CORPORATE AND PROFESSIONAL UPDATE JULY 9, 2016

Professional Update For the Day:

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DIRECT TAX:

Income Tax : Cash deposits in bank can’t be held as undisclosed income without verifying source of deposits Gurpal Singh v. Income-tax Officer, Ward-1, Kapurthala Income-tax Officer, Ward-1, Kapurthala

Income Tax : Chennai ITAT denies Sec 11 exemption to assessee ,an educational trust  with respect to income earned from renting of ‘auditorium hall’ during AY 2010-11.It observed that exemption u/s 11(4) is available on income derived from business held under trust and the words ‘property held under trust’ includes business undertaking held under trust. [TS-364-ITAT-2016(CHNY)]

Income Tax:  Hyderabad ITAT rules that compensation received by assessee ,an India based publication house,in terms of settlement  agreement for not using the trademark obtained from a London based company – Longman Communications Ltd.  which was taken over by Pearson Group, UK,  is a non-taxable capital receipt for AY 2008-09. [TS-363-ITAT-2016(HYD)]

INDIRECT TAX:

Service tax :   Calcutta high court in the case of Saurav Ganguly held that there is no service tax for writing artlcles, anchoring TV shows, playing IPL matches & Brand Endorsement.( Sourav Ganguly -Vs.- Union of India & Ors.)  

    Service tax : Consultancy service availed to procure finance for business is eligible input service Commissioner of Central Excise Bangalore II Commissionerate v. Sanmar Speciality Chemicals Ltd.[2016] 71 taxmann.com 10 (Karnataka)

Excise : Supreme Court in the judgment of the given case held that Subsidy by way of refund of excise duty and interest for setting up a new industrial undertaking is a capital receipt & not taxable as income. Alternatively, such receipts are “derived” from the industrial undertaking and are deductible u/s 80-IB.( CIT Vs. Shree Balaji Alloys)

Custom : Karnataka HC upholds Tribunal order denying exemption u/s 5(2) of CST Act on lease transactions effected by Hewlett Packard (assessee) with local customers on ground that same did not constitute ‘sale in course of import. [TS-268-HC-2016(KAR)-VAT]

OTHER UPDATES:

Banks need not report details about invocation of bank guarantee for service imports RBI/2016-17/8  A.P. (DIR Series) Circular No. 1 Dated July 07, 2016

Time period u/s 139 to comply with provisions of rotation, changed to 1st AGM held after 3yrs from commencement of Companies Act, 2013. Removal of Difficulties 3rd Order, 2016.

Where appellant holding merely eight shares objected to scheme of amalgamation which had been approved by all shareholders, secured and unsecured creditor, objection of appellant was malicious and mala fide as he was disqualified from continuing as statutory auditor of company – [2016] 70 taxmann 394 (Delhi)

KEY DATES :

Excise return in Form ER-1 for non SSI assessee for the month of June: 10/07/2016

Excise Return in Form ER-2 for EOUs for the month of June: 10/07/2016

Submission of Excise Return in ER-3 by SSI unit for June quarter: 10/07/2016

“No masterpiece was ever created by a lazy artist”

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Disclaimer:
All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.
The visitors may visit the web site of Government site Like Income Tax Department, Services Tax, Excise, Etc for resolving their doubts or for clarifications.

Continue reading

CORPORATE AND PROFESSIONAL UPDATE JULY 7, 2016

Professional Update For the Day:

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DIRECT TAX:

Income Tax : Deduction u/s 80HH of the Act in respect of profit and gains from newly established industrial undertaking in backward areas would be given subject to fulfillment of certain conditions as provided in sub section (2) of the said provision. Indian Railway Const. Co. Ltd. Vs. IAC (A) -ITAT Delhi

Income Tax : Bangalore ITAT upholds capital gains addition in respect of sale of various lands held by assessee, engaged in buying / selling of immovable properties, during AY 2007-08, rejects assessee’s claim of exemption on the ground that land was agricultural land and falls under exclusion clause (iii) to Sec 2(14). [TS-360-ITAT-2016(Bang)]

Income Tax:  ITAT in the given case held that the ‘upfront fee’ paid to Central Bank of India on loan taken from it is allowable as a deduction from the assessee’s income. ( DCIT, Mumbai Vs. M/s Videocon Industires Ltd.)

Income Tax:  Income Computation and Disclosure Standards (ICDS) are to be applicable from 1.4.2016 i.e. previous year 2016-17 (AY 2017-18), postponed by one year.

Payment made to agencies for services of Toll collection would attract sec. 194C TDS and not sec. 194H TDS Deputy Commissioner of Income-tax, Circle-3(1), (TDS), Vijayawada v. Project Director, NHAI [2016] 71 taxmann.com 7 (Visakhapatnam – Trib.)

INDIRECT TAX:

CENVAT : CENVAT Credit on Canteen Services and House Keeping/Cleaning Services availed in office building are admissible to Assessee when same was situated within licensed factory premises of Assessee.( M/S. Tata Steel Ltd. Vs. Commissioner Of Central Excise & Service Tax, Jamshedpur (Cestat Kolkata)

 Vat & sales tax:  Joint Commissioner has to decide VAT proceedings without any interference of other authority Tanuj Agency (P.) Ltd. v. State of Gujarat [2016] 71 taxmann.com 4 (Gujarat)

OTHER UPDATES:

COMPAT quashes CCI’s penalty order of Rs. 6.75 crores on India Trade Promotion  Organization India Trade Promotion Organization v. Competition Commission of India , New Delhi [2016] 71 taxmann.com 71 (CAT – New Delhi).

Time period u/s 139 to comply with provisions of rotation, changed to 1st AGM held after 3yrs from commencement of Companies Act, 2013. Removal of Difficulties 3rd Order, 2016.

KEY DATES :

Submission of form 27C (TCS) received in the month of June: 07/07/2016

Payment of TDS for the month of June: 07/07/2016

“There was never a night that could defeat sunrise, as equally there is never a problem that could defeat hope. Hope for the best always.”

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Disclaimer:

All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.

The visitors may visit the web site of Government site Like Income Tax Department, Services Tax, Excise, Etc for resolving their doubts or for clarifications. Continue reading

CORPORATE AND PROFESSIONAL UPDATE JULY 6, 2016

Professional Update For the Day:

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DIRECT TAX:

Income Tax : ITAT in the given case held that-as the international transactions of payment of royalty and fees for technical services are separate transactions and not closely linked with the other transactions with which the assessee has merged them, we cannot permit such merger or aggregation for the purpose of the determining their ALP on entity level under TNMM. (Gruner India Pvt. Ltd. Vs. DCIT, New Delhi)

Income Tax : S. 37(1): Expenditure on Corporate Social Responsibility (CSR), though voluntary, is allowable as business expenditure. Explanation 2 to s. 37(1) inserted w.e.f. 01.04.2015 is not retrospective. It applies only to CSR expenditure referred to in s. 135 of the Companies Act and not to voluntary CSR expenditure ACIT vs. Jindal Power Limited (ITAT Raipur)

Income Tax: No notional interest on belated payments by AE when assessee allows credit period to non-AEs as well GSS Infotech Ltd. v. Assistant Commissioner of Income-tax, Circle-2(2), Hyderabad [2016] 70 taxmann.com 356 (Hyderabad – Trib.)

Income Tax: Apex Court admits SLP of revenue against ‘Vodafone India’ to decide taxability of transfer of call option rights
Commissioner of Income-tax-3 v. Vodafone India Services (P.) Ltd. [2016] 70 taxmann.com 383 (SC).)

INDIRECT TAX:

Vat & sales tax: Department of Trade & Taxes has issued a circular regarding description of goods /Items along with their item codes vide circular No. 10 /2016-17 dated 01.07.2016.All registered dealers of Delhi are mandatorily required to file their returns as per the list made by the department for the tax period commencing from 1st April, 2016 and all subsequent tax periods. The list along with item codes has been uploaded on the website of the department.

Vat & sales tax: Department of Trade & Taxes has issued a notification regarding filling of return through Digital Signature vide notification No. F3 (643)/Policy/VAT/2016/419-31 dated 01-07-2016 The dealers with gross turnover exceeding one crore rupees, shall furnish their returns in Form DVAT 16 or in Form DVAT 17, as the case may be with digital signatures in accordance with the provisions of the Information Technology Act, 2000 for the tax period 1st April, 2016 to 30th June, 2016 and subsequent tax periods.

CBEC has issued a circular regarding recovery of confirmed demands during the pendency of stay application vide circular No. 1035/23/2016-CX dated 04-07.2016.

OTHER UPDATES:

COMPAT quashes CCI’s penalty order of Rs. 6.75 crores on India Trade Promotion Organisation India Trade Promotion Organisation v. Competition Commission of India , New Delhi [2016] 71 taxmann.com 71 (CAT – New Delhi)

Time period u/s 139 to comply with provisions of rotation, changed to 1st AGM held after 3yrs from commencement of Companies Act, 2013. Removal of Difficulties 3rd Order, 2016.

KEY DATES :

E- Payment of service tax for June: 06/07/2016

Payment of TDS for the month of June: 07/07/2016

“Trust because you are willing to accept the risk, not because it’s safe or certain.”

FOR FURTHER QUERIES CONTACT US:
W: www.carajput.com E: info@carajput.com T: 011-233-4-3333, 9-555-555-480

Disclaimer:
All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.
The visitors may visit the web site of Government site Like Income Tax Department, Services Tax, Excise, Etc for resolving their doubts or for clarifications. Continue reading

CORPORATE AND PROFESSIONAL UPDATE JULY 5, 2016

Professional Update For the Day:

blog-rja-with-imageDIRECT TAX:

Income Tax : Gujrat High Court held that the payment of stamp duty is not for business expediency but it is in the nature of a compulsory levy under the Bombay Stamp Act. It is legally settled that accounting practice cannot over rider the provisions of the Income Tax Act, 1961. Whole expenditure allowed as revenue expenditure. (M/s. Prithvi Associates Vs. ACIT)

Income Tax : ITAT Delhi in the given case held that business loss cannot be set off against the income assessed under the deeming provisions of section 68, which is not falling under any of the five heads of income.( ACIT, Circle, Haridwar Vs. M/s. Sant Steel & Alloys (P) Ltd.)

Income Tax: Transfer-fees from outgoing member not taxable for co-operative housing society applying ‘mutuality’  [TS-346-HC-2016(BOM)]

Income Tax:  AO isn’t required to furnish reasons for rejecting computation of assessee for determination of ALP
Philips Electronics Ltd. v. Assistant Commissioner of Income-tax, Circle-11, Kolkata
[2016] 70 taxmann.com 350 (Kolkata – Trib.)

Voluntary CSR Expense allowable as business expenditure. [ACIT vs. Jindal Power Limited (ITAT Raipur)].

INDIRECT TAX:

Vat & sales tax:  Uploading of notice on DVAT website in account of assessee is valid service of notice: HC Bajrang Fabrics (P.) Ltd. v. Commissioner of VAT [2016] 70 taxmann.com 348 (Delhi)

Excise: Onus of establishing that inputs have been received is on person taking credit and not on revenue. (Commissioner of Central Excise, Pune-II v. K.B. Chougula)

Custom : Clearance of bunker fuels to Indian ship/vessel carrying containerized cargo—reg. vide Circular No. 1034/22/2016-CX dated 1st July, 2016.

Excise: Buyer can take credit of excess duty paid by supplier as long as assessment at end of supplier isn’t modified Commissioner of Central Excise, Bhopal v. Hindustan Electro Graphite Ltd.
[2016] 70 taxmann.com 353 (New Delhi – CESTAT)

Service tax : Ministry of Finance has vide notification exempted the entire service tax leviable on taxable services provided by way of transportation of goods by a vessel from outside India upto the customs station in India with respect to which the invoice for the service has been issued on or before the 31st May, 2016. However, the exemption is subject to the condition that the import manifest or import report required to be delivered under Section 30 of the Customs Act, 1962 has been delivered on or before 31st May, 2016 and the service provider or recipient produces Customs certified copy of such import manifest or import report.

CENVAT: Canteen, Housekeeping & cleaning service- CENVAT credit allowed. [M/S. Tata Steel Ltd. Vs. Commissioner Of Central Excise & Service Tax, Jamshedpur (Cestat Kolkata)]

OTHER UPDATES:

Form MR-1 (Return of Appointment) not required to be filed for CEO, CS, and CFO w.e.f. 30.06.16. Companies (Appt. & Remuneration of Managerial Personnel) Amendment Rules, 2016.]

Time period u/s 139 to comply with provisions of rotation, changed to 1st AGM held after 3yrs from commencement of Companies Act, 2013. Removal of Difficulties 3rd Order, 2016.

KEY DATES :

E- Payment of service tax for June: 06/07/2016

Payment of TDS for the month of June: 07/07/2016

“Tough times are like physical exercise, you may not like it while you are doing it but tomorrow you’ll be stronger because of it.”

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CORPORATE AND PROFESSIONAL UPDATE JULY 4, 2016

Professional Update For the Day:

trademark-patent-startup-india-incentive-1050x600

DIRECT TAX:

Income Tax : Mumbai ITAT allows Sec.11 exemption on profits earned by assessee hospital from pharmacy business for AY 2006-07, upholds assessee’s claim that pharmacy business was an integral part of hospital business;  [TS-350-ITAT-2016(Mum)]

Income Tax : ITAT: Retention bonus for arresting employee attrition deductible as revenue expenditure [TS-349-ITAT-2016(DEL)]

Income Tax: Transfer-fees from outgoing member not taxable for co-operative housing society applying ‘mutuality’  [TS-346-HC-2016(BOM)]

CBDT issued 3rd clarification in the form of FAQs on the Income Declaration Scheme, 2016 Vide Circular No. 25 of 2016 dated 30.06.2016 Under the ‘Income Declaration Scheme’ tax of forty-five per cent of such undisclosed income is there. The IDS is effective from June 1, 2016 and will remain open up to September 30, 2016. The declarant is required to pay tax up to November 30, 2016. In the recent FAQs issued on June 30, 2016 the CBDT has clarified that once the person had declared undisclosed income, no question will be asked from where such income or tax is coming from. So the effective rate of tax will be 31% as you have to pay 45% on 145 i.e. amount declared and tax paid thereon.

No denial of sec. 54F relief due to two houses if taxpayer had partial interest in one of the houses  Mrs. V.R. Usha v. Income-tax Officer, Business Ward-XV(1), Chennai[2016] 70 taxmann.com 340 (Chennai – Trib.)

Interest on FD was includible in operating profit as FD was made from advances received from buyers Deputy Commissioner of Income-tax, Circle- 8 (1), Mumbai v. Bunge India (P.) Ltd. [2016] 70 taxmann.com 323 (Mumbai – Trib.)

INDIRECT TAX:

Vat & sales tax : Dealers having gross turnover above Rs. 1 Cr in F.Y. 2015-16, are required to attach DSC with form DVAT 16/DVAT 17 for Q1 of 2016-17 and onwards. Notification of 1.6.16

Excise : CBEC specified the procedure and conditions for supply of bunker fuel without payment of Central Excise duty from the warehouse of the OMCs to the eligible ships/vessels Vide Circular No. 1034/22/2016 – CX dated 01.07.2016  Excise: The time limit for taking Central excise registration of an establishment by a jeweller  is being extended up to 31.07.2016.

Custom : Clearance of bunker fuels to Indian ship/vessel carrying containerized cargo—reg. vide Circular No. 1034/22/2016-CX dated 1st July, 2016.

Excise: Time limit for excise registration by jewellers extended up to July 31, 2016 Circular No. 1033/21/2016 – CX. Dated  July 1, 2016 F. No. 354/25/2016–TRUExcise: Refund of tax paid on non-taxable services is also governed by time limit of section 11B Giriraj Construction v. Commissioner of Central Excise & Customs, Service Tax, Nasik [2016] 70 taxmann.com 303 (Mumbai – CESTAT)

Service tax : No recovery of service tax without adjudication even if tax was collected from customers: HC  Union of India v. Mrs. Prashanthi [2016] 70 taxmann.com 346 (Karnataka)

OTHER UPDATES:

RBI: As per new guideline given by RBI spelling should be written in LAKH not LAC on cheque and Bank Mandate.

Companies  (Removal of difficulties) Third Order, 2016 released by MCA. MCA order dated 30.06.2016.

Bank of Baroda invites proposal for appointment of concurrent auditors of the bank for Branches/RBOs/CBOs/Other Units vide RFP for 545 of its Branches, 22 CBOS, 13 RBOs and 3 Other Units Last date : – 21/07/2016.

Employees drawing salary of Rs.1.2Cr p.a. / 8.5Lac p.m. to be disclosed in board report. Companies (Appt. and remuneration of managerial personnel) amendment rules, 2016.

Invalid transfer of shares didn’t become valid just because petitioner didn’t dispute her sign on transfer docs Ms. Sulochana Neelkanth Kalyani v. Takle Investments Co. [2016] 70 taxmann.com 351 (Bombay)

KEY DATES

E- Payment of service tax for June: 06/07/2016

Payment of TDS for the month of June: 07/07/2016

“Knowledge is being aware of what you can do. Wisdom is knowing when not to do it.”

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CORPORATE AND PROFESSIONAL UPDATE JULY 2, 2016

 

Professional Update For the Day:

DIRECT TAX:

Income Tax : CBDT issues 3rd FAQs on Income Declaration Scheme, 2016, Circular No.25 of 2016 -Income Tax Dated 30th of June, 2016.

Income Tax : Explanation on disallowance of CSR exp. doesn’t have retro-effect, says ITAT Assistant Commissioner of Income-tax, Circle 1 (1), Bilaspur V. Jindal Power Ltd. [2016] 70 taxmann.com 389 (RAIPUR-TRIB)

Income Tax: TP provisions can be invoked even for 100% EOU enjoying tax holiday under sec. 10A Transcend MT Services (P.) Ltd. v. Assistant Commissioner of Income-tax, Circle 16(1), New Delhi [2016] 70 taxmann.com 388 (Delhi – Trib.)

CBDT issued 3rd clarification in the form of FAQs on the Income Declaration Scheme, 2016 Vide Circular No. 25 of 2016 dated 30.06.2016

No denial of sec. 54F relief due to two houses if taxpayer had partial interest in one of the houses V.R. Usha v. Income-tax Officer, Business Ward-XV(1), Chennai[2016] 70 taxmann.com 340 (Chennai – Trib.)

INDIRECT TAX:

Excise : The liability for payment of Central excise duty will be with effect from 01.03.2016. The payment for excise duty for the month of March, April , May , June  is also extended to 31.07.2016.

Excise: The time limit for taking Central excise registration of an establishment by a jeweller  is being extended up to 31.07.2016.

Custom : Clearance of bunker fuels to Indian ship/vessel carrying containerized cargo—reg. vide Circular No. 1034/22/2016-CX dated 1st July, 2016.

Excise: CBEC has extended the time limit for taking central excise registration of an establishment by jeweler to31.07.2016. The liability for payment of central excise will be from 1st March, 2016. However the assessee jewelers may make the payment of excise duty for the months from March 2016 to June 2016 also extended upto31.07.2016. Vide Circular No. 1033/21/2016 – CX dated 01.07.2016.

Excise: Refund of tax paid on non-taxable services is also governed by time limit of section 11B Giriraj Construction v. Commissioner of Central Excise & Customs, Service Tax, Nasik [2016] 70 taxmann.com 303 (Mumbai – CESTAT)

Excise: Extension of time-limit for refund claim would also be applicable on time-barred claims Nobel Art & Craft House v. Commissioner of Central Excise, Jaipur-II [2016] 70 taxmann.com 315 (New Delhi – CESTAT

OTHER UPDATES

RBI: The Reserve Bank of India has released the Financial Stability Report (FSR) June 2016The FSR reflects the overall assessment on the stability of India’s financial system and its resilience to risks emanating from global and domestic factors. Besides, the Report also discusses issues relating to development and regulation of the financial sector.

Companies  (Removal of difficulties) Third Order, 2016 released by MCA. MCA order dated 30.06.2016.

KEY DATES

E- Payment of service tax for June: 06/07/2016

Payment of TDS for the month of June: 07/07/2016

“Dreams are the seeds of change. Nothing ever grows without a seed and nothing ever changes without a dream. Dream on, move on and change the world.”

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CORPORATE AND PROFESSIONAL UPDATE JULY 1, 2016

Dear   Professional Colleagues,
Heartiest greetings on CA Day!

6

Professional Update For the Day:

DIRECT TAX:

Income Tax : CBDT issues 3rd FAQs on Income Declaration Scheme, 2016, Circular No.25 of 2016 -Income Tax Dated 30th of June, 2016.

Income Tax : Explanation on disallowance of CSR exp. doesn’t have retro-effect, says ITAT Assistant Commissioner of Income-tax, Circle 1 (1), Bilaspur V. Jindal Power Ltd. [2016] 70 taxmann.com 389 (RAIPUR-TRIB)

Income Tax: TP provisions can be invoked even for 100% EOU enjoying tax holiday under sec. 10A Transcend MT Services (P.) Ltd. v. Assistant Commissioner of Income-tax, Circle 16(1), New Delhi [2016] 70 taxmann.com 388 (Delhi – Trib.)

CBDT has issued Income Tax (18Th Amendments) Rules, 2016 vide Notification No. -54/2016 dated27.06.2016. These rules will be applicable from 1st day of April, 2017. In the Income-tax Rules, 1962 , after rule 127, Foreign tax credit Rule has been inserted in Rule 128.Further,  in Appendix-II, after Form No.66, Form 67 has also been inserted.

Central Government appoints the 27th day of June, 2016, as the date on which the provisions of Part I of Chapter XII of Finance Act 2016 shall come into force vide Notification No. S.O. 2214(E) dated 27.06.2016.

New versions of e-TDS/TCS Return Preparation Utility (RPU) & File Validation Utilities (FVUs) available at TIN website applicable W.e.f. 28.06.16.

INDIRECT TAX:

 Excise : Delay in filing appeal condoned on payment of costs though no detailed explanation given by assessee for delay Sivalogam Steels (P.) Ltd. v. Customs Excise & Service Tax Appellate Tribunal [2016] 70 taxmann.com 301 (Madras)

Excise: Cenvat credit – the question of taking credit on POY contained in certain waste arising in process of manufacture of polyester texturised yarn would also not arise. Nowhere Rule 9A of CENVAT Credit Rules, 2002 contains anything to the contrary – Tri

Custom : Tariff notification in respect of fixation of tariff value of Edible Oils, Brass scrap, poppy seeds, Gold and Silver-92/2016-Dated 30-6-2016-custom.

Custom: Assessee can’t pursue writ when appellate remedy is available Socomec Innovative Power Solutions (P.) Ltd. v. Commissioner of Customs (Appeals), Chennai [2016] 70 taxmann.com 344 (Madras)

CBEC has given an Instruction of Inclusion of Show Cause Notices issued in relation to sub-section (11) of Section 28 of the Customs Act, 1962 on the competency of officers of DGDRI, DGCEI and Customs (Prev.), in the “Call Book” vide F.No.276/104/2016-CX.8A (Pt.) dated 29.06.2016 .

Under Excise Act service of notice by registered post without acknowledgement due is not valid.( HC RP Casting (P.) Ltd. v. Customs, Excise & Service Tax Appellate Tribunal) New Delhi

OTHER UPDATES : 

ICAI has issued FAQs regarding requirements to prepare consolidated Financial Statement dated on 24.06.2016. These FAQs on Consolidated Financial Statements have been issued by the Accounting Standards Board (ASB) of the Institute of Chartered Accountants of India (ICAI). The purpose of these FAQs is to illustrate and to assist in clarifying the requirements regarding preparation of Consolidated Financial Statements.

RBI: The Reserve Bank of India has released the Financial Stability Report (FSR) June 2016The FSR reflects the overall assessment on the stability of India’s financial system and its resilience to risks emanating from global and domestic factors. Besides, the Report also discusses issues relating to development and regulation of the financial sector.

KEY DATES

E- Payment of service tax for June: 06/07/2016

Payment of TDS for the month of June: 07/07/2016


“If you have the spirit of understanding everything in a positive way, you will enjoy each and every moment of life, whether it s pressure or pleasure.”

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REAL ESTATE BILL

real-estate-bill-2015

POWER TO BUYER – THE NEW REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016

The real estate sector in India, in the recent times, has been plagued with lack of transparency, unregulated and unscrupulous activities of developers, oppressed and highly dissatisfied consumers and lack of timely and cost effective remedies. The arm twisting tactics and unethical business practices followed by many real estate developers have led to skyrocketing prices of real estate and a pool of consumers which is repelled by such high pricing and absence of proper check on developers. As a result, a large section of our population still dreams of owning a home.

In order to address the aforesaid issues affecting the real estate sector in the country, the Real Estate (Regulation And Development) Act, 2016 (“RERA”) has been brought into force. RERA received Presidential assent on March 26, 2016 and the Ministry of Housing and Urban Poverty Alleviation (“MHUPA”), vide its notification dated April 26, 2016, appointed May 1, 2016 as the date for coming into effect of 69 out of total 92 sections of RERA.

The rules for giving effect to the provisions of RERA are to be formulated and notified within a period of 6 (six) months from the date of commencement of the Act by respective State Governments (for each Sate), MHUPA (for  Union Territories  except Delhi  and Puducherry), Ministry of Urban Development (for Delhi) and Union Territory Government (for Puducherry).

RERA aims at putting institutional infrastructure in place in the country for the purpose of ensuring uniform regulatory environment, protection of consumer interest, quick adjudication/ resolution of disputes and overall development of the real estate sector.

THE SALIENT FEATURES OF RERA ARE DISCUSSED HERE UNDER:

Uniform Applicability: The provisions of RERA extend to whole of India  (except  Jammu  and  Kashmir)  and  are  applicable  to commercial as well as residential real estate projects. The said feature of RERA will be crucial in ensuring its uniform applicability and preventing any real estate project from escaping the provisions of RERA, unless expressly exempted, by the reason of said project being commercial or residential. Constitution of Regulatory Authority: RERA provides for constitution of Real Estate Regulatory  Authority (“Regulatory Authority”) for all States and Union Territories, as regulator for real estate projects, within a period of one year from the date of coming into effect of the Act. The said Regulatory Authority will perform such duties and exercise such powers as are assigned to it under RERA, including but not limited to granting registration to real estate  projects/real estate agents, maintaining database of projects/ promoters/ real estate agents, issuing orders/directions to ensure compliance of RERA, imposing penalty for offences, etc. Registration of Real Estate Projects: All real estate projects shall be required to be registered with the concerned Regulatory Authority if the area of land proposed to be developed therein exceeds 500 square meters, or the number of apartments proposed to be developed therein exceeds 8 (inclusive of all phases), or if the completion certificate with respect to such project has not been obtained on the date of commencement of the Act,. The said application shall be filed within a period of 3 (three) months from the date of commencement of this Act with respect to ongoing projects.

Undertaking marketing/sale with respect to a real estate project will not be permissible for promoters till necessary registration has been obtained under RERA.

Disclosures by Promoters: While filing an application for registration of a real estate project, promoters are required to provide disclosures with respect to all the details of the project and give declaration with respect to completion schedule and title of the land for the project. The period within which a promoter undertakes to complete the project under its application of registration is the period for which the registration for the said project shall be valid under RERA .Agreement with Buyers: RERA mandates the promoters to first enter into a written agreement for sale with the buyers and register the said agreement before accepting any advance payment or application fee (not exceeding 10% percent of the cost). Further, the said agreement for sale shall be in the prescribed form in order to prevent promoters from drafting one-sided agreements in their favour. Maintenance of Project Receivables in a Separate Account: RERA directs promoters to deposit and maintain at least 70% (seventy percent) of the amounts realised for the real estate project from the allottees, from time to time, in a separate account to be maintained in a scheduled bank, to be withdrawn in proportion to percentage of completion of project for covering the cost of construction and the land cost. The said requirement has been incorporated in RERA in order to prevent diversion/misappropriation of funds so obtained by promoters from allottees of a real estate project. Check on Promoters’ Powers: RERA imposes several checks on powers/activities of promoters, including but not limited to the requirements of seeking prior consent of at least two third allottees before altering sanctioned plans/common areas of a project and/or transferring the project to a third party, rectifying structural/ workmanship/ quality defects within a period of 30 days of being notified, maintaining insurance with respect to land and building of the project, refunding the money or paying monthly interest, as the allottee may desire, in the event of delay in completion, etc. Registration of Real Estate Agents: RERA has mandated all real estate agents to get themselves registered with the Regulatory Authority before facilitating any real estate transaction. Further, RERA incorporates a provision that requires real estate agents to facilitate possession of all necessary documents that an allottee is entitled to and perform all such other function as may be prescribed under the rules. Buyers’ Rights: RERA grants several rights to the buyers, including but not limited to right to have access to database of promoters/projects/real estate agents, right to claim refund/monthly interest in the event of delay, right to claim compensation for any loss caused due to defect in title of project land, etc. Time Bound Dispute Resolution Mechanism: In addition to constitution of Regulatory Authorities, RERA also provides that appropriate Government shall constitute an Appellate Tribunal (“Appellate Tribunal”) within a period of 1 (one) year from the date of commencement of the Act for hearing appeals against the orders of Regulatory Authority that are preferred within a period of 60 (sixty) days from the date of receipt of copy of concerned order.

RERA also provides that the proceedings of Regulatory Authority and Appellate Tribunal shall be completed within a period of 60 (sixty) days from the date of receipt of complaint or appeal, as the case may be.

Offences and Penalties: Failure of any promoter to get its real estate project registered in compliance with section 3 of RERA may result in levy of penalty up to 10% of the estimated cost of the project along with imprisonment for a term up to 3 (three) years in the event of continued default. Further, in the event of any promoter failing to provide correct information for registration or failing to adhere to any other provision of RERA, apart from section 3, such promoter shall be liable to a penalty up to 5% of the estimated cost of the project.

The Central Government has, as of now, notified 69 out of the total 92 sections under RERA. However, the 22 sections that are yet to be notified, such as prior registration of real estate projects; registration of real estate agents; duties/ obligations of promoters, are essential for regulating the activities of promoters and achieving the key objective of bringing transparency in the real estate sector.

Until the said remaining sections are notified, constitution of Regulatory Authority and framing of necessary rules under RERA will not result in achievement of desired results of transparency, accountability and timely handovers. Therefore, it will have to be seen as to how much time the Government takes before notifying the remaining sections and, accordingly, makes it obligatory for the promoters to ensure full compliances of their duties under the Act.

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HOW TO FILE TDS RETURN ONLINE?

USUAL MANUAL FOR CHANGED PROCEDURE FOR FILING OF E-TDS QUARTERLY STATEMENT W.E.F. 01 MAY 2016

how to file tds returns online

WITH EFFECT FROM 01 MAY 2016 ETDS QUARTERLY STATEMENT / RETURNS SHALL BE UPLOADED AT TRACES TDSCPC WEBSITE AND NOT ON TIN NSDL WEBSITE.

TDS STATEMENT UPLOAD: User Manual

  • Pre-Requisites for Uploading TDS Statement
  • To upload TDS, user should hold valid TAN and should be registered in e-Filing
  • Statement should be prepared using the Return Preparation Utility (RPU) and validated using the File Validation Utility (FVU). The utilities can be downloaded from tin-nsdl website (https://www.tin-nsdl.com/).
  • Valid DSC should be registered in e-Filing.
  • Upload TDS/TCS Statement

STEPS in Uploading TDS Statement:

Step 1: In e-Filing Homepage, Click on “Login Here”

Step 2: Enter User ID (TAN), Password, and Captcha. Click Login.

Step 3: Post login, go to TDS   Upload TDS.

Step 4: In the form provided, select the appropriate statement details from the drop down boxes for:

  • FVU Version
  • Assessment Year
  • Form Name
  • Quarter
  • Upload Type

Note:

  • TDS can be uploaded from Asst. Year 2011-12
  • Only Regular Statements can be uploaded, the Correction statement can be uploaded only through tin-NSDL portal.

Step 5: Click Validate to Validate Statement details.

Step 6: “Upload TDS ZIP file”: Upload the TDS/TCS statement (Prepared using the utility downloaded from tin-NSDL Website)

Step 7: “Attach the Signature file” Upload the signature file generated using DSC Management Utility for the uploaded TDS ZIP file. For further details on generating Signature file click here. Navigate to Step by Step Guide for Uploading Zip File (Bulk Upload)

Step 8: Click on “Upload” button.

Once the TDS is uploaded, success message will be displayed on the screen. A confirmation mail is sent  to the registered email id.

View Filed TDS Statement – the steps are as below:

Step 1: Login to e-Filing, Go to TDS

Step 2: In the form provided, select the details from the drop down boxes for Assessment Year, Form Name and Quarter respectively for which the TDS was uploaded.

Step 3: Click on “View Details”.

Step 4: The status of the TDS uploaded is displayed.

  • Once uploaded the status of the statement would be “Uploaded”. The uploaded file will be processed and validated. Upon validation the status will be either be “Accepted” or “Rejected” and would be reflected within 24 hours from the time of upload. In case if “Rejected”, the rejection reason will be displayed.
  • If the status is “Rejected”, click on the Token Number to view the error details.
  • Reason for rejection would be displayed as below:

Step 6: If the status is “Accepted”, click on the Token Number to see the details of acknowledgement of the statement uploaded for all future reference. 

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GOODS AND SERVICE TAX (GST)

gst

GST is levied only at the Destination point, It is taxed only at the value addition at each stage and supplier at each stage is permitted to set off through tax credit mechanism which would eliminate all cascading effect. There will be a no distinction between goods and services. 

STRUCTURE OF GST IN INDIA: 

  • INTRA STATE TAXABLE SUPPLY: Excise and service tax will be known as CGST.
  • Local VAT and other taxes will be known as SGST.
  • INTER STATE TAXABLE SUPPLY: CST will be replaced by integrated GST (IGST).
  • IMPORT FROM OUTSIDE INDIA: In this case custom duty like CVD, SAD etc. IGST will be charged 

FEATURES, REGISTRATION & RETURNS UNDER GST:

  • GST shall have two component one levied by the central and the other levied by the states .Rates for GST would be prescribed appropriately reflecting revenue consideration and acceptability.
  • IGST is applicable on the import of goods & services and inter-state stock transfer of goods & services and is levied and collected by the central.
  • The taxpayer would need to submit periodical return, in common format as far as possible , to both central GST authority and to the concerned state GST authorities
  • Export of goods and services are zero rated.
  • Each taxpayer would be allotted a PAN linked identification number with a total of 13-15 digits. This would bring the GST PAN-linked system in line with in existing PAN based system for income tax facilitating data exchange and taxpayer compliance.
  • The taxpayer would need to submit periodic return to both the central GST authority and to the concerned state GST authority. ITC credit can also be verified on the basis of return filed and revenues reconciled against challan data from bank.
  • Current threshold limit under central excise duties is RS 1.50 lacs and that under service tax is RS 10 lacs. Whereas the threshold limit under state VAT is between 10 lacs to 20 lacs.
  • Constitutional amendment bill is required to be passed in both the house of parliament. The CG has full majority in lok sabha however a lot depend on how the CG will ensure safe passage of the bill in rajya sabha , where it does not have the sufficient majority.

Hope GST Bill is approved in this monsoon session of Parliament: Arun Jaitley The finance minister 

Contributed by: Team Rajput Jain & Associates, Chartered Accountants–Managing Partner, Swatantra Singh

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