To handle the menace of fake firms and circular trading entities, GST officials have cancelled 1,63,042 registrations in the month of October and November this year due to non-filing of GSTR-3B returns for more than six months
The Government has canceled the Goods and Service Tax (GST) registration of 163,000 business entities who have not filed monthly tax returns (GSTR-3B) for the last six months or more.
Furthermore, the department would persuade 25,000 taxpayers, who have not filed returns for October that was due by November 24, to comply with tax return deadlines.
“All these business entities, who had not filed their GSTR-3B returns for more than six months, were first issued the cancellation notices and then their registrations were cancelled as per standard operating procedure,” one of the officials said.
The Tax officers have been directed to follow up personally with these defaulting taxpayers so that their GSTR-3B returns due for the month are filed by November 30.
The push for better compliance comes on the heels of the tax department’s nationwide drive against fake invoice scams. It is suspected that fraudsters often register firms under GST but remain mostly dormant on compliance while using the status to claim invalid input tax credit (ITC).
As per the sources, in the Ahmedabad zone 11,048 GST registrations have been cancelled. In the Chennai zone, 19,586 suo motu cancellations have been done so far in respect of GST taxpayers who have failed to file returns for more than six months.
The officials said that the tax authority is also scanning newly registered entities that have not provided correct details at the time of registration.
Out of 720 deemed registrations granted between August 21 and November 16 this year, where Aadhaar authentication was not done, 55 deemed registrations have been identified for the discrepancy and the process of cancellation was initiated in these cases.
The government has cancelled Goods and Services Tax (GST) registration of over 163,000 business entities due to non-filing of tax returns for more than six months to curb the menace of fly-by-night operators who create bogus firms and fraudulently avail input tax credit (ITC) worth thousands of crores.
The Government has canceled the Goods and Service Tax (GST) registration of 163,000 business entities who have not filed monthly tax returns (GSTR-3B) for the last six months or more.
Furthermore, the department would persuade 25,000 taxpayers, who have not filed returns for October that was due by November 24, to comply with tax return deadlines.
“All these business entities, who had not filed their GSTR-3B returns for more than six months, were first issued the cancellation notices and then their registrations were cancelled as per standard operating procedure,” one of the officials said.
The Tax officers have been directed to follow up personally with these defaulting taxpayers so that their GSTR-3B returns due for the month are filed by November 30.
The push for better compliance comes on the heels of the tax department’s nationwide drive against fake invoice scams.
It is suspected that fraudsters often register firms under GST but remain mostly dormant on compliance while using the status to claim invalid input tax credit (ITC). As per the sources, in the Ahmedabad zone 11,048 GST registrations have been cancelled.
In the Chennai zone, 19,586 suo motu cancellations have been done so far in respect of GST taxpayers who have failed to file returns for more than six months.
The officials said that the tax authority is also scanning newly registered entities that have not provided correct details at the time of registration.
Out of 720 deemed registrations granted between August 21 and November 16 this year, where Aadhaar authentication was not done, 55 deemed registrations have been identified for the discrepancy and the process of cancellation was initiated in these cases.
Furthermore, the department would persuade 25,000 taxpayers, who have not filed returns for October that was due by November 24, to comply with tax return deadlines.
The Government has also extended PAN-Aadhaar linking deadline.
In view of the challenges faced by taxpayers in meeting the statutory and regulatory compliance requirements across sectors due to the outbreak of Novel Corona Virus (COVID-19), the Government brought the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 [the Ordinance] on 31st March, 2020 which, inter alia, extended various time limits.
In order to provide further relief to the taxpayers for making various compliances, the Government has issued a Notification on 24th June, 2020, the salient features of which are as under:
I. The time for filing of original as well as revised income-tax returns for the FY 2018-19 (AY 2019- 20) has been extended to 31st July, 2020.
II. Due date for income tax return for the FY 2019-20 (AY 2020-21) has been extended to 30th November, 2020. Hence, the returns of income which are required to be filed by 31st July, 2020 and 31st October, 2020 can be filed upto 30th November, 2020. Consequently, the date for furnishing tax audit report has also been extended to 31st October, 2020.
III. In order to provide relief to small and middle-class taxpayers, the date for payment of self-assessment tax in the case of a taxpayer whose self-assessment tax liability is upto Rs. 1 lakh has also been extended to 30th November, 2020. However, it is clarified that there will be no extension of date for the payment of self-assessment tax for the taxpayers having self-assessment tax liability exceeding Rs. 1 lakh. In this case, the whole of the self-assessment tax shall be payable by the due dates specified in the Income-tax Act, 1961 (IT Act) and delayed payment would attract interest under section 234A of the IT Act.
IV. The date for making various investment / payment for claiming deduction under Chapter-VIA-B of the IT Act which includes section 80C (LIC, PPF, NSC etc.), 80D (Mediclaim), 80G (Donations) etc. has also been further extended to 31st July, 2020. Hence the investment / payment can be made upto 31st July, 2020 for claiming the deduction under these sections for FY 2019-20.
V. The date for making investment / construction/ purchase for claiming roll over benefit / deduction in respect of capital gains under sections 54 to 54GB of the IT Act has also been further extended to 30th September, 2020. Therefore, the investment / construction/ purchase made up to 30th September, 2020 shall be eligible for claiming deduction from capital gains.
VI. The date for commencement of operation for the SEZ units for claiming deduction under section 10AA of the IT Act has also been further extended to 30th September, 2020 for the units which received necessary approval by 31st March, 2020. VII.
VII. The furnishing of the TDS/ TCS statements and issuance of TDS/ TCS certificates being the prerequisite for enabling the taxpayers to prepare their return of income for FY 2019-20, the date for furnishing of TDS/ TCS statements and issuance of TDS/ TCS certificates pertaining to the FY 2019-20 has been extended to 31st July, 2020 and 15th August, 2020 respectively.
VIII. The date for passing of order or issuance of notice by the authorities and various compliances under various Direct Taxes & Benami Law which are required to be passed/ issued/ made by 31st December, 2020 has been extended to 31st March, 2021. Consequently, the date for linking of Aadhaar with PAN would also be extended to 31st March, 2021.
IX. The reduced rate of interest of 9% for delayed payments of taxes, levies etc. specified in the Ordinance shall not be applicable for the payments made after 30th June, 2020. The Finance Minister has already announced extension of date for making payment without additional amount under the “Vivad Se Vishwas” Scheme to 31st December 2020, necessary legislative amendments for which shall be moved in due course of time. The said Notification has extended the date for the completion or compliance of the actions which are required to be completed under the Scheme by 30th December, 2020 to 31st December, 2020. Therefore, the date of furnishing of declaration, passing of order etc under the Scheme stand extended to 31st December, 2020
Deferment of the implementation of new procedure for approval/ registration/ notification of certain entities u/s 10(23C), 12AA, 35 and 80G of the IT Act has already been announced vide Press Release dated 8th May, 2020 from 1st June, 2020 to 1st October, 2020. It is clarified that the old procedure i.e. pre-amended procedure shall continue to apply during the period from 1st June, 2020 to 30th September, 2020. Necessary legislative amendments in this regard shall be moved in due course of time.
The Finance Minister has already announced reduced rate of TDS for specified non-salaried payments to residents and specified TCS rates by 25% for the period from 14th May, 2020 to 31st March, 2021. The announcement was also followed by the Press Release dated 13th May, 2020. The necessary legislative amendments in this regard shall be moved in due course of time
The finance minister heads the Economic Task Force that was set up by the Prime Minister.
Finance minister Nirmala Sitharaman announced a slew of measures for extension of statutory and regulatory compliances in view of the corona virus pandemic spreading its wings and impacting the economy.
Allaying fears that there is no economic emergency in the country, FM said that the Economic Task Force will soon announce an economic relief package to deal with the impact of the corona virus pandemic on the economy.
These are largely in the area of ease of doing business, by providing reliefs in extension of due dates for compliances and reliefs from late fee and penalties, in view of the lock downs announced in several states and districts.
Income Tax
The last date for filing income tax returns for Financial Year 2018-19, extended from 31st March, 2020 to 30th June, 2020.
Aadhaar-PAN linking date extended from 31st March, 2020 to 30th June, 2020.
Vivad se Vishwas scheme – no additional 10% amount, if payment made by June 30, 2020.
Due dates for issue of notice, intimation, notification, approval order, sanction order, filing of appeal, furnishing of return, statements, applications, reports, any other documents and time limit for completion of proceedings by the authority and any compliance by the taxpayer including investment in saving instruments or investments for roll over benefit of capital gains under Income Tax Act, Wealth Tax Act, Prohibition of Benami Property Transaction Act, Black Money Act, STT law, CTT Law, Equalization Levy law, Vivad Se Vishwas law where the time limit is expiring between 20th March 2020 to 29th June 2020 extended to 30th June 2020.
For delayed payments of advanced tax, self-assessment tax, regular tax, TDS, TCS, equalization levy, STT, CTT made between 20th March 2020 and 30th June 2020, reduced interest rate at 9% instead of 12 %/18 % per annum ( i.e. 0.75% per month instead of 1/1.5 percent per month) will be charged for this period. No late fee/penalty shall be charged for delay relating to this period.
Necessary legal circulars and legislative amendments for giving effect to the aforesaid relief shall be issued in due course.
GST/Indirect Tax
Last date for filing GSTR-3B in March, April and May 2020 extended till the last week of 30th June, 2020 for those having aggregate annual turnover less than Rs. 5 Crore. No interest, late fee, and penalty to be charged.
For any delayed payment made between 20th March 2020 and 30th June 2020 reduced rate of interest @9 % per annum ( current interest rate is 18 % per annum) will be charged. No late fee and penalty to be charged, if complied before till 30th June 2020.
Date for opting for composition scheme is extended till the last week of June, 2020. Further, the last date for making payments for the quarter ending 31st March, 2020 and filing of return for 2019-20 by the composition dealers will be extended till the last week of June, 2020.
Date for filing GST annual returns of FY 18-19, which is due on 31st March, 2020 is extended till the last week of June 2020.
Due date for issue of notice, notification, approval order, sanction order, filing of appeal, furnishing of return, statements, applications, reports, any other documents, time limit for any compliance under the GST laws where the time limit is expiring between 20th March 2020 to 29th June 2020 extended to 30th June 2020.
Necessary legal circulars and legislative amendments to give effect to the aforesaid GST relief shall follow with the approval of GST Council.
Payment date under Sabka Vishwas Scheme extended to 30th June, 2020. No interest for this period shall be charged if paid by 30th June, 2020.
Customs
Custom clearance will operate 24X7 till June 30, 2020.
Due date for issue of notice, notification, approval order, sanction order, filing of appeal, furnishing applications, reports, any other documents etc., time limit for any compliance under the Customs Act and other allied Laws where the time limit is expiring between 20th March 2020 to 29th June 2020 shall be extended to 30th June 2020.
Financial Services
Relaxations for 3 months
Debit cardholders to withdraw cash for free from any other banks’ ATM for 3 months
Waiver of minimum balance fee
Reduced bank charges for digital trade transactions for all trade finance consumers
Corporate Affairs
No additional fees shall be charged for late filing during a moratorium period from 01st April to 30th September 2020, in respect of any document, return, statement etc., required to be filed in the MCA-21 Registry, irrespective of its due date, which will not only reduce the compliance burden, including financial burden of companies/ LLPs at large, but also enable long-standing non-compliant companies/ LLPs to make a ‘fresh start’;
The mandatory requirement of holding meetings of the Board of the companies within prescribed interval provided in the Companies Act (120 days), 2013, shall be extended by a period of 60 days till next two quarters i.e., till 30th September;
Applicability of Companies (Auditor’s Report) Order, 2020 shall be made applicable from the financial year 2020-2021 instead of from 2019-2020 notified earlier. This will significantly ease the burden on companies & their auditors for the year 2019-20.
As per Schedule 4 to the Companies Act, 2013, Independent Directors are required to hold at least one meeting without the attendance of Non-independent directors and members of management. For the year 2019-20, if the IDs of a company have not been able to hold even one meeting, the same shall not be viewed as a violation.
Requirement to create a Deposit reserve of 20% of deposits maturing during the financial year 2020-21 before 30th April 2020 shall be allowed to be complied with till 30th June 2020.
Requirement to invest 15% of debentures maturing during a particular year in specified instruments before 30th April 2020, may be done so before 30th June 2020.
Newly incorporated companies are required to submit commencement of Business certificate within 6 months of incorporation. This is now extended to 12 months.
Non-compliance of minimum residency in India for a period of at least 182 days by at least one director of every company, under Section 149 of the Companies Act, shall not be treated as a violation.
Due to the emerging financial distress faced by most companies on account of the large-scale economic distress caused by COVID 19, it has been decided to raise the threshold of default under section 4 of the IBC 2016 to Rs 1 crore (from the existing threshold of Rs 1 lakh). This will by and large prevent triggering of insolvency proceedings against MSMEs. If the current situation continues beyond 30th of April 2020, we may consider suspending section 7, 9 and 10 of the IBC 2016 for a period of 6 months so as to stop companies at large from being forced into insolvency proceedings in such force majeure causes of default.
Detailed notifications/circulars in this regard shall be issued by the Ministry of Corporate Affairs separately.
Department of Commerce
Extension of timelines for various compliance and procedures will be given. Detailed notifications will be issued by Ministry of Commerce.
35th GST Council Meeting was held on 21 June 2019 at New Delhi, after a gap of more than three months, chaired by Union Finance Minister, Mrs Nirmala Sitharaman.
This GST Council meeting has been called at a time when the countdown to upcoming Union Budget 2019 is less than a month away. A lot of expectations piled up over months concerning various indirect tax issues will be addressed in this meeting.
Highlights of 35th GST Council Meeting
The 35th GST Council meeting concluded with consensus on the following matters
GST annual return due date extended till 31 August 2019 for FY 2017-18
The due date for filing GSTR-9, GSTR-9A, and GSTR-9C for the FY 2017-18 has been extended by two months, till 31 August 2019. Official notification can be made anytime soon.
Aadhaar-enabled GST Registration introduced:
In order to ease the current process of GST registration and reduce the paperwork involved, GST Council has given a go-ahead to a new system for verification of taxpayers registering themselves under GST. Aadhaar number shall be linked to the GSTIN while generation.
NAA tenure extended by two years
Tenure of National Anti-profiteering Authority (NAA) was due to end by 30 November 2019. GST Council has further extended this tenure by two years, to enable it to take up all the pending cases. Hence, the authority can take up new cases in future due to rate cut issues, indicating that the GST Council has plans for further rationalisation of GST rates.
10% penalty to apply for any delay in depositing profiteered amount
GST Council has approved a levy of 10% penalty for delay in depositing the profiteered amount by more than 30 days. This is a fair measure that would encourage timely compliance by the taxpayer.
E-invoicing to start from January 2020
The new system for raising all the tax invoices on the GST portal has received in-principle approval for implementation from 1 January 2020. This applies to only B2B invoicing. By this system, no separate e-way bill will be required in case of e-invoice. Returns to be framed from these e-invoices. A phased implementation is being worked out.
Earlier, the government had fixed Rs 50 crore as the limit for the applicability of e-invoicing.
E-ticketing made mandatory for multiplexes
Among other major decisions, the GST Council approved the electronic ticketing system, for multiplexes, having multi-screens. This will help curb cases of tax evasion and the use of black tickets that have been prevalent.
Rate cut decision on electric vehicles, chargers & leasing thereof deferred; Committee to submit its report
The decision to cut GST rates for electric vehicles and electric chargers have been postponed to the next Council meeting. The matter has been referred to the Fitment Committee for checking the feasibility of the rate cut. At present, the GST rates for electric vehicles and electric chargers are 12% and 28% respectively.
Likewise, the valuation rules for goods and services pertaining to solar power generating systems and wind turbines will be placed before the next Fitment Committee. The suggestions made by this Committee will be placed before the next GST Council meeting.
Rate cut for lottery put on hold; Matter to be referred before an Attorney General
The previous council meet had not tabled the rate cut matter for lotteries. The 35th GST Council meeting discussed the matter at length and also brought to light two pending cases on this matter before the high court and supreme court respectively. Although the courts had referred the matter back to GST Council, the Council has decided to consult the Attorney General of India.
GSTAT to be GST Appellate Tribunal.
The GST council also definitively stated the Goods and Service Tax Appellate Tribunal will be the appellate authority and will adjudicate on appeals arising from central and state tax authorities’ in-house dispute resolution system. The states will decide the number of GSTAT required by them as a result of which there can be two tribunals in a single state.
CMP-02 for opting into the composition scheme for service providers under Notification 2/2019-CT rate
31 July 2019
For non-filing of GST returns, E-way bills to be blocked
The law stated that where the GST returns in GSTR-3B/ GSTR-4 is not filed for two consecutive tax periods, e-way bill generation for such taxpayers would be disabled. This will be brought into effect from 21 August 2019, instead of the earlier notified date of 21st June 2019.
The Ministry of Corporate Affairs (MCA) has decided to give 21 lakh India Inc directors another 15 days to reactivate their Director Identification Numbers (DINs) by filing Know-Your-Customer (KYC) details upon paying a reduced fee. The decision was taken by Finance and Corporate Affairs minister Arun Jaitley on Wednesday. The notification regarding the extension of deadline is as below.
As you are aware the last date for filing form DIR-3 KYC without fee has expired on 15th September 2018. The process of deactivating the non-compliant DINs has since been completed and their status has been updated as ‘Deactivated due to non-filing of DIR-3 KYC’. However, the non-compliant DIN holders may file DIR-3 KYC with a fee of Rs.500 (Rupees Five Hundred Only) from 21st September till 5th October 2018(both days inclusive) to get their DINs reactivated. From 6th October 2018 onwards, a fee of Rs.5000 (Rupees Five Thousand Only) becomes payable for reactivation.
DINs, the unique identification numbers, of nearly 21 lakh directors were deactivated by the MCA following non-filing of KYC details.
“The directors will be given another 15-day extension to reactivate their DINs by filing the e-form along with a nominal fee, which is being kept much lower than the current late fee of Rs 5,000,” top government sources said.
Many individuals and professional bodies, including the Institute of Chartered Accountants of India (ICAI) and Institute of Companies Secretaries of India (ICSI), have written to the government seeking extension in the date of submission for KYC without any additional fee. They have citied practical difficulties such as time-consuming process of obtaining digital signatures, video verification, reaching out to foreign directors and Kerala floods among the reasons for the delay.
“It took us an average time of one to one-and-a-half hour to do one KYC filing. It is quite time consuming to get the digital signature and then feed the client details on MCA software. Many a times the site shows glitches,” said Ashok Tyagi, a company secretary, who is looking forward to an extension in the filing time.
After the last date for filing of the e-KYC form, the MCA deactivated DINs of nearly 21 lakh directors, about 63% out of a total of 33 lakh directors registered in the country after they failed to furnish their KYC details. Only 12.15 lakh directors filed their KYC details within the stipulated time.
DIN is the unique number allotted to the directors on the Boards of registered companies without which they can’t sign any compliance document on behalf of the company.
According to some government officials, not more than two lakh directors are likely to come forward to file KYC over next 15 days. “A large number of directors will be dummy directors or the ones having multiple DINs,” said an official.
The MCA launched the e-KYC form under the MCA 21 system on July 14, this year. All the 33 lakh directors were required to provide their personal details such as e-mail address, Permanent Account Number (PAN) and Aadhaar number in an e-filing with the government in a major clean-up drive on ‘fly by night and dummy directors’. The directors also had to upload their short videos introducing themselves. The directors who could not comply with the new rule could, however, get their DINs activated provided they paid a sum of Rs 5,000 as late fee.
MCA extends due date of DIR -3KYC / E-KYC of Directors
The government is considering giving another opportunity to 2.1 million company directors who have failed to comply with the ‘know your customer’ (KYC) norms, according to a senior official.
The government could give another 15 days for meeting the compliance norms or reduce the penalty for late filing, the official said, requesting not to be named. In June, the corporate affairs ministry had decided to seek KYC for all 3.3 million active directors. The last date for complying with the new norms by way of submitting form ‘DIR-3 KYC’ without fee ended on September 15.
Only 1.2 million directors were able to complete KYC. The post of remaining 2.1million can be re-activated only after a fee payment of Rs 5,000 along with requisite form. “We are looking at the option of either providing a window of 15 days or reducing late fee. The situation has been reviewed by corporate affairs minister Arun Jaitley. A lot of these people are genuine directors who could not complete the process,” the official said. “Decision on providing another window could be taken once the corporate affairs secretary, who’s currently traveling, is back.”
The Institute of Chartered Account of India and several other corporate bodies have also made representations to the ministry, requesting them to extend the period by another 15 days.
“The website wasn’t functioning properly between September 13 and September 15. Also, there were glitches in uploading the digital signatures,” ICAI president Naveen ND Gupta wrote in a recent letter to the ministry. Among those whose director identification number (DIN)—a unique number allotted to individuals eligible to have directorship on boards of registered companies— is being de-activated for non-compliance is a Union minister, a person in the know said. As a part of the KYC drive, company directors had to provide their passport, PAN and contact details, such as phone number and email address. They were required to link their Aadhaar and PAN with the DIN.
The move is aimed at weeding out fake names being listed as genuine directors.
This was a part of the government’s larger strategy to clamp down on shell companies. The government is currently in the process of de-registering 200,000 such companies. These companies have been struck off for not carrying out any business or operation in the last two years.
