INTRODUCTION:

1. On 01.02.2019, the amendments made to Goods & Services Tax (GST) laws vide Central Goods and Services Tax (Amendment) Act, 2018 are made effective. One of the amendment  relates to determination of place of supply for transportation of goods. Though, it was clarified that the purpose of this amendment is to grant relief to taxpayers, the manner in which the amendment was brought in does not legally assure such relief.  In this article, we are going to discuss this issue.

LEGAL POSITION:

Pre-Amendment Position:

2. Section 5 of Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as ‘IT Act’) provides for levy and collection of Integrated tax (IT) on all the inter-state supplies, that takes place in case of goods or services or both, whether by way of forward charge or reverse charge. Similarly, with respect to intra-state supplies, section 9 of Central Goods and Services Tax Act, 2017 (hereinafter referred to as ‘CT Act’) read with section 9 of respective State Goods and Services Tax Act, 2017 (hereinafter referred to as ‘ST Act’) shall provide for payment of Central Tax (CT) and State Tax (ST) for intra-state supply of goods or services or both whether by way of forward charge or reverse charge. 

   Read more: GST Applicability on GTA services, where POS is outside India

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In this edition, we bring to you certain important articles on various aspects.

We have penned an article on ‘Interesting Issues in Arrest and Interplay of GST laws, IPC and PMLA’, which deals with the question whether completion of assessment is mandatory to initiate prosecution under GST laws, for which the Supreme Court has answered in negative. This judgment is important as it gives wide powers to the taxation authorities to tackle with the economic frauds. Further, in the article, we also discussed the interplay between GST laws, IPC and PMLA for the trending offence of circular trading.

We have also brought an article, which deals with the recent amendments made to Foreign Contribution Regulation Act and rules made thereunder. I request everyone to read the same to keep yourself updated with the changes which effect your businesses.

Read more: SBS Wiki E Journal June 2019

Key Topis:

AUDIT

• SA 701 COMMUNICATING KEY AUDIT MATTERS IN THE INDEPENDENT AUDITOR’S REPORT

INDIRECT TAX

• GST APPLICABILITY ON GTA SERVICES WHERE PLACE OF SUPPLY IS OUTSIDE INDIA

DIRECT TAX

• SECTION 56 OF INCOME TAX ACT, 1961

FEMA

• IMPORT OF GOODS BY SEZ DEVELOPER AND UNIT

The Central Board of Direct Taxes (for brevity ‘CBDT’) has released a paper for public consultation on the proposals pertaining to the amendment of rules which deal with profit attribution to Permeant Establishment (for brevity ‘PE’). The current rule does not lay down a universal approach for determination of profits attributable to PE, leaving to the discretion of Assessing Officer a wide power for such attribution. This has led to multiple rounds of litigations both by tax payer and revenue. The Courts also held in different matters, different profit attributions making this more complicated. Further, the tax payer is also burdened in absence of a concrete mechanism, which leads to tax uncertainty. Hence, the CBDT thought in the best interests of tax payers and to achieve a universality in attributions of profits to PE, brought out a paper for public consultation dealing with the amendments to such rules. The paper was published on 18^th April 2019 and CBDT has provided a window of 30 days for providing the comments on the proposed amendments. Such comments can be mailed to This email address is being protected from spambots. You need JavaScript enabled to view it.. In this write up, we have tried to concisely capture the key contents in the paper, so that reader can go through this write up and make his suggestions to the proposed amendments.

Read more: Summary of Proposal for Amendment of Rule for Profit Attribution to Permanent Establishment