I.T. MIRROR VOL 23-24 VOL 12

Glimpses of Webinar for the month of April 2024

2 Chairman's Message 3 President's Message 5 Hon. Secretary's Message - CA (Dr.) Vishves Shah - CA Ashish Tekwani - CA Jaykishan Pamnani 6 13 19 26 35 31 NFRA - an independent audit regulator - CA Parag Raval Why are Year-End GST Reconciliations so Important? - CA Abhishek Goel GST not applicable on Hostels and PG accommodations - CA Sujata G Goods And Service Tax Provisions For Work Contractors - Adv. Aditya Sinhal Standard Input Output Norms (SION) for Customs under DGFT - CA Yash Shah How Gmail can be your buddy in Tax Practice! - CA Shridhar Shah Buying US Stocks On The NSE IFSC Exchange - CS Jekil Pancholi 1 Adv. Ashutosh R. Thakkar Adv. (Dr.) Dhruven V. Shah Adv. (Dr.) Kartikey B. Shah Dhruvin D. Mehta (IPP) Bhavesh K. Govani Hiren C. Thakkar CA Kenan M. Satyawadi Narendra D. Karkar CA Parth H. Doshi Parth K. Katharia CA Pratik P. Kaneria CA Suvrat S. Shah Adv Dhiresh T Shah President Emeritus CA Ashish T. Tekwani President CA Shridhar K. Shah Vice President CA Jaykishan P. Pamnani Hon. Secretary CA Maulik B. Patel Hon. Joint Secretary CA Shivam K. Bhavsar Hon. Treasurer CA (Dr.) Vishves Shah Chairman CA Nisha Tekwani CA Suvrat Shah CA Rajesh Mewada Co – Chairman Jinal Shah CA Kaivan Parekh CA Pratik P. Kaneria Members Room No. 204, Nature View Building, Nr. Mrudul Tower, Ashram Road, Ahmedabad - 380009. Tel. No. : 079-48011947 I e-mail: [email protected] I www.incometaxbar.org Mouth Piece of Income Tax Bar Association INVITEE MEMBERS COMMITTEE MEMBERS IT MIRROR COMMITTEE OFFICE BEARERS Vol. 12 - MAY 24 CONTENTS 10

Chairman’s Message CA (Dr.) VISHVES SHAH Chairman 2 Dear Readers, As we conclude yet another enriching edition of our Tax Journal, I extend my heartfelt gratitude to every one of you for your support to our publication. Your commitment to staying informed and engaged in the ever-evolving world of taxation and allied laws and subjects is what drives us to continuously strive for excellence. I must also take this moment to express my deepest appreciation to the contributors whose tireless efforts and expertise have undoubtedly shaped the quality and depth of content within each edition. Their dedication to upholding the highest standards of professionalism and accuracy is truly commendable. I appreciate the vision of President CA Ashish Tekwani to go for monthly editions and excellent support by Co-Chairs CA Nisha Tekwani & CA Suvrat Shah and the entire IT Mirror team which made it possible to bring these issues to you in time with relevant and interesting topics. I am honored to work alongside such talented individuals. I congratulate the President for having a term with 12 editions of IT Mirror and setting a new trend at the association. Furthermore, I am overwhelmed by the tremendous response we have received from our readers. IT mirror has spread wings from being the mouthpiece of association to being a tax journal with nationwide coverage. Your feedback and love are invaluable to us as we endeavor to deliver variety of useful content with each issue. What matters the most to us is the change this knowledge brings in tax practice, and I feel that IT mirror has served that purpose to a great extent. As we look ahead to future editions, rest assured that at Income Tax Bar Association, we remain committed to providing you with timely updates, in-depth analysis, and expert commentary on the latest developments in taxation and allied laws. Once again, thank you for your unwavering support, and I look forward to our continued journey together. Warm regards, CA (Dr.) Vishves A. Shah Chairman, IT Mirror Committee Income Tax Bar Association

3 Dear Readers, As I present to you the 12th Edition of IT Mirror, I find myself reflecting on the remarkable journey we've embarked upon together. What started as a dream of taking our IT Mirror to a monthly edition has become a reality. A dream doesn't become reality through magic; it takes sweat, determination and hard work. First and foremost, I wish to express my profound gratitude to the exceptional IT Mirror Committee whose dedication and expertise have been instrumental in shaping the quality and relevance of the content in the 12 editions. CA (Dr) Vishves Shah : Chairman of IT Mirror Committee has been the guiding light for us and set up the base by connecting us with the authors. His constant follow up has been instrumental in maintaining the deadlines. CA Nisha Tekwani and CA Suvrat Shah : Co Chairman's of IT Mirror Committee have been the driving force of IT Mirror. Their tireless efforts, meticulous attention to detail, and unwavering commitment to excellence have undoubtedly elevated the stature of our IT Mirror, ensuring that it remains a beacon of knowledge and insight in the realm of taxation. CA Shridhar Shah, CA Jaykishan Pamnani and Adv. Ashutosh Thakkar : No words will be enough for thanking you. It is with your determination, cooperation and coordination that the 12 IT Mirrors have seen the light of the day. To our esteemed writers and contributors, I extend my heartfelt thanks for your invaluable contributions and unwavering dedication to excellence. Your passion for your craft and your relentless pursuit of accuracy and depth have enriched the pages of our journal and have inspired countless readers in their quest for understanding and enlightenment. I would also like to thank the Vice Chancellors of Gujarat University, Gujarat Technical University and Central University of Gujarat, Chairman of Gujarat Sahitya Academy, Director Space Application Centre for giving the Foreword to various editions. Your blessing have added a new insight to the IT Mirror. The special "She Tax" edition contributed by all women professionals is a historic moment for the journal. This special edition has broken the barriers of gender gap and scaled IT Mirror to new heights. It showcases the financial prowess of our women professionals. Furthermore, I am deeply humbled by the overwhelming response we have received from our readers. Your enthusiasm, engagement, and feedback serve as a constant source of motivation and inspiration for us to continue pushing the boundaries of excellence in journal. Your unwavering support reaffirms our belief in the importance of our mission—to provide timely, insightful, and authoritative analysis of the latest developments in taxation, empowering our readers with the President’s Message CA ASHISH TEKWANI President

knowledge and understanding that they need to navigate the ever-changing landscape of tax law and policy. Indeed, it is your trust and confidence in our publication that drive us to continually raise the bar and strive for excellence in everything we do. Your feedback, whether in the form of emails or social media interactions, fuels our passion and informs our editorial decisions, ensuring that we remain responsive to the evolving needs and interests of our readership. As we look back on the journey we've traveled together, I am filled with a profound sense of gratitude for the privilege of serving as your president. It has been a tremendous honor to lead this esteemed publication, and I am profoundly grateful for the opportunity to work alongside such dedicated and talented individuals. Looking ahead, I am filled with excitement and anticipation for the future of our IT Mirror. As we continue to adapt to the ever-changing landscape of taxation, I am confident that we will rise to the challenges that lie ahead, armed with the collective wisdom, expertise, and passion of our editorial team and readership. In closing, I once again would like to express my deepest appreciation to each and every one of you for your continued support, dedication, and enthusiasm. It is through your collective efforts and shared commitment to excellence, the dream of monthly edition has turned into reality. Warm regards, CA Ashish Tekwani President Income Tax Bar Association 4

Dear Esteemed Readers, I hope this message finds you happy, well and in high spirits. It is my pleasure to extend my warmest greetings as we celebrate the release of the 12th edition of our I.T. Mirror Magazine. This milestone marks a journey of dedication, perseverance, and excellence in the realm of tax reporting. Over the past editions, our magazine has evolved into a beacon of knowledge, offering valuable insights, expert analysis, and practical guidance on the everchanging landscape of taxation. We have navigated complex regulations, explored emerging trends, and provided our readers with the tools they need to thrive in an increasingly dynamic environment. As we commemorate the successful issuance of 12 editions, I want to extend my heartfelt appreciation to everyone who has contributed to the success of our magazine. I am immensely proud of the hard work and commitment demonstrated by our team. From our writers and contributors, to our designers, each individual has played a vital role in shaping our publication into what it is today. Their passion for excellence and relentless pursuit of accuracy have set a standard of quality that we are honored to uphold. I would like to thank the I.T. Mirror Committee and its members and also members of the Office Bearers for successfully issuance of 12 editions for the very first time in the history of our Association. I would also like to express my heartfelt gratitude to you, our loyal readers. Your continued support and engagement have been the driving force behind our success. Your feedback and insights inspire us to continually raise the bar and deliver content that meets your needs and exceeds your expectations. On behalf of the entire team, I extend my sincerest thanks to each and every one of you for your unwavering support. Together, we have reached a significant milestone, and I am confident that there are many more milestones to come!! Happy reading!!! Yours sincerely, CA Jaykishan Pamnani Hon. Secretary Income Tax Bar Association Hon. Secretary’s Message CA JAYKISHAN PAMNANI Hon. Secretary 5

The National Financial Reporting Authority (NFRA) is a statutory body notified on 1st October 2018 under Section 132 of the Companies Act, 2013.The main objective of NFRA is to protect public interest and the interests of investors, creditors and others associated with companies or bodies corporate by establishing high-quality standards of accounting and auditing and exercising effective oversight of accounting functions performed by the companies and bodies corporate and auditing functions performed by the auditors. Why NFRA? 1. It was experienced at various forums that the existing regulatory apparatus provided under the Chartered Accountants Act, of 1949 was unable to maintain required discipline and accountability amongst Chartered Accountancy professionals due to the challenges posed by self-regulation of the profession. 2. The Standing Committee on Finance- Companies Bill 2009, while discussing the role of auditors, discussed the need for establishment of an independent audit regulator. 3. The Companies Law Committee Report, 2016, highlighted unsatisfactory oversight over the profession prior to establishment of NFRA. 4. The Hon'ble Supreme Court of India vide its judgment dated 23 February 2018, in the matter of S. Sukumar vs The Secretary, Institute of Chartered Accountants of India & Ors., stated that the Union of India should consider appropriate legislation and mechanism for oversight of profession of auditors on the lines of Sarbanes-Oxley Act, 2002. 5. Therefore, in line with the global trend of regulatory shift from self-regulatory organisations to an independent regulatory and oversight body, the Parliament, after due deliberation and on the recommendations of various expert committees, created an independent regulatory body with the establishment of NFRA in terms of section 132 of the Companies Act, 2013. Who are covered under NFRA : Rule 3 of NFRA Rules 2018, provides for the companies and class of companies over which NFRA has jurisdiction. The Rule states that NFRA shall have power to monitor and enforce compliance with accounting standards and auditing standards, oversee the quality of service under sub-section (2) of section 132 of the Companies Act, 1932 or undertake investigation under sub-section (4) of such section of the auditors of the following class of companies and bodies corporate, namely:- a) companies whose securities are listed on any stock exchange in India or outside India; b) unlisted public companies having paid-up capital of not less than Rs. 500 Cr. Or having annual turnover of not less than Rs. 100 Cr. or having, in aggregate, outstanding loans, debentures and deposits of not less than Rs. 500 Cr. as on the 31st March of immediately preceding financial year; c) insurance companies, banking companies, companies engaged in the generation or supply of electricity, companies governed by any special Act for the time being in force or bodies corporate incorporated by an Act in accordance with clauses (b), (c), (d), (e) and (f) of sub-section (4) of section 1 of the Act; d) any body corporate or company or person, or any class of bodies corporate or companies or persons, on a reference made to the Authority by the Central Government in public interest; and NFRA - an independent audit regulator - CA PARAG RAVAL 6

I. T. MIRROR (2023-24) e) a body corporate incorporated or registered outside India, which is a subsidiary or associate company of any company or body corporate incorporated or registered in India as referred to in clauses (a) to (d), if the income or net worth of such subsidiary or associate company exceeds 20% of the consolidated income or consolidated net worth of such company or the body corporate, as the case may be, referred to in clauses (a) to (d). Powers & Functions of NFRA : As per Sub Section (2) of Section 132 of the Companies Act, 2013, notwithstanding anything contained in any other law for the time being in force, the National Financial Reporting Authority shall- (a) make recommendations to the Central Government on the formulation and laying down of accounting and auditing policies and standards for adoption by companies or class of companies or their auditors, as the case may be; (b) monitor and enforce the compliance with accounting standards and auditing standards in such manner as may be prescribed; (c) oversee the quality of service of the professions associated with ensuring compliance with such standards, and suggest measures required for improvement in quality of service and such other related matters as may be prescribed; and (d) perform such other functions relating to clauses (a), (b) and (c) as may be prescribed. NFRA shall- (a) have the power to investigate, either suo motu or on a reference made to it by the Central Government, for such class of bodies corporate or persons, in such manner as may be prescribed into the matters of professional or other misconduct committed by any member or firm of chartered accountants, registered under the Chartered Accountants Act, 1949 (38 of 1949): Provided that no other institute or body shall initiate or continue any proceedings in such matters of misconduct where the National Financial Reporting Authority has initiated an investigation under this section; (b) have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit, in respect of the following matters, namely: - (i) discovery and production of books of account and other documents, at such place and at such time as may be specified by the National Financial Reporting Authority; (ii) summoning and enforcing the attendance of persons and examining them on oath; (iii) inspection of any books, registers and other documents of any person referred to in clause (b) at any place; (iv) issuing commissions for examination of witnesses or documents; (c) Where professional or other misconduct is proved, have the power to make order for- (A) imposing penalty of – i. not less than Rs. 1,00,000/-, but which may extend to five times of the fees received, in case of individuals; and ii. not less than Rs. 5,00,000/-, but which may extend to ten times of the fees received, in case of firms; (B) debarring the member or the firm from- i. being appointed as an auditor or internal auditor or under taking any audit in respect of financial statements or internal audit of the functions and activities of any company or body corporate; or ii. performing any valuation as provided under section 247, for a minimum period of six months or such higher period not exceeding ten years as may be determined by the NFRA. 7

I. T. MIRROR (2023-24) Explanation.--- For the purposes of this sub-section, the expression “professional or other misconduct” shall have the same meaning assigned to it under section 22 of the Chartered Accountants Act, 1949 (38 of 1949). Auditors – Be vigil : 1. In course of discharge of its statutory functions, NFRA has noticed that auditors are not fulfilling their statutory responsibilities relating to reporting of fraud as mandated under the Companies Act, 2013 (CA 2013) read with the relevant Rules and the applicable Standards on Auditing (SAs). 2. The CA 2013, the Companies (Auditor's Report) Order (CARO) and the Standards on Auditing (SAs) place mandatory reporting obligations on auditors to report fraud and/or suspected fraud to the Central Government and the Board/Audit Committee. 3. Section 143 (12) of CA 2013 and related Rules places certain reporting obligations on the auditor, in relation to frauds: “Notwithstanding anything contained in this section, if an auditor of a company in the course of the performance of his duties as auditor, has reason to believe that an offence of fraud involving such amount or amounts as may be prescribed, is being or has been committed in the company by its officers or employees, the auditor shall report the matter to the Central Government within such time and in such manner as may be prescribed: ….” 4. Rule 13 of the Companies (Audit and Auditors) Rules 2014, prescribes detailed steps that need to be followed by the auditor if he has reason to believe that an offence of fraud, which involves or is expected to involve individually an amount of rupees one crore or above, is being or has been committed against the company by its officers or employees. The auditor is required to report the matter to the Board or Audit Committee and to the Central Government in the form of a statement as specified in Form ADT-4. 5. Clause (xi) of Companies (Auditor's Report) Order, 2020((Additional matters to be reported in the Auditor's Report in terms of Order issued by the Central Government in exercise of powers u/s 143 (11) of the CA 2013.)) also requires auditors to make statements relating to reporting of fraud in his/her report. 6. Section 140 (5) of the CA 2013, contains consequences for auditors if they have acted, directly or indirectly, in a fraudulent manner or abetted or colluded in any fraud by, or in relation to, the company or its directors or officers. Under the section, the auditor shall also be liable for action under section 447 of CA 2013 apart from removal and debarment for a period of five years. In this regard, it is pertinent to note that the definition of fraud under section 447 of CA 2013 is wide and states that, “fraud” in relation to affairs of a company or anybody corporate, includes any act, omission, concealment of any fact or abuse of position committed by any person or any other person with the connivance in any manner, with intent to deceive, to gain undue advantage from, or to injure the interests of, the company or its shareholders or its creditors or any other person, whether or not there is any wrongful gain or wrongful loss” (emphasis supplied). 7. SA 240 ((Standard on Auditing 240, The Auditor's Responsibilities Relating to Fraud in an Audit of Financial Statements (SA 240) )) -The Auditor's Responsibilities Relating to Fraud in an Audit of Financial Statements-elaborately deals with the auditor's responsibilities relating to fraud in an audit of financial statements. The SA requires the auditor to maintain professional skepticism throughout the audit and states: “12. In accordance with SA 200, the auditor shall maintain professional skepticism throughout the audit, recognizing the possibility that a material misstatement due to fraud could exist, notwithstanding the auditor's past experience of the honesty and integrity of the entity's management and those charged with governance.” 8. The guidance provided in paras A59-A66 of SA 240, details the Communications to Management, Those Charged with Governance (TCWG) and Regulatory and Enforcement Authorities regarding reporting of the fraud/suspected fraud. 8

I. T. MIRROR (2023-24) 9. There is a misconception amongst some Auditors that resigning from an audit engagement absolves them of their reporting obligations relating to fraud and the consequences under CA 2013 for nonreporting of fraud. In this regard, the Hon'ble Supreme Court of India in a recent judgment dated 03.05.2023 (Union of India and Another versus Deloitte Haskins and Sells LLP & Anr CRIMINAL APPEAL NOS.2305-2307 OF 2022), has held that the consequences of section 140 (5) of CA 2013 will be applicable also on those auditors who resign from the their audit engagements without reporting fraud/suspected fraud. The Hon'ble Apex Court observed: “7…. Therefore, on true interpretation, even on resignation by an auditor of a company even during the enquiry/proceedings under section 140(5) or even prior to that, there shall not be any termination of the proceedings under section 140(5) as observed and held by the High Court. At the cost of repetition, it is observed that in a given case, an auditor, who in fact has, directly or indirectly, acted in a fraudulent manner, to avoid any further consequence under the second proviso to section 140(5), resigns to avoid any consequence under the second proviso to section 140(5), it cannot be permitted. 14…Acting in a fraudulent manner, directly or indirectly, by an auditor is a very serious misconduct and therefore the necessary consequence of indulging into such fraudulent act shall follow.” 10. Statutory Auditors are under a mandatory obligation to report fraud or suspected fraud if they observe suspicious activities, transactions or operating circumstances in a company that indicate reasons to believe that an offence of fraud is being or has been committed against the company by its officers or employees. In such an event, the Statutory Auditor shall initiate the steps prescribed under Rule 13 of Companies (Audit and Auditors) Rules 2014 which begins with reporting the matter to the Board/Audit Committee within TWO days of his/her knowledge of the fraud. In the case of reporting of a fraud involving or expected to involve individually an amount of rupees one crore or above, the Statutory Auditor fails to get any reply / observations from the Board/Audit Committee within 45 days, the Auditor shall forward a report in the specified form viz., ADT-4 to Secretary, Ministry of Corporate Affairs, Government of India. 11. The Statutory Auditor is duty bound to submit Form ADT-4 to the Central Government u/s 143 (12) even in cases where the Statutory Auditor is not the first person to identify the fraud/suspected fraud. 12. Resignation does not absolve the Auditor of his responsibility to report suspected fraud or fraud as mandated by the law. 13. The Statutory Auditor shall exercise his/her own professional skepticism while evaluating fraud, and need not be influenced by legal opinion provided by the Company or its Management. Disciplinary Orders In pursuance of powers under section 132 (4), NFRA, passed many disciplinary orders during the year. As at the end of March 2023, a total of 74 disciplinary cases were in progress at various stages of the disciplinary process. 9

Its time when F.Y. 2023-24 has concluded and we have closed our books of accounts for the said financial year. It is high time that we now gear up for accuracy in GST return filings and reconciliations. As the financial year has concluded, businesses under the Goods and Services Tax (GST) regime in India must turn their attention to year-end reconciliations. This process is very crucial as it ensures the accuracy of your GST return filing and helps avoid any discrepancies that could lead to penalties or complications down the line. The article will also discuss importance of filing GSTR- 1, GSTR- 3B so that beginners may also be able to refer to the reconciliation discussed in the article. In the world of GST, three crucial elements play a vital role: GSTR-1, GSTR-3B, and your Books of Accounts. While they all contribute to your tax filing, they serve distinct purposes. Let's break down the key differences: GSTR-1/ IFF: OUTWARD SUPPLIES What is GSTR- 1/ IFF: A monthly or quarterly return that reflects all your outward supplies (sales made) during the period. Details reflected in GSTR- 1: It includes invoice-wise information like date of invoice, recipient details, HSN/SAC codes, taxable value, GST rate, and tax liability for each outward supply. Filing frequency: Can be filed monthly or quarterly (IFF under QRMP scheme), depending on your turnover. Impact on tax payment: No tax payment is done through GSTR- 1. However, the tax liability calculated here gets auto populated into GSTR-3B through which the ultimate payment of tax is made. GSTR-3B: SUMMARY RETURN What is GSTR- 3B: A monthly return/ quarterly return (QRMP scheme) that summarizes your overall GST transactions for a tax period. Details reflected: It provides consolidated details of outward supplies including exports (which is nowadays auto populated from GSTR- 1 itself), amount on which tax payable under reverse charge mechanism, ITC claimed on inward supplies (purchases), and tax payment details. Filing frequency: Must be filed monthly/ quarterly (QRMP) by all registered taxpayers under GST. Impact on tax payment: GSTR-3B determines your final tax liability payable after adjustment of eligible ITC for the concerned tax period. To understand it better: Think of GSTR-1 as a detailed sales report, listing every tax invoice/ bill of supply. GSTR-3B is like a short summary, combining all your sales for the month and ITC with other tax details. Your Books of Accounts are the master source information, recording all your financial transactions, including those related to GST. Crucially, all three elements should be reconciled with each other. This means ensuring that the sales figures in GSTR-1 match the sales recorded in your books, and the overall tax liability calculated in GSTR-3B aligns with the data from GSTR-1 and your books. Discrepancies can lead to errors in your tax filing and potential penalties from the tax department. Why are Year-End GST Reconciliations so Important? - CA ABHISHEK GOEL 10

I. T. MIRROR (2023-24) WHAT ARE 'GST RECONCILIATIONS'? In simpler terms, GST reconciliation involves comparing data from various sources to identify and rectify any errors or omissions. It's a comprehensive check to ensure that GST returns reflect the same figures as are reflecting in books of accounts. WHY IS YEAR-END RECONCILIATION IMPORTANT? There are several compelling reasons to prioritize year-end GST reconciliations such as: ● Minimal Errors: It minimizes the risk of errors in your GST filing, preventing potential tax liabilities and penalties. ● Timely ITC Claims and reconciliation of ITC: It helps identify any missing ITC from suppliers' invoices, allowing you to claim them before the prescribed deadline. ● Reduced Scrutiny: Accurate returns reduce the chances of getting flagged for scrutiny by the tax authorities. Even if the assessee gets a notice for scrutiny of returns, reconciled figures will be available at hand for preparation and submissions of defence replies. ● Peace of Mind: A clean reconciliation process ensures peace of mind and avoids last-minute filing hassles. Since the financial year has just closed, we will be filing GSTR- 1 & GSTR- 3B for the month of March, 2024 in a short while. Any difference that would have occurred in the period April, 2023- February, 2024, can easily be adjusted/ settled in the return of March, 2024 so that the difference stands settled in the financial year itself. If the differences are settled in the same financial year, it becomes easy for the assessee to explain the same before tax authorities. During assessment proceedings, ASMT- 10 will be issued by authorities. A ready reconciliation will serve as a sturdy tool to draft appropriate reply to such ASMT- 10 within prescribed time limits. This will in turn save a lot of time and ensure accuracy in replies as well. WHAT TO RECONCILE DURING YEAR-END? Year-end reconciliations go beyond the regular monthly or quarterly checks. Here's what you need to compare: ● Monthly Sales data in GSTR-1 matches the sales recorded in books of accounts. This will make sure that no sale invoice goes un- reported in GSTR- 1. ● Monthly Sales as reflected in GSTR- 1 matches with sales declared in GSTR- 3B so that there is no difference in tax payments. It is important to make sure that the data in GSTR- 1 and GSTR- 3B is matched specially for 'zero- rated supplies'. Any difference in this field may result in delayed/ non- processing of IGST refunds by ICEGATE. ● Claimed Input Tax Credit (ITC) aligns with information available in GSTR-2B. ● Sales data in GSTR-1 matches with e- invoices and e- way bills. It is very important to reconcile GSTR- 1, books and e invoice data. This will make sure that e invoice is present for every sale transaction and the same has been reported in GSTR- 1. ● Purchase data with supplier invoices (GSTR-2B). ● ITC claimed in GSTR-3B with ITC available in GSTR- 2B and your books. ITC is not allowed to be availed in current scenario if the same is not reflecting in GSTR- 2B. ● HSN/SAC codes and GST rates applied on transactions. ● One more important aspect is updating/ filing of shipping bills in GSTR- 1 for all export invoices. 11

I. T. MIRROR (2023-24) Tips for a Smooth Year-End GST Reconciliation ● Start Early: Though the differences can also be adjusted till November 30, don't wait until the last minute. Begin the reconciliation process well before filing GSTR- 1 & GSTR- 3B for the month of March, 2024. ● Organize Your Records: Maintain proper records of invoices, sale register, purchase register, e-way bills, and GST returns for easy comparison. ● Make good use of Technology: Consider using GST reconciliation software to automate the process and minimize errors. ● Seek Professional Assistance: If you're unsure about any aspect of reconciliation, consult a tax professional for guidance. By following these steps and prioritizing year-end GST reconciliations, you can ensure accurate tax filing, maximize ITC claims, and achieve peace of mind throughout the financial year. CONCLUSION One must be Pro- active and not reactive in the above reconciliations. By understanding the distinct purposes of GSTR-1, GSTR-3B, your books of accounts, and e-way bills, you can effectively navigate the GST system. Remember, regular reconciliation between these elements is essential. This ensures data consistency, minimizes errors, and streamlines your tax filing process. With a clear understanding and a focus on reconciliation, you can stay compliant with GST regulations and avoid any unnecessary complications. Even if you have filed the returns for March, 2024, there is no need to worry as the differences can still be figured th out and can be adjusted till 30 November, 2024. So do not miss the opportunity to resolve the return filing errors. Reconcile now and adjust your next returns accordingly. 12

BACKGROUND: The concept of Working Professional Hostels or Paying Guest accommodations is widely recognized in metropolitan areas with a higher population of young working individuals. Students and working professionals prefer to seek accommodation closer to their educational institutions or workplaces. Currently in India, this concept is becoming popular in every city. In general Hostel accommodations are managed by enthusiastic landowners who aim to maximize returns from their immovable property. As a result, the hostel fees or PG rentals are slightly higher than the regular rentals of residential premises. The agreement typically includes a clause specifying a minimum period of stay ranging from 1 day to 11 months, depending on individual needs. Additionally, the fee often covers various modern amenities such as television, Wi-Fi, gym access, and more. Therefore, hostel accommodations are either managed by the landlord directly or sublet by the tenant of the original landlord. In some cases, landlords choose to mitigate operational risks by outsourcing the activity through subleasing or hiring an agent to manage it. It is a well-known provision under GST that premises leased out for residential purposes are exempted from taxation. When it is rented out as PG or Hostel with basket of other services, landlords are in a dilemma regarding the applicability of GST. The reason for the confusion and the need for clarity arises from the fact that a. nature of the transaction is profit motive in the course or furtherance of business b. Few State Government authorities insist on license to establish. c. The operations are regulated and governed by State specific laws. Few prefer to collect tax from tenants and discharge it to avoid potential litigation. This article aims to comprehensively analyse the applicability of GST on hostel accommodation services, providing clarity and rationale from all perspectives. ISSUE: 1. The issue to be sorted out is whether GST exemption on residential dwelling can be extended to Hostel and PG accommodation? If so to what extent? 2. Is there are any legal precedents supporting the interpretation in case of litigation. ANALYSIS: First let us understanding the meaning of “Residential Dwelling” As the term “Residential Dwelling” is not defined in the CGST Act, it is necessary to derive definitions from legal dictionaries. It is well settled rule of Statutory Interpretation of fiscal statues that the words used therein if not defined in the statute have to be interpreted in their popular sense. The word 'residence' and 'dwelling' as defined in Concise Oxford English Dictionary 2013 Edition as well as BLACKS LAW DICTIONARY 6th Edition to ascertain its meaning in common parlance and in popular sense which read as under: The Oxford Dictionary defines “Domicile” 1. the country in which a person has permanent residence. GST not applicable on Hostels and PG accommodations - CA SUJATA G 13

I. T. MIRROR (2023-24) 2. the place at which a company or other body is registered. Residence: 1. the fact of residing somewhere. 2. a person's home. 3. the official house of a government minister or other official figure. Blacks Law Dictionary: Residence– Place where one actually lives or has his home; a person's dwelling place or place of habitation; an abode; house where one' home is; a dwelling house. Dwelling– The house or other structure in which a person or persons live; a residence; abode; habitation; the apartment or building , or a group of buildings, occupied by a family as a place of residence. Structure used a place of habitation Before delving into the analysis of GST provisions, it is crucial to examine and prove that Hotel and Residential dwellings unit are interchangeable and the purpose of letting out both is one and the same. As far the governing statutes are concerned, there is a special exception available to Hostel to deem it a Residential Unit. Now let us analyse below points in detail: 1. Is there any difference between Hostel and Hotel? 2. Is there any difference in the relationship between landlord and tenant vis a vis hostel owner and hostel inmate? 3. Does the Government view the transactions differently? Is there any difference between a Hostel and a Hotel? The duration of stay and purpose of stay are the differentiating factors between Hostel and Hotel. The expression residence connotes that a person eats, drinks and sleeps at that place. The ownership of the place of residence is immaterial.[1] The hostel is used by the students as residence. They use the hostel for sleeping, eating, and for the purpose of studies for a period ranging between 3 months to 12 months. In the hostels, the duration of stay is more as compared to hotel in guest house, club etc, which is typically starts from one day to weeks or at the maximum few months. We infer from Sec. 2 , sub clauses of The Tamil Nadu Hostels and Homes for Women and Children (Regulation) Act, 2014, (e) “hostel” or “lodging house” means a building in which accommodation is provided for women or children or both, either with boarding or not; (d) “home for women and children” means an institution, by whatever name called, established or maintained or intended to be established or maintained for the reception, care, protection and welfare of women or children or both; Sec. 2 of Tamil Nadu Shops and Establishment Act, 1947 defines (14) 'residential hotel´ means any premises in which business is carried on bona fide for the supply of dwelling accommodation and meals on payment of a sum of money to a traveller or any member of the public or class of the public; “clubs and residential hotels, hostels attached to schools or colleges, and establishments maintained in boarding schools in connection with the boarding and lodging of pupils and residents masters;” 14

I. T. MIRROR (2023-24) There is an exemption u/s 4(2) (c) from opening and closing hours as applicable to Shops as defined in Sec.7 and Sec.13 of the Act. In the case of in decision, para 25 , it was held that [2] the work 'dwelling house' is synonymous with residential accommodation as distinct from a house of business, warehouse, office, shop, commercial or business premises. The word 'house' means a building. It would include the out-houses, courtyard, orchard, garden etc. which are part of the same house, but it cannot include a distinct separate house In few cases, the term 'dwelling house' has been interpreted to mean even a single room as part of a house. Therefore, from the above, though the term Hostel is used, it is meant for home for women and children with or without meals. The accommodation which is used for the purposes of the hostel of students and working women is classified in residential category in the Revised Master Plan 2015 of Bangalore City. Thus, it 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 hostel which used for residential purposes by students or working women. From the above provisions of the various act, the purposive interpretation can be summarised that, as long as the need of stay is more akin to the residential purpose, the Hostel can be termed as Residential Unit. Is there any difference in the relationship between landlord and tenant vis a vis hostel owner and hostel inmate? Let us examine whether the relationship of the contracting parties decides the nature of the underlying transaction. The definition of Tenant is drawn from The Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act, 2017 Sec.2 (c) “landlord” means a person who, for the time being is receiving, or is entitled to receive, the rent of any premises, whether on his own account, or on account of, or on behalf of, or for the benefit of, any other person or as a trustee, guardian or receiver of any person or who would so receive the rent or be entitled to receive the rent, if the premises were let to a tenant, and shall include his successor-in-interest; Whereas there is no specific exemption provided for the Hostel buildings as contained in Sec.3 (a) any premises owned or promoted by the Central or State Government or Local Authority or a Government undertaking or enterprise or a statutory body or cantonment board; (b) premises owned by a company, university or organization given on rent to its employees as part of service contract; (c) any premises owned by religious or charitable institutions as may be specified by the Government, by notification; (d) any premises owned by Waqf registered under the Waqf Act, 1995 or to any trust registered under the Indian Trusts Act, 1882; (e) any other building or category of buildings specifically exempted in public interest by the Government, by notification: Provided that any owner of the premises falling under clauses (a) to (d) wishes that the tenancy agreement entered into by them be regulated under the provisions of this Act, they may inform the Rent Authority of their desire to do so at the time of information of the tenancy agreement under section 4 of this Act. The definitions above clarify that while hostels are governed by the registration requirements under the Shops and Establishment Act, which typically applies to commercial establishments, there are specific exemptions regarding the rules that apply to commercial shops. This distinction separates business owners from landlords renting out to Hostels. 15

I. T. MIRROR (2023-24) Does the Government view the transactions differently? The land and tenancy being State subject, the reference has been drawn from The Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act, 2017, sec. 4 4.(1) Notwithstanding anything contained in this Act or any other law for the time being in force, no person shall, after the commencement of this Act, let or take on rent any premises except by an agreement in writing, which shall be informed to the Rent Authority by the landlord and tenant jointly, in the form specified in the First Schedule. By the above provision, there is no specific exclusion has been created in the statute for the Hostel and Paying Guest accommodation. From the information above, we deduce that the terms and relationship in typical transactions between a landlord and tenant are the same as those between a hostel owner and hostel inmate. The end users, inmates of Hostel use the room allotted to them as their residential dwelling unit, which includes kitchen, wash room, cots and beds, so as to enable them to prepare food and wash clothes etc. The residential dwelling varies from person to person. As far as the homeless people are concerned, the residential dwelling will be wherever they are residing such as public roads, streets or in any other places and except the same, no other places can be provided, unless and otherwise if the Government has accommodated those people in a home, where they are maintaining the same for homeless. Therefore it depends upon the status and the lifestyle of each person, the nature of residential dwelling will vary. The State Government levies property taxes at differential rates when let out for commercial and residential purposes. The end user of the building is the criteria for levying taxes by the Government namely whether it is for the purpose of residential or commercial. In the case of Hostels, as the nature of end user of Hostel, is purely residential in character, the rates applicable for residential dwelling is levied by State Government authorities. The zoning Regulations as specified in Rule 33 of Tamil Nadu combined development and building Rules,2019 wherein under the Residential Zone, Entry No (vii) is given “Woking zones hostels and old age homes”. The property tax categorises hotels in “residential zone” only. Legal provisions under GST: Sec.7(1) of the CGST Act, covers the rental as one of the forms of supply wherein Entry 5 (a) of Sch.II affirms renting of immovable property as Service. If the underlying transaction is in the course or for the furtherance of business then GST is applicable as per Entry No, 16 of CGST (R) NN.11/2017 - at the rate of 18% under HSN 9972.However, NN 12/2017, entry No, 12 clearly specifies “Services by way of renting of residential dwelling for use as residence” is exempted. In this case, it is necessary to examine and interpret how the Exemption Notification can be applied in this scenario. The inference can be drawn that interpretation of exemption notification is no longer res integra and the Constitution Bench of the Supreme Court in 'DILIP KUMAR AND COMPANY AND OTHERS, held 66.1 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. 66.2 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 the revenue. 66.3 The ratio in sun Export case is not correct and all the decisions which took similar view as in sun Export case stand overruled. When the exemption notification is clear and the taxpayer wants to avail the benefit of the notification, the burden of proof lies on the taxpayer. Hence while availing this exemption, the taxpayer has to satisfy the below key points in mind: I. The owner is providing services as similar to any other residential property. 16

I. T. MIRROR (2023-24) II. The person who is staying also using the Hostel as same as residence. Hence, it tantamount to residential dwelling for use as residence. Hence from the above inference from allied laws and purposive interpretation of statutes and strict application of exemption notification, it can be concluded that, renting of Hostel or Paying Guest doesn't attract levy of GST, as it falls under the Exemption list. Judicial precedence: 1. Sri. Thagar Vasudeva Ambrish filed an application vide KAR ADRG 17/2020 for advance ruling questioning the applicability of Exemption prescribed under Entry No. 13 of the Notification Number 13/2017 IGST (R) dt 28.6.2017 while rendering leased services to M/s D Twelve Space Pvt Ltd., which in turn was engaged in affordable residential accommodation services to students. The Karnataka Advance Ruling Authority on 23.03.2020 ruled that leased services doesn't fall under the exemption and GST to be levied provided the lessee is registered under GST. The petitioner thereupon filed an appeal under Section 100 of the CGST Act before the Appellate Authority for Advance Ruling, Karnataka (AAAR Karnataka). However, the AAAR Karnataka by an order dated 31.08.2020 in the case of Sri. Thagar Vasudeva Ambrish inter alia held that property rented out by the petitioner is a hostel building which is more akin to sociable accommodation rather than what is commonly understood as residential accommodation. Therefore, the property rented out by the petitioner cannot be termed as residential dwelling. It was further held that benefit of exemption notification is available only if the residential dwelling is used as a residence by the person who has taken the same on rent / lease. In the result, the appeal preferred by the petitioner was dismissed. Aggrieved by the order, the applicant filed a Writ Petition under Art.226, on 7th day of February 2022, with Hon'ble High Court of Karnataka vide Writ Petition No. 14891 of 2020 (R-RES). The order passed by the AAAR Karnataka was quashed and held that services provided by the petitioner is entitled for exemption. 2. M/s Thai Mookambikaa ladies Hostel runs a Hostel for girls and working women professionals and provides residential accommodation along with food at a reasonable rate without profit motive. It believed that entry 12 of the Exemption Notification 12/2017-Central Tax, (R), is applicable and exempt from GST. It filed application for Advance Ruling before the Tamil Nadu State Appellate Authority AAAR vide application No.56/2023/ARA /dt.30.03.2023 . The order clarifying the definition of 'residential dwelling' as outlined in the CBIC guide, ruled that a 'Hostel' does not align with the definition of 'residential dwelling', but can be categorized as 'social accomodation', akin to a hotel. It distinguished between 'accomodation' and 'residence', emphasizing that for the exemption to apply, two conditions must be met i.e. the renting of residential dwelling and its use as a residence. It was brought to the attention of the authorities that, in the earlier service tax regime,” services by way of residential dwelling for use as residence was included in the negative list under Sec.66D clause (m) of the Finance Act, 1994. Thus entry under residential accommodation falls under unconditional exemption category. The Authorities held that, the applicant is not eligible for exemption and further, it is taxed @ 18% as composite supply, under HSN 9963 as Hostel accommodation services. Aggrieved by the order, the M/s Thai Mookambikaa ladies Hostel filed a Writ Petition in the High Court of Judicature at Madras, vide WPNo.28486 of 2023. Though statutory provision of Appeal was very much available, the applicant decided to file Writ with the understanding that, availability of alternate remedy will not take away the right since Appeal filing was believed to be an empty formality due to the ruling of AAAR in case of Sri. Thagar Vasudeva Ambrish, in Karnataka. The Hon'ble High Court held that, purport and object of the legislation in issuing the present Notification is only to give exemption towards the services which are in residential nature and not towards commercial nature and the premises should be of residential dwelling for use as residence. The purpose of exemption given in the Notification is only to lessen the burden of tax on the dwellers, who are the tenants/occupants of the residential premises taken on rent. The GST Exemption Notification must be viewed from the recipient of service perspective and not from service provider. Further, the inmates of Hostel are using it for residential purpose and not for commercial 17

I. T. MIRROR (2023-24) hence the renting out the hostel rooms to the girl students and working women is exclusively for residential purpose and the petitioner is entitled for Exemption. The judgment of Thai Mookambikaa Ladies Hostel vs Union of India & Ors., dated 22-03-2024 by Hon'ble Madras High Court was delivered on 22.03.2024. CONCLUSION: Based on the above analysis and legal precedents, it can be inferred that renting out building premises to working professionals as Paying Guests is not subject to GST provided the test of purpose of letting out, duration of stay, comfort and feel of residential dwelling, State Government regulations are satisfied. The legal precedence will have persuasive value in the States where the Writ application has been held in favour of the taxpayer . This article keeps the issues open for the scenarios such as Service Apartments, Rehabilitation centre, commercial complex later converted to residential etc., The eligibility of exemption to be examined from the end users point of view and facts of the case. [1] KISHORE CHANDRA SINGH VS BABU GANESH PRASAD BHAGAT AIR 1954 SC 316 [2]V.L.Kashyap versus R.P.Puri, para 25 18

A. REGISTRATION There has always been a doubt over the requirement of registration for a person supplying Work Contract (hereinafter referred to as WCT) service because of varied understanding of the legal provisions involved therein. Let's refer to some rulings in this regard:- Goods And Service Tax Provisions For Work Contractors - ADV ADITYA SINHAL Case Name Jaimin Engineering Pvt Ltd, Guj. (AAR Rajasthan) Dated 20/07/2018 Ms T & D Electricals, Raj. (AAR KARNATAKA) Dated 31/03/2020 GEW (India) Pvt. Ltd., U.P. (AAR Karnataka) Dated 08/11/2021 Facts & Rulings Facts:- Supplier is engaged in construction of cold storages at various parts of Country. They are expecting to do some construction work in the state of Rajasthan whereas they are located in the state of Gujarat and registered there in GST. Ruling:- While supplying services if the supplier of services (i.e. applicant who in the given case is a Works Contractor and is registered in State of Gujarat) has any place of business/office in the State of Rajasthan i.e. has a fixed establishment for operation in State of Rajasthan (place where the services are to be provided) then he is required to get himself registered in State of Rajasthan. Facts:- Applicant is registered as works contractor and wholesale supplier in Jaipur, Rajasthan. They have been awarded a contract by M/s Shree Cement Ltd., Rajasthan for work of the contract include complete electrical & instrumentation jobs; installation, testing and commissioning at township. The job involves supply of material and installation, testing and commissioning of the same at township, Karnataka Cement Project (a unit of Shree Cement Ltd.,) in the state of Karnataka. Ruling:- Separate GSTregistration in other State not needed for execution of contract in that state. Facts:- In this case, the applicant is a company who got a sub- contract work from M/s. L&T, claimed to be a works contract, for erecting steel structure casted and bolted on ground in the civil foundation, at the site at Karwar, Karnataka. 19

I. T. MIRROR (2023-24) Ruling:- A. The applicant need not obtain separate registration in Karnataka, for supply of services and can raise the invoice by charging IGST from their registered office at Noida, UP, with place of supply as Karnataka. B. Since the applicant are neither having nor intending to have any establishment at the site at Karwar, Karnataka, they cannot obtain ISD registration for the site at which they are delivering service. M/s Pragati Engineers vs UOI (Delhi High Court) Dated 15/11/2021 Facts:- The petitioner has already obtained registration in Delhi and the aforesaid clause mandates that the petitioner should obtain registration in the State in which the work is to be taken up, or as required by the GST authorities. The petitioner claims that since it is already registered in Delhi, it cannot be required to be registered at any other place. Ruling:- The company is required to take registration as 'casual taxable person' (defined in section 2(20) of CGST Act) in Hyderabad in which the work is taken up where there is no fixed place of business. The Delhi HC opines that the concern of the petitioner having no place of business/ fixed establishment in Hyderabad is sufficiently addressed by the definition of casual taxable person. Although the majority of them have ruled that there shall not be any mandatory requirement for regular registration in states where WCT supply is given, we shall still look upon some legal provisions of CGST Act 2017 on which the aforementioned rulings have emphasized: - a. Section 22. Persons liable for registration - Every supplier 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: …………………… The term “from where he makes a taxable supply of goods or services or both” takes us to:- b. Section 2(71). Definition of "location of the supplier of services" means - (a) where a supply is made from a place of business for which the registration has been obtained, the location of such place of business; (b) where a supply is made from a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere), the location of such fixed establishment; (c) where a supply is made from more than one establishment, …………….. (d) in absence of such places, …………………. and, post reading clauses (a) and (b) it is important to understand the definition of: - c. Section 2(50). Definition of "fixed establishment" means - A place (other than the registered place of business) which is characterised by a sufficient degree of permanence and suitable structure in terms of human and technical resources to supply services, or to receive and use services for its own needs d. Section 2(85). Definition of "place of business" means - A place from where the business is ordinarily carried on, and includes 20

I. T. MIRROR (2023-24) (a) warehouse, a godown or any other place where a taxable person stores his goods, supplies or receives goods or services or both; or (b) a place where a taxable person maintains his books of account; or (c) a place where a taxable person is engaged in business through an agent, by whatever name called; Although it is a subjective topic, in cases where the contractor is allotted a temporary workplace adjacent to or on work sites by the principal employer/client for the execution of work, such sites shall not fall under the definition of “Fixed Establishment” because:- Such sites are temporary in the form of portable prefabricated cabins/ containers for site engineers/supervisors to use for the execution of work and don't have a sufficient degree of permanence. Such sites have no suitable structure in terms of human and technical resources to supply WCT services, rather such trait is present in the head office of the registrant (registered Place of Business) from where his designing and planning team is instructing on whose directions the site engineers/ supervisors usually operate. Practical & Legal Challenges in having multiple registrations in WCT Supply states: - a) Filing of registration Form REG-01: - There is no written agreement (neither rent agreement nor consent letter) for occupancy of such work site offices, to be uploaded for filing Form REG-01. Also, there is neither any Fixed Establishment nor Place of Business anywhere else, in the state where work has been carried on, for it to qualify as the “Location of supplier of services” pertaining to relevant WCT Services. b) No godown or storage of goods:- Goods are usually kept under open sky, near railway tracks (Railway contracts), or at work sites in case of WCT services involving Bridge works, Construction of residential or commercial buildings, Road constructions, Contracts involving construction of structures in Cement plants, Government or Private departments etc. It gets consumed very soon post-delivery, and there is no specific need to store it in Godowns or Warehouse, hence such sites don't fall under clause (a) of the definition of “Place of business”. c) Complying with Section 35 read with CGST Rules 2017:- Even if the person applies for registration at some place foreign to the actual work site in the state post somehow arranging necessary documents (although it shall not be advisable), the books of accounts pertaining to such WCT Supply are still maintained at the Principal place of business (Head office) which is in strict violation of legal provisions, if separate registration is taken. d) Acknowledging the Legal notice/letters:- The applicant would not be able to acknowledge the physical notices/letters served under various provisions especially Chapters 12 to 15 at such place, because such premises are not occupied by any person and are used for the sake of registration only (if applied). e) Casual Taxable Person: - Such registrations are usually considered a good option for, a person who does not have a fixed place of business in the state for execution of work contracts, but there is a limitation as per section 27 of the law for a period of validity which is merely 90 days (which can be extended to 90 more days). So basically, if the contract includes an execution period of more than 180 days i.e. 6 months, then such a category of registration is not among the available option. Conclusion:- Given the above-discussed facts and circumstances, for section 22 read with section 2(71), Location of the supplier of services in case of WCT services shall always (as per clause (a)) be “Principal place of business” i.e. location of head office, and the applicant need not be required to take separate registration in the state where such WCT supply is being provided. 21

I. T. MIRROR (2023-24) B. INPUT TAX CREDIT Input Tax Credit (hereinafter referred to as ITC):- For the WCT supplier there involves both inward supply of Goods and Services:- Legal Provisions:- Section 16 - Eligibility and conditions for taking input tax credit Sub-section 2 clause (b) - he has received the goods or services or both. Almost all the sub-section/clauses are considered to be fulfilled but there has been a buzz over clause (b) of subsection 2 which asks for receipt of goods or services to avail the itc and is contended that if the person is not registered in a particular state then how does the goods or services qualify to be “RECEIVED” by WCT provider, without presence in that state as the supply is delivered at work site and not at the place of registration. But, there is an explanation to this clause which has further been amended via CGST Amendment Act CGST Amendment Act 2018 w.e.f 01-02-2019 in respect of services. It says:- [Explanation. - For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services- (i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise; (ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person;] Conclusion:- Hence, as far as the receipt of goods or services as per S. 16(2) (b) is concerned, the above-mentioned explanation makes it clear that even if the place of delivery at a work site in state other than the state of registration, (or even at some work site in same state but at a location other than the place of registration) the “SUPPLY WOULD BE CONSIDERED DEEMED RECEIVED BY REGISTERED PERSON” for fulfilment of “receipt”. C. PLACE OF SUPPLY (For Inward supplies) Let's again refer to a ruling in this regard – GEW (India) Pvt. Ltd., U.P. (AAR Karnataka) Dated 08/11/2021 Case Name Facts & Rulings Facts:- Applicant is registered as works contractor and wholesale supplier in Jaipur, Rajasthan. They have been awarded a contract by M/s Shree Cement Ltd., Rajasthan for work of the contract include complete electrical & instrumentation jobs; installation, testing and commissioning at township. The job involves supply of material and installation, testing and commissioning of the same at township, Karnataka Cement Project (a unit of Shree Cement Ltd.,) in the state of Karnataka. Ruling:- A. The dealer in Rajasthan has to charge CGST & SGST when the goods, purchased by the applicant, are shipped to project site in Karnataka, under bill to ship to transaction in terms of Section 10(1)(b) of the IGST Act 2017. B. The dealer in Karnataka has to charge IGST when the goods, purchased by the applicant, are shipped to project site in Karnataka, under bill to ship to transaction in terms of Section 10(1)(b) of the IGST Act 2017. 22

I. T. MIRROR (2023-24) As already ruled above, for goods procured from suppliers registered in the same state of registration, CGST + SGST would be charged and from suppliers registered in any other state including the state of the work site, IGST would be charged by suppliers. For services, it has been interpreted that the sub-contractor of services which can be in the form of Manpower supply, Engineering work, Earth work, Machinery rental services, etc. or even the complete work being sub-contracted to some other person. Place of supply shall be decided based upon the location of immovable property as per Section 12(3) (a) of the IGST Act which is reproduced below: (3) The place of supply of services,–– (a) directly in relation to an immovable property, including services provided by architects, interior decorators, surveyors, engineers and other related experts or estate agents, any service provided by way of grant of rights to use immovable property or for carrying out or co-ordination of construction work; or (b)…... (c) ……, (d) …… shall be the location at which the immovable property or boat or vessel, as the case may be, is located or intended to be located: One important thing to be noted here is that clause 3 is to be referred to only in case the services provided are “directly” in relation to an immovable property, whereas such direct relation is absent in case of services provided by the sub-contractor to the principal contractor, instead such services are made to Principal Contractor as per his directions, hence Place of supply is to be determined as per section 12 (2) (a) i.e. it will be the location of registered person. Conclusion:- For goods, the Place of supply will be determined as per Section 10(1) (b) of the IGST act being billed to-shipped to transactions and will always be the Principal place of business i.e. state of registration of Contractor irrespective of the Place of delivery. and, For services, as discussed above Place of supply shall be determined as per Section 12(2) (a) of the IGST Act and it shall be the location of the registered person (Contractor). D. DOCUMENTS FOR THE MOVEMENT OF GOODS 1. E-Way bill CBIC has issued a press release dated 23/04/2018 in this regard, clarifying the requirement of the E-Way Bill for the “Bill to Ship” model of supplies. There is an option over the E-Way bill portal which allows to select the transaction type as a “Bill to Ship” model and goods can be delivered to work sites conveniently in such a scenario. 2. Delivery Challan Rule 55(1) (c) of CGST Rules 2017, governs the rule pertaining to “Transportation of goods without issue of invoice” The contractor is required to move consumables and assets to the work site, for mobilization of work and later post-completion or during the work, such goods are also moved to other sites (which may be in some other state too) as per requirement of work. Such transactions don't qualify for the supply of goods, rather the goods are said to be moved for “Own use” In such cases, a delivery challan needs to be prepared as per Rule 55(1) (c). Also, the value of goods shall be determined as per books of accounts, and no tax shall be mentioned as such “transport is not for the supply to any consignee”. 23

I. T. MIRROR (2023-24) E. HOW REVENUE TRAVELS IN WORK CONTRACT SERVICES Place of supply is a crucial factor in determining the state to which revenue should accrue. From section 12(3) (a) of the IGST Act it seems the lawmakers have an interest in accruing the revenue to the state where such immovable property is located in the case of WCT supplies. Let's understand this with an example:- Party A having its head office in Madhya Pradesh, has been awarded a contract for the construction of an immovable property located in Rajasthan by Party B registered in Rajasthan. For the execution of work, Party A will procure goods and services from various sellers across the country to be delivered directly to the work site located in Rajasthan. It will also deploy owned assets and goods for own use at different intervals during the contract period, which will not be bought afresh and will be re-used at other sites post-completion of the present contract. Here we are going to compare 2 Cases:- Goods :- Bought Steel, Cement & other building material Services :- Availed Manpower Supply services, IGST CGST SGST Machinery rental services, Other construction services From Supplier Registered in MP 0 100 100 From Supplier Registered in state other than MP 200 0 0 Total Input Tax Credit 200 100 100 Deploy owned assets and goods for own use at work site Sends to site (on Delivery challan) 0 0 0 Retrieves back from site (on Delivery challan) 0 0 0 Total Input Tax Credit (Own use) 0 0 0 Total Input Tax Credit 200 100 100 Outward supply billing to Party B (P.O.S Rajasthan) 500 0 0 CHALLAN (Outward (-) Inward supply) 100 In this way, IGST 500/- will get transmitted to Rajasthan state finally. CASE A (M.P. GSTIN) a) Party A doesn't take separate registration in Rajasthan 24

I. T. MIRROR (2023-24) Goods :- Bought Steel, Cement & other building material Services :- Availed Manpower Supply services, Machinery rental IGST CGST SGST services, Other construction services From Supplier Registered in RAJ 0 100 100 From Supplier Registered in state other than RAJ 200 0 0 Total Input Tax Credit 200 100 100 Deploy owned assets and goods for own use at work site Sends to site (on Delivery challan) 50 0 0 Retrieves back from site (on Delivery challan) 45 0 0 Total Input Tax Credit (Own use) 5 0 0 Total Input Tax Credit 205 100 100 Outward supply billing to Party B (P.O.S Rajasthan) 0 250 250 CHALLAN (Outward (-) Inward supply) 0 47.50 47.50 CASE A (RAJ. GSTIN) b) Party B takes separate registration in Rajasthan Conclusion:- After a comparative analysis of both cases, it is quite evident that the revenue finally travels to the state where the work site is present, irrespective of the state of registration of the WCT supplier. Hence the WCT supplier shall be at his liberty to take the registration and shall not be forced to take separate registration, as it is not in violation of the provisions of law as discussed above. 25

Introduction: Standard Input Output Norms (SION) are benchmarks that specify the quantity of inputs required to produce a unit of output for a particular product or service. These norms are established by the Directorate General of Foreign Trade (DGFT) in India to regulate and facilitate international trade. SION plays a crucial role in determining the eligibility of exporters for various benefits and incentives provided by the government. Purpose of SION: ● Ensure uniformity and transparency in determining the entitlements of exporters. ● Facilitate the assessment of export performance and compliance with international trade regulations. ● Promote efficiency and competitiveness in the export sector by optimizing resource utilization. ● Encourage value addition and technological upgradation in manufacturing processes. Components of SION: ● Product Description: Each SION specifies the product for which the norms are applicable, along with its detailed description and classification under the Harmonized System of Nomenclature (HSN). ● Input-Output Ratios: SION delineates the quantity and type of inputs required to produce a unit of output. Inputs may include raw materials, components, consumables, energy, and utilities. ● Normative Values: Normative values indicate the permissible limit of inputs for a given output. These values are expressed in physical quantities, such as weight, volume, or units. ● Productivity Parameters: Some SIONs also incorporate productivity parameters, such as yield, wastage, and process efficiencies, to account for variations in manufacturing practices. ● Validity Period: SIONs are periodically reviewed and revised by DGFT to align with changing market dynamics, technological advancements, and trade policies. Each SION specifies its validity period to ensure relevance and accuracy. Types There are two primary categories of norms established by the Directorate General of Foreign Trade (DGFT) to regulate international trade and facilitate export processes: 1. Standard Input-Output Norms (SION): Definition: Standard Input-Output Norms (SION) are predetermined benchmarks that specify the quantity and type of inputs required to produce a unit of output for a particular product or service. Characteristics: ● Predefined Benchmarks: SIONs provide standardized benchmarks for various products, ensuring consistency and uniformity in determining the entitlements of exporters. ● Comprehensive Coverage: SIONs cover a wide range of products across different industries, including manufacturing, agriculture, and services. ● Periodic Review: SIONs are periodically reviewed and revised by DGFT to accommodate changes in market dynamics, technological advancements, and trade policies. Standard Input Output Norms (SION) for Customs under DGFT - CA YASH SHAH 26

I. T. MIRROR (2023-24) ● Publication: Approved SIONs are published in the Handbook of Procedures (HBP) issued by DGFT, making them accessible to exporters and stakeholders. 2. Ad-hoc Norms: Definition: Ad-hoc norms refer to norms that are fixed on a case-by-case basis for specific products or situations where standard benchmarks may not be applicable or available. Characteristics: ● Customized Solutions: Ad-hoc norms are tailored to the specific requirements and circumstances of individual exporters or products, providing flexibility and customization. ● Exceptional Cases: Ad-hoc norms are applied in exceptional cases where standard SIONs may not accurately reflect the input-output ratios or where exporters face unique challenges or constraints. ● Approval Process: Exporters seeking ad-hoc norms submit applications to DGFT, providing detailed justifications and supporting documents for the proposed norms. ● Limited Validity: Ad-hoc norms may have a limited validity period, after which they require reevaluation and renewal by DGFT to ensure continued relevance and applicability. Searching Norms ~ To access existing Standard Input-Output Norms (SION), exporters can follow these steps: ● Visit the DGFT website at (https://www.dgft.gov.in/CP/). ● Navigate to the "Regulatory Updates" section. ● Select "SION" from the options provided. This will display a list of chapter-wise notes. ● Choose the relevant chapter notes. ● By clicking on the chapter notes, exporters can view the existing SION for that particular chapter. These steps provide a straightforward process for exporters to search and access the specific SION norms they require for their export activities. ~ To access the Application Master Data containing information on SION, Ad-hoc norms, and No norms/Self Declaration Norms, exporters can follow these steps: ● Visit the DGFT website. ● Navigate to the "Regulatory Updates" section. ● Click on "Application Master Data." ● Then, choose from options such as "Standard IO Norms," "Ad-hoc norms," or "SION Chapter-wise Notes." ● Within the selected category, exporters can view details including the types of norms, Export Product Group, ITS(HS Code), and corresponding descriptions. By following these steps, exporters can conveniently access and explore the specific norms relevant to their export activities. Roles of Norms Committee (NC) for Fixation of Norms: 1. Composition and Scope: ● There are 7 Norms Committees (NC) aligned with the Indian Trade Classification (Harmonized System) - ITC (HS) categories of export products (refer to Annexure A). ● Each Norms Committee is responsible for specific product groups and corresponding HS Chapters related to norms fixation. 27

I. T. MIRROR (2023-24) 2. Review of Ad-hoc Norms Applications: ● Exporters submit project reports along with ad-hoc form applications to the respective Norms Committee. ● The Norms Committee conducts a thorough review of the ad-hoc norms application. ● Utilizing input from various technical consultants, the committee determines the permissible wastage proportion that exporters are eligible for. 3. Appeals Process: ● Exporters dissatisfied with the decisions of the Norms Committee have the right to represent their case again to the concerned NC. ● This representation must be made within 4 months from the date of the decision on ad-hoc norm fixation. 4. Setting and Control of SION List: ● The Norms Committee is responsible for establishing and managing the Standard Input Output Norms (SION) list. ● This list serves as a benchmark for determining the quantity of inputs required to produce a unit of output for various products or services. 5. Conversion of Ad-hoc Norms to SION: ● The NC endeavors to convert ad-hoc norms into Standard Input Output Norms (SION) within a specified timeframe. ● Efforts are made to accomplish this conversion within 6 months from the date of ratification of ad-hoc norms. ● Ideally, this conversion should be completed positively within 12 months from the date of ratification. These roles underscore the pivotal responsibilities of the Norms Committee in regulating and optimizing the norms fixation process, ensuring fairness and efficiency in resource allocation for exporters across different product categories. Document required for Norms Fixation under Advance License: 1. DGFT DSC (Digital Signature Certificate): A valid Digital Signature Certificate issued by the Directorate General of Foreign Trade (DGFT) is required for online submission of the application and other related documents. It ensures the authenticity and security of electronic documents. 2. Copy of IEC (Importer Exporter Code): The Importer Exporter Code is a mandatory registration required for carrying out import and export activities in India. A copy of the IEC certificate must be submitted to validate the exporter's identity. 3. Application form ANF - 4B: This is the prescribed application form for seeking fixation of norms under the Advance License scheme. It contains essential details about the exporter, product, and proposed norms. 4. Copy of Valid RCMC (Registration-cum-Membership Certificate): The RCMC is issued by Export Promotion Councils or Commodity Boards and is required for availing various benefits under export promotion schemes. A valid copy of the RCMC specific to the exporter's industry is necessary. 5. Copy of GST Certificate: The Goods and Services Tax (GST) certificate is necessary to validate the exporter's registration under the GST regime in India. 6. Appendix - 4E - Chartered Engineer Certificate: 28

I. T. MIRROR (2023-24) This certificate is issued by a Chartered Engineer and provides technical validation of the manufacturing process, including the justification for claimed wastage at each stage. 7. Appendix 4K: This appendix likely contains additional details or declarations required for the norms fixation process under the Advance License scheme. 8. Application Fees Receipt: Proof of payment of the prescribed application fees is required to complete the application process. 9. Production & Consumption Data of Preceding 3 Financial Years: Detailed data regarding production and consumption for the preceding three financial years are essential for assessing the exporter's historical performance and determining the norms. 10. ADVANCE LICENCE Copy if Taken: If the exporter has previously obtained an Advance License, a copy of the license should be provided for reference. 11. Details of Earlier Licenses Obtained: Information about any licenses obtained for the resultant product during the preceding two licensing years is necessary for tracking the export history. 12. Copy of SSI/IEM/MSME: If applicable, copies of Small Scale Industry (SSI), Industrial Entrepreneur Memorandum (IEM), or Micro, Small, and Medium Enterprises (MSME) registrations should be included. 13. Detailed Technical Notes on Manufacturing Process: A comprehensive explanation, including a manufacturing flowchart, along with technical justifications for claimed wastage at each stage of the process, is required to support the norms fixation application. This document provides insight into the manufacturing process and helps in assessing the validity of the proposed norms. How does the Norms Fixation work? We can get norms fixed in two ways: Prior Fixation of Norms: In this method, exporters seek fixation of norms before obtaining an Advance Authorization. The process typically involves the following steps: ● Application Submission: Exporters submit an application to the concerned a u t h o r i t y ( o f t e n t h e N o r m s Committee) detailing the proposed manufacturing process, input-output ratios, and justifications for the norms sought. ● Technical Evaluation: The submitted application undergoes technical evaluation by experts or technical consultants appointed by the authority. They assess the feasibility and Fixation of Norms after obtaining the Advance Authorization: In this method, exporters obtain an Advance Authorization from the relevant authority before seeking fixation of norms. The process involves the following steps: ● Advance Authorization Obtained: Exporters first obtain an Advance Authorization from the concerned authority, which allows them to import raw materials, inputs, or components duty-free, subject to the condition of export obligation. ● Actual Production: The exporter utilizes the imported materials to manufacture the export product as per the terms and conditions specified in the Advance Authorization. ● Application for Norms Fixation: After completing the manufacturing process, the exporter submits an application to the Norms Committee or relevant authority for fixation of norms. This application 29

I. T. MIRROR (2023-24) reasonableness of the proposed norms, considering factors such as industry s t a n d a r d s , t e c h n o l o g i c a l advancements, and wastage rates. ● Norms Fixation: Based on the technical evaluation, the Norms Committee or relevant authority determines the norms for the specific product or manufacturing process. These norms include input-output ratios, wastage allowances, and any other relevant parameters. ● Approval and Notification: Once the norms are fixed, the authority approves the application and notifies the exporter of the approved norms. These norms are typically published in official documents or guidelines for reference by exporters and customs authorities. includes details of the actual production process, inputoutput ratios observed, wastage incurred, and other relevant information. ● Technical Evaluation: Similar to the prior fixation method, the submitted application undergoes technical evaluation by experts or consultants. They assess the actual production process and determine whether the observed input-output ratios and wastage levels are in line with industry standards and norms. ● Norms Fixation: Based on the technical evaluation, the Norms Committee or authority determines the norms applicable to the actual production process. These norms may differ from initially proposed norms based on the observed production data and technical assessment. ● Approval and Notification: Once the norms are fixed based on actual production data, the authority approves the application and notifies the exporter of the finalized norms. These norms are applicable for future exports under similar conditions. 30

Gmail is one of the widely used email services across the globe which is by Google. It would be very interesting to know how Gmail can be your buddy in Tax Practice. You might be using some or even all the tips provided here, but let's have a look and work out how Gmail can be of much use to the tax practitioners. The focus of this article is to show how the features can be used in our practical life. In this Article I am covering the following features of Gmail 1. Auto Forward mail 2. Using Labels (smartly) 3. Schedule Send 4. Use of Aliases 5. Confidential Mode 6. Smart Search 7. Tasks 1. Auto Forward mail Situations: - Client sent a mail to the staff mail ID, but forgot to CC you. - You have to share your mail ID with staff, forcing you to use another primary mail for your private details like banking etc. - A mail was sent to staff but there was an oversight and you missed an important mail. - You have multiple Gmail IDs but everywhere the space of 15GB (free space) is getting full. - While filing GST Returns, you need OTP. Asking OTP is always a task. Keeping your mail ID for IT or GST registration is now a risk. What to do? - Client receives notices in GST / Income Tax but sends you late. Limited time and you have to literally race against time! Are you facing such issues? Auto forward can be a handy tool (with its own limitations of course). Auto Forwarding feature of most of all mail service providers is a useful solution for such scenarios, here we go with Gmail. There are two ways to set Auto Forward. (1) You can select all mails to auto forward or (2) you can choose specific or all mails received from specific mail IDs to auto forward. How Gmail can be your buddy in Tax Practice! - CA SHRIDHAR SHAH 31

I. T. MIRROR (2023-24) - Open the mail ID which receives the mail which needs to be forwarded - Go to Settings > Forwarding and POP/IMAP > Forwarding - Add a forwarding address (mail ID to which you need to forward mails) - Gmail will require verification - complete verification by getting verification code from the mail ID on which the mails are going to be forwarded For forwarding all incoming mails, select the radio button and dropdowns as per your choice. (useful in case of unattended mail ID / staff mail ID) For client's mail ID, first go through above process to add a forwarding ID and instead of forwarding all mails, just create a filter, add rules and forward mails from specific mail IDs like [email protected] or [email protected] or any other specific mail ID and for specific mails, key words can be used. Remember, It is never advisable to have any of our mail ID / mobile number for any client registrations. 2. Using Labels (smartly) Gmail uses Labels as a dual tool. You can label the mail as well as it can be used as a folder too. Just like our PC, where folders help us to organise the data, using labels can help to organise our inbox and keep the mails clutter free. Also, labels can be nested under other labels too (just like a subfolder inside a folder). But how to use labels smartly? 2.1. Creation of rule through create filter. There is a menu at the end of the search bar, which helps to filter the search as well as creation of filters. You can create multiple labels and set rules (through filter) where a mail from a specific mail ID (even multiple mail IDs) can be directly moved to the label instead of delivery in Inbox. (e.g. you can receive all GST auto forward mails under a label OR you can move all the mails from a client to a specific label OR you can simply get your monthly credit card bills, bank statements etc. under a specific label.) 2.2. If you don't want to move to a label, but you need any mail for future reference, you can just apply a label and the mail will be visible in Inbox as well as from the label. The best part of this feature is that you can apply multiple labels to a single mail and a label can be added or removed just with a single click! (e.g. a mail which you need in GST label and a specific client label can have two or even more than two labels) 3. Schedule Send - Do you feel that the informative mails sent in the evening or during weekends get less attention as compared to mails sent in the morning and during working days? - You regularly send a compliance calendar to your clients on the first day of the month and reminders on specific dates, but you find it difficult when some unexpected situation fails your plans. Schedule Send is a helpful tool for such situations. While composing a mail, there is a drop down in the send button in Gmail, from where you can schedule the date and time to send mail. So now just draft the entire mail at your convenience and put it for scheduled send. Let Gmail do the rest. It's one of the simple but useful Gmail features. 4. Use of Aliases There are two types of Aliases you can use in Gmail. 32

I. T. MIRROR (2023-24) 4.1. Temporary Alias If your gmail ID is [email protected], then [email protected] or [email protected] will always be your mail ID. So basically adding + sign and writing anything before @ in gmail ID is related to the same mail ID. Best thing is you need to do nothing in Gmail settings!! This helps on many websites where we register and then we are being spammed. Better to register with an alias. Alias are easy for setting filters so all updates from even 10 websites can be checked at one go. e.g. you are registering your mail ID on 3-4 websites which send regular updates related to profession. While registering there register your mail ID as [email protected] instead of [email protected]. So now whenever you register on any website which requires registration, register an alias and set filters to directly delete the marketing mails or move to a specific label. It definitely helps you to have a clutter free and spam free experience. 4.2. Permanent Alias Marketing spamming is a real problem which reduces our efficiency. At times we don't feel like sharing our actual mail ID. Nowadays so many websites ask for registration and we are not sure how many registrations we have. Creating permanent aliases can resolve this issue to an extent. For creation of permanent alias, you need another mail ID. So there are two mail IDs. One your primary mail ID & another is your secondary mail ID to use as alias. In Primary mail ID - - Go to Settings > Accounts and Import > Send mail as - Add another email Address. - Fill name and secondary email ID - tick Treat as an alias box & go for verification, verify from the secondary mail ID - You may add reply to option if needed (which helps to have a different reply to mail ID) To keep your primary email address private, change the address connected to the from and reply-to fields. To do this, navigate to your settings, click Accounts and Import > Send mail as > edit info. Now you can give this email ID to any one and even mail from alias ID from your mail ID. This definitely helps improve privacy and at the same time no need to go to multiple mailboxes. 5. Confidential Mode With Gmail confidential mode, protect the sensitive information from unauthorised or accidental sharing. Confidential mode advantages / features: - Set a message expiration date - Revoke message access at any time - Require a verification code by text to open messages - No options to forward, copy, print, or download messages or attachments This feature is useful when you want a specific person to access your email and share private information. It will ensure that the mail is not available to forward, copy, print or download (however, nothing can stop someone from taking screenshots). Also, with verification code, it is made secure. With expiry date, the message is automatically discarded. Even with revoke access from sent mail, you can revoke access even after sending the mail. To use confidential mode, at the time of composing mail, select the “Toggle Confidential Mode” button from the bottom bar to get the options related to confidential mode. 33

I. T. MIRROR (2023-24) By using expiry date, the mail automatically becomes self-destructing mail. This feature is useful for sharing sensitive details with clients when the client account is used by multiple people or you want the mail to be removed after a certain period of time. 6. Smart Search Google is the most popular search engine and they have integrated very deep searching options in Gmail. In the search bar, there is a sign for “Show Search Options” where you can specify many criteria to filter your search results. But there are some shortcuts which you can type while searching and it can improve search results to a great extent. Here is the list of some useful search operators. Full list is available at https://support.google.com/mail/answer/7190?hl=en - Mail received from a specific sender - from:suresh - Mail sent to a specific sender - to: suresh - Search word in subject line only - subject: reliable industries - Search with multiple terms, use OR or { } - from: suresh OR from: rakesh / {from: suresh from: rakesh} - Mails with certain named attachments - filename: computation 2023 - Search for mails sent during a certain time period - after: 01/04/2024; before: 01/04/2024; older: 01/04/2024; newer: 01/04/2024 - For exact matching result, use + sign - +registration certificate 7. Tasks Gmail is loaded with Add-ons, which improve the usability of your google service. There is a right side panel in Gmail which contains few shortcuts like Keep (for taking notes), Tasks (for task management), Calendar, Contact etc., which can be customised. We will understand how tasks work for professionals. Google Tasks is also available as an Application for Android & iOS. WIth tasks you can - Add task with description and due date / time - Set a task on repeat mode - Set a sub-task (sub-task can not be put on repeat mode) - Update the status of the task, date/ time and mark as completed - Make multiple lists to use task - Synchronise task with Google Calendar - View your completed tasks - Access from anywhere (Web / Application) from any device Author Remarks: Gmail is a very efficient tool with hundreds of options available for users. Exploring these features and options and making a use case for the profession is in our hands. With our professional life mostly moving to technology assisted and digital, it is time to understand the products in the best efficient manner. In the help section of Gmail, what we call mail or email in regular terms, is called message. However, to avoid confusion, I have used the word “mail” for an email message in this article. 34

Preamble: Diversifying investment portfolios has become increasingly popular among Indian investors through international stock investments. Initially, there were only two avenues for investing in US equities: through a US-registered broker or via International Mutual Funds focusing on foreign companies. However, a third option has emerged—Indian investors can now participate in the trading of leading US stocks on the NSE IFSC (International Financial Service Centre) Exchange. This exchange, located in GIFT City (Gujarat International Finance Tech City), Gandhinagar, began facilitating Indian retail investors' trade in US stocks from March 3, 2022. In this blog, we will discuss what the NSE IFSC exchange is, how you can buy and sell US stocks on the new exchange, and some key things you must keep in mind before you start trading. Definition of NSE IFSC Exchange The NSE IFSC (International Financial Service Centre) stands as a wholly-owned subsidiary of the National Stock Exchange (NSE). Functioning as an international stock exchange situated in GIFT City, Gandhinagar, it was established with the aim of facilitating convenient trading in Indian equities for NRIs (Non-Resident Indians) and foreign investors. Recently, this NSE subsidiary has expanded its services, allowing retail investors in India to seamlessly purchase stocks listed in the United States through the NSE IFSC exchange. The NSE IFSC exchange in GIFT City operates as an international platform where all transactions occur in foreign currency, specifically in US dollars. Given that investments outside India in foreign exchange fall under the Liberalized Remittance Scheme (LRS), any investments made in NSE IFSC US stocks would adhere to this scheme. According to LRS regulations, investors are permitted to invest up to a maximum of US$ 2.5 lakh during a financial year. Therefore, this amount serves as the upper limit for investing in US stocks listed on the NSE IFSC. How To Trade Currently, the NSE IFSC Exchange allows the purchase of 8 US stocks, including Alphabet (Google), Amazon, Meta Platforms (Facebook), Netflix, Apple, Walmart, Tesla, and Microsoft. However, there are plans to expand the offering to include a total of 50 US stocks, which will be introduced on the exchange gradually. The trading hours on the NSE IFSC will align with those of the NYSE (New York Stock Exchange), spanning from 8 pm IST to 2:30 pm IST. To trade or buy these stocks, you will need a new demat account. Your existing demat account for trading domestic shares will not be enough and you will have to open a special demat account. That's why, you have to do the following: To begin trading in US stocks on the NSE IFSC Exchange, initiate the process by opening a trading and demat account with a broker registered with IFSC. If your existing broker is already registered with NSE IFSC, contact them to inquire about any specific formalities you need to fulfill before commencing trading on the international exchange. For an updated list of IFSC-registered brokers and their contact information, refer to the provided resource. This approach ensures that you follow the necessary steps and collaborate with a registered broker to seamlessly engage in US stock trading on the NSE IFSC Exchange. Buying US Stocks On The NSE IFSC Exchange - CS JEKIL PANCHOLI 35

I. T. MIRROR (2023-24) Transfer funds from your Indian bank account to the account of the IFSC-registered broker. It's essential to note that NSE IFSC trades are denominated in US dollars, not Indian rupees. Therefore, currency conversion is a mandatory step to facilitate investments in NSE IFSC US stocks. After the funds have been successfully transferred to the account of the IFSC-registered broker, you are ready to commence trading in US stocks listed on the NSE IFSC Exchange. This process ensures that you have the necessary funds in the right currency to engage in trading activities on the international exchange. Points To Be Kept In Mind Before Investment: 1. You Get Depository Receipts Not Shares Investors utilizing the NSE IFSC exchange do not directly purchase actual US stocks of the company. Instead, they receive depository receipts (DRs), which are financial instruments representing an equity stock listed on a foreign exchange. Depository receipts offer a mechanism for investors to hold equity shares of foreign companies without the necessity of directly engaging in trades on a foreign stock exchange. 2. You Can Buy US Stocks In Fractions Unlike direct equity transactions on an international stock exchange, you can purchase US stocks in fractions using DRs. This increases affordability as the cost of actual US stocks runs into hundreds and thousands of dollars. Various Types of Costs and Taxations: Before you start trading in US stocks on this international exchange, there are a few things you should keep in mind: NSE IFSC Transaction Fees: Currently the NSE IFSC exchange charges 12 cents for every US$100 of stocks traded. So 0.12% of the transaction value is charged as transaction fees by the exchange. However, there is no additional Securities Transaction Tax (STT) or stamp duty for these transactions. Brokerage and Demat Account Charges: Purchasing or selling US stocks on the NSE IFSC exchange also features brokerage and demat charges that can vary from one broker to another. Currency Conversion Charges: Since you have to complete your transactions using US dollars, you will be charged a currency conversion fee by the bank. This fee can also vary from one bank to another. Taxation of Gains: There is currently some confusion if DR of US stocks will be taxed as per the rules similar to gains from direct international equity investments. If the rules are the same, you have to stay invested for 2 years or longer prior to redemption in order to qualify for long-term capital gains (LTCG). Currently, short-term capital gains (STCG) on US stocks held for less than 2 years prior to redemption are taxed as per the slab rate of the investor. LTCG rate for these US stocks is 20% with indexation. CONCLUSION: It's important to recognize that investing directly in individual US stocks carries unique risks, necessitating thorough research for each stock before making investment decisions. For investors who may lack the time or expertise to conduct in-depth research on individual stocks, an alternative strategy is to consider Mutual Funds that specialize in foreign equities. This approach allows for portfolio diversification without the need for detailed stock analysis. Presently, several international funds in India offer investors opportunities to diversify across not only US stocks but also other regions such as Japan, China, and the European Union, providing a well-rounded approach to global investment exposure. 36

Glimpses of Fourth Study Circle and CA Bakul I. Shah & Late Shri Ramniwas Basantilal Rathi Elocution Competition

Glimpses of Fourth Study Circle and CA Bakul I. Shah & Late Shri Ramniwas Basantilal Rathi Elocution Competition