SBC

AP Integrated Clean Energy Policy 4.0

Home > AP Integrated Clean Energy Policy 4.0

Introduction

India’s government has set ambitious climate goals in line with its Nationally Determined Contributions (NDCs), aiming to install 500 GW of renewable energy (RE) capacity by 2030. A key part of this effort is the “National Green Hydrogen Mission” launched in 2023, targeting 5 million tonnes of green hydrogen production per year by 2030 to establish India as an export leader in clean fuel. Andhra Pradesh has emerged as a renewable energy leader, expanding its RE capacity from 1.3 GW in 2014 to 9.5 GW in 2024. To further advance these goals, the state government introduced the “Andhra Pradesh Integrated Clean Energy Policy, 2024. ”This policy seeks to add over 160 GW of RE capacity and attract investments worth INR 10 lakh crore, potentially creating 750,000 jobs. This policy aims to establish Andhra Pradesh as a clean energy hub and foster economic self-reliance.

Operating Period and Policy Scope

The Policy is set to operate for five years from its issuance date (i.e., from 30-10-2024), focusing on various clean energy technologies, including

Solar Power
Wind Power
Wind-Solar Hybrid Power
Mini and Small Hydro
Energy Storage
Green Hydrogen and its derivatives
Biofuels
Electric Mobility-EV Charging Infrastructure
Renewable Energy Manufacturing Projects

All Clean Energy Projects and RE Manufacturing Projects availing incentives under this policy shall not be eligible for any additional incentives under the AP Industrial Development Policy (IDP) or other policies issued by GoAP .

Migration of Projects from Previous Policies

Projects approved under previous policies may migrate to this policy if they meet conditions, such as demonstrating progress. Migrated projects must comply with the new policy’s charges and timelines but may adjust previous payments made under earlier policies.

All the projects allocated under previous policies that are unable to migrate because of non- adherence to timelines stated therein and also not commissioned / that have not been completed as per the timelines including extension(s)/ conditions shall be treated as deemed cancelled and the allocated resources will be made available for fresh allocation under the ICE policy

Eligibility for Clean Energy Projects

Entities Eligible

Registered companies, government entities, partnership firms, individuals, and all APDISCOM consumers can establish clean energy projects for electricity sale or captive use, per the Electricity Act – 2003, as amended from time to time.

Project Requirements

Developers must submit a Detailed Project Report (DPR) to the State Nodal Agency (State Nodal Agency ) outlining technical and financial capabilities.

Evaluation by State Nodal Agency

State Nodal Agency will assess current capacities and the technical, financial, and commercial feasibility of proposals, ensuring developers have the necessary capabilities.

Technical Experience

Developers should have prior experience in renewable energy (RE) or relevant infrastructure projects.

Net Worth Requirements

• Solar: Rs.50 Lakhs/MWp

• Wind: Rs.100 Lakhs/MW.

• Pumped Storage Power, small and Mini Hydro: Rs.50 Lakhs/MW.

• No net worth requirement for RE manufacturing, Green Hydrogen (GH), and Biofuel projects, but a Detailed Project Report (DPR) is mandatory.

Land Facilitation, Power Evacuation, and Allotment

1. Land and Substation Availability: The State Nodal Agency (State Nodal Agency ) will provide a quarterly list of available government land parcels, while APTRANSCO will list substations suitable for power evacuation.

2. Land Allotment Process: Developers must apply for land allotment to the respective government department. State Nodal Agency will facilitate the process by coordinating between the department and developers.

3. Lease and Allotment Terms: Government land can be leased to developers for up to 30 years (or 33 years for Pumped Storage Power, Mini, and Small Hydro Projects) as per the Andhra Pradesh Land Allotment Policy 2012. Land used for Clean Energy Projects will receive deemed non-agricultural status, with applicable land conversion fees exempted.

4. Land Purchase Option for Pumped Storage Power & Hydro Projects: Developers of Pumped Storage Power and Mini/Small Hydro projects can opt to buy government land outright at a minimum rate of INR 5 lakh per acre.

5. Lease Rates: Different rates apply based on the project type:

Clean Energy Projects: INR 31,000/acre/year, with a 5% increase every two years.
Biofuel Projects: INR 15,000/acre/year (only for government land), with the same 5% escalation.
Green Hydrogen Hubs: INR 1,00,000/acre/year (only for government land at ports).

6. Forest Land: Developers must apply through the State Nodal Agency for forest land allocation per the forest department’s guidelines.

7. Private Land: Developers planning projects on private land must handle land acquisition independently.

Resource Allocation

State Nodal Agency’s Role in Resource Allocation and Land Prioritization-

Facilitation by State Nodal Agency: The State Nodal Agency will help developers with resource allocation and project feasibility checks with APTRANSCO/APDISCOMs.
Allocation Basis: Resources will be allocated on a first-come, first-served basis. However, Renewable Energy (RE) Manufacturing and biofuel projects, which generate high employment, will receive priority.
Priority for Land Allocation: Land is allocated based on project value addition (INR per acre) in the following priority order:

Statutory Clearances

a) All the Clean Energy Projects (except Pumped Storage Power, Mini & Small Hydro projects) shall be exempted from obtaining any NOC/Consent for establishment under pollution control laws from the AP Pollution Control Board.

b) In case of Pumped Storage Power, Mini & Small Hydro projects, the State Nodal Agency shall facilitate in faster issuance of Environmental Clearances (EC) & Forest Clearances (FC).

Renewable Energy Certificate (REC)

• Projects developed under this policy are eligible for Renewable Energy Certificate (REC) benefits, following APERC Renewable Power Purchase Obligation regulations, 2022, and any future amendments.

• Deemed injection of in-house or co-located solar generation by prosumers is also eligible for REC benefits per guidelines in APERC Regulation No. 5 of 2022.

Single Window Clearance

NREDCAP will develop a portal for facilitating single window clearance for all projects under this policy. The services of this single window clearance portal will be made available to all the projects under this policy for obtaining time-bound statutory clearances.

Download To Know More About Projects and its Incentives

Project Timelines

Projects using resources allocated by GoAP must follow policy-defined timelines; projects allocated via bidding without state resources follow bid document and Power Purchase Agreement timelines.
Projects with land and resource allocation by SNA must meet milestones set by the SNA, divided into two phases: Allotment and Project Construction Schedule.
Allotment Phase: Requires meeting 7 milestones, including payment of fees, DPR approval, connectivity approval, land agreement, and financial closure.
Construction Schedule Phase: Requires meeting 4 milestones, including equipment order, construction start, mid-term status, and project commissioning
PSP projects may receive a maximum extension of 12 months, while other projects are eligible for a 6-month extension.
Developers must return resources to SNA within 14 days of cancellation notice, allowing reallocation to others.
SNA grants time extensions at INR 20,000 per MW/month (plus GST).
Additional delays (beyond 6/12 months) incur a penalty of 0.25% of project cost per quarter, up to 6 months. No incentives apply beyond this period.
If only part capacity is commissioned within the allowed time, the remaining capacity is canceled, and the Performance Bank Guarantee (PBG) for un-commissioned capacity is forfeited.

Policy Implementation

• The State Investment Promotion Committee (SIPC) and State Investment Promotion Board (SIPB) expedite investment decisions in Andhra Pradesh.

• NREDCAP receives, screens, and evaluates Clean Energy and RE Manufacturing investment proposals.

• After NREDCAP’s review, proposals go to the Energy Department, which submits them to SIPC.SIPC scrutinizes and forwards proposals to SIPB for review.

• SIPB recommends proposals to the Government of Andhra Pradesh, which has the final approval authority.

Where can SBC help

Our Incentives & Refunds team will assist you in

Analyzing eligibility for Incentives and refunds
Documentation review
Application for Incentives and reimbursements
Documentation review
Resolving issues with authorities

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SBC_GST Annual Returns for the FY 23-24

Home > SBC_GST Annual Returns for the FY 23-24

Introduction-

As per Sec 44 of the CGST Act, 2017, Every registered person, other than specified persons shall

furnish an annual return (GSTR-9) and a self-certified reconciliation statement (GSTR-9C) annually

before 31st December of the following financial year.

Form	Applicability
Annual Return (GSTR-9)	All GST-registered taxpayers must file GSTR 9. However, businesses with an annual turnover of up to Rs 2 crore are exempt from filing GSTR 9 and can opt not to file via Notification 14/2024 dated 10th July 2024.
Self-certified reconciliation (GSTR-9C)	Every registered person whose aggregate turnover during a financial year exceeds Rs.5 crore rupees must file this form as per Rule 80.

Due Date:The due date to file GSTR-9 and GSTR-9C for the FY 2023-24 is by 31st December 2024

Late Fees:

• GSTR-9: INR 200 per day of delay subject to a maximum cap at 0.50% of its turnover.

• GSTR 9C: No specific provisions are applicable for GSTR 9C, and hence the non-filing of GSTR-9

and GSTR 9C could be subject to a general penalty of INR 25,000.

SBC Assistance in filing GSTR 9 and GSTR 9C:

Assist in Sales and Purchase Reconciliation to ensure alignment between financial records and

GST returns.

Review Input Details to ensure no ineligible ITC is claimed

Check Valuation and GST Rates for sales to ensure compliance with GST provisions.

Verify Tax Payment on purchases under reverse charge mechanism (RCM).

Review the Place of Supply for inputs to ensure ITC is claimed under the correct

registration

Ensure Proper Accounting for amendments, adjustments, credit notes, and debit notes.

Review Sales Presentation to ensure proper classification based on the nature of supply.

Why accurate and timely filling is necessary?

Timely filing will help avoid late fees and penalties.

• Accurate and proper disclosure will reduce the risk of receiving notices, penalties, interest,

and other legal consequences.

• Even income missed reporting in GST returns can be identified and paid now which avoids any

future litigation of interest and penalties.

• GSTR 9C reconciles financial statements with GST returns, correcting discrepancies and

ensuring ITC claims match actual purchases, thus preventing the risk of ineligible ITC claims,

reversals, and penalties.

Checklist for filing GSTR 9 and GSTR 9C:

S no	Particulars
1	GST Login Credentials
2	Reconciliation of Outward Supply filed in GST Returns and Turnover in Books
3	Reconciliation of Input considered in GSTR-3B and amounts reflected in GSTR-2A
4	Reconciliation of ITC as per Purchase register Vs. Books
5	Sales and Purchase Register with HSN
6	Invoice-wise details of purchases with Description
7	Details of Advances Received and Advances adjusted
8	Details of Credit and Debit Notes
9	Adjustments pertaining to ITC of the previous year are considered in the Current year
10	Sales of the previous year are considered in the current year
11	Details of Capital Goods purchased whether ITC capitalized or not
12	Details of Capital Goods Sold along with sample Invoices
13	Sample Sales and Purchases Agreements
14	Any Refund claimed, sanctioned, rejected or pending during the FY
15	Sample Invoices of Sales and Purchases.
16	E-Invoices details
17	E-Way Bills details
18	Details of ITC reversed and reclaimed (if any)
19	Signed Audited financial statements for the financial year

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SBC Guide for GST Amnesty Scheme (Section 128A)

Home > SBC Guide for GST Amnesty Scheme (Section 128A)

CGST ACT, 2017

1. INTRODUCTION

Section 128A has been introduced in the Central Goods and Services Tax Act, 2017, vide the Finance Act, 2024, effective from November 1, 2024, based on recommendations from the GST Council’s 53rd meeting held on June 22, 2024. It provides for the waiver of interest, penalties, or both, related to tax demands under Section 73 for the financial years 2017-18, 2018-19, and 2019-20, subject to specific conditions. This amendment aims to offer relief to taxpayers while ensuring compliance with past GST obligations.

2. WHAT IS COVERED UNDER THIS AMNESTY SCHEME?

2.1. Scope: Applies specifically to demands under Section 73, which generally deals with non-fraudulent tax discrepancies and refunds.

2.2. Time-Frame: Relief applicable for tax periods from FY 2017-18 to FY 2019-20.

2.3. Due Date for Payment: All taxes must be paid on or before March 31, 2025, as per the 53rd GST Council meeting. However, currently, the law remains silent and an official notification from the government is yet to be issued.

2.4. Relief: Complete waiver of interest and penalty.

3. WHAT IS NOT COVERED IN THE SCHEME?

While the proposed GST Amnesty Scheme under Section 128A offers significant relief to taxpayers, it is important to understand that certain cases are not eligible for this scheme. This exclusion aims to maintain the integrity of the tax system and ensure that the scheme benefits those who comply with the law in good faith. The following are the

a. Demand raised under Section 74, i.e., cases involving fraud, willful misstatement, or suppression of facts to evade tax.

b. c. Erroneous refunds received by the assesses.

No refund will be issued for interest and penalties already paid by the taxpayers.

4. ADVANTAGES OF THE SCHEME

4.1. Reduction in Litigation: By offering a waiver of interest and penalties, the scheme incentivizes taxpayers to settle disputes without further legal proceedings, reducing the burden on tax tribunals and courts.

4.2. Revenue Generation: The scheme encourages the payment of outstanding taxes, leading to immediate revenue generation for the government.

4.3. Relief for Taxpayers: Provides significant relief to taxpayers who faced difficulties during the initial years of GST implementation, offering a chance to settle their dues with a reduced financial burden.

5. IS THE SCHEME APPLICABLE AT ALL STAGES OF LITIGATION?

The applicability extends to:

5.1. Notice issued under section 73 of the CGST Act:

The scheme covers cases where a notice has been issued under Section 73 for recovery of tax not paid, or short paid or erroneously refunded, or input tax credit wrongly availed or utilized.

5.2. Notice issued under section 74, deemed as issued under section 73 due to the absence of elements of fraud/suppression/ willful misstatement:

If a notice initially issued under Section 74 is later deemed to be issued under Section 73 because it lacks elements of fraud, suppression, or willful misstatement, it falls under the purview of this amnesty scheme.

5.3. Order issued under section 73 of the CGST Act, where no order under sub-section (11) of section 107 [Appellate Authority] or sub-section (1) of section 108 [Revisional Authority] has been issued:

If an order has been issued under Section 73, and there is no subsequent order from the Appellate Authority (Section 107) or the Revisional Authority (Section 108), this situation is also covered by the amnesty scheme.

5.4. Appeal Order or Revisional Authority Order:

The scheme also includes cases where orders have been issued by the Appellate Authority or the Revisional Authority.

Section 128A targets non-compliant taxpayers who haven’t filed returns on time. The scheme aims to bring them back into compliance and reduce the number of non-compliant GST accounts.

AMENSTY RULES

Vide Notification no.20/2024-Central Tax dated 8th October 2024 Rule 164 of CGST Rules, 2017 Government of India introduces a detailed procedure for the closure of proceedings related to tax demands issued under Section 73 of the Goods and Services Tax (GST) Act. This rule outlines the process and conditions under which a taxpayer can seek a waiver of interest or penalties, or both, in connection with notices, statements, or orders issued under Section 128A. It sets forth the application methods, timelines, required documentation, and necessary payments for eligibility, ensuring an organised framework for taxpayers and GST officers to resolve disputes.

1. Application for Waiver:

Persons eligible for the waiver of interest, penalty, or both may apply electronically on the common GST portal using-

a) FORM GST SPL 01- applies to SCNs under Section 128A(1)(a) (i.e., Section 73(1), or a statement is issued under Section 73(3) (for unpaid or short-paid tax)

b) FORM GST SPL 02- applies to orders under Section 128A(1)(b) (i.e., determining the amount of tax) and Section 128A(1)(c) (i.e., Section 73(9) or through appeals under Sections 107 or 108)

2. Payment Conditions for orders under Section 128A(1)(b) and (c):

a) Tax payments must be made by crediting the amount to the Electronic Liability Register against the debit entry created.

b) Additionally, if any payment has already been made using GST DRC 03, an application in FORM GST DRC 03A must be filed for the transfer of such amounts to the Electronic Liability Register against the debit entry created.

3. Partial Demands:

If the demand partially involves erroneous refunds or periods not covered by Section 128A, the applicant must ensure the full tax amount is paid before filing the application.

4. Deadline for Applications:

a) Applications must be submitted within three months from the notified date under Section 128A(1).

b) An extended deadline of six months applies if the application in Form GST SPL 02 refers to the first proviso (for cases involving fraud or willful misrepresentations) of Section 128A(1)

5. Withdrawal of Appeals:

a) To qualify for the waiver of interest or penalty, applicants must show evidence of having withdrawn appeals or writ petitions filed with appellate authorities, tribunals, or courts.

b) If the order for withdrawal isn’t issued by the time of application, a copy of the filed withdrawal request should be uploaded. The final order of withdrawal must be uploaded within one month after it is issued.

6. Rejection of Applications:

If the officer deems that the application made in FORM GST SPL 01 or FORM GST SPL 02 is ineligible for the waiver, a notice in FORM GST SPL 03 will be issued within three months. The applicant can then respond via FORM GST SPL 04 within one month.

7. Approval and Finalization:

a) Upon successful review, the officer issues an approval order in FORM GST SPL 05, which concludes the proceedings.

b) If the application is rejected, an order in FORM GST SPL 07 will be issued.

8. Issuance of Orders and Modification of Liability under FORM GST SPL-05:

a) If an application is filed in FORM GST SPL-01 for a notice under Section 128A(1)(a), the proper officer does not need to issue FORM GST DRC-07

b) If an application is filed in FORM GST SPL-02 for orders under Section 128A(1)(b) or 128A(1)(c), the Electronic Liability Register will be modified accordingly to reflect any changes in liability after the waiver or order.

9. Time limit for issuance of order:

a) If notice in FORM GST SPL 03 has not been issued, then the proper officer shall issue the order within three months from the date of receipt of the application in FORM GST SPL 01 or FORM GST SPL 02.

b) If the above notice is issued, then the proper officer shall issue the order within three months from the date of receipt of the reply of the applicant or within four months if no reply is received.

10. Deemed Approval:

If no order is passed by the proper officer within the prescribed time, the application in FORM GST SPL 01 or FORM GST SPL 02 as the case may be, is deemed to be approved and the proceedings concluded.

11. Appeal and Restoration of Appeals:

a) If the application for waiver is rejected (FORM GST SPL 07), the applicant can appeal. If the appeal is successful, the order shall be passed in FORM GST SPL 06 and the waiver will be granted.

b) Otherwise, any previously withdrawn appeal related to the original demand will be restored in FORM GST SPL 08.

12. Voidance of Waiver:

If any additional tax amount is not paid within the specified time, the waiver of interest or penalty will become void.

13. Conditions under which a taxpayer is required to pay interest, penalties, or both:

a) Interest or Penalty Payment Requirement: If a taxpayer receives a demand for an erroneous refund or for a tax period not covered under section 128A, and the details of the interest or penalty are mentioned in FORM GST SPL-05 or FORM GST SPL-06, the taxpayer is obligated to pay the specified amount.

b) Three-Month Time Frame: The taxpayer must pay the interest, penalty, or both within three months from the date of the order issued in FORM GST SPL-05 or FORM GST SPL-06.

c) Consequences of Non-Payment: Failure to pay within the specified three-month period voids any waiver of interest or penalty previously granted under section 128A, removing eligibility for that waiver.

GSTN Advisory for Taxpayers: Waiver Scheme Under Section 128A

Forms availability:

• FORM GST SPL-01 and SPL-02 will be available on the common portal starting January 2025.

Immediate Action for Taxpayers:

• Payments can be made now under “Payment towards demand” for demand orders.

FORM GST DRC-03:

• If payments have already been made, taxpayers should link FORM GST DRC-03 to the demand order using FORM GST DRC-03A, now available on the common portal.

Rule 164 of CGST Rules is comprehensive almost covers all the aspects while filing the GST Amnesty scheme application. However, a delay in the availability of forms on the GST portal are not expected

GST Amnesty Scheme

CLARIFICATIONS AND FAQS

CBIC Vide Circular No.238/32/2024-GST dated 15th October 2024 CBIC clarified various issues in relation to the implementation of the scheme. The clarifications and FAQs are as follows:

Clarification on Section 16(5) or (6):

a. Deduction of Non-Payable Amounts:

Tax amounts related to the contravention of Section 16(4) that are no longer payable due to the retrospective addition of Sections 16(5) and 16(6) should be deducted when calculating the total tax payable under Section 128A.

b. No Rectification Required for Reinstated ITC:

If input tax credit (ITC) previously denied under Section 16(4) is now available due to the new provisions, no rectification application is needed.

c. Deductions Limited to Section 16(4) Violations:

Deductions of non-payable amounts must be solely due to Section 16(4) violations, and the tax officer will verify this during scrutiny.

FAQs:

1. Will the benefit under Section 128A apply to taxpayers who paid the tax component in full before the section came into effect?

Yes, Any amount paid toward the demand up to the date notified under Section 128A will be considered, regardless of whether it was paid before or after the section’s effect or demand notice.

2. Will the amount recovered by tax officers from another person on behalf of the taxpayer be considered as paid for the demand under Section 128A?

Yes, Such amounts recovered by tax officers from any other person will be considered as paid towards the demand if recovered before the date notified under Section 128A.

3. Can the interest or penalty amount recovered for demands under Section 73 (Financial Years 2017-18, 2018-19, and 2019-20) be adjusted against the tax payable for the same demand?

No, There is no refund or adjustment of interest or penalty towards the tax demand. Amounts paid or recovered as interest or penalty cannot be adjusted toward tax payable

4. If the tax due is already paid and the notice under Section 73 pertains only to interest/penalty, is Section 128A applicable?

Yes, Section 128A benefits are available for such cases, except when interest is demanded for delayed filing or reporting of returns.

5. Can partial waiver of interest or penalty be availed by making part payment and litigating the remaining amount?

No, Section 128A benefits are only available when the full amount of tax demanded in the notice/order is paid.

6. If a demand notice/order includes multiple periods and some other tax periods for which such waiver is not applicable, can the benefit of waiver under Section 128A be claimed for the applicable period?

Yes, You can apply for a waiver for the period covered by Section 128A. However, the full tax amount in the notice must be paid to avail of the waiver.

7. Can a taxpayer apply for a waiver of interest/penalty under Section 128A if the demand includes erroneous refunds?

Yes, The taxpayer must pay the full amount, including erroneous refunds. However, the waiver under Section 128A applies only to tax demands not related to erroneous refunds.

8. If the department has filed an appeal and the tax liability is increased, will the waiver under Section 128A still apply?

Yes, but the taxpayer must pay the additional tax liability within three months of the appellate order. Failure to do so will void the waiver of interest or penalty.

9. If the taxpayer has already paid some tax through FORM GST DRC-03, do they need to file FORM GST DRC-03A for adjustments?

Yes, If an order has been issued and the taxpayer has paid through FORM GST DRC-03, the amount must be adjusted before filing FORM GST SPL-02.

10. Does Section 128A cover cases involving IGST and Compensation Cess?

Yes, The benefit of Section 128A also applies to IGST and Compensation cess demands, and full payment of the tax (CGST, SGST, IGST, and Compensation cess) is required.

11. Does Section 128A cover demands related to irregularly availed transitional credit?

Yes, provided the transitional credit was availed during the period covered under Section 128A, and the demand was raised under Section 73.

12. Does Section 128A cover penalties under other provisions, such as late fees or redemption fines?

Section 128A covers penalties under sections 73, 122, and 125, but not late fees or redemption fines

13. Can payment for the waiver under Section 128A be made using Input Tax Credit (ITC)?

Yes, The tax payment required to avail of the waiver can be made using ITC or electronic cash ledger, except in cases of Reverse Charge Mechanism (RCM) or erroneous refunds, where cash payment is mandatory.

14. Is the waiver under Section 128A applicable to IGST payable under the Customs Act, 1962?

No, Such cases fall under the Customs Act and are not covered under Section 128A.

15. If a demand reduces due to the retrospective insertion of Section 16(5) and (6), does the entire tax demand have to be paid to avail the waiver?

No, The amount payable to avail the waiver will be calculated after deducting the reduced amount based on Section 16(5) or (6).

Clarifications & Applicability of Amnesty Scheme:-

Applicable	Not Applicable
For complete waiver of interest and penalty.	For Partial waiver of interest and penalty.
To notice under Section 73 pertaining to only interest and penalty.	To demands raised under Section 74
To penalties under Section 73, 122 and 125	To late fees or redemption fines.
Only applicable to tax demands which include erroneous refunds	To erroneous refunds received by the assesses.
For tax periods from FY 2017-18 to FY 2019- 20.	To tax periods after FY 2019-20.
To IGST and Compensation cess demands.	To IGST payable under Customs Act, 1962.

Where can SBC help:

Check client eligibility for the scheme.
Advise on financial impact and remaining liabilities
Monitor status of filed returns and receipt of amnesty benefits
Represent clients before tax authorities if disputes arise

CONTACT US

GST Rate changes and clarifications post 54th GST council meeting

Rate Changes and Clarifications as per 54th GST Council Meeting

Home > Rate Changes and Clarifications as per 54th GST Council Meeting

Introduction

The 54th GST Council meeting introduced key changes to improve the efficiency, accessibility, and responsiveness of the GST system. These changes include:

Tax Rate Adjustments: Revising rates across sectors to encourage growth and balance government revenue.
Industry-Specific Issue Resolution: Addressing sectoral concerns, especially in manufacturing, e-commerce, and services.
Simplified GST Structure: Streamlining processes to ease compliance and reduce refund delays.
Enhanced Taxpayer Services: Upgrading digital infrastructure for better tracking and support.
Anti-Evasion Measures: Strengthening compliance checks on high-risk transactions.
Sectoral Incentives: Lower GST rates for green energy and digital services to encourage investment.
Future Policy Review: Establishing a roadmap for regular policy reviews to adapt to economic changes.

What is covered Further:

Extension of the RCM list
Extension of the exemption list
Changes in the rates of some of the goods and services
Clarifications issued Regarding certain ambiguities

Changes in GST Rates on Certain Items:

S.No.	Particulars	Previous rate	Amendment	Clarification, if any
1	Extruded or Expanded Products savoury or salted, other than un-fried or un-cooked snack pellets by whatever name called, manufactured through process of extrusion	18%	12%	Rate of 5% will continue un- fried or un-cooked snack pellets.
2	Classification of seats meant for four wheeled cars and two-wheelers	18%	28%*
3	Transportation of passengers by air in a helicopter on a seat share basis	12%	5%	In case the helicopter is chartered it will still attract 18% GST.
4	GST on Cancer drugs Namely Trastuzumab Deruxtecan Osimertinib Durvalumab	12%	5%

* Earlier bike seats were charged at 28% and car seats were charged 18% now both are charged at 28%

Extension of Exemption list

The following are inserted in the exemption list:

• Metering Services:

Providing metering equipment on rent, Testing meters, transformers, capacitors, etc., Releasing electricity connections, shifting meters or service lines, Issuing duplicate bills, and other incidental or ancillary services related to electricity

• Research and development:

A Government Entity, A research association, university, college, or other institution, which is notified under clauses (ii) or (iii) of section 35(1) of the Income Tax Act, 1961. provided that the institution is notified under section 35(1) of the Income Tax Act at the time of the supply of research and development services.

• Affiliation Services:

A Central or State Educational Board, A Council, or any similar body. to schools that are, Established, owned, or controlled by the Central Government, State Government, Union Territory, local authority, Governmental authority, or Government entity.

INSERTIONS

The following are inserted to RCM and TDS list:

1. Metal scrap

1.1 RCM:

• This amendment modifies Notification No. 4/2017-Central Tax (Rate), dated June 28, 2017.

• A new entry is added to the notification’s table, specifying metal scrap under HS codes 72

to 81.

• It states that if metal scrap is supplied by an unregistered person to a registered person, the reverse charge mechanism applies.

1.2 TDS:

• On October 9, 2024, the government issued Notification No. 25/2024-CT, mandating TDS compliance for metal scrap supplies under GST. From October 10, 2024, any registered person receiving metal scrap (Chapters 72 to 81 of the Customs Tariff Act) must deduct TDS at 2% if the transaction value exceeds ₹2,50,000.

2. Immovable Property:

• A new entry, “5AB,” has been introduced under Notification No. 09/2024-Central Tax (Rate).

• The entry relates to renting of “any immovable property”*, excluding residential dwellings.

• It applies when the supplier of the rental service is an unregistered person.

• The recipient of the rental service must be a registered person.

*Initially it is mentioned as “any property”. Later through Corrigendum G.S.R. 652(E) dated 22-10-2024 it has been changed to “any immovable property”

OTHER CLARIFICATIONS

• GST rate on Roof Mounted Package Unit (RMPU) Air Conditioning Machines

for Railways:

• Air conditioning machines under HS 8415 are excluded from being classified as “parts” under HS 8607 according to the Customs Tariff Act, 1975. To remove any doubt, it is explicitly clarified that Roof Mounted Package Unit (RMPU) Air Conditioning Machines for Railways are classified under HS 8415 with a 28% GST rate.

• GST on the Directorate General of Civil Aviation (DGCA) approved flying

training courses conducted by Flying Training Organizations approved by

the DGCA:

• Under Sl. No. 66 of Notification No. 12/2017-Central Tax (Rate), educational services provided by institutions are exempt from GST.

• Since these courses are approved by the DGCA and include the requirement for completion certificates, they are classified as educational services and are therefore exempt from GST under the mentioned notification.

• Ancillary services Related to GTA :

• Ancillary services provided by GTAs during the transportation of goods (such as loading/unloading and packing/unpacking) will be treated as a composite supply of transport services.

• Regularizing the payment of GST for services rendered by film distributors:

• Prior to 01.10.2021, GST was 18% for “Motion Picture, videotape, and television programme distribution services” under Heading 9996, and 12% for intellectual property rights under Heading 9973, both covering film licensing. The 45th GST Council meeting on 17.09.2021 recommended a uniform 18% GST rate from 01.10.2021.

• Applicability of GST on the service of affiliation provided by universities to

colleges:

Clarifications have been sought on whether GST applies to affiliation services provided by universities to colleges. These services ensure that colleges meet the required standards in terms of infrastructure, faculty, and other criteria to conduct courses and grant degrees under the university’s name. Following the 54th GST Council’s recommendation, it has been clarified that affiliation services are not exempt from. An 18% GST is applicable to these services provided by universities.

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Digitization of Customs Bonded Warehouse Procedures

Home > Digitization of Customs Bonded Warehouse Procedures

Background –

The Central Board of Indirect Taxes and Customs (CBIC) has introduced several digitized processes to improve the ease of doing business in Customs Bonded Warehouses. This report outlines the major enhancements through the Warehouse Module on the Indian Customs Electronic Gateway (ICEGATE) portal. The focus areas include obtaining Warehouse Licenses, bond-to-bond movements of goods, and uploading Monthly Returns.

1. Introduction to the Warehouse Module on ICEGATE

CBIC’s new Warehouse Module on ICEGATE is designed to digitize and streamline several key procedures for Customs Bonded Warehouses, ensuring transparency and efficiency in compliance.

Key Functions Introduced:

Online Filing for Warehouse Licenses
Online Submission for Transfer of Warehoused Goods (Bond to Bond Movement)
Uploading Monthly Returns

These updates aim to provide a seamless, paperless experience for warehouse owners, importers, and Customs officers, reducing delays and improving regulatory compliance.

2. Warehouse Licensing Procedure

The Private Warehouse Licensing Regulations, 2016 and the Special Warehouse Licensing Regulations, 2016 govern the licensing of Public, Private, and Special Warehouses under Sections 57, 58 and 58A of the Customs Act, 1962. The digitization of this process simplifies applying for a license, with the following features:

2.1. Online Application Process

Authorized signatories of applicants can now apply via the ICEGATE portal.
Documents are uploaded online, and applications are automatically sent to the proper Customs officer.
Officers review and process applications entirely within the system, with built-in query features allowing applicants to respond to any raised issues.
Once approved, the warehouse code is generated online, and the license is forwarded electronically.

2.2. Jurisdiction and Port Code

Different Customs Zones may designate specific Commissionerate for handling warehouse licensing.
Applicants must enter the correct port code for their jurisdiction as specified in Public Notices issued by the Zones.
Customs officers are assigned specific roles based on port codes for streamlined processing.
Once an application for obtaining a license is filed using the port code specified by the Zone, the application would move to the officer of that port having the role created referred to above.

2.3. Warehouse Licensing Module

The CBIC has digitized the process of applying for warehouse licenses through the Warehouse Module on the ICEGATE portal at https://wwwicegate.gov.inlguidelines/warehouse-licensing

2.3.1. Transfer of Warehoused Goods

The Warehouse Module allows users to file requests for transferring goods and handles three main scenarios:

Case 1: Changing the owner of goods while keeping them in the same warehouse.

Case 2: Moving goods to a different warehouse without changing ownership.

Case 3: Changing both the warehouse and the ownership.

The system ensures all necessary information about the buyer, seller, and goods (like quantity and value) is properly validated. Buyers must provide a Triple Duty Bond, which ensures that any due taxes or duties are covered.

2.3.2. How the Module Works?

Once fully functional, the system will track goods from their importation to their movement between warehouses and owners.
Monthly returns about the goods storage and movement will also be processed through the module.

2.3.3. Transfer Form

Regulation 3 of the Warehouse Goods (Removal) Regulations, 2016, requires a physical form for transferring goods between warehouses.
This form tracks goods being dispatched and received at warehouses and must be signed by the warehouse licensee or bond officer.
Although the digital system (ICEGATE) captures transaction details, the physical form is still needed until the system is fully integrated with the online module.

The digitization of the warehouse licensing process enhances efficiency and accessibility in obtaining licenses for Public, Private, and Special Warehouses under the Customs Act, 1962.

3. Monthly Returns:

Licensees must file two monthly returns under the Warehouse (Custody and Handling of Goods) Regulations, 2016:

i. Form A: Information about goods received, stored, and removed within the month.

ii. Form B: Information about goods whose warehousing period is expiring in the current month.

3.1. How to File

Scanned copies of these returns can be uploaded as PDFs to the ICEGATE portal.
Customs officers can download and review these documents for any necessary action.
Phase 2 will introduce web forms to make it even easier to file these returns directly online.

3.2. Security Requirements

Under Section 59(3) of the Customs Act, 1962, warehouse licensees must provide security along with a Triple Duty Bond.
This security ensures compliance with Customs regulations and must be submitted at the Port of Import.

4. User Support

Users (trade members and Customs officers) can refer to the User Manuals for guidance on the different steps in the process. For any issues:

Trade Members: Can email the ICEGATE helpdesk at icegatehelpdesk@icegate.gov.in
Customs Officers: Can email saksham.seva@icegate.gov.in for quick help

5. Chief Commissioners of Customs are required to issue Public Notices specifying the port codes and guiding applicants through the process.

• Licensees must submit two monthly returns under the Warehouse Regulations: Form A for goods transactions and Form B for expiring warehousing periods.

• Users can refer to User Manuals for guidance and email the ICEGATE helpdesk for support at specified addresses for trade members and Customs officers.

ANNEX-A

Breakdown of the step-by-step process for transferring warehoused goods on the ICEGATE platform, covering different scenarios:

Scenario 1: Change in Ownership Without Change in Warehouse

The supplier (current owner) fills out an application form on ICEGATE to transfer goods to a new owner.
Details required: goods information, into bond Bill of Entry, and buyer’s information (Import Export Code (IEC) and ICEGATE registration).
The application appears on the buyer’s ICEGATE dashboard.
The buyer can accept or reject the request. If accepted, the buyer enters the Triple Duty Bond details (a bond that covers duties owed) after submitting it physically to the customs officer at the port.
Once the buyer submits the bond, the officer in charge of the warehouse reviews the request.
After approval, the system reassigns the bond responsibilities from the supplier to the buyer, completing the change in ownership. The customs officer at the port is also informed in real-time.

Scenario 2: Change in Warehouse Without Change in Ownership

The supplier initiates an application for physically transferring goods to a new warehouse.
Required: goods info, into-bond Bill of Entry, warehouse details, space certificate, Transshipment Bond, and insurance policy.
Since the supplier and buyer are the same in this case, no new bond is needed. However, the space certificate must be uploaded.
The source warehouse officer reviews and approves or rejects the transfer request. Upon approval, the goods are cleared for transfer.
After the goods arrive at the destination warehouse, the officer there confirms the receipt recredits the transhipment bond and updates the system.

Scenario 3: Change in Warehouse and Change in Ownership

The supplier initiates the transfer request on ICEGATE, including details of the goods, destination warehouse, and buyer.

Required documents: Transshipment Bond, insurance policy, and destination warehouse details. If the supplier does not provide these, the buyer must submit them.

The buyer accepts the request and submits necessary details, including the Triple Duty Bond, transhipment documents, and space certificate from the destination warehouse.

The customs officer at the source warehouse verifies all documents (space certificate, transhipment bond, etc.). If everything is in order, the officer approves the request, transferring ownership to the buyer.

The officer at the destination warehouse confirms the receipt of the goods.

The system updates the ownership, credits and debits the respective bonds, and informs the customs officer at the port in real time.

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Amendment to Companies Rules – Streamling Norms For Holding-WOS Cross-Border Mergers

AMENDMENT TO COMPANIES RULES: STREAMLING NORMS FOR HOLDING- WOS CROSS-BORDER MERGERS

Home > AMENDMENT TO COMPANIES RULES: STREAMLING NORMS FOR HOLDING-WOS CROSS-BORDER MERGERS

The Ministry of Corporate Affairs (MCA) vide its notification dated September 09, 2024 has introduced a sub-rule (provided below) which is effective from September 17, 2024 to further amend the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, which affects cross-border mergers involving a Foreign Holding Company and an Indian Wholly-Owned Subsidiary in order to provide clarity around the process and compliance requirements with regulatory bodies as per the Companies Act, 2013 (the “Act”):

New Sub-rule 5:

“(5) Where the transferor foreign company incorporated outside India being a holding company and the transferee Indian company being a wholly owned subsidiary company incorporated in India, enter into merger or amalgamation –

1. both the companies shall obtain the prior approval of the Reserve Bank of India;

2. the transferee Indian company shall comply with the provisions of section 233;

3. the application shall be made by the transferee Indian company to the Central Government under section 233 of the Act and provisions of rule 25 shall apply to such application; and

4.the declaration referred to in sub-rule (4) shall be made at the stage of making application under section 233 of the Act.“

Key Highlights of the New Sub-rule 5:

1. Approval from the Reserve Bank of India (RBI):

Both the Foreign Holding Company and the Indian Wholly-Owned Subsidiary must obtain prior approval from the RBI before proceeding with the merger or amalgamation. Notable Aspect: Rule 9 of the Foreign Exchange Management (Cross Border Merger) Regulations, 2018 states that “any transaction on account of a cross-border merger undertaken in accordance with these Regulations shall be deemed to have prior approval of the Reserve Bank as required under Rule 25A of the Companies (Compromises, Arrangement and Amalgamations) Rules, 2016.”

Therefore, prior approval under the new sub-rule will have to be read with said Regulation 9, and RBI approval will only be required if the transaction is not in compliance with the applicable requirements of Foreign Exchange Management (Cross Border Merger) Regulations, 2018.

2. Compliance with Section 233:

The Indian subsidiary, as the transferee company, is required to comply with Section 233 of the Companies Act, 2013, which lays down a simplified procedure for fast-track mergers for certain companies.

3. Application to Central Government:

The Indian Transferee Company must submit an application to the Central Government under Section 233, and the provisions of Rule 25 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 will govern this application process.

Rule 25 outlines the process for making an application to the Central Government for mergers or amalgamations, particularly under Section 233 of the Companies Act, 2013 (related to fast-track mergers). It specifies the documents and procedures that need to be followed when filing for approval, including submitting necessary documents, resolutions, and schemes for the merger to obtain Central Government sanction. This Rule ensures that the application process is clear, structured, and compliant with the Act.

4. Declaration under Sub-rule 4:

The Indian subsidiary will need to make a declaration as required under Sub-rule 4 at the time of submitting the application under Section 233.

In case of a compromise or an arrangement or merger or demerger between an Indian company and a company or body corporate which has been incorporated in a country which shares land border with India, a declaration in Form No. CAA-16 shall be required at the stage of submission of application. This declaration is a legal statement made by companies involved in the merger, confirming that the proposed merger or amalgamation is in compliance with applicable laws and regulations. It must be submitted along with the application to ensure transparency and to affirm that all legal requirements are met before the approval process moves forward. It helps prevent any later-stage legal issues by requiring a formal declaration of compliance early in the process.

Intent of the Notification:

Regulatory Streamlining:

Ensures cross-border mergers comply with India’s Foreign Exchange Regulations by requiring RBI approval, preventing regulatory gaps.

Simplified Merger Process:

Aligns cross-border mergers with the fast-track provisions of Section 233, reducing procedural burdens for holding-subsidiary mergers.

Clear Application Process:

Provides transparency by specifying that the Indian subsidiary must file with the Central Government under Section 233, streamlining the approval pathway.

Enhanced Compliance:

Requires declarations to ensure early-stage compliance with the Act, reducing future disputes and ensuring transparency in the merger process.

CONCLUSION:

The notification is aimed at fostering a more predictable, transparent, and compliant environment for cross- border mergers between Foreign Holding Companies and Indian Wholly-Owned Subsidiaries. It strengthens regulatory oversight while simultaneously providing companies with a clearer, simplified route for mergers under Indian Corporate Law. This aligns with the government’s broader objective of encouraging foreign investments, avoid tax evasion strategies and align with national economic interests.

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Transfer Pricing Insights: A Deep Dive into Inter-Company Agreements (ICAs)

Home > Transfer Pricing Insights: A Deep Dive into Inter-Company Agreements (ICAs)

Inter-company agreements (ICAs) serve as crucial legal documents governing transactions within Multinational Enterprise (MNE) groups. These agreements delineate rights and obligations for various intra-group arrangements of the MNE, including the exchange of goods, services, loans, and intellectual property.

Before delving into the significance of ICAs in the broader tax andlegal landscape, it is essential to dive into the roots and obtain an understanding of their fundamental nature. Unlike Transfer Pricing (TP) policies, which establish pricing guidelines for inter-company transactions, ICAs provide the contractual framework for implementing these policies. While TP policies ensure transactions take place at arm’s length, ICAs serve as the practical application of these principles, guiding the parties involved in adhering to tax and regulatory requirements and mitigating potential disputes.

With this understanding, let’s explore the critical checkpoints for drafting ICAs and delve into best practices for their effective implementation within MNE groups.

A. Important Checkpoints while Drafting/Reviewing an ICA

ICAs are not standardized and vary based on the underlying inter-company transactions, roles and responsibilities, and various key terms. Providing general guidance on how ICAs are to be drafted may not encompass all exhaustive scenarios. Therefore, it is prudent to highlight key checkpoints or questions that must be addressed during the drafting of any ICA. With this context in mind, the key checkpoints are encapsulated as follows:

Context:

Do the ICAs accurately delineate the actual inter-company transaction that is taking place?

Transparency:

Do the ICAs clearly outline the relevant background and roles & responsibilities of the parties to the agreement?

Timelines:

Is the timing of drafting and execution of ICAs, including tenure and termination clauses, appropriately documented?

Specificity:

Is the description and scope of ICAs taken care of as it is the heart of the ICA?

Benchmarks:

Are pricing policies aligned with TP policies, benchmarking studies, comparability analyses, and litigation experience?

Credit Evaluation:

Is the credit period evaluated to avoid the risk of deemed loans and imputed interest from delayed payments

Intangible Rights:

In alignment with the roles & responsibilities of the parties involved, are the relative risks properly documented and highlighted?

Critical Conditions:

Given recent experiences like the COVID-19 pandemic, is including a force majeure clause in ICAs essential for unforeseen circumstances?

TP adjustments:

Is there adequate coverage for true-up/true-down adjustments to ensure adherence to TP policy during periodic reviews or prior to financial closures?

B. Best Practices for ICAs

01 Clarity

ICAs must be clear, unambiguous, legally binding, and duly executed (signed and dated) by the authorized signatories of the parties to the agreement.

02 Review

ICAs should undergo regular review and updates to stay aligned with changing business practices, pricing policies, roles, responsibilities, and tax regulations.

03 Support

ICAs must align with MNEs’ transfer pricing policies and corporate tax strategies, covering indirect taxes (VAT/GST, customs) and key considerations like WHT, GAAR, POEM, and PE risks.

04 Controls

MNEs should ensure dedicated personnel manage ICAs, conduct regular audits for TP compliance, prevent adjustments without ICAs, and review ICAs before submission to tax authorities.

05 Expertise

Drafting ICAs requires expertise in the TP life cycle—planning, monitoring, compliance, and controversy management—along with tax, regulatory insights, and thorough legal review. Proper care is needed in choosing the preparer.

06 Explanation

The professional drafting ICAs needs thorough checklists, while MNE teams must clearly explain business objectives, roles, and key considerations.

07 Simplicity

Simplicity is key when drafting ICAs. Clear, straightforward agreements help avoid complexity and misinterpretation

08 3ʳᵈ Party ICA:

MNEs should ensure dedicated personnel manage ICAs, conduct regular audits for TP compliance, prevent adjustments without ICAs, and review ICAs before submission to tax authorities.

C. Key Take Aways for ICAs

• Alignment Importance:

Firstly, if the ICAs are not in place or not aligned to support the TP policies and tax positions of the MNEs, tax authorities may be compelled to draw their own conclusions regarding the nature and key terms of the inter-company transactions.

• Strategic Tool:

Further, ICAs should not be perceived merely as supporting TP documentation to be filed with tax authorities upon request but must be considered integral tax strategic tool to guide and monitor intra-company transactions and to support and defend the TP and tax positions of the MNEs.

• Evidential Value:

ICAs are vital evidence for determining transfer pricing, corporate tax, withholding tax, permanent establishment, place of effective management, GAAR, indirect taxes (VAT/GST, customs), statutory audit documentation, and cross-border regulations.

• Risk Awareness:

It is crucial to bear in mind that there have been numerous instances of tax rulings/decisions across major TP jurisdictions wherein defects in the ICAs have led to significant adverse TP consequences for taxpayers.

• Proactive Approach:

In conclusion, well-documented ICAs are essential for TP monitoring, compliance, and controversy management, helping MNEs avoid fines, save time during audits, and mitigate reputational damage.

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GST Update on Renting Residential and Commercial property

Home > GST Update on Renting Residential and Commercial property

Is Rental Income from Property Taxed under GST?

According to the provisions of the Act, a transaction is subject to GST only if it involves a supply. The Renting of Property, whether Residential or Commercial, falls under the definition of supply of services as per Schedule II of the Central Goods and Services Tax Act,2017. Consequently, Rental income from property will be taxable under GST, and the tax implications vary for renting residential and commercial properties, as detailed below:

GST Implications for Renting Residential Property:

The following are the GST provisions applicable to rental income from residential properties:

The rental income from residential properties used as residential dwelling was unconditionally exempt from GST until July 17, 2022.
From July 18, 2022, rental income from residential properties used as residential dwellings is exempt only when rented to an unregistered tenant; if rented to a registered tenant, it is taxable.
The registered tenant need to pay tax under the Reverse Charge Mechanism (RCM) as per Sr. No. 5AA.

Nature of Property	Landlord	Tenant	Taxability under GST
Residential Property	Any person (Registered or Unregistered)	Unregistered person	Exempt
Residential Property	Any person (Registered or Unregistered)	Registered person (Sole proprietor – For personal residential purpose)*	Exempt
Residential Property	Any person (Registered or Unregistered)	Registered person (Sole proprietor – For Business purpose)**	Taxable (under RCM)
Residential Property	Any person (Registered or Unregistered)	Other Registered persons/Business entities	Taxable (under RCM)

*Residential Property Used for Residence Without Any Commercial Intention:

If a registered person rents a residential property to registered sole proprietor solely for personaldwelling, such rental Income is exempt from GST.

** Residential Property Used for Residence With Commercial Intention:

If a registered person rents a residential property for the purpose of providingaccommodation for employees, the provision differs. Although the Residential property isused for residential purposes, the underlying intention is commercial. Therefore, the rentalincome is taxable at 18%.

Note: The above provisions are applicable regardless of whether the landlord is registeredor unregistered.

Can ITC be claimed for tax paid on renting Commercial property?

Input tax credit would be available on renting of Commercial Property where it has been used forin course or furtherance of business of registered person.
In case where the Registered person provides residential property for residential purposes to its employees, few people may take stand that ITC can be claimed as the taxpayer and their employees are distinct persons and it cannot be set for personal consumption hence ITC is not restricted under Section17(5).However, it is litigative as Department met a different stand.

GST Implications for Renting Commercial Property:

If any commercial property is rented out by a registered person, the rent is taxable @18% under forward charge. This applies to all types of commercial properties, including office spaces, shops, warehouses, and industrial buildings.

Amendment:

During 54th GST council meeting it was proposed renting of any commercial property by an unregistered person to registered to tax under RCM
Notification No. 09/2024-Central Tax (Rate) amends the provision regarding the renting of commercial property by an unregistered person to a registered person, specifying that GST shall be applied under the Reverse Charge Mechanism (RCM).
This Amendment will take effect from the 10thOctober 2024.

Nature of Property	Landlord	Tenant	Taxability under GST
Commercial Property	Registered person	Registered person	Taxable (under FCM)
Commercial Property	Registered person	Unregistered person	Taxable (under FCM)
Commercial Property	Unregistered person	Unregistered person	Not Taxable
Commercial Property	Unregistered person	Registered person	Taxable (under RCM) W.e.f. 10th October 2024

Can ITC be claimed for tax paid on renting Commercial property?

Input tax credit would be available on renting of Commercial Property where it has been used forin course or furtherance of business of registered person.

SBC Remarks

There is an increase in the scope of RCM from recent proposal . The main aim is to tax all registered persons on all kind of property rentals, whether Residential or Commercial.
The cashflows of the Registered persons who takes rent of Commercial Property will get impacted as the RCM need to be paid in Cash.
The nature of property is not a relevant factor to decide the ITC availability but on how the property is used by the recipient of service is relevant factor to decide the Credit eligibility.

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Condonation of delay in filing return of income

Home > Condonation of delay in filing return of income

Summary:

This Circular addresses the condonation of delays in filing income tax returns claiming refunds and carry forward of losses under Section 119(2)(b) of the Income-tax Act, 1961 (IT Act).

The Circular supersedes all earlier guidelines issued by the Central Board of Direct Taxes (CBDT) for handling such applications.

It lays out comprehensive guidelines on the procedure to be followed by tax authorities and specifies monetary thresholds for approving or rejecting such applications. There are various instances wherein a condonation application is the only option to file a tax return wherein the original due date was missed and additionally, there are claims of relief, losses or refunds which would be available only post filing tax return in time.

Section 119(2)(b) provides for application to CBDT for claiming refund and returns claiming carry forward of loss and setoff thereof.

Condonation of Delay – Limits & Timeline

A. Circular 11/2024 issued now has revised the limits for making an application for delay in filing return leading to claim of refund or claim of carry-forward of losses.

Authority for acceptance/rejection	Revised Claim Limit	Earlier Limit
Principal Commissioners/Commissioners (Pr.CsIT/CsIT)	Up to INR 1 Crore	Up to INR 50 Lakhs
Chief Commissioners (CCsIT)	Exceeds INR 1 Crore but less than INR 3 Crores	Exceeds INR 50 lakhs but less than INR 2 Crores
Principal Chief Commissioners (Pr. CCsIT)	Above INR 3 Crores	Exceeds INR 2 Crores but less than INR 3 Crores*
Commissioner (CIT), CPC Bengaluru	Delay in verifying return via ITR-V	NA

These limits apply for each assessment year and establish clear demarcations for the acceptance or rejection of refund claims. * More than INR 3 Crores, application to CBDT was required. However, as per the revised guidelines now such application shall lie before Pr.CCsIT

B. Time Limit for filing Condonation Applications:

Condonation applications for refunds or loss carry forward claims must be filed within five years from the end of the relevant assessment year. This five-year time limit applies to applications filed on or after October 1, 2024.

C. Time Limit for disposal of Condonation Applications:

All authorities must aim to dispose of applications within six months of receipt, as far as possible.

D. Conditions for Condonation:

As per Section 139(9A) of the IT Act, if a return is filed pursuant to an order under Section 119(2)(b), the provisions of this section shall apply. While considering cases under Section 119(2)(b), tax authorities must ensure:
a) The taxpayer was prevented by reasonable cause from filing within the due date.
b) The case involves genuine hardship, and appropriate inquiries can be made by the Assessing Officer.

Claim of refund related:

A. Refund arising from a Court Order:

Refund claims arising from a court order will exclude the period during which proceedings were pending, provided the application is filed within six months of the order or the end of the financial year, whichever is later.

B. Supplementary or additional refund claims after assessment:

Supplementary refund claims (additional refund claim after completion of assessment) can be admitted if the following additional conditions are complied with:

a) Income is not assessable in another’s hands.
b) No interest will be paid on belated claims.
c) Refunds arise due to excess tax deducted/collected at source or excess payment of advance or self assessment tax.

Administrative clarifications:

A, Impact on Pending Applications:

This Circular applies to all condonation applications pending as of October 1, 2024, ensuring consistency in handling previously submitted applications.

B. Powers of the Board:

The CBDT retains the authority to intervene in case of any grievances arising from the actions or decisions of the authorities listed in thresholds. The Board may issue directions to ensure proper implementation of the Circular.

Our comments:

SBC Comments:

This Circular provides clarity on the following for the condonation applications:- Authority levels- Time limits and – Conditions for condonation of delay.

This will be ensuring a more streamlined and transparent process for taxpayers seeking relief in filing delayed returns. SBC India recommends all stakeholders review this Circular to understand its implications on pending and future refund claims.

Additionally, now condonation seeking relief in delay in verification of ITR has been categorically specified. The taxpayers prevented from completing such verification due to reasonable cause or cases of genuine hardship can make application to CIT (CPC).

It is interesting to note that the CBDT intends to entertain only grievances, while tax authorities are now empowered to handle any kind of condonation application under Section 119(2)(b) of the Income Tax Act. The threshold limits have been increased, allowing tax authorities to deal with such applications, in contrast to earlier instances where claims exceeding INR 3 crores were directly handled by the Board.

Where can we assist you?

• Filing of Condonation Application: Assistance in preparing and submitting condonation applications with proper documentation.
• Representation: Provide representation before tax authorities to ensure approval of condonation requests.
• Post Condonation Filings: Support in filing or rectifying returns once condonation is granted.
• Refund Follow-up: Help in tracking and ensuring timely processing of refund claims and adjustments.

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Supreme Court Landmark Ruling on Safari Retreats Case – Our Preliminary Analysis

Home > Supreme Court Landmark Ruling on Safari Retreats Case – Our Preliminary Analysis

The eagerly anticipated judgment in the Safari Retreats Private Limited case case has finally been handed down by the Supreme Court of India. This landmark ruling has significant implications for the real estate sector and the GST framework.

Background:

The Revenue Department filed a Special Leave Petition (SLP) challenging the Orissa High Court’s judgment. The High Court had read down Section 17(5)(d) of the Central Goods and Services Tax Act (CGST Act) and allowed input tax credit on materials and services used for constructing shopping malls intended for commercial leasing.

Key Highlights from the SC Ruling on GST ITC for Construction of Immovable Property:

• Constitutional Validity Upheld: The Court has upheld the constitutional validity of clauses (c) and (d) of Section 17(5) of the Central Goods and Services Tax Act, 2017, rejecting the challenges posed against them.
• Clarification on Plant and Machinery: The Court has clarified that the term “plant or machinery” used in Section 17(5)(d) cannot be interpreted identically to the definition provided in the explanation to the same section.
• Buildings as Plants: The Court has ruled that whether a mall, warehouse, or building (excluding hotels and cinema theatres) qualifies as a plant for GST input tax credit purposes depends on the specific business of the registered person and the building’s role in that business.
• Leasing and Renting: If a building is constructed for services such as renting or leasing (as per Schedule II of the CGST Act), it could potentially be treated as a plant for GST ITC purposes.
• Functionality Test: The Court has emphasized the need to apply a functionality test in each case to determine whether a building qualifies as a plant.

Next Steps:

• Remand for Reconsideration: Cases where High Courts had read down provisions related to GST ITC for construction will be remanded for reconsideration in light of the Supreme Court’s new interpretation.
• Case-by-Case Assessment: Other cases will be decided based on their specific factual matrices, considering the guidelines laid down by the Court.

Far-Reaching Implications:

This decision is expected to have a profound impact on the real estate industry and the GST landscape. It provides much-needed clarity on the eligibility of input tax credits for construction activities and will likely influence future tax planning and compliance efforts.

*The complete judgment copy is awaited.

SBC

AP Integrated Clean Energy Policy 4.0

Introduction

Operating Period and Policy Scope

Migration of Projects from Previous Policies

Eligibility for Clean Energy Projects

Land Facilitation, Power Evacuation, and Allotment

Resource Allocation

Statutory Clearances

Renewable Energy Certificate (REC)

Single Window Clearance

Project Timelines

Policy Implementation

Where can SBC help

Our Incentives & Refunds team will assist you in

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RELATED POSTS

SBC_GST Annual Returns for the FY 23-24

Late Fees:

SBC Assistance in filing GSTR 9 and GSTR 9C:

Why accurate and timely filling is necessary?

Checklist for filing GSTR 9 and GSTR 9C:

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RELATED POSTS

SBC Guide for GST Amnesty Scheme (Section 128A)

CGST ACT, 2017

1. INTRODUCTION

2. WHAT IS COVERED UNDER THIS AMNESTY SCHEME?

3. WHAT IS NOT COVERED IN THE SCHEME?

4. ADVANTAGES OF THE SCHEME

5. IS THE SCHEME APPLICABLE AT ALL STAGES OF LITIGATION?

AMENSTY RULES

GSTN Advisory for Taxpayers: Waiver Scheme Under Section 128A

Forms availability:

Immediate Action for Taxpayers:

FORM GST DRC-03:

GST Amnesty Scheme

CLARIFICATIONS AND FAQS

Clarification on Section 16(5) or (6):

a. Deduction of Non-Payable Amounts:

b. No Rectification Required for Reinstated ITC:

c. Deductions Limited to Section 16(4) Violations:

FAQs:

Clarifications & Applicability of Amnesty Scheme:-

Where can SBC help:

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RELATED POSTS

Rate Changes and Clarifications as per 54th GST Council Meeting

Introduction

What is covered Further:

Changes in GST Rates on Certain Items:

Extension of Exemption list

• Metering Services:

• Research and development:

• Affiliation Services:

INSERTIONS

1. Metal scrap

1.1 RCM:

1.2 TDS:

2. Immovable Property:

OTHER CLARIFICATIONS

• GST rate on Roof Mounted Package Unit (RMPU) Air Conditioning Machines

for Railways:

• GST on the Directorate General of Civil Aviation (DGCA) approved flying

training courses conducted by Flying Training Organizations approved by

the DGCA:

• Ancillary services Related to GTA :

• Regularizing the payment of GST for services rendered by film distributors:

• Applicability of GST on the service of affiliation provided by universities to

colleges:

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RELATED POSTS

Digitization of Customs Bonded Warehouse Procedures

Background –

1. Introduction to the Warehouse Module on ICEGATE

Key Functions Introduced:

2. Warehouse Licensing Procedure

2.1. Online Application Process

2.2. Jurisdiction and Port Code

2.3. Warehouse Licensing Module