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custom duty_mmtaxclub

Government Rescinded exemption notification on import duty of Palm oil, soya bean oil, sunflower seed oil etc.
September 12th, 2021
Posted By: Team-MMTaxClub

Govt. vide notification no. 34/2021-custom dated 29-06 2021 exempted custom duty on palm oils and other oils in excess of the amount calculated at the standard rate specified.

Notification number 34/2021-custom dated 29-06-2021 can be read as under;

G.S.R. (E)…- In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the goods of the description specified in column (3) of the Table below, falling within the Chapter, heading, sub–heading or tariff item of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) specified in column (2) of the said Table, when imported into India, from so much of the duty of customs leviable thereon under the said First Schedule, as is in excess of the amount calculated at the standard rate specified in the corresponding entry in column (4) of the said Table, namely –

S. No.

Chapter, heading, subheading or tariff item

Description

Standard Rate

(1)

(2)

(3)

(4)

1

1511 10 00

Crude Palm Oil

10%

2

1511 90

All goods (RBD Palm Oil, RBD Palmolein, RBD Palm Stearin and any Palm Oil other than Crude Palm Oil)

37.5%

 

This notification was effective from 30th June 2021 to 30th September, 2021.

 

Now Govt. vide notification no. 43/2021- Customs dated 10th September, 2021  rescinded the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 34/2021- Customs, dated the 29th June, 2021 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 449 (E)., dated the 29th June, 2021.

Meaning thereby, the specified goods covered under exemption notification 34/2021 will charged to basic custom duty as specified under First Schedule of Customs Tariff Act, 1975.

Notification 43/2021 come into force w.e.f 11th September, 2021.

Notification can be accessed from here

AAR-Maharashtra_mm-tax-club

Hostel Rent less than Rs.1000/- Per day exempted Under GST MAAR in M/S Ghodawat Eduserve LLP
September 10th, 2021
Posted By: Team-MMTaxClub

Maharashtra Authority of Advance Ruling

[Order No. GST-ARA-72/2019-20/B-51 dated August 27, 2021]

 

M/s. Ghodawat Eduserve LLP (The Applicant) seeking an advance ruling on following questions;

  1. Wether activity of providing the hostel on rent to various students by the applicant is exempt ( where hostel fees charged per students per day is much less than Rs.1000/-)?
  2. If is it exempt it shall be claimed as exempted under sr. no. 12 or sr. no. 14 of notification no. 12/2017-central tax (rate) (as mentioned time to time) dated 28/06/2017 ?

Brief Description of case;

Applicant provides commercial training and coaching service to students, it provides hostel facilities to the students on demand basis and charge them additionally for hostel facilities.

The hotel provides basic residential facilities which are require to stay and to study. Hostel is charging a lump sum fees of Rs.34000/- P.A which comes to Rs.95/- (approx) per day.

Extract of Sr. no. 12 and Sr. no. 14 of notification no. 12/2017 can be read as under;

Sr. no.

Chapter, Heading

Description of Service

Rate %

Conditions

12

Heading 9963 or

Heading 9972

Services by way of renting of residential dwelling for use as residence

Nil

Nil

14

Heading 9963

Services by a hotel inns, guest house club or composite by whatever name called for the residential or lodging purposes, having declared tariff of a unit of accommodation below one thousand rupees per day or equivalent.  

 

 

Nil

 

 

Nil

 

The applicant contended that Residential Dwelling not defined anywhere in the act or notification hence meaning of “residential dwelling” has to be understood in normal trade parlance.

Concerned tax officer contended that Residential dwelling not defined anywhere in law, However in normal case Residential dwelling means a house given on rent to a person or a family consisting of kitchen, Bathroom, Toilet, Rooms and other amenities required for a day to day living purpose under agreement.

The Hon’ble Maharashtra Authority of Advance Ruling  hold that;

The contention of Jurisdictional officer , stating that the subject activity is taxable is not acceptable. The applicant is providing hostel on the rent to various students where fees charged per student per day per room is much less than Rs.1000/- per day per person.

Therefore considering the provisions of notifications Entry no. 14, and clarification given by the CBIC in circular No. 32/06/2018-GST dated 12th February 2018, it is held that, the applicant’s activity is satisfying the condition of Entry sr. no. 14 of the said notification and hence would be exempt from taxes.

 

Full order copy can be accessed from; Click Here

 

Income Tax Settlement _ MM Tax Club

CBDT allows taxpayers an opportunity to file application for settlement
September 7th, 2021
Posted By: Team-MMTaxClub

 

CBDT provided relief to the taxpayers with regard to file application for settlement which was to file on or before 31-01-2021 now taxpayer can file settlement application till 30-09-2021.

Settlement of cases was introduced in income tax act with effect from 01-04-1976. Income Tax Settlement Commission (ITSC) formed u/s 245B to take up the cases under income tax for settlement. But with Finance Bill 2021, Govt. discontinued Income Tax Settlement Commission (ITSC) w.e.f 01-02-2021 and an Interim Board was formed by the central govt. for settlement of the pending application which was filed till 31-01-2021 but not resolved by the ITSC.

Commissioner of Income Tax Surabhi Ahluwalia said in a statement that taxpayer can file application for settlement before interim Board till 30th Sept. 2021 if following condition satisfied ;-

 

  1. The assessee was eligible to file application for settlement on 31.01.2021 for the assessment years for which the application is sought to be filed (relevant assessment years); and

  2. all the relevant assessment proceedings of the assessee are pending as on the date of filing the application for settlement.

 

Press Release in this regard stated hereunder;

The Finance Act, 2021 has amended the provisions of the Income-tax Act, 1961 (“the Act”) to inter alia provide that the Income-tax Settlement Commission (“ITSC”) shall cease to operate with effect from 01.02.2021. Further, it has also been provided that no application for settlement can be filed on or after 01.02.2021, which was the date on which the Finance Bill, 2021 was laid before the Lok Sabha. In order to dispose off the pending settlement applications as on 31.01.2021, the Central Government has constituted Interim Board for Settlement (hereinafter referred to as the “Interim Board”), vide Notification no. 91 of 2021 dated 10.08.2021. The taxpayers, in the pending cases, have the option to withdraw their applications within the specified time and intimate the Assessing Officer about such withdrawal.

It has been represented that a number of taxpayers were in advanced stages of filing their application for settlement before the ITSC as on 01.02.2021. Further, some taxpayers have approached High Courts requesting that their applications for settlement may be accepted. In some cases, the Hon’ble High Courts have given interim relief and directed acceptance of applications of settlement even after 01.02.2021. This has resulted in uncertainty and protracted litigation.

In order to provide relief to the taxpayers who were eligible to file application as on 31.01.2021, but could not file the same due to cessation of ITSC vide Finance Act, 2021, it has been decided that applications for settlement can be filed by the taxpayers by 30th September, 2021 before the Interim Board if the following conditions are satisfied:-

 

  1. The assessee was eligible to file application for settlement on 31.01.2021 for the assessment years for which the application is sought to be filed (relevant assessment years); and

  2. all the relevant assessment proceedings of the assessee are pending as on the date of filing the application for settlement.

 

Such applications, subject to their validity, shall be deemed to be “pending applications” under clause (eb) of section 245A of the Act and shall be disposed of by the Interim Board as per the provisions of the Act.

It is clarified that taxpayers who have filed such applications shall not have the option to withdraw such applications as per the provisions of section 245M of the Act. Further, the taxpayers who have already filed application for settlement on or after 01.02.2021 as per the direction of the various High Courts and who are otherwise eligible to file such application, as per para 3 above, on the date of filing of the said application shall not be required to file such application again.

Legislative amendments in this regard shall be proposed in due course.
Free cash flow_mmtaxclub

Free Cash Flow (F.C.F)
September 5th, 2021
Posted By: Team-MMTaxClub

What is Free Cash Flow

Free cash flow represents an available income of a firm after deducting all the revenue and capital expenditure which can be used for expansion of the business in future or to pay dividend.

Purpose

Free Cash Flow calculated to evaluate actual earning of the firm and to evaluate future performance.

Need

Calculation of Free Cash Flow Mainly need for Valuation of Company where irregular dividends and in case of merger and Acquisition.

Illustration

Let’s we understand F.C.F with example:

 Suppose a firm has sales of Rs.1200/- Operating Cost (excluding depreciation)  Rs.600/-, Depreciation Rs.50/-, So we can calculate EBIT as under;

Sales                                                                      1200/-

Less: Operating Cost                                              600/-

Depreciation                                                            50/-  

EBIT                                                                      550/-

Less:Tax@40%                                                     220/-

EAT                                                                       330/- 

For the purpose of calculating free cash flow we have to identify depreciation, Because depreciation is non cash transaction, Practically there is no cash outflow of Rs.50/- but we get tax credit on the same. It means firm will have earning after tax plus Depreciation.

Since we are looking for F.C.F of the firm, hence we will not reduce interest from EBIT.

EAT                                                        330/-

Add: Depreciation                                    50/-

NOPAT                                                  380/-

 Now Rs.380/- is Net cash inflow to the firm after deducting Revenue expenditure  and Taxes, but even its not represents F.C.F to firm because the firm may require fund to Operate and maintain  business.

To operate they may need addition working capital and to maintain business they may need Capital expenditure (i.e. F.A)

Let say Capex is Rs.100/- and additional Working Capital Rs.75/-, we need to deducted these two items to get F.C.F to the firm.

NOPAT                                                 380/-

Capital Expenditure                             100/-

Change in Working Capital                   75/-

Free Cash Flow                                 205/-

Summary

F.C.F is available earning to the Equity holders and Lender of the firm which can be freely used by the firm at their discretion.