I.T. MIRROR 23-24 VOL 4

Income Tax Bar Association 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 Vol. 4 September

Glimpses of First Webinar on 18/08/2023

6 11 14 17 19 22 27 38 Appeals Before CIT(A) - Adv. Jaimin Gandhi Jurisdictional issue of the Notices issued under Section 148 of the Income Tax Act, 1961 - Adv (CA) Hirak Shah Reporting of TDS / TCS in Clause 34 (a) of Form 3CD - CA Mayur J Sondagar Understanding Time of Supply under GST Law - Abhishek Raja Ram Input Service Distributor v/s Cross Charge - the saga continues - CA Jenil Shah Key recommendations of 50th GST Council Meeting - CA Pratibha Goyal Understanding the Power to Summon under GST - CA Jaykishan Vidhwani Redevelopment of a Real Estate Project in Gujarat - Adv (CS) Lokesh Shah - CA Harsh Mehta All about Corporate Social Responsibility [CSR] under Companies Act, 2023 - Adv (CS) Harshvardhan A. Sharma - CS Archita H Sharma GIFT City - Entry & Exit Clause - CA Bhavin Soni 30 34 2 Chairman's Message 3 President's Message 4 Hon. Secretary's Message - CA (Dr.) Vishves Shah - CA Ashish Tekwani - CA Jaykishan Pamnani 5 Message of SAC Director - Shri N. M. Desai Distinguished Scientist 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. 4 - September CONTENTS

Chairman’s Message CA (Dr.) VISHVES SHAH Chairman 2 Dear Readers, I am pleased to present before you another issue of our association's mouthpiece, IT Mirror, a place where we share knowledge and wisdom vital for tax professionals like you. This time, we are diving into direct and indirect taxes, examining the world of RERA, and exploring related laws that affect our work. Taxes can be tricky, and they keep changing. In this issue, we aim to drive you through these changes, helping you make sense of new rules, adjustments, and interpretations. Staying up to date is not just important; it's a MUSTin our field. The central idea behind the regular publications by the Association is "Learners for Lifetime". As tax professionals, we guide people and businesses through tax laws. In this ever-changing world, learning never stops. We must keep up with new tax rules, learn how technology affects our work, and get better at presenting our cases. In these pages, you will find articles by the experts which explain why learning is so important. We show how staying informed, learning new skills, and adapting to change are keys to success. I want to thank our dedicated authors, contributors, and the hard-working team behind this issue of IT Mirror. Their hard work ensures that IT Mirror stays full of wisdom and remains a source of inspiration for all tax professionals. I also wish to congratulate the President CA Ashish Tekwani for having a vision to publish IT Mirror every month and publishing 4th issue in 4th month. As we read through this issue, let's remind ourselves to keep learning. Let's commit to becoming even better at what we do. Together, we will understand taxes better, fight for fairness, and keep up the good work we do every day. Thank you for your support and dedication to the Association. I look forward to seeing our community grow and succeed. Warm regards, CA(Dr.) Vishves A. Shah Chairman - ITMirror

3 Dear Members, As we embark on the month of September 2023, we find ourselves at a crucial juncture in the world of taxation and allied laws. This month's issue comes at a time when we will not only be celebrating various festivals, but it is also the onset of the busy tax audit season. Balancing professional commitments with personal festivities can be quite a challenge, and this is where the true mettle of tax professionals shines through. September marks the beginning of the festive season in our diverse and culturally rich country. We are blessed to celebrate a multitude of festivals, each with its unique customs and traditions. While these celebrations bring joy and togetherness, they also present a test of our ability to manage our professional responsibilities. Tax professionals are often called upon to ensure that financial matters stay on track during these times of celebration, a task that requires exceptional dedication and commitment. On the professional front, September also signals the start of the tax audit season. As tax professionals, we understand that this is a period of heightened activity and pressure. Tax audits demand our utmost attention to detail, patience, and diligence. Our role is not only to assist our clients in complying with the tax laws but also to represent them effectively during audits. It is during this season that the true value of our expertise is demonstrated, and we must rise to the occasion. Amidst the hustle and bustle of festive preparations and tax audits, it is imperative that we remember the importance of maintaining a balanced life. Our profession can be demanding, often requiring long hours and unwavering focus. However, we must not forget to carve out time for ourselves and our loved ones. A harmonious work-life balance is essential for our well-being and productivity. This balance not only rejuvenates us but also enhances our efficiency in serving our clients. As tax professionals, we play a crucial role in nation-building. Our expertise ensures that the government's tax revenue is collected efficiently and fairly. This revenue, in turn, fuels the development and growth of our nation. We are not just advisors; we are partners in the progress of our country. Let us continue to discharge our duties with integrity, ensuring that the tax system remains robust and transparent. I wish you all a successful tax audit season, joyous festivals, and a balanced life ahead. Together, we will continue to contribute to the growth and prosperity of our great nation. Warm regards, CA Ashish Tekwani President Income Tax Bar Association President’s Message CA ASHISH TEKWANI President

Dear Members, It is my pleasure to address you as the Secretary of the Income Tax Bar Association, Ahmedabad. I am grateful to have been given this opportunity to serve the association and its members and contribute to its growth and development. I hope this message finds you and your loved ones in good health and high spirits. I am thrilled to announce that your Association is issuing its 4th Edition of ITMirror for the activity year 2023-24. As the Secretary of our esteemed organization, I am delighted to share this exciting news with you. Our team has been working diligently to curate a collection of insightful articles, analyses and updates that cover a wide spectrum of tax and other allied laws related topics. The IT Mirror aims to provide you with in-depth insights into the ever-evolving landscape of taxation, helping you stay informed and updated in your professional pursuits. This magazine is a testament to the expertise and dedication of our contributors who have shared their knowledge and experience to create a resource that is both informative and thought provoking. The IT Mirror magazine promises to offer valuable content for professionals. I would like to express my gratitude to the editorial team for their meticulous work in bringing this magazine to the members. Their commitment for maintaining the highest standards of quality is evident in every page and I am confident that you will find ITMirror magazine to be a valuable addition to your professional library. As you all know, the Association has made all past editions of the IT Mirror available online for all its members. The members may download the magazine online through the link and also through scanning the QR Code provided in the mail. This initiative has been praised by many members. Be sure to keep an eye on your mail inbox for the 5th edition. Further, on 23rd August, 2023, India created the history by reaching on the moon for the first time and became 4th country in the world after USA, China and Russia. It was a proud moment for all of us as Indians. Also India created the WORLD RECORD by landing on the south pole of the moon. No country has ever landed on the South Pole before India. We from the bottom of our heart thank ISRO and all the great scientists and whole team of ISRO for making all of us proud. We salute to their tireless efforts for CHANDRAYAAN 3 mission. In conclusion, I would like to thank all the respected members of the Association for their ongoing support and engagement. I look forward to your feedback and hope that the IT Mirror magazine proves to be a valuable source of knowledge for all our readers. I wish you all prosperity and success in your personal and professional endeavors. I also wish all the tax professionals a successful audit season. Happy reading!!! Warm Regards. Yours Sincerely, CA Jaykishan Pamnani Hon. Secretary Income Tax Bar Association CA JAYKISHAN PAMNANI Hon. Secretary 4 Hon. Secretary’s Message

5 Message of SAC Director

Appeals Before CIT (A) The purpose of this article is to explain the basics of various aspects of filing of appeals before Commissioner of Income Tax (Appeals). (A) STATEMENT OF FACTS The Statement of Facts (SOF) becomes a part of the permanent record to determine the issues of facts. The purpose of SOF is to present in a concise form, the material facts on which the appellant relies upon in his support but not the evidence by which they are to be proved. Though the concept of SOF is neither defined nor mentioned either in the Act or in Rules but it is derived from Order VI "Pleadings Generally" of The Civil Procedure Code, 1908. The form notified under the Act for the purpose of filing appeal before CIT (A) provides for filing of SOF. Accordingly it is a mandatory requirement and an appeal filed without a SOF is a defective appeal and it cannot be adjudicated till the defect is removed. The SOF should be drafted in a clear, lucid, logical, coherent manner and in a narrative form without any argument. Since the SOF is only required to be filed before CIT(A) and not before any other higher appellate authority, it forms an integral basis for all subsequent appellate proceedings. It is based on the principle that the facts always remain static or constant and do not mutate over time. It may not be possible for the appellant to add new facts on record before a higher appellate authority. So it shall be drafted cautiously. Points to take care fordrafting SOF: (a) All material and necessary facts must be disclosed since it may not be possible for the appellant to bring out new facts on record before a higher appellate authority (ie. ITAT, High Court or Supreme Court). Even if the higher appellate authority permits the appellant to place on record additional facts, it comes with the risk of the matter being remanded back to the lower authorities, resulting in delay, additional litigation cost and procedural issues. (b) Since the facts are always in the knowledge of the appellant, the appellant bears the duty of disclosure of full and complete material facts. If the respondent proves that the failure to disclose a material fact was with malafide intent, it may result into the court holding that the appellant has suppressed material fact resulting in the dismissal of the appeal. Though “material fact” is neither defined in Income Tax Act, 1961 nor Civil Procedure Code, 1908, but generally it includes all those facts which must be proved in order to establish the right to claim a relief (c) The contents of SOF to include the brief overview of the case including the nature of the appellant's business activities, a summary of the grievances of the appellant on the point of facts (eg. reasons for rejection of books of accounts), various points of law (eg. lack of Jurisdiction, failure providing opportunity of cross examination) and procedural issues (eg. violation of principles of natural justice, lack of opportunity of hearing). (d) It should be clear, specific and unambiguous. It should only narrate the facts. An elaborate discussion on laws and arguments should be avoided. - ADV. JAIMIN GANDHI 6

7 (e) It should be used as an opportunity to bring additional facts on record if the same were not or could not have been brought before the assessing officer (Not additional evidence). (f) All the factual mistakes, errors and incorrect observations of the assessing officer must be specifically mentioned and challenged. Moreover the correct position should also be expressed. (eg - the assessing officer has stated erroneously that certain details were called for but not submitted). (g) Issue such as lack of proper opportunity of being heard or violation of principle of natural justice (eg. denial of cross examination) must be specifically brought out. This will also assist the case of the appellant for the purpose of placing on record additional evidences under rule 46Aof The Income Tax Rules, 1962, if required. (h) It should be divided into proper paragraphs, structured properly and state the facts as far as possible in the chronological order. (B) GROUNDS OF APPEAL • They convey the grievances of the appellant. It is the most important part of the appeal. It should be comprehensive, clear and concise. Though there are no standard guidelines or rules for drafting the grounds of appeal, the commonly accepted practices are as under:- All the causes of action (controversies – addition, deletion etc.) involved should be included. Even those controversies wherein the chances of success are limited on account of factual weaknesses or legal interpretation, particularly later, shall be included. Law is continuously evolving and so even if the present interpretation is not entirely favourable, the possibility of future developments altering the interpretation cannot be ignored. • The ground should be brief, indicating the nature of dispute and the relief prayed for. It should not be argumentative. The grounds of appeal convey the specific grievances of the appellant and not the underlying arguments. The arguments are not a part of the grounds of appeal. It can be submitted by way of written submissions. • Further, the arguments are required to be supplemented by the future judicial and legislative developments or any additional factual evidences. Normally case laws should be avoided in the grounds. • The language used must be firm but not be offensive, emotional or personal. Unnecessary jargons and adjectives shall be avoided. • Grounds must be serially numbered and there should be a separate ground for each grievance. • Normally the issues pertaining to jurisdiction of the assessing officer are dealt with first and the other issues are dealt with later on by the appellate authority. Accordingly the grounds pertaining to the jurisdiction of the assessing officer should be taken up first. • Legal issues regarding non-compliance with basic requirements such as applicability or non-applicability of a specific provision, lack of proper opportunity of being heard, denial of opportunity of cross-examination etc. must be specifically and independently challenged in the grounds of appeal. It will also assist the case of the appellant for the purpose of admission of additional evidence under Rule 46A of the Income Tax Rules, 1962. • Normally for a particular issue (addition or dis-allowance), the grounds pertaining to interpretation of law (legal grounds) should be taken up first, to be followed by the grounds on facts of that issue. I. T. MIRROR (2023-24)

8 I. T. MIRROR (2023-24) • The first ground should be of general nature challenging the entire action of the assessing officer. The last ground should be in a form of a permission to add, delete, modify, alter or even substitute a ground. • The appellant must take alternative ground for relief for the same cause of action in case the original ground fails(eg - if the appellant is challenging the applicability of section 14A in the facts of the case then alternatively the appellant should also claim that the dis-allowance cannot exceed the exempt income. The appellant must clarify that the ground is of an alternative nature and it will be enforced only in the event if the appellant does not succeed in the main ground. • Illustrations of Grounds of Appeal:- The Ld. AO erred in disallowing the travelling expenditure of Rs.10,00,000/-. The learned AO failed to appreciate that the appellant had substantiated that the expenditure was wholly for the purpose of business. (C) ADDITIONAL GROUND / FRESH CLAIM BEFORE CIT (A) Additional Ground • Section 250 (5) permits the Commissioner (Appeals) to adjudicate on any ground of appeal not specified in the grounds originally raised in the memo of appeal, if he satisfied that the omission was not wilful or unreasonable. The judicial analysis of judgments of various Tribunals and Courts indicate that the discretion shall be exercised liberally and ordinarily the appellant should be permitted to raise the additional ground unless the omission was wilful or unreasonable. Fresh Claim • It is clarified that an additional ground is not the same as a fresh claim. Afresh claim means a claim which was not made before the Assessing Officer whereas additional ground means a ground arising out of the assessment order but it was omitted to be raised in the original appeal memo. Accordingly a fresh claim means a claim which is not made in the return of income or the belated return of income. • If the fresh claim is regarding the jurisdiction of the Assessing Officer then it can be raised at any stage. If the fresh claim pertains to an alternate issue, which could not have been raised at the time of filing return then it can be allowed. For eg.- the assessee did not claim deduction u/s 80 since it filed return of income at nil income. Now as a result of the assessment, the assessee is having taxable income, the assessee can claim deduction u/s 80 [172 Taxman 83 (Jaipur)(Mag), ITO v World Wide Stones] [120 Taxman 887 (Mad), CITv/s Pioneer Press Pvt Ltd][208 Taxman 498 (Bom) CITv/s Prithvi Brokers Pvt Ltd]. • Fresh claim can be entertained if the necessary documentary evidences are already available on record to verify the factual aspects of the claim[111 ITR 1 (SC), ACIT v/s Gurjargravures Pvt Ltd] [272 Taxman 543 (Bom), Sesa Goa Ltd v/s ACIT] [3 SOT87 (Del Trib), Mantec Consultants Pvt Ltd v/s ACIT] • The Honorable Supreme Court in the case of National Thermal Power Company Limited v. CIT, reported at 229 ITR 383 (SC), was deciding whether a fresh claim can be raised for the first time before The Honorable Tribunal. The Supreme Court has held that the Tribunal has the widest possible powers for the purpose of deciding the appeals and so the assessee can raise a question of law for the first time before the Tribunal so long as the relevant facts are on record.

9 I. T. MIRROR (2023-24) (D) ADDITIONAL EVIDENCES BEFORE CIT (A) • Normally the appellant cannot supplement or add to the evidences already filed before the assessing officer. If the appellant intends to submit evidence which was not placed by him before the assessing officer (hereafter referred to as "the additional evidence") then he has to follow the procedure as prescribed by Rule 46Aof the Income Tax Rules, 1962. • The appellant is required to make a separate application under rule 46A(1), seeking permission to produce additional evidence by narrating the circumstances under which the appellant was prevented to file the same before AO. The appellant must make out a case to fall within the exceptions narrated under rule 46A. • Rule 46A permits production of additional evidences only in the following circumstances:- (a) the AO has refused to admit evidence, which AO ought to have admitted (b) the appellant was prevented by sufficient cause to produce the evidence before the AO, which AO has called upon to produce or is otherwise relevant to any ground of appeal or (c) the AO has passed the assessment order without giving sufficient opportunity to adduce evidence. • The CIT (A) has to record its reason for admitting or rejecting the application seeking permission to file additional evidence. If the CIT(A) allows the additional evidences then it must permit the AO an opportunity of examining the evidence, document or cross examine the witness produced by the appellant and further produce new evidence on its side in rebuttal. • The CIT (A) shall not take into account any evidence produced unless AO has been allowed a reasonable opportunity to (a) to examine the documentary evidences,(b) to cross examine the witnesses produced by the appellant and (c) produce any evidence (documentary or witness) in rebuttal. • Rule 46A (4) read with section 250(4) empowers CIT (A) to direct the production of any document or examination of any witness, to enable itself to dispose of the appeal or for any other substantial cause including enhancement of assessment or penalty. Since it is discretionary power of CIT(A), if the appellant is otherwise not entitled to produce additional evidence under rule 46A, the appellant cannot as a matter of right require the CIT(A) to exercise its discretionary powers under rule 46A(4). (E) STAY ON RECOVERY • There is no bar on the assessee from pursuing a matter in appeal even if the appellant has not paid the tax determined by the assessment order. The appellant is required to pay the outstanding tax as per the demand notice issued u/w 156 within 30 days. Section 220 authorises the AO to extend the time for payment or allow payment by installments. Section 220(6) empowers the AO in his discretion, to treat the assessee as not being in the fault in respect of the amount in dispute in appeal, even though the time for payment is expired. • As per circular dated 29/02/2016 if 15% of the disputed demand is paid by the appellant then the assessing officer shall not enforce recovery during the pendency of the appeal before CIT (A). The AO has the discretion to demand a higher or lower amount. If the appellant is not satisfied with the order of the AO, the appellant can approach The Principal Commissioner or The Commissioner for review of the decision. Subsequently the instructions were revised by instruction dated 31/07/2017 and requirement of payment of 15% of the disputed amount was revised to 20% of the disputed amount. • Though the Act does not specifically empower the CIT(A) to grant stay on demand, s.251 (1) (c) enables CIT (A) to "in any other case, pass such orders as he deem fit".Various judicial decisions suggest that the above powers are wide enough to include the power to grant stay on demand. Accordingly, after exhausting the above mentioned remedies, the appellant can file an application for stay before CIT(A).

I. T. MIRROR (2023-24) • While deciding the issue of stay on demand, the CIT(A) has a delicate task of balancing the case made out by the appellant by considering the appellant's financial condition, prima facie case and safeguards to protect the interest of the revenue. Filing of an appeal does not automatically stay the operation of the assessment order. (F) AGREED ADDITION • The assessee may, after due consideration of the facts, decide to surrender a particular issue or agree to an addition. There is no immediate or a legal bar on filing appeal against an assessment order involving an agreed addition. Normally, having agreed to a certain addition, it negates the possibility of a successful challenge by an appeal. But if the assessee can successfully prove that the surrender or consent was under a mistaken belief or by misunderstanding or wrong interpretation of law then it can be successfully challenged by way of an appeal. • The procedure to be followed in an agreed addition is:- (a) file an application for rectification u/s 154 before AO, stating all the facts whereby the addition was mistakenly agreed to (b) support the application u/s 154 by an affidavit affirming all the facts and circumstances and further state that the addition has defeated the purpose of assessment by not taxing the correct income (c) in case the rectification application is rejected then file an appeal before CIT(A). 10

11 Jurisdictional issue of the Notices issued under Section 148 of the Income Tax Act, 1961 1. The Income Tax Department has been issuing notices under Section 148 of the Income Tax Act, 1961 for initiating re-opening of assessments under Section 147 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”)to various assessees across the country. However, the jurisdiction of such notices basis landmark judgements passed by the Hon'ble Supreme Court and Hon'ble Gujarat High Court is under serious consideration. 2. The present article delves into the relevant legal provisions of the Income Tax Act, 1961, the present ongoing situation across the country with respect to issuance of Notice for re-opening of assessment pertaining to Assessment Year 2013-14 and 2014-15 and the legal position adopted by various Courts of Law with respect to jurisdiction of Notices issued under section 148. 3. Relevant Legal Provisions of the Income Tax Act, 1961 The relevant legal provisions for analyzing the jurisdiction of the notices issued for re-opening of assessment are as under: A. Section 147: Income escaping assessment If any income chargeable to tax, in the case of an assessee, has escaped assessment for any assessment year, the Assessing Officer may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance or any other allowance or deduction for such assessment year (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year). B. Section 148: Issue of notice where income has escaped assessment Before making the assessment, reassessment or recomputation under section 147, and subject to the provisions of section 148A, the Assessing Officer shall serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of section 148A, requiring him to furnish within [a period of three months from the end of the month in which such notice is issued, or such further period as may be allowed by the Assessing Officer on the basis of an application made in this regard by the assessee], a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139: Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice: [Provided further that no such approval shall be required where the Assessing Officer, with the prior approval of the specified authority, has passed an order under clause (d) of section 148A to the effect that it is a fit case to issue a notice under this section:] - ADV(CA) HIRAK SHAH

I. T. MIRROR (2023-24) [Provided also that any return of income, required to be furnished by an assessee under this section and furnished beyond the period allowed shall not be deemed to be a return under section 139.] C. Section 148A: Conducting inquiry, providing opportunity before issue of notice under section 148 [Inserted by Finance Act, 2021] The Assessing Officer shall, before issuing any notice under section 148,— (a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment; (b) provide an opportunity of being heard to the assessee, 23[***] by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a); (c) consider the reply of assessee furnished, if any, in response to the show-cause notice referred to in clause (b); (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires: BRIEF BACKGROUND AND THE RELEVANT JUDGEMENTS ISSUED BY VARIOUS HIGH COURTS 4. Numerous assessees across the country have received notices from the Department initiating re-opening of assessments for Assessment Year 2013-14 and 2014-15. In the interim, vide Finance Act, 2021, provisions relating to reassessment proceedings of Section 148 of the Income Tax Act, 1961 were substituted with st effect from 01 April 2021 whereby a separate mechanism to be followed by tax authority before issuing the notice for reopening assessments was prescribed and the same was materially different from the procedure laid down under the erstwhile reassessment provisions of Section 148 of the Act. The new reassessment provisions provided for a curtailed time limit of 4 years from the end of relevant assessment year. 5. Pursuant thereto, the Hon'ble Supreme Court in the case of Union of India & Others vsAshish Agarwal – [Civil Appeal No. 3005/2022]vide judgement dated 04.05.2022 held that the Revenue be permitted to proceed with reassessment proceedings as per the substituted reassessment law by the Finance Act, 2021 subject to the compliance of all the procedural requirements and defences available to the assessee under the substituted reassessment provisions. 6. Consequent to the said judgement which led to its first round of litigation, a common issue which arose before the Hon'ble Gujarat High Court and the Hon'ble Allahabad High Court was whether to consider the revised reassessment notices which were issued beyond the limitation period under the erstwhile provisions of Section 148 of the Act as invalid. 7. Thereafter, the Hon'ble Gujarat High Court in the case of Keenara Industries Private Limited vs the Income Tax Officer, Ward 1(1)(3), Surat – [SCA No. 17321/2022]held that the Notices issued under Section 148 of the Act between 01 April 2021 to 30 June 2021 are required to fulfill the test of limitation as st th on 31 March 2021 and thereafter held that the reassessment proceedings relevant to AY2013-14 and 2014- st 15 initiated after 31 March 2021 are required to be quashed and set aside being barred by limitation. st 12

13 ANALYSIS AND COMMENTS 8. Despite the aforementioned judgements passed by the Hon'ble Supreme Court and the Hon'ble Gujarat High Court, the Department has proceeded to issue notices under the provisions of Section 148 of the Act to initiate reassessment proceedings for AY 2013-14 and 2014-15. Numerous writ petitions have been filed before various High Courts challenging the jurisdiction of the said notices whereby the Hon'ble High Courts have been kind enough to grant stay on the reassessment proceedings and simultaneously directing that the Department shall not proceed to issue final assessment order. 9. On the other hand, with the objective that the assessees do not obtain stay of reassessment proceedings from the Hon'ble High Courts, the Department have been quick to frame assessment orders and confirm demand liability upon the assessees. It is pertinent to note that once the assessment order is framed, the assessee is then compelled to follow the hierarchical route of challenging the assessment order by way of an appeal before Commissioner (Appeals). 10. Even in such scenarios, preferring a writ petition before the Hon'ble High Court would be a preferable st option as the same is backed by the judgement dated 01 March 2023 passed by the Hon'ble Madhya Pradesh High Court in case of M/s Space Enclave Private Limited vs Income Tax Department [WP No. 19516 of 2022]wherein it was held that as the jurisdictional issue of notices was raised, even assuming an alternative remedy under section 246 of the Act of preferring an appeal is available, it will not operate as an absolute bar for entertaining the writ petition as jurisdictional issues goes to the root of the matter and it is one of the exceptional factors carved out by the Hon'ble Supreme Court for exercise of jurisdiction under Article 226 of the Constitution of India. 11. Only time will tell the ultimate fate qua the jurisdictional issue of the notices issued under section 148 of the Act however considering all the stakeholders involved and in the interest of the assessee, preferring a writ petition challenging the jurisdiction of the notices issued and obtaining stay on reassessment proceedings looks the only way forward for the time being. I. T. MIRROR (2023-24)

Reporting of TDS /TCS in Clause 34 (a) of Form 3CD What is Clause No. 34(a) of Form No. 3CD? 34. (a) Whether the assessee is required to deduct or collect tax as per the provisions of Chapter XVII-B or Chapter XVII-BB, if yes please furnish: - MAYUR SONDAGAR Tax deductio n and collection Account Number (TAN) Sectio n Nature of payment Total amount of payment or receipt of the nature specifie d in column (3) Total amount on which tax was require d to be deducte d or collecte d out of (4) Total amount on which tax was deducted or collected at specified rate out of (5) Amoun t of tax deducte d or collecte d out of (6) Total amount on which tax was deducted or collected at less than specified rate out of (7) Amount of tax deducte d or collecte d on (8) Amount of tax deducted or collected not deposited to the credit of the Central Governme nt out of (6) and (8) How to do reporting in the said clause practically? Details of payment and TDS deducted Date Name Section Amount Paid TDS Reason 15-06-2022 21-06-2022 25-06-2022 28-06-2022 Shridhar Sudhir Arpit Saurin 194J 194J 194J 194J Total 25000 40000 50000 60000 175000 Nil 4000 2500 6000 12500 Payment below threshold limit of Rs.30,000 TDS @ 10 % (Payment above threshold limit of Rs.30,000) TDS @ 5 % (Received Lower Deduction Certificate) TDS @ 10 % (But Saurin is specified person u/s 206AB) 14 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) Rs. Rs.

I. T. MIRROR (2023-24) 15 Reporting under Clause No. 34(a) TAN TDS Section Nature of payment Total payments of specified nature Sum liable to TDS TDS at specified rate Sum liable TDS TDS at Lower rate Sum liable TDS 1 2 3 4 5 6 7 8 9 TAN 194J Fees/Royalty 175000 150000 90000 6500 60000 6000 Explanation: - Sum liable to TDS is Rs. 150000 = 40000 + 50000 + 60000 - TDS at specified rate is 90000 = 40000 + 50000* & TDS is 6500 = 4000 +2500* - TDS at Lower rate 6000 because Saurin is specified person u/s 206AB so TDS required to be deducted at higher rate *In case the payer deducts/recipient collects tax at source at a rate lower than the specified rate on the basis of certificate issued under section 195 or 197, the lower rate or nil rate, as the case may be will be considered as the specified rate for the purpose of reporting under this clause. Details of payment and TDS deducted Date Name Section Amount Paid Rs. TDS Rs. Reason 15-06-2022 21-06-2022 28-06-2022 Ind HUF Pvt Ltd 194C 194C 194C Total 20000 70000 90000 180000 Nil 700 900 1600 Payment below threshold limit of Rs.30,000 TDS @ 1 % (Payment above threshold limit of Rs.30,000) TDS @ 1 % (TDS Deducted @ 1 % instead of 2 %) Reporting under Clause No. 34(a) TAN TDS Section Nature of payment Total payments of specified nature Sum liable to TDS TDS at specified rate Sum liable TDS TDS at Lower rate Sum liable TDS 1 2 3 4 5 6 7 8 9 TAN 194J Contract 180000 160000 70000 700 90000 900

Explanation: - Sum liable to TDS is Rs. 160000 = 70000+90000 - TDS at specified rate is Rs. 70000 & TDS is Rs. 700 - TDS at Lower rate is Rs.900 because u/s 194C TDS Rate for Pvt Ltd is @ 2% but here TDS deducted @ 1% Due Dates for Furnishing TDS/TCS Returns for FY 2022 – 2023 Quater Form 26Q TDS Return other than Salary for residents Form 27EQ TCS Return 1 Form 27Q TDS Return other than Salary for non residents Form 24Q TDS Return on Salary 31-07-2022 31-07-2022 31-07-2022 15-07-2022 2 31-10-2022 31-10-2022 30-11-2022# 15-10-2022 3 31-01-2023 31-01-2023 31-01-2023 15-01-2023 4 31-05-2023 31-05-2023 31-05-2023 15-05-2023 #Extended from 31/10/2022 to 30/11/2022 vide Circular no.21/2022, dated 27-10-22 Due Dates for Payment of TDS/TCS for FY 2022 – 2023 Section 201(1A): If TDS is paid after due date then Interest payable @ 1.5 % for every month or part of a month on TDS amount. Section 206C(7): If TCS paid after due date then Interest payable @ 1 % for every month or part of a month on TCS amount Month April, 2022 May, 2022 June, 2022 July, 2022 August, 2022 September, 2022 October, 2022 November, 2022 December, 2022 January, 2023 February, 2023 March, 2023 Due Date for TDS Payment 07-05-2022 07-06-2022 07-07-2022 07-08-2022 07-09-2022 07-10-2022 07-11-2022 07-12-2022 07-01-2023 07-02-2023 07-03-2023 30-04-2023 Due Date for TCS Payment 07-05-2022 07-06-2022 07-07-2022 07-08-2022 07-09-2022 07-10-2022 07-11-2022 07-12-2022 07-01-2023 07-02-2023 07-03-2023 07-04-2023 I. T. MIRROR (2023-24) 16

17 Understanding Time of Supply under GST Law INTRODUCTION The concept of time of supply plays a crucial role in determining the tax liability of suppliers under the Goods and Services Tax (GST) law. It refers to the point in time when goods are deemed to be supplied or services are deemed to be provided, which is essential for determining when the taxpayer is liable to pay taxes. The time of supply varies for goods and services and is determined by specific provisions outlined in the CGSTAct, 2017 and the IGSTAct, 2017. TIME OF SUPPLY FOR GOODS Under normal charge, the time of supply for goods is determined as the earlier of the following dates: 1. Date of issuing of invoice (or the last day by which the invoice should have been issued): If the supply involves the movement of goods, the invoice should be issued before or at the time of removal of goods for supply to the recipient. If there is no movement of goods, the invoice should be issued before or at the time of delivery of goods or making them available to the recipient. 2. Date of receipt of payment: The time of supply can also be the date on which the supplier receives the payment from the recipient. It's important to note that the supply is assumed to be made to the extent it is covered by the invoice or the payment. Additionally, if the supplier receives an amount up to Rs. 1,000 in excess of the invoice amount, the time of supply for the extra amount can be the date of issue of the invoice at the option of the supplier. In case of reverse charge, where the recipient of goods is liable to pay tax, the time of supply shall be the earliest of the following dates: 1. Date of receipt of goods 2. Date of payment as entered in the books of accounts of the recipient or the date on which the payment is debited in his bank account, whichever is earlier 3. Date immediately following 30 days from the date of issue of invoice by the supplier If it is not possible to determine the time of supply using the above methods, the time of supply shall be the date of entry of the transaction in the books of accounts of the recipient. TIME OF SUPPLY FOR SERVICES For services, the time of supply is determined based on the provisions outlined in Section 13 of the CGST Act, 2017. The time of supply for services is as follows: 1. Invoice is issued in a timely manner: The time of supply shall be the earlier of the date of issue of invoice by the supplier or the date of receipt of payment. 2. Invoice is not issued in a timely manner: In cases where the invoice is not issued within the prescribed time frame, the time of supply shall be the earlier of the date of provision of service or the date of receipt of payment. - ABHISHEK RAJA RAM

If the above provisions cannot determine the time of supply, it shall be the date on which the recipient shows the receipt of services in his books of account. TIME OF SUPPLY FOR VOUCHERS In the case of supply of vouchers, the time of supply is determined as follows: 1. Supply is identifiable at the point of issuance of the voucher:The time of supply shall be the date of issue of the voucher. 2. Supply is not identifiable at the point of issuance of the voucher: In all other cases, the time of supply shall be the date of redemption of the voucher. RESIDUAL PROVISIONS If it is not possible to determine the time of supply using the above provisions, the time of supply shall be as follows: 1. Periodical return has to be filed:The time of supply shall be the due date of filing the return. 2. CGST/SGST is paid: In all other cases, the time of supply shall be the date on which the CGST/SGST is paid. CONCLUSION The time of supply is a crucial aspect of the GST law as it determines the point at which tax liability arises for suppliers. It is essential for businesses to understand the provisions related to time of supply for goods and services to ensure compliance with the GST law. By adhering to the guidelines outlined in the CGST Act, businesses can accurately determine the time of supply and fulfill their tax obligations in a timely manner. Additional Information: Three events to determine the time of supply From the following 3 events, whichever is earlier can be determined as the date for the time of supply of goods and services under the GSTlaw. The events are as follows: 1. Issuing an invoice 2. Receiving payment 3. Completing the services I. T. MIRROR (2023-24) 18

19 Input Service Distributor v/s Cross Charge BACKGROUND In today's competitive world, to scale up the business and growth, every company is moving towards the Multi Locational Business Model where they have Head Office (referred as “HO”) in one state and Branch Offices (referred as “BO”) in the other states. The HO would be procuring certain services which would be commonly used between HO & other BO, and sometimes those services might not have been consumed by HO but the other BO. However, the billing in both cases have been done to HO but the HO itself would or would not be providing any output supply to utilize the credit which gets accumulated on account of such input services. Since the common expenditure is meant for the business of all units, it is but natural that the credit of input services in respect of such common invoices should be apportioned between all the consuming units. With this, the concept of Input Service Distributor (referred as “ISD”) takes place where the companies can distribute the Input Tax Credit (referred as “ITC”) to the branches. BRIEFING INPUT SERVICE DISTRIBUTOR (ISD) Definition: Section 2(61) of the CGSTAct'2017 defines ISD- means an office of the supplier of goods or services or both which receives tax invoices issued under section 31 towards the receipt of input services and issues a prescribed document for the purposes of distributing the credit of central tax, State tax, integrated tax or Union territory tax paid on the said services to a supplier of taxable goods or services or both having the same Permanent Account Number as that of the said office; Registration:Aperson, whether or not separately registered under this Act, desirous of distributing ITC will have to take separate GSTRegistration as ISD u/s 24(vii). An ISD will have to compulsorily take a separate registration as such ISD and apply for the same in form GSTREG-1. There is no threshold limit for registration for an ISD. Return: An ISD shall file monthly return within thirteen days of the month u/s 39(4) and details furnished in FORM GSTR-6. Manner of Distribution of ITC: Section 20 of the CGST Act read with Rule 39 of the CGST Rules, contains provisions relating to manner of distributing the credit by ISD. The credit shall be distributed by issuing invoice as per Rule 54(1) & 54(1A) in proportion to the turnover of branches in the previous financial year in respective states and if there is no turnover in the previous year, then it shall be distributed in proportion to the turnover of the previous quarter to the month in which credit is to be distributed. The principles of distribution of credit as per following partNo. Credit to be Distributed To be Distributed as 1. CGST CGST or IGST 2. IGST CGST or IGST* 3. CGST & SGST, UTGST If the recipient is in the same state or UT of ISD, it will be distributed as CGST & SGST, UTGST 4. CGST & SGST, UTGST If the recipient is in other state or UT other than state of ISD, it will be Distributed as IGST - CA JENIL SHAH *Section 20(1) contradicts with Rule 39(1)(e), where the section itself provides IGST shall be distributed as IGST or CGST, whereas as Rule provides IGSTshall be distributed as IGSTonly.

ARISE OF CROSS CHARGE Introduction ISD deals with the distribution of ITC which is attributable to distinct persons and in case of cross charge there is charging of services to distinct persons who are beneficiary of services directly or indirectly and may not have any input service GST to be distributed. There is no specific provision in GST Act or Rules which specifically levy GST on Cross Charge. However, the general meaning drawn as “charging a cost to a person towards whom it has been actually incurred”. Service between Related/Distinct Persons As per Entry-2 of Schedule-I, any supply of goods or services or both between “related persons” (defined as per explanation to Sec. 15) or between “distinct persons” (defined as per Sec. 25[4]) as specified in section 25, when made in the course or furtherance of business. Element of “Supply” between Distinct Persons Sec. 7 defines the “supply” where it covers the activities specified in Schedule-I to be treated as “supply” even though they are made or agreed to be made without consideration. On reading down the meaning of “distinct persons” and “Entry-2 of Schedule-I”, that gives rise to the concept of Cross Charge where the entity performs the services or supplies goods to another entity within the organization then it is covered under cross charge even without consideration. This mechanism leads to passing of ITC between the distinct persons and avoids the unnecessary blockage of ITC. Valuation of Supply Sec. 15 determines the value of supply between unrelated persons where the price is the sole consideration and sec. 15(4) provides the manner of valuation which are not covered by the said section. Rule 28 provides the valuation between distinct or related persons which shall be the Open Market Value, where if it is not available then the value of like kind and quantity of goods or services and if by both the ways the value is not determinable it shall be determined by the Rule 30 or 31. Second proviso to the Rule-28 provides “where the recipient is eligible for full input tax credit, the value declared in the invoice shall be deemed to be the open market value of the goods or services” (i.e. the value determined by the organization in this case shall be considered as the open market value) CRUX OF DRAFT CIRCULAR ON ISD-35TH GST COUNCIL MEETING Proposed by the Council Meeting: As per the minutes and draft circular the intent of the government was clear to tax such support activities internally generated and the cross charge of the same needs to be done. The circular also clarified that ISD mechanism is mandatory and once common expenses are incurred by one unit or GSTIN for the company, then the ITC on such common expenses needs to be mandatorily distributed through ISD mechanism only. The said circular was never published or issued for clarification and it remained as draft, hence the clarification given therein has no validity as such, but it shows the intent of the Government towards such support activities internally generated. Intention of the Circular: For ISD and cross charge mechanism, common credit shall be used in the same state in which the unit it is registered, to which the expense is attributable. The accumulation of such common credit should not happen only in one state in which the expense is incurred but it should be used by all states in which such units are registered to whom the expenses are attributable. th The proposed agenda of the 35 GSTCouncil meeting was not concluded and it was deferred to the next meetings. Even, the draft circular was never published. PRESS RELEASE OF THE 50TH GST COUNCIL MEETING HELD ON 11.07.2023 Point No. 3 Measures for facilitation of trade:The Council has recommended to clarify through a circular that Input Services Distributor (ISD) mechanism is not mandatory for distribution of input tax credit of common input services procured from third parties to the distinct persons as per the present provisions of GST law, and also to clarify issues regarding taxability of internally generated services provided by one distinct person to another distinct person. The Council has also recommended that amendment may be made in GST law to make ISD mechanism mandatory prospectively for distribution of input tax credit of such common input services procured from third parties. I. T. MIRROR (2023-24) 20

RECENT CLARIFICATION ON CROSS CHARGE & ISD VIDE CIRCULAR-199/11/2023 DATED 17/07/2023 Clarifications: Government has provided clarification on taxability of services provided by an office of an organization in one state to office of that organization in another state, both being distinct persons. Further the circular is bifurcated into two parts- taxability on common input services from third party and on internally generated services. Common Input Services from Third Party: HO has two options - Either to obtain ISD registration and distribute common ITC as per ISD provisions given in Sec. 20 read with Rule 39 OR Can issue tax invoice to BO as per Sec. 31 in respect of common input services. Note: Distribution by HO to BO through ISD mechanism can be done only if the said input services are attributable to the said BO or have actually been provided to the said BO and in case of HO issue tax invoice to BO, such services have actually been provided to the concerned BOs. Internally Generated Services: There are two scenariosWhere Full ITC is available to BO: nd Tax Invoice issued by HO: As per the 2 Proviso to Rule-28, value declared in the invoice shall be the open market value. Whether any cost of any services included or not, the invoice value for such services shall be accepted as deemed market value. Tax Invoice not issued by HO: HO has not made any cross charge for the said services. Then the value of such nd services deemed to be declared as NILby HO to BO as per 2 Proviso to Rule-28. Where Full ITC is not available to BO: The cost of salary of employees of the HO, involved in providing the said services to the BOs, is not mandatorily required to be included while computing the taxable value of the supply of such services, even in cases where full input tax credit is not available to the concerned BO. Raise invoice by HO to BO is not mandatory for said internal service and not required to pay GST. EPILOGUE Carving out the intention of the press release, government will make amendment in GST law to mandate ISD mechanism for distribution of input tax credit of common input services procured from third parties. Now, the recent circular has been bifurcated into two parts- 1. Common Input Services from third parties and 2. Internally generated services, where the clarification has been issued with respect to ISD and cross charge. For Internally Generated Services, taxpayers to follow the circular where it has been clarified the valuation with respect to second proviso of Rule-28 which is related to the availability of ITC to the branches in full or not and in case of full ITC is available, whether the tax invoice is issued or not, the tax invoice will always play a vital role to decide the value of services for cross charge. Hence, cross charge is not mandate for internally generated services where Full ITC is available to BO. Even after these clarifications, Sec. 20(1) read with Rule 39(1) still mandates to distribute input tax credit through ISD mechanism wherein the word 'shall' has been used in the said sub section. The CBIC-FAQ on Banking, Insurance and Stock Brokers Sector serial no.17 also clarifies that the ITC on input services procured from third party needs to be appropriately invoiced or distributed through the ISD mechanism to the “distinct persons” who have used such services. To some extent, the circular has resolved the issues between ISD mechanism and Cross Charge. However, in order to further smoothen the compliances of ISD mechanism, the amendment shall be compiled and implemented in such a way that it shall not contradict the existing circular which does not mandate ISD mechanism. I. T. MIRROR (2023-24) 21

Key recommendations of 50th GST Council Meeting The 50th GST Council Meeting was held on 11th July 2023 under the leadership of Hon'ble Union Finance Minister Nirmala Sitharaman and attended by Group of Members (GOM). Many important changes in tax rates, GST compliances and legal procedure were notified in the meeting. The meeting was important as it was held after completion of 5 years of implementation of GST Law. The present article aims to make analysis of the key amendments and clarifications that were made as a result of recommendations of the GSTCouncil. The Key highlights are as follows: Trade friendly measures forGoods & Transport Agency (GTA) With effect from 18th July 2022, GTA was given option to choose Forward charge Mechanism. Now, to opt for Forward charge Mechanism (FCM), the GTA was required to exercise the option by giving declaration in Annexure V, required to be filed by GSTAuthorities upto 15th March of the preceding financial year. Changes notified: It has been notified that GTAs will not be required to file a declaration for paying GSTunder forward charge every year. If they have exercised this option for a particular financial year, they shall be deemed to have exercised it for the next and future financial years unless they file a declaration that they want to revert to reverse charge mechanism (RCM). It has also been notified that the last date of exercising the option by GTAs to pay GST under forward charge shall be 31st March of preceding Financial Year instead of 15th March. 1st January of the preceding Financial Year shall be the start date for exercise of option. These changes are applicable with effect from 27th July 2023. Relevant Notification Notification No. 06/2023- Central Tax (Rate), No. 06/2023- Integrated Tax (Rate) and No. 06/2023- Union Territory Tax (Rate) Notification No. 08/2023- Central Tax (Rate), No. 08/2023- Integrated Tax (Rate) and No. 08/2023- Union Territory Tax (Rate) CLARIFICATION WITH RESPECT TO DIRECTOR SERVICES IN PERSONAL CAPACITY As per CGSTRate Notification No. 13/2017 dated 28th June 2017, services supplied by a director of a company or a body corporate to the said company or the body corporate come in the ambit of reverse charge. Now there existed a dispute between Department and Taxpayers on whether the services provided by the director in his private/ personal capacity will come in ambit of this notification. Same has now been clarified by Circular Number 201/13/2023-GST dated the 1st August, 2023. The Circular has clarified that services given by a director of a company or body corporate in his personal/private capacity such as services by way of renting of immovable property to the company or body corporate are not subject to GST under RCM. - CA PRATIBHA GOYAL 22

Readers are requested not to confuse this with RCM on Service by way of renting of residential dwelling to a registered person. Relevant Extract of RCM Notification No. 13/2017-CTR dated 28th June, 2017 is given below with comments for better understanding. I. T. MIRROR (2023-24) S. NO. Category of supply of services Supplier of service Recipient of service Author Comments 6 Services supplied by a director of a company or a body corporate to the said company or the body corporate. A director of a company or a body Corporate. The company or a body corporate located in the taxable territory. If a Director Rents his residential Dwelling to the company, the same shall not come in ambit serial number 6 due to clarification issued by GST Council. 5AA. Service by way of renting of residential dwelling to a registered person. Any person Any registered person But RCM can still be applicable by virtue of serial number 5AA. SUPPLY OF FOOD AND BEVERAGES IN THE CINEMA HALLS CBIC vide Circular Number 201/13/2023-GST dated the 1st August, 2023 has clarified on taxation on supply of food and beverages in cinema halls. The circular has clarified that supply of food and beverages in cinema halls is taxable as restaurant service as long as they are supplied by way of or as part of a service and supplied independently of the cinema exhibition service. Accordingly, the service being restaurant service, be eligible for GSTRate of 5% (without Input Tax Credit). MUVs to be treated at parwith SUVs for levy of 22% compensation cess underEntry 52B Entry 52B of Notification No. 1/2017-Compensation Cess (Rate), Dated 28-6-2017 provides that the compensation cess at the rate of 22% shall be levied on motor vehicles fulfilling below mentioned conditions. Popularly known as SUVs and Length exceeding 4000 mm, Engine capacity exceeding 1500 cc and having Ground Clearance of 170 mm & above If anyone condition is not met, then those cars are taxed at a rate of 20%. AAAR Maharashtra in case of Tata Motors (Tata Harrier) held that for purpose of Cess at rate of 22% under Sr. No. 52B of Notification No. 1/2017-Compensation Cess (Rate), ground clearance of vehicle is to be considered in laden condition only and any vehicles whose ground clearance in laden state are below 170mm are not covered under Sr. No. 52B of said notification. On the recommendations of the GSTCouncil,it was notified to levy compensation cess of 22% on all categories of motor vehicles irrespective of whatever name they are called. This change is likely to settle disputes with regard to differential compensation cess issues basis the categorisation of vehicles between sports utility vehicles (SUVs) and MUVs. 23

Further, it was also notified to add an explanation to clarify that 'Ground clearance' means Ground Clearance in unladen condition. These changes are applicable with effect from 27th July 2023. Relevant Notification Notification Number 3/2023-Compensation Cess (Rate) AUTOMATIC GST NOTICES FOR MISMATCH OF ITC IN GSTR-2B AND GSTR-3B As per Section 16(2)(aa) read with rule 36(4) no input tax credit shall be availed by a registered person unless the details of such invoices or debit notes have been furnished by the supplier in the statement of outward supplies in FORM GSTR-1 or using the invoice furnishing facility and the details of input tax credit in respect of such invoices or debit notes have been communicated to the registered person in FORM GSTR-2B. Form GSTDRC-01C, Intimation of difference in input tax credit available in auto-generated statement containing the details of input tax credit and that availed in return has now been notified to address the issue of ITC mismatch. Where Input Tax Credit in GSTR-3B is more than ITC available in GSTR-2B, the said registered person shall be intimated of such difference in Part Aof FORM GST DRC-01C, electronically on the common portal, and a copy of such intimation shall also be sent to his e-mail address provided at the time of registration or as amended from time to time, highlighting the said difference. The Registered person within 7 days of intimation, is required to pay the differential tax liability via DRC-03, along with interest under section 50 and intimate in FORM GST DRC01C or give a reasonable explanation for the difference in FORM GSTDRC-01C. Where any amount specified in the FORM GSTDRC-01C remains unpaid and where no reasonable explanation is furnished, the said amount shall be recoverable in accordance with the provisions of Section 73/74. [Unlike Rule 88C, in this case SCN will be issued by the department.] Additionally, Rule 59(6) of the CGSTRules has been amended to restrict filing Form GSTR-1 if the taxpayer fails to respond to the intimation in Form GSTDRC-01C. Relevant Notification Notification No. 38/2023-Central Tax dated 4th August 2023 RECOVERY OF TAX AND INTEREST WHERE TAX LIABILITY IN FORM GSTR-1 EXCEEDS THE TAX LIABILITY AS PER FORM GSTR-3B. As per Rule 88C, where the tax payable by a registered person, in accordance with the statement of outward supplies furnished by him in FORM GSTR-1 or using the Invoice Furnishing Facility in respect of a tax period, exceeds the amount of tax payable by such person in accordance with the return for that period furnished by him in FORM GSTR-3B, the said registered person shall be intimated of such difference in Part Aof FORM GST DRC01B. The taxpayer is required to pay the differential amount along with interest or provide a response explaining the reasons for the discrepancy within 7 days of intimation. Where any amount specified in the FORM GSTDRC-01B remains unpaid and where no reasonable explanation is furnished, the said amount shall be recoverable in accordance with the provisions of Section 79 of CGST Act without taking the recourse of Section 73 or Section 74 of the CGST Act. This provision empowers GST authorities to directly initiate recovery proceedings without going through the regular demand procedure. CBIC has notified Rule 142B of the CGST Rules and introduced Form GST DRC-01D to provide for manner of recovery of tax and interest as per Rule 88C where the tax has not been paid and for which no satisfactory explanation has been furnished by the registered person. I. T. MIRROR (2023-24) 24

I. T. MIRROR (2023-24) 25 As per Section 142B, the intimation referred in FORM GST DRC-01D shall be treated as the notice for recovery. As per Authors understanding, no further opportunity of being heard will be given beyond the initial 7-days period and after that the proper officer shall proceed to recover the amount that remains unpaid in accordance with the provisions of rule 143 or rule 144 or rule 145 or rule 146 or rule 147 or rule 155 or rule 156 or rule 157 or rule 160. Relevant Notification Notification No. 38/2023-Central Tax dated 4th August 2023 Amendment in CGST Rules, 2017 regarding GST Registration As per the Amended provisions, taxpayer is required to furnish details of its bank account (in the name and PAN of the registered person) before filing of Form GSTR-1. System based suspension of GSTN has been notified if the Registered person fails to furnish the details of a valid bank account within the prescribed time period. Registered person who fails to provide valid bank details under Rule 10A will not be allowed to furnish the details of outward supplies in Form GSTR-1 or use the Invoice Furnishing Facility (IFF). Relevant Notification Notification No. 38/2023-Central Tax dated 4th August 2023 EXTENSION OF GST AMNESTY SCHEME FOR NON-FILERS Amnesty scheme for non-filers of Form GSTR-4, Form GSTR-9 & Form GSTR-10, revocation of cancellation of registration and deemed withdrawal of assessment orders extended till 31.08.2023. Relevant Notification Notification Date Subject No. 22/2023 - Central Tax 17th July 2023 Due date of Amnesty Scheme to GSTR-4 non-filers extended to 31st August 2023 No. 23/2023 - Central Tax 17th July 2023 Due Date for Extension of time limit for application for revocation of cancellation of registration extended to 31st August 2023 No. 24/2023 - Central Tax 17th July 2023 Due Date for Amnesty scheme for deemed withdrawal of assessment orders issued under Section 62 extended to 31st August 2023 No. 25/2023 - Central Tax 17th July 2023 Due date of Amnesty Scheme to GSTR-9 non-filers extended to 31st August 2023 No. 26/2023 - Central Tax 17th July 2023 Due date of Amnesty Scheme to GSTR-10 non-filers extended to 31st August 2023

CLARIFICATION ON THE CALCULATION OF ADJUSTED TOTAL TURNOVER FOR CALCULATION OF REFUND Rule 89(4) of the CGSTRules, 2017 provides for the calculation of refund in case of export under LUTas under: Refund Amount = (Turnover of zero-rated supply of goods + Turnover of zero-rated supply of services) × Net ITC ÷ Adjusted Total Turnover An explanation was added in Rule 89, pertaining to the calculation of turnover of zero-rated supply of goods. The Rule states that the value of export goods is to be taken as lower of : (a) the Free on Board (FOB) value declared in the Shipping Bill or Bill of Export form, as the case may be, as per the Shipping Bill and Bill of Export (Forms) Regulations, 2017; or (b) the value declared in tax invoice or bill of supply Clarification is being sought as to whether value of goods exported out of India has to be considered as per Explanation under sub-rule (4) of rule 89 of CGSTRules for the purpose of calculation of “adjusted total turnover” in the formula under the said sub-rule. CBIC vide Circular No. 197/09/2023-GST Dated 17th July 2023 has clarified that consequent to Explanation having been inserted in sub-rule (4) of rule 89 of CGST Rules vide Notification No. 14/2022- CT dated 5ht July 2022, the value of goods exported out of India to be included while calculating “adjusted total turnover” will be same as being determined as per the Explanation inserted in the said sub-rule. Particulars Before Clarification After Clarification Export Turnover (FOB) 1000 1000 Export Turnover (CIF) 1100 1100 Domestic Turnover 500 500 Net Input Tax Credit 300 300 Refund 1000 × 300 ÷ (1100 + 500) 1000 × 300 ÷ (1000 + 500) 187.5 200 (Note that this is an inclusive list, not an exhaustive list of recommendations) I. T. MIRROR (2023-24) 26

27 Understanding the Power to Summon under GST INTRODUCTION The Goods and Services Tax (GST) system, implemented in various countries to streamline indirect taxation, has introduced a modern and comprehensive approach to tax administration. One of the essential tools available to tax authorities under the GST framework is the power to summon individuals or entities for various purposes related to compliance, investigation, and enforcement. This power, known as the "power to summon," empowers authorities to gather information, investigate potential irregularities, and ensure the proper implementation of GST laws. Let's delve into the intricacies of the power to summon under GSTand its implications. Defining the Power to Summon The power to summon, granted to tax authorities, enables them to require the attendance of any person or entity related to the administration of GST. This person may include a taxpayer, supplier, recipient, agent, or any other relevant individual with knowledge of the subject matter. The summoned person is expected to provide information, documents, or evidence that can assist the authorities in various tasks, such as audits, investigations, or the resolution of disputes. LEGAL PROVISIONS CGSTAct 2017 Section 70. Power to summon persons to give evidence and produce documents (1) The proper officer under this Act shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry in the same manner, as provided in the case of a Civil Court under the provisions of the Code of Civil Procedure, 1908. (2) Every such inquiry referred to in sub-section (1) shall be deemed to be a “judicial proceedings” within the meaning of Section 193 and Section 228 of the Indian Penal Code. The Indian Penal Code 1860 Section 174. Non-attendance in obedience to an order from public servant. Whoever, being legally bound to attend in person or by an agent at a certain place and time in obedience to a summons, notice, order, or proclamation proceeding from any public servant legally competent, as such public servant, to issue the same, intentionally omits to attend at that place or time, or departs from the place where he is bound to attend before the time at which it is lawful for him to depart, shall be punished with simple imprisonment for a term which may extend to one month, or with fine which may extend to five hundred rupees, or with both; or, if the summons, notice, order or proclamation is to attend in person or by agent in a Court of Justice, with simple imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both. - CA JAYKISHAN VIDHWANI

I. T. MIRROR (2023-24) Section 193. Punishment for false evidence. Whoever intentionally gives false evidence in any of a judicial proceeding, or fabricates false evidence for the purpose of being used in any stage of a judicial proceeding, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine; and whoever intentionally gives or fabricates false evidence in any other case, shall be punished with imprisonment of either description for a term which may extend to three years, and shall also be liable to fine. Section 228. Intentional insult or interruption to public servant sitting in judicial proceeding. Whoever intentionally offers any insult, or causes any interruption to any public servant, while such public servant is sitting in any stage of a judicial proceeding, shall be punished with simple imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both. PURPOSES AND SCENARIOS FOR SUMMONING The power to summon can be exercised for a range of purposes, each with the goal of ensuring tax compliance and integrity. Some common scenarios include: 1. Audit and Verification: Tax authorities can summon individuals for audit and verification purposes to validate the accuracy and completeness of the information provided in GSTreturns. 2. Investigations: When tax evasion or fraudulent activities are suspected, authorities may summon persons to gather evidence, examine financial records, and obtain statements relevant to the investigation. Eg Examination of Export documents for Compliance with Rule 96(10) of CGST Rules 2017 and other investigations. 3. Clarification: Authorities may summon individuals to clarify or explain specific transactions, classifications, or reporting discrepancies. Eg Supply under Deemed Export and others. PROCEDURE AND LEGAL FRAMEWORK The power to summon is generally exercised by Superintendents as per power delegated by proper officer. Instruction No. 03/2022-23 (GST-Investigation) dated 17.08.2022 provides for detailed guidelines for issuance of Summons. The procedure involves following several key steps: 1. Prior Permission: Summons by Superintendents should be issued after obtaining prior written permission from an officer not below the rank of Deputy/ Assistant Commissioner with the reasons for issuance of summons to be recorded in writing. 2. Issuance of Summons: The authorized officer issues a summons with proper Document Identification Number (DIN) to the concerned individual, specifying the purpose, date, time, and place of appearance. 3. Submission of Documents: The summons may also require the individual to produce specific documents, records, or evidence relevant to the inquiry. 4. Compliance: The summoned person must comply with the summons by appearing at the designated time and place, and by providing the requested information or documents. 5. Recording of Statements: The summoned person's statements and responses are recorded during the session. These records serve as evidence in case of further proceedings. 6. Name of Offenders : Summons should normally indicate the name of the offender(s) against whom the case is being investigated unless revelation of the name of the offender is detrimental to the cause of investigation, so that the recipient of summons has prima-facie understanding as to whether he has been summoned as an accused, co-accused or as witness. 28

29 I. T. MIRROR (2023-24) 7. Summons to Senior Management: Senior management officials such as CMD/ MD/ CEO/ CFO/ similar officers of any company or a PSU should not generally be issued summons in the first instance. They should be summoned when there are clear indications in the investigation of their involvement in the decision making process which led to loss of revenue. 8. Legal Safeguards: The summoned person has the right to have a legal representative present during the summoning process. The summoned individual should provide truthful and accurate information to avoid legal consequences. IMPLICATIONS AND IMPORTANCE The power to summon plays a crucial role in maintaining the effectiveness of the GST system. By enabling authorities to gather information directly from relevant parties, the power to summon: Facilitates efficient audits and verifications to ensure compliance with GSTlaws. Aids in the detection and prevention of tax evasion, fraud, and other irregularities. Assists in resolving disputes by obtaining first-hand information and clarifications. Enhances transparency and accountability in tax administration. CONCLUSION The power to summon under the GST framework empowers tax authorities to effectively enforce tax laws, deter non-compliance, and maintain the integrity of the taxation system. While this power is a critical tool for authorities, it also underscores the importance of accurate record-keeping, transparent reporting, and cooperation with tax authorities for individuals and entities. By adhering to the principles of fairness, transparency, and cooperation, both tax authorities and taxpayers contribute to a robust and efficient GSTecosystem.

Redevelopment of a Real Estate Project in Gujarat Redevelopment of real estate projects has become a vital aspect of urban development, especially in densely populated areas where land is scarce. In a dynamic landscape like Gujarat, where urbanization is rapidly advancing, the process of redevelopment holds immense potential to transform outdated structures into modern, sustainable, and aesthetically appealing developments. Redevelopment is the process of demolishing and reconstructing an existing building or a group of buildings to create new and improved structures that meet the current needs and standards of the occupants and the society. This article aims to provide a comprehensive insight into the process, benefits, and legal guidelines surrounding real estate redevelopment in Gujarat which is governed by the Gujarat Ownership Flats Act, 1973 and its amendment in 2019. We will also briefly include snapshots of important judgements on redevelopment. Reasons of Redevelopment. To replace old and dilapidated buildings that are unsafe and unhealthy to live in; To increase the floor space index (FSI) and utilize the land potential more efficiently; To provide larger and better amenities to the residents, such as parking, fire safety, security, etc.; To enhance the aesthetic and environmental quality of the area; To generate revenue from the sale of surplus units or commercial spaces. Redevelopment is done by:- The owners or members of the building or society themselves. The developers or builders who enter into an agreement with the owners or members. The public authorities, such as Gujarat Housing Board (GHB), Urban Local Bodies (ULBs), Urban Development Authorities (UDAs), etc. Legal guidelines for redevelopment in Gujarat. The redevelopment has to be done with the consent of not less than seventy-five per cent of the members of the society. The redevelopment has to be done after twenty-five years of the issuance of the permission for development or if the building is declared dilapidated, ruinous or dangerous by the concerned authority. The redevelopment has to be done by a registered developer or builder who has experience in redevelopment projects. The redevelopment has to be done as per the Common GDCR, Redevelopment Rules, Affordable Housing Policy, etc. The redevelopment has to be done with all the necessary clearances and permissions from various authorities, such as GHB, ULBs, UDAs, RERA, fire department, environment department, etc. CA HARSH MEHTA ADV (CS) LOKESH SHAH 30

I. T. MIRROR (2023-24) The redevelopment has to be done with safety norms and environmental standards. The redevelopment has to be done with transparency and accountability. PROCESS OF REDEVELOPMENT 1. Initiation: The redevelopment can be initiated by the managing committee of the society suo-moto or by an application from at least one-fourth of the members of the flats. The managing committee must call for a special general meeting within a period of one month on receipt of the application. The meeting must follow the rules and bylaws of the society with respect to convening, notice, agenda, quorum, decision, agreement, minutes, etc. 2. Consent: The consent of not less than seventy-five per cent of the total members of the society for redevelopment is necessary. The consent has to be obtained in writing. 3. Developer selection: The managing committee along with the society members must select a developer for construction of the project. The proposals of redevelopment received from various developers shall be evaluated based on various parameters, such as financial capability, technical expertise, quality standards, track record, etc. However, the society shall give more priority to the experience and project completion capacity of the builder over other things. The selection can be from the internal references or through a tender bidding process. 4. Registered Development Agreement: The society must select the best developer or builder and enter into a registered development agreement with him. The society can engage advocate/consultant for preparation/verification of the documents so as to safeguard their rights. The agreement has to specify the roles and responsibilities of each party, the scope and specifications of work, the payment terms and schedule, the penalty clauses for delay or default, the dispute resolution mechanism, etc. The said development agreement must be registered with the subregistrar. Currently the stamp duty of 3.5% of the Jantri Value and registration fees of 1% of Jantri value is payable on the same. 5. Plan Approval and Permissions: The developer or builder has to obtain all the necessary clearances and permissions from various authorities, such as GHB, ULBs, UDAs, RERA, fire department, environment department, etc. for carrying out the redevelopment project. The developer or builder has to comply with all the applicable rules and regulations, such as Common GDCR (General Development Control Regulations), Redevelopment Rules, Affordable Housing Policy, etc. 6. Demolition: The developer or builder must demolish the existing building or society after vacating all the members and providing them with alternative accommodation and rent as agreed upon. The demolition must be done in a safe and scientific manner without causing any damage or inconvenience to the neighboring properties or people. 7. Construction: The developer or builder must construct the new building or society as per the approved layout plan and design within the stipulated time frame. The construction must be done with quality materials and workmanship under the supervision of the architect or project management consultant. The construction has to follow all the safety norms and environmental standards. 31

8. Handover: The developer or builder has to hand over the possession of the new flats or units to the members after obtaining all the completion certificates and occupancy certificates from the concerned authorities. The developer or builder has also to hand over all the documents and records related to the redevelopment project to the managing committee. BENEFITS OF REDEVELOPMENT 1. Infrastructure Upgrade: Redevelopment projects provide an opportunity to upgrade and modernize infrastructure, including roads, drainage systems, and utilities, enhancing overall living conditions. 2. Increased Housing Stock: Redevelopment optimizes land use by replacing old structures with modern, multi-story buildings, thereby increasing the available housing stock. 3. Enhanced Aesthetics: The introduction of contemporary architectural designs and landscaping improves the visual appeal of the area, contributing to the overall urban aesthetics. 4. Improved Amenities: Redevelopment projects often incorporate amenities such as green spaces, recreational facilities, and commercial spaces, enhancing the quality of life for residents. 5. Economic Growth: The real estate and construction industries experience growth through increased demand for skilled labor, building materials, and related services, fostering economic development. SOME IMPORTANT JUDGEMENTS IN RELATION TO REDEVELOPMENT 1. Hansaben Ratubhai Prajapati v. State of Gujarat. (Gujarat High Court decided on 11-04-2023.) When a redevelopment scheme is in the interest of public at large, the entire project cannot be put to a standstill at the behest of few persons (14 petitioners) when 75% of the occupants have consented to the redevelopment. 2. Adityaraj Builders v. State of Maharashtra. (Bombay High Court decided on 17-02-2023.) A development agreement (DA) between a cooperative housing society and a developer for developing society's property (land, building, apartments, flats, garages, godowns, galas) requires to be stamped. The development agreement need not be signed by individual members of society as a mandate. Even if individual members do not sign the DA, it controls the re-development and society members' rights. A Permanent Alternate Accommodation Agreements (PAAA) between developer and an individual society member does not require to be signed on behalf of the society. Stamp cannot be levied twice. Once the DAis stamped, the PAAAcannot be separately assessed to stamp beyond the requirement of Rs. 100 under Section 4(1), if it specifically relates to rebuilt or reconstructed premises in lieu of the old premises used/occupied by the member. The same applies even if the PAAA includes an additional area available to the member, since it is not a purchase or a transfer but is in lieu of the member's old premises. The stamp on DA includes reconstruction of every unit in the society building. I. T. MIRROR (2023-24) 32

I. T. MIRROR (2023-24) If PAAA is limited to rebuilt premises in the absence of actual purchase for consideration of any additional area, such PAAAis an incidental document under Section 4(1) of the Stamp Act. PAAA between a developer and a society member must be additionally stamped if it provides for purchase for actual stated consideration and a purchase price of additional area beyond the area given to the member against the earlier premises. Assessing stamp on PAAA on construction cost of the new premises in lieu of old premises cannot be sustained. Reference to redevelopment and homes includes garages, galas, commercial and industrial use and every form of redevelopment of the society. Redevelopment is a complex and challenging process that requires careful planning and execution. It involves various stakeholders, such as members, managing committee, developer, builder, architect, consultant, authorities, etc. It also involves various risks, such as legal disputes, financial losses, delays, defects, etc. Therefore, it is advisable to seek professional guidance and assistance from experts in the field of redevelopment. Redevelopment is a powerful tool for revitalizing urban spaces in Gujarat, catering to the growing demands of modern living while simultaneously enhancing the aesthetic and economic aspects of the region. By adhering to the established legal guidelines and fostering cooperation between stakeholders, successful redevelopment projects can contribute significantly to the state's urban development narrative. As Gujarat progresses towards a more vibrant urban future, redevelopment stands as a testament to innovation, sustainable growth, and community development. 33

All about Corporate Social Responsibility [CSR] under Companies Act, 2023 Corporate Social Responsibility (CSR) is a notion, an act of a Company, wherein companies contribute to a better society and a cleaner environment. CSR signifies an act of a company whereby it presents its concern & commitment towards the society at large in connection with the sustainability & development. It is not merely charity or donations, but a way for the Companies to give something back to the society as they grow and benefit from its stakeholders. CSR APPLICABILITY IN INDIA According to section 135 of the Companies Act,2013, CSR is compulsory for all companies whether government or private and applies to: every company its holding company its subsidiary company foreign company Provided they meet the following fiscal criteria: Net Worth > Rs. 500 Crore Turnover > Rs. 1000 Crore Net Profit > Rs. 5 Crore Once the CSR provisions become applicable on a company, they will continue to be applicable. CSR EXPENDITURE As per Section 135(5) of the Companies Act, 2013, the Board (of every eligible company as per above criteria) shall ensure that the company spends, in every financial year, at least two per cent. of the average net profits of the company during the three immediately preceding financial years or where the company has not completed the period of three financial years since its incorporation, during such immediately preceding financial years. NET PROFIT FOR CSR APPLICABILITY Every company which needs to comply with the CSR provisions have to spend 2% of the average net profits earned during the preceding 3 years as per the CSR policy. The computation of net profit for CSR is as per Section 198 of the Companies Act, 2013. Section 198 provides that while computing the net profits of a company a credit should be given for the subsidies and bounties received from any Government, or public authority authorised or constituted on this behalf. The following needs to be taken note of while computing profits under section 198: CS ARCHITA H SHARMA CS HARSHVARDHAN A. SHARMA 34

I. T. MIRROR (2023-24) Credits disallowed Profits, by way of premium on shares, unless the company is an investment company. Profits on sales of forfeited shares. Profits of a capital nature, including profits from the sale of the undertaking or any part thereof. Profits from the sale of any fixed assets or immovable property of a capital nature comprised in the undertaking, unless the company business consists of buying and selling any assets or property. Any change in the carrying amount of an asset or of a liability recognised in equity reserves, including surplus in profit and loss accounts for the measurement of the asset or the liability at fair value. Any amount representing notional gains, unrealised gains or revaluation of assets. Deductions allowed Every usual working charge. Directors’ remuneration. Bonus or commission payable or paid to any member of the company’s staff, technician, engineer or person engaged or employed by the company, whether on a part-time or whole-time basis. Any tax notified by the Central Government as a tax on abnormal or excess profits. Any tax on business profits imposed for special reasons or special circumstances and notified by the Central Government. Interest on debenture issued by the company. Interest on mortgages executed by the company and on advances and loans secured by a charge on its floating or fixed assets. Interest on unsecured advances and loans. Expenses on repairs, whether to movable or immovable property, provided the repairs are not of a capital nature. Outgoings inclusive of contributions made under section 181. Depreciation to the extent specified in section 123. Excess of expenditure over income. Damages or compensation to be paid for any legal liability and any sum paid by way of insurance against the risk of meeting the such liability. Debts considered bad and adjusted or written off during the year of account. Deductions disallowed Income-tax and super-tax payable by the company under the Income-tax Act, 1961. Any damages, compensation or payments made voluntarily. Loss of capital nature including loss on sale of the undertaking or of any part thereof not including any excess of the written-down value of any asset which is discarded, sold, discarded, destroyed or demolished over its sale proceeds or its scrap value. Any change in carrying amount of an asset or of a liability recognised in equity reserves, including surplus in profit and loss accounts for the measurement of the asset or the liability at fair value. 35

CSR ACTIVITIES AS PER SCHEDULE VII Schedule VII of the Companies Act, 2013 specifies various fields / activities eligible for CSR. MODES OF SPENDING Such CSR expenditure can be made by the Company itself or through implementing agency viz trust, NGOs etc. However, every such Implementing Agency shall obtain registration under MCAby filing form CSR-1 to consider its activities under CSR expenditure. TREATMENT OF EXCESS OR UNSPENT AMOUNT ON CSR ACTIVITIES In case Excess amount spent such excess amount may be set off up to the immediate succeeding 3 FY, subject to: i. Excess amount shall not include surplus from CSR activities ii. Approval by Board Unspent amount for ongoing projects any unspent amount from such an ongoing project should be transferred within 30 days of the end of FY, to the specifically designated ‘Unspent CSR Account’. Such transferred amount to be used within next 3 FY for CSR If still unspent, to be transferred to any fund specified in Schedule VII within 30 days from end of third FY. Unspent amount for other projects such unspent amount shall be transferred, to any fund specified in Schedule VII within six months of the end of FY. Reasons for not spending to be specified in Board report. I. T. MIRROR (2023-24) 36

CSR COMMITTEE If a company fulfils the requirements of Section 135 of the Companies Act, 2013 then they are required to form a CSR committee to fulfil their CSR obligations under law. Moreover, constitution of a CSR Committee is mandatory where the Company has any amount in its Unspent CSR Account in terms of i.e., if the Company has any extant ongoing project, it is mandatorily required to constitute a CSR Committee. Constitution of the CSR Committee Minimum 3 directors are necessary to form a CSR Committee. One among these directors must be an independent director. If Independent director not required for Company, CSR committees can be without any independent director In Private companies which have only 2 directors, CSR Committees shall have only 2 directors. In a foreign company, the CSR committee shall have atleast 2 persons. Among these, one person shall be a resident of India who must be authorized to accept notice or documents on behalf of such foreign company. The other person shall be nominated by the foreign company accordingly. Duties of CSR Committee Policy creation to implement the CSR activities according to the Schedule VII of the Companies Act, 2013 Allocate and audit money for CSR activities. Oversee the execution of the CSR activities for which money has been allocated so that it is not misused. Regular assessment of profits of the company and ensure that atleast 2 percent of it is spent on CSR activities annually Issue an annual report on various CSR activities undertaken by the company. Ensure local issues and regions are prioritized or promotion of local regions and people. Ensure that CSR polices are made public by issuing them on company's official website in accordance with the format approved by the committee. FINES AND PENALTIES FOR NON-COMPLIANCE In case if company fails to make prescribed CSR expenditure or fails to transfer unspent amount, following penalties shall be applicable: Company: penalty of twice the amount required to be transferred to the Fund specified in Schedule VII or the Unspent CSR Account, as the case may be, or one crore rupees, whichever is less Every officer in default: penalty of one-tenth of the amount required to be transferred by the company to such Fund specified in Schedule VII, or the Unspent CSR Account, as the case may be, or two lakh rupees, whichever is less. I. T. MIRROR (2023-24) 37

GIFT City : Entry & Exit Clause Greetings Readers! First of all, I would like to thank all of you for your overwhelming response on my earlier Article on GIFTCity : The Financial Hub. In the last Article, we had gone through basic details regarding GIFT City and IFSC. We also discussed about eligible services and activities for which we can take registration under IFSC Regulations. We also had an overview regarding competitive tax regime available to IFSC Units. In this article, we will discuss about the process of setting up of unit in GIFT City and what are the consequences of early exit from GIFTCity. PROCESS FOR SETTING UP UNIT IN GIFT CITY Identify office Space, at the available buildings in GIFT SEZ, to start SEZ Unit. On finalizing Office space in GIFT SEZ, Provisional Letter of Allotment (PLOA) would be issued by the Developer / Co-Developer Based on the PLOA, the entity can proceed for SEZ application. Entity must submit “Form F” to “The Office of Development Commissioner (DC)”, GIFT SEZ. Form must be prepared & submitted online @ www.sezonline-ndml.co.in. Steps required to be followed for filing Form F are as under: Creation of applicant user id on www.sezonline-ndml.co.in Filing of New Unit Application request (through the Created User id) Submission of online New Unit Application request to DC office Print Form F Rectification of deficiencies, if request is sent back by DC office. Approval of New Unit Application request by DC office. Updating Registration Fee payment Creation of Unit admin user Creation of Unit operational users (Unit Maker / CHA/ Approver User) Submission of Lease deed details Approval of Lease deed details by DC office. (Detailed procedure of filing the Form F is available at https://www.sezonline-ndml.com) - CA BHAVIN SONI Khandhar Mehta Shah (KMS) 38

Along with the “Form F”, entity is required to submit the following additional documents: Demand Draft of Rs 5,000/- in favour of “REGIONALPAYAND ACCOUNT OFFICER MUMBAI payable at GANDHIDHAM” Provisional Letter of Allotment issued by the Co-Developer. Detailed Project Report – including Projections for 5 years (Annexure 1) Company IDs such as License, PAN Card, IEC Code, etc. Memorandum of Association (MOA), Articles of Association (AOA), Certificate of Incorporation (COI) Board Resolution for setting up office in GIFTIFSC List of Directors with their Identity proofs Last 3 Years ITreturn of the Company or Directors. Brief Presentation covering the Company profile and scope of activities to be carried out Affidavit (Annexure 2) The above documents are required to be prepared in 3 Sets Original set to be submitted to the Office of the Development Commissioner. Second set to be submitted to the Developer i.e. GIFTSEZ. Third copy is for the entity itself. Post the submission of application, the Development Commissioner would call the entity for appearing in the “Unit Approval Committee” (UAC) meeting. On approval from UAC, the unit will get Letter of Approval (LOA) from the office of Development Commissioner. After this, the Unit will be required to do the following: Submit LOAAcceptance Letter to the DC office within 45 days of LOA. Registration in SEZ Online system, through which the Form F was created. Opening Foreign Currency Account & SNRR Account with IFSC Bank. Execute Bond cum Legal Undertaking with Development Commissioner & Specified Officer, GIFT SEZ & submit the same to DC office. GST/ IEC / RCMC Registration. Procurement of assets like Computers, servers, furniture etc Electricity & broad band connections. Getting issued Identity Cards of employees from SEZ Customs. After completing the formalities mentioned above, unit will be eligible to start its business operations. It is mandatory to intimate the date of first export of service to the Office of Development Commissioner, by an application containing subject line “Commencement of business operations” with supporting evidence like Tax Invoice. Also mark a copy to GIFT SEZ Developer. I. T. MIRROR (2023-24) 39

Annexure 1 – Project Report PROJECT REPORT FOR ______________ SEZ UNIT AT GIFT SEZ 1. Background of the organization 2. Description of services offered in India & Abroad 3. Description of proposed Project 4. Revenue Projections i.e. Net Foreign Exchange Earnings projection for forthcoming 5 FY. 5. Description of Foreign Technical Collaboration, Marketing Collaboration (If Any, Nature of agreement, Duration of agreement, Payment to consultant) 6. Existing and proposed financing structure over a period of 5 years Annexure 2 - AFFIDAVIT I/We hereby declare that the statements made in FORM F of the application to Development Commissioner SEZ are true and correct to the best of my/our knowledge and belief. I/We shall abide by any other condition, which may be stipulated by the Development commissioner. I/ We hereby fully understand that any Permission Letter/ Approval granted to me/us on the basis of the statement furnished is liable to cancellation or any other action that may be taken having regard to the circumstances of the case if it is found that any of the statements or facts therein are incorrect or false. Signature of the Applicant …………………………………………………. Name in Block Letters………………………………………………………… Designation ………………………………………………………………………. Official Seal/ Stamp……………………………………………………………. Tel no ……………………………………………………………………………….. Email …………………………………………………………………………………. I. T. MIRROR (2023-24) 40

FLOWCHART FOR SETTING UP OF UNIT I. T. MIRROR (2023-24) 41

VALIDITY OF LOA 1. LOAis a license for all purposes in SEZ. 2. LOAis valid for 1 year from date of issue. 3. It is mandatory to Commence Operation within that period. 4. Valid for five years from the date of Commercial Operation. 5. Further 3 Year extension may be granted. 6. Can be Extended after Completing 5 year. 7. Ownership of the Unit Can be Transferred. 8. Can Exit before the 5 years period also. CONSEQUENCES OF CANCELLATION OF LOA I. T. MIRROR (2023-24) 42

CONSEQUENCES OF EARLY EXIT FROM SEZ / IFSC SEZ / IFSC units can exit from SEZ / IFSC scheme. They have to apply for exit from SEZ/IFSC Scheme and remit the funds back to India, however they will have to follow rules and regulations mentioned in SEZ Act & Rules as well as under RBI/SEBI norms for winding up of WOS/JVs abroad. From RBI Perspective Units can disinvest WOS/JVs by way of sale or shares or liquidation or merger subject to RBI norms and other conditions of Write off Investment or No write off investment. From SEZ Perspective The unit have following options available on early exit. OPTION - 1 The Unit may choose to step out of the SEZ with the approval of the DC and such exit shall be subject to payment of applicable duties on the imported or indigenous capital goods, raw materials, components, consumables, spares and finished goods in stock. If the unit has not achieved positive Net Foreign Exchange, the exit shall be subject to penalty that may be imposed under the Foreign Trade (Development and Regulation), Act, 1992. The following conditions shall apply to the unit winding up: - Penalty imposed by the competent authority would be paid and in case an appeal against an order-imposing penalty is pending, exit shall be considered if the unit has obtained a stay order from competent authority and has furnished a Bank Guarantee for the penalty adjudicated by the appropriate authority unless the appellate authority makes a specific order exempting the Unit from this requirement. In case the Unit has failed to fulfil the terms and conditions of the Letter of Approval and penal proceedings are to be taken up or are in process, a legal Undertaking for payment of penalties, that may be imposed, shall be executed with the DC. The Unit shall continue to be treated a unit till the date of final exit. Depreciation shall be allowed in straight line method as specified below:- - for computer and computer peripherals for every quarter in the 1st, 2nd and 3rd year at the rate of 10%, 8% and 5% respectively and for every quarter in the 4th and 5th year at the rate of 1%. - for capital goods other than computer and computer peripherals for every quarter in the 1st, 2nd, 3rd year at the rate of 4%, 3% and 3% respectively, for every quarter in the 4th and 5th year at the rate of 2.5% and thereafter for every quarter at the rate of 2%. For the purpose of computing depreciation for any part of a quarter, the rate applicable to such quarter in full shall be considered. In the event of a gems and jewellery unit ceasing its operation, gold and other precious metals, alloys, gem and other materials available for manufacture of jewellery shall be handed over to an agency nominated by the Central Government at a price to be determined by that agency. Development Commissioner may permit a Unit, as one time option, to exit from SEZ on payment of duty on capital goods under the prevailing Export Promotion Capital Goods Scheme under the Foreign Trade Policy subject to the Unit satisfying the eligibility criteria under that Scheme. I. T. MIRROR (2023-24) 43

OPTION - 2 Any unit/developer may also opt out of the SEZ by transferring its assets and liabilities to another person by way of transfer of ownership including sale of SEZ units subject to the conditions stipulated under Rule 75A of the SEZ Rules:- Unit has held a valid LOAas well as lease of land for not less than a period of 5 years on the date of transfer, The unit has been operational for a minimum period of 2 years after the commencement of production as on the date of transfer, Such sale or transfer transactions shall be subject to the approval of the Approval Committee, The transferee fulfils all eligibility criteria applicable to a unit and The applicable duties and liabilities, if any, as calculated under rule 74 as well as export obligations of the transferor unit, if any, shall stand transferred to the transferee unit which shall be under obligation to discharge the same on the same terms and conditions as the transferor unit. I. T. MIRROR (2023-24) 44

Glimpses of RRC at Nathdwara

Glimpses of Second Study Circle on 05/08/2023