Latest Blogs from SBS and Company LLP

    SBS Wiki E Journal February 2022

    In this edition, we bring you, an article on the understanding of the depth of the most litigative entry in the indirect taxation sphere, which is agreeing to the obligation to refrain from an act or tolerate an act or to do an act. Though we understand that we have only touched the tip of iceberg, we have made an honest attempt in understanding the direction in which it would be interpreted. The article comes in two-part series, the one dealing with the position under the European VAT and the next dealing with position under Indian scenario.

    The next article is on the interpretation of ‘Most Favoured Nation’ clause in the tax treaties. The Courts have shown a direction as to how the same has to be interpreted specifically in the context of interpretation of treaties in light of Vienna Convention of Law of Treaties. However, the Board’s Circular has attempted to override the judgments and gave a new interpretation to their favour. Though the said circular is binding only on the revenue and not on the courts or assessee, it would be an unwanted fight of the taxpayer with the revenue. We have covered the exact issue with our remarks.

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    Various Issues under Section 50 – Capital Gains – Depreciable Capital Asset

    In this article, we shall discuss various issues under section 50 of Income Tax Act, 1961 (‘ITA’) which deals with computation of gain arising from the transfer of depreciable capital asset.

    Introduction:

    Section 50 of ITA states that when there is a transfer of capital asset which forms part of block of assets in respect of which depreciation has been allowed, gain or loss arising from transfer of such depreciable capital asset shall be treated as gain or loss arising from transfer of short-term capital asset.

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    Residential Status and Taxability of Crew Members of a Ship or Aircraft

    In our previous articles[1], the concept of deemed residency and various aspects of residency under Section 6 has been discussed in detail. In this part, the concept of determination of residential status of a crew member of a ship or aircraft along with taxability of such person has been dealt with.

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    Refund of Unutilised Credit – Closure of Unit – Possibility Thereof

    We are all aware that one of the cardinal principles of any taxation regime of any country is that to see that the domestic vendors export services or goods but not the taxes. To neutralise the tax burden borne by the domestic vendors in pursuit of exports, the Government, normally allows the tax borne by the vendors/exporters as refund. The refund is normally allowed only to the extent of unutilised input tax credit. In simpler words, if the exporter has domestic supplies also, then he can first use the credit to set off the tax liability on the domestic supplies and then approach the Government for the balance unutilised portion as refund. We have written previously on the refunds under the GST laws , please read An Incisive analysis on Refund of TRAN Credit | SBS Blog before proceeding to read this piece.

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    Insights into Aatmanirbhar Bharat Rozgar Yojana (ABRY)

    The Scheme proposes to incentivize employers, registered with Employees Provident Fund Organisation (EPFO), for giving employment to new employees. The Scheme commenced from 1st October 2020 and remain open for registration of eligible employers and new employees up to 31 March 2022.

    Reference Base:

    The number of employees with Universal Account Number (UAN) for whom employer has remitted EPF/EPS contributions through ECR filed for wage month of September 2020 shall be taken as reference base number of employees. Establishment will be eligible only if the ECR for wage month September 2020 is filed on or before 15th December 2020. For any new establishment getting registered under EPF from 1.10.2020 to 31.3.2022, the reference base shall be treated as zero.

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