Page 48 - GSTL_18th June 2020_Vol 37_Part 3

J82 GST LAW TIMES [ Vol. 37
paid to independent Directors was in the nature of professional fee, which was
taxed in line with provisions of the I-T Act.
The authorities also eased refund of accumulated Input Tax Credit
availed on imports, input service distributor invoices for tax on services availed
of across branches and reverse charge.
[Source : The Times of India, New Delhi, dated 11-6-2020]

Telcos seek tax relief on unpaid bills
India’s telecom operators want the Goods and Services Tax to be levied
on actual payments received from customers - and not on invoices raised - so
that they don’t have to pay GST on delayed payments or defaults, which are on
the rise due to the COVID-19 outbreak.
The operators, including Reliance Jio Infocomm, Vodafone Idea and
Bharti Airtel, are seeking the change for the 18% GST levied on telecom services
for a six-month period.
Experts said the problem of rising defaults is causing financial stress in
telecom companies, given the tough economic conditions after the nationwide
lockdown was imposed in March.
Many customers have defaulted or postponed bill payments due to job
losses, salary cuts, business closures and also a general breakdown in corporate
payment cycles, they said.
“Various taxpayers including the telecom companies are demanding that
they should be allowed to pay GST on actual receipts as against on the date of
raising invoice as there are huge cashflow and working capital issues,” said Ab-
hishek A. Rastogi, a Partner at Khaitan & Co. “GST on bad debts is a real issue
amid the COVID-19 pandemic and unless something is done, this could result in
litigation.”
“With most businesses having apprehensions on recoverability or antici-
pation of delayed collections, the Government could consider relief proposals
sought by businesses on GST being payable on receipt basis vis-à-vis mile-
stones/billing prescribed currently,” said Abhishek Jain, a Tax Partner at EY.
[Source : The Economic Times, New Delhi, dated 9-6-2020]

AAR order may give taxman new fang : Experts

The AAR’s recent judgment on Tiger Global will give ammunition to tax
officers to go beyond the legal form of an entity claiming tax exemption under
bilateral treaties and assess its management and control, experts said.
The Authority for Advance Rulings (AAR) in a recent order rejected
Tiger Global’s application for exemption from payment of capital gains tax on
sale of its stake in Flipkart to Walmart in 2018. US-based PE firm Tiger Global
had invested in Flipkart through its Mauritius arm.
The AAR, in its ruling, said the investment was routed through the Mau-
ritius entity only to benefit from the India-Mauritius tax treaty while the ‘head
and brain’ of the company was in the US.

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