Amid a severe hit to the Indian economy by the Covid pandemic in the past eight months, the country’s foreign exchange reserves increased by more than $100 billion since the Covid-induced lockdown was enforced in March-end.
From $469.9 billion in the week ended March 20, 2020, the forex reserves jumped by $102.8 billion to a lifetime high of $572.7 billion in the week ended November 13, 2020, according to the data released by the Reserve Bank of India.
Importantly, the reserves grew by $4.277 billion from the week ended November 6, 2020. The jump was on account of Foreign Currency Assets (FCA), a major component of the country’s reserves, that increased by $5.526 billion to $530.2 billion from $524.7 billion in the preceding week.
However, the gold reserves reduced by $1.233 billion from $37.587 billion to $36.354 billion in the week. On the other hand, the special drawing rights with the International Monetary Fund (IMF) were unchanged from the preceding week at $1.488 billion, the data showed.
Foreign portfolio investors (FPI) have invested Rs 49,553 crore in Indian markets in November so far on the back of high liquidity along with improving global indicators and clarity after the US presidential elections, PTI reported.
The investment stood at Rs 44,378 crore in equities and Rs 5,175 crore in the debt segment between November 3-20 while FPI’s October investment was Rs 22,033 crore.
On the other hand, India saw its highest ever Foreign Direct Investment (FDI) during the first five months April-August of the current financial year. The total inflow was $35.73 billion, according to the Ministry of Commerce and Industry that was also 13 per cent up from the year-ago period.
Meanwhile, bank credit grew 5.67 per cent to Rs 104.04 lakh crore in the fortnight ended November 6, 2020, according to the RBI data.
The bank credit stood at Rs 98.46 lakh crore in the fortnight ended November 8, 2019. Moreover, deposits had jumped 10.63 per cent to Rs 143.80 lakh crore from Rs 129.98 lakh crore during the said period.
This include Personal income tax (PIT) refunds amounting to Rs 35,123 crore and corporate tax refunds amounting to Rs 97,677 crore during this period.
The Income Tax department has issuedrefundsworth over Rs1.32lakh crore to over 39 lakhtaxpayers so far this fiscal.
This include Personal income tax (PIT) refunds amounting to Rs 35,123 crore and corporate tax refunds amounting to Rs 97,677 crore during this period.
“CBDT issues refunds of over Rs 1,32,800 crore to to more than 39.75 lakh taxpayers between April 1,2020 to November 10,2020.
Income tax refunds of Rs 35,123 crore have been issued in 37,81,599 cases and corporate tax refunds of Rs 97,677 crore have been issued in 1,93,813 cases,” the I- T department tweeted.
For improving the ease of doing business in India and to reduce the cost of compliance, RBI has made a review of requirements of submission of various forms and reports under FEMA and has decided to discontinue submission of 17 such returns/ reports with immediate effect.
Discontinuation of Returns/ Reports under Foreign Exchange Management Act, 1999
1. The attention of Authorised Persons is invited to the Master Direction- Reporting under Foreign Exchange Management Act, 1999 dated January 01, 2016, as amended from time to time, and other reporting related instructions issued by the Reserve Bank of India.
2. With a view to improve the ease of doing business and reduce the cost of compliance, the existing forms and reports prescribed under FEMA, 1999, were reviewed by the Reserve Bank. Accordingly, it has been decided to discontinue the 17 returns/ reports as listed in the Annexure with immediate effect.
3. The Master Direction- Reporting under Foreign Exchange Management Act, 1999 dated January 01, 2016, shall accordingly be updated to reflect the above changes. AD banks may bring the contents of this circular to the notice of their constituents.
4. The directions contained in this circular have been issued under Section 10(4) and 11(2) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/ approvals, if any, required under any other law.
List of Discontinued Reports
Sl. No.
Name of Report
Reporting Entity
Frequency
1
Category-wise transaction where the amount exceeds USD 5000 per transaction
AD Category-II
Monthly
2
Category-wise, transaction-wise statement where the amount exceeds USD 25,000 per transaction
AD Category- II
Monthly
3
Statement of Purchase transactions of USD 10,000 and above (including transactions of their franchisees)
FFMCs and AD Category- II
Monthly
4
Extension of Liaison Offices (LOs)
AD Category-I banks
As and when extension is granted
5
Extension of Project Offices (POs)
AD Category-I banks
As and when extension is granted
6
FII/FPI daily: Daily inflow/outflow of foreign fund on account of investment by FPIs
AD banks
Daily
7
FII/FPI Return (Monthly): Data relating to actual inflow/ outflow of remittances on account of investments by Foreign Institutional Investors (FIIs) in the Indian Capital market
AD Category-I banks
Monthly
8
FVCI reporting: Inflows/outflows of remittances on account of investments by Foreign Venture Capital Investor (FVCIs) and Market value of Investments made by FVCIs
AD Category-I banks/Custodian banks
Monthly
9
Reporting of Inflow/ Outflow details in respect of Mutual Fund by Asset Management Companies
Asset Management Companies
Quarterly
10
Market value of FII Investment in India on fortnightly basis
AD Category-I banks
Fortnightly
11
Market value of FII Investment in India on Monthly basis
AD Category-I banks
Monthly
12
FII holdings as percentage of floating stock
AD Category-I banks
Monthly
13
Form DRR for Issue/ transfer of sponsored/ unsponsored Depository Receipts (DRs)-Hardcopy**
Custodian
At the time of issue/transfer of depository receipts
14
ADR/ GDR Movement Report- two way fungibility
AD Category-I banks
Monthly
15
Repatriation of Sales proceeds of underlying shares represented by FCCBs/ GDRs/ ADRs
Custodian
Monthly
16
GDR/ ADR underlying shares issued, re deposited and released monthly reporting
Custodian
Monthly
17
Monitoring of disinvestments by Overseas Corporate Bodies
AD banks
Monthly
** Please note that it is only the hardcopy filing of form DRR that has been discontinued. The domestic custodian may continue to report the form DRR on FIRMS application in terms of Regulation 4(5) of FEM (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019.
In a statement, the Department of Revenue (DoR) reiterated that there will be no extra compliance burden on the taxpayers for GST turnover displayed in the Form 26AS, which is an annual consolidated tax statement that can be accessed from the income-tax website by taxpayers using their Permanent Account Number (PAN).
Prime Minister Narendra Modi launched GST into operation on the 1 st of July, 2017. GST was publicised as ‘one nation, one tax’ by the government, aimed to provide a simplified, single tax regime. GST is a dual levy where the Central Government levies and collects Central GST (CGST) and the State levies and collects State GST (SGST) on intra-state supply of goods or services. Centre also levies and collects Integrated GST (IGST) on inter-state supply of goods or services. The GST Portal is a website where all the compliance activities of GST can be done before and after GST login. Activities such as the GST registration return filing, payment of taxes, application for refund, etc. can be done on the GST Portal.
GSTN, recently launched many new features on GSTN portal. One of its features is that GSTN portal is now showing aggregate annual turnover for previous financial year after logging in to the portal.
The GST turnover is being shown in 26AS just for the information of the taxpayer. DoR acknowledged that there may be some differences in GSTR-3Bs filed and the GST shown in the Form 26AS but it can’t happen that a person shows turnover of crores of rupees in GST and doesn’t pay a single rupee of income tax.
The DoR said that the notified Income Tax Return for the current AY 2020-21 already requires reporting of GST outward supplies in the Schedule GST.
Therefore, the information displayed in Form 26AS would provide ease of compliance to the taxpayers in filling Schedule GST.
The revenue department has noticed that many unscrupulous persons are trying to avail or pass on input tax credit fraudulently by generating fake invoices and has already formulated a strategy for identifying these fake invoice generators which inter alia takes into account the income tax profiles of the suspected fake invoice generators.
These persons in most of the cases never file their income tax returns or disclose very meagre taxable income in the income tax return.
The suspected fake invoice generators are being identified for serious action under GST and other laws including suspension of their GST registration based on the fact that whether their income tax payment commensurate with the expected profit margin on turnover reported by them in the GST returns, the DoR said.
What “aggregate turnover” means?
“Aggregate turnover” is the aggregate value of all taxable supplies, exports of goods or/and services or both, exempt supplies and interstate supplies of persons having the same PAN, to be computed on all India basis. However, such taxable supplies do not include the value of inward supplies on which GST is being paid under reverse charge basis. The aggregate turnover also excludes Central tax, State tax, Union territory tax, Integrated tax and cess.
Basically, sum of the following shall be considered as an aggregate turnover:
Value of all taxable supplies of goods and services
Value of all Inter-state supplies
Value of all exempt supplies of goods and services
Value of all export of goods or services or both
However, the following items would be excluded from Turnover:
Inward supplies on which taxes are paid under reverse charge
Taxes and cesses under GST
Interstate supply of services
Transactions which are neither supply of goods or service.
Supplies provided outside India or received outside India
Extrapolation of Turnover at GSTIN level (for those who have not filed all the returns as per their eligibility or liability)
GSTIN-wise GSTR-3B turnover for FY 2019-2020 has been extrapolated by the formula: >> Total turnover declared as per all GSTR-3B filed / No. of GSTR-3B filed) X No. of GSTR-3B eligible or liable to be filed
GSTIN-wise CMP-08 outward supply has been extrapolated by the formula: >> Total outward supply declared as per all CMP-08 filed / No. of CMP-08 filed) X No. of CMP- 08 eligible or liable to be filed
Added both the values of S. No. (a) and S. No. (b).
For those taxpayers who have filed all the returns as per their respective eligibilities, value of S. No. (c) will be the actual turnover)
Aggregation of extrapolated turnover at PAN level or Annual Aggregate Turnover Resultant values as per S.No. (c) above are aggregated or rolled up at PAN level to arrive at the Annual Aggregate Turnover.
What is the relevance of knowing aggregate turnover?
The aggregate turnover is a crucial parameter for determining the following aspects:
Determining whether registration is required or not-
Aggregate Turnover is relevant for a person to determine threshold limit to obtain registration under GST.
Threshold turnover limit for exclusively supply of goods = Rs 40 lakh (Rs 20 lakh in case of supplies effected from special category states)
Threshold turnover limit for supply of Services or (goods and services both): Rs 20 lakh (Rs 10 lakh in case of supplies effected from special category states)
Determine the limit of composition levy – Threshold limit to opt for composition scheme: Rs 1.5 crore in a financial year (Rs 75 lakh in case of supplies effected from special category states).
To determine a “Taxable person” – Section 2 of CGST Act defines the “taxable person” as a person who has obtained registration or is liable to register as per section 22 and 24 of CGST Act. Here the Section 22 provides a liability to register when the tax payer’s turnover exceeds the limit as determined in certain cases. This is again based on aggregate turnover.
Calculation of Late fee –
Under section 33 any registered taxable person person who fails to file the return u/s 30 i.e Annual return shall be liable to pay late fees of Rs. 100 for every day when such failure continues subject to a maximum of an amount of 0.25% of his aggregate turnover.
This can escalate the amount of late fee because aggregate turnover will include all supplies except reverse charge.
To determine whether Audit is required –
Registered persons with an aggregate turnover exceeding the prescribed GST audit limit of Rs 2 Crore during a financial year are liable for GST Audit. The turnover limit of Rs 2 Crore is same for the registered tax persons across all States and UTs. Thus, no separate turnover limit is defined for Special Category States for GST Audit.
Therefore, it is advised to carry on the computation of aggregate turnover accurately as the same will be used at a number of places which will in turn determine the tax liability of a person.
– The rate of interest as of February 29 that will be used to calculate the interest differential will not include any penalties or any penal rate of interest applied to the loan. – The package will be available for eligible borrowers irrespective of whether they have availed or partially availed or not availed the moratorium on repayment announced by RBI
Borrowers will not need to apply for the interest-on-interest waiver scheme for the six-month loan moratorium, the finance ministry has said, asking lenders to credit ex-gratia relief amount into the accounts of those eligible.
The ministry late Tuesday issued a set of 20 clarifications on the scheme in form of frequently asked questions or FAQs
The lending institutions will draw up a list of their borrowers eligible under the criteria laid down by the government and refund the difference between the compound interest and simple interest paid between March 1 and August 31.
The benefit is available to all eligible borrowers including those who did not opt for moratorium. The lenders can seek a refund from the government that will foot the bill.
According to a Crisil report, 75% of borrowers will be covered under the scheme, which likely to cost the government Rs 7,500 crore.
The scheme is not applicable to accounts classified as non-performing assets (NPAs) at the end of February as also loans against fixed deposits, bonds, shares or other interest-bearing instruments and loans given for investment in financial assets such as shares and debentures.
While the scheme includes any outstanding amount on credit cards, relief will not be paid to those credit card holders with a card balance in ‘credit’, as per the FAQs.
The Rs 2 crore limit is based on the borrower’s aggregate loans across lending institutions as on February 29.
Non-fund based limits such as letters of credit and guarantees would not count towards the Rs 2 crore limit.
For calculating the interest differential, lending institutions will consider the contracted interest rate on loans as of February 29. For zero interest loans, the lender’s base rate should be used while for credit card dues, the weighted average lending rate for the transactions between March 1 and August 31 should be applied, the ministry said.
On October 23, the government had announced the scheme for ex-gratia payment of difference between compound interest and simple interest for six months (March 1, 2020 to August 31, 2020) to borrowers in specified loan accounts.
The move was in response to the Supreme Court (SC) seeking clarity on the waiver of ‘interest on interest’ in the ongoing case filed for relief of borrowers availing the moratorium on loan repayments granted by the Reserve Bank of India (RBI).
The case was filed on behalf of borrowers, seeking relief from payment of the interest accruing on the monthly instalments that were paused for six months.
The SC has set the next hearing for November 2 to assess the implementation of the scheme, which the government said would be completed by November 5.
“Banks will not have to go through individual borrowers, only the categories need to be selected and the scheme needs to be applied. It will all be system-based, there is not much manual intervention required,” said Mukesh Kumar Jain, former managing director and CEO of the erstwhile Oriental Bank of Commerce.
The FAQs said banks would use the information they had along with information from credit bureaus to assess a borrower’s aggregate loans. Jain said this should not be an issue as, “Normally, loans up to Rs 2 crore are taken from a single bank since it is a relatively small amount”.
1. Due Date for Taxpayers (having Tax Audit) – Extended to 31st Jan, 2021 2. Due Date for Taxpayers (Not having Tax Audit) – Extended to 31st Dec, 2020 3. Due Date For Taxpayers (Under TP) – Extended to 31st Jan, 2021 4. Due Date of Deposit Self Assessment Tax (Only if up to Rs. 1 lakh) – Extended to 31st Jan,2021 5. Due Date of Furnishing Audit Report by CA – Extended to 31st Dec, 2020
The income tax return (ITR) filing deadline for FY 2019-20 has been extended to December 31, 2020, for most individual taxpayers, from the earlier deadline of November 30, 2020. This the second time the tax filing deadline for FY20 has been extended.
As per the government’s press release issued on October 24, 2020, “In order to provide more time to taxpayers for furnishing of their ITR, it has been decided to further extend the due date for furnishing of Income-Tax Returns as under:
The due date for furnishing of income tax returns for these individual taxpayers [for whom the due date (i.e. before the extension by the said notification dated June 24, 2020 as per the Act was 31st July, 2020] has been extended to 31st December, 2020.
The due date for furnishing of Income Tax Returns for the taxpayers (including their partners) who are required to get their accounts audited [for whom the due date (i.e. before the extension by the said notification dated June 24, 2020) as per the Act is 31st October, 2020] has been extended to 31st January, 2021.
The due date for furnishing of Income Tax Returns for the taxpayers who are required to furnish report in respect of international/specified domestic transactions [for whom the due date (i.e. before the extension by the said notification dated June 24, 2020) as per the Act is 30th November, 2020] has been extended to 31st January, 2021.
Consequently, the date for furnishing of various audit reports under the Act including tax audit report and report in respect of international/specified domestic transaction has also been extended to 31st December, 2020, said the government press release issued today.
Further, relief is provided to the small and middle class taxpayers in the matter of payment of self-assessment tax, the due date for payment of self-assessment tax date is hereby again being extended. Accordingly, the due date for payment of self-assessment tax for taxpayers whose self-assessment tax liability is up to Rs. 1 lakh has been extended to 31st January, 2021 for the taxpayers whose accounts are required to be audited and to 31st December, 2020 for the taxpayers whose accounts are not required to be audited.”
The govt has given a suitable extension for annual compliance under GST laws as well as income tax laws due to disruptions caused by coronavirus.
The government on Saturday said due dates for filing income tax returns and tax audit reports for FY20 for various classes of tax payers have been extended to give more time for tax payers to comply.
The government also, on advice from the federal tax body, the Goods and Services Tax (GST) Council, extended the due date for filing annual return for FY19 from 31 October to 31 December, finance ministry said.
For filing income tax returns for FY20, individuals who are not required to conduct a tax audit report will now get time till 31 December. The original due date of 31 July was earlier extended to 30 November.
Tax payers who are required to file their tax audit reports—professionals with gross receipts more than ₹50 lakh and those running businesses with sales up to ₹1 crore—have also got extra time. They can now file their tax returns by 31 January. The earlier deadline, after one extension, was 30 November.
Assessees who enter into international transactions or specified domestic transactions and are required to file tax audit reports, have also been given extra time to file their FY20 tax returns. As per Saturday’s announcement, they can file their tax returns for FY20 by end of January.
“Consequently, the date for furnishing of various audit reports under the Income Tax Act including tax audit report and report in respect of international or specified domestic transaction has also been extended to 31 December, 2020,” said the finance ministry statement.
The ministry also gave extra time for small tax payers to pay their self- assessment tax. This facility is available only to those with self-assessment tax liability up to ₹1 lakh. Accordingly, those who are liable to get tax audit done, can pay self assessment tax by end of January and others can pay by end of December. Finance ministry said it will notify these changes.
The government also said it has been receiving requests for more time to file GST annual return and the reconciliation statement for FY19. Accordingly the due date for the same has been extended from 31 October to 31 December, said the ministry.
Filing annual return (form GSTR-9/GSTR-9A) for FY19 is optional for taxpayers who had sales below ₹2 crore. Filing of reconciliation statement in form 9C is optional for the taxpayers with sales up to ₹5 crore, said the ministry.
Amid a severe hit to the Indian economy by the Covid pandemic in the past eight months, the country’s foreign exchange reserves increased by more than $100 billion since the Covid-induced lockdown was enforced in March-end. 
