Employer-employee relationship for directors determines reverse charge applicability; contractual terms and trade practices are decisive.
Whether payments to a director fall outside the Reverse Charge Mechanism turns on whether a genuine employer-employee relationship exists, judged by substance: duties, reporting obligations, authority to hire or remove, remuneration periodicity and records, and trade usages. Directors may be employees as well as agents; oral terms, current-account practices or customary usages can evidence employment. To avoid adverse tax treatment, engagement letters, defined responsibilities, reporting clauses, payroll entries and records of assignment and supervision are practical safeguards. (AI Summary)

Intermediary services: marine consultancy treated as composite supply with intermediary as principal, affecting GST classification and place of supply.
MCS to foreign ship-owners involves consultancy, facilitation and post-fixture administrative tasks; AAAR held these activities meet the statutory intermediary conditions and classified the services as a composite supply of intermediary services (principal) together with accounting services, requiring classification by SAC and determining GST place and tax treatment accordingly. (AI Summary)

Source-based taxation of artistes and sportspersons lets the performance country tax earnings while residence provides relief.
Article 17 grants the country where a performance occurs the right to tax income of entertainers and sportspersons based on the performance nexus; residence states retain taxing jurisdiction but must provide relief under treaty methods. The article covers direct performers and income paid to third parties as an anti avoidance rule, excludes non performing contributors absent a predominant entertainment element, and leaves tax base, deductions and collection rules to source state domestic law, creating potential for double taxation where source and residence rules diverge. (AI Summary)

Post-notice adjustments by tax processing units trigger unlawful alterations to returns and delay rightful refunds, causing taxpayer hardship.
Unlawful automated adjustments by the Central Processing Centre (CPC) are causing taxpayer harassment by issuing intimations and altering returns after issuance of a scrutiny notice, despite lacking jurisdiction. CPC practices described include delayed refunds, denial or miscrediting of TDS, unilateral set offs against current refunds for disputed or time barred demands, partial additions without reconciling loss set offs, and failure to update records after appellate vacatur, all of which conflict with principles of procedural jurisdiction, finality, and consistency. (AI Summary)

Operational creditor status: trade unions may initiate corporate insolvency proceedings on behalf of members under insolvency law.
A registered trade union, being a body corporate empowered to sue and deploy its general fund for members' employment-related claims, may qualify as an operational creditor under the Insolvency and Bankruptcy Code and initiate corporate insolvency proceedings on behalf of its workmen; this aligns with the Code's definitions of person and operational debt, the demand-notice and dispute-response framework, and procedural rules recognizing conjoint claims, and avoids the burden of multiple individual petitions. (AI Summary)

Input tax credit restriction: allowed only to the extent non-capitalised or for plant and machinery and input services.
Section 17(5)(c) and (d) disallow ITC on works contract services and on goods or services received for construction of immovable property except to the extent those costs are not capitalised. GST on items capitalised as part of the immovable asset is ineligible, whereas expenses of a revenue nature charged to profit and loss remain eligible. Exceptions include supplies used for construction of plant and machinery and supplies that are input services for further supply of works contract services; classification and accounting treatment determine entitlement. (AI Summary)

Input tax credit denied where supplier invoices inter-unit transfers at zero value, barring recipient from claiming credit.
The AAR allowed inter-unit transfers to be valued under the second proviso to Rule 28 where the recipient is eligible for full input tax credit, meaning the recipient may claim credit of tax actually charged in the supplier's invoice; however the AAAR clarified that for supplies between distinct or related persons the invoice value is deemed open market value and if the supplier declares zero value in the tax invoice or debit note, no input tax credit is available to the recipient. (AI Summary)

Auditor reporting standards updated for 2018-19: revised SAs introduce KAM, modified opinion rules, and company exemptions.
Revised reporting standards effective 1 April 2018 require auditors to reshape Independent Auditor's Reports: key changes include the introduction of Key Audit Matters, revisions to opinion formulation and modification standards, updated rules on emphasis/other-matter paragraphs and responsibilities for other information, and practical templates for clean-opinion reports. The text also sets out exemption criteria for internal financial controls, cash-flow statements and Auditor's Report Order applicability for small and specified private companies. (AI Summary)

Supply of food by employer to employees: employer recoveries from canteen treated as taxable supply under GST.
Providing food in an employer run canteen and recovering the actual cost from employees qualifies as a supply under the GST Act because it involves consideration and falls within the definition of business activities incidental or ancillary to trade; Schedule II treats supply of food for consideration as a service, and absence of profit does not negate the existence of supply, while prior service tax/VAT precedents addressing double taxation are distinguishable in the GST context. (AI Summary)

Minimum income guarantee funding may rely on tax buoyancy, budget rationalisation and strict targeting to avoid new targeted taxes.
The article analyses the NYAY Minimum Income Guarantee targeting the poorest 20 percent and assesses whether the large fiscal requirement can be met without imposing new targeted taxes. It proposes funding from tax buoyancy, rationalisation and dovetailing of existing central schemes, Direct Benefit Transfer mechanisms, partial state contributions and modest non-interest expenditure savings. It rejects further taxation of individuals, corporations, agricultural exemptions or charitable receipts as unsuitable, and stresses that success depends on stringent sourcing, accurate targeting to beneficiaries, minimising leakages and managing macroeconomic risks. (AI Summary)

Reversal of input tax credit requires reversal and may attract interest where payment to supplier is not made within the deadline.
Reversal of input tax credit is required when a recipient does not pay the supplier within the 180 day period; the recipient must add the amount to output tax liability and discharge the attendant interest under the GST statutory regime. Although the GST Council recommended waiving interest, no implementing notification has been issued, and judicial commentary treating recommendations as not self executing supports recovery of interest. In audit situations where the taxpayer disputes interest but has not reversed credit, the auditor must qualify the opinion. (AI Summary)

GST transitional credit redressal mechanism allows taxpayers to pursue representation through nodal officers and grievance committees.
The article notes significant GST-era litigation and administrative remedies, emphasising the role of nodal officers and an IT grievance redressal committee for taxpayer claims on transitional credit; interim judicial intervention in municipal advertisement tax tenders; retention of Central Sales Tax registration and issuance of C-Form for goods not notified under CGST (such as high speed diesel) where legislative amendment left them outside GST coverage; and scrutiny of whether pre-GST entertainment tax scheme benefits continue under statutory saving clauses. (AI Summary)

Zero-rated supply to SEZ units does not apply to food supplied to employees; such contract catering is taxable as outdoor catering.
Contractual supply of food prepared at the supplier's kitchen and delivered to customer premises is classifiable as outdoor catering service, not as restaurant or canteen services, and is taxable under the classification for contract food services. Additional distribution duties or contracting with an employees' cooperative do not change this character. Supplies of food to employees in an SEZ do not constitute supply to an SEZ unit or developer and therefore do not qualify as zero rated supply absent specific authorization under SEZ rules. (AI Summary)

Interest on gross tax liability: delayed GST return filing can trigger interest on the full assessed tax until credit is made available.
The High Court held that input tax credit is made available in the electronic credit ledger only upon filing the prescribed return and, until such filing, the entire tax liability remains unpaid for purposes of the interest provision; accordingly, interest applies to the gross assessed tax liability pending return filing rather than solely to the net cash amount actually remitted. (AI Summary)

Investment in land as capital asset: transfers attract capital gains unless land is clearly converted into stock-in-trade.
Investment in land held for long periods is ordinarily a capital asset and transfers attract capital gains treatment; development, plotting and construction on owned land are normally improvements to the capital asset rather than trading, and conversion to stock-in-trade requires factual justification such as consistent accounting treatment and absence of construction activity confirmed by inspection. (AI Summary)

Works contract classification for CCTV systems impacts GST treatment where installations are affixed and form immovable property.
The contract to design, develop, implement and maintain a CCTV city surveillance system, priced as a single supply with asset ownership vesting in the government and contractor liability extending through commissioning and maintenance, was treated as a composite supply whose principal character is a works contract because the CCTV components are affixed to structures and partake of immovable property. (AI Summary)

Advance rulings divergence: AARs decide classification, supply and rate issues, prompting centralized appellate reform.
Advance rulings under GST, issued by State AARs per sections 95-106 and related rules, resolve classification, rate and supply characterization questions but have produced divergent orders; a centralized appellate authority has been approved to address conflicts. Recent rulings: cast iron brackets were classified as cast articles under Chapter 7325 due to casting process and iron predominance; supply of power between related captive units was held to be a supply of goods not job work; cured dried tobacco leaves were classified as unmanufactured tobacco under HSN 2401 but assigned to a different rate schedule entry; storage provided in third party godowns was treated as rental/leasing of non residential property. (AI Summary)

Place of Effective Management determines corporate residence and can subject a foreign company's global income to Indian taxation.
POEM determines corporate residence by locating where key management and commercial decisions for the business as a whole are, in substance, made. CBDT guidance prescribes a fact specific, annual, substance over form test: first assess Active Business Outside India via four objective metrics averaged over three years; if ABOI exists, majority of board meetings abroad tends to indicate POEM outside India unless de facto control is exercised from India; if not ABOI, identify who makes key decisions and where they are made using primary and secondary factors. Administrative approvals and transition rules govern tax computation, depreciation, loss carryovers, accounting periods and TDS. (AI Summary)

Waiver of interest requires genuine hardship, circumstances beyond control and cooperation before discretionary relief may be granted.
Waiver of interest under Section 220(2A) allows specified Commissioners to reduce or waive interest charged under post-demand interest where three cumulative conditions are met: payment would cause genuine hardship; the default arose from circumstances beyond the assessee's control; and the assessee cooperated in assessment or recovery proceedings. The power is discretionary, must be exercised judicially with satisfaction on each limb, and cannot be invoked where willful evasion or concealment defeats the statutory criteria. (AI Summary)

Reopening of assessment should not be used where rectification power can correct apparent mistakes, to avoid undue prejudice.
Where an apparent mistake exists in an assessment order, the Assessing Officer must invoke rectification power rather than reopening; reopening requires contemporaneous recorded reasons, relevant material supporting a belief that income escaped assessment, and cannot be used to reargue conclusions from the same material. Parallel reopening while rectification is pending is invalid, and reopening for simple computational or apparent errors is disproportionate and prejudicial when rectification is an available efficacious remedy. (AI Summary)