:Corporate and Professional Updates on 9th April 2019

Direct Tax Updates:

• The disclosure requirement in the income tax return (ITR) forms have been rising in recent years as the income-tax (I-T) department has been using technology extensively to track tax evasion and process returns. But this year, the number of changes made to the ITR forms notified for the assessment year (AY) 2019-20 is probably the highest in the recent time. The changes have been made regarding disclosure of information and computation of income, inter-alia, change in method to disclose salary income, property-wise disclosure of arrears/unrealised rent, and many more for business owners. “Several changes have been made in the forms seeking additional details, which will help in automatically validating or cross-checking the income and other details that the tax authorities may have from other sources.
• ITR-1 form is meant for residents that have an income of up to Rs 50 lakh from salary, one house property and sources such as interest income etc. But this year onwards this ITR form cannot be used by an individual who is either a director of a company or has invested in unlisted equity shares.It is now mandatory for every taxpayer to file the return electronically. The option available to a taxpayer, whose income was below Rs 5 lakh during the previous year, to file the physical return has been withdrawn. For the AY 2019-20, every taxpayer will need to file the income-tax return electronically except a super senior citizen. In the new ITR-1, if you have a house, you are now required to specify if it is self-occupied, let-out or deemed to let-out. You are also required to provide details of income from other sources this year.
• The new ITR forms have changed the mechanism of reporting salary income. Up to AY 2018-19, an individual was required to report salary amount excluding all exempt and non-exempt allowance, perquisites and profit in lieu of salary. These items are reported separately in the same schedule and had no impact on the calculation of net salary income.The new ITR forms have changed this reporting mechanism, which is now in sync with the columns of Form 16 Now, an individual must mention his gross salary and then the amount of exempt allowances, perquisites and profit in lieu of salary shall be deducted or added to arrive at the taxable figure of salary income. Further, the new ITR forms seek separate reporting of all deductions that are allowed under Section 16, which include standard deduction, entertainment allowance and professional tax.
• If an individual reports capital gains from the transfer of immovable property in income-tax return, it is now mandatory for him to furnish details of the buyer including name, PAN, percentage share, amount, and so on.table In new ITR forms, besides specifying the residential status — resident, resident but not ordinarily resident, or non-resident — the assessee is now required to provide additional information with respect to his residential status, such as, the number of days stayed in India, and jurisdiction of his residence and tax identification number in case he is a non-resident. The tax department has also increased the scope of foreign assets. Besides foreign bank accounts, details of foreign depository accounts are also required.
• The assessee is also now required to furnish various details such as the name and code of the country in which custodial account is held and account opening date and peak balance during the year, etc.

Indirect Tax Updates:

• The move by the government to bring warehouses under the Goods and Services Tax (GST) net is likely to have a major impact on players in the organised sector who take warehouses on rent as part of their collateral management business. They see a huge burden especially when they deal in farm commodities. Agri commodities collateral management business has flourished the past few years as companies in this space help farmer and processors get finance from banks and non-banking institutions. The new government decision means that they have to pay now 18 percent GST on the rent they pay for the warehouses in which their collateral commodities are stored. In many cases, such companies themselves finance farmers or their group NBFCs finances them against collateral.
• These collateral management companies cannot get input credit of the GST they pay on rent because the commodities in which they deal are agri commodities, which do not attract GST. This is a big burden on them.“If agri commodities are fully exempt from GST, all products and services linked to them should also have been exempted. The entire channel either needs to be taxed or exempted.
• Smaller warehouses with annual rent income of below Rs 20 lakh are however exempted from GST. This is a major relief as, according to CARE research report, approximately 90 percent of the warehousing space controlled by unorganised sector players and are less than 10,000 square feet. But this causes another problem when their services are used by collateral management services companies.“Most of the private warehouse service providers like StarAgri create a network of warehouses for rendering storage services by leasing-in or renting warehouses from small service providers on an individual basis. This service arrangement was not liable to service tax, since, the small service providers were below the threshold limit during the service tax regime. The agriculture sector remains largely exempt from GST.
• Table Another relief is that reverse charge mechanism has been suspended. Under RCM, if service provider is not registered in GST, the service user has to pay the tax on their behalf. “Reverse charge implementation is suspended till further orders. This has given a major relief to all warehouses with income less than Rs 20 lakhs. For the income more than Rs 20 lakhs, 18 percent GST is applicable which we have to incur and for which we have no input tax credit available as agriculture produce is exempt from GST. To address this issue, many players in the warehousing sector, meanwhile, have also started focusing on innovative technology to monitor entire logistic issues to avoid demurrage and also the delay in loading and unloading to cut down their cost of warehousing and transportation.
• For commodity exchange registered warehouses, however, tax recovery from other services has become a herculean task. The government has levied 5 percent of GST on trading as against 18 percent on rented warehouses above the threshold and exemption on unprocessed agri commodities. Thus, the warehousing sector faces tax anomalies in every channel.

Other Updates:

• Govt. to discuss a strategy to boost exports to China
• Liquidity issues, drop-in crop area drag tractor sales in FY19
• Climate, conflicts set to plunge millions into a food crisis
• Tea board fixes ₹98/kg as green leaf price for April
• NTPC’s installed capacity at 55,126 MW
• MG Motor India in talks with payment gateways.
• EU drags India to WTO over import duties on ICT products.
• Sebi issues are circular on the appointment of administrators.
• No production of Tata Nano for the third month in a row, no sales in March.
• Wipro Infrastructure Engineering buys Incite Cam Centre’s Automation Business.
• RBI cuts inflation forecast to 2.9-3% for H1 FY20.
• USFDA clearance may strengthen Cipla.
• PVR files a complaint with SEBI against Ronnie Screwvala’s allegations.
• JSW Living ventures into the steel furniture business.
• IL&FS Financial Services gross NPA at 90%.
• Dispensing more cups of coffee, Shell also sells fuel.
• M&A deals in India declined 17% to $25.8 billion in Jan-Mar.
• Lenders to invite bids for Jet Airways stake sale on 6 April.
• New government to announce proposed industrial policy.
• Govt may cap export of anti-rabies vaccine.
• RBI to come out with a fresh circular on the resolution of bad loans.
• India will be a big market for H&M globally.

Key Due Dates:

• 10-04-2019 – GSTR 8 for E-Commerce operators for the m/o March 2019.
• 10-04-2019 – Filing GSTR-7 (for the assessee who is required to deduct TDS under GST) for the m/o March 2019.
• 11-04-2019 – GSTR-1 for the month of March 2019 for taxpayers with Annual Aggregate turnover More than 1.50 Crore.
• 13-04-2019 – GSTR-6 for Input Service Distributor.
• 18-04-2019 – Quarterly return for taxpayers opting for Composition Scheme(GSTR-4)
• 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 up to than 1.50 Crore.
• 14-04-2019 – Issue of TDS Certificate for tax deducted under section 194-IA/194-IB in m/o Feb’19.
• 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 the 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:

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