Direct tax updates:
- Candidates contesting all forthcoming elections will not only have to declare their income-tax returns of the last five years, offshore assets and PAN details, but also those of their spouses and family members as announced by the Government.
- Form 26 is filed along with the nomination papers giving details about the criminal antecedents, if any, PAN, income tax return of self, spouse and dependent. It is also used to provide a list of assets and liabilities of a candidate, spouse and all dependents. As per the new notification, offshore assets will include the details of deposits or investments in foreign banks, any other body or institution abroad. It will also include details of assets and liabilities abroad.
Indirect Tax Updates:
FAQ’s on GST:
Ques. Would forward contracts in commodities or currencies be within the ambit of definition of ‘supply’?
Ans. A forward contract is an agreement, executed, to purchase or sell a predetermined amount of a commodity or currency at a pre-determined future date at a pre-determined price. The settlement could be by way of actual delivery of underlying commodity/currency or by way of net settlement of differential of the forward rate over the prevailing market rate on the settlement date. Where the settlement takes place by way of actual delivery of underlying commodity/currency, then such forward contracts would be treated as normal supply of goods and liable to GST. Where the settlement takes place by way of net settlement of differential of the forward rate over the prevailing market rate on the settlement date, the same would be falling within the purview of ‘securities’ as defined in Section 2(101) of the CGST Act, 2017. As securities are neither ‘goods’ nor ‘services’ as defined in the CGST Act, 2017, future contracts are not chargeable to GST. However, if some service charges or service fees or documentation fees or broking charges or such like fees or charges are charged, the same would be a consideration for supply of service and chargeable to GST.
Ques. What is the nature of income earned / expended in instruments like repos and reverse repos and is such income taxable under GST?
Ans. Section 45U(c) of the RBI Act, 1934 defines ‘repos’ as an instrument for borrowing funds by selling securities with an agreement to repurchase the securities on a mutually agreed future date at an agreed price which includes interest for the funds borrowed. Section 45U (d) of the RBI Act, 1934 defines ‘reverse repos’ as an instrument for lending funds by buying securities with an agreement to re-sell the securities on a mutually agreed future date at an agreed price which includes interest for the funds lent. Repos and reverse repos are financial instruments of short term call money market that are normally used by banks to borrow from or lend money to RBI. Page 14 of 32 The margins, called the repo rate or reverse repo rate, in such transactions are nothing but interest charged for lending or borrowing of money. Thus they have the characteristics of loans and deposits for interest and are accordingly exempt from GST.
Ques. Whether assignment or sale of secured or unsecured debts is liable to GST?
Ans. 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. Schedule III of the CGST Act, 2017 lists activities or transactions which shall be treated neither as a supply of goods nor a supply of services and actionable claims other than lottery, betting and gambling are included in the said Schedule. Thus, only actionable claims in respect of lottery, betting and gambling would be taxable under GST. Further, where sale, transfer or assignment of debts falls within the purview of actionable claims, the same would not be subject to GST Further, any charges collected in the course of transfer or assignment of a debt would be chargeable to GST, being in the nature of consideration for supply of services
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Key Due Dates:
- Due date of TDS Return for the month of January 2019 is 28th February 2019.