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India releases the final rules on Country-by-Country Reporting and Master File requirements

Global Tax Update : November 2017 / India

This India newsletter explains 6 topics including " All exporters to furnish letter of undertaking (LUT) in place of a bond for export without payment of Integrated Goods and Services tax (IGST) ". (Global Tax Update:November 2017/India)

1. India releases the final rules on Country-by-Country Reporting and Master File requirements

On May 5, 2016, India introduced core elements of the Country-by-Country (“CbC”) reporting requirement and the concept of Master File in the Indian Income Tax Act, 1961 (“the Act”) through Finance Act 2016, effective from 1 April 2016.

The CBDT has on 31 October 2017 released the rules on CbC reporting and Master File requirements in India.

2. All exporters to furnish letter of undertaking (LUT) in place of a bond for export without payment of Integrated Goods and Services tax (IGST)

Goods and Services Tax (GST) law initially prescribed that export without payment of IGST could be done only after filing a bond and LUT, as applicable to the exporter.

Furnishing of bond was time consuming and caused lot of hardships to the exporters.

To ease out the export process, Government has prescribed furnishing of LUT in place of a Bond, for all exporters (including Japanese companies in India undertaking exports out of India), on complying with specified conditions.

3. Exemption from payment of GST for supplies received from unregistered persons

GST registered person was earlier liable to pay tax under reverse charge for supplies, where the aggregate value exceeded Rs. 5,000/- in a day, received from an unregistered supplier.

4. Introduction of a new invoice format for supplies to unregistered person

The Central Goods and Services Tax Rules, 2017, have been amended to introduce the Concept of “Invoice cum Bill of Supply” where a taxable person supplies taxable as well as exempted goods or services or both to an unregistered person, a single “invoice cum bill of supply” may be issued.

5. Issuance of a consolidated invoice by a banking company/financial institution/non-banking financial company

A banking company, financial institution including non-banking financial company shall issue “consolidated tax invoice”, in lieu of “tax invoice” “for supply of services made during a month” at the end of the month.

6. Changes in the Customs Valuation Rules for determining the value of imported goods

Rule 10(2) of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 which provide for inclusions in the value of imported goods to determine the Assessable Value has been amended vide Notification dated 26 September 2017.

Prior to the amendment, the Rules mandated inclusion of cost of loading, unloading and handling charges at the place of importation in the assessable value at a notional rate of 1% of the sum of FOB (Free on board) value, cost of transportation and cost of insurance irrespective of the actual cost.

 

>> Click for Japanese [インドが国別報告書及びマスターファイルに係る要件の最終規則を公表 ほか]

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