Corporate and Professional Updates on 19th January 2019

Direct Tax Updates:

• The Central Board of Direct Taxes may soon issue circular directing field officials not to press for payment until the case has been decided at the first stage of appeal. In case notice have been Issued no action will be taken, allowing investors to approach Central Board Of direct Tax and obtain relief under new simplified scheme Issued by CBDT.
• A New Circular may be issued by DIPP notifying a new scheme. Tax Directors would be directed to Give Relief to startups and angel investors in line with the new scheme for all past cases where notices have been issued.
• The assessment was carried out in with 117 companies in the year 16-17 and tax demand was raised only from 19 companies. A new scheme is notified by DIPP for startups and their investors to shield them from the angel tax.

Budget Updates:

• The finance ministry’s review meeting with the chief executives of public sector banks ahead of the Interim Budget 2019-20 will focus on ways to reduce non-performing assets and boost their recovery, especially by auctioning borrowers’ properties.
• “The position of NPAs and recovery made in NPA and written-off accounts” are the topmost agenda items of the meeting.
• The ministry is set to take up the issue of “transparent auction of property” of borrowers whose loans have become NPA. A ministry official said banks are going slow in auctioning the properties under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act.
• The ministry will push banks to send more applications to debts recovery tribunals to ease recovery of loans. Last year, the government decided to double the pecuniary limit to Rs 20 lakh for banks to file applications with a DRT. Six new DRTs have also been established in a bid to expedite recovery. The government will also discuss institutional improvements, including robust board governance.
• The government asked PSBs to follow a reforms agenda, known as EASE and one of the tasks included improving governance in banks. In its review meeting, the ministry may discuss the progress made by PSBs on board-led strategic vision for banks and evaluation of performance of board directors.

FAQ’s On GST:

QUES. Stock Brokers deal with clients who are not residents of India like Foreign Portfolio Investors, Non Resident Indians, Persons of Indian Origin, etc. Will brokerage earned from such clients who are not resident in India qualify as “export of service” under section 2(6) of the IGST Act, 2017?

ANS.  The stock broker being an intermediary, this situation shall be covered under the provisions of section 13(8)(b) of the IGST Act, 2017 which provides that the place of supply shall be the location of the supplier of services. Thus such a supply will be treated as an intra-State supply and would be subject to Central tax and State tax / Union territory tax, as the case may be.

QUES.  In the course of stock broking, funds are received from the clients as margin money for trade. Would the same be treated as consideration?

ANS. In the context of stock broking, funds/ securities are provided by the clients to the stock brokers in advance of the potential orders/ trades that would lead to margin/ settlement obligations. All such advances will fall in the category of deposit under the proviso to section 2(31) of the CGST Act, 2017 and thus will not be considered as payment made for such supply unless the stock broker applies such deposit as consideration for the said supply in his books of accounts.

Key Due Dates:

• GSTR-3B for the m/o December 2018 is 20-01-2019.
• TDS Return By all the Deducter for December Quater is 30th January 2019.

Other Updates:

• Microsoft to include India in Venture Fund.
• Mukesh Ambani in Top Global Thinkers list of Foreign Policy.
• Infosys gets Mandate for next-gen ITR filing system.
• Ashok Leyland set to ply 50 Electric Buses for Ahmedabad BRTS by May.
• Skoda India Profit after Tax plunges 66% in FY18, hit by Higher Expenses and Lower Financial Support from the Parent Entity.
• India to bar Private Refiners from tapping Iran Oil Quota.
• Patanjali only suitor for Ruchi Soya as Adani opts out.
• Bond slide in India reflects fiscal jitters about Farm Stimulus.
• Maha Govt keen on buying Air India building in Mumbai.
• Listed realty developers saddled with unsold properties worth Rs 1 trillion.
• Crude steel output falls 1.4% to 8.936 mt in Dec.
• Storage norms in e-commerce policy: Govt asks e-retailers to store payments data within India.
• Only 12-13% of workforce under pension covers: Hemant G Contractor, As per PFRDA chairman.