Tax Journal July 2020

TaxbyManish
 INDEX
SN CONTENTS PAGE NO

1 Assessing the Measures for an Atma Nirbhar Bharat 1

2 Enlarging the scope of Equalization levy 2

3 Power of ITAT to grant stay after budget 2020 3

4 Analysis of Deemed Residency 7

5 List of countries who have deposited their MLI 10

6 Safe Harbor Margins- AY 2020-2021 11

7 GST on Managerial Remuneration - the end of the dispute 14

8 Step wise process to file NIL GSTR3B returns through SMS 16

9 Impact on APA mechanism due to lockdown 17

10 COVID-19: Impact on Transfer Pricing Benchmarking 19

11 FAQs on Relaxations Relating To Income Tax Due To Covid 19 21

12 Indirect Tax Relief measures during Covid 19. 28

13 GST Council Meeting recommends relief measures for small taxpayers 30

14 FAQ on Foreign Trade Policies for Lockdown reliefs. 31

15 Japan Relief Measures during the Coronavirus Outbreak 38

16 Direct Tax News 39

17 Indirect Tax News 41

18 International Tax News 43

19 Trade Policy News 46

20 Tax on News 47

21 Recent Judicial Pronouncement on Tax 48

22 Changes in due dates due to Covid-19 49

 Assessing the Measures for an Atma Nirbhar Bharat
The Hon’ble PM announced a big relief package for people of India during this pandemic and the middle class of India
experienced some hope of financial relief from the government. The next day the country’s Finance Minister made
announcements which in their view would reduce the difficulties of citizens. However, there is still some uncertainty in
understanding how these steps will reduce hardships for the people of India, especially the middle class.

Firstly, let us analyze the three direct tax steps and try to understand how this help entrepreneurs of India:

 The rate of TDS has been decreased by 25%. Thus, this will decrease the quantum of TDS and increase the
cash flow for businesses, especially in the service sector. However, there is no reduction in the tax payable by
entrepreneurs and they may have an increased burden of advance tax liability. Further, the decline in tax rate
is during the middle of the month and hence different rates would be applicable in a quarter. This might bring
confusion among deductors and also potential difficulties to file TDS return. We hope deductors do not
impose tax demands and penalties due to small errors in TDS compliances

 Income tax refunds will be sanctioned at the earliest, except for corporate taxpayers. A tax refund may not be
seen as financial assistance from the government. Tax refunds are an eligible right of the taxpayer and there
already exist some delays made by the government issuing the same. Furthermore, there’s no reasoning as to
why corporate taxpayers’ tax refunds are deferred

 All Income tax due dates are extended to November 30, 2020. Frankly speaking during this lockdown phase
almost all due dates are extended constantly, with no centralized hub for updated information. Extending due
dates may also not act as financial assistance for entrepreneurs. Now full-year compliances would be due
during the festive season which might make it challenging for professionals to plan and execute. Also, due
dates extensions might defer invoicing of professionals leading to cash flow issues.

 The due date of Vivad se Vishwas scheme was extended till December 31, 2020. This may create confusion as
the due date of filing application is now December 31, 2020. According to tax officials though, the last date
for application is June 30, 2020 with December 31, 2020 being the last date of application disposal

 The government also extended due dates of tax department’s responsibilities such as completion of
assessments etc. This may lead to prolonged staying of companies’ refunds till the end of their assessment.

Thus, from above it could be possible that these tax measures may not provide any financial assistance to
entrepreneurs.

Also, the rate of PF contributions by employers and employee has reduced from 12% to 10%. Employees will take home
relatively more salary but this will also increase the tax liability of the employees. Further, there will be lesser contributions
made in the PF account of the employees. Ultimately this move by the government might lead to a loss for all employees of the
nation.

MSMEs can now avail additional loans without any collateral. The quantum of collateral-free loan is 20% of the existing credit
limit. From this the following can be concluded
 This facility is only available for MSMEs and not to others
 The MSME must have a pre-exiting loan. If there is no such loan, then it cannot opt for any loan without security
 There is no relief in interest or payment schedules of loan repayments
 Over leveraged businesses get more loans than prudent businesses

We are also yet to get a clear picture as to how a change in the MSME definition would provide financial assistance to
entrepreneurs.

Steps like equity infusion and restrictions of global tenders are prudent steps that will help budding entrepreneurs in the
country. We hope the government adopts similar steps which directly assist entrepreneurs.

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 Enlarging the scope of “equalisation levy”
As part of the measures to address the tax challenges posed by the increased digitalization of the economy, an
“equalisation levy” was introduced by the Finance Act, 2016 on certain non-resident businesses. The levy was applied at
a rate of 6% on certain “specified services”—such as online advertisement and any provision for digital advertising
space or any other facility or service for the purpose of online advertisement.

The measure imposes an obligation on Indian business residents to deduct the amount of the equalisation levy on
payments made for such specified services and to remit the amounts to the government.

For these purposes, an “e-commerce operator” is defined as a non-resident that owns, operates or manages a digital or
electronic facility or platform for online sale of goods or the online provision of services.

The “e-commerce supply or services” on which the levy applies are:

•Online sale of goods owned by the e-commerce operator

•Online provision of services provided by the e-commerce operator

•Online sale of goods or provision of goods facilitated by the e-commerce operator (i.e., when the operator provides a
platform for others to supply goods or provide services)

•Any combination of the above

The levy is applicable when the goods or services are provided / facilitated by the e-commerce operator to:

•A person resident in India

•A non-resident (in respect of sale of advertisements targeted at persons resident in India or using IP address in India)

•A person who buys goods or services using an IP address located in India

There are certain situations when the equilisation levy is not applicable. These include situations when:

•The non-resident has a permanent establishment in India and the e-commerce supply or services are effectively
connected to such permanent establishment

•The equalisation levy at 6% on “specified services” (as defined above) applies to such services

•The gross receipts / turnover in respect of goods sold / services provided to residents, non-residents and persons using
IP addresses in India (referred to above) is less than Rs. 2 crores in a year

Unlike in the case of the equalisation levy on specified services when the resident payer was responsible to deduct and
pay the equalization levy, this levy on the e-commerce operator is the responsibility and is to be discharged by the
operator itself, on a quarterly basis. Consequently, an exemption from income tax is proposed for the e-commerce
operators in respect of amounts covered by the equalisation levy.

Similar to liabilities of the equalisation levy as previously imposed, this expanded levy would not be part of the Income-
tax Act and, thus, would not be subject to provisions of India’s income tax treaties.

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 Power of ITAT to grant stay after budget 2020.

Finance Act, 2020 has inter alia amended the provisions of section 254 of the Income-tax Act, 1961 (‘the Act’) to dilute, the hitherto

absolute, stay granting powers of the the Income Tax Appellate Tribunal (‘the Tribunal’). The first proviso to sub-section (2A) of

section 254 has been amended to provide that the Tribunal may grant a stay of demand subject to the condition that at least twenty

percent of the tax, interest, fee, penalty, or any other sum payable under the Act is deposited or a security of an equal amount is

furnished. Similarly, the second proviso of the same sub-section has been amended to provide that an extension of stay shall not be

granted unless the condition referred to in the first proviso has been met with.

This sub-section of section 254 has the rare distinction of being read down by the High Courts on two earlier occasions . Considering

this notorious history, it may not be far-fetched to think that a constitutional challenge to this amendment is very likely. Be that as it

may, it would be naïve to presume unconstitutionality of a provision at the get go. If the provision does pass the constitutional

challenge, if and when there is one, an important question which would arise is as to when does this provision take effect and which

stay applications are saved from its rigour. The Finance Act, as also the Memorandum explaining the provisions of the Finance Bill,

state that this amendment is effective from 1st April, 2020. Therefore, the amendment is certainly prospective in its operation.

However, the question remains as to what does prospective mean in the context of an amendment which affects the jurisdiction of an

appellate authority. Which event occurring after 1st April, 2020 will attract the amended provisions is what is sought to be examined

in this write-up.

It is trite that charging and computation provisions, as they stand on the first day of a the financial year are relevant for that year,

irrespective of what the law is when the assessment is completed or an appeal comes to be heard .However, the provisions dealing

with jurisdiction of authorities follow a different principle. Such provisions are generally procedural in nature, and in the absence of

anything to the contrary, apply retrospectively in the sense that they apply to all actions after the date they come into force even

though the action may have begun earlier or the claim on which the action may be based may be of an anterior date . However, this

retrospectivity is subject to an exception that a ‘vested right’ of a litigant should not be impaired as a result thereof.

An amendment cannot impair a vested right-

The Courts have time and again reiterated the principle that the right to appeal and the incidental rights thereto are substantive rights

which are vested in every litigant. These vested rights cannot be impaired or made more onerous by a subsequent legislation unless

the subsequent legislation says so either expressly or by necessary intendment. This principle of law follows from the legal maxim

‘Nova constitution futuris formam imponere debet, non praeteritis’, which literally translates to mean that a new law ought to be

construed to interfere as little as possible with vested rights . Neither the Finance Act, 2020, nor the Memorandum explaining the

provisions give any indication of its intention to affect the rights already vested in the appellants under section 254. Therefore, the

exception, as noted in the above principle does not apply to these amendments. It would follow that all such appellants having already

acquired a ‘vested right’ to obtain a complete stay of demand as of 1st April, 2020 should not stand to suffer due to the amendment.

The only question that remains is as to which appellants can be said to have such a vested right as of this date.

Relevance of commencement of dispute-

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An issue, fairly similar to the one being dealt with herein, arose before the Supreme Court in the context of Sales Tax Act. Section 22

of the Central Provinces and Berar Sales Tax Act, 1947 dealt with the appeals filed before the Sales Tax Commissioner. The

provision was amended in 1949 to provide that no appeal could be filed unless the amount of tax, in respect of which the appeal was

being filed, was paid. The question arose that whether this condition of predeposit of tax would apply to all the appeals which were to

be filed after the section had been amended. In the case of the Petitioner therein, the assessment order had been passed in 1950 and the

appeal against such an order was also filed in the same year, i.e., both the events had occurred after the amendment came into force in

1949. However, the first notice, that initiated the dispute and which eventually culminated into the assessment order was issued by the

Sales Tax Officer in 1947. The case of the Petitioner was that the law pertaining to an appeal has to be seen on the date of the

‘commencement of lis’, i.e., on the date of initiation of the dispute in the original proceeding, as it is on such date, that the right to

appeal ‘vests’ in an appellant. It was argued that any subsequent amendment cannot impair this right of appeal which has vested on

the date the dispute was initiated. Affirming the Petitioner’s stance, the Supreme Court first explained the nature of the amendment in

the following words-

“There can be no doubt that the new requirement "touches" the substantive right of appeal vested in the appellant. Nor can it be

overlooked that such a requirement is calculated to interfere with or fetter, if not to impair or imperil, the substantive right. The right

that the amended section gives is certainly less than the right which was available before. A provision which is calculated to deprive

the appellant of the unfettered right of appeal cannot be regarded as a mere alteration in procedure. Indeed the new requirement

cannot be said merely to regulate the exercise of the appellant’s pre-existing right but in truth whittles down the right itself and

cannot be regarded as a mere rule of procedure.”

The Supreme Court then went on to hold that the date on which the first notice was issued by the Sales Tax Officer would be the date

on which the ‘lis’ arises. The law pertaining to appeals has to be seen as of this date. Any subsequent amendment thereto will not

govern an appeal which arises out of this assessment order. Following extract is noteworthy-

“It will appear from the dates given above that in this case the ‘lis’ in the sense explained above arose before the date of amendment

of the section. Further, even if the ‘lis’ is to betaken as arising only on the date of assessment, there was a possibility of such a ‘lis’

arising as soon as proceedings started with the filing of the return or, at any rate, when the authority called for evidence and started

the hearing and the right of appeal must be taken to have been in existence even at those dates. For the purposes of the accrual of the

right of appeal the critical and relevant date is the date of initiation of the proceedings and not the decision itself.”

The Supreme Court quoted with approval the judgment of the Calcutta High Court . Following passage is of relevance in this regard-

“There can be no doubt that the right of appeal has been affected by the new provision and in the absence of an express enactment

this amendment cannot apply to proceedings pending at the date when the new amendment came into force. It is true that the appeal

was filed after the Act came into force, but that circumstance is immaterial for the date to be looked into for this purpose is the date of

the original proceeding which eventually culminated in the appeal.”

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The Supreme Court also rejected the Respondent’s argument that after the amendment, the appellate authority had no jurisdiction to

hear an appeal without enforcing the pre-deposit of tax. It was held that for those purposes the old law must be presumed to continue

to exist. The law which created a right must be presumed to exist in order to support the right so created by it.

The Supreme Court dealing with an identical issue in the context of Assam Sales Tax Act, 1947 accepted the above ratio with a slight

variation. It was held therein that the critical date to determine the rights of appeal available to a litigant is the date of ‘completion of

assessment’. In holding so, the Court rejected the Petitioner’s argument that since the assessment year had ended prior to the

amendment, the old law would apply to it.

The same principle was also laid down by the Supreme Court in another judgment , wherein the Court further clarified that all

successive appeals from court to court really constitute one proceeding. Therefore, the law relating to appeals before every such

forum has to be seen on the date of commencement of dispute in the original proceeding.

To draw a parallel to the issue at hand, the law governing appeals before every appellate forum, right from the Commissioner of

Income-tax (Appeals) to the Supreme Court has to be seen as on the date on which the dispute arises, i.e. when a notice is issued by

the Assessing Officer, or at any rate, the date on which the assessment is completed.

Similar disputes under the Income-tax Act-

Disputes, similar to the one being dealt with herein, have arisen under the Income-tax Act as well. Sub-section (2) of section 254 was

amended by the Finance Act, 2016 with effect from 1st June, 2016, whereby the period available to the Tribunal to rectify a mistake

apparent from record in its orders was reduced from 4 years to 6 months from the end of the month in which the order is passed. A

literal reading of the provision meant that in the cases where the orders had been passed by the Tribunal under section 254(1) at least

6 months prior to the amendment, the right to file a rectification application against such orders stood automatically extinguished once

the amendment came into force. In one such case, wherein the Tribunal had passed the order under section 254(1) in 2015 (i.e., prior

to the amendment), a rectification application was filed in August, 2016. The Tribunal refused to entertain the application on the

ground that the reduced limitation of six months had expired. The order of the Tribunal was assailed before the Madhya Pradesh High

Court . The Court negatived the Tribunal’s approach and held that if the amendment was applied to the orders passed under section

254(1) prior to the amendment, it would take away vested rights of the appellants to file a rectification application and the provision

would become ‘virtually retrospective’. Accordingly, the Tribunal was directed to adjudicate upon the rectification application as per

the old law.

An amendment was made to the court fee leviable on filing of an appeal before the High Court under section 260A of the Act. The

Petitioners argued that all aspects of the appeal before the High Court had to be governed as per the law prevailing on the date of the

assessment order and that the subsequent amendments would be wholly irrelevant. It was, therefore, argued that the court fee was

leviable at the rates in force on the date when the assessment order was passed and not when the appeal came to be filed before the

High Court. The Respondents opposed this contention by arguing that since the appeal before the High Court was filed after the

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amendment, the court fee would be leviable as per the new rates. The Supreme Court concurred with the Petitioners and held that the

date of passing of the assessment order would be decisive in determining all aspects of appeals including the levy of court fee.

In the context of penalty proceedings, the Supreme Court held that the jurisdiction to levy penalty has to be seen as on the date of the

assessment order, because it is on such date, that the penalty proceedings are initiated.

Amendment to section 234D of the Act by the Finance Act, 2012 is an example of a situation where, although, a vested right was

hampered, however, the same was done in view of the express language of the amendment. Section 234D, dealing with the levy of

interest where excess refund is granted under section 143(1) visa vis the final determination under section 143(3) was introduced on

1st June, 2003. The Bombay High Court held that in cases where refunds were granted prior to this date, there will be no levy of

interest. The section was amended by way of insertion of an Explanation by the Finance Act, 2012, which clarified that the provision

will also apply to the assessment years prior to the amendment, as long as the assessment proceedings were pending as of 1st June,

2003. Therefore, in this case, the legislature, by express language, sought to impose an additional liability to pending proceedings.

When the very same issue came up before the Bombay High Court again after the amendment, it was held that in view of the express

language of the Explanation, the interest was leviable on refunds granted prior to the amendment. Since the language of the

amendments to section 254 by the Finance Act, 2020 are in contrast to the language of the amendment to section 234D, in as much as,

it does not expressly provide for its application to all the proceedings pending before the Tribunal, the hitherto unrestricted power of

granting stay of demand arising from such proceedings will continue to hold the field.

The judgments referred to hereinabove overwhelmingly support the proposition that a vested right to appeal and the incidental rights

thereto come to fruition as soon as the dispute arises in the original proceeding and the law prevailing on such date will continue to

govern all aspects of the appeals, notwithstanding subsequent amendments. In the context of the appeals arising out of income tax

proceedings, the above would translate into determining and freezing the appellant’s rights on the date of the assessment order.

The right to obtain a stay of demand is incidental to the right to appeal and is naturally governed by the same principles. However,

even if it is looked at independently, the same consequences will follow since the dispute with respect to demand, for which a stay is

sought, arises with the issuance of the notice of demand under section 156 of the Act, which also accompanies the assessment order.

Therefore, looked from either perspective, the critical date would be the date of the assessment order.

In view of the above, it appears that the amended provisions of section 254 will apply only to those cases, where the assessment order

is passed on or after 1st April, 2020. In all other cases, the Tribunal will continue to hold the power of granting stay of demand

without any restriction. This conclusion will hold good for both, original applications for stay (under the first proviso) and

applications for extension of stay (under the second proviso).

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 Analysis of Deemed Residency

The issue of stateless persons has been bothering the tax world for quite some time. It is entirely possible for an
individual to arrange his affairs in such a fashion that he is not liable to tax in any country or jurisdiction during a year.
This arrangement is typically employed by high net worth individuals (HNWI) to avoid paying taxes to any country/
jurisdiction on income they earn. Tax laws should not encourage a situation where a person is not liable to tax in any
country. The current rules governing tax residence make it possible for HNWIs and other individuals, who may be
Indian citizen to not to be liable for tax anywhere in the world. Such a circumstance is certainly not desirable;
particularly in the light of current development in the global tax environment where avenues for double non-taxation are
being systematically closed.

Final Amendments – in the Finance Act 2020

Insertion of clause (1A) to Section 6

“(1A) Notwithstanding anything contained in clause (1), an individual, being acitizen of India, having
total income, other than the income from foreign sources, exceeding fifteen lakh rupees during the
previous year shall be deemed to be resident in India in that previous year, if he is not liable to tax in
any other country or territory by reason of his domicile or residence or any other criteria of similar
nature;

Amendment in Section 6(6) – Related to above

(6) A person is said to be "not ordinarily resident" in India in any previous year if such person is—
(a) …….; or
(b) …….; or
(c) …….; or
(d) a citizen of India who is deemed to be resident in India under clause (1A).

Analysis of above amendments

1. The new clause (1A) has been inserted to Section 6 to specifically override Clause (1) of Section 6. As we all know,
Section 6(1) is the basic section which determines the residential status of an Individual based on the number of days
stayed in India for different categories of Individuals.

2. Thus, technically an Indian Citizen who is Resident as per Section 6(1) but if he is not liable to tax in any other
country or territory by reason of his domicile or residence or any other criteria of similar nature, then now he will be
FIRSTcovered by the provisions of Section 6(1A)as same would have an upper hand in terms of Notwithstanding
provisions. All such Indian Citizen would now be considered as ‘Deemed Resident’ under clause (1A) irrespective
of number of days stayed in India.

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3. Interestingly, as per the amendment by the Finance Act 2020, deemed resident as per Section 6(1A) i.e. stateless
person has further been categorized as “Not Ordinary Resident”. This amendment was aimed to exempt the Bonafide
Indian working abroad but seems to result into unintended implications, as discussed hereunder.

4. As we all now that by virtue of proviso to Section 5(1), “Not Ordinary Resident” is not liable to Tax on his Income
that accrues or arises outside India unless same is derived from business controlled in or profession set up in India.Thus,
technically ‘Not Ordinary Resident’ are not liable to tax in respect of their Global Income in India.

Impact of above Amendments –

1. The underlying legislative intention was to Tax the stateless Indian Citizen by deemed them to be resident of India.

2. But the language used in the newly inserted Section 6(1A) –

a. Covers cases of all Indian Citizens,

b. His Income other than the income from foreign sources, Exceeds fifteen lakh rupees during the previous year,
c. Who are not liable to tax in any other country or territory by reason of his domicile or residence or any other criteria
of similar nature
d. Overrides number of days criteria as per Section 6(1)

3. Thus, for example an Mr A is Indian Citizen and having Indian Income Rs 20 Lakh and Foreign source Income Rs
20 Crore. In facts of the case, Mr A stays in India and had never visited aboard would also now be covered within the
Deemed residency provisions of Section 6(1) instead of regular residency provisions Section 6(1).

4. Therefore, in terms of amendment in Section 6(6), now Mr A will be ‘Not Ordinary Resident’ in India. Accordingly,
it may be a good case to argue that Entire Global Income if Rs 20 Crore of Mr A (accrued or arisen outside India) would
now be out of scope of Total Income in terms of proviso to Section 5(1) of the Act.

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5. The impact of the recent amendment would make cases of all the Indian Citizens to be ‘Not Ordinary Resident’
in India, if
a. they are not resident of any other country and
b. having Indian Source Income exceeding 15 Lakh.

6. The resultant picture after careful analysis of insertion of Section 6(1A) along with insertion of Section 6(6)(d), would
emerge that in an adventure to tax the stateless person, Government may end up extinguishment of rights to Tax
Global Income of all the Indian Citizens who were otherwise Resident of India in terms of Section 6(1).

7. The CBDT vide their press release February 2, 2020 clarify that the new provisions is not include to tax net those
India citizens who are bonafide workers in other country. Any clarificatory statement by CBDT in the above intended
situation of interpretation of recent amendment would be highly welcomed.

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 List of countries who have deposited their MLI and
notified India as Covered Tax Agreement ('CTA')
Updated on 25. 04.2020.

SN Country Date of entry into effect (from India's perspective)

Withholding Tax Other Taxes
1 Austria 01-Apr-20 01-Apr-20
2 Australia 01-Apr-20 01-Apr-20
3 Belgium 01-Apr-20 01-Apr-20
4 Finland 01-Apr-20 01-Apr-20
5 France 01-Apr-20 01-Apr-20
6 Georgia 01-Apr-20 01-Apr-20
7 Ireland 01-Apr-20 01-Apr-20
8 Israel 01-Apr-20 01-Apr-20
9 Japan 01-Apr-20 01-Apr-20
10 Lithuania 01-Apr-20 01-Apr-20
11 Luxembourg 01-Apr-20 01-Apr-20
12 Malta 01-Apr-20 01-Apr-20
13 Netherlands 01-Apr-20 01-Apr-20
14 New Zealand 01-Apr-20 01-Apr-20
15 Poland 01-Apr-20 01-Apr-20
16 Serbia 01-Apr-20 01-Apr-20
17 Singapore 01-Apr-20 01-Apr-20
18 Slovak 01-Apr-20 01-Apr-20
19 Slovenia 01-Apr-20 01-Apr-20
20 UAE 01-Apr-20 01-Apr-20
21 United Kingdom 01-Apr-20 01-Apr-20
22 Canada 01-Apr-20 01-Jun-20
23 Denmark 01-Apr-20 01-Jul-20
24 Iceland 01-Apr-20 01-Jul-20
25 Latvia 01-Apr-20 01-Aug-20
26 Norway 01-Apr-20 01-May-20
27 Qatar 01-Apr-20 01-Oct-20
28 Ukraine 01-Apr-20 01-Jun-20

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 Safe Harbour Margins- AY 2020-2021
The Central Board of Direct Taxes vide Notification No. 25/2020/ F. No. 370142/14/2020-TPL dated May 20, 2020
has notified that the rates applicable from AY 2017-18 to 2019-20 will continue to apply for AY 2020-2021 (April
2019- March 2020). The applicable Safe Harbour rates for AY 2020-21 are as below:

Sl. Eligible international Safe Harbour rates- applicable for AY 2020-2021

No. transactions

1 Provision of Software Operating profit margin to operating expense

development services (IT) and  Where the aggregate value of such transactions ≤
Information Technology Enabled Rs.100 crore – not less than 17%
Services (ITES)
 Where the aggregate value of such transactions > Rs.100
crore < Rs.200 crore – not less than 18%

2 Provision of knowledge process The value of international transaction ≤ Rs.200 crore and the
outsourcing services (KPO) operating profit margin to operating expense is –

 Not less than 24%, if the Employee Cost to Operating

Expense is at least 60%

 Not less than 21% ,if the Employee Cost to Operating

Expense is greater than 40% or more but less than 60%; or

 Not less than 18%, if the Employee Cost to Operating

Expense does not exceed 40%.

3 Provision of corporate guarantee Not less than 1% per annum on the amount guaranteed

4 Provision of specified contract The operating profit margin to operating expense not less than 24%,
research and development services where the value of the international transaction is
wholly or partly relating ≤ Rs.200 crore
to software development

5 Provision of contract research and The operating profit margin to operating expense not less than 24%,
development services wholly or where the value of the international transaction is
partly relating to ≤ Rs.200 crore
generic pharmaceutical drugs

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6 Manufacture and export of: Operating profit margin to operating expense:

 core auto components  Not less than 12%

 non-core auto  Not less than 8.5%

components

7 Receipt of low value-adding Aggregate value of such transactions (including mark up not
intra-group services exceeding 5%), does not exceed Rs.10 crore

8 Advancing of intra-group loans where
the amount of loan is denominated in
Indian Rupees (INR)
The interest rate declared in relation to the eligible international
transaction is not less than the one-year marginal cost of funds
lending rate of State Bank of India as on 1st April of the relevant
previous year plus basis points as below:
 175 basis points, where the associated enterprise has
CRISIL credit rating between AAA to A or its equivalent
 325 basis points, where the associated enterprise has
CRISIL credit rating of BBB-, BBB or BBB+ or its
equivalent
 475 basis points, where the associated enterprise has
CRISIL credit rating between BB to B or its equivalent
 625 basis points, where the associated enterprise has
CRISIL credit rating between C to D or its equivalent
 425 basis points, where credit rating of the associated
enterprise is not available and aggregate amount of loan
advanced to all associated enterprises as on 31st March of
the relevant previous year < Rs.100 crore

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9 Advancing of intra-group loans The interest rate declared in relation to the eligible international
referred to in item (iv) of rule 10TC transaction is not less than the six-month London Inter-Bank Offer
where the amount of loan is Rate of the relevant foreign currency as on 30th September of the
denominated in foreign currency. relevant previous year plus basis points as below:
 150 basis points, where the associated enterprise has

CRISIL credit rating between AAA to A or its equivalent

 300 basis points, where the associated enterprise has
CRISIL credit rating of BBB-, BBB or BBB+ or its
equivalent
 450 basis points, where the associated enterprise has
CRISIL credit rating between BB to B or its equivalent
 600 basis points, where the associated enterprise has
CRISIL credit rating between C to D or its equivalent
 400 basis points, where credit rating of the associated
enterprise is not available and aggregate amount of loan
advanced to all associated enterprises as on 31st March of
the relevant previous
year < Rs.100 crore

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 GST on Managerial Remuneration - the end of the dispute!.
This is to update you in respect of the recent Circular No 140/10/2020-GST dated 10 June 2020 (‘Circular’) issued by
CBIC clarifying the position with respect to leviability of GST under reverse charge mechanism on the remuneration (or
consideration or by whatever name called) payable to a director of a company.

The said topic has been the subject matter of dispute between the taxpayer and department. While Serial No 6 of
Notification no 13/2017-CGST (Rate) dated 28 June 2017 states that remuneration payable to a director is liable to GST
under reverse charge mechanism, Entry no. 1 of Schedule III to the CGST Act, 2017 provides that services rendered by
an employee to the employer in the course of employment is outside the purview of GST. The moot question in
determining the leviability of GST on the Director’s remuneration is to decide whether or not a ‘Director’ is an
employee of the company.

Several advance rulings have been pronounced in the recent past providing divergent views with respect to the same.
While the Rajasthan Authority for Advance Ruling in the case of M/s Clay Craft India Private Limited had ruled that
amount payable to directors as remuneration is subject to GST under reverse charge mechanism, the Karnataka
Authority for Advance Ruling (in case of Mr Anil Kumar Agarwal) provided that executive directors of the Company
are employees of the company and hence, remuneration paid to executive directors are not subject to GST under reverse
charge.

Further, certain field officers have started issuing notices to the companies, seeking details of amounts paid to the
directors. Hence, there was a purported dispute regarding taxability of salary/ remuneration paid to the directors who are
also employees of the company.

The instant circular attempts to clarify the position which is summarised as follows:

Leviability of GST on remuneration paid by companies to the independent directors or those directors who are
not the employee of the said company –

1. Reference has been drawn to the definitions of Whole-time director and independent director under the
Companies Act, 2013 and following conclusions have been made:

 The definition of whole-time director as per Section 2(94) of the Companies Act is inclusive in nature
and may include a person who is not an employee
 An independent director is a person who should not have been an employee or a partner or a
proprietor in the said Company

2. Accordingly, it has been clarified that remuneration paid to all such independent directors or other directors,
who are not employees of the company, is taxable in the hands of the recipient company under reverse charge
mechanism. It is to be noted that all the whole-time directors have not been treated equally. Only the directors
who are not employees of the Company have been brought under the GST net (under the reverse charge
mechanism).

 Leviability of GST on remuneration paid by companies to the directors, who are also an employee of the
said company –

1. The Circular states that once it is determined whether the director is an employee, it is relevant to determine if
the activities performed are in the course of employer-employee relationship or not (referring to the terms
‘contract of service’ and ‘contract for service’).

2. It is to be noted that similar terms had been used in the case of “Indian Medical Association vs. V.P. Shantha
[AIR 550, 1995 SCC (6) 65]” wherein it was held that there lies a distinction between a contract of service and
Page 14
 contract for service as per which contract of service imposes an obligation on the servant to obey the orders in
the work to be performed. The Managing and Whole Time Directors work under direction and control of the
Board of Directors and the shareholders and accordingly, it can be said that the agreement between the
Managing and Whole Time Directors and the Company is that of a contact of service.

3. While it has not been specifically clarified who is an employee, Para 5.1 of the Circular indicates that existence
of master-servant relationship is an essential characteristic of employment (‘contract of service’).

4. Further, referring to the treatment of director remuneration under Income Tax Act, 1961, the Circular clarifies
that the part of Director’s remuneration which are declared as ‘Salaries’ in the books of the company and
subjected to TDS under Section 192 of the Income Tax Act, are not taxable under GST being consideration for
services by an employee to the employer in the course or in relation to the employment under Schedule III of
the CGST Act, 2017. Any other amount which is subjected to TDS under Section 194J is liable to GST being
outside the scope of Schedule III of the CGST Act.

The gist of the Circular has been captured in a table below:

Particulars Taxability

Where such remuneration is Falls under the category of ‘services by an employee

declared Salaries in the books of to the employer in the course of or in relation to his
Whole-time the company and subjected to employment’ under Schedule III.
directors(‘WTD’) TDS under Section 192 of the IT
including managing Act. NOT liable to GST.
director who are
employees of the said Where such remuneration declared
company. separately other than salaries in
the books of the company and Remuneration paid for such services provided are
subjected to TDS under Section outside the purview of Schedule III & therefore
194J of the IT Act taxable in hands of the company, on reverse
charge basis vide entry no 6 of notification No.
Independent Directors defined in terms of section 149(6) of the
13/2017 – Central Tax (Rate).
Companies Act, 2013 or those directors who are not the
employees of the said company

In essence, the onus has now been shifted to the treatment/ position being adopted by companies while deducting TDS
under the Income Tax Act, 1961. Hence, companies are advised to be careful while deducting TDS in respect of such
payments. Prior to the issuance of this Circular, treatment under Income Tax Act was viewed only as an indicative
ground rather than being the determining factor.

Page 15
 Step wise process to file NIL GSTR3B returns through SMS

Government rolls out facility of filing of NIL GST return through SMS. Know the process to file step wise from
June 2020. Taxpayers can file NIL return of any period which are due from February 2020 whose due date to file is 30
June

In a major move towards taxpayer facilitation, the government has today onwards allowed filing of NIL GST monthly
return in FORM GSTR 3B through SMS. This would substantially improve ease of GST compliance for 22 lakh
registered taxpayers who had to otherwise log into their account on the common portal and then file their returns every
month. Now, these taxpayers with NIL liability need not log on to the GST portal and may file their NIL returns through
SMS.

2. For this purpose the functionality of filing Nil FORM GSTR 3B through SMS has been made available onthe GSTN
portal with immediate effect. The status of the returns so filed can be tracked on the GST portal by logging in to GSTIN
account and navigating to Services > Returns > Track return status. The procedure to Nil return by SMS is as follows:

Following is Step wise process to file NIL GSTR3B returns through SMS

Steps SMS to 14409 Receive from VD-GSTIND

NIL < Space > 3B < Space > 123456 is the code for Nil filing of GSTR3B for
GSTIN < Space > Tax
Initiate Nil
period Ex. NIL 3B 27XXXXXXXXXXXZC for period 0502020 Code
filing
27XXXXXXXXXXXZC
0502020 validity 30 min.

Your, 27XXXXXXXXXXXZC GSTR 3B is filed

Confirming CNF < Space > 3B < Space successfully and acknowledged vide ARN is
Nil filing > Code Ex. CNF 3B 123456 AA70219000385. Please use this ARN to track the

status of your return.

To file NIL return of GSTIN for Mar 2020:

For Help, HELP < Space > 3B Ex. NIL 3B 07CQZCD111114ZC 032020. To confirm
any time Help 3B Nil Filing: CNF 3B CODE More details

http://www.gst.gov.in

Page 16
 Impact on APA mechanism due to lockdown.
Introduction

This ongoing pandemic disease, popularly known as Covid-19, needs no elaboration. The entire world has engulfed
under its sweep. This is much more than what any of us have ever witnessed in the past. This certainly will
have (though already started to have) a ripple effect on the global economy with a complete lockdown all over. The
businesses are shut, be it manufacturing operations, aviation operations, hotel chains, restaurant, transportation
facilities, etc., sparing no industry. To make the matters worse, it is still not known how much more damage will be
caused by it before it eventually subsides – if, at all, itdoes.

With this brief background, we now proceed to discuss the potential impact of this ongoing pandemic disease, on the
Advanced Pricing Agreement (‘APA’) mechanism. APA is one of the tools opted for by the assessees, inter alia, to
attain tax certainty and avoid litigation. The potential impact could be on the (unilateral/bilateral) APAs already in
force and the ones which were under final stages of negotiation.

Why renegotiation may be warranted?

With the impact which Covid-19 will have on the businesses (regardless of the industry in which the business
operates), it may lead to drastic changes in the business dynamics viz. business models, supply chain models, value
chain models, etc.

Hence, the APA terms (critical assumptions, financial projections, etc.) on which the transactions were originally
entered and agreed with the CBDT, may not remain the same.

All such changes may now make it unfeasible for an assessee to continue with the terms agreed in its APA. Provisions

of APA under the Income-tax Act, 1961

In India, the provisions of APA are governed by section 92CC and section 92CD of the Income-tax Act, 1961 (‘the
Act) read with Rule 10F to Rule 10T and Rule 44GA of Income-tax Rules, 1962 (‘the Rules’). Based on section
92CC, an APA can be entered for a total period of 9 years (including roll-back period of 4 years) at a stretch.

Sub-section (6) of section 92CC of the Act, reads as under:

(6) The agreement referred to in sub-section (1) shall not be binding if there is a change in law or facts having
bearing on the agreement so entered.

[Emphasis supplied]

Assume that a Company, namely ABC Ltd., has entered into a Unilateral APA, with the Central Board of Direct
Taxes (‘CBDT’) in March 2019, which covered financial year (‘FY’) 2017-18 to FY 2021-22 (assuming no roll back
period has been opted for).

In our example, say ABC Ltd. agreed for a cost plus 20% mark-up for rendering certain services to its related entity
abroad but, in the above backdrop, the related entity, while renegotiating, reduces the margin to 15%.
Based on the literal interpretation of sub-section (6) of section 92CC, can ABC Ltd. step back and say this APA
agreement is no longer binding on it? Can this forced renegotiation of contractual terms be called as change in facts
having bearing on the APA? Potentially, yes.

Furthermore, is renegotiation of APA terms legally possible? Yes, Rule 10Q of the Rules provides for an option to
CBDT to revise the terms of an APA, either suo-motu or on request from the assessee or competent authority in India
or the Director General of Income-tax (International Taxation) or competent authority in the other country (in case of
bilateral or multilateral APA). Even the executed APAs provide for the same.

Page 17
Furthermore, the APAs which were almost in the final stages of negotiation may require all the parties (could
be more than two in case of bilateral) to get back to the drawing board and re-negotiate the terms.

Conclusion

It will not be surprising to see taxpayers lining up before the CBDT for renegotiating the terms of the APA. Not sure
if that has ever happened before.
Not to forget, with the large-scale impact this will potentially have on the businesses, even the revision of terms of
APA would require detailed discussion within the organisations and would be a practical challenge. Projections which
were made basis normal expected growth rate would drastically fall making it difficult for the taxpayers to justify
their positions.

Only time will tell if CBDT, considering the gravity of the situation, will appreciate and agree to potential loss in the
tax revenue or it will restrain relenting to the situation because even they will look to maximise their tax collections to
reduce the major dent this disease is likely to have on the overall economy.

Points to ponder

Having discussed the above from the Indian context, this issue could be faced by all taxpayers across the world who
have entered into the APAs which are still in force. Depending on the provisions of tax laws of the respective
countries, taxpayers may act accordingly.

However, what if such tax laws do not specifically provide for any renegotiation? Can a taxpayer enforce ‘doctrine of
force majeure’ even if there is no such clause in the APA?

Even if force majeure is not present, a taxpayer may invoke other similar legal doctrines, depending on the governing
law of the contract in that particular country. These include frustration of purpose or commercial impracticability, and
in civil law jurisdictions, doctrines like hardship and changed circumstances.

Time to explore all such possibilities?

Page 18
 COVID-19: Impact on Transfer Pricing Benchmarking

COVID-19 presents an unprecedented /extraordinary situation impacting the economic environment, which needs to be factored,
while undertaking transfer pricing analysis of transactions effected during FY 2019-2020 and also in the next financial year. India
is known to be one of the most aggressive Transfer Pricing (TP) jurisdiction. TP Team at Vaish Associates Advocates has noted
the following issues, which would arise in TP arena, in the aftermath of COVID-19:

1. Challenges on Comparability due to Fall in operating margins of companies due to COVID 19(FY 2019-20 and 2020-
21):

1.1 Comparability is the cardinal principle under Transfer Pricing. Although the fall in profitability would be across the
industry and the same would also get captured in the margins of the comparable companies, the companies having
business models dependent on imports from /exports to China, or other European countries, due to lockdown in
these countries would see a greater disruption in their operations and consequently impact on their profitability in
FY 2019-2020 in comparison to companies not so dependent on such imports/exports. Therefore, comparability
adjustments would be warranted in the margins of such companies.

1.2 Further, the need for making comparability adjustment would have to be evaluated on a case to case basis and
reasons for exceptionally high losses to be identified – Adjustment on account of capacity underutilization,
loss/mark down in the value of inventory due to lock down, possible severance payments, contractual
defaults/penalties and other extra ordinary expenses.

Courts in India have upheld the comparability adjustment to account for the disruption in the business caused lock
out/ceiling of business premises [ref. Delhi ITAT in Transwitch India Pvt Ltd vs. ACIT (I.T.A. No. 6083/Del/2010)
(approved by Delhi High Court) Smart Cube India Pvt. Ltd. vs. ACIT (6274/Del/2012)]. Similarly, courts have
upheld comparability adjustments to account for underutilization of capacity [ref. ACIT vs. Fiat India Pvt Ltd (ITA
no 1848/Mum/2009), Brintons Carpets Asia Pvt. Ltd. vs. ACIT (ITA No. 1296/PN/10),E.I. Dupont India Pvt Ltd vs.
DCIT (ITA No 5336/D/2010)]

1.3 Related issue which needs to be taken into consideration while claiming comparability adjustment is the selection of
entity in which the adjustment is to be made. [Delhi Bench of the Tribunal in the case of Claas India Pvt Ltd (ITA
No. 1783/Del/2011) held that such adjustments have to be made in the margins of the comparable companies.
However, Benches of Tribunal, have held that such adjustment made be made either in the margins of the tested
party or the comparable companies-Pangea3 & Legal Database Systems Pvt Ltd vs ITO (ITA No
2128/Mum/2014),Ariston Thermo India Ltd vs DCIT (ITA No 1455/PN/2010) IKA India Pvt Ltd vs DCIT 98
Taxmann.com 312 ]. Further, the Benches of the Tribunal have held that abnormal costs are required to be excluded
while calculating the normalized profit for the purpose of undertaking benchmarking analysis [ref. Delhi Bench of
the Tribunal in HCL Technologies BPO Services Ltd (ITA No. 3547/Del/2010)]. The aforesaid approach is also
supported by the OECD.

2. Selection of comparable companies: Companies with global operations (i.e. companies having high exports or imports) may
be more severely impacted as compared to domestic-oriented companies. Therefore, appropriate comparable would need to be
selected so that we don’t compare companies with global operations (i.e. companies having high exports/imports) with
domestic companies. [Delhi Bench of the Tribunal in the case of Actis Global Services Pvt Ltd (ITA No. 30/Del/2015)
approved the export filter for selection of comparable companies].

3. Captive service providers: Captive service providers, generally characterized as risk immune/limited risk service providers,

Page 19
 are compensated on a cost plus basis. Whether Nil or lower cost plus mark-up would have to be recovered by such captive
IT/software/ITES/R&D service providers during the period of lock down considering that they are claimed to be risk free
entities may turn out to be a major area of dispute going forward.
In the environment of COVID-19, FAR analysis of such companies would have to be carefully documented, and inter-
company agreements would need to be examined to identify as to which entity bears the risk of loss arising from the lock
down.
4. Business Restructuring: Countries / MNEs may seek to diversify their manufacturing operations away from one particular
geography (e.g. China) and instead have manufacturing bases in different countries. Local subsidiary companies which were
hitherto engaged only in the distribution or low-end assembly in India may expand and start domestic manufacturing.
Analysis from transfer pricing perspective would be required while deciding the business and pricing model taking into
consideration the Indian regulatory environment, i.e. Contract Manufacturing or licensed manufacturing. The trend may
change towards domestic manufacturing to fulfil domestic market needs instead of import dependence.
Appropriate documentation and reporting of business restructuring to be done as per local regulations and to be appropriately
documented in the master file.

5. Intra group financial transactions: Local subsidiary companies of MNEs may have to seek support from parent companies
in these difficult times. Further, considering the volatility in the financial markets and low interest rate scenario, companies
may consider opting for fixed rate of interests or may even swap/convert existing floating interest rate loan into fixed rate
loans. The said arrangement may be challenged by Revenue authorities:

a. The authorities may challenge the conversion from floating to fixed rate of interest – The Delhi Bench of the
Tribunal in the case of BG Exploration & Production India Ltd (ITA No. 1170/Del/2015) upheld the
conversion of floating interest rate loan to fixed-rate loan due to the 2008 financial crises.

b. For some specific industries such as the oil and gas industry, considering the crash in oil prices, the rate of
interest may actually go up due to heightened credit risk. The revenue authorities may challenge the high rate
of interest even though the global /treasury rates are going down. Industry-specific analysis of credit spreads
may have to be undertaken to demonstrate that transactions were at arm’s length.

6. Industries likely to be most impacted due to COVID 19;Pharma , Healthcareand medical devices: Countries may encourage
shifting of manufacture of pharma and healthcare products /Medical devices from China to other locations. India has already
announced the scheme of fiscal incentive / subsidy for local manufacturing of bulk drugs / Active Pharmaceutical Ingredients
(‘API’) and Medical devices in the last week. In the aftermath of COVID-19, it may become increasingly necessary to advise on
business and pricing models to MNEs seeking to shift base to India for manufacture and export of bulk drugs. Additionally,
companies may have to revisit the terms agreed in the existing APAs in view of the change in economic environment.

Impact of COVID 19 on profitability and value chain would be known only once the situation settles and businesses resume,
however, considering the fiscal requirementsof the countries, heightened TP scrutiny may be expected

Page 20
 FAQs on Relaxations Relating To Income Tax Due To Covid 19
Here are some FAQs in respect of Relaxations, relating to Income Tax, granted due to Covid Pandemic.

Which due dates have been extended due to COVID 19 lockdown?

1. The Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance 2020 has extended the following due
dates: (Also refer CBDT Press Release dated 31ST March 2020, 24TH March 2020 and Announcement made by
Hon'ble Finance Minister on 13TH May 2020)

(a) Last date for furnishing original or revised Return of income for asst year 2019-20 has been extended to
31 July 2020 from 31 March 2020.
(b) Due date of furnishing Return of income for all assessees for asst year 2020-21 has been extended to 30
November 2020 in place of 31 July and 31 October 2020.
(c) Due date of furnishing Tax audit report or other audit report extended to 31 October 2020 from 30
September 2020.
(d) Due date of completion of assessment which were expiring on 30 September 2020 has been extended to
31 March 2020.
(e) Due date for completion of assessment which were expiring on 31 March 2021 has been extended to 30
September 2021.
(f) Last date for linking PAN with Aadhaar-PAN has been extended to 31 March 2021 from 31 March
2020.
(g) The date for making various investment/deposit/payment or such other action, by whatever name called,
for claiming deduction under Chapter-VIA-B of the Income tax Act (i.e. sec 80C to sec 80GGC)
which includes Section 80C (LIC, PPF, NSC etc.), 80D (Mediclaim), 80G (Donations), etc. which were
required to be executed from 20 March 2020 to 29 June 2020 has been extended to 31 July, 2020.
Hence the investment/payment can be made up to 31.07.2020 for claiming the deduction under these
sections for FY 2019-20.
(h) The date for making investment, deposit, payment, acquisition, construction, purchase or such other
action by whatever name called for claiming roll over benefit/deduction in respect of capital gains under
sections 54 to 54GB of the Income tax Act which were required to be executed from 20 March 2020
to 29 June 2020 has also been extended to 31 July 2020.
Therefore, the investment/ construction/ purchase made up to 31.07.2020 shall be eligible for
claiming deduction from capital gains arising during FY 2019-20.
(i) The date for making investment, deposit, payment, acquisition, construction, purchase or such other
action by whatever name called for the purpose of claiming any deduction, exemption or allowance
under the provisions of Income Tax Act which were required to be executed from 20 March 2020 to 29
June 2020 has been extended to 30th June 2020.
(j) The date for beginning of manufacture or production of article or thing or providing any services
referred to in sec 10AA (commencement of operation for the SEZ units for claiming deduction under
deduction 10AA of the Income tax Act) has been extended to 30.09.2020 for the units which received
necessary approval by 31.03.2020.
(k) Completion of any proceeding or passing of any order or issuance of any notice, intimation, notification,
sanction or approval or such other action by whatever name called by any authority, commission or
tribunal under the provisions of Specified Acts (various direct taxes & Benami Law) which were
required to be completed from 20 March 2020 to 29 June 2020 has been extended to 31.03.2021 or
any further date as may be notified by the Central Government.
(l) Filing of appeal, reply or application or furnishing of any report, document, return, statement or such

Page 21
 other record, by whatever name called, under the provisions of Specified Acts (various Direct taxes &
Benami Law) which were required to be complied with from 20 March 2020 to 29 June 2020 has been
extended to 30.06.2020 or any further date as may be notified by the Central Government.
(m) Reduced rate of interest of 9% shall be charged for non-payment of Income-tax (e.g. advance tax, TDS,
TCS), Equalization Levy, Securities Transaction Tax (STT), Commodities Transaction Tax (CTT)
which are due for payment from 20.03.2020 to 29.06.2020 if they are paid by 30.06.2020. Further, no
penalty/ prosecution shall be initiated for these non- payments.
(n) Under Vivad se Vishwas Scheme, the date has been extended up to 31.12.2020. Hence, declaration
and payment under the Scheme can be made up to 31.12.2020 without additional payment.

For the above purposes, Specified Act means Income Tax Act, Wealth Tax Act, Prohibition of Benami Property
Transaction Act, Black Money Act, STT Law, CTT Law, Equalization Levy law, Vivad Se Vishwas law.

What deduction is allowable for making donation to PM CARES fund?

2. A special fund "Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund (PM
CARES FUND)" has been set up for providing relief to the persons affected from the outbreak of Corona virus. The
Ordinance also amended the provisions of the Income-tax Act to provide the same tax treatment to PM CARES
Fund as available to Prime Minister National Relief Fund. Therefore, the donation made to the PM CARES Fund
shall be eligible for 100% deduction under section 80G of the Income-tax Act. Further, the limit on deduction of
10% of gross income shall also not be applicable for donation made to PM CARES Fund.

As the date for claiming deduction u/s 80G under IT Act has been extended up to 31.07.2020, the donation
made up to 31.07.2020 shall also be eligible for deduction from income of FY 2019-20. Hence, any person
including corporate paying concessional tax on income of FY 2020-21 under new regime can make donation to
PM CARES Fund up to 31.07.2020 and can claim deduction u/s 80G against income of FY 2019-20 and shall
also not lose his eligibility to pay tax as per concessional taxation regime for income of FY 2020-21.

What relaxation has been provided with regard to for rate of TDS and TCS from 14 May 2020 to 31 March
2021?

3. W.e.f. 14 May 2020 to 31 March 2021, the rates of TDS and TCS in the undermentioned sections have been
reduced to 75% of the prescribed rates. the relaxation provided applies most of the TDS and TCS cases other than
TDS on salary and TDS on payments to non residents due to the Covid 19 Pandemic. Refer Press release dated 13
May 2020

Page 22
 Tax Deduction at Source (TDS)

S. Section of the Nature of Payment Existing Rate of TDS Upto Reduced rate from
No Income- 13/05/2020 14/05/2020to
tax Act 31/03/2021

1. 193 Interest on Securities 10% 7.5%

2. 194 Dividend 10% 7.5%

3. l94A Interest other than interest on securities 10% 7.5%

4. 194C Payment to Contractors and sub- 1% (INDIVIDUA1 / HU F) 0.75% (individual /

contractors 2% (others) HUF) 1.5%(OTHERS)

5. 194D Insurance Commission 5% 3.75%

6. 194DA Payment in respect of life insurance 5% 3.75%

policy

7. 194EE Payments in respect of deposits under 10% 7.5%

National Savings Scheme

8. 194F Payments on account of re- purchase of 20% 15%

Units by Mutual Funds or UTI

9. l94G Commission, prize etc., on sale of 5% 3.75%

lottery tickets

10. 194H Commission or brokerage 5% 3.75%

11. 194-I(a) Rent for plant and machinery 2% 1 .5%

12. 194-I(b) Rent for immovable property 10 % 7.5%

13. 194-IA Payment for acquisition of immovable 1% 0.75%

property

14. 194-IB Payment of rent by individual or HUF 5% 3.75%

15. 194-IC Payment for Joint Development 10% 7.5%

Agreements

16. 194J Fee for Professional or Technical 2% (FTS, certain 1.5% (FTS, certain
Services (FTS), Royalty, etc. royalties, call centre) royalties, call centre)
10% (others) 7.5% (others)

17. l94K 10% 7.5%

Payment of dividend by Mutual Funds

Page 23
18. 194LA Payment of Compensation on 10% 7.5%
acquisition of immovable property

19. 194LBA(1) Payment of income by Business trust 10% 7.5%

20. 194LBB(i) Fee for income by investment fund 10% 7.5%

21 L94LBC(1) Income by securitization trust 25% (Individual / 18.75% (Individual/

HUF) 30% (Others) HUF) 22.5% (Others)

22 194M Payment of Commission, brokerage, 5% 3.75%

etc. by Individual and HUF

23 194 O 1% (w.e.f. 1.10.2020) 0.75%

TDS on e-commerce participants

Tax Collection at Source TCS)

S. Section of the Nature of Receipts Existing Rate of Reduced rate from

No Income- tax Act TCS 14/05/2020 to 31/03/2021
1. 206C(1) Sale of

(a) Tendu Leaves 5% 3.7

5%
(b)Timber obtained under a forest lease 2.5% 1.875%

(c) timber obtained by any other Mode 2.5% 1.875%

(d) Any other forest produce not being 2.5% 1.875%

timber/tendu leaves

(e) scrap 1% 0.7

5%
(f) Minerals, being coal or lignite or iron 1% 0.7
ore 5%

2. 206C(1C) Grant of license, lease, etc. of

(a) Parking lot 2% 1.5

%
(b) Toll Plaza 2% 1.5
%
(c) Mining and quarrying 2% 1.5
%
3. 206C(IF) Sale of motor vehicle above 10 Lakhs 1% 0.7
5%

4. 206C(1H) Sale of any other goods 0.1% (w.e.f. 0.075%

01.10.2020)

Page 24
 Whether lower or NIL tax deduction/collection certificate valid till 31 March 2020 can be used after 31
March 2020?

4. CBDT has issued three orders vide F.NO.275/25/2020-IT(B) dated 31 March 2020, 3 April 2020 and 9 April 2020
for the purpose of extending the validity of certificates for lower/nil deduction issued for FY 2019-20 or where the
application for lower/nil deduction of tax is pending. The salient features of the same are as under:-

(1) All assessees who have filed application for lower/nil deduction on TRACES portal for FY 2020-21 and
whose applications are pending disposal as on date and they have been issued such certificate for FY
2019-20 then such certificate would be applicable till 30.6.2020 or disposal of their application by the
AO. The lower/nil deduction certificate shall be valid only for the TAN for which it is issued.
(2) Where assessees who could not apply for lower/nil deduction on TRACES portal for FY 2020-
21 but were having certificates for FY 2019-20, such certificate will be applicable till
30.6.2020. However they need to apply at the earliest to the AO in the prescribed manner.
(3) Where assessee has not applied for lower/nil deduction on TRACES portal for FY 2020-21 and were not
having certificates for FY 2019-20, a modified email application procedure has been prescribed.
(4) Payments to non-residents having permanent establishment in India and not having lower/nil deduction
certificate for FY 2019-20, tax on payments made will be deducted at 10% (including surcharge and
cess) on payments till 30.6.2020 or disposal of application whichever is earlier.

Further for all assessees whose application for lower/nil deduction for FY 2019-20 is pending on 3 April 2020,
are required to intimate the AO through prescribed e-mail procedure and such applications will be disposed on or
before 27 April 2020.

With reference to the above, CBDT has further clarified that where the certificate for FY 2019-20 was
applicable for a specific period and not for entire year (for example 1 October 2019 to 15 December 2019),
the same shall also valid from 1.4.2020 to 30.6.2020 subject to conditions mentioned above.

Where the lower/nil deduction certificate has been extended till 30.6.2020, the threshold limit will be same
and applied afresh for 1.4.2020 to 30.6.2020

It has also been clarified that where assessee desires to have a certificate for a new TAN or at a rate lower than that
granted, a fresh application shall be required.

Where non resident having PE in India made an application for lower deduction of tax at 15% for FY 2020-
21 which is pending, can assessee on the basis of CBDT claim lower rate of deduction at 10%?

5. As per clause 2(d) of CBDT Order dated 31.3.2020, the applicant is entitled to lower rate of deduction of 10%
till its application is disposed off or 30.6.2020, whichever is earlier. It is immaterial that it had asked a concessional
rate of 15%.

Page 25
Whether it is necessary that quantum mentioned in the low/nil deduction certificate should not be fully
exhausted for extending the validity of the certificate to 30 June 2020?

6. There is no such condition. Certificate issued for FY 2019-20 shall be extended till 30 June 2020 even if the
threshold limit mentioned in the certificate is fully exhausted in FY 2019-20. It has also been clarified that the
threshold limit shall start afresh.

Where certificate for lower/nil deduction has been granted for FY 2019-20 and no application for FY
2020-21 could be made, is extension upto 30 June, 2020 automatic or email application in prescribed form
is to be made?

7. As per para 2(b) of CBDT Order dated 31.3.2020, validity of certificate of FY 2019-20 is extended to 30 June
2020. However, assessee is required to provide the details of transactions and the deductor as per prescribed e-mail
procedure at the earliest as soon as normalcy is restored or by 30 June 2020, whichever is earlier. It is suggested that
assessee should make the application over e-mail at the earliest.

Whether certificates for FY 2019-20 stands renewed with the same threshold amount for FY 2020-21?

8. Yes. Certificate of FY 2019-20 will be renewed for the same amount, same transaction and same deductor, but
shall be valid upto 30 June 2020 and not for the whole FY 2020-21.

In FY 2019-20, TDS rate for fees for technical services was 10% and assessee received a lower deduction
certificate of 5%. For the FY 2020-21, due to amendment in the Act, the TDS rate is 2% on fees for
technical services. Can assessee ask the deductor to deduction tax at 1% on the basis of 50% concessional
rate mentioned in the certificate?

9. Assessee does not have option of concession of lower tax deduction in this case. It has to get its tax deducted at
2% only, unless a new certificate granting a rate lower than 2 per cent is issued.

Whether Form 15G or 15H submitted for FY 2019-20 will be applicable till 30 June 2020?

10. Where assessee had furnished Form 15G or Form 15H for non deduction of TDS for FY 2019-20, the same
shall be valid till 30 June 2020. Refer Circular F. NO. 275/25/2020-IT(B), Dated 3-4-2020.

What relaxation has been given for determining residential status for FY 2019-20?

11. CBDT vide Circular No. 11 of 2020 dated 8 May 2020 has provided the following relaxation for residential
status for FY 2019-20:

♦ An individual who has come to India on a visit before 22 March 2020 and has been unable to leave
India on or before 31 March 2020, his period of stay in India from 22 March 2020 to 31 March 2020
shall not be taken into account
♦ An individual who has come to India on a visit before 22 March 2020 and has been quarantined in
India on account of Novel Corona virus (Covid 19) on or after 1 March 2020 and has departed on an
evacuation flight on or before 31 March 2020, his period of stay from the beginning of his quarantine
to his date of departure or 31 March 2020, as the case may be, shall not be taken into account
♦ An individual who has come to India on a visit before 22 March 2020 and has departed on an evacuation
flight on or before 31 March 2020, his period of stay in India from 22 March 2020 to his date of
departure shall not be taken into account.

Whether due date for making renewal application for the existing registration/approval under sections
10(23C), 12AA, 35 and 80G is extended to 31 December 2020?

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 12. All charitable trust, institutions, educational or medical institution, research associations who are registered or
approved under sections 10(23C), 12AA, 35 and 80G were required to make online application for renewal of their
registration/approval on or before 31 August 2020. In view of the Covid 19 pandemic the date has been extended
to 30 September 2020. Refer Press Release dated 9 May 2020.

Whether the new procedure for registration/approval under section 12AB, 10(23C), 35 or 80G will apply from
1 June 2020?

13. The new procedure for registration/approval under sections 12AB, 10(23C), 35 or 80G, which was applicable
from 1 June 2020 shall now be applicable from 1 October 2020. Press Release dated 9 May 2020.

Can Income tax department initiate proceedings which adversely effect assessee during Covid 19 pandemic
period?

14. CBDT has released Interim Action Plan for first quarter of FY 2020-21. It emphasizes that "no communication
with the assessee having adverse effect on him / her is to be done during this period till fresh guidelines" are issued
by the Board.

What Ordinance has been issued for extending dates under various Acts?

15. The Ordinance dated 31 March 2020 for extending the due dates under different Acts is reproduced below:

Page 27
 Indirect Tax Relief measures during Covid 19.
Vide Notification dated 24.06.2020 the CBIC had extended the due dates of GSTR3B based on turnover and the details of the same is
available in the last article of the same edition. Other than there are number of reforms being announced and summary of same being
given below.

Reduction in Late Fees for past returns

 If any person has not yet filed any GSTR 3B for the period July 2017 to January 2020, then they get a further
opportunity to file their return between 1st July 2020 to 30th September 2020 with reduced / late fees as
below:

o Where there is no tax liability – NIL late fees

o If there is any tax liability – Rs. 500 per return

It should be noted that this reduction is not for those persons who have already filed their returns before 1st
July 2020.

(Notification 52/2020- Central Tax dated 24th June, 2020)

Rate of tax applicable for person who has opted for composition scheme

Relavant Rate of Rate of

Category of taxable Persons
Section of Tax Tax
CGST Act, (CGST) (SGST)
2017

Manufacturer and Trader of Goods 0.5% 0.5%

10(1)&(2)

Restaurants/ Catering not serving Alcohol 0.5% 0.5%

10(1)&(2)

Other composition taxpayers having Turnover 3% 3%

10(2A)
not exceeding 50 Lakhs

(Notification No. 50/2020- Central Tax Dated 24th June, 2020)

Date Notifying various provisions of Finance Act, 2020

 The Central Government notifies 30th June, 2020 as the date on which the following provisions of Finance
Act, 2020 shall come into force:-

Section 118 of Finance Act, 2020 amending Section 2(114) of the CGST Act, 2017

Page 28
The defination of Union Territory now recognizes ‘Ladakh’ as a separate Union Territory in the
CGST Act 2017. ‘Dadra and Nagar Haveli and Daman and Diu’ have been combined in the
definition of Union Territory as they are now considered as part of the same Union Territory

Section 125 of Finance Act, 2020 amending Section 109 of the CGST Act, 2017 The provisions
for Appellate Tribunal and its benches thereof have been made applicable in the Union Territories
of Jammu and Kashmir.

Section 129 of Finance Act, 2020 amending Section 168 of the CGST Act, 2017 Allowing the
jurisdictional Commissioners to exercise the following powers which could earlier be exercised by
the Commissioner in Board

(i) The expenses of the examination and audit of records under Special Audit including the
remuneration of Chartered Accountant is to be determined and paid by the Commissioner.

(ii) The period of one year for inputs and three years for capital goods may on sufficient cause
being shown can be extended by a further period not exceeding one year and two years
respectively by the Commissioner

Section 130 of the Finance Act,2020 amending Section 172 of the CGST Act, 2017 The time
period for issuance of removal of difficulties order was only prescribed upto three years from the
commencement of the Act. This has now been extended upto 5 years. Thereby, the Government has
the power to issue Removal of Difficulties order upto 30th June 2022 (earlier it was upto 30th June
2020 only) (Notification No. 49/2020- Central Tax dated 24th June, 2020)

Page 29
 GST Council Meeting recommends relief measures for small taxpayers

The Goods and Services Tax (GST) Council held its 40th meeting on 12 June 2020. The key recommendations
are:

 In case of small taxpayers (having aggregate turnover of up to INR 5 crore), revised rate of interest for
delayed filing of GSTR-3B for the months of February, March and April 2020 is as follows:

 Returns filed till notified dates (staggered up to 6 July 2020) – Nil interest
 Returns filed after notified dates till 30 September 2020 – Nil interest till notified dates and, thereafter,
reduced interest at 9% (instead of 18%) till 30 September 2020.

Further, such taxpayers can file GSTR-3B for the months of May, June and July 2020 till September 2020
(staggered dates to be notified) without any interest and late fee.

 Late fee for delay in filing GSTR-3B for the months of July 2017 to January 2020 has been waived for Nil
return and capped at INR 500 per return in case if there is any tax liability. This benefit will be available for
all such returns furnished between 1 July 2020 to 30 September 2020.

 Time limit to file application for revocation of cancellation of registration under GST has been extended till
30 September 2020 in all cases where the registration has been cancelled till 12 June 2020.

 Certain clauses of the Finance Act, 2020 amending Central Goods and Services Tax Act, 2017 and
Integrated Goods and Services Tax, 2017, to be made effective from 30 June 2020.

Page 30
 FAQ on Foreign Trade Policies for Lockdown reliefs.
1. Whether the Central Government has introduced new Foreign Trade Policy ('FTP'), as the FTP 2015-20 has
expired on 31st March 2020?
Answer: No, the Central Government has not introduced the new FTP. The Directorate General of Foreign
Trade (‘DGFT’), vide Notification No. 57/2015-20 dated 31.03.2020, has extended the validity of FTP 2015-
20 upto 31st March 2021.

2. Whether the validity of Hand Book Procedure ('HBP') 2015-20 has also been extended to 31st March 2021?
Answer: Yes, the DGFT, vide Public Notice No. 67/2015-20 dated 31.03.2020, has extended the validity of
HBP 2015-20 upto 31st March 2021.

3. Whether the Central Government has extended the SEIS for Financial Year 2019- 2020?
Answer: Yes, the Central Government, vide Notification No. 57/2015-20 dated 31.03.2020, has extended the
applicability of SEIS for the Financial Year 2019-20.

4. What are the categories of services eligible for benefit under SEIS and rates of rewards available for the
Financial Year 2019-20?
Answer: The categories of services eligible for benefit under SEIS and rates of rewards available for the
Financial Year 2019-20 are not yet notified.

5. What is the last date for filing of application under SEIS for the Financial Year 2018- 19?
Answer: The DGFT, vide Public Notice No. 67/2015-20 dated 31.03.2020, has extended the last date of filing
application under SEIS for the Financial Year 2018-19 from 31st March 2020 to 31st December 2020.

6. Whether the due date for filing of application under MEIS, falling between 1st February 2020 to 31st May
2020, has been extended?
Answer: Yes, the DGFT, vide Public Notice No. 67/2015-20 dated 31.03.2020, has extended the due date for
filing of application under MEIS, falling between 1st February 2020 to 31st May 2020, by 3 months from the
actual due date.

7. Whether the MEIS will be in existence after 31st March 2020?

Answer: The DGFT, vide Trade Notice No. 03/2020-21 dated 15.04.2020, clarified that the benefits under
MEIS for any item/ tariff line/ HS code listed in MEIS Schedule will be available up to 31.12.2020.
Further, it was clarified that as and when an item/ tariff line/HS code is notified to be covered under Remission
of Duties and Taxes on Exported Products (RoDTEP) Scheme Scheme, it would at the same time be removed
from coverage under MEIS.

8. Whether the validity of AA Licence, expiring between 1st February 2020 to 31st July 2020, has been
extended?
Answer: Yes, the the DGFT, vide Public Notice No. 67/2015-20 dated 31.03.2020, has extended the validity of
AA Licence, expiring between 1st February 2020 to 31st July 2020, by 6 months from the actual date of expiry.
For example: The validity of an AA Licence was due to expire on 20th April 2020. Now, due to the above
extension, the validity of the above AA Licence automatically stands extended by 6 months i.e., upto 20th
October 2020.

9. Whether the export obligation period, expiring between 1st February 2020 to 31st July 2020, against
import made under AA Licence has been extended?
Answer: Yes, the the DGFT, vide Public Notice No. 67/2015-20 dated 31.03.2020, has extended the export
obligation period, expiring between 1st February 2020 to 31st July 2020, against import made under AA
Licence, by 6 months from the actual date of expiry.
For example: The time limit to fulfil export obligation against import made under AA is due to expire on 24th
May 2020. Now, due to the above extension, the time limit to fulfil export obligation automatically stands
extended by 6 months i.e., upto 24th November 2020

10. Whether the validity of EPCG Authorization, expiring between 1st February 2020 to 31st July 2020, has
been extended?
Answer: Yes, the the DGFT, vide Notification No. 57/2015-20 dated 31.03.2020, has extended the validity of
EPCG Authorization, expiring between 1st February 2020 to 31st July 2020, by 6 months from the actual date
of expiry.

Page 31
For example: The validity of an EPCG Authorization is due to expire on 10th April 2020. Now, due to the
above extension, the validity of the above EPCG Authorization automatically stands extended by 6
months i.e., upto 10th October 2020.

11. Whether the time limit, expiring between 1st February 2020 to 31st July 2020, for submission of
installation certificate under EPCG Scheme has been extended?
Answer: Yes, the DGFT, vide Public Notice No. 67/2015-20 dated 31.03.2020, has extended the time limit,
expiring between 1st February 2020 to 31st July 2020, for submission of installation certificate under EPCG
Scheme, by 6 months from the actual
date of expiry.

12. Whether the validity of export obligation period/ blockwise export obligation period, expiring between 1st
February 2020 to 31st July 2020, against import made under EPCG Authorization has been extended?
Answer: Yes, the the DGFT, vide Public Notice No. 67/2015-20 dated 31.03.2020, has extended the validity of
export obligation period/ blockwise export obligation period, expiring between 1st February 2020 to 31st July
2020, against import made under EPCG Authorization, by 6 months from the actual date of expiry.
For example: The time limit to fulfil export obligation against import made under EPCG Authorization is due to
expire on 26th April 2020. Now, due to the above extension, the time limit to fulfil export obligation
automatically stands extended by 6 months i.e., upto 26th October 2020.

13. Whether the application for one-time condonation under EPCG Scheme can be made after
31.03.2020?
Answer: Yes, the DGFT, vide Public Notice No. 01/2015-20 dated 07.04.2020, has extended the time period
to receive requests by Regional Authorities for condonation of delay, in filing application for extension in
time period to fulfil blockwise export obligation, time period to fulfil export obligation and time period to
submit installation certificate, till 31st March 2021.

14. Whether the validity of Letter of Permission/ Letter of Intent, which is due to expire on or after 1st March
2020, issued to an EOU/ EHTP/ STP/ BTP Unit has been extended?
Answer: Yes, the DGFT, vide Public Notice No. 67/2015-20 dated 31.03.2020, has extended the validity of
Letter of Permission/ Letter of Intent, which is due to expire on or after 1st March 2020, upto 31st December
2020.

15. Whether the export obligation period, due to expire between 1st March 2020 to 30th June 2020, against the
import of coconut oil and items covered under Chapter 9 of ITC(HS) by EOU units has been extended?
Answer: Yes, the DGFT, vide Public Notice No. 67/2015-20 dated 31.03.2020, has extended the export
obligation period, due to expire between 1st March 2020 to 30th June 2020, against the import of coconut oil
and items covered under Chapter 9 of ITC(HS) by EOU units, upto 30th September 2020.

16. Whether the due date for filing of Quarterly Progress Report, for the quarter ending 31st March 2020 and
30th June 2020, has been extended?
Answer: Yes, the DGFT, vide Public Notice No. 67/2015-20 dated 31.03.2020, has extended the due date for
filing of Quarterly Progress Report, for the quarter ending 31st March 2020 and 30th June 2020, to 30th
September 2020.

17. Whether the due date for filing of Annual Progress Report for the Financial Year 2019-20 has been
extended?
Answer: Yes, the DGFT, vide Public Notice No. 67/2015-20 dated 31.03.2020, has extended the due date for
filing of Annual Progress Report, for the Financial Year 2019- 20, to 30th September 2020.

18. Whether the due date for filing of Monthly Progress Report, for February 2020 to June 2020, by the
STP unit has been extended?
Answer: Yes, the DGFT, vide Public Notice No. 67/2015-20 dated 31.03.2020, has extended the due date for
filing of Monthly Progress Report, for February 2020 to June 2020, by the STP unit, to 30th September
2020.

19. Whether the due date for claiming reimbursement of Central Sales Tax, for the quarter ending 30th
September 2019 and 31st December 2019, has been extended?

Page 32
Answer: Yes, the DGFT, vide Public Notice No. 67/2015-20 dated 31.03.2020, has extended the due date for
claiming reimbursement of Central Sales Tax, for the quarter ending 30th September 2019 and 31st
December 2019, to 30th September 2020.

20. Whether the validity of DFIA, expiring between 1st February 2020 to 31st July 2020, has been extended?
Answer: Yes, the DGFT, vide Notification No. 57/2015-20 dated 31.03.2020, has extended the validity of
DFIA, expiring between 1st February 2020 to 31st July 2020, by 6 months from the actual date of expiry.
For example: The validity of the DFIA is due to expire on 10th May 2020. Now, due to the above
extension, the validity of the above DFIA automatically stands extended by 6 months i.e., upto 10th
November 2020.

21. Whether the validity of Status Holder Certificate has been extended?
Answer: Yes, the DGFT, vide Public Notice No. 67/2015-20 dated 31.03.2020, has extended the validity of
Status Holder Certificate upto 31st March 2021 or five years from the date on which application for
recognition as Status Holder, whichever is later.
Previously, the Status Holder Certificate was valid for a period of five year. Now, the validity of Status
Holder Certificate, due to expire between 31st March 2020 to 30th March 2021, has been extended upto
31st March 2021.

22. Whether the validity of norms ratified by the Norms Committee has been extended?
Answer: Yes, the DGFT, vide Public Notice No. 67/2015-20 dated 31.03.2020, has extended the validity of
norms ratified by the Norm Committee upto 31st March 2021 or three years from the date of ratification,
whichever is later.
Previously, the norms ratified by the Norm Committee was valid upto 31st March 2020 or three years
from the date of ratification, whichever is later. Now, the validity of norms ratified by the Norm
Committee, due to expire between 31st March 2020 to 30th March 2021, has been extended upto 31st
March 2021.

23. Whether the last date, falling between 1st February 2020 to 31st July 2020, to re-export the diamonds,
imported for the purpose of certification/ grading, has been extended?
Answer: Yes, the DGFT, vide Public Notice No. 67/2015-20 dated 31.03.2020, has extended the last date,
falling between 1st February 2020 to 31st July 2020, to re-export the diamonds, imported for the purpose of
certification/ grading, by 6 months from the actual due date.
The normal time period to re-export of the imported diamonds is 3 months from the date of import.

24. Whether the validity of export obligation period, expiring between 1st February 2020 to 31st July
2020, against supplies from Foreign Buyer has been extended?
Answer: Yes, the DGFT, vide Public Notice No. 67/2015-20 dated 31.03.2020, has extended the validity of
export obligation period, expiring between 1st February 2020 to 31st July 2020, against supplies from
Foreign Buyer, by 6 months from the actual due date.
The normal time period to fulfil export obligation is 90 days from the date of import.

25. Whether the last date, falling between 1st February 2020 to 31st July 2020, of filing application for
Replenishment Authorisation has been extended?
Answer: Yes, the DGFT, vide Public Notice No. 67/2015-20 dated 31.03.2020, has extended the last date,
falling between 1st February 2020 to 31st July 2020, of filing application for Replenishment Authorisation,
by 6 months from the actual due date.

26. Whether the last date to re-import, to take replenishment and to book with nominated agency, falling
between 1st February 2020 to 31st July 2020, in case of Export through Exhibitions/ Export Promotion Tours/
Export of Branded Jewellery, has been extended?
Answer: Yes, the DGFT, vide Public Notice No. 67/2015-20 dated 31.03.2020, has extended the last date to
re-import, to take replenishment and to book with nominated agency, falling between 1st February 2020 to
31st July 2020, in case of Export through
Exhibitions/ Export Promotion Tours/ Export of Branded Jewellery, by 6 months from the actual due date.

27. Whether the last date to export, import, take replenishment and drawl of precious metal, falling
between 1st February 2020 to 31st July 2020, in case where exporter has obtained gold/ silver/ platinum
on replenishment basis/ outright purchase basis/ loan
basis, has been extended?

Page 33
Answer: Yes, the DGFT, vide Public Notice No. 67/2015-20 dated 31.03.2020, has extended the last date to
export, import, take replenishment and drawl of precious metal, falling between 1st February 2020 to 31st
July 2020, in case where exporter has
obtained gold/ silver/ platinum on replenishment basis/ outright purchase basis/ loan basis, by 6 months
from the actual due date.

28. Whether the last date of filing of application for Duty Credit scrips under Scheme for Rebate of State and
Central Levies and Taxes (RoSCTL), for shipping bills with Let Export Order ('LEO') from 7th March 2019 to
31st December 2019, has been extended?
Answer: Yes, the DGFT, vide Public Notice No. 67/2015-20 dated 31.03.2020, has extended the last date of
filing of application for Duty Credit scrips under RoSCTL, for shipping bills with LEO from 7th March
2019 to 31st December 2019, upto 31st December 2020.

29. Whether the last date, falling on or after 1st March 2020, for filing of application for refund of Terminal
Excise Duty has been extended?
Answer: Yes, the DGFT, vide Public Notice No. 67/2015-20 dated 31.03.2020, has extended the last date,
falling on or after 1st March 2020, for filing of application for refund of Terminal Excise Duty upto 30th
September 2020.

30. Whether the last date to file the application for Transport and Marketing Assistance, for the quarter ending
31st March 2019 and 30th June 2019, has been extended?
Answer: Yes, the DGFT, vide Public Notice No. 67/2015-20 dated 31.03.2020, has extended the last date to
file the application for Transport and Marketing Assistance, for the quarter ending 31st March 2019 and
30th June 2019, upto 30th September
2020.

31. Whether the person who has submitted the online application for Transport and Marketing Assistance
between 1st February 2020 to 30th September 2020, is required to submit physical copy of application in ANF-
7A(A) within 30 days of submitting online application?
Answer: No, the DGFT, vide Public Notice No. 02/2015-20 dated 13.04.2020, clarified that the person who
has submitted the online application for Transport and Marketing Assistance between 1st February 2020 to
30th September 2020, can submit the
physical copy of application in ANF-7A(A) till 30th October 2020.

32. Whether any arrangements are made by the Central Government for issuance by Certificate of Origin
required under India’s free trade agreements (FTAs), comprehensive economic cooperation agreements
(CECA), comprehensive economic partnership agreement (CEPA) and preferential trade agreements (PTAs)?
Answer: Yes, the DGFT, vide Trade Notice No. 01/2020-21 dated 07.04.2020, informed that the online
platform (https://coo.dgft.gov.in/) has been expanded and all application for issuance of Preferential
Certificate of Origin shall be made on the above online platform. Further, the concerned agencies are also
directed to issue preferential Certificate of Origin through the said platform.

33. Whether India has requested the customs authorities and other competent authorities, of the Countries with
whom India has a trade agreement, to allow the eligible imports under preferences on a retrospective basis?
Answer: Exporters are required to submit the Certificate of Origin at the landing port of the importing country to
claim duty concessions under FTAs'
The DGFT, vide Trade Notice No. 59/2019-20 dated 28.03.2020, informed that the domestic authorities are
currently not issuing the Certificate of Origin on account of the ongoing lockdown and therefore, requested the
customs authorities and other competent authorities, of the Countries with whom India has a trade
agreement, to
allow the eligible imports under preferences on a retrospective basis subject to the subsequent production
of the certificates of origin by the Indian exporters.

34. Whether the exporters are required to re-validate the RCMCs, which has expired on or before 31st March
2020, issued by the Export Promotion Council to claim any incentive or authorization from Regional
Authorities?
Answer: No, the DGFT, vide Trade Notice No. 60/2019-20 dated 31.03.2020, decided that the Regional
Authorities will not insist on valid RCMC, which has expired on or before 31st March 2020, till 30th
September 2020.

Page 34
35. Whether the import made under AA Licence after 31st March 2020 is exempt from IGST and Compensation
Cess?
Answer: Yes, the CBIC, vide Notification No. 18/2020-Cus dated 30.03.2020, exempted levy of IGST and
Compensation Cess on imports made under AA Licence upto 31st March 2021. Similarly, the DGFT also,
vide Notification No. 57/2015-20 dated 31.03.2020, exempted levy of IGST and Compensation Cess on imports
made under AA Licence upto 31st March 2021.

36. Whether the import made under EPCG Authorization after 31st March 2020 is exempt from IGST and
Compensation Cess?
Answer: Yes, the CBIC, vide Notification No. 18/2020-Cus dated 30.03.2020, exempted levy of IGST and
Compensation Cess on imports made under EPCG Authorization upto 31st March 2021. Similarly, the
DGFT also, vide Notification No. 57/2015-20 dated
31.03.2020, exempted levy of IGST and Compensation Cess on imports made under EPCG Authorization upto
31st March 2021.

37. Whether the imports and/ or procurement from bonded warehouse in DTA or from international exhibition
held in India, made by an EOU/EHTP/STP/BTP unit after 31st March 2020, is exempt from IGST and
Compensation Cess?
Answer: Yes, the CBIC, vide Notification No. 16/2020-Cus dated 24.03.2020, exempted levy of IGST and
Compensation Cess on imports and/ or procurement from bonded warehouse in DTA or from international
exhibition held in India, by an EOU/EHTP/STP/BTP unit, till 31st March 2021.
Similarly, the DGFT also, vide Notification No. 57/2015-20 dated 31.03.2020, exempted levy of IGST and
Compensation Cess on imports and/ or procurement from bonded warehouse in DTA or from international
exhibition held in India, by an EOU/EHTP/STP/BTP unit, till 31st March 2021.

38. Whether the exporters or importers are required to furnish bond during the period of lockdown?
Answer: No, the CBIC, vide Circular No. 17/2020-Cus dated 03.04.2020 (as amended), has relaxed the
requirement of furnishing bond and allowed certain categories of exporter or importers to furnish
undertaking in lieu of bond under Customs Act, 1961, till 30th May 2020, subject to conditions mentioned
therein.

39. What are the categories of exporter and importers benefited by the above relaxation?
Answer: The CBIC, vide Circular No. 17/2020-Cus dated 03.04.2020, relaxed the requirement of furnish bond
for the following categories of exporter and importers:

 Government/ Public Sector Undertakings

 Manufacturer/ Actual User importer;
 Authorised Economic Operators;
 Status Holder;
 All importers availing warehouse facility

40. What are the conditions to be fulfilled to avail the above benefit?
Answer: In term of Circular No. 17/2020-Cus dated 03.04.2020 (as amended), the exporter or importer
availing the benefit of not furnishing bond has to fulfil the following conditions:

 The content of the undertaking should, to the extent possible, be same as the content of the prescribed
bond;

 The undertaking should be duly signed by the IEC holder concerned on their business letter head and
submitted by the registered email ID of the IEC holder or their authorised Customs Broker;

 The undertaking should include a commitment from the IEC holder to submit the proper bond in
prescribed format on notarized stamp paper etc. on or before 15.06.2020;

 The undertaking will not be treated as a substitute for security, wherever mandated;

 The security, where required, shall be furnished in the nature and manner as deemed fit by the
proper officer;

Page 35
  In case of warehoused goods, any subsequent movement of goods to another warehouse under
section 67 of the Customs Act, 1962, shall be allowed only to manufacturer/ actual user importer
or AEO or Status holders. For requests related to change of ownership after warehousing, the
facility shall be considered only in cases where the prospective buyer is either
manufacturer/actual user importer or AEO or Status holder.

41. Whether the exporter or importer availing the above benefit can be subjected to more conditions and safe
guards than mentioned in Circular No. 17/2020-Cus dated 03.04.2020?
Answer: Yes, the Circular No. 17/2020-Cus dated 03.04.2020 provides that the Jurisdictional Commissioner,
on case to case basis, can subject the exporter or importer to such additional safe guard as it may deem fit,
in order to safeguard the revenue and compliance of statutory provisions.

42. Whether the exporter or importer furnishing undertaking in lieu of Bond is required to furnish the Bond at a
later stage?
Answer: Yes, the Circular No. 17/2020-Cus dated 03.04.2020 (as amended) provides that such person shall
replace the undertaking with a proper bond by 15th June 2020.

43. How can an exporter or importer avail the benefit of furnishing undertaking in lieu of Bond?
Answer: The exporter or importer can submit the undertaking in lieu of bond through the registered email id of
the IEC holder or their authorized Custom Broker or can approach the Customs field formation.

44. Whether any relief has been granted to the importers for late filing Bill of Entry amidst Covid-19 crisis?
Answer: Yes, the Commissioner of Customs (NS-I), Mumbai Zone - II, vide Public Notice No. 33/2020 dated
24.03.2020, those Bills of Entry which pertain to IGMs filed on or after 20th March 2020, if filed late for
clearance of import consignments, will not attract any late fee charges for the time being and till further
orders. Similar order are issued by all the Customs Commissionerates.

45. Whether the CBIC has designated officers who can be contacted for facilitating customs clearances amidst
Covid-19 crisis?
Answer: Yes, the CBIC, on 1st April 2020, has provided a list of Nodal Officer for facilitating customs
clearance amidst Covid-19 crisis. Click here to view the list of Nodal Officers.

46. Whether the Central Government has extended the validity of Letter of Undertaking, furnished under
Section 16 of the IGST Act, 2017, which was due to expire on 31st March 2020?
Answer: The CBIC, vide Notification No. 35/2020-CT dated 03.04.2020, has extended the due date of various
compliance under CGST Act, IGST Act and UTGST Act, falling between 20th March 2020 to 29th June 2020,
to 30th June 2020. The CBIC has also notified certain exception to the above extension, however, Section 16 of
the IGST Act, 2017 is not included in such exceptions.

Accordingly, the validity of Letter of Undertaking, furnished under Section 16 of the IGST Act, 2017, which
was due to expire on 31st March 2020, has been extended upto 30th June 2020.

47. Whether the Central Government has provided any relief with respect to pending refund or drawback claims
under GST and Customs?
Answer: Yes, the Ministry of Finance, vide Press Release dated 08.04.2020, has intimated that the with a view
to provide immediate relief to the business, the Central Government has decided to disburse all pending
Customs and GST refund and drawback claims at the earliest.
In line to the above decision, the CBIC, vide Instruction No. 03/2020-Cus dated 09.04.2020, has instructed all
its officers to expeditiously process and disburse all Customs refund and drawback claims pending as on
7th April 2020, till 30th April 2020.

48. Whether the time limit, prescribed under Foreign Exchange Management Act, 1999 and regulations made
thereunder, for realisation of export proceeds against the export of goods or software has been extended?
Answer: Yes, the RBI, vide Notification No. FEMA 23(R)/(3)/2020-RB dated 31.03.2020, extended the time
limit for realisation of export proceeds against the export of goods or software, from 9 months to 15 months.

49. Whether the time limit extended for realisation of export proceeds shall be applicable for the exports made
prior to 31st March 2020?

Page 36
Answer: The Notification is silent on retrospective effect of the extended time limit. However, a representation
can be made before the appropriate authorities for extending the above benefits to the exports made prior to 31st
March 2020.

50. Whether the due date for claiming of reimbursement of Central Sales Tax, for the quarter ending 30th
September 2019 and 31st December 2019, has been extended?
Answer: Yes, Ministry of Home Affairs, vide DO No. 40-3/2020-DM-I(A) dated 24.03.2020 (as amended),
allowed the transportation of all types of goods. It covers all the essential commodities or non-essential
commodities, imported or to be exported.

51. Whether the validity of e-Way Bills, where period of validity between 20th March 2020 to 15th April 2020,
has been extended?
Answer: Yes, the CBIC, vide Notification No. 35/2020-CT dated 03.04.2020 (as amended), has extended the
validity of e-Way Bills, where period of validity between 20th March 2020 to 15th April 2020, upto 30th May
2020.

52. Whether the Central Government has provided any relief measures pertaining to container detention charges
on import and export shipments during the period of lockdown?
Answer: Yes, the Directorate General of Shipping, Mumbai, Government of India, vide Advisory dated
29.03.2020 and 22.04.2020, has advised the shipping lines not to impose any container detention charges
for the period from 22.03.2020 to 03.05.2020
over and above free time arrangement as part of negotiated contractual terms. This is a one-time measure only to
tackle the pandemic scenario.
This step has been taken to maintain proper supply lines at the Indian seaports in view of the Order dated
25.03.2020 issued by the Ministry of Home Affairs whereby a nationwide lockdown was announced to contain
the spread of COVID-19 disease.

53. Whether the Central Government has provided any relief measures pertaining to ground rent and demurrage
charges during the period of lockdown??
Answer: Yes, the Directorate General of Shipping, Mumbai, Government of India, vide Advisory dated
31.03.2020 and 22.04.2020, has advised the authorities not to impose any demurrage, ground rent beyond
the allowed free period storage charge in the port,
additional anchorage charge, berth hire charge or vessel demurrage charge or any performance related
charges on cargo owners/consignees of non-containerized cargo (whether LCL or not), for the period from
22.03.2020 to 03.05.2020 (both days inclusive).
This has been done to provide relief against the hardships faced by the ship owners/ consignees due to delay in
evacuation of cargo in view of the Order dated 25.03.2020 issued by the Ministry of Home Affairs whereby a
nationwide lockdown was announced to contain the spread of COVID-19 disease.

Page 37
 Japan Relief Measures during the Coronavirus Outbreak
(As of April 29, 2020)

Measures Applicable Conditions Comments

Corporations
Delay of tax All Corporations • 20% decrease of sales Applicable to payments due between February 1,
payments (Corporate amount in any one month 2020 to January 31,2021 for maximum of one
tax, Consumption tax, after February 2020. year without interest.
Local corporate tax, • The corporation has
Social insurance) temporary cash flow In the current application, bank balance
difficulty to make the copy and 6 months cash plan etc. is
payment required for and need to pass the
evaluation.
Telecommut SMEs (Varies by NA Expansion of existing tax incentive to
ing asset tax industry. Wholesale; promote capital investment. The
incentive Capital amount 100M applicable assets are to be later
JPY or less or 100 announced.
employees or less. The assets purchased can be expensed
Service; Capital at once or applicable for tax credit (7%
amount 50M JPY or of investment, 10% for companies with
less or 100 employees 30MJPY capital orless)
or less. ) Requires the certificate issued by
the accredited institutions.
Fixed asset tax reduction SMEs (Capital amount 30% decrease of sales for 3 Limited to 2021
100M JPY or less) months between February 2020 to
October 2020. 30-50% decrease : 50% cut
More than 50% decrease: 0 JPY
Requires the certificate issued by
the accredited institutions.
Carryback of Corporations with NA If the company is in loss, the National
net operating capital amount of 1 corporate tax paid in the previous year can be
losses (NOLs) billion yen or less. partially refunded.

1
Jizokuk Corporations 50% or more decrease of sales The company registers email address and
a with capital of any one month after apply though website.
Kyufuk amount of 1 January 2020 Requirements:
in or billion yen or The amount of decrease will
Subsidy less. be provided as subsidy
(1) Corporate number
to support (Maximum of 2M JPY for (2) Tax returns in Previous year
sustainabi corporations) Subsidy= Total (3) Any proof to show reduced
lity sales of last year – sales of revenue (Trial Balance, sales register,
month with 50% or more etc.)
decrease *12 months (4) copy of bankbook
2019 set up company is also applicable. The
result will come in approx.2weeks.
Koyo All business *5% or more decrease of sales in The subsidy ratio depends on the size of the
Chosei company and situation of employment.
any one month.
Joseikin Or The maximum subsidy is 8,330 yen/day per
Subsidy for *Employees stay home with employee
employment more than 60% of salary Applicable for salaries paid from April
adjustment salary paid. 1, 2020 to June 30, 2020.
Shogakko Kyugyoto All business Paid leave is provided apart Same subsidy ratio for all companies.
Joseikin Or from the stipulated annual The maximum subsidy is 8,330 yen/day per
Subsidy for special paid paid leave. employee
leave for employees
whose children cannot got Application valid until September 30th for
to elementary schools leaves provide between February 27th, 2020
and nurseries. to June 30, 2020.
Telecommuting subsidy SMEs (See page 1) Special equipment purchased 50% of total investment (Maximum of 1M
for working from JPY)
home.(Normal computers are Applicable period from February 17, 2020 to
excluded) or costs incurred by May 31,2020.
setting up new work or
employment agreement to
enable working from home.

Page 38
 Direct Tax News
• The CBDT admitted that there will be delay in issuing lower
TDS certificates for FY 2020-21. In this regard, they
announced that lower TDS certificates issued for FY 2019-20
will continue to valid for FY 2020-21 till June 30, 2020.

• Extension of validity of Form 15G and Form 15H applicable

for tax year 2019-20 for non-withholding of tax to 30 June 2020

• Government of India directs to provide immediate refunds due

under the Income-tax law for cases where refund is up to
INR0.5 million

• CBDT issued the circular wherein they had allowed employer

to consider new tax regime u/s 115BAC for the purpose of
TDS. Thus, employees at the beginning of the year require to
declare to the employer which option he want to preferred and
accordingly employer require to deduct TDS.

• CBDT defers reporting of GAAR and GST particulars in the tax

audit report till 31 March 2021

• CBDT provided relief to individuals to become resident in

India during Lockdown. Now there stay during lock down will
not be counted as stay in India. - Circular No. 11/2020 dated
May 8, 2020.

• Amended MAP Rules underscore India’s commitment to

resolve MAP cases within 24 months and provide additional
guidance to taxpayers making use of the MAP in India.
Page 39
• CBDT defers applicability of revamped registration procedure for existing and
new charitable and research institutions from 1 June 2020 to 1 October 2020.

• CBDT exempts taxpayers carrying on only B2B transactions from providing

prescribed mandatory electronic modes of payment.

• India Tax Administration extends applicability of transfer pricing safe harbor

rules to financial year 2019-20

• Income Tax Department further amended the Rule 12 and Notified New ITR
Form. Due to COVID-19 effect New Schedule-DI has been added in all ITR
form Except ITR-7. An additional disclosure of investment made during 01-04-
2020 to 30-06-2020 shall be required to be given.

• Cost Inflation Index for FY 2020-21 is 301.

•
• Government of India clarifies employer can make consolidated donations to PM
CARES Fund on behalf of employees and issue receipts to them

• The Finance (No. 2) Act, 2019 had amended section 9A of the Income-tax Act,
1961 to state that a separate calculation shall be prescribed to determine amount
of remuneration for eligible fund managers to be paid by the offshore funds. In
December 2019, the Central Board of Direct Taxes (‘CBDT’) had issued draft
notification to prescribe the manner for calculation of such remuneration. After
due consideration of the input from public and stakeholders, the CBDT vide
Notification G.S.R. 315(E) dated 27 May 2020, has released final rules on
calculation of remuneration of fund managers as Income-tax (10th Amendment)
Rules, 2020

Page 40
 Indirect Tax News
• GSTR-3B filing has been enabled with EVC option
(OTP mode) for companies and LLP. Accordingly,
Companies and LLP can file the GSTR-3B either
with EVC (OTP) or Digital Signature(DSC) mode.

• Form GST PMT-09 has been enabled to transfer any

amount of tax, interest, penalty, etc. in the electronic
cash ledger from one account head to another
account head. The form can be accessed in the
GSTN portal from Services > Ledgers > Electronic
Cash Ledger > File GST PMT-09 for Transfer of
Amount.

• Delhi High Court rules that time-limit prescribed for

transitional credit is only directory and allowed
assessee to claim ITC till June 30 2020. However
revenue able to get stay on this order from supreme
court.

• Delhi HC allows rectification of GSTR-3B of the

period in which ITC claim was due

• CBIC has provided for paperless export process.

Page 41
CBIC extends time limit for issuing refund order and
validity of e-way bill

• Where the time limit for issuance of refund order (after

considering reply in response to notice issued for non-
admissibility of any part of refund) falls between 20
March 2020 to 29 June 2020, the same has been
extended till expiry of 15 days after the receipt of reply
or 30 June 2020, whichever is later.

• Validity of e-way bill, generated on or before 24 March

2020 and expired on or after 20 March 2020, has been
extended till 30 June 2020. Earlier, the validity of e-
way bill expiring between 20 March 2020 to 15 April
2020 had been extended till 31 May 2020.

• Transition date on account of merger of erstwhile

Union Territories of Daman and Diu and Dadra and
Nagar Haveli has been extended till 31 July 2020

Page 42
 International Tax News
• Some businesses are planning to challenge Kenya’s VAT auto
assessment (VAA) system, arguing that it has unfairly shifted
the administrative burden onto buyers, many of which are
large businesses.

• Turkey - The digital services tax is imposed at a rate of 7.5%

on gross revenue realized from certain services provided in
Turkey

• Hong Kong - To date there has been no guidance on how

crypto currencies are to be taxed which has led to divergent
approaches as to how the general charging provisions in the
Inland Revenue Ordinance (IRO) would apply to the various
forms of crypto.

• Germany - Temporarily Reduces VAT on Restaurants services

- COVID19 measure. The VAT on takeaway food reduced to
7% from 19%

• Saudi Arab – The VAT rate has been increased from 5% to

15%. .

• UK - The date of payment of VAT falling due between 20

March and 30 June 2020 can be deferred until 31 March 2021.

• USA is opposing one sided digital tax by other countries

Page 43
 USA COVID 19 Tax Relief

The Senate has enacted the Coronavirus Aid, Relief, and

Economic Security Act (known as the CARES Act). The CARES
Act, amongst others, provides for the following measures:

• Net operating losses (NOL): Various NOL changes introduced

i.e. five-year NOL carry-back for 2018, 2019 or 2020 losses,
temporary removal of 80% NOL limitation, and modification
of pass through loss limitation.

• Deduction of business interest expense: For tax years

beginning in 2019 and 2020, the percentage limit of deduction
for business interest has been increased from 30% to 50% of
adjusted taxable income (ATI). Further, a taxpayer can elect to
use its 2019 ATI for the purpose of calculating its 2020
limitation.

Employee retention credit: Eligible employers are given a

refundable tax credit for up to 50% of the qualified wages paid to
each employee during the calendar quarter with a maximum of
$10,000 of such wages per employee for all quarters. In order to
claim the credit, the employer must carry on a trade or business
during calendar 2020, and must meet either the business closure or
significant decline in gross receipts test for the quarter in which
the credit is claimed Page 44
 UK COVID 19 Tax Relief

Additional tax break allowed for small

enterprises only on satisfaction of following
conditions

• Assets purchased in UK between June 11,

2020 to end of tax year 2020-21 .
• Assets were purchased by employee and
claimed reimbursement of the same from the
employer.
• The assets must be equipment’s which are
necessary to work from home for the
employees.
• The employer is exempt from reporting of
reimbursed expenses to tax and NICs

Page 45
 Trade Policy News
• The Government of India has decided to extend the existing
foreign trade policy (2015-20) for six more months till
September 30, 2020. Similarly, all the existing schemes under
the policy will be extended till September. Some more
measures are also expected to be provided to exporters to ease
strain caused by the outbreak, the official added.

• Last date of filing of SEIS application for FY 2018-19 would

be 31 December 2020

• Foreign Trade Policy, 2015-2020 would remain in force upto

31 March 2021 unless otherwise specified

• RBI has extended the time period for realization and

repatriation of export proceeds from 9 months to 15 months
for exports made up to or on July 31, 2020.

• A non-resident entity can invest in India, subject to the FDI

Policy except in those sectors/activities which are prohibited.
However, an entity of a country, which shares land border
with India or where the beneficial owner of an investment into
India is situated in or is a citizen of any such country, can
invest only under the Government route. Further, a citizen of
Pakistan or an entity incorporated in Pakistan can invest, only
under the Government route, in sectors/activities other than
defence, space, atomic energy and sectors/activities prohibited
for foreign investment.

Page 46
Tax on News.

Page 47
 Recent Judicial
Pronouncement on Tax
• Bombay High Court upheld validity of penalty notice
despite defect in non striking-off of inapplicable limb
of charge of penalty. - Ventura Textiles Limited.

• Gujarat High Court held that interest is payable on

delay in granting refund of integrated tax- Saraf
Natural Stone.

• Supreme Court of India denies benefit of mutuality

when contribution is received from non-member to
common fund and involves profit motive- Yum
Restaurants.

• Supreme Court explains difference between retirement

of a partner and dissolution of a partnership firm -
Gurunanak Industries.
•
• Supreme Court decided that there cannot be any re-
opening under section 148 once the issues being
discussed during assessment procedure - Marico Ltd.

Page 48
 Changes in due dates due to Covid-19.
Income Tax Act

Sl. Particulars Original Extended Revised Cha Changed Sources Remarks

No. due date due date due Extended Due nged Penalty &
to Covid Date Inte Late Fee
rest
rate
A1 31/03/2020 30/06/2020 31/07/2020 Ordinance dt 31st Mar 2020
Notification dated 24th June 2020

A2 Filing of Income Tax return for FY 19- 31/07/2020 30/11/2020

20 30/09/2020 Notification dated 24th June 2020
30/11/2020
A3 Filing of Tax Audit Report 31/08/2020 31/10/2020
31/10/2020 Notification dated 24th June 2020

B Between 20th No change 9 Nil Ordinance dt 31st Mar 2020

assessment tax, regular tax March 2020 to
%
30th June 2020
C Vivad Se Vishwas Scheme declaration 31/03/2020 30/06/2020 31/12/2020 Ordinance dt 31st Mar 2020 Additional
Notification dated 24th June 2020 10% not to
be payable
D Filing of Form 15G/H 07/04/2020 30/06/2020 Ordinance dt 31st Mar 2020

e Filing of TDS return 31/05/2020 30/06/2020 31/07/2020 Ordinance dt 31st Mar 2020

Notification dated 24th June 2020

f Payment of TDS /TCS for the month of Between 20th No change 9 Nil Ordinance dt 31st Mar 2020
March, April & May 2020 March 2020 to
%
30th June 2020

g Payment of Equalisation Levy for the month Between 20th No change 9 Nil Ordinance dt 31st Mar 2020
of March, April & May 2020 March 2020 to %
30th June 2020
 h Adhar PAN Linking Date 31/03/2020 30/06/2020 31/03/2020 Ordinance dt 31st Mar 2020

Notification dated 24th June 2020

i Notice issuance, due dates, filling of appeal, Between 30/06/2020 Ordinance dt 31st Mar 2020
submissions, applications, any other 20/03/2020 to
proceedings against any income tax authority 29/06/2020

Benami Property Act, Equalisation lavy

j Making/payment for Investment under 31/03/2020 30/06/2020 31/07/2020 Ordinance dt 31st Mar 2020 Donation to
PM CARES
PPF, NSC etc.), 80D FUND would
(Mediclaim), 80G (Donations), etc. for Notification dated 24th June 2020 enable the
donor to get
100%
deduction in
section
80G(2)(a)(iiia)
i.e. without any
internal limit of
10% of
adjusted Gross
Total
Income.
k Payment/making investment in Capital Gain 31/03/2020 30/06/2020 31/07/2020 Ordinance dt 31st Mar 2020
Scheme u/s 54 to 54GB
Notification dated 24th June 2020

Note :
(i) No Interest u/s 234A for self assessment tax payable liability upto Rs. 1 Lakh.
 Certificates for lower TDS or TDS u/s 195, 197 & 206 C(9)

Sl. Particulars Original due extended due Changed Changed Sources Remarks
No. date date due to Interest Penalty &
Covid rate Late Fee

a) In case of Application filed but pending for 31/03/2020 30/06/2020 or CBDT Order
disposal of their u/s 119 dt.
application by 31st March
AO 2020

b) could not apply for for 31/03/2020 30/06/2020 or

but were having the certificates for F.Y. 20 disposal of their
application by
AO

c) 30/06/2020 or TDS to be deducted

foreign companies) having Permanent disposal of their @10% including
Establishment in India and not covered by (a) application by AO surcharge and cess
and (b) above,
 3. Important Dates for GST (Feb, March, April, May, June, July & August 2020)

GSTR-3B date of Interest Charged GSTR-1 Date

If Filed before If Filed after the comments
Tax Period benefit Late Fee (without late fee and
the decided decided date in Reference
(A) penalty)
date in (A) (A)
Turnover more than 5 Crores
NIL for first 15 18% p.a from *NN.51/2020–Central Tax dt
Late fee shall be
days from 24.06.2020 N.A. if filed 24.06.2020
applicable from
Original Due [clarity awaited, before date **NN.52/2020–Central Tax dt Original Date and no
February 24th June 2020 original due date if
Date condition of main mentioned in 24.06.2020 & clarity for any benefit
filed after date
9% p.a. from notification (A) ** Circular No. 136/06/2020-GST
mentioned in (A).
04.04.2020* removed] dt.03.04.2020 @CA Navya Malhotra
@CA Navya Malhotra
NIL for first 15 18% p.a from *NN.51/2020–Central Tax dt
Late fee shall be
days from 24.06.2020 N.A. if filed 24.06.2020 10th July 2020
applicable from
March 24th June 2020 Original Due [clarity awaited, before date original due date if **NN.52/2020–Central Tax dt NN: 53/2020-Central
Date condition of main mentioned in 24.06.2020 &
filed after date Tax dt 24.06.2020
9% p.a. from notification (A)** Circular No. 136/06/2020-GST
mentioned in (A).
05.05.2020* removed] dt.03.04.2020
NIL for first 15 18% p.a from *NN.51/2020–Central Tax dt
Late fee shall be
days from 24.06.2020 N.A. if filed 24.06.2020
applicable from 24th July 2020
Original Due [clarity awaited, before date **NN.52/2020–Central Tax dt
April 24th June 2020 original due date if NN: 53/2020-Central
Date condition of main mentioned in 24.06.2020 &
filed after date Tax dt 24.06.2020
9% p.a. from notification (A) ** Circular No. 136/06/2020-GST
mentioned in (A).
04.06.2020* removed] dt.03.04.2020
27th June 2020 Applicable if 28th July 2020
Interest @18% p.a. if filed after
May (Extended Due filed after 27th - @CA Navya Malhotra - NN: 53/2020-Central
27th June
Date) June Tax dt 24.06.2020
05th Aug 2020
June No Change No Change No Change No Change No Change No Change NN: 53/2020-Central
Tax dt 24.06.2020

Turnover up to 5 Crores (Presented & Compiled by CA Navya Malhotra & Team)

@CA Navya Malhotra
Monthly : Original Date
9% Interest if *Nil till the date and no clarity for any
N.A. if filed NN.51/2020-Central Tax
No interest if after specified mentioned in (A), and benefit
30th June- For before date dt.24.06.2020 &
February filed before date date in (A) till 9 per cent thereafter till Qtrly : Jan to March
States 1 & States 2 mentioned in **NN.52/2020-Central Tax
mentioned in (A) 30.09.2020 and the 30th day of 17th July 2020
(A) ** dt.24.06.2020
18% thereafter* September, 2020 NN: 53/2020-Central
Tax dt 24.06.2020
Monthly : 10th July
9% Interest if *Nil till the date
N.A. if filed NN.51/2020-Central Tax 2020.
States 1: 3rd July No interest if after specified mentioned in (A), and
before date dt.24.06.2020 & Qtrly : Jan to March
March States 2: 5th July filed before date date in (A) till 9 per cent thereafter till
mentioned in **NN.52/2020-Central Tax 17th July 2020
mentioned in (A) 30.09.2020 and the 30th day of
(A) ** dt.24.06.2020 NN: 53/2020-Central
18% thereafter* September, 2020
Tax dt 24.06.2020
@CA Navya Malhotra
9% Interest if *Nil till the date Monthly : 24th July
N.A. if filed NN.51/2020-Central Tax 2020.
States 1: 6th July No interest if after specified mentioned in (A), and
before date dt.24.06.2020 & Qtrly : Apr to June
April States 2: 9th July filed before date date in (A) till 9 per cent thereafter till
mentioned in **NN.52/2020-Central Tax 03rd Aug 2020
mentioned in (A) 30.09.2020 and the 30th day of
(A) ** dt.24.06.2020 NN: 53/2020-Central
@CA Navya Malhotra 18% thereafter* September, 2020
Tax dt 24.06.2020
@CA Navya Malhotra
Monthly : 28th July
9% Interest if *Nil till the date
N.A. if filed NN.51/2020-Central Tax 2020.
States 1: 12th Sept No interest if after specified mentioned in (A), and
before date dt.24.06.2020 & Qtrly : Apr to June
May States 2: 15th Sept filed before date date in (A) till 9 per cent thereafter till
mentioned in **NN.52/2020-Central Tax 03rd Aug 2020
mentioned in (A) 30.09.2020 and the 30th day of
(A) ** dt.24.06.2020 NN: 53/2020-Central
18% thereafter* September, 2020
Tax dt 24.06.2020
Monthly : 05th Aug
9% Interest if *Nil till the date
N.A. if filed NN.51/2020-Central Tax 2020.
States 1: 23rd Sept No interest if after specified mentioned in (A), and
before date dt.24.06.2020 & Qtrly : Apr to June
June States 2: 25th Sept filed before date date in (A) till 9 per cent thereafter till
mentioned in **NN.52/2020-Central Tax 03rd Aug 2020
mentioned in (A) 30.09.2020 and the 30th day of
@CA Navya Malhotra (A) ** dt.24.06.2020 NN: 53/2020-Central
18% thereafter* September, 2020
Tax dt 24.06.2020
9% Interest if *Nil till the date
N.A. if filed NN.51/2020-Central Tax
States 1: 27th Sept No interest if after specified mentioned in (A), and
before date dt.24.06.2020 &
July States 2: 29th Sept filed before date date in (A) till mentioned in 9 per cent thereafter till **NN.52/2020-Central Tax Clarity Awaited
mentioned in (A) 30.09.2020 and the 30th day of
(A)** dt.24.06.2020
18% thereafter* September, 2020
@CA Navya Malhotra
States 1: 1st Oct
No interest if N.A. if filed
States 2: 3rd Oct
August The original due filed before date Clarity Awaited before date Clarity Awaited NN.54/2020-Central Tax Clarity Awaited
mentioned in dt.24.06.2020
date is extended. mentioned in (A)
(A)

Page 52
 Central Excise and Customs Act

Sl. Particulars Original due extended due Changed Changed Sources Remarks
No. date date due to Interest Penalty &
Covid rate Late Fee

a Central Excise returns due in March, 30/06/2020

April and May 2020
b 31/03/2020 30/06/2020

be levied if payment will be made on

c 30/06/2020
Clearance will server 24X7 Ordinance dt
31st Mar 2020
d Notice issuance, due dates, filling of Between 30/06/2020
appeal, submissions, applications, 20/03/2020 to
any other proceedings under the 29/6/2020
Central Excise Act, 1944 and Rules
made thereunder, under the
Customs Act, 1962 and rules made
thereunder
 Professional Tax

Sl. Particulars Original due extended due Changed Changed Sources Remarks
No. date date due to Interest Penalty &
Covid rate Late Fee

Monthly or annual return pertaining to any 31/03/2020 30/04/2020 X X Trade Circular

periods upto 31st Mar 20 by registered No.04T of 2020
employer only if tax payable as per return dated 19/03/20
paid on or before 30/04/20

MCA

Sl. Particulars Original due extended due Changed Changed Sources Remarks
No. date date due to Interest Penalty &
Covid rate Late Fee

a irrespective of its moratorium Nil Nil General Circular No additional Fees, Also
additional fees for late fillings of Forms, due date Till period from No. 12 dated
Return, Statements etc by Company except 31/08/2020 01st April to 30th companies
30th March 2020
September
2020

b irrespective of its moratorium Nil Nil General Circular No additional Fees, Also
additional fees for late fillings of Forms, due date Till period from No. 13 dated
Return, Statements etc by LLP except 31/08/2020 01st April to 30th LLPs
30th March 2020
September
2020
c not exceeding Extended to Nil Nil Ordinance dt 31st
120 days 180 days for Mar 2020
Interval between 2 Board Meetings
meeting till
30/9/20

d N.A. N.A. F. No.

w.e.f. w.e.f.
01.04.2019 01.04.2020
24th March
2020

e DIN holders of DINs marked as between 1st NA NIL General without any filing fee of Rs.
April Circular No. 5000/10000 respectively
2020 to 30th 11 dated 24th
case may be September March 2020
2020
f Ordinance dt 31st
Independent director are required to hold Mar 2020
atleast one meeting without the attendance of then it will not be considered as
violation
management.

g spending on COVID 19 would be CSR General Circular

spending under clauses (i) & (vii) of No. 10 dated
Schedule VII 23rd
March 2020

h any contribution made to the PMCARES

Fund shall qualify as CSR expenditure
under the Companies Act 2013.
Dt.28th Mar
2020
i Ordinance dt 31st
atleast 182 days in India then it will Mar 2020 stays for less than 182 days in
India then it will not be
considered as violation

j within 6 months of An additional Ordinance dt 31st

are required to file a declaration for incorporation time of 6 more Mar 2020
Commencement of Business months shall be
allowed

k Companies (Meeting of Board and its 30/06/2020

Powers) Rules to allow meetings by listed
companies on matters referred in rule 4(1) dt.19/03/2020
[accounts approval, etc] through video
conference etc
 SEBI (LODR) Regulations, 2015 & SEBI (SAST) Regulations, 2011

Sl. Particulars Original due date extended due date Changed Changed Sources Remarks
No. due to Covid Interest Penalty &
rate Late Fee

a Compliance Certificate on share 30/04/2020 31/05/2020

transfer facility U/s 7(3)

b Statement of Investor Complaint U/s 13(3) 21/04/2020 15/05/2020

c Nomination & Remuneration Committee shall 31/03/2020 30/06/2020

meet atleast once in a year U/s 19(3A)

d Stakeholder Relationship Committee shall 31/03/2020 30/06/2020 circular dated

meet atleast once in a year U/s 20(3A) March 19,
2020 and
March 26,
e Risk Management Committee shall meet 31/03/2020 30/06/2020 2020
atleast once in a year U/s 21(3A)

f Secretarial Compliance Report U/s 24A 30/05/2020 30/06/2020

g Corporate Governance Report U/s 27(2) 15/04/2020 15/05/2020

h Shareholding Pattern U/s 31 21/04/2020 15/05/2020

i Financial Results U/s 33 30/05/2020 30/06/2020
j Certificate from PCS on timely issue of 30/04/2020 31/05/2020
Share Certificates U/s 40(9)

k Holding AGM (Top 100 Listed Entities on 31/08/2020 30/09/2020

market capitalization basis
l SEBI (SAST) Disclosure U/s 30(1),(2) & Within 7 Working Within 7 working
(4) Days from the days from the end
end of FY. of 1st June,2020
m The Board of Director Shall meet at least 4 with a maximum gap No any maximum
times a year U/s 17(2) of 120 days between gap for meeting held
any two meetings between the period
1st December, 2019
& 30th June,
2020.

n The audit committee shall meet at least 4 with a maximum gap No any maximum
times a year U/s 18(2)(a) of 120 days between gap for meeting held
any two meetings between the period
1st December, 2019
& 30th June,
2020.

o Publication of Advertisements in Now exempt from

Newspapers U/s 47 publication of
advertisements in
Newspaper till 15th
May, 2020