Corporate and Professional Updates on 5th February 2019

Direct Tax Updates:

ANGEL TAX:

Image result for hd pics on Angel Tax

  • The industry department setting up a panel comprising startups, angel investors and income tax officials to look into the issue. The department for promotion of industry and internal trade who heads the panel.
  • India introduced a so-called angel tax in 2012, which counts investments received by startups above their fair market value as taxable income, much to the dismay of angel investors and the startup community. CBDT officials were against scrapping the angel tax altogether citing the possibility of a spurt in shell companies engaged in money laundering, they were ready to look at options to bring a carve-out for startups.
  • Automatic exemption from angel tax or startups registered with DPIIT could be asked to submit additional documents to prove their genuineness. The CBDT officials looked willing to consider the second option. Further discussions will take place on the proposals.
  • The objective is to devise a mechanism through which startups can be differentiated from shell companies and get a blanket relief from angel tax,” he added. A survey by the Indian Venture Capital Association on Local Circles showed that 73% of the startups that raised capital have received one or more angel tax notices under the Income Tax Act since their inception. When asked what happens to the angel tax notices already sent to startups, CBDT would not take any coercive action against startups.
  • The notices issued to startups are for initiation of assessment. “The number of cases where actual tax demand has been raised is far less In Last Month DPIIT eliminated the need for certification from an inter-ministerial body for startups seeking exemption from angel tax demands. Such applications routed through DPIIT will now be processed by CBDT within 45 days. Startups were not happy with the clarification and sought a blanket exemption from angel tax.
  • Angel tax, framed as an anti-abuse provision, was introduced in the Income Tax Act in 2012 to curb the practice of politicians accepting bribes in the guise of share premium in unlisted firms set up by them. The Income Tax Act provides for taxation of the share premium that is above the fair valuation of shares as “other income”. As startups are valued on the basis of the business potential of their ideas, which could change with time, they find it hard to justify the premium. Tax officials prefer to value these enterprises on the basis of their net asset value, but companies tend to be valued on the basis of their earnings potential.

Updates Regarding Rebate:

  • The government opted to announce a tax rebate on annual income up to ~5 lakh instead of raising the exemption limit as it did not wish to tinker with rate slabs, The emphasis of the budgetary exercise was on maintaining the economic reforms road map set over four-and-a-half years by Prime Minister Narendra Modi and Union minister Arun Jaitley so that India could continue to be the world’s fastest growing major economy, as per the current finance Minister Piyush Goyal.
  • The announced annual payout of 6,000 to small and marginal farmers was in keeping with the government’s efforts to ensure sustainable growth in the agriculture sector.

Indirect Tax:

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  • GSTN adds 2 New Features in the GST Portal including List of Preferred Banks list while making Payment and the Monthly Refund applications by Quarterly GSTR-1 filers.
  • CBIC excludes Certain Exempt Services for determining Eligibility for Composition Scheme. CBIC clarifies that the value of supply of exempt services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount, shall not be taken into account – (i) for determining the eligibility for composition scheme under second proviso to sub-section (1) of section 10; (ii) in computing aggregate turnover in order to determine eligibility for composition scheme under GST.

SEBI Updates:

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  • SEBI may re-consider the Liquidity Enhancement Scheme (LES) framework for the Commodities Segment. In the equity segment, there is no such restriction on launching the scheme.
  • SEBI almost finalises the mechanism for “Tap Issue of Bonds” through a Shelf Offer Document and likely to implement it from FY 2020. Under Tap Issue, companies will be allowed to file Shelf Prospectus on the same lines as Private Placements, once a year and raise money when required without going through the process of seeking approval from regulatory authorities.

Other Updates:

  • SBI, other performing PSBs may see stake sale.
  • CERC pushes for 100% power sale in spot market.
  • IDBI may now become LIC IDBI Bank or LIC Bank.
  • TDSAT exempts RCom from one-time spectrum charge.
  • India’s exports to surpass USD 314 bn peak this year.
  • Tata’s plea to bid for Bhushan Steel struck down.
  • RCOM goes to NCLT to speed up Jio deal, hopes move will expedite DoT nod.
  • Fugitive tycoon Vijay Mallya’s extradition to India approved by UK minister.
  • Zee group’s Subhash Chandra gives personal guarantee to mutual funds.
  • NCLAT asks govt for list of IL&FS firms categorised by financial position.
  • Setback for Tata Steel as NCLAT upholds creditors decision on Bhushan Power.
  • Sugar mills want Centre to hike ex-mill price to help clear arrears.
  • Fiscal deficit for April-December at 112% of FY19 Budget Estimate.
  • to begin process to monetise assets of CPSEs from April.
  • Anti-dumping duty imposed on ‘fluoroelastomers’ from China.
  • JSW Steel’s bid for Bhushan Power upheld.
  • SRF posts a 26% jump in consolidated net.
  • ONGC Videsh looks to pare stake in one of its costliest acquisitions.
  • RBI to announce policy before noon on 7 February.
  • Ruia, Essar Steel directors move NCLT to squash Mittal’s bid.
  • UPL open to buy back TPG Cap, ADIA stakes in Arysta.
  • Amfi’s MF campaign may turn focus on debt funds Nimesh Shah.
  • IndoStar to buy IIFL’s CV financing business.
  • Rating agencies downgrade various loan facilities of DHFL.
  • Jet Airways debt resolution plan outline is ready.
  • Aditya Birla Fashion Q3 net up 100% to Rs 70 crore.
  • TPG Growth set to invest $30 Million in Solara Active.
  • Coal India approves share owner buyback worth Rs 1,050 crore.
  • Governance standards improving in corporate India.
  • Essel Promoters sell Shares worth over Rs 1,050 cr in 6 firms.
  • Tribunal sets Feb 11 deadline to decide on Arcelor-Essar bid.
  • Vedanta Resources rating downgraded to Negative.

Key Due Dates:

  • Due Date for Payment of TDS & TCS Deducted/Collected in the month of January is 7th February 2019.
  • Due Date for TDS Return for the month of January is 10th January 2019.

Quote of the Day:

“If you want to change attitudes, start with a change in behavior. In other words, begin to act the part, as well as you can, of the person you would rather be, the person you most want to become. Gradually, the old, fearful person will fade away.”

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 4th February 2019

Indirect Tax Updates:

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FAQ’s on GST:

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.

SEBI Updates:

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  • The SEBI (security exchange Board of India) is directed by the finance ministry to submit proposed regulations to an independent committee for vetting before they are passed by the regulator’s board. It is not clear if the new committee will comprise external members or independent directors on the SEBI board. In either case, the finance ministry’s department of economic affairs will name the members of this committee. The DEA earlier this month directed SEBI that all proposed regulations would need to be placed before an independent committee for vetting before they are approved by the regulator.
  • The markets regulator has independently drafted regulations for approval by its board. The latest move revives the autonomy-versus-accountability debate at India’s financial market regulators, sparked by the recent turmoil that ended in the resignation of Reserve Bank of India governor Urjit Patel.
  • The issue of regulatory autonomy bubbled to the surface in October when RBI deputy governor Viral Acharya spoke about the importance of central bank independence. In the ensuing tense standoff with the finance ministry, the government contemplated the use of Section 7 of RBI Act that empowers it to give directions to the central bank, following which Patel resigned.

Other Updates:

  • India’s ranking on Corruption Perceptions Index (CPI) has gone up by three positions to 78 in 2018.
  • The Government of India has reduced the customs duty on import of parts and components of electric vehicles to 10 percent to promote domestic assembling of such vehicles.
  • The Government of Kerala is aiming to double the inflow of foreign tourists to more than two million by the end of 2020, according to Mr B S Biju, Tourist Information Officer, and Kerala Tourism.
  • India’s reinsurance market is expected to witness increased competition driven by relaxation of norms for foreign re-insurers by the Insurance Regulatory and Development Authority of India.
  • Lower logistics cost to help boost Exports by 5-8%.
  • Escorts chalks out 400-cr CapEx for expansion.
  • GDP Growth rate for 2017-18 revised upwards to 7.2%.
  • China appeals to US to accept its technology progress.
  • HERO MotoCorp quarterly Profit slips on higher expenses.

Key Due Dates:

  • Due Date for Payment of TDS & TCS Deducted/Collected in the month of January is 7th February 2019.
  • Due Date for TDS Return for the month of January is 10th January 2019.

Quote of the day:

“You have to perform at a consistently higher level than others. That’s the mark of a true professional. Professionalism has nothing to do with getting paid for your services.”

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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Service Exports from India Scheme of Government

SERVICE EXPORTS FROM INDIA SCHEME (SIES) INTRODUCED BY LATEST FOREIGN TRADE POLICY 2015-2020 A TOOLS TO ENCOURAGE EXPORT:

Related imageService Exports from India Scheme (SIES) has been introduced through the latest Foreign Trade Policy 2015-2020 as a tool to encourage export of notified services from India. It replaces the Served from India Scheme (SFIS) that was introduced in the Foreign Trade Policy 2004-2009.

Service Exports from India Scheme (SEIS) mainly aims to encourage export of services from India by providing duty scrip credit for eligible exports. Under the scheme, service providers, located in India, would be rewarded under the SEIS scheme, for the eligible export of services from India. In this article, we look at the Service Exports from India Scheme in expend. Service Exports from India Scheme was earlier termed as Served from India Scheme (SFIS).

Eligible Service Providers:

All type of Service Providers (i.e. Companies, Partnership, Proprietorship) providing notified services will be eligible for SEIS if they are providing services as per any of the two specified modes (out of four modes) .

Mode Title of Mode Description Eligible for SEIS
1 Cross border trade Supply of a ‘service’ from India to any other country Yes
2 Consumption abroad Supply of a ‘service’ from India to service consumer(s) of any other country in India Yes
3 Commercial Presence Supply of a ‘service’ from India through commercial presence in any other country No
4 Presence of natural persons Supply of a ‘service’ from India through the presence of natural persons in any other country No

Calculation of Benefits:

The first step in calculation of scheme benefits is to arrive at the figure of Net Foreign Exchange earned during the particular financial year as per following formula:

Net Foreign Exchange = Gross Earnings of Foreign Exchange minus (-) Total expenses / payment / remittances of Foreign Exchange by the IEC holder, relating to service sector in the Financial year – Once Net Foreign Exchange earnings are calculated, the next step is to find out the applicable rate as per the services being exported.

In the starting of the scheme, DGFT notified the rates between 3 to 5% of the Net Foreign Exchange earnings. However, later on, these rates were increased by 2% and the applicable rate of benefit under SEIS is in the range of 5 to 7% with effective from 1st November’2017 and applicable till 31st March’2018.

Following are the reward rates notified under the Annexure to Appendix 3D of The Foreign Trade Policy 2015-2020:

 

Services

Reward Rates (from 1.4.15

to 31.10.17)

Reward Rates (from 1.1.17 to

31.3.18)

Professional Services (Legal, Accounting, Tax, Medical etc.) 5% 7%
Research & Development Services 5% 7%
Rental/Leasing services without operators 5% 7%
Other Business Services 3% 5%
Audiovisual services 5% 7%
Construction & related Engineering Services 5% 7%
Educational Services 5% 7%
Environmental Services 5% 7%
 

Services

Reward Rates

(from 1.4.15

to 31.10.17)

Reward Rates

(from 1.1.17 to

31.3.18)

Health-Related and Social Services 5% 7%
Tourism and Travel Related Services 3-5% 5-7%
Recreational, Cultural and Sporting Services (other than audio visual services) 5% 7%
Maritime Transport Services 5% 7%
Air Transport Services 5% 7%
Road Transport Services 5% 7%
Services auxiliary to all modes of Transport 5% 7%

Procedure of filing application for benefit under the scheme  SEIS:

  • Application to claim the benefit under SEIS is filed in Form ANF 3B online using digital signature.
  • This application contains one part which needs to be certified by a practicing Chartered Accountant.
  • Physical copy of application along with all supporting documents also needs to be submitted to the jurisdictional office of DGFT.
  • A small fee of Rs. 1000 is paid at the time of filing the application.
  • Application once filed, can’t be revised online.
  • Exchange rate for each year is notified to calculate the value of duty credit scrip.
  • Application for each financial year is filed separately.

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 Other important points about SEIS:

  • The duty credit scrip can be utilized for the payment of basic custom duty for the procurement of eligible inputs and capital goods.
  • The scrip is freely transferable i.e. the service exporter can sell the scrip to any other person.
  • The duty credit scrip shall be valid for a period of 24 months from the date of its issue.
  • An application for obtaining duty credit scrip shall be filed within a period of 12 months from the relevant financial year of claim period.
  Period of delay in filing the claim Late cut %
Application received after the expiry of last date but within six months from the last date 2%
Application received after six months from the prescribed date of submission but not later than one year from the prescribed date 5%
Application received after 12 months from the prescribed date of submission but not later than 2 years from the prescribed date 10%

Ineligible categories under SEIS:

(1) Foreign exchange remittances other than those earned for rendering of notified services would not be counted for entitlement. Thus, other sources of foreign exchange earnings such as equity or debt participation, donations, receipts of repayment of loans etc. and any other inflow of foreign exchange, unrelated to rendering of service, would be ineligible.

(2) Following shall not be taken into account for calculation of entitlement under the scheme

(a) Foreign Exchange remittances:

  1. Related to Financial Services Sector:

(i) Raising of all types of foreign currency Loans;

(ii) Export precedes realization of clients;

(iii) Issuance of Foreign Equity through ADRs / GDRs or other similar instruments;

(iv) Issuance of foreign currency Bonds;

(v) Sale of securities and other financial instruments;

(vi) Other receivables not connected with services rendered by financial institutions; and

  1. Earned through contract/regular employment abroad (e.g. labour remittances):

(b) Payments for services received from EEFC Account;

(c) Foreign exchange turnover by Healthcare Institutions like equity participation, donations etc.

(d) Foreign exchange turnover by Educational Institutions like equity participation, donations etc.

(e) Export turnover relating to services of units operating under SEZ / EOU / EHTP / STPI / BTP Schemes or supplies of services made to such units;

(f) Clubbing of turnover of services rendered by SEZ / EOU /EHTP / STPI / BTP units with turnover of DTA Service Providers;

(g) Exports of Goods.

(h) Foreign Exchange earnings for services provided by Airlines, Shipping lines service providers plying from any foreign country X to any foreign country Y routes not touching India at all.

(i) Service providers in Telecom Sector.

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 2nd February 2019

Direct Tax Updates:

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  • People with annual income of around Rs. 10 lakh would be beneficiary by this move. This is because various tax saving instruments can be used to reduce taxable income for a given level of income.
  • The finance minister, in his interim budget speech, proposed a complete rebate on tax for those earning up to Rs.5 lakh a year, with an eye on middle-class voters before the general elections this year. The beneficiaries of this move could include people with annual income of around Rs.10 lakh. This is because various tax saving instruments can be used to reduce taxable income for a given level of income.
  • The income tax department gives occupation-wise break up of ITR filings with taxable incomes. Out of the total 49.8 million ITRs filed in AY 2017-18, 46.6 million were filed in the salary income category. The total number of salary income category ITRs filed for incomes up to Rs.5 lakh and Rs.10 lakh was 35.3 million and 39.5 million. This means that salary income ITR filers would account for 73% and 88% out of the ITRs filed in these two income categories. The short point is that the salaried class will be the biggest gainer from the income tax.

Indirect Tax Updates:

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  • After a Huge shortfall of Rs. 1 trillion in the expected central goods and services tax collection in 2018-19. The Central government is aiming to an ambitious 18 per cent growth in the overall GST mop-up in 2019-20. The Government is watching similar growth in income tax, corporation tax and customs revenue in FY20. Overall tax revenue growth is pegged at 14 per cent.
  • The government was able to meet its Budget Estimates in the current year. Its Revised Estimates of gross tax collection fell 1 per cent short of the budgeted target, mainly due to the CGST shortfall. The Centre has lesser worries than the states in this bargain. States’ share in the center’s tax revenue, which was budgeted at Rs 7.88 trillion, fell 3.4 per cent to Rs 7.6 trillion in the Revised Estimates. As a result, the Centre’s net tax revenue remained at the near-budgeted level of Rs 14.8 trillion.
  • The direct tax collection in FY19 is set to exceed the budget target by Rs 50,000 crore entirely due to enhanced corporation tax revenue. The Revised Estimates of personal income tax is kept at the budgeted level. Revenues from excise particularly levied on petrol and diesel have remained static in the Revised Estimates of FY19 as well as in the budget estimate of FY20, despite the fact that consumption of these fuels tends to rise every year. Despite the under-achievement in the goods and services tax.
  • This is appreciable that this government has consistently gone to the GST Council and reduced the GST rates on hundreds of items. We are ensuring 14 per cent growth to states’ revenues from the GST kitty to the states. It is almost 50 per cent growth over three years, which has never happened before in indirect tax collection,” he said in a post-Budget media interaction.
  • The expectation of Rs 6.04 trillion from the CGST, the Centre could garner only Rs 5.04 trillion. Now, the CGST is a component of the divisible pool of tax revenue, 42 per cent of which is shared with states. Thus, the burden of the CGST shortfall will be borne by both the Centre and states. This was partially compensated by corporation taxes, which have been revised upwards by Rs 50,000 crore, and by revenue from basic customs duties, which have been revised upwards by Rs 19,000 crore.

 Other Updates:

  • The Ministry of Housing & Urban Affairs, Government of India has approved the construction of 478,670 more houses under the Pradhan Mantri Awas Yojana (PMAY) (Urban), taking the cumulative number of houses sanctioned under the scheme to 7.27 million.
  • Assam is the top ranking state in India for best practices followed in budget formulation, followed by Andhra Pradesh and Odisha, according to a survey by Transparency International.
  • India sales of Hennes & Mauritz , a Swedish fashion retailer, increased 41 per cent year-on-year to around Rs 306 crore between September-November 2018.
  • The Government of India has increased the fellowship for doctorate students and research personnel in all areas of science and technology, effective from January 01, 2019.
  • India to account for 40 per cent of global rail travel by 2050.
  • Indian Railways will account for 40 per cent of global rail activity by 2050, as per the International Energy Agency.
  • India’s retail sector can provide employment opportunities to disabled people and mainstreaming of differently abled people can boost the country’s GDP by 5-7 per cent, as per a report by Trust for Retailers and Retail Associates of India and HSBC.
  • The Indian Space Research Organisation (ISRO) will deploy its Lithium-ion cell technology to 10 Indian companies, to establish production facilities of lithium ion cells in India.
  • India’s ranking on Corruption Perceptions Index (CPI) has gone up by three positions to 78 in 2018.
  • The Government of India has reduced the customs duty on import of parts and components of electric vehicles to 10 percent to promote domestic assembling of such vehicles.
  • The Government of Kerala is aiming to double the inflow of foreign tourists to more than two million by the end of 2020, according to Mr B S Biju, Tourist Information Officer, and Kerala Tourism.
  • India’s reinsurance market is expected to witness increased competition driven by relaxation of norms for foreign reinsurers by the Insurance Regulatory and Development Authority of India.
  • Lower logistics cost to help boost Exports by 5-8%.
  • Escorts chalks out 400-cr CapEx for expansion.
  • GDP Growth rate for 2017-18 revised upwards to 7.2%.
  • China appeals to US to accept its technology progress.
  • HERO MotoCorp quarterly Profit slips on higher expenses.

Key Due Dates:

  • Due Date for Payment of TDS & TCS Deducted/Collected in the month of January is 7th February 2019.
  • Due Date for TDS Return for the month of January is 10th January 2019.

Professional quotes:

“You have to perform at a consistently higher level than others. That’s the mark of a true professional. Professionalism has nothing to do with getting paid for your services.”

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 1st Feb 2019

Direct Tax updates:

Image result for Direct Tax Hd pics

  • The Central Board of Direct Taxes  has come up with a new scheme of  verification for issuing e-notices to taxpayers. It will also process the documents of information related to the taxpayers’, and make all the data available to the assessing officer.
  • The notice should be served by delivering a copy by e-mail or by placing a copy in the registered account on the portal, followed by intimation of SMS.
  • The scheme would ensure “no person shall be required to appear in person or through authorised representative before the designated authority at the communication centre in connection with any proceedings.

Indirect Tax Updates:

Image result for Indirect Tax Hd Pics

In Budget’s Reference:

  • The Enhanced Revenue from GST would definitely help govt. to reduce pressure on the fiscal deficit in the current financial year when the ministry is expecting a shortfall of about Rs 50,000 crore in Centre.
  • The GST (goods and services tax) in January has crossed Rs 1 trillion, the finance ministry informed by social media. This is the third instance of GST revenue crossing the trillion mark in the 2018-19 financial year, the first two being in April and October 2018.
  • The positive trend in the data has been considered in projecting the revised estimate of GST revenue for 2018-19 and the Budget estimate for 2019-20. Enhanced revenue from GST would help the Centre red­uce pressure on the fiscal deficit in the current financial year when the min­istry is expecting a shortfall of about Rs 50,000 crore in central GST.
  • The GST collection in Jan­uary stands at Rs 1 trillion, the total collection in April 2018 to January 2019 would be close to Rs 9.7 trillion. To meet the annual budgeted expectation of nearly Rs 12.5 trillion from GST till April 2019, the government needs to collect Rs 2.8 trillion in two months.
  • The average monthly collection of Rs 97,100 crore in ten months, the required revenue strike rate for the next two months would be Rs 1.4 trillion, 44 per cent higher than the monthly average. Instead to imminent shortfall, experts were hopeful due to increased revenue in January. The increased GST collection is overwhelming and quite positive for the economy.”
  • The Centre’s revenues, the CGST collection till November 2018 stands at Rs 2.97 trillion according to data maintained by the Controller General of Accounts (CGA). Adding Rs 43,851 crore collected as CGST in December 2018 as per the press release and assuming Rs 50,000 crore of CGST collection in January the CGST accumulated in 10 months would touch Rs 3.9 trillion.

FAQ’s on GST:

QUES. 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. 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.

Other Updates:

  • Oil India gets SEBI exemption from buyback norms.
  • NCLT allows Govt to add 19 new names in PNB scam.
  • Airtel loses 5.7 cr Mobile Customers in Dec 2018.
  • Ola losses narrow to Rs 2,842 Crore for FY18.
  • Sale in SE Asia business will improve Tata Steel’s leverage profile.
  • India’s Core Sector Growth falls to 18-month low of 2.6% in December.
  • Govt refuses to extend February 1 deadline for new e-commerce FDI rules.
  • Unemployment rate at four-decade high of 6.1% in 2017-18.
  • RBI removes BoI, BoM, OBC from Prompt Corrective Action framework.
  • IRDAI asks insurers to provide for IL&FS exposure, wants mis-selling curbed.
  • Domestic mining firms to gain as International Iron oyre prices surge.
  • CPI inflation for Industrial workers rises to 5.24% in December.
  • Higher cost, lower realisation pull Vedanta’s net down 21%.
  • NMDC net up 78% at ₹1,577 Cr.
  • Lower logistics cost to help boost Exports by 5-8%.
  • Escorts chalks out ₹400-cr CapEx for expansion.
  • GDP Growth rate for 2017-18 revised upwards to 7.2%.
  • China appeals to US to accept its technology progress.
  • HERO MotoCorp quarterly Profit slips on higher expenses.
  • Bharti Airtel Q3 net Profit falls 71.8% to₹2 Crore.
  • Bank of India, Bank of Maharashtra out of RBI’s corrective action list.
  • Govt approves 4 Lakh Houses under PMAY.
  • Govt floats tender to tie up 2.5 GW PPAs with stranded plants.
  • Power Grid Corp Q3 Profit rises 14.2% to Rs 2,368 Crore.
  • Central bank Gold buying at highest level since 1970s.
  • Limited awareness among SMEs restricts growth of online lending platforms.

Key Due Dates:

  • Due Date for Payment of TDS & TCS Deducted/Collected in the month of January is 7th February 2019.
  • Due Date for TDS Return for the month of January is 10th January 2019.

Quote of the Day:

“You have to perform at a consistently higher level than others. That’s the mark of a true professional. Professionalism has nothing to do with getting paid for your services.”

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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corporate and Professional Updates on 31st January 2019

Direct Tax Updates:

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  • Income Tax Department has confiscated assets worth Rs 6,900 crore till now as part of its action under the anti-benami transactions law, the agency said in a public advertisement. who “abet and induce” benami transactions, benamidar and beneficiaries are prosecutable and may face rigorous imprisonment up to 7 years besides being liable to pay fine up to 25 per cent of fair market value of benami property.
  • The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that the circular issued by the Central Board of Direct Taxes (CBDT) clarifying that there is no need to deduct TDS on the Bank Guarantee Commission has retrospective application.
  • CBDT notifies Centralised Verification Scheme 2019 which will setup the Centralised Verification Centre for Centralised Issuance of Notice and for Processing of Information or Documents and making available the outcome of the processing to the Assessing Officer.

Indirect Tax Updates:

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  • Springs of Iron and Steel for railways are classifiable under heading 7320 and to be taxed at 18% GST.
  • The Central Board of Indirect Taxes & Customs has issued an Order which may be called as the Central Goods and Services Tax Order, 2018.

FAQ’s on GST:

QUES. Would services provided by banks to RBI be also taxable?

ANS. Yes. Services provided by banks to RBI would be taxable as these are not covered by any of the exemptions or excluded from the purview of GST under the CGST Act, 2017 or under the IGST Act, 2017.

QUES. Who is liable to comply with GST on charges levied by Overseas Correspondent Banks facilitating trade and other cross border transactions?

ANS. In this case, there are two supplies namely, from bank in India to the importer/exporter and one from the overseas correspondent banks to the bank in India. So the liability to discharge GST on such supplies will be required to be determined accordingly.

MCA Updates:

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  • Under the newly introduced The Companies (Amendment) Ordinance 2018, MCA has re-introduced the concept of obtaining Commencement of Business Certificate for all companies registered in India having Share Capital before commencing any business activity or exercising any borrowing powers by any company incorporated after November 2018.

Time Limit for Obtaining COB:

  • Within 180 days of incorporation of the company.

Form to File:

  • Form INC-20A will be filed in which each director of the company must declare that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him/her on the date of the making of such declaration.

Penalty for Non-Compliance:

  • On Company- Rs.50,000/-.
  • On Directors- Rs.1000/- per day of default up to a maximum of Rs.1Lac.
  • Also, after 180 days of incorporation, if the ROC has reasonable cause to believe that the company is not carrying on any business or operations, he/she may initiate action for the removal of the name of the company from the register of companies.

RBI Updates:

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  • RBI has asked all registered peer-to-peer (P2P) lenders to furnish details about borrowers, lenders, their financial profiles, total exposure of participants and the financial health of the platforms themselves as it looks to assess the overall well being of the sector. The regulator sent its queries to the companies earlier this month and asked them to respond in two weeks.
  • The government had made a case for expansion and more active participation in the Board for Financial Supervision and the Committee of the Central Board the two important committees where there is no government representation.
  • RBI governor Shaktikanta Das attending the recent meeting with state-run lenders held by the finance ministry. Relations between the regulator and the government had deteriorated before Urjit Patel resigned as RBI governor on December 10, 2018. The government appointed former bureaucrat Shaktikanta Das, who then took charge on December 12.
  • The government has also moderated its stance on relaxation of the prompt corrective action framework and is agreeable to only performing lenders being given some relief. RBI, after its central board meeting in November 2018, had said: “With regard to banks under PCA, it was decided that the matter will be examined by the Board for Financial Supervision of RBI”.

SEBI Updates:

SEBi

  • SEBI has put out a consultation paper on commodity index design, to boost derivative markets in such indices. Index-based commodity products should shore up institutional participation and raise liquidity in futures and options, for instance, to arbitrage across index products, and use one product to hedge their position in another.

Other Updates:

  • Allows separate registration for multiple places of business within a State or Union territory.
  • Threshold limit for registration increased to 20 Lakhs for certain dealers operating from 5 special category states.
  • Defines jurisdiction of Joint Commissioner and Joint Commissioner.
  • Govt to probe allegations against Dewan Housing.
  • Oilfield auction Vedanta, ONGC, others put in bids.
  • India may again defer duty hike on US products till.
  • NCLT initiates insolvency process against Emaar MGF.
  • Postal dept to spin off life insurance biz into separate unit.
  • US Fed leaves rates steady, says will be ‘patient’ on future hikes.
  • Zydus Wellness completes acquisition of Heinz India.
  • Unemployment rate at four-decade high of 6.1% in 2017-18: NSSO survey.
  • ICICI Bank Q3 profit declines 3% to Rs 1,605 cr, GNPA ratio improves.
  • Govt arms DIPP with policy oversight to assume singular control over retail.
  • Trai asks DTH firms to allow customers with long-term packs to continue.
  • SBI Research report backs govt to meet fiscal deficit target this year.
  • Parliament’s Budget Session will start from Today i.e. January 31 and will last till February 13. Finance Minister CA Piyush Goyal will present Interim Budget 2019-20 on February 1 i.e. tomorrow.
  • Nearly 2 months after the extradition of Christian Michel from Dubai, 2 more accused was extradited to India from the Dubai, CA Rajiv Saxena, and corporate lobbyist Deepak Talwar was brought back to India in a special aircraft reportedly by a team of the Enforcement Directorate.
  • FDI during the previous fiscal grew 18 % to Rs 28.25 lakh crore, data from RBI showed. FDI increased by Rs 4,33,300 crore, including revaluation of past investments, during 2017-18 to reach Rs 28,24,600 crore in March 2018 at market value, according to RBI data on ‘Census on Foreign Liabilities and Assets of Indian Direct Investment Companies, 2017-18′.
  • Piyush Goyal to present interim Budget on Feb 1.
  • renames DIPP as Department for Promotion of Industry and Internal Trade.
  • Divestment process for Air India subsidiary likely to begin in 10 days.
  • RTIL’s largest investor moves NCLAT.
  • JSW Energy net profit up by 212% at Rs 146 cr.
  • Bajaj Auto Q3 profit up 20% to Rs. 1,220.77 cr.
  • Chanda Kochhar sacked after probe panel indictment.
  • Godrej Consumer’s household insecticides performance repels investors.
  • HCL Tech’s new IBM products will help generate 30% profit.
  • Investcorp acquires IDFC Alternatives’ private equity, realty arms.
  • IBC may go the way of Sarfaesi Act if cases are not resolved soon: Seshagiri Rao.
  • Indian Oil looking for annual deal to buy US oil.
  • Nudge by govt: Buyback spree by PSUs to begin with Coal India.
  • Essel set to sell solar business to Actis.
  • Stung by falling crude prices, IOC net falls 91 per cent to Rs 717 crore.
  • Jubilant Foodworks reports 46 per cent rise in Q3 net profit.
  • Bailout Planning Jet Airways may turn to Adani Group for investment.
  • Govt may hold back Q4 fertilizer subsidy to meet fiscal deficit goal.
  • SC refuses to interfere in 63 Moons case, asks HC to conclude hearing in Feb.
  • PM credits demonetisation for affordable housing.
  • Accenture to sell software that eats up BPO jobs.
  • HDFC net falls to Rs 2,114 crore.

Key Due dates:

  • TDS Return For All the Deductor For December Quarter Is 31st January 2019.
  • GST TCS Return for the month of Oct., Nov., & Dec is 31st
  • GST TDS Return for the month of Oct., Nov., & Dec is 31st

Quote of the Day:

“Believe passionately in what you do, and never knowingly compromise your standards and values. Act like a true professional, aiming for true excellence, and the money will follow.”

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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SERVICE EXPORTS FROM INDIA SCHEME (SIES)

SERVICE EXPORTS FROM INDIA SCHEME (SIES) INTRODUCED BY LATEST FOREIGN TRADE POLICY 2015-2020 A TOOL TO ENCOURAGE EXPORT 

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Service Exports from India Scheme (SIES) has been introduced through the latest Foreign Trade Policy 2015-2020 as a tool to encourage export of notified services from India. It replaces the Served from India Scheme (SFIS) that was introduced in the Foreign Trade Policy 2004-2009.

Service Exports from India Scheme (SEIS) mainly aims to appreciate export of services from India by providing duty scrip credit for eligible exports. Under the scheme, service providers, located in India, would be rewarded under the SEIS scheme, for the eligible export of services from India. In this article, we look at the Service Exports from India Scheme in expend. Service Exports from India Scheme was earlier termed as Served from India Scheme (SFIS).

Eligible Service Providers:

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All type of Service Providers (i.e. Companies, Partnership, Proprietorship) providing notified services will be eligible for SEIS if they are providing services as per any of the two specified modes (out of four modes) .

Mode Title of Mode Description Eligible for SEIS
1 Cross border trade Supply of a ‘service’ from India to any other country Yes
2 Consumption abroad Supply of a ‘service’ from India to service consumer(s) of any other country in India Yes
3 Commercial Presence Supply of a ‘service’ from India through commercial presence in any other country No
4 Presence of natural persons Supply of a ‘service’ from India through the presence of natural persons in any other country No

How to Calculation of Benefits: The first step in calculation of scheme benefits is to arrive at the figure of Net Foreign Exchange earned during the particular financial year as per following formula:

Net Foreign Exchange = Gross Earnings of Foreign Exchange minus (-) Total expenses / payment / remittances of Foreign Exchange by the IEC holder, relating to service sector in the Financial year – Once Net Foreign Exchange earnings are calculated, the next step is to find out the applicable rate as per the services being exported.

In the starting of the scheme, DGFT notified the rates between 3 to 5% of the Net Foreign Exchange earnings. However, later on, these rates were increased by 2% and the applicable rate of benefit under SEIS is in the range of 5 to 7% with effective from 1st November’2017 and applicable till 31st March’2018.

  • Following are the reward rates notified under the Annexure to Appendix3D of The Foreign Trade Policy 2015-2020:
 Services Reward Rates (from 1.4.15to 31.10.17) Reward Rates (from 1.1.17 to31.3.18)
Professional Services (Legal, Accounting, Tax, Medical etc.) 5% 7%
Research & Development Services 5% 7%
Rental/Leasing services without operators 5% 7%
Other Business Services 3% 5%
Audiovisual services 5% 7%
Construction & related Engineering Services 5% 7%
Educational Services 5% 7%
Environmental Services 5% 7%
 Services Reward Rates (from 1.4.15

to 31.10.17)

Reward Rates (from 1.1.17 to

31.3.18)

Health-Related and Social Services 5% 7%
Tourism and Travel Related Services 3-5% 5-7%
Recreational, Cultural and Sporting Services (other than audio visual services) 5% 7%
Maritime Transport Services 5% 7%
Air Transport Services 5% 7%
Road Transport Services 5% 7%
Services auxiliary to all modes of Transport 5% 7%

 Procedure for filing application for benefit under SEIS:

  • Application to claim the benefit under SEIS is filed in Form ANF 3B online using digital signature.
  • This application contains one part which needs to be certified by a practicing Chartered Accountant.
  • Physical copy of application along with all supporting documents also needs to be submitted to the jurisdictional office of DGFT.
  • A small fee of Rs. 1000 is paid at the time of filing the application.
  • Application once filed, can’t be revised online.
  • Exchange rate for each year is notified to calculate the value of duty credit scrip.
  • Application for each financial year is filed separately.

Other important points:

  • The duty credit scrip can be utilized for the payment of basic custom duty for the procurement of eligible inputs and capital goods.
  • The scrip is freely transferable i.e. the service exporter can sell the scrip to any other person.
  • The duty credit scrip shall be valid for a period of 24 months from the date of its issue.
  • An application for obtaining duty credit scrip shall be filed within a period of 12 months from the relevant financial year of claim period.
  Period of delay in filing the claim Late cut %
Application received after the expiry of last date but within six months from the last date 2%
Application received after six months from the prescribed date of submission but not later than one year from the prescribed date 5%
Application received after 12 months from the prescribed date of submission but not later than 2 years from the prescribed date 10%

Ineligible categories under SEIS:

(1) Foreign exchange remittances other than those earned for rendering of notified services would not be counted for entitlement. Thus, other sources of foreign exchange earnings such as equity or debt participation, donations, receipts of repayment of loans etc. and any other inflow of foreign exchange, unrelated to rendering of service, would be ineligible.

(2) Following shall not be taken into account for calculation of entitlement under the scheme

(a) Foreign Exchange remittances:

  1. Related to Financial Services Sector:

(i) Raising of all types of foreign currency Loans;

(ii) Export precedes realization of clients;

(iii) Issuance of Foreign Equity through ADRs / GDRs or other similar instruments;

(iv) Issuance of foreign currency Bonds;

(v) Sale of securities and other financial instruments;

(vi) Other receivables not connected with services rendered by financial institutions; and

  1. Earned through contract/regular employment abroad (e.g. labour remittances):

(b) Payments for services received from EEFC Account;

(c) Foreign exchange turnover by Healthcare Institutions like equity participation, donations etc.

(d) Foreign exchange turnover by Educational Institutions like equity participation, donations etc.

(e) Export turnover relating to services of units operating under SEZ / EOU / EHTP / STPI / BTP Schemes or supplies of services made to such units;

(f) Clubbing of turnover of services rendered by SEZ / EOU /EHTP / STPI / BTP units with turnover of DTA Service Providers;

(g) Exports of Goods.

(h) Foreign Exchange earnings for services provided by Airlines, Shipping lines service providers plying from any foreign country X to any foreign country Y routes not touching India at all.

(i) Service providers in Telecom Sector.

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 30th January 2019

Indirect Tax Updates:

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FAQ’s on GST:

Ques. Is there a requirement to issue a ‘payment voucher’ at the time of making payment to the foreign supplier? When should the details of such transactions be reported in the GSTR returns?

Ans. Section 31(3)(g) of the CGST Act, 2017 mandates issuance of a payment voucher in such cases and the same is therefore required to be issued at the time of making payment to the foreign supplier of services. It would be reflected in the GSTR return of the tax period in which the supply takes place as per the provisions of section 13(3) of the CGST Act, 2017.

Ques. Banks deploy various equipment such as Point of Sale machines or ATMs at various locations. At times, the equipment is required to be moved between locations for the purpose of repairs, encryption, etc. Will such movement constitute a supply for the purpose of the GST law?

Ans. Procedure prescribed under Section 143 of the CGST Act, 2017 and Rule 55 of the CGST Rules, 2017 may be followed in such cases. Movement of equipment for the purpose of repairs, etc. does not constitute a supply. The equipment may be moved by the Banks to the location of the third party service providers and after repairs, the equipment may be moved to a central / regional location for the purpose of programming, encryption, reconfiguration, etc. and thereafter to that place of business from where the equipment had been sent earlier. The equipment can be moved between such locations on the basis of a ‘delivery challan’.

SEBI Updates:

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  • The finance ministry has directed the Securities and Exchange Board of India to submit proposed regulations to an independent committee for vetting before they are passed by the regulator’s board, two people aware of the matter said. It is not clear if the new committee will comprise external members or independent directors on the Sebi board. In either case, the finance ministry’s department of economic affairs would name the Members Name.
  • All proposed regulations would need to be placed before an independent committee for vetting before they are approved by the regulator. There might be some amendment in the SEBI’s ACT.
  • The composition of this independent committee and whether it will include only the independent board members. The government will need to appoint new independent members and will also need to communicate the composition of this independent committee.
  • The Sebi Act prescribes that half of its directors be independent. Its board currently has eight members, including the chairman and four whole-time directors named by the government.
  • SEBI has always made its regulations independently the flip side is a lack of transparency. “Sebi releases its board meeting agenda in the public domain, but the comments or deliberations of the independent committee may not be made public. The other impact could be a delay in important regulations, as a new layer of approvals comes in.

Other Updates:

  • HDFC Q3 profit plunges 60% YoY to Rs 2,114 crore.
  • Ruias’ Rs 54,389 cr offer to retain family silver hits NCLT wall.
  • Axis Bank Q3 profit rises, asset quality improves.
  • Timely NCLT resolutions can free Rs 67,000 cr according to report.
  • BoB Q3 profit jumps 4-fold to Rs 471 crore.
  • EOW seeks legal opinion on attachment of brokers’ assets.
  • Govt likely to miss FY19 share sale target by Rs 15,000 crore; FY20 target seen at Rs 1 lakh crore.
  • India improves global corruption index ranking by 3 points to 78 in 2018.
  • DHFL siphoned off Rs 31,000 crore of public money, claims report.
  • SBI poised to control 15% in debt-laden Jet Airways.
  • Income support better option than loan waivers, says India Ratings.
  • HCL Tech shows better-than-expected Q3 results, net up 19% to Rs 2,611 cr.
  • Bajaj Finserv Q3 netup 16% at 851 crore.
  • 8 lakh tonnes of pulses, oilseeds bought under price support scheme.
  • Gems and jewellery exporters want import duties reduced.
  • KoPT plans 40% capacity addition at Haldia, Kolkata docks.
  • Ramco Cements’ net falls 18% on cost, price pressures.
  • Labour Ministry decides to allow women to work in underground coal mines.
  • Accenture to sell automation software that allowed it to cut 40,000 jobs.
  • Sugar millers in India to seek higher sugar price to clear dues.
  • Stake sale in South Asia business will help Tata Steel reduce debt.
  • ESSAR Steel revival: NCLT rejects promoter Ruias’ settlement bid.
  • Cement Manufacturers’ Association reaches wage pact with unions.
  • Google, Facebook, Twitter must do more against fake news.
  • NPA recognition cycle seems peaked for PSBs.
  • Gold prices hit six-year high, seen heading to Rs 34,500.
  • Jindal Stainless seeks duty cuts on raw material imports.
  • Vedanta Resources to invest $1.6b in South Africa.
  • BoI Q3 net loss widens to Rs 4,738 cr; NPA provisions jump two-fold.
  • Economic Offences Wing (EOW) issues notices to 300 brokers after SEBI files FIR against them. The notices allege that Forward Contracts on NSEL were illegal.
  • Punjab National Bank beefs up its Technology Platform and improved the processes with more checks and audit controls to ensure that there is little scope to manipulate the systems.
  • MCA Form PAS-3 Revised Version (Return of Allotment) will be available from 31stJanuary 2019 for filing purposes. Stakeholders may kindly download the latest version from the portal.
  • To promote Domestic Assembling of Electric Vehicles (EVs), Govt lowers Import Duty on Parts and Components of Electric Vehicles to 10-15%. Until now, Vehicle Parts and Components imported for assembly in India attracted import duty of 15 to 30%.

Key Due Dates:

  • TDS return for Purchase of Property For the month of December 2018 is 30thJanuary 2019.
  • Due Date of GSTR-1 for Quarterly Return Filler of taxable supplies is 31st January 2019.

Quote of the Day:

“I don’t put my ideas in a meeting for acceptance or rejection, I put them in the market for success or failure”

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 29th January 2019

Indirect Tax Updates:

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  • The various structural changes and demand pressures over the past two years, the real estate sector is expecting the upcoming Interim Union Budget for 2019-20 to rationalise the Goods & Services Tax rates for under construction properties, further incentives for affordable housing, and convergence of stamp duties within the GST rates.
  • Changing farm incomes and adding job opportunities are the main objective for Union Budget 2019-20. Real estate and construction industry fit into the Budget 2019-20 schemes as the second largest employer after agriculture, and contribute close to 10% of GDP. GST and personal income tax so as to boost home ownership is a strategic option that government may well consider exercising,” as per the president of CREDAI.
  • The regulatory approval being in place for quite some time, REITs, a potent instrument of change in the real estate industry, have been held back. For making Real estate more attractive for Investors experts are suggesting making it more tax-efficient for investors.
  • The liquidity pressure created by fears of defaults by realty developers and non-banking finance companies following the IL&FS default in September 2018, experts are also seeking to re-finance NBFCs by raising their limits. The industry at large, one of the most critical steps that this budget can take is to increase the finance limits for NBFCs.
  • Proposal to encourage taxmen to file GST profiteering complaints.

RBI Updates:

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  • The Reserve Bank of India has asked all registered peer-to-peer lenders to furnish details about borrowers, lenders, their financial profiles, total exposure of participants and the financial health of the platforms themselves as it looks to assess the overall wellbeing of the sector.
  • RBI is now devising this quarterly reporting feature for the P2P lending space as well, showing that they are keeping a close eye on the space,” added this person. The move follows several NBFCs losing registration in the past few months as the regulator has clamped down on those not adhering to the rules.
  • The regulator will use the data to see if the limits they have imposed are being adhered to and devise ways to prevent violations,” said the founder of a P2P startup. “They have asked for details about borrowers’ overall exposure and how much exposure each person has to one loan.
  • By Hoping that the regulator will take this data point and look at the need for caps to be relaxed a bit so that the business can expand and we manage to get lenders easily

SEBI Updates:

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  • The Regulator of capital Market SEBI has put out a consultation paper on Index Commodity Design, to change derivative market in indices. Index-based commodity products should shore up institutional participation and raise liquidity in futures and options, for instance, to arbitrage across index products, and use one product to hedge their position in another.
  • SEBI did approve a framework for foreign portfolio investors to trade in commodity derivatives. It would provide inward access and foreign participation in onshore markets. But there remain onerous capital controls, rigid position limits, adhoc margin requirements and questionable tax policy that come in the way of a vibrant domestic market for commodity derivatives.
  • The paper calls for transparency in index parameters, comprising commodities from more than one sector. But there remain regulatory constraints on mutual funds and banks to participate in the commodity derivatives market.

Key Due Dates:

  • TDS return for Purchase of Property For the month of December 2018 is 30thJanuary 2019.
  • Due Date of GSTR-1 for Quarterly Return Filler of taxable supplies is 31st January 2019.

Quote of the Day:

“Be creative while inventing ideas, but be disciplined while implementing them.”

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 28th January 2019

Direct Tax Updates:

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  • CBDT Chairman said that the Govt. will exceed the Direct Tax Target of Rs 11.5 Lakh Crore in the financial year 2018-19. This will either help the Govt. in restricting FISCAL DEFICIT to 3.3% of the Gross Domestic Product as planned or assist in reducing fiscal slippage.

Indirect Tax Updates:

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  • Concerned over a decline in GST revenues, Tax Officials are likely to examine the High Usage of Input Tax Credit to set off tax liability by businesses. The issue of high ITC was flagged at the meeting of the Group of Ministers (GoM) which was set up by the GST Council to look into the reasons for revenue shortfall being faced by a large number of states.

RBI Updates:

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  • The Reserve Bank of India is Building a plan to Release data that would present the number of corporate defaulting on bank loans have down the central bank’s stern presented on February 12 previous year. The regulator is understood to have sounded out the government on the proposed move that could counter arguments of industry lobbies and defend the directive at a time it has been challenged in the court of law.
  • The Reserve Bank of India issued a policy paper on retail payment systems that proposes to ease norms for the entry of new players in a bid to boost competition and innovation.
  • The central bank Reserve bank of India is have the opinion that the OIS market needs to be developed in line with the developed countries as it provides an interest rate hedging tool to overseas investors. If FPIs participate in large numbers, liquidity would increase.
  • RBI Governor Shaktikanta Das will meet Top Global Funds in Singapore and Hong Kong next month to sell India’s Growth Story and shore up Foreign Fund Inflows.
  • RBI is planning to release NPA data that would demonstrate that the number of corporates defaulting on bank loans have dipped following the RBI’s Stern Directive on February 12 last year that had rattled large, influential borrowers and irked many within the Govt.

Other Updates:

  • In a bid to prevent big economic offenders like Vijay Mallya and Nirav Modi from fleeing the country, the Govt. empowers PSU banks to request Look-Out Circulars (LOCs) against Wilful Defaulters and Fraudsters. The Home Ministry also authorises the Serious Fraud Investigation Office (SFIO), a Statutory Corporate Fraud Investigation Agency, to request LOCs if it feels the suspect may escape from India.
  • Supreme Court issues contempt notice to RBI for denying information under RTI on Loan Defaulters and details of action taken against banks in connection with fraud.
  • Zee claims to have reached understanding with lenders, MFs.
  • Essel group denies link with Nityank lnfra power.
  • enables PSUs to seek LOCs against defaulters.
  • Efforts on to double exports from $321 as per prabhu.
  • Piyush Goyal to meet heads of PSU banks on Monday.
  • Debt funds have over Rs 8,000 crore invested in Zee group firms.
  • Zee denies any link with Nityank Infra amid money laundering allegations.
  • Jio may join race to pick stake in Subhash Chandra’s Zee Entertainment.
  • Tata Capital’s arm to raise up to Rs 3,000 crore through debentures.
  • TRAI hopeful of 90% customer in new tariff regime by Feb 1 deadline: Chief.
  • Coal India’s supply to power sector up 8% in Apr-Dec 2018.
  • Cabinet likely to approve agri-package for farmers on Monday.
  • Centre must allocate more funds to build roads under the EPC model.
  • Tax officials may examine high usage of ITC to set off GST liability.
  • European Union reviewing concessions from Siemens and Alstom on rail deal.
  • Gold ETFs register 570 crore outflow in 2018.
  • Aurobindo recalls nearly 5 lakh bottles of blood pressure lowering drug in US.
  • Donald Trump’s China tariffs likely to be investigated by the WTO.
  • PM Modi’s record debt sales before polls to pressure Indian bonds.
  • ‘India could be fastest growing among Ems.
  • NCLT allows Guild Builders to top up shares of Omaxe.
  • Cotton output may fall to 335 lakh bales for 2018-19.
  • Vodafone Idea rights issue by February-end; smooth sailing seen.

FAQ’s on Financial Sector:

QUES. What is the location of the supplier in case of banking and other financial services where multiple locations are involved in providing the services to a customer?

ANS.  Banking services emanate from the bank account opened by a customer with the branch of a bank or through a contractual relationship between the branch of a bank and the customer. The branch holding the customer’s account is referred to as the ‘Account Branch’ or the ‘Home Branch’. An account would include all types of accounts – viz. interest bearing, non- interest bearing, loan account, deposit account, etc. In the present day of “anywhere banking”, the customer avails banking services through mobile/ internet banking or by visiting any branch of the bank. At times the services are provided through Page 19 of 32 branches / locations other than the ‘Account Branch’ or the ‘Home Branch’. It is clarified that the services provided by the other branches are actually services provided to the ‘Home branch’ and are ultimately billed to the home branch. Thus, the location of supplier in such cases is the Home Branch/Account Branch.

QUES.  Would imposition of a fine or penalty for violation of a provision of law be a consideration for the activity of breaking the law, making such activity as service?

ANS.   No Fines and penalties are imposed for breaking the law by a person. They are not in the nature of a consideration for an activity and hence, would not constitute a supply of service.

Key Due Dates:

  • TDS return for Purchase of Property For the month of December 2018 is 30thJanuary 2019.
  • Due Date of GSTR-1 for Quarterly Return Filler of taxable supplies is 31st January 2019.

Quote of the Day:

“Treat your clients with high professionalism and they will no more negotiate with you”

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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