MM TAX CLUB

Government announced creation of ‘Distressed Assets Fund- - Subordinate Debt for Stressed MSMEs’ on 13th May, 2020, under the Aatma Nirbhar Bharat Package.

Accordingly, a scheme viz. ‘Credit Guarantee Scheme for Subordinate Debt’ was approved by the Government on 1st June, 2020 and the scheme was launched on 24th June, 2020 to provide credit facility through lending institutions to the promoters of stressed MSMEs viz. SMA-2 and NPA accounts who are eligible for restructuring as per RBI guidelines on the books of the Lending institutions. Initially the scheme was upto 31.03.2021.

In order to keep the avenues of assistance to stressed MSME Units open, the Government had earlier extended this scheme upto 31.03.2022.

Now, on the basis of the requests received from the stakeholders of the scheme, the Government has decided to further extend this scheme till 31.03.2023.

Circular No. 05/2022-Customs Dated 04/03/2022

With a view to enhance the efficiency and professionalism of officers/teams deployed for carrying out anti-evasion/anti-smuggling work, particularly when they are required to search premises, vehicles; verify a stock of goods; draw up a panchnama or to arrest a person away from their office premises, Board has received a suggestion that a standard toolkit may be provided.

In this regard, the undersigned is directed to say that officers/teams deployed for such work in Customs or CGST formations may be equipped with a suitable toolkit. A tentative list of items which could be considered for inclusion in the toolkit is given as Annexure-A. The list is suggestive in nature and may be modified so as to suit local needs.

Difficulties faced/suggestions, if any, may kindly be brought to the attention of the undersigned.

Annexure-A

Suggested list of items in toolkit for Anti evasion:

i. Battery Power Banks;

ii. Binoculars;

iii. Car Inverter to operate Printer etc. independently;

iv. Comprehensive First Aid box;

v. Drug Detection/ Narcotics test kit;

vi. Fabric thickness gauge;

vii. Faraday Bag (cuts off Mobile etc. from any sort of radio-waves and prevents remote tampering/

Deletion of Data of mobile etc.);

viii. File kit containing Copies of Summons, Panchnama, Test Memo etc.;

ix. GPS Tracker;

x. Hand held metal detector;

xi. High Power LED Torch;

xii. High precision digital weighing machine, closed door;

xiii. Modern Search Lights;

xiv. Multipurpose Screwdriver set;

xv. Night vision devices;

xvi. Stationery (Scissor, Stapler, Pen, Marker, Cello tape etc.);

xvii. Swiss Knife;

xviii. Videoscope

The Income Tax Department conducted search & seizure operations on a multinational group, engaged in distribution of telecom products and providing captive software development services, on 15.02.2022. The ultimate shareholding of the group lies with a foreign entity of a neighbouring country. The searches, which were spread across Delhi, Gurugram and Bengaluru covered the main business premises and also the residential premises of the key office bearers. 

The search action has revealed that the group has made inflated payments against receipt of technical services from its related parties outside India. The assessee company could not justify the genuineness of obtaining of such alleged technical services in lieu of which payment has been made as also the basis of determination of consideration for the same. The expenses debited by the assessee company towards receipt of such services are to the tune of Rs. 129 crore over a period of five years.

During the search, it was found that, the assessee group has debited more than Rs.350 crore in its books of account in recent financial years towards royalty to its related party. Such expenses have been incurred for the use of brand and technical know-how related intangibles. During the search, the group has failed to substantiate receipt of any such services/technical know-how, or the basis of quantification of royalty rate for such claim. Consequently, the rendering of services and such royalty payments become highly questionable and prima facie, disallowable as business expenses as per extant Income Tax law.

Evidences gathered and statements recorded during the search also reveal that one of the group entities engaged in providing software development services, has been disclosing lower net margins from the related parties, by claiming its operation to be of low-end nature. However, the evidences collected during the investigation indicated that this entity has been rendering significant services/ operations of high-end nature. On this aspect, suppression of income of Rs. 400 crore has been detected.

The search action has further revealed that the group has manipulated its books of account to reduce its taxable income in India through creation of various provisions for expenses, such as provisions for obsolescence, provisions for warranty, doubtful debts/ loans & advances etc., which have little or no scientific/financial rationale. During the investigation, the group has failed to provide any substantial and appropriate justification for such claims.

Further investigations are in progress.

Advisory No: 06/2022 Dated 1st March,2022

IGCR module is developed by ICEGATE, CBIC to provide a digital service to importers to avail benefits under the IGCR Rules (Import of Goods at Concessional Rate of Duty).

The broad provisions are as under:

1. Available post log in on ICEGATE for importers in their existing account, registered with valid DSC.
2. Provision of declaration of advance intimation of Import of Goods at concessional rate of duty.
3. Generation of a unique IIN for a Financial Year with facility to amend as and when required.
4. A continuity Bond of IGCR Bond Type is created or amended by the Importer.
5. Bond Management Module
6. Multiple Details are auto populated in the monthly statement.
7. Interface of details entered by the user provided to the jurisdictional Customs officer

2. This advisory is a complete step-by-step guide for the user to declare an advance intimation of goods to be imported, access continuity bond management module, file monthly return statements. 

Full advisory can be access from the below link for stepwise detailed process.

The Department for Promotion of Industry and Internal Trade (DPIIT) has launched the third edition of the National Startup Awards. In line with Azadi Ka Amrit Mahotsav, the National Startup Awards 2022 will acknowledge startups and enablers who have been instrumental in revolutionising the development story of India and hold within them the power and potential to further fuel the spirit of Aatmanirbhar Bharat.

The first National Startup Awards were announced in 2020 and witnessed applications from over 1,600 startups and ecosystem enablers across India. The recently concluded National Startup Awards 2021 saw participation from over 2,200 startups and ecosystem enablers. After conducting two successful editions, the National Startup Awards 2022 are open for applications.

The awards for startups will be given in 17 sectors classified into 50 sub-sectors. The 17 sectors are Agriculture, Animal Husbandry, Construction, Drinking Water, Education & Skill Development, Energy, Enterprise Technology, Environment, FinTech, Food Processing, Health and Wellness, Industry 4.0, Media & Entertainment, Security, Space, Transport, and Travel.

In addition, there are seven special categories of awards for startups:

• Women-led startups
• Impact in rural areas
• Campus startups
• Manufacturing excellence
• Innovation tackling the pandemic (preventive, diagnostic, therapeutic, monitoring, digital connect, work from home solutions, etc.)
• Solution delivery or business operations in Indic languages
• Startups from North-East (Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura) and Hilly States/ Union Territories (Himachal Pradesh, Uttarakhand, Jammu & Kashmir, and Ladakh)

The National Startup Awards 2022 will also reward exceptional incubators and accelerators as key building blocks of a robust startup ecosystem.

A cash prize of INR 5 lakh will be awarded to each winning startup. The winners and runners-up will also be given opportunities to present their solutions to relevant public authorities and corporates for potential pilot projects and work orders and pitching opportunities with investors. They will also be given priority for participation in various national and international startup events.

A cash prize of INR 15 lakh each will be awarded to one winning incubator and one winning accelerator.

The applications for the National Startup Awards 2022 are open till 15th March 2022. For more details, visit www.startupindia.gov.in/content/sih/en/nsa2022.html.