Do you have expenses for entrepreneurial activities in Switzerland as a recipient of services with a registered office, domicile, or permanent establishment outside Switzerland, and would you like a VAT refund?
The legal basis for VAT refunds can be found in Art. 107, s. 1, b of the Swiss VAT Act and to art. 151 to 156 of the VAT Ordinance (OTVA).
The Federal Administrative Court has just confirmed the practice of the AFC concerning the content of the certificate required for the reimbursement of Swiss VAT paid by foreign companies.
What should the certificate issued by the foreign authority contain?
To be entitled to reimbursement, a foreign company must, among other things, prove to the Swiss tax authorities (AFC) that it has the status of the company in the country in which it is domiciled, or in which it has its headquarters or a permanent establishment (see art 151, paragraph 1, letter d, OTVA).
The certificate issued by the foreign tax authority must be valid for the reimbursement period (calendar year).
Insofar as reciprocity is granted, and the country has a VAT system (see list of these countries on the AFC website), it is essential that the certificate confirms that the applicant is registered with the register of persons liable for VAT during the period for which the VAT refund is requested, or indicates the date from which the applicant is entered in the register of persons subject to VAT.
Insofar as reciprocity is granted, and the country does not have a VAT system (see list of these countries on the AFC website), it is essential that the company certificate confirm the applicant’s status as an entrepreneur during the period for which the VAT refund is requested, or indicates the date from which the applicant has the status of the contractor.
Attention, if the above conditions are not met, the AFC will not be able to process the request, nor refund the Swiss VAT!
Re: New Provision of Income Tax to be followed by you. As informed donation received by you to be filled in the form, you should electronically upload & sign no 10BD and should be uploaded before 15th May 2022 and every year.
The following details are to be filled up:
1. Name of the donor. 2. Address of donor. 3. Nature of donation. 4. Mode of receipt. 5. Amount of donation. 6. Section code under which donation was received. 7. PAN no. /Aadhar no./Tax Identification no. of the donor.
After uploading Form 10BD, Form 10BE is to be downloaded and this Certificate of Donation is to be issued to the Donor before 31st May of every year and contains the following details.
1) Name of Charitable Organization. 2) PAN 3) Aadhar 4) Approval number u/s 80G
There is a heavy penalty for not filling the form, Rs. 200 per day for Delay in uploading FORM 10BD. The Assessing Officer may also impose a penalty of a minimum of Rs. 10,000 to a maximum of Rs. 1 Lakh.
Operational creditors to furnish extracts of GSTR-1, GSTR-3B, and e-way bills, with the application for initiation of the corporate insolvency resolution process.
The amendment provides the operational creditors to furnish extracts of Form GSTR-1, Form GSTR-3B, and e-way bills, wherever applicable, along with the application filed under section 9 of the Insolvency and Bankruptcy Code, 2016. These additional sets of documents can be used as evidence of transactions with the corporate debtor, debt, and default, easing the process of admission. These documents will also be submitted as part of the claims submitted to the resolution professional to help collate of claims. Further, creditors filing applications under section 7 or 9 of the Code are required to furnish details of their PAN and Email ID to ensure smooth correspondence.
A person, responsible for giving out any benefit or perquisites to a resident arising out of business/ profession, whether it’s convertible into money or not, requires deducting TDS @ 10% on such aggregate amt.
Provided that no TDS if the value doesn’t exceed 20k in a year.
In the case of an Individual or HUF whose turnover, gross sales and gross receipts during the preceding FY don’t exceed 1 cr and in the case of the profession, gross receipts don’t exceed 50 lacs, the provision of 194R will not be applicable.
The scenario where this TDS will be applicable
Q. Whether benefits to employees under 17(2) are covered: Ans. No, because it covers only the course of business/ profession
Q. Sponsored trips to clients
Ans. Yes, achieving targets and sponsoring trips for clients would be covered as non-monetary benefits and would be liable for TDS
Q. Prize Money awarded on winning lottery/ Games: Rummy India/ Dream11, Teen Patti:
Ans. No, since this is not a benefit given in the course of business/ profession as it arises as a reward of making a payment towards playing/ gaming
Q. Diwali/ Festive gifts to suppliers: Ans. Yes, this is a benefit in the course of business. TDS will be applicable.
Rights Of Homebuyers under IBC – The Insolvency and Bankruptcy Code, 2016 (“IBC”), as originally enacted, did not provide adequate protection and recognition of the interests of homebuyers in real estate projects. While the Homebuyers are vital stakeholders in real estate projects, the IBC, as initially crafted, did not protect them. This is because they were treated only as ‘other creditors’, not at par with financial and operational creditors, thus they were not only unable to start proceedings under the IBC but had no statutory voting rights in the Committee of Creditors.
Homebuyers recognized as Financial Creditors – Rights Of Homebuyers
On June 6, 2018, the Insolvency and Bankruptcy Code (Amendment) Ordinance was passed, which was replaced by the Insolvency and Bankruptcy Code (Second Amendment) Act, 2018 (“2018 Amendment Act”) on August 17, 2018. By way of the said amendment, an explanation of Section 5(8)(f) of the IBC was added, which provides a definition of “financial debt”. It was clarified that the amount raised from an allottee under a real estate project shall be deemed to be an amount having the commercial effect of a borrowing. It was further clarified that the expressions “allottee” and “real estate project” shall have the meanings assigned to them under the Real Estate (Regulation and Development) Act, 2016 (“RERA”). As a result, Homebuyers/allottees were expressly recognized as financial creditors under the IBC, which enabled them to start corporate insolvency resolution proceedings (“CIRP”) against a defaulting developer under Section 7 of the IBC. It may be noted that homebuyers have been recognized as allottees under RERA. [See Section 2(d)].
The 2018 Amendment Act was challenged before the Supreme Court in Pioneer Urban Land and Infrastructure Limited v. Union of India on the grounds of it being violative of Article 14 and Article 19(1)(g) read with Article 19(6) of the Constitution of India. The Supreme Court rejected the challenges and upheld the constitutional validity of the 2018 Amendment Act. The Supreme Court on reading and interpreting Section 5(8)(f) of the IBC, observed that Homebuyers/allottees were included in the main provision i.e. Section 5(8)(f) from the very inception of the Code, the Explanation being added in 2018 merely to clarify doubts that had arisen in relation the status of Homebuyers. Therefore, the Court held that the 2018 Amendment Act does not infringe Article 14 and Article 19(1)(g) read with Article 19(6), or 300-A of the Constitution of India.
Minimum threshold requirement – Rights Of Homebuyers
On December 28, 2019, the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2019, was promulgated which was replaced by the Insolvency and Bankruptcy Code (Amendment) Act, 2020 (“2020 Amendment Act”)inserting provisos to Section 7 of the IBC. The second proviso states that with Homebuyers, an application for initiating CIRP under Section 7 of the IBC is to be filed jointly by at least 100 allottees or 10% of the total allottees under the said project, whichever is lesser. The third proviso further stated that matters already filed by individual Homebuyers but not yet admitted by the adjudicating authority before the commencement of the 2020 Amendment Act shall be dismissed if they are not modified to fulfill the minimum threshold requirement as stated above within 30 days from the commencement of the 2020 Amendment Act. The Apex Court upheld the constitutional validity of the 2020 Amendment Act in the case of Manish Kumar v. Union of India.
The above clarifies that the courts, as well as the legislature, have taken an active approach in not only recognizing but also protecting the rights of homebuyers. There are a host of issues that periodically arise for consideration vis-à-vis their rights, and one such issue is regarding the submission of claims by homebuyers.
Once a Section 7 application is admitted, the adjudicating authority has to pass an order under Section 14 of the IBC, declaring a moratorium and appointing an interim resolution professional (“IRP”). The IRP is required to then make a public announcement which is required to mention the last date for submission of claims by creditors. In terms of Regulation 6 read with Regulation 12 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”), the creditors may submit their claims within 14 days from the appointment of the IRP, failing which the claim may be submitted within a period of 90 days from the insolvency commencement date. In many judgments, the National Company Law Tribunal (“NCLT”) has clarified that rejection of the claim on the grounds of delay beyond the 90-day period is not sustainable, as the aforesaid provision is merely directory and not mandatory.
While this appears to be settled law, on June 1, 2022, the Principal Bench of the National Company Law Appellate Tribunal (“NCLAT”), New Delhi, comprising Justice Ashok Bhushan, Ms. Shreesha Merla, Mr. Naresh Salencha granted further relief to Homebuyers in relation to the filing of their claims. In the said case titled Puneet Kaur v. K V Developers Private Limited, the NCLAT held that even claims of those Homebuyers ought to be included in the information memorandum who did not file their claims if the same were reflected in the record of the corporate debtor. The NCLAT held that non-consideration of such claims would lead to inequitable and unfair resolution.
The Appellate Tribunal further noted the difficulty faced by homebuyers in filing their claims. It was observed that the public announcement inviting claims is normally done in the area where the corporate debtor has its registered office and corporate office, and there is every likelihood that all the Homebuyers who are usually hundreds in number neither come to know about the CIRP nor do they file their claims within the stipulated period. The NCLAT thus observed that non-submission of claims within the prescribed time is a common feature in the insolvency process of almost all real estate projects. The Appellate Tribunal went on to hold that once the allotment letters have been issued to the Homebuyers and payments have been received, there is an obligation on the part of the real estate company to provide possession of the houses along with other attached liabilities. Therefore, the Homebuyers have every right to agitate their claim.
The NCLAT has recognized the difficulties faced by Homebuyers, who, as the NCLAT recorded in its judgment dated June 1, 2022, usually belong to the “middle class of society”, most of whom have taken loans from banks and other financial institutions, saddling them with liability. In doing so, the NCLAT furthered the trend of the courts, viewing homebuyers with a fair mindset and reiterating the need to protect homebuyers from the technical rigors and procedures contemplated in the IBC.
The Maharashtra Authority of Advance Ruling (AAR), consisting of Rajiv Magoo and T.R. Ramnani, has ruled that 18% GST is payable on PV DC cables.
The applicant is in the business of manufacturing and supplying solar cables, commonly known as photo-voltaic DC cables (PVDC cables) under various brand names. The cables are made from copper conductors with cross-linked polyolefin (XLPO) insulation and are used between solar modules and inverters in a photovoltaic system.
The applicant supplies cables to its customers for the commissioning and stationing of solar power generating systems (SPGS). The cables connect a solar panel or array with inverters only for the purpose of carrying electricity between solar panels and inverters. The cables are exclusively used by manufacturers of SPGS, Procurement, Construction Company (EPC Company), for setting up a solar power plant as inputs for transmitting direct current from a PV module in SPGS. The cables are specifically designed and tailor-made for solar power projects. Thus, the cables have restricted applications and are used in a photovoltaic system only for the generation and transmission of solar energy.
The applicant has sought an advance ruling on the issue in respect of GST rates on PV DC Cables manufactured and supplied by Leoni Cable Solutions (India) Pvt Ltd to its customers who are into the business of manufacturing solar power generating systems or EPC companies setting up a solar power plant.
The AAR noted that the PV DC cables manufactured and supplied by the applicant to its customers would be classified under Entry number 395 of Schedule III of Notification No. 1/2017-Central Tax (Rate) (as amended) dated June 28, 2017, and liable to GST at 18%.
The Goods and Services Tax Network (“GSTN”) has issued an advisory dated June 18, 2022, regarding availing Input Tax Credit (“ITC”) as per law and GSTR-2B.
For some of the taxpayers, there was an issue in relation to duplicate entries in GSTR-2B which has since been fixed and correct GSTR-2B has been generated. In this regard, taxpayers while filing GSTR-3B, are advised to check and ensure that the value of ITC they are availing of is correct as per the law.
They may check the correct ITC value from the download of Auto drafted ITC statement GSTR-2B or pdf of System Generated GSTR-3B or on the ITC observed on the mouse hover of Table 4 in GSTR-3B, particularly in any such case where there is any difference observed between the correct figures available at places as stated above and the pre-filled GSTR-3B observed on-screen.