2024MONTHLY NEWS & UPDATES FOR NOVEMBER 2024

Executive Summary

Income Tax

• Specifying Forms prescribed in Appendix-II of The Income Tax Rules, 1962 to be furnished electronically under Sub-Rule (1) and Sub-Rule (2) of Rule 131 of the Income Tax Rules,1962.
• Specifying Forms prescribed in Appendix-II of The Income Tax Rules, 1962 to be furnished electronically under Sub-Rule (1) and Sub-Rule (2) of Rule 133 of the Income Tax Rules,1962.
• Section 119, Read with Section 220 of The Income Tax Act, 1961- CBDT- fixing monetary limit of Income Tax Authorities in respect of reduction or waiver of interest paid or payable u/s 220(2)
• Section 119 of The Income Tax Act, 1961- CBDT- Condonation of delay u/s 119(2)(b) in filing of Form no. 10-IC and Form no. 10-ID for A.Y. 2020-21, 2021-22 and 2022-23.

Goods And Service Tax (GST)

• Circular No. 237/31/2024-GST [F.NO. CBIC-20001/6/2024-GST] Clarifying the issues regarding implementation of provisions of Sub- Section (5) and Sub-Section (6) in section 16 OF CGST ACT, 2017
• Circular No. 238/32/2024-GST [F. NO. CBIC-20001/6/2024-GST] Clarification of various doubts related to Section 128A OF THE CGST ACT, 2017
• Notification No. G.S.R. 644(E) [NO. 109 (F. NO. A-50050/2/20… Goods and Services Tax Council Secretariat, Group ‘A’ Executive posts recruitment (Amendment) Rules, 2024 – Amendment in Rule 7 and Schedule
• Corrigendum G.S.R. 652(E) [F. NO. 190354/149/2024-TO (TRU-II)-PART-I CBEC], Dated 22-10-2024, Section 9 of the Central Goods and Services Tax Act, 2017
• Corrigendum to Circular No. 237/31/2024-GST [F.NO. CBIC-20001/6/2024- GST, dated 25-10-2024, Clarifying the issues regarding implementation of provisions of Sub- Section (5) and Sub-Section (6) in section 16 of CGST ACT, 2017
• Notification No. 26/2024–CENTRAL TAX [G.S.R. 713(E)/F. NO CBIC-20001/8/2024-GST], Dated 18-11-2024, Section 39 of the Central Goods and Services Tax Act, 2017-Furnishing of Returns- Extension of due date to furnish form GSTR-3B for month of October 2024, for registered person having specified principal place of business.

Companies Act 2013/ Other Laws

• Filing of Financial Statements of Producer Companies within 60 days of Annual General Meeting
• Reporting of Foreign Exchange Transactions to Trade Repository
• Operational Framework for Reclassification of Foreign Portfolio Investment to Foreign Direct Investment (FDI)
• Onboarding Process on the Trade Receivables Discounting System
• SEBI (Bankers to an Issue) (Amendment) Regulations, 2024.

• · Specifying Forms Prescribed In Appendix-Ii Of The Income Tax Rules, 1962, To Be Furnished Electronically Under Sub Rule (1) And Sub- Rule (2) Of Rule 131 Of The Income Tax Rules, 1962

  a)      In exercise of the powers conferred under sub-rule (1) and sub-rule (2) of Rule 131 of the Income-tax Rules, 1962 (‘the Rules’), the Director General of Income Tax (Systems), Bengaluru with the approval of the Board, hereby specifies that the following Forms shall be furnished electronically and shall be verified in the manner prescribed under sub-rule (1) of Rule 131:

  Form	Description
  Form 3CEDA	Application for the rollback of an Advance Pricing Agreement
  Form 3  CO	Application form for approval under sub-section (1) of section 35CCC of the Income Tax Act, 1961

   

  2024. This notification shall come into effect from 31^st October 2024.
  • Specifying Forms Prescribed In Appendix-Ii Of The Income Tax Rules ,1962 To Be Fuurnished Elecctronically Under Sub-Rule (1) And Sub-Rule (2) Of Rule 133
  1. In exercise of the powers conferred under sub-rule (1) and sub-rule (2) of Rule 131 of the Income-tax Rules, 1962 (‘the Rules’), the Director General of Income Tax (Systems), with the approval of the Board, hereby specifies that the following Forms that shall be furnished electronically and shall be verified in the manner prescribed under sub-rule (1) of Rule 131:—

   

  Form	Description
  Form 42	Appeal against refusal to recognise or withdrawal of recognition from a provident fund
  Form 43	Appeal against refusal to approve or withdrawal of approval from a superannuation fund
  Form 44	Appeal against refusal to approve or withdrawal of approval from a gratuity fund

   

  2024. This notification shall come into effect from 22-11-2024.
  • Section 119, Read With Section 220 Of The Income Tax Act, 1961-Cbdt-Fixing Monetary Limit Of Income–Tax Authorities In Respect Of Reduction Or Waiver Of Interest Paid Or Payable Under Section 220(2)
  1. Section 220(2) of the Income-tax Act (‘the Act’) deals with the consequences of non-payment of income tax by a taxpayer. As per Section 220(2) of the Act, if a taxpayer fails to pay the amount specified in any notice of demand under section 156 of the Act,the person shall be liable to pay simple interest at the rate of 1 % per month or part of the month for the period of delay in making the payment. Further, section 220(2A) of the Act empowers the Principal Chief Commissioner (Pr. CCIT) or Chief Commissioner (CCIT) or Principal Commissioner (Pr. CIT) or Commissioner (CIT) for reduction or waiver of the amount paid or payable under section 220(2) of the Act in the circumstances specified therein.
  2. The Central Board of Direct Taxes, for the proper administration of the Act, hereby specifies the following monetary limits as below:

  Income-Tax Authority	Monetary limits for reduction or waiver of interest
  Pr. CIT/CIT	Upto Rs. 50 lacs
  CCIT/DGIT	Above Rs. 50 lacs to Rs. 1.5 crore
  Pr. CCIT	Above Rs. 1.5 crore

   

  1. The powers of reduction or waiver of interest paid or payable u/s 220(2) of the Act shall continue to be subject to satisfaction of all the following conditions-
  • Payment of such amount has caused or would cause genuine hardship to the assessee,
  • Default in the payment of the amount on which interest has been paid or was payable under the sub-section was due to circumstances beyond the control of the assessee; and
  • The assessee has co-operated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him.
  1. The above shall come into effect from the date of issue of this circular.

   

  • Section 119 of the income tax act,1961-cbdt-condonation of the dealy under section 119(2)(b) in filing of form no. 10-ic and from no. 10-id for assessment years 2020-21, 2021-22 and 2022-23
  1. In exercise of the powers conferred under section 119(2)(b) of the Income-tax Act, 1961, the Central Board of Direct Taxes by Circular No. 6/2022, dated 17-03-2022 and Circular No. 19/2023, dated 23-10-2023 condoned the delay in filing of Form No. 10-IC as per Rule 21AE of the Income-tax Rules, 1962 for Assessment Years 2020-21 and 2021-22 in cases where the conditions mentioned in the said Circulars are satisfied.
  2. With a view to avoid genuine hardship to the assessee in exercising the option, under section 115BAA of the Act, read with Rule 21AE of the Rules or under section 115BAB of the Act, read with Rule 21AF of the Rules, the CBDT in exercise of the powers conferred under section 119(2)(b) of the Act, hereby authorizes: –
     • the Pr. Commissioners of Income Tax (‘Pr. CsIT’)/ Commissioners of Income Tax (‘CslT’) to admit and deal with the applications for condonation of delay in filing of Form No. 10-IC or Form No. 10-ID for Assessment Years 2020-21, 2021-22 and 2022-23 where there is a delay of upto 365 days.
     • the Pr. Chief Commissioners of Income Tax (‘Pr. CCsIT’)/Chief Commissioners of Income Tax (‘CCsIT’)/ Directors General of Income Tax (‘DsGIT’) to admit and deal with the applications for condonation of delay in filing of Form No. 10-IC or Form No. 10-ID for Assessment Years 2020-21, 2021-22 and 2022-23 where there is a delay of more than 365 days.
  3. The Pr. CCsIT/CCsIT/DsGIT/Pr. CsIT/CsIT shall ensure that the following conditions are satisfied, while deciding such applications: –
     • The return of income for relevant assessment year has been filed on or before the due date specified under the section 139(1) of the Act.
     • The assessee has opted for taxation, u/s 115BAA of the Act in case condonation of delay is for Form No. 10-IC and u/s 115BAB of the Act in case condonation of delay is for Form No. 10-ID, in “Filing Status” in “Part A-GEN” of the Form of Return of Income ITR-6; and
     • The assessee was prevented by reasonable cause from filing such Form before the expiry of the time allowed and the case is of genuine hardships on merits.

  No application for condonation of delay in filing of Form No. 10-IC or Form No. 10-ID shall be entertained beyond three years from the end of the assessment year for which such application is made. The time limit for filing of such application within three years from the end of the assessment year will be applicable for application filed on or after the date of issue of this Circular. A condonation application should be disposed of, as far as possible, within six months from the end of the month in which such application is received by the Competent Authority.

• Circular No. 237/31/2024-GST [F.NO. CBIC-20001/6/2024-GST] Clarifying the issues regarding implementation of provisions of Sub- Section (5) and Sub-Section (6) in section 16 OF CGST ACT, 2017
• Section 16 Amendments:
• The Finance (No. 2) Act, 2024 extends the time for claiming Input Tax Credit (ITC) retrospectively, especially for taxpayers affected by wrongful ITC claims under Section 16(4) of the CGST Act.
• ITC can be claimed under newly inserted provisions 16(5) and 16(6) for past periods where it was previously denied.
• Refunds and Appeals:
• No refund for taxes or ITC reversals due to violations of Section 16(4), even if ITC is now allowed under Section 16(5) or 16(6) (as per Section 150 of the Finance Act, 2024).
• Taxpayers who were denied ITC due to Section 16(4) can now apply for rectification through a special procedure (Notification No. 22/2024, dated 8th October 2024).
• Rectification applications must be submitted electronically within 6 months from the notification date.
• Action for Rectification:
• Taxpayers can apply for rectification if ITC was wrongly denied due to Section 16(4). The rectification will be handled by the officer who issued the original order and must be completed within 3 months.
• In case of adverse effects from rectification, natural justice principles will apply.

• Implementation:
• The tax authorities must consider the new provisions when issuing orders or rectifications for cases involving wrongful ITC claims under Section 16(4).
• Suitable notices should be issued to inform the public about these changes.
• Limitations:

Rectification applications under Notification No. 22/2024 can only be filed for cases where ITC was denied under Section 16(4) but is now allowed under Section 16(5) or 16(6). Other cases must follow the regular process within the set time limits.

• Further Clarifications: Any difficulties in implementation should be communicated to the Board for resolution.

• Circular No. 238/32/2024-GST [F. NO. CBIC-20001/6/2024-GST] Clarification of various doubts related to Section 128A OF THE CGST ACT, 2017
• Waiver of Interest/Penalty: Section 128A, effective from 1-11-2024, allows taxpayers to waive interest or penalty related to tax demands under Section 73 for FY 2017-18 to 2019-20, subject to certain conditions. The waiver applies only if the taxpayer fulfills the specified conditions.
• Key Provisions:
• Notification & Rule: Rule 164, effective from 1-11-2024, outlines the procedure for applying for the waiver. Taxpayers must pay the demanded tax by 31-03-2025 or within six months if re-determined by a proper officer.
• Application Forms: Taxpayers must file applications in FORM GST SPL-01 or FORM GST SPL-02 on the portal by 31-03-2025 or within six months in specific cases.
• Payment Process:
• Payment Deadlines: Tax must be paid through FORM GST DRC-03 or ELR before the waiver can be processed. Any amounts due to Section 16(4) violations, now eligible under Sections 16(5) or 16(6), are excluded from the tax amount for waiver eligibility.
• Waiver Eligibility: The waiver applies only to tax demands related to the specified periods and issues like erroneous refunds.
• Processing Applications:
• Applications are reviewed by the proper officer. If they meet criteria, the officer issues a waiver order (FORM GST SPL-05). If not, the application may be rejected (FORM GST SPL-07).
• Appeals: Appeals can be filed against rejection orders but not against approvals. The appellate authority can modify the tax liability in such cases.

• Additional Clarifications:
• Rejection & Appeal: If a waiver application is rejected, the taxpayer may file an appeal. If the appeal is in his favor, the liability is adjusted in the Electronic Liability Register (ELR).
• Final Decisions: Once an order is passed, the taxpayer must pay any remaining interest or penalties within three months to keep the waiver valid. This process ensures clarity on tax demands and provides taxpayers with an opportunity to avoid interest and penalty payments under specified conditions.

Further, the following issues with respect to availing the benefit of waiver of interest or penalty or both provided under Section 128A, are also clarified hereby: –

• Tax Paid Before Section 128A Came into Effect: Tax paid before or after Section 128A came into effect will be considered for the waiver, as long as it was paid for the specified demand.
• Tax Paid by Another Person on Behalf of Taxpayer: Amount recovered by tax officers from another person on behalf of the taxpayer can be counted as tax paid under Section 128A, if it was recovered before the notified date.
• Interest/Penalty Adjustments: Interest or penalty amounts cannot be adjusted against tax dues for Section 128A benefits.
• Tax Paid & Only Interest/Penalty Demand: If tax is already paid and only interest/penalty remains, Section 128A benefits can still apply, except for interest due to delayed returns or supply reporting.
• Partial Waiver & Litigation: Partial payments for interest/penalty and litigation are not allowed; full payment is required for Section 128A benefits.
• Multiple Tax Periods in One Notice: For a notice covering multiple periods, tax for the entire period must be paid, but the waiver only applies to the periods under Section 128A.
• Erroneous Refund Demand: Tax must be paid in full (including for erroneous refunds) to avail waiver, but the waiver applies only to tax demand, not the erroneous refund penalty.
• Appeals & Enhanced Tax Liability: If the tax liability is increased in an appeal, the taxpayer must pay the additional amount within 3 months for the Section 128A waiver to remain valid.
• Pending SLP in Supreme Court: If an SLP is pending, the taxpayer must withdraw it and apply in FORM GST SPL-01 or SPL-02, with proof of withdrawal.
• IGST & Compensation Cess: Section 128A applies to IGST and Compensation Cess, provided the full tax (including CGST, SGST, IGST, and Cess) is paid.
• Irregular Transitional Credit: If wrongly availed transitional credit is involved and the demand is under Section 73, it’s covered under Section 128A.
• Late Fees and Redemption Fine: Late fees and redemption fines are not covered by Section 128A, but penalties under sections 73, 122, and 125 are.
• Payment Using ITC: Tax payments for Section 128A can be made using ITC, except for reverse charge or erroneous refund cases, which require payment in cash.
• Reduced Tax Due to Retroactive Changes: Pay only the adjusted tax amount after applying the changes due to Sections 16(5) or (6) for transitional credit issues.
• Filing Adjustments for DRC Payments: If tax is paid through FORM GST DRC-03, the taxpayer must adjust the payment using FORM GST DRC-03A before filing an application in FORM GST SPL-02.

• It is requested that suitable trade notices may be issued to publicize the contents of this Circular.
• Difficulty, if any, in implementation of the above instructions may please be brought to the notice of the Board.
• Notification No. G.S.R. 644(E) [NO. 109 (F. NO. A-50050/2/20… Goods and Services Tax Council Secretariat, Group ‘A’ Executive posts recruitment (Amendment) Rules, 2024 – Amendment in Rule 7 and Schedule

The Goods and Services Tax Council Secretariat, Group ‘A’ Executive Posts Recruitment (Amendment) Rules, 2024 are as follows:

1. Title and Commencement: These are called the “Goods and Services Tax Council Secretariat, Group ‘A’ Executive Posts Recruitment (Amendment) Rules, 2024” and will come into force from the date of publication in the Official Gazette.
2. Amendments:

• Rule 7: Add “Other Backward Classes” after “Scheduled Tribes”.
• Schedule Changes:
• For the Director post (Serial No. 1), the requirement “is necessary” in column (13) is changed to “is not necessary”.
• For the Deputy Secretary post (Serial No. 2), the requirement “is necessary” in column (13) is changed to “is not necessary”.
• For the Under Secretary post (Serial No. 3), the requirement “is necessary” in column (13) is changed to “is not necessary”.

• Corrigendum G.S.R. 652(E) [F. NO. 190354/149/2024-TO (TRU-II)-PART-I CBEC], Dated 22-10-2024, Section 9 of the Central Goods and Services Tax Act, 2017

In the Notification No. 09/2024-Central Tax (Rate) dated 8th October 2024, the term “any property” in serial number 5AB, column (2), line 12 is corrected to “any immovable property”.

• Corrigendum to Circular No. 237/31/2024-GST [F.NO. CBIC-20001/6/2024- GST, dated 25-10-2024, Clarifying the issues regarding implementation of provisions of Sub- Section (5) and Sub-Section (6) in section 16 of CGST ACT, 2017

The following is added to the end of para 4 of the circular:

“The restriction on refunds under Section 150 of the Finance (No. 2) Act, 2024 does not apply to refunds of pre-deposits made by the taxpayer under Section 107(6) or Section 112(8) of the CGST Act, if the appeal is decided in the taxpayer’s favor.”

• Notification No. 26/2024–CENTRAL TAX [G.S.R. 713(E)/F. NO CBIC-20001/8/2024-GST], Dated 18-11-2024, Section 39 of the Central Goods and Services Tax Act, 2017-Furnishing of Returns- Extension of due date to furnish form GSTR-3B for month of October 2024, for registered person having specified principal place of business.

The Commissioner, based on the GST Council’s recommendation, extends the deadline for filing FORM GSTR-3B for October 2024 until November 21, 2024, for registered taxpayers whose principal place of business is in Maharashtra or Jharkhand.

• Filing of Financial Statements of Producer Companies within 60 days of Annual General Meeting

The Ministry of Corporate Affairs has notified that Producer companies shall file their Financial Statements with the Registrar within 60 days of the annual general meeting, as per section 378ZA(10) of the Companies Act,2013. Additional fee logic changes in Form AOC-4 are expected to be deployed in the next week to enable filing within 60 days with nominal fee.

• Reporting of Foreign Exchange Transactions to Trade Repository

The Reserve Bank of India has expanded the reporting requirements for foreign exchange contracts. Authorised Dealers are now required to report all foreign exchange spot, cash, and tom deals to the Trade Repository of Clearing Corporation of India Limited (CCIL), ensuring completeness of transaction data. Starting February 10, 2025, inter-bank FX contracts must be reported in hourly batches, while client FX contracts exceeding USD One Million (USD 1,000,000) and USD Fifty Thousand (USD 50,000) must be reported by May 12, 2025, and November 10, 2025, respectively. Dealers must ensure the accuracy of transactions and reconcile outstanding balances with the Trade Repository.

• Operational Framework for Reclassification of Foreign Portfolio Investment to Foreign Direct Investment (FDI)

The Reserve Bank of India (RBI) has informed that the the Central Government has notified the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, which require that foreign portfolio investors (FPIs) and their investor group limit their investments to less than Ten (10%) of a company’s total paid-up equity capital on a fully diluted basis, if this limit is breached, FPIs must either divest their holdings or reclassify them as Foreign Direct Investment (FDI), An operational framework for this reclassification has been provided in the Circular, and AD Category – I banks are tasked with facilitating the reporting of such transactions. The directions are effective immediately.

• Onboarding Process on the Trade Receivables Discounting System Description

The Ministry of Micro, Small and Medium Enterprises has issued a notification  wherein:

1. All companies registered under the Companies Act, 2013 (18 of 2013) with a turnover of more than Rs. 250 crore (two hundred and fifty crore rupees) and all Central Public Sector Enterprises shall be required to get themselves onboarded on the Trade Receivables Discounting System platforms, set up as per the notification of the Reserve Bank of India.
2. The onboarding process on the Trade Receivables Discounting System platforms shall be completed by 31st March 2025

• SEBI (Bankers to an Issue) (Amendment) Regulations,2024

The Securities and Exchange Board of India has notified amendments in the SEBI (Bankers to an Issue) Regulations, 1994 wherein Regulation 2 and 3  has been amended as specified therein and these regulations may be called SEBI (Bankers to an Issue) (Amendment) Regulations, 2024. They shall come into force from immediate effect.

Disclaimer: Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates are for    the period 30.11.2024.