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.

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.

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.

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.

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.

Corporate and Professional Updates on 25th January 2019

Indirect Tax:

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  • The government’s decision to create a national Goods and Services Tax Appellate Tribunal to adjudicate disputes is on the way. It will help in faster resolution and also bring uniformity in the redressal of GST disputes.
  • The tribunal will act as a forum for second appeal and decide cases where there are divergent orders by the authority for advance rulings at the state level. This will reduce the burden on high courts that have a huge pendency of cases.
  • Industry has been demanding the creation of a centralised authority for advance ruling. And the GST Council has seen merit in this demand. So, amendments needed to the GST Act should be done swiftly to remove any tax uncertainty for businesses. Appeals against contradictory rulings by the Authority for Advance Rulings should be disposed of quickly.
  • The GST Council should make the tax rules simple for their transparent, consistent interpretation. Fewer and lower rates will minimise classification disputes, reduce the burden on the judiciary and boost GST collections, as well as direct tax collections.

FAQ on GST:

Ques. Are services supplied by a Bank to its branch / head-office outside India, which are neither intermediary services nor services to account holders, taxable under GST?

ANS. GST is a destination based consumption tax. Such services provided by a Bank or the branch of a foreign Bank in India to its offshore branch / head-office, which are neither intermediary services nor services to account holders, are inter-State supply of services between distinct establishments (as per section 7(5)(a) read with Explanation to section 8 of the IGST Act, 2017), and will be taxable in India, as the location of the supplier is in India and the place of supply is outside India. Such services will not be treated as exports in view of the sub-clause (v) of section 2(6) of the IGST Act, 2017 read with Explanation 1 to section 8 of the IGST Act, 2017.

Ques. Is the Nominated Bank, receiving gold on consignment basis, required to pay IGST on import of gold from the overseas supplier?

ANS. The dispatch of gold by the principal from a place outside India to the Bank in India is deemed to be a supply in terms of para 3 of Schedule I to the CGST Act, 2017. Accordingly, IGST will be payable on such import of gold by the Nominated Bank at the time of clearance of gold by the Customs.

RBI Updates:

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  • 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.

Policy Paper:

  • RBI, in its monetary policy announced that it would publish a policy paper on retail payment systems. The paper throws light on the concerns of increasing concentration of a single operator for retail payments. It also discusses the need for competition and innovation and the resultant impact on economic efficiency and financial stability.

Recommend:

  • The policy paper proposes an open and keep-on-tap window for making applications to all payment systems. It also seeks to review entry-point norms for payment operators.

NPCI’s role in the payment system:

  • RBI and the Indian Banks’ Association. It has a diversified shareholding with 56 banks and a 51% stake held by public sector banks. NPCI operates retail payment systems such as National Financial Switch, Immediate Payment Service, and Unified Payments Interface including Bharat Interface for Money, National Unified USSD Platform and RuPay. It processes nearly 48% of transactions by volume, aggregating 15% in terms of value. RBI manages and operates the National Electronic Funds Transfer system and the Electronic Clearing Service.

Other Updates:

  • Kocchar got Rs 64 cr bribe through her husband, reveals CBI.
  • SBI defers sale of Essar Steel loans to February 11.
  • Bharti Infratel settles tower exits for Rs 3,800 Crore.
  • Piyush Goyal to meet heads of PSU banks on Monday.
  • PNB’s $45 million fraud claim dismissed by English court.
  • Tata Motors to bid adieu to Nano from April 2020.
  • Ravneet Gill to take over from Rana Kapoor as YES Bank’s MD & CEO.
  • Etihad wants to end exclusivity for Jet Privilege as part of rescue deal.
  • Oil rises after US threat of sanctions on Venezuelan crude exports.
  • Steel industry’s capital expenditure to rise to Rs 75,000 cr, says study.
  • Domestic crude output down 4.3% in December.
  • Sops for agriculture to top Govt. priority list.
  • R Power net down 32.5% to 189 cr in December quarter.
  • Coal India reports 8% increase in supplies to power sector.
  • Wheat production may cross record 100 mt in 2018-19.
  • Supreme Court to hear Vedanta’s plea to reopen Sterlite plant on 29 January.
  • Global business leaders raise concerns over e-commerce policy changes in India.
  • Ultra Tech December quarter consolidated net falls 14% on higher fuel, input costs.
  • CBI files FIR against Kochhars, Dhoot over Videocon loan issue.
  • MSCI may reduce India weight in Emerging Market index.
  • Irdai to pick systemically important insurers.
  • Arcelor Mittal, Ruias’ ding-dong battle for Essar Steel continues.
  • Investment through P-notes rises to Rs 79,513 cr till December-end.
  • Cabinet clears $400-m standby swap facility for SAARC nations.
  • NMPT targets 44 mt of cargo handling in 2018-19.
  • HAL to outsource ALH to domestic private sector company.

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:

They copied my product, they copied my strategies yet they failed miserably in the business, because they couldn’t copy my professionalism

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.

Corporate And Professional updates on 24th January 2019

Direct Tax:

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Case Laws on Income Tax:

Orchid Infrastructure Developers Pvt. Ltd and Ajay Kumar Gupta & ORS. Vs. Union of India & ORS.

Liability to pay interest u/s 234B(2A) – retrospective legislation – sub-section (2A) to Section 234B would be applicable to all proceedings in which orders are pending and /or in which orders u/s 245D(4) are passed on or after 1st June, 2015

 CIT -6, New Delhi Vs. NDR Promoters Pvt. Ltd.

Addition u/s 68 – unexplained money receipt in the form of share capital/share premium – The reasoning given is contrary to human probabilities, for in the normal course of conduct, no one will make investment of such huge amounts without being concerned about the return and safety of such investment.

CIT-7 Vs. M/S. Oracle (OFSS) BPO Services Ltd.

Constitutional validity – Section 80A(5) bars and prohibits the assessee from claiming the deduction u/s 10A and 10B and Chapter VIA if no such claim was made in the return of income. It is also mandatory that the return of income for claiming such deduction should be filed within the time stipulated u/s 139 (1) – The amendment made cannot be faulted and quashed on the ground that it was discriminatory, arbitrary, unreasonable and violative of Article 14 – However, amendment or correction in the claim allowed.

Indirect tax:

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FAQ’s on GST:

QUES. What is the time of supply of services for deposits and advances in cases of the recipient issuing a bank guarantee or making a deposit before assumption of risk and issuance of a policy?

ANS. As per the proviso to Section 2(31) of the CGST Act, 2017, a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply. In case of advances, however, the time of supply is the time of receipt of advance as provided in section 13(2)(a) of the CGST Act, 2017.

QUES. Whether the service provided by the re-insurance company to an insurer will be treated as a supply?

ANS. The service of re-insurance falls within the scope of supply, and is chargeable to GST.

Budget Related Updates:

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  • The Government Assigned Piyush Goyal temporary additional charge of the finance and corporate affairs ministries in the absence of finance minister Arun Jaitley, Due To Medical problem.
  • When preparations for the interim budget for 2019-20 are in full swing and the date is too near. Honorable prime Minister Narendra modi advised the president that during the period of indisposition of Arun Jaitley, the portfolios of finance and corporate affairs held by him, be temporarily assigned to Piyush Goyal.
  • There was no clarity on whether Jaitley would be back for presenting his sixth budget, scheduled for 1 February or Not.
  • The forefront of the National Democratic Alliance government’s trying to deal with a series of current economic affairs, including an instant depreciation in the value of the rupee, a spike in oil prices and a liquidity faced by small businesses. The interim budget comes with high expectations of an election year budget.
  • India Ratings and Research last week said it expects India’s fiscal deficit to widen by 70 basis points in the fiscal 2019-20 if a relief package is decided by the government for small and marginal farmers. The budget may try to bring some kind of a feel-good factor for sections like farmers, the middle class and small and medium enterprises.

SEBI Updates:

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New Rules for Surplus Reserves of SEBI:

  • Framing of New Rules is decided by Central Government for mandate regulators and other autonomous bodies to transfer surplus funds to the exchequer.
  • The New Guidelines may come soon within a month. The move would make the Securities and Exchange Board of India and a dozen other regulators, such as the Insurance Regulatory and Development Authority of India and a dozen other regulators, such as the Insurance Regulatory and Development Authority of India to shell out a significant portion of their reserves into the Consolidated Fund of India. The Centre has been eyeing these resources that would help it reduce fiscal deficit.
  • SEBI to provide details of expenses they require for their internal operations. The rest of it would go to a public account and the government can allocate funds as and when required,” said a source cited above. According to him, a final consensus is required on the operational aspect of the surplus fund.

Other Updates:

  • India to surpass China as oil demand center in 2019.
  • NCLAT may look in issue of frivolous bids under CIRP.
  • Reliance Industries gets CCI nod to acquire Hathway, DEN.
  • To approve Power Tariff Policy soon.
  • 32 Lakh jobs created in November EPFO payroll data.
  • IL&FS effect ICRA downgrades 6 funds from HDFC, UTI, and Birla AMC.
  • Six extensions later, Govt. cancels sole bid for Solar Unit, Power Plant.
  • Indian Oil to shut half of Panipat refinery from mid-Feb for maintenance.
  • HDFC Life reports 20% rise in net profit at Rs 913 cr in 9 months of FY19.
  • Move to allow NITI Aayog to steer drug-price control raises hackles.
  • India 4th most attractive investment marketaccording to PWC survey.
  • NMDC revives sponge iron unit in Telangana.
  • Reliance gets green signal for Jamnagar refinery expansion.
  • Sun Pharma replaces formulations distributor with own unit.
  • India likely to overtake US in Steel Consumption in 2019.
  • Jaypee Infratech Bankruptcy Lenders may extend deadline to submit revival plan.
  • Aluminium, zinc edge up on signs of tighter China supply.
  • IL&FS Crisis Govt. to seek special dispensation from Reserve Bank
  • India’s 7% Growth good, but not enough jobs getting created, says Raghuram Rajan.
  • Reliance Nippon Life Asset Q3 net profit drops 17 % to Rs 109 Crore.
  • Commerce Ministry seeks stakeholders’ views on report to revive SEZs.
  • Reliance Retail 94th among top 250 Global Retailers.
  • Sun Pharma shares up 5% after firm replaces domestic formulations distributor
  • Installment Payment allowed for PA benefit-based health Policy Claims
  • Advances, Margin boost Kotak Bank Net Profit by 13.5%
  • Brokerages hopeful of govt meeting FY19 disinvestment target.
  • SBI chief to seek open offer exemption for Etihad.
  • Bank of Maharashtra Q3 net loss widens 7-fold to Rs 3,764 crore.
  • Retail sector investments double to Rs 1,300 crore in 2018
  • TCS 3rd most-valued IT services brand globally.
  • to spend 6.5% more on food subsidies in FY-20.
  • may relax sourcing norms for single-brand retailers
  • SBI’s plan to sale Essar Steel loans face uncertainty.
  • Foreign firms can now open offices without RBI nod.
  • Voda Idea board clears Rs 25,000 cr rights issue.
  • Secondary steel producers to play big role for 300 mn tonne industry
  • India needs $80-bn investments in next 5 years for grid transmission infra.
  • Investment through P-notes rises to Rs 79,513 cr till December-end.
  • Cabinet clears $400-m standby swap facility for SAARC nations.
  • NMPT targets 44 mt of cargo handling in 2018-19.
  • HAL to outsource ALH to domestic private sector company.
  • Piyush Goyal given interim charge of finance till Arun Jaitley resumes.
  • United Spirits Q3 profit up 43% on demand for premium brand.
  • India cuts coffee output estimate by 16% as heavy rains trim yield.
  • Moody’s upgrades IDBI Bank rating on improved solvency.
  • India, China affecting world economy much more.
  • India’s industrial activity likely to remain subdued in near term.

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:

In business ‘professionalism’ is not a tactic but a moral value.

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.

Corporate and Professional Updates on 23rd January 2019

Direct Tax Updates:

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  • The Department of Income Tax made a list of Individuals who made Out High value transaction in financial year 2017-18 but did not file income tax returns. The Department is analyzing the list carried out to identify non-filers about whom specific information was available in the database of the department.
  • The information may include statement of financial transactions, tax deduction at source, tax collection at source, foreign remittance, Export and Import. The Non-filers Monitoring System aims to identify and keep a watch on people who enter into high-value transactions and have potential tax liabilities but have not filed their tax returns Data analysis has identified some non-filers who have made high-value transactions in financial year 2017-18 but have still not filed income tax return for assessment year 2018-19. The department has enabled e-verification for taxpayers to decrease the cost of compliance by responding online.
  • The Taxpayers Can Access information relating Their cases from the portal of compliance which is accessible through the e-filling portal of the income tax Department. A Stable Accountholder needs to submit the response on the compliance portal and obtain a proof of it. All the Non Fillers are requested to file Their Income tax Return and assess their tax liability for AY2018-19 or submit online response within 21 days. Explaining if the matter Find Satisfactory Would Be Closed online. In Case of No Return File Or no Response is received initiation of proceedings under the Income-tax Act, 1961 will be considered.

Case Laws of Income Tax:

Bombay High Court in case of  Suresh Kishna Bhagat Vs. Pr. CIT-2 Thane

Payment of 3rd installment as per the Income Declaration Scheme, 2016 (IDS) been delayed – These are strong indications that the legislature does not envisage any extension of time for payment of tax under the Scheme. No directions contrary to such legislation scheme can be granted.

Punjab and Haryana High Court in case of M/S Glaxo Smithkline Consumer Healthcare Limited vs. ACIT

Treatment of unutilised MODVAT credit, balance as at the end of the year as payment of excise duty – Deduction u/s 43B – Excise duty paid in advance in the Personal Ledger Account (PLA) – Benefit of deduction allowed

ITAT Delhi in case of Cliff Scaffoldings Pvt. Ltd. Vs. ITO,Ward-3 (2), New Delhi

Denial of exemption claimed u/s 10AA – sale made by one SEZ unit to another SEZ unit – there is a provison in another enactment (SEZ Act) which contains non obstante clause then that would override the provision of the Income Tax Act – Benefit of exemption allowed.

ITAT Amritsar in case of M/S Ram Lal Bhasin Public School Vs. The CIT (Exemptions), Chandigarh

Exemption u/s 10(23C) – assessee is a school of “Sanatam Dharma Paracharak Sabha” – when the assessee was running a school for educational purposes and not for earning profit, then it was entitled to the exemption u/s 10(23C)(vi)

Indirect Tax Updates:

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  • The biggest tax reform since India’s independence is still in a fluid state of continuous change as businesses, especially the small ones, struggle to cope with the rigors of a technology-driven and transparent tax system that has cast its net far and wide to bring at least 3.4 million new indirect taxpayers. Some of the concessions to small businesses announced earlier this month by federal indirect tax body, the GST Council, ahead of parliamentary polls due by April-May, raise fears about sacrificing some of the basic design advantages of GST over the previous regime simplicity and uniformity.

GST Registration:

On The Last Meeting of GST Council Held On 10th January 2019 decided to let states choose between two possible criteria i.e. 20Lakh & 40Lakh annual sales for businesses to get GST registration as it could not arrive at a consensus on doubling the current threshold level.

Having two state-specific turnover threshold limits can shake the foundations of GST. One can only hope that local businesses will put pressure on those states that refuse to raise the threshold, to eventually raise it to 40 lakh and bring it at par with the other states.

Return of the CESS:

The State is working towards the process of taking a call on the threshold that suits their local economy Kerala, which is recovering from the worst floods in a century that submerged large parts of the state last year, will opt to retain 20 lakh annual sales threshold for GST registration, while Delhi, Jammu and Kashmir, and Assam have opted for 40 lakh Even in most advanced countries, it took twothree years for GST to stabilize. India is far more diverse.

When there are different legal provisions in different states, uniformity takes a hit which is a step backwards This could also encourage some units to move to other states for staying out of tax net, the kind of distortions India tried to address with the tax reform.

Reform Goals Achieved:

GST has helped in adding 3.4 million new indirect taxpayers, according to Economic Survey of FY18 and has helped in formalizing the economy. It has also improved transparency in the tax system and reduced the tax incidence on a host of products and services.

This, despite the fact that the administration is not on a tax enforcement drive. The number of items in the highest slab of 28% has also been brought down. The Council is now working on using data from radio frequency identification tags attached to vehicles to verify whether e-way bills or electronic permits issued for goods shipment are misused. The idea is to collect data passively to check tax evasion and boost revenue receipts. GST could see further changes with the opposition Congress party making it an election issue, arguing a revamp is needed.

RBI Updates:

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  • The central bank is of 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.
  • The Investors on Us basis, who need to be compliant with stringent US Securities and Exchange Commission norms, look for operational ease whenever they come to any emerging market. The RBI on Monday met about 40 FPIs for the first time in about five years to gauge overseas investment interest in domestic fixed-income and debt securities.

Key Due dates:

  • Challan-Cum Statement in respect of TDS under Section 194IB for the month of December 2018 is 30thJanuary 2019.
  • Challan-cum statement in respect of TDS under section 194IA for the month of December 2018 is 30thJanuary 2019.
  • TDS return for Purchase of Property For the month of December 2018 is 30thJanuary 2019.

Quote of the Day:

The purpose of a profession is to fulfill the personal wishes of a prospect.

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.

Corporate and Professional Updates on 22nd January 2019

Indirect Tax:

FAQ’s On GST:

QUES. What is considered as ‘securities’ under the Goods and Services Tax Act? Are they taxable under GST?

ANS. Section 2(101) of the CGST Act, 2017 defines “securities” to have the same meaning as assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956. Section 2(52) of the CGST Act, 2017 defines “goods” to mean every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply. Thus, securities are not goods under the CGST Act, 2017. Section 2(102) of the CGST Act, 2017 defines “services” to mean anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged. Thus, securities are not services under the CGST Act, 2017. Since securities neither fall in the definition of goods nor in the definition of services, they fall in the definition of “non-taxable supply” under section 2(78) of the CGST Act, 2017.

QUES. Whether GST will be levied on the exit-load on mutual funds?

ANS. Exit load in the form of a fee (whether or not as a fixed percentage of the investment) is liable to GST. Even if the exit load is in the form of units in the fund, it may be concluded that the consideration received in money was later converted to NAV units

RBI Updates:

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  • The Reserve Bank of India met about 40 Portfolio Investor for the First time in 5 years to measure overseas Investment interest in domestic fixed-income and debt securities.
  • The RBI proposed new norms for FPIs to attract long-term and stable FPI investments into debt markets, and cushion the currency and debt securities against “hot money” that can vanish overnight. The central bank, in consultation with the government and the Securities and Exchange Board of India, drafted a special route called VRR.
  • The Reserve Bank of India has mentioned norms for private parties to apply for the development of retail payment systems in the country like IMPS, UPI and others. The central bank has stated in a note that it could allow multiple entities to set up payment systems in India to encourage competition as there are very few players in this space at present.
  • The Reserve Bank of India (RBI) is governed needs changes. That the terms of engagement are set to evolve further is apparent following a turbulent 2018 that culminated in Urjit Patel’s departure as governor.
  • RBI board is not comparable to a corporate board said Partha Ray, professor of economics at the Indian Institute of Manament, Calcutta. It functions as per norms and conventions developed over the years. If a board chooses to be activist and question some of the governor’s decisions, it can perhaps be done within the existing legal parameters.
  • Effectiveness of RBI’s supervision on banks has always been under scrutiny,” said a former bank chairman who didn’t want to be named. “The issue was escalated manifold following Punjab National Bank’s Rs 13,700 Crore scam. But the government, which is the owner of 21 banks, should not get involved in RBI’s supervision. In India, the issue of owner neutrality needs to be addressed fast as the primary step towards improving governance.

Other Updates:

  • CIT wasn’t justified in refusing deduction if employee’s contribution to PE made before due date of ITR filing.
  • No Sec. 194J TDS on amount reimbursed to affiliated colleges for conducting examination.
  • Some better performing banks may be out of PCA.
  • Soon, no e-way bill if GST returns not filed for 6 months.
  • IBC noose now tightens on corporate guarantors
  • Bimal Jalan calls for political reform & autonomy.
  • Voda Idea seeks 2 yrs extension for spectrum payment.
  • Reliance asks Niko to exit from KG-D6 gas block over payment default.
  • Coal projects worth Rs 11,000 cr facing delays, govt seeks report from CIL
  • Renewable sector jittery on new external commercial borrowings norms.
  • Mumbai I-T Dept detects 191 cases of over ₹2-lakh cash transactions.
  • Promoters enter fray for Coastal Energen power, offer up to Rs 3,500 cr
  • FIEO seeks govt, RBI intervention in resolving exporters’ banking issues.
  • L&T applied for share buyback-based on standalone financials.
  • Security Exchange Board Of India  rejects L&T’s ₹9,000 crore share buyback proposal.
  • Lupin, Sun Pharma, Glenmark recall products in US.
  • Small electric cars may be unaffordable for some: Volkswagen chairman.
  • India to get its size in textile and garments on lines of US, UK: Smriti Irani.
  • ArcelorMittal to build its first-ever desalination plant in Brazil.
  • Foreign investors to drive changes to green packaging
  • Government may hike farm credit target to Rs 12 lakh crore.
  • Six of top-10 most valued companies add Rs 1,08,274 cr in m-cap.
  • FPI outflow crosses Rs 4,000 cr in Jan.
  • Coffee market awaits monsoon report from Brazil.
  • ‘Short-term debt funds can be considered for investment.
  • Traders resent RIL bid to enter e-commerce.
  • US could offer oil at discount to compensate for Iran curbs.
  • 12 state failed on jobs, despite faster growth.
  • Indian economy poised to pick up in 2019, says IMF.
  • PM mulls cheap loans, sops for small businesses.
  • IMF cuts global growth outlook, cites trade war.
  • NCLAT dismisses Jignesh Shah plea against insolvency of his investment firm La-Fin Financial Services.
  • India moves up a notch on global talent competitive index, ranked 80th.
  • Govt may impose anti-dumping duty on Malaysian glass used in solar panels.
  • India pips Japan to be second largest global steel producer
  • RIL’s asset monetization likely to pare Rs 1 trn of total debt
  • NCLT okays Airtel, Tata Tele merger
  • India among the most trusted nations globally.
  • 8,000 MW of old thermal power generation capacity phased out, says official.
  • Despite poor show in global markets, Uber posts 30% rise in net in FY18.
  • L&T Finance Q3 profit surges 81% to Rs 581 cr.
  • Farm-loan waivers to hit states fiscal deficit targets.
  • Skilled diaspora altering world’s view of India.
  • Govt likely to circumvent PESB route to fast-track hiring of Air India directors.
  • Bajaj Auto set for foray into electric vehicles next year.
  • India’s contribution to world growth doubles in a decade.
  • Apex court refuses to stay TDSAT order rejecting Trai’s predatory pricing rule.
  • Oil falls as slowing China economy dents markets.
  • IDBI Bank decides to continue with existing MD, DMDs.
  • Union Bank of India third-quarter profit misses estimates.
  • For Q3, IRB InvIT declares distribution of Rs 3.10/unit.
  • ONGC share buyback to open on January 29.
  • Advances, margin boost Kotak Bank net profit by 13.5%
  • LIC completes acquisition of 51% stake in IDBI Bank.
  • Bajaj Auto brands itself as The World’s Favourite Indian.
  • Rs 42,000-crore BharatNet projects face delay, cost overrun.

Key Due dates:

  • Challan-Cum Statement in respect of TDS under Section 194IB for the month of December 2018 is 30th January 2019.
  • Challan-cum statement in respect of TDS under section 194IA for the month of December 2018 is 30th January 2019.
  • TDS return for Purchase of Property For the month of December 2018 is 30th January 2019.

Quote of the Day:

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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.

Corporate and Professional updates on 21st January 2019

Direct Tax:

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  • The Income Tax Department Has Come across Several Cases Where Tax Payers Have Taken Credit for Payment of “Self-Assessment tax” without actually clearing the dues, resulting in arrears of around Rs 5,000 crore.
  • I-T dept is chasing those tax payers to recover Rs 5,000 Cr.

Indirect Updates:

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  • The leader and deputy chief minister Sushil Kumar Modi has been deeply involved in the reform of indirect taxes. He had previously led the empowered committee of state finance ministers, the predecessor to Goods and Services Tax (GST) Council, when India tried to build consensus among states to pool their sovereignty in taxation so that Asia’s third largest economy could have uniform indirect tax across the country.
  • The GST Council turns towards Modi, who has all the related information and knows What the Decision of state finance ministers across the political spectrum, to resolve contentious tax issues.
  • The Council is making several changes towards GST to give relief to sections of taxpayers.
  • No E-Ways Bills if GST Returns not filed for 6 months. Non filers of GST Returns for six consecutive months will soon be barred from generating e-way bills for movement of goods. The GST Network is developing an information technology system that would debar businesses, which have not filed returns for two cycles.

SEBI Updates:

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  • SEBI issues Show-Cause Notice to Raymond alleging Multiple Securities Market Violations. The allegations include failure to obtain necessary approvals for related party transactions in the JK House episode, Corporate Governance Violation for Non-Disclosure of material information about litigations and Non-Compliance of Shareholder Reclassification Norms.
  • SEBI rejects Larsen & Toubro’s Rs 9,000 Crore Buyback Offer, citing Compliance Issues over its Post-Buyback Debt-Equity Ratio.

FAQ’s on GST:

QUES. Whether GST will be levied on the exit-load on mutual funds?

ANS. Exit load in the form of a fee (whether or not as a fixed percentage of the investment) is liable to GST. Even if the exit load is in the form of units in the fund, it may be concluded that the consideration received in money was later converted to NAV units.

QUES. Can the stock broker continue to issue bills and contracts under the normal Stock Exchange mechanism and issue a monthly tax invoice for the purpose of Goods and Services Tax?

ANS. The stock broker can issue bills and contracts under the normal Stock Exchange mechanism mentioning the GST amount but will have to issue a tax invoice as envisaged under Section 31(2) of the CGST Act, 2017 read with Rule 47 of the CGST Rules, 2017.

Key Due Dates:

  • Payment of TDS of purchase of property for the Month of December is 30th January 2019.
  • Challan-cum-statement of tax Deducted under Section 194IB for the month of December 2018 is 30th January 2019.
  • Challan-cum-statement of tax Deducted under Section 194IA for the month of December 2018 is 30th January 2019.

Other Updates:

  • Commencement Certificate is mandatory now to be obtaining within 6 months of Incorporation without which, it cannot comment its business activity or borrow money.
  • The ROC can strike off a company if the address of Regd Office is bogus or incomplete improper address.
  • Conversion of public Ltd to Pvt Ltd matters shifted from NCLT to Regional Directorate.
  • Company cannot issue shares at discount, – heavy penalty imposed on violation.
  • Alteration of Authorised Capital to be intimated within 30 days, default – penalty 1000 every day or 5 Lac whichever is less.
  • Creation of charge filing with ROC- time limit reduced from 300 days to 60 days.
  • Wrong statement/ information in filing Charge forms with ROC may lead to misrepresentation and jail.
  • Annual Return should be filed within 60 days from AGM failure to this penalty of 100 per day to Company + directors max 5 Lakh apart from ROC delay charges is applicable.
  • Penalty of 5 lakh to Company secretary certifying wrong Annual Return.
  • Explanatory statement to be given with Notice of General Meeting must contain all details as required by Law, if no detail/short detail/misleading – penalty for Company, Director and KMP.
  • Filing of Resolutions with ROC- delay will be very costly now. Penalty for defaulter increased substantially.
  • Filing of Balance sheet with ROC within time limit- failure is costly for Company and Director Both. Penalty of 100 per day 1 lakh to Company Director each.
  • A director cannot become director in more than 20 companies. If so then He will be disqualified.
  • Appointment of CS on payroll (Pvt Co having paid-up capital 5 cr. & above) is mandatory. Default is now very costly- penalty increased substantially.
  • ROC may strike off a company if subscribers have not paid initial share capital after incorporation of a Company within 6 months.
  • NCLAT tells NCLT that it should not hear any third party, other than the applicant who has taken a company to the NCLT and the company which is the corporate debtor itself, at the time of the admission of a case.

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.