19 advance withdrawal  Notification - Notified in official gazette on 27 March 2020
06/02/2021 Operational guidelines for Production Linked Incentive scheme (PLI scheme) for Pharmaceuticals  
05/31/2021 GST update | 43rd GST Council meeting  
05/26/2021 CBDT notifies a new rule for computation of fair market value of capital assets transferred in the case of slump sale CBDT Circular No. 68/2021, dated 24 May 2021
05/20/2021 CBDT extends time limits of certain compliances in view of Covid-19 pandemic  CBDT Circular No. 9/2021, dated 20 May 2021
05/20/2021 GST Notification update | Amendment to the Central Goods and Services Tax Rules, 2017 (CGST Rules) Notification no. 15/2021-Central Tax dated 18 May 2021
05/17/2021 CBDT extends PAN exemption to certain category of investors in IFSC Notification N0. 42/2021, dated 4 May 2021
05/13/2021 The Tribunal permits reduction of foreign taxpayer’s taxable income in India basis APA signed by taxpayer’s Indian Associated Enterprise Discussion on admissibility of additional grounds before Tribunal has not been covered in this Flash News
05/07/2021 In case of non-resident shareholders, beneficial tax treaty rate will apply for dividend distribution tax C W Spencer v. ITO [1957] 37 ITR 107 (Mad)
05/07/2021

TDS liability cannot be fastened on a transaction of indirect transfer of shares occurred before the retrospective amendment introduced by the Finance Act, 2012

CIT v. Vatika Township Pvt Ltd [2014] 367 ITR 466 (SC)
05/06/2021 India Tax Konnect - April 2021 CBDT Order N0. F. N0. 187/3/2020-ITA-1, dated 31 March 2021
05/05/2021 CBDT notifies thresholds for the provisions of ‘Significant Economic Presence’ CBDT Notification N0. 41/2021, dated 3 May 2021
04/28/2021 Carry forward of capital loss on sale of shares is allowed to a Singapore entity under the Income-tax Act even though such capital gains are not taxable in India under the tax treaty CIT v. R M Muthaiah [1993] 202 ITR 508 (Kar)
04/28/2021 CBDT issues notifications extending certain timelines due to COVID-19 pandemic CBDT Notification N0. 38 of 2021 and Notification N0. 39 of 2021, dated 27 April 2021
04/26/2021 Tax is to be deducted at a concessional rate of 5 per cent on dividends in view of the MFN clause under the India-Netherlands tax treaty Steria (India) Ltd. v. CIT [2016] 386 ITR 390 (Del)
04/22/2021 Consultancy services do not satisfy ‘make available’ conditions and hence are not taxable as FTS under the India-US tax treaty DIT v. Guy Carpenter & Co Ltd [2012] 346 ITR 504 (Del)
04/22/2021 Provisions of Section 56(2)(viib) are not applicable when shares are issued at face value pursuant to the scheme of amalgamation  CBDT Circular N0. 3/2012, dated 12 June 2012
04/20/2021 India Tax Konnect - March 2021 CBDT Notification N0. 10/2021, dated 27 February 2021
04/19/2021 CBDT amends conditions and form for an eligible pension fund seeking exemption of its income from investments made in specified Indian infrastructure entities Notification N0. 32/2021, dated 15 April 2021
04/15/2021 PAN is mandatory under Section 206AA even if the income of a person is below the taxable limit  Smt. Kowsalya Bai v. UOI [2012] 346 ITR 156 (Kar)
04/12/2021 Since income is not accrued, TDS provisions are not appliable on the provision for expenses -
03/30/2021 Reimbursement of certain expenditure by an Indian branch to a Singapore company is not liable for deduction of tax at source -
03/28/2021 CBDT notifies rules for registration, approval and compliance by educational institutions, funds, trusts, hospitals, etc. Notification N0. 19/2021, dated 26 March 2021
03/26/2021 The benefit of India-Netherlands tax treaty is not available to the Netherlands based fiscally transparent fund -
03/24/2021 Proposed amendments to the Finance Bill, 2021 Notice of Amendments, dated 22 March 2021 - Source: Taxman
03/18/2021

CBDT issues notification on application for grant of certificate to determine appropriate proportion of sum chargeable to tax in case of payment made to non-residents      

Notification No. 18/2021 F. No 370142/24/2019-TPL, dated 16 March 2021
03/17/2021

Payment for excess of the liability over the assets of a bank on its acquisition represents intangible asset eligible for depreciation       

CIT v. Techno Shares and Stocks Ltd.(ITA No. 971/2006 and 218/2007) (BOM)
03/09/2021 GST Notification update | E-invoice mandatory for turnover in excess of INR 50 crore             Notification no. 61/2020-Central Tax dated  30 July 2020
03/09/2021

Consolidation of Guidelines for OCI Cardholder

Notification dated  4 March 2021 S.O. 1050(E)
03/08/2021 Computation of perquisite for annual accretion related to excess contribution made by employer to specified fund or scheme -
03/05/2021 Clarification on residential status of individuals for financial year 2020-21
Section 6 of the Act
03/03/2021

CBDT issues notification extending the due dates for assessment, reassessment, imposition of penalty, etc.

CBDT Notification  No. 10/2021, dated 27 February 2021
03/03/2021 Payment by Indian resident end-users/distributors to non-resident computer software manufacturers/ suppliers for the resale/use of the software is not payment of royalty under various tax treaties - Supreme Court  CBDT Circular No.152 dated 27 November 1974
02/25/2021 Production Linked Incentive Scheme to promote domestic manufacturing of telecom and networking products Notification F. no. 13-01/2020-IC dated 24 February 2021
02/25/2021 Production linked incentive scheme for Pharmaceutical products -
02/24/2021 The AAR accepted the application since the issue was not pending before the tax department Centrient Pharmaceuticals Netherlands, B.V. AAR No. 01 of 2018 (New Delhi) - Taxsutra.com
02/19/2021 CBDT notification amending Faceless Assessment Scheme, 2019 Notification No. 61/2019, dated 12 September 2019
02/12/2021 Support services are taxable as FTS under the India-UK tax treaty. However, consultancy services which are merely advisory in nature are not taxable as FTS Aircom International Ltd. (AAR No. 1329/2012) - Taxsutra.com
02/11/2021 Offshore supply of equipment under the composite contract is not taxable in India, however, offshore services are taxable in India Technip France SAS (AAR No. 1413/2012) - Taxsutra.com
02/08/2021 Training centres of a Canadian entity do not constitute an agency PE in India International Air Transport Asscociation (Canada) v. ACIT [ITA No. 587/Mum/2016]- Taxsutra.com
02/01/2021 India Union Budget 2021-22 -
01/30/2021 India Tax Konnect - January 2021 -
01/22/2021 Taxpayer is eligible for foreign tax credit in India on taxes paid in various foreign countries ITTIAM Systems Pvt. Ltd. v. ITO (ITA No. 2464 and 2465/Bang/2017) - Taxsutra.com
01/19/2021 Employment Stock Option Plan exercised by non-resident, if granted for employment in India, not eligible for treaty benefits Section 17(2)(vi) of the Act
01/15/2021 Training fees are not taxable as FTS in view of the MFN clause under the India-Sweden tax treaty Sandvik AB v. DCIT (ITA NO.2524/PUN/207) - Taxsutra.com
01/14/2021 CBDT notifies the Faceless Penalty Scheme, 2021    CBDT Notifications Nos. 2 & 3/2021, dated 12 January 2021
01/13/2021 TDS provisions are not applicable on the ‘provisions for expenditure’ since the payee is not identifiable and liability is not ascertained DCIT v. Sonata Information Technology Ltd (ITA No. 3244 and 3245/Mum/2018) - Taxsutra.com
01/13/2021 Notice pay recovery liable to GST at 18% – Gujarat AAR Amneal Pharmaceuticals Pvt. Ltd. [Advance Ruling no. GUJ/GAAR/R/51/2020 dated 30 July 2020]
01/12/2021 Consultancy services are not taxable as FTS in view of MFN clause under the India-Sweden tax treaty -
01/07/2021 Payments for grant of distribution rights of channels are not taxable as royalty or FTS under the India-USA tax treaty   NGC Network Asia LLC v. DDIT (ITA No. 8671/Mum/2004) - Taxsutra.com
01/04/2021 Provisions of Section 56(2)(vii) of the Income-tax Act are not applicable on receipt of bonus shares PCIT v. Dr. Ranjan Pai (ITA No. 501 of 2016) - Taxsutra.com
01/01/2021 Tax Assemblage 2020 -