Corporate and Professional Updates on 20th April 2019

Direct Tax Updates:

• CBDT has directed the Income-Tax Department to initiate penalty proceedings by June 30 against non-filers and ‘drop filers’ of tax returns. According to the non-filer monitoring system of the I-T department, data for 20.4 million non-filers has been obtained between 2013 and 2017, of which 2.5 million are those who are inconsistent — popularly known as ‘dropped filers’.
• CBDT Committee on ‘Profit Attribution to Permanent Establishment (PE) in India’ said MNCs that are incurring global losses or a global profit margin of less than 2 per cent and have operations in India will be deemed to have made a profit of 2 per cent of Indian revenue or turnover and will be taxed accordingly.
• The tax department has initiated action based on the NMS database, which has identified such non-filers and dropped filers
• The Central Board of Direct Taxes (CBDT) has directed the Income-Tax Department to initiate penalty proceedings by June 30 against non-filers and ‘drop filers’ of tax returns. According to the non-filer monitoring system (NMS) of the I-T department, data for 20.4 million non-filers has been obtained between 2013 and 2017, of which 2.5 million are those who are inconsistent — popularly known as ‘dropped filers’.
• “We are issuing notices in all the non-filer/dropped filer cases across the country, and proceedings shall be initiated accordingly in the relevant cases,” said an assessing officer. Typically, the penalty for non-filing is pursued under Section 271F of the Income Tax Act, and that for late filing under Section 234. If an assessee files returns after the due date of August 31 but before December 31, it will attract a penalty of Rs 5,000. For those who file returns after December 31, the penalty rises to Rs 10,000. However, there is an exemption for small taxpayers — if the total income does not exceed Rs 5 lakh per annum, the maximum penalty will be Rs 1,000.
• The tax department has initiated action based on the NMS database, which has identified such non-filers and dropped filers. The said data has been shared with assessing officers. This information may be acted upon as efficiently as possible to widen the tax base, said the officer cited above. The NMS data shows a sharp increase in non-filers since 2013. In 2014, the number of non-filers was 1.22 million, which surged to 6.75 million in 2015. The number of dropped filers in FY18 stood at 2.52 million, down from 2.83 million in FY17.

Indirect Tax Updates:

• GST 20.4.2019 is Last date to file GSTR-3B of March 2019 & claim pending ITC of 2017-18, not claimed till now but shown by Suppliers in their GSTR-1.

RBI Updates:

• The Reserve Bank of India (RBI) on Thursday released a draft ‘Enabling Framework for Regulatory Sandbox’ in order to support the country’s rapidly growing fintech space. The sandbox will begin the testing process with 10-12 selected entities focusing on financial inclusion, payments and lending, digital KYC, etc. The cohorts may run for varying time periods, but should ordinarily be completed within six months, said the RBI.
• A regulatory sandbox usually refers to live testing of new products or services in a controlled/test regulatory environment for which regulators may permit certain regulatory relaxations for the limited purpose of the testing. The regulatory sandbox would be within a well-defined space and duration where the RBI will provide the requisite regulatory guidance, so as to increase efficiency, manage risks, and create new opportunities for consumers.
• The draft guidelines highlight the clear principles and role of the proposed regulatory sandbox, its pros and cons, the reasons for setting up the regulatory sandbox and expectations of the RBI from the sandbox. The central bank has invited comments on the draft guidelines from stakeholders by May 8.

Key Due Dates:

• 20-04-2019 – GSTR-3B for the m/o March 2019.
• 30-04-2019 – GSTR-1 for the quarter ending March 2019 for taxpayers with Annual Aggregate turnover upto than 1.50 Crore.
• 30-04-2019 – Deposit of TDS/TCS for m/o March 2019.
• 30-04-2019 – Furnishing challan-cum-statement in respect of tax deducted u/s 194-IA/194IB in month of March’19
• 30-04-2019 – Due date for uploading declarations received from recipients in Form. 15G/15H during the quarter ending March, 2019.

Quote of the Day:

Your personal life, your professional life, and your creative life are all intertwined. I went through a few very difficult years where I felt like a failure. But it was actually really important for me to go through that. Struggle, for me, is the most inspirational thing in the world at the end of the day – as long as you treat it that way.