Quvisor’s weekly refresher on Legal updates in India: May 28, 2021

GST:

GST exemption on vaccines – Relieving the burden or aggravating it?
India is grappling with the secondwave of the COVID-19 pandemic. The vicious wave of the deadly virus has impaired the public health system leading to a shortage of oxygen, hospital beds, medicines and other significant resources.

Liaison office of Dubai Chamber of Commerce in India is liable to pay GST being an intermediary
GST : Where applicant, liaison office of Dubai Chamber of Commerce (DCCI) in India, undertakes liaison/representation activities in India viz, liaison between India office and Dubai office, it is held that applicant is an intermediary who is providing services to various business in India and Dubai for a consideration and, therefore, activities performed by applicant shall be treated as supply and it is required to obtain GST registration and pay GST.

CBIC issued guidelines for GST officers regarding cancellation of registration
In view of non-compliance of provisions relating to cancellation of GST registration by the department officials, especially after Camp; AG has observed these findings in its audit, the CBIC has issued guidelines for GST officers regarding cancellation of registration and instructed them to follow the due process and guidelines.

Income tax:

SC refused to condone delay of 433 days in filing SLP as assessee failed to supply justifiable reasons
INCOME TAX : SLP dismissed on ground of delay against impugned order of High Court holding that no protective assessment could have been made against assessee as there was no allegation of withholding material or suppression of facts, nor was there anything incriminating recorded against assessee

ITAT deleted penalty as no loss occurred to revenue if TDS statement was filed belatedly
INCOME TAX : Where no loss had occurred to revenue due to late filing of TDS statements/returns by assessee because tax deducted at source was already deposited on time and there was mere technical breach to provisions contained in Act for submitting return/statements of TDS, penalty levied under section 272A(2)(k) was not justified.

There is no provision under Act which restrict claim of exp. only to extent it reduces profit to nil: ITAT
INCOME TAX: There is no provision in Act and more particularly in Chapter IV-D from sections 28 to 44BB dealing with profit and gains of a business or a profession which can suggest that an expenditure claim’s disallowance could be restricted to ‘zero’ income therein resulting in ‘loss’ figures as well.

CBDT notifies rule for computation of FMV of Capital Assets for section 50B
The Finance Act, 2021 has amended Section 50B(2) to provide that the FMV of capital assets (being an undertaking or division transferred by way of slump sale) as on the date of transfer shall be calculated in the prescribed manner. Such FMV shall be deemed to be full value of the consideration received or accruing as a result of transfer of such capital asset. Now the board has notified Rule 11UAE for computation of FMV.

Corporate Laws:

Formulating Policy on Related Party Transactionsunder the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
In any company, listed or unlisted, public or private, the companies enters into various transactions, with multiple parties including its related parties, in the course of conducting its business.

An Analysis of the Dispute Redressal Mechanism under RERA vis a vis the effect of Arbitration and Conciliation (Amendment) Act 2015.
Speedy dispute redressal is one among the first objectives of the important Estate (Regulation amp; Development) Act, 2016 (“the Act”) and tons of ink has been utilized in effective application of the provisions of the Act to guard the rights and resolve the woes of the flat buyers.

NCLT imposes ad valorem fine for all violations of non-criminal nature un-intentionally committed by Co. COMPANY LAW : Where applicant company filed application under section 441 for compounding of offences under sections 125,138 and 142 , it was held that nature of violations/offences committed were not criminal in nature and they were committed un-intentionally and non- deliberately and, therefore, lenient view was to be taken in current pandemic situation and ad valorem fine for all offences/ violations was to be imposed.

CSR: Excess CSR paid in ‘PM CARES Fund’ for FY 2019-20 can be offset as CSR spent in F.Y. 2020-21
The MCA has clarified that any amount to ‘PM CARES Fund’ on 31.03.2020, which is over and above the minimum amount as prescribed under section 135(5) of the Companies Act, 2013 (“Act”) for FY 2019-20, and such excess amount or part thereof is offset against the requirement to spend under section 135(5) for FY 2020-21.

Insolvency & Bankruptcy Code:

Personal Guarantor Under IBC: Whether Trapped Between The Devil And The Deep Blue Sea?
As per Section 5(22) of the IBC “personal guarantor” means an individual who is the surety in a contract of guarantee to a corporate debtor.

A multi – jurisdictional analysis of the Indian pre – packaged Insolvency regime
Pre-packaged insolvency resolution process (“PPIRP”) is a form of corporate rescue that aims at establishing an equilibrium between the interests of creditors and the business and assets of the corporate debtor (“CD”) by ensuring a smooth transition of aforementioned business and assets.

State Bank of India vs. Anil Dhirajlal Ambani: Is it time for personal guarantor’s conundrum to settle?
A Contract of Guarantee is an essence of commercial contractual regime. It’s a promise made by an individual to discharge the liabilities of a third party in case of their default.

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