direct taxes

July 2022

The Government levied additional duties on exports of petroleum crude, petrol, diesel and aviation turbine fuel to tax the windfall gains earned by petroleum companies on exports. The situation shall be reviewed weekly, and the additional levies would be withdrawn only if the global oil prices fall by USD 40/barrel. The Press Release dated July 01, 2022 detailing the Government’s motives behind these levies can be accessed here.

Jun 2022

CBDT vide its office orders has set up National Faceless Assessment Centre (NaFAC), Assessment Units, Verification Units and Review Units across the country, and these orders shall be in effect from June 06, 2022.
CBDT has amended Rule 10TD of the Income Tax Rules, 1962 to extend the applicability of Safe Harbour Rules for AY 2022-23. The amended rules are applicable from April 01, 2022. The Notification number 66/2022 dated June 17, 2022 can be accessed here.
CBDT issued updated guidelines concerning MAP on June 10, 2022, clarifying certain issues requested by stakeholders:

(i) Clarification on the interplay of Vivad Se Vishwas Scheme (VSV) and MAP

  • For resident taxpayer opting for VSV in a case involving TP adjustments and where the same is accepted by Indian authorities, MAP applications from the taxpayer and their AEs may be allowed. The outcome under MAP however shall not deviate from that under VSV. Correlative relief shall be provided instead.
  • For non-resident taxpayer opting for VSV, there shall be no access to MAP for the same issue.


(ii) Clarification regarding responsibilities of applicants to make full disclosure and provide up to date information.

The detailed guidance can be accessed here.
CBDT notified new Rule 21AIA prescribing ‘other conditions’ required to be fulfilled by a specified fund claiming exemption in respect of certain incomes under Section 10(4D) of the Income Tax Act, 1961.The Notification No. 64/2022 dated June 16, 2022 can be addressed here.
CBDT issued a notification exempting TDS on lease rentals paid to aircraft leasing units located in International Financial Services Centre (IFSC). The exemption shall be applicable from July 01, 2022, and the relaxation shall be available for ten consecutive assessment years. The Notification No. 65/2022 can be accessed here.
CBDT has issued guidelines in Q-and-A form to address difficulties in implementation of Section 194R, which mandates TDS on any benefit or perquisite in respect of business or profession. The circular dated June 16, 2022 can be addressed here.
CBDT has notified conditions specified by the Central Government under Section 9A(8A for investment fund and fund manager located in International Financial Services Centres. Please access the notification here.

May 2022

In light of changes under Finance Act, 2022 that deals with functionality for compliance of Sections 206AB and 206CCA CBDT has modifies circular to bring in portal functionality for the purpose of Sec 206AB/206CCA. Please refer to the circular here.
CBDT has notified Faceless Penalty (Amendment) Scheme, 2022 to amend Faceless Penalty Scheme, 2021. Please access the scheme here.

April 2022

Last month USISPF, along with our knowledge partner Deloitte India conducted an interactive session to discuss the recent trends in APA and MAP in India and the US. The session provided insights on the evolution of APA and MAP program, its progress to date and way forward, both in India and the US. A summary of key discussion points which are accessible here. As next steps, we look forward to receiving feedback from our members on the following:

1. Regulatory issues and resultant challenges in APA and MAP if any

2. Your view on the outcomes under APA and MAP and how it has helped in financial planning of the group.

3. Suggestions if any on the safe harbour rules / rates with rationale and experience so far

4. Any other suggestion as appropriate

We intend to submit a detailed note to the concerned department at Ministry of Finance by the end of this month hence please share your suggestions if any by June 5th .

CBDT has issued revised Instruction for Constitution and Functioning of Local Committees to deal with Taxpayers’ Grievance from High-Pitched Scrutiny Assessments. Please refer to the instructions here.
CBDT has allowed physical filing of Form No. 3CF required under the provisions of Section 35(1)(ii)/(iia)/(iii) read with Rules 5C(1A) and 5F(2)(aa). The relaxation from e-filing is applicable from the date of issuance of this Circular upto the date on which e-filing is made available for Form No. 3CF but not beyond Sep 30, 2022. The Circular has been issued as difficulties were being faced in e-filing of Form No. 3CF which was notified with effect from Apr 1, 2021. Please refer to the circular here.
Directorate General of Systems and Data Management (DG Systems), CBIC has issued advisory detailing step-by-step guide for creation of e-scrip account, generating scrips and transferring of the scrips to any other Importer-Exporter Code for availing the benefit under various incentive schemes. Please refer to the advisory here.

February 2022

To bring parity in the tax treatments for the Organisation for Economic Cooperation ad Development (OECD) member nations, the concept of Most Favoured Nation (MFN) is prevalent under International tax laws.  Central Board of Direct Taxes has issued clarifications around the applicability of MFN clause of Indian Double Taxation Avoidance Agreements (DTAAs or treaties) with OECD member states (or countries). Please access the CBDT circular here.

OECD has released Draft Rules for Nexus & Revenue Sourcing as a part of multi-stage public consultation for Amount A of Pillar One. Click here to read the OECD Press Release and also to download the public consultation document.

OECD/G20 Inclusive Framework on BEPS releases fifth annual Peer Review Report assessing 131 jurisdictions’ progress on exchanging information on tax rulings, in accordance with Action 5, for the calendar year 2020. This is the first review taking place under the renewed peer review process, agreed upon by the member nations last year, with a view to further enhancing and consolidating transparency in relation to the issuance of tax rulings; Click here to read and download the Annual Peer Review Report.

The OECD has published detailed rules to assist in the implementation of a landmark reform to the international tax system, which will ensure Multinational Enterprises (MNEs) will be subject to a minimum 15% tax rate from 2023. The Pillar Two model rules provide governments a precise template for taking forward the two-pillar solution to address the tax challenges arising from digitalisation and globalisation of the economy agreed in October 2021 by 137 countries and jurisdictions under the OECD/G20 Inclusive Framework on BEPS. Please refer to the rules along with the press release here.

The Central Board of Direct Taxes has issued new rules for faceless collection of information from taxpayers, where mismatches are detected. The scheme is notified under a provision in Income Tax Act 135A that proposes faceless information gathering aimed at imparting efficiency, transparency and accountability by eliminating the interface between the income-tax authority and the assessee. Please refer to the notification here.
The income tax department has brought in changes to the existing faceless appeal scheme, easing the process for taxpayers wanting a personal hearing through video conference while appealing against a tax demand by the department. The Central Board of Direct Taxes (CBDT) on December 28, notified the ‘Faceless Appeal Scheme, 2021’ and said that the Commissioner (Appeals) shall allow the request for personal hearing via video conference and communicate the date and time of hearing to the appellant through the National Faceless Appeal Centre. Please refer to the relevant office orders along with the notifications  here.
CBDT has issued guidelines to address the request of priority/out of turn hearing of appeals by CIT(A)/Appeal Units. Click here to read and download CBDT Guidelines. Please refer to the guidelines here.

November 2021

CBDT, vide Circular No. 20 of 2021 has issued much awaited guidelines on scope of Sections 194-O(4), 194Q(3) and 206C(1-I). Click here to read and download the CBDT Circular.

US and India have reached an agreement with respect to differences relating to the 2% equalization levy (DST) charged by India on e-commerce transactions. The final terms of the agreement will get crystallized by February 1, 2022. India’s Union Budget is announced on February 1, 2022 and we are expecting these aspects to get covered and necessary amendment being introduced. Please access the Ministry of Finance Press release here .
CBDT has notified the e-Settlement Scheme, 2021 framed by the Central Government . The Scheme is meant to deal with pending applications in respect of which the option u/s 245M has not been exercised and have been allotted or transferred by CBDT to the Interim Board. Please refer to the notification here.

October 2021

Ministry of Finance has extended the applicability of Transfer Pricing Tolerance Range to AY 2021-22 and has also retained the tolerance range u/s. 92C of the Income-tax Act, 1961 (for AY 2021-22 at 1% for wholesale trading and 3% in all other cases. Please refer to the notification here.

September 2021

OECD/G20 Inclusive Framework on BEPS releases fifth annual Peer Review Report assessing 131 jurisdictions’ progress on exchanging information on tax rulings, in accordance with Action 5, for the calendar year 2020. This is the first review taking place under the renewed peer review process, agreed upon by the member nations last year, with a view to further enhancing and consolidating transparency in relation to the issuance of tax rulings; Click here to read and download the Annual Peer Review Report.

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