Self-reliant

INDIA
 India 2022
Budget 2023

Direct Tax
at a glance

01 Self-reliant India Direct Tax 01-07

 India
Budget
Non-Corporate Assessee
§§ No changes have been proposed in basic
exemption limit, slab rates and surcharges
applicable to individual or HUF both under the
regular tax regime as well as Sec. 115BAC.
§§ Surcharge applicable to AOP consisting only of
companies as its members has been proposed
to be capped at 15% as against earlier rates of
25% & 37%.
§§ In case of individuals, HUFs, BOIs and AOPs who
are taxable at slab rates, maximum surcharge
on long terms capital gains taxable u/s 112 has
also been proposed to be capped at 15% as
presently applicable for long term capital gains
on listed equity shares, equity oriented Mutual
Funds and units of business trusts u/s 111A &
112A.
§§ Basic tax rates for co-operative society
other than Sec. 115BAD proposed to remain
unchanged. However, surcharge has been
proposed to be reduced from 12% to 7% in
case the total income of a cooperative society
exceeds H1 Cr but does not exceed H10 Crs.
while surcharge @ 12% shall continue to be
levied in case total income exceeds H10 Crs.
§§ Alternate Minimum Tax Rate prescribed u/s
115JC has been proposed to be reduced from
18.5% to 15% for co-operative societies to align
with MAT rate applicable for Companies.
§§ It is proposed to enhance the eligible deduction
u/s 80CCD(2) retrospectively w.e.f. AY 2020-21
for contribution made by an employer being
State Govt. to Notified Pension Scheme (NPS)
from 10% to 14% of the salary to align with the
deduction available to Central Govt. employees.
§§ Deduction u/s 80DD(of H75,000 and H1,25,000
for severe disability) is available on amount paid
or deposited under scheme framed by LIC or
other insurer for maintenance including medical
treatment of a dependent person with disability
subject to the condition that the aforesaid
scheme provides for payment of annuity or lump
sum for the benefit of a dependant, in event
of death of the assessee. Deduction is now
proposed to be available for schemes wherein
payments are made during the lifetime of the
assessee if the assessee attains the age of 60
years and where payment to the scheme has
been discontinued. Further, amount received as
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annuity or lump sum by the dependant before
death which was taxable earlier shall also be
non- taxable.
§§ Any sum received by a person/family member
from his employer/any other person in respect
of any expenditure actually incurred on his own/
family’s medical treatment, for any illness related
to COVID-19, is proposed not to be taxed as
perquisite u/s 17(2) or income u/s 56(2)(x) w.r.e.f
01-04-2020. Exemption u/s 56(2)(x) is also
proposed when the sum is received by family
member upto a maximum of H10,00,000 within
12 months from the death of the person, subject
to fulfilment of the conditions to be prescribed.
Corporate Assessee
§§ Corporate Tax Rates proposed to remain
unchanged at 30%. Tax rate for domestic
companies having annual turnover or gross
receipts ≤ H400 Crs. in FY 2020-21 shall be
25%. In case of companies other than domestic
companies, the rates are same as specified for
FY 2020-21. Tax rate for domestic companies
opting taxation u/s 115BAA or 115BAB remain
unchanged at 22% and 15% respectively with a
surcharge @ 10%.
§§ New manufacturing companies incorporated
after 01-10-2019 which commences
manufacturing or production on or before
31-03-2023 were eligible for concessional
tax rate of 15% u/s 115BAB. Such period for
commencement of manufacturing or production
has been proposed to be extended by one year
to 31-03-2024.
§§ Eligible start-up incorporated between 01-04-
2016 to 31-03-2022 were eligible for tax holiday
u/s 80-IAC. Such period for incorporation has
been proposed to be extended by one more year
to 31-03-2023.
§§ It is proposed to insert an Explanation in Sec.
50, w.r.e.f. AY 2021-22, to clarify that for the
purposes of computing capital gain u/s 50,
reduction of the WDV of goodwill of a business
or profession determined in accordance with
Sec. 43(6)(c)(ii)(B) from the block of asset shall
be deemed to be transfer.
§§ Exemption from Sec. 79, restricting carry
forward of losses on change in shareholding,
proposed to be extended to an erstwhile public
sector company provided that immediately
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after the completion of strategic disinvestment,
ultimate holding company continues to hold 51%
or more of the voting power of such company
either directly or through its subsidiaries.
Such condition to be satisfied in all the years
subsequent to the completion of strategic
disinvestment.
International Taxation and Transfer
Pricing
§§ While several tax concessions have been
provided over the past few years to units located
in International Financial Services Centre (IFSC),
it is proposed to further incentivise operations
from IFSC by providing the following additional
incentives w.e.f. A.Y. 2023-24:-
ŸŸ Sec. 10(4E) has been proposed to be
amended to extend the exemption to any
income of a non-resident from transfer of
offshore derivative instruments or over-
the-counter derivatives entered into with an
Offshore Banking Unit of IFSC.
ŸŸ Sec. 10(4F) has been proposed to be
amended to extend the exemption to any
income of a non-resident by way of royalty
or interest on account of lease of ship in a
PY, paid by a unit of an IFSC, if the unit has
commenced operation on or before 31-03-
2024.
ŸŸ Sec. 10(4G) has been proposed to be inserted
to provide exemption to any income received
by a non-resident from portfolio of securities
or financial products or funds, managed or
administered by any portfolio manager on
behalf of such non-resident, in an account
maintained with an Offshore Banking Unit, in
any IFSC, to the extent such income accrues
or arises outside India and is not deemed to
accrue or arise in India.
ŸŸ Provisions of Sec. 56(2)(viib) do not apply
where the consideration for issue of shares
as referred therein has been received by a
venture capital undertaking from a specified
fund. Clause (aa) of Explanation to Sec. 56(2)
(viib) has been proposed to be amended to
expand the definition of specified fund to also
include Category I or a Category II Alternative
Investment Fund which is regulated under the
IFSC Authority Act, 2019.
ŸŸ Sec. 80LA(2)(d) has been proposed to be
amended to extend 100% deduction of any
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income arising from transfer of an asset,
being ship, which was leased by a unit of IFSC
to a person subject to condition that the unit
has commenced operation on or before 31-
03-2024;
§§ In the light of simplification of Indian Tax laws
and phasing out of tax incentives and exemption,
the following exemptions have been proposed to
be withdrawn w.e.f. AY 2023-24:
ŸŸ Exemption for income specified u/s
10(8) in the hands of an Individual who
is assigned duties in India in connection
with any co-operative technical assistance
programmes and projects in accordance
with an agreement entered into by CG and
the Government of foreign state subject to
specified conditions being fulfilled.
ŸŸ Exemption for income specified u/s 10(8A)
in the hands of a consultant engaged by
the international organisation (agency)
for rendering technical services in India in
connection with any technical assistance
programme or project subject to specified
conditions being fulfilled.
ŸŸ Exemption for income specified u/s 10(8B) in
the hands of an Individual being an employee
of the consultant referred to in Sec. 10(8A)
subject to specified conditions being fulfilled.
ŸŸ Exemption for income specified u/s 10(9) in
the hands of family members of any such
Individual as referred in Sec. 10(8), 10(8A) and
10(8B) who accompanies such individual to
India, subject to specified conditions being
fulfilled.
§§ In order to provide parity in tax treatment on
dividend received by Indian companies from
domestic companies vis-à-vis dividend received
from specified foreign companies, Sec. 115BBD
is proposed to be amended w.e.f. AY 2023-24 to
provide that the concessional rate of tax @ 15%
on dividend received by an Indian company from
specified foreign company shall not apply.
§§ Sec. 239A has been proposed to be inserted
w.e.f. 01-04-2022 to provide for a mechanism to
file application before the AO to claim refund of
TDS borne by a payer in respect of payments to
non-resident in certain cases, when such payer
denies his liability to deduct tax. Sec. 246A has
been proposed to be amended to provide for an
appeal by such payer before the CIT(Appeals)
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against order passed by the AO. Also, it has been
proposed that provisions of Sec. 248 shall not
apply in cases where the date of payment of tax
is on or after 01-04-2022.
§§ W.e.f. 01-04-2022, revisionary powers u/s 263
have been proposed to be extended to PCCIT
or the CCIT or the PCIT or CIT (who is assigned
the jurisdiction of transfer pricing) qua transfer
pricing orders passed by the TPO u/s 92CA.
Consequential amendment also has been
proposed to be made in Sec. 153 w.e.f. 01-04-
2022.
Other Relevant Proposals
§§ It is proposed to insert a non-obstante clause to
Sec. 14A to provide that it would be applicable
on expenditure incurred in relation to exempt
income not accrued/arisen/received during the
PY.
§§ Sec. 40(a)(ii) specifying that deduction shall not
be allowed in respect of any rates or tax levied
on any profits and gains of any business or
profession, has been proposed to be amended
w.r.e.f AY 2005-06, to include surcharge or cess,
by whatever name called, within the definition
of tax. Hence, various cess on income tax from
time to time is no more available for deduction.
§§ Sec. 43B has been proposed to be amended
to provide that conversion of interest payable
on a loan from Specified Financial Institutions,
NBFCs, Scheduled Banks or Co-operative
Banks referred in Clauses (d), (da) and (e) into
debenture or any other instrument by which the
liability to pay is deferred to a future date shall
not be deemed to have actually been paid for the
purposes of allowing deduction under the said
section.
§§ It is proposed to clarify legal position emanating
from conflicting rulings on the scope of
disallowance u/s 37 w.e.f. 01-04-2022 and
add another Explanation to Sec. 37(1) to cover
expenses: (a) incurred for any purpose which
is an offence or prohibited by any law in India
or outside India, (b) to provide any benefit or
perquisite to a person (whether or not carrying
on a business or exercising a profession), for
whom acceptance of such benefit or perquisite
is in violation of the law governing the conduct of
such person, (c) to compound an offence under
domestic or foreign law.
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§§ Sec. 68 has been proposed to be amended
w.e.f. AY 2023-24 to provide that the nature
and source of any sum, whether in the form of
loan or borrowing, or any other liability credited
in the books of assessee shall be treated as
explained only if, in addition to identity and credit
worthiness of the creditor, the source of funds
in the hands of the creditor or entry provider is
also explained. However, this additional onus of
proof of satisfactorily explaining source in the
hands of creditor, would not apply if the creditor
is a Venture Capital Fund or Venture Capital
Company registered with SEBI.
§§ Sec. 139(8A) has been proposed to be inserted
to enable filing of an updated return of income
within 24 months from the end of the relevant
AY notwithstanding the fact that an original/
belated/revised return has been filed for the said
AY or not. Such updated return cannot be filed,
among others,
ŸŸ for reporting of losses or in cases where the
updated return has the effect of decreasing
the total tax liability or results in refund or
increases the refund due on the basis of
original/belated/revised return.
ŸŸ in cases of search & survey, ongoing or
completed assessment/reassessment/
revision proceedings
§§ Sec. 140B has been proposed to be inserted
to provide for payment of tax, interest (u/s
234A, 234B & 234C), fees payable under the
Act including an additional tax on the income
reported in the updated return filed u/s 139(8A).
The additional tax shall be payable @ 25% of
the aggregate of tax and interest payable on
the incremental income reported in the updated
return if such return is furnished after expiry of
the time available for filing of belated/revised
return u/s 139(4)/139(5) and before completion
of 12 months from the end of the relevant AY. If
the updated return is furnished after the expiry of
12 months but before 24 months from the end
of the relevant AY, rate of additional tax shall be
50%.
§§ Hitherto, tax was deducted u/s 194-IA @ 1%
on transfer of immovable property on actual
amount paid or credited if consideration is H50
Lacs or more. It is proposed to amend the Sec.
to provide for deduction of tax on actual amount
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of consideration or the stamp duty value of such ŸŸ Payer is other than specified person and
property, whichever is higher, w.e.f 01-04-2022. aggregate value of consideration does not
exceed H10,000.
§§ New Sec. 194R is proposed to be inserted w.e.f.
01-07-2022 for deducting tax @ 10% on value of ‘Specified Person’ means an individual or
any benefit or perquisite arising from business Hindu undivided family, whose business
or profession to a resident, whether convertible income does not exceed H1 Cr. or professional
into money or not if value of benefit or perquisite income does not exceed H50 Lacs or no
exceeds H20,000. If cash component of benefit income under the head ‘Profits and gains of
or perquisite is insufficient for depositing TDS, business or profession’.
before releasing the benefit or perquisite, payer
§§ In relation to reassessment proceedings under
shall ensure tax payment on such benefit or
the Act, following major changes have been
perquisite.
proposed:
§§ Condition of non-filing of return of income for
ŸŸ Hitherto, reassessment proceedings u/s
applicability of higher TDS/TCS u/s. 206AB and
147 could be initiated beyond 3 years where
206CCA is proposed to be reduced from 2 years
income above H50 Lacs represented in the
to 1 year. Further, to provide relief to individual
form of an asset has escaped assessment.
and HUF, from higher deduction of tax, TDS
The scope of such reassessment has been
u/s 194-IA, 194-IB and 194M proposed to be
widened to also include any expenditure in
excluded from applicability of higher TDS u/s
respect of a transaction or in relation to an
206AB.
event or occasion or entries in the books of
§§ Sec. 115BBH is proposed to be inserted from AY account.
2023-24 to provide that income from transfer of
ŸŸ Notice u/s 148 can be issued only if the AO
any virtual digital asset shall be taxable @ 30%.
has information which suggests that income
No deduction (other than cost of acquisition) or
chargeable to tax has escaped assessment.
allowance or set off of any loss shall be allowed
Currently, such information includes any
in computing income from transfer of such
audit objection raised, which has now been
asset. Further, loss on transfer of such asset
proposed to be extended even to information
shall not be allowed to be carried forward to
received from foreign jurisdiction, faceless
subsequent assessment years.
collection of information u/s 135A and
§§ Provisions of bonus stripping u/s 94(8) hitherto also information which requires action in
applicable only to units now also extended to consequence of the order of a Tribunal or a
securities being stocks and shares. Further, both Court.
dividend stripping u/s 94(7) & bonus stripping
ŸŸ Compliance u/s 148A shall now not be
u/s 94(8) also extended to units of Infrastructure
required where the AO has information
Investment Trust (InvIT), Real Estate Investment
under the scheme of Faceless Collection of
Trust (REIT) and Alternative Investment Funds
Information u/s 135A in relation to income
(AIFs) w.e.f. AY 2023-24.
escaping assessment.
§§ Clause (47A) to Sec. 2 proposed to be inserted to
ŸŸ AO shall no longer be required to take
define “virtual digital asset”. Further, w.e.f from
approval of the specified authority for issuing
AY 2023-24, it is proposed to include “virtual
Notice u/s 148, where an order u/s 148A(d)
digital asset” in the definition of property as
is passed with prior approval of specified
given in Explanation to Sec. 56(2)(vii).
authority.
§§ Sec. 194S is proposed to be inserted w.e.f. 01-
ŸŸ In case of search & seizure, AO shall now be
07-2022 to provide for TDS @ 1% on payment
deemed to have information which suggests
for transfer of virtual digital asset to a resident.
that the income chargeable to tax has
No tax is required to be deducted in case
escaped assessment in terms of Sec 148 only
ŸŸ Payer is a specified person and aggregate for the year in which search or survey u/s 132,
value of consideration does not exceed 132A & 133A is initiated or conducted, instead
H50,000. of 3 previous AYs, and survey conducted in

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connection with expenditure incurred on any
function or ceremony or event as specified
u/s 133A(5) also to be considered as basis of
information, which was not there earlier.
§§ Sec. 79A proposed to be inserted w.e.f. 01-04-
2022 to provide that where total income of any
PY of an assessee includes any undisclosed
income, consequent to a search initiated u/s
132, requisition made u/s 132A or survey
conducted u/s 133A [other than Sec. 133A(2A)],
such undisclosed income shall not be allowed
to be set off with any loss including brought
forward loss or unabsorbed depreciation u/s
32(2).
§§ Definition of Slump Sale u/s 2(42C) was
amended vide Finance Act, 2021 w.e.f. AY 2021-
22 to expand its scope to cover all forms of
transfer within its ambit. However, inadvertently,
reference of the word ‘sales’ was there in the last
sentence of definition instead of word “transfer”,
which is now proposed to be substituted with
the word “transfer” w.r.e.f. AY 2021-22.
General and Administrative
§§ Existing provisions of Sec. 144B(1) to Sec.
144B(8) relating to faceless assessment has
been proposed to be substituted w.e.f. 01-04-
2022, to provide modified procedure for faceless
assessment.
§§ Hitherto, Sec. 144B(9) provided that the
assessment proceedings shall be void, if
the procedure mentioned in Sec. 144B was
not followed. Now, to avoid disputes and
unnecessary litigation, including technical issues
due to use of information technology, Sec.
144B(9) has been proposed to be omitted from
its date of inception i.e. w.r.e.f. 01-04-2021.
§§ Sec. 158AB is proposed to be introduced to
provide that in case where identical question of
law is pending before Jurisdictional HC or SC in
assessee’s own case or any other assessee’s
case for any AY, the IT Department may decide
to defer the filing of appeal. A collegium
(comprising of 2 or more CCITs, PCITs or CITs)
may decide and intimate the PCIT or CIT not to
file any appeal before ITAT or HC in such cases
only after assessee agrees that question of law
in its case is identical to the question in the case
pending before the Jurisdictional HC or SC.
§§ Sec. 170 has been proposed to be amended to
provide that assessment or other proceedings
06 Self-reliant India Direct Tax
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made on the predecessor during the course
of pendency of business reorganization
(amalgamation, demerger or merger of
business) or proceedings under IBC shall be
deemed to have been made on the successor.
§§ A new Sec. 170A has been proposed to be
inserted w.e.f. 01-04-2022 to enable successor
entity, going through business reorganization or
IBC proceedings, for filing of modified return of
income for the AYs to which order of business
reorganization or IBC proceedings apply within
six months from the end of the month in which
such order was issued provided return was filed
u/s 139 by the successor.
§§ Sec. 156A has been proposed to be introduced
to provide a mechanism to reduce the demand
from the outstanding demand register in case
where as a result of an order of Adjudicating
Authority under IBC, demand raised vide demand
notice u/s 156 is reduced.
§§ It is proposed to empower CIT(Appeals) to levy
penalty u/s 271AAB (cases where search has
been initiated), 271AAC (in respect of income
referred to in Sec. 68, 69, 69A to Sec. 69D) and
Sec. 271AAD (for false entry etc. in books of
accounts) which hitherto was available with AO.
§§ The quantum of penalty u/s 272A for failure
to answer questions, sign statements, furnish
information, returns or statements, allow
inspections etc. has been proposed to be
increased to H500 per day from H100 per day
w.e.f 01-04-2022.
§§ Presently, Sec. 179 of the Act enables IT
Authorities to recover tax due from a private
company from its directors where such tax
cannot be recovered from the company itself.
The title of said Section inadvertently refers
to “Liability of directors of private company
in liquidation” which was not in line with the
provisions of the said section. In order to avoid
ambiguity, the title of the section has been
proposed to be amended to “liability of directors
of private company”. Further, the “tax due” as
referred in aforesaid section would also include
“fees” payable under the Act.
§§ Terminal date for issuing directions by CG to
notify Faceless Schemes for the purpose of Sec.
92CA (Faceless determination of arm’s length
price), Sec. 144C (Faceless Dispute Resolution
Panel), Sec. 253 (Faceless appeal to Appellate
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Tribunal) has been proposed to be extended TDS/TCS shall be paid in accordance with order
from 31-03-2022 to 31-03-2024. In case of of the AO wherein assessee has been deemed to
Scheme for Faceless Appellate Tribunal u/s 255, be in default in respect of such taxes.
terminal date to notify the scheme has proposed
§§ Sec. 234F which levies fee of H5,000 for default
to be extended from 31-03-2023 to 31-03-2024.
in furnishing return of income u/s 139, is
§§ Requirement to furnish statement in Form proposed to be included in the list of sections
52A giving particulars of all payments mentioned u/s 119(2)(a) w.e.f. 01-04-2022 to
above H50,000/- u/s 285B by producers of enable CBDT to issue orders or directions for
cinematograph films now proposed to be providing relaxations in public interest.
extended also to persons engaged in event
§§ Various amendments have been proposed to
management, documentary production,
rationalise the provisions of exemption to trust,
production of programmes for television/OTT
university or other educational institutions,
platforms, sports event management, other
hospitals or medical university referred to
performing arts or any other activity as may be
in various clauses of Sec. 10(23C) or trusts
notified by CG in the official gazette.
registered u/s 12AA/12AB to ensure their
§§ Sec. 245MA has been proposed to be amended effective monitoring and implementation,
to enable the AO to pass an order giving effect in bringing consistency in the provisions governing
conformity with the direction given by the DRC the trusts or institutions referred to sec. 10(23C)
within a period of one month from the end of the or 12AA/12ABand also providing clarity on
month in which such direction is received by the taxation under certain circumstances
AO.
§§ Proviso to Sec. 201(1A)/206C(7) has been
proposed to be inserted to provide that interest
for default in deduction/collection/payment of

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 India 2022
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INDirect Tax
at a glance

08 Self-reliant India inDirect Tax 08-13

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Goods and Services Tax
Amendments proposed in the Central Goods &
Services Tax Act, 2017 (CGST Act) and Integrated
Goods & Services Tax Act, 2017 (IGST Act)
(Effective date to be notified coinciding with
amendments in SGST Acts.)
§§ Amendments relating to Input Tax Credit (ITC)
ŸŸ ITC for inward supply to be available only on
the basis of auto-generated statement (Form
GSTR-2B) – where credit is not restricted.
[Sec. 16(2)(ba)]
ŸŸ Time limit for availment of ITC in respect of
an invoice or debit note to be extended to
30th day of November following the end of
financial year to which such invoice or debit
note pertains or furnishing of the relevant
annual return, whichever is earlier. [Sec. 16(4)]
ŸŸ Sec. 38 to be substituted to prescribe the
manner, conditions and restrictions for
communication of details of inward supplies
and ITC availability to the recipient by means
of an auto-generated statement.
ŸŸ The auto-generated statement to also consist
details of inward supplies in respect of which
ITC may not be available to the recipient on
account of supplies made by the:
• Supplier within such period of taking
registration as may be prescribed.
• Supplier who has defaulted in payment of
tax and the default has continued for such
period as may be prescribed.
• Supplier, output tax payable by whom
during such period exceeds the output
tax paid by him, by such limit as may be
prescribed.
• Supplier who has availed ITC in excess of
the ITC that can be availed by him as per
the auto-generated statement, by such
limit as may be prescribed.
• Supplier who has defaulted in discharging
his tax liability in terms of Sec. 49(12).
• Such other class of persons as may be
prescribed [Sec 38(2)]
§§ Amendments relating to cancellation or
suspension of GST registration
ŸŸ GST registration of a Composition taxpayer
09 Self-reliant India inDirect Tax
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to be liable for cancellation if such person
has not furnished return for a financial year
beyond 3 months from the due date of
furnishing the said return. [Sec. 29(2)(b)]
ŸŸ GST registration of other taxpayers to be
liable for cancellation if such person has not
furnished returns for such continuous tax
period as may be prescribed. [Sec. 29(2)(c)]
§§ Amendments relating to issuance of credit notes
ŸŸ Time limit for issuance of credit note in
respect of a supply to be extended to 30th
day of November following the end of the
financial year in which such supply was made
or the date of furnishing of the relevant annual
return, whichever is earlier. [Sec. 34(2)]
§§ Amendments relating to GST Returns
ŸŸ Furnishing details of outward supply and
communication of such details of outward
supply to the recipient to be subject to
such conditions and restrictions as may be
prescribed. The two way communication
process in return filing to be omitted. [Sec.
37(1)]
ŸŸ Time limit for rectification of errors or
omissions in respect of the details furnished
in Form GSTR-1 to be extended to 30th day
of November following the end of the financial
year or furnishing of the relevant annual
return, whichever is earlier. [Sec. 37(3)]
ŸŸ A registered person not to be allowed to
furnish details of outward supplies if such
details for any of the previous tax periods
has not been furnished by him. However, the
Government may specify, on recommendation
of the Council, class of registered persons
that may be allowed to furnish details of
outward supplies even if he has not furnished
the details of outward supplies for one or
more previous tax periods. [Sec. 37(4)]
ŸŸ Every registered non-resident taxable person
to furnish return for a month by 13th day of
the following month. [Sec.39(5)]
ŸŸ Persons opting for Quarterly Return Filing
Scheme to be given an option to either pay
self-assessed tax or an amount that may be
prescribed. [Sec. 39(7)]
ŸŸ Time limit for rectification of errors or
omissions in respect of the details furnished
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in Form GSTR-3B to be extended to 30th
day of November following the end of the
financial year or the actual date of furnishing
of relevant annual return, whichever is earlier.
[Sec. 39(9)]
ŸŸ A registered person not to be allowed to
furnish GSTR-3B for a tax period if GSTR-3B
for any of the previous tax periods or GSTR-1
for the tax period has not been furnished by
him. [Sec. 39(10)]
ŸŸ Sec. 41 to be substituted to do away with
the concept of provisional ITC. Further, ITC
to be reversed by the recipient, along with
applicable interest, where the tax payable has
not been paid by the supplier. The recipient
may re-avail such ITC where the supplier
subsequently makes payment of the tax
payable. [Sec. 41]
ŸŸ Sec. 42, 43 and 43A to be omitted so as to
do away with the two way communication
process in return filing.
§§ Amendments relating to levy of late fee
ŸŸ Late fee to be omitted on inward return under
Sec. 38. Such changes have been made
consequent to the amendment in Sec. 38.
[Sec. 47(1)]
ŸŸ Late fee to be levied on late filing of TCS
return. [Sec. 47(1)]
§§ Amendment relating to payment of tax, interest,
penalty and other amounts
ŸŸ Amount available in Electronic Credit Ledger
to be used for payment of tax subject to
such conditions and restrictions that may be
prescribed. [Sec. 49(4)]
ŸŸ Registered person may transfer balance
available in the Electronic Cash Ledger to the
Electronic Cash Ledger of a distinct person.
However, transfer to distinct person shall not
be allowed if the said registered person has
any unpaid liability in his electronic liability
register [Sec. 49(10)]
ŸŸ CBIC may prescribe the maximum
proportion of output tax liability which may
be discharged through the electronic credit
ledger by a registered person or a class of
registered persons as may be prescribed.
[Sec. 49(12)]
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2023
§§ Amendment in Interest Provision (retrospectively
w.e.f. 01-07-2017)
ŸŸ Interest to be levied on ITC wrongly availed
and utilized, at such rate not exceeding
twenty-four per cent as may be notified by
the Government, on the recommendations of
the Council and in such manner as may be
prescribed. [Sec. 50(3)]
§§ Amendments relating to Collection of tax at
source
ŸŸ Time limit for rectification of any omission or
incorrect particulars to be extended to 30th
day of November following the end of the
financial year in which such supply was made
or the actual date of furnishing of the relevant
annual return, whichever is earlier. [Sec. 34(2)]
§§ Amendment relating to refund provisions
ŸŸ The time limit for claiming refund of tax paid
on inward supplies of goods or services or
both by “a specialised agency of the United
Nations Organisation or any Multilateral
Financial Institution and Organisation notified
under the United Nations (Privileges and
Immunities) Act, 1947, Consulate or Embassy
of foreign countries or any other person
or class of persons, as notified under Sec.
55” has been increased from six months to
two years. The period of two years is to be
calculated from the last day of the quarter
in which the said supply was received. [Sec.
54(2)]
ŸŸ The scope of withholding of refund or
recovery of dues from the amount of refund
payable to a taxpayer who has defaulted in
filing of return or payment of tax, interest
or penalty, has been expanded to all types
of refund (earlier refund of unutilised ITC
covered). [Sec. 54(10)]
ŸŸ New clause inserted to provide that the
relevant date for filing of a refund claim
in respect of supplies made to a Special
Economic Zone developer or a Special
Economic Zone unit shall be the due date for
furnishing of return under Sec. 39 in respect
of such supplies. [Clause (ba) inserted after
clause (b) in the Explanation in clause (2)
under Sec. 54]
08-13
 India
Budget
Central Excise (Non – GST Items)
§§ Amendments in the Fourth Schedule of the
Central Excise Act 1944
ŸŸ In Chapter 27, description of goods under
Tariff item 2710 (petroleum oils and oils
obtained from bituminous minerals, other
than crude) has been amended.
The Customs Act, 1962
[Amendments to be effective from the date of
enactment of the Bill]:
§§ Amendments relating to powers granted to
Officers of Customs
ŸŸ Definition of “proper officer” amended to
provide that any assignment of functions
to an officer of Customs by the CBIC or the
Principal Commissioner of Customs or the
Commissioner of Customs, shall now be done
under the newly inserted Sec. 5(1A) and Sec.
5(1B). [Sec. 2(34)]
ŸŸ Officers of DRI, Audit and Preventive
formation specified as officers of Customs.
[Sec.3]
ŸŸ The CBIC, the Principal Commissioner of
Customs and Commissioner of Customs now
empowered to assign various functions to
Officers of Customs who shall be the proper
officer in relation to such functions. [Sec.5(1A)
and Sec.5(1B)]
ŸŸ CBIC may consider specified criteria for
imposing limitations or conditions u/s 5(1)
or while assigning functions u/s 5(1A) to the
officer of Customs. [Sec. 5(4)]
ŸŸ Two or more officers of Customs, can
concurrently exercise powers and functions,
wherever it is necessary for the proper
management of work. [Sec.5(5)]
ŸŸ Where any officer of Customs has reasons to
believe that any duty or interest is liable to be
recovered or has been erroneously refunded
or any drawback has been erroneously
allowed in any completed assessment, then
such officer shall after considering necessary
inquiry, investigation & audit, transfer relevant
documents to the proper officer assigned
u/s 5 who had originally completed the
assessment [Sec.110AA]
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2023
§§ CBIC to be empowered to frame the rules
regarding additional obligations of the importer
for a class of imported goods whose value,
according to CBIC is not being declared correctly,
along with the criteria of selection and checks in
respect of such goods. [Sec.14]
§§ Amendments in relation to Advance Ruling
Provisions:
ŸŸ The definition specified for the terms
“non-resident”, “Indian company”, “foreign
company” and “joint venture in India”
has been removed from the meaning of
“applicant”. [Sec. 28H]
ŸŸ Provisions introduced for prescribing
appropriate fees by Board relating to
application for Advance Ruling and also
flexibility to the applicant to withdraw his
application at any time before a ruling is
pronounced instead of the current 30 day’s
time period for withdrawal. [Sec. 28H]
ŸŸ Requirement of members of the advance
ruling authority to sign the certified copy of
the ruling done away with. [Sec.28I(7)]
ŸŸ Advance ruling pronounced shall now be valid
for earlier of the following [Sec. 28J(2)]:
(a) a period of three years; or
(b) till there is a change in law or facts on the
basis of which the advance ruling has been
pronounced
For Advance rulings in force on the date of
enactment of the Bill, the above period of
three years shall be reckoned from the date
of enactment.
§§ Publishing of import and export data submitted
to Customs by importers or exporters in their
declarations, unless provided by the law, would
be treated as an offence under Customs Act and
such offence shall be non-cognizable. The same
shall not be applicable for a publication made or
on behalf of the Central Government. [Sec.135AA
& Sec.137]
Other amendments in relation to
Customs laws
§§ Validation for certain actions already taken under
the Customs Act
ŸŸ Clause 96 inserted in the Bill to give
validation to any action taken before date of
08-13
 India
Budget
commencement of the Finance Act, 2022,
under certain chapters of the Customs Act
by any officer of Customs as specified u/s 3
where such action was in pursuance of their
appointment and assigning of functions by
the Central government or CBIC the Customs
Act.
§§ Clarifications regarding Social Welfare Surcharge
(SWS)
ŸŸ It has been clarified that the amount of SWS
payable would be ‘Nil’ in cases where the
aggregate of customs duties (which form the
base for computation of SWS) is zero even
though SWS has not been exempted.
§§ Amendment in the Customs (Import of Goods
at Concessional Rate of Duty) Rules, 2017 for
simplification of Custom procedures [w.e.f. 01-
03-2022]
ŸŸ Facilities to include end to end automation in
the entire process and submission of details
electronically in the common portal
ŸŸ Amendment includes standardizing and
notifying the various forms in which details
are to be submitted electronically
ŸŸ Procedure to claim the notification benefit is
being simplified and automated
ŸŸ Amendments includes details relating to
records maintenance by importer, procedure
for allowing imported goods for unit transfer,
procedure for allowing imported goods for job
work and Re-export or clearance of unutilised
or defective goods.
The Customs Tariff Act, 1975
[to be effective from the date of enactment of the
Bill, unless otherwise specified]
Changes in Rates of Duties of Customs
[to be effective from 02-02-2022]
§§ Agriculture Products and By Products
ŸŸ Reduction in the BCD on Commodity Live
black tiger shrimp from 30% to 10% and for
frozen kills and algal Oil rate from 30% to 15%.
ŸŸ Increase in BCD on microbial fats and oils
from 30% to 100%.
§§ Fuels, Chemical and plastics
ŸŸ Reduction in BCD on Fuel oils falling under
chapter 27 from 5% to 2.5%.
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2023
ŸŸ Increase in BCD on sodium cyanide (HS
28371100) from 7.5% to 10%.
§§ Paper
ŸŸ Increase in BCD on waste and scrap paper or
Paper board used in manufacturing of paper,
paperboard or newsprint from NIL to 2.5%.
§§ Gems and Jewellery Sector
ŸŸ Reduction in BCD on cut and polished
Diamonds and Gemstones from 7.5% to 5%.
Change in BCD on imitation jewellery from
existing 20% to 20% or H400 per Kg, which is
higher.
§§ Metal
ŸŸ Reduction in BCD on Camera lens and parts
of adaptors/chargers from 10%/15% to 2.5%
and on Copper/aluminium based copper clad
laminate from 5% to NIL.
ŸŸ Increase in BCD of X-Ray grid, Multi leaf
collimator/Iris and Static User Interface from
5% to 10% and on X- Ray Machine from 7.5%
to 10%
§§ Medical Devices
ŸŸ Reduction in BCD on Surgical needles from
Health cess @ 5% to NIL.
§§ Toys
ŸŸ Increase in BCD on Parts of electronic Toys
from 15% to 25%.
§§ Capital Goods
ŸŸ Reduction in BCD on S. G. Ingot Casting,
Bushing, Coffee roasting, brewing or vending
machineries from 10% to 7.5%
§§ Changes in Social Welfare Cess (‘SWS’) [w.e.f.
02.02.2022]
ŸŸ Exemption from SWS granted to imports
of Olive oil, Crude and trimmed marbles,
construction stones, granite, porphyry, basalt
or sandstone, blocks or slabs of marbles,
granite, porphyry, basalt or sandstone, etc.
ŸŸ Withdrawal of exemption of SWS on
overcoats, car coats, capes, cloaks, anoraks
(including ski-jackets), wind-cheaters,
wind-jackets and similar articles, knitted or
crocheted, other than those of heading 6103,
of wool or fine animal hair.
08-13
 India
Budget
§§ Exemption from Agriculture Infrastructure
and Development Cess (‘AIDC’) and Road and
Infrastructure Cess (‘RIC’) [w.e.f. 02.02.2022]
ŸŸ AIDC and RIC exempted on certain specified
goods like free gifts etc. imported by
Charitable organizations, Red Cross Society,
CARE and Government of India, specified
goods imported from Nepal, Bhutan,
China and border areas of Bangladesh,
transhipment of goods during exports-
imports undertaken by Bhutan and Nepal,
drugs used for treatment of rare diseases.
§§ Changes in Anti-Dumping Duty (ADD) /
Countervailing Duty (CVD) / Safeguard measures
[w.e.f. 02.02.2022]
ŸŸ Revocation of ADD on straight length bars
and rods of alloy steel originating or exported
from China, High Speed steel of Non-Cobalt
grade originating or exported from Brazil,
China or Germany, flat rolled product of steel,
plated or coated with alloy of Aluminium or
Zinc originating or exported from China, Korea
or Vietnam.
ŸŸ Revocation of CVD on imports of Certain Hot
Rolled and Cold Rolled Stainless Steel flat
products, originating or exported from China.
§§ Other Changes [w.e.f. 02-02-2022]
ŸŸ Phased Manufacturing Program [PMP] being
implemented with a phased increase in BCD
on Wrist wearable devices, hearable devices,
smart metres, and portions thereof.
ŸŸ Certain Customs Notifications granting
exemption or concessional rate, which have
elapsed or merged into another notification,
have been rescinded. These notifications
include concessional rate on import of
face masks, COVID-19 test kits, drugs &
equipment for National AIDS programme,
Anti-Tuberculosis Drugs and inputs to be
used for manufacturing of iron and steel
intermediaries.
ŸŸ Export duty has been reduced by 10% on raw
hides and skins of buffalo.
ŸŸ The validity for concessional rate of Customs
on the specified goods like fire arms,
ammunition for renowned shot, Sports
equipment imported by National Sports
federation, components for R & D projects,
13 Self-reliant India inDirect Tax
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2023
machinery for setting up power generation
project, equipment and apparatus for setting
up fuel based power generation unit etc. are
to be governed by provisions of Sec. 25(4) of
the Customs Act, 1962.
§§ Review of Customs Exemptions and Tariff
Simplification
ŸŸ More than 350 exemption entries, relating
to agricultural produce, chemicals, fabrics,
medical devices, drugs among others,
contained in various notifications to be
phased out.
ŸŸ The current applied rates operates through
their respective exemptions/ concessional
notifications. Such concessional rates are
being incorporated in the Customs Tariff
Schedule itself, w.e.f. 01-05-2021, to simplify
Customs rate and tariff structure particularly
in sectors such as chemicals, textiles and
metals, and minimise disputes and the
effective rates would be available in the tariff.
ŸŸ Duty exemptions on capital goods / project
imports with respect to textiles, power,
petroleum, leather, food packaging and
project import sector to be phased out in
gradual manner.
ŸŸ Exemption, on raw materials items which
are or can be manufactured in India, to be
removed and concessional rate of duty
introduced on raw material that go into
manufacturing of intermediate products to
boost the indigenous sector.
§§ SEZ to be replaced with new legislation and IT
driven SEZ Custom facilitation
ŸŸ In the Budget speech, Hon’ble FM has
proposed that Special Economic Zones Act
will be replaced with a new legislation for
optimum utilization of infrastructure and
enhance competitiveness of exports. Details
in relation to the said announcement are not
available in the public domain.
ŸŸ As a mechanism for ease of doing business
by SEZ units, in the Budget speech, it has also
been proposed that Customs Administration
of SEZs to be fully IT driven and implemented
by 30-09-2022 with focus on higher
facilitation and risk-based checks.
08-13
 India 2022
Budget 2023

Contact us
To know more about Baker Tilly DHC, please visit www.bakertilly.in or any of our offices as mentioned below:

Corporate Office:
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Bengaluru - 560 003 Tel: +91 (33) 2474 6303
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Chennai - 600 017 Mumbai - 400 021
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For more information or for any queries, write to us at info@dhc.co.in

Disclaimer
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broad guidance only. The publication cannot be relied upon to cover specific situations and you should not
act or refrain from acting, upon the information contained therein without obtaining specific professional
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14 Self-reliant India