Tax Policy - July 2019

Tax Policy - July 2019

Tax Policy - July 2019

GREETINGS FROM US INDIA STRATEGIC PARTNERSHIP FORUM!
We present you our third edition of the Tax policy newsletter sharing insights of the Forum’s key areas of engagement in the tax policy space. Our areas of engagement now spread across direct and indirect taxes coverings all aspects of international taxation, GST and Custom laws. We look forward to your ideas, suggestions and views.  Happy reading and hope you find this an interesting read. For any queries, please contact Ms Shweta Kathuria at skathuria@usinfoundation.org.

A- ADVOCACY AND GOVERNMENT ENGAGEMENT BY USISPF

  1. GST councils granted an exemption from furnishing of Annual Return / Reconciliation Statement for suppliers of OIDAR
    A notification issued by the CBIC clarifies that furnishing of Annual Return / Reconciliation Statement in form GSTR 9 and GSTR 9C is not required to be filed for suppliers of Online Information Database Access and Retrieval Services (“OIDAR services”). USISPF had represented a detailed note and put in this request with the central and state officials, we are glad this has come through well in time given that there is already an extension in the  GST return filing date to August 31st 2019.

  2. Updates on 35th GST council meeting
    The first meeting of the GST council under the chairmanship of new FM was held on June 21st 2019. Some of the relevant key decisions taken are as under. Some of USISPF’s key asks which we had submitted to the policy and legislative sub-committee members are considered and we will continue to engage with the GST council on these matters.
    • Approval of E-invoicing scheme under GST
    • The discussion on GST rate on solar projects gets further passed on to the fitment committee under GST council
    • Due date for filing first GST return and audit extended to August 31st 2019
    • GST rates on electric vehicles to be rationalised 

B- NEWS ALERTS / UPDATES

  1. Tax amendments in Union Budget 2019
    India's Union Budget 2019 was presented on July 5, 2019 by the Hon’ble Finance Minister Nirmala Sitharaman. The expectations were high as this was Prime Minister Modi’s first budget of his 2nd term.
    • Increase in the revenue threshold for reduced corporate Tax rates of 25%.
    • Relief in levy of Securities Transaction Tax (STT) by restricting it only to the difference between settlement and strike price in case of exercise of options.
    • Levy of dividend distribution tax listed companies
    • Customs - Basic customs duty (BCD) rates revised as below
    BCD rates reduced/exempted for
    • Inputs and raw materials in the nature of select chemicals, textile, steel, other base metals, etc.
    • Capital goods used in manufacturing electronic items, such as populated PCBA, parts of mobile phones, and set top boxes
    • Select parts of electric vehicles
    • Select military equipment and their parts imported by the Ministry of Defence or armed forces
    • Raw material, parts and accessories used in manufacturing artificial kidneys
    • Increase in Road and Infrastructure Cess on petrol and diesel
    BCD rates increased for
    • Various chemical, plastic and rubber products, optical fibre cables, electronic goods, automobile parts, completely built units of vehicles, and steel products
    • Precious metals
    • Capital goods used in manufacturing electronic goods, such as cathode tray tubes, CD/DVD, CRT monitors, and plasma display panels.
    • Specified electronic goods , such as switches , sockets, plugs, connecters, and relays
  2. Genuine exporters to receive their IGST refunds without delay
    The CBIC has recently instructed its Customs and GST formations to verify the correct availment of input tax credit (ITC) by few exporters who are perceived as “risky” on the basis of predefined risk parameters. 

  3. India approves ratification of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting
    The Government has approved ratification  of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS). Convention will modify India's treaties in order to curb revenue loss through treaty abuse and base erosion and profit shifting strategies by ensuring that profits are taxed where substantive economic activities generating the profits are carried out and where value is created.

  4. Government of India issues guidelines for compounding of offences under Direct Tax Laws, 2019
    The Central Board of Direct Taxes has issued revised 32-page guideline for ‘compounding of offences under direct tax laws, 2019’ which will be executed under the Income Tax Act, 1961.  

C- AN UPDATE ON MEMBER ENGAGEMENTS 

  1. Past engagements
    • USISPF hosted an interactive roundtable with Hon’ble Finance Secretary on Union Budget 2019
    • Forum hosted a webinar on first time GST returns and audit for companies in India
  2. Upcoming engagements
    • Forum to Participate In The 11th All India Customs Consultative Group Meeting | July 25
    • Roundtable discussion on profit attribution rules by CBDT committe - TBD