corporate and Professional Updates on 12th March 2019

Direct Tax Updates:

• CBDT has started paving the way for offshore fund managers to relocate to India for managing their offshore funds without having to face any adverse tax consequences. This is being done for the public markets space, mainly foreign portfolio investors structures.

Indirect Tax Updates:

• In first-of-its-kind meeting of a federal forum in the midst of the code of conduct of general elections, the Goods and Services Tax (GST) Council is scheduled to meet on March 19 to finalise guidelines to support the changed tax rate structure for under construction houses. This would be the only substantive item that will be taken up, officials in the know said. The meeting will happen via a video conference.
• The pending decision to introduce parity in GST rates on government and private lottery is unlikely to feature in the meeting. Sources said the meeting of group of ministers (GoM) mandated to deliberate on the issue of lottery was cancelled at the last moment. It is learnt that the decision to cancel the GoM meeting was taken to prevent any possible violation of the model code of conduct, which has set in on Sunday following the announcement of general elections to the Lok Sabha by the Election Commission of India.
• The law review committee and the fitment committee under the GST Council deliberated on setting up the guidelines for taxpayers after the rates on under construction houses were slashed in the last Council meeting on February 24. The GST rate for affordable houses was reduced to 1 per cent, while that for all other under construction houses was reduced to 5 per cent.
• The need for detailed guidelines or rules was borne from the fact that the rate reduction made builders ineligible to avail input-tax credit (ITC) in the value chain, which would bring back informal cash channels to the real estate business. The committees are said to have gone ahead with the mandatory requirement for builders to procure 80 per cent of their inputs from registered dealers in the formal sector. The new rates and rules come into force on April 1.  In addition, the rules would specify the extent to which the opening input-tax credit on April 1 could be used by builders. It is likely that the Council would take a decision to utilise credit to the extent of the completion of the housing project.
• Experts said the projects that are nearing completion would benefit the most from the rules, which are learnt to have been submitted to the GST Council. It is yet not known as to which authority would certify the extent of completion, but experts said it would be subject to audit nonetheless. The guidelines would also have the methodology to deal with properties which have a mix of residential and commercial spaces.
• CBIC has said that the TCS amount would be excluded from the value of goods for computing GST liability. Under the Income Tax Act, the TCS is levied at one per cent on purchase of motor vehicles above Rs 10 lakh, jewellery exceeding Rs 5 lakh and bullion over Rs 2 lakh.
• Indian businesses that paid most of their GST liability using input tax credit. Tax officials have sent emails seeking information from businesses that paid over 95% of their dues using input tax credit to ascertain the key factors responsible for subdued GST collections.

FAQ’s on GST:

Ques. Is a “Bill of Supply” to be issued by a bank for exempt services like interest on loans and advances, inter-se sale or purchase of foreign currency amongst banks?

ANS. As per clause (c) of sub-section (3) of section 31 of the CGST Act, 2017 read with Rule 49 of the CGST Rules, 2017, there is a requirement for issuance of bill of supply for supply of exempt services by Banks. It may be noted, however, that there is no need to issue a separate bill of supply in case any invoice or document has already been issued in accordance with the provisions of any other law. Further, in view of the provisions contained in sub-rule (5) of rule 54 of the CGST Rules, 2017, banks may issue any other document in lieu of bill of supply.

Ques. Where a Bank takes a separate registration for a separate business vertical, say for Bullion business, whether the requirement for reversal of 50 percent will also apply to bullion purchased by the Bank?

ANS. In terms of Section 2(94) read with Section 25(4)&(5) of the CGST Act, 2017, a person required to obtain more than one registration within a State or more than one State shall be treated as a distinct person for each such registration. Section 17(4) of the CGST Act, 2017 is applicable qua each registration and not for the Bank as a whole, provided each of the business verticals is separately registered. Therefore, a bank engaged in trading in bullion may not opt for 50 percent reversal in respect of its purchases of bullion, where it is separately registered as a business vertical.

Other Updates:

• PNB awaits SBI resolution plan on Jet Airways.
• NSE launches weekly options on Nifty IT index.
• Venezuelans scramble for food, water as oil exports hit.
• Crisis-hit Jet Airways defaults on repayment of ECBs.
• Former Essar directors oppose Arcelor takeover.
• TVS Motor announces 2nd interim dividend of 140%.
• Siemens’ Finance arm buys 46% Stake in Greenko’s wind unit.
• Oil, Gas Policy: Govt not to seek share of profits in less explored areas.
• Moody’s upgrades rating for Central Bank, IOB over capital infusion.
• IRDAI seeks proposal from LIC on stake reduction in the IDBI Bank.
• GST Council to meet on March 19 to finalise real estate tax structure.
• RBI inching towards becoming tenth largest holder of gold worldwide.
• Godfrey Phillips denies charges of FDI norms violation.
• Dr Reddy’s wants UK firm to pay $70-million compensation.
• MEP Infra secures over ₹1,400 Cr for 3 ‘Hybrid Annuity’ Road Projects.
• Auto woes drive dip in German industrial output.
• Prices of BLF fall in most tea producing states in February.
• NHPC eyes 46% higher capex next fiscal.
• National Housing Bank’s norms will not address credit risk of HFCs.
• Govt bans unregulated deposits offered by builders, jewelers.
• Jet Airways denies report of ₹2,050 Crore loan from PNB.
• RBI warned of demonetisation impact on Indian economy, no effect on black money.
• China pushes against US demands on trade deal enforcement, yuan.
• Encouraging neighbours to buy electricity from India: CERC eases Power trading norms.
• Jaypee homebuyers will get Flats in 3 years, assures NBCC.
• Steel-making units for SME sector become imperative.
• HSBC Daisy moves Supreme Court in Anil Ambani, Reliance Infratel’s Rs 230 Crore default case.
• Sensex posts biggest gains in 6 Months, reclaims 37K mark in Pre-poll Rally.
• FCI sells almost entire pulses stock of 2.98 lakh tonne.
• Global economy hits weakest spell since financial crisis a decade ago.
• Rupee gains 25 Paise against Dollar on Positive cues.

Key Due Dates:

• 10th March 2019- Monthly GST-TDS/TCS payment in form GSTR-7 for the month of February 2019 under GST.
• 11th March 2019- GST Filing of returns by registered person with aggregate turnover more than 1.50 crores (GSTR-1) for February 2019.
• 15th March 2019- Due date for forth and last installment/ entire amount of advance tax for Assessee having presumptive basis income,
• 20th March 2019 – GST monthly return for the month of February 2019 (GSTR-3B)
• 15th March 2019- Due date for PF and ESIC payment.
• 25th March 2019- Due date for filing monthly return of PF.
• 30th March 2019- Challan cum statement for TDS u/s 194 IA for immovable property and 194 IB for rent payment for February 2019.
• 31st March 2019 – PT payment for the month of February 2019.
• 31st March 2019 – Due date for filing of GSTR 3B and 1 from July 2017 to September 2018 without late fees.
• 31st March 2019 – Due date for filing of ITC 4 under GST for claiming Input tax credit on goods sent for job works for the period July 2017 to December 2018.
• 31st March 2019 – Due date for Annual return under PT from April to March 2019.
• 31st March 2019 – Last date for linking Aadhar with PAN.
• Quote of the Day:
• “Professionalism: It’s NOT the job you do it’s HOW you DO the job.”