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    ManualsIncome Tax
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    Retention money recognition as revenue requires reasonable certainty of ultimate collection under ICDS on construction contracts.
    Retention money, as part of overall contract revenue under the ICDS on construction contracts, shall be recognised as revenue only when the contingency tied to performance is satisfied or there is reasonable certainty of its ultimate collection.
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    Inventory recording requirement under ICDS II now mandates service providers to maintain inventories and disclose valuation for tax purposes.
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    Valuation of Inventories: ICDS II applies to traders and dealers of primary commodities while excluding producers.
    ICDS II governs valuation of inventories for income computation and disclosure. The standard is excluded for a producer of primary goods like livestock, agricultural and forest products, mineral oils, ores and gases, but it applies to persons who trade or deal in those commodities; therefore the producer/dealer distinction determines whether ICDS II applies.
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    ICDS II valuation excluded for closely held company shares when ICDS VIII classifies them as securities outside its scope.
    Shares of a company in which the public are not substantially interested are excluded from ICDS II valuation even if held as inventory, because ICDS VIII's definition of securities expressly includes such shares, placing them outside ICDS II's scope.
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    ICDS II applicability to derivatives: derivatives held as inventory fall under ICDS II because securities exclusion applies.
    Where an assessee holds derivatives as part of inventory, the valuation and related provisions of ICDS II apply because the definition of securities in ICDS VIII expressly excludes derivatives, so such instruments are governed by the inventory valuation standard rather than the securities disclosure regime.
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    Disclosure of accounting policies: ICDS requires taxpayers to disclose net ICDS effect in returns and tax audit report.
    ICDS I mandates disclosure of significant accounting policies and requires the net effect on taxable income from application of ICDS to be disclosed in the Return of Income; ICDS disclosures are to be made in the tax audit report in Form 3CD, with no separate disclosure requirement for persons not liable to tax audit.
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    Marked-to-market gain recognition: ICDS I's non-recognition rule for MTM loss applies equally to gains.
    Recognition of marked-to-market losses or expected loss is disallowed under ICDS I unless permitted by other ICDS provisions; the same conditional rule applies mutatis mutandis to recognition of marked-to-market gains or expected profit, so gains or anticipated income may not be recognised for income computation unless another ICDS expressly authorises recognition.
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    Accounting Policies: treat ICDS I as computation policies affecting taxable income computation, not books of account.
    ICDS I should be read as prescribing computation policies for taxable income so that accrual, going concern, consistency, substance over form and non recognition of mark to market losses apply to income computation under business or other sources, and the disclosure requirement concerns the policies used in computing income rather than the policies used for maintaining books of account.
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    Interpretation of undefined tax terms: ICDS provisions generally govern unless declared ultra vires by a competent authority.
    Where a term in the ICDS coincides with terminology in Accounting Standards, the AS interpretation generally applies; where no AS analogue exists, judicial tax-law interpretations ordinarily govern. If a current ICDS provision conflicts with earlier AS or judicial interpretations, the ICDS provision will prevail for tax computation and disclosure unless declared ultra vires by a competent court or authority.
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    ICDS applicability: ICDS do not apply to MAT on book profit but apply to AMT on adjusted total income.
    ICDS do not apply to MAT because MAT is computed on book profit as per the Profit and Loss Account under company law, with specific statutory adjustments; ICDS are not incorporated into that book profit basis. ICDS apply to AMT because AMT is calculated on adjusted total income derived from total income determined under the regular tax provisions, and ICDS affect that regular computation.
    ManualsIncome Tax
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    Income Computation standards: specific tax-rule provisions prevail over general ICDS when the two provisions conflict.
    ICDS are subordinate general principles for computing income and do not override specific provisions of the Income-tax Rules; where a specific rule governs a particular circumstance, that rule prevails over any inconsistent ICDS guidance.
    ManualsIncome Tax
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    ICDS applicability may govern specified transactional tax issues, raising whether prior judicial precedents remain operative.
    The ICDS, notified under section 145(2), are intended to standardise computation of business and other income for the transactional issues they address and apply to assessment years following notification. They were framed after reviewing judicial views to supply authoritative guidance where earlier judicial decisions arose without statutory standards; nevertheless, some ICDS provisions may conflict with those precedents, posing a question about which authority should prevail.
    ManualsIncome Tax
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    ICDS application: accounting standards govern business income computation for exempt trusts, triggering ICDS when commercial books are maintained.
    ICDS do not apply to the standalone computation of exemption for charitable entities based on the commercial concept of income; however, when income is taxed under the regular heads, ICDS apply to income classified under Profits and Gains of Business or Profession and Income from Other Sources if books are kept on the mercantile system. If a trust carries on incidental business with separate books, business income must be computed on a commercial basis and ICDS apply to that business income despite entitlement to charitable exemption.
    ManualsIncome Tax
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    Applicability of ICDS may indirectly determine whether TDS provisions apply by altering gross receipts/turnover calculations.
    ICDS influence the computation of gross receipts/turnover used to determine whether statutory TDS provisions apply; while ICDS govern income computation and not TDS rules, their application to receipts can indirectly change whether individuals, HUFs or presumptive taxpayers cross the turnover benchmarks that attract TDS obligations.
    ManualsIncome Tax
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    ICDS applicability: applies to taxable income computation under business or other income irrespective of Ind AS adoption.
    For computing taxable income under the heads Profits and Gains of Business or Profession and Income from Other Sources, ICDS provisions govern determination of income irrespective of whether an entity follows erstwhile Accounting Standards or Ind AS for financial reporting; companies adopting Ind AS must apply ICDS adjustments when computing taxable income under those heads.
    ManualsIncome Tax
    Show AI Summary
    ICDS applicability clarified: sector-specific provisions and statutory overrides determine application to banks, insurers and financial firms.
    ICDS apply generally for income computation unless an ICDS contains sector-specific provisions or the substantive law provides a special regime; ICDS VIII addresses banks and certain financial institutions, while statutory and regulatory accounting requirements for insurance business prevail over general ICDS provisions.
    ManualsIncome Tax
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    ICDS applicability to non-residents ensures income is determined under ICDS before flat-rate tax treatment on passive receipts.
    ICDS applies to non-resident income taxed at a flat rate-such as interest, royalty and fees for technical services-because the flat tax is applied after determination of income, so Income Computation and Disclosure Standards govern measurement and recognition for computing taxable income.
    ManualsIncome Tax
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    Change of accounting method: an assessee may adopt cash basis if the change is bona fide and consistently applied thereafter.
    An assessee may change the method of accounting from mercantile to cash basis if the change is bona fide and is followed regularly thereafter; such a change is distinct from a change in accounting policy and must be consistently applied to support proper income computation and disclosure.
    ManualsIncome Tax
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    ICDS revenue recognition applies to presumptive tax schemes computing income from gross receipts or turnover.
    ICDS on revenue recognition applies to taxpayers under presumptive tax schemes when such schemes compute income by reference to gross receipts, turnover or similar revenue measures; absent an express exclusion, ICDS principles govern the computation of those receipts or turnover for income-tax computation and disclosure.
    ManualsIncome Tax
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    Accounting method application: ICDS governs sources using the mercantile system but not sources accounted on a cash basis.
    ICDS applies at the source level: it governs only those sources where the assessee follows the mercantile (accrual) system of accounting and does not apply to sources maintained on the cash system, a distinction intended to prevent escapement of income caused by heterogeneous accounting across an assessee's activities.

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      Review of Customs duty Exemptions - Review of conditional exemption rates of BCD

      24 July, 2024

      Contents
      Notifications
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      Union Budget 2024-25 (Full) + FINANCE (No.2) Bill, 2024

      (i) The BCD exemption for the goods covered under following serial numbers of the notification are being extended upto 31st March, 2026 unless specified otherwise.

      S. No.

      S N of 50/17-Cus

      Brief Description

      1.

      17

      Specified Planting materials, namely, oilseeds, seeds of vegetables, tubers, etc.

      2.

      80A

      Algal oil for manufacturing of aquatic feed

      3.

      90

      Lactose for use in manufacture of homeopathic medicines

      4.

      104

      Specified goods used in processing of sea-food

      5.

      133

      Gold ores and concentrates

      6.

      139

      Bunker Fuels namely: (i). IFO 180 CST; (ii). IFO 380 CST; (iii). VLSFO (CTH 27)

      7.

      150

      Naphtha for manufacture of Fertilisers (scope of exemption is being reduced only to Naphtha)

      8.

      155

      Liquefied petroleum gases (LPG) received from unit in SEZ and returned by the DTA unit to the SEZ unit

      9.

      164

      Electrical energy supplied from SEZ unit to DTA

      10.

      165

      Electrical energy supplied from SEZ to DTA

      11.

      172

      Specified goods used in manufacture of silicon wafers or solar wafers, for manufacture of solar cell or module

      12.

      183

      Medical use fission Molybdenum-99 (Mo-99) for use in manufacture of radio pharmaceuticals

      13.

      184

      Pharmaceutical Reference Standard

      14.

      188

      Goods for manufacture of ELISA Kits

      15.

      191

      Maltol for manufacture of deferiprone

      16.

      204

      Anthraquinone or 2-Ethyl Anthraquinone for use in manufacture of Hydrogen peroxide

      17.

      237

      Specified material for manufacture of EVA (Ethylene Vinyl Acetate) sheets or backsheet, which are used in the manufacture of solar photovoltaic cells or modules (Scope of materials which can be imported is being increased)

      18.

      253

      Specified Goods for manufacture of Brushless Direct Current (BLDC) motors

      19.

      257

      Tags, labels, stickers, belts, buttons, hangers or printed bags, imported by bonafide exporters

      20.

      257A

      Specified goods used in manufacture of handicraft items for export when imported by bonafide exporter

      21.

      257B

      Specified goods used in manufacture of textile or leather garments for export when imported by bonafide exporter

      22.

      257C

      Specified goods used in manufacture of leather or synthetic footwear or other leather products for export when imported by bonafide exporter

      23.

      258

      Security fibre, threads, Paper based Taggant, M-feature for use in manufacture of security paper by Security Paper Mill, Hoshangabad and Bank Note Paper Mill India Pvt Ltd, Mysore.

      24.

      259

      Raw materials for manufacture of security fibre and security thread for supply to Security Paper Mill, Hoshangabad and Bank Note Paper Mill India Pvt. Ltd, Mysore for use in manufacture of security paper

      25.

      260

      Goods for the manufacture of specified orthopedic implants (902110)

      26.

      261

      Raw material for manufacture of Copper-T Contraceptive

      (i) Alatheon

      (ii) Copper Wire

      27.

      265

      Capacitor grades polypropylene granules for manufacture of Capacitor grade plastic

      28.

      269

      Super absorbent polymer for manufacture of adult diapers and specified goods

      29.

      271

      Polytetrametylene ether glycol, (PT MEG) for use in manufacture of spandex yarn

      30.

      276

      Ethylene- propylene- non-conjugated diene rubber (EPDM) for manufacture of insulated wire and cables

      31.

      279

      New or retreated Pneumatic tyres of rubber for use in servicing, repair of maintenance of aircrafts used for operating scheduled air transport service or scheduled air cargo service etc

      32.

      280

      New or retreated Pneumatic tyres of rubber for use in servicing, repair or maintenance of aircraft imported or procured by Aero Club of India/ for flying training purpose/ operating non-scheduled (passenger or charter) services/ AAI for flight calibration purpose

      33.

      290

      Wood pulp for manufacture of newsprint, paper or paperboard

      34.

      292

      Goods imported for manufacture of paper, paper boards, newsprint

      35.

      293A

      Newsprint and uncoated paper imported for printing of newsprint

      36.

      296A

      Lightweight coated paper imported by actual users for printing of magazines

      37.

      326

      Hydrophilic /Hydrophobic Non- Woven, imported for use in the manufacture of Adult Diapers

      38.

      329

      Pile fabrics for the manufacture of toys

      39.

      333

      Moulds, tools and dies, for the manufacture of parts of electronic components or electronic equipment

      40.

      334

      (i) Graphite Felt or Graphite pack for growing silicon ingots (ii) Thin Steel wire used in wire saw for slicing of silicon wafers

      41.

      345A

      Simply Sawn Diamonds

      42.

      364A

      Spent catalyst or ash containing precious metals

      43.

      368

      Ferrous Scrap

      44.

      374

      Magnesium Oxide (MgO) coated cold rolled steel coils for use in manufacture of cold rolled grain oriented (CRGO) steel

      45.

      375

      Specified items for manufacture of cold rolled grain-oriented steel (CRGO) steel

      46.

      378

      Metal parts for manufacture of electrical insulators falling under heading 8546

      47.

      379

      Pipes and tubes for use in manufacture of boilers

      48.

      380

      Forged steel rings for manufacture of special bearings for use in wind operated electricity generators

      49.

      381

      Flat copper wire for use in the manufacture of photo voltaic ribbon for manufacture of solar photovoltaic cell or modules

      50.

      392

      Dies for drawing metal, where imported after repairs from abroad

      51.

      403

      Parts and raw materials for offshore oil exploration

      52.

      404

      Specified items including capital goods and raw materials for off shore oil exploration

      53.

      415

      Parts for manufacture of catalytic convertors

      54.

      415A

      Platinum or Palladium for manufacture of Noble Metal Compounds & Noble Metal Solutions

      55.

      416

      Ceria zirconia compounds for use in the manufacture of washcoat for catalytic converters

      56.

      417

      Cerium compounds for use in the manufacture of washcoat for catalytic converters

      57.

      418

      Zeolite for use in the manufacture of washcoat for catalytic converters

      58.

      422

      Machinery, electrical equipment for use in semiconductor wafer and LCD

      59.

      423

      Machinery, electrical equipment for use in marking and packaging of semiconductor chips

      60.

      426

      Specified goods for the manufacture of semiconductor devices, memory card, IC, solar cell

      61.

      435

      Capital goods for printing industry

      62.

      442

      Bushings made of Platinum and Rhodium alloy when imported in exchange of worn out or damaged bushings exported out of India

      63.

      446

      Parts and components for manufacture of tunnel boring machines

      64.

      451

      Evacuated tubes with three layers of solar selective coating for use in manufacture of solar water heater

      65.

      462

      Ball screws for use in the manufacture of CNC Lathes

      66.

      463

      Linear Motion Guides for use in the manufacture of CNC Lathes

      67.

      464

      CNC Systems for use in the manufacture of CNC Lathes

      68.

      464A

      Goods for manufacture of plastic processing machineries

      69.

      467

      Parts and components of cash dispenser or automatic bank note dispenser

      70.

      468

      Parts for manufacture of Micro ATM, Fingerprint reader/scanner, Iris scanner, Miniaturised POS (Scope of exemption is being limited to import of raw materials only)

      71.

      471

      All parts for use in the manufacture of LED lights

      72.

      472

      All inputs for use in the manufacture of LED driver or MCPCB for LED lights

      73.

      476

      Television equipment, cameras etc for taking films, imported by a foreign film unit or television team

      74.

      477

      Filming equipment of foreign origin if imported into India after having been exported therefrom.

      75.

      480

      Goods imported for being tested in specified test centers

      76.

      489B

      Goods for manufacturing of Microphones

      77.

      504

      Parts and Components of Digital Still Image Video Cameras

      78.

      509

      Parts, components and accessories for manufacture of Digital Video Recorder

      79.

      510

       Parts, components and accessories for use in manufacture of reception apparatus for television

      80.

      511

      Parts, components and accessories for manufacture of CCTV Camera

      81.

      512

      Specified Parts, components and for use in manufacture of Lithium-ion battery and battery pack

      82.

      512A

      Inputs, parts or sub-parts for use in the manufacturing of Printed Circuit Board Assembly

      83.

      515A

      Open Cell for manufacture of TV Panel

      84.

      516

      The following goods for use in the manufacture of Liquid Crystal Display (LCD) /LED TV Panel

      85.

      517

      Magnetrons for manufacture of domestic microwave ovens

      86.

      519

      Raw materials or parts for use in manufacture of e-Readers

      87.

      523A

      Parts, sub-parts, inputs or raw material for use in manufacture of Lithium-ion cells

      88.

      527

      Lithium-ion cell use in manufacture of battery or battery pack

      89.

      527A

      Lithium-Ion Cell for use in manufacture of battery or battery pack of cellular mobile

      90.

      527B

      Lithium-Ion Cell manufacture of battery or battery pack of EV

      91.

      534

      Parts of gliders or simulators of aircrafts (excluding rubber tyres and tubes of gliders)

      92.

      535

      Raw materials for manufacture of aircraft and parts of aircraft

      93.

      535A

      Parts of aircraft for manufacture of aircraft or for manufacture of parts of aircraft by PSU under Min of Defence

      94.

      536

      Parts, testing equipment, tools and tool-kits for maintenance, repair, and overhauling of aircraft, components or parts of aircrafts

      95.

      537

      All goods of Heading 8802 (except 88026000-spacecraft)

      96.

      538

      Components or parts, including engines, of aircraft of heading 8802

      97.

      539

      (a) Satellites and payloads; (b) Ground equipment brought for testing of (a)

      98.

      539A

      Scientific and technical instruments etc for launch vehicles and satellites

      99.

      540

      Specified goods imported by scheduled air transporter

      100.

      542

      Specified goods imported by Aero Club, Flying Training Institutes

      101.

      543

      Specified goods imported by non-scheduled air transporter

      102.

      544

      Parts (other than rubber tubes), of aircraft of heading 8802

      103.

      546

      Parts (other than rubber tubes), of aircraft of heading 8802

      104.

      548

      Barges or pontoons imported along with ships

      105.

      551

      Cruise ships, Excursion ships

      106.

      553

      Fishing vessels, Tugs and Pusher crafts, light vessels excluding vessels and floating structure imported for break up

      107.

      555

      Vessels like warships, lifeboats excluding vessels and floating structure imported for break up

      108.

      567

      Stainless steel tube and wire, for manufacture of Coronary stents /artificial valve

      109.

      569

      Parts required for manufacture of Ostomy products

      110.

      570

      Medical and surgical instruments, apparatus and appliances including spare parts and accessories thereof

      111.

      575

      Specified Hospital Equipment for use in specified hospitals

      112.

      578A

      Raw materials, for the manufacture of Cochlear Implants

      113.

      580

      X-Ray Baggage Inspection Systems and parts thereof

      114.

      581

      Portable X-ray machine / system

      115.

      583

      Parts and cases of braille watches, for the manufacture of Braille watches

      116.

      591

      Parts of electronic toys

      117.

      593

      Parts of video games for the manufacture of video games

      Note: Description of entries is indicative. Notification may be referred to for complete description.

      (ii) The BCD exemption for the goods covered under following serial numbers of the notification no 50/2017-Customs is being extended upto 31st March 2029.

      S. No.

      S. No. of 50/2017Cus

      Brief Description

      1.

      212A

      Medicines/drugs/vaccines supplied free by United  Nations International Children's Emergency Fund (UNICEF), Red Cross etc

      2.

      213

      Drugs and materials

      3.

      428

      Specified goods imported by accredited press cameraman

      4.

      429

      Specified goods, imported by accredited journalist

      5.

      549

      Capital goods, raw materials and spares for repairs of ocean-going vessels

      6.

      550

      Spare parts and consumables for repairs of ocean going vessels registered in India.

      7.

      577

      Lifesaving medical equipment for personal use

      8.

      607

      Life Saving drugs like Keytruda etc

      9.

      607A

      Lifesaving drugs/medicines for personal use

      10.

      611

      Archaeological artefacts for exhibition in a museum

      11.

      612

      Specified raw material for sports goods

      Note: Description of entries is indicative. Notification may be referred to for complete description.


      Full Text:

      Union Budget 2024-25 (Full) + FINANCE (No.2) Bill, 2024

      Topics

      ActsIncome Tax