INCOME TAX UPDATES ON 28th December 2018

Income Tax Updates:

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  • The Government has increased the interest income exemption limit on bank and post office deposits from Rs. 10,000 to Rs. 50,000. TDS (Tax Deducted at Source) for senior citizens will not be trigged if interest income is up to Rs. 50,000.
  •  Dividend distribution tax on dividends from equity mutual funds which were earlier tax-free, attracted tax at the rate of 10%. Remember that dividends from equity mutual funds are tax-free in the hands of investors. But dividends from equity mutual funds are paid after deducting a dividend distribution tax (DDT) of 11.648% (including cess), which reduces the in-hand return for investors.
  • 1st April onwards a new long term capital gains (LTCG) regime on equity instruments – listed shares or equity – oriented mutual funds – came into effect. Earlier such gains on equity were exempt from tax. Now investors have to pay 10% tax on gains exceeding Rs 1 Lakh a year. Equity holding beyond a year is considered long term.
  • Rs 40,000 standard deduction, one need not provide any documents and proof. A salaried individual or pensioner can claim standard deduction up to Rs 40,000 from his/her income.
  • The Government has raised the percentage of cess on income tax from 3% to 4% for individual taxpayers on the amount of income tax payable.
  • It is allowed to withdraw up to 40% of the total corpus without any tax at the time of maturity or closure of the account for the employees who are continuously contributing to the National Pension System (NPS).
  • Now senior citizen can avail deduction of up to Rs 50,000 for health insurance premium under section 80D. Earlier the limit was Rs 30,000. Also, the deduction available for payment towards medical treatment of specified disease has been hiked to Rs 1 Lakh for senior citizens.
  • In case of premium for health insurance for multiple years has been paid in one year, the deduction shall be allowed on proportionate basis for the number for years for which the benefit of health insurance is provided.

Case Laws:         

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Madras High Court:

CIT, Chennai vs. M/S Tamilnadu Industrial Investment Corporation Ltd.

Entitlement to deduction of provision made in respect of doubtful and loss assets u/s 36(1) (viia) (c) – Assessee did not have any positive profits to set it off from – scope of amendment – claim of the Assessee allowed – the proper method of interpreting the proviso is to give life to the proviso and the intention behind the insertion of the proviso:

ITAT Delhi:

ACIT, Central Circle- 30, New Delhi Vs. Ankush Saluja, Archana Saluja And Saluja Construction Co. Ltd.

Assessment u/s 153A – Addition u/s 68 – nowhere it is the case of Revenue that the aforesaid additions made in the Assessment Order were based on any incriminating material found in the course of search U/s 132 of I.T. Act. – No additions can be made

ITAT Delhi:

M/S Sony India pvt Ltd Vs. The ADDL. C.I.T, Range – 9, New Delhi

Transfer pricing – ALP – Since the operating profit margin of the appellant company is better than those of the comparable, it can be safely concluded that the Assessee has been suitably remunerated and no further adjustment is required to bench mark the AMP expenses.

ITAT Ahmadabad:

ITO, Ward-3 (3) (1) Surat. Vs. Shri Ghanshyambhai Laljibhai Lukhi

Addition on account of suppression of production – Rate of net profit – For determination of total production, all products and raw-material cannot be clubbed together to arrive at standard or a uniform quantity, because the Assesse is manufacturing different products having different recipe with common raw-material.

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 decision do consult your professional /tax advisor for their 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 & Associate, a leading Tax & Investment planning Advisor Service provider. His Blog can be found at http://carajput.com 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- 9555555480.

 

 

 

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Corporate and Professional Updates on 26th December 2018

INCOME Tax Updates:

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  • The Assessment is reopened simply on the basis unclear information received from the Director of Income Tax by the Assessing without independently applying his own mind to form any belief, it is not justify by the reason for reopening of the assessment.
  • CBDT has ordered a fresh cadre review and restructuring of the income tax department with an aim to create a “caring but strict” direct taxes regime in the country. CBDT ordered the creation of a 12-member committee of senior officials to accomplish the task within the next three months.
  • To Avoid higher Late fee of upto Rs 10,000 file your Income Tax Return before 31st December 2018 if not filed yet.
  • Direct Taxes Code task force is likely to submit its report by February 28, 2019 and some of its recommendations of the panel is expected to be included in the final Budget for 2019-20 which will be presented after the general elections due in May next year.
  • CBDT has asked field officials to desist from taking any coercive action against angel tax notices being slapped on start-u or recovery of demands of completed assessments from these firms till a policy decision is taken.

GST Updates:

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  • It is said by the finance ministry that the Council had been looking at the 28% tax slab and constantly rationalising items in it in lesser tax slabs. The GST council had been looking at the 28% tax slab and constantly rationalising items in it in lesser tax slabs. Council has decided to reduce tax slabs for 178 items from 28 per cent to 18 per cent. It will be applicable from 15th of this month.
  • When you claim ITC through RFD 01 Credit on Capital goods not allowed.
  • It is said by the , NITI Aayog Vice-Chairman Rajiv Kumar that the Average rate of GST will soon be around 15%, after a day after Prime Minister Narendra Modi expressed his Govt commitment to reduce GST on many more items.

MCA Updates:

  • MCA vide its notifications dated 13 December, 2018 has Extended the last date of filing of Form NFRA-1 to 30 days from the date of deployment of this form on the website of Ministry/ NFRA.
  • Minimum Additional Fee payable to MCA after 31.12.2018 for Annual filing of Financial statements for y.e.31.3.2018 will be filing fee plus Rs 6,100/- for Financial Statements (Form AOC-4) and Rs. 3,100/- for Annual Returns (Form MGT-7)* plus Rs. 100/- per day per document thereafter.

SEBI Updates:

  • The Clubbing of investment limit norm of SEBI by well regulated foreign investors, the foreign portfolio investors (FPIs) are treated as part of the same investor group and the investment limits of all such entities.
  • The guidelines pertaining to setting up cyber security operations centre for small market intermediaries as they lack knowledge in cyber security is relaxed by SEBI.
  • A more robust risk management framework with regard to margin system for the equity derivatives segment is put in place by SEBI. Now, the payment of mark to market margin (MTM) would mandatorily be made by all the members on T+0 basis — before start of trading on the next day, as per a circular.
  • SEBI said it was planning a sandbox policy to support technology developments in financial markets. The Sandbox policy will allow companies to test products in a closed environment, a particular geography or among a set of users, before they are allowed roll out commercially meeting all regulations.

RBI Updates:

  • It is announced by the RBI on the outstanding stock of ECB at 6.5 percent of GDP at current market prices. On the basis of GDP Figures on March end 2018, the soft limit works out to $160 billion for the current financial year.

FAQ’S on Financial Sector:

Ques.  Is the condition to make payment for the value of supply plus the GST thereon required to be complied with by the recipient to claim the input tax credit where supplies for services are made between distinct persons?

Ans. No, this condition is not required to be complied with by the recipient. As per the proviso to sub rule (1) of Rule 37 of the CGST Rules, 2017 the value of supplies made without consideration as specified in paragraph 2 of Schedule I of the CGST Act, 2017 shall be deemed to have been paid for the purposes of the second proviso to sub-section (2) of Section 16 of the CGST Act, 2017.

Ques. A customer may avail numerous services from the Bank / insurer in a given taxable period. Is it mandatory for Banks to issue a tax invoice for each transaction or can the Bank issue a consolidated invoice for the service rendered during the tax period?

Ans. As per the provisions contained in the first proviso to Rule 47 of the CGST Rules, 2017 an insurer, a banking company or a financial institution, including a NBFC may issue invoices within 45 days from the date of supply of service. Further, sub-rule (2) of rule 54 of CGST Rules, 2017 provides that such entities may issue any other document in lieu of the tax invoice. Accordingly, such entities may issue a consolidated statement/ invoice/ advice to the customer at the end of the month, with the details of all the charges levied during such month and GST payable thereon.

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 decision do consult your professional /tax advisor for their 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 & Associate, a leading Tax & Investment planning Advisor Service provider. His Blog can be found at http://carajput.com 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- 9555555480.

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Corporate and Professional Updates on 14th December 2018

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Income Tax Updates:

  • Income tax department has collected Rs. 6.75 trillion In direct tax this year up to November, accounting for close to half of its full year target of Rs. 11.5 trillion. The April-November gross direct tax receipts show a 15.7% jump in revenue compared to the same time a year ago.
  • File the Income Tax return before 31st December to avoid high rate of Income Tax late fee Up to 10,000.

GST Updates:

  • GST Notification on Annual Return Portal enhancement to file GSTR-9 will be likely till 31st January, 2019. Government wants another 1/5 months to get it operational Notification brought in for extending due date to file GSTR-9.
  • No registration required under GST Act as amount collected by Lions Club & districts are for member’s convenience, not towards ‘supply’. AAR, Maharashtra vide Advance Ruling No. GST-ARA-33/2018-19/B-100 dated 28.08.2018.
  • CBIC said despite the electronic way or E-way bill mechanism there has been rampant evasion and there is a need to increase compliance from April-November we have detected Rs 12,000 Crore of GST evasion.

SEBI Updates:

  • SEBI is considering steps to strengthen the framework for debenture trustees, including raising minimum net worth requirement for registration of such entities and introducing e-voting provision to obtain consent of the unit holders.
  • SEBI eased norms for startup listings and allowed mutual funds to segregate distressed assets to safeguard investment returns. Sebi board also approved a proposal to expand the offer-for-sale mechanism for reduction of a stake in listed companies and relaxed clubbing of investment limit norms for well-regulated foreign investors.

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 decision do consult your professional /tax advisor for their 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 & Associate, a leading Tax & Investment planning Advisor Service provider. His Blog can be found at http://carajput.com 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- 9555555480.

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Corporate & Professional Updates on 11th December 2018

Income tax Updates:

  • Direct tax collection has risen up by 15.7% for the period of April-November as compared to previous year. Collections added to Rs 6.75 lakh crore while refunds amounting to Rs 1.23 lakh crore have been issued during April-November, that is 20.8% higher than refunds issued during the same period.
  • The income tax department has moved up over half the kitty of the targeted direct tax revenue for this financial year on more than 6.63 trillion on a record “high growth rate of last seven years” it was also appreciated by demonitisation, according to CBDT report. As per the report of CBDT, the policy-making body for the I-T Department, on the “impact of demonetisation” states that the 2016 exercise of invalidating the two high-value currencies of Rs 1,000 and Rs 500 has “thrown up a large tranche of data and credible information based on which enforcement actions, with the process of search and survey, should be conducted by the tax department.

GST Updates:

  • Finance Ministry has extended the due date for filing annual return by three more months. “The competent authority has decided to extend the due date for filing FORM GSTR-9, FORM GSTR-9A and FORM GSTR-9C till 31st March, 2019.
  • The large number of small firms registered under Goods and Services Tax (GST) has made it possible to attract the working population so far not covered by any retirement savings schemes to pensions, chairman of Pension Fund Regulatory and Development Authority Hemant Contractor said.
  • GST has pulled up the no. of taxpayers by 3.4 million, According to the Economic Survey of FY 17-18. By the requirement of maintaining books of accounts and becoming part of the Digital tax return system, they have become new potential to customers the National Pension System.
  • Contractor said GST has addressed one of the major challenges in getting small firms to join NPS lack of proper maintenance of accounts. More firms getting registered under GST, small firms operating in the informal sector are becoming part of the formal sector.
  • India may soon offer some relief to the back-office support sector that is rattled by the recent Authority for Advance Ruling decision that services rendered to overseas clients did not qualify as exports and would face GST of 18%.

RBI Updates:

  • Urjit Patel has resigned as Governor Reserve Bank of India. His resignation comes against the backdrop of increasing tensions between the Finance ministry and the Reserve Bank of India. Shri Hasmukh Adhia appointed as RBI Governor with immediate effect.
  • The benchmark reached down 13 points as prices rose. The benchmark paper Thursday reached 7.43% the lowest since April 10. Bond prices are yield move in opposite direction. “It seems, India is heading towards a comparatively lower interest rate scenario,” said Kamal Mahajan, head of treasury and global markets at Bank of Baroda. “Banks are about to show higher profits because of the fact that they have heavy provision against treasury losses made between March to June will now get a scope of reversal amid dipping yields.”
  • Banks incur losses they are mandated to make provisions against such losses. Now onwards they are not allowed to book mark-to-market profits, already made against earlier losses. The central bank lowered the inflation forecast for the second time to 2.7-3.2% for second half of FY19, from 3.9-4.5% forecast made in the October policy meeting in the first Fiscal Year 2020, inflation is projected at 3.8-4.2%, with Risk.
  • It’s a positive development as lower bond will reduce MTM provisions in banks which have not fully provided and in other cases write-backs could be there in third quarter earnings,” said Ashutosh K Mishra, head of research, institutional equity at Ashika Stock Broking.
  • The changing global environment may impose further pressure on domestic yield. Traders mostly expect the benchmark yield to trade in the range of 7.20-7.70% with an element of risk emanating from domestic elections. “There could be some uncertainty over domestic elections,” said Mahajan. Moreover, trading activity has gone up in the sovereign debt market giving banks opportunity to tap trading profits.
  • The efficacy of central banking lies in how much fast a central bank can get lenders to pass on changes in policy rates to the economy, by altering their loan rates. In India’s case, it has been a Herculean task to make banks give borrowers the benefit of monetary policy changes and most of the Reserve Bank of India’s (RBI’s) efforts have been lost in transmission.
  • The central bank wants to remove deposits from the formulae, banks simply cannot. Lenders are allowed to charge a spread over the market benchmark to compensate for the credit risk of the borrower and a premium for the tenure.
  • The RBI may introduce new modes for the electronic verification of customers for all the financial institution. In last week a meeting with industry executive the officials of RBI indicated they were keen on rolling out a digital authentication method that would use the XML internet format to extract limited information on customers from the Aadhaar database. It wouldn’t include Biometric collection while generating Aadhaar digital identities for Indian resident.
  • RBI is more wishes to on starting off with XML-based Aadhaar authentication instead of offline QR code based verification.

Other Updates:

Concept of Intermediary:

  • A levy of 18% on these services would completely derail the cost dynamics of the back-office model that operates on thin margins and increasingly face challenges from other low-cost jurisdiction such as the Philippines. The issue could be taken up by the GST Council or even clarified by the GST Implementation Council once the law committee firms up its view, said the official quoted earlier. Industry bodies such as Nasscom have represented to the government on the issue.

Frequently Asked Questions on Banking, Insurance and Stock Brokers Sector:

Ques.1. Whether Banks are required to capture the details of ATMs in registration certificate as a ‘place of business’?

Ans.  No. Banks are not required to provide the details of ATMs while applying for registration. For the purposes of registration, ATM on its own does not constitute a place of business, as defined in the CGST Act, 2017.

Ques.2. As per RBI guidelines, Banks can use third party ATMs, Business Correspondents (BC), Customer Service Points (CSP) or third party warehouses. Are Banks required to include these third party places also in their GST registration?

Ans.No. Third party places are neither places of business nor fixed establishments from where Banks ordinarily carry on their business. These are independent service providers to the Bank which are subject to GST. Thus, these places are not required to be declared as place of business by the Bank.

Ques.3. What will be the time of supply in respect of services rendered upto 30th June, 2017 where the invoices are raised or payments are received after 30th June, 2017?

Ans. Where the services are rendered upto 30th June, 2017 and invoices in respect thereof are also raised on or before 30th June, 2017, the point of taxation would be as per the earlier service tax law and the services will be subject to service tax. Where the services are rendered upto 30th June, 2017 and the services are liable to be taxed under the reverse charge mechanism, the point of tax for such services as per the Point of Taxation Rules, 2011 shall be the date of payment. If the payment is made on or after 1st July, 2017, the supply of services shall be liable to GST.

Ques.4. Which tax is to be applied by the service provider on invoice issued on or after 1st July 2017 for services rendered up to 30th June 2017?

Ans. The time of supply being issuance of invoice under the CGST Act, 2017, the supplier of services must charge GST in this case. However, where the payment for such supplies has been made (prior to issuance of invoice) as advance before the 1st of July, 2017, the tax would be payable under the law prevalent prior to 1st July, 2017, as the point of taxation had arisen before this date to the extent of advance.

KEY DUE DATES:

  • GSTR Return summary for November is 20/12/2018.
  • Return of inward supplies by Non Resident foreign taxable person is 20/12/2018.
  • Payment of TDS for purchase of property for Nov. is 30/12/2018.
  • Annual return for registered tax payers is 31/12/2018.
  • Annual accounts filling on MCA is 31/12/2018.

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 decision do consult your professional /tax advisor for their 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 & Associate, a leading Tax & Investment planning Advisor Service provider. His Blog can be found at http://carajput.com 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- 9555555480.

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GST on Housing Societies & Resident Welfare Associations on 8th December 2018

GST on Housing Societies & Resident Welfare Associations.

  • supply of service by RWA (unincorporated body or a registered non- profit entity) to its own members by way of reimbursement of charges or share of contribution up to an amount of five thousand rupees per month per member for providing services and goods for the common use of its members in a housing society or a residential complex are exempt from GST.
  • If the aggregate turnover of such RWA is up to Rs.20 Lakh in a financial year, then such supplies would be exempted from GST even if charges per member are more than Rs. five thousand.
  • If payment received is greater than Rs 5,000 per member and the yearly turnover of society /RWA by means of supplying of services and goods is also greater than Rs 20 lakhs Housing Society or resident welfare association (RWA) will be required to pay GST on monthly subscription.

Applicability of GST on Resident Welfare Associations.

  • All the housing societies and resident welfare association which have an aggregate annual turnover of Rs. 20 lakhs p.a. will have to deal with GST regulations and have to obtain the GST registration. Services provided by all the Housing Society or Resident Welfare Associations will be considered a supply and thus taxable under GST.
  • Co-operative Housing Society or Residential Welfare Association shall be treated as a Person as per Sec 2(84) of CGST Act.
  • Person making supply of goods or services /both shall be treated as a Supplier as per Sec 2(105) of CGST Act.
  • Since the Co-operative Housing Society or Residential Welfare Association providing services to its members, it falls under the definition of Facilities, Benefits and other services provided by society are treated as supply as per As per (1) of CGST Act.
  • Monthly / periodic maintenance charges collected from members may be treated as Consideration as per definition provided in Sec 2(31) of CGST Act
  • When the aggregate turnover of a Supplier in a financial year exceeds twenty lakh rupees, such Person(s) become Liable for Registration under GST as per Sec 22. (1) Of CGST Act. That means the collection money) maintenance charges by society exceeds Rs 20 Lakhs per Annum then the Society need to be Registered.
  • A person who is registered or liable to be registered becomes a “Taxable Person” as per Sec 2(107) of CGST.
  • Thus Co-operative Housing Society or Residential Welfare Association whose Turnover crosses Rs 20 Lakhs per Annum become liable for Registration under GST and should charge GST (CGST + SGST) from its members.

Taxable and Non-Chargeable Parts of Housing Society Income

  • It is clear that a co-operative housing society providing some common services to its members and collects the expenditure incurred either for some specific purpose like municipal taxes, water charges, electricity charges etc. on the basis of area of flats or some other appropriate basis. Other expense like maintenance, repairs to society’s building, maintaining common facilities like lift, DG Set, Gym, Garden, parking space etc. are also allocated and collected from the members. It is clear that the society is providing above services constitutes as supply. Not all charges or supply by a housing society would be taxable under GST. For instance, housing societies collect and remit property tax on behalf of the residents. GST would not be applicable on the property tax collected and remitted.
  • All maintenance and repair charges will be taxable, parking charges and charges for swimming pool, clubhouse and other facilities would be taxable. Sinking fund or repair fund or painting fund would be considered non-taxable.

Input Tax Credit Allowed

  • If Housing Society became liable to pay GST, it will allow to take Input Tax Credit under Sec 169 (1) of CGST Act. Housing Society is allowed to claim the ITC In respect to taxes paid by them on Capital Goods such as generator, water pumps, lawn, furniture and machinery etc. Input Services such as repair and maintenance services such as Housekeeping, Security Fire AMC, Repairs & Maintenance, Contract staff, Accounting & Auditing Services and other such services.
  • Housing societies are capable to set off their tax liability by claiming Input Tax credit on various expenditure incurred on behalf of the resident for upkeep of property but no ITC would be allowed for the expenditure incurred by the housing society or resident welfare associations.
    • Electricity Expenses
    • Stamp Duty
    • Property Tax

Relaxation under GST:

EXEMPTIONS:

  • Services provided by an unincorporated body or a non-profit organization registered under any law for the time, to its member by the way of reimbursement of charges or contribution towards shares

(a) As a trade union;

(b) For the provision of carrying out any activity which is exempt from the levy of Goods and service Tax; or

(c) Up to an amount of five thousand rupees per month per member for sourcing of goods or services from a third person for the common use of its members in a housing society or a residential complex.

  • Services and supply provided by Housing Society and RWA to its own members by way of reimbursement of charges or share of contribution up to Rs 5,000 per month per member for providing services and goods for the personal use of its members in a housing society and residential complex are exempt from GST. But the exemption would not be available for commercial units or complexes.
  • If the aggregate turnover of such Housing Society and RWA is up to Rs 20 lakh in a financial year, then such supplies would be exempted from GST even if charges per member are more than Rs 5,000. And supplies would also be Exempted even if the charges per member are more than Rs. 5000.

Applicability of Reverse Charge Mechanism:

  • The tax liability under Reverse charge as defined under the sec 2(98) of CGST Act also be applicable. It means tax liability shall be payable by the housing society when the supplies are received which are notified Services as per Sec 9(3) of CGST Act like services of Goods Transport Agency, Advocate Services etc and also supplies from Un-registered Person under Sec 9(4) of CGST Act. It is suggested to avoid receiving of supplies from unregistered persons.

 Whether Eligible for Composition Scheme?

Composition scheme is beneficial for the small Businesses which have Turnover less than Rs 75 Lakhs per Annum. The scheme has many restrictions and one of them is Service Sector. But the Housing Society is not eligible for Composition Scheme.

Invoice Format for Housing Societies:

From the Implementation of GST, All the Housing Society has to make changes in the Invoice Format. The nature of supply made by a housing society and resident welfare association would be in intra-state the CGST and SGST would be applicable. 

Statutory Compliances:

  • In GST all the dealers including society which has annual turnover crosses Rs. 20 lakhs has to be registered.
  • GST Registered Housing Society Needs to Issue a Tax Invoice to its Member. All the members have to file 3 Returns in a month.

GSTR – 1 by 10th of following month – Towards Outward Supply (Maintenance Charges)

GSTR – 2 by 15th of following month – Towards Expenses Side  and

GSTR – 3 by 20th of following month – Monthly consolidated return and

GSTR – 9 by 31st December of the Following Year.

  • Overall have to file 37 returns..

 

Benefits of GST Compliance for Housing Societies:

  • It is advisable for housing societies to get GSTIN and be registered under GST. GST registration will allow the society to reduce the cost by claiming Input tax credit. GST charged by the suppliers for services like housekeeping, repairs, maintenance security, contract staff, accounting as well as auditing services and others can be claimed as a refund if there is no output liability.

 

Conclusion:

  • The services provided by co-operative Housing Society and RWA are covered under taxable supply and GST is applicable on it.
  • In case where the monthly subscription of members is less than Rs. 5000 per member is exempt from Tax. Apart from it exemptions on supplies up to Rs. 20 lakh per annum is also available to Housing Society.
  • If the monthly subscription received from members and also annual turnover Rs. 20 lakh then Housing society need register and discharge tax liability. The society should issue tax from invoice and collect GST @ 18% (CGST @9% + SGST @9%) from the members
  • Input Tax Credit is available on tax paid inputs and capital goods to Registered Housing Societies. Since the nature of supply is service, Composition Scheme is not available

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 decision do consult your professional /tax advisor for their 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 & Associate, a leading Tax & Investment planning Advisor Service provider. His Blog can be found at http://carajput.com 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- 9555555480.

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GST Registration on 8th December 2018

How to do GST registration for the branches and business verticals?

  • As per the CGST Act, in union territory it is necessary to be registered under GST for those suppliers who sell taxable goods and services.
  • There is a provision made for the GST registration Rules for getting GST registration for the branches.

GST Registration for Business vertical and Branches in the Different States:

  • The GST registration is mandatory in each state and union territory for the person who sells the taxable goods and services where the taxable goods and services are created.
  • For Example: If a cloth shop is open in the state of Haryana and Chennai then it is necessary to get registration no. in the state of Haryana and Chennai.

GSTIN Format:

  • In GSTIN No., the First 2 numbers in the GST registration number are connected to the state of registration. If the Business is running in any two states, then the 1st two number of the GSTIN would change, and the PAN would remain same in case more than 1 GST registration in a state then the firm code would also change
  • In the GSTIN format, the first 2 numbers in the GST registration number are connected to the state of the registration. Hence, If the business leverage in the 2 different states, then the 1st two numbers of the GSTIN would change, while the PAN of the organization would be the remain the same. Also, in the case of the more than 1 GST registrations in the state, then the firm code would also change.

GST Registration for Branches within a State:

In same state separate GST can also be obtained for the business having multiple business verticals. For the Different GST within a state following condition must be satisfied:

  • Have more than one business vertical. Business vertical means a distinguishable component of an enterprise that is engaged in the supply of individual goods or services or a group of related goods or services which are subject to risks and returns that are different from those of the other business verticals.
  • The business must not be registered to pay tax under the GST Composition Scheme.
  • All separately registered business verticals have to pay tax on supply of goods or services to another registered business vertical of the same business and have to issue a tax invoice for such supply.

Getting Registration for the Branches:

  • GST registration for the branches or different business verticals in the same state can be obtained in FORM GST REG- 01. The GST registration Is applied in the Form GST REG-01 by all the Business.
  • When the application for the GST registration submitted then it will send to an officer for the verification and it takes 7 days to finish the process and generate the GST certification. It is must show the principal place of the additional place.

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 decision do consult your professional /tax adviser for their 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 & Associate, a leading Tax & Investment planning Adviser Service provider. His Blog can be found at http://carajput.com 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- 9555555480

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CORPORATE AND PROFESSIONAL UPDATES ON 6th December 2018

INCOME TAX Updates:

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  • The code of Direct Tax will likely be about to stable. Prime Minister Narendra Modi’s parting shot in policy making before national polls early next year the draft direct tax code is likely to be a strong message about stability and certainty in taxation rather than any structural shift.
  • In India the personal income tax is very low. Personal income is taxed in the range of 35-40% in most developed economies. Girish Vanvari, founder of advisory firm Transaction Square, said it was important to reduce tax litigation and make the corporate tax rate more competitive.
  • Corporate tax rate is coming down to 20-22%. The government has committed to lowering corporate tax rate to 25%, which is important to attract investments into India, considering that tax exemptions are being phased out, said Vanvari.

SEBI Updates:

  • The Securities and Exchange Board of India has started an inquiry into the affairs of pharma major Sun Pharmaceutical Industries on the basis of a whistle-blower complaint, said regulatory sources. The sources said the market regulator was in receipt of a 150-page letter in which the whistle-blower accused the company of committing corporate governance and tax-related lapses, besides other securities market-related violations.
  • Sun Pharma, its Managing Director Dilip Shanghvi, and nine others had settled the insider trading probe, paying Rs 1.8 million against the settlement charges in 2017. But SEBI had not disclosed details of the case, it was probably linked to the acquisition of Ranbaxy by Sun Pharma from Japanese drug maker Daiichi. The regulator are ready to settle the proposed adjudication proceedings linked to the violation of the internal code of conduct for prevention of insider trading. No enforcement action was started for the alleged defaults.
  • SEBI starts checking against Sun Pharma, to also open it again insider trading case. An allegation is raised by the whistleblower which was of serious nature. We will consider each one of them,” said a regulatory source. Sources said SEBI had also taken cognizance of another note by Australia-based brokerage Macquarie on the faulty audit process and dubious practices used while raising funds through foreign currency convertible bonds.
  • On Monday SEBI Extended the deadline for transfer of shares of listed companies in Demat from to April 1 The last date has been extended after taking into consideration representations from shareholders as the initial deadline was to end on December 5.
  • Shares in the Demat form will maintain a transparent record of shareholding at firms amid rising concerns over beneficial ownership of entities In March, SEBI’s board decided that except in case of transmission or transposition of securities, requests for effecting transfer of securities will not be processed unless the securities are held in dematerialized form with a depository.
  • These changes will come into Effect from December 5. In view of the same, the deadline has been extended and the aforesaid requirement of transfer of securities only in demat form shall now come into force from April 1, 2019,” it said in a statement.

GST Updates:

  • Related imageAnti-profiteering body says machinery supplier didn’t pass on benefits of input credit to buyer. In crucial environment for the traders who import and sell in India, the National Anti-profiteering Authority has held a supplier of imported machinery guilty of profiteering for not passing on the benefit of input tax credit due to GST, and also ordered a proper checking into other products sold by the entity. The authority directed the Director General of Anti-Profiteering to conduct a new investigation covering all products supplied.

INPUT CREDIT AVAILABILITY

  • Crown Express Dental Lab, the applicant, submitted that a number of taxes such as the Central Sales Tax, Countervailing Duty and Special Additional Duty had been subsumed in the IGST, yet it had been charged 18% IGST. The authority held that the seller should have reduced the base price to the extent of CVD which was chargeable on the amount mentioned in the quotation. This is because in the period prior to GST, no CENVAT credit was available for the CVD paid on theimport of the goods whereas in the post GST period, no CVD was charged, instead IGST was levied on the import of goods which was available as Input Tax Credit.
  • Before the implementation of GST the prices were high after that the GST force the prices to reduce the amount of CVD paid in order to neutralize the impact of Input Tax Credit is available now. “This is an important ruling for businesses in the import and sell model as the order clearly states that credit of IGST, CVD which was not availableto set off need to pass to reduce the price for the consumers.

RBI Updates:

  • The Reserve Bank of India’s monetary policy committee is about to keep policy rates hold on Wednesday, among falling crude prices, less than the expected food prices and changes in economic growth. The market by keeping rates on hold, crude oil prices have slipped below $60/bbl and retail food inflation has eased to a 13-month low of 3.31%, below the medium-term inflation target of 4% for the third straight month. On the other hand, growth has slowed to 7.1% in the September quarter and factory output measured by the index of industrial production to 4.5%, giving enough reasons for the central bank to deliver a status quo policy this time.
  • Inflation is expected to be below 3% for the November, and the next hike is expected in fiscal year 2019-20. “.” In the previous policy, MPC had lowered its inflation trajectory to 3.9-4.5% and 4.8% for the second half of the current fiscal.
  • The Reserve Bank of India nixed hopes of any special liquidity window for non-banking finance companies.
  • Fast investments and credit growth rate, which is higher than the nominal economic growth rate, are signs of strength rather than weakness that warrants bailout schemes, said deputy governor Viral Acharya.

Other Updates:

  • GDP growth for the financial year 2018-2019 in the second quarter as per the GDP data.
  • In second quarter reasonable growth of 7.1% is recorded. The H-1 2018-2019 growth of the GDP is7.6%and the H-1 GVA growth is 7.4%. The growth in second quarter is higher as compare to the first quarter.
  • The growth in manufacturing on the base of 7.1% in Q-2 2017-2018 has been 7.4% in Q-2 2018-2019. The sector of construction has grown by 7.8%. As a ratio of GDP the fixed Gross Capital Formation has increased by almost.

Key Due Dates:

  • Payment of TDS /TCS Deducted in November is 07/12/2018.
  • Submission of forms received in November to IT commissioner is 07/12/2018.
  • Return of outward supplies for November by regular & casual suppliers (turnover exceeds 1.50 Crore) is 11/12/2018.
  • Issue of TDS certificate in case of Payment /credit made in October for purchase of property u/s 194IA is 14/12/2018
  • Issue of TDS certificate for tax deducted under sec 198IB for the month of October is 14/12/2018.
  • Due Date for Payment of ESI of November is 15/12/2018.
  • E-Payment of PF for November is 15/12/2018.

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 decision do consult your professional /tax advisor for their 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 & Associate, a leading Tax & Investment planning Advisor Service provider. His Blog can be found at http://carajput.com 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- 9555555480.

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‘LIMITED SCRUTINY’ UPDATES ON 30th’NOVEMBER’2018

CASS UPDATES:

Image result for scrutiny in CASS hd pics

  • It is explained by the Central Board of Direct Taxes (CBDT) that the  limited scrutiny cases referred under CASS cycles in 2017 and 2018 where the issues referred to by the law scope enforcement/ intelligence/ regulatory authority or agency.
  • In CASS cycles 2017 and 2018, few cases were selected for scrutiny in form of ‘Limited Scrutiny’ case. In the cases of ‘Limited Scrutiny’ the officers appointed for the case cannot travel beyond those issues for which they were appointed for.
  • The issues of several cases under ‘Limited Scrutiny’ information pointing out specific tax-evasion for the relevant year enforcement are asked by the filed authority. Agencies are available with the concerned Assessing Officer, however, in view of the restrictive nature of the restrictive nature of enquiry which can be made in ‘Limited Scrutiny’ cases, the same presently cannot be acted upon.
  • After the Examination of issue properly, it was said by the board that the issue coming out in this from the information  can also be examined during the course of conduct of assessment proceedings in such ‘Limited Scrutiny’ with prior approval.
  • It was said by the board that in Limited Scrutiny, assessing officer shall not expand the enquiry level for which the case was assigned for ‘Limited Scrutiny’ & issue arising from nature of information,” the Board said.
  • The officers assigned for the same should duly record the reason for expansion of the scope of ‘Limited Scrutiny’ to the extent.
  • For the proper monitoring in the cases provisions of Section 144A of the Income Tax Act, 1961 may be invoked in suitable cases.
  • The mentioned aspects shall be applicable from the date of issue and shall apply to the pending ‘Limited Scrutiny’ case selected in CASS 2017 and 2018 cycle.

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 decision do consult your professional /tax advisor for their 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 & Associate, a leading Tax & Investment planning Advisor Service provider. His Blog can be found at http://carajput.com 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- 9555555480

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PROFESSIONAL UPDATES ON 30th November 2018

SEBI UPDATES:

Image result for SEBI hd pics

 

  • Security Exchange Board of India May introduce a new law to allow Mutual Funds to segregate distressed debt Securities in their portfolios. The proposal for the formation of law is recently approved by the mutual funds advisory Committee, appointed by security board exchange of India. The move comes in the wake of defaults by IL&FS that led to erosion in NAVs of various debt schemes. As the value of few schemes fall 3-6% on a single day. This is about 50-70% of the annual return of some bond schemes.
  • In previous 2 years, there are some Default in companies like Amtek Auto and JSPL, which leads to massive redemption in some mutual funds the presence of select NBFC papers in various debt portfolios had led to several liquid schemes facing redemption pressure.

RBI UPDATES:

Image result for Rbi hd pics

 

  • RBI should provide funds to non-banks through a dedicated window, buy more government bonds from the market to infuse money and even cut the cash reserve ratio. Before we move forward we should consider the problem already arising.
  • On the other hand the currency with the public is increased by 23% in only one year. As on 9 November, credit had increase by 14.9% in a year ago, while the Banks can only mop up maximum upto 9.1% more deposit than they did a year ago.
  • The option to borrow from its different repo tenders, RBI has been infusing more than o1 trillion daily through its repo operations, a sign of growing liquidity deficit liquidity. . The blow to the sterling image of non-banking financial companies (NBFCs) has made them unworthy of credit in the eyes of banks.
  • Urjit Patel The governor of Reserve Bank of India on Tuesday mainly focused on the need to protect the autonomy of the central bank before a parliamentary panel, but stayed away from any direct criticism of the government. Patel assured the members he would provide details on the specifics of certain non-performing assets held by various banks. Patel’s deposition came in the wake of public disagreements between RBI and the finance ministry on easing liquidity supply in the credit markets. Patel asserted in his responses that RBI’s autonomy was essential to both the interests of depositors and the credibility of the Indian economy before the international rating agencies, according to the people aware of the proceedings.
  • Patel recommended that the autonomy of RBI is essential for both the depositors and the and the credibility of the Indian economy before the international rating agencies. As per the people aware of the proceedings. He was responding to a series of questions raised on the recent RBI-finance ministry.
  • Some of the BJP Members such as Nishikant Dubey and Shivkumar C Udasi have enquired if the India being overenthusiastic in Basel-III norms compliance when many signatories are not following it in letter and spirit. In Answer RBI governor said India’s compliance was a matter of credibility besides its commitment to a G20 decision.Dubey, it’s learnt, quoted from Adair Turner’s prescription in his book “Between Debt and the Devil” to make the point that the RBI must help the government in difficult times. He claimed that a committee appointed by the UPA regime had recommended a more central role for the finance ministry in relation to RBI and markets regulator the Securities and Exchange Board of India (Sebi) to resolve contentious issues.
  • At the time of Demonetization in the Economy, the governor apparently said it was only transient as the volume of credit outflow had gone up by 15.5%. The digital economy had significant growth, he said, adding that inflation had come down to around 4%. Patel projected a robust outlook for the national economy and opined that the fall in international crude oil prices will give the Indian economy the much-need boost.
  • It is decided by the RBI if it needs to call the RBI governor again after examining his written response which he is expected to submit over the next couple of weeks.
  • It is the responsibility of government and the nation to respect the functional autonomy of RBI as happened in the board meeting of RBI its  autonomy came up when RBI governor Urjit Patel testified before Parliament’s standing committee on finance. It is important for all stakeholders to view and appreciate institutional autonomy in the right spirit.

GST  UPDATES:

Related image

  • The total collection from goods and services (GST) was projected to be Min. Rs. 12 trillion in this current financial year. On the other hand, in each month it is expected to collect Rs. 1 trillion by GST averagely. The GST in two months i.e.(April and October) has hit target. As average monthly target stood at Rs. 970 billion in the first seven months of FY19. But the average monthly revenues will have to rise at least 14 per cent in the next five months than what was achieved in the first five months to hit the target.
  • Any fall in collections on CGST will not burden the Centre alone as 42 per cent of it goes to the states under the devolution formula. Any fall in collections on CGST will not burden the Centre alone as 42 per cent of it goes to the states under the devolution formula.
  • A notice to finance department, the commerce ministry and the Goods and Services council is issued by the Punjab and Haryana Government High Court for restricting the benefits of advance authorisation licence for exporters under the GST regime. The advance authorisation licence is issued to for allowing the duty-free import of inputs.
  • The CBIT and customs and the ministry of commerce had introduced a clause of “pre-import” for exempting imports done on advance authorisation licenses from integrated GST.

Other Updates:

  • The government is a data bank for all medicine brands to prevent pharmaceutical companies from using the same or similar looking and sounding brand names for drugs, especially those used to treat different conditions, senior officials close to the development said.
  • The brand ‘Medzole’ has been used to market at least four different kinds of medications, including an antifungal, an antibiotic and a medication for stomach acid problems. “This is dangerous, because the patient might accidentally be taking a medicine that they are not supposed to be consuming and which could cause unwanted side effects or health problems for them,” the person told ET on condition of anonymity. It was also said that medicines in different condition are sold with the same or similar brand names without the government’s knowledge.

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 decision do consult your professional /tax advisor for their 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 & Associate, a leading Tax & Investment planning Advisor Service provider. His Blog can be found at http://carajput.com 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- 9555555480

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CORPORATE AND PROFESSIONAL UPDATES 25th NOVEMBER 2018

Image result for PIC OF CORPORATE AND PROFESSIONAL HDCORPORATE & PROFESSIONAL UPDATES:

  • ANTI-RTI (Right to Information) policy of Reserve Bank of India is pulled up by Central Information Commission. The list of Defaulters of loans has to be provide within 45 days as ordered by the Supreme Court in its 2015 Judgment.
  • A question is raised on the governor Urjit Patel why the name of willful Defaulters is not disclosed and has given a 10-day relief to the RBI and asked it to respond to the notice. Information Commissioner M Sridhar Acharyulu had issued the notice 2, giving Patel time till November 16 to explain. Acharyulu, who is set to retire on Tuesday, heard the matter on Friday and gave the central bank time till November 26 as sought by it. Acharyulu said, “The commission strongly recommends immediate correction and an appropriate action against RBI’s declared anti-RTI policy” and further ordered to disclose and time to time update.
  • Huge addition in September payroll almost a million as per the data of EPFO. The highest addition in the past 13 months.
  • Department of Industrial Policy and Promotion (DIPP) wants to amend the Public Procurement Order so that penal action can be taken against erring officials of procurement agencies of any government department if they include restrictive or discriminatory conditions against domestic suppliers in bid documents.

 Notification:

  • CBDT amends Form of appeal to the Appellate Tribunal.
  • Highest payroll in September as according to last 13 months

Key cases:

  • In the case of Sushmita Sen Vs. ACIT received by Sushmita Sen towards damages for being sexually harassed not taxable
  • SEBI asked listed companies to disclose detailed reasons for the delay in submission of financial results to the stock exchanges within one working day of the stipulated deadline. As in a case a company it was delayed which should be taken within a working day.

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 decision do consult your professional /tax advisor for their 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 & Associate, a leading Tax & Investment planning Advisor Service provider. His Blog can be found at http://carajput.com for any query you can write toinfo@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- 9555555480.

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