JOURNAL DECEMBER 2023

Ahmedabad Chartered Accountant Journal December, 2023 585 GST and VAT - Judgements and Updates Facts: In the present case, a notice was issued to assessee for difference of ITC between GSTR-3B and GSTR-2A. The department passed order levying interest and penalty since the reply submitted by the assessee was not found convincing and satisfactory. The assessee filed writ petition against the demand order and contended that there was no difference GSTR-3B and GSTR-2A, on the basis of which the ITC was claimed. Held: The Hon’ble High Court noted that the invoices for which the assessee claimed input tax credit were reflected in Form GSTR-2A, though with some delay. Therefore, the claim of the assessee for input tax credit which had been denied in impugned order did not appear to be correct. Thus, the Court held that the impugned order was to be quashed and one more opportunity to be granted to the assessee to appear before the Assessing Authority with all relevant documents. [4] Issue: Assessee was not entitled to cross-examine witnesses relied upon by dept. while cancelling registration :HC: Case Laws: Steel India v. STO [2023] 153 taxmann.com 250 (Ker) Facts: The petitioner received a show cause notice issued by GST Authority for cancellation of its registration on ground that it was not conducting business from its declared place of business. It filed reply to the notice stating that business premises were temporarily closed due to unforeseen reasons and would resume business when conditions improved. But the GST Authority cancelled its registration. It filed writ petition against the cancellation order and contended that it had been denied opportunity to cross-examine landlord whose statement had been relied upon the department while cancelling registration as there was violation of principles of natural justice. Held: The Hon’ble High Court noted that the petitioner did not file any document for change of its business place nor supported its claim that it was running business from given address by producing any documentary or oral evidence. The Court further noted that the petitioner was not entitled to crossexamination as enquiry conducted by department was not a trial, but just summary proceedings. Therefore, it was held that there was no infraction of principles of natural justice and action by department was not arbitrary as reasonable opportunity was given to submit reply to notice. However, the petitioner may avail remedy of appeal against cancellation of registration [5] Issue: Demand order passed without considering reply of assessee was liable to be quashed: HC: Case Law: Daksh Enterprise v. CST [2023] 155 taxmann.com 645 (Gujarat). Facts: The petitioner was a partnership firm and a show cause notice/intimation in Form GSTDRC-01 was issued wherein, a demand had been raised against the petitioner for the financial year 2019- 20. It filed detailed reply but the authorities proceeded on an assumption that pursuant to the show cause notice, a response had to be filed on or before 14.2.2022, which the petitioner did not file, and therefore, the order was passed. It filed writ petition against the demand order. Held: The Hon’ble High Court noted that the petitioner was asked to submit his reply on or before 20.02.2022 and the detailed reply was duly filed on 19.02.2022. However it was evident from the perusal of impugned order that it didn’t reflect consideration of the reply so filed and there was a clear violation of principles of natural justice. Therefore, the Court held the impugned order dated was to be quashed and set aside due to non-consideration of the reply. (Sources: Corporate Professionals Today) ❉ ❉ ❉

586 Ahmedabad Chartered Accountant Journal December, 2023 Taxability on Hostel accommodation services provided by the applicant to the students/ office goers. Advance Ruling No. 104/AAR/2023 dated 04.09.2023 in M/s. Vrindavan Ladies Hostel Tamil Nadu Brief Facts: - The applicant is running a ladies residential hostel for college students and working people. - The applicant has submitted copy of application in Form GST ARA – 01 and also submitted a copy of challan evidencing payment of application fees of Rs. 5,000/- each under sub-rule (1) of Rule 104 of CGST Rule 104 of CGST Rule 2017 and SGST Rules 2017. - The Applicant submitted that they are providing best hostel facilities to collegefemale students and also to working women as most of the students and workingpeople travel far and wide from their remote villages. The total charges collected forboarding and lodging per student or per inmate is Rs. 6500/- per month. Theyprovide single room occupation, or double room sharing or dormitory style ofaccommodation and rates vary accordingly. Question: 1. Whether the hostel and residential accommodation extended by the applicant hostel would be eligible for exemption under Entry 12 of Exemption Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017 and under the identical Notification under the TNGST Act, 2017 and also under Entry 13 of Exemption Notification No. 9/2017 – Integrated Tax – Rate dated 28.06.2017 as amended? 2. Whether the applicant hostel being eligible for exemption under SI. No. 12 of Notification No. 12/ 2017 – Central Tax (Rate) dated 28.06.2017 as amended would at all be required to register under the GST enactments by virtue of the exemption notification as afore mentioned and also under the provision of section 23 of the CGST/TNGST Act, 2017? 3. Whether any specific tariff is applicable to hostels under the Tariff Notification, in the event of requirement of registration? 4. Whether, in the event of the hostel accommodation being an exemption activity, the incidental activity of supply of in-house food to the inmates of the hostel would also be exempt being in the nature of a composite exempt supply? 5. Whether the judgement of the division bench of the Hon’ble Karnataka High Court in the case of Taghar Vasudeva Ambrish Vs. Appellant Authority for Advance Ruling, Karnataka reported in Manu/ KA/0327/2022 is applicable to the facts of the applicant? Issues on which advance ruling required: 1. Classification of services/composite services. 2. Applicability of a notification. 3. Whether applicant is required to be registered under the Act. Interpretation of Applicant: - The applicant has license to run the residential hostel for boarding and lodging under Section 5 of the Tamilnadu Hostels and Home for women and children (Regulation Act 2014) [hereinafter referred to as the “Hostel Regulation Act”]. - Section-2 (e) of the Hostels Regulation Act’ defines “Hostel” or “LodgingHouse” to mean ‘a building in which accommodation is provided for womenor CA. Monish S. Shah [email protected]

Ahmedabad Chartered Accountant Journal December, 2023 587 Advance Ruling under GST children or both either with bearding or not.” The term ‘Home for Women & Children” is defined in scetion-2 (d) to mean ‘an institution, by whatever name called, established or maintained or intended to be established or maintained for the reception, care, protection for welfare of women or children or both’ On the other hand, the term Residential hotel” is definedin scction-2 (14) of the Tamilnadu Shops & Establishments Act, 1947 to mean ‘any premises in which business is carried on bonafide for the supplyof dwelling accommodation and meals on payment of a sum of money to atraveler or any member of the public or class of the public’; Thus, the‘hostel’ accommodation which falls within the purview of the ‘Hostels Regulation Act’ cannot be equated with that of a ‘hotel accommodation which falls within the realm of Tamilnadu Shops & Establishments Act,1947 by any stretch of imagination. - Under the erstwhile Service Tax regime, the ‘services by way of renting of residential dwelling for use as residence’ was included in the negative list under clause (m) of Section-66 D of the Finance Act 1994. Similarly, no VAT was leviable for supplying food to inmates, being an incidental activity to the activity of accommodation and relied on the Hon’ble Andhra Pradesh HighCourt decision in the case of Bharatiya Vidya Bhavan’s Residential Public School v. State of Andhra Pradesh. - Under the Exemption Notifications above mentioned, Entry No. 12 of Exemption Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 [similar entry: Entry 13 of Exemption Notification No.9/2017- Integrated Tax Rate dated 28.06.2017] reads follows: Sr. Chapter/Section/ Description Rate No. Heading/Group/ of (%) Condition Service Code Service (Tariff) 1. Heading 9963 or Services by Nil Nil Heading 9972 way of renting of residential dwelling for use as residence Nil - Thus ‘residential accommodation’ falls under the unconditionally exempt category. It is submitted that Entry 12 of Exemption Notification No 12/2017- Central Tax (Ratc) dated 28.06.2017 (and Entry 13 of Exemption Notification N0.9/2017- Integrated Tax Rate dated 28.06.2017) and also the identical Entry in the identical Exemption Notification under TNGSTAct,2017 underwent an amendment in the year 2022 by virtue of Notification 15/2022-Central Tax (Rate) dated 30.12.2022 wherein an Explanation was inserted in Column-3 against Entry 12 which reads asfollows: o “Explanation For the purpose of exemption under this entry this entry shall cover services by way of renting of residential dwelling to a registered person where the registration person is Proprietor of a Proprietorship concern and rents the residential dwelling in his personal capacity for use as his own residence and to such renting is on his own account and not that of the proprietorship concern.” - Thus, the inserted Explanation qualified only occupants/inmates who are registered persons for the purpose of reverse charge and the positionremained the same when inmates were unregistered persons; Thus, in thecase of the Applicant herein, the occupants or the inmates of the residential hostel are cither students or working women are not registered persons under the GST Enactments. Thus, in such an eventthe exemption that is available under Entry 12 of Exemption Notification No. 12/2017-CentralTax (Ratc) dated 28.06.2017 as also under the TNGST Act, 2017 and alsounder Entry 13 of Exemption Notification No.9/2017- Integrated Tax-Rate dated 28.06.2017 is applicable on all fours to the Applicant herein, irrespective of the threshold limit. - The term “residential dwelling” is not defined under the CGST Act, 2017 /TNGST Act, 2017. Para-4.1 3.1 of the Taxation of services aneducation guide dated 20.06.2012’ which was issued by the Central Board of Indirect Taxes & Customs under the erstwhile Service Tax Regime has defined the term “residential dwelling” as: ‘“The phrase residential dwelling has not been defined in the Act. It is

588 Ahmedabad Chartered Accountant Journal December, 2023 therefore 1o be interpreted in normal trade parlance as per which it is any residential accommodation, but does not include hotel, motel, Inn, guest house, camp site, house, lodge, house boat orlike places meant for temporary stay.’; To understand the term ‘dwelling house’ they rely on the decision of the House of Lords in appeal in the case of Uratemp Ventures Limited v. Collins (AP), [2001] UKHL 43 dated 11/10/2001. - The applicant relies on the decision of the Hon’ble Karnataka High Court in the case of Taghar Vasudeva Ambrish -vs- Appellate Authority for Advanced Ruling, Karnataka, wherein the Hon’ble High Court has held the identical question of law in favour of “hostels” and has held that the exemption available in Entry 13 of Exemption Notification No.9/2017- Integrated Tax-Rate dated 28.06.2017 is available to a residential hostel/ residential dwelling meant for students or working people. - The hostels attached to educational institutions are exempt from GST andtheir hostel which essentially caters to students at very nominal charges incontrast to hostels attached to educational institutions, also has to beexempt from the levy of GST and ought to fall outside the scope of levy. - The applicant expends the nominal amount collected from the inmates on their food and clean environment with no profit motive. - The Applicants were offered personal hearing on 26.07.2023, wherein Smt. Aparna Nandakumar, Advocate (Authorized Representative -AR) appeared for the Applicant and reiterated the submissions made in the application She highlighted the difference between hostel and hotel. She stated that: o The definition of ‘hostel’ under Section 2(c) of the Tamil Nadu Hostels andHome for Women and Children (Regulation) Act, 2014 and also definition of ‘home for women and children’ in Scction-2 (d) of the said Act arc available. o The term ‘residential hotel’ is defined in Section 2 (14) of the Tamil NaduShops & Establishments Act, 1947, and by which hostel cannot be equated to hotel. o The duration of stay in hotel is short and it is a temporary accommodationwhereas the duration of stay in a hostel is for a long term. o The hostel is run with a motive to provide safe residence to students and working women/ men and charges collected are nominal; Food given is the same for all occupants and no choice in menu given. o The definition of landlord’ is given under Section 2(c) and definition of‘tenant’ is given under Section 2(n) of Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act, 2017 [TNRRRLT Act, 2017from which it can be gathered that the term ‘tenant’ includes ‘sub-tenant’also. Thus, if the Applicant is a tenant, then the hostel in mates are ‘sub tenants’ and come within the ambit of tenants. o Further, Section 3 of TNRRRLT Act, 2017, specific s bar on some categories of institutions wherein this Act is not applicable; Hostels do not come underthis ‘barred list’ and hence TNRRRLT Act is applicable to hostels also; therefore, the agreement between a hostel owner (he be an owner of thepremises or a tenant himself) and the hostel inmates is a ‘tenancy’ as per TNRRRLT Act, 2017. o The buildings used as hostels are ‘residential buildings’ as per the Zoning Regulations as stated in Rule 33 of the Tamil Nadu Combined Development and Building Rules, 2019 and are specified in Annexure XVIII, whereinunder the Residential Use Zone, Entry No.(vii) is given Working women’shostels, old age homes’ The property tax receipts categorize hostels in ‘residential’ zone only. o The tenants living in these hostels often give the hostel address as their place of residence for procurement, verification or receiving government, bank or other similar official documents. Advance Ruling under GST

Ahmedabad Chartered Accountant Journal December, 2023 589 o In Para 14 of Taghar Vasudeva Ambrish Vs AAAR, Karnataka and Ors, itis held that it is evident that the expression ‘residence’ and ‘dwelling’ have more or less the connotation in common parlance and therefore, no different meaning can be assigned to the expression ‘residential dwelling’ and it cannot be held that the same does not include hostels which areused for residential purposes by students or working women. Findings and Arguments: - The relevant part of the provision of section 7 & 8 and Exemption Entry No 7, 12&14 of the CGST Act 2017, stated as under: - Section 7(1)(a) Supply: All forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business - Section 8(a) Composite Supply: A composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply. Sr. Chapter/Section/Heading/ Description of Service Rate (%) Condition No. Group or Service Code (Tariff) - Entry No. 7: 7 Heading 9963 (Accommodation, Food (i) Supply of “hotel accommodation” having value of 6% and Beverage Services) supply of a unit of accommodation less than or equal to seven thousand five hundred rupees per unit per day or equivalent. (ii) Supply of ‘restaurant Services’….. 2.5% (iii) Supply of goods, being food or any other article 2.5% for human consumption or any drink, by the Indian railways or Indian railways catering and tourism corporation ltd. or the licensees, whether in trains or at paltforms (iv) Supply of ‘outdoor catering…. 2.5% (v) Composite supply of “outdoor catering together 2.5% with renting of premises…. (vi) Accommodation, food and beverage services 9% other than (i) to (v) above - Entry No. 12: 12 Heading 9963 or Heading 9972 Services by way of renting of residential dwelling for Nil Nil uses as residence - Entry No. 14: 14 Heading 9963 Services by a hotel, inn, guest house, club or campsite, Nil Nil by whatever name called, for residential or loading purposes, having declared tariff of a unit of accommodation below one thousand rupees per day or equivalent. - The Applicant’s jurisdictional State Authority had submitted the motive of the Applicant is to run the ladies’ hostel against the CONSIDERATION and they have also admitted that they are receiving some amount for rendering accommodation and food services, which clearly falls under the ambit of definition of SUPPLY as provided in Section 7 of theTNGST /CGST-Act. The applicant registered under various acts to run its business. The act ofthe applicant covers under the definition of the term “Business” as per Section 2(17) of the TNGST /CGST Act which includes any trade, commerce, Advance Ruling under GST

590 Ahmedabad Chartered Accountant Journal December, 2023 manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit; The applicant is a service provider whereas they have referred the case lawin respect of TNVAT Act which does not include the services but dealt with only goods. Their services do not fall under SERVICES BY WAY OF RENTING OFRESIDENTIAL DWELLING FOR USE AS RESIDENCE since they are lettingout a single room to various inmates for various time period for a pecuniary benefit.In this type of transactions, they are not entering any rental agreement with the inmates for the transfer of rights of the specified place for a specific period and hence it does not cover the definition of residence which iscontrolled by the Tamil Nadu Rent Regulation Act.The rent received from the renting out or subletting of property is subject toTax Deduction at Source. They are not deducting any TDS under section194 I of the Income Tax Act. Hence, the claim of renting of residential dwelling for the use as residence become failure. - In addition to the above, the State Jurisdictional authority further stated that they are rendering services by way of renting of immovable property with a business motive for pecuniary benefit. These services are classified under Heading 9963 (Accommodation, food and beverage services). The services rendered by the applicant clearly falls under Entry No. 7 (ix) of the Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 viz. Accommodation, food and beverage services other than (i), (ii), (ifi), (iv), (v), (vi), (vii) and (viii) above and the rate of tax to the services are the settled one as per rate notification. the State Jurisdictional Authority also opined that since the definition of hotel accommodation was broadly expanded in the Notification No. 20/2019 Central Tax (Rate) dated 30.09.2019, wherein all the accommodation services including hostel accommodations services were brought in to the tax net @ 12% and hence rate of tax for the hostel accommodation services may be taxable @ 12% with effect from 30.09.2019 onwards. - The Applicant claims that the immovable property being used for providingaccommodation is a residential dwelling which is used as residence by the in mates and thereby the rent received on such accommodation qualifies for GST exemption in terms of Entry No. 12 of Notification 12/2017 Central Tax (Rate), dated 28.06.2017.The first question raised by the Applicant is whether the hostel accommodation extended by the Applicant hostel would be eligible for exemption Notification No.12/2017 CT (Rate) dated 28.06.2017 under Entry 12 of Exemption Notification and under the identical Notification under the TNGST Act, 2017, and also under Entry 13 of Exemption Notification No.09/2017-IT (Rate) dated 28.06.2017, as amended. We observe that the term ‘residential dwelling’ has not been defined either under CGST Act or under Notification No. 12/2017. However, underthe erstwhile service tax law, in paragraph 4.13.1 of the “Taxation of Services: An Education Guide dated 20.06.2012, issued by the CBIC, the expression ‘residential dwelling’ has been interpreted in terms of the normal trade parlance as per which itis any residential accommodation, but does not include hotel, motel, inn, guest house, camp - site, lodge, house boat, or like places meant for temporary stay. - A house/ residential dwelling for occupation contains one or more rooms with one/part of the room being used as kitchen and the other/part as livingroom etc. But, in the instant case, a single house with two or more rooms where normally a single family resides, is subdivided, and let out to different persons and rent being collected on per bed basis with bundle of other service against a consideration clearly constitutes a business of supplying accommodation services along with ancillary services. Thus, on this count as well, the impugned accommodation thus provided does not qualify as a residential dwelling and thusthe question of using the same as residence does not arise.Further, we find that there are certain regulatory provisions for runninghostels and license/certificates arc to be obtained by a person running hostels inthe state of Tamil Nadu under the respective enactments and the Applicant also submitted copies of such licenses/certificates: Advance Ruling under GST

Ahmedabad Chartered Accountant Journal December, 2023 591 - We find that the above provisions are not mandatory or applicable to a typically residential building or “residence dwelling for use as residence”, whereas it is mandatory for a hostel building. This also shows that hostel building cannot be considered as residential dwelling but a nonresidential complex.7.1.8. From the above, it is evident that the premises rented outby the Applicantcannot be construed as residential dwelling in view of the above facts.The AR has strongly placed reliance on the decision of the Hon’ble HighCourt of Karnataka in the case of Taghar Vasudeva Ambrish Vs. Appellate Authority for Advance Ruling, dated 07.02.2022, wherein it was held that hostel isa residential dwelling and since it is used for residence, the assesses is eligible forexemption. However, it is observed that Special Leave Petition (Civil) No.29980/2022 has been filed against this order before the Hon’ble Supreme Court ofIndia and the case is pending disposal.The Applicant has claimed that the buildings used: as hostels arc‘residential buildings’ as per the Zoning Regulations as stated in Rule 33 of theTamil Nadu Combined Development and Building Rules, 2019. But we find that the eligibility to claim exemption is not solely dependent upon the zoning regulations. - Further, exemption notification should be interpreted strictly. The Hon’ble Apex Court of India has made this abundantly clear in the case of Commissioner of Customs(import), Mumbai Vs. Dilip Kumar & Company [2018 (361) E.L.T. 577(SC)], while answering the question, ‘what is the interpretative rule to be appliedwhile interpreting a tax exemption provision/notification when there is ambiguity as o its applicability with reference to the entitlement of the assessee or the rate oftax to be applied?” held that:”52, To sum up, we answer the reference holding as under:- (1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of revenue” - Further, it was observed by The Hon’ble Supreme Court of India in thecase of Rohit Pulp and Paper Mills 1id. v. Collector of Central Excise 1991taxmann.com 73/ 1990 (47) ELT 191 (SC), that;”in interpreting the scope of any notification, the Court has first to keep in mind the object and purpose of the Notification. All parts of it should be read harmoniously in aid of, and not in derogation of that purpose”.Therefore, in order to implement the notification, it is necessary to keep in mindthe purpose and the objective of notification.As persettled position in taxation laws, especially when exemptions or concessions or benefits are to be availed, the interpretation is to be literally and strictly construed and not in liberal terms. In effect, the place rented out is neither a residential dwelling nor being rented out for use as residence. Hence, it is clear that hostel accommodation is not equivalent to residential accommodation and hence we hold that the services supplied by the Applicant would not be eligible for exemption. - Regarding the second question raised by the Applicant, from the previous discussions, it is clear that the Applicant’s service of providing hostel accommodation is not eligible for exemption under Entry 12 of Exemption Notification No. 12/2017- CT(Rate) dated 28.06.2017 as amended, the Applicant is very much be required to take registration under the GST Enactments, as the arrangement between the Applicant and the hostel occupants is liable to be classified as transaction in the course of furtherance of business and hence, as per Section 7(1)(a) of CGST Act, 2017 read with Entry No. 2(b) of the Second Schedule to the CGST Act, the said transaction constitutes “supply”. Thus, the Applicant is a supplier of services and therefor, in terms of Section 22 of the GST Acts, which states that:”Every supplier of service shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees.” Therefore, we hold that the Applicant is required to get themselves registered in thestate of Tamil Nadu, if their aggregate turnover in a financial year exceeds twenty lakh rupees. Advance Ruling under GST

592 Ahmedabad Chartered Accountant Journal December, 2023 - Regarding the third question raised by the Applicant, which pertains to the tariff heading and the rate of taxability of the supply of service, relevant entries in Notification No. 11/2017, Central Tax (Rate), dated 28.06.2017, as amended vide Notification No. 20/2019 — Central Tax (Rate) dated 30.09.2019. It is observed that hotels arc meant for a temporary stay (25 days) and have lot offacilities and staff, but hostels arc used for a longer period and have basic facilitieswith minimal staff required by the inmates to stay at a reasonable rate. Therefore,hostel services cannot be equated to a hotel accommodation and hotel GST rates cannot be applied to a hostel. Therefore, we held that supply of hostel accommodation services (Tariff heading 9963) is taxable @ 9% CGST + 9% SGST under Sl. No. 7(vi) of the above Notification (Sl. No. 7 (ix) as per original notification). - Regarding the fourth question raised by the Applicant, which is in the eventof the hostel accommodation being an exempt activity, whether the incidental activity of supply of in-house food to the inmates of the hostel would also be exempt being in the nature of a composite exempt supply. Firstly, the service ofproviding hostel accommodation is not an exempt activity as discussed in the previous paras. It is seen from the submissions of the Applicant, that along withthe provision of accommodation services, they are also providing food and certainother services to the inmates of the hostel for consolidated charges. Now it is pertinent to see the definition of ‘Composite Supply’ whichgiven under Section 2(30) of the GST Act. As per Section 8 of the CGST Act, 2017, for a Composite supply, the tax rateon the principal supply will be treated as the tax rate on the given composite supply. We hold that since the Applicant provides a number of services in a composite manner, the hostel accommodation services provided by the Applicant,being the principal supply, which is taxable @18%, will be tax rate for the composite supply provided by them. - Regarding the fifth question raised by the Applicant, no ruling could be issued as the question put forth by the Applicant does not fall under the scope of Section 97(2) of the GST Act. - Ruling: o For Question No. 1: The services by way of providing hostel accommodation supplied by the Applicant arc not eligible for exemption under Entry 12 of Exemption Notification No. 12/2017 CT (Rate) dated 28.06.2017 and under the identical Notification under the TNGST Act, 2017, and also under Entry 13 of Exemption Notification No. 09/ 2017-IT(Rate] dated 28.06.2017, as amended. o For Question No. 2: The Applicant is required to get themselves registered in thestate of Tamil Nadu, if their aggregate turnover in a financial year exceeds twenty lakh rupees. o For Question No. The supply of services by way of providing hostel accommodation falls under Tariff heading 9963 and is taxable @ 9% CGST + 9%SGST under Si.No. 7(vi) of the Notification No. 11/2017, Central Tax (Rate, dated 28.06.2017, as amended vide Notification No. 20/2019 — Central Tax (Rate) dated30.09.2019. o For Question No. 4: The activity of supply of inhouse food to the inmates of the hostel amounts to providing services in a composite manner and the hostel accommodation services provided by the Applicant, being the principal supply, which is taxable @18%, is the tax rate for the composite supply provided by them. o For Question No. 5: No ruling is issued, as the question put forth by the applicant does not fall under the scope of Section 97(2) of the GST Act. Comment: The hostel services thus provided are taxable in nature and no benefit of the exemption notification is allowed in such cases. This AAR will apply fairly and squarely to all hostels which are providing services other then being educational institutes. Working women hostels, Students Hostels and such other places are now burdened with GST and the value offered by such dwelling places will be expensive to the extent of GST being charged. ❉ ❉ ❉ Advance Ruling under GST

Ahmedabad Chartered Accountant Journal December, 2023 593 MCA UPDATES: 1) Commencement of section 5 of the Companies Amendment Act,2020: With effect from 30.10.2023, provisions of section 5 of the Companies Amendment Act, 2020 shall come into force. Section No. Effect of change Sub-section Section 5 states that in section 23 (3) and (4) of the principal Act, after sub-section after (2) and before the Explanation, the sub-section following sub-sections shall be (2) of inserted, namely:” Section 23. (3) Such class of public companies [Inserted] may issue such class of securities for the purposes of listing on permitted stock exchanges in permissible foreign jurisdictions or such other jurisdictions, as may be prescribed. (4) The Central Government may, by notification, exempt any class or classes of public companies referred to in subsection (3) from any of the provisions of this Chapter, Chapter IV, section 89, section 90 or section 127 and a copyof every such notification shall, as soon as may be after it is issued, be laidbefore both Houses of Parliament.” [F. No. 1/3/2020-CL.I dated 30.10.2023] 2) Limited Liability Partnership (Significant Beneficial Owners) Rules, 2023: These rules aim to regulate and identify significant beneficial owners in Limited Liability Partnerships CA. Naveen Mandovara [email protected] Update and such individual to make a declaration in Form No. LLP BEN-I. These Rules will be effective from 09.11.2023 and shall be applicable to all LLPs. Rule Particulars No. 3 [Definitions] Definitions of “Control”, “Partnership Entity”, “Reporting Limited Liability Partnership” and “Significant Beneficial Owner” have been defined. 4 Duty of the reporting limited liability partnership: - Individual who is a Significant Beneficial Ownershall file a declaration in Form No. LLP BEN-I. - Reporting LLP shall give notice seeking information in Form No. LLP BEN-4, to its partners (Other then Individual) holding not less than 10% contribution/ voting rights/right to receive distributable profits in a F.Y. 5 Declaration of significant beneficial ownership: - Every individual who is a significant beneficial owner in a reporting shall file declaration in Form No. LLP BEN-1 to the reporting LLP within ninety days from such commencement i.e. 09.11.2023. - Every individual, who subsequently becomes a significant beneficial owner, or where his significant beneficial ownership undergoes any change shall file a declaration in Form No. LLP BEN1 to the reporting LLP, within thirty days

594 Ahmedabad Chartered Accountant Journal December, 2023 of acquiring such significant beneficial ownership or any change therein. 6 Return of significant beneficial owners in contribution: Upon receipt of declaration under rule 5, the reporting LLP shall file a return in Form No. LLP BEN-2 with the Registrar in respect of such declaration, within a period of thirty days from the date of receipt of such declaration by it, along with the fees as prescribed in the Limited Liability Partnership Rules, 2009. 7 Register of significant beneficial owners: - The LLP shall maintain a register of significant beneficial owners in Form No. LLP BEN-3. - Form No. LLP BEN-3 shall be open for inspection during business hours, at such reasonable time of not less thantwo hours, on every working day as may be decided on payment of fees notexceeding fifty rupees for each inspection. 8 Notice seeking information about significant beneficial owners: A limited liability partnership shall give notice in Form No. LLP BEN-4 seeking information in accordance with sub-section (5) of section 90 as applied to the limited liability partnership by the notification. 9 Application to the Tribunal: The reporting LLP shall apply to the Tribunal: i. where any person fails to give the information required by the notice in Form No. LLP BEN-4, within the time specified therein; or ii. where the information given is not satisfactory, under sub-section (7) of section 90 of Companies Act,2013, for order directing that the contribution in question be subject to such restrictions as Tribunal deems fit, includinga) restrictions on the transfer of interest attached to the contribution in question; b) suspension of the right to receive profits or any other distribution in relation to the contribution inquestion; c) suspension of voting rights in relation to the contribution in question; d) any other restriction on all or any of the rights attached with the contribution in question. 10 Non-applicability: These rules shall not apply to the extent the contribution of the reporting LLP is held by.- a) the Central Government, State Government or any local authority; (i) a reporting limited liability partnership, ora body corporate, or (ii) an entity, (iii) controlled by the Central Government or by one or more State Government, or partly by the Central Government and partly by one or more State Government; b) an investment vehicle registered with and regulated by the Securities and Exchange Board of India, such asmutual funds, alternative investment funds (AIF), Real Estate Investment Trusts (REITs), Infrastructure Investment Trust (ln VITs). c) an investment vehicle regulated by the Reserve Bank of India, or the Insurance Regulatory and Development Authority of India, or the Pension Fund Regulatory and Development Authority. [F. No.17/30/2018-CL-Vdated 09.11.2023] Corporate Law Update Continued to page 604

Ahmedabad Chartered Accountant Journal December, 2023 595 Launch of RERA 2.0 portal & Voluntary Compliance Scheme 2023 In a significant stride towards enhancing transparency and efficiency in the real estate sector, the state of Gujarat proudly announces the launch of the Real Estate Regulatory Authority (RERA) 2.0 portal. This technologically advanced platform is designed to revolutionize the way real estate transactions are monitored and regulated, offering a seamless and integrated experience for both developers and consumers. The RERA 2.0 portal was launched on 24/ 11/2023 by the Gujarat RERA Authority. The RERA 2.0 portal in Gujarat is a pioneering initiative, revolutionizing real estate regulation by incorporating advanced features to streamline processes and enhance transparency. The portal encompasses several key features, focusing on professional registration, promoter approval, project registration, tech-savvy QPR compliances, grievance redressal mechanisms, conciliation forums, source information functionality, and a citizen-centric approach. 1. Professional Registration: Architects, Engineers, Chartered Accountants, Lawyers, and Structural Engineers can register on the portal, enhancing accountability and professionalism in the real estate sector. 2. Promoter Approval: Promoters are required to register first, gaining approval from the Gujarat RERA authority, ensuring compliance with regulatory standards. 3. Project Registration: Once approved, promoters register their projects on the portal, contributing to a comprehensive database of real estate developments in the state. 4. Site Verification by Architects: Architects are mandated to visit project sites, capturing the latest photos, and uploading them through an official app, fostering transparency in project documentation. 5. Tech-Savvy QPR Compliances: The Quality, Performance, and Reliability (QPR) compliances are seamlessly managed through digital processes, eliminating the need for physical forms issued by professionals. 6. Grievance Redressal Mechanism: A robust grievance redressal mechanism is in place, covering various types of complaints such as Authority Complaints, Adjudicating Complaints, Suo Motu Complaints, Conciliation Applications, Review Applications, Support Requests, and Defect Liability issues. 7. Conciliation Forum: A dedicated Conciliation Forum facilitates mediated discussions between allottees and promoters, offering an alternative dispute resolution avenue. 8. Source Information Functionality: Citizens can report non-registered real estate projects to the Authority through the Source Information functionality. This feature generates a unique ticket (SI no.) and allows tracking the investigation status. 9. Citizen-Centric Mechanism: A comprehensive citizen-centric mechanism bridges the gap between the Authority, Promoters, and Citizens, leveraging technology for effective and standardized processes. CA. Manan Doshi [email protected] GujRERA Corner

596 Ahmedabad Chartered Accountant Journal December, 2023 GujRERA Corner Major Components of Citizen Centricity: Inventory-wise View: Enables stakeholders to view project details comprehensively. Citizen Survey: Gathers feedback from citizens to improve regulatory processes. Chat Bot: Provides real-time assistance and information to users. Noted Buyer: Recognizes and acknowledges responsible and engaged buyers. Seminar Registration: Allows citizens to register for educational seminars. Attribute on Map: Offers a geographical overview of real estate projects. Geo Tagging of Photos and Mobile App: Enhances location-based information and project tracking. Support Requests: Facilitates citizens in seeking assistance and support. The Gujarat RERA authority has vide order 82 dated 23/10/203 launched a Voluntary Compliance Scheme 2023 which is extended to 30/12/2023. The brief about the scheme is as follows: Gujarat RERA Voluntary Compliance Scheme 2023: 1. Applicability: The scheme is applicable to promoters who have failed to submit QPR/QE (Quarterly Progress Report) on due dates. 2. Scope: The scheme covers suomoto complaints initiated by the Gujarat RERA authority before the issuance of the scheme. 3. Challan Generation: Challans of late processing fees will be generated in the RERA 2.0 portal for all the defaulters. 4. Payment Deadline: Promoters are required to pay the challan amount by the end of the Voluntary Compliance Scheme (VCS) duration. 5. QPR/QE Submission: After payment, the Gujarat RERA Authority will open the QPR/QE submission, which must be filed within 7 days. 6. Non-Refundable Late Fees: If promoters fail to submit QPR/QE within the stipulated 7 days, the late processing fees shall not be refundable. This voluntary compliance scheme seems to provide an opportunity for promoters to rectify their non-compliance with QPR/QE submission by paying late processing fees within a specified timeframe. The provision of non-refundable late fees serves as an incentive for prompt compliance with the scheme. The late processing fees under Voluntary Compliance Scheme shall be as follows: No. Project Cost Processing Fee 1 Up 25 Cr Rs. 20000/- 2 Form 25 Cr to 50 Cr Rs. 40000/- 3 Form 50 Cr to 100 Cr Rs. 60000/- 4 More than 100 Cr Rs. 80000/- ❉ ❉ ❉

Ahmedabad Chartered Accountant Journal December, 2023 597 Summary: The Indian economy grew 7.6 per cent during the JulySeptember quarter of the current financial year(Q2FY24), beating the earlier projections by RBI. The rise in GDP was supported by manufacturing, mining and construction sector. The stock markets also continued their positive rally on account of robust economic performance and FPIs returning as buyers as US treasury yields fell. 10 new main board IPOs came in November amid retail investors over subscribing most of the IPOs. Key M&A and PE Deals include of Fortis selling Malar Hospital to MGM Healthcare for Rs 128 Crores and Incred Financial Services Ltd. raising Rs 500 Crores in Series D Funding round. Economic Update: - Real gross domestic product (GDP) grew year-onyear (y-o-y) by 7.6% in Q2:2023-24, much higher than the RBI Monetary Policy Committee’s (MPC) earlier projections. The rise in GDP growth was supported by government spending and robust performance in manufacturing, mining, and construction sectors. CA. Karan Vora [email protected] - The manufacturing sector, which in the past decade has accounted for 17% of the economy, expanded 13.9% year-on-year in the September quarter, compared to a contraction of 3.8% in the year-ago period. This was mainly on the back of substantial easing in price pressures and strengthening demand from clients. Construction industry did second best with growth at 6.5%. - The growth in capital formation, an indicator of investment, picked up pace to 11% year-on-year from 8% in the previous three months. - Despite challenges like surging inflation and multiple interest rate hikes by the RBI, India retains its position as the fastest-growing major economy globally. - MPC at its meeting on December 8, decided to keep the policy repo rate unchanged at 6.50% and decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth. - CPI headline inflation fell by about 2 percentage points since the last meeting of the MPC to 4.9 per cent in October 2023 on sharp correction in prices of certain vegetables, deflation in fuel and a broadbased moderation in core inflation (CPI inflation excluding food and fuel). Israel -GazaCrisis: - Israel – Gaza war continued amid growing international pressure for a humanitarian cease fire. - The 193-member UN General Assembly overwhelmingly adopted a resolution expressing “grave concern over the catastrophic humanitarian situation in the Gaza Strip and the suffering of the Palestinian civilian population,” and said that Palestinians and Israelis must be protected in accordance with international humanitarian law.

598 Ahmedabad Chartered Accountant Journal December, 2023 Capital Markets - It put forward two key demands, including “an immediate humanitarian ceasefire” and “the immediate and unconditional release of all hostages, as well as ensuring humanitarian access”. - Earlier, On October 7, 2023, Palestinian armed groups in Gaza launched thousands of rockets toward Israel and breached through the perimeter fence of Gaza at multiple locations, entering into Israeli towns and killing and capturing Israeli forces and civilians. The Israeli military declared “a state of war alert,” and began striking targets in the Gaza Strip, including residential buildings and health care facilities. Since then, thousands of people have been killed and more than one million have been displaced, as parts of Gaza have been reduced to rubble. Secondary Market Update: - The Indian stock markets continued their rally with Nifty 50 and Sensex gaining 5.52% at 20,133.15 and 4.87% at 66,988.44 respectively. - The surge comes on the back of positive market sentiment driven by better-than-expected GDP growth in the September quarter, FPIs returning as buyers in November, a decline in US treasury yields and a fall in oil prices. Moreover, upgrades by various brokerages on FY24 India GDP growth has also aided the gains. - This performance is noteworthy because it approaches the highest gains recorded following the February 2021 series, when the small-cap increased by 12.8% and the midcap soared by 12.7%. - The auto sector gained due to increased sales numbers witnessed because of festival cheer, while the premium valuation restricted the upside potential. - FPIs bought Indian equities worth Rs. 9,001 Crore after selling shares worth Rs. 24,548 Crore in October and Rs. 14,767 Crore in September, data with the depositories showed. - The rally was also fueled by the dovish stance of US Feds which is leading to decline in US yields and should likely result into capital inflows into Indian economy. Equity Markets Oct- 23 Nov - 23 % Change BSE Sensex 63,874.93 66,988.44 4.87% Nifty 50 19,079.60 20,133.15 5.52% BSE 500 26,605.19 28,442.43 6.91% BSE Healthcare 27,271.79 30,374.52 11.38% BSE IT 31,060.45 33,227.34 6.98% BSE FMCG 18,518.38 19,157.37 3.45% BSE Metal 22,238.64 24,239.95 9.00% Primary Market Update: There were 10 main board IPO in November, 2023 of Flair Writing Industries Limited, Fedbank Financial Services Limited, Tata Technologies Limited, Gandhar Oil Refinery (India) Limited,

Ahmedabad Chartered Accountant Journal December, 2023 599 Indian Renewable Energy Development Agency Limited, ASK Automotive Limited, Protean eGov Technologies Limited, ESAF Small Finance Bank Limited, Honasa Consumer Limited, Cello World Limited, and Blue Jet Healthcare Limited against 06 IPOs in October, 2023. There were 05 SME IPOs inNovember,2023 as against 04SME IPOs in October, 2023. IPO market is extremely bullish as retail investors are over subscribing most IPOs due to positive sentiments and perceived reasonableness of valuations of IPOs compared to existing higher valuation multiples of listed peers. Tata Technologies Limited: About the Company Founded in 1994, Tata Technologies is a global engineering services company offering product development and digital solutions, including turnkey solutions, to OEMs and their Tier-I suppliers. The company is primarily focused on the automotive industry. Funds Utilization The IPO will help to achieve the benefits of listing the Equity Shares on the Stock Exchanges; and Carry out the Offer for Sale of up to 95,708,984 Equity Shares by the Selling Shareholders. IPO Performance Tata Technologies IPO was entirely an offer for sale (OFS) of 6.09 Crore equity shares by the promoter and investors. Promoter Tata Motors will offload 4.62 Crore equity shares worth Rs. 2,313.75 Crore in the OFS, while investors Alpha TC Holdings Pte. Ltd will sell 97.17 lakh shares and Tata Capital Growth Fund I will offload 48.58 lakh shares in the Tata Technologies IPO. The company raised Rs 791 Crore from anchor investors ahead of its IPO. The IPO listed at a premium of 140% and then rose nearly three-fold the IPO price. Tata Group’s first initial public offering (IPO) in almost 20 years was subscribed over 69 times by the final day of bidding. It jumped 180% over the IPO price to Rs 1,400 within minutes. Funds Mobilization by Corporates (Rs. In Crore) Particulars Sept- 23 Oct-23 I. Equity Issues 14,658 15,829 a. IPOs (i+ii) 9,284 5,158 i. Main Board 8,758 4,478 ii. SME Platform 526 680 b. FPOs 0 0 c. Equity Rights Issues 280 130 d. QIPs/IPPs 3,102 5,609 e. Preferential Allotments 1,991 4,932 II. Debt Issues 52,394 36,231 a. Debt Public Issues 2,318 2,972 b. Private Placement of Debt 50,076 33,259 Total Funds Mobilized (I+II) 67,052 52,060 Mergers and Acquisitions (M&A) and Private Equity (PE) key deals: M&A: Fortis Healthcare sells Malar Hospital and adjacent land to MGM Healthcare for Rs. 128 Crores. Transaction: - Fortis Healthcare Ltd has announced that it has agreed to sell Fortis Malar Hospital (known as Malar Hospital) in Adyar, Chennai, and adjacent land parcels to MGM Healthcare Pvt. Ltd for a sale consideration of about Rs. 128 Crores. - The transaction comprises the following parts: o The divestment of the business operations pertaining to Fortis Malar Hospital residing in the listed subsidiary of the company, Fortis Malar Hospitals Ltd, in which Fortis Healthcare owns a 62.7% equity stake will be sold for Rs 45.50 Crores. o There is an adjacent land parcel and another vacant land, which will be sold for around Rs 35 Crore. o Further, the deal includes the OPD and radiology business operations of Fortis Malar Hospital (including the land and building where the hospital is situated) and the land parcel adjacent. o These assets, part of Fortis Health Management (Fortis Healthcare’s subsidiary), will be sold for over Rs 47.59 Crore. Capital Markets

600 Ahmedabad Chartered Accountant Journal December, 2023 o The transaction will be an all-cash deal and is expected to be consummated by the end of January 2024. About Fortis Healthcare Limited: - Incorporated in 1996, Fortis Healthcare’s first facility became operational in Mohali, Punjab in 2001. - Currently, Fortis operates 27 healthcare facilities (including JVs and O&M facilities). The Hospital’s network comprises approximately 4,300 operational beds and 400 diagnostics centres. - On February 15, 2018, the shareholding of the erstwhile promoters (Singh Brothers), reduced to less than 1% after the Supreme Court intervention. - IHH became the new promoter, investing around Rs 4,000 Crore in the company against fresh issuance of around 31.1% stake. About MGM Healthcare: - Two Decades old and reputed, MGM Healthcare’s flagship Mahatma Gandhi Medical College and Research Institute and Sri Balaji Vidyapeeth (Deemed to be University). - MGM Hospital is a state-of-the-art, super-specialty hospital in the heart of Chennai city in India, with 400 beds with 100 ICU beds. Rationale: - The company added that the Fortis Malar hospital divestment is part of its portfolio rationalization strategy to ramp up presence in select geographic clusters. Fortis Healthcare had in July divested business operations in its Vadapalani facility in Chennai. - Fortis said that this was their second underperforming asset divestment in the last 2 quarters. - The Malar Hospital has been facing certain legacy issues. Over the past few years, with continuous efforts, several of these issues have been resolved. However, some of the legacy aspects continue to persist which have given rise to certain challenges for the Company and have constrained further investments into the facility. The matter has accentuated the need for the Company to divest itself business as a viable and prudent option for its stakeholders. - MGM Healthcare said that they have been investing in both Greenfield and existing facilities as a part of their long term growth and nation-wide expansion plans. With this acquisition MGM Healthcare now has Approx. 800 Beds in Chennai. - Fortis Malar Hospital saw a slight decline in revenues to Rs. 85.95 Crore during FY23, against Rs. 86.18 Crore in FY22. The hospital continued to make losses for FY23, the loss stood at Rs. 7.01Crore and loss for FY22 was Rs 8.26 Crores. While EBITDA (earnings before interest, tax, depreciation, and amortization) saw a 3.51 per cent improvement to Rs. 11.21Crore in FY23 compared to Rs. 10.83 Crore in FY22. - Indian healthcare Industry is witnessing consolidation that can be seen in the recent hospital deals that include Manipal Hospitals acquiring 84% stake in AMRI Hospitals for Rs 2400 Crores, Fortis acquiring Gurugram-based Medeor Hospital for Rs 225 Crore, Temasek Holdings buying a majority stake in Bengaluru-based Manipal Health Enterprises for over $2 billion, Marengo Asia Healthcare acquiring W Pratiksha Hospital, Gurugram. PE:Incred Financial Services Ltd. raises Rs 500 Crores in Series D Funding round Transaction: - InCred Financial Services Ltd (InCred Finance), the lending arm of financial services firm InCred Group, has raised Rs. 500 Crore in its Series D round of funding, becoming the second startup to join the coveted ‘unicorn’ club this year. Capital Markets MGM Healthcare Pvt Ltd. Public Public

Ahmedabad Chartered Accountant Journal December, 2023 601 About Incred Financial Services Limited: - A former Deutsche Bank executive, Singh founded InCred Finance in 2016 as a tech-enabled lending platform. - InCred Group operates in the BFSI space through 3 entities – ‘InCred Finance’ in Lending, ‘InCred Capital’ in Wealth and Asset Management, Investment Banking and Equities, and ‘InCred Money’ in retail bonds and alternative investments. - InCred is a new-age lender offering online and offline loans to consumers, small businesses and for education. It manages a loan book of Rs. 7,500 Croregrowing at a compound annual growth rate of more than 50% over the last three years. - Incred also counts Investcorp, Oaks Asset Management, Moore Capital, Elevar Equity, Paragon Partners, Manipal Group chairman Ranjan Pai and Gaurav Dalmia, the founding chairman of Landmark Holdings (Dalmia Group), among others, as its investors. Rationale: - The latest round values InCred Financial at about Rs. 8,800 Crore ($1.05 Billion). - The company did not identify the investors, but said they include a global private equity (PE) fund, corporate treasuries, family offices and ultra-highnet-worth individuals. - The latest development comes 16 months after the firm completed its merger with American PE giant KKR’s local non-banking finance arm in July last year in an all-stock deal. - InCred Financial Services was formed by the merger of KKR India Financial Services Ltd and the erstwhile InCred Financial. - KKR, along with two other investors, the Teacher Retirement System of Texas and the Abu Dhabi Investment Authority, together hold a little more than a third of stake in the merged entity. - InCred Finance said it plans to use the capital across its core business verticals—consumer loans, student loans and MSME (micro, small and medium enterprises) lending. In September 2023, Crisil stated that as on June 30, the assets under management (AUM) mix of the company consisted of around 44% of personal loans, 18% of student loans, 9% allocated to other financial institutions, and 8% towards secured school financing, accordingly the wholesale lending book has reduced from 42% in March 2021 to around 17% in June, 2023. - Incred is improving overall profitability gradually and reported a net income of Rs 121 Crore supported by rise in share of higher yielding loan portfolio and minimal credit costs during FY2023, RoMA (Return on Managed Assets) for fiscal 2023 improved to 2.2% from 1.1% in fiscal 2022. Acknowledgements: RBI Bulletin (www.bulletin.rbi.org.in), SEBI (www.sebi.gov.in), NSE (www.nseindia.com), BSE (www.bseindia.com) ❉ ❉ ❉ Capital Markets

602 Ahmedabad Chartered Accountant Journal December, 2023 IND-AS 38 - INTANGIBLE ASSETS - ANNUAL REPORT 2022-23 Indian Oil Corporation Limited 2.3.1 Technical know-how/license fee relating to production process and process design are recognized as Intangible Assets and amortised on a straight-line basis over the life of the underlying plant/facility. 2.3.2 Expenditure incurred in research phase is charged to revenue and that in development phase, unless it is of capital nature, is also charged to revenue. 2.3.3 Cost incurred on computer software/licenses purchased/ developed resulting in future economic benefits, other than specific software that are integral part of the related hardware, are capitalized as Intangible Asset and amortised over a period of three years beginning from the month in which such software/licenses are capitalized. However, where such computer software/license is under development or is not yet ready for use, accumulated cost incurred on such items are accounted as “Intangible Assets Under Development” 2.3.4 Right of ways with indefinite useful lives are not amortised but tested for impairment annually at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis. 2.3.5 Intangible Assets acquired separately are measured on initial recognition at cost. The cost of Intangible Assets acquired in a business combination is based on its fair value at the date of acquisition. Following initial recognition, Intangible Assets are carried at cost less any accumulated amortisation and accumulated impairment losses. In case of internally generated intangibles, development cost is recognized as an asset when all the recognition criteria are met. However, all other internally generated intangibles including research cost are not capitalized and the related expenditure is recognized in the statement of profit and loss in the period in which the expenditure is incurred. 2.3.6 The useful lives of Intangible Assets are assessed as either finite or indefinite. Intangible Assets with finite lives are amortised over the useful life on straight line basis and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on Intangible Assets with finite lives is recognized in the Statement of Profit and Loss unless such expenditure forms part of carrying value of another asset. 2.3.7 On transition to Ind AS, the Group has elected to continue with the carrying value of all of its Intangible Assets recognized as at April 1, 2015 measured as per the previous GAAP and use that carrying value as the deemed cost of the Intangible Assets. 2.3.8 Amortisation is charged pro-rata on monthly basis on assets, from/upto the month of CA. Pamil H. Shah [email protected] From Published Accounts

Ahmedabad Chartered Accountant Journal December, 2023 603 capitalization/sale, disposal/ or classified to Asset held for disposal. NTPC Limited 3.1 Initial recognition and measurement An intangible asset is recognized if and only if it is probable that the expected future economic benefits that are attributable to the asset will flow to the Company and the cost of the asset can be measured reliably. Intangible assets that are acquired by the Company, which have finite useful lives, are recognized at cost. Subsequent measurement is done at cost less accumulated amortization and accumulated impairment losses. Cost comprises purchase price including import duties, non -refundable taxes after deducting trade discounts and rebates and any directly attributable expenses of preparing the asset for its intended use. Expenditure on development activities is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Company intends to & has sufficient resources to complete development and to use or sell the asset. Expenditure incurred which are eligible for capitalizations under intangible assets are carried as intangible assets under development till they are ready for their intended use. 3.2 Subsequent costs Subsequent expenditure is recognized as an increase in the carrying amount of the asset when it is probable that future economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item can be measured reliably. 3.3 De-recognition An intangible asset is derecognized when no future economic benefits are expected from their use or upon their disposal. Gain or loss on derecognition of an intangible asset is determined as the difference between the net disposal From Published Accounts proceeds, if any, and the carrying amount of intangible assets and are recognized in the statement of profit and loss. 3.4 Amortization Cost of software recognized as intangible asset, is amortized on straight-line method over a period of legal right to use or 3 years, whichever is less. Other intangible assets are amortized on straightline method over the period of legal right to use or life of the related plant, whichever is less. The amortization period and the amortization method of intangible assets with a finite useful life is reviewed at each financial year end and adjusted prospectively, wherever required Infosys Limited Intangible assets are stated at cost less accumulated amortization and impairment. Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, from the date that they are available for use. The estimated useful life of an identifiable intangible asset is based on a number of factors, including the effects of obsolescence, demand, competition, and other economic factors (such as the stability of the industry, and known technological advances), and the level of maintenance expenditures required to obtain the expected future cash flows from the asset. Amortization methods and useful lives are reviewed periodically, including at each financial year end. Research costs are expensed as incurred. Software product development costs are expensed as incurred unless technical and commercial feasibility of the project is demonstrated, the future economic benefits are probable, the Company has an intention and ability to complete and use or sell the software, and the costs can be measured reliably. The costs which can be capitalized include the cost of material, direct labour, and overhead costs that are directly attributable to prepare the asset for its intended use. Mahindra & Mahindra Limited Intangible assets are initially recognised at cost. Intangible assets with definite useful lives are amortised on a straight line basis so as to reflect the pattern in which the asset’s economic benefits are consumed.

604 Ahmedabad Chartered Accountant Journal December, 2023 Intangible assets under development The Company expenses costs incurred during research phase to profit or loss in the year in which they are incurred. Development phase expenses are initially recognised as intangible assets under development until the development phase is complete, upon which the amount is capitalised as intangible asset. Intangible assets i) Technical Knowhow The expenditure incurred is amortised over the estimated period of benefit, commencing with the year of purchase of the technology. ii) Development Expenditure The expenditure incurred on technical services and other project/product related expenses are From Published Accounts amortised over the estimated period of benefit, not exceeding 60 months. iii) Brand license fee The expenditure incurred is amortised over the period of relevant licence fee or the estimated period of benefit, whichever is lower. iv) Software Expenditure The expenditure incurred is amortised over three financial years equally commencing from the year in which the expenditure is incurred. v) Others The expenditure incurred is amortised over the estimated period of benefit. The amortisation period for intangible assets with finite useful lives are reviewed annually and changes in expected useful lives are treated as changes in estimates. ❉ ❉ ❉ Continued from page 594 Corporate Law Update SEBI UPDATES: 1) Simplification and streamlining of Offer Documents of Mutual Fund Schemes: In order to enhance ease of preparation of the Scheme Information Document (SID) by mutual funds and increase its readability for investors, SEBI revamped the format of SID. The revised format is mentioned at “Annexure A” of this Circular. The revised format for SID, Statement of Additional Information (SAI) and Key Information Memorandum (KIM) shall be adopted as under: a. Updated format for SID/KIM/SAI to be implemented w.e.f. April 01, 2024. b. Draft SIDs to be filed with SEBI on or before March 31, 2024 or SIDs already filed with SEBI (final observations yet to be issued) or SIDs for which the final observations have already been received from SEBI (if launched on or before March 31, 2024), can use the old format of SID, provided that the SIDs are updated as per timeline mentioned at (c) below. c. For Existing SIDs – by April 30, 2024 with data as on March31, 2024. For detailed text, please refer at https:// www.sebi.gov.in/legal/circulars/nov-2023/ simplification-and-streamlining-of-offer-documentsof-mutual-fund-schemes_78665.html [Circular No.: SEBI/HO/IMD/IMD-RAC-2/P/CIR/ 2023/000175 dated 01.11.2023] 2) Simplified norms for processing investor’s service requests by RTAs and norms for furnishing PAN, KYC details and Nomination: To mitigate unintended challenges on account of freezing of folios, the SEBI has amended the para 19.2 of the Master Circular dated May 17, 2023for RTAs and made the following changes: 2.1. Reference to the term ‘freezing/ frozen’ has been deleted. 2.2. Referral of folios by the RTA/listed company to the administering authority under the Benami Transactions (Prohibitions) Act, 1988 and/or Prevention of Money Laundering Act, 2002, has been done away with. [Circular No.: SEBI/HO/MIRSD/MIRSD-PoD-1/P/ CIR/2023/181 dated 17.11.2023] ❉ ❉ ❉

Ahmedabad Chartered Accountant Journal December, 2023 605 CA. Kunal A. Shah [email protected] From the Government CA. Ashwin H. Shah [email protected] - If a taxpayer has already filed an appeal and wants it to be covered by the benefit of the amnesty scheme would need to make differential payments to comply with Notification No. 53/2023. The payment should be made against the demand order using the “Payment towards demand” facility available on the GST portal. The navigation step for making this payment is provided: Login >> Services >> Ledgers >> Payment towards Demand. - Taxpayers who have previously filed an appeal but it was rejected as time barred in APL-02 by the Appellate authority, then the taxpayer would be able to refile the appeal. However, in case, the taxpayers face any issue while re-filing APL-01, a ticket shall be raised on the Grievance redressal portal: https://self service.gstsystem.in. The taxpayer shall select the Category “Amnesty Scheme” and the subcategory ”Amnesty scheme- Issue in appeal filing” while raising a ticket. - Furthermore, if the Appellate authority has issued a rejection order in APL-04 due to the appeal application being time-barred, then the taxpayer has to approach the respective Appellate authority office well in advance to comply with the dates in the said notification. The Appellate authority after checking the eligibility of the taxpayer for the amnesty scheme will forward the case to GSTN through the State Nodal officer. - Also, it is important to note that for the APL 04 issued cases no direct representations will be entertained by GSTN or through the Grievance redressal portal. APL 04-issued cases have to be compulsorily forwarded through the State Nodal officer. GOODS AND SERVICE TAX 1) Advisory for the procedures and provisions related to the amnesty for taxpayers who missed the appeal filing deadline for the orders passed on or before March 31, 2023 - Amnesty for Taxpayers: The GST Council, in its 52nd meeting, recommended granting amnesty to taxpayers who could not file an appeal under section 107 of the CGST (Central Goods and Services Tax) Act, 2017, against the demand order under section 73 or 74 of the CGST Act, 2017, passed on or before March 31, 2023, or whose appeal against the said order was rejected due to not being filed within the specified time frame in sub-section (1) of section 107. - In compliance with the above GST Council recommendation, the government has issued Notification No. 53/2023 on November 2, 2023. - Taxpayers can now file an appeal in FORM GST APL-01 on the GST portal on or before January 31, 2024, for the order passed by the proper officer on or before March 31, 2023. It is further advised that the taxpayers should make payments for entertaining the appeal by the Appellate officer as per the provisions of Notification No. 53/2023. The GST Portal allows taxpayers to choose the mode of payment (electronic Credit/Cash ledger), and it is the responsibility of the taxpayer to select the appropriate ledgers and make the correct payments. Further, the office of the Appellate Authority shall check the correctness of the payment before entertaining the appeal and any appeal filed without proper payment may be dealt with as per the legal provisions. Continued to page 608

606 Ahmedabad Chartered Accountant Journal December, 2023 Digital Personal Data Protection Act, 2023 Impact of the New Legislation on Individuals and Organizations The Digital Personal Data Protection Act, 2023 (DPDPA) was passed by the Parliament in August 2023. India now has its own legislation to govern the use of digital personal data in the digital spectrum. It lays down a framework for processing of personal data in digital form. The Act aims to empower individuals (defined as ‘Data Principals’ in the Act) whose personal data are processed by various organizations (defined as ‘Data Fiduciaries’ and ‘Significant Data Fiduciaries’ under the Act) for multiple commercial or other purposes (except for personal purpose of the individual). It lays the onus on the data fiduciaries and data processors to ensure the provisions of the Act are complied with in order to preserve data privacy. There are also provisions for penalties in case of breach or non-compliance with the Act, which can act as deterrent for rogue players and keep data misuse in check. Impact of DPDPA Let us now take a look at how DPDP Act affects data fiduciaries and data principals. Data Fiduciary: As per Section 2(i), Data Fiduciary means any person who alone or in conjunction with other persons determines the purpose and means of processing of personal data. Further, ‘person’ has been defined to include an individual, a Hindu undivided Family, a Company, a Firm, Association of Persons or Body of Individuals, the State, and every artificial juristic person not covered above (Section 2(s)). Thus, the definition is exhaustive and wide enough to include all and sundry who collect, store or process digital personal data. The impact on data fiduciary is as follows: - Notice to Data Principal: The data fiduciary has to take consent from the data principal which has to be accompanied with or CA. Darshil Surana [email protected] preceded by a Notice. The Notice would explain the personal data being collected and the purpose of collecting the data along with informing the data principal about her rights to withdraw consent and grievance redressal mechanism, both, with the data fiduciary as well as with the Data Protection Board. - Consent of Data Principal: The consent has to be free, specific, informed, unconditional and unambiguous with a clear affirmative action. Every request for consent has to be either in English or any other official language of India, based on the choice of the data principal. - Limiting Data: Data fiduciary will be allowed to take consent for and gather only such data as is relevant for the stated purpose. For e.g., a food delivery app may seek consent for the data principal’s name, address, and contact number. However, it may not ask access to the contact list of the data principal, as it is not relevant to the purpose. In such a case, even if the data principal gives consent to access the Contact List, the consent will be limited to name, address, and contact number only and the data fiduciary would be liable for breach of the Act if contact list data are stored and / or processed. - Limiting processing of data pertaining to minors: Data fiduciaries are prohibited from processing data of minors which may cause detrimental effects on well being of minors. They may also not process data which can lead to tracking or monitoring of children or targeted advertising directed at children. - Data Purging: Data fiduciaries are mandated to delete / purge / erase data of the data principal once the understated purpose is achieved and the data are no longer relevant, or upon receipt of request from data principal withdrawing her consent, whichever is earlier. Data fiduciary is not allowed to store the

Ahmedabad Chartered Accountant Journal December, 2023 607 data perpetually unless mandated by any other law for the time being in force. - Compliance with the Act: It is the responsibility of the data fiduciary to ensure compliance with the Act, even if the data principal fails to comply. It will have to take reasonable measures to ensure compliance. - Data Security: Data fiduciary will have to implement cyber security measures to ensure data protection at all times. Data Principal: Section 2(j) defines Data Principal as the individual to whom the personal data relates and where such individual is— i. a child, includes the parents or lawful guardian of such a child; ii. a person with disability, includes her lawful guardian, acting on her behalf; ‘Data Principal’ is at the centre of the Act and the Act aims to protect the personal data as well as interests of the Data Principals through various provisions.Moreover, there are special provisions too to protect the rights and interests of minors and their parents as we saw above. The rights of data principal can be summarised as under: - Extends beyond boundaries of India: The Act extends the rights to data principal to prevent data misuse even outside India, if the data was collected for goods / services to be provided in India. - Right to obtain summary of data: Data principal may request summary of data being processed by data fiduciary and the processing activities with respect to such data. - Right to obtain identities of data fiduciary(ies) and data processor(s): Data principal has the right to know the identities of the data fiduciary(ies) and data processor(s) who are utilizing and processing data of the data principal. - Correction / Updating of Data: Data principal may seek correction or updating of data for which she has previously given her consent. - Consent Withdrawal: Data principal, at any time she may think fit, can request for withdrawal of consent and data fiduciary will be bound to purge the relevant personal data within reasonable time. - Sectors affected by the DPDPA: The Act has defined the term data fiduciary very widely and will cover virtually every person within its ambit. There are, however, certain sectors which will have an immediate impact as soon as the Rules are framed: · Banks and Financial Institutions · E-Commerce Companies · Government Portals · Healthcare Companies · Insurance Companies · IT and ITeS Sector · Education Institutions - Pro-active Measures Any person / organization who is likely to fall under the definition of the data fiduciary should take steps to prepare themselves to be compliant with the provisions of the Act. The following pre-emptive actions ought to ensure compliance with the Act: - Data Protection Impact Assessment: Persons engaged in collection, recording, organizing, storing, processing, adapting, retrieving, indexing, sharing, restricting, erasing, destructing etc. of digital personal data should get an impact assessment done. This assessment will tell them the level of exposure they have and how to limit their exposure and take corrective actions. It will also help evaluate whether they need to limit the data collection to the purpose of the data processing and determine which data should be purged. - Consent Mechanisms: Consent and withdrawal mechanisms should be designed in accordance with the Act which will make them compliant. A system needs to be developed to manage and store consents electronically. These consents will form documentary evidence for data fiduciary during litigation. IT Corner

608 Ahmedabad Chartered Accountant Journal December, 2023 - Data Audit: Establish periodic data audits in order to purge data which are no longer being processed. Organizations are collecting immense data today. There is a need to take a good look at these data and trim them to minimum possible extent. - Cyber Security: It is data fiduciary’s responsibility to ensure there are data protection and security measures implemented which can thwart data breach attack. Organizations should implement sufficient cyber security measures based on the risk assessment, size and need. Organizations should also have data back up and disaster recovery policies implemented to avoid data and monetary loss. Summary: The DPDPA is India’s version of General Data Protection Regulation (GDPR). It is aimed to be as effective in substance as well. It’ll empower Indian citizens to protect their digital data against misuse and give full control of their digital personal life. The number of cyberattacks and data thefts are increasing day by day and attackers are also becoming technologically advanced. With the advent of Artificial Intelligence and Augmented Reality / Virtual Reality in the digital world, it is high time such a regulation is implemented. ❉ ❉ ❉ IT Corner Continued from page 605 From the Government - Post receiving the case from the State nodal officer, GSTN will enable the taxpayer to file an appeal against the concerned order. (GST Updates 28/11/2023) INCOME TAX 1) Notification regarding Procedure and Guidelines for submission of Statement of Financial Transaction (SFT) for Mutual Fund Transactions by Registrar & Share Transfer Agent The format, procedure and guidelines for submission for SFT data for mutual fund transactions by registrar and share transfer Agents (RTA) were notified vide Notification no. 4 of 2021 dated 30th April 2021 as mandated by section 285BA of the Income Tax Act and Rule 114E sub – rule 5A. The notification lists various files, file formats, data types for different data fields that need to be reported, and various DQ rules that should be validated by RTA before submission of the data. The S.No. 6 of the existing notification mentions the following “ The statement of financial transactions relating to Financial Year 2020-21 shall be furnished on or before the 31st May 2021. Thereafter, the statement of financial transactions relating to the quarter ending 30th June, 31st September, 31st December and 31st March shall be furnished on or before 25th of July, October, January and April respectively.” This should be read as following: “With effect from 1st April 2023 the statement of financial transactions data will be submitted on half yearly basis instead of existing quarterly basis i.e. data relating to 1st half of the Financial Year ending 30th September and remaining half of the Financial Year ending on 31st March shall be furnished on or before 31st of October and 30th of April respectively.” (For full text refer Notification No 4 of 2021, dated 15/11/2023) ❉ ❉ ❉

Ahmedabad Chartered Accountant Journal December, 2023 609 CA. Mayur H. Modha Hon. Secretary CA. Prakash B. Nandola Hon. Secretary Association News 1. Glimpses of Past Events. Day & Date Program Speaker Venue Saturday 9th Cricket Match President XI v/s HL College December,2023 Secretary XI on 9-12-2023 Cricket Ground, 8.30 am onwards — Ahmedabad Saturday 16th Half Day Seminar on Occasion of CAA Day Sr.Adv. Tushar Hemani, Hotel Crown Plaza, December, 2023 Adv. Uchit Sheth, SG Highway, CA. Yamal Vyas, Nr.Shapath V, Janki Patel, Prahlad Nagar, Prit Nagarsheth Ahmedabad 2. Forthcoming Event Day & Date Program Speaker Venue Monday 8th 54th Residential Refresher Course To be Announced Hotel Hyatt Regency January 2024, to Nepal-The Land of Himalayas. Kathmandu, Nepal Friday 12th Hotel Hyatt Regency Kathmandu, Nepal January, 2024 Saturday 20th 3rd Brain Trust Meeting on CA. Pradip Modi ATMA Hall January, 2024 Navigating Taxation for Ashram Road, Non Resident Indians (NRIs) Ahmedabad CAA Day Foundation day of C A Association, 15th December was celebrated by organizing a full day program jointly with Journal, Direct Tax and Indirect Tax and P D Committees. On that day a Website for Journal of the Association was launched. The seminar was attended by more than 100 participants. Advocate Tushar Hemani and Advocate Uchit Sheth delivered excellent lectures on subjects of Direct and Indirect Tax respectively. CA Yamal Vyas, Miss Janki Patel and Mr. Prit Nagarsheth gave their views on current financial and Equity Market along with sharing some interesting strategies and opportunities. All the sessions were very interactive and informative. Cricket Match A customary cricket match was organized between President XI and Secretary XI at H L College Cricket Ground. President XI won the match. The spirit of sportsmanship was a displayed and both teams agev their best of efforts. CA Pratik Joshi was awarded as Man of the Match, CA Chintan Oza was declared best Batsman and CA Rohan Mehra, Best Bowler.

610 Ahmedabad Chartered Accountant Journal December, 2023 Association News

Ahmedabad Chartered Accountant Journal December, 2023 611

612 Ahmedabad Chartered Accountant Journal December, 2023 Across 1. Section 185 of the Companies Act is an important provision in order to govern the deployment of _______ by the companies to its directors. 2. The Chartered Accountants Association, Ahmedabad has been in existence since last _________ years. 3. Life is measured not by its duration but by its ___________. ACAJ Crossword Contest - 31 ❉ ❉ ❉ Notes: 1. The Crossword puzzle is based on this issue of ACA Journal. 2. Two lucky winners on the basis of a draw will be awarded prizes. 3. The contest is open only for the members of Chartered Accountants Association and no member is allowed to submit more than one entry. 4. Members may submit their reply either physically at the office of the Association or by email at [email protected] on or before 25-01-2024. 5. The decision of Journal Committee shall be final and binding. Prize Courtesy Winners of ACAJ Crossword Contest – 30 1. CA. Rinkesh Shah 2. CA. Gaurang Choksi ACAJ Crossword Contest 30 - Solution Across: Down: 1. Personal 4. Success 2. Liberty 5. Foundation 3. Vostro 6. Germany Down 4. Unemployment and Inflation for the opposition have become nothing but __________ moments. 5. As per Section 73(10) of CGST Act, 2017, the proper office must pass an order under section 73(9) within ______ years from the due date of filing the annual return for the relevant financial year. 6. Supply includes all forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a ___________ by a person in the course or furtherance of business 6 1 4 5 2 3