Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations




The Insolvency and Bankruptcy Board of India (Board), in exercise of its powers conferred under Section 240 of the Insolvency and Bankruptcy Code, 2016 (Code), has notified the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. These Regulations inter alia provide for the details of activities from issue of liquidation order under Section 33 of the Code to dissolution order under Section 54.These Regulations come into force with immediate effect.


These Regulations prohibit an insolvency professional from acting as a liquidator for a corporate debtor if he is not independent of the corporate debtor. These prohibit partners or directors of an insolvency professional entity of which the insolvency professional is a partner or director from representing other stakeholders in the same liquidation process. These oblige the liquidator, and also registered valuer (s) and professional(s) assisting him in liquidation to make disclosures – initial and continuing – about pecuniary or personal relationship with any of the stakeholders entitled to distribution of assets.


These Regulations specify the manner and contents of public announcement, receipt and verification of claims of stakeholders, reports and registers to be maintained, preserved and submitted by the liquidator, the manner of realisation of assets and security interest, and distribution of proceeds to stakeholders.


These Regulations provide that a liquidator should ordinarily sell the assets through auctions. He may sell the assets through private sale only when the asset is perishable; the asset is likely to deteriorate in value significantly if not sold immediately or the asset is sold at a price higher than the reserve price of a failed auction. He may sell an asset on standalone basis, or assets in a slump sale, assets in parcels or a set of assets collectively.


These Regulations provide that the fee payable to a liquidator shall form a part of liquidation cost. These further provide that a liquidator shall be paid such fees and in such manner as has been decided by the committee of creditors during the resolution process. In all other cases, the liquidator shall be entitled to a fee as a percentage of the amount realised net of other liquidation costs and of the amount distributed.
; +91- 9810936720


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Rebate of State Levies on Exports

Rebate of State Levies on Export of Garments
The Government of India has decided to adopt a mechanism wherein the rebate of State levies on garment exports is provided based on a budgetary allocation of the Ministry of Textiles under a scheme in which the Department of Revenue/Central Board of Excise and Customs (CBEC) handles disbursement along with the extant Duty Drawback. Please refer Circular No. 43/2016 – Customs F.No.605/42/2016-DBK (Pt.II) Government of India(CBEC), dated 31st August 2016

The Central Government (Ministry of Textiles) has issued Notification Nos. 12020/03/2016-IT dated 12.8.2016 and 31.8.2016 for the Scheme for Rebate of State Levies on Export of Garments, 2016 (ROSL scheme). Further, based on the recommendations of the Drawback Committee constituted by the Central Government (Ministry of Finance, Department of Revenue, CBEC), the Central Government (Ministry of Textiles) has issued Notification No. 12020/03/2016-IT dated 13.8.2016 notifying the rates of rebate in Schedule I and Schedule II. These notifications should be downloaded from and perused. This Circular provides the guideline framework for implementation of this scheme.

The ROSL scheme is meant for exports of garments that are defined in the scheme as goods falling under Chapters 61 or 62 of the Schedule of All Industry Rates of Drawback. It is applicable to exports with Let Export Order dates from 20.9.2016 onwards. Though applicability is for three years, nonetheless based on changes in underlying conditions, the Central Government can adjust the rates of rebate.

The rates of rebate notified are accompanied by rebate caps in Rupees/Unit. These rates are on an average basis and determined in a like manner as AIRs of Drawback. The rate of rebate is not divisible into any component tax or input. The rates of rebate are provided either as the general rates of rebate (Schedule I) or the rates of rebate applicable for exports when the fabric (including interlining) only has been imported duty free under Special Advance Authorization (Schedule II). These schedules are based on the extant Schedule of All Industry Rates of Drawback for Chapters 61 and 62. The rebate is not applicable on exports made under the general Advance Authorization Scheme with claim of duty drawback under Rule 6 of the Drawback Rules. The definition of export in ROSL scheme does not cover movement of goods from DTA to SEZ units.

In ROSL scheme, the rebate of State levies is understood to comprise State VAT/CST on inputs including packaging, fuel, duty on electricity generation and duties and charges on purchase of grid power, as accumulated through the stages of production from yarn to finished garments. The ROSL scheme is not mandatory for an exporter. Therefore, an exporter has to make a conscious choice to opt for ROSL scheme by making claim for rebate in acceptance of the ROSL schemes terms and conditions (including under this Circular) cum a declaration of eligibility for the rate and rebate. This declaration of eligibility is exporter’s self-declaration that he is eligible for the rate and rebate in as much as exporter has not claimed and shall not claim the credit/ rebate/ refund/ reimbursement of the specific taxes that comprise the rebate of State levies under any other mechanism and also that exporter has constituted an Internal Complaints Committee (ICC), where applicable, in pursuance of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

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The claim cum declaration of eligibility has to be made by exporter on drawback exports at item- level. The drawback exports (shipping bill or bill of export) may be standalone or in combination with other schemes. The options in permutation with the ROSL Scheme are being provided with separate scheme-codes which the exporter is to declare at item level to make claim cum declaration for the rebate. For EDI shipping bill, selection of the scheme-code involving ROSL scheme at the time of export shall itself amount to making claim cum declaration of eligibility. For EDI shipping bill this shall be the only means to make the claim. If need for manual shipping bill arises, only then the exporter printing the claim cum declaration on the shipping bill shall be accepted. No claim for rebate shall lie except in this manner. The scheme-codes are being publicized by the Systems Directorate.

The amount of rebate is calculated using the FOB value and the rates and caps of rebate specified in ROSL scheme. The rate and cap of rebate for a tariff item as shown in columns (4) and (5), –

(a) of said Schedule I is used for calculation when shipping bill item has claim for AIR drawback or when the shipping bill item involves export under Rule 7 of Drawback Rules 1995 under claim for Brand Rate of drawback with identifier 9807 followed by tariff item number and suffix “B” of the AIR Drawback Schedule where provisional Drawback of Customs portion is to be paid;

(b) of said Schedule II is used for calculation when the shipping bill item has claim for AIR drawback in combination with Special Advance Authorization of para 4.04A of FTP 2015-20 or when the shipping bill item involves export under Rule 7 of Drawback Rules 1995 under claim for Brand Rate under this combination with identifier 9807 followed by tariff item number and suffix “D” of the AIR Drawback Schedule where provisional Drawback of Customs portion is to be paid.

The ROSL scheme provides for rebate claims handling only after the goods are exported (i.e. on correct filing of Export General Manifest for the shipping bill or bill of export) and in parallel with Duty Drawback albeit separately, and after Drawback is processed. For EDI shipping bills the calculation is being automated by the Systems Directorate. For manual exports, the Deputy/Assistant Commissioner (Drawback) shall calculate the rebate amount. Before scrolling out rebate for payment in EDI or manually generating the list for rebate payment, the DC/AC (Drawback) would rule out existence of alert against exporter or shipping bill. Based on Central Government (Ministry of Finance) approval, the DC/AC (Drawback) is authorized by CBEC to issue sanction of rebate. The scroll/list of payments would be routed to PAO. For EDI shipping bills, the routing is being arranged by Customs EDI with digital signature in manner compatible with e-PAO. The PAO shall ensure payment into exporter’s bank account based on availability of budgetary allocation of Ministry of Textiles.

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To facilitate exporters, the Systems Directorate is making arrangements to reflect the rebate amount in shipping bill check list, during export processing and in print out of post-LEO shipping bill and make available rebate related information to exporters on similar lines as being made available for Drawback.

The ROSL scheme provides that the exporter shall return any over-payment of rebate arising from miscalculation. It is also a condition of the ROSL scheme that the rebate allowed is subject to the receipt of sale proceeds within time allowed under the Foreign Exchange Management Act, 1999 failing which such rebate is deemed never to have been allowed on the same lines as Duty Drawback, and any other cause that also affects the Drawback is deemed to have the similar effect on the rebate. Since the officers of CBEC adopt the processes applicable to Drawback Scheme for recovery from exporter or repayment by exporter of Drawback, on this premise, the ROSL scheme declares that in such cases the decisions with respect to Drawback, including in cases of disputes, are deemed to apply mutatis mutandis to the rebate. Thus, the officers of CBEC are not required to directly adjudicate or dispose in appeal the rebate amount; however the status/decisions in Drawback matters are to be adopted for the rebate.

In pursuance of recovery provisions for rebate in the ROSL scheme, it is guided that the DC/AC (Drawback) is to issue a letter to the exporter in terms of para 7 of ROSL Scheme informing the rebate amount to be paid into the account head of Ministry of Textiles and specify that interest at the rate of 15% per annum on that amount is due from the date of payment of rebate. The letter is to request the exporter to deposit the full sum within 30 days in the designated account head of Ministry of Textiles and to submit proof of such deposit to the office of the Textile Commissioner within 60 days of the date of the letter. The letter shall also inform the exporter that any such amount that remains to be reconciled as deposited in the office of the Textile Commissioner would be recovered by the Textile Commissioner. A copy of this letter shall be endorsed to the office of the Textile Commissioner for necessary action. These actions by DC/AC (Drawback), where applicable, are to be taken based on the status of actions/decisions on the Drawback front. This is an area where the Commissioners have responsibility of close monitoring of the nature of actions being taken by the DC/AC (Drawback), for ensuring proper record-keeping distinct from that for Drawback Scheme and for maintaining effective coordination with the Textile Commissioner so that actions remain logical and informed as the ROSL scheme has empowered the Textile Commissioner to have the amounts recovered as arrears of land revenue. Moreover, to ensure hundred percent effective communication the above mentioned endorsed letters or other documentary exchanges made with Textile Commissioner’s office should necessarily be replicated via official email.

The ROSL scheme requires the Ministry of Textiles to cause checks to ensure integrity of the declarations of eligibility for rate and rebate made by exporters on the counts of having constituted the ICC where required and/or not having claimed reimbursement etc of the specific State levies under any other mechanism. For this purposes, a monthly list of rebate claims processed in EDI containing details that include IEC number, name of exporter, State of origin of goods declared in shipping bill and shipping bill number-date-wise amount of rebate scrolled, would be conveyed by the Systems Directorate via email to Ministry of Textiles. Every Customs location from where any rebate may have been processed manually shall convey this information from its official email. Where recovery arises on ground of wrongful declaration of eligibility by exporter, the entire actions for recovery would be initiated and concluded by the Textile Commissioner.

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It is clarified that making good short-payment of rebate, if any, or when rebate allowed is deposited back by exporter with office of Textile Commissioner but is required to be repaid to exporter, would require the DC/AC (Drawback) to manually issue payment list to the PAO. ;+91-9810936720

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Scheme of Deferred payment of Customs Duty Introduced by India

Government of India through Circular No. 52/2016-Cus(F.No.450/81/2016-Cus IV) dated the 15th November, 2016 has drawn attention to Customs Notification No. 134/2016-Custorns (N.T) & 135/2016-Custorns (N.T.) dated 2nd November, 2016 permitting Importers certified under Authorized Economic Operator Programme as AEO (Tier-Two) and AEO (Tier-Three) to make deferred payment of duty of Customs. Explaining therein that :

Every importer certified as AEO-T2/AEO-T3 shall obtain ICEGATE Login which is essential to avail benefits envisaged in the AEO Programme. Further, in order to avail the facility of deferred payment, every AEO-T2/AEO-T3 is advised to nominate a nodal person borne on their establishment who would be responsible for authenticating all the customs related transactions on behalf of the AEO. Since the option of deferred payment has been extended only to AEO (Tier-Two) and AEO (Tier-Three), it is important for the AEO to exercise due caution in nominating the AEO nodal person to prevent misuse of facility of deferred payment. The contact details of AEO nodal person shall also be provided in ICEGATE login to ensure that the information reaches in time at their registered mail for authentication.

As per rule 4 of the Deferred Payment of Import Duty Rules, an eligible importer who intends to avail the benefit of deferred payment shall intimate to the Principal Commissioner of Customs or the Commissioner of Customs, as the case may be, having jurisdiction over the port of clearance, his intention to avail the said benefit. An intimation addressed to the AEO Programme Manager with a copy to the Principal Commissioner(s) of Customs or the Commissioner(s) of Customs, as the case may be, having jurisdiction over the port(s) of clearance shall be considered as an intimation by an eligible importer of his intention to avail the said benefit.

The eligible importer who intends to make deferred payment shall indicate the same using flag “D” in the Payment Method column of Bill of Entry filed. In order to ensure that the facility of deferred payment is availed only by the eligible importer, option has been provided in ICEGATE Login for AEO Nodal person to acknowledge such intent and authenticate using One Time Password (OTP) sent to his registered e-mail address. The Nodal person would be able to authenticate multiple Bills of Entry at once. Only on such authentication by the eligible AEO importer, customs clearance would be provided for the consignment under deferred payment of duty Rules. The due dates for deferred payment of import duty by eligible importers are specified in rule 6 of the said Rules. The eligible importer also has an option to select the challans belonging to the deferred period and pay at anytime, even before the due date at their convenience.


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India–USA Bilateral Competent Authority MAP/APA

The Bilateral Competent Authority Mutual Agreement Procedure (MAP) / Advance Pricing Agreement (APA) meeting between India and USA was held in Washington DC, USA during the last week of October, 2016. The discussions in the meeting were focussed on resolving MAP cases pending for a long time and to achieve significant developments in Bilateral APA Process.
During the meeting, 66 MAP cases relating to Transfer Pricing issues and 42 MAP cases relating to Treaty Interpretation issues were agreed to be resolved successfully. The total amount that was locked-up in dispute in these cases is approximately Rs.5,000 crore and these cases were related to Assessment Years ranging from AY 1999-2000 to AY 2011-12. The resolved cases pertain to various issues like transfer pricing adjustments made to the international transactions in the nature of Payment of Royalty, Payment of Management Fees, Cost Contribution Arrangements, Engineering Design Services, Contract R&D Services, Investment Advisory Services, Marketing Support Services, Software Development Services, IT enabled Services (both BPO and KPO services) etc. and treaty interpretative issues in the nature of Presence of Permanent Establishment (PE) in India and Profit Attribution to such PEs, disputes pertaining to royalty income v/s business income of foreign companies, etc.
Further, during the meeting, the two Competent Authorities reached an agreement on the terms and conditions of the first ever Bilateral APA involving India and USA. Though India started its Bilateral APA process with the USA by accepting applications from the Indian taxpayers from FY 2012-13, the USA started its Bilateral Process with India only in February 2016 by way of accepting applications from US taxpayers. Within a short span of 8 months, the Agreement has been reached upon in the first ever Bilateral APA involving India and USA.
The speedy resolution of cases and agreement on Bilateral APA due to effective mechanism of development of mutual trust and cooperation between the Competent Authorities of two countries would really be a positive factor in creating a conducive atmosphere for investments and business by US Companies in India.


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  • The GST Act is divided into 25 Chapters, 162 Sections and 4 Schedules.


  • Tax on supply of goods or services rather than manufacture / production of goods, provision of services or sale of goods.
  • Supply includes:
    • all forms of supply for a consideration;
    • certain specified supplies without a consideration;
    • importation of service;
    • transaction between a principal and agent;
    • supply of any branded service by an aggregator under a brand name.
  • Reverse charge mechanism on certain supplies on recommendations of GST Council (GSTC).
  • Certain supplies declared as supply of services or that of goods:
Ø  Transfer of goods or right in goods or undivided share in goods without transfer of title Ø  Transfer of title in goods
Ø  Lease, tenancy, easement, license to occupy land, lease, letting out of building (commercial/industrial/residential) complex for business or commerce Ø  Transfer/disposal of goods forming part of business assets whether or not for a consideration
Ø  Treatment/process applied to another person’s goods Ø  Sale of business assets for recovering debt
Ø  Goods made available to any person for use, for any other purpose other than for purpose of business whether or not for consideration Ø  Goods forming part of business assets wherein any person ceases to be a taxable person except in case of transfer as a going concern or business carried by personal representative who is a taxable person
Ø  Renting of immovable property, construction of complex, building, civil structure intended for sale  
Ø  Temporary transfer/ permitting use or enjoyment of intellectual property right  
Ø  Development, design, programming, customization, adaptation, upgradation, enhancement, implementation of information technology services  
Ø  Obligation to refrain from an act/tolerate an act or situation or to do an act  
Ø  Works contract including transfer of property in goods  
Ø  Transfer of right to use any goods for any purpose  
Ø  Supply of food or drink for human consumption  
Ø  Supply of goods by unincorporated association or body of persons to a member for cash  


  • Powers to grant exemptions, by notification or by special order, given to the Central and State Governments, on the recommendation of the GST Council


Ø Normal Supply of goods Ø Earliest of:

·         Date on which the goods are removed by the supplier (where the goods are required to be removed)

·         Date on which the goods are made available to the recipient,(if goods are not required to be removed such as installed/assembled goods)

·         Date on which supplier issues invoice

·         Date on which supplier receives the payment

·         Date on which recipient shows the receipt of the goods in his books of account

Ø Continuous supply of goods Ø  Where successive statements of accounts or successive payments are involved:

·         Period to which such successive statements of accounts or successive payments relate.

Ø  Otherwise earliest of:

·         date of issue of invoice;

·         date of receipt of payment.

Ø Supply of Services Ø  If invoice issued within prescribed period, then earliest of:

·         date of issue of invoice;

·         date of receipt of payment.


Ø  If invoice issued within prescribed period, then earliest of:

·         date of completion of provision of service;

·         date of receipt of payment.


Ø  Other cases:

·         date on which recipient shows receipt of services in his books of account

Ø Continuous supply of Services Ø  Due date of payment is ascertainable from the contract:

·         date on which payment is liable to be made by recipient of service


Ø  Due date of payment not ascertainable from the contract then earliest of:

·         date of issue of invoice;

·         date of receipt of payment.


Ø  Where payment linked to completion of event:

·         time of completion of such event.


Ø Reverse Charge Ø Earliest of:

·         date of receipt of goods and /or services;

·         date of receipt of invoice;

·         date on which payment is made;

·         date of debit in books of accounts.



  • On Intra-State supplies of goods and/ or services, CGST & SGST shall be levied by the Central and State Government respectively, at the rate to be prescribed;



  • Taxable person means a person who is registered or required to be registered under Schedule III.
  • Liability to pay tax arises only when the taxable person crosses the exemption threshold i.e. [Rs. 10 lakhs]. (Rs. 5 lakh for special category States).
  • The Central / State Government and local authorities are regarded as taxable person.
  • Persons who are not regarded as taxable persons under GST:
    • an agriculturist;
    • an employee providing services to his employer;
    • person dealing with goods and/or services that are not liable to tax under the Act;
    • person receiving services from abroad up to a specified value for personal use.


  • A registered taxable person, with aggregate turnover not exceeding Rs. 50 lakhs in a financial year shall be provided an option to pay, in lieu of the tax payable by him, an amount calculated at such rate as may be prescribed, but not less than 1% of the turnover during the year, subject to following conditions:
    • The benefit of composition scheme shall not be granted to a taxable person who effects any Inter-State supplies of goods and/or services;
    • The taxable person opting for composition levy shall not collect any tax from the recipient to whom goods and/ or services are supplied;
    • No credit of input tax shall be allowed.


  • Tax is to be paid on Transaction value of supply generally i.e. the price actually paid or payable for the supply of goods and/or services.
  • Transaction value shall, inter-alia, include:
    • any taxes, duties, fees and charges levied under any statute other than CGST/SGST/IGST Act;
    • incidental taxes such as commission, packing etc. charged by the supplier to the recipient of supply;
    • royalties and licence fees related to the supply of goods and/or services;
    • subsidies provided in any form or manner including subsidies provided by the Government;
    • any discount or incentive that may be allowed after supply has been effected.


  • ITC is available for business purposes and in respect of all taxable supplies.
  • Input Tax Credit of tax paid on goods or services used for making taxable supplies by a taxable person allowed subject to four conditions:
    • possession of invoice;
    • receipt of goods or services;
    • tax actually paid to government;
    • furnishing of return.
  • Proportionate credits allowed in case inputs, inputs services and capital goods used for taxable and non-taxable supplies.
  • Negative list approach for non-allowance of ITC.
  • Full ITC allowed on capital goods in one go.
  • ITC cannot be availed on invoices which are more than one year old.
  • Unutilized ITC can be carried forward or can be claimed as refund in certain situations.
  • Manner of utilization of credit:
    • ITC of IGST can be utilized towards payment of IGST, CGST and SGST in that order;
    • ITC of CGST can be utilized towards payment of CGST and IGST in that order;
    • ITC of SGST can be utilized towards payment of SGST and IGST in that order;
    • No cross-utilization of CGST and SGST credits.
  • Input Service Distributor (ISD) can distribute ITC amongst its units located in different States or different business verticals within the State, on the strength of a prescribed document, by utilising ITC of CGST and SGST towards IGST and vice versa.
  • Where credit distributed by ISD is more than the available quantum, excess credit so distributed shall be recovered from ISD.
  • Where distribution results in excess credit with one or more supplier but no overall excess distribution by ISD, such excess credit shall be recovered from the supplier(s).


  • Registration to be obtained within 30 days from the date registration becomes due.
  • A supplier has to take registration in the State from where taxable goods and/or services are supplied.
  • Liability to be registered:
    • Every person who is registered or who holds a license under an earlier law;
    • Every person whose turnover in a year exceeds Rs. [9 lakhs]. (Rs. 4 lakhs for special category States).
  • Liability to be registered irrespective of threshold:
    • Persons making inter-State taxable supply;
    • Persons required to pay tax under reverse charge;
    • Casual and non-resident taxable persons;
    • E-Commerce operator ;
    • Persons who supply goods through e-commerce operator;
    • An aggregator who supplies services under his brand name;
    • Persons who supply goods and/or services on behalf of a registered taxable person;
    • Input Service Distributor;
    • Persons required to deduct tax at source.
  • A person, though not liable to be registered, may take voluntary registration.
  • Registration to be PAN based and is required to be obtained for each State from where taxable supplies are being made (State-wise).
  • A person having multiple business verticals in a State may obtain separate registration for each business vertical.
  • UN agencies, Embassies etc. shall be granted a Unique Identity Number instead of registration.
  • Registration shall be given by both Central and State Tax Authorities on a common e-application.
  • Registration is deemed to be granted after three common working days unless objected to.
  • Amendment of certain specified details of registration on self-service basis, for other details approval of tax authorities required.
  • Provision for surrender of registration and also for suo motu cancellation under certain circumstances.
  • Cancellation of registration under CGST Act means cancellation of registration under SGST Act and vice-versa.


  • First return: Every registered taxable person to furnish first return from the date on which he became liable to registration till the end of the month in which the registration has been granted.
  • Normally, registered taxable persons are required to file, electronically, monthly GSTR-1(for outward supplies), GSTR-2(for inward supplies) and GSTR-3(return) consisting of all details by 20th of the month succeeding the tax period.
  • Compounding taxpayers to file Quarterly returns within 18 days after end of such quarter.
  • TDS Deductor to file a return, electronically, within 10 days after the end of month in which deduction is made.
  • Input Service Distributor to file a return, electronically, within 13 days after the end of tax period
  • Casual taxpayers, non-resident taxpayers, TDS Deductors, Input service Distributors (ISDs) to file separate returns.
  • Different cut offs for filing of returns keeping in mind auto-population and matching requirements.
  • Short-filing of return is allowed, but returns filed without payment of full tax shall not be treated as a valid return for allowing ITC.
  • ITC shall be provisionally allowed on filing of return.
  • An Annual return shall be required to be filed by 31st December of the following Financial Year along with a reconciliation statement.
  • After filing of return, inward supplies details in GSTR-2 shall be matched with the corresponding outward supplies details declared by the supplier in his GSTR-1. In case of matching, ITC claimed by the recipient shall be finally accepted if matched. In case of mis-match, ITC to be disallowed after a period of two months.
  • Final return:Every registered taxable person who applies for cancellation of registration to furnish a final return within three months of the date of cancellation or date of cancellation order, whichever is later.


  • There shall be an electronic cash ledger and electronic ITC ledger
  • Every deposit made by a taxable person shall be credited to the electronic cash ledger of such person
  • ITC as self assessed in the return of a taxable person shall be credited to his electronic credit ledger.
  • Payment of Tax to be made not later than last date on which return is to be furnished.
  • Payment of tax is made by way of the debit in the electronic cash or credit ledger.
  • Where the amount available in the cash/ credit ledger falls short of the aggregate of tax, interest etc. payable, the same shall be debited in the following order:
    • interest liability related to returns of previous tax periods;
    • tax liability related to returns of previous tax periods;
    • tax liability of the current tax period; and
    • any other amount payable under the Act including the demand determined under section 51 in the order of penalty, interest and tax.
  • TDS: Certain persons including government departments, local authorities and government agencies shall deduct a part of taxes payable by the supplier. This deducted amount shall be credited to the electronic cash ledger of the supplier who can use it for discharge of his tax liability.


  • Refund of tax or interest or amount can be claimed within two years from the relevant date.
  • The limitation of two years shall not apply where such tax or interest or the amount has been paid under protest.
  • Refund of ITC allowed in case of exports or where the credit accumulation is on account of inverted duty structure.
  • Refund of ITC not allowed where the export goods are subject to Export duty under Customs Tariff Act.
  • Refund shall be granted within 90 days from the date of receipt of application.
  • In case of refund claim on account of exports, 80% of the amount of refund claim can be given immediately on a provisional basis.
  • Principle of Unjust Enrichment: Applicant shall produce documentary evidence that he has not passed on the incidence of tax on to any other person.
  • No need to furnish such evidence if the refund claim is less than Rs. 5 lakhs. Self-certification would suffice.
  • Interest payable after 90 days from the date of receipt of application till the date of refund.


  • Taxable person shall himself assess the taxes payable
  • Taxable person may request for provisional assessment in cases where he is unable to determine the value or rate of tax
  • Taxable person will have to furnish bond and security for availing this facility.
  • Provisional assessment is to be finalized within 6 months
  • After final assessment, the taxable person shall be liable to pay additional tax or may claim refund, as case may be




  • AUDIT:
  • Audit can be conducted at the place of business of the taxable person or at the office of the tax authorities.
  • Taxable person shall be informed sufficiently in advance, prior to the conduct of audit.
  • Audit to be completed within 3 months, extendable by a further period of 6 months.
  • On conclusion of audit, the proper officer shall without delay notify the taxable person of the findings, the taxable person’s rights and obligations and reasons for the findings.


  • Adjudication order shall be issued within 3 years of filing of annual return in normal cases
  • The time limit is 5 years (from the filing of annual return) in fraud/suppression cases.
  • No separate time lines for issue of SCN and adjudication order.
  • Provisions for settlement of cases at every stage, right from audit/investigation to the stage of passing of adjudication order and even thereafter.
  • Minimal penalty if the tax and interest is paid at the stage of audit/investigation.
  • The officer shall in his order set out the relevant facts and the basis of his decision.
  • No demand shall be confirmed on grounds other than the grounds specified in the notice.


  • Any amount collected as tax from customers shall be paid to account of the Government regardless of whether the supplies are taxable or not.
  • If not paid, SCN shall be issued.
  • The proper officer shall, after considering the representation if any, determine the amount.
  • The person concerned shall pay tax along with interest from the day the tax was collected till the date of payment.
  • The proper officer shall issue the order within 1 year from the date of issue of SCN.
  • The person who has ultimately borne the incidence of tax may apply for refund.
  • The proper officer may deduct the amount from any money owing to such person which is under his control or he may make a request to another officer to do so.
  • The proper officer may recover the amount by detaining and selling goods belonging to such person which are under his control, or he may make a request to another officer to do so.
  • The proper officer may, by notice in writing, require any other person from whom money is due or may become due to such person to pay the amount to the Govt.
  • Every person to whom the notice is issued shall be bound to comply with such notice.
  • The proper officer may prepare a certificate specifying the amount and send it to District Collector, who shall recover the amount as if it were an arrear of land revenue.


  • Officers to have the Power to search places and seize goods, documents etc.
  • After seizure of goods, if notice not is given within 60 days, the goods shall be returned to the person. The period is extendable up to 6 months.
  • A person can be arrested only where the amount of tax evaded exceeds Rs.25 lakhs or where it is a repeat offence.
  • If the amount of tax evaded exceeds Rs.2.5 crore, the offence is cognizable and non-bailable.
  • If the amount of tax evaded is below Rs.2.5 crore, the offence is non-cognizable and bailable.


  • No substantial penalties for minor breaches of tax regulations or procedural requirements.
  • No penalty in respect of any omission or mistake in documentation which is easily rectifiable and obviously made without fraudulent intent or gross negligence.
  • Penalty shall be commensurate with the degree and severity of the breach.
  • No penalty shall be imposed w/o issue of SCN and w/o giving PH.
  • Reasoning to be given in the order, specifying the nature of the breach and the applicable laws or procedure.
  • In case of voluntary disclosure of breach, the tax authorities may consider this fact as a potential mitigating factor when establishing a penalty for that person


Ø  Amount of tax evaded exceeds Rs.2.5 crore, or repeat offences. Ø  5 years  imprisonment plus fine


Ø  Amount of tax evaded exceeds Rs. 50 lakhs but does not exceed Rs.2.5 crore. Ø  3 years imprisonment plus fine


Ø  Amount of tax evaded exceeds Rs.25 lakhs but does not exceed Rs.50 lakhs. Ø  1 year  imprisonment plus fine



  • Any offence, either before or after institution of prosecution, can be compounded by Competent Authority on payment of compounding amount to the Central Government or the State Government.
  • Compounding to be allowed only after making payment of tax, interest and penalty involved in such offences.
  • Option of Compounding available only once.


  • First appeal against any order passed by an adjudicating authority shall lie before the First Appellate Authority.
  • Subsequent appeals lie before the Tribunal, High Court and Supreme Court.
  • One Tribunal with State-level branches.
  • Tribunal benches consisting of three members one Judicial, one CGST-Technical and one SGST-Technical.
  • Pre-deposit of 10% of the amount in dispute for filing an appeal before the First Appellate Authority and Tribunal.
  • The Department could request for higher amount of deposit in “serious cases,” where the disputed tax liability is Rs.25 crore or more.
  • First Appellate Authority/Tribunal shall hear and decide the appeal within a period of 1 year, where it is possible to do so.
  • Appeal to be filed in Supreme Court against an order of the Appellate Tribunal:
    • where two or more States or a State and the Centre have a difference of views regarding place of supply; or
    • where the matter involves two or more States or a State and Centre regarding treatment of transactions being intra-State or inter-State.
  • Certain decisions are not appealable, viz.,
    • an order for transfer of proceeding from one officer to another officer.
    • an order pertaining to seizure or retention of books of account, register and other documents.
    • an order sanctioning prosecution under the Act.
    • an order passed by the Commissioner allowing payment of tax dues in installments.


  • Advance ruling may be sought in respect of classification, method of valuation, rate of tax, admissibility of ITC etc.
  • Advance ruling is not to be given where the issue is:
    • already pending in the applicants’ case before any appellate forum;
    • the same as in a matter already decided by the Appellate Tribunal or any Court.
  • Advance ruling to be issued within 90 days.
  • Advance ruling shall be binding only on the applicant and jurisdictional tax authorities.
  • Advance ruling shall be binding unless there is a change in law or facts.
  • Advance ruling shall be void in certain circumstances.
  • Advance ruling cane be appealed against by the applicant or the tax Authority



  • A registered person can send goods for job work without payment of tax subject to conditions and restrictions specified.
  • The Principal can bring back goods after completion of job work to any of his place of business without payment of tax for supply within India or export.
  • Goods can be supplied directly from premises of job worker if Principal declares the place of business of job worker as his additional place of business.




  • E-Commerce Operators required to collect and deposit Tax at source on payments made to vendors.
  • Supplies of branded services by Aggregators to be deemed supply by Aggregator.



  • Amount of Cenvat credit carried forward in a return to be allowed as ITC. Similar provision for carry forward of Value Added Tax.
  • Carry forward allowed only if ITC admissible under the GST Laws. Procedure in this regard to be notified by Rules.
  • Unavailed Cenvat credit on capital goods, not carried forward in a return, also allowed in certain situations.
  • Credit of eligible Duties and Taxes in respect of inputs held in stock also allowed in certain situations.



















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Liberalization of the Foreign Direct Investment Policy, 2016 by India




Government of India has given its ex-post-facto approval for the FDI policy amendments announced by the Government on 20th June, 2016. The FDI policy amendments are meant to liberalise and simplify the FDI policy so as to provide ease of doing business in the country leading to larger FDI inflows contributing to growth of investment, incomes and employment.  The details are as follows:


  1. Food Products manufactured/produced in India


It has now been provided that 100% FDI under government route for trading, including through e-commerce, is permitted in respect of food products manufactured and/or produced in India.


  1. Foreign Investment in Defence Sector up to 100%


Earlier FDI regime permitted 49% FDI participation in the equity of a company under automatic route. FDI above 49% was permitted through Government approval on case to case basis, wherever it is likely to result in access to modern and ‘state-of-art’ technology in the country. In this regard, the following changes have inter-alia been brought in the FDI policy on this sector:


  1. Foreign investment beyond 49% has now been permitted through government approval route wherever it is likely to result in access to modern technology or for other reasons to be recorded.
  2. FDI limit for defence sector has also been made applicable to Manufacturing of Small Arms and Ammunitions covered under Arms Act 1959.


  1. Review of Entry Routes in Broadcasting Carriage Services

FDI policy on Broadcasting carriage services has also been amended. New sectoral caps and entry routes are as under:


Sector/Activity New Cap and Route

(1)Teleports(setting up of up-linking HUBs/Teleports);

(2)Direct to Home (DTH);

(3)Cable Networks (Multi System operators (MSOs) operating at National or State or District level and undertaking upgradation of networks towards digitalization and addressability);

(4)Mobile TV;

(5)Headend-in-the Sky Broadcasting Service(HITS)



Automatic Cable Networks (Other MSOs not undertaking upgradation of networks towards digitalization and addressability and Local Cable Operators (LCOs))
Infusion of fresh foreign investment, beyond 49% in a company not seeking license/permission from sectoral Ministry, resulting in change in the ownership pattern or transfer of stake by existing investor to new foreign investor, will require FIPB approval



The earlier FDI policy on pharmaceutical sector provides for 100% FDI under automatic route in greenfield pharma and FDI up to 100% under government approval in brownfield pharma. With the objective of promoting the development of this sector, 74% FDI under automatic route has been permitted in brownfield pharmaceuticals. FDI beyond 74% would be permitted through Government approval route.


  1. Civil Aviation Sector

(i)     The earlier FDI policy on Airports permitted 100% FDI under automatic route in Greenfield Projects and 74% FDI in Brownfield Projects under automatic route. FDI beyond 74% for Brownfield Projects is under government route.

(ii)   With a view to aid in modernization of the existing airports to establish a high standard and help ease the pressure on the existing airports, 100% FDI under automatic route has now been permitted in Brownfield Airport projects.

(iii) As per the earlier FDI policy, foreign investment up to 49% was allowed under automatic route in Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline and regional Air Transport Service. This limit has now been raised to 100%, with FDI upto 49% permitted under automatic route and FDI beyond 49% through Government approval. For NRIs, 100% FDI will continue to be allowed under automatic route. Foreign airlines would continue to be allowed to invest in capital of Indian companies operating scheduled and  non-scheduled air-transport services up to the limit of 49% of their paid up capital.


  1. Private Security Agencies

The earlier policy permitted 49% FDI under government approval route in Private Security Agencies. Since Private Security Agencies are already required to get license under PSAR Act 2005, the requirement of putting them through another line of Government approvals through FIPB has now been done away with for FDI up to 49%.  Accordingly, FDI up to 49% is now permitted under automatic route in this sector. FDI beyond 49% and upto 74% is permitted through Government approval route.


  1. Establishment of branch office, liaison office or project office

For establishment of branch office, liaison office or project office or any other place of business in India if the principal business of the applicant is Defence, Telecom, Private Security or Information and Broadcasting, it has provided that approval of Reserve Bank of India would not be required in cases where FIPB approval or license/permission by the concerned Ministry/Regulator has already been granted.


  1. Animal Husbandry

As per FDI Policy 2016, FDI in Animal Husbandry (including breeding of dogs), Pisciculture, Aquaculture and Apiculture is allowed 100% under Automatic Route under controlled conditions. The requirement of ‘controlled conditions’ for FDI in these activities has now been done away with.



  1. Single Brand Retail Trading

Local sourcing norms have been relaxed up to three years, with prior Government approval, for entities undertaking Single Brand Retail Trading of products having ‘state­ of ­art’ and ‘cutting edge’ technology. For such entities, sourcing norms will not be applicable up to three years from commencement of the business i.e. opening of the first store for entities undertaking single brand retail trading of products having ‘state-of-art’ and ‘cutting-edge’ technology and where local sourcing is not possible. Thereafter, sourcing norms would be applicable.





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Permanent Residency Status to Foreign Investors in India




Government of India  has approved the scheme for grant of Permanent Residency Status (PRS) to foreign investors subject to the relevant conditions as specified in the FDI Policy notified by the Government from time to time.

The scheme is expected to encourage foreign investment in India and facilitate Make in India Programme. Under the Scheme, suitable provisions will be incorporated in the Visa Manual to provide for the grant of PRS to foreign investors.

The PRS will be granted for a period of 10 years with multiple entry. This can be reviewed for another 10 years if the PRS holder has not come to adverse notice. The scheme will be applicable only to foreign investors fulfilling the prescribed eligibility conditions, his/her spouse and dependents. In order to avail this scheme, the foreign investor will have to invest a minimum of Rs. 10 crores to be brought within 18 months or Rs.25 crores to be brought within 36 months. Further, the foreign investment should result in generating employment to at least 20 resident Indians every financial year.

Permanent Residency Status will be granted for a period of 10 years initially with multiple entry facility, which can be renewed for another 10 years. PRS will serve as a multiple entry visa without any stay stipulation and PRS holders will be exempted from the registration requirements. PRS holders will be allowed to purchase one residential property for dwelling purpose. The spouse/ dependents of the PRS holder will be allowed to take up employment in private sector (in relaxation to salary stipulations for Employment Visa) and undertake studies in India.





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