Corporate and Professional Updates on 28th January 2019

Direct Tax Updates:

• CBDT Chairman said that the Govt. will exceed the Direct Tax Target of Rs 11.5 Lakh Crore in the financial year 2018-19. This will either help the Govt. in restricting FISCAL DEFICIT to 3.3% of the Gross Domestic Product as planned or assist in reducing fiscal slippage.

Indirect Tax Updates:

• Concerned over a decline in GST revenues, Tax Officials are likely to examine the High Usage of Input Tax Credit to set off tax liability by businesses. The issue of high ITC was flagged at the meeting of the Group of Ministers (GoM) which was set up by the GST Council to look into the reasons for revenue shortfall being faced by a large number of states.

RBI Updates:

• The Reserve Bank of India is Building a plan to Release data that would present the number of corporate defaulting on bank loans have down the central bank’s stern presented on February 12 previous year. The regulator is understood to have sounded out the government on the proposed move that could counter arguments of industry lobbies and defend the directive at a time it has been challenged in the court of law.
• The Reserve Bank of India issued a policy paper on retail payment systems that proposes to ease norms for the entry of new players in a bid to boost competition and innovation.
• The central bank Reserve bank of India is have 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.
• RBI Governor Shaktikanta Das will meet Top Global Funds in Singapore and Hong Kong next month to sell India’s Growth Story and shore up Foreign Fund Inflows.
• RBI is planning to release NPA data that would demonstrate that the number of corporates defaulting on bank loans have dipped following the RBI’s Stern Directive on February 12 last year that had rattled large, influential borrowers and irked many within the Govt.

Other Updates:

• In a bid to prevent big economic offenders like Vijay Mallya and Nirav Modi from fleeing the country, the Govt. empowers PSU banks to request Look-Out Circulars (LOCs) against Wilful Defaulters and Fraudsters. The Home Ministry also authorises the Serious Fraud Investigation Office (SFIO), a Statutory Corporate Fraud Investigation Agency, to request LOCs if it feels the suspect may escape from India.
• Supreme Court issues contempt notice to RBI for denying information under RTI on Loan Defaulters and details of action taken against banks in connection with fraud.
• Zee claims to have reached understanding with lenders, MFs.
• Essel group denies link with Nityank lnfra power.
• enables PSUs to seek LOCs against defaulters.
• Efforts on to double exports from $321 as per prabhu.
• Piyush Goyal to meet heads of PSU banks on Monday.
• Debt funds have over Rs 8,000 crore invested in Zee group firms.
• Zee denies any link with Nityank Infra amid money laundering allegations.
• Jio may join race to pick stake in Subhash Chandra’s Zee Entertainment.
• Tata Capital’s arm to raise up to Rs 3,000 crore through debentures.
• TRAI hopeful of 90% customer in new tariff regime by Feb 1 deadline: Chief.
• Coal India’s supply to power sector up 8% in Apr-Dec 2018.
• Cabinet likely to approve agri-package for farmers on Monday.
• Centre must allocate more funds to build roads under the EPC model.
• Tax officials may examine high usage of ITC to set off GST liability.
• European Union reviewing concessions from Siemens and Alstom on rail deal.
• Gold ETFs register 570 crore outflow in 2018.
• Aurobindo recalls nearly 5 lakh bottles of blood pressure lowering drug in US.
• Donald Trump’s China tariffs likely to be investigated by the WTO.
• PM Modi’s record debt sales before polls to pressure Indian bonds.
• ‘India could be fastest growing among Ems.
• NCLT allows Guild Builders to top up shares of Omaxe.
• Cotton output may fall to 335 lakh bales for 2018-19.
• Vodafone Idea rights issue by February-end; smooth sailing seen.

FAQ’s on Financial Sector:

QUES. What is the location of the supplier in case of banking and other financial services where multiple locations are involved in providing the services to a customer?

ANS.  Banking services emanate from the bank account opened by a customer with the branch of a bank or through a contractual relationship between the branch of a bank and the customer. The branch holding the customer’s account is referred to as the ‘Account Branch’ or the ‘Home Branch’. An account would include all types of accounts – viz. interest bearing, non- interest bearing, loan account, deposit account, etc. In the present day of “anywhere banking”, the customer avails banking services through mobile/ internet banking or by visiting any branch of the bank. At times the services are provided through Page 19 of 32 branches / locations other than the ‘Account Branch’ or the ‘Home Branch’. It is clarified that the services provided by the other branches are actually services provided to the ‘Home branch’ and are ultimately billed to the home branch. Thus, the location of supplier in such cases is the Home Branch/Account Branch.

QUES.  Would imposition of a fine or penalty for violation of a provision of law be a consideration for the activity of breaking the law, making such activity as service?

ANS.   No Fines and penalties are imposed for breaking the law by a person. They are not in the nature of a consideration for an activity and hence, would not constitute a supply of service.

Key Due Dates:

• TDS return for Purchase of Property For the month of December 2018 is 30thJanuary 2019.
• Due Date of GSTR-1 for Quarterly Return Filler of taxable supplies is 31st January 2019.

Quote of the Day:

“Treat your clients with high professionalism and they will no more negotiate with you”