Direct Tax Updates:
- CBDT has tightened framework for compounding of offences almost shutting the window for money laundering, non-disclosure of foreign assets or possession of a benami asset. The latest guidelines which come into effect from June 17, clearly state offences in this category cannot normally be compounded. However, finance minister can relax restrictions on consideration of a report from CBDT.
- CBDT has issued notification no 10/2019 for further changes in rule 31A(5) and 31AA(5) for e-filing of TDS returns. The procedure is same as issued as earlier, now the tds return can be validated either through DSC or EVC. The EVC generation is same as ITR EVC.
Indirect Tax Updates:
- Goods and Services Tax Council, the federal indirect tax body, is set to take several decisions to curb tax evasion in its first meeting to be chaired by new finance minister Nirmala Sitharaman on 21 June. The government plans to increase scrutiny on businesses amid lower-than-expected GST collections after handholding them through the first two years of the tax reform. The 35th meeting of the GST Council will seek to introduce compliance requirements, initially on big businesses and eventually on all merchants to curb tax leakage.
- GST compliance will take enforcement activities under the indirect tax system to the next level. At present, the ministry of corporate affairs (MCA) is implementing a geotagging scheme for companies aimed at identifying every active company and the people behind them. Pooling the geo-tagging information available from the MCA database with the data generated by indirect tax authorities will help in verifying the credentials of different parties to a transaction. However, all measures to improve compliance will be implemented only in a gradual way, starting with the largest businesses. The slow recalibration of the tax system is meant to avoid a backlash that the tax reform had witnessed immediately after its rollout two years ago, forcing the council to defer tax return filing deadlines several times and temporarily suspend some of the safety features of the new system.
- With revenue receipts below targets, the central government, which has the Constitutional obligation to compensate states for their revenue shortfall in the first five years of GST implementation, and states that worry about loss of revenue in the subsequent years are keen to gradually increase enforcement measures. Experts said grievances that some businesses and traders, especially the smaller ones, have about GST are not about the indirect tax per se, but on account of the light the technology-driven tax sheds on sales, that makes it harder to avoid paying tax on income. No big tax rate cut is likely in the forthcoming meeting of the council.
- Fixed income investors perceive non-banking finance companies (NBFCs) as less of a problem than housing finance companies (HFCs), corporate bond data shows. The cost of borrowing for AAArated NBFCs declined by 13 basis points in May versus April in the debt market, while it increased by 19 basis points for AAA-rated HFCs, according to a report by CARE Ratings.
- NBFCs have been witnessing higher cost of borrowings compared with all other categories, including Alternative Investment Funds and HFCs, since April 2018. The yields on corporate bonds and commercial paper have been on the rise following the stress in the NBFC sector from September 2018 and defaults by IL&FS. Corporate bond yields have since moved down to 8.49% in May, from 9.8% in September. Similarly, commercial paper yields have moved lower to 7.48% in May from 7.72% in September.
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- Niti asked to follow due process for suggesting CPSE assets for monetisation
- Agrochemicals exporters widen their valuation gap vis-à-vis domestic plays
- ONGC to auction over 60 fields to private operators
- Rainfall deficiency hits 43 per cent; monsoon progress likely in the next 2-3 days: IMD
- FPIs remain net buyers in June, invest Rs 11,132 crore
- India can boost exports of 300 products to US, China amid trade war, says report
- Jaypee Infratech lenders moot fresh plan to complete housing projects
- CREDAI seeks bank funding for developers to buy land for affordable housing projects
- Round-tripping still rampant in gold exports
- Steel industry seeks safeguard duty to counter rise in imports
- Start-ups entering listed space via reverse merger
Key Due Dates:
- The Due Date of GSTR-3b For the Month Of May is 20th June 2019.
- The Due Dates for the Deposit of TDS/TCS for the Purchase of Property 30th June 2019.\
- Annual Return For Registered Tax Payers is 30th June 2019.
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