Analysis of Notifications and Circulars for Week ending 29th September 2024

The week of 23rd-29th September 2024 saw several important notifications and circulars across income tax, GST, and other legal matters. The CBDT extended the deadline for filing audit reports for the Assessment Year 2024-25 until 7th October 2024, while the Supreme Court invalidated reassessment notices for lack of proper approval under Section 148 of the Income-tax Act. GST updates included the implementation of key sections of the Finance Act 2024, covering changes in input tax credit deadlines, anti-profiteering provisions, and new guidelines for revocation of GST registration. The GSTN portal announced the archival of returns older than seven years starting from August 2024, advising taxpayers to retain their data. The IBBI introduced amendments to insolvency regulations, allowing the appointment of interim representatives for creditor classes during resolution processes. Additionally, the Ministry of Labour increased the minimum wage rates effective from October 2024, categorizing wages based on skill levels and geographical areas.
A. Income Tax
Extension of time lines for filing of various reports of audit for the Assessment Year 2024-25:  CBDT has extended the deadline for filing various audit reports for Assessment Year 2024-25 to 7th October 2024. The extension has been granted under the powers conferred to the CBDT by Section 119 of the Income-tax Act, addressing challenges faced by taxpayers and other stakeholders in meeting the original deadline. (Income Tax Circular 10/2024 Dated 29/09/2024)
Corrigendum to notification 104/2024 related to Direct Tax Vivad se Vishwas Rules: The corrigendum addresses specific changes in various schedules of the Income Tax rules. The key changes include the omission of the phrase “OR to be filed” from Schedule V, and the removal of the phrase “or appeal to be filed” from Schedule XXIII. (Income Tax Notification 105/2024 Dated 27/09/2024)
SC, Non-furnishing of section 151 approval, reassessment under section 148 held invalid: Case of ITO vs Tia Enterprises, SC Judgement Dated 13th September 2024. The SC upheld the judgement of Delhi High court that the absence of proper approval and detailed reasoning from the statutory authority renders the reassessment notice fatally flawed. The statutory requirement mandates that the AO must furnish the approval from the PCIT along with the reasons for believing that income has escaped assessment. In this instance, the approval was noted only by the signature of the PCIT, with no substantive reasoning recorded. The court concluded that the absence of a clear approval process indicates non-application of mind by the tax authorities, ad held that both the notice and the subsequent order were invalid and set aside. (SC Judgement Dated 13/09/2024)
HC, Interest under section 234B and 234C leviable as depositing advance tax has nothing to do with seizure of books: Case of Sant Lal vs Income Tax Settlement Commission, P&H HC Judgement dated 2nd September 2024. Income Tax Settlement Commission accepted the version of the petitioners that the returns could not been filed in time, and were delayed on account of the fact that the seized papers were not available with them, and were lying with the Department. Thus, the court waived the interest charged, in terms of Section 234-A. It further held that the interest under Section 234-B and 234-C cannot be waived, as depositing of advance tax has nothing to do with the seizure of the books of accounts. (P&H HC Judgement Dated 02/09/2024)
HC, Rent from factory building taxable under the head income from house property: Case of PCIT vs Mahle Filters Systems, Delhi HC Judgement Dated 11th September 2024.
Revenue has argued for treating income as ‘income from other sources’ owing to the fact that the assessee has entered into ‘lease and license agreement’ not ‘lease rental agreement’. HC held that whether there existed ‘leave and licence’ agreement and not ‘rental agreement’ would not change the colour of receipts in the hands of the assessee. The undeniable fact is that the assessee has earned rental income from letting out its property and the same has to be taxed under the head ‘income from house property’ eligible for deduction as per the provisions of section 24 of the Act. (Delhi HC Judgement Dated 11/09/2024)
B. GST
Implementation of provisions of the Finance Act, effective dates notified:  The Finance (No. 2) Act, 2024 sections 118, 142, 148, and 150 will take effect from 27th September 2024. Additionally, sections 114 to 117, 119 to 141, 143 to 147, 149, and 151 to 157 will come into force on 1st November 2024. (CGST Notification 17/2024 Dated 27/09/2024)
Changes in CGST effective from 27th September 2024 –
– Section 16(5): Extend the deadline for claiming ITC for invoices or debit notes to 30th November, 2021 for financial years 2017-18, 2018-19, 2019-20 and 2020-21.
– Section 16(6): Availment of ITC in case of revocation of cancellation of GST registration, where returns are filled within 30 days of the revocation order.
– Section 109: Empower the Government to notify types of cases that shall be heard only by Principal Bench of Appellate Tribunal, including Anti-profiteering matters.
– Section 118: No refund shall be made of all the tax paid or the input tax credit reversed, which would not have been so paid, or not reversed, had section 118 been in force at all material times.
– Section 171: Introduce a sunset clause for Anti-Profiteering measures and align these cases to the GSTAT (GST Tribunal).
Changes in CGST effective from 1st November 2024 –
– Section 9: Exclude undenatured extra neutral alcohol or rectified spirit used for manufacture of alcoholic liquor, for human consumption from purview of GST.
– Section 11A: Empower the government to regularize past discrepancies in tax practices by issuing a notification, ensuring that businesses are not unduly penalized for following a generally accepted but incorrect tax practice.
– Section 13(3): Specify the time of supply of services where the self-invoice has to be issued by the recipient of services liable to pay GST under Reverse Charge Mechanism (RCM).
– Section 17(5): Restrict the non-availability of input tax credit in respect of tax paid under section 74 of the Act only for demands up to Financial Year 2023-24.
– Section 30: Empower the Central Government to prescribe conditions and restrictions for revocation of cancellation of registration by rules.
– Section 31: Propose a time limit for issuance of invoice by the recipient in case the recipient is liable to make payment of taxes  under Reverse Charge Mechanism.
– Section 39: Provide registered persons required to deduct tax u/s 51 must file return in FORM GSTR-7 monthly, even if no tax has been deducted.
– Section 54: Restrict IGST refunds for goods subject to export duty, including those exported or supplied to SEZs, regardless of with or without payment of tax.
– Section 70: Enable an authorised representative to appear on behalf of the summoned person before the proper officer
– Section 73 & 74: Provide that the different time limit for issuance of demand notices and orders pertains to period upto Financial year 2023-24.
– Section 74A: Provide for the common time limit for issuance of demand notices and orders for period pertaining to Financial year 2024- 25 onwards.
– Section 107: Reducing the amount of pre-deposit required to be paid for filing of appeal under GST.
– Section 112: Allow 3 months period for filing appeals before GSTAT to start from a date to be notified by Government in respect of appeals/ revision orders passed.
– Section 122: Relates to Penalty provisions on E- commerce operators.
– Section 128A: Waiver of interest & penalty for FY 2017-18, 2018- 19 & 2019-20.
– Section 140: Allow transitional credit for service invoices received by the IGST before the appointed date.
– Schedule III: Co-insurance premium apportioned by lead insurer to co-insurer and transactions of ceding commission/ re-insurance commission between insurer and re-insurer. (The Finance Act Dated 16/08/2024 Relevant Pages 57-68)
Advisory on Archival of GST Returns data on GST portal: As per CGST Section 39(11), taxpayers are prohibited from filing GST returns after three years from the due date. Moreover, the GST portal has implemented a data retention policy, whereby taxpayers’ return data will only be available for seven years. The GST portal has begun archiving returns older than seven years starting August 2024. Taxpayers are advised to download their return data from the GST portal for any future reference, as data beyond seven years will no longer be accessible. (GSTN Advisory Dated 24/09/2024)
Advisory on issuance of Notices/Orders without digital signatures of the issuing:  It clarified that these documents are generated through the officers’ logins, which require digital signatures for access. Consequently, physical signatures are not necessary, as these documents are produced under the authority of the logged-in officer. Taxpayers can verify the validity of such documents by accessing the GST common portal both before and after logging in, following a specific path to confirm the details. (GSTN Advisory Dated 25/09/2024)
Advisory on Restoration of GST Returns data on Portal:
Reference advisory regarding the archival of return data from the Common Portal after seven years. In view of the requests received from the trade due to the difficulties faced, data has been restored back on the portal. We recommend you to download and save the data if needed, as the archival policy shall be implemented again after giving advance information. (GSTN Advisory Dated 29/09/2024)
Advisory for Biometric-Based Aadhaar Authentication and Document Verification for GST Registration Applicants of Odisha: CGST rule was amended to provide that an applicant can be identified on the common portal, based on data analysis and risk parameters for Biometric-based Aadhaar Authentication and taking a photograph of the applicant along with the verification of the original copy of the documents uploaded with the application. The said functionality has been developed by GSTN. The new functionality mandates that after submitting Form GST REG-01, applicants will receive an email with either a link for OTP-based Aadhaar Authentication or a link to book an appointment at a GST Suvidha Kendra (GSK). It has been rolled out in Odisha on 28th September 2024. (GSTN Advisory Dated 29/09/2024)
SC, Renewal of the attachment and freezing of bank accounts lacked lawful basis: Case of RHC Global Exports vs Union of India, SC Judgement Dated 18th September 2024. The applicant contended that once the attachment expired, the tax authorities lacked the jurisdiction to reattach the account, leading to the present legal challenge. SC directed the tax authorities to lift the attachment and defreeze the bank account, as the renewal of the attachment lacked lawful basis. The Court also referenced a recent advisory circular that clarified the procedures surrounding the provisional attachment of property under the CGST Act, emphasizing the importance of adhering to statutory time frames for attachments. (SC Judgement Dated 18/09/2024)
HC, CGST Rule 86A(1) cannot mandate taxpayer to replenish ECL for past ITC: Case of Best Crop Science vs PCIT, Delhi High Court Judgement Dated 24th September 2024. The court emphasized that Rule 86A of the CGST Rules is designed as a temporary measure to protect revenue and is not a mechanism for recovering taxes. An order under Rule 86A allows the blocking of ITC in the ECL if there are reason to believe that the credit was wrongfully claimed. However, the restriction must only apply to the ITC available in the ledger at the time of passing such an order, and cannot extend to replenishing ITC already used. The court set aside the impugned orders to the extent that they disallowed the debit of ITC in excess of what was available in the ECL. (Delhi HC Judgement Dated 24/09/2024)
C. Central Excise
No Notification/ Circular during the week.
D. Custom Duty
Revision of export duties on specific rice varieties: The notification provides a 10% export duty on rice in the husk (paddy or rough), husked (brown) rice, and parboiled rice. The semi-milled or wholly-milled rice, excluding parboiled and Basmati rice, will have Nil export duty. (Custom Notification (T) 44/2024 Dated 27/09/2024)
Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver: CBDT notified the Tariff Values of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver, which shall come into force w.e.f. 27th September 2024. (Custom Notification (NT) 63/2024 Dated 26/09/2024)
Anti-dumping Duty on Anodized Aluminium Frames for Solar Panels/ Modules originating  in or exported from China: Anti-dumping Duty has been imposed on imports of Anodized Aluminium Frames for Solar Panels/Modules  originating in or exported from China and imported into India. It shall be applicable for a period of 5 years. (Custom Notification (ADD) 16/2024 Dated 27/09/2024)
Anti-dumping Duty on Isobutylene-Isoprene Rubber (‘IIR’) originating  in or exported from China, Russia, Saudi Arabia, Singapore, and USA: Anti-dumping Duty has been imposed on imports of Isobutylene-Isoprene Rubber (‘IIR’) originating in or exported from China, Russia, Saudi Arabia, Singapore and USA, and imported into India. It shall be applicable for a period of 5 years. (Custom Notification (ADD) 17/2024 Dated 27/09/2024)
Classification of laboratory chemicals: The circular refers to notification 62/2024 dated 19th September 2024, whereby the new definition of laboratory chemicals stipulates that it include all organic and inorganic chemicals that are either chemically defined or not, which are imported solely for personal use. Importantly, these chemicals must be packaged in quantities not exceeding 500 grams or 500 millilitres and must be identifiable based on their purity or markings that indicate their exclusive use as laboratory chemicals. (Custom Circular 18/2024 Dated 23/09/2024)
Extension of validity of CAVR Order in respect of Linear Alkyl Benzene:  CBIC has extended the validity of CAVR Order No 1/2023- Customs dated 18th September 2023, under Customs (Assistance in Value Declaration of Identified Imported Goods) Rules, 2023, issued in respect of Linear Alkyl Benzene, for a period of 1 year with effect from 26th September 2024. This order shall remain in force till 25th September 2025. (Custom CVAR Order 01/2024 Dated 25/09/2024)
HC, Custodian liable to pay duty on goods pilfered while in custody: Case of Container Corporation of India vs Commissioner of Customs, Delhi HC Judgement Dated 9th September 2024. Section 45(3) of the Act provides that the custodian of the imported goods having been in custody is liable to pay duty in case they are pilfered while in custody. In terms of Section 45 and regulations, appellant being the custodian of imported goods, was responsible of safe custody of the imported goods. Appellant cannot escape such burden by shifting its responsibility upon the CISF and has therefore been rightly held liable to pay customs duty and penalty.  (Delhi HC Judgement Dated 09/09/2024)
E. Directorate General of Foreign Trade (DGFT)
Amendment in Export Policy of Non-Basmati White rice:  The export policy of Non-Basmati White rice (Semi-milled or wholly milled rice, whether or not polished or glazed) is amended from `prohibited’ to ‘free’ subject to MEP of USD 490/tonne with immediate effect. (DGFT Notification 31/2024 Dated 28/09/2024)
Import authorisations for certain specified IT hardware valid until 31st December 2024:  It relates to implementation of previous notifications related to the import of restricted IT hardware. According to DGFT Notification No. 23/2023, 26/2023, and 38/2023, the import of certain specified IT hardware had been restricted. The clarifications were provided by Circular No. 06/2023-24 on the subject regarding establishing import management system. Now this circular modifies the earlier policy by allowing importers to apply for import authorisations valid until 31st December 2024. Existing authorisations issued will also remain valid until the same date. (DGFT Circular 07/2024 Dated 24/09/2024)
Allocation of quantity 5841 MT of Sugar to EU for export from India under TRQ: The quantity of 5841 MT Sugar to be exported to EU from India under TRQ for the year 2024-25 (October 2024 to September 2025) has been notified. (DGFT Public Notice 25/2024 Dated 27/09/2024)
F. Securities and Exchange Board of India (SEBI)
Amendment to SEBI Delisting of Equity Shares Regulations: Fixed delisting price, is the price offered by an acquirer for delisting shares. Floor price is the minimum price in delisting proposals. Acquirers must now deposit 25% of the total consideration in an interest-bearing escrow account upon obtaining shareholder approval, with specific provisions for calculating the total consideration based on the delisting method chosen. It is stipulated that the bidding period for delisting offers must commence promptly, and acquirers are required to announce the results within two days of bidding closure. Further, if delisting occurs via a fixed price process, the offered price must be at least 15% higher than the calculated floor price, and acquirers must accept shares if they attain a 90% post-offer shareholding. (SEBI Notification Dated 25/09/2024)
Amendment to SEBI Infrastructure Investment Trusts Regulations: The key amendments include the establishment of a trading lot of ₹25 lakhs for unit trading, requirements for distribution declarations at least semi-annually for publicly offered InvITs and annually for privately placed InvITs, and specified timelines for these distributions. It allow for unit holder meetings to be conducted with shorter notice if a significant majority consents. It also mandate that investment managers ensure robust electronic record-keeping and continuity plans. (SEBI Notification Dated 26/09/2024)
Amendment to SEBI Real Estate Investment Trusts Regulations: The key amendments include the reduction of the timeline for payment distribution to unit holders, requiring it within five working days from the record date, instead of fifteen. It also modifies voting provisions to calculate thresholds based on total votes cast rather than votes against, facilitating smoother unit holder meetings. It mandates video conferencing options for meetings and remote electronic voting. (SEBI Notification Dated 26/09/2024)
Master Circular on Surveillance of Securities Market: SEBI has been issuing various circulars from time to time pertaining to effective surveillance of the securities market. The Master Circular consolidates all the circulars pertaining to surveillance of securities market at one place. It covers trading rules and shareholding in dematerialized mode, monitoring of unauthenticated news circulated by SEBI registered market intermediaries through various modes of communication and disclosure reporting under PIT Regulations. (SEBI Master Circular Dated 23/09/2024)
Usage of UPI by individual investors for making an application in public issue of securities through intermediaries:  It mandate the use of Unified Payments Interface (UPI) by individual investors for applying in public issues of debt securities, non-convertible redeemable preference shares, municipal debt securities, and securitized debt instruments. This applies to applications made through intermediaries like syndicate members, stock brokers, registrars, and depository participants where the application amount is up to ₹5 lakh. However, other modes of application, such as using Self Certified Syndicate Banks (SCSBs) or stock exchange platforms, will continue to be available. (SEBI Circular Dated 24/09/2024)
Parameters for Performance Evaluation of Market Infrastructure Institutions (MIIs): It mandates that MIIs appoint independent external agencies for performance evaluations every three years, beginning with the financial year 2024-25. The evaluation criteria include resilience in technology (40% weightage), investor protection (17%), regulatory compliance (15%), and governance practices (8%). SEBI also introduced a rating framework to ensure consistency and transparency in assessments across MIIs.. The roles and responsibilities of Key Management Personnel (KMPs), including managing directors, must be clearly defined and evaluated, with a minimum 50% weightage on regulatory and risk management outcomes. (SEBI Circular Dated 24/09/2024)
Reduction in the timeline for listing of debt securities and Non- convertible Redeemable Preference Shares to T+3 working days: The circular is aimed at shortening the timeline for listing debt securities and non- convertible redeemable preference shares (NCRPS) from the existing T+6 days to T+3 days. Initially, the T+3 timeline will be optional for issuers for one year starting 1st November 2024, after which it will become mandatory from 1st November 2025. (SEBI Circular Dated 26/09/2024)
Operational Guidelines for Foreign Venture Capital Investors (FVCIs) and Designated Depository Participants (DDPs): The guidelines include provisions related to the registration process for FVCIs via DDPs, eligibility conditions, and renewal of registration. (SEBI Circular Dated 26/09/2024)
Consultation paper on Draft Circular for Simplified registration for Foreign Portfolio Investors (FPIs):  At present, all FPI applicants must submit a Common Application Form (CAF) along with an Annexure supported by various documents. However, it has been observed that for certain categories of applicants (such as sub-funds of registered master funds and schemes of insurance companies) much of the required information is either redundant or already captured in existing systems. The proposed changes suggest using an abridged version of the CAF that includes only the unique fields necessary for registration. The comments from the stakeholders are invited. (SEBI Consultation Paper Dated 24/09/2024)
Consultation paper on the proposal to exempt certain transactions from trading window restrictions:  The present PIT Regulations prohibit trading based on Unpublished Price Sensitive Information (UPSI) and require the trading window to close when Designated Persons (DPs) may possess such information. The aim is to explore the possibility of exempting transactions involving subscriptions to non-convertible securities (NCS), which include non- convertible debentures and other specified securities. The comments from the stakeholders are invited. (SEBI Consultation Paper Dated 26/09/2024)
Consultation paper on draft circular for Disclosure of expenses, half yearly returns, yield and risk-o-meter of schemes of Mutual Funds: The proposals are aimed to enhanced transparency through the separation of expense ratio and returns data for regular and direct plans of mutual funds, along with a standardized format for such disclosures. It proposes to update the risk-o-meter by introducing a color-coded system to visually represent the levels of risk, ranging from low to very high. The comments from the stakeholders are invited. (SEBI Consultation Paper Dated 26/09/2024)
Unified Distilled File Formats (UDiFF), SEBI promotes standardised reporting:  SEBI has introduced the Unified Distilled File Formats (UDiFF) to streamline reporting processes for Trading Members (TMs), Clearing Members (CMs), and Depository Participants (DPs). Earlier, over 200 proprietary report formats were required daily. UDiFF reduces these formats to just 23, promoting ease of doing business and the initiative is expected to save the market ecosystem over INR 200 crore in the next five years. (SEBI Press Release Dated 26/09/2024)
G. Ministry of Corporate Affairs (MCA)
Amendment to Companies (Accounts) Rules: The amendment relates to the filing process of the Corporate Social Responsibility (CSR) report for financial year 2023-2024. According to the new rule, companies must file Form CSR-2 separately by 31st December 2024, after submitting Form AOC-4 or Form AOC-4-NBFC (Ind AS), or Form AOC-4 XBRL. (MCA Notification Dated 24/09/2024)
Measures by MCA to address concerns and guide stakeholders for compliances: To enhance regulatory compliance on the MCA21 Portal, the ministry regularly reviews concerns raised by stakeholders through various channels, including emails, helpdesk systems, ticketing tools, chatbots, and social media. To further address urgent issues, the MCA has formed a special team responsible for managing stakeholder grievances and ensuring efficient resolution. (MCA Post Dated 25/09/2024)
H. Insolvency and Bankruptcy Board of India (IBBI)
Amendment to IBBI Insolvency Resolution Process for Corporate Persons (CIRP) Regulations: The amendment relates to appointment of an interim representative who will act as a representative for a class of creditors during the period when the application for appointment of the authorised representative is under consideration of the Adjudicating Authority for approval. This interim representative will have the same rights and duties as an authorised representative in meetings of the committee of creditors. (IBBI Notification Dated 24/09/2024)
IBBI amends Insolvency Resolution Process for Corporate Persons (CIRP) Regulations: It provides for the appointment of an interim representative who will act as a representative for a class of creditors during the period when the application for appointment of the authorised representative is under consideration of the Adjudicating Authority for approval. This interim representative will have the same rights and duties as an authorised representative in meetings of the committee of creditors. It aims to facilitate the effective representation of certain classes of creditors which are large in numbers, such as homebuyers, during the corporate insolvency resolution process. (IBBI Press Release Dated 24/09/2024)
NCLAT, Approval of resolution plan proposing NIL amount to operational creditor upheld: Case of Sai Balaji Facility vs CA Ramchandra Dallaram Chaudhry, NCLAT Delhi Judgement Dated 19th September 2024.The statutory protection granted to the operational creditor in Section 30(2)(b) is that they shall not be paid any amount less than as mentioned in (i) and (ii). NCLAT New Delhi held that proposing NIL amount doesn’t result into non-compliance of section 30(2)(b) of IBC. Hence, approval of resolution plan proposing NIL amount to Operational Creditor justified. (NCLAT Judgement Dated 19/09/2024)
I. Reserve Bank of India (RBI)
No Notification/ Circular during the week.
J. Miscellaneous
Increases in Minimum Wage Rates for Workers: Central Government has announced an increase in minimum wage rates by revising the Variable Dearness Allowance (VDA), effective from 1st October 2024. The minimum wage rates are categorized based on skill levels—unskilled, semi-skilled, skilled, and highly skilled—as well as by geographical areas i.e. A, B, and C.
— After revision, minimum wage rates in area “A” for workers in construction, sweeping, cleaning, loading & unloading for unskilled work will be Rs 783 a day ( Rs 20,358 per month) for semi-skilled Rs 868 a day( Rs 22,568 per month) for skilled, clerical and watch & wards without arms Rs 954 a day( Rs 24,804 per month) and for highly skilled and watch & ward with arms Rs1,035 a day( Rs 26,910 per month). (Ministry of Labour Press Release Dated 26/09/2024)
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Disclaimer: The contents of this article are for informational purposes only. The user may refer to the relevant notification/ circular/ decisions issued by the respective authorities for specific interpretation and compliances related to a particular subject matter)