Quvisor’s weekly refresher on Legal updates in India : July 05, 2018



GST applicable on rental charges of electricity meters recovered by distribution utility: AAR
GST : Transmission or distribution of electricity by an electricity transmission or distribution utility is exempt from GST under notificationNo.12/2017-CT (R), SI. No.25, however, non-tariff charges recovered by distribution utility, such as application fee for releasing connection of electricity, rental charges against metering equipment, testing fee for meters/ transformers, capacitors etc, labour charges from customers for shifting of meters or shifting of service lines, are taxable

Product ‘Kimam’ classifiable as preparation containing chewing tobacco: SC
GST/Excise & Customs: Product ‘kimam’ containing tobacco and used in small quantities in making pan classifiable under Heading No. 2403 99 20

Sum retained by hospital from fees charged by contractual doctors not taxable as fee for support services
GST/Service Tax : Where assessee, a hospital, was engaged in health care services to patients and to provide such services it had engaged doctors on contractual basis and it retained certain amount out of total charges collected from patients, assessee was not liable to pay service tax on retained amount under category of ‘support services of business or commerce

GST is applicable on compensation received by tenant for delayed possession of new premises: AAR
GST : Amount received by tenant of building premises towards alternate accommodation or delayed possession of new premises would be receipt of amounts for doing an act i.e. vacating premises for redevelopment as well as tolerating construction cum redevelopment work till possession of new redeveloped premises and further for tolerating an act of not having completed redevelopment period within time, same would be a ‘supply’ and therefore, GST to be levied on such amount


Income tax:

No reassessment after 4 years just because deduction u/s 80-IB was wrongly claimed by assessee
IT : Where after expiry of four years from end of relevant year, Assessing Officer sought to reopen assessment on ground that deduction under section 80-IB(11A) was wrongly claimed as assessee was engaged in manufacturing and processing of fruit juices and did not derive profits from processing, preservation and packaging of fruits, since there was no failure on part of assessee to disclose fully and truly any material facts which were necessary for assessment, in view of proviso to section 147, impugned reassessment proceedings deserved to be set aside

Assessee following project completion method liable to income tax when sale deed of units sold were registered
IT : Where assessee, engaged in construction business, was following project completion method, its income could be brought to tax only in year when sale deeds of units sold were registered even though sale consideration might have been received earlier from buyer

CBDT extends due date for linking Aadhaar with PAN till March 31, 2019
The Central Board of Direct Taxes (CBDT) has extended the last date for linking of Aadhaar with PAN from June 30, 2018 to March 31, 2019. This is the 4th time, CBDT has extended the due date for linking Aadhaar number with PAN.


Corporate Laws:

RBI issues action framework on bank auditors
In order to improve audit quality and to instituting a transparent mechanism to examine accountability of Statutory Auditors in a consistent manner, the RBI has decided to put in place a graded enforcement action framework to enable appropriate action in respect of bank’s statutory auditors.

Mandatory KYC for directors of all companies by August 31, 2018: MCA
Every Director who has been allotted DIN on or before 31st March, 2018 and whose DIN is in ‘Approved’ status, would be mandatorily required to file form DIR-3 KYC on or before 31st August, 2018.

CCI launches online guidance system for merger and acquisitions
The online guidance system has been launched as part of the fair trade watchdog’s outreach initiatives and measures to simplify compliance requirements regarding combinations, the Competition Commission of India (CCI) said in a statement. This application envisages a staged process to guide the stakeholders in determining whether a merger or acquisition is notifiable to CCI.

Sebi raises overseas investment limit of AIFs, VCFs to $750 million
Market regulator SEBI today enhanced the overseas investment limit of alternative investment funds and venture capital funds to $750 million from the current $500 million.


Insolvency & Bankruptcy Code:

Claim of creditor rejected as there was no contractual liability to pay interest by corporate debtor
IBC: Where operational creditor filed application to initiate insolvency resolution process claiming that Rs. 4.50 crores was due from corporate debtor which included interest, however there was no contractual liability to pay interest by corporate debtor, said application was to be rejected

NCLT admits insolvency plea where debts for goods supplied were accepted by corporate debtor
I&B Code: Where petitioner’s claim was in respect of sale of goods by petitioner to corporate debtor, it was an operational debt and respondent corporate debtor having accepted that debt for goods supplied to them, petition under section 9 was to be admitted

IBBI amends norms to allow homebuyers to get relief as financial creditors
The Insolvency and Bankruptcy Board of India (IBBI) has notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person), Regulation, 2018. The regulations has been amended the procedural requirement on various classes of creditors and also allowed homebuyers to get relief as financial creditors.

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