Indirect Tax

The Hon’ble Supreme Court, vide its judgement dated 22 April 2020, in the case of Union of India and Another v M/s V V F Limited and Another (Civil Appeal Nos 2256-2263 of 2020) and other connected appeals, has upheld the validity of the notifications issued under the Central Excise Act, 1944 (Excise Act), which retrospectively amended the area based exemption schemes notified in relation to certain areas within Gujarat and the North Eastern region.

Recently, the Rajasthan Advance Ruling Authority (AAR) in the case of M/s Clay Craft India Private Limited [2020 (4) TMI 228] has held that remuneration paid to Directors would attract Goods and Services Tax (GST).

The Goods and Services Tax (GST) Council during its 39th meeting, held on 14 March 2020, decided that a special procedure should be prescribed for corporate debtors undergoing the corporate insolvency resolution process (CIRP) under the provisions of the Insolvency and Bankruptcy Code, 2016 (IBC), in order to enable such entities to comply with the provisions of the GST laws.

The Hon’ble Finance Minister has announced a host of relaxations in the compliance timelines for small taxpayers and various other relief measures. The major announcements from the standpoint of Indirect Taxes included:

On March 4, the Supreme Court of India pronounced the verdict which was the culmination to two years’ worth of legal battle that ensued after the Reserve Bank of India (RBI), on April 6, 2018, restricted financial entities from providing services to cryptocurrency players. In its decision, the court has held that since the RBI was not able to provide evidence to prove the potential harm that could be suffered by the regulated entities due to the operation of the cryptocurrency players, the RBI’s ban was unjustified.

M/s Indo Rubber and Plastic Works (Indo Rubber) entered into a non-exclusive distribution agreement with Sunlight Sports, Singapore (Sunlight Sports) for import and sale of branded sports goods in India by the name ‘Li Ning’. In terms of the Agreement, Indo Rubber had to bear all costs of marketing, advertising and promotion of the Li Ning products within India.

The Directorate General of Trade Remedies (DGTR) has, in January and February 2020 initiated the following investigations:

The government has taken a pragmatic approach by proactively taking several measures to reduce tax litigations across various tax jurisdictions up to the Supreme Court. In the last budget, the government introduced Sabka Vishwas Litigation Dispute Resolution Scheme, 2019 (SVLDRS) in a bid to reduce litigation in pre-GST central indirect taxes. The scheme was a huge success among assessees.