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    NewsBills
    AMENDMENTS IN THE CUSTOMS TARIFF ACT 1975
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    AMENDMENTS IN THE CUSTOMS ACT 1962
    NewsBills
    Amendment in the provisions of Act relating to verification of the return of income and appearance o...
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    Rationalisation of the provisions of section 49 and clause (42A) of section 2 of the Act in respect ...
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    Penalty for fake invoice.
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    Insertion of Taxpayer’s Charter in the Act.
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    Clarity on stay by the Income Tax Appellate Tribunal (ITAT).
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    NewsBills
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    Safeguard measures expanded to permit duties or tariff rate quotas when increased imports threaten domestic industry.
    The substituted Section 8B empowers the Central Government to apply safeguard measures-including imposition of a Safeguard Duty, application of a Tariff Rate Quota, or any other appropriate measure-when increased imports of an article cause or threaten to cause serious injury to domestic industry, centralising authority to identify qualifying import patterns and to select proportional remedial instruments.
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    Preferential tariff verification: suspension of duty concessions pending exporter verification and security requirement for import clearance.
    New Chapter VAA (section 28DA) creates a framework for preferential tariff treatment under trade agreements, imposes importer obligations and requires time bound verification from the exporting country; preferential treatment may be suspended pending verification with clearance only on furnishing security equal to the differential duty, and may be denied in certain cases. Section 51B establishes an Electronic Duty Credit Ledger for duty credits in lieu of remission and extends recovery provisions to such credits. Amendments also add confiscation liability for contraventions of preferential claims and empower rulemaking under sections 156 and 157; an explanation preserves pre 2018 notices under section 28.
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    Verification of Returns: prescribed persons may verify company and LLP returns and act as authorised representatives.
    Amendments allow any person prescribed by the Board to verify the income-tax return of a company or LLP and permit any person prescribed by the Board to appear as an authorised representative on behalf of an assessee, supplementing existing verification and representation rules that currently designate managing directors, directors, insolvency professionals, designated partners or partners.
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    Cost of acquisition for segregated portfolio units: holding period continuity and proportional NAV-based allocation determine tax basis.
    Units in a segregated portfolio inherit the holding period of the original units in the main portfolio, and the cost of acquisition of segregated portfolio units is the portion of the original cost proportionate to the ratio of the NAV of assets transferred to the segregated portfolio to the NAV of the total portfolio immediately before segregation; the cost of the original units in the main portfolio is deemed reduced by that allocated amount.
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    Annual financial statement upload expands tax-statement data in assessees' accounts, aiding compliance and accurate return filing.
    The administering income-tax authority, or its authorised person, will be required to upload an Annual Financial Statement to the assessee's registered account on the designated portal, in such form, manner and within such time as may be prescribed, containing financial information in the possession of the authority (including items beyond tax deducted or collected). The existing provision specifically governing the prior tax-deduction statement is proposed to be deleted and the amendment takes effect from 1st June, 2020.
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    Tax audit threshold increase for low-cash businesses; tax audit reports must be furnished earlier to enable return pre-filling.
    The proposal raises the audit exemption threshold for businesses where both aggregate cash receipts and aggregate cash payments do not exceed five percent of totals; it mandates that tax audit reports for business or professional income be furnished at least one month before the return filing due date to enable pre-filling, and it amends return due dates and partner treatment while making consequential TDS/TCS amendments to align withholding references with the revised audit framework.
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    Eligibility expansion for Adjudicating Authority members adds District Judge qualification, broadening appointment pool under Benami Property law.
    Section 9 eligibility for appointment as a Member of the Adjudicating Authority under the Prohibition of Benami Property Transaction Act is expanded to include persons who are qualified for appointment as District Judge, in addition to existing eligibility for Indian Revenue Service officers who have held Commissioner of Income-tax (or equivalent) and Indian Legal Service officers who have held Joint Secretary (or equivalent). The amendment takes effect from 1 April 2020 under Clause 143 of the Finance Bill.
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    Donation reporting: donees must file statements and issue certificates before donor deduction claims are allowed under tax law.
    Entities receiving donations must furnish a standardized statement of donations and issue certificates to donors; donor deduction claims will be permitted only where the donee has filed the prescribed statement, with fees and penalties for non compliance. Approvals and registrations under charitable exemption provisions will be time limited and may be granted provisionally on application without detailed enquiry, with requirements to reapply to reactivate inoperative registrations.
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    Time-limited exemptions: periodic renewal of registrations to ensure compliance and reduce intrusive inquiries.
    Modernise and streamline the process for grant of registration and approval for tax-exempt entities by using technology, and institute time-limited, renewable exemptions to ensure ongoing compliance while reducing intrusive day-to-day inquiries; the reform would apply to both existing and new exempt entities.
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    Exemption switching for registered charitable entities allowed once to obtain statutory notification, preserving single-mode compliance and admin efficiency.
    Amendment permits registered charitable entities to seek notification under the statutory exemption for bodies created by Central or State enactment, correcting an anomaly that denied such notification to entities holding registration. It retains the complete-code principle requiring compliance with registration conditions, but allows a one-time switch to the notified exemption while ensuring only one mode of exemption is operative and limiting routine switching for administrative efficiency.
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    Stamp duty cap on fair market value for land and buildings limits FMV to stamp duty value where available.
    For land or building assets, the fair market value on the reference date for computing cost of acquisition shall not exceed the stamp duty value where such stamp duty value is available; "stamp duty value" means the value adopted, assessed or assessable by any Central or State authority for stamp duty purposes.
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    Taxation of dividends shifts to shareholders, abolishing payer-level tax and imposing withholding and limited deductions under transitional rules.
    Removal of Dividend Distribution Tax and return to a classical system makes dividend and income from units taxable in the hands of shareholders and unit holders at their applicable rates, removes payer-level additional tax and related exemptions, limits deductions against such income to interest expense capped at twenty per cent, reallocates taxability for business trusts and interposed vehicles to unit holders, and introduces expanded withholding obligations and transitional rules phasing out payer-level taxation.
    NewsBills
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    Significant Economic Presence deferred while source rules target India-directed digital ad and data revenue for taxation.
    The proposal defers the Significant Economic Presence concept until 1 April 2022 (applicable AY 2022-23), pending threshold rules; clarifies that India-sourced income includes advertising targeted at Indian customers and sale of India-collected data (effective 1 April 2021), aligns the indirect transfer exception for investments by foreign portfolio investors with SEBI's revised FPI regulations (effective 1 April 2020), expands the definition of royalty to include receipts from sale/distribution/exhibition of cinematographic films (effective 1 April 2021), and empowers the Board to prescribe income attribution rules under section 295 with staggered effective dates.
    NewsBills
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    Treaty anti abuse preamble aligns DTAA purpose with MLI to prevent treaty shopping via statutory amendment.
    The proposal amends the statutory power to enter into DTAAs so that agreements for the avoidance of double taxation must be made without creating opportunities for non taxation or reduced taxation through tax evasion or avoidance, including treaty shopping arrangements aimed at indirect benefit of residents of other jurisdictions, thereby implementing the MLI's anti abuse preamble into domestic treaty making authority.
    NewsBills
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    Penalty for false invoices: levy equals aggregate false or omitted entries and also targets those who cause them.
    A new provision proposes a penalty for false entries under GST where penalty equals the aggregate amount of false or omitted entries used to evade tax; liability extends to persons who cause such entries. "False entries" include forged or falsified documents, invoices without actual supply or receipt of goods or services, and invoices involving non existent persons. The amendment is intended to deter fraudulent ITC claims and takes effect from the fiscal implementation date in the Finance Bill.
    NewsBills
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    Contract manufacturing classification: raw materials supplied by assessee or associate treated as work under section 194C, preventing tax avoidance.
    Amendment treats contract manufacturing where raw material is provided by the assessee or its associate as work under section 194C, closing a compliance gap exploited by sourcing materials through related parties, and defines "associate" by reference to the relational test in clause (b) of sub section (2) of section 40A.
    NewsBills
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    Tax residency thresholds tightened: visit exemption reduced, not ordinarily resident test tightened and deeming rule for citizens without foreign tax liability.
    The proposal reduces the special visit exemption for Indian citizens and persons of Indian origin so shorter periods of presence in India count towards residency; replaces the existing multi-part test for not ordinarily resident status with a single prior non-residence stability test; and deems an Indian citizen who is not liable to tax in any other jurisdiction to be resident in India, aimed at preventing arrangements that result in global non taxation.
    NewsBills
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    Taxpayer's Charter empowers the tax board to adopt a charter and issue directions and guidelines to tax authorities for administration.
    Insertion of section 119A empowers the Board to adopt and declare a Taxpayer's Charter and to issue orders, instructions, directions or guidelines to other income tax authorities for administration of the Charter, with the amendment taking effect from 1st April, 2020.
    NewsBills
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    E-penalty scheme to digitalise penalty proceedings, remove in-person AO interface and enable dynamic jurisdiction in penalty imposition.
    A proposed amendment would insert a sub-section empowering the Central Government to notify an e-penalty scheme to digitalise penalty proceedings, remove in-person interface between Assessing Officers and assessees insofar as technologically feasible, optimise resources by centralised speciality, and provide for penalties to be imposed under a dynamic jurisdiction model by one or more income-tax authorities; the Government may notify exceptions or adaptations to existing jurisdictional and procedural provisions and must lay notifications before Parliament.
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    Stay conditions for appeals: security deposit requirement limits extensions and total stay period before tribunal under tax law.
    The ITAT may grant a stay only if the assessee deposits or furnishes security equal to a prescribed proportion of the tax, interest, fee, penalty or other sums; extensions of stay are available only on application showing delay not attributable to the assessee and upon compliance with the deposit/security condition, and the total period of stay is subject to an overall statutory cap. Effective from 1 April 2020.

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

      3 February, 2020

      Contents
      Rules & Regulations
      Plus +
      Summary
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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