GST Compendium January 2024

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Key highlights of the publication

  • Important updates/announcements: The taxability of secondment arrangements has been one of the most debated issues after the apex court’s decision regarding M/s. Northern Operating Systems Private Limited. A significant development to note is that the Board has clarified via an instruction that the ratio of this decision cannot be implicitly applied to every secondment transaction. The evaluation of the various factual matrices, mainly the terms of the agreement between the foreign entity and the group company, would be the significant factor in determining the taxability of such a transaction.
  • Key judicial pronouncements: The Supreme Court dismissed the Revenue’s appeal and upheld the Calcutta HC's decision, affirming that ITC cannot be denied due to the supplier’s default to pay tax. The HC had pertinently emphasised the trite principle that the purchasing dealer cannot be made to bear the consequences for default of the selling dealer and permitted the entitlement of ITC to the assessee.
  • Important developments in direct taxes: On the direct tax front, the Central Board of Direct Taxes has notified ITR-1 and ITR-4 for AY 2024-25, issued directions for extending the timelines for processing of ITR with refund claims for AY 2018-19 to AY 2020-21, and issued guidelines relating to TDS provisions for e-commerce operators.