CORPORATE AND PROFESSIONAL UPDATE NOV 1, 2016

CORPORATE AND PROFESSIONAL UPDATE NOV 1, 2016

34Direct Tax:-

  • CBDT has issued a  clarification regarding taxability of the compensation received by the land owner for the land acquired under the right to fair compensation and transpereancy in land acquisition , rehabilitation and resettlement act, 2013 vide Circular No. 36/2016 dated 25/10/2016.Compulsory acquisition of non-agricultural land is also tax-free under new Land Acquisition Act.
  • CBDT has issued prohibition of Banami Property Transaction Rules,2016 vide Notification No. 99/2016 dated 25/10/2016.They shall come into force on the 1st day of November, 2016. (Click here to view)
  • Computerized machines not eligible for depreciation@ 60%, [T.C.A.No.624 of 2016, Decided on 02.09.2016].
  • Sale consideration received by the assessee is entitled to benefit under Section 54 of income tax act 1961, even though the transaction for purchase of new property was not completed and possession was also not handed over to the assessee within 2 years. ( CIT Vs Mrs. Shakuntala Devi (Karnataka High Court)).
  • 10B relief allowable even if assessee had substantial unabsorbed losses for set-off against EOU; SLP dismissed Commissioner of Income-tax v. BEHR India Ltd. [2016] 74 taxmann.com 171 (SC)
  • No penalty due to delay in filing TDS return as it was first year of introduction of e-TDS return Nav Maharashtra Vidyalaya v. Additional Commissioner of Income-tax (TDS), Range, Pune [2016] 74 taxmann.com 240 (Pune – Trib.)
  • HC allows retrenchment compensation paid to employees of transferee-co. under transfer agreement Wallace Flour Mills Co. Ltd. v. Commissioner of Income-tax, Central circle-I [2016] 74 taxmann.com 174 (Bombay)
  • Pune ITAT deletes penalty levied u/s 272A(2)(k) for belated filing of TDS returns/statements for AY 2011-12, grants immunity u/s 273B as ‘reasonable cause’ established. [TS-571-ITAT-2016(PUN)]

Indirect Tax:-

  • Mumbai CESTAT restores Custom House Agent’s license, states that even though clearance of imported consignments was violative of declaratory provisions of Customs Act, there is no evidence on record to show that such agent was aware of the intent / modus adopted by client / customer to evade customs duty. [TS-426-CESTAT-2016-CUST]
  • Refund claim – claim filed after about 10 years from the relevant date – unutilized Modvat credit in Modvat account which could not be used for payment of duty as the final product has become exempted – claim of refund rejected – Tri – Central Excise. M/s M.P. State Co-operative Oilseed Grower’s Federation Limited Versus CCE, Bhopal – 2016 (9) TMI 840 – CESTAT NEW DELHI

RBI Update

  • RBIpermits Startup Enterprises to access loans under ECB framework – P. (DIR Series) Circular No.13, dt.27.10.2016.
  • RBI has issued a circular allowing 100% FDI through the automatic route to NBFC Cos other than banks or insurance companies.
  • RBI to support financing for start-ups, issued rules permitting these to raise external commercial borrowings (ECB).

SEBI Update

  • SEBI has issued circular on detailed requirements and guidelines for disclosure of financial information in offer document/ placement memorandum for InvITs.
  • SEBI has issued a circular freezing of promoter group demat accounts for non compliance with certain provisions of SEBI.

MCA Update

  • MCA extends last dates for filing of Annual Filing Forms without payment of additional fee of filing of e-Forms AOC-4, AOC-4 XBRL, AOC – 4 CFS and MGT-7 under the Companies Act, 2013 upto 29th November, 2016.
  • NCLT allows compounding of offence for delay in appointment of women director
    Jalpower Corporation Ltd. v.Registrar of Companies [2016] 74 taxmann.com 201 (NCLT – Hyd.)

GST Update

  • Under GST value and taxable value have to be given in GST returns as they may be different. Taxable value is to be given even if there is no consideration.
  • GST paid on reverse charge will also be eligible for Input tax credit if goods or services are used or intended to be used for business.
  • Under GST Co, LLP etc to use DSC to sign application for enrolment of exisiting assessees in GST REG-20. others with valid aadhar can use e-signature also.

GST UPDATE :

Returns Process and matching of Input Tax Credit

  • What is the purpose of returns?
  • a)  Mode for transfer of information to tax administration;
  • b)  Compliance verification program of tax administration;
  • c)  Finalization of the tax liabilities of the taxpayer within stipulated period of limitation; to declare tax liability for a given period;
  • d)  Providing necessary inputs for taking policy decision;
  • e)  Management of audit and anti-evasion programs of tax administration.
  • Who needs to file Return in GST regime?
  • Every registered taxable person – who crosses the threshold limit for payment of taxes. A supplier needs to be registered when the aggregate turnover crosses Rs. nine lacs but he become taxable person ONLY when he crosses Rs. ten lacs. So he will be required to file returns when he crosses the threshold limit of Rs. ten lacs. There are some other class of persons who need to be registered and therefore will have to file returns like interstate suppliers, TDS deductors, e-commerce operators, suppliers supplying goods through e-commerce operators etc (reference Schedule-III and Question 6 of the Registration Chapter).
  • What type of outward supply details are to be filed in the return?
  • A normal registered taxpayer has to file the outward supply details in GSTR-1 in relation to various types of supplies made in a month, namely outward supplies to registered persons, outward supplies to unregistered persons (consumers), details of Credit/Debit Notes, zero rated, exempted and non-GST supplies, exports, and advances received in relation to future supply.
  • Is the scanned copy of invoices to be uploaded along with GSTR-1?
  • No, scanned copy of invoices is to be uploaded. Only certain prescribed fields of information from invoices need to be uploaded.
  • Whether all invoices will have to be uploaded?
  • No. It depends on whether B2B or B2C plus whether Intra-state or Inter-state supplies.
  • For B2B supplies, all invoices, whether Intra-state or Inter- state supplies, will have to be uploaded. Why So? Because ITC will be taken by the recipients, invoice matching is required to be done.
  • In B2C supplies, uploading in general may not be required as the buyer will not be taking ITC. However still in order to implement the destination based principle, invoices of value more than Rs.2.5 lacs in inter-state B2B supplies will have to be uploaded. For intra-state invoices below Rs. 2.5 lacs and all intra-state invoices, state wise summary will be sufficient.

Other Update :

  • Central government hereby appoints the 1st day of November, 2016 as the date on which provisions of Benami transaction (Prohibition) Amendment Act, 2016 shall come into force

Key Dates:

  • Benami Transaction Amendment Act would be effective from Nov. 1, 2016
    NOTIFICATION NO. SO 3289(E) [NO.98/2016 (F.NO.149/144/2015-TPL (PART-II)], DATED 25-10-2016.
  • MCA has revised Form AOC-4 with effect from 27th October 2016.

We wish you and your family a very happy and prosperous Dhanteras. May lord bless you with happiness and peace of mind.

Don’t get attracted to people who achieved great heights. Love those who hold you when you fall from the heights. A loyal one is better than royal one

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CORPORATE AND PROFESSIONAL UPDATE OCT 26, 2016

CORPORATE AND PROFESSIONAL UPDATE OCT 26, 2016

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Direct Tax:-

  • Karnataka High Court held that Sale consideration received by the assessee is entitled to benefit under Section 54 of the Income Tax Act, even though the transaction for purchase of new property was not completed and possession was also not handed over to the assessee within 2 years- (CIT Vs Mrs. Shakuntala Devi (Karnataka High Court)
  • Compensation received by flat owner from builder for hardship caused due to redevelopment of the building is a non-taxable receipt and has to be reduced from the cost of the flat-(Jitendra Kumar Soneja vs. ITO (ITAT Mumbai)
  • FM: Better tax payer services key to direct tax reforms; Launches SMS Alert Service for about 2.5 crore private and Government salaried employees in order to directly inform them about the deposit of tax deducted at the end of every quarter. Press Information Bureau 24­October­2016 19:26 IST

Indirect Tax:-

  • Allahabad High Court in the below mentioned case held that the assessee cannot be forced to pay entire disputed amount when the assessment proceedings are pending. The department can only take action to ensure compliance of order passed by the Court-(Prosper Build Home Pvt. Ltd. V/s. Union Of India (Allahabad High Court)
  • AAR held that Processing of steel scrap into blended steel scrap amounts to manufacture-(T.T. Recycling Management India Private Limited (Authority for Advance Rulings)
  • Draft rules for prescribing the method of valuation of fair market value in respect of the trust or the institution ceases to exist as charitable organization or converts into a non-charitable organization have been prescribed.
  • Quarterly returns under DVAT Act and CST Act for dealers registered in Delhi or the 2nd quarter of 2016 ended on 30.9.2016 is due to be filed on or before 28.10.2016 along with details of closing stocks as at 31.3.2016

GST UPFDATE:

  • Under GST a taxable person who has taken registration voluntarily cannot apply for cancellation before completion of one year from date of registration.
  • Aprox 80 lakhs of the existing assessees of excise, customs, service tax and VAT will start shifting to GSTN Portal on 8th November 2016. This is going to be one of the biggest moves for GST implementation.
  • Under GST every taxable person (other than Composition Supplier) has to submit final return before cancellation of registration.

FAQ on Company Law:

  • Query Can an Indian company be amalgamated with another foreign company?

Answer: Yes, subject to the provisions of Section 234 of the Companies Act 2013, an Indian company can be amalgamated with another foreign company. Provided that prior approval of Reserve Bank of India should have been obtained by the foreign company in this behalf.

  • Query : Can an Independent director be reappointed after the term for he was appointed is complete?

Answer: As per the provisions of section 149 (10), an independent director shall hold office for a term up to five consecutive years on the Board of a company, but shall be eligible for reappointment on passing of a special resolution by the company and disclosure of such appointment in the Board’s report.

 

SEBI UPDATE

  • SEBI issued disclosure norms for listed insurance companies in respect to their quarterly results. Besides, additional disclosures should be made as prescribed by IRDAI.
  • SEBI introduced an online system for investment advisers and research analysts which aims to ease the operations in terms of registration and compliance reporting, etc.

OTHER UPDATE

  • Compulsory acquisition of non-agricultural land is also tax-free under new Land Acquisition Act: CBDT Circular No. 36/2016 Dated 25th October 2016
  • Haryana government has revised minimum wages for different categories of workers, in exercise of the powers conferred by Sub-Section (2) of Section 5 of the Minimum Wages Act, 1948.

Key Dates:

  • Advance information for 1st fortnight of Nov of function with booking cost more than Rs. 1 Lakh in Banquet halls, hotels etc in Delhi-27.10.2016
  • Filling of DVAT Return verification form for quarter ended September where return not signed with digital signature:- 28.10.2016
  • Return of TDS for September quarter in DVAT-48 -28.10.2016
  • Return by scheduled bank branches in Delhi engaged in sale of silver, gold, repossessed vehicle for quarter ended September:-28.10.2016

Keep your face always toward the sunshine-and shadows will fall behind you.  Walt Whitman

Truth is always like oil in water. No matter how much water you add oil always floats on top.

 

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CORPORATE AND PROFESSIONAL UPDATE OCT 24, 2016

CORPORATE AND PROFESSIONAL UPDATE OCT 24, 2016

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Direct Tax:-

  • Sum paid to brothers for vacating house held as cost of improvement of house
    Nanubhai Keshavlal Chokshi HUF v. Income-tax Officer, Ward- 6 (2), Ahmedabad
    [2016] 74 taxmann.com 113 (Ahmedabad – Trib.)
  • Discrepancies in docs under penultimate sales would also lead to denial of export exemption
    Commissioner of Commercial Tax v. Shakti Containers[2016] 74 taxmann.com 39 (Gujarat)
  • ITAT denies set-off of speculative loss when assessee misstated that it was connected with brokerage businessCommissioner of Income-tax, Kol-II v. Eureka Stock & Share Broking Services Ltd.[2016] 74 taxmann.com 114 (Calcutta)
  • IT:Notice u/s 148 for reopening assessment by the very same officer who executed the scrutiny assessment and granted exemption U/s 11- It is a case of change of opinion – Notice quashed – Gujarat State Board of School Textbooks Vs ACIT (2016 (10) TMI 775 – Gujarat High Court)
  • Attachment order had be lifted when ITAT deleted all tax demand and revenue didn’t apply for stayShangkalpam Industries (P.) Ltd. v. Income Tax Officer, Company ward VI(1), Chennai
    [2016] 74 taxmann.com 102 (Chennai – Trib.)
  • The Delhi High Court in Pr CIT vs. Samcor Glass Ltdhas warned the department not to harass taxpayers by reopening assessments u/s 147/148 in a mechanical and casual manner. Pr CIT directed to issue instructions to AOs to strictly adhere to the law explained in various decisions and make it mandatory for them to ensure that an order for reopening of an assessment clearly records compliance with each of the legal requirements. AOs also directed to strictly comply with the law laid down in GKN Driveshafts 259 ITR 19 (SC) as regards disposal of objections to reopening assessment.
  • The Karnataka High Court inColumbia Sportswear Company vs. DIT has held that a liaison office of a foreign co which identifies a manufacturer in India, negotiates the price, helps in choosing raw material to be used, ensures compliance with quality and gets material tested is not a ‘permanent establishment’ under Article 5 of India-USA DTAA.
  • CBDT vide Notification No. 95/2016 notified director, vigilance and anti-corruption bureau, Kerala U/s. 138(1)(a)(ii) to whom in public interest disclosure of information respecting assessees can be made by income tax Department.

Indirect Tax:-

  • HC dismisses writ petition, denies assessee cross examination of Chemical Examiner of Central Revenue Control Laboratory who gave sample testing report of imported goods; Person whom assessee seeks to cross examine is an officer / Govt. servant who was discharging statutory duty and therefore, not a witness to the proceedings. [TS-415-HC-2016(MAD)-CUST]
  • HC dismisses writ petitions, refuses to interfere with order of Settlement Commission that directed payment of excise duty liability against removal of leather goods by assessee by indulging in manipulation of records of sister concerns and job-workers to avail SSI exemption. [TS-414-HC-2016(MAD)-EXC]
  • ST:Activity of toll collection on commission basis would not fall under the category of business auxiliary services so as to make the same liable to service tax – service not liable to tax -Prakash Asphal Ting & Toll Highways (India) Ltd. Vs CCE, Jaipur-II (2016 (10) TMI 746 – CESTAT New Delhi)
  • VAT:Taxability of a Car Stereo System – electronic goods falling under Entry 75 or motor vehicle falling under Entry 18 – It cannot be gainsaid that a car stereo does add to the comfort for the use of a motor vehicle – car stereo held as accessory – to be taxed accordingly – Sony India Pvt. Ltd. Vs CIT & Anr. (2016 (10) TMI 720 – Allahabad High Court)
  • Quarterly returns under DVAT Act and CST Act for dealers registered in Delhi for the 2nd quarter of 2016 ended on 30.09.2016 is due to be filed on or before 28.10.2016.
  • Body building of buses on job-work basis should be valued under rule 10A of Excise
    HMM Infra Ltd. v. Commissioner of Central Excise, Panchkula[2016] 74 taxmann.com 86 (SC)
  • Discrepancies in docs under penultimate sales would also lead to denial of export exemption
    Commissioner of Commercial Tax v. Shakti Containers[2016] 74 taxmann.com 39 (Gujarat)

RBI UPDATE :

  • The Reserve Bank of India decided to allow foreign investment up to 100 per cent under the automatic route in ‘other financial services’.
  • RBI issued operational guidelines for sovereign gold bonds 2016-17 series III vide notification No.RBI/ 2016-17/ 99I DMD. CDD.No.894 /14.04.050/2016-17 October 20, 2016.

 

MCA UPDATE :

  • MCA has recently revised Forms CHG-8, AOC-4 and 20-B. Stakeholders are advised to check the latest version before filing.
  • MCA:MGT-07/20B filed but the same has not been taken on records due to non-submission/non-uploading of CD are requested to upload the data in excel sheet by 07th November 2016.

GST UPDATE :

  • Under GST proposed GST Rates. Food items-Exempt, Gold, Silver-4%, Essential items-6%, Luxury items, FMCG, cigarettes-26%+cess, most items-18%, Others-12%.
  • Under GST w.e.f.  8/11/16, existing 80 lac assessees will be able to access their data migrated to GSTN, make necessary corrections & upload relevant documents.
  • GSTCouncil to meet on 3-4 Nov to consent on Rates, Draft Bill, Etc.

Key Dates:

  • Issue of DVAT Certificate for deduction made in the month of September-22/10/2016
  • E-return of DVAT for the quarter ended September(Form 61 and CST-1)-25/10/2016
  • Filling of half yearly service tax return-25/10/2016

Everyone has two eyes. But no one has the same view. So always try to prove that you are right but never attempt to prove that others are wrong.

The kite gives us a nice & wonderful message. Fly high & high. But stay connected to the ground to our roots or else you will be lost.

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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 Continue reading

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CORPORATE AND PROFESSIONAL UPDATE OCT 21, 2016

CORPORATE AND PROFESSIONAL UPDATE OCT 21, 2016

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Direct Tax:-

IT: Repayment of loan – violation u/s 269SS – journal entries – there was no payment in cash either by the assessee or on its behalf. No penalty – CIT-II, Kanpur Vs Apex Finlease Ltd. C/O M/s M.L. Puri & Co. (2016 (10) TMI 636 – Allahabad High Court)

IT: When the property was shown as stock in trade it should not be considered for the purpose of exemption u/s 54F – CIT, ACIT Vs Shri Gregory Mathias (2016 (10) TMI 635 – Karnataka High Court)

CBDT extended the ‘due date’ for filing ITR and Tax Audit Reports for AY 2016-2017 for all categories of taxpayers in the state of J&K to 31. 12. 2016.

Bompaby High Court in the below citied case held that AO cannot rely on Instruction No.1/2015 dated 13.01.2015 to withhold refunds as the same has been struck down by the Delhi High Court in Tata Teleservices & the same is binding on all AOs across the Country. Action of the AO in not giving reasons for not processing the refund application is “most disturbing” and stating that he will wait till the last date is “preposterous”. Action of the AO suggests that it is not enough that the deity (Act) is pleased but the priest (AO) must also be pleased.(Group M. MediaIndia Pvt. Ltd. Vs. UOI)

Bangalore ITAT allows exemption u/s 11 to assessee-trust for AYs 2004-05 to 2007-08 despite Sec 12A registration granted only w.e.f. April 1, 2008, holds first proviso to Sec 12A(2) inserted vide Finance Act, 2014 (which provides for roll-back of registration for earlier years) as retrospective in nature. [TS-561-ITAT-2016(Bang)]

CBDT issues the income-tax (28th Amendment), rules, 2016, effective from 01.06.2016. Final rules on buy-back of shares notified. CBDT notification of 17.10.2016.

CBDT issued Circular No.35 of 2016 dated 13.10.2016 on applicability of TDS provisions of section 194-I of the income-tax act, 1961 on lump sum lease premium paid for acquisition of long term lease-regarding.

Section 14A cannot be invoked, where no regular activities were undertaken by the assessee in respect of the investments to earn exempt income and no change in the investments during the year.[M/s Power Grid Corp of India Ltd. vs. DCIT, ITAT – Delhi].

Taxability- compulsory acquisition of capital asset

More than one business & filing of tax audit report with return

Indirect Tax:-

SC allows Revenue appeal, sets aside CESTAT order to the extent penalty levied u/s 11AC of Central Excise Act was reduced as against confirmed duty demand. [TS-418-SC-2016-EXC]

CESTAT holds that financial advisory services in respect of energy, banking, transport & urban infrastructure shall be taxable as “Banking and Other Financial Services” (BoFS) w.e.f. August 2002, cannot be classified as “Management Consultancy Services” (MCS) for prior period . [TS-416-CESTAT-2016-ST]

ST/ED: CENVAT credit – capital goods – installation of bulk milk coolers & DG sets at milk collection centres to store milk – Credit allowed – Glaxo Smithkline Consumer Health Ltd. Vs CCE, Chandigarh-II (2016 (10) TMI 649 – CESTAT Chandigarh)

CBEC issued instructions for rationalization of procedures regarding handling exporters obligations under EPCG authorizations.

CBEC mission zero has been launched there with the objective of sharply reducing the pendency of adjudications, refunds, rebates and drawback in a time bound manner.

FAQ ON GST

Concept of Input Service Distributor in GST

Q 8. Whether SGST credit can be distributed as IGST credit by an ISD to units located in different States?

Ans. Yes, an ISD can distribute SGST credit as IGST for the units located in different States.(Section 17(2)

Q 9. Whether the ISD can distribute the CGST and IGST Credit as CGST credit?

Ans. Yes, CGST and IGST credit can be distributed as CGST credit by an ISD for the units located in same State.

Q 10. Whether the SGST and IGST Credit can be distributed as SGST credit?

Ans. Yes, ISD can distribute SGST and IGST credit for the units located in same State.

Q 11. What are the documents through which the credit can be distributed by an ISD?

Ans. The document under which the credit can be distributed is yet to be prescribed. The Act provides that the credit can be distributed only through prescribed document.

Q 12. How to distribute common credit among all the units of an ISD?

Ans. The common credit used by all the units can be distributed by ISD on pro rata basis i.e. based on the turnover of each unit to the aggregate turnover of all the units to which credit is distributed.

GST UPDATES

GST Council meet ended in New Delhi after the States failed to come to a consensus on the rates, will meet again in the first week of  Nov’ 2016.

Under GST large taxpayer units to be shut down under GST at all locations i.e. Bengaluru, Chennai, Delhi, Kolkata & Mumbai, due to their failure.

Under GST every advance receipt against supplies shall get a transaction id which is to be mentioned against invoice issued later in GSTR-1.

Under GST Summary of invoices issued to be given in GSTR-1(including invoices issued for inward supplies from Unregistered Persons liable to Reverse Charge).

Central Govt proposes 26% peak rate for GST as Four-tier structure may be proposed at GST Council meet started; almost 20-25% of all taxable goods may come under the maximum rate.

FAQ on Company Law:

Query: Can a foreign resident form an OPC in India with Indian resident as his nominee?

Answer: As per Rule 3(1) of the Companies (Incorporation) Rules 2014, only a natural person who is an Indian citizen and resident in India shall be eligible to incorporate OPC .

No Body Corporate and Foreign Citizen resident in India is allowed to form OPC.

MCA UPDATES

MCA is likely to update LLP Forms, LLP 3 & LLP 4 w.e.f. TODAY (20 Oct  2016)

E-forms- (SPICe) Simplified Proforma for Incorporating Companies Electronically and electronic AOA (SPICe AOA) revised on MCA portal w.e.f. 18.10.2016.

MCA is expected to revise the version of e-Forms: Form CHG-8, Form AOC-4 and Form 20-B  w.e.f. 22.10.2016.

ICAI UPDATES

ICAI

has issued Guidance Note on audit of Consolidated Financial Statements (Revised 2016).

ICAI issued guidance note on audit of consolidated financial statements (Revised 2016). For details visit www.icai.org

NCLT has designated its members in different branches of the tribunal to hear appeal against order of registrar or such other officer officiating as the registrar of the Bench

OTHER UPDATE

SEBI has issued a circular easing rules on bullion as collateral now keep a higher quantum of up to 30 per cent of their total liquid assets bullion as commodities collateral.

ESIC Hikes wage ceiling from Rs.15000 to Rs.21000 w.e.f 1st Oct 2016

Key Dates:

Payment of ESI for the month of September :-21/10/2016

E-Payment of DVAT & CST tax for the month ended September- 21/10/2016

Issue of DVAT Certificate for deduction made in the month of September-22/10/2016

  • Silence is the strong fence around wisdom, if your foot slips, you can re-gain your balance, but if your tongue slips, you can never re-build your image again.
  • Patience is a great quality. we should learn it from the sun and the moon.  both patiently wait for their turn.
  • It doesn’t matter if the glass is half empty or half full. Be thankful that you have a glass & grateful that there is something in it.
  • If you think positively sound become music, movement becomes dance, smile becomes laughter, mind becomes meditation and life becomes a celebration.

We look forward for your valuable comments. 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 Continue reading

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CORPORATE AND PROFESSIONAL UPDATE OCT 17, 2016

CORPORATE AND PROFESSIONAL UPDATE OCT 17, 2016

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Direct Tax:-

Income escaping reassessment void if reasons not supplied. Bombay High Court. The Assessing Officer (AO) is bound to furnish reasons within a reasonable time and bound to dispose of the same by passing a speaking order.

Electoral trusts will not be able to accept foreign funds or contributions from public sector companies, according to new rules notified.

CBDT has issued a circular regarding applicability of TDS provisions of section 194-I of the Income Tax Act , 1961 on lump sum lease premium paid for acquisition of long term lease. No TDS liability u/s 194-I on lump sum lease premium or one-time upfront lease charges which are not adjustable against periodic rent paid or payable for acquisition of long-term leasehold rights over land (Click here to view)

ITAT  Mumbai in the below citied case  held that merely because doctors are subject to the payment of PF or other retirement benefit TDS u/s 194J is not deductible. Neither the AO nor the ld CIT (A) gave their finding that any of the condition contained in the contract of the Doctors mandate that there was employee-employer relationship between the assessee and them, which specifically may brings the doctors in the category of employee. ( Sir Hurkisondas Nurrotumdas Hospital and Research Centre Versus The DCIT, (TDS) -3 (2) , Mumbai. – 2016 (10) TMI 432

Indirect Tax:-

Supreme Court in the below citied case held that in case of levy of security servive tax after choosing one particular remedy the plaintiff cannot avail the other remedy as well in respect of the same relief founded on same cause of action. – SC – Service Tax-( State of Rajasthan Versus Union of India And Others) – 2016 (10) TMI 462

CESTAT Mumbai in the below citied case held that no penalty can be levied on late payment of service tax as appellant has collected the service tax but not depositied the same it in time but deposited before issuance of show cause notice.(M/s. Kalbhor Construction Co. Versus Commissioner of Central Excise, Pune – 2016 (10) TMI 458 )

The government has doubled the limit of excise duty evasion for arrest and prosecution of accused to Rs 2 crore and also asked officials not to resort to penal provision in cases of technical nature.

FAQ on Company Law:

Query:  We have a query that in case a person is a director of a private Company and holds 50% shareholding in that company and at the same time also hold 25% shareholding in another company of which he is not a director. Then, the two companies shall be Related Parties or not. If yes, kindly provide me the provision in Companies Act 2013 as well.

Answer: As per Section 2(76)(iv) of the Companies Act 2013, Related Party with reference to a company means & includes – a private company in which a director or manager is a member or director.

Thus, Both the Companies shall be Related Parties as per the provisions of Companies Act 2013.

 

 

MCA UPDATE :

MCA has notified that e-Form INC-29 (Integrated Incorporation Form) will be withdrawn w.e.f. 1 .11. 2016.

The Ministry of Corporate Affairs has released the new forms relevant to costing rules prior to companies (cost records and audit) FORM 23C, FORM 23D.

GST UPDATE :

Under GST returns GSRT-1A & 2A introduced in draft rules for additions, corrections, deletions of outward/inward supplies by the recipient /supplier.

Under GST normal & compounding taxpayer to file annual return. Not to be filed by casual / Non-resident taxpayers, ISDs & persons liable to deduct TDS.

SEBI UPDATE:

The special investigation team (SIT) on black money has asked the SEBI to furnish the details of P-Note data for black money investigation.

SEBI in it’s circular stated that exclusively listed co (ELCs) will be required either raise capital for listing or exit from the dissemination board.

RBI UPDATE:

The Reserve Bank of India has allowed banks to classify government securities borrowed from the central bank as SLR.

State Bank of India request for proposal (RFP) for engagement of auditor for special audit of 5 associate banks namely (SBH) ii) (SBP) iii) (SBT) iv) (SBBJ) v) (SBM) and Bhartiya Mahila Bank Ltd.

Bank of Baroda, invites proposal (RFPs) for appointment of concurrent auditors for branches for south Gujarat zone (Baroda) Last Date : 07.11.2016.

Key Dates:

Payment of DVAT TDS for the month of September-15/10/2016

Form 27EQ (TCS return) by all deductor-15/10/2016

Issue of TDS Certificate in case of payment/credit made in the month of august for purchase of property u/s 194IA-15/10/2016

Statement by bank in Form no. 15CC in respect of foreign remmitence during the quarter-15/10/2016

E-Payment of PF for the month of September-15/10/2016

  • Mistakes, failures, Insult, frustration and rejections are part of progress and growth. Nobody ever achieved anything worthwhile without facing these five Things.
  • Pain makes you stronger, tears make you braver, and heartbreaks make you wiser, so thank the past for a better future.
  • if you don’t design your own life plan, chances are you’ll fall into someone else’s plan. And guess what they have planned for you? Not much 

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CORPORATE AND PROFESSIONAL UPDATE OCT 15, 2016

CORPORATE AND PROFESSIONAL UPDATE OCT 15, 2016

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Direct Tax:-

Telecommunication expenses, insurance charges, personnel expenses, professional expenses, branch office expenses and other expenses incurred in foreign exchange – exclusion from the export turnover for the purpose of computing deduction under Section 10B – Held that – In the instant case, the order for software and hardware are placed separately, though in the same order sale of hardware cannot be a part of software exported by the assessee -.sale of hardware cannot be a part of export turnover(M/s. Subex Limited Versus The Deputy Commissioner of Income Tax, Circle 12 (3) , Bangalore)

Senior citizens do not have to pay advance tax on salary and interest income.

CBDT has instructed the income tax department to expedite cases of TDS mismatch and reduce taxpayers grievances in this regard.

Return of income filed in response to notice u/s 148 – that levy of interest u/s 234C is an automatic and the interpretation of charging of interest u/s.234C cannot be restricted to the tax due on Returned income as referred u/s 139(1) – Tri – Income Tax(Sree Meenakshi Reltors Versus The Income Tax Officer, Ward II (3) , Coimbatore)

 

IT: Transaction of shares – nature of income – business income or capital gain – magnitude of transactions carried out by the assessee in our view should not be very material in coming to the conclusion that income in question is income from business – Shree Padmasagar Exports Pvt. Ltd. Vs CIT, Cir-5, Kol (2016 (10) TMI 320 – ITAT Kolkata)

IT: Validity of reopening of assessment – Revenue in the instant case has come to the conclusive finding which attained finality that the transactions of purchase of shares are sham and bogus transactions camouflaged with an intention to evade taxes -Ratnakar M. Pujari Vs ITO, W-25(3)(3), Mumbai (2016 (10) TMI 316 – ITAT Mumbai)

 

Indirect Tax:-

Delhi high court seeks Delhi Govt and centre to reply on restaurants charging excess VAT, service tax as they are charging entire amount of the bill.

ST: Suo motu adjustment of excess payment of service tax made in October 2008 with subsequent service liability – procedural violation – demand of service tax of the said amount is not sustainable – ONGC Ltd. Vs CCEC&ST, Surat-II (2016 (10) TMI 307 – CESTAT Ahmedabad)

High Court in the below case held that no VAT liability can be imposed on providing cleaning services where The use of pesticides and chemicals was wholly incidental. There was no intention of sale of goods from the assessee to the company – NO transfer of property in goods involved.( State of Gujarat Versus Bharat Pest Control)

 

No tax can be levied on entry of goods into local areas in terms of the impugned provisions over the transactions made on e-commerce portals for personal use or consumption of individual consumer. – HC – VAT and Sales Tax.(Instakart Services Private Limited, WS Retail Services Private Limited Versus The State of Bihar, The Commissioner-cum-Principal Secretary, Commercial Taxes Department, The Deputy Commissioner of Commercial Taxes)

FAQ on Company Law:

Query: Whether pension advisor is exempted from obtaining registration under IA Regulations?

Answer: The PFRDA Act envisages registration of pension Advisors by PFRDA. Such Pension Advisors will be registered and regulated by PFRDA. If such advisors advice on other financial products, then they may be subjected to regulation under IA Regulations for their conduct relating to advice of financial products other than pension products.

Query: Whether insurance agent or insurance broker is exempted from obtaining registration under Investment Adviser Regulations?

Answer: Insurance Agents or Insurance Brokers registered with IRDA who provide advice in various insurance products across manufacturers shall be regulated by IRDA only. If such Insurance Agents or Insurance Brokers expand their activities to include investment advice on other financial products, then they may be registered and regulated under IA Regulations for such other financial products other than insurance products.


ICAI Updates:-

ICAI has made an announcement regarding clarification in respect of MFE-2016-17 dated on 06/10/2016.(Click here to view)

Delhi high court held that a Chartered Accountant while doing concurrent audit is expected to check the transactions falling within the scope of audit in depth. He is liable to face the charge of professional misconduct under clause 7 of the first schedule of the CA Act, 1949.

GST update

The Commerce Ministry has suggested to its finance counterpart that the exemptions given to exporters should continue under the new GST Law.

Key Dates:

Advance information for 2nd fortnight of Oct of functions with booking cost more than rs 1 lakh in Banquet halls, hotels etc. in Delhi-12/010/2016

Payment of DVAT TDS for the month of September-15/10/2016

Form 27EQ (TCS return) by all deductor-15/10/2016

Issue of TDS Certificate in case of payment/credit made in the month of august for purchase of property u/s 194IA-15/10/2016

Statement by bank in Form no. 15CC in respect of foreign remmitence during the quarter-15/10/2016

E-Payment of PF for the month of September-15/10/2016

Today (15.10.2016) is the due date to file TCS returns by all collectors for Sep quarter & for e-payment of PF for the month of Sep, 2016.

Monday (17.10.2016) is the due date to file income tax return of companies /firms etc.  where audit is required for the F.Y.  2015-16.

A lot of people are afraid to say what they want. That’s why they don’t get what they want.

When  you  are  in  the light, everything follows  you, But when  you  enter  into   the dark, even your own shadow doesn’t  follow  you.

We look forward for your valuable comments. 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, Etc for resolving their doubts or for clarifications. Continue reading

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CORPORATE AND PROFESSIONAL UPDATE OCT 14, 2016

CORPORATE AND PROFESSIONAL UPDATE OCT 14, 2016

1 (2)

Direct Tax:-

High Court in the below citied case held that Statement of 22-year-old partner should be considered in search if he is actively involved in business of firm.( Classy the Antique Disigned Furniture v. Deputy Commissioner of Income-tax, Central Circle-2, Kozhikade.)

Bombay High Court in the below citied case held that Income Escaping Reassessment will be void Void if Reasons are not supplied to the assessee- (CIT (Large Tax Payer Unit), Mumbai IDBI Ltd.)

IT: TDS u/s 192 or 194J – merely because doctors are subject to the payment of PF or other retirement benefit TDS u/s 194J is not deductible – Sir Hurkisondas Nurrotumdas Hospital & Research Centre Vs DCIT (TDS)-3 (2), Mumbai (2016 (10) TMI 432 – ITAT Mumbai)

IT: No TDS liability u/s 194-I on lump sum lease premium or one-time upfront lease charges which are not adjustable against periodic rent paid or payable for acquisition of long-term leasehold rights over land – CBDT Circular No. 35 of 2016, dt.13 OCT 2016.

CBDT restricts acceptance of contributions by electoral trust by amending Rule 17C to provide that   (a)  from an individual who is not a citizen of India (b) from any electoral trust registered u/s 25 of the Co Act.

Indirect Tax:-

CESTAT denies CENVAT Credit on capital goods received in FY when final product (asbestos cement sheet) was chargeable to Nil rate of excise duty; Notes that assessee claimed credit i.r.o. capital goods and services upon obtaining Central Excise Registration consequent to final product becoming exigible to 18% duty. [TS-409-CESTAT-2016-EXC]

The government has doubled the limit of excise duty evasion for arrest and prosecution of accused to Rs 2 crore and also asked officials not to resort to penal provision in cases of technical nature.

ST: Levy of service tax – security services – sovereign functions – After choosing one particular remedy the plaintiff cannot avail the other remedy as well in respect of the same relief founded on same cause of action – State of Rajasthan Vs Union of India & Others (2016 (10) TMI 462 – Supreme Court)

Indirect Tax collections up to September, 2016 show an increase of 25.9% over the net Indirect Tax collections for the corresponding period last year(2015-16)

Bombay HC grants interest on delayed CENVAT Credit refunds u/s 11BB of Central Excise Act; Notes that original refund application was initially rejected by Revenue on merits and not on basis of incomplete application. [TS-410-HC-2016(BOM)-EXC]

GST Updates:

GST: Portal of GST Registration would be open for the existing taxpayer from Nov’ 2016 – GSTN Chairman

GST law to be passed in winter session of parliament commencing from 16 Nov 16 and ending on 16 Dec 16.

Under GST amount paid by assessee is used first for self assessment tax and interest of earlier periods, then current period & then other amounts e.g. demand.

Under GST normal & compounding taxpayer to file annual return. Not to be filed by casual / Non-resident taxpayers, ISDs & persons liable to deduct TDS.

MCA Updates:

The e-Form INC-29 (Integrated Incorporation Form) will no longer be available on the Ministry’s portal and stakeholders will not be able to file any previously downloaded versions from 1st November, 2016. The e-Form INC-29 (Integrated Incorporation Form) will be withdrawn w.e.f. 1st November, 2016.

Only Forms INC-32 i.e. SPICE (Simplified Proforma for Incorporating Company electronically), INC-2 (One Person Company), or INC-7 (Incorporation of Company) are applicable for incorporation of Company.

MCA has notified that e-Form INC-29 (Integrated Incorporation Form) will be withdrawn w.e.f. 1 .11. 2016.

MCA revised Forms 23AC XBRL,23ACA XBRL & AOC-4 XBRL,w.e.f. 5.10.16,& Forms MGT-15, FC-3, INC-4, MGT-14, 23C,23D,A-XBRL,I-XBRL w.e.f. 8.10.16.

SEBI Update :

SEBI in it’s circular stated that exclusively listed co (ELCs) will be required either raise capital for listing or exit from the dissemination board.

The special investigation team (SIT) on black money has asked the SEBI to furnish the details of P-Note data for black money investigation.

OTHER UPDATE :

Bank of Baroda, invites proposal (RFPs) for appointment of concurrent auditors for branches for south Gujarat zone (Baroda) Last Date : 07.11.2016.

Ministry of labour and employment invites comments on increasing limit for ESI coverage from INR 15,000 to INR 21,000.

ICAI request members to improve annual ROC filing compliance to promote high standard of integrity and professionalism it is an essential part of the professional duty of the Chartered Accountants.

Key Dates:

Payment of DVAT TDS for the month of September-15/10/2016

Form 27EQ (TCS return) by all deductor-15/10/2016

Issue of TDS Certificate in case of payment/credit made in the month of august for purchase of property u/s 194IA-15/10/2016

Statement by bank in Form no. 15CC in respect of foreign remmitence during the quarter-15/10/2016

E-Payment of PF for the month of September-15/10/2016

Your mind is a magnet, thoughts attract. If you always think of blessings, you attract more blessings. If you always think of problems, you attract more problems.

Your problem isn’t the problem. Your reaction is the problem.

We look forward for your valuable comments. 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. Continue reading

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Everything That You Need To Know About GST

Everything That You Need To Know About GST

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Goods and Services Tax (GST) is a form of indirect tax. It is proposed to come into force from 1st of April 2017. The main intention of introducing the GST is to remove the cascading effect of taxes which basically means taxes on taxes. Cascading effect wasprevalentin VAT (Value Added Tax), Central Sales Tax(CST) and excise duty. Once the GST comes in effect all other forms of indirect taxes like VAT, CST, excise duty will be removed from the picture.

Who levies it?

The GST is levied by both central and the state government depending upon the different wings as explained below.

There are 3 wings of GST :

  1. CGST – Central Goods and Services Tax

CGST is imposed and collected by the central government. The goods which are sold between 2 different states comes under this. This effectively replaces CST.

  1. SGST – State Goods and Services Tax

SGST is imposed by the state government. The local sales happening within the state comes under this wing. This can be seen as a replacement of state VAT.

  1. IGST – Integrated Goods and Services Tax

Other sales which are outside the ambit of CGST and SGST come under the IGST. This can be referred to as a residual list.

What benefits can we expect from GST?

  • No room for confusions

The whole of India would unanimously come under GST. GST rate is fixed at 18% for all goods and services. This uniform rate will remove all the confusions which are currently happening because of variable rates, especially in VAT.

  • Ease of calculations

For businesses which undergo a lot of transactions and sales in just one day in awide range of products, theapplicability of a single uniform leads to easier tax calculations.

  • Price reduction in various goods and services

We can expect a fall in the prices of many goods and services. The GST will have a positive impact on many goods and services. To put in simpler terms, the goods which are in a higher tax bracket now will be reduced to18%. The electronic goods can expect a lot more benefits in particular.

  • Less time-consuming

Unlike service tax which is complicated to understand due to its negative list or mega exemption list, the GST has lesser complications making it a quick process. We no longer need to check if the service is a taxable service or not like in service tax. Thus, half the time is reduced.

  • Boom in government revenues

There is no escapism from GST. It is a compulsory tax and no one can escape it due to the system in force. The government revenue is thus bound to increase once GST comes in force.

  • Fewer documentations and statutory formalities

Unlike the service tax or CST, the GST will involve very fewer documentations and legal formalities. The process of paying indirect taxes is made much easier and quicker with the advent of GST. This will also lessen the burden of paying heavy fees to expertise professionals.

Thus the introduction of Goods and Services Tax is no less than a boon to the world of indirect taxes making all confusions and complications vanish!

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

FOR FURTHER QUERIES CONTACT US: W: www.carajput.com  E: info@carajput.com T: 011-233-4-3333, 9-555-555-460

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. Continue reading

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How will Tax Structure Look Like After Implementation of Goods and Services Tax?

How will Tax Structure Look Like After Implementation of Goods and Services Tax?

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GST Council approves four tier GST rates @ 5% (Food Items), 12% & 18% (Standard) & 28% (Aerated drinks, Pan Masala, Tobacco & Luxury Items). GST rate for Gold to be decided later.

The Goods and services tax is a new regime in the indirect taxation in India. This was basically introduced mainly with the intention of removing the cascading effect that is the effect of paying taxes on taxes in India. The prevailing indirect taxes which are VAT, CST, service tax, central excise will all vanish once the GST comes into force. It is proposed that GST would come into force from 1st of April,2017.

This new GST would open the doors of theIndian market to many foreign investors who are willing to trade in India. Thus the trade barriers which are prevailing now due to the complications of Indian indirect taxation regime will be removed by GST. On the darker side, GST would also bring up some challenges to Indian businesses as there would be an ease of entry into Indian market thus increasing competition. But however, the business persons in India are still happy with GST because they no longer have to face the complications which prevail right now. Especially for service-oriented industries, it is no less than a boon.

In order to appreciate the provisions of GST, we need to have an overlook over the present tax structure. By doing so, we can have a comparative view. That would be more convincing. Here we go!

Present tax structure

Presently both state and the central governments are involved in imposing and collecting of taxes under various entries of the constitution. A detailed analysis is given below:

  • Service tax

Service tax is collected by the union government for the taxable services which are provided in the taxable territory ( thewhole of India except Jammu and Kashmir). The rates are differential based on the service provided.

  • Central Sales Tax ( CST)

It is collected by the state where the sale has been made. Only interstate sales come under CST. Local sales are left under State VAT.

  • State VAT

The sales or purchases which are affected within the state are subject to state VAT. They are collected by respective state governments.

  • Central excise

This is collected by the union government. It is collected by the manufacturers producing goods and is collected when the manufactured goods are removed from the premises.

  • State excise

This is collected by the state government on the alcoholic production.

Now, that was an overview of the present tax structure. Let us now zoom into the proposed GST structure. Read on!

The proposed GST structure

There would be 3 types of Tax in the proposed GST regime:

  • Central Goods and Services Tax( CGST)

The sale of goods and services between 2 different states come under this. It is levied and collected by the central government.

  • State Goods and Services Tax ( SGST)

The local sales happening in the state are covered here. It is imposed and collected by the state government.

  • Integrated Goods and Services Tax ( IGST)

Other residual sales are covered under this head. This is again collected by the central government.

The list of central taxes which are going to be subsumed in GST is given below for better insight:

  • Additional excise duty
  • Service tax
  • Central excise
  • Excise duty which is presently levied under Medicinal and toiletries preparation act
  • Central Sales tax
  • Cesses

Similarly, the state taxes or levies which are going to be subsumed in GST are:

  • Luxury tax
  • State VAT
  • Entry tax
  • Entertainment tax
  • State cessesand surcharges
  • Taxes on betting, gambling and lotteries

GST in relation to certain specific products

Though GST is supposed to be the unanimous tax which promises uniformity in taxes, the GST treats certain products differentially. These products have a separate provision in the GST regime. Highlights of these provisions are summarized below:

  • The manufacturing of alcoholic beverages is outside the ambit of GST. Thus alcoholic beverages will have no ruling sections and would continue to be levied by the state excise act and collected by the respective state government.
  • Also, the tobacco and tobacco related products also are not covered under GST. They would continue to be charged by the central excise by the central government.
  • Imposing GST on the petroleum products is kept at a halt as of now. It would be included on a later date when the GST council deems it necessary. Till then, the central government would continue to collect taxes on petroleum products. The petroleum products are inclusive of the following:
  • Petrol
  • Diesel
  • Natural gas
  • Aviation turbine fuel

The set-off and adjustment credit

As it is already mentioned, the main intention of GST is to remove the cascading effect of taxes. The double taxation will thus be removed by GST. Therefore, it is crucial that some set-off and adjustment credits need to be given when thetax is paid on both services and goods which are received to be set off against the liability which is to be paid when the goods are sold.

The 3 types of GST will have set off provisions like:

  • SGST can be set off against any surplus arising from IGST.
  • CGST can be set off against SGST and surplus from IGST.
  • IGST can be set off against SGST and CGST in the same sequence.

Exemption limits and the GST rate

The exemption limits and the GST rates are yet to be finalized by the GST council. However, it is estimated that the exemption limit would be INR 10 lacs. In layman terms, businesses which do not cross the turnover of 10 lacs are given exemptions under GST.

The rate of GST will have apositive impact on themajority of products like electronic goods and consumer goods and a negative impact on a few. The rate is estimated to be fixed between 18% and 20%. The concessional rate would be around 12% and the rate fir precious metals would be 2% to 6%.

GST registration

All the businesses indulged in thesale of goods and services are required to get themselves registered under GST. The registration has to be obtained based on states and not India as a whole. As the E- filing is in practice now obtaining GST registration is mandatory. The GST council has announced that the registration process is kept very simple and there is ease of operation.

Bottom line of GST

Thus as a whole, we can come to a conclusion that GST is going to reduce the price of many products and services. Moreover, due to ease of entry and ease of operations, the Indian market will be exposed to the international market. This can also pave way for investors to invest in India globally. The complications that prevailed in the indirect tax regime are removed by GST. Especially the service tax which is considered very complicated and confusing for many persons, GST is a boon. Besides the consumers too can benefit from theintroduction of GST as the frauds and errors are bound to decrease. There is no scope for escapism too to the dealers. Thus, bills will all be made white and no scope for theblack money. Everything would be billed and with a uniform tax rate. Thanks to the GST council and GST proposing committee!

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

FOR FURTHER QUERIES CONTACT US: W: www.carajput.com  E: info@carajput.com T: 011-233-4-3333, 9-555-555-460

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. Continue reading

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A Comparative Outlook Of Goods And Services Tax

A Comparative Outlook Of Goods And Services Tax

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The GST is a new regime in the world of indirect taxes. It is a tax on the sale of goods and services and a uniform rate is applied to all kinds of goods and services.  It is proposed to be brought into force from 1st of April 2017. All the complications which people faced while filing their indirect tax returns are said to be removed by GST. Besides, introduction of GST also paves way for the foreign investors to invest in India. Further,it is expected that GST will ease the operations and provide ease of entry for global dealers.

To have an insight of GST knowing the objectives is important. The basic objectives of GST are listed below:

  • The whole of Indian market must be integrated as one global village having a uniform rate
  • The working efficiency of the indirect taxes department must be increased. The formalities are made much easier with the introduction of GST.
  • The tax incidence must have an impact only on the domestic consumption and not on industrial consumption.
  • To reduce tax evasion by making it compulsory to get GST registration for all businesses carrying on business in sale of goods and services.
  • To remove the cascading effect of taxes. In present,we tend to pay taxes on taxes leading to double taxation. This problem is solved by GST.
  • The cooperative federalism would be built between the central and the state governments.
  • The existing confusions about the indirect tax rates especially the service tax and State VAT ought to be solved once GST is in force.

The GST model

The GST council has decided that the taxes would be collected by both central and state governments. There are 3 wings of GST:

  • Central Goods and Services Tax (CGST) which is imposed and collected by the central government on interstate sales.
  • State Goods and Services Tax (SGST) which is levied and duly collected by the respective state governments on local sales.
  • Integrated Goods and Services Tax (IGST) which covers those which are not covered in the above two and collected by the central government.

The principle of set off and input credit

The set off benefit is made available to the people who would have purchased goods with the intention of sales. Thus they can set off the GST which is paid. But there are specific provisions regarding the set off. Some basic rules being:

  • The taxes which are paid against the CGST should be taken as the credit when the same goods are being purchased and sold.
  • The SGST cannot be set off with the CGST. It can be set off against the IGST if there is any surplus available.
  • Cross set off between the CGST and SGST is strictly prohibited by the GST law.
  • But on purchase of capital goods, the set off can be made between the CGST and SGST. Thus the government is encouraging the purchase and sale of capital goods.

Few exemptions to be provided by the GST as suggested by the GST council

In the prevailing indirect laws like service tax, there is a mega exemption list which exempts few kinds of services from the levy of service tax. Similarly, the GST council has laid down that GST also should be providing some exemptions to certain range of goods and services. A list of such goods and services proposed to be exempted from levy of GST are:

  1. All government public services inclusive of the following:-
  • Government schools and colleges
  • Defense department
  • Police departments
  • Intelligence and verification departments

On the other hand, the following services are not going to have exemptions:

  • Banks and insurance companies
  • Post and telegraph
  • Railway department
  • Commercial departments
  • Education and health departments
  1. Any sale of food articles which are unprocessed and which are covered under the public distribution system.
  2. Health and education services which are provided by the non-governmental establishments.
  3. Any transactions of service contract between an employee and his employer for the service provided as well as service received.
  4. GST exempts goods including alcoholic products, tobacco products and emission fuels.
  5. Also petroleum products and natural gas are outside the ambit of GST and they would continue to be levied and collected by the central government.

The taxes to be subsumed by GST and its impact

The central levies which will be subsumed by GST once it comes into force are listed below which helps us to have a comparative analysis:

  • Central excise
  • Service tax
  • Additional customs duty
  • All cesses and surcharges

These taxes would no longer continue to apply. They shall cease to be collected from the central government. Thus the service industries which face a lot of confusions and dilemmas while they undertake filing of service tax returns will be benefitted by GST. The excise and customs too will have fewer complications now and the customs clearance offices will be benefitted to a great extent by GST.

State levies which would be subsumed in GST are:

  • State VAT
  • Entry tax
  • Luxury tax
  • Entertainment tax

There are differential rates in the state VAT and people face difficulties in determining the rate. GST would fix that problem. Also, the sky scrapping rates of entry tax and luxury taxes are washed away benefiting mostly the customers.

Thus the introduction of GST will lower the prices of many products and services. There will be a uniform rate applicable to the whole of India. All the confusions about the differential rates would thus be removed by GST. The tax authorities too are benefitted as they don’t have to crack their heads searching for what rate is applicable to what kind of product. The collection of revenue would be regular to the government as the GST would be made compulsory to all indulged in sale of goods and services. At the end of the day, except for few industries or categories, majority of the tax stake holders are going to be benefitted by the GST. Whole of India is looking forward to the introduction of GST with their fingers crossed!

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

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