Last week in Parliament, the finance minister Nirmala Sitharaman stated that the average time taken to process income tax returns (ITR) has decreased from 93 days in 2013 to 10 days. While this is a commendable achievement for the government, does this mean you can expect faster tax refunds in the future? Read on to find out. Not all ITRs are going to be processed in 10 days The FM mentioned that the 'average' processing time has been reduced to 10 days now. This does not mean that all types of ITRs will get processed in 10 days. The higher the complications of an ITR form, the higher the time it takes to process it. ITR-3 is more complex than ITR-2, and ITR-2 is more complex than ITR-1. "Normally refund claims of ITR-1 gets prioritised followed by ITR-2 and ITR-3 in view of the simple and complex structure of the income returned. Refund claims in ITR-1 without any defect/adjustments generally are received by the taxpayers within a few days from the date of filing returns. However, if returns are filed very close to the last date of filing of ITR there could be delay in processing of returns. Refund claims in ITR-2 and ITR-3 without any defect/adjustments can be expected to be received in a couple of months normally," says Ramakrishnan Srinivasan, former chief commissioner of Income tax.
Read More →Instant mixes, including idli, dosa and khaman flour, cannot be classified as chhatua or sattu and 18% GST should be levied on them, the Gujarat Appellate Authority for Advance Ruling (Gaaar) has ruled. Gujarat-based Kitchen Express Overseas Ltd had approached the AAAR against the ruling by the GST advance authority, saying that its seven 'instant flour mixes' are not 'ready to eat' but are required to undergo certain cooking procedures and can be termed 'ready to cook'. The company sells flour mixes of gota, khaman, dalwada, dahi-wada, dhokla, idli and dosa in powder form and pleaded that it is akin to Sattu and should attract Goods and Services Tax (GST) of 5 per cent. The GAAAR rejected the appellant's contention, saying that ingredients which go into the making of 'instant flour mixes" are not covered under the relevant GST rules as is the case with Sattu. According to a CBIC circular, small amounts of ingredients, which are mixed to make Sattu, are specified in the GST rules to be eligible for a 5% tax rate. "However, the said clarification is not applicable in the present case as the products being supplied by the appellant contain spices and other ingredients, which is not the case with the 'chhatua or sattu'," the Gaaar said.
Read More →Please refer to the notification Notification No. 04/2024 – Central Tax dated 05-01-2024 to seek information from taxpayers dealing in the goods mentioned therein. Two forms have been notified vide this notification namely GST SRM-I and GST SRM-II. The former pertains to the registration and disposal of machines while the latter asks for information on inputs and outputs during a month. Form GST SRM-I meant for registration of machines has already been made available on the portal w.e.f. 15-05-2024. Concerned taxpayers are using the same for the registration of machines and other information asked therein. Now, the second form namely, Form GST SRM-II is also available on the portal. Taxpayers dealing in the manufacture of Pan Masala and Tobacco products can now report the details of inputs and outputs procured and consumed for the relevant month.
Read More →Infant food products containing ingredients other than milk may be subject to an 18 per cent goods and services tax (GST), contrasting with the 5 per cent applicable to milk products, if a judgment by the Rajasthan Authority for Advance Ruling (AAR) sets a precedent. The AAR issued the ruling in response to an application submitted by Jaipur-based Bebymil seeking clarification on the GST rate for its products — milk food for infants and milk for infants — marketed under the trade name Momylac. The authority noted that the primary product manufactured by the company is infant milk formula, which includes cereals and protein supplements, serving as a substitute for mother’s milk. GST rates for goods are determined based on their Harmonized System of Nomenclature (HSN) codes. In this instance, the authority observed that the products are classified under HSN 1901, encompassing products where milk is one of the ingredients, rather than HSN 0402, which specifically relates to milk products, explained Sandeep Sehgal, partner at tax and consulting firm AKM Global.
Read More →Non-compete fees received by a taxpayer will be a non-taxable capital receipts up to the financial year 2002-03. The amendment to treat non-compete fees as taxable revenue receipts came into effect only from April 1, 2003 – this was upheld by the Income-tax Appellate Tribunal (ITAT), Mumbai bench in its recent order. The amendment does not have a retrospective effect, held the ITAT bench and declined to set aside the order of the Commissioner (Appeals), who had treated the non-compete fees of Rs.10 crore received by Lyka Labs (a company engaged in manufacture and sale of bulk formulation of pharmaceutical products) as a capital receipt. Lyka Labs had as per an agreement dated March 12, 2002 entered into a non-compete agreement with its joint venture company Lyka Hetro Health Care Limited (LHHCL) for not competing with LHHCL in the marketing, distribution and selling activities of certain formulations for the trade mark which has been registered or used by it. Both Lyka Labs and the Commissioner (Appeals) relied on an earlier order given by the Supreme Court in the case of Guffic Chem. The apex had categorically held that the amendment is only with effect from April 1, 2003 (Assessment year 2004-05 onwards) and does not have a retrospective effect for taxing the non-compete fee received prior to the said period. The Supreme Court in this order had also distinguished the compensation received for termination/loss of agency and a loss of source of business as per a negative covenant where the former would be a ‘revenue receipt’ and the latter a ‘capital receipt’. There is no doubt that the agreement entered into by Lyka Labs and LHHCL was a negative covenant. Accordingly, the ITAT bench dismissed the appeal filed by the I-T department.
Read More →Taxpayers had until May 31, 2024, to link their PAN with Aadhaar. Failure to do so will result in a higher Tax Deducted at Source (TDS) being levied on their income. This applies to transactions entered into before March 31st, 2024, with the TDS rate doubling for those with unlinked PANs. "The IT department has given a final deadline for 31st May 2024 for linking PAN with Aadhaar. In case assessee still fail to do so, this will tantamount to PAN being inoperative and will attract section 206AA whereby deduction shall be @ 20%," said Ritika Nayyar, Partner, Singhania & Co. The situation was particularly frustrating for homebuyers who unknowingly purchased property from sellers with unlinked PANs. These buyers faced notices demanding additional tax due to the higher TDS rate. However, a recent CBDT circular provides relief. If the seller links their PAN with Aadhaar by May 31st, the homebuyer will be off the hook for the additional tax. The income tax department in April 2024 provided relief to many homebuyers who were issued tax deduction at source (TDS) notices because the Permanent Account Numbers (PAN) of the property sellers were inoperative. The circular gave the homebuyers a chance to avoid the tax notices as long as the property sellers link their PAN with Aadhaar by May 31.
Read More →GSTN is pleased to inform that NIC is releasing the E-Way Bill 2 Portal (https://ewaybill2.gst.gov.in) on 1st June 2024. This portal ensures high availability and runs in parallel to the e-way Bill main portal (https://ewaybillgst.gov.in). The e-way bill 2 portal synchronises the e-way bill details with main portal within a few seconds. The highlights of the portal are as follows: • Presently, E-Way Bill 2 Portal provides the critical services of E-Way Bill system, and gradually it will be extended with other services of e-way bill system. • E-Way Bills can be generated and updated on the E-Way Bill 2 Portal independently. • E-Way Bill 2 portal provides the web and API modes of operations for e-way bill services. • The taxpayers and logistic operators can use the E-Way Bill 2 portal with the login credentials of the main portal. • The taxpayers and logistic operators can use the E-Way Bill 2 portal during technical glitches in e-way bill main portal or any other exigencies. • The Criss-Cross operations of printing and updating of Part-B of E-Way Bills can be carried out on these portals. That is, updating of Part-B of the E-Way bills of portal 1 can be done at portal 2 and vice versa. • In case E-Way Bill main portal is non-operational because of technical reasons, the Part-B can be updated to the E-Way Bills, generated at Portal 1, at portal 2 and carry both the E-way Bill slips. • For further details, please visit the e-way bill portals.
Read More →GST authorities are working out a mechanism to deal with the taxation and registration issues related to shared warehouses maintained by e-commerce companies, where multiple suppliers store their goods for the last mile delivery, an official said. The issue of taxation for warehouses has cropped up after multiple suppliers have geo-tagged the same warehouse as their 'additional place of business' under the Goods and Services Tax (GST) rules. "We are working to see whether a 'shared workplace' or 'coworking space' concept can be implemented for the warehouses maintained by e-commerce companies to store goods of multiple suppliers," the official told PTI.
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