In this 97h edition, we bring you articles on interesting overlapping issues and other items. The article on ‘Remittance of Assets vs LRS – Comparative Study under FEMA and IT’ deals about various issues that we face on day to day from our NRI and resident clients. The recent introduction of TCS on LRS has created an additional layer of complexity for the residents transferring money using the LRS route. Also, there are certain stark differences between the remittance of asset regulations and LRS both under FEMA and IT Act. Hence, we thought to contribute an article around those aspects with FAQs.
The next article is on the recent Karnataka High Court judgment wherein the Circular 150 under GST laws was struck down. The Circular tried to tax the annuities received by concessionaire naming them as deferred payments for construction and those are not the payments which were referred to Entry 23A of Notification No 12/2017 – CT (R). However, the High Court stated that a circular cannot override the Entry in the notification and accordingly struck down the Circular. The High Court stated that there is nothing in law which prohibits the executive to collect tax on the annuity payment aka deferred payments for construction but that should be stipulated in the law. Though the judgment is favourable to the concessionaries, how the GST Council sees this and try to restrict the benefit of Entry 23A to annuity payments aka deferred payments for construction must be observed in days to come. The ideology behind Entry 23A was to grant exemption for annuities which are paid instead of toll. However, the said intention seems to be put on the back burner by the GST Council after 43rd GST Council meeting which was evident from the issuance of Circular 150. Interestingly, without waiting for the above judgment or contesting before any Courts, the NHAI started sending letters to concessionaries stating that they will the pay the tax on the annuities which were earlier stated by NHAI as exempted at the time of bidding.
