Direct Tax
CBDT issues guidelines for Section 194-O
Circular No. 20 of 2023 F. NO. 370142/43/2023-TPL dated 28 December 2023
Finance Act 2020 inserted new Section 194-O, wherein it is mandatory for an e-commerce operator to deduct TDS at the rate of 1% of the gross amount of sale of goods/provision of service.
However, the board received several representations for clarifications on some practical issues in the applicability of Section 194-O after the introduction of Section. Considering this, CBDT has issued guidelines via Circular No. 20 of 2023, clarifying treatment that should be adopted for various practical difficulties in applying Section 194-O.
It provides clarification regarding various issues such as who shall deduct TDS where there are multiple e-commerce operators involved in a transaction, the calculation of gross amount for the purposes of this Section, Treatment of GST and various states taxes as well as levies when calculating Gross Amount for the purpose of Section, adjustments in case of purchase returns, discounts, etc. while calculating gross amount.
Indirect Tax
Customs
CBIC rationalizes BCD rates for cellular mobile phone parts and sub-parts
Notification No. 9/2024-Customs dated 30 January 2024 r/w Notification No. 57/2017-Customs dated 30 June 2017
CBIC has prescribed a 10% Basic Customs Duty (BCD) for specified goods used in the manufacture of cellular mobile phones. These goods include inter alia battery cover; front, middle, and back covers; main lens; SIM socket; GSM antenna/antenna of any technology; other mechanical items of plastic and metals. On the other hand, inputs or parts used to manufacture aforesaid goods shall attract Nil BCD. The aforesaid rates shall be applicable subject to the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017.
CBIC extends the validity of import duty exemptions till September 2024
Notification Nos. 6/2024-Customs and 7/2024-Customs, both dated 29 January 2024
CBIC has extended the validity of customs duty exemptions lapsing on 31 March 2024 up to 30 September 2024 under 33 Notifications. The Board has also extended the BCD and IGST exemption under Notification No. 50/2017-Customs for specified imports till 30 September.
Foreign Trade Policy
Import policy restrictions applicable only to ‘Laptops,’ ‘Tablets,’ ‘All-inone Personal Computers,’ ‘Ultra Small Form Factor Computers,’ and ‘Servers,’ clarifies DGFT
Policy Circular No. 09/2023-24 dated 12 January 2024 r/w DGFT Notification No. 23/2023 dated 3 August 2023, Notification No. 26/2023 dated 4 August 2023, Notification No. 38/2023 dated 19 October 2023 and in continuation to Policy Circular No. 6/2023-24 dated 19 October 2023
The DGFT has clarified that the import restriction is applicable to only Laptops, Tablets, All-in-one Personal Computers, Ultra Small Form Factor Computers and Servers falling under HSN Code 8471. Accordingly, imports shall be allowed against a valid authorization only for the aforesaid five item categories. The said restriction does not apply to any other goods, such as Desktop Computers, etc., under tariff head 8471.
DGFT prohibits the import of ‘Screws’ covered under HSN Code 7318
Notification No. 55/2023, dated 3 January 2024
The DGFT has prohibited the import of Screws under ITC (HS) Codes 73181110, 73181190, 73181200, 73181300, 73181400, 73181500, and 73181900. However, the import shall be free if the CIF value is INR 129 or above per kg.
DGFT eases the import policy restriction for ‘Silver’ covered under HSN Code 7106
Notification No. 57/2023, dated 15 January 2024
The import of Semi-Manufactured Silver Paste, Sheets, Plates, Strips, Tubes, Electrodes, Wires, and Silver Brazing Alloys (in any form) by Electrical, Electronics, and Engineering industries, including Glass and Solar industries as input for their manufacturing process on “Actual User” basis shall be Free. Similarly, import of given items for R&D purposes by government or Govt. Recognized Institutions shall also be Free. On the other hand, imports for any other purposes shall continue to be through specified agencies (i.e., nominated RBI and DGFT agencies) as per the earlier provisions.