Budget 2024 Updates

FM proposes to lessen tedium of TDS; reduces rates in many casesFM overhauls capital gains regime; to come into play from todayFM hikes exemption limit for long-term capital gain to Rs 1.25 lakh + hikes tax rate to 12.5% on specified financial assetsTourism: Temple corridors to be developed in BiharCGST - Finance Bill proposes to amend Sec 9 to take ENA out of purview of GST + inserts Sec 11A to regularise non-levy of tax on general practice in tradeCGST - Sub-sections to be inserted in Act to relax time-limit to avail ITC u/s 16(4) + New Sec 74A proposed to provide for common time limit for demand notices in fraud cases3.4% of GDP allocated as Capital expenditure to support infra sectorCGST - Proviso to be inserted in Sec 30(2) to provide for enabling conditions for revocation of registration + Amendment in Sec 39 to mandate return filing by TDS deductors even if there is no deduction in a particular monthIGST - Amendment proposed to prohibit refund of unutilised ITC on zero-rated supplyIncome tax - Finance bill revamps re-assessment regime againCustoms - Finance Bill proposes to amend Sec 28DA for acceptance of different types of proof of origin under FTAsFM hikes standard deduction to Rs 75K for new ITR regime + revises tax rates for all income slabs + Rs 7000 Cr revenue foregoneIncome tax - Search & Seizure cases - Block assessment is backBudget withdraws 2% equalisation levyFM reduces corporate tax rate for foreign companies to 35%FM proposes vivad se vishwas scheme + hikes monetary limits for filing appealsFM proposes 20% capital gains tax on short-term assets + listed financial assets held for more than one year to be classified as long-termGovt scraps TDS on Mutual Funds + decriminalises delay in depositing TDS + rationalisation of compounding of offences + revamps reassessment periodBudget proposes comprehensive review of I-T Act, 1961 + simplifies provisions for charities and TDSFM reduces customs duty on gold and silver to 6% + Nil BCD on nickel cathodeBudget proposes to reduce BCD on mobile phone and chargers to 15% + exempts 25 minerals from customs dutyFM exempts cancer medicines from Customs duty + amends BCD for various machinesFM proposes Rs 48 lakh expenditure outlay; 4.9% fiscal deficitFM announces Rs 1 lakh crore fund for developing space economyPromotion of Tourism - Vishnupad temple and Bodh Gaya temple corridors to be supportedFM announces over Rs 11 lakh crore capital expenditure in current fiscalGovt to invest in small Nuclear energy plants in partnership with private playersCentre to ask States to lower stamp duty for women purchasers of housesIBC - More Benches of NCLT to be set up to speed up recoveryFM spikes limit of Mudra loan to Rs 20 lakhsBudget offers financial aid to labour-intensive MSMEs in manufacturing sectorGovt announces 3 crore additional houses under PM SchemeGovt to secure Rs 15K loan for AP from multilateral agenciesGovt to frame new policy for all-round development of Bihar, Jharkhand and OdishaGovt to give one-month salary to all new recruits in formal sector through EPFOGovt to promote vegetable clusters closer to urban settlementsGovt to focus on productivity of agriculture with climate-resilient seedsFM allocates Rs 2 lakh outlay for PM's five schemes for job creation and farmersFM Nirmala Sitharaman presents 7th Union Budget in ParliamentBudget 2024: FM arrives at Parliament; Speech to begin at 11AMEconomic Survey 2023-24 - from GST PerspectiveUkrainian FM goes on tour to ChinaI-T- Additions framed u/s 69A are untenable where affidavits submitted by assessee's parents to explain source of cash deposits, were discarded by AO without consideration : ITATSurvey acknowledges productivity loss due to mental health disordersI-T- Short term capital gains returned by the assessee in terms of provisions of section 50 of the Act on assets held for a period of more than 36 months be treated as long term capital gains: ITATExpenditure on social services up from 6.7% to 7.8% of GDP: SurveyI-T-Additions framed u/s 68 are upheld where assessee is unable to prove genuineness of transaction involving purchase and sale of penny stock: ITATTrade deficit contracts to USD 78 bn from USD 126 bn in 2023I-T-Re-assessment is invalidated when there is no failure on part of assessee to make full and true disclosure of facts necessary for assessment: ITATCorporate profitability has peaked to 15-yr-old high between 2020-2023: SurveyI-T- When cash generated out of sales has been credited in the books of accounts, the provisions of Sec.69A could not be invoked: ITATBudget 2024: More relief for senior citizens & individual taxpayers on card; tweaking of capital gains tax likely; steady capital expenditure to stayI-T- If any amount invested is purely a strategic investment & for purpose of commercial expediency, then AO cannot hold such investments to be for non-business purpose: ITATGoogle backpedals on plan to scrap cookies from ChromeCus - For a HNWI individual, an expensive watch of 'Rolex' make would be his personal effect but same may not be the case if the person is of mere means - Pendant studded with diamonds not liable for confiscation: HCGovt amends Recruitment Rules for Debts Recovery TribunalGST - Even if no date, time or place of hearing is indicated in the notice issued, it was the duty of assessee to file his reply to SCN, which was admittedly received - Plea regarding violation of principles of natural justice cannot be countenanced: HCAbhinav Bindra conferred with Olympic OrderGST - Mismatch between value of e-way bills generated on portal and returns filed in Form GSTR-3B - Petitioner did not provide a comprehensive explanation - To remit sum of Rs.3.50 crores within six weeks - Matter remanded: HCHackers mercilessly hack Bangladesh PM’s website along with police portalsGST - Rule 30 of Rules, 2017 - Assessing officer ought to have issued summons and obtained clarification rather than estimating the outward supply value at 110% of purchase value - Order set aside and matter remanded subject to remit of 10% disputed tax demand: HCUS law-makers call for resignation of Secret Service chief in Trump assassination caseGST - Net ITC shown incorrectly - An inadvertent error was committed and such error was rectified, albeit irregularly, however, sum recovered from petitioner's bank account - Order set aside and matter remanded: HCKarnataka IT Industries piling pressure on govt to extend working hoursGST - Since notification is declared unconstitutional, Amount of IGST paid pursuant to Entry No. 10 of Notification No. 10 of 2017 is to be refunded along with statutory interest: HCStudy says earth’s water depleting fastFDI inflows slide to USD 26.5 bn in 2024 from USD 42 bn in 2023: Economic Survey
Why Country of Origin is Important ?

JUNE 13, 2024

By Neeraj Prasad, IRS (C & IT)

DETERMINATION of Country of Origin (CoO) for all imports as well as exports of goods is based on the concept of Rules of Origin (ROO), and are of two types - Preferential Rules of Origin and Non- Preferential Rules of Origin. While Preferential Rules of Origin are primarily adjuncts of Agreements between its countries or trade blocks extending most favoured/preferential treatment to each other; they are used to confer concessions to goods of the concerned parties. Non-Preferential Rules of Origin apply to imports from all countries other than those covered by preferential treatment for the purpose of appropriate tariffs, quotas, trade protection measures such as anti-dumping, safeguards & marking of goods, statistical purposes, etc.

The contours on which Country of Origin are to be determined are stated in the WTO Agreement on Rules of Origin, whose technical foundation are based on the principles enunciated in Annexure K of the revised Kyoto Convention, which is about simplification and standardisation of Customs procedures, negotiated under the aegis of World Customs Organisation.

Annexure K of the revised Kyoto Convention provides the basis for signatories to determine the origin, both of goods produced in more than one country, and goods which are produce of one country; For latter, the criteria of Wholly Obtained product is used, and for former the origin of goods is required to be determined with reference to the last / final country in which Substantial Transformation of the goods took place. Substantial Transformation is to be determined by applying one of three different methods on a standalone basis or in combination; percentage of value added; change in tariff heading; specified process of manufacture.

While India has a series of notified Preferential Rules of Origin as in the case of, Generalised System of Preferences (GSP), Global System of Trade Preferences (GSTP), SAARC Preferential Trading Agreement (SAPTA), Asia-Pacific Trade Agreement (APTA), India-Sri Lanka Free Trade Agreement (ISLFTA) and Indo-Thailand Free Trade Agreement etc. These arrangements / agreements prescribe Rules of Origin which have to be met for imports/ exports to be eligible for tariff preference. In the Finance Act of 2020, amendments have been made in the Customs Act to incorporate Section 28DA followed by Customs Administration of Rules of Origin under Trade Agreements Rules, 2020, which essentially prescribes requirements when an importer is making claim for preferential rate of duty, in terms of any trade agreement.

There is reference to Non-Preferential Rules of Origin in para 2.90 of the Handbook of Procedure of the Foreign Trade Policy. However, we are still to have a legally binding full-fledged Non-Preferential Rules of Origin regime, without which the basis for declaring the CoO for the entire gamut of Exim trade, remain inadequately addressed, and is a major regulatory vacuum.

The Ministry of Consumer Affairs, Food and Public Distribution has issued Consumer Protection (E-Commerce) Rules, 2020 which have come into force from July 23, 2020. The rules elaborate on their scope and applicability stating the duties and liabilities of the e-commerce entities, and of the sellers offering their goods or services through a marketplace e-commerce entity. The rules are fashioned on the draft National E-Commerce Policy released by the government in early 2019. Declaration of Country of Origin (CoO) has been made mandatory in these rules. Further, e-commerce companies have been directed to tag 'country of origin' on all items on their platforms by 30 September, 2020 by the Department for Promotion of Industry and Internal Trade (DPIIT). Further, the Legal Metrology (Packaged Commodities) Rules, 2011, requires a declaration of 'country of origin' or 'country of manufacture' or 'country of assembly' on the imported products, and the requirement of indicating origin of goods imported/exported has also been mentioned in Section 71 of the Geographical Indications of Goods (Registration and Protection) Act, 1999.

These developments, in many measures, are a result of a series of PILs which were filed in various HCs, amongst other emergent developments. In one of the PILs, Delhi High Court on July 01, 2020, issued notice to the Centre, in a case wherein the petitioner sought directions to the Centre to display the name of manufacturing country on E-commerce websites. Similar petition has also been filed in the Hon. SC. However, on what basis the CoO would be declared is an inadequately addressed issue, in our extant regulatory framework.

The provisions of HBP, Legal Metrology Act, Geographical Indicators Act, are inadequate as they don't contain all the elements which is necessary for having a comprehensive "Rules of Origin - ROO" regime in terms of the WTO Agreement on Rules of Origin, and Annexure K of the revised Kyoto Convention.

A HSN chapter wise joint Harmonization Work Programme for developing ROO criteria is being carried out under the joint aegis of WCO/WTO, but it appears, the joint Harmonization Work Programme which is in the works for a while now, is going to take some more time before all outstanding issues are finalised. Meanwhile, most of the major trading nations/blocs have already enacted their Non-Preferential Rules of Origin framework such as Australia, Japan, People's Republic of China, European Union etc.

We are lagging behind in the regulatory catch up on this issue by more than a decade now, in comparison to other major trading powers with whom we wish to compete. While having a legally binding Non-Preferential rules of Origin regime is certainly need of the hour, care would have to be taken that the framework is not complicated to implement, especially in terms of the substantial transformation criteria, and has a very definitive and empowered administrative mechanism for implementing it. Whatever be the approach adopted for legislating Non-Preferential Rules of Origin, it has to be an ambiguity free, comprehensive legal and administrative framework.

[The views expressed are strictly personal.]

(DISCLAIMER : The views expressed are strictly of the author and Taxindiaonline.com doesn't necessarily subscribe to the same. Taxindiaonline.com Pvt. Ltd. is not responsible or liable for any loss or damage caused to anyone due to any interpretation, error, omission in the articles being hosted on the site)


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