CORPORATE AND PROFESSIONAL UPDATES 2ND OCT 2018

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Direct Tax:

  • ITAT Indore held that profit from sale of land with well thought business project is business income.Smt. Anita Singh Vs ACIT (ITAT Indore)
  • ITAT Chandigarh held that 100% deduction under section 80IC allowable on substantial expansion of eligible unit.  Friends Alloys VsAsstt. CIT (ITAT Chandigarh)
  • Gujarat High court held that tax cannot be levied on gain from sale of agricultural land based on intention of buyer to use the land for business purpose.  Principal CIT Vs Heenaben Bhadresh Mehta (Gujarat High Court)
  • ITAT Jaipur held that interest on income tax refund not eligible for deduction under section 80IE. M/s. OMIL JSC (JV) Kameng Kota. Vs Dy. CIT (ITAT Jaipur)

INDIRECT TAX

  • GST Offline utility of Form GSTR-10 (Final Return) is now available in the download section of GST portal. The excel based offline utility is designed to help taxpayers to prepare their Form GSTR-10 offline.
  • CBIC extends Mandatory RFID sealing due date to 01.11.2018. References have been received regarding Circular 19/2018-Customs dated 18th June 2018 seeking a postponement in the date for mandatory RFID sealing in case of movement of goods under warehousing bond.
  • GST Council set up a committee of seven state finance ministers to examine the legality and recommend the methodology for levying an ‘additional tax’ to raise revenue for floods-ravaged Kerala.

FAQ on GST Audit:

  • Query: What is the legal recourse available in respect of a person who is liable to pay tax but has failed to obtain registration?
  • Answer:Section 47 of MGL provides that in such a case, the proper officer can assess the tax liability and pass an order to his best judgment for the relevant tax periods. However, such an order must be passed within a period of five years from the due date of filing of the annual return for the financial year to which non-payment of tax relates.

RBI UPDATES

  • RBI issued draft directions for the prohibition of abuse in the fixed income markets, stating, among other things, that market participants, either acting independently or in collusion, shall not undertake any action with the intention to manipulate the process of calculation of a benchmark rate or reference rate.
  • The Reserve Bank of India has issued notification regarding Co-origination of loans by Banks and NBFCs for lending to priority sector.

MCA UPDATES

  • MCA has A High Level Committee on CSR (HLC-2018) to review the existing framework and guide and formulate the roadmap for a coherent policy on Corporate Social Responsibility ( CSR).

KEY DUE DATES 

  • GSTR-3B (SEP 2018)-OCT 20th, 2018
  • GSTR-5 (SEP 2018)-OCT 20th, 2018
  • GSTR-4 (JULY-SEP, 2018)-OCT 18th, 2018
  • GSTR-5A (SEP 2018)-OCT 20th, 2018
  • Quarterly return for registered persons with aggregate turnover up to Rs. 1.50 Crores- GSTR-1 (JULY- SEP, 2018)-OCT 31ST, 2018.
  • Quarterly return for registered persons with aggregate turnover more than Rs. 1.50 Crores- GSTR-1-(SEP 2018)-OCT 31ST 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 1ST OCT 2018

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DIRECT TAX

  • Reopening of assessment – If the Assessing Officer is prevented from carrying out assessment, the serious question of such assessment getting time barred by the time the petitioner’s litigation before the Civil Court achieves finality  – Gujarat High Courtin case of [Abha Vinaykumar Jain Vs. ITOWard 4 (1) (4))
  • Assessment in the hands of representative assessee – The ITAT made a clear mistake in believing that since it was held in an earlier proceeding that the income in question arose in India, a representative assessee could not be liable because it was only liable according to it in respect of the income which was deemed to have arisen in India  – Calcutta High Courtin case of [Director Of Income Tax (International Taxation) Vs. Board Of Control For Cricket In Sri Lanka And Ors. Through Pilcom)
  • Reopening of assessment u/s 147 – bogus purchases – to what exact income had escaped assessment may be open for argument, nevertheless, would not be a ground to quash the notice of reopening  – Gujarat High Courtin case of [Lalitkumar Babubhai Patel Vs.. DY. CIT, Circle 4 (2) Or His Successor )
  • Denial of deduction/exemption under section 54EC – advance received in specified assets before the date of transfer of asset – the Board have decided that if the assessee invests the earnest money or the advance received in specified assets before the date of transfer of asset, the amount so invested will qualify for exemption under section 54E  – ITAT Ahmedabadin case of [Rahul G. Patel Vs. DCIT, CIR. 1 (2) , Baroda)
  • CBDT notifies Ex-Servicemen Contributory Health Scheme for purpose of section 80D of the Income Tax Act, 1961 vide notification number 50/2018 dated 26th September, 2018
  • Penalty under section 271B justified on Assessee who was Partner in M/s. Price Waterhouse which is a partnership firm for his Failure to get his accounts audited as his remuneration was exceeding the limit specified U/s. 44AB.Sagar Dutta Vs DCIT (ITAT Kolkata)
  • Gujarat High Court directs CBDT to respond on Tax Audit Due date Extension filed by All Gujarat Federation of Tax Consultants Versus Union of India (Gujarat High Court)
  • ITAT Kolkata held that partner to get his A/Cs audited if his remuneration from firm exceed audit limit. Sagar Dutta Vs DCIT (ITAT Kolkata)
  • ITAT Delhi held that reassessment on mere audit objections without any tangible material is invalid.Siddhi VinayakAeromatics (P) Ltd. Vs ACIT (ITAT Delhi)

INDIRECT TAX

  • Internal Auditor cannot undertake GST Audit simultaneously : ICAI in an announcement dated 28th September 2018 has clarified that Internal Auditor cannot undertake Goods and Service Tax (GST) Audit simultaneously.
  • Union Cabinet, chaired by the Prime Minister Shri Narendra Modi has approved increasing of Government ownership in Goods and Services Tax Network (GSTN) and change in the existing structure with transitional plan.

FAQ on GST Audit:

  • Query:Is summary assessment order to be necessarily passed against the taxable person?
  • Answer: In certain cases, like when goods are under transportation or are stored in a warehouse, and the taxable person in respect of such goods cannot be ascertained, the person in charge of such goods shall be deemed to be the taxable person and will be assessed to tax (proviso to Section 64 of CGST/SGST Act).

RBI Update:

  • The Reserve Bank of India (RBI) has imposed, by an order dated September 25, 2018, a monetary penalty of Rs 50 million on KarurVysya Bank Limited (the bank) for non-compliance with the directions issued by RBI on Income Recognition and Asset Classification (IRAC) norms, reporting of frauds, and on need for discipline at the time of opening of current accounts. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.

SEBI UPDATES

  • The Securities and Exchange Board of India (Sebi) has sent letters to mutual funds seeking details about their exposure to all NBFCs and housing finance companies, regulatory and industry sources said.

OTHER UPDATES

  • Finance Minister launched a transformative initiative in MSME credit space. The webportal  psbloansin59minutes.comwill enable in principle approval for MSME loans up to Rs. 1 crore within 59 minutes from SIDBI and 5 Public Sector Banks (PSBs).

KEY DUE DATES 

  • GSTR-3B (SEP  2018)-OCT 20th, 2018
  • GSTR-5 (SEP 2018)-OCT 20th, 2018
  • GSTR-4 (JULY-SEP, 2018)-OCT 18th, 2018
  • GSTR-5A (SEP 2018)-OCT 20th, 2018
  • Quarterly return for registered persons with aggregate turnover up to Rs. 1.50 Crores- GSTR-1 (JULY- SEP, 2018)-OCT 31ST, 2018.
  • Quarterly return for registered persons with aggregate turnover more than Rs. 1.50 Crores- GSTR-1-(SEP 2018)-OCT 31ST  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 29th aug 2018

Image result for corporate and professional updatesDirect Tax :

  • Mumbai ITAT grants vacancy allowance u/s 23(1)(c)  to Saif Ali Khan Pataudi (‘assessee’)  in respect of his Bandra flats that could not be let out during AY 2012-13;  Notes that assessee had offered Rs.11.83 lakh  as taxable rent, however, Revenue had substituted a sum of Rs. 50 lakh as reasonable rent for the property, accepts assessee’splea that due to inherent defects/ construction, the flat could not be let out; [TS-488-ITAT-2018(Mum)]
  • Kolkata ITAT delivers double blow to a Kolkata based Vijay Mallya group entity (‘assessee’), holds that the sale of its pledged shares by Citicorp would result in a capital gain of Rs. 267 cr for MAT purposes, while also disallowing the deduction of write-off of a similar amount in normal computation for failing to meet the “business expediency” test; Mallya group entities United Breweries Holding Ltd. (UBHL) & Bangalore Beverages Ltd. (BBL) availed short term loan of Rs. 200 cr & Rs. 73 cr respectively from Citicorp, for which the assessee stood guarantor by pledging its 6.2 million shares in United Breweries Ltd.; [TS-451-ITAT-2018(Kol)]
  • CBDT has mandated ‘e-proceeding’ for all income-tax scrutiny in 2018-19. It has also specified seven situations where e-proceeding will not be mandatory this year. These include search cases, cases where returns were filed in paper mode and the assessee doesn’t have an e-filing account, and geographical areas with limited bandwith.
  • Government of India has notified the Common Application Form (CAF) for the purpose of registration, opening of bank and dematerialized accounts, as well as for Permanent Account Number (PAN) application by Foreign Portfolio Investors (FPIs).

INDIRECT TAX

  • GST complaints can be filed at Consumer Helpline No. 011-21400643 regarding GST input credit and profiting under National Anti Profiting Authority Act (NAA).

FAQ on GST Audit:

  • Query: Can any conveyance carrying goods without cover of prescribed documents be subject to confiscation?
  • .Answer:  Section 130 provides that any conveyance carrying goods without the cover of any documents or declaration prescribed under the Act shall be liable to confiscation. However, if the owner of the conveyance proves that the goods were being transported without cover of the required documents/declarations without his knowledge or connivance or without the knowledge or connivance of his agent then the conveyance shall not be liable to confiscation as aforesaid.

 MCA update

  • As per the extant rules, in respect of an individual who is in possession of Duplicate/Multiple DINs, he can retain the Oldest DIN only. DINs obtained later have to be surrendered. Further DIN once associated is NOT eligiblefor surrender. Stakeholders may kindly take note and plan accordingly.
  • MCA:As per the extant rules, in respect of an individual who is in possession of Duplicate/Multiple DINs, he can retain the Oldest DIN only. DINs obtained later have to be surrendered. Further DIN once associated is NOT eligible for surrender.

SEBI UPDATES

  • SEBI is likely to let cos use stock exchanges to sell bonds directly to investors, including retail investors, any time and as many times during a financial year, after filing a single prospectus Sugata Ghosh & Reena Zachariah ‘Bond tap’, which gives corporates the flexibility to time the market, prune cost, and dramatically cut down on paperwork for raising money, will soon be a reality in India.

OTHER UPDATES

  • ICAI Invites Application for Awards for Excellence in Financial Reporting for the year 2017-18, to all business entities that publish annual reports, to participate in this annual competition of the Institute by 30th Sept 2018

KEY DUE DATES 

  • GSTR-3B (aug 2018)-sep 20th, 2018
  • GSTR-6 (JULY 17 – AUG’18)- SEP 30TH, 2018
  • GSTR-4 (JULY-SEP, 2018)-OCT 18th, 2018
  • Quarterly return for registered persons with aggregate turnover up to Rs. 1.50 Crores- GSTR-1 (JULY- SEP, 2018)-sep 15TH, 2018.
  • Quarterly return for registered persons with aggregate turnover more than Rs. 1.50 Crores- GSTR-1-(aug 2018)-sep 11th 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 6th aug 2018

Image result for professional updatesDirect Tax :

  • Madras HC reverses ITAT order for AY 2000-01, Rejects Revenue’s capital expenditure plea for non-compete fees paid by assessee-company (a television broadcasting co.) to one of its directors for not competing with assessee’s business for 5 years; Though HC acknowledges that the doctrine of enduring benefit is on the wane for determining whether an expenditure is capital or not, it observes that “… the assessee has not acquired any new business, profit making apparatus has remained the same, the assets used to run the business remained the same and there is no new business or no new source of income, which accrue to the assessee on account of its payment”;[TS-429-HC-2018(MAD)]
  • Madras HC (Division Bench) upholds Single Judge’s order dismissing assessee’s writ against DRP order & AO’s final assessment order for AY 2012-13 citing alternate remedy before CIT(A); Notes that DRP rejected assessee’s objections against AO’s draft assessment order on the ground of limitation (citing 1 day delay in filing) on the basis that DRP had no power and/or authority and/or jurisdiction to condone the delay in filing the objection;[TS-759-HC-2018(MAD) -TP]

INDIRECT TAX

  • India could consider offering a one-time settlement to clear legacy central excise duty and VAT issues to ensure they do not linger and act as a drag in the GST regime.
  • Incentives on digital payments-customers making payments through Rupay card and BHIM UPI, would get a cash back of 20 per cent of the total GST amount, subject to a maximum limit of Rs 100,

FAQ on GST :

  • Query:  What are the prescribed offences under CGST/SGST Act?
  • Answer:The CGST/SGST Act codifiesthe offences and penalties in Chapter XVI. The Act lists 21 offences in section 122, apart from the penalty prescribed under section 10 for availing compounding by a taxable person who is not eligible for it.

MCA UPDATES

  • MCA has revised the version of the eForm ADT-1 (Information to the Registrar by Company for appointment of Auditor) and Form DIR – 3KYC (Application for KYC of Directors),

RBI UPDATES

  • RBI has added some gold to its reserves. the central bank bought 2.5 tonnes in March, following a fractional 0.3-tonne addition in December. These increases are the first since November 2009 when it bought 200 tonnes from IMF.

OTHER UPDATES

  • DGFT has issued a Trade Notice stating that Activation of E-com module for applying for SEIS, based on ANF 3B shall be effective from 01-09-2018.

 KEY DUE DATES 

  • GSTR-3B (JULY 2018)-AUG 20th, 2018
  • GSTR-5 (JULY 2018)-AUG 20th, 2018
  • GSTR-6 (JULY 17 – AUG’18)- SEP 30TH, 2018
  • GSTR-4 (JULY-SEP, 2018)-OCT 18th, 2018
  • GSTR-5A (JULY 2018)-AUG 20th, 2018
  • Quarterly return for registered persons with aggregate turnover up to Rs. 1.50 Crores- GSTR-1 (JULY- SEP, 2018)-OCT 10TH, 2018.
  • Quarterly return for registered persons with aggregate turnover more than Rs. 1.50 Crores- GSTR-1-(july 2018)-Aug 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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DIFFERENT MEANING OF TURNOVER IN INCOME TAX ACT, COMPANIES ACT & GST

SSRR

As per companies act, 2013: -

“Turnover” means the gross amount of revenue recognized in the profit and loss account from the sale, supply, or distribution of goods or on account of services rendered, or both, by a company during a financial year.

From the above clause it is clearly understood that turnover of a company is defined on the basis of amount of realization made during the financial year rather than value of goods sold or service rendered during the financial year.

The New Definition of turnover under companies act {Section 2 (91)} which says that calculation of realization of amount made from the sale of goods or rendering of service during the financial year is require to be done on cash basis. It means sales of goods and rendering of service on credit term basis during the year is not included in turnover.

In Companies Acceptance and Deposit Rule, 2014 define eligible company means company having turnover of not less than Rs. 500 crore or more.

Every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during the immediately preceding financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director.

As per Guidance Note issued for Financial Statements: -

 Turnover means the aggregate amount for which sales are effected or services.

As per Accounting Standards Interpretation (ASI)-29: -

Recognized as revenue in the statements of the contractors as per the requirement of AS-7”

As per The Statement on the Companies (Auditors’ Report) Order, 2003 issued by the Institute in April 2004, while discussing the term ‘turnover’ in paragraph 23 states `as follows: -

The term, “Turnover”, has not been defined by the Order. Part II of Schedule VI of the Act, however, defines the term “turnover” as the aggregate amount for which sales are affected by the company. It may be noted that the “sales effected” would include sale of goods as well as services rendered by the company. In an agency relationship, turnover is the amount of commission earned by the agent and not the aggregate amount for which sales are affected or services are rendered. The term “turnover” is a commercial term and it should be construed in accordance with the method of accounting regularly employed by the company.

As per income tax act, 1961: -

Section 44AB: an assessee is required to get his accounts audited when his turnover/sales from business is more than Rs 1 crore

Section 44AD: Businesses, whose annual gross turnover does not exceed Rs. 2 Crore, are eligible under this scheme.

Derivatives, futures and options: Such transactions are completed without the delivery of shares or securities. Turnover in such type of transactions are to be determined as follows: -

  1. The total of favorable and unfavorable differences shall be taken as turnover.
  2. Premium received on sale of options is also to be included in turnover.
  3. In respect of any reverse trades entered, the difference thereon should also form part of the turnover.

Delivery based transactions: Where the transaction for the purchase or sale of any commodity including stocks and shares is delivery based whether intended or by default, the total value of the sales is to be considered as turnover.

Gross Receipt: the following items of income would be included: -

  1. i) Cash assistance received or receivable by any person against exports under any scheme of the Government of India;

(ii) Any duty of customs or excise or service tax re-paid or repayable as drawback to any person against exports under the Customs and Central Excise Duties and Service tax Drawback Rules, 1995;

(iii) The aggregate of gross income by way of interest received by the money lender;

(iv) Commission, brokerage, service and other incidental charges received in the business of chit funds;

(v) Reimbursement of expenses incurred and if the same is credited to a separate account in the books, only the net surplus on this account should be added to the turnover for the purposes of Section 44AB;

(vi) The Net exchange rate difference on export sales during the year on the basis of the principle explained in.

 (v) Above will have to be added;

 (vii) Hire charges of cold storage;

 (viii) Liquidated damages;

(ix) Insurance claims – except for fixed assets;

(x) Sale proceeds of scrap, wastage etc. unless treated as part of sale or turnover, whether or not credited to miscellaneous income account;

(xi) Gross receipts including lease rent in the business of operating lease;

(xii) Finance income to reimburse and reward the less or for his investment and services;

(xiii) Hire charges and instalments received in the course of hire purchase;

(xiv) Advance received and forfeited from customers.

(xv) The value of any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession.

The following items would not form part of “gross receipts in business” for purposes of section 44AB.

(i) Sale proceeds of fixed assets including advance forfeited,

(ii) Sale proceeds of assets held as investments;

(iii) Rental income unless the same is Assessable as business income;

(iv) Dividends on shares except in the case of an Assessee dealing in shares;

(v) Income by way of interest unless Assessable as business income;

(vi) Re Imbursement of customs duty and other charges collected by a clearing agent;

(vii) In the case of a recruiting agent, the advertisement charges received by him by way of reimbursement of expenses incurred by him;

(viii) In the case of a travelling agent, the amount received from the clients for payment to the airlines, railways etc. where such amounts are received by way of reimbursement of expenses incurred on behalf of the client.

(ix) In the case of an advertising agent, the amount of advertising charges recovered by him from his clients provided these are by way of reimbursement.

(x) Share of profit of a partner of a firm in the total income of the firm excluded from his total income under section 10(2A) of the Income-tax Act;

(xi) Write back of amounts payable to creditors and provisions for expenses or taxes no longer required.

As per GST Act: -

In past, CST/VAT was levied on sale of goods, Service Tax was levied on sale of services while Excise Duty was levied on manufacture. Under the proposed current GST regime, these and certain other levies are proposed to be subsumed and Tax is leviable on supply of goods or services or a blend of both. The concept of “supply” and what forms part of Turnover, would be included. The scope of “supply” is quite wide and includes:

  1. sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made;
  2. importation of service, whether or not for a consideration; and
  3. specified in Schedule I, made or agreed to be made without a consideration.

Under the proposed GST regime, “Turnover in a State” has been defined as “the aggregate value of all taxable and non-taxable supplies, including exempt supplies and exports of goods and/or services made within a State by a taxable person and inter-state supplies of goods and/or services made from the State by the said taxable person excluding taxes.

In summarized form “Turnover”:

Includes:

 Supplies in Goods or Services or in both effected within state or outside the state.3

 Stock Transfer, Barter, Gift in kind, Samples, Exchange of services, etc.3

 Exempted supplies, supplies made in the course of export.3

 Excludes: Taxes Leviable under the GST Enactments.7

Turnover Redefinition brings certain changes:-

  • For Small business exemption is Aggregate Turnover over Rs.9 lakhs for registration and Rs.10 lakhs for levy of Tax. Impact of these are as follows:-

 More businesses coming into the Taxation regime.3

 Improved benefits with respect to Input Credits.3

 Compliance requirements for Small Businesses.7

  • For Persons exclusively dealing in exempted goods/services or Exports would be mandatory to take GST registration.
  • For North-eastern States Aggregate Turnover over Rs.4 lakhs for registration and Rs.5 lakhs for levy of Tax (as against 9 and 10 lakhs respectively)

As per Amendments in GST law limits of turnover are as follows: -

  • Limit of turnover for opting for composition scheme to be raised from Rs. 1 crore to Rs. 1.5 crore. Present limit of turnover can now be raised on the recommendations of the Council.
  • Composition dealers to be allowed to supply services (other than restaurant services), for up to a value not exceeding 10% of turnover in the preceding financial year, or Rs. 5 lakhs, whichever is higher.
  • Exemption limit for registration in the States of Assam, Arunachal Pradesh, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand to be increased to Rs. 20 Lakhs from Rs. 10 Lakhs
  • Council approved quarterly filing of return for the small taxpayers having turnover below Rs. 5 Cr.
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 11th july 2018

Image result for corporate and professionalDirect Tax :

  • Karnataka HC dismisses Revenue’s appeal against Tribunal’s allowance of assessee’s [Kirloskar Toyota Textile Machinery Private Ltd] claim that gross profit over sales (PLI) can eliminate difference in depreciation claim due to machinery age, rate / method difference; ITAT had directed AO/TPO to adopt comparison of profitability ratios using gross profit over sales to benchmark international transaction of purchase of auto-components from AE for AY 2010-11; [TS-502-HC-2018(KAR)-TP]
  • Hyderabad ITAT denies Sec. 36(1)(iii) deduction for finance cost of Rs. 164 cr. incurred by assessee-company (a promoter company for the GVK group of companies) for advancing interest-free loan to sister concerns out of interest-bearing borrowings from banks / financial institutions during AY 2012-13; Notes that assessee made interest-free advance to the two sister concerns i.e., level-2 companies, which in turn respectively made investment in the equity capital of level-3 companies i.e. two SPVs which are ultimately involved in construction and maintenance of Mumbai and Bangalore airports; [TS-363-ITAT-2018(HYD)]
  • Reopening of assessment – validity of reasons to believe – Just by stating absence of information’, the Respondent revenue cannot get over the jurisdiction bar. – Notice u/s 148 is without jurisdiction – Goa State Co-Op. Bank Ltd. Vs ACIT (2018 (7) TMI 464 – Bombay HC).

INDIRECT TAX

  • GST Councilunveiled the draft of 46 changes proposed to the GST law before they are introduced in the upcoming monsoon session of parliament.
  • Mere inclusion of Rakhi in a Puja Thali does not make it an integral and essential part of Puja Samagri – Rakhi is not exempt from GST – AAR, West Bengal inM D Mohta (2018 (7) TMI 390).
  • Levy of GST – job-work – Whether the processing of goods belonging to another person qualifies as job work even if it amounts to manufacture? -Held Yes– AAR, Maharashtra in JSW Energy Ltd. (2018 (7) TMI 511).
  • The next meeting of Goods and Services Tax (GST) Council scheduled on July 21 is likely to endorse 3 per cent cess on sugar.

FAQ ON GST

  • Query:  When can a taxpayer pay tax on a provisional basis?
  • Answer: Under the GST regime, the taxpayer normally pays tax on a self-assessment basis. If a taxpayer is unable to determine the value and tax rate applicable to the goods/services they supplied, they should raise a request for provisional assessment, citing the reasons why they need to pay tax on a provisional basis. This request will be processed by a tax officer.

MCA UPDATES

  • The e-form DIR-3-KYC (Directors KYC) to be filed by 30th April every year. For the individual who has DIN as on 31.03.2018, the due date is 31 AUG 2018.

OTHER UPDATES

  • ICAI introduces Unique Document Identification Number (UDIN) to be generated for documents / certificates issued by CA’s. UDIN is a unique number, which will be generated by the system for every document certified / attested by a Chartered Accountant and registered with the UDIN portal available at https://udin.icai.org/.
  • Cost accountants’ apex body ICAI has suggested constituting a central agency, with cost accountants and experts from other fields, to evaluate applications for large loans before banks give their approval.
  • To ensure transparency in the allotment of chartered accountants (CAs) for bank audits, the Institute of CharteredAccountants of India (ICAI) has developed a software that randomly selects the auditors and allots them to banks.

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
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 10TH JULY 2018

Image result for PROFESSIONAL UPDATESDirect Tax :

  • Madras HC reverses ITAT order for AYs 1998-99 and 1999-2000, allows deduction to assessee-company for expenses incurred on abandoned project, holds the same as revenue in nature as the venture did not fructify; Assessee was invited to take over the Chemical Beneficiation Project by the Government of Tamil Nadu, however, due to several reasons, Government decided to abandon the project and consequently, assessee claimed revenue deduction for major portion of intangibles which was disallowed by AO; [TS-332-HC-2018(MAD)]
  • Karnataka HC allows assessee’s (distributor of diabetic care and other products) writ, quashes reassessment notice for AY 2006-07; Notes that during assessment proceedings u/s 143(3), TPO had accepted assessee’s transactions to be ALP, however, assessment was reopened on March 28, 2013 alleging that assessee’s transaction would qualify as ‘deemed international transaction’ and assessee failed to report the same in Form 3CEB; [TS-501-HC-2018(KAR)-TP]

Indirect Tax:

  • Punjab & Haryana High Court held that GST appeal should not be dismissed for delay if No Appellate Authority constituted. [R.S. Steel Traders Vs State of Haryana (Punjab & Haryana High Court)]

FAQ on GST AUDIT:

  • Query: When will a best judgement assessment order be withdrawn?
  • Answer:After a taxpayer receives a best judgement assessment order issued by a tax official, they have 30 days to file their returns for the tax period and pay the tax shown on the assessment. As soon as they have done so, the best judgement assessment order will be withdrawn. 

MCA UPDATES

Every Director who has been allotted DIN on or before 31st March, 2018 and whose DIN is in ‘Approved’ status, would be mandatory required to file form DIR-3 KYC on or before 31st August, 2018. Otherwise LATE FEES PENALTY 5000 FROM 1 SEPTEMBER 2018 AND DIN WILL BE DEACTIVATED.

  1. Documents Required:
  • 1. DSC of Director duly Registered;
  • 2. Self attested PAN card;
  • 3. Self attested Aadhar card with updated Mobile number with UIDAI;
  • 4. Self attested Electricity Bill, Mobile Bill, Bank statement of Director (latest 2 Months) of his/her present address;
  • 5. Latest Passport size photo;
  • 6. DIN declaration cum KYC.
  • DIR-3 KYC Will be deploy from 10.07.2018.

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 JULY 2018

Image result for corporateDirect Tax :

  • 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 20th JUNE 2018

Image result for corporateDirect Tax :

  • Mumbai ITAT remits comparability of 2 companies for benchmarking product development services rendered by assessee [engaged in business of import, wholesale trade, manufacture of drug and medicines and research in pharmaceuticals products] for AY 2008-09; In respect of CIT(A)’s exclusion of Celestial Lab Ltd, ITAT holds that no deeper probe of the financial statements were made by the authorities below to find out reasons for earning super normal profits in the subject year and also how the functional profile was different from assessee.[TS-457-ITAT-2018(Mum)-TP]
  • Delhi ITAT deletes addition u/s 68 [dealing with unexplained cash credits] in respect of cash deposited in the bank accounts of assessee-individual during AYs 2010-11 to 2012-13, despite assessee being unable to explain the sources of cash deposits; Holds that Sec. 68 is applicable only when the credits are found in the books of account of assessee, relies on jurisdictional HC ruling in Ms. Mayawati; Clarifies that a credit in the bank account of an assessee cannot be construed as a ‘credit’ in the books of the assessee, remarks that “The account of the assessee in the books of the bank is different from the books of the assessee. [TS-306-ITAT-2018(DEL)]
  • CBDT has proposed amendments in two forms and one rule under to Income Tax Rules, 1962. It has suggested changes in Form No.36 for filing an appeal to the ITAT and in Form 36A, which is a memorandum of cross-objections to the ITAT.
  • Govt has notified 280 as the cost inflation index (CII) number for FY 2018-19. This CII number is important as it will be used to compute inflation adjusted long-term capital gains (LTCG) on assets such as house, gold, debt mutual funds etc.
  • CBEC has issued a circular clarifying the Procedure for e-commerce exports through Post and clarification regarding personal imports. As there are large  number of cases where low-value-small-shipments, which characterize e-commerce environment, are shipped through post.

FAQ on E-WAY BILLS:

  • Query:How can the taxpayer use the SMS facility to generate the e-way bill?
  • Answer: The taxpayer has to register the mobile numbers through which he intends to generate the e-way bill on the e-way bill system. Please see the user manual for SMS based e-way bill generation available on the portal for further details. 

RBI Update :

  • The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs. 5 lakh on M/s Kosamattam Finance Ltd. (the company) under section 58G(1)(b) read with sub-section 5(aa) of section 58B of the RBI Act, 1934 for violation of directions/orders issued by Reserve Bank of India from time to time.

MCA UPDATES

  • MCA nhas plans to dematerialize all unlisted companies with paid up capital of more than Rs. 50 Million (Rs. 5 crore and above) their shares by 30th June, 2018 and rest of the companies may dematerialize by 30th September, 2018.

OTHER UPDATES 

  • PNB’s fraud risk management division issued advisory following reports of borrowings against fake property title deeds, fictitious address proofs and sham income tax returns against the people involved to help.

KEY DATE:

  • QUARTERLY RETURN FOR REGISTERED PERSONS WITH AGGREGATE TURNOVER UP TO RS. 1.50 CRORES: GSTR-1 :-31. JULY 2018
  • DUE DATE FOR FILLING GST TRAN-2- 30.06.2018
  • DUE DATE FOR GSTR-3B -20.06.2018
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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