Top

Newsletter - April 2022

The war between Russia and Ukraine continues - what seemed like a swift and quick political move by Russia is getting to be a protracted war with intermittent ceasefires. As it is said, one should not try and predict anything, especially about the future. At the same time, China has put Shanghai in a lockdown over Covid fears and Sri Lanka continues to suffer economically due to poor decisions by the Government.

The power vested in the governments and a few individuals can have some significant implications for the public. Elon Musk's decision to acquire Twitter and take it private, is another example of extreme power getting vested in the hands of a few people. While Elon Musk says his intentions are to encourage freedom of speech, having the worlds 'town hall' in the hands of an individual leaves it open to his whims and has the potential for abuse. We already saw this with Facebook being used to meddle in the US elections in 2016. 

Business dynamics remain highly volatile with higher commodity prices and inflation. Interest rates seem to be inching higher too and at the same time the wage bill for a lot of companies is seeing a jump. Profit margins will need to be monitored closely and investments in capacity need to be recalibrated to see if the increased costs of capital inputs require anything to be re-planned. 

Despite the challenges, demand is great for most businesses and it is great to be able to make more human connections as Covid restrictions have been relaxed. While there is a small wave of Covid that seems to be imminent, we hope you stay safe and in good health.

INDIRECT TAX (GST)

HIGH COURT OF GUJARAT - ORDER BLOCKING OF ECL WITHOUT RECORDING REASON IN WRITING IS ERRONEOUS
 
The Government has introduced Rule 86A to block ineligible or fraudulently availed Input Tax Credit (ITC) by the taxpayers vide Notification No. 75/2019 dated 26.12.2019. As per this rule, the Commissioner or any officer authorized by him can block the ITC available in the Electronic credit ledger (ECL) of the taxpayer if he has ‘reasons to believe’ that taxpayer has fraudulently availed ITC. This Rule was inserted to curb the malpractice of fake invoicing without actual supply of goods.  Recently, Hon’ble High Court of Gujarat has allowed the writ application filed by the petitioner M/s New Nalbandh Traders and order of blocking of ECL is quashed and set aside. The brief analysis of said case law is enclosed herewith.
 
To know more in detail, please click here.

 

Newsletter - April 2022
Articleship at GBCA