CORPORATE AND PROFESSIONAL UPDATES 14TH AUG 2018

Image result for professional updatesDirect Tax :

  • Delhi ITAT held that the AO proceeded to initiate reassessment proceedings u/s. 147 of the Act and to issue notice u/s. 148 of the Act on the basis of borrowed satisfaction and without any application of mind and examination of the so called material and information received from the investigation wing to establish any nexus, even prima facie, with the such information.Pioneer Town Planners Pvt. Ltd vs. DCIT (ITAT Delhi)
  • Delhi HC upholds ITAT’s characterization of research and information services rendered by McKinsey India to its AE as high-end knowledge-based research services (KPO) for AYs 2011-12 & 2012-13; Noting that the services rendered by assessee were “specialized and require specific skill based analysis and research that is beyond the more rudimentary nature of services rendered by a BPO”, HC concludes that “it would be incorrect to slot the services provided by the Assessee into that of a BPO, when it is more akin to a KPO”; [TS-812-HC-2018(DEL)-TP]
  • Ahmedabad ITAT quashes Pr. CIT’s revisionary order u/s. 263 in case of a Pharma co. (assessee) for AY 2014-15, holds that “the foundation for exercise of revisional jurisdiction is sorely missing” as all the issues raised by Pr.CIT have been duly touched by  AO  in his detailed order (running into over 100 pages and resulting in additions/disallowances of whopping Rs.131 Cr.); Considering that assessee is a very big player in the pharma sector, ITAT remarks that “having regard to the staggering turnover and scale of operation, it is virtually impossible for any adjudicating authority to examine and reexamine all the points in a given assessment year to the hilt as perceived by thePr.CIT”;[TS-443-ITAT-2018( Ahd)]

INDIRECT TAX

  • GST Audit: As per section 16(4) of the GST Act a registered person shall not be eligible to take adjustment of any input tax credit in respect of any invoice pertaining to FY 2017-18 after the due date of filing GSTR3B for the month of Sept 2018 i.e. 20.10.2018.
  • Reverse Charge Mechanism on purchases from unregistered persons u/s 9(4) deferred till 30.09.19. Notification 22/2018-CT (Rate) of 6.8.18.
  • CBIC has modified the due date for filing of final GST sales returns by businesses with turnover exceeding Rs 1.5 crore to the 11th day of the succeeding month. Currently, such businesses are required to file GSTR-1 or final sales return of a particular month by the 10th day of the succeeding month.
  • Lok Sabha approved GST Cess surplus: changes to the relevant law to allow both to dip into the surplus in the GST Compensation Fund at any time during a financial year. The law has hitherto allowed division of the surplus only after a five-year “transition period” (till June 2022), during which states are constitutionally guaranteed a GST revenue growth (over the base year, 2015-16) of 14% per year.

FAQ on GST Audit:

  • Query: What is the consequence of compounding of an offence under CGST/SGST Act?
  • Answer:Sub-section (3) of section 138 provides that on payment of compounding amount no further proceeding to be initiated under this Act and criminal proceeding already initiated shall stand abated

MCA UPDATES

  • Form DIR3-KYC is likely to be revised on MCA21 Company Forms Download page w.e.f. 13th AUG 2018. Stakeholders are advised to check the latest version before filing.

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 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)

CORPORATE AND PROFESSIONAL UPDATES 13TH AUG 2018

Image result for corporate and professionalDirect Tax :

  • Bombay HC dismisses Revenue’s appeal, upholds ITAT’s exclusion of 4 comparables on grounds of functional dissimilarity, abnormal profit etc. for assessee providing software development services to AE for AY 2008-09; States that “Revenue has failed to show as to how the finding arrived at by the Tribunal is perverse in any manner. Nor has the Revenue even attempted to demonstrate that analysis done by the Tribunal while excluding the aforesaid four companies from the list of comparables, was in any manner contrary to the settled position in law”, thus holds that there is no reason to entertain this appeal; [TS-787-HC-2018(BOM)- TP]
  • Cochin ITAT holds that compensation of Rs. 40 cr. received by assessee (a Geojit group of company) during AY 2009-10 from BNP Paribas (a French Bank) for discontinuing commodity trading business is taxable u/s 28(va); Rejects assessee’s stand that compensation was towards loss of source of income /profit earning apparatus and therefore, it was a non-taxable capital receipt; Observes that a new company under the same group `Geojit’ was incorporated by common promoters whereby assessee’s commodity trading was transferred entirely along with its clientele to the new floatedcompany GCL, notes that in the eyes of the clients, the business is carried on in the same name;[TS-439-ITAT-2018(COCH)
  • Mumbai ITAT deletes Sec 80IC disallowance made by AO in the final assessment order, over and above the amount disallowed in the draft assessment order for AY 2008–09, rejects Revenue’s plea that since enquiry was incomplete at the time of passing of draft assessment order, AO was competent to make addition/disallowance in variance with draft assessment order; Explaining the scheme of Sec 144C, which is a code by itself, ITAT opines that “… where the Assessing Officer passes the final assessment order under sub–section (3) of section 144C of the Act, he has no such power to deviate from the draft assessment order and can pass the final assessment order only on the basis of draft assessment order”;[TS-441-ITAT-2018(Mum)]
  • Chennai ITAT reverses CIT(A) order for AY 2014-15, holds that payment made by partnership firm (assessee) to retiring partner consequent to family settlement, is deductible from taxable income; Notes that restaurant business run by assessee firm was originally established by an individual and after his death, his legal heirs formed a partnership firm to run the inherited restaurant business, however, on account of family dispute, one of the partners decided to retire from the partnership firm and accordingly, payment was made to him and his wife which was disallowed by AO;[TS-442-ITAT-2018(CHNY)]
  • CBDT clarified that income tax department would scrutinise only 0.35% of returns filed for the last fiscal, down from 1% earlier. While the department would repose faith in taxpayers, the enforcement action would be severe on tax evaders.

INDIRECT TAX

  • Karnataka Authority for Advance Rulings has held that deposit of goods to a custodian with obligation to return on submission of electronic receipts would not be liable for GST.
  • CBEC has extends the time limit for furnishing the details of outward supplies in FORM GSTR-1 of the Central Goods and Services Tax Rules, 2017, by such class of registered persons having aggregate turnover of more than 1.5 crore rupees in the preceding financial year or the current financial year, for each of the months from July, 2018 to March, 2019 till the eleventh day of the month succeeding such month.

FAQ on GST Audit:

  • Query: Can a customer who buys from a taxable person who is under composition scheme claim composition tax as input credit?
  • Answer: No. The recipient is not eligible to take input tax credit of composition tax paid.Moreover, a taxable person paying taxes under composition scheme is not entitled to collect taxes from the recipient in terms of Section 10(4) of the CGST Act, 2017.Accordingly, there does not arise a question for the recipient to claim input tax credit.
  • Query: Can a company be proceeded against or prosecuted for any offence under the CGST/SGST Act ?
  • Answer: Yes. Section 137 of the CGST/SGST ACT provides that every person who was in-charge of or responsible to a company for the conduct of its business shall, along-with the company itself, be liable to be proceeded against and punished for an offence committed by the company while such person was in-charge of the affairs of the company. If any offence committed by the company.

 MCA UPDATES

  • MCA through RoC, Delhi and Haryana strikes off names of 24,280 registered  Companies under Section 248 of Companies Act, 2013 for non-compliances of Company law effective 8th August, 2018.
  • Form DIR3-KYC is likely to be revised on MCA21 Company Forms Download page w.e.f 13th AUG 2018. Stakeholders are advised to check the latest version before filing.

SEBI UPDATES

  • SEBI panel recommends seeking powers to tap phone callsto aid investigations and also grant immunity to whistle-blowers blowing the lid off frauds and other violations.
  • SEBI has constituted a Committee on Fair Market Conduct in August, 2017 has invited Comments from public are invited on the recommendations given by the Committee on Fair Market Conduct, in the prescribed format, latest by August 24, 2018.

RBI Update:

  • The Reserve Bank released data on the performance of the private corporate sector during 2017-18 drawn from abridged financial results of 3,096 listed non-government non-financial (NGNF) companies. Data pertaining to 2016-17 are also presented in the tables to enable comparison.
  • The on India’s inward remittances in 2016-17, the fourth in the series.It captures various aspects relating to remittances – source; destination; purpose of inward remittances; size; prevalent mode of transmission; and receivers’/ senders’ cost of remittances.

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 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)

corporate and professional updates 7th aug 2018

Image result for professional updatesDirect Tax :

  • Karnataka HC dismisses assessee’s appeal challenging ITAT-order on 2 comparables (Jeevan Scientific Technologies Ltd and ICRA Online Ltd) for assessee rendering ITeS to AE for AY 2011-12, follows Softbrands India ruling; Regarding Jeevan Scientific Technologies, stating that ITAT had only remanded the case back to the file of AO/TPO for fresh consideration and therefore its selection as a comparable had not yet become final at the hands of AO/TPO, HC opines that “… we do not find any substantial question of law to be arising with regard to the said company M/s Jeevan Scientific Technologies Ltd(seg)”; [TS-766-HC-2018(KAR)-TP]
  • Delhi ITAT rules on the stage at which deduction should be allowed for MAT credit available u/s. 115JAA, holds that MAT credit, inclusive of surcharge and education cess etc. should be reduced from the amount of tax determined on the total income after adding surcharge and education cess and only the resultant amount payable should suffer interest u/s. 234A/B/C; [TS-431-ITAT-2018( DEL)]

INDIRECTTAX

Summary of GST meeting 4th August 2018:

1. GOM for MSME Issues:

  • GST Council constitutes a Group of Ministers (GoM) to look into issues of MSME’s.
  • Finance Minister’s of Assam, Delhi, Punjab & Kerala will be part of this GoM.
  • Finance Minister of State – Shri Shiv Pratap Shukla ji will be head of this GoM.

Further a Sub-Committee to be formed under this GoM. This Committee will interact with MSME’s and listen to issues like

  1. Return filing with Turnover upto Rs. 1.50 Crores
  2. Competition & Benefits of co’s with turnover upto Rs. 1.50 Crores

Further another sub-committee named fitment committee will submit report and will provide suggestions where rate changes are required.

2. Adding more MSME in GST Network

  • After GST Council meeting Mr. Sushil Modi, Finance Minister of Bihar, stated that it was also discussed to add more MSME to the GST Network.
  • He also discussed that steps would be taken in next meeting to benefit MSME’s.
  1. Cash Back Facility:
  • GST Council gives approval for Pilot Project to promote Digital Payments through cash back of GST.
  • 20% cash back of GST paid to be proposed. Subject to maximum Rs. 100/-.
  • Cash Back applicable on payments through RuPay Debit Card, Bhim, USSD etc.
  • It’s on wish of States to launch this incentive scheme or not.
  1. West Bengal opposes idea of Digital incentivization of GST!!
  • West Bengal Finance Minister Mr. Amit Mitra opposes the idea of Digital incentivization.
  • He said that these incentives will come from the GST’s revenue that was collected dearly.
  • He also says that total revenue loss in Q1 has been Rs 43,000 cr.
  1. Next meeting to be held on month end of September’18 at Goa.

FAQ on GST :

  • Query: What are the general disciplines to be followed while imposing penalties?
  • Answer:The levy of penalty is subject to a certain disciplinary regime which is based on jurisprudence, principles of natural justice and principles governing international trade and agreements. Such general discipline is enshrined in section 126 of the Act.

 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)

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)

corporate and professional updates 04th aug 2018

Image result for professional updatesDirect Tax :

  • Indore ITAT rules that CIT is not empowered to direct AO to issue notice u/s 143(2) after expiry of normal limitation period, quashes time-barred assessment for AY 2000-01 on assessee-firm; Notes that assessee had filed revised return in April, 2001 (original return was filed within Sec 139 time-limit) to claim refund of TDS and made an application u/s. 119 to regularize the revised return which was allowed by CIT (vide CIT’s order of January, 2008) who directed AO to determine refund after scrutinizing the case by issue of notice u/s 143;[TS-424-ITAT-2018(Ind)]
  • Bombay HC upholds ITAT order in case of Mr. Fardeen Khan (assessee), rules that there was no transfer u/s 2(47)(v) upon entering into Development Agreement during subject AY 2008-09, since it was not registered; Assessee had entered into a Development Agreement (‘DA’) in April, 2007  whereby 13 acres of land owned by assessee was given for development to M/s. Godrej Properties (‘developer’) and assessee received Rs.13.75 cr. as deposit;[TS-425-HC-2018(BOM)]
  • Delhi ITAT accepts assessee’s (company incorporated in Cyprus) contention of non-constitution of ‘installation PE’ under clause 5(2)(g) of India Cyprus treaty pursuant to award of contract  by another foreign entity (AMC) for placement of rock in seabed for laying of gas pipelines and other work;Rejects Revenue’s contention that assessee’s activity went beyond 12 months threshold period prescribed for installation PE, observes that AO and DRP wrongly concluded that assessee was involved in multifarious functions by considering the scope of work to be carried by AMC as scope of work for assessee; [TS-426-ITAT-2018( DEL)]

INDIRECT TAX

  • Applicability of GST on ambulance services provided to Government by private service providers under the National Health Mission (NHM).
  • Withdrawal of Circular No. 28/02/2018-GST dated 08.01.2018 as amended vide Corrigendum dated 18.01.2018 and Order No 02/2018–Central Tax dated 31.03.2018.

FAQ on GST Audit:

  • Query: What is the time limit to submit the audit report?
  • Answer:The auditor will have to submit the report within 90 days or within the further extended period of 90 days.
  • Query: Who can serve the notice of communication for special audit?
  • Answer:The Assistant / Deputy Commissioner is to serve the communication for special audit only after prior approval of the Commissioner.

MCA Update:

  • MCA has made amendment in Companies (Accounts) Rules , 2014.These rules may be called the Companies (Accounts ) Amendments Rules,2018 which shall come into force on the date  of their publication in the official Gazetee.
  • Form ADT-1 is likely to be revised on MCA21 Company Forms Download page w.e.f 3rd AUG, 2018. Stakeholders are advised to check the latest version before filing.
  • To make the Swachh Bharat Mission truly universal and inclusive, all Union Ministers and Departments of Government of India observe SwatchhtaPakhwada and lead the Process in turns.

RBI Update:

  • In the Third Bi-monthly Monetary Policy Statement 2018-19 of the Monetary Policy Committee (MPC), the repo rate under the Liquidity Adjustment Facility (LAF) has been increased by 25 basis points to 6.50 per cent from 6.25 per cent with immediate effect.

OTHER UPDATES

  • Multipurpose Empanelment Form for the year 2018-19: Practicing Chartered Accountants are invited to fill the Multipurpose Empanelment Form (MEF) http://www.meficai.org/ or www.pdicai.org/
  • For any other query/clarification, please lodge your complaint online on MEF Application itself. If the same is not resolved within 3 working days,
  • please contact PDC Secretariat at mefpdc@icai.in or 011-30110444 /440 between 3.00 pm to 5.00 pm.
  • The last date for submission of online MEF Form for the year 2018-19 is 21st August, 2018 and online Declaration is to be submitted within 10 days of the filling of MEF but not later than 30th August, 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)

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)

CORPORATE AND PROFESSIONAL UPDATES 31ST JULY 2018

Image result for professional updatesDirect Tax :

  • Mumbai ITAT allows deduction for professional fees / merchant banking fees paid to PwC and other financial advisors for conducting financial and legal due diligence during AY 2008-09, observes that the very purpose of the expenditure was to raise funds to meet working capital requirements; Rejects Revenue’s stand that since the funds were raised through issue of rights shares, the payment incurred in connection therewith was capital in nature being incurred for the purpose of raising equity; [TS-413-ITAT-2018(Mum) ]
  • Andhra Pradesh and Telangana HC confirms ITAT order to uphold Sec 68 addition for gifts received by assessee-invidual from his father-in-law for AY 2005-06, rejects assessee’s reliance on co-ordinate bench ruling in context of gift received by assessee from his maternal aunt; Clarifies that “this is not a case where we can import the principle ‘what is sauce for the goose is sauce for the gander'”, also points out that gift from maternal aunt which was held non-taxable in view of Sec 56(2)(v), was received after the amendment to Sec. 56(2) unlike gift from father in law which was received prior, refuses to apply spirit of said amendment to grant relief; [TS-411-HC-2018(AP)]
  • Violation of principles of the natural justice by the lower authority – reliance on the statement of employees – the statement is stated to have been recorded at the time of inspection and one can easily perceive the mood in which the employee would have been – DXN Herbal Manufacturing (India) Pvt. Ltd. Vs. ITO (2018 (7) TMI 1733 – Madras HC).
  • Income tax authorities to issue certificate u/s 195 or 197 within 30 days, a good step to help the charitable trust and societies to avoid harsh TDS provisions.

INDIRECT TAX

  • TODAY (31 JUL 2018)is the last date for filing Apr-Jun’18 Qtr Return in GSTR-1 for registered persons with aggregate turnover up to Rs.1.50 Crores & GSTR-6 for Jul’17-Jun’18).
  • Levy of GST – Classification – composite supply – EPC Contract – standalone contract for transportation of Equipment for which separate consideration is received – same is liable to tax as a works contract as per provisions of section 2(119) of the GST Act – AAR, Maharashtra in Dinesh Kumar Agrawal (2018 (7) TMI 1691).
  • Central Government has now given effect to the recommendations of GST Council vide various notifications dated July 26, 2018 and all such notifications, unless specifically mentioned, shall be effective from July 27, 2018.
  • Union Finance minister said that the 28% category of goods in under GST is being phased out and the bracket currently covers mostly luxury items or sin goods. The tax on other items as cement, air-conditioners, large screen televisions and a handful of others could also be reduced as revenues rise.
  • One of the significant changes proposed by the GST Council in its recently concluded 28th meeting on July 21, 2018 is inclusion of following transactions in Schedule III to the CGST Act, 2017 :Retrospective Application of Merchant Trading, In-bond sales and High sea sales covered in Schedule III. 

FAQ on GST Audit:

  • Query:Who will bear the cost of special audit?
  • Answer:The expenses for examination and audit including the remuneration payable to the auditor will be determined and borne by the Commissioner.

MCA Update:

  • Updating of Email ID and Mobile number in DIR-6 has been temporarily disabled till further notice. Stakeholders may kindly take note.
  • Nearly 5.90 Lac (34%) of the 17.90 Lac Companies registred in India are in-active.
  • (Intimation of change in particulars of Director to be given to the Central Government)

RBI Update:

  • The Monetary Policy Committee (MPC) will meet during July 30 to August 1, 2018 for the Third Bi-monthly Monetary Policy Statement for 2018-19. The resolution of the MPC will be placed on the website at 2.30 pm on August 1, 2018.

SEBI UPDATES

  • Sebi barred more than 30 entities from the securities market for at least ten years for alleged fraudulent transactions in the shares of SMS Techsoft.

KEY DUE DATES

31 July 2018 -

  • Quarterly statement of TDS deposited for the quarter ending June 30, 2018
  • Annual return of income for the assessment year 2018-19 for all assessee other than (a) corporate-assessee or (b) non-corporate assessee (whose books of account are required to be audited) or (c) working partner of a firm whose accounts are required to be audited or (d) an assessee who is required to furnish a report under section 92E.
  • Quarterly return of non-deduction of tax at source by a banking company from interest on time deposit in respect of the quarter ending June 30, 2018
  • Statement by scientific research association, university, college or other association or Indian scientific research company as required by rules 5D, 5E and 5F (if due date of submission of return of income is July 31, 2018)
  • Application in Form 9A for exercising the option available under Explanation to section 11(1) to apply income of previous year in the next year or in future (if the assessee is required to submit return of income on or before July 31, 2018)
  • Statement in Form no. 10 to be furnished to accumulate income for future application undersection 10(21) or 11(2) (if the assessee is required to submit return of income on or before July 31, 2018)
  • Due date for claiming foreign tax credit, upload statement of foreign income offered for tax for the previous year 2017-18 and of foreign tax deducted or paid on such income in Form no. 67. (If the assessee is required to submit return of income on or before July 31, 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)

CORPORATE AND PROFESSIONAL UPDATES 30TH JULY 2018

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Direct Tax :

  • Agra ITAT allows Sec. 89 relief to assessee-employee with respect to arrears received in lieu of employer’s contribution to an approved superannuation fund [taxable as perquisite u/s. 17(2)(vii)] during AY 2014-15; Rejects Revenue’s stand that the payments made by employer was perquisites u/s. 17(2), which cannot qualify for relief u/s. 89(1) as it covers salary arrears and arrears for profit in lieu of salary u/s. 17(3) only; [TS-408-ITAT-2018(AGR)]
  • SC clarifies that CBDT’s office memorandum (‘OM’) dated July 31, 2017 regarding stay of demand does not interfere with AO’s power to grant stay on deposit of a lesser amount, pursuant to Revenue’s appeal challenging Delhi HC judgment in LG Electronics India Pvt. Ltd.’s (‘assessee’) case; SC gives credence to Additional Solicitor General Vikramjit Banerjee’s submission before it that the said administrative Circular of the CBDT will not operate as a ‘fetter’ on the Commissioner, since it is a quasi judicial authority; [TS-406-SC-2018]
  • Calcutta HC upholds ITAT order, rejects Revenue’s stand that since possession of land owned by assessee-company was made over to developer pursuant to development agreement (‘DA’) dated February, 2007, capital gains arise in AY 2007-08 in view of Sec. 2(47)(v); HC rules that “it is only the kind of possession that is protected u/s. 53A of the Act of 1882 which is to be regarded as transfer and the mere handing over of possession of an immovable property for any other purpose may not fall within the scope of “transfer” in Section 2(47)(v);[TS-404- (HC-2018CAL)]
  • Kolkata ITAT deletes Sec 68 addition for consideration on sale of shares, allows assessee-individual’s LTCG exemption claim; AO had made addition based on information from Investigation Wing that relevant scrip on which LTCG was earned was involved in bogus LTCG scam and assessee’s PAN was listed in beneficiaries identified by Investigation Wing;[TS-402-ITAT-2018(Kol)]
  • Calcutta HC upholds ITAT order, rejects Revenue’s stand that since possession of land owned by assessee-company was made over to developer pursuant to development agreement (‘DA’) dated February, 2007, capital gains arise in AY 2007-08 in view of Sec. 2(47)(v); HC rules that “it is only the kind of possession that is protected u/s. 53A of the Act of 1882 which is to be regarded as transfer and the mere handing over of possession of an immovable property for any other purpose may not fall within the scope of “transfer” in Section 2(47)(v);[TS-404- (HC-2018CAL)]
  • CBDT has extended the ‘Due Date’ of filling Income Tax Return from 31st July 2018 to 31stAugust 2018, Dated 26th July 2018 (F. No. 225/242/2018/ITA.II).
  • CBDT: The date of Filing of Income tax return for A.Y 2018-19 ( Non Audit) is extended 31-08-2018 Vide Notification No . 225/242/248 dated 26-07-18.
  • CBDT has revised the mandatory tax audit report Form 3CD, which is to be filed by certain taxpayers, to expand the scope of the exercise. An auditor will now have to furnish details related to GST sales, information on transactions covered by transfer pricing provisions, cash transactions and transaction involving TDS.
  • The Delhi High Court directs Central Board of Direct Taxes to accept online filing of tax returns without furnishing Aadhaar number.
  • The Income Tax Department is set to crack down on TDS defaul ts by government and private sector entities, especially e-retail portals, local bodies like panchayats, as the CBDT has directed its assessing officers (AOs) across the country to undertake at least 30 surveys or on-spot checks.
  • The Securities Appellate Tribunal (SAT) on Thursday asked the income tax department to provide clarity on applicability of securities transaction tax (STT) on physically-settled derivative contracts.

INDIRECT TAX

  • E-commerce companies to face tax audit over GST refund issue: The anti-profiteering authority has ordered audit of major e-commerce companies like Flipkart, Amazon and Snapdeal, to find out whether they have refunded the excess GST collected from the consumers.
  • Central Government has now given effect to the recommendations of GST Council vide various notifications dated July 26, 2018 and all such notifications, unless specifically mentioned, shall be effective from July 27, 2018.
  • The Goods and Service Tax Council would exclusively consider issues related to micro, small and medium enterprises taxpayers at its 29th meeting scheduled for August 4, a finance ministry official said.
  • GST Tribunal (GSTAT) will come into effect soon, providing a higher judicial forum for businesses to redress disputes under the new tax framework. The GST Council approved creation of the tribunal with a national bench in Delhi and three regional benches in Chennai, Kolkata and Mumbai.
  • CBIC has notified that the services supplied by individual Direct Selling Agents (DSAs) to banks/ non-banking financial company (NBFCs) are taxable under Reverse Charge Mechanism (RCM). Notification No. 15/2018.

FAQ on GST Audit:

  • Query: When can a taxable person pay tax on a provisional basis?
  • Answer:As a taxpayer has to pay tax on self-assessment basis, a request for paying tax on provisional basis has to come from the taxpayer which will then have to be permitted by the proper officer. In other words, no tax officer can suomoto order payment of tax on provisional basis. This is governed by section 44A of MGL. Tax can be paid on a provisional basis only after the proper officer has permitted it through an order passed by him.
  • Query: Under what circumstances a best judgment assessment order issued under section 46 be withdrawn?
  • Answer: The best judgment order passed by the Proper Officer under section 46 of MGL shall automatically stand  withdrawn if the taxable person furnishes a valid return for the default period (i.e. files the return and pays the tax as assessed by him), within thirty days of the receipt of the best judgment assessment order.

MCA Update:

  • Form DIR6 is likely to be revised on MCA21 Company Forms Download page w.e.f 26th JUL 2018. Stakeholders are advised to check the latest version before filing.
  • Updating of Email ID and Mobile number in DIR-6 has been temporarily disabled till further notice. Stakeholders may kindly take note..

RBI Update:

  • Directions under Section 35A of the Banking Regulation Act, 1949 (AACS) – The Kapol Co-operative Bank Ltd, Mumbai, Maharashtra.

SEBI UPDATES

  • SEBI proposed Unified Payments Interface (UPI)-based payments for retail investors investing in IPO. The move will help cut down the time taken between closing of an IPO and listing of the security from current six days to just three days.
  • SEBI proposed measures to provide promoters a say in the price offered to shareholders of companies that are planning to delist from stock exchanges. The proposal is aimed at plugging loopholes in the current delisting method for companies. Issuing a draft paper, Sebi has suggested for a price discovery as per reverse book building (RRB) method, along with considering counter offer of promoter .

OTHER UPDATES

  • Parliament passed the Fugitive Economic Offenders Bill to prevent economic offenders from fleeing the country and evading the legal process. It also gives teeth to the Enforcement Directorate to confiscate the property of fugitive economic offenders.
  • Cash-on-delivery (COD) method of payment option provided by online retailers such as Flipkart and Amazon may be a regulatory grey area as per the Reserve Bank of India’s (RBI’s)
  • India will soon lay down the ground rules for professionals to assess the value of businesses, including those slipping into bankruptcy, according to Insolvency and Bankruptcy Board of India (IBBI) chairperson M.S. Sahoo.
  • ICAI vide announcement dated July 25,2018 has requested the members to add/update their mobile number and email-id in the records of ICAI in order to enable the ICAI to send bio-data of candidates, important election related announcements, etc. to members.
  • Cheque bounce law passed in lok sabha on 23.07.18. 20 % immediately to pay to party, 20 % to deposit in court, 100 % to pay with interest if found guilty within two month. Penalty will be charged 20% to 100% for guilty by court.

KEY DUE DATES

30 July 2018 -

  • Quarterly TCS certificate in respect of tax collected by any person for the quarter ending June 30, 2018
  • Due date for furnishing of challan-cum-statement in respect of tax deducted undersection 194-IA for the month of June, 2018
  • Due date for issue of TDS Certificate for tax deducted under section 194-IB in the month of June, 2018

31 July 2018 -

  • Quarterly statement of TDS deposited for the quarter ending June 30, 2018
  • Annual return of income for the assessment year 2018-19 for all assessee other than (a) corporate-assessee or (b) non-corporate assessee (whose books of account are required to be audited) or (c) working partner of a firm whose accounts are required to be audited or (d) an assessee who is required to furnish a report under section 92E.
  • Quarterly return of non-deduction of tax at source by a banking company from interest on time deposit in respect of the quarter ending June 30, 2018
  • Statement by scientific research association, university, college or other association or Indian scientific research company as required by rules 5D, 5E and 5F (if due date of submission of return of income is July 31, 2018)
  • Application in Form 9A for exercising the option available under Explanation to section 11(1) to apply income of previous year in the next year or in future (if the assessee is required to submit return of income on or before July 31, 2018)
  • Statement in Form no. 10 to be furnished to accumulate income for future application undersection 10(21) or 11(2) (if the assessee is required to submit return of income on or before July 31, 2018)
  • Due date for claiming foreign tax credit, upload statement of foreign income offered for tax for the previous year 2017-18 and of foreign tax deducted or paid on such income in Form no. 67. (If the assessee is required to submit return of income on or before July 31, 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)

OVERVIEW OF GOOGLE TAX/ EQUALISATION LEVY

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Over the last decade, Information Technology has gone through an expansion phase in India and globally. Consequently, this has given rise to various new business models, where there is heavy reliance on digital and telecommunication networks.

As a result, the new business models have come with a set of new tax challenges  in terms of nexus, characterization and valuation of data and user contribution. The combination of inadequacy of physical presence based nexus rules in the existing tax treaties and the possibility of taxing such payments as royalty or fee for technical services creates a fertile ground for tax disputes.

A new chapter (viii) titled ‘Equalisation levy’ is inserted in the finance bill which will take effect from 1st of June 2016 to provide for an equalisation levy of 6 % of the amount of consideration for specified services received or receivable by a non-resident not having permanent establishment (‘PE’) in India, from a resident in India who carries out business or profession, or from a non-resident having permanent establishment in India.

With the introduction of the equalisation levy, the Govt. has been indirectly able to tax the global advertising companies and has set the more services may be added in the list of specified services in future.

The Salient Features of this Equalisation Levy are as Under: -

  • It is to tax the e-commerce transaction/digital business which is conducted without regard to national boundaries.
  • The equalization levy would be 6% of the amount of consideration for specified services received or receivable by a non-resident not having the permanent establishment (‘PE’) in India, from a resident in India who carries out business or profession, or from a non-resident having the permanent establishment in India.
  • Specified services mean online advertisement, any provision for digital advertising space or any other facility or service for the purpose of online advertisement and includes any other service as may be notified by the Central Government.
  • No levy if the aggregate amount of consideration does not exceed Rs.1 lac in any previous year.

Equalization Levy will not be Charged: -

  • If service provider being a non-resident having Permanent Establishment in India.
  • Service provider is a resident in India.
  • Amount of consideration is less than Rs 1 lakh

Applicability and Manner of Deduction of Equalization Levy: -

This levy of equalization would be in the same manner as TDS, like the person making the payment for advertisement will require to deduct Equalization levy @ 6% on total amount of consideration and deposit the same to the account of Central Govt.

In case of failure to do so, these expenditures will not be allowed to claim for Income Tax Purpose.

Reason for Introduction of Equalization Levy: -

Many Companies who are providing services in the whole world register themselves in a country wherein the Tax rates are very low and pay very low taxes on their global income.

Like in India revenue of Google in FY 2014-15 was 4,108 Crores, hence the introduction of Equalisation levy would help the Governmentto collect a lot of money which till now was not Taxed that’s why many people are calling Equalisation levy as Google Tax. Because a major share of online ads spent goes to Google.

Due Date of Depositing Equalization Levy

Due Date of depositing Equalization levy to the account of Central Govt by the 7th day of the Month immediately following the said calendar Month. 

Due Date of Furnishing Equalization Levy Statement (Form-1)

Due Date of Furnishing Equalization levy Statement is on or before 30th June of Financial Year ended. (after the end of Financial Year Assesse has to submit Form-1 on or before 30th June or within the prescribed time as the case may be.) 

Revision or Late Submission of Form-1

If assesse failed to furnish statement within time or had furnish wrong and now want to revise the same he can upload belated return or revise return at any time before the expiry of two years from the end of financial year in which specified services were provided.

Interest on Default: -

If the amount of levy is not deposited within a specified time, then assessee shall have to pay 1% Interest on such levy for every month or part of the month by which such credit of the Tax or any part of Tax delayed.

Failed to deduct levy: -

penalty amount will be equal to the amount of Equalization levy that Assessee failed to deduct.

Levy has been deducted but not deposited then Penalty amount will be Rs. 1,000 per Day till default continues but the total of a penalty shall not exceed the amount of equalisation levy.

Penalty for Default in Furnishing Statement: -

If Assessee failed to furnish the Equalization levy statement within the prescribed time, he has to pay penalty Rs. 100 Per day till the default continues.

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)