PROFESSIONAL UPDATES ON 30th November 2018

Direct Tax:-

• CBDT has issued a  clarification regarding taxability of the compensation received by the land owner for the land acquired under the right to fair compensation and transpereancy in land acquisition , rehabilitation and resettlement act, 2013 vide Circular No. 36/2016 dated 25/10/2016.Compulsory acquisition of non-agricultural land is also tax-free under new Land Acquisition Act.
• CBDT has issued prohibition of Banami Property Transaction Rules,2016 vide Notification No. 99/2016 dated 25/10/2016.They shall come into force on the 1st day of November, 2016. (Click here to view)
• Computerized machines not eligible for depreciation@ 60%, [T.C.A.No.624 of 2016, Decided on 02.09.2016].
• Sale consideration received by the assessee is entitled to benefit under Section 54 of income tax act 1961, even though the transaction for purchase of new property was not completed and possession was also not handed over to the assessee within 2 years. ( CIT Vs Mrs. Shakuntala Devi (Karnataka High Court)).
• 10B relief allowable even if assessee had substantial unabsorbed losses for set-off against EOU; SLP dismissed Commissioner of Income-tax v. BEHR India Ltd. [2016] 74 taxmann.com 171 (SC)
• No penalty due to delay in filing TDS return as it was first year of introduction of e-TDS return Nav Maharashtra Vidyalaya v. Additional Commissioner of Income-tax (TDS), Range, Pune [2016] 74 taxmann.com 240 (Pune – Trib.)
• HC allows retrenchment compensation paid to employees of transferee-co. under transfer agreement Wallace Flour Mills Co. Ltd. v. Commissioner of Income-tax, Central circle-I [2016] 74 taxmann.com 174 (Bombay)
• Pune ITAT deletes penalty levied u/s 272A(2)(k) for belated filing of TDS returns/statements for AY 2011-12, grants immunity u/s 273B as ‘reasonable cause’ established. [TS-571-ITAT-2016(PUN)]

Indirect Tax:-

• Mumbai CESTAT restores Custom House Agent’s license, states that even though clearance of imported consignments was violative of declaratory provisions of Customs Act, there is no evidence on record to show that such agent was aware of the intent / modus adopted by client / customer to evade customs duty. [TS-426-CESTAT-2016-CUST]
• Refund claim – claim filed after about 10 years from the relevant date – unutilized Modvat credit in Modvat account which could not be used for payment of duty as the final product has become exempted – claim of refund rejected – Tri – Central Excise. M/s M.P. State Co-operative Oilseed Grower’s Federation Limited Versus CCE, Bhopal – 2016 (9) TMI 840 – CESTAT NEW DELHI

MCA Update

• MCA extends last dates for filing of Annual Filing Forms without payment of additional fee of filing of e-Forms AOC-4, AOC-4 XBRL, AOC – 4 CFS and MGT-7 under the Companies Act, 2013 upto 29th November, 2016.
• NCLT allows compounding of offence for delay in appointment of women director
  Jalpower Corporation Ltd. v.Registrar of Companies [2016] 74 taxmann.com 201 (NCLT – Hyd.)

GST Update

• Under GST value and taxable value have to be given in GST returns as they may be different. Taxable value is to be given even if there is no consideration.
• GST paid on reverse charge will also be eligible for Input tax credit if goods or services are used or intended to be used for business.
• Under GST Co, LLP etc to use DSC to sign application for enrolment of exisiting assessees in GST REG-20. others with valid aadhar can use e-signature also.

GST UPDATE :

Returns Process and matching of Input Tax Credit

• What is the purpose of returns?
• a)  Mode for transfer of information to tax administration;
• b)  Compliance verification program of tax administration;
• c)  Finalization of the tax liabilities of the taxpayer within stipulated period of limitation; to declare tax liability for a given period;
• d)  Providing necessary inputs for taking policy decision;
• e)  Management of audit and anti-evasion programs of tax administration.

• Who needs to file Return in GST regime?
• Every registered taxable person – who crosses the threshold limit for payment of taxes. A supplier needs to be registered when the aggregate turnover crosses Rs. nine lacs but he become taxable person ONLY when he crosses Rs. ten lacs. So he will be required to file returns when he crosses the threshold limit of Rs. ten lacs. There are some other class of persons who need to be registered and therefore will have to file returns like interstate suppliers, TDS deductors, e-commerce operators, suppliers supplying goods through e-commerce operators etc (reference Schedule-III and Question 6 of the Registration Chapter).

• What type of outward supply details are to be filed in the return?
• A normal registered taxpayer has to file the outward supply details in GSTR-1 in relation to various types of supplies made in a month, namely outward supplies to registered persons, outward supplies to unregistered persons (consumers), details of Credit/Debit Notes, zero rated, exempted and non-GST supplies, exports, and advances received in relation to future supply.

• Is the scanned copy of invoices to be uploaded along with GSTR-1?
• No, scanned copy of invoices is to be uploaded. Only certain prescribed fields of information from invoices need to be uploaded.
• Whether all invoices will have to be uploaded?
• No. It depends on whether B2B or B2C plus whether Intra-state or Inter-state supplies.
• For B2B supplies, all invoices, whether Intra-state or Inter- state supplies, will have to be uploaded. Why So? Because ITC will be taken by the recipients, invoice matching is required to be done.
• In B2C supplies, uploading in general may not be required as the buyer will not be taking ITC. However still in order to implement the destination based principle, invoices of value more than Rs.2.5 lacs in inter-state B2B supplies will have to be uploaded. For intra-state invoices below Rs. 2.5 lacs and all intra-state invoices, state wise summary will be sufficient.

SEBI Update

• SEBI has issued circular on detailed requirements and guidelines for disclosure of financial information in offer document/ placement memorandum for InvITs.
• SEBI has issued a circular freezing of promoter group demat accounts for non compliance with certain provisions of SEBI.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

• Security Exchange Board of India May introduce a new law to allow Mutual Funds to segregate distressed debt Securities in their portfolios. The proposal for the formation of law is recently approved by the mutual funds advisory Committee, appointed by security board exchange of India. The move comes in the wake of defaults by IL&FS that led to erosion in NAVs of various debt schemes. As the value of few schemes fall 3-6% on a single day. This is about 50-70% of the annual return of some bond schemes.
• In previous 2 years, there are some Default in companies like Amtek Auto and JSPL, which leads to massive redemption in some mutual funds the presence of select NBFC papers in various debt portfolios had led to several liquid schemes facing redemption pressure.

RBI Update

• RBI permits Startup Enterprises to access loans under ECB framework – P. (DIR Series) Circular No.13, dt.27.10.2016.
• RBI has issued a circular allowing 100% FDI through the automatic route to NBFC Cos other than banks or insurance companies.
• RBI to support financing for start-ups, issued rules permitting these to raise external commercial borrowings (ECB).

 

 

 

 

 

 

 

 

 

• RBI should provide funds to non-banks through a dedicated window, buy more government bonds from the market to infuse money and even cut the cash reserve ratio. Before we move forward we should consider the problem already arising.
• On the other hand the currency with the public is increased by 23% in only one year. As on 9 November, credit had increase by 14.9% in a year ago, while the Banks can only mop up maximum upto 9.1% more deposit than they did a year ago.
• The option to borrow from its different repo tenders, RBI has been infusing more than o1 trillion daily through its repo operations, a sign of growing liquidity deficit liquidity. . The blow to the sterling image of non-banking financial companies (NBFCs) has made them unworthy of credit in the eyes of banks.
• Urjit Patel The governor of Reserve Bank of India on Tuesday mainly focused on the need to protect the autonomy of the central bank before a parliamentary panel, but stayed away from any direct criticism of the government. Patel assured the members he would provide details on the specifics of certain non-performing assets held by various banks. Patel’s deposition came in the wake of public disagreements between RBI and the finance ministry on easing liquidity supply in the credit markets. Patel asserted in his responses that RBI’s autonomy was essential to both the interests of depositors and the credibility of the Indian economy before the international rating agencies, according to the people aware of the proceedings.
• Patel recommended that the autonomy of RBI is essential for both the depositors and the and the credibility of the Indian economy before the international rating agencies. As per the people aware of the proceedings. He was responding to a series of questions raised on the recent RBI-finance ministry.
• Some of the BJP Members such as Nishikant Dubey and Shivkumar C Udasi have enquired if the India being overenthusiastic in Basel-III norms compliance when many signatories are not following it in letter and spirit. In Answer RBI governor said India’s compliance was a matter of credibility besides its commitment to a G20 decision.Dubey, it’s learnt, quoted from Adair Turner’s prescription in his book “Between Debt and the Devil” to make the point that the RBI must help the government in difficult times. He claimed that a committee appointed by the UPA regime had recommended a more central role for the finance ministry in relation to RBI and markets regulator the Securities and Exchange Board of India (Sebi) to resolve contentious issues.
• At the time of Demonetization in the Economy, the governor apparently said it was only transient as the volume of credit outflow had gone up by 15.5%. The digital economy had significant growth, he said, adding that inflation had come down to around 4%. Patel projected a robust outlook for the national economy and opined that the fall in international crude oil prices will give the Indian economy the much-need boost.
• It is decided by the RBI if it needs to call the RBI governor again after examining his written response which he is expected to submit over the next couple of weeks.
• It is the responsibility of government and the nation to respect the functional autonomy of RBI as happened in the board meeting of RBI its  autonomy came up when RBI governor Urjit Patel testified before Parliament’s standing committee on finance. It is important for all stakeholders to view and appreciate institutional autonomy in the right spirit.

GST  UPDATES:

• The total collection from goods and services (GST) was projected to be Min. Rs. 12 trillion in this current financial year. On the other hand, in each month it is expected to collect Rs. 1 trillion by GST averagely. The GST in two months i.e.(April and October) has hit target. As average monthly target stood at Rs. 970 billion in the first seven months of FY19. But the average monthly revenues will have to rise at least 14 per cent in the next five months than what was achieved in the first five months to hit the target.
• Any fall in collections on CGST will not burden the Centre alone as 42 per cent of it goes to the states under the devolution formula. Any fall in collections on CGST will not burden the Centre alone as 42 per cent of it goes to the states under the devolution formula.
• A notice to finance department, the commerce ministry and the Goods and Services council is issued by the Punjab and Haryana Government High Court for restricting the benefits of advance authorisation licence for exporters under the GST regime. The advance authorisation licence is issued to for allowing the duty-free import of inputs.
• The CBIT and customs and the ministry of commerce had introduced a clause of “pre-import” for exempting imports done on advance authorisation licenses from integrated GST.

Other Updates:

• The government is a data bank for all medicine brands to prevent pharmaceutical companies from using the same or similar looking and sounding brand names for drugs, especially those used to treat different conditions, senior officials close to the development said.
• The brand ‘Medzole’ has been used to market at least four different kinds of medications, including an antifungal, an antibiotic and a medication for stomach acid problems. “This is dangerous, because the patient might accidentally be taking a medicine that they are not supposed to be consuming and which could cause unwanted side effects or health problems for them,” the person told ET on condition of anonymity. It was also said that medicines in different condition are sold with the same or similar brand names without the government’s knowledge.

Other Update :

• Central government hereby appoints the 1st day of November, 2016 as the date on which provisions of Benami transaction (Prohibition) Amendment Act, 2016 shall come into force

Key Dates:

• Benami Transaction Amendment Act would be effective from Nov. 1, 2016
  NOTIFICATION NO. SO 3289(E) [NO.98/2016 (F.NO.149/144/2015-TPL (PART-II)], DATED 25-10-2016.
• MCA has revised Form AOC-4 with effect from 27th October 2016.

We wish you and your family a very happy and prosperous Dhanteras. May lord bless you with happiness and peace of mind.

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