Direct Tax

IFSC boost: CBDT gives compliance relief to non-resident investors

Non-resident individuals and foreign companies have now been given a compliance relief as part of the government’s efforts to attract more investment activity in the International Financial Services Centre (IFSC) located in India. These class of persons have been exempted from filing income tax returns subject to fulfilment of two conditions prescribed by CBDT. The conditions are that TDS on income of these class of persons (from funds set up in IFSC) should have been deducted and remitted to the Central Government by the investment fund. Secondly, there should be no other income during the previous year for which these class of persons are otherwise liable to file the income tax returns.

Thresholds for filing appeals sharply increased to cut litigation

The CBDT has sharply raised the threshold for filing appeals in tax disputes at all levels i.e. from tribunals, through High Courts to the Supreme Court as under:

Appeal to Threshold (tax effect / disputed tax claim) Earlier Threshold
Income Tax Appellate Tribunal (ITAT)
50 lakh
20 lakh
High Court
1 Crore
50 lakhs
Supreme Court
2 Crore
1 Crore
Tax dues are related to inquiry, investigation, audit against the assessee
Waiver of 70% dues
Waiver of 50% dues

As per the circular, tax authorities shall not appeal unless the ‘tax effect’ or the disputed tax claim is more than the above thresholds. This move shall reduce tax litigation and give relief to taxpayers. Further, the move is expected to improve ease of doing business for companies struggling to cope with a cooling down economy.

Roll back of enhanced surcharge to Woo Foreign Funds, Revive Growth

The Indian government has rolled back an additional levy on foreign funds and announced a raft of measures to boost economic growth from a five-year low. Finance Minister Nirmala Sitharaman has withdrawn enhanced surcharge on long and short-term capital gains on FPIs. She also announced an immediate infusion of INR 700 billion ($9.8 billion) set aside in the budget to boost capital of banks, and lifting on curbs on government departments to buy new vehicles. The withdrawal of the additional levy on FPIs is expected to boost sentiment after overseas funds withdrew more than $3 billion since the measure was announce in July.

Indirect Tax

Postponement of blocking of e-way bill generation

The implementation of the provision which allows blocking and unblocking of e-way bill generation on non-filing GST returns for two consecutive tax periods has been postponed till 21 November 2019.

[Notification No. 36/2019 - Central Tax dated 20 August 2019]

Implementation of the Sabka Vishwas Scheme, 2019 and clarifications issued

The government vide Notification No. 5/2019- Central Excise (N.T.) dated 21 August 2019 has notified the Rules under the Sabka Vishwas Scheme. Further, 1 September 2019 has been notified as the date on which the Scheme shall come into force.

The Central Board of Indirect Taxes and Customs (CBIC) has also released FAQs on the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (the Scheme) announced in the Union Budget 2019.

The key clarifications issued are as follows:

  • Voluntary disclosure: It has been clarified that voluntary disclosures are eligible under the Scheme barring the specified exclusions mentioned in the Scheme.
  • SCN covering multiple issues: In relation to declaration being filed under the Scheme in respect of a Show Cause Notice (SCN) covering multiple issues, all issues have to be covered under the declaration. Thus, the applicant cannot be selective about the issues/disputes covered in a SCN which he wishes to cover in his declaration under the Scheme.
  • Applicability of the Scheme to certain orders: The Scheme should not be applicable in cases where an adjudication order has been passed and received prior to 30 June 2019, but the appeal is filed on or after 1 July 2019.
  • Waiver of interest and penalty: In all the cases, total waiver of interest, penalty, and fine would be provided under the Scheme.
  • Refund under the Scheme: There would not be a refund of any amount paid under the Scheme. Further, in a case where pre-deposit or other deposit already paid exceeds the amount payable under the Scheme, the difference would not be refunded.

New GST return made available to taxpayers for trial purposes

In line with the proposed transition plan, the government has released the new returns on the GST portal on a trial basis. The taxpayers can use the trial mechanism for the following purpose:

  • Upload invoices on the GST portal (in GST ANX-1) and view pre-filled data;
  • Online and Offline preparation of GST ANX-1 and GST ANX-2;
  • View and download the inward supplies for GST ANX-2.

The taxpayers can view and try the new returns by logging into the GST portal.

Public consultation on e-invoicing

Earlier, the GST Council had announced the implementation e-invoicing from January 2020. Now, the GST network, in partnership with Institute of Chartered Accountants of India (ICAI), has drafted an e-invoice standard, [referring and considering the Pan European Public Procurement Online (PEPPOL) standard, which is based on Universal Business Language (UBL) standard] which also takes into account the requirement under tax laws and has features which are required for international trade.

The e-invoice draft now placed in the public domain is in the following three parts:

  • E-invoice schema: It has the Technical field name, description of each field, whether it is mandatory or not, and has a few sample values along with explanatory notes.
  • Masters: Masters are included of fields like UQC, State Code, invoice type, supply type etc.
  • E-invoice template: This template is as per the GST law and has been provided here to enable the reader to correlate the terms used in other sheets. The compulsory fields are marked green and optional fields are marked yellow.

The stakeholders can give their feedback on https://www.