Key highlights of this week!

Income Tax

1. Mumbai ITAT rules that active involvement in a business established in India, passive investments in mutual funds, and residing in India with a resident spouse and children, indicates a strong "center of vital interests" and shall result in the taxpayer being a resident of India as per India-US Tax Treaty
2. Mumbai ITAT holds that providing gem grading services to an Indian subsidiary, that lacks authority to finalize contracts for its US holding company and has neither concluded contracts nor secured orders on its behalf, does not constitute an agency permanent establishment in India for the US entity
3. CBDT notifies that the Tax Collection at Source (TCS) provisions will not apply to any payments received from the RBI

GST, Customs, and FTP

1. Gujarat High Court holds that once IGST is paid on the value of goods including freight, cost, and insurance, regardless of whether the transaction is on a ‘CIF’ or ‘FOB’ basis, Revenue cannot levy IGST under reverse charge on the ocean freight
2. CBIC issues multiple notifications to give effect to the recommendations made in the recent 54th GST Council meeting such as the omission of Rule 96(10) of CGST Rules, bringing renting of commercial property by an unregistered person to a registered person under the Reverse Charge Mechanism (RCM), etc.
3. CBIC notifies March 31, 2025, as the date up to which demand of tax needs to be paid to qualify for a waiver of interest and penalty under Section 128A of the CGST Act and in this regard, prescribes the Rules and Forms
4. West Bengal AAR rules that while the applicant qualifies to be an “e-commerce operator” under the GST Act as it is the owner of a digital platform named ‘Yatri Sathi’ app however, it is not liable to discharge the GST liability on passenger transport services under Section 9(5) of the CGST Act, as it only connects the drivers with the passengers and the services are not provided ‘through’ the platform
5. Rajasthan AAR rules that GST is required to be paid on the issuance of corporate guarantee by a group entity at one time and not periodically

Policy/ Regulatory

1. SEBI notifies that FPIs to receive sale proceeds on T+1 day settlement, with streamlined tax certificate issuance, bringing them on par with domestic institutional investors
2. SEBI introduces a Liquidity Window to boost early redemption of debt securities; enabling issuers to offer put options for investor redemption before the maturity date

We hope you find this crisp update insightful. We will continue to endeavor to improve it further as we progress. Feel free to reach out.

Disclaimer: This update is for information and educational purposes only.