CORPORATE AND PROFESSIONAL UPDATE NOV 1, 2016

CORPORATE AND PROFESSIONAL UPDATE NOV 1, 2016

34Direct Tax:-

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

Indirect Tax:-

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

RBI Update

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

SEBI Update

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

MCA Update

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

GST Update

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

GST UPDATE :

Returns Process and matching of Input Tax Credit

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

Other Update :

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

Key Dates:

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

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