Corporate and Professional Updates on 14th February 2019

Indirect Tax Updates:

• Almost 73% of Indian received ‘angel tax’ notices more than 2,500 startups and entrepreneurs While the government has indicated that it is working to resolve the issue the taxman’s efforts to tax investments by ‘angel’ or early-stage investors has already dented sentiment.
• India’s recent economic history offers enough evidence to show that tax revenues can be raised even without a rampaging tax bureaucracy or ad-hoc measures such as demonetization. India’s tax-to-GDP ratio improved significantly in the period between 2003-04 and 2007-08 simply because of higher growth and tax reforms.
• The obsession with raising taxes has often been justified by the fact that India collects less tax as a share of its national income compared to several other large economies. However, compared to other economies at a similar stage of development, India’s tax-GDP ratio appears respectable.

FAQ’s on GST:

QUES. Whether for the services received from a related person / distinct person outside India, the recipient of services would be eligible for full input tax credit?

ANS. In terms of the second proviso to section 17(4) of the CGST Act, 2017, the restriction of reversal of 50% credit would not apply to the tax paid on supplies made by one registered person to another registered person having the same PAN. The non-applicability of 50% reversal is only to the extent of inter-branch services between registered branches having the same PAN in India. Thus, tax paid on services received from a related person / distinct person located outside India would be liable to 50% reversal.

QUES. Whether the provision of section 18(6) for reversal of input tax credit availed on capital goods be applicable to banks only to the extent of the input tax credit availed?

ANS. Yes. The provisions of section 18(6) of the CGST Act, 2017 for reversal of input tax credit availed on capital goods would be applicable to banks only to the extent of the input tax credit availed by it. In case the Bank opts to avail input tax credit to the extent of 50% in terms of the second proviso to Section 17(4) of the CGST Act, 2017, reversal of credit would be in proportion to the actual credit availed by the Bank i.e. only with reference to 50% of the input tax credit availed by it on capital goods.

SEBI Updates:

• The Securities and Exchange Board of India is planning to tighten risk management practices in equity derivatives and stocks in the runup to the general elections.
• The market regulator is likely to tighten margin rules for futures and options trades and restrict introduction of strike prices in options intra-day as it looks to curb wild speculation by traders, said three people privy to the development. It is also planning to bring more stocks under its surveillance schemes, they said. Brokers said the cost of trading in derivatives could rise by at least 20%.

Other Updates:

• PNB to e-auction 4,000 properties to recover loans.
• Bank credit grows 14.5%, deposits up 9.63%.
• Volvo wants to lead the electric vehicles race in India.
• DHFL CEO resigns amid allegations of Rs 31,000 cr scam.
• Centre allows all firms to take part in strategic disinvestment of EPIL.
• Valuation of Indian equities still remains expensive, says Credit Suisse.
• Coal India’s bank interest income likely to fall after another buyback with debt exposure at Rs 56,000 cr, MFs’ infra bets come under IL&FS cloud.
• SEBI mulls strict disclosure norms for MFs.
• Venezuela turns to India for oil exports as US sanctions bite.
• Canada, US accuse India of ‘dramatic’ under-reporting of MSP for five pulses.
• NCLT grants ‘operational creditor’ status to GAIL.
• Cabinet clears higher MSP of 3,950/quintal for raw jute
• Bombay HC refuses interim relief to Reliance Power against Edelweiss.
• JSW Steel declared winning bidder Bhushan Power and Steel.
• Cyclical concerns mask Bharat Forge’s robust Q3 results
• Sun Pharma Q3 result only a brief reprieve for investors
• NCLT allows Amtek Auto’s debt resolution process to start from scratch
• Tata Power to be selective about bidding for stressed assets: CEO
• NCLT bench reserves order on plea of Essar Steel’s suspended management
• Nestle set to sell first Starbucks coffee under $7.15 billion deal
• 15 sugar mills in Maharashtra likely to face recovery action
• Prathap C Reddy family mulls selling entire stake in Apollo Munich
• Venkataramanan quits Tata Trusts; Noel joins Ratan Tata Trust
• Rupee snaps 6-day rise, settles 10 paise down at 70.80 vs USD
• Show-cause notices to Idea, BSNL for not meeting TRAI’s call drop norms in Sep Quarter.

Key Due Dates:

• Payment of ESI of January 2019 is 15th February 2019.
• Due Date of GSTR 3B for the month of January 2019 is 20th February 2019.

Quote of the Day:

“You have to perform at a consistently higher level than others. That’s the mark of a true professional. Professionalism has nothing to do with getting paid for your services.”