This document provides a weekly newsletter with updates on GST and income tax. For GST, it summarizes two court cases - one where the government appealed a case allowing Airtel to claim GST refunds, and another related to invoking writ remedy. For income tax, it outlines CBDT actions like facilitating TDS verification for banks, extending refund processing timelines, and clarifying tax benefits for NPS contributions.

1. 1. GST UPDATES
2. INCOME TAX UPDATES
TAX WEEKLY NEWSLETTER
12-JULY-2020
CONTENTS

2. 1
Weekly Newsletter
GST UPDATES
JUDICIAL UPDATES
Government moves to Supreme
Court, seeks reversal of Delhi High
Court order allowing refund of Rs.
932 crores by revising GST returns
The Central Government has moved to
the Supreme Court challenging a Delhi
High Court order allowing Bharti Airtel to
claim GST refund worth Rs. 923 crores.
The case pertains to under-reporting of
input tax credit in GSTR-3B between July
and September 2017 because of the
absence of GSTR-2A at that time. In
May, the Delhi High Court had allowed
the telecom major to seek a refund by
rectifying GST returns filed between July
and September 2017 in a well-reasoned
order reading down Paragraph 4 of
Circular 26/26/2017-GST restricting the
rectification of GST returns in the same
tax period.
The Circular restricted mechanism of
rectification of GST returns to the tax
period in which they were noticed and
sought to be rectified. Delhi High Court
held that there is no cogent reasoning
behind logic for restricting rectification
only in period in which error is noticed
and not in period to which it relates. The
constraint introduced by impugned
Circular, is arbitrary and contrary to
provisions of CGST Act - petitioner
permitted to rectify GSTR-3B for period
to which error relates, excess tax paid in
cash allowed to be claimed as refund.
Where efficacious remedy is
prescribed by law, writ remedy
cannot be invoked by making High
Court as middle authority - L&T
Hydrocarbon Engineering Limited
(Karnataka high court)
The company was moving goods from its
SEZ Unit in Tamil Nadu to their bonded
warehouse at Gujarat under the cover of
Delivery Challan and e-way bill.
One of the conveyances was intercepted
in Karnataka and detained under Section
129(1). The Company had approached
High Court against the detention order.
The High Court observed that where
efficacious remedy is prescribed by law
and the authority has been notified, the
matter has to be agitated before such
authority and the writ remedy cannot be
invoked by making High Court as middle
authority or cannot be placed in between
the prescribed authority and appellate
authority as per Section 107 of the
Central Goods and Services Tax Act.
The prayer to carry out the search
and seizure in the presence of
Advocate cannot be accepted -
Subhash Joshi (Madhya Pradesh High
Court)
The petitioner had approached the High
Court seeking direction that search to be
carried out shall be in the present of an
Advocate, as they apprehended that the
search and seizure may not be carried
out in a fair manner and the confession
of the petitioner may be recorded under
pressure.

3. 2
The High Court held that having regard
to the position in law and the fact that no
such legal right has been pointed out for
presence of an Advocate during search
and seizure, the prayer to carry out the
search and seizure operation in the
presence of the petitioner cannot be
accepted.
ADVANCE RULINGS
Margin scheme under Rule 32(5) is
applicable to antiques and paintings
brought from art collectors
- Maharashtra Appellate Authority for
Advance Rulings - Safset Agencies
Private Limited
The Authority for Advance Rulings had
denied the option to pay GST under Rule
32(5). The Appellant had argued that
that there is a subtle difference between
the term ‘use’ and ‘consume’ - just
because these goods cannot be
consumed, it cannot be said that they
are not ‘used’ and display of paintings,
antiques and collectibles also amounts to
‘use’.
Further, the goods option cannot be
denied because of the increase in value
of second-hand goods with passage of
time.
Appellate Authority observed that the
classification of goods cannot affect the
applicability of Rule 32(5) of the CGST
Rules, 2017.When the words of a statute
are unambiguous and only one
reasonable meaning can be given to it,
then, the Courts are bound to give that
meaning. Since all the conditions of Rule
32(5) of CGST Rules, 2017 are fulfilled,
the rule can be applied to paintings,
antique jewelleries.
No ITC of GST on input & input
services used for construction of
commercial immovable property,
subsequently used for renting -
Maharashtra Authority for Advance
Rulings - Ashish Arvind Hansoti
Section 17(5) restricts ITC on
construction of immovable property even
when such goods or services or both are
used in the course or furtherance of
business i.e. renting of immovable
property in the instant case.
The Authority did not consider the
decision of Orissa High Court in the case
of Safari Retreats Pvt Ltd wherein ITC on
construction of malls given on rent was
allowed since the same has been
challenged by the department before the
Supreme Court.

4. 3
Weekly Newsletter
INCOME TAX UPDATES
CBDT provides Utility to ascertain TDS Applicability Rates on Cash Withdrawals-
The Income Tax Department has
facilitated a new functionality for Banks
and Post offices through which they can
ascertain the TDS applicability rates on
cash withdrawal of above Rs.20 lakh in
case of a non-filer of the income-tax
return and that of above Rs. 1 Crore in
case of a filer of the income-tax return.
So far,more than 53,000 verification
requests have been executed
successfully on this facility.
CBDT today said that this functionality
available as “Verification of applicability
u/s 194N” on
www.incometaxindiaefiling.gov.in since
1st July 2020,is also made available to
the Banks through web-services so that
the entire process can be automated and
be linked to the Bank’s internal core
banking solution.
Section 194N in the Income Tax Act
w.e.f. 1st September, 2019 to provide
for levy of TDS @ 2% on cash withdrawal
exceeding Rs. 1 crore from a Bank/Post
Office account/s subject to certain
exceptions. w.e.f. 1st July, 2020 further
amended Income-tax Act to lower
threshold of cash withdrawal to Rs. 20
lakh for the applicability of this TDS for
the non-filers and also mandated TDS at
the higher rate of 5% on cash withdrawal
exceeding Rs. 1 crore by the non-filers.
CBDT Extends Time Limit for
processing of Income Tax Return
with Income Tax Refund Claims u/s
143(1) for AY 2017-18 in Non
scrutiny cases till 31.10.2020 - As per
the earlier order dated 5th August. 2019.
time frame was given till 31.12.2019 to
process such returns with refund claims.
by virtue of its powers under section 119
of the Act. hereby relaxes the lime-frame
prescribed in second proviso to sub-
section (1) of section 143 and directs
that all validly- filed returns up to
assessment year 2017-18 with refund
which could not be processed under sub-
section (1) of section 143 of the Act and
which have become time-barred, subject
to the exceptions mentioned in para
below, can be processed now with prior
administrative approval of Pr.CCIT/CCIT
concerned and intimation of such
processing under subsection (1) of
section 143 of the Act can he sent to the
assessee concerned by 31.10.2020.
SEBI signs MoU with CBDT to share
Data with each other- Press Release
No. 38/2020-08/07/2020- The MoU
will facilitate the sharing of data and
information between CBDT and SEBI on
an automatic and regular basis. The MoU
will ensure that both CBDT and SEBI
have seamless linkage for data
exchange. In addition to regular
exchange of data, CBDT and SEBI will
also exchange with each other, on
request and suo moto basis, any
information available in their respective
databases, for the purpose of carrying
out scrutiny, inspection, investigation
and prosecution.
The MoU is an ongoing initiative of CBDT
and SEBI, who are already collaborating
through various existing mechanisms. A

5. 4
Data Exchange Steering Group has also
been constituted for the initiative, which
will meet periodically to review the data
exchange status and take steps to
further improve the effectiveness of the
data sharing mechanism.
Tax benefit of Section 80C will be
available to the Government
employee if, they contributes
towards Tier-II of NPS -Notification
No. 45/2020-Income Tax-
07/07/2020- If a Government
employee contributes towards Tier-II of
NPS, the tax benefit of Section 80C for
deduction up to Rs. 1.50 lakh will be
available to them provided if there is a
lock-in period of 3 years.
The contribution made in the National
Pension System (NPS) qualifies for tax
benefits under the Income Tax Act,
1961. On the amount invested in NPS,
one can avail tax breaks under Section
80CCD (1), Section 80CCD(1B) and
Section 80CCD (2) of the I-T Act.
Importantly, as per Section 80CCE, the
aggregate amount of deduction under
Section 80C, 80CCC and 80CCD(1)
cannot exceed Rs 1. 5 lakh in a financial
year.
CBDT widens the definition of
infrastructure u/s10(23FE) to align
it with Harmonised List of
Infrastructure notified by DEA -
Notification No. 44/2020- Income
Tax- 06/07/2020 - Section 10 (23FE)
provides for exemption to specified
income of certain entities including
notified SWF & PF from investment in
specified infrastructure sectors.CBDT
widens the definition of infrastructure
u/s10(23FE) and this will encourage
investment from certain entities incl.
notified Sovereign Wealth Funds &
Pension Funds in wide range of
infrastructure as per the List
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