CORPORATE AND PROFESSIONAL UPDATES ON 6th December 2018

INCOME TAX Updates:

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  • The code of Direct Tax will likely be about to stable. Prime Minister Narendra Modi’s parting shot in policy making before national polls early next year the draft direct tax code is likely to be a strong message about stability and certainty in taxation rather than any structural shift.
  • In India the personal income tax is very low. Personal income is taxed in the range of 35-40% in most developed economies. Girish Vanvari, founder of advisory firm Transaction Square, said it was important to reduce tax litigation and make the corporate tax rate more competitive.
  • Corporate tax rate is coming down to 20-22%. The government has committed to lowering corporate tax rate to 25%, which is important to attract investments into India, considering that tax exemptions are being phased out, said Vanvari.

SEBI Updates:

  • The Securities and Exchange Board of India has started an inquiry into the affairs of pharma major Sun Pharmaceutical Industries on the basis of a whistle-blower complaint, said regulatory sources. The sources said the market regulator was in receipt of a 150-page letter in which the whistle-blower accused the company of committing corporate governance and tax-related lapses, besides other securities market-related violations.
  • Sun Pharma, its Managing Director Dilip Shanghvi, and nine others had settled the insider trading probe, paying Rs 1.8 million against the settlement charges in 2017. But SEBI had not disclosed details of the case, it was probably linked to the acquisition of Ranbaxy by Sun Pharma from Japanese drug maker Daiichi. The regulator are ready to settle the proposed adjudication proceedings linked to the violation of the internal code of conduct for prevention of insider trading. No enforcement action was started for the alleged defaults.
  • SEBI starts checking against Sun Pharma, to also open it again insider trading case. An allegation is raised by the whistleblower which was of serious nature. We will consider each one of them,” said a regulatory source. Sources said SEBI had also taken cognizance of another note by Australia-based brokerage Macquarie on the faulty audit process and dubious practices used while raising funds through foreign currency convertible bonds.
  • On Monday SEBI Extended the deadline for transfer of shares of listed companies in Demat from to April 1 The last date has been extended after taking into consideration representations from shareholders as the initial deadline was to end on December 5.
  • Shares in the Demat form will maintain a transparent record of shareholding at firms amid rising concerns over beneficial ownership of entities In March, SEBI’s board decided that except in case of transmission or transposition of securities, requests for effecting transfer of securities will not be processed unless the securities are held in dematerialized form with a depository.
  • These changes will come into Effect from December 5. In view of the same, the deadline has been extended and the aforesaid requirement of transfer of securities only in demat form shall now come into force from April 1, 2019,” it said in a statement.

GST Updates:

  • Related imageAnti-profiteering body says machinery supplier didn’t pass on benefits of input credit to buyer. In crucial environment for the traders who import and sell in India, the National Anti-profiteering Authority has held a supplier of imported machinery guilty of profiteering for not passing on the benefit of input tax credit due to GST, and also ordered a proper checking into other products sold by the entity. The authority directed the Director General of Anti-Profiteering to conduct a new investigation covering all products supplied.

INPUT CREDIT AVAILABILITY

  • Crown Express Dental Lab, the applicant, submitted that a number of taxes such as the Central Sales Tax, Countervailing Duty and Special Additional Duty had been subsumed in the IGST, yet it had been charged 18% IGST. The authority held that the seller should have reduced the base price to the extent of CVD which was chargeable on the amount mentioned in the quotation. This is because in the period prior to GST, no CENVAT credit was available for the CVD paid on theimport of the goods whereas in the post GST period, no CVD was charged, instead IGST was levied on the import of goods which was available as Input Tax Credit.
  • Before the implementation of GST the prices were high after that the GST force the prices to reduce the amount of CVD paid in order to neutralize the impact of Input Tax Credit is available now. “This is an important ruling for businesses in the import and sell model as the order clearly states that credit of IGST, CVD which was not availableto set off need to pass to reduce the price for the consumers.

RBI Updates:

  • The Reserve Bank of India’s monetary policy committee is about to keep policy rates hold on Wednesday, among falling crude prices, less than the expected food prices and changes in economic growth. The market by keeping rates on hold, crude oil prices have slipped below $60/bbl and retail food inflation has eased to a 13-month low of 3.31%, below the medium-term inflation target of 4% for the third straight month. On the other hand, growth has slowed to 7.1% in the September quarter and factory output measured by the index of industrial production to 4.5%, giving enough reasons for the central bank to deliver a status quo policy this time.
  • Inflation is expected to be below 3% for the November, and the next hike is expected in fiscal year 2019-20. “.” In the previous policy, MPC had lowered its inflation trajectory to 3.9-4.5% and 4.8% for the second half of the current fiscal.
  • The Reserve Bank of India nixed hopes of any special liquidity window for non-banking finance companies.
  • Fast investments and credit growth rate, which is higher than the nominal economic growth rate, are signs of strength rather than weakness that warrants bailout schemes, said deputy governor Viral Acharya.

Other Updates:

  • GDP growth for the financial year 2018-2019 in the second quarter as per the GDP data.
  • In second quarter reasonable growth of 7.1% is recorded. The H-1 2018-2019 growth of the GDP is7.6%and the H-1 GVA growth is 7.4%. The growth in second quarter is higher as compare to the first quarter.
  • The growth in manufacturing on the base of 7.1% in Q-2 2017-2018 has been 7.4% in Q-2 2018-2019. The sector of construction has grown by 7.8%. As a ratio of GDP the fixed Gross Capital Formation has increased by almost.

Key Due Dates:

  • Payment of TDS /TCS Deducted in November is 07/12/2018.
  • Submission of forms received in November to IT commissioner is 07/12/2018.
  • Return of outward supplies for November by regular & casual suppliers (turnover exceeds 1.50 Crore) is 11/12/2018.
  • Issue of TDS certificate in case of Payment /credit made in October for purchase of property u/s 194IA is 14/12/2018
  • Issue of TDS certificate for tax deducted under sec 198IB for the month of October is 14/12/2018.
  • Due Date for Payment of ESI of November is 15/12/2018.
  • E-Payment of PF for November is 15/12/2018.

Disclaimer:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Before making any decision do consult your professional /tax advisor for their misrepresentation or interpretation of act or rules author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. The author is a Chartered Accountant and the Chief Gardener & Founder Director of Rajput Jain & Associate, a leading Tax & Investment planning Advisor Service provider. His Blog can be found at http://carajput.com for any query you can write to info@carajput.com. Hope the information will assist you in your professional endeavors. For query or help contact: info@carajput.com  or call at 09811322785/4- 9555555480.

CORPORATE AND PROFESSIONAL UPDATE SEPT 17,2016

Professional Update For the Day:

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DIRECT TAX:

CBDT has extended the due date of filling of Income tax return  by tax payers whose accounts are required to be audited under the Income Tax Act from 30th September , 2016 to 17th october, 2016 vide order  F.No.225/195/2016-1TA-II dated 09/06/2016.

ITAT Delhi in the below citied case held that no penalty u/s 271(1))(c) will be levied as  The entire addition was based on the conditional surrender made by the assessee. The AO did not honour the condition of not levying penalty and went ahead and issued notice for levying penalty u/s 271(1)(c)- [AdeshTyagi, S/o Shri Karan Singh Tyagi Vs. ITO, Ward-1 (1) , Ghaziabad]

Office in Chennai doesn’t confer territorial jurisdiction to Chennai HC if assessment records available at Delhi Tecpro Systems Ltd. v. Union of India [2016] 73 taxmann.com 58 (Madras)

IT: The NOIDA has been constituted by the State Act and therefore entitled to exemption of payment of tax at source under section 194-A (1) of the Act – CIT (TDS) Vs Syndicate Bank (2016 (9) TMI 308 – Allahabad High Court).

IT: Transfer pricing adjustments – TPO directed to take into account 30 additional cost base to account free of cost material and revised the OP/TC margin of 13.65 for determining the arm s length margin as claimed by the Assessee – Pr.CIT-02 Vs Bombardier Transportation India Pvt. Ltd (2016 (9) TMI 306 – Delhi High Court)

If there is neither anything in its condition nor anything in the evidence to indicate the intention of its owners or possessors so as to connect it with an agricultural purpose the land could not be agricultural land.( Mr. Rajesh J. Thakkar Versus The Deputy Commissioner of Income Tax)

CBDT has launched the ambitious ‘e-nivaran’ facility for online redressal of taxpayers’ grievances related to refunds, ITRs and PAN among others as part of its initiative to reduce instances of harassment of the public when it comes to complaints related to the I-T Department.

INDIRECT TAX:

The doctrine of unjust enrichment is established even if the credit notes are issued after clearance of goods. –( C.C.E., Bhopal Versus M/s. Tesla Transformer Ltd.) – 2016 (9) TMI 285 – CESTAT NEW DELHI – Central Excise

ST: The Department of Revenue has specified that the religious places shall be exempted from payment of Service Tax. All religious places shall be considered to fall within the purview of clause (a) of entry 5 of Notification No. 25/2012- ST, to be exempted from payment of service tax.

DVAT: Date of filling of DVAT Return in Form-16, 17 & 48 for Q-1FY2016-17 has been extended up to 19 SEP 2016. Circular No.14, dt.09-09-2016.

DVAT has extended the due date of filling the return in form 16,17 & 48 for Q1 2016-17 upto 19-09-2016 videcircular No- 14/2016 F. No. .7(420)/VAT/Policy/2011/PF/ 172-17 dated 09-0-2016.

GST UPDATE:

GST Act of the Parliament received the assent by the president on the 8th September,2016 and has been published for general information.This Act may be called the Constitution (One Hundred and First Amendment) Act, 2016.

GST bill now a law, President Shri Pranab Mukherjee gives assent to the constitutional amendment bill. GST Council to be constituted to resolve GST rates, dual control over assessment / scrutiny & area based exemptions.

GST: Provisions relating to Formation of GST Council comes into effect from  (12 SEP 2016 – The Constitution (One Hundred and First Amendment) Act, 2016 as notified on 10.09.2016.

FAQ on Company Law:

Query:   A Private limited Company has subsidiary named ‘Y Private Limited, and both are SMC’s. Kindly confirm whether that Private Limited  Company  be required to prepare CFS?

Answer: As per section 129(3) every company is required to prepare the CFS. In AS-21, it is clearly stated that the accounting standard does not mandate an enterprise to present consolidated financial statements but, if the enterprise presents consolidated financial statements for complying with the requirements of any statute or otherwise, it should prepare and present consolidated financial statements in accordance with AS.

So in this case, that Private Limited Company will be required to prepare the CFS as per the requirement of Companies Act, 2013 and for the purpose of preparing CFS it has to follow guidelines of AS.

Query:  Can a director attend all Board meetings in a year through video conferencing mode. Will it be counted for quorum? Please advice.

Answer: Yes, as per Rule 3(2)(e) & (f) of the Companies (Meetings of Board and its Powers) Rules, 2014, any director who desire, to participate may intimate his intention of participation through electronic mode at the beginning of calendar year and such declaration shall be valid for one calendar year. And in absence of any intimation, it shall be assumed that director shall attend the meeting in person.

Further, Rule 4 of the Companies (Meetings of Board and its Powers) Rules, 2014 provides for the matters which shall not be dealt with in a meeting through video conferencing mode or other audio visual means.

RBI UPDATE

RBI asks banks to accept cash from declarants of IDS, 2016 RBI/2016-17/62 Dated September 8, 2016 DBR.No.Leg.BC. 13/09.07.005/2016-17 Dated September 8, 2016

RBI issued Income Declaration Scheme , 2016 –Acceptance of cash over the counter vide RBI/2016-17/62 dated 08/09/2016. RBI asks banks to accept cash from declarants of IDS, 2016

ICAI UPDATES:

MEF online submission date has been  extended to 20th Sept . This is the second extension. Declaration to be submitted by 30 Sept in case of manual submission of declaration. You can also sign it digitally. In case of partnership firm, DSC of all the partners required. The application is in three Parts. Now only Part A shall be filed.  B and Part  C of MEF have been made non functional thus MEF PART A for Bank Audit is to be filed by 20 sep rest to be filed after 1 October 2016.

Key Dates:

  • Issue of TDS certificate in case of payment/credit made in july for the purchase of property u/s 194IA- 14/09/2016
  • Deposit of DVAT/TDS for the month of August-15/09/2016
  • Payment of Advance Tax(Second Installment) for the A.Y. 2017-18.-15/09/2016
  • Last date of deposit of PF contribution by the employee;- 15/09/2016

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