Legal Update

885

Circulars/Notifications
Given below are summarised important Circulars and Notifications issued by the CBDT, CBIC-
GST, MCA, SEBI and FEMA since the publication of the last issue of the journal, for information
and use of members. Readers are requested to use the citation/website or weblink to access the full
text of desired circular/notification. Suggestions on this column can be submitted at eboard@icai.in

DIRECT I. CIRCULARS CBDT has specified that the Income-tax efiling

TAXES
1. Income-tax Deduction from salaries
during the Financial Year 2020-21 under
section 192 of the Income-tax Act, 1961 -
Circular No. 20/2020, dated 03-12-2020
This CBDT Circular contains the rates for
deduction of income-tax from the payment of
income chargeable under the head “Salaries”
during the financial year 2020-21 and explains
certain provisions of the Income-tax Act, 1961
and Income-tax Rules, 1962, including the broad
scheme of TDS from Salaries, persons responsible
for deducting tax at source from Salaries and their
duties, computation of income under the head
“Salaries”, etc.
Refer: https://www.incometaxindia.gov.in/communications/
circular/circular_20_2020.pdf
2. Clarifications on provisions of the Direct Tax Vivad
se Vishwas Act, 2020 - Circular No. 21/2020, dated
04-12-2020
Section 10 and 11 of the Direct Tax Vivad se
Vishwas Act, 2020 empowers the CBDT/ Central
Government to issue directions or orders in public
interest or to remove difficulties. This circular
is being issued in continuation of Circular No.
09/2020 dated 22.04.2020 (which covered Q. no. 1
- 55) under section 10 and 11 to provide answers to
34 more FAQs (Q. no. 56 - 89).
Refer: https://www.incometaxindia.gov.in/communications/
circular/circular-21-of-2020.pdf
II. PRESS RELEASES/INSTRUCTIONS/OFFICE
MEMORANDUM/ORDER
CBDT to validate Unique Document Identification
Number (UDIN) generated from ICAI portal at the time
of upload of Tax Audit Reports – Press Release, dated
26-11-2020
portal had already factored mandatory quoting of
UDIN w.e.f. 27.04.2020 for documents certified/
attested in compliance with the Income-tax
Act,1961 by a Chartered Accountant. With this
system level integration, UDIN provided for
the audit reports/certificates submitted by the
Chartered Accountants in the e-filing portal shall
be validated online with the ICAI.
Refer:https://www.incometaxindia.gov.in/Lists/Press%20
Releases/Attachments/878/validate_UDIN_generated_from_
ICAI_portal_26_11_20.pdf
INDIRECT GST
TAXES I. Notifications
1. Penalty payable for non-compliance of
QR Code provisions on B2C transactions
waived off from 1st December 2020 to 31st March
2021
The CBIC vide Notification No. 89/2020- Central
Tax dated 29th November 2020 has waived off
the general penalty payable by any registered
person under section 125 of CGST Act for
non-compliance of the provisions of Dynamic
Quick Response (QR) code on B2C transactions
between the period from 1st December 2020 till
31st March 2021 provided the said registered
person complies with the provisions of QR Code
from April 1, 2021.
2. Mentioning 8-digit HSN code mandatory on tax
invoice in respect of certain chemicals and chemical
based products
The CBIC vide Notification No. 90/2020- Central
Tax dated 1st December 2020 has notified 49
chemicals and chemical based products in respect
of which it is mandatory for a registered person
to mention 8 digit HSN code in the tax invoice
issued by him.

(Matter on Direct and Indirect Taxes, is contributed by Direct Taxes Committee and GST & Indirect Taxes Committee of ICAI respectively. FEMA updates by CA. Manoj Shah, CA
Hinesh Doshi and CA. Sudha G. Bhushan)

www.icai.org THE CHARTERED ACCOUNTANT JANUARY 2021 109

 Legal Update
886
3. Extension of due date for compliances and actions
in respect of anti-profiteering proceedings under GST
till 31.03.2021
The CBIC vide Notification No. 91/2020- Central
Tax dated 14th December 2020 has extended
the time limit for completion or compliance
of any action, by any authority, specified in, or
prescribed or notified under section 171, i.e.
anti-profiteering proceedings, which falls during
the period from the 20th day of March, 2020
to the 30th day of March, 2021” till 31st day of
March, 2021.
II. Circulars
1. Waiver from recording of UIN on the invoices for the
months of April 2020 to March 2021
The CBIC vide Circular No.144/14/2020- GST
dated 15th December, 2020 has decided to grant
waiver from recording of UIN on the invoices issued
by the retailers/suppliers, pertaining to the refund
claims from April 2020 to March 2021, subject
to the condition that the copies of such invoices
are attested by the authorized representative of
the UIN entity and the same is submitted to the
jurisdictional officer.
CUSTOMS
I. Circulars
1. Faceless Assessment - Clarification on issues
raised by stakeholders
With a view to further enhance the efficiency of
the process involved in Faceless Assessment, CBIC
has issued instructions/guidelines vide Circular
No. 55/2020-Customs dated 17th November 2020
on certain key areas, which require immediate
attention. The detailed instructions/guidelines can
be accessed from www.cbic.gov.in.
2. Clarification regarding availment of exemption
on temporary import of durable containers which
do not conform to the standard marine container
dimensions
The CBIC has issued Circular No.
51/2020-Customs dt 20th November 2020 to
prescribe the procedure for import and re-export
110 THE CHARTERED ACCOUNTANT JANUARY 2021
of durable containers which do not conform to
the standard marine container dimensions, but
which are intended for temporary import and
eventual re-export. The detailed procedure
can be accessed from www.cbic.gov.in. The
procedure to be followed for import and re-
export of marine containers is governed by
guidelines provided in Circular No. 31/2005-
Cus., dated 25.07.2005.
The Circular has also clarified that the
containers that satisfy the following conditions
are eligible for the duty exemption provided vide
Notification No. 104/94-Cus., dated 16.03.1994
(as amended):
a) they are durable,
b) capable of being re-used multiple times,
c) capable of being identified at the time of re-
export vis a vis the imported containers, and
d) satisfy all the other stipulated conditions in
the notification.
3. Clarification on export of Gems and Jewellery
through Courier mode
The CBIC vide Circular No. 52/2020-Customs
dt 27th November 2020 has clarified that the
extant Courier Imports and Exports (Electronic
Declaration and Processing) Regulations, 2010
and the Courier Imports and Exports (Clearance)
Regulations, 1988 do not restrict exports of gems
and jewellery through the courier mode.
FEMA Discontinuance of Returns/Report
under Foreign Exchange Management
Act, 1999
A.P. (DIR Series) Circular No. 05 dated
November 13, 2020
With a view to improve the ease of doing business
and reduce cost of compliance, the existing
forms and reports prescribed under FEMA, 1999
have been reviewed and it has been decided to
discontinue 17 returns/reports as listed below with
immediate effect:
www.icai.org
 Legal Update
888

Sr. Name of Report Reporting Entity Frequency

No.
1. Category-wise transaction where AD Category-II Monthly
the amount exceeds USD 5000 per
transaction
2. Category-wise, transaction-wise AD Category-II Monthly
statement where the amount exceeds
USD 25,000 per transaction
3. Statement of Purchase transactions FFMCs and AD Category- II Monthly
of USD 10,000 and above (including
transactions of their franchisees)
4. Extension of Liaison Offices (LOs) AD Category-I banks As and when extension is
granted
5. Extension of Project Offices (POs) AD Category-I banks As and when extension is
granted
6. FII/FPI daily: Daily inflow/outflow of AD banks Daily
foreign fund on account of investment
by FPIs
7. FII/FPI Return (Monthly): Data AD Category-I banks Monthly
relating to actual inflow /outflow of
remittances on account of investments
by Foreign Institutional Investors
(FIIs) in the Indian Capital market
8. FVCI reporting: Inflows/outflows AD Category-I banks/ Monthly
of remittances on account of Custodian bank
investments by Foreign Venture
Capital Investor (FVCIs) and Market
value of Investments made by FVCIs
9. Reporting of Inflow/Outflow details Asset Management Quarterly
in respect of Mutual Fund by Asset Companies
Management Companies
10. Market value of FII Investment in AD Category-I banks Fortnightly
India on fortnightly basis
11. Market value of FII Investment in AD Category-I banks Monthly
India on Monthly basis
12. FII holdings as percentage of floating AD Category-I banks Monthly
stock
13. Form DRR for Issue/transfer of Custodian At the time of issue/
sponsored/unsponsored Depository transfer of depository
Receipts (DRs)- Hardcopy@ receipts
14. ADR/GDR Movement Report- two AD Category-I banks Monthly
way fungibility

112 THE CHARTERED ACCOUNTANT JANUARY 2021 www.icai.org


15. Repatriation of Sales proceeds of Custodian
underlying shares represented by
FCCBs/GDRs/ ADRs
16. GDR/ADR underlying shares issued, Custodian
re deposited and released monthly
reporting
17. Monitoring of disinvestments by AD banks
Overseas Corporate Bodies
Please note that it is only the hardcopy filing of form
DRR that has been discontinued. The domestic
custodian may continue to report the form DRR
on FIRMS application in terms of Regulation 4 (5)
of FEM (Mode of Payment and Reporting of Non-
Debt Instruments) Regulations, 2019.
The Master Direction - Reporting under Foreign
Exchange Management Act, 1999 dated January
01, 2016, shall accordingly be updated to reflect the
above changes.
Establishment of Branch office (BO) / Liaison
Office (LO) / Project Office (PO) or any other
place of business in India by foreign Law firms
A.P. (DIR Series) Circular No. 07 dated November
23, 2020
RBI vide AP Dir Circular No. 23 dated October
29, 2015 had advised that no fresh permissions/
renewal of permission shall be granted by the
Reserve Bank of India to any foreign law firm for
opening Liaison Office in India, till the policy is
reviewed based on, among others, final disposal of
matter by Hon’ble Supreme Court.
The Supreme Court while disposing the matter held
that advocates enrolled under the Advocates Act,
1961 alone are entitled to practice in India and that
foreign law firms/companies or foreign lawyers or
any other person resident outside India, are not
permitted to establish any branch office, project
office, liaison office or any other place of business in
India for the purpose of practicing legal profession.
Accordingly, RBI has directed AD Category I
Banks not to grant any approval to any branch
office, project office, liaison office or any place of
business in India under FEMA for the purpose of
practicing legal profession.
www.icai.org
Legal Update
889
Monthly
Monthly
Monthly
External Trade – Facilitation – Export of Goods
and Services
A.P. (DIR Series) Circular No. 08 dated December
04, 2020
With a view to further enhance the ease of doing
business and quicken the approval process, it has
been decided to delegate more powers to AD
Category I Banks in following cases:
Direct Dispatch of Shipping Documents
The limit of USD 1 million per export shipment
upto which AD Bank allowed to regularize cases
of dispatch of shipping documents by exporter
directly to consignee or his agent resident in
country of final destination of goods has been
removed. Now AD Banks will regularize direct
dispatch of shipping documents irrespective of
any limits subject to conditions. For detailed
conditions refer A.P. Dir Circular at –
https://rbidocs.rbi.org.in/rdocs/Notification/PDFs/
PDIR08DCB570D45FF14E369652F751858C99F8.
PDF
Write-off of Export Bills
The procedure of write-off of export bills is
revised. As per revised procedure the limits
of self write-off remain unchanged. However
the conditions required to be fulfilled for self
write-off and write-off by AD Banks have been
changed. As per revised conditions, apart
from amount remaining outstanding for more
than one year and submission of satisfactory
documentary evidence, the exporter must be
regular customer of bank for period of at least
6 months and fully compliant with KYC/AML
guidelines.
THE CHARTERED ACCOUNTANT JANUARY 2021 113
 Legal Update
890
Further in following cases write-off of unrealised
export bills shall be allowed without any limits:
1. Overseas buyer is declared insolvent and
certificate of official liquidator indicating
that there is no possibility of any recovery
has been produced.
2. Unrealised amount represents balance
due in case settled through intervention
of Indian Embassy, Foreign Chamber of
Commerce or similar organisation.
3. The goods exported have been auctioned
or destroyed by Port/Customs/health
Authorities in importing country.
For other changes relating to write-off of export
bills refer A.P. Dir Circular at -
https://rbidocs.rbi.org.in/rdocs/Notification/PDFs/
PDIR08DCB570D45FF14E369652F751858C99F8.
PDF
Set off of Export Receivables against Import
Payables
Presently AD Banks are only allowing set off of
export receivables against import payables from/to
5833 A 40-year-old CA firm primarily based
out of Mumbai is looking for interested
firms in Delhi/NCR, Hyderabad, Chennai,
Bangalore, Ahmedabad, Kolkata,
Chandigarh, for association/merger.
E-mail - partnership.cafirm@gmail.com
5834 We, KPSN & Associates LLP, Chartered
Accountants, a Chennai based CA
firm with 7 partners and with 7 years of
experience. Currently, we have branches
in Chennai and Madurai. We are looking
for merger opportunities with existing CA
firms in locations such as Bombay, Delhi
NCR, Hyderabad, Bangalore, Kolkata, Pune,
Bhubaneswar, Cochin, Trichy, Coimbatore,
Vellore, Tuticorin, Ahmedabad, Chandigarh
and Vizag. We are looking at CA firms
with 3-5 years of existence and with good
standing. We prefer sole proprietorship
firms or partnership firms having 2-5
114 THE CHARTERED ACCOUNTANT JANUARY 2021
same overseas buyer/supplier. Upon review, now it
has been decided to delegate powers to AD Banks
to consider requests of set off of export receivables
against import payables with the overseas group
/ associate companies either on net basis or gross
basis, through in house or outsourced centralized
settlement arrangement subject to fulfillment of
conditions as prescribed. For detailed conditions
refer A.P. Dir Circular at –
https://rbidocs.rbi.org.in/rdocs/Notification/PDFs/
PDIR08DCB570D45FF14E369652F751858C99F8.
PDF
Refund of Export Proceeds
AD banks upon review shall not insist on re-import
of goods where exported goods have already been
auctioned or destroyed in importing country and allow
refund of export proceeds after due diligence on track
record of exporter, verifying bonfides of transaction
and obtain certificate from exporter issued by DGFT/
Customs authorities that no export incentive has been
availed or proportionate incentive if availed has been
surrendered.
Classifieds
partners. Interested firms can reach us at:
krishna@kpsn.in (9345915959)
5835 Retired CAs, practicing CA professionals,
proprietorship/ Partnership firms in India
interested in joining or merging with a
more than 40 years old CA firm.  Write with
details of name of city, years of CP, DISA, etc
to capickup1975@gmail.com
5836 We are a 40 year old professional practice,
looking for firms which are interested
to officially 
merge with us. Please
mail: cafirmgujarat@gmail.com 
5837 We are 52 years old CA firm having H.O.
at Delhi & branches at 8 places are looking
for 15 or more years old proprietor firm at
Kanpur for merger, additional DISA/CISA
is preferred. Interested firms can send
proposal with profile on : jk.sarawgi@jksco.
in, Phone - 9871599182
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