The income tax department on Saturday extended the deadline for filing income tax returns by corporates by 15 days till November 15 for assessment year 2024-25. In a circular, the Central Board of Direct Taxes (CBDT) said the deadline will be extended from the earlier target date of October 31.
The Central Board of Direct Taxes (CBDT) has recently announced extension of the due date for filing Income Tax Returns (ITR) for audited accounts for Asst Year 2024-25.
In a recent announcement, the Central Board of Direct Taxes (CBDT) has extended the due date for filing Income Tax Returns (ITR) for audited accounts from October 31, 2024, to November 15, 2024.
– This extension applies to taxpayers who are required to undergo a tax audit, providing them with additional time to ensure accurate and compliant filings.
– The decision to extend the deadline comes as a relief to many taxpayers and professionals who were concerned about meeting the original deadline amidst the upcoming festive season.
– The extension is expected to ease the pressure on taxpayers and professionals, allowing them to prioritize accuracy and compliance without the stress of last-minute filings
– This move also aligns with the CBDT’s ongoing efforts to support taxpayers and enhance the overall compliance process.
– As the new deadline approaches, taxpayers are encouraged to take full advantage of this additional time to gather their financial documents and ensure thorough and accurate reporting.
– This extension is a welcome change, especially during a peak period, and is likely to reduce disputes and penalties associated with late submissions.
The GSTN has introduced a transformative feature called the IMS on the GST portal aimed at simplifying the process of correcting invoices
Through an advisory issued on September 3, 2024, the IMS is set to go live for taxpayers starting October 1, 2024, marking a significant milestone in the evolution of GST compliance procedures.
Key Features of the GST Invoice Management System (IMS)
The GST Invoice Management System (IMS) offers businesses a streamlined approach to managing their GST invoices, particularly in cases where discrepancies or amendments are necessary.
According to the GSTN advisory, “To enable taxpayers to efficiently address invoice corrections/amendments with their suppliers through the portal, a new communication process called the Invoice Management System (IMS) is being brought up at the GST portal.”
This system is designed to help businesses reconcile their GST records with those issued by their suppliers, ensuring ITC claims are compliant and accurate.
One of the standout features of IMS is that it allows taxpayers to accept, reject, or keep invoices pending before including them in their GST ITC claims.
This ensures that businesses can review the accuracy of each GST invoice and avoid potential issues during audits. The flexibility offered by the system allows businesses to defer action on GST invoices and address them in future tax periods, if necessary.
Taxpayers can update their GST invoice records anytime before filing their GSTR-3B return, a critical component in the GST compliance process.
Impact of the GST Invoice Management System on the ITC Ecosystem
The IMS is expected to significantly enhance the efficiency of ITC claims under the GST regime by providing a more structured mechanism for matching invoices between recipients and suppliers.
Since mismatches in GST invoices have been a primary source of discrepancies in ITC claims, the new system is a welcome addition.
The GSTN has long sought to introduce this level of control to minimize incorrect or fraudulent ITC claims.
Under this system, only accepted GST invoices will form part of the taxpayer’s GSTR-2B, which is the auto-populated form used to claim ITC under the GST framework.
By ensuring that only verified invoices are included in this form, businesses can significantly reduce errors in their GST returns, thus reducing the risk of disputes or penalties during audits.
Moreover, the IMS integrates seamlessly with the Quarterly Return Monthly Payment (QRMP) scheme, which allows smaller taxpayers to file GST returns quarterly while making monthly GST payments. For those enrolled in the QRMP scheme, the IMS will generate GSTR-2B on a quarterly basis, making it easier to manage GST invoices and ITC claims. This feature is particularly beneficial for small and medium-sized enterprises (SMEs), which often struggle with the administrative burden of GST compliance.
“The IMS is expected to facilitate transparency between GST recipients and suppliers and streamline the reconciliation of ITC, which has been a challenging process since the introduction of GST.”
While the full benefits of the system will become evident after its implementation, the IMS is expected to address several long-standing issues in GST compliance.
Reporting of inter-state taxable outward supplies to unregistered dealers – Advisory by GST.
An advisory has been issued on September 3,2024 by the Government of India for the recent amendment under Notification No. 12/2024 Central Tax, dated 10th July 2024, that lessens the threshold limit for the reporting of inter-state taxable outward supplies to unregistered dealers.
The invoice-wise reporting of information of these supplies was lessened from Rs 2.5 lakh to Rs 1 lakh, impacting how businesses file their GSTR-1 and GSTR-5 returns.
As per the notification, the above reduction in the threshold would need the assesses to furnish the detailed invoice-wise data for all inter-state supplies to unregistered dealers that surpass Rs 1 lakh in value. The same information should be reported in Table 5 of Form GSTR-1, for regular tax payers and Table 6 of GSTR-5, for non-resident taxable persons.
The same advisory states that the said revisions are being executed at present in the Goods and Services Tax (GST) portal and will be available for taxpayers shortly.
In the interim, taxpayers need to continue reporting inter-state taxable outward supplies to unregistered dealers that surpass the previous threshold of ₹2.5 lakh. These must be filed in Table 5 of GSTR-1 for regular taxpayers and Table 6 of GSTR-5 for non-resident taxable persons.
Further, till the time the functionality gets updated and is made available to the GST portal, it is advised to continue reporting the invoice wise details of taxable outward supplies to unregistered dealers which are more than Rs. 2.5 Lakhs in the Table 5 of Form GSTR-1 and Table 6 of GSTR-5, which would facilitate the process of reporting and align it with the amended threshold limits.
The businesses are suggested to stay updated with the additional announcements on the operationalization of the revision and the assesses are advised to track the updates on the GST portal for the additional guidelines.
The budget features higher spending, job creation efforts, and tax relief for the middle class. Key tax changes include an increase in the Securities Transaction Tax (STT), cuts in short-term and long-term capital gains taxes, and the elimination of the angel tax. It also adjusts personal income tax slabs under the New Tax Regime.
The Union Budget for FY 2024-25, presented by Finance Minister Nirmala Sitharaman, brings several significant changes aimed at boosting the economy, simplifying tax structures, and promoting sustainable growth.
Here are the key highlights:
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1. Revised Income Tax Slabs:
➤Finance Minister Nirmala Sitharaman announced a thorough review of the Income Tax Act of 1961 to benefit the middle class, expected to be completed in six months.
➤ The new tax regime includes revised tax slabs:
No tax up to Rs 3 lakh income
Rs 3 -7 lakh 5 per cent
Rs 7-10 lakh 10 per cent
Rs 10-12 lakh 15 per cent
Rs 12-15 lakh 20 per cent
Above Rs 15 lakh 30 per cent
➤ The Standard Deduction under the New Tax Regime increased from Rs 30,000 to Rs 75,000, saving Rs 17,500. The family pension deduction for pensioners rose from Rs 15,000 to Rs 25,000.
Announcements for STT, Short-term and long term capital gains:
➤ Capital gains taxation has been streamlined with short-term gains reduced to 20% and long-term gains to 12.5% for specific assets. Capital gains tax will now also apply to unlisted bonds and debentures.
➤ The Securities Transaction Tax (STT) on option sales has increased from 0.0625% to 0.1%. The STT on futures and options (securities has been raised by 0.02% and 0.1%, respectively.
➤ The indexation benefit for immovable assets, like real estate, has been removed, meaning property sellers can no longer adjust their purchase price for capital gains tax. Although the long-term capital gains (LTCG) tax on immovable properties has been reduced from 20% to 12.5%, indexation benefits are no longer available.
➤ The TDS on e-commerce transactions has been reduced from 1% to 0.1%.
➤ The angel tax has been abolished for all investors…
➤ Employer NPS deduction increased from 10% to 14%.
➤ A new solution for NPS (Central Government employees) will be developed based on a review committee’s recommendations.
➤ Assessment Rules: Reopening and reassessment rules have been relaxed. Assessments can now be reopened beyond three years only if undisclosed income exceeds Rs 50 lakh, with a maximum reopening period of five years from the end of the assessment year.
➤ Indian Professionals: Indian professionals working for multinational companies will no longer face penalties for not reporting movable foreign assets, such as ESOPs, if their value is up to Rs 20 lakh.
2. GST Updates
The budget introduces several changes to the Goods and Services Tax (GST) framework. These include waivers of interest and penalties for non-fraudulent demands from FY 2017-18 to 2019-20, provided certain conditions are met. This move aims to ease compliance and reduce the burden on businesses.
3. Fiscal Deficit and Economic Growth
The fiscal deficit is projected to reduce to 4.9% of GDP, with a commitment to further decrease it to 4.5% in the coming years. This disciplined approach is expected to enhance investor confidence and ensure sustainable economic growth.
4. Support for MSMEs and Startups
The budget allocates substantial funds to support Micro, Small, and Medium Enterprises (MSMEs) and startups. New loan schemes and financial support initiatives are introduced to foster innovation and entrepreneurship, which are crucial for job creation and economic diversification
5. Infrastructure Development
Significant investments are planned for infrastructure projects, including transportation, energy, and digital infrastructure. These projects aim to improve connectivity, reduce logistics costs, and enhance the overall business environment.
6. Agricultural Sector Boost
The agricultural sector receives a major boost with increased funding for various schemes aimed at improving productivity, ensuring fair prices for farmers, and promoting sustainable farming practices
7. Customs Duties and Capital Gains Tax
The budget also includes changes in customs duties to promote domestic manufacturing and reduce dependency on imports. Rationalization of the capital gains tax structure to simplify the tax system and encourage investments.
8. Corporate Tax:
➤ Reduction of the corporate income tax rate on foreign companies from 40 % to 35%. ➤ Introduction of measures to streamline transfer pricing assessment procedures.
9. Angel Tax and Equalization Levy:
➤ Abolition of the angel tax to support innovation and startups. ➤ Repeal of the equalization levy to simplify the tax landscape.
10. Reassessment Provisions:
➤ Simplification of reassessment provisions, allowing assessments to be reopened beyond three years, up to five years from the end of the year of assessment, only if the escaped income is more than ₹50 lakh. ➤ In search cases, the time limit for reassessment has been reduced from ten years to six years.
11. Indirect Tax Procedures:
➤ Simplification of indirect tax procedures to reduce compliance burdens and improve efficiency.
12. Vivad Se Vishwas Scheme:
➤ Introduction of the new Vivad Se Vishwas Scheme, 2024, for the settlement of pending direct tax disputes.
Conclusion
The Union Budget for FY 2024-25 reflects the government’s commitment to fostering economic growth, simplifying tax structures, and supporting key sectors. These measures are expected to create a more resilient and inclusive economy, benefiting all sections of society.
Several measures were proposed to ease compliance and reduce litigation for taxpayers in the 53rd GST council meeting.
The 53rd meeting of the Goods and Services Tax (GST) Council was held on June 22 in New Delhi. Several recommendations were made at the meet to refine tax rates and service exemptions under the GST regime.
The meeting, chaired by Union Finance Minister Nirmala Sitharaman, deliberated on various proposals to streamline GST applicability across goods and services.
Many items were present on the agenda from this GST Council meeting. Further, before the GST Council meeting, the Union FM had a pre-budget consultation with various states and UTs. Union FM also clarified that as of 31st December 2023, less than 1.96% of GST taxpayers received the notices under GST (1,14,999 taxpayers).
Several measures were proposed to ease compliance and reduce litigation for taxpayers.
Here are the key highlights:
Ease of compliance burden of taxpayers
Changes will be allowed in GSTR-1 going forward within same tax period: The GST Council approved implementing a functionality for a new form GSTR-1A that allows taxpayers to add/amend particulars of GSTR-1 of current tax period/IFF for 1st and 2nd month of quarter, that is missed out before filing GSTR-3B.
Reporting B2C supplies in GSTR-1: The threshold for reporting Business-to-Consumers (B2C) interstate supplies invoice-wise in Table 5 of GSTR-1 will be reduced from Rs.2.5 lakh to Rs.1 lakh.
GSTR-4 Due Date Revised: Extension provided to the due date for filing GSTR-4 by the composition taxable persons from the present 30th of April to 30th of June 2024 from FY 2024-25 onwards.
TCS Rate Reduction: Electronic Commerce Operators (ECOs) had to collect Tax Collected at Source (TCS) at 1% (0.5% each under CGST and SGST/ 1% under IGST) on net taxable supplies under Section 52(1) of the CGST Act. It is recommended to reduce this to 0.5 % (0.25% under CGST and 0.25% under SGST/UTGST/0.5% under IGST).
Compulsory filing of GSTR-7: GSTR-7 must be filed mandatorily even if no TDS is deducted, reported invoice-wise and no late fee will be charged for nil filing.
GSTR-9/9A filing applicability: The filing of annual return in GSTR-9/9A for the FY 2023-24 would be exempted for taxpayers with an aggregate annual turnover upto Rs.2 crore.
Modification to Section 16(4): The time limit to avail ITC for invoices or debit notes in any GSTR-3B filed up to 30th November 2021 (applicable for fiscal years 17-18, 18-19, 19-20 and 20-21) may be deemed to be 30th November 2021, which will apply retrospectively from 1st July 2017. Furthermore, Section 16(4) shall be relaxed where returns for the period from the date of cancellation of registration/ effective date of cancellation of registration till the date of revocation of cancellation of the registration, are filed by the registered person within thirty days of the order of revocation.
Amendment to CGST Rule 88B: The GST Council has recommended not to charge interest on the amount available in the electronic cash ledger on the due date of filing GSTR-3B and is debited while filing the said return in cases of delayed filing of GSTR-3B.
New Section 128A: GST Council has waived interest and penalties for demand notices issued u/s 73 of CGST (applicable for fiscal years 17-18, 18-19 and 19-20) for cases not involving fraud, suppression and misstatement. It is applicable to cases where the taxpayer pays the full amount in the notice by 31st Mar 2025.
Changes in Section 73 and 74: A common time limit will be set for issuing demand notices and orders under both these provisions without differentiating cases as fraud/non-fraud. The time limit for the taxpayers to claim the benefit of reduced penalty, by paying the tax demanded along with interest, would be increased from 30 to 60 days.
Monetary Limits set for GST Appeals: The recommended monetary limits for filing appeals by the department before these legal fora are Rs.20 lakh for GST Appellate Tribunal, Rs.1 crore for HC and Rs.2 crore for SC.
Amending Sections 107 and 112: The maximum amount for pre-deposit for filing appeal before appellate authorities shall be reduced from Rs.25 crore under CGST and Rs.25 crore under SGST to Rs.20 crore respectively. Moreover, the amount of pre-deposit for appeal before the GST Appellate Tribunal has been reduced from 20% with a maximum amount of Rs.50 crores under CGST and Rs.50 crores under SGST to 10% with a maximum of Rs.20 crores under CGST and Rs.20 crores under SGST.
Sunset Clause to amend Sections 109 & 117: Sunset clause to be added for anti-profiteering cases pending and decision taken to shift the hearing panel from CCI to principal bench of GSTAT. The GST Council has also recommended the sun-set date of 1st April 2025 for receiving any new application regarding anti-profiteering.
Time limit to file appeals before the GSTAT: The GST Council recommended modifying Section 112 to provide a 3 months time for filing appeals before the GST Appellate Tribunal. It will start from a date yet to be notified by the Government, most likely to be announced by 5th August 2024 as this is the last date.
New Section 11A: The new provision allows regularization of non-levy or short levy of GST, where tax was being underpaid or unpaid due to common trade practices.
IGST Refund due to upward price revisions after exports: A mechanism is being introduced for claiming refund of additional IGST paid due to any upward revision in price of the goods after their export, helping taxpayers claim refunds for paying additional IGST due to such move.
No refund of IGST in specific case: Where export duty is payable, IGST will not be refunded by modifying Sections 16 and 54. This applies for both exports and supplies to SEZ unit/developer with or without payment of tax.
Biometric-based Aadhaar Authentication: Those applicants who have opted for Biometric based Aadhaar authentication conducted at the GST Suvidha Kendra will be rolled out for GST registration on all-India basis in a phased manner.
DRC-03 Circular expected to be notified: A circular will be issued to prescribe a mechanism for adjusting any demand amount paid through DRC-03 against the amount payable as pre-deposit for filing GST appeal.
Section 122(1B) to be amended: Amendment will apply retrospectively w.e.f. 1st October 2023, so as to clarify that the said penal provision is applicable only for those e-commerce operators, who are required to collect TCS u/s 52 and not for other e-commerce operators.
Rate rationalisation for Goods and Services
The GST Council announced several GST rate revisions and exemptions for goods and services, as listed below-
Particulars
New GST Rates / Exemptions
Extra Neutral Alcohol used for the manufacture of alcoholic liquor for human consumption
Exempt
Imports of parts, components, testing equipment, tools, and tool-kits of aircraft, irrespective of their HS classification, are used to boost the MRO activities subject to specified conditions.
5% IGST
Parts of Poultry keeping Machinery
12%
All milk cans (different materials), irrespective of use
12%
All carton boxes and cases of both corrugated and non-corrugated paper board
12%
All types of sprinklers, including fire water sprinklers
12%
All solar cookers, whether or not single or dual energy source
12%
Services provided by Indian Railways to common man for sale of platform tickets, cloak rooms, and battery operated car services are exempted, including intra railway supplies
Exempt
Service by way of hostel accommodation is currently not exempted if outside educational institution upon satisfying the conditions that the rent limit is up to Rs. 20,000 per person per month, and the service is rendered for a continuous period of 90 days
Exempt
Corporate guarantee if in case it is for services or goods where whole ITC is available
Exempt
Services provided by Special Purpose Vehicles (SPV) to Indian Railway by way of allowing Indian Railway to use infrastructure built & owned by SPV during the concession period and maintenance services supplied by Indian Railways to SPV
Exempt
Imports of specified items for defence forces
IGST is exempt for five years till 30th June 2029
Imports of research equipment/buoys imported under the Research Moored Array for African-Asian-Australian Monsoon Analysis and Prediction (RAMA) programme subject to specified conditions
IGST is exempt
Imports in SEZ by SEZ Unit/developers for authorised operations with effect from 1st July 2017
Compensation Cess is exempt
Supply of aerated beverages and energy drinks to authorised customers by Unit Run Canteens under the Ministry of Defence
Compensation Cess is exempt
Import of technical documentation for AK-203 rifle kits imported for the Indian Defence forces.
Ad hoc IGST exemption provided
These measures aim to streamline the GST compliance process, provide clarity on various issues, and ensure consistency across the GST framework. The recommendations will be implemented through relevant circulars, notifications, and law amendments.
The Ministry of Corporate Affairs (MCA) has recently extended the deadline for filing Form LLP BEN-2 and LLP Form No. 4D for Limited Liability Partnerships (LLPs). Here are the details:
Background:
The MCA introduced LLP BEN-2 and LLP Form No. 4D as crucial forms for declarations under the Companies Act, 2013.
These forms relate to significant beneficial owners and beneficial interest in contributions received by the LLP.
Extension and Waiver of Additional Fees:
To facilitate compliance during the transition from MCA-21 version-2 to version-3, the MCA has extended the deadline.
LLPs now have until 1st July 2024 to submit these forms without incurring any additional fees.
This extension aims to ease the financial burden on LLPs and promote adherence to legal obligations.
Conclusion:
General Circular No.-03/2024 demonstrates the government’s commitment to supporting businesses, especially LLPs, during transitional phases.
By prioritizing ease of doing business and encouraging compliance, the MCA promotes transparency and efficiency within the corporate sector.
The Ministry of Corporate Affairs, has made it mandatory for private limited companies also to issue their securities in dematerialized form starting from 30 September 2024 and to facilitate conversion of all their existing securities in dematerialized form
Background:
Till now, only public limited companies were required to issue these securities in dematerialized form and private limited companies were exempted and hence could issue their securities in the form of a physical document.
Previously, the Ministry of Corporate Affairs (MCA) mandated that public companies must maintain and transact their shares in Demat form starting from October 2nd, 2018
Effective from October 27, 2023, the MCA has introduced significant changes in the regulations governing the dematerialization of securities for private limited companies.
The Companies (Prospectus and Allotment of Securities) Second Amendment Rules, 2023 now apply to private limited companies, excluding small companies.
These rules come into effect on September 30th, 2024.
As per the new amendment every private company which has not been classified as small company shall mandatorily convert their existing physical securities into demat form within 18 months of end of F.Y. 2023. (i.e. 30/09/2024)
Small company, as per Section 2(85) of the Companies Act,2013, means a company, other than a public company,
having a paid-up share capital of which does not exceed 4 crore rupees or such higher amount as may be prescribed; and
Turnover of which as per profit and loss account for the immediately preceding financial year does not exceed 40 crore rupees or such higher amount as may be prescribed: Exceptions:
A holding company or a subsidiary company;
A company registered under section 8; or
A company or body corporate governed by any special Act.
Consequences of non-dematerialization of physical security into demat on or before 30/09/2024:
After the due date, the company shall not be able to undertake a) Issue any securities b) buyback of securities c) issue bonus shares d) Offer for right issue of securities
After the due date, Security holders shall not be able to transfer the securities of the company or subscribe further issue of securities.
Penalty would be levied on the Company under the provisions of section 450 of the Companies act, 2013 as no specific penalty has been provided for the said noncompliance under the act.
* The penalty to be levied under Section-450 of the Companies Act, 2013 is as mentioned hereunder: “Fine which may extend to Rs. 10,000 and in case of continuous contravention, a further fine of which may extend to Rs. 1,000 per day after the first during which the contravention continues.”
Summary: Failure to convert physical securities into demat form by the specified deadline carries significant repercussions for private companies. They risk being unable to issue securities, undertake buybacks, issue bonus shares, or offer right issues. Moreover, security holders may face restrictions on transferring securities or subscribing to further issues. Non-compliance also attracts penalties under Section 450 of the Companies Act, 2013, emphasizing the importance of adhering to the new mandate.
