Direct Tax
CBDT notifies rule for determination of value of perquisite in respect of residential accomodation provided by employer
Press release dated 19 August 2023
- The Central Board of Direct Taxes has modified Rule 3 (Valuation of perquisites) of the Income –Tax Rules, 1961 for amending the calculation of perquisite with regard to the value of rent-free or concessional accommodation provided by an employer to its employees.
- The categorization and limits of the population are now based on the 2011 census as against the 2001 census.
- The revised limits of population are now less than 15 lakhs, 15 to 40 lakhs and more than INR 4 million. The perquisite rates against these limits are 5%, 7.5% and 10%, respectively.
- There has been a reduction in the perquisite rates, which earlier were 7.5%, 10% and 15% against population limits of less than INR 1 million, 1 million to 2.5 million and more than 2.5 million, respectively.
Rule inserted for calculation of amount of income chargeable to tax in case of sum received under a life insurance policy
Notification G.S.R. 604(E) NO. 61/2023/ F.NO.370142/28/2023-TPL dated 16 August 2023
- Rule 11UACA has been inserted for tax calculation on life insurance policy amount under clause (xiii) of subsection (2) of Section 56, i.e., where any person receives any sum under a life insurance policy other than a unit–linked insurance plan (ULIP) where aggregate premium paid exceeds Rs. 5 lakhs then the sum received will be chargeable to tax in the year when such sum is received and shall be computed based on the method given in the rule.
- If this amount is received for the first time under the life insurance policy, income to be offered to tax shall be the difference between the amount received and the aggregate of premium paid during the term of the policy till the date on which such amount is received.
- If any amount from the life insurance policy is received subsequent to the case discussed above, the chargeable income will be the difference between the amount received and the aggregate of premium paid during this period,i.e., the period after receiving the amount of the first time.
- The aggregate of premium paid shall not be claimed as a deduction under any other provision of the Act.
- This income shall be offered under the head “Income from Other Sources.”
Indirect Tax
Goods and Services Tax
GST Council’s nail in the coffin for online gaming industry
Excerpts from various sources
During its 51st meeting held in the first week of August, the GST Council stuck to its decision to levy a 28% tax on the face value of entry-level bets placed on online gaming, horse racing, and casinos w.e.f. 1 October 2023. Following this, the Parliament passed the Bills to amend the central GST legislation to specifically define online gaming, online money gaming, virtual digital assets used to play online games and suppliers in case of online gaming, thus paving the way for implementation of higher taxation of online gaming industry.
CBIC notifies the recommendations of 50th GST Council meeting
Excerpts from various sources
The CBIC issued various Notifications to implement the decisions of GST Council’s 50th meeting, the key highlights of these updates can be viewed here.
Foreign Trade Policy
Import of laptops, tablets, all-in-one PCs, and servers to be ‘restricted’ from 1 November 2023
Notification No. 23/2023 dated 3 August 2023 r/w Notification No. 26/2023 dated 4 August 2023
The Central Government has notified restrictions on the import of Laptops, Tablets, All-in-one Personal Computers, Ultra Small Form Factor Computers and Servers falling under HSN 8471, w.e.f. 1 November 2023. Accordingly, their imports would be allowed against a valid License for Restricted Imports, except in the following cases:
- Imports under Personal Baggage Rules, as amended from time to time.
- Import of 1 Laptop, Tablet, All-in-one Personal Computer, or Ultra Small Form Factor Computers, including those purchased from e-commerce portals, through post or courier.
- Import of up to 20 such items per consignment for the purpose of R&D, Testing, Benchmarking and Evaluation, Repair and Re-export, Product Development purposes. After the intended purpose, the products would either be destroyed beyond use or re-exported.
- Re-import of goods repaired abroad.
- Said products are an essential part of a Capital Good.
As a liberal transitional arrangement, the import consignments can be cleared till 30 October 2023 without a License for Restricted Imports.
Implementation of Track and Trace system for export of Pharmaceuticals and drug consignments extended
Public Notice No. 26/2023 dated 4 August 2023
The date for implementation of Track and Trace system for the export of drug formulations with respect to maintaining the Parent-Child relationship in packaging levels and it’s uploading on the Central Portal has been extended up to 1 February 2024 for both SSI and non-SSI manufactured drugs.
Revision in registration fees under Steel Import Monitoring System (SIMS)
Notification No. 28/2023 dated 28 August 2023
The Directorate General of Foreign Trade (DGFT) has simplified the fee structure for registration under SIMS with immediate effect. Accordingly, instead of the erstwhile registration fee of INR 1 per thousand of CIF value, subject to a minimum of INR 500 and a maximum of INR 0.1 million, the importer would now be required to pay a flat fee of INR 500.
Customs
CBIC amends the Deferred Payment of Import Duty Rules
Notification No. 58/2023-Cus (N.T.) dated 3 August 2023
The Central Board of Indirect Taxes and Customs (CBIC) has amended the Deferred Payment of Import Duty Rules, 2016, to allow the Central Government to allow deferred payment to be made a different due date under exceptional circumstances, as well as to permit the eligible importer to make deferred payment if he has:
- Paid the duty for a bill of entry within the due date in terms of Rule 4; and
- Paid the differential duty for the same bill of entry along with interest on account of reassessment within one day (excluding holidays).