Changes Relating to Cash Payments/Receipts

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New Changes Relating to Cash Payments/Receipts and reporting related to MCA and in Income tax return with Effect from 01.04.2017  

Section 269ST which has been newly inserted provides that no person shall receive an amount of two lakh rupees or more-

  1. In aggregate from a person in a day
  1. In respect of a single transaction
  1. In respect of transaction relating to one event or occasion from a person

Otherwise, than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account.

The section is not applicable to the following:

  • Government
  • Any banking company
  • Post office savings banks
  • Co-operative banks
  • Any other person as notified by the Central Government

Transactions of the nature referred to in Section 271 DA in the Act shall provide for levy of penalty on a person who receives a sum in contravention of the provisions of the proposed section 269ST. The sum equal to the amount of receipt shall be levied as penalty by the Joint Commissioner.

Important Points in respect of Section 269ST and Section 271D and other Cash Restrictions are as follows:

Relating to Cash Receipts

1)      The provision restricts the receipt of cash above Rs. 2 lacs:

Any person who receives above Rs. 2 lacs in cash will be liable to penalty equivalent to the amount received however there is no restriction on payment of cash under this section.

2)      Receiving cash in a day from a person above Rs. 2 lacs is not allowed:

The cash receipt of more than Rs. 2 lacs from a single person in a day is not allowed even though the amount has been paid in multiple transactions during the day.

3)      Receipt exceeding Rs. 2 lacs for a single transaction or single event is not allowed.

Relating to Cash Payments

1)      Cash Payments above Rs. 10000/-:

The earlier provision U/S 40A(3) restricting cash payments above Rs. 20000 for business purposes has also been amended. The limit for payment of expenses by Cash for both Capital and Revenue expenditure has been reduced from Rs. 20000 to Rs. 10000 per day in aggregate per person.

2)      Now cash payments above Rs. 10,000/- shall not be allowed as expense in the income tax return.

For Capital Expenditure the depreciation shall not be allowed on Capital Asset in case of payment made in cash.

3)      Cash donations exceeding Rs.2, 000 will not be eligible for education under Section 80G.

Consequently:

  1. The limit for receipt of amount in Cash has been prescribed as 2, 00,000.
  1. In case of violation of such provision equivalent penalty shall be leviable U/s 271DA of Income Tax Act.
  1. If a person accepts amount of Rs.2, 00,000 or more

         By Cash either in one transaction or

         From one person in aggregate in a day or

         In relation to one event or occasion from a person

He /she shall be liable for equivalent amount of penalty under Section 271DA.

  1. Since cash receipts exceeding Rs. 2 lacs have been made liable for equivalent penalty the TCS provisions requiring collection of tax @ 1% on cash sales exceeding Rs. 5 lacs in case of bullion/jewellery and Rs. 2 lacs in case of other goods/ services has been withdrawn.

CASH REPORTING REQUIRED IN INCOME TAX RETURN FORM ITR-1 & ITR-4S INTRODUCED FOR ASST YEAR 17-18

CBDT notified the ITR forms for assessment year 2017-18 on 1st April 2017. ITR form 1 which is for person having taxable income less than 50lacs and ITR 4S for deemed income under Section 44AD are introduced requiring declaration of cash deposited during demonetization period i.e. 09.11.16 to 31.12.16. Column Part-E of the ITR-1 form is added requiring information on cash deposits during such period if the “aggregate cash deposits” during this period were Rs 2 lakhs or more.

CASH REPORTING AS PER MCA

The Ministry of Corporate Affairs has made amendment in the Companies Act, 2013 to add provisions for Companies  to  disclose details of SBN in balance sheet held and transacted during demonetization period from 08-11-2016 to 30-12-2016.

 1) The following clause shall be inserted in Schedule III, in Division I, in Part I under the heading “General instructions for preparation of Balance Sheet” in paragraph 6:

“Every company shall disclose the details of Specified Bank Notes (SBN) held and transacted during the period from 8th November, 2016 to 30th December, 2016 as provided in the Table below:

  SBNs Other Denomination Notes Total
Closing cash in hand as on 08.11.2016
(+) Permitted receipts
(-) Permitted payments
(-) Amount deposited in Banks
Closing cash in hand as on 30.12.2016

 

For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.”.

2) The following clause shall be inserted in the principal Act, in Schedule III, in Division II, in Part I under the heading “General instructions for preparation of Balance Sheet” in paragraph 6:

 “Every company shall disclose the details of Specified Bank Notes (SBN) held and transacted during the period 08/11/2016 to 30/12/2016 as provided in the Table below:

  SBNs Other Denomination Notes Total
Closing cash in hand as on 08.11.2016
(+) Permitted receipts
(-) Permitted payments
(-) Amount deposited in Banks
Closing cash in hand as on 30.12.2016

 For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.”.

3) MCA has also made amendments in the Companies (Audit and Auditors) Rules, 2014 to add provisions for auditors to report on company disclosure of SBN during demonetization period from 08-11-2016 to 30-12-2016.

In rule 11, the following clause shall be inserted:

“Whether the company had provided requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 and if so, whether these are in accordance with the books of accounts maintained by the company.”

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Disclaimer:

All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.

The visitors may visit the web site of Government site Like Income Tax Department, Services Tax, Excise, Etc for resolving their doubts or for clarifications.

 

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OVERVIEW ON STATEMENT OF FINANCIAL TRANSACTIONS (SFT)

1 (2)

Any person who is liable for audit under section 44AB of the Act and Receipt of cash payment exceeding two lakh rupees for sale, by any person, of goods or services of any nature – Make Sure your Statement of Financial Transactions (SFT) in Form 61A  for financial year 2016-2017 is to be filled by you till the May 31st, 2017

Taxpayers who are liable for audit under section 44AB is a new inclusion who are liable for reporting the transactions from the financial year 2016-17 onwards. This will create huge database for the government to do an effective cleaning up of the parallel economy.

The CBDT in its press release dated 22.12.2016 has clarified that besides its Notification No.91/2016 dated 06.10.2016 that the aggregate of cash receipt during the year is not the benchmark for reporting. In other words, the requirement under SFT reporting is receipt of cash payment exceeding Rs.2 lakhs or more for sale of goods or services per transaction.

Every person, listed in section 285BA(1) is under an obligation to furnish a periodic statement of specified financial transactions (ISFT) as prescribed under the Income Tax Rules. Rule 114E of the Income Tax Rules, as amended w.e.f. 01.04.16, specifies the nature and value of reportable transactions, periodicity of furnishing of SFT, format of SFT, etc.

In order to reduce generation and circulation of domestic black money the Finance Act 2017 has imposed a prohibition on receipt of cash payments of rupees Two lakhs and above under new section 269ST, applicable w.e.f. 01.04.2017. Any contravention of the aforesaid provision would invite penalty on the recipient under Section 271DA which shall be equivalent to the amount of cash received. However, there would be no penalty if there is good and sufficient reason for contravention of such provision.

To keep a watch on high value transactions undertaken by the taxpayer, the Income-Tax law has framed the new concept of furnishing of Statement of Financial Transactions (SFT) in Form No 61A. It has replaced earlier annual information return reporting.  All business assesses liable under tax audit, various financial institutions and professionals will have to report a slew of high-value transactions such as cash deposit, credit card payments, share sale, property deals, debentures and mutual fund units among others. All these transactions are to be reported in a separate statement which will be Statement of Financial transactions (SFT).

As far as sale of goods or services are concerned, it would be interesting to analyze as to how these two machineries are going to supplement each other.

Rule 114E: Furnishing of statement of financial transaction: [w.e.f . 01.04.16]

  1. Rule 114E. (1)The statement of financial transaction required to be furnished under sub-section (1) of section 285BA of the Act shall be furnished in respect of a financial year in Form No. 61A and shall be verified in the manner indicated therein.

(2) The statement referred to above shall be furnished by every person mentioned in column (3) of the Table below in respect of all the transactions of the nature and value specified in the corresponding entry in column (2) of the said Table in accordance with the provisions of sub-rule (3), which are registered or recorded by him on or after the 1st day of April, 2016, namely:—

No.* Nature and value of transaction Reporting person
(1) (2) (3)
10 Purchase or sale by any person of immovable property for an amount of thirty lakh rupees or more or valued by the stamp valuation authority referred to in section 50C of the Act at thirty lakh rupees or more. Inspector-General appointed under section 3 of the Registration Act, 1908 or Registrar or Sub-Registrar appointed under section 6 of that Act.
11. Receipt of cash payment exceeding two lakh rupees for sale, by any person, of goods or services of any nature (other than those specified at Sl. Nos. 1 to 10 of this rule, if any.) Any person who is liable for audit under section 44AB of the Act.

* Only items relevant to the discussion of this article are listed.

(3) The reporting person mentioned in column (3) of the Table under sub-rule (2) (other than the person at Sl. No. 10 and Sl. No. 11 w.e.f. 06.10.16)** shall, while aggregating the amounts for determining the threshold amount for reporting in respect of any person as specified in column (2) of the said Table,—

(a) take into account all the accounts of the same nature as specified in column (2) of the said Table maintained in respect of that person during the financial year;
(b) aggregate all the transactions of the same nature as specified in column (2) of the said Table recorded in respect of that person during the financial year;
(c) attribute the entire value of the transaction or the aggregated value of all the transactions to all the persons, in a case where the account is maintained or transaction is recorded in the name of more than one person;
(d) apply the threshold limit separately to deposits and withdrawals in respect of transaction specified in item (c) under column (2), against Sl. No. 1 of the said Table.

(5) The statement of financial transactions referred to in sub-rule (1) in Form 61A shall be furnished on or before the 31st May, immediately following the financial year in which the transaction is registered or recorded.

** As per Notification No. 91/2016

(ALERT: As per sec. 285BA, r.w.r. 114E(6)(a) every reporting person mentioned in column (3) of the table under sub-rule (2) of rule 114E should obtain a registration number from IT Department for the purpose of filing Statement of Financial Transactions [SFT] in Form No. 61A.

CBDT vide Notification No. 13 of 2016, dt. 30.12.16 explained the procedure for Registration and generation of ITD registered Entity Identification Number [ITDREIN])

Issues:

(i) Reporting in Form 61A [in case of transaction No.11 mentioned in Rule 114E(2) above] applies only to 44AB audit cases.
(ii) The norms of aggregation contained in sub-rule 3 of Rule 114E have been amended vide CBDT’s Notification No. 91/2016, dated 6th October, 2016; clearly indicating that the said transactions do not require aggregation and the reporting requirement under Statement of Financial Transactions [SFT] for this purpose is on receipt of cash payment exceeding Rupees Two Lakh for sale of goods or services PER TRANSACTION. [CBDT press release dated 22.12.16]

Section 269ST inserted by the F.A. 2017: 

  1. 269ST.No person shall receive an amount of two lakh rupees or more—
(a) in aggregate from a person in a day; or
(b) in respect of a single transaction; or
(c) in respect of transactions relating to one event or occasion from a person, otherwise than by an account-payee cheque or an account-payee bank draft or use of electronic clearing system through a bank account:

Comparison:

On one hand any person who is liable for audit under section 44AB of the Act is liable to report, on yearly basis, all his transactions involving receipt of cash payment exceeding two lakh rupees for sale of goods or services of any nature in Form 61A electronically.

On the other hand, as per newly introduced section 269ST, there is equivalent penalty on receipt of cash payments of rupees Two lakhs or above, in the circumstances as specified in clause (a) to (c) of S. 269ST(1)!!

Thus, these two machineries of the Act are clearly supporting each other for effective implementation of the legislative intent to curb black money through restrictions on cash transactions above specified limits. This is further explained below by way of comparative chart in the context of transactions of sale of goods or services.

5.1 Applicability of Rule 114E and S. 269ST in sales transactions

Sr. No. Nature of Transaction S. 269 ST w.e.f. 01.04.2017 applicable Yearly Reporting in Form 61A w.e.f. (01.04.16)
(1) (2) (3) (4)
1 Single Bill below Rs. 2,00,000/-.
1.1 - Full Recovery in cash NO NO
1.2 - Part recovery in cash NO NO
1.3 - Full recovery by Cheque NO NO
2 Single Bill exceeding Rs. 2,00,000/-.
2.1 - Full Recovery in cash on single occasion YES YES
2.2 - Part recovery in cash below Rs. 2 Lacs NO NO
2.3  – Part recovery in cash above Rs. 2 Lacs on single occasion YES YES
2.4 - Part recovery in cash above Rs. 2 Lacs on multiple occasions but not a single receipt exceeds Rs. 2 Lacs YES NO
2.5 - Full recovery by Cheque NO NO
3 Multiple Bills issued during year to same person and the aggregate bill amount exceeds Rs. 2,00,000/-. (However, not even a single bill exceeds Rs. 2 Lacs)
3.1 - Full Recovery in cash on single occasion YES YES
3.2 - Part recovery in cash above Rs. 2 Lacs on multiple occasions (on different days) but not a single receipt exceeds Rs. 2 Lacs NO NO
3.3 - Part recovery in cash above Rs. 2 Lacs on multiple occasions (IN SINGLE DAY) but not a single receipt exceeds Rs. 2 Lacs YES NO*
3.4  – Part recovery in cash above Rs. 2 Lacs on single occasion YES YES
3.5 - Full recovery by Cheque NO NO

 Assumptions:

- Multiple bills issued to a person do NOT relate to one event or occasion
- ‘On single occasion’ means, at a moment in a day

*Refer to CBDT’s press release, dt. 22.12.16 as discussed above

 NOTE: In case of –

- multiple Bills issued during year to same person and the aggregate bill amount exceeds Rs. 2,00,000/-; and
- One or more bills exceed Rs. 2 Lakh,

assessee has to establish one to one correlation in books of account between bills issued and cash receipts from time-to-time, so as to check applicability of section 269ST.

Therefore, dealers should specifically mention on every cash receipt the sale Bill No. and date against which the cash is accepted.

Key points for understanding the Statement of Financial reporting

  • Requirement of filing Annual Information Return (AIR) is now being replaced by Statement of Financial Transactions (SFT).
  • SFTs have to be filed in separate form and not along with Income Tax (IT) returns.
  • The form for SFT reporting is Form 61A. It consists of 4 parts.
  • The due date for filing first SFT for financial year 2016-2017 is May 31, 2017.
  • It is applicable for all the business taxpayers liable for tax audit, professionals, and financial institutions.
  • Entities that will report are banks, professionals, fund houses, forex dealers, post office, nidhis, non-banking finance companies, property registrars, companies issuing bonds and debentures, and listed companies buying back shares from specific persons.
  • Changes have created new classes of first time filers who have to file SFT of specified transactions for FY 2016-17.
  • Salaried individuals are not required to file for statement of financial transactions (SFT)
  • The nature of transactions includes cash payment for purchase of demand drafts or pay orders of Rs 10 lakh or more in a year; cash payment of Rs 10 lakh or more for purchase of prepaid RBI instruments, cash deposit or withdrawal of Rs 50 lakh or more from current account; one-time deposit of Rs 10 lakh or more with banks, nidhis, NBFCs and post offices; payment of Rs 1 lakh or more in cash and Rs 10 lakh or more by other mode against credit card bill issued to a person during the year; and property registrars for deals worth Rs 30 lakh or more.
  • While reporting the transaction in Form 61 ( Statement of Financial transaction) a business taxpayer will have to take into account all the accounts of the same nature maintained in respect of a person during a financial year; also, while attributing the entire value of the transactions to all the persons in cases where the account is maintained or transactions recorded in the name of more than one person.
  • Penalty on delay is Rs. 100 per day, if notice not received, else upto Rs 500/ day
  • Filing of inaccurate information will attract penalty of Rs 50,000.

Conclusion:

There is a notable difference between the two provisions as discussed above. Section 269ST applies to transactions of receipt of money of Two Lakh rupees or more, whereas reporting of SFT, as implemented by Rule 114E, applies to receipt of cash payment exceeding Two Lakh rupees. Thus, the sales transactions involving receipt of cash of exactly Rs. Two lakhs will go unreported in Form 61A under Rule 114E, which are, in fact, liable to be booked under S. 269ST, read with section 271DA of the Act.

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W: www.carajput.com    E: info@carajput.com   T: 011-233-4-3333, 9-555-555-480

Disclaimer:

All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.

The visitors may visit the web site of Government site Like Income Tax Department, Services Tax, Excise, Etc for resolving their doubts or for clarifications.

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FAQs on GST

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Question   Is GST registration open for new users before July?

Answer     No.

 

Question   How would GST work with regards to Cinema halls? Can you please share     some details?

Answer    Admission to Cinema hall for exhibition of film is a supply and GST is leviable on value of supply for such admission.

 

Question   Whether a separate GSTIN would be allotted to a registered person for     deducting TDS (he has PAN and TAN as well)?

Answer     Separate registration as supplier and tax deductor is required.

 

Question   What are list of formats of composition scheme?

Answer

Sr. No. Form No. Description
1 GST CMP-01 Intimation to pay tax under section 10 (composition levy) (Only for persons registered under the existing law migrating on the appointed day)
2. GST CMP-02 Intimation to pay tax under section 10 (composition levy) (For persons registered under the Act)
3 GST CMP-03 Intimation of details of stock on date of opting for composition levy (Only for persons registered under the existing law migrating on the appointed day)
4. GST CMP-04 Intimation/Application for withdrawal from composition Levy
5. GST CMP-05 Notice for denial of option to pay tax under section 10
6. GST CMP-06 Reply to the notice to show cause
7. GST CMP-07 Order for acceptance / rejection of reply to show cause notice

 

Question  Can input credit of SGST of one state be used to pay output SGST of  another state? Can it be used to pay IGST of another state?

Answer  One State SGST to another State SGST – No

One State SGST to another State IGST – Yes

 

Question  Implication on manufacturing under excise notification no 49 & 50 of year 2003 Will they also be paying CGST?

Answer    Yes, in GST regime, there is no provision for area based exemptions and thus CGST would be payable which can be recovered from customers

 

Question  Current VAT6%, GST 18%, if I charge 18% GST to my customer on my existing Stocks the price goes up > MRP or margin finished?.

Answer    Excise component would be embedded. Besides, Cascading of VAT over   Excise too possibly present, resulting in likely total incidence of ~18%.

 

Question  What is the GST rate on textile and readymade garment?

Answer    Textiles GST rate, including that for readymade garments, yet to be considered and recommended by the GST Council.

 

Question  GST Registration starting from 1st June, is it also opening for people who had no registration before, no VAT /no ST etc & want to register fresh in GST?

Answer   15 days’ window will be opened for migration of existing registrants only.

 

Question  Can one invoice contain both taxable as well as exempted supplies?

Answer    No. As for exempted items, bill of supply is required to be issued.

 

Question  How job worker will avail ITC on inputs recd from supplier and adjust against supply because ITC reflect in GSTR2 of principal.

Answer   ITC is on inward supply received on a duty paying docx. Inputs supplied for job work belongs to principal and so is the credit thereof

If principal makes a supply, in a particular situation, job worker, such supply gets reflected in GSTR2 and job worker gets ITC.

 

Question   Are the cesses additive or multiplicative? i.e. 28% GST and 15% cess =   43% or 1.28×1.15 => 47.2%?

Answer    The cess will be additive

 

Question  GST Regn starting from 1st June, is it also opening for people who had no  registration before, no VAT /no ST etc & want to register fresh in GST?

Answer    It is only for migrating assessees.

 

Question   In respect of exports, will GST be directly credited to a/c.or rebate papers have to be filed?

Answer Refund / Rebate application is to be filed after processing of which eligible amount would be directly credited to bank account.

 

Question   Whether Electricity co. can avail ITC on Dry Fly ash/other taxable goods/services whereas electricity is out of GST

Answer ITC is allowed only if engaged in taxable supplies.

 

Question Whether invoice to be raised by Head office to branches on salary charges incurred by Head office

Answer   No, services by employee to employer shall be treated neither as supply of goods nor of services.

 

Question do you know when to expect the final GST return formats and corresponding APIs for the same?

Answer   GST Return forms are likely to be finalized in the 15th GST Council meeting scheduled to be held on 3 June 2017.

 

Question what will be the position of SSI Exemption Limits on Excise duty now CGST. SSI units are back bone of our Economy

Answer  No separate limit for excise duty exemption in GST. Anybody w aggregate turnover up to Rs.20 lakh (10 lakh in Special Category) is exempt.

 

Question  What is the rate of GST for purchase of flat?

Answer  Rate of GST on purchase of flat before completion is 12% of value including value of land.

 

Question On formulations GST will be on MRP or at sale price?

Answer  No concept of payment of GST on MRP basis.

 

Question  Restaurant with annual turnover upto 20lakhs are exempted under GST. Is it correct?

Answer  Anybody with aggregate turnover of up to Rs. 20 lakh (Rs. 10 lakh in Special Category States) is exempt except cases listed in Sec 24, CGST

 

Question What is GST rate for apparels and readymade garments?

Answer GST Rate for readymade garments and apparels are yet to be finalized by the GST Council.

 

Question Do registered dealers have to upload sale details of unregistered dealers also in GSTR1?

Answer   Generally not. But required in case of inter-State supplies having invoice value of more than Rs 2.50 Lakhs.

 

Question  Will there be GST in A& N Islands – previously there was no VAT..?

Answer  Yes. For supplies within A& N, CGST plus UTGST would be leviable

 

Question What will be the impact of closing stock which has been already paid vat on 1st July?

Answer The supplier would be eligible to carry forward ITC on such stock and would be liable to pay GST when supplied in new regime.

 

Question What will be the impact of GST on coal? Will the clean energy cess on coal go or stay?

Answer  Clean Environmental Cess on coal will continue in form of GST Compensation Cess.

 

Question Whether maritime commissioner will be there for rebate and refund on export, in GST regime? If not, how rebate be sanctioned?

Answer    Refund will be sanctioned by the jurisdictional Commissioners of GST.

 

Question What would be implications of gst for jewellery retailers? At present 1% vat for sale will be diff in GST?

Answer    Rates are yet to be finalized by the GST council

 

 

 

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CORPORATE AND PROFESSIONAL UPDATE May 31, 2017

Professional Update for the day:

Untitled3

 Direct Tax:

  • ITAT Mumbai held that AO is required to specify the exact charge in the notice for which the assessee was being penalized, Failure to specify exact charge in section 274 notice makes it invalid Jehangir HC Jehangir Vs ACIT (ITAT Mumbai)
  • Delhi HC confirms ITAT’s deletion of notional interest adjustment on delayed AE-receivables in hands of assessee, rejects Revenue’s plea for considering “receivables” as an international transaction as per Explanation to Sec 92B [TS-412-HC-2017(DEL)-TP]
  • TDS on Interest Income Accrued to a Minor after Parent’s Death, shall be Deducted from Minor, not from Grand-Parents: CBDT Circular No.18/2017 dated 29/05/2017

Indirect Tax: 

  • DVAT Department clarified that in respect of dealers who have been issued Provisional Registration pursuant to earlier Circular No. 3 of 2015-16 dt. 27.04.2015, but the signed copy of registration certificate (DVAT-06) has not yet been issued due to pending VATI verification, the Assessing Authority/Ward Incharge shall process and issue signed copy of R.C. (DVAT-06)after due verification of registration application under the ACT vide Circular No. 7/2017 dated 29.05.2017.

GST Updates:

  • Under GST Goods can be supplied from place of business of registered job worker or if unregistered, principal declares it as additional place of business.
  • The decision on revising the tax rates fixed on various goods and services has been left to the discretion of the GST Council, Central Board of Excise and Customs Chairperson Vanaja Sarna said

Other Updates:

  • MCA Circular No 06 /2017 DT 29.05.2017: where the period of seven years provided under sub-section (5) of section 124 has been completed or being completed during the period from 7th September, 2016 to 31st May, 2017, the due date of transfer of such shares shall be deemed to be 31st May, 2017.

Key dates:

  • Issue of TDS certificate to employee:31/05/2017
  • TDS returns for march quarter by ALL deductors:31/05/2017

Quote of the Day:

“Be someone else sunshine, be someone’s smile today”

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FOR FURTHER QUERIES CONTACT US:

W: www.carajput.com    E: info@carajput.com   T: 011-233-4-3333, 9-555-555-480

Disclaimer:

All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.

The visitors may visit the web site of Government site Like Income Tax Department, Services Tax, Excise, Etc for resolving their doubts or for clarifications.

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CORPORATE AND PROFESSIONAL UPDATE May 27, 2017

 Professional Update for the Day:

FDi in E Commerce www.carajput.com

Direct Tax:

  • 271(1)(c): ‘Furnishing of inaccurate particulars of income’ and ‘concealment of particulars of income’ have different connotations. The failure by the AO to specify in the s. 274 notice which of the two charges is applicable reflects non-application of mind and is in breach of natural justice as it deprives the assessee of an opportunity to contest. The penalty proceedings have to be quashed Jehangir HC Jehangir vs. ACIT (ITAT Mumbai)
  • Allahabad High Court held that Rejection of Books of Accounts is Pre-Requisite As Per Section 145(3) For Making an Assessment Under Section 144 CIT vs. Pashupati Nath Agro Food Products Pvt. Ltd (Allahbad High Court)

Indirect Tax:

  • HC allows assessee’s appeal, sets aside CESTAT order which denied SSI exemption on ground that turnover of manufactured electric furnace and heating elements exceeded turnover limit prescribed under Notification No. 1/93 [TS-131-HC-2017(MAD)-EXC]

Other Updates:

  • GST Council may reconsider the proposed 43 per cent tax on hybrid cars at its meeting next week after the auto industry voiced disappointment over the steep rate hike.
  • RBI issued Regulatory requirements for issue of Pre-paid Payment Instruments by Co-operative Banks which have installed ATMs and issued ATM cum Debit cards to introduce semi-closed Prepaid Payment Instruments (PPIs) for payment of utility bills / essential services up to a limit of Rs.10, 000.

Key dates:

Advance Information for 1st fortnight of June functions with booking cost > Rs. 1 lakh in Banquet Halls, hotels etc. in DVAT: 27/05/2017

Issue of TCS Certificates by collectors for quarter ended March: 30/05/2017

Issue of TDS certificate to employee:31/05/2017

TDS returns for march quarter by ALL deductors:31/05/2017

Quote of the Day:

You can get assent to almost any proposition so long as you are not going to do anything about it.

We look forward for your valuable comment www.carajput.com

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Disclaimer:

All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.

The visitors may visit the web site of Government site Like Income Tax Department, Services Tax, Excise, Etc for resolving their doubts or for clarifications.

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CORPORATE AND PROFESSIONAL UPDATE May 26, 2017

PROFESSIONAL UPDATE FOR THE DAY

Untitled8

Direct Tax:

Bogus purchases: In view of the Supreme Court’s order in Vijay Proteins Ltd vs. CIT whereby the verdicts of the Gujarat High Court in Sanjay Oilcake Industries vs. CIT 316 ITR 274 (Guj) and N.K. Industries Ltd vs. Dy. CIT were confirmed, the AO has to accept the law and verify whether the transaction is genuine or not on the basis of the aforesaid three judgments CIT vs. M/s Carpet Mahal (Rajasthan High Court)

ITAT Kolkata held that in absence of fresh material indicating escaped income, the AO cannot assume jurisdiction to reopen already concluded assessment. A.C.I.T., Circle-2(1) Vs M/s. BNK E Solution Pvt. Ltd. (ITAT Kolkata)

 Indirect Tax:

SC dismisses assessee’s SLP, thereby upholds levy of service tax on commission received by automobile dealer from Maruti Finance, a unit of Maruti Udyog Ltd. (Maruti) under ‘business auxiliary service’ (BAS) u/s 65(105) of Finance Act, 1994; HC had earlier dismissed assessee’s writ petition rejecting his plea that, since Maruti had already deposited service tax amount, hence, it (i.e. assessee) cannot be asked to satisfy outstanding demand as same would amount to ‘double taxation’  [TS-127-SC-2017-ST]

FAQ on GST

Query:  What is the time limit for issuance of invoice in case of supply of service stopped before completion of the service?

Answer: In situation when supply of service cease under a contract before completion of supply. The invoice would be issued to the extent of supply which has been made before such cessation.

Other Updates

Central Government directed Income-tax authorities under section 116 of the Income-tax Act, 1961, having headquarters at the places specified, to exercise the powers and perform the functions of the ‘Authority’ under the Prohibition of Benami Property Transactions Act, 1988.

Under GST Casual taxable person or Non-resident taxable person cannot opt for Composition scheme under GST. (Rule 3(1) (a) of Composition Rules).

GST Council may reconsider the proposed 43 per cent tax on hybrid cars at its meeting next week after the auto industry voiced disappointment over the steep rate hike.

RBI issued Regulatory requirements for issue of Pre-paid Payment Instruments by Co-operative Banks which have installed ATMs and issued ATM cum Debit cards to introduce semi-closed Prepaid Payment Instruments (PPIs) for payment of utility bills / essential services up to a limit of Rs.10, 000.

Union Cabinet scrapped the 25-year-old Foreign Investment Promotion Board (FIPB), which has been overseeing foreign direct investment (FDI) proposals requiring government approval.ICAI issued Important Clarification on Amendment to Paragraph 17 of Revised Guidance Note on Audit of Consolidated Financial Statements.

LIVE Webcast on SFT in Form 61A under Rule 114E on 26.5.17 from 3-5 PM addressed by DIT (I&CI) -organized by DTC, ICAI. Visit www.icai.org

Key dates:

Advance Information for 1st fortnight of June functions with booking cost > Rs. 1 lakh in Banquet Halls, hotels etc. in DVAT: 27/05/2017

Issue of TCS Certificates by collectors for quarter ended March: 30/05/2017

Issue of TDS certificate to employee:31/05/2017

TDS returns for march quarter by ALL deductors:31/05/2017

Quote of the Day:

“Remember your yesterdays, dream your tomorrows and live your todays..”

” The biggest challenge in life is being yourself… In a world trying to make you like everyone else.”.”

We look forward for your valuable comment www.carajput.com

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Disclaimer:

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The visitors may visit the web site of Government site Like Income Tax Department, Services Tax, Excise, Etc for resolving their doubts or for clarifications.

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CORPORATE AND PROFESSIONAL UPDATE May 25, 2017

1 (2)

Direct Tax:

ITAT Delhi held that Medical illness and that to be in the nature of the typhoid fever and UTI is definitely reasonable cause for non- appearing on the date and therefore, no penalty should be levied u/s 271(1)(b) in such circumstances as the same is covered under exception of ‘reasonable cause’ as enshrined in section 273B. Sangeeta Sawhney Vs. ACIT (ITAT Delhi)

Delhi High Court held that Addition is justified for Voluntarily admitted tax liability retracted after 2 years PR. CIT (C)-2 Vs Avinash Kumar Setai (Delhi High Court)

 Indirect Tax:

  • High court held that Section 35L is being amended so as to clarify that determination of disputes relating to tax ability or excisability of goods is covered under the term ‘determination of any question having a relation to rate of duty’ and hence, appeal against Tribunal orders in such matters would lie before the Supreme Court. Commissioner Service Tax Vs DLF Golf Resorts Ltd. (Punjab & Haryana High Court)
  • MCA has revised the versions of e Forms – Form DIR-3C and Form RD – 1 (Applications made to Regional Director) are being revised w.e.f. 11th May, 2017.

Key dates:

Advance Information for 1st fortnight of June functions with booking cost > Rs. 1 lakh in Banquet Halls, hotels etc. in DVAT: 27/05/2017

Issue of TCS Certificates by collectors for quarter ended March: 30/05/2017

 Other Updates:

Takeaways of Final GST Rules passed by GST Council:

 

In its 14th meeting in Srinagar on 18th and 19th May,2017 the all-powerful GST council cleared seven rules pertaining to different aspects of GST. These rules relate to Registration, Input Tax Credit, Payment, Refund, Invoice, Valuation and Composition and have paved the way for the rollout of GST from July 1, 2017. The key highlights of these final GST Rules are as follows:

Registration:

1)  PAN is mandatory for taking registration under GST. PAN will be validated by CBDT. After successful validation, registration will be granted.

2)  If a person has a SEZ unit, then he is required to make separate registration application for that unit. Similarly, a separate application of registration is required for becoming Input Service Distributor.

3)  A non- resident seeking registration under Non-Resident Taxable Person has to appoint an authorized signatory who will sign the application of registration. That person must be resident of India having a valid PAN.

4)  A person registered under GST is required to display his certificate of registration at a prominent location at his principal place of business and GST Number on the name board at entry of his principal place of business.

5)  Physical verification of place of business will not be conducted to grant registration under GST. But officer can do physical verification after granting of registration, if he is satisfied that it is necessary to do the same. He must upload verification report on GST Portal within 15 working days after verification.

Invoice:

6)  Tax invoice in case of supply of taxable services must be issued within 30 days of date of supply of services. However, time limit for banking company, insurance company or financial institutions is 45 days.

7)  The invoice shall be in triplicate for Supply of Goods and in duplicate for Supply of Services.

8)   The serial number of invoices issued will be furnished electronically on GST Portal.

9)  On receiving advance, Receipt Voucher will be issued. If rate is not determinable, tax is to be paid at 18%. If nature of supply is not determinable, it will be treated as Inter-State Supply.

10)  If reverse charge is applicable, the recipient will issue Payment Voucher.

Payment:

11)  Electronic Liability Register shall be maintained for each person liable to pay tax on the GST Portal.

12)  Electronic Credit Ledger and Electronic Cash Ledger shall also be maintained on the GST Portal for the person eligible for input tax credit and for person liable to pay tax respectively.

13)  Tax will be paid only through internet banking, RTGS, NEFT or Debit and Credit Cards. However, over the counter payment is allowed through authorized banks for the amount up to Rs.10,000 per challan per tax period.

Refund:

14)  A separate formula is prescribed for Maximum Refund in case of inverted duty structure, i.e., GST rate is higher on Inputs than on Output Supply.

15)  Refund application shall be filed electronically on GST Portal.

16)  The grant of provisional refund shall be made if person clamming refund has not been prosecuted during any period of 5 years preceding the tax period for which refund is claimed. However, the following 2 condition mentioned in Draft Refund rules have been deleted:

a)     The assessee should have a GST compliance rating of not less than

b)     The assessee should not have any pending proceeding or appeal on any issue.

17  17)   If Commissioner wants to withhold refund, order must be issued along with reasons of withholding refund.

Valuation:

18)  The value of supply made by principal to its agent or made to any related person shall be 90% of price charged for the supply of like kind and quality to unrelated person.

19)  The value of a token, coupon or a voucher shall be equal to the money value of goods redeemable against such token or voucher or coupon.

20)  The expense incurred by a supplier as a pure agent will not form value of supply and shall be excluded. The supplier will be treated as pure agent on complying with following three conditions:

a)     He makes payment to third party on authorization by such recipient.

b)     The payment made by pure agent on behalf of recipient has been shown separately on invoice.

c)     The supplies procured from third party by pure agent on behalf of recipient are in addition to services he supplies on his own account.

Earlier, in draft rules, 8 conditions were prescribed. Now, only these three conditions have to be fulfilled.

Input Tax Credit:

 

21)  The person eligible to take credit in respect of input of goods held in stock after registartion is required to file a declaration on GST Portal that he is eligible for input tax credit within 30 days.

22)  ITC would not be available to registered person if tax has been paid by supplier after issuing demand order on account of fraud, wilful misstatement or suppression of facts.

23)  The time limit to claim input tax credit is not applicable to re-claim credit reversed earlier due to non-payment of consideration to supplier.

Composition:

24)  Following persons will not be eligible for composition scheme:

a)     Casual taxable person or non-resident taxable person

b)     Person having goods in stock which were purchased in course of inter-State trade or from unregistered person

25)  Rates of Taxes for Composition Levy

a)     Manufacturers, other than manufacturers of such goods as may be notified by the Government – at 1%

b)     Suppliers making supplies referred to in clause (b) of paragraph 6 of Schedule II – at 2%

c)     Any other supplier – at 0.5%

 

 

Quote of the Day:

 

“Take rest; a field that has rested gives a bountiful crop.”

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The visitors may visit the web site of Government site Like Income Tax Department, Services Tax, Excise, Etc for resolving their doubts or for clarifications.

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CORPORATE AND PROFESSIONAL UPDATE May 23, 2017

PROFESSIONAL UPDATE FOR THE DAY12036518_636965443073687_8061467608404050178_n

Direct Tax:

  • Allahabad High Court held that Gain on sale of Shares held for 16 years as investment cannot be treated as business income The Commissioner Of Income Tax Vs M/S Jindal Poly Films Ltd. (Allahabad High Court)
  • Kolkata ITAT rules that remission of employee training expenses to Chinese parent by assessee (an Indian company engaged in construction of integrated steel plant) for payment to a Chinese training agency (i.e. third party) for AY 2010-11, not reimbursement [TS-190-ITAT-2017(Kol)]
  • CBDT releases New Rules under Sec 115BA(4) & Form10-IB for Startups to Opt for Lower Tax Rate.
  • IT: Non deduction of TDS – the word payable u/s 40(a)(ia) also covers the cases where the amount is actually paid during the year – Palam Gas Service Vs CIT (2017 (5) TMI 242 – Supreme Court).
  • CBDT releases Draft Rules for Valuation of Unquoted Equity Shares

Indirect Tax:

Delhi High Court held that Practice of taking “undated cheques” by      excise department is illegal Digipro Import & Export Pvt. Ltd Vs            Union of India & Ors. (Delhi High Court)

 FAQ on GST

Query:  A person has a balance of Rs 1 lakh in his electronic credit ledger as on 1st December but on 2nd Dec, the goods subsequently become exempt from the levy of tax. What would be the treatment of balance Input Tax Credit lying in his electronic ledger?

Answer:  Once the goods or services or both supplied by a registered person become wholly exempt under the law, then the person would be required to pay, by debiting to electronic cash ledger or electronic credit ledger, an amount equivalent to the credit of input tax credit in respect of

  1.  Inputs held in stock, and
  2.  Inputs contained in semi-finished or finished goods held in  stock, and
  3.  Capital goods

on the day immediately preceding to the date of such exemption of goods or services or both. After payment of amount by way of debit to the electronic cash ledger or credit ledger, balance of input tax credit, if any, lying in his electronic credit ledger shall lapse.

Other Updates

  • Bogus share capital: AO must scrutinize documents produced by assessee, addition cannot be done merely on report of investigation wing -Pr. Commissioner of Income Tax Vs. Laxman Industrial Resources Pvt. Ltd. (Delhi High Court)
  • Tax on financial services transactions will rise from the current 15% to 18% as the goods and services tax (GST) kicks in on 1 July, making them marginally costlier.
  • Arbitrator cannot Lift Corporate Veil:  Case Name: Sudhir Gopi Vs Indira Gandhi National Open University and ANR. (Delhi High Court).
  • MCA has notified Exit Scheme for LLP. The Central Government has amended the Rules by notified the Limited Liability Partnership (Amendment) Rules, 2017, which shall come into force with effect from 20th May, 2017.
  • WTO has called a review meeting to promote connectivity through digital trade in developing countries amid strong opposition by India owing to apprehensions among experts that this may be a back door attempt to push e-commerce.
  • of India has notified the Companies (Transfer of Proceedings) Rules, 2016. Through these rules all matters relating to winding up and amalgamation has been transferred from High Courts to NCLT.

Key dates:

  • Issue of DVAT certificates for deduction made in April:22/ 05/2017
  • Advance Information for 1stfortnight of June functions with booking cost > Rs. 1 lakh in Banquet Halls, hotels etc. in DVAT: 27/05/2017
  • Issue of TCS Certificates by collectors for quarter ended March: 30/05/2017

Quote of the Day:

“Even if you’re on the right track, you’ll get run over if you just sit there.”

“Challenges are what make life interesting And overcoming them is what makes life meaningful”.”

We look forward for your valuable comment www.carajput.com

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Disclaimer:

All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.

The visitors may visit the web site of Government site Like Income Tax Department, Services Tax, Excise, Etc for resolving their doubts or for clarifications.

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CORPORATE AND PROFESSIONAL UPDATE May 20, 2017

Untitled18A

Direct Tax:

· S. 56(2)(vi): A HUF is a “group of relatives”. Consequently, a gift received from a HUF by a member of the HUF is exempt from tax as provided in the Explanation to s. 56(2)(vi)  DCIT vs. Ateev V. Gala (ITAT Mumbai)

·  S. 68 cash credit: If the assessee has explained the source of the loans received by it, the fact that the lender may have raised bogus share capital to advance the funds to the assessee does not mean that the loan received by the assessee can be treated as unexplained income.

·  A statement recorded under duress, which is retracted later, cannot be the sole basis for addition Anil Chhaganlal Jain vs. ACIT (ITAT Mumbai)

Due date of filing of Form 61A of Income Tax for specified persons is 31st May 2017.
· Income Tax department published names of five entities owing over Rs 10 crore in taxes, as part of its strategy to name and shame big defaulters

 Indirect Tax:

Centre releases GST Rate Schedule of Goods as well as GST Compensation Cess Rates for different supplies, pursuant to GST Council meeting today; “Rate Schedule” contains 98 chapters categorized into Nil, 5%, 12%, 18% and 28% tax slabs.
GST Updates:

GST Council has broadly approved the GST rates for goods at nil rate, 5%, 12%, 18% and 28% to be levied on certain goods. The Council has also broadly approved the rates of GST Compensation Cess to be levied on certain goods.
GST Council finalises Rates of Cess on Pan Masala (60%), cold drinks (12%), Tobacco, Tobacco products, Cigarettes, Motor vehicles (1% to 15%) etc.
GST Council finalises rates of 1211 Goods under 98 categories. Rates for textiles, footwear, biris, precious metals etc& services to be decided.

Key dates:

E-payment of DVAT & CST for April: 05.2017
Payment of ESI of April:05.2017
Issue of DVAT certificates for deduction made in April: 05.2017
FAQ on GST

Query:  Whether a person applying for new registration within thirty days of becoming liable for registration or applying for voluntary registration would be entitled to claim of credit of tax paid on Capital Goods held on the date of registration?

Answer:  No, Capital goods held by person as on date of registration would not be eligible for claim of Input Tax Credit. Thus, in the case of capital intensive Industries, registration would have to be taken right at the time of commencement of set up of business and before any purchase of capital goods have been made, otherwise any delay might result in loss of Input tax Credit paid on Purchase of Capital goods.

Other Updates

ICAI advised the members involved in Coaching/Teaching Activities to abstain from advertising their association with Coaching /teaching activities through hoardings, posters, banners and by any other means, failing which they may be liable for disciplinary action, as per the provisions of Chartered Accountants Act, 1949 and Rules /Regulations framed thereunder Vide Announcement dated 18.05.2017.

MCA Update:

MCA issued clarification regarding applicability of Section 16(1)(a) of the Companies Act, 2013 with reference to cases under corresponding provisions of Companies Act, 1956 Vide Circular No 04/2017 dated 16.05.2017.

Time barred plea for rectification of name once rejected can’t be filed afresh under Companies Act, 2013: MCA CIRCULAR NO.4/2017 [F.NO.17/89/2016-CL-V], DATED 16-5-2017.

RBI relaxed the branch authorization policy, bringing all branches and fixed business correspondent outlets under the definition of banking outlets and removing restrictions on opening branches in Tier 1 centers

Quotes of the Day:

“A man who dares to waste one hour of time has not discovered the value of life.”

“Be not afraid of life. Believe that life is worth living, and your belief will help create thefact.”.

We look forward for your valuable comment www.carajput.com

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The visitors may visit the web site of Government site Like Income Tax Department, Services Tax, Excise, Etc for resolving their doubts or for clarifications.

 

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WannaCry Ransomeware

Image result for For the last few days the WannaCry ransomware event created mayhem, where organizations worldwide were hit with ransomware that spread quickly primarily via a self-propagating worm mechanism. It exploited vulnerable versions of Windows.

For the last few days the WannaCry ransomware event created mayhem, where organizations worldwide were hit with ransomware that spread quickly primarily via a self-propagating worm mechanism. It exploited vulnerable versions of Windows.

There has been some indication of low-volume email seeding campaigns containing URL links leading to the initial malware being downloaded. We have not been able to independently confirm this, but it remains a possibility. One thing is clear, we have not seen any large-scale email campaigns distributing the malware to date, although that could change at any time.

What we have seen to date is likely only the beginning. Expect new variants of this threat to quickly emerge. Note, even though you might have patched your systems, it may still be possible to get impacted by the WannaCry Ransomware itself if it is spread via email or the web in the future.

Cyber risk is a major threat to businesses today as companies increasingly face new vulnerabilities due to exposure, including first and third party damages, business interruption, operational damages or any other catastrophic consequences.

The financial impact of the ransomware attack and cyber risk can be minimized with a cyber liability insurance. Every business working on or depending on a computer network should consider buying Cyber Insurance protection.

so designing a Cyber Insurance cover as per your company’s specific requirements.

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The visitors may visit the web site of Government site Like Income Tax Department, Services Tax, Excise, Etc for resolving their doubts or for clarifications.

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