Govt introduces employees' compensation bill in lok sabha

1. Now the Centre and the States, both have powers to make laws with respect to levy of taxes on both goods and services. However, the Parliament will have exclusive powers to make laws with respect to goods and services tax where the supply of goods, or services, or both takes place in the course of inter-State trade or commerce.

2. CGST collected from intra-State trade or commerce shall be assigned to States in accordance with law formulated by the Parliament.

3. IGST collected from inter-State trade or commerce shall be apportioned between the Union and the States on the recommendations of the GST Council.

4. GST apportioned by Central Government to States will not form part of Consolidated Funds of India.

5. The President of India will constitute GST council.

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Hevy fine for traffic violations – 8 things you should know

In an attempt to improve road safety in the country, the Cabinet has approved of the Motor Vehicle (Amendment) Bill.

Key takeaways from Motor Vehicle amendment bill are as follows:

1. Compensation for Hit and Run cases proposed to be increased from Rs. 25,000 to Rs. 2,00,000. Bill also includes provision for payment of compensation upto Rs. 10 lakh in road accident fatalities.

2. Guardian or owner shall be deemed to be guilty in cases of offences by the Juveniles. They will have to pay penalty of Rs. 25,000 apart from undergoing 3 years imprisonment. The juvenile will be tried under Juvenile Justice Act. Registration of his/her motor vehicle will be cancelled.

3. It would enable online learning licenses, increase validity period for driving licenses and do away with the requirement of educational qualifications for transport license. 

4. It proposes to have automated fitness testing for the transport vehicles with effect from 1 October 2018.

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A decade long Journey of GST Bill

Today, Rajya Sabha is discussing amendments to Constitution Bill for Goods and Service Tax i.e. Constitutional (One Hundred and Twenty-Second Amendment) Bill, 2014. Hopefully, GST will be introduced in the country after a long journey of 13 years as it was discussed in the Kelkar Task Force report on indirect taxes in 2003 for the first time.

Since, Government agreed to drop 1% additional tax which was key demand of Congress and recommendation of Select Committee of Rajya Sabha and gave assurance that it will compensate States for any revenue loss incurred due to GST rollout, there is high probability that this amendment bill will be passed and supported by all parties. Today, Ministry of Finance issued “Frequently Asked Questions” on Goods and Service Tax and ICAI issued Background Material on Model GST law. There will be a huge impact of GST on common man. Goods like Small Cars, Two wheeler, Movie Tickets, Electronic Items etc. will be cheaper. But Air Travel, Insurance, Textile, Jewellery, Mobile Calls, Cigarettes will be costlier.

Click here to View FAQ’s on GST

Click here to view BGM on Model GST Law

CCI slaps penalty of Rs 72 crores on Lupin for restricting supply of drugs

Competition Act, 2002: Act of restricting supply of drugs by Lupin, pharmaceutical company, due to non-compliance of condition of furnishing of NOC by ‘Chemists and Druggist association’ was anti-competitive

Facts :

a) Karnataka Chemists & Druggist Association (KCDA) restrained pharmaceutical companies from appointing new stockists in the State of Karnataka without a NOC.

b) Maruti & Co. (Informant) was appointed as a stockist for the Diabetes care division. Lupin, being a Pharmaceutical company, refused to supply drugs to informant. It had directed informant to obtain an NOC from KCDA to get supply of drugs.

MFN clause is an integral part of DTAA and selfoperational; Delhi HC sets aside decision of AAR

Facts :

a) An application was filed by the Steria India (i.e., petitioner) before the AAR to determine taxability of payment made for the management services provided by Steria France.

b) The Petitioner (i.e., Steria India) was of the view that due to existence of Most Favoured Nation (‘MFN’) clause in India-France DTAA (Clause 7 of the Protocol) the less restrictive definition of FTS‟ appearing in the India-UK DTAA, must be read as forming part of the India-France DTAA as well.

c) The AAR disagreed with the Petitioner. It ruled that the Protocol could not be treated as forming part of the DTAA itself. Further, it held that the “make available” clause found in the India-UK DTAA could not be read into the expression “FTS” occurring in the India-French DTAA unless there was a notification issued by the Govt. to incorporate the less restrictive provisions of the India-UK DTAA into the India-France DTAA.

d) The petitioner filed the writ petition against such ruling of AAR. The Delhi High Court held in favour of assessee as under:

Stringent law to deal with Benami Properties - 7 things you should know

n an attempt to restrain the generation of black money in domestic market, the Lok Sabha has approved the Benami transactions Prohibition (Amendment) Bill.

Key takeaways from Bemani amendment bill are as follows:

1) It empowers the Government to confiscate Benami properties held in the name of another person or under a fictitious name to avoid taxation and conceal wealth.

2) The person found guilty of Benami transaction may have to face rigorous imprisonment for a period not less than one year and which may be extended to seven years. In addition to imprisonment, there would be a penalty of 25 percent which will be calculated on the basis of fair market value of the property.

CA shall not be deemed to be in practice if he is only running coaching classes for CA aspirants

Where a CA has given undertaking before Court (on charges of professional misconduct) that he would voluntarily not practice the profession of CA till next hearing, he could not be said to be practicing a CA profession when he has issued advertisements offering to take coaching classes to CA aspirants. Thus, such action of CA couldn’t treated as Contempt of Court. 

Facts:

a) Vinod Gupta, a CA had given an undertaking before Court (on charge of professional misconduct) that he would voluntarily not practice the profession of CA till the next date of hearing.

b) Later the respondent issued an advertisement offering to take coaching classes for CA asprints.

c) The petitioner filed a contempt petition contending that the respondent had willfully violated the contempt of court by issuing advertisements representing himself as a Chartered despite giving the undertaking that he would not practice the profession of CA till the next date of hearing.

The High Court held as under:

Excise Duty on Jewellery – 15 things you should know

The Central Government proposed to impose excise duty on manufacturing of jewellery except silver jewellery (other than studded with diamond and precious stones) in the Union Budget. However, the jewellers protested against such levy of excise duty. They went on strike across the Country demanding withdrawal of excise duty levy on jewellery. Finally the Govt. did not change its stance and retained such levy in the Finance Act, 2016.

Now the rate of excise duty on jewellery is 1% if assessee does not avail of any credit on inputs and capital goods. However, the rate of excise duty will be raised to 12.5% if assessee avails of credit on inputs and capital goods. Recently the CBEC has issued set of Circulars and Notifications with regard to excise duty on

Jewellery. Key takeaways from such Circulars/Notifications are given here under:

Prepayment charges on home loans are deductible as 'interest' under Sec. 24(b): Mumbai ITAT

Facts:

a) The assessee had been claiming deduction on account of payment of interest to six bankers from whom the assessee had taken loan for construction of property.

b) The assessee took fresh loan from Axis Bank which was utilized for exclusive purpose of repayment of loans to the aforesaid six parties. In the process of change over of lender, it paid prepayment charges and processing charges to these six bankers.

c) It claimed deduction of such prepayment charges and processing charges under Section 24(b). The AO disallowed assessee's claim. The CIT(Appeals) upheld order of AO. The aggrievedassessee filed the instant appeal.

The Tribunal held in favour of assessee as under:

1) The only issue that needed to be decided was whether 'pre -payment charges' and 'processing fee' shall form part of 'interest' under section 24(b). The term 'interest' has been defined in section 2(28A) as under:

“Interest means interest payable in any manner in respect of any moneys borrowed or debt incurred (including a deposit, claim or other similar right or obligation) and includes any service fee or other charge in respect of moneys borrowed or debt incurred or in respect of any credit facility which has not been utilized”

Trust letting out its auditorium for marriage functions wasn't entitled to sec. 11 relief

Facts:

a) The assessee-trust was formed with the main objective of alleviating human suffering, eradication of illiteracy, poverty and imparting of sound education with opportunities for research. It was running an Auditorium in the name of community hall which was given on rent for different commercial activities like marriage functions, exhibition, etc.

b) The assessee claimed that the income earned from auditorium was not a business income and should be exempted under section 11 because the same income was used for the charitable purpose of the trust.

c) The AO denied such claim of exemption under section 11. The CIT(Appeals) confirmed the additions made by the AO. Aggrieved-assessee filed the instant appeal. 

The ITAT held as under: