CORPORATE AND PROFESSIONAL UPDATES 9TH JULY 2018

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  • Delhi ITAT deletes Sec. 40(a)(i) disallowance of Rs. 120 cr. for airfreight payments made by assessee (a logistic and Cargo handling company) without TDS to non-resident parties during AY 2014-15; Observes that assessee did not claim the airfreight as expenses in the P & L account as the payments were made on behalf of its Indian clients/customers (who reimbursed the amount to assessee); [TS-354-ITAT-2018( DEL)]
  • Kolkata ITAT allows the long term capital loss claim on off-market sale of shares by assessee to its group company during AY 2009-10; Rejects Revenue’s stand that the off market transaction with group company was a colourable device only to claim the loss and reduce the tax burden;Observes that in present case, the share-sale transaction was duly supported by the required documentary evidence, delivery instructions were also issued to the depository participant evidencing that there was actual delivery of shares; [TS-349-ITAT-2018(Kol)]
  • CBDThas issued Final Notification (applicable from AY 2017-18) for exception, modification and adaptation in respect of a foreign company said to be resident in India due to its place of effective management (POEM) being in India, u/s 115JH of IT Act.
  • When the revenue has accepted the amount as loan in the hands of other party, it cannot take up a contrary stand and treat the same loan in the hands of the assessee as a gift or a sum received without consideration taxable u/s-56(2)(vii)(a) – ITO Vs. Shri Paramveer Abhay Sancheti (2018 (7) TMI 215 – ITAT Nagpur).

Indirect Tax:

  • CBEC has amended the Central Goods and Services Tax Rules, 2017. These rules may be called the Central Goods and Services Tax (Seventh Amendment) Rules, 2018, which shall be deemed to have come into force with effect from the 12th day of June, 2018. Vide notification no 29/2018, dated 6th July 2018.
  • GST: CBIT notifies CGST (Seventh Amendment) Rules, 2018 and amended Rules 125, 129, 130, 131, 132 & 133 effective from 12.06.2018 –N.29/2018-CT, dt.06.07.2018.
  • Alternate accommodation to be paid to the tenant of the old building by the developer / owner – compensation for alternate accommodation / damages for delayed handover of possession of the new premises – Levy of GST confirmed – AAR, in Zaver Shankarlal Bhanushali (2018 (7) TMI 227).
  • CBIC has developed a mobile app ‘GST Verify’ to protect interest of consumers. It is an android app to verify if the person collecting GST from the consumer is eligible to collect it or not. It also provides the details of the person collecting GST.
  • Electricity bills can have GST component at times. Non-tariff charges, which include application fee for releasing connection, rentals charged against metering equipment and labour charges for shifting of meters and service lines, are liable to taxed at 18% under the GST.

FAQ on GST AUDIT:

  • Query: Is a summary assessment order always passed against the taxpayer?
  • Answer:No, the order is not always passed against the taxpayer. If the goods are being transported or stored in a warehouse, the taxpayer cannot be held responsible for them. In such cases, the order is passed against the person in charge of the goods at that point, per Section 64 of the CGST/SGST Act.

RBI UPDATES

  • RBI has decided to put in place a graded enforcement action framework to enable appropriate action in respect of statutory auditors for any lapses observed in conducting a bank’s statutory audit. The framework would cover, instances of divergence identified in asset classification and provisioning during the RBI inspection vis-à-vis the audited financial statements of banks above the threshold specified etc.

SEBI UPDATES

  • SEBI reviewed the mechanism of dividend adjustment for stock options and allowed alteration in strike price. According to the regulator, adjustment in strike price will be carried out in case dividend declared by a company is above 5 per cent of the underlying stocks.

OTHER UPDATES 

  • IBBIhas notified, the IBBI (IRP for Corporate Persons) (Third Amendment) Reg., 2018.
  • DGFThas Notified the office address of DGFT and its Regional Authorities and their Jurisdiction and Private SEZs under the Foreign Trade Policy, 2015-20.

KEY DUE DATES

  • GSTR-3B (Jun 2018)-Jul 20th, 2018
  • GSTR-5 (Jun 2018)-Jul 20th, 2018
  • GSTR-6 (Jul’17 – Jun’18)- Jul 31st, 2018
  • GSTR-4 (Apr-Jun, 2018)-Jul 18th, 2018
  • GSTR-5A (Jun 2018)-Jul 20th, 2018
  • Quarterly return for registered persons with aggregate turnover up to Rs. 1.50 Crores- GSTR-1 (Apr-Jun, 2018)-Jul 31st, 2018
  • Turnover exceeding Rs. 1.5 Crores or opted to file monthly Return GSTR-1 (Jun 2018)- Jul 10th, 2018
Disclaimer:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. The author is a Chartered Accountant and the Chief Gardener & Founder Director of Rajput Jain & Associates , a leading Tax & Investment Planning Advisory Service Provider. His blog can be found at http://carajput.com/blog/For any query you can write to info@carajput.com. Hope the information will assist you in your Professional endeavors. For query or help, contact:   info@carajput.com or call at 09811322785/4 9555 5555 480)

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CORPORATE AND PROFESSIONAL UPDATES 9TH JUNE 2018

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  • Mumbai ITAT holds that Executive Search Services fees (‘ESF’) received by assessee (a Dutch company) not taxable as FTS under Article 12 of India-Netherlands DTAA for AY 2011-12; Rejects Revenue’s stand that ESF, which was received pursuant to Service Agreement (SA) with Indian group entity (SSIPL), was to be treated as ancillary and subsidiary to license fee (taxed as royalty) received from SSIPL under another agreement viz. License Agreement (LA) which was towards use of trade name, trademark, logo and the rights to use software;[TS-288-ITAT-2018(Mum)]
  • Delhi ITAT Special Bench (majority view) rules in favour of Nokia Networks OY (assessee, a Finnish company), holds Nokia India Pvt. Ltd. (NIPL, Indian subsidiary) does not constitute assessee’s PE in India for AYs 1997-98 and 1998-99; [TS-289-ITAT-2018(DEL)]
  • Penalty paid to Stock Exchange is a regular Business Expenditure: ITAT allows Deduction
  • CBDT dedicates Fortnight for Disposal of Pending Appeals.
  • Central Govt has decided to make PAN mandatory for remitting money abroad as the RBI has decided to stringent norms for Liberalized Remittance Scheme (LRS) as per which, anyone who is utilizing the scheme will now have to share PAN details – something that was not applicable earlier with regards to CA transactions up to $25,000.
  • Kolkata ITAT allows Sec. 10AA benefit to assessee in respect of international trading, warehousing and consultancy income for AY 2009-10; ITAT acknowledges that trading activity is not expressly covered u/s 10AA, but observes that as per the Special Economic Zone Act, 2005 (SEZ Act) and its Rules, 2006, definition of ‘service’ included trading activity; [TS-292-ITAT-2018(Kol)]
  • Mumbai ITAT confirms CIT(A)’s Rs. 50cr relief to industrialist Anil Ambani, allows Sec. 37(1) deduction for ‘consent’ fees /”settlement charges” paid by Mr. Ambani w.r.t charges of alleged violation of SEBI Act/Regulations; AO disallowed the said amount, reasoning that the payment was for ‘violation’ of provisions of SEBI Act and hence made for an ‘offence’ and therefore liable to be disallowed by invoking Explanation to Sec. 37(1); [TS-291-ITAT-2018(Mum)]

INDIRECT TAX

  • LAST DATE FOR SUBMITTING GSTR 1 FOR registered persons filing monthly returns for the month of May 2018 is 10th June 2018.

FAQ on E-WAY BILLS:

  • Query:If the vehicle, in which goods are being transported, having e-way bill is changed, then what is required to be done?
  • Answer:The e-way bill for transportation of goods should always have the vehicle number that is actually carrying the goods. There may be requirement to change the vehicle number after generating the e-way bill or after commencement of movement of goods, due to trans-shipment or due to breakdown of vehicle. In such cases, the transporter or generator of the e-way bill can update the new vehicle number in Part B of the EWB.
  • Query: How the transporter is identified or assigned the e-way bill by the taxpayer for transportation?
  • Answer:While generating e-way bill the taxpayer has a provision to enter the transporter id in the transportation details section. If he enters 15 digits transporter id provided by his transporter, the e-way bill will be assigned to that transporter. Subsequently, the transporter can log in and update further transportation details in Part B of eway bill.

MCA UPDATES     

  • MCA has sought details from some auditor companies, which resigned their assignment after the companies concerned had reportedly refused to give them adequate information. Officials said explanations had been sought from auditors in 15-odd cases.
  • The President of India gave assent to promulgate the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 which will give relief to Home Buyers and SMSE.

RBI UPDATES

  • RBI extended loan repayments deadline to 180 days from the due date without being classified as a non-performing asset. This latest announcement comes after the regulator’s April diktat which had allowed GST registered MSME borrowers with a turnover of up to Rs. 25 crore to delay loan repayments by 180 days.
  • RBI voted unanimously to hike repo rate by 25 basis points, in a first interest rate hike in a four-and-a-half year, citing a major upside risk to the baseline inflation on the back of high crude oil price. The central bank said that there was a 12% increase in the price of Indian crude basket, which was “sharper, earlier than expected and seems to be durable”

SEBI UPDATES

  • Sebi extended the date for submission of Aadhaar details by those investing in capital markets till a final judgment by the Supreme Court on proposed mandatory linking of 12-digit unique ID for all financial dealings.

OTHER UPDATES

  • last date for online claim of Unstructured CPE hours extended to 30th June – ICAI(Last date for submitting Self Declaration form for claiming CPE Hours under Unstructured Learning Activities for the Calendar Year 2017 – has been extended from 31st May, 2018 to 30th June, 2018)
  • Online Facility for members to update Email ID, Mobile & Address – ICAI has launched an Online Form for Members by which they can update their Mobile number and e-mail ids which are currently available in ICAI records.
KEY DATE:
  • QUARTERLY RETURN FOR REGISTERED PERSONS WITH AGGREGATE TURNOVER UP TO RS. 1.50 CRORES: GSTR-1 :-31. JULY 2018
  • TURNOVER EXCEEDING RS. 1.5 CRORES OR OPTED TO FILE MONTHLY RETURN: GSTR-1 (MAY2018):-10 JUNE 2018
  • DUE DATE FOR FILLING GST TRAN-2- 30.06.2018

Disclaimer:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. The author is a Chartered Accountant and the Chief Gardener & Founder Director of Rajput Jain & Associates , a leading Tax & Investment Planning Advisory Service Provider. His blog can be found at http://carajput.com/blog/For any query you can write to info@carajput.com. Hope the information will assist you in your Professional endeavors. For query or help, contact:   info@carajput.com or call at 09811322785/4 9555 5555 480)

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CORPORATE AND PROFESSIONAL UPDATES 18TH MAY 2018

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  • Gujarat HC reverses ITAT order, holds that payment to education society for recouping deficit in payment of tuition fees of employees’ children does not amount to perquisite for AY 2000-01 and 2001-02; Notes that the children of the employees were studying in that Education Society and were paying fees at a subsidized rate and burden borne by assessee per child per month never exceeded Rs. 1000; [TS-246-HC-2018(GUJ)]
  • Ahmedabad ITAT opines that location of AO, at the point of time when Tribunal hears and determines the case, is relevant for determining jurisdiction of bench to hear stay/appeals, however,  directs registry to place matter before the President for final decision on transfer of assessee’s case to Delhi benches ; [TS-240-ITAT-2018(Ahd)]
  • Where asssessee had charged depreciation for wind mills at a higher rate than what is mentioned in Schedule XIV of Companies Act, 1956,as windmill had not performed at expected level and nothing was brought on record to show how and on what basis, higher rate of depreciation was arrived,while computing book profit AO had restricted the depreciation as per Schedule XIV of Companies Act, 1956 and holding that assessee had no reason to provide depreciation at a higher rate.-Indus Finance Corporation Ltd. v. Deputy Commissioner of Income Tax.
  • HUF does not come under specified category of relative under section 56(2) (vii), Explanation (e); therefore, money received by an individual from HUF as gift would not considered as valid gift.-Gyanchand M. Bardia v. Income Tax Officer.
  • Incurred in connection with issue of shares was to be held as capital in nature: Madras- HC Sterling Holiday Financial Services Ltd. v. Assistant Commissioner of Income Tax.
  • Income Tax could be levied only when real income would accrue to assesse. Where a dispute was pending between assessee-contractor and builders, only income that had come to assessee in relevant assessment year would be taxable and not income that would have come to it if claims against builders were allowed.-HC of Kerala- Commissioner of Income Tax v. Sushil Thomas Abrahum.
  •  for individuals and HUF having income from any sources except profits and gains of business and profession, including NRIs.
  • ITR-1 Sahaj was activated earlier by the department for resident Indians having income from salaries, house property and bank interest with total income of up to Rs 50 lakh.

INDIRECT TAXES

  • Constructing residential accomodation for police couldn’t be classified as construction of complex services.-CESTAT New Delhi BENCH, Gupta Construction Company v. Commissioner of Central Excise.
  • Replacing old damaged water lines of villages was classifiable as commercial construction services.-CESTAT New Delhi- Vijay Kumar Kataria v. Commissioner of Central Excise, Delhi.
  • Where applicant is a supplier of materials for erection of towers, testing etc. called Tower Package and supply of allied services like survey and erection of towers etc. and wants a ruling on whether he is liable to pay tax on freight bills, it is held that applicant supplies works contract service and GST is to be paid at 18 per cent on entire value of composite supply, including supply of materials, freight and transportation, erection, commissioning etc.and it is merely a composite supplies.-AAR West Bengal-EMC Ltd.,In re.
  • GST waives off late fees from October for taxpayers who were unable to file GSTR-3B due to technical issues of Trans-1 filing, failed to file TRANS-1 before December 27, 2017.
  • Accommodation and restaurant services provided by applicant engaged in hotel business within premises of Hotel, to employees and guests of SEZ units cannot be treated as supply of goods and / or services to SEZ units in State; said services constitute ‘intra-State’ supplies and are taxable accordingly-AAR Karnataka.
  • 31 May is last day to file GSTR-1 for April if turnover 1.5 cr or more. For May file by 10 June & for June by 10 July i.e before GSTR-3B. Notification No. 18/28 March.
  • No late Filing fee if GSTR-3B from October 17 – April 18 filed by 31 May, where TRAN-1 submitted by 27 December but filed by 10 May due to technical issues.

FAQ on E-WAY BILLS:

  • Query: How is the validity of the e-way bill calculated?
  • Answer:The validity period of the EWB is calculated based on the ‘approx. distance’ entered while generating the EWB. For every 100kms one day is a validity period for EWB as per rule and for part of 100 KM one more day is added. For ex. If approx. distance is 310KMs then validity period is 3+1 days.

OTHER UPDATES

  • Aadhaar not mandatory for central govt. employees for getting pension: Minister of State for Personnel. Press Trust of India.
  • DGFT has issued trade notice w.r.t Non-submission of complete Appendix 4E, containing technical details, chemical reactions and data sheet for advance authorisation applications on self declaration basis under Para 4.04 and 4.07 of HBP for cases relating to NC-4.

Key Date:

  • GSTR Return summary for April: 20.05.2018
  • Return of TDS/TCS collected in March: 31.05.2018
  • Due date for filling of GSTR-6- 31 . may . 2018
  • Due date for filling GST TRAN-2- 30.06.2018

Disclaimer:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. The author is a Chartered Accountant and the Chief Gardener & Founder Director of Rajput Jain & Associates , a leading Tax & Investment Planning Advisory Service Provider. His blog can be found at http://carajput.com/blog/For any query you can write to info@carajput.com. Hope the information will assist you in your Professional endeavors. For query or help, contact:   info@carajput.com or call at 09811322785/4 9555 5555 480)

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A quick glance on Impacted the Economy & Taxation on Budget 2018

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Arun Jaitey recalls the measures — like GST, FDI, demonetisation, etc. — taken by the NDA government in the past four years that have impacted the economy of the country. 

The government estimates 7.2-7.5% GDP growth in second half of the current FY18.

Fiscal deficit for 2017-18 at 3.5% and projected for 2018-19 at 3.3%

Divestment target for 2018-19 has been set at Rs 80,000 crore

Proposed spending on rural infra is Rs 14.34 lakh crore.

Rs 5 lakh per family annually to be given for medical reimbursement under the National Health Protection Scheme.

Impact on Taxation in Budget 2018

  • No change in Tax Rate. All persons including individuals, HUF, Firms and Companies to pay same tax. However Education cess is being increased from 3 to 4 % to be known as Education and Health cess.
  • However  for Domestic Companies having total turnover or  gross receipts  not exceeding  Rs 250 crores in Financial year 2016-17 shall be liable to pay tax at 25% as against present ceiling of Rs 50 crore in Financial year 2015-16.
  • Long term Capital gain exemption under section 10(38) in respect of listed STT paid shares being withdrawn.
  • However capital gain up to 31.1.2018 shall not be taxed as cost of acquisition will be taken as Fair Market Value as on 31.1.2018.
  • Tax on STT paid long term capital Gain will be 10% under Section 112A. Further such tax will be liable for TDS.
  • Standard Deduction of Rs 40,000 for salaried employees. However benefit of transport allowance of Rs 19,200 and Medical Reimbursement of Rs 15,000 under Section 17(2) are being withdrawn. Thus net benefit to salaries class only Rs 5,800.
  • Provision of Section 43CA, 50C and 56(2) (x) being amended to allow 5% of sale consideration in variation Vis a Vis stamp duty value. On account of location, disadvantage etc.
  • Provision of section 40(IA) and 40A (3) and 40A (3A) are being made applicable to Charitable Trust. Hence expenditure incurred without deduction of tax and in cash will not be eligible as application of income under section 10(23C) and section 11(1) (a).
  • Agriculture Commodity Derivative income /loss also not to be considered as speculative under section 43(5).
  • Income Computation and Disclosure Standards (ICDS) being given statutory backing in view of decision of Delhi High Court decision.
  • Marked to market loss computed as per ICDS to be allowed under section 36.
  • Gain or loss in Foreign Exchange as per ICDS to be allowed under new section 43AA.
  • Construction Contract income to be computed on percentage completion method as per ICDS.
  • Valuation of Inventory including Securities to be as per ICDS.
  • Interest on compensation, enhanced compensation. Claim or enhancement claim and subsidy, incentives to be taxed in the year of receipt only as per new Section 145B.
  • Conversion of stock in trade to capital asset to be charged as business income in the year of conversion on Fair Market value on the date of conversion.
  • 54EC benefit of investment in Bonds to be restricted to Capital gain on land and building only. Further period of holding being increased from 3 years to 5 years.
  • PAN to be obtained by all entities including HUF other than individuals in case aggregate of financial transaction in a year is Rs 2, 50,000 or more. All directors, partners, members of such entities also to obtain PAN.
  • All companies irrespective of income to file return and in case it is not filed, such companies will be liable for prosecution irrespective of the fact weather it has tax liability of Rs 3,000 or not.
  • Assessments to be E assessment under new section 143(3A).
  • No adjustment under section 143(1) while processing on account of mismatch with 26AS and 16A.
  • Deemed dividend to be taxed in the hands of the company itself as Dividend Distribution of tax @ 30%.
  • Penalty for non filing financial return as required under section 285BA being increased to Rs 500 per day.
  • PAN to be used as Unique Entity Number for non- individuals from April 1.
  • Govt makes PAN mandatory for any entity entering into a financial transaction of Rs 2.5 lakh or more.

INDUSTRIAL IMPACT  ANALYSIS

  • This budget will accelerate economic growth, it is focused on all sectors: PM Modi
  • Prime Minister Narendra Modi praises his finance minister Arun Jaitley for delivering a budget that is “farmer friendly, common citizen friendly, business environment-friendly and development friendly.”
  • Govt’s health scheme to cover 10 crore poor families is world’s largest government-funded health protection scheme.
  • Arun Jaitley proposed to tax long term capital gains exceeding Rs 1 lakh at 10 per cent without indexation.
  • Electronic IT assessment will be rolled out across the country, leading to greater efficiency and transparency: FM
  • Mobile phones set to become costlier as custom duty on them has been increased to 20 per cent.
  • Health and education cess has been increased to 4 per cent.
  • For senior citizens, exemption of interest income on bank deposits raised to Rs 50,000: FM Jaitley
  • FM Jaitley proposes to introduce tax on distributed income by equity oriented mutual funds at 10 per cent.
  • Standard deduction of Rs 40,000 for salaried employees in lieu of transport and medical expenses: FM Jaitley
  • Companies with turnover of up to Rs 250 crore to be taxed at 25 per cent: FM
  • Arun Jaitley says that the government does not propose any changes in tax slabs for the salaried class this year.
  • FM proposes a fiscal deficit of 3.3% of GDP for 2018-19.
  • Finance Minister Arun Jaitley proposes revising emoluments as per the following structure:– Rs 5 lakh for the President of India
    — Rs 4 lakh for the Vice President
    — Rs 3.5 lakh for the Governors
  • Jaitley also proposes automatic revision of emoluments of Parliamentarians every five years, indexed to inflation.
  • We have already exceeded our disinvestment target, announces Arun Jaitley.
    Disinvestment target for 2017-18 has been exceeded and will reach Rs 1 lakh crore. Target for 2018-19 is Rs 80,000 crore.
  • 5 lakh WiFi hotspots will be set up in rural areas to provide easy internet access.
  • Government will take all steps to eliminate use of cryptocurrencies which are funding illegitimate transactions.
  • Govt announces Amrut program to focus on water supply to all households in 500 cities. Water supply contracts for 494 projects worth Rs 19,428 core will be awarded: FM
  • NITI Aayog will establish a national programme to direct our efforts in the area of Artificial Intelligence towards national development: FM
  • Airport capacity to be hiked to handle 1 billion trips every year.
  • Arun Jaitley says that 4,000 km of new railway track will be laid down by 2019.
  • All railways stations with footfall more than 25,000 to have escalators, says the Finance Minister.
  • Mumbai transport receives Rs 40,000 crore.
  • The government will undertake redevelopment of 600 major railway stations across the country.
  • Arun Jaitley announces capital expenditure of Rs 1,48,528 crore for Indian Railways in 2018-19.
  • National Heritage City Development Augmentation Scheme has been undertaken to preserve and protect heritage cities in the country, announces the Finance Minister.
  • Government to contribute 12 per cent of EPF contribution for new employees in all sectors: FM
  • Infrastructure is the growth driver of economy: Jaitley
  • Target of 3 lakh crore for lending under PM Mudra Yojana: FM
  • MSME enterprises are a major element for growth, says Jaitley. He also added that mass formalization of MSME sector is happening after demonetization and GST.
  • Govt will launch health scheme to cover 10 crore poor families, Arun Jaitley says.
  • The Government is slowly but steadily progressing towards universal health coverage
  • Government aims to bring 60 crore bank accounts under the Jan Dhan Yojana.
  • Eklavya schools to be started for Scheduled Tribe populations: Finance Minister
  • Rs 600 crore allocated to Tuberculosis patients undergoing treatment.
  • Govt will set up two new Schools of Planning and Architecture, says Finance Minister Jaitley.
  • To tackle brain drain, Jaitley announces scheme to identify bright students pursuing B Tech in premiere engineering institutes, and providing them higher-education opportunities in the IITs and IISc. These students will receive handsome fellowships, and will be expected to dedicate a few hours to teach in higher education institutions weekly.
  • Specialized railway university to be set up at Vadodara.
  • Jaitley proposed integrated BEd programmed for teachers: “training of teachers during service is essential.” Technology will be the biggest driver in improving the quality of education.
  • Budget allocates money for social security and protection programme for all widows and orphaned children.
  • We have a target to provide all Indians with their own homes by 2022, says Jaitley.
  • Ujjwala scheme to amplify targets, will now provide 8 crore rural women free LPG connections.
  • Air pollution in Delhi-NCR has been a cause of concern, govt has proposed subsidized machinery for in-situ management of crop residue in Punjab, Haryana, Uttar Pradesh and NCT Delhi.
  • Govt of India will take necessary measures to put in place measures for the state government to purchase surplus solar power produced by local farmers at suitable prices.
  • Arun Jaitley proposes a sum of Rs 500 crore for ‘Operation Green’ on the lines of ‘Operation Flood’.
  • Food processing sector is going at an average of 8 per cent per annum.
  • We have been saying it for years that India is primarily an agricultural country: Jaitley
  • Arun Jaitley on Minimum Support Price of agricultural products: Only increasing the MSP is not enough, the government will fix the MSP of agricultural products at 1.5 times the market rate.
  • Our emphasis is on generating higher benefits and productive employment for the farmers: Jaitley while addressing the agricultural sector in his Budget speech 2018.
  • Our government has worked sincerely, and without weighing the political costs, hoping that benefits are delivered to people at their doorsteps. The Direct Benefit Transfer system of India is a success story that is reiterated across the world: Jaitley.
  • This year’s Budget will particularly focus on agriculture, says Jaitley.
  • The finance minister also pointed out that India is one of the fastest-growing economies in the world.
  • Indian economy has performed very well since our government took over in May 2014, says Arun Jaitley.

SECTOR WISE ANALYSIS IN BUDGET 2018

budget impact on Banking and Financial Sector

The government’s decision to impose long-term capital gains tax on equity investments may dent investor sentiment for financial services companies, life insurers and providers of mutual fund products including IDFC Ltd., Reliance Capital Ltd., Aditya Birla Capital Ltd., ICICI Prudential Life Insurance Co Ltd., HDFC Standard Life Insurance Co Ltd., General Insurance Corp of India

budget impact on Defense Sector

Jaitley praised the armed forces and promised an industry-friendly policy to promote defense production as he addressed parliament. But there was no indication of a huge boost to defense spending. Companies such as Bharat Forge Ltd. may not see a boost.

Impact of budget on agriculture sector  

Farmers have been protesting across the country. This budget promises to raise the minimum price offered to farmers for crops, while investing heavily in agricultural markets across India. It also delivers more money for rural areas, including irrigation projects and aquaculture projects, and directs state governments to purchase extra solar power generated by farmers using solar-powered pumps. Agriculture-focused companies such as Shakti Pumps India Ltd., Jain Irrigation Systems Ltd., KSB Pumps Ltd., Kirloskar Brothers Ltd., Avanti Feeds Ltd., Waterbase Ltd., JK Agri Genetics Ltd., PI Industries Ltd. could benefit.

Health Care Providers

The government’s new flagship National Health Protection Scheme, which aims to insure as much as 500 million people for up to 500,000 rupees a year of care, could benefit companies such as Apollo Hospitals Enterprise Ltd., India’s largest hospital company, as well as Fortis Healthcare Ltd.

Effect of budget on Transport Companies

With Jaitley promising record infrastructure spending on roads and railways, construction and engineering firms, as well as train wagon-producers, could benefit. That includes Larsen & Toubro Ltd., Hindustan Construction Co Ltd., NCC Ltd., IRB Infrastructure Developers Ltd., Dilip Buildcon Ltd., Titagarh Wagons Ltd., and Cimmco Ltd.

FOR Consumer Companies in budget

With boosted spending on India’s vast hinterland, fast-moving consumer goods companies such as Hindustan Unilever Ltd., Britannia Industries Ltd. and Marico Ltd.could benefit as day laborers get jobs and disposable income. Other companies with rural exposure include: Hero MotoCorp Ltd., Mahindra & Mahindra Ltd., Larsen & Toubro Ltd.

Budget effect on Jewelers

Gold necklaces hang on display at a jewelry store in Pune. With 60 percent of gold demand coming from rural India, the budget’s focus on boosting rural and farm incomes could benefit companies such as Titan Co Ltd., Tribhovandas Bhimji Zaveri Ltd., PC Jeweller Ltd.

Impact of budget on Airports

With the government pledging to expand regional airport construction, firms such as GMR Infrastructure Ltd. and GVK Power & Infrastructure Ltd. could benefit.

Disclaimer:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. The author is a Chartered Accountant and the Chief Gardener & Founder Director of Rajput Jain & Associates , a leading Tax & Investment Planning Advisory Service Provider. His blog can be found at http://carajput.com/blog/ For any query you can write to info@carajput.com. Hope the information will assist you in your Professional endeavors. For query or help, contact:   info@carajput.com or call at 09811322785/4 9555 5555 480)

 

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CORPORATE AND PROFESSIONAL UPDATES 15-jan-2018

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MCA Update:

Stakeholders of Coadunation of Delay Scheme (CODS) (notified vide General Circular No.16/2017 dated 29th December 2017) may kindly note that the process for ‘reactivation’ of the DINs in respect of disqualified Directors has been completed and the status of the relevant DINs can be checked now. Stakeholders are therefore requested to file necessary ‘overdue documents’ as per the scheme. They may further note that the scheme is not applicable for those Directors who may have been associated with a company which was stuck off under section 248(1) of the companies Act, 2013and DINs for such individual shall be re-activated only upon receipts of order for revival of the said company, as per due process laid down under section 252 of the companies Act, 2013.

MCA unlocks DIN of Disqualified Directors, who has Availed CODS, 2018: Valid till 31.03.2018.

Direct Tax:

Jammu and Kashmir HC reverses ITAT order,  allows assessee-society’s (running two educational institutions) claim of exemption u/s 10(23C) for AY 2005-06 as the aggregate annual receipts for each institution did not exceed Rs. 1 crore cap ‘individually’; [TS-620-HC-2017(J & K)]

SC dismisses Revenue’s appeal against Delhi HC ruling holding that interest on Inter-Corporate Deposits (ICDs) which had become non-performing asset (NPA) in terms of RBI Prudential Norms, not taxable in the hands of a non-banking financial company (‘assessee’);  [TS-619-SC-2017]

Share application money cannot be treated as unexplained credit if the AO does not make any investigation on the documentary evidences filed by the assessee or if adverse material is found during search to prove that share application money is bogus. ACIT vs. TRN Energy Pvt. Ltd (ITAT Delhi).

Indirect Tax:

CBEC has issued Guidelines for the sale of seized/ confiscated gold. Vide circular no 01/2018, dated 11th January 2018.

Key Dates:

TCS Returns by all collectors: 15/01/2018

GST Returns Summary for December: 20/01/2018

Other updates

Income Tax Department has attached 900 Properties worth RS 3500 Crore under Benami Properties Act.

Supreme Court Dismisses SLP to Interfere in Delhi High Court Judgment on Input Matching Ruling in Bonafide Cases.

SEBI has extended till 1 April deadline for stockbrokers to comply with the requirement of keeping evidence of every instruction given by clients for equity and equity derivative trades.

FDI guidelines have been amended to provide for mandatory joint statutory Auditor in case foreign shareholder mandates appointment of a particular International Audit firm of their choice.

Govt. Of India made it mandatory that Overseas Auditors (Big Four Firms or its Indian affiliate) will have to take joint Audit with Indian Firms if an International Investor insists on audit by global firm or its Indian affiliate while liberalizing FDI rules.

FAQ on GST:

Query:  Whether the parties to an appeal could seek adjournment of the hearing?

Answer: The Tribunal may, if sufficient cause is shown at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing. However, no such adjournment shall be granted more than three times to a party during hearing of the appeal.

 

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CORPORATE AND PROFESSIONAL UPDATE SEPTEMBER 27 2017

3 (2)

3 (2)

DIRECT TAX:

  • Delhi HC quashes assessment order passed pursuant to ITAT’s remand in case of Nokia India (‘assessee’) for AY 2007-08, holds that the order was barred by limitation u/s. 153(2A) [which prescribes time-limit for framing assessment pursuant to ITAT order setting aside or cancelling assessment]. [TS-425-HC-2017(DEL)]
  • SC allows Revenue’s appeal and sets-aside Punjab & Haryana HC ruling. Rules that enhanced compensation along with interest thereon received by assessee-HUF pursuant to HC’s interim order in pending appeals relating to land acquisition matter, taxable in the year of receipt;

INDIRECT TAX:

  • CBEC notifies changes in GST rates and exemptions in respect of various commodities, including 5% on cereals, pulses and flours put up in unit container and bearing registered brand name or bearing brand name on which actionable claim or enforceable right in court of law is available.

GST UPDATE:

  • Collections under the GST dropped marginally to Rs 90,669 crore for August from therevised figure of Rs 94,063 crore for July.
  • GST Network (GSTN) has tweaked some of the features on its portal over the past month to make the system more robust and allow glitch-free tax payment facility to almost 35 lakh assessees, CEO Prakash Kumar said on Sunday. Of the total 87.33 lakh registered businesses on the GSTN, which manages the IT infrastructure of the new tax regime, 68 lakh.
  • GST e-way Bill and Returns & Burden of Proof & Evidentiary Law with Discussion on recent Update under Income Tax (OTHERS) Date: From: 04-10-2017 – To: 04-10-2017 POU Name: North Campus Study Circle of NIRC Event Venue: ART OF CURRY, OPP-FUN CINEMA, NETAJI SUBHASH PLACE,DELHI-34. City: DELHI …
  • The Goods and Services Tax (GST) Council has put in place an elaborate framework for division of taxpayers between the state and central tax authorities, in a move aimed at bringing clarity and effectiveness in the administration of the new indirect tax regime. The guidelines for the division of the taxpayer base between the Centre and states will…
  • In view of difficulties of online filing, the industry body suggested that “the due dates for filing GSTR-1, GSTR-2 and GSTR-3 should be deferred for another month or two” Industry chamber CII today sought extension of time by two months for filing of GST returns in view of difficulties being faced by businesses. The GST Council has already exten.
  • This article discusses in detail  “whether -GSTR3B is to be filed mandatorily or not when it entails huge tax liability due to submission of some wrong information & non revision of the same or filing of the same can be avoided filing of GSTR-1, 2 & 3?” Query : Sir, i have done mistake..

FAQ on GST: 

Query: How should the assessee disclose the details of inward supplies on which he wishes to avail input tax credit?

Answer: In Form GSTR-2, against each inward supply at invoice level, the assessee has to state whether he is fully eligible, partially eligible or not eligible for availing credit on such inward supply. Further, in case invoice level details cannot be mentioned, the assessee can specify the quantum of ineligible input tax credit on inward supplies, which are relatable to non-taxable supplies or for purpose other than business

MCA UPDATE:

  • Banks have started the process of scanning account details of directors disqualified by the MCA to analyze their links with shell companies and check whether they diverted funds.

RBI UPDATE:

  • RBI has notified the amendments to Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 as per the existing norms.
  • RBI/2017-18/66DBR.No.FSD.BC.89/24.01.040/2017-18 September 25, 2017 All Scheduled Commercial Banks(excluding RRBs) Dear Sir/ Madam, Amendments to Master Direction- Reserve Bank of India (Financial Services provided by Banks) Directions, 2016 Considering the suggestions and queries received from SEBI, banks and other stakeholders, Reserve Bank …
  • Ahead of the monetary policy review by the Reserve Bank of India early next month, the Finance Ministry is hoping for a further cut in key rates to boost domestic demand. “Inflation has picked up in the last one month but all the analyses we had done was based factoring in a rise in inflation. The medium-term inflation target is kept at 4 pe…

OTHER UPADATE:

  • The Central Government has notified the Customs and Central Excise Duties Drawback Rules, 2017 to replace the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 which shall be effective from 1.10.2017.
  • SEBI allowed Stock brokers to submit monthly data on their clients’ funds to the exchanges within three trading days after the month-end. Currently, brokers need to submit this data by the next trading day.
  • Prime Minister constituted a five member Economic Advisory Council (EAC) headed by Niti Aayog member Bibek Debroy, at a time when concerns are being raised over the declining growth in India.

KEY DATES:

  • Return of input service distributer for August: 27.09.2017

WORD OF WISDOM:

  • “Great minds discuss ideas; average minds discuss events; small minds discuss people.”

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

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, GST Etc for resolving their doubts or for clarifications.

 

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CORPORATE AND PROFESSIONAL UPDATE 26 SEPTEMBER 2017

DIRECT TAX UPDATE:

  • Mumbai ITAT allows assessee-company’s claim of exemption u/s 54G  for AY 2004-05 with respect to capital gains arising on sale of land, rejects Revenue’s denial on the ground that investment was made in plant and machinery after 9 years of shifting of industrial undertaking. Hence, assessee can purchase machinery even after shifting and commissioning of business from the new premises, however, opines that most important and decisive factor for claiming the deduction is ‘transfer’ of capital asset. [TS-410-ITAT-2017(Mum)].
  • Rajasthan high court held that deemed registration of an application under section 12AA of the Income Tax Act if not responded to within six months, it would be taken that the application is registered under the provision. CIT Vs Sahitya Sadawart Samiti (Rajasthan High Court)

INDIRECT TAX UPDATE:

  • High Court Allows Clean Energy Cess credit utilization until CBEC evolves appropriate process therefor.
  • CBEC madeamendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.5/2017-Central Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 677(E), dated the 28th June, 2017. Vide notification no 29/2017, dated 22th September 2017
  • CBEC made in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.2/2017- Central Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 674(E), dated the 28th June, 2017. Vide notification no 28/2017, dated 22th September 2017.

GST UPDATE:

  • GST network has tweaked some of the features on its portal over the past month to make the system more robust and allow glitch-free tax payment facility to nearly 35 lakh assessees, its CEO Prakash Kumar Said.

FAQ on GST:

Query: Where a supplier transfers a running business as a whole either due to sale,     merger, amalgamation of such business, whether the portion of the un-utilized input tax credit by the supplier can be claimed immediately by the recipient?

Answer: There is no specific provision under the Act prohibiting transfer of such unutilized credit. Rather, Section 18(3) specifically provides that when there is a change in constitution of a registered person on account of sale, merger, or amalgamation of business with specific provision of transfer of liabilities, the registered taxable person shall be allowed to transfer the input tax credit which remains unutilized. Therefore, if the recipient is registered under the Act, he should be eligible to claim such unutilized credits. In a situation, where the recipient is not registered under the Act, he may have to make a fresh application for registration and claim such unutilized credits after making an intimation to the department.

MCA UPDATE:

  • MCA has notified the Companies (Restriction on Number of Layers) Rules, 2017 which shall come into force from 20-09-2017. Now no company, other than a company belonging to a class specified, shall have more than two layers of subsidiaries.
  • MCA has notified the amendments to the Companies (Acceptance of Deposits) Rules, 2014 applicable from   19-09-2017.

OTHERS UPDATE:

  • CBDT asks I-T department to take urgent steps for collection from the TDS category witnessing a sluggish pace, It asked the I-T dept to pull up its socks and take “urgent” steps and also conduct survey operations to shore up the funds.
  • The Department of Industrial Policy and Promotion (DIPP) will facilitate the process of ranking and it would be done by a third party. The Centre has initiated an exercise to rank states and Union territories on the basis of measures being taken by them to promote buddi entrepreneurs.

KEY DATES:

  • Return of input service distributer for August: 26/09/2017

WORD OF WISDOM:

  • Clear, written goals have a wonderful effect on your thinking. They motivate you and galvanize you into action. They stimulate your creativity, release your energy, and help you to overcome procrastination as much as any other factor.”
  • The most common way people give up their power is by thinking they don’t have any.

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

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, GST Etc for resolving their doubts or for clarifications.

 

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CORPORATE AND PROFESSIONAL UPDATE SEPTEMBER 23rd 2017

DIRECT TAX:

  • Delhi ITAT allows deduction u/s 10B to assessee [(operating an Export Oriented Unit (EOU)] for AY 2010-11 and AY 2011-12 in respect of duty drawback receipts forming part of EOU’s profits, ITAT holds that manner of computing profits u/s 10B(4) does not require direct nexus with business unlike Sec 80(IB).  TS-408-ITAT-2017(DEL)
  • Mumbai ITAT treats interest earned by assessee company on fixed deposit as capital receipt for AY 2012-13, being inextricably linked with setting up of power project, directs set-off against pre-operative expenditure. [TS-409-ITAT-2017(Mum)

INDIRECT TAX:

  • CBEC made amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No.11/2017- Central Tax (Rate), dated the 28thJune, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 690(E), dated the 28thJune, 2017. Vide notification no 24/2017, dated 21th September 2017
  • Income Tax Department at the time of login asking for Residential Status, Mobile and Email, Bank details and at last Mobile and E-mail OTP. Otherwise Login is not allowed. Also, one Mobile and E-mail address cannot be used for more than 3 Assessee.
  • CBDT via Notification No. 9 dated. 19.09.2017 notifies procedure for filing Statement of Income to avail foreign tax credit as per Rule 128 of Income Tax Rules 2016.
  • CBEC exempts intra state supply of heavy water and nuclear fuels falling in Chapter 28 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) by the Department of Atomic Energy to the Nuclear Power Corporation of India Ltd from the whole of the central tax leviable thereon under section 9 of the Central Good and Services Tax Act, 2017. Vide notification no 26/2017, dated 21thSeptember 2017.

GST UPDATE:

  • Extension of last date for filing TRAN-1 to 10.2017. Now original TRAN1 can be filed and revised once till 31.10.2017.  [Order 03/2017-GST of 21.9.2017.]
  • As many as 2.97 million assessees have filed the summary input-output return under the GST for the month of August (‘GSTR 3B’), much less than the 4.6 million that came for the month of July.

FAQ on GST:

Query: I have a registration as an Input Service Distributor. Am I required to raise invoices even though no taxable supplies are made from this registration number?

Answer: Yes. An Input Service Distributor (ISD) should issue a tax invoice being an ‘ISD invoice’ for distributing credits to the GST registrations that have the same PAN as that of the ISD. Such invoice will be different from invoices reflecting supply of goods or services (refer Invoice Rules). This is a document required under Section 20 of the Act.

MCA UPDATE:

  • MCA made amendments in companies Act, 2013. These rules may be called the Companies (Restriction on number of layers) Rules, 2017 which shall come into force on the date of their publication in the official Gazette. Vide notification no 01/1312013 CL-V (Vol.IIl), dated 20.09.2017.
  • The last date for submission of research proposal for “Funding of Research Studies and Workshops conference, etc. under the CDM plan Scheme” is now extended up to 29th September, 2017.

OTHER UPADATE:

  • SEBI has empowered stock exchanges to conduct forensic audits on listed companies which seem dubious, being suspected of  use as conduits for illicit fund flow.

KEY DATES:

  • Return of input service distributer for August: 23/09/2017

WORD OF WISDOM:

  • To be successful, you must decide exactly what you want to accomplish, then resolve to pay the price to get it.
  • “There is only one corner of the universe you can be certain of improving, and that’s your own self”

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

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

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