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    Refund of IGST in SEZ Transactions: Legal Insights
    Case LawsIncome Tax
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    Classification of goods and the reliance on technical reports for legal decision-making.
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    Case LawsGST
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    Refund entitlement for SEZ supplies upheld despite endorsement delays and technical defects; limitation treated as directory.
    A refund claim for IGST on supplies to SEZ units should not be denied solely for delay or technical defects in export endorsements when delays arise from the authorized officer and the goods have reached the SEZ with tax remitted. The endorsement need not state authorized operations retrospectively. Procedural rules permit rectification and refiling of refund applications, limitation provisions are to be treated as directory in this context, and notifications excluding periods from limitation computation support allowance of genuine claims; minor documentary mismatches can be corrected by revised statements.
    Case LawsIncome Tax
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    Unexplained cash deposits: prospective application of higher tax rate under Section 115BBE clarified for post-amendment assessments.
    The assessing process treated certain cash receipts as unexplained under Section 69A read with the higher-rate taxation provision, but acceptance of an opening cash balance and maintenance of a cash book reduced the addition; contemporaneous records are decisive. The amendment imposing a special flat tax rate on unexplained income applies prospectively and does not operate retrospectively, so its applicability depends on the assessment year.
    Case LawsCustoms
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    Classification of goods: tribunal treated unauthorised laboratory testing as undermining test reports, affecting customs classification and valuation.
    Classification turned on whether imports were furnace oil or waste oil, with the tribunal emphasising the necessity that laboratory test reports originate from a laboratory authorised to analyse the substance; unauthorised testing undermined the reports' evidentiary weight and, accordingly, the tribunal accepted the appellant's declared classification and valuation while stressing reliance on duly authorised, competent laboratories for customs determinations.
    Case LawsIncome Tax
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    Jurisdictional transfer under Section 127 can reassign assessments within the same city without prior hearing, as an administrative measure.
    Jurisdictional transfer under Section 127 empowers senior tax officials to reassign cases for administrative convenience, generally requiring reasons and an opportunity to be heard; however, transfers within the same city do not require prior hearing. The tribunal found a valid transfer order centralising the matter within the same city, held the absence of prior hearing immaterial under the intra-city exception, and concluded the administrative transfer did not prejudice the assessee or invalidate the assessment.
    Case LawsIncome Tax
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    Notional rental income: ownership can trigger annual value assessment with standard deduction; vacancy allowance restricted when not let.
    Ownership alone can give rise to taxable annual value by way of notional rental income, with annual value for unlet properties determined by reference to expected rent and, where applicable, by a proportionate measure of property cost. From that annual value the statutory 30% standard deduction and interest on borrowed capital are deductible. Vacancy allowance is not treated as available where properties remain unlet for the entire year, and balance-sheet disclosure of property ownership can support assessment.
    Case LawsIncome Tax
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    Incriminating material discovered during search permits reassessment under Section 153A, validating additional income adjustments by tax authorities.
    The Tribunal applied the principle that discovery of previously undisclosed documents during a search can constitute incriminating material, thereby activating Section 153A jurisdiction to reassess income for multiple prior years. It found an undisclosed balance sheet showing ownership of properties as incriminating, and addressed related challenges - estimation of house property income, jurisdictional objections, notice deficiencies, interest levies, and natural justice claims - against the backdrop of valid reassessment under the search-linked provision.
    Case LawsIncome Tax
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    Genuineness of transactions: accommodation entries and circumstantial evidence can defeat claimed tax exemptions without commercial substance.
    Denial of exemption under Section 10(38) is justified where claims rest on paper companies and accommodation entry providers; synchronized trading, SEBI identified price rigging, and weak connection between claimants and transactions diminish the probative value of demat statements and share certificates. The legal focus is on the onus of proof, application of the preponderance of probabilities and circumstantial inferences, requiring the assessee to establish commercial substance for unsecured loans and claimed trades rather than rely solely on documentation.
    Case LawsCustoms
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    Timely filing of cross objections: strict procedural compliance required, limited scope for delay condonation without sufficient cause.
    The article focuses on the requirement to file cross objections within the prescribed period after service of an appeal notice, the department's failure to meet that timeline, and its subsequent delay condonation application citing unavailability of appeal copies and pandemic disruption. The tribunal closely examined these grounds, applied the sufficiency-of-cause standard and pandemic limitation guidance, and emphasized strict procedural compliance and departmental duty to ensure timely filings.
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    Deduction under Section 80P for cooperative societies hinges on mutuality and classification as cooperative banks.
    Deduction eligibility under Section 80P depends on the principle of mutuality and on whether receipts involve entities that qualify as banking companies; interest income meeting mutuality criteria may be deductible for cooperative societies, whereas interest arising from dealings with entities classifiable as banks should be treated as income from other sources. The tribunal required verification of claims and reclassification of such interest where applicable.
    Case LawsIncome Tax
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    Section 43B payment rule prevents deduction for unpaid service tax, altering taxable income and accounting timing.
    Section 43B's payment-based rule makes deductions allowable only on actual payment; applied to service tax, unpaid service tax not remitted before the return filing due date is disallowable and may be treated as part of assessee's income, despite not being charged to profit and loss. Under mercantile accounting service tax received must be included in turnover, and legislative changes to payment schedules affect compliance timing; precedents reinforce that non-payment precludes deduction under the non-absentee payment requirement of Section 43B.
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    Validity of reassessment notices to deceased assessees hinges on proper service to legal heirs, else jurisdiction is lacking.
    The core legal rule is that reassessment notices must be served on a living person or the legal heir; issuance to a deceased individual vitiates jurisdiction. Service on the correct person is a condition precedent to reassessment, and legal heirs have no statutory duty to inform authorities of death. Legal representative liability arises only where proceedings began during the assessee's lifetime and may be continued against successors. Courts may restrain actions taken without jurisdiction while statutory remedies remain available.
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    Refund of unutilized ITC: circulars cannot override statutory entitlement where inverted duty structures cause credit accumulation.
    Interpretation of Clause (ii) of the proviso to Section 54(3) concerns eligibility for refund of unutilized ITC when inputs attract higher tax than outputs; administrative Circular No. 135/05/2020 was applied by revenue to deny refunds where principal input and output bore the same rate, but the circular cannot add to or curtail statutory entitlements and the legislative intent requires considering all inputs that cause ITC accumulation.
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    Typographical error in e-way bill should not attract GST penalty absent intent to evade tax.
    A typographical error in the e-way bill vehicle number resulted in seizure and a GST penalty; the court held that an isolated clerical mismatch, when other transport and tax documents correspond and no further evidence of evasion exists, does not demonstrate the requisite mens rea for penal action and quashed the penalty orders, stressing equitable application of detention and seizure provisions.
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    Failure to file tax returns within the prescribed time can sustain criminal prosecution despite later accepted belated returns.
    The dispute focuses on prosecution under Section 276CC for failure to file returns within the prescribed time, where acceptance of a belated return and dismissal of penalty proceedings do not necessarily negate the presumption of mens rea; the accused bears the burden to rebut intentional concealment, and evidential material from searches indicating undisclosed transactions can sustain criminal proceedings.
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    Moratorium protection preserves debtor rights and enforces strict statutory timelines in insolvency proceedings while safeguarding participatory fairness.
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    Timeliness of Section 80G applications: application treated as timely and statutory reconsideration directed under purposive interpretation.
    Timeliness of registration under Section 80G was examined with focus on statutory deadlines, the effect of provisional approval under Section 80G(5), and amendments impacting trusts that commenced activities before formal registration; interpretation emphasised purposive and harmonious construction, legislative intent, natural justice in notice and hearing, and directed reconsideration of eligibility with opportunity to submit documents.
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    Limitation period in tax reassessment: amended time limits prevent retrospective validation of reassessment notices under the new regime.
    The document focuses on the amended reassessment regime introduced by the Finance Act 2021, highlighting the shortened limitation periods and the mandatory pre-notice procedure requiring inquiry and opportunity to be heard. It rejects administrative attempts to render earlier notices compliant with amended law via retrospective treatment, finds the 'travel back in time' theory legally impermissible, and stresses that limitation periods, pandemic-related extensions, and procedural safeguards determine the validity of reopening assessments.
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    Reverse charge mechanism applies when buyer bears GST liability for raw cotton purchased through an intermediary Kacha Arhtia.
    The AAR concluded that a Kacha Arhtia acts as an intermediary who facilitates sale, executes Form I, deducts commission and remits proceeds to the seller, and does not transfer title; therefore, where raw cotton is purchased from an agriculturist through a Kacha Arhtia, the registered buyer is liable to pay GST under the reverse charge mechanism, while market fee obligations and auction procedures under the APMC Rules govern the transaction.
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    Source rule protects payments for services used to earn income abroad from domestic taxation when characterised accordingly.
    Whether aircraft maintenance and repair by a non-resident constitutes technical services is addressed by reference to the specialised expertise, regulatory and safety obligations distinguishing such services from ordinary repairs; contemporaneously, retrospective statutory amendments clarifying taxation of fees for technical services are balanced against the source rule exception, under which payments for services used to earn income abroad are not taxed domestically.
    Case LawsIncome Tax
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    Nexus doctrine: source based taxation requires a real territorial connection to tax cross border consultancy success fees.
    A "success fee" paid to a non resident for consultancy services characterized by human expertise constitutes a fee for technical services when there is a real and substantial connection between the income and India. The right to tax is allocated by the source rule: income is taxable in the jurisdiction where the economic source of payment is located. Parliamentary taxing power over extra territorial income is limited by the Doctrine of Territorial Nexus; only payments with a sufficient nexus to India are subject to tax at source obligations.

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      AMENDMENTS IN THE FIRST SCHEDULE TO THE CUSTOMS TARIFF ACT, 1975

      3 February, 2020

      Contents
      Rules & Regulations
      Plus +
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      Budget 2020-21 + FINANCE BILL, 2020

      AMENDMENTS

      A.

      Tariff rate changes for Basic Customs Duty [to be effective from 02.02.2020] * [Clause 115 (a) of the Finance Bill, 2020]

      Rate of Duty

      S.No.

      Heading, sub-heading, tariff item

      Commodity

      From

      To

       

       

      Food processing

       

       

      1.

      0802 32 00

      Walnuts, shelled

      30%

      100%

       

       

      Chemicals

       

       

      2.

      3824 99 00

      Other Chemical products and preparations of the chemical or allied industries, not elsewhere specified

      10%

      17.5%

       

       

      Footwear

       

       

      3.

      6401, 6402,

      6403, 6404, 6405

      Footwear

      25%

      35%

      4.

      6406

      Parts of footwear

      15%

      20%

       

       

      Household Items

       

       

      5.

      6911 10, 6911 90 20, 6911 90 90

      Tableware, kitchenware, water filters (of a capacity not exceeding 40 litres) and other household articles, of porcelain of china.

      10%

      20%

      6.

      6912 00 10, 6912 00 20, 6912 00 40, 6912 00 90

      Ceramic tableware, kitchen-ware, clay articles and other household articles

      10%

      20%

      7.

      7013

      Glassware of a kind used for table, kitchen, toilet, office, indoor decoration or Similar purposes (other than that of heading 7010 or 7018)

      10%

      20%

      8.

      7323

      Table kitchen or other household articles and parts thereof, of iron or steel, iron or steel wool; pot scourers and scouring or polishing pads, gloves and the like, of iron or steel, including pressure cookers pans utensils, misc articles such as iron & steel wool, polishing pads, gloves etc.

      10%

      20%

      9.

      7418 10

      Table, kitchen or other household articles and parts thereof, of copper; pot scourers and scouring or polishing pads, gloves and the like, of copper.

      10%

      20%

      10.

      7615 10

      Table, kitchen or other household articles and parts thereof, of aluminum; pot scourer and scouring or polishing pads, gloves and the like, of aluminum.

      10%

      20%

      11.

      8301

      Padlocks and locks (key, combination or electrically operated) of base metal; Clasps and frames with clasps, incorporating locks of base metals; keys for any of the foregoing articles, of base metals (Other than lock of a kind used for automobiles.)

      10%

      20%

      12.

      9603

      Brooms, brushes, hand operated mechanical floor sweepers, not motorized, mops and feather dusters; prepared knots and tufts for broom or brush making; paint pads and rollers; Squeegees (other than roller squeegees).

      10%

      20%

      13.

      9604 00 00

      Hand sieves and hand riddles.

      10%

      20%

      14.

      9615

      Combs, hair-slides and the like, hairpins curling pins, curling grips, hair curlers and the like other than those of heading 8516 and parts thereof.

      10%

      20%

      15.

      9617

      Vacuum flasks and other vacuum vessels, complete with cases; parts thereof other than glass inners.

      10%

      20%

      16.

      8414 51 10

      Table Fans

      10%

      20%

      17.

      8414 51 20

      Ceiling Fans

      10%

      20%

      18.

      8414 51 30

      Pedestal Fans

      10%

      20%

      19.

      8414 59 20

      Blowers, Portable

      10%

      20%

      20.

      8509 40 10

      Food Grinders

      10%

      20%

      21.

      8509 40 90

      Other grinders and Mixer

      10%

      20%

      22.

      8509 80 00

      Other Appliances

      10%

      20%

      23.

      8510 10 00

      Shavers

      10%

      20%

      24.

      8510 20 00

      Hair Clippers

      10%

      20%

      25.

      8510 30 00

      Hair-removing appliances

      10%

      20%

      26.

      8516 10 00

      Water heaters and immersion heaters

      10%

      20%

      27.

      8516 21 00

      Storage heating radiators

      10%

      20%

      28.

      8516 29 00

      Other electrical space heating apparatus

      10%

      20%

      29.

      8516 31 00

      Hair Dryers

      10%

      20%

      30.

      8516 32 00

      Other hair dressing apparatus

      10%

      20%

      31.

      8516 33 00

      Hand Drying apparatus

      10%

      20%

      32.

      8516 40 00

      Electric smoothing irons

      10%

      20%

      33.

      8516 60 00

      Other ovens, cookers, cooking plates, boiling rings, grillers and roasters

      10%

      20%

      34.

      8516 71 00

      Coffee and Tea Makers

      10%

      20%

      35.

      8516 72 00

      Toasters

      10%

      20%

      36.

      8516 79 10

      Electro-thermic fluid heaters

      10%

      20%

      37.

      8516 79 20

      Electrical or electronic devices for repelling insects

      10%

      20%

      38.

      8516 79 90

      Other electro-thermic appliances used for domestic purposes

      10%

      20%

      39.

      8516 80 00

      Electric heating resistors

      10%

      20%

       

       

      Precious Metals

       

       

      40.

      7118

      Coin

      10%

      20%

       

       

      Machinery

       

       

      41.

      8414 51 40

      Railway Carriage fans

      7.5%

      10%

      42.

      8414 51 90

      Other fans with a self-contained electric motor not exceeding 125W

      7.5%

      20%

      43.

      8414 59 10

      Air Circulator

      7.5%

      10%

      44.

      8414 59 30

      Industrial fans blowers and similar blowers

      7.5%

      10%

      45.

      8414 59 9

      Other industrial fans

      7.5%

      10%

      46.

      8414 30 00, 8414 80 11

      Compressor of Refrigerator and Air conditioner

      10%

      12.5%

      47.

      8419 89 10

      Pressure vessels

      7.5%

      10%

      48.

      8418 10 10

      Commercial type combined refrigerator freezers, fitted separate external doors

      7.5%

      15%

      49.

      8418 30 10

      Commercial freezer of chest type, not exceeding 800 litre capacity

      7.5%

      15%

      50.

      8418 30 90

      Other chest type freezers

      10%

      15%

      51.

      8418 40 10

      Electrical freezers of upright type, not exceeding 800 litre capacity

      7.5%

      15%

      52.

      8418 40 90

      Other freezers of upright type, not exceeding 800 litre capacity

      7.5%

      15%

      53.

      8418 50 00

      Refrigerating or freezing display counters, cabinets, Show-cases and the like

      7.5%

      15%

      54.

      8418 61 00

      Heat pumps other than air conditioning machines

      7.5%

      15%

      55.

      8418 69 10

      Ice making machinery

      7.5%

      15%

      56.

      8418 69 20

      Water cooler

      10%

      15%

      57.

      8418 69 30

      Vending machine, other than automatic

      10%

      15%

      58.

      8418 69 40

      Refrigerating equipment/devices used in leather industry

      7.5%

      15%

      59.

      8418 69 50

      Refrigerated farm tanks, industrial ice cream freezer

      7.5%

      15%

      60.

      8418 69 90

      Others (like freezers of capacity 800 litres and more etc.]

      7.5%

      15%

      61.

      8515 (except 8515 90 00)

      Welding and Plasma cutting machines

      7.5%

      15%

       

       

      Other Electronic goods

       

       

      62.

      8504 40 (except 8404 40 21)

      Static Converters

      15%

      20%

      63.

      8504 40 21

      Dip bridge rectifier

      10%

      20%

      64.

      8517 70 10

      Populated, loaded or stuffed printed circuit boards

      10%

      20%

       

       

      Automobile and automobile parts

       

       

      65.

      8421 39 20, 8421 39 90

      Catalytic Convertor

      10%

      15%

       

       

      Furniture Goods

       

       

      66.

      9401

      Seats and parts of seats (other than aircraft seats and their parts)

      20%

      25%

      67.

      9403

      Other Furniture and parts thereof

      20%

      25%

      68.

      9404

      Mattress supports: Articles of bedding and similar furnishing

      20%

      25%

      69.

      9405

      Lamps and lighting fittings including searchlights and spotlights and pads thereof; Illuminated signs, illuminated name plates and the like, having a permanently fixed light source, and parts thereof (except solar lantern and solar lamps).

      20%

      25%

       

       

      Toys

       

       

      70.

      9503

      Tricycles, scooters, pedal-cars and similar wheeled-toys; dolls' carriages; dolls; other toys; reduced-Size (“scale”) models and similar recreational models, working or not; puzzles of all kinds

      20%

      60%

       

       

      Stationary items

       

       

      71.

      8304 00 00

      Filing, cabinets. card-index cabinets, paper-trays, paper rests, pen trays, office-stamp stands and similar office or desk equipment of base metal, Other than office furniture of heading 9403

      10%

      20%

      72.

      8305

      Fittings for loose-leaf binders or files, letter clips, letter corners, paper clips, indexing tags and similar office articles, of base metal; staples in strips (for example, for offices, upholstery, packaging), of base metal

      10%

      20%

      73.

      8310

      Sign-plates, name-plates, address-plates and similar plates, numbers, letters and other symbols, of base metal, excluding those of heading 9405

      10%

      20%

       

       

      Miscellaneous

       

       

      74.

      6702

      Artificial Flowers

      10%

      20%

      75.

      7018 10 20

      Glass Beads

      10%

      20%

      76.

      8306

      Bells, gongs, statuettes, trophies and like, non-electric of base metal; statuettes and other ornaments of base metal; photograph, picture or similar frames, of base metal; mirrors of base metal.

      10%

      20%

      B.

      New entries added to the First Schedule [to be effective from 02.02.2020] * [Clause 115(b) of the Finance Bill, 2020]

      S. No

      Tariff Item

      Description

      Tariff Rate

      Effective rate

      1.

      8414 51 50

      Wall fans

      20%

      20%

      2.

      8529 90 30

      Open cell for television set

      15%

      0%

      3.

      8541 40 11

      Solar cells, not assembled

      20%

      0%

      4.

      8541 40 12

      Solar cells, assembled in modules or made up in panels

      20%

      0%

      *Will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931.

       


      Full Text:

      Budget 2020-21 + FINANCE BILL, 2020

      Topics

      ActsIncome Tax