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STUDY MATERIALPROFESSIONAL PROGRAMMEADVANCED TAX LAWSAND PRACTICEMODULE 3PAPER 7ICSI House, 22, Institutional Area, Lodi Road, New Delhi 110 003tel 011-4534 1000, 4150 4444 fax 91-11-2462 6727email website

THE INSTITUTE OF COMPANY SECRETARIES OF INDIATIMING OF HEADQUARTERSMonday to FridayOffice Timings – 9.00 A.M. to 5.30 P.M.Public Dealing TimingsWithout financial transactions – 9.30 A.M. to 5.00 P.M.With financial transactions – 9.30 A.M. to 4.00 P.M.Phones41504444, fo@icsi.eduLaser Typesetting by Delhi Computer Services, Dwarka, New DelhiPrinted at

(iii)PROFESSIONAL PROGRAMMEADVANCED TAX LAWS AND PRACTICEThis Study Material is designed for the benefit of the students preparing for the abovesubject under the Professional Programme and written in lucid and simple language for thebenefit of the students.The course material is unique in its treatment of various provisions of the relevant Acts.Income Tax, Customs, Goods and Service Tax “GST” pose the peculiar problem of beingsubjected to frequent changes either by legislative amendments or by issue of notifications,orders, trade notices etc. Every effort has been made to give the latest information, whereverpossible including changes made by the Finance Act, 2017.While writing the study material an attempt has been made to present the material in aunified and cohesive manner, giving the blend of provisions of Direct Tax Laws and Indirect TaxLaws. This paper comprises two parts. The first part (Part A) deals with ‘Direct TaxManagement the second part (Part B) deals with the Customs and GST.Company Secretaryship being a professional course, the examination standards are setvery high, with emphasis on knowledge of concepts, applications, procedures and case laws,for which sole reliance on the contents of the study material may not be enough. Besides,Company Secretaries Regulations, 1982 requires the students to be conversant with theamendments to the laws made upto six months preceding the date of examination. This studymaterial may therefore be regarded as basic material and must be read along with the Bare Act,Rules, Regulations, Case Law, leading journals and financial dailies in addition to variouscirculars and notifications, etc. issued from time to time by the CBDT and CBEC as well assuggested readings.The various changes made upto 10th October, 2017 have been included in this studymaterial. However, it may happen that some developments might have taken place during theprinting of the study material and its supply to the students. The students are therefore advisedto refer to the ‘Student Company Secretary’, ‘Chartered Secretary’ and other publications forupdation of study material. In the event of any doubt, students may write to the Institute forclarification at care has been taken in publishing this study material yet the possibility of errors,omissions and/or discrepancies cannot be ruled out. This publication is released with anunderstanding that the Institute shall not be responsible for any errors, omissions and/ordiscrepancies or any action taken in that behalf.The students may note that Assessment Year for June 2018 examinations is 2018-2019.Besides all other changes made through notification etc. and made effective six months prior tothe examination will also be applicable. This study material is updated in accordance with theFinance Act, 2017 and is applicable for Assessment Year 2018-19 relevant for June 2018session onwards. GST is based on the four Acts, passed by the Parliament and related relevantrules as applicable.

(iv)PROFESSIONAL PROGRAMMESYLLABUSFORPAPER 7: ADVANCED TAX LAWS AND PRACTICE (100 Marks)Level of Knowledge: Advance KnowledgeObjective: To acquire Advance knowledge of the practical and procedural aspects of Direct and IndirectTax Laws.Detailed Contents:PART A: Direct Tax Management (30 Marks)Chapter 1: Taxation of Individual Entities, Partnership, LL.P, Companies.Chapter 2: International Taxation Covering Taxation of Non Resident Entities, Advance Ruling, TransferPricing, Direct tax Avoidance Agreement.Chapter 3: Case studies and Practical Problems covering Advance Tax Planning relating to Companiesand Business Entities.Part B: Customs Laws, Goods and Service Tax* (70 Marks)Customs Law1. IntroductionSpecial Features of Indirect Tax Levies – All Pervasive Nature, Contribution to Government Revenues;Constitutional Provisions Authorizing the Levy and Collection of Customs2. Customs Laws Levy of Customs Duties, Types of Customs Duty Leviable, Tariff Classification & Exemptions,Valuation of Imported and Exported goods Provision of Assessment, Payment of Duties, Recovery and Refund of Customs Duties Duty Drawback Procedure for Clearance of Imported and Exported Goods Transportation and Warehousing Confiscation of Goods and Conveyances and Imposition of Penalties; Search, Seizure and Arrest,Offences and Prosecution Provisions Adjudication, Appeal and Revision; Settlement of Cases, Advance Ruling Other Relevant Areas and Case Studies under Custom Laws and Rules3. Promissory Estoppel in Fiscal Laws – Principles and Applicability with reference to Indirect Taxes

(v)4. Tax Planning and Management – Scope and Management in Customs, with Specific Reference toimportant Issues in the Respective AreasGoods and Services Tax (GST)(a) The Central GST Act, 2017(b) The Integrated GST Act, 2017(c) The Union Territory GST Act, 2017(d) The GST (Compensation to States) Act, 2017th*Notified vide Notification No. 8 of 2017 dated 18 July, 2017.Earlier the syllabus of Part B was as under:Part B: Central Excise, Customs, VAT and Service Tax (70 Marks)1. IntroductionSpecial Features of Indirect Tax Levies – All Pervasive Nature, Contribution to Government Revenues; Constitutional ProvisionsAuthorizing the Levy and Collection of Duties of Central Excise and Customs2. Central Excise Laws Basis of Chargeability of Duties of Central Excise – Goods, Manufacture, Classification and Valuation of Excisable Goods CENVAT Credit Mechanism Registration, Assessment, Provisional Assessment, Manner of Payment of Duty, Exemption, Recovery and Refunds ofDuties Clearance of Excisable Goods; Invoice System, Central Excise Bonds; Maintenance of Accounts and Records and Filing ofReturns, Large Tax Payer Units, Excise Audit 2000, Audit u/s 14 and 14AA of Central Excise Act 1944 Exemption to First Clearance of Specified Goods Export Incentives under Central Excise such as SEZs, STPI, EHTP, EPZ Investigation, Adjudication, Appeal and Revision, including Appearance before CESTAT by Company Secretary asAuthorized Representative; Settlement of Cases, Advance Ruling Search, Seizure, Arrest, Prosecution and Compounding; Offences and Penalty Miscellaneous Provisions under Central Excise3. Customs Laws Levy of Customs Duties, Types of Customs Duty Leviable, Tariff Classification & Exemptions, Valuation of Imported andExported goods Provision of Assessment, Payment of Duties, Recovery and Refund of Customs Duties Duty Drawback Procedure for Clearance of Imported and Exported Goods Transportation and Warehousing Confiscation of Goods and Conveyances and Imposition of Penalties; Search, Seizure and Arrest, Offences andProsecution Provisions Adjudication, Appeal and Revision; Settlement of Cases, Advance Ruling Other Relevant Areas and Case Studies under Custom Laws and Rules

(vi)4. Promissory Estoppel in Fiscal Laws – Principles and Applicability with reference to Indirect Taxes5. Tax Planning and Management – Scope and Management in Customs, with Specific Reference to important Issues in theRespective Areas6. Background, Negative List Approach, Statutory Provisions, Taxable Services, Valuation, Point of Taxation, Place of Provision ofService, Administrative Mechanism and Procedural Aspects, Assessment, Computation, Levy, Collection and Payment ofService Tax, Exemptions, CENVAT Credit for Service Tax, Returns, Refunds, Demands, Appeals, Revisions, Advance Rulings,Settlement Commission, Audit under Section 72A of Finance Act, 1994.7. Goods and Service Tax (GST) – Concept and Developments8. Background, Concept and Mechanism of VAT, Classification, Invoicing, Exemption, Returns, Refunds, Demands, Appeals,Revisions, Liability under VAT9. Set off and Composition Scheme, Computation of VAT, Assessment, VAT on Works Contract, Right to use Property, Rate ofTax, Procedural Aspects including Registration, Preparation and Filing of E-Returns, Audit and Appearances

(vii)LIST OF RECOMMENDED BOOKSMODULE 3PAPER 7: ADVANCED TAX LAWS AND PRACTICERecommended Readings:I. Direct Taxes1.Girish Ahuja & RaviGupta:Professional Approach to Direct Taxes-Law and Practice; Bharat LawHouse (P) Ltd. 22, Tarun Enclave, Pitampura, New Delhi-110034.2.E. A. Srinivas:Corporate Tax Planning; McGraw Hill Education (India) Ltd., B-4,Sector-63, Noida – 201 301.3.Dr. V. K. Singhania:Direct Taxes Law and Practices; Taxmann Publications (P) Ltd;59/32, New Rohtak Road, New Delhi – 110 005.4.B.B. Lal and N.Vashist:Direct Taxes, Income Tax, Wealth Tax and Tax Planning; DarlingKindersley (India) Pvt. Ltd., 482, FIE, Patparganj, Delhi.- 110092II. Indirect Taxes1. GST Ready Reckoner – V.S. Datey2. A complete guide to Goods & Services Tax Ready Reckoner in Q & A Format – Bloomsbury –Dr. Sanjiv Agarwal & Sanjeev Malhotra3. Goods & Services Tax, Laws, Concepts and Impact Analysis – Bloomsbury - Dr. Sanjiv Agarwal& Sanjeev Malhotra4. GST Manual – Taxmann5. ICSI GST Educational Series and GST News LetterReferences:I. Direct Taxes1.Bare Act:Income Tax Act & Rules2.Annual Finance Act: Iyengars:Law of Income Tax; Bharat Law House Pvt. Ltd., T-1/95, MangolpuriIndustrial Area, Phase I, New Delhi-110083.4.Kanga & Palkhivala:Shalmadas Gandhi Marg, Chikal House, Opposite Bank of India,Princess Street, Mumbai5.S. C. Mishra:Transfer Pricing Manual

(viii)II. Indirect taxesR. K. Jain’s:Custom Law Manual; Centax Publications Pvt. Ltd, 1512-B, BhishmPitamah Marg (Opp. ICICI Bank of Defence Colony), New Delhi110003, India1.CharteredSecretary:ICSI, New Delhi2.E-bulletin:Available at ICSI website www.icsi.edu3.Income TaxReports:Company Law Institute of India (P) Ltd., Chennai.4.Taxmann:Taxmann Publications (P) Ltd., Chennai.5.Tax and Corporate:Referencer, Bharat Law House (P) Ltd., 22, Tarun Enclave,Pitampura, New Delhi – 110 034.6.Customs Cases:Fortnightly Reporting Journals; Indirect Tax Laws of India (P) Ltd.,Chennai.1.Journals:

(ix)ARRANGEMENT OF STUDY LESSONSPAPER 7: ADVANCED TAX LAWS AND PRACTICE (100 Marks)Lesson No.TopicPART A: DIRECT TAX MANAGEMENT (30 Marks)I.Taxation of Individual, Partnership, LLP and CompaniesII.International TaxationIII.Tax Planning and Tax ManagementPART B: CUSTOMS, GOODS AND SERVICES TAX (70 Marks)IV.Indirect Tax Laws and Practice - An IntroductionV.Customs Laws: Introduction and Basic Concepts, Valuation, Assessment of Importedand Export Goods and Procedural Aspects Introduction and Basic Concepts,Valuation, Assessment of Imported and Export Goods and Procedural AspectsVI.Customs Law: Arrival or Departure and Clearance of Imported or Export Goods,Warehousing, Duty Drawback, Baggage and Miscellaneous ProvisionsVIISearch, Seizure, Confiscation of Goods, Offences and PenaltiesVIII.Advance Ruling, Settlement Commission and Appellate ProcedureIX.Promissory Estoppel in Fiscal Laws and Tax Planning Tax ManagementXAn Overview of Goods and Services Tax LawXI.Central Goods & Services Tax Law “CGST”XII.Input Tax Credit, Job Work and Input Service DistributorXIII.Registration, Accounts and Record, Payment, Refunds, Returns, Tax Invoice, Creditand Debit Note, E way BillXIV. Assessment, Audit, Search and Seizure, Offences and PenaltiesXV.Integrated Goods and Services Tax Act, 2017XVI. The Union Territory Goods and Services Act, 2017XVII. GST Compensation CessTEST PAPERS

(x)PROFESSIONAL PROGRAMMEADVANCED TAX LAWS AND PRACTICECONTENTSLesson 1Taxation of Individual, Partnership, LLP and CompaniesPageLesson OutlineLearning ObjectivesIntroduction and Constitutional ProvisionsWhat is Finance Act? . 1124 6791122262636427281868791108 109112120 121121122124124Part I: Basic Concepts and Taxation of IndividualsBasic ConceptsComputation of Taxable Income and Tax Liability of an AssesseeTax Rates for AY 2018-19Determination of Residential Status [Section 6]Scope of Total Income [Section 5]Various Heads of IncomeIncome under the Head Salaries (Section 15 to 17)Income from House Property (Section 22 to 27)Profits and Gains of Business or Profession (Section 28 to 44DB)Capital GainsIncome from other SourcesClubbing of IncomeSet off and Carry Forward of LossesDeductions from Gross Total Income u/s 80C to 80USelf Test QuestionsPart II: Taxation of Partnership Firms/Limited Liability PartnershipAssessment as a Firm [Section 184]Taxation of Limited Liability Partnership (LLP)Self Test QuestionsPart III: Taxation of CompaniesConstitutional ProvisionsMeaning of CompanyCategories of CompaniesTax Incidence on CompanyRates of Income Tax for the Assessment Year 2018-19

(xi)PageMinimum Alternate Tax (MAT)Dividend Distribution Tax (DDT) (Section 115O)Taxation of Foreign Dividends (Section 115BBD)Self Test Questions 125131132135 137137138140140149 150 154160165 .167167168169171171172172172. .175175176176177178180182189192193198Lesson 2INTERNATIONAL TAXATIONPART I: TAXATION OF NON-RESIDENTS ENTITIESLesson OutlineLearning ObjectivesWho is a Non-Resident?Tax Incidence on Non Resident (Section 5)Business ConnectionIncomes Exempt in the hands of Non-Resident / Foreign Company [Section 10]Special provisions for computing profits and gains in case of Non-Residents[Deemed/Presumptive Income/Taxation]Charge of Tax on Incomes Arising to Non Residents or Foreign Companies –Special Rates [Section 115A to 115BBA]Special Provisions Relating to Certain Incomes of Non-Resident IndianSelf-Test QuestionsPART II: ADVANCE RULINGConcept of Advance RulingWho can seek Advance Ruling?Authority for Advance Ruling (AAR) (Section 245O)Application for Advance Ruling (Section 245Q)Powers of the Authority (Section 245U)Applicability of Advance Ruling (Section 245S)Question PrecludedAdvance Ruling to be Void [Section 245T]Self-Test QuestionsPART III: TRANSFER PRICINGIntroductionImportance of transfer pricingTransfer pricing provisions in indiaWhat is arm’s length price?Associated Enterprises (AE)Meaning of international transactionTransfer pricing – Applicability to Domestic TransactionsTransfer Pricing – MethodsReference to Transfer Pricing OfficerAdvance Pricing AgreementRoll Back Provision in APATransfer pricing – Documentation

(xii)PageTransfer Pricing – Penalty for ContraventionSelf-Test Questions.204206 51252253254254PART IV: DOUBLE TAXATION AVOIDANCE AGREEMENTSDouble Tax AvoidanceAgreements with Foreign Countries or Specified Territories (Section 90)Adoption by Central Government of Agreement between SpecifiedAssociations for Double Taxation Relief (Section 90A)Countries with which no Agreement Exists (Section 91)Necessity for DTAATaxation of Income from Air and Shipping Transport under DTAAPermanent Establishment (PE)Foreign Tax CreditPassive Foreign Investment Company (PFIC)Self-Test QuestionsLesson 3TAX PLANNING AND TAX MANAGEMENTLesson OutlineLearning ObjectivesConcept of Tax PlanningTax Planning, Tax Avoidance and Tax EvasionDifference between tax Planning, Tax Avoidance and Tax EvasionObjectives of Tax PlanningImportance of Tax PlanningEssentials of Tax PlanningTypes of Tax PlanningAreas of Tax Planning in the context of the Income-Tax Act, 1961Form of the OrganisationLocational AspectsNature of BusinessSome General Considerations Regarding New BusinessSetting up and Commencement of Business vis-à-vis Tax PlanningMeasures of Tax Planning in Relation to Setting Up and CommencementTax Planning Relating to Corporate RestructuringConcept of Reverse MergerTax Planning Relating to Financial Management DecisionsTax Planning Relating to Non-ResidentsTax Planning for Indian CollaboratorsTax Planning for EmployeesPlanning in the Context of Court Rulings and Legislative AmendmentsStatutory Force of the NotificationsOrganisation of Tax Planning CellsLesson Round UpSelf Test Questions

(xiii)PageLesson 4INDIRECT TAX LAWS AND PRACTICE -AN INTRODUCTIONLesson OutlineLearning ObjectivesIntroductionConstitutional Provisions in Relation to TaxationIndirect TaxesGoods and Service TaxLesson Round UpSelf-Test Questions. .257257258258258259260260Lesson 5CUSTOMS LAWIntroduction and Basic Concepts, Valuation, Assessment of Imported andExport goods and Procedural aspectsLesson OutlineLearning Objectives.261261PART I: INTRODUCTION AND BASIC CONCEPTS OF CUSTOMS LAWIntroductionStatutory Provisions of Customs Act, 1962Limbs of Customs LawImportant DefinitionsLevy of Custom DutyTaxable EventTypes of Duties under CustomsSelf-Test 303 .304305305305PART II: VALUATION, ASSESSMENT OF IMPORTED ANDEXPORT GOODS AND PROCEDURAL ASPECTSIntroductionValuation of Goods for Levy of Customs DutyValuation of Imported GoodsValuation of Export GoodsAssessment of DutyProvisional Assessment of Duty [Section 18]Determination of Duty Where Goods Consist of Articles Liableto Different Rates of Duty (Section 19)Re-Importation of Goods (Section 20)Duty on Pilfered Goods (Section 13)Goods Derelict, Wreck, Etc. (Section 21)

(xiv)PageAbatement of Duty on Damaged or Deteriorated Goods (Section 22)Remission of Duty on Lost, Destroyed or Abandoned Goods (Section 23)Denaturing or Mutilation of Goods (Section 24)Power to Grant Exemption from Duty (Section 25)Refund and Recovery Provisions (Section 26 To 28D)Self Test Question.306306307307310318Lesson 6CUSTOMS LAWArrival or Departure and Clearance of Imported or Export Goods, Warehousing, Duty Drawback,Baggage and Miscellaneous ProvisionsPART I: ARRIVAL OR DEPARTURE AND CLEARANCE OFIMPORTED OR EXPORT GOODSIntroductionProvisions Relating to Conveyances Carrying Imported or Export GoodsProvisions Relating to Arrival or Departure of GoodsClearances of Imported Goods And Export Goods (Section 44 To 51)Clearance of Export GoodsProcedure for Exports through Inland Container DepotsGoods in Transit (Section 52 to 56)Self Test Question.322322324329335340343346Warehousing (Section 57 to 73)Case StudiesDuty Drawback (Section 74 to 76)Baggage (Section 77 to 81)Goods Imported or Exported by Post [Section 82 to 84]Stores [Section 85 to 90].349362364372378379Provisions Relating to Coastal Goods and Vessels CarryingCoastal Goods [Section 91 to 99]Self Test Questions.381382 385385PART II: WAREHOUSING, DUTY DRAWBACK,BAGGAGE AND MISCELLANEOUS PROVISIONSLesson 7CUSTOMS LAW - SEARCH, SEIZURE, CONFISCATION OFGOODS, OFFENCES AND PENALTIESLesson OutlineLesson Objective

(xv)PageSearches, Seizure and ArrestConfiscation of Goods (Section 111 To 127)Offences and Prosecution Provisions (Section 132 to 140A)Self Test 434.437438438438439441442443443450451451. 453453454Lesson 8ADVANCE RULING, SETTLEMENT COMMISSION ANDAPPELLATE PROCEDURELesson OutlineLearning ObjectivesAdvance RulingSettlement CommissionAppellate ProceduresAdjudication and Appellate Provisions under Customs Laws(A) Appeals to Commissioner (Appeals)(Section 128)(B) Appellate Tribunal (Section 129)Lesson Round UpSelf Test QuestionsLesson 9PROMISSO

5. Tax and Corporate : Referencer, Bharat Law House (P) Ltd., 22, Tarun Enclave, Pitampura, New Delhi – 110 034. 6. Customs Cases : Fortnightly Reporting Journals; Indirect Tax Laws of India (P) Ltd., Chennai. (ix) ARRANGEMENT OF STUDY LESSONS PAPER 7: ADVANCED TAX LAWS AND PRACTICE (100 Marks) Lesson No. Topic PART A: DIRECT TAX MANAGEMENT (30 Marks) I. Taxation of Individual, Partnership .

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