M W A & Associates

04/10/2024

*Supreme Court Ruling: GST Input Tax Credit on Construction Costs Can Be Claimed If Building is Necessary for Renting Services*

📢 The bench of Justice Abhay Oka and Justice Sanjay Karol held, "If the construction of a building was essential for carrying out the activity of supplying services such as renting or giving on lease, the building could be held as a plant. Functionality test will have to be applied to decide whether the building is a plant."

*🔍 Facts:*
*Case Title:* Chief Commissioner of Central Goods and Service Tax and Ors v. M/S Safari Retreats Private Limited and Ors
*Case Number:* C.A. No. 2948/2023

*Issue:* Whether Input Tax Credit (ITC) can be claimed for construction costs of a building intended for rental services, falling under the "plant" exception to Section 17(5)(d) of the CGST Act.

*Proceedings:* The petitioner, Safari Retreats Pvt. Ltd., constructed a shopping mall to rent out and sought to claim ITC on GST paid for construction materials. The tax authorities denied this claim under Section 17(5)(d) of the CGST Act, which restricts ITC for goods used in constructing immovable property, except for plant or machinery.

*⚖️ Judgement:*
The Supreme Court ruled that buildings constructed for supplying services, such as renting or leasing, can qualify as a "plant" under Section 17(5)(d) of the CGST Act. The court emphasized that the functionality test must be applied to determine whether a building is essential for the business activity and thus qualifies for ITC. The matter was remitted to the High Court to assess if the construction in this case falls within the "plant" exemption for availing ITC.

📜 This ruling provides clarity on the application of ITC in the construction of buildings intended for rental services, allowing businesses to claim credits on necessary construction costs.

01/08/2024

Vivad Se Vishwas Scheme 2024: A Comprehensive Overview -

The Vivad Se Vishwas Scheme 2024, introduced through the Finance (No. 2) Bill 2024, is a significant initiative by the Indian government aimed at resolving tax disputes and reducing litigation under the Income-tax Act, 1961. The scheme offers taxpayers an opportunity to settle their disputes with tax authorities under favorable terms, thus simplifying and expediting the resolution process.

Objectives and Purpose

The primary goal of the Vivad Se Vishwas Scheme 2024 is to minimize the backlog of pending tax disputes and offer immediate relief to taxpayers. By allowing taxpayers to settle disputes by paying a portion of the contested tax, interest, and penalties, the scheme aims to enhance tax administration efficiency and foster a more compliant tax environment.

Key Definitions and Provisions

1. Appellant: Refers to any person whose appeal, writ petition, or special leave petition is pending before an appellate forum as of the specified date, July 22, 2024. This includes appeals filed by the individual, the income-tax authority, or both.

2. Objections Before the Dispute Resolution Panel (DRP): Covers individuals who have filed objections under section 144C of the Income-tax Act, 1961, where the DRP has not issued any direction by the specified date. It also includes cases where the DRP has issued directions, but the assessment remains incomplete.

3. Pending Revision Applications: Encompasses individuals with pending applications for revision under section 264 of the Income-tax Act, 1961, as of the specified date.

4. Declarant: A person who submits a declaration under section 91 of the scheme.

5. Designated Authority: An officer, at least at the rank of a Commissioner of Income-tax, appointed for the scheme's implementation.

6. Disputed Tax: The tax amount, including surcharge and cess, subject to dispute, varies depending on the status of legal proceedings as of July 22, 2024. This could pertain to pending appeals, DRP objections, incomplete assessments post-DRP directions, or pending revision applications.

7. Disputed Interest and Penalty: Relates to the interest and penalty amounts under dispute, typically not charged or leviable if not for the disputed tax. The scheme also addresses disputed fees and income related to the contested tax.

8. Tax Arrear: This encompasses the total amount of disputed tax, interest, penalty, and fees.

Procedure for Availing the Scheme

1. Filing of Declaration and Payment: The declarant must submit a declaration in the prescribed form and manner to the designated authority. Within 15 days of receiving the declaration, the designated authority will determine the payable amount and issue a certificate specifying the tax arrear and the amount due.

2. Payment and Confirmation: The declarant is required to pay the determined amount within 15 days of receiving the certificate. Proof of payment must be submitted to the designated authority, who will then confirm that the payment has been made.

3. Effect on Appeals: Upon submission of the declaration, pending appeals or writ petitions concerning the disputed tax, interest, penalty, or fee will be deemed withdrawn from the issuance date of the certificate by the designated authority.

4. Withdrawal of Court Cases: If the declarant has filed any appeals or writ petitions before higher judicial forums, they must withdraw these cases upon receiving the certificate and provide proof of such withdrawal along with the payment intimation.

The Vivad Se Vishwas Scheme 2024 provides a streamlined process for resolving tax disputes, offering a path to legal certainty and reducing the burden of prolonged litigation. By encouraging taxpayers to settle disputes amicably, the scheme aims to create a more efficient and transparent tax administration system.

25/05/2023

14/08/2022

14/08/2022

Happy Independence Day 2022..!!

27/04/2022

Requirement:

Accountant with 1-5 years of experience in handling accounts of the organisation.

Candidates having experience of working with e-commerce seller with Flipkart, Amazon etc. will be preferred.
Salary: 15000-30000
Skills required: Tally, Excel, Reconciliation of various e-commerce portal reports.
Location: New Delhi

Email cv at [email protected]

25/03/2022

Residents of 75 years or more with pension & interest income from the same bank need not file ITR if he submits Form 12BBA to a bank that deducts TDS u/s 194P.

25/03/2022

The last date for filing of belated ITR filing for FY 2020-21 is 31st March 2022. According to the Income Tax Rules under Section 234F, the penalty for belated ITR could be up to Rs 5,000.

25/03/2022

Delhi High Court entertains writ petition preferred by Federation of Chartered Accountants Association against hardships faced by tax practitioners and Assessees due to delay in providing SCHEMA utility for e-filing of Income-tax Returns (ITRs) and Tax Audit Reports (TARs); High Court lists the matter on May 23, 2022.

23/03/2022

For assessment years prior to Assessment Year 2021-22, where PF and ESI dues are paid after due date under respective statutes but before due date of filing of return of income under section 139(1), same cannot be disallowed under section 36(1)(va). – [Raj Kumar v. ITD, CPC, Bengaluru – Date of Judgement 28.02.2022 (ITAT Delhi)]

23/03/2022

Much to the disappointment of crypto traders, investors and industry experts, the Central Government has clarified that losses from one type of crypto or virtual digital asset cannot be set off against gains from other crypto assets while calculating Income Tax.


#