Corporate and Professional Updates on 23rd January 2019

Corporate and Professional Updates on 23rd January 2019

Direct Tax Updates:

  • The Department of Income Tax made a list of Individuals who made Out High-value transactions in the financial year 2017-18 but did not file income tax returns. The Department is analyzing the list carried out to identify non-filers about whom specific information was available in the database of the department.
  • The information may include statements of financial transactions, tax deduction at source, tax collection at source, foreign remittance, Export, and imports. The Non-filers Monitoring System aims to identify and keep a watch on people who enter into high-value transactions and have potential tax liabilities but have not filed their tax returns Data analysis has identified some non-filers who have made high-value transactions in the financial year 2017-18 but have still not filed an income tax return for the assessment year 2018-19. The department has enabled e-verification for taxpayers to decrease the cost of compliance by responding online.
  • The Taxpayers Can Access information relating to Their cases from the portal of compliance which is accessible through the e-filling portal of the income tax Department. A Stable Accountholder needs to submit the response on the compliance portal and obtain proof of it.
  • All the Non-Fillers are requested to file Their Income tax Return and assess their tax liability for AY2018-19 or submit an online response within 21 days. Explaining if the matter Find Satisfactory Would Be Closed online. In Case of No Return File Or no Response is received initiation of proceedings under the Income-tax Act, 1961 will be considered.

Case Laws of Income Tax:

Bombay High Court in case of  Suresh Krishna Bhagat Vs. Pr. CIT-2 Thane

Payment of 3rd installment as per the Income Declaration Scheme, 2016 (IDS) been delayed – These are strong indications that the legislature does not envisage any extension of time for payment of tax under the Scheme. No directions contrary to such legislation scheme can be granted.

Punjab and Haryana High Court in case of M/S Glaxo Smithkline Consumer Healthcare Limited vs. ACIT

Treatment of unutilized MODVAT credit, balance as at the end of the year as payment of excise duty – Deduction u/s 43B – Excise duty paid in advance in the Personal Ledger Account (PLA) – Benefit of deduction allowed

ITAT Delhi in case of Cliff Scaffoldings Pvt. Ltd. Vs. ITO,Ward-3 (2), New Delhi

Denial of exemption claimed u/s 10AA – sale made by one SEZ unit to another SEZ unit – there is a provison in another enactment (SEZ Act) which contains nonobstante clause then that would override the provision of the Income Tax Act – Benefit of exemption allowed.

ITAT Amritsar in case of M/S Ram Lal Bhasin Public School Vs. The CIT (Exemptions), Chandigarh

Exemption u/s 10(23C) – assessee is a school of “Sanatan Dharma Paracharak Sabha” – when the assessee was running a school for educational purposes and not for earning a profit, then it was entitled to the exemption u/s 10(23C)(vi)

Indirect Tax Updates:

  • The biggest tax reform since India’s independence is still in a fluid state of continuous change as businesses, especially the small ones, struggle to cope with the rigors of a technology-driven and transparent tax system that has cast its net far and wide to bring at least 3.4 million new indirect taxpayers.
  • Some of the concessions to small businesses announced earlier this month by federal indirect tax body, the GST Council, ahead of parliamentary polls due by April-May, raise fears about sacrificing some of the basic design advantages of GST over the previous regime simplicity and uniformity.

GST Registration:

On The Last Meeting of GST Council Held On 10th January 2019 decided to let states choose between two possible criteria i.e. 20Lakh & 40Lakh annual sales for businesses to get GST registration as it could not arrive at a consensus on doubling the current threshold level.

Having two state-specific turnover threshold limits can shake the foundations of GST. One can only hope that local businesses will put pressure on those states that refuse to raise the threshold, to eventually raise it to 40 lakh and bring it at par with the other states.

Return of the CESS:

The State is working towards the process of taking a call on the threshold that suits their local economy Kerala, which is recovering from the worst floods in a century that submerged large parts of the state last year, will opt to retain a 20 lakh annual sales threshold for GST registration, while Delhi, Jammu and Kashmir, and Assam have opted for 40 lakh Even in most advanced countries, it took two-three years for GST to stabilize. India is far more diverse.

When there are different legal provisions in different states, uniformity takes a hit which is a step backward This could also encourage some units to move to other states for staying out of tax net, the kind of distortions India tried to address with the tax reform.


Reform Goals Achieved:

GST has helped in adding 3.4 million new indirect taxpayers, according to the Economic Survey of FY18, and has helped in formalizing the economy. It has also improved transparency in the tax system and reduced the tax incidence on a host of products and services.

This, despite the fact that the administration is not on a tax enforcement drive. The number of items in the highest slab of 28% has also been brought down. The Council is now working on using data from radio frequency identification tags attached to vehicles to verify whether e-way bills or electronic permits issued for goods shipment are misused.

The idea is to collect data passively to check tax evasion and boost revenue receipts. GST could see further changes with the opposition Congress party making it an election issue, arguing a revamp is needed.

RBI Updates:

  • The central bank is of the opinion that the OIS market needs to be developed in line with the developed countries as it provides an interest rate hedging tool to overseas investors. If FPIs participate in large numbers, liquidity would increase.
  • The Investors on the Us basis, who need to be compliant with stringent US Securities and Exchange Commission norms, look for operational ease whenever they come to any emerging market. The RBI on Monday met about 40 FPIs for the first time in about five years to gauge overseas investment interest in domestic fixed-income and debt securities.

Key Due dates:

  • Challan-Cum Statement in respect of TDS under Section 194IB for the month of December 2018 is 30th January 2019.
  • Challan-cum statement in respect of TDS under section 194IA for the month of December 2018 is 30th January 2019.
  • TDS return for Purchase of Property For the month of December 2018 is 30th January 2019.

Quote of the Day:

The purpose of a profession is to fulfill the personal wishes of a prospect.

More updates;New TDS deduction No cash transactions exceeding 1 Crore -Section 194N

More updates:Deduction u/s 80CCD of Income Tax Act, 196

Rajput Jain & Associates

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