ITC Can Be Claimed Under Marginal Scheme On Rent, Advertisement expenses, commission, Professional expenses: AAR

The Karnataka Authority of Advance Ruling (AAR) has held that the input tax credit (ITC) under the marginal scheme on expenses like rent, advertisement expenses, commission, professional expenses, and other like expenses is subject to sections 16 to 21 and rules 36-45 of the CGST Act and Rules 2017.The two-member bench of M.P. Ravi Prasad and Kiran Reddy T. has observed that ITC can be claimed on capital goods under the marginal scheme, subject to sections 16 to 21 and rules 36-45 of the CGST...

Tax Cases Weekly Round-Up: 30 October To 5 November 2022

Supreme CourtIndustrial Townships Are "Local Areas" For Entry Tax Levy By States Though They Are Excluded From Municipalities : Supreme Court Case Title: OCL India Limited vs State of Orissa Citation: 2022 LiveLaw (SC) 911 The Supreme Court upheld States' power to impose entry tax from Industrial Township/Areas. The bench of CJI UU Lalit, Justices S. Ravindra Bhat and J B Pardiwala held that industrial townships are 'local area' for the purposes of entry tax. Delhi High...

Expenses Towards Advertisement, Brokerage And Commission, Incurred By A Real Estate Developer; Deductible As Revenue Expenditure: Delhi High Court

The Delhi High Court has ruled that advertisement expenses, Software Developing Charges, and expenses towards brokerage and commission, incurred by a real estate developer, are in the nature of general administration cost and selling cost, as classified by the Guidance Note issued by the ICAI. Thus, they qualify for deduction as revenue expenditure. The bench of Justices Manmohan and Manmeet Pritam Singh Arora observed that the dispute involving the year of deduction, which was sought to...

No Mala Fide Intent To Evade Service Tax: CESTAT Quashes Penalty

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has deleted the penalty and held that the service provider receiving a commission in lieu of providing "business auxiliary services" from Adarsh Credit Cooperative Society did not have a mala fide intention to evade service tax.The bench of Rachna Gupta (Judicial Member) has held that the entire amount of commission was shown by the appellants in their income tax returns and the tax liability under direct taxes...

Industrial Townships Are "Local Areas" For Entry Tax Levy By States Though They Are Excluded From Municipalities : Supreme Court

The Supreme Court upheld States' power to impose entry tax from Industrial Township/Areas.The bench of CJI UU Lalit, Justices S. Ravindra Bhat and J B Pardiwala held that industrial townships are 'local area' for the purposes of entry tax. The court dismissed appeals against filed against (1) Orissa High Court Judgment by OCL India Ltd. and Steel Authority of India Ltd. and (2) the Allahabad High Court judgment by Hindustan Aluminium Company Ltd.'Local Area'Entry 52 of List II of of the...

Sale Of Scrap By Trader, Not Engaged In Any Manufacturing Activity, Will Also Attract TCS: ITAT

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that sale of scrap by a trader, who is not engaged in any manufacturing activity from which the scrap arose, will also attract TCS. The Bench of Judicial Member Suchitra Kamble, after referring to the Circular No. 18, dated 21.05.2012, issued by the CBDT, held that for the applicability of TCS on sale of scrap, there is no requirement that the goods from which the scrap arose should be produced or manufactured by...

Services Of Business Promotion/Support And Marketing Service Do Not Qualify As Intermediary Service: CESTAT

The Chandigarh Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the services of business promotion, support, and marketing do not qualify as intermediary services.The bench of S. S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) has observed that the place of provision of business promotion service shall be the location of the recipient of service, which is outside India, and such services shall qualify as exports of service and hence not subject...

Use Of Word 'Mediation' In Arbitration Clause Is Immaterial, Clause Does Not Lose Its Character : Delhi High Court

The Delhi High Court has held that nomenclature of an arbitration clause is immaterial when all the elements are present. The bench of Justice Prateek Jalan held that an arbitration clause would not loose its character merely because the word 'mediation' has been used as its nomenclature. It held that, in construction of a contractual clause, the Court should be guided by the substance of the agreement between the parties rather than by the nomenclature employed. The Court expounded on...

Delhi High Court Condones Delay In Payments Under VSV Due To Covid and Death Of Managing Director

The Delhi High Court, while exercising its extraordinary writ jurisdiction under Article 226 of the Constitution of India, has condoned the delay in payments under Direct Tax Vivad Se Vishwas (VSV) due to COVID and the death of the managing director of the company.The division bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora has observed that the power to condone the delay with regard to delay in payment is not vested with the departmental authorities, yet this Court, under its...

Parking Services Of Cycle, Scooters Doesn't Attract Service Tax: Punjab & Haryana High Court

The Punjab and Haryana High Court has held that the service tax is not payable on the parking services for cycles and scooters.The single bench of Justice Vinod S. Bhardwaj has directed the department to release the security amount along with the interest within four weeks.The petitioner/assessee had taken vacant land on lease at Bus Stand, Karnal, for parking of cycles/scooters during the period of April 10, 2011, to March 31, 2012, as well as for the 2012–2013 financial year.The petitioner was...

Currency can't be confiscated if it is not Proceeds Of Goods Cleared Clandestinely: CESTAT

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the seized currency during the course of an investigation cannot be confiscated without proving that the said seized currency is the sale proceeds of excisable goods cleared clandestinely.The two-member bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has ordered that the confiscation of the seized currency of Rs. 17,50,000 is not sustainable; the cash of Rs. 17,50,000 is to be...

Applicant Withheld Information Regarding Commencement Of Investigation: AAAR Declares AAR's Ruling Void

The Gujarat Appellate Authority of Advance Ruling (AAAR) declared the AAR ruling void as the appellant had withheld information regarding the commencement of an investigation against them on the issue raised by them in the application for an advance ruling.The two-member bench of Vivek Ranjan and Milind Torawane has observed that the term "proceeding" is a very comprehensive term and, generally speaking, means a prescribed course of action for enforcing a legal right. It necessarily comprises...