Society News for month of September 2023

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1. SPR&MD Committee felicitates young CAs

The Seminar, Public Relations & Membership Development Committee (SPR&MD) Committee of BCAS felicitated young successful CAs of the  May 2023 Examination at a talk show titled “Let’s Get Techni-CA-l – Avenues & Opportunities” held on 11th August, 2023 at the Society Hall. The event was attended by over 100 participants, including some walk-ins.

The two eminent speakers, CA Nitin Shingala (Past President) and CA Vivek Shah, enthralled the audience with their presentations and guided them on how to mould themselves into becoming discerning professionals.

The audience were overwhelmed after listening to the experiences shared by CA Shubham Sahebrao Nighute during his journey of becoming a chartered accountant overcoming various obstacles and innumerable challenges faced by him in his life. Two other all-India rankers, AIR 10 CA Pooja Baghmar from Chennai and AIR 11 CA Gogula Bhargavi from Vijaywada were also e-felicitated. They too shared their experiences with the audience.

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YouTube Link:  https://www.youtube.com/watch?v=N_Hs-Hu899c

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2.    ITF Study Circle Meeting on “Taxation of Software as a Service”

The International Tax and Finance Study Circle of the Society organised a hybrid meeting on 10th August, 2023 to discuss the topic of “Taxation of Software as a Service”.

• The discussion began with the speaker CA Divya Jokhakar touching upon different services (with examples) which would be covered by the expression Software as a Service (‘SaaS’).
• The taxability of payments for SaaS as royalty under the Income-tax Act, 1961 (‘the Act’) as well as various tax treaties was discussed.
• Various provisions of Copyright law were also discussed to test the application of the definition of “royalty”.
• Further, the situations in which such payments would attract the provisions related to capital gains were also discussed.
• Further, the prospect of these payments falling within the ambit of Fees for Technical Services (‘FTS’) was also discussed.
• During the course of discussions, key rulings of the Supreme Court in the case of Engineering Analysis Centre of Excellence (P.) Ltd (432 ITR 471) and Kotak Securities Ltd (383 ITR 1) were discussed.
• It was further discussed that once such payments were not taxable as royalty / FTS, the taxability as business profits would need to analysed – both in terms of the Act (business connection) and the treaty.
• The applicability of Equalisation Levy II (introduced in 2020) to the payments for SaaS was also discussed.
• The speaker suggested the order in which the above provisions ought to be applied in order to determine the taxability of SaaS.

Towards the end of the session, various practical examples in terms of the taxability of services such as Zoom, Mailchimp, Office 365, etc — which are used frequently — were discussed.

3.     Suburban Study Circle meeting on “Amendments in the Tax Audit Report”

The Suburban Study Circle organised a meeting on “Important Amendments in the Tax Audit Report for Trusts / NGOs — Form 10B/10BB” on 9th August, 2023, under the leadership of  CA Pankaj Jain.

Making an insightful presentation,  Jain shared his views on the following:

• An elaborate discussion on various new and complex clause applicability of the respective forms:

1.    Statutory provisions vis-à-vis practical difficulty

2.    Regulatory implications for CA / CS professionals and matters to be included in the audit report

3.    Management responsibility

4.    Compliance checkpoints

5.    Other practical challenges

The session covered numerous real-life examples, with Jain sharing an excellent clause-by-clause interpretation.

4.    Indirect Tax Laws Study Circle case studies on “GST in Automobile Industry”

The Indirect Tax Laws Study Circle presented six case studies on various aspects of GST with reference to clarificatory circulars, provisions of law, judicial pronouncements and embracing technology, and the overall impact of all of these on the automobile sector. Presented by CA Shabd Roop Satsangi, the case studies covered the following aspects:

• Discounts and Incentives, Reimbursement Claims, Price & Margin Support in the light of Tata Motors Ltd vs. Deputy Commissioner of Commercial Taxes (SPL) – [2023] 150 taxmann.com 382 (SC) & Circular No. 195/07/2023-GST, dated 17th July, 2023
• Issues in supply for repairs undertaken in the state outside the state of registration
• Sale of secondhand vehicles, calculation of margin, understanding the transaction value thereof w.r.t. ancillary services provided
• Blocked credits for demo vehicles whether purchased, leased, supply of ancillaries like stereo, etc., foreign trips or gold coins, etc.
• Taxation of add-on software like speed controllers, boot automation and massage functions at rear seats when opted at different time frames, i.e., after or at the time of supply and payment made to dealer or manufacturer separately.
• Issues of composite supplies, mixed supplies or independent supplies were also discussed as well as valuation principles under 15.
• Change of definition of “SUV” in light of AAAR Maharashtra — Re: Tata Motors Ltd. – order no. MAH/AAAR/SS-RJ/06/2019-20 & Circular No. 195/07/2023-GST, dated 17th July, 2023.
• Pre-GST jurisprudence in the CENVAT Regime, multiple GST AARs, clarificatory circulars, as well as principles held in the case of Mohd. Ekram Khan & Sons (SC) were discussed by the group.

The meeting was held virtually on 3rd August, 2023. Around 68 participants from across India participated in the event mentored by CA Yash Dhadda, discussed the bare law, circulars, AARs and SC decisions. The seminar also presented an interesting segment analysis on the automobile sector.

5.    IESG Meeting on China’s Economy

The International Economics Study Group (IESG) organised a virtual meeting on 1st August, 2023 to discuss “What’s really happening in China”. Chaired by CA Harshad Shah, the meeting noted that Chinese Economy is in turmoil and on the brink of deflation, which can trigger a recession, create a ‘doom loop’ and loss of momentum. This could mean China is headed for a lost decade, similar to Japan in 1990s. China’s property market is in crisis with a bubble situation (the property sector accounting for over 30 per cent of GDP), educated youth unemployment surging to 21.3 per cent (experts suggest it could go to 46.5 per cent), China’s $23 trillion local debt and a massive infrastructure mess about to get worse as cities are on the verge of a debt crisis threatening the stability of the banking system. The meeting also noted that China is facing complex geopolitical and geoeconomical challenges, with the ongoing trade and technology (mainly chips) war turning into Cold War II. China is also facing serious internal challenges with high unemployment, falling income and climate change, which is bringing about extreme weather conditions like floods, drought and heat wave. Its tech titans are losing investors, due to a crackdown by regulators, the collapse of CCP due to challenges it faces on the economic and social front and rare dissent shown by the public. This has resulted in many MNCs relocating their manufacturing from China to India in the China+1 policy.

6.    Indirect Tax Laws Study Circle Meeting on the concept of Taxable Persons

The group leader of the Indirect Tax Study Circle made a virtual presentation on the topic “Casual Taxable Person and Non-resident Taxable Person” on 21st July, 2023. The presentation focused on the legal concept, with multiple case studies addressing the probable practical issues relating to the Casual Taxable Person and Non-Resident Taxable Person. The presentation and discussion broadly covered the intricacies of the following topics:

• Meaning of Casual Taxable Person
• Situations to identify the events determined as “occasional” as well as the impact of the definition of business, the furtherance of business and supply by itself, ‘supply made from’ position, the impact of identification of supply and clientele prior to the change of location
• Classification for Inter State vs. Intra State w.r.t. to Casual Taxable Person
• Mandatory registration provisions and situations for service providers were discussed on these aspects of co-work spaces, marketing services, etc.
• Situations covering deemed supplies, ISD mechanism
• Inference of casual taxable person analogy for classification of services
• Non-Resident Taxable Person, its impact and utility

Around 64 participants all over India participated in the discussion.

7.     Direct Tax Laws Study Circle Meeting on intricacies and issues relating to Reassessment

Under the leadership of the speaker, CA Dharan Gandhi, the Direct Tax Laws Study Circle organised a meeting on the topic, “Reassessment under the Income Tax – Law and Practice”. The meeting discussed the following concepts and issues relating to assessment procedures:

• Concept of Self-Assessment, Assessment, Revision of Assessment and Rectification of Assessment under the Income-tax Act, 1961 (Act)
• New provisions relating to Reassessment, Search and Survey as Introduced by the Finance Act 2021, explaining and comparing the old and new provisions of Section 147 of the Act.
• Recent Case Laws relating to Section 148:

a.    [2022] 449 ITR 517 (Delhi) Suman Jeet Agarwal vs. ITO

b.    (2022) 329 CTR (Mad) 809 Dr Mathew Cherian & ORS. vs. ACIT

• Section 148A of the Act relating to conducting an inquiry and providing an opportunity before issuance of a notice under section 148
• Section 149 of the Act relating to the time limit for notice

By delving into the minute details of these statutory provisions, the speaker shed light on the nuanced procedures and potential pitfalls that arise during the reassessment process. The meeting was held on 14th July, 2023.

8.    Taxation Committee organises a Webinar on Filing of Income Tax Returns for A.Y. 2023-24

A webinar to guide taxpayers on filing their income tax returns (ITR) was taken by CA Divya Jokhakar on 5th July, 2023. The webinar highlighted that the due date for filing returns varies depending on a person’s income and filing status. He can file his returns online or by mail. By following these tips, he can file his income tax return easily and on time. Starting early will give him more time to gather his documents and ensure the accuracy of the returns. Using tax preparation software can help him file his returns quickly and easily. He can also get help from a tax professional. The speaker explained  how A.Y. 2023-24 returns have changed and what precautions are needed to be taken. She further gave examples of disclosures relating to the foreign assets and incomes.

She also emphasised the importance of the various rules in  Income Tax Rules 1962 and the way to compute and disclose in the ITR.

Towards the end, the method of e-verification of the ITR was explained, and it was emphasised that the new rule mentions that one must everify the ITR within 30 days of e-filing.

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YouTube Link:  https://www.youtube.com/watch?v=zDsRLnNN_uk

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9.    Taxation Committee organises a Seminar on CBDT’s e-Verification Scheme, 2021

A hybrid seminar on CBDT’s e-Verification Scheme, 2021 was organised on 27th June, 2023.

Sunil Kumar Jha, Director of Income Tax (I&CI), Mumbai, broadly explained the important features of the e-Verification Scheme, 2021, and the manner in which the Income-tax department is collecting / collating data and information from multiple sources. He educated the members about the rationale of introducing this scheme and the intention of the department to share the information they have received from sources with the taxpayers.

Nagesh Kale, ITO (I&CI), Mumbai, made a detailed presentation explaining the features and provisions of this scheme. He also shared certain statistics regarding the number of cases selected for e-verification for F.Y. 2019-20 and F.Y. 2020-21.

Sanjay Joseph, CIT, DIT Systems, briefly explained how information collected by the department is displayed on the AIS portal and how the taxpayers are allowed to give a response on the reporting portal. He threw light on the manner of processing the query once a taxpayer provides a response on the reporting portal.

This was followed by a Q&A session wherein Sunil Kumar Jha, DIT (I&CI), and Shri Sanjay Joseph, CIT, addressed the practical issues faced by the taxpayers while responding to e-verification queries and reporting on the AIS portal.

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YouTube Link:  https://www.youtube.com/watch?v=MeDGy0mpW88

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