Under the pension scheme, there is a provision of part withdrawal of pension, commonly known as commutation of pension money
Retirement fund body EPFO has made it mandatory to file online claims for provident fund withdrawals above Rs 1 million, taking another step towards becoming a paperless organisation.
The Employees Provident Fund Organisation (EPFO) has also made it mandatory to file online claims for withdrawals of above Rs 0.5 million under the Employees Pension Scheme 1995.
Under the pension scheme, there is a provision of part withdrawal of pension, commonly known as commutation of pension money.
At present, EPFO subscribers have the option of filing online as well as manual claims for provident fund withdrawal as also for a pension.
The decision was taken at a meeting chaired by Central Provident Fund Commissioner on January 17, 2018, an official said.
The official said the field offices have been directed that the claims must be accepted online in case the amount of provident fund withdrawal is above Rs 1 million.
Similarly, the claims must be online in case the amount is above Rs 0.5 million under employees’ pension scheme, the official added.
The bank account of the subscriber has to be seeded and verified in the system before the online claims can be settled.
Moreover, the subscriber should have been issued a universal account number and same must be activated.
The official said that all claims exceeding the said limits would not be accepted in the physical form now onwards.
The EPFO has over 60 million subscribers and manages a corpus of Rs 10 trillion.
January was dominated by investments in start-ups which contributed to 52% of total investment volumes
Private equity (PE) investors announced deals worth $983 million in January, a 23 per cent rise in value terms over last year, driven by big ticket transactions, says a Grant Thornton report.
According to the assurance, tax and advisory firm, in January, there were 84 PE deals worth $983 million, against 81 such transactions worth $796 million in January 2017.
“Private equity deals recorded 4 per cent increase in deal volumes and 23 per cent increase in deal value in January 2018 as compared to January 2017,” said Pankaj Chopda Director at Grant Thornton India LLP.
January was dominated by investments in start-ups which contributed to 52 per cent of total investment volumes. On the other hand, energy & natural resources and real estate sectors witnessed big-ticket PE investment over $100 million together capturing 39 per cent of total PE deal values.
Altico Capital’s investment of $195 million across five realty projects in Hyderabad and Pune was the top PE deal in January.
Other major transactions include Canada Pension Plan Investment Board’s 6 per cent stake acquisition in ReNew Power Ventures for $144 million and Warburg Pincus and SAIF Partners’ $50 million investment in Rivigo Services.
Going forward, the PE deal outlook looks bullish especially for the start-up sector.
“Increasing customer penetration in online transactions and increasing solutions to simplify online transactions offered by start-ups will attract interest in start-ups engaged in retail, fintech, foodtech, on demand services and travel and logistics,” Chopda said.
“Government reforms such as RERA, focus on cleantech and on increasing digital financial transactions will drive the momentum in banking and financial, real estate and energy and natural resources.
India-specific strategies by global and already present PE firms and funds raised by new players will act as catalyst for PE transactions,” he added.
Highlights Once the GST return filing process stabilises, the DGARM will be put to action for 360 degree profiling and matching the database of people filing GST with I-T returns filed Officials said the revenue estimates for next fiscal are conservative and could go up depending on enforcement actions taken by the government
Revenues from the Goods and Services Tax could cross Rs 1 lakh crore a month towards the end of next fiscal once anti-evasion measures like matching of tax data and e-way bill are put in place, finance ministry officials said on Tuesday.
Once the GST return filing process stabilises completely, the Directorate General of Analytics and Risk Management (DGARM) will be put to action for 360 degree profiling and matching the database of people filing GST with Income Tax returns filed, they said.
The government has budgeted about Rs 7.44 lakh crore from GST in the 2018-19 fiscal beginning April 1. The estimated collection for 8 months (July-February) of the current fiscal is Rs 4.44 lakh crore. The March collection will take place in April, the start of new financial year, 2018-19.
Officials said the revenue estimates for next fiscal are conservative and could go up depending on enforcement actions taken by the government.
Collections under the GST, implemented from July 1 last year, were over Rs 95,000 crore for the first month, while in August the figure was just over Rs 91,000 crore. In September, it was over Rs 92,150 crore, October (Rs 83,000 crore), November (Rs 80,808 crore) and December (Rs 86,703 crore).
As of December 2017, 98 lakh businesses were registered under the GST regime.
“We will soon start matching of the turnover shown in GST returns with the income returns filed with the I-T department. It could begin by second half of next financial year,” a senior finance ministry official said.
“Once these measures are put in place, there is no reason why GST revenues would not average Rs 1 lakh crore every month,” he added.
Another official said that the focus of the department will also be on plugging the gaps in the gold and jewellery industry.
“Gold imports have been rising every month despite a 10 per cent customs duty. But where is this imported gold channelled to? With GST in place, the revenue authorities now have the power to seek details about end supplies,” the official said.
Import of gold attracts a 10 per cent basic customs duty. On top of that, a 12.5 per cent countervailing duty (CVD) was levied prior to GST. Since GST subsumed CVD, the GST rate on gold at 3 per cent has to be paid at the time of imports in the form of Integrated GST with effect from July 1.
India is the world’s second biggest gold consumer after China. The import mainly takes care of the demand of the jewellery industry.
The official said that once the system stabilises, the intelligence agencies within the revenue department could better monitor end usage of the imported gold.
“DGARM would be utilised to provide intelligence inputs and do big data analytics for taxmen for better policy formulation and taking action against tax evaders,” he said.
Set up under the Central Board of Excise and Customs (CBEC), DGARM will use internal and external sources for detailed data mining and risk management.
As per data on GST returns filed by companies opting for composition scheme, as many as 5 lakh firms reported such a turnover which works out to annual sales of Rs 5 lakh only.
Out of 10 lakh businesses that opted for the composition scheme during the July-September period, about 7 lakh have filed GST returns for the quarter.
The official further said that currently, there is little tracking of goods movement from one state to another and the e-way bill would act as a tool to check tax evasion as then movement of stock and its end use would be monitored.
E-way or electronic way bill is for the movement of goods and can be generated on the GSTN (common portal). Movement of goods of more than Rs 50,000 in value cannot be made by a registered person without an e-way bill.
The GST Council had in November allowed businesses with turnover of up to Rs. 1.5 crore to file final returns GSTR-1 quarterly
The government has extended by 10 days the last date for filing of final sales return GSTR-1 till January 10 under the Goods and Services Tax, sources said.
Businesses with turnover of up to Rs. 1.5 crore will have to file GSTR-1 for July-September by January 10, 2018, as against December 31, 2017 earlier. For businesses with turnover of more than Rs. 1.5 crore GSTR-1 has to be filed for the period July-November by January 10.
Earlier these businesses were required to file GSTR-1 return for July-October by December 31 and that for November by January 10. For the month of December, GSTR-1 is to be filed by February 10 and for subsequent months, it would be 10th day of the succeeding month.
The GST Council had in November allowed businesses with turnover of up to Rs. 1.5 crore to file final returns GSTR-1 quarterly. Businesses with turnover of up to Rs. 1.5 crore will have to file returns by February 15 for the period October- December and that for January-March by April 30.
Avoiding income tax notices by fudging addresses or shifting residence will now become difficult. Income tax rules have been amended that will allow the tax department to deliver notices to assessees at addresses given by them to banks, insurance companies, post offices etc in case the notice is undeliverable at the address supplied to the tax department.
The government issued a notification dated December 20, 2017 amending the Income Tax Rules to ensure that all notices, summons, requisitions or any other communication issued in your name is delivered to you either via post or e-mail.
As per the notification, in case the communication or notice to be served to the assessee cannot be delivered/transmitted to the available address, as per Rule 127 of the Income Tax Rules, the government may use the address mentioned in the following databases to deliver the communication:
a) Address given by you to the bank;
b) Address given by you to the insurance company;
c) Address given by you to the post office while investing in the Post Office schemes;
d) Address as available in government records;
e) Address available in the records of local authorities;
f) Address of the assessee as furnished in Form 61 to the income tax department under Rule 114D;
g) Address as furnished in Form 61A to the tax department under rule 114E.
As per the earlier norms, the communication to the assessee was sent through post or email at the any of the following addresses:
a) Address available in the PAN database;
b) Address available in the income tax return (ITR) to which the communication pertains to;
c) Address as available in the previous year’s ITR;
d) E-mail address available in the ITR for which communication pertains to;
e) E-mail address as available in the last ITR;
f) Any e-mail address available with the income tax authority.
The notification has been published in the Gazette of India by the Minsitry of India vide Notification No. 98/2017/F. No. 370142/36/2017-TPL
Increasing the fear of an unravelling of the exercise of invoices-matching, which is crucial to realising the presumed merits of the goods and services tax (GST), like reduction of tax evasion and cascades, three-fourths of the 60 lakh eligible taxpayers haven’t completed the formalities of filing.
Increasing the fear of an unravelling of the exercise of invoices-matching, which is crucial to realising the presumed merits of the goods and services tax (GST), like reduction of tax evasion and cascades, three-fourths of the 60 lakh eligible taxpayers haven’t completed the formalities of filing both the inward and outward supplies-based returns for July till a day before the October 31 deadline. This has forced the government to give another window till November-end “to facilitate about 30.81 lakh taxpayers” to file details of inward supplies (GSTR-2). The triplicate comprehensive returns for July, the first month since GST’s launch, were originally required to be filed in the subsequent month itself, but due to the GST Network’s technical glitches and low levels of compliance, the deadlines have been extended multiple times. The schedule for filing these returns for August onwards has not even been announced yet, as this was to follow from the July-cycle learning. While invoice-matching is getting unduly delayed, piling up a huge job for the taxmen, the consequent blockage of input tax credits is bound to hit the working capital for large sections of the industry.
Since the launch of GST, small and medium enterprises have faced cash crunch, while exporters have got the refunds of July and August taxes only recently. Of course, the government has allowed industries with turnover up to Rs 1.5 crore to file the detailed returns on a quarterly basis while assuring them of prompt release of input tax credits claimed via monthly interim returns, but the deferment of invoices-matching would mean large-scale adjustments of the tax and ITC figures later. The government has faced much criticism for the imperfections of the GST it launched (multiple rates, high peak rates, exclusion of real estate and five petro- leum products etc). Also, since the GST was introduced, it has had to make more compromises that besmirched the new tax further. While dozens of items saw rate changes post-July, the GST Council, on October 6, accorded virtual tax waiver for exporters till March 31, 2018, despite exemptions running contrary to the GST’s basic tenet.
Besides, units with up to Rs 1.5 crore turnover were allowed to file quarterly instead of monthly returns, a move that would allow 90% of the non-composition GST registrants to shift to the easier system of filing returns every quarter, but could make prompt invoices-matching difficult. As reported by FE on Monday, the council may allow all taxpayers to move to quarterly mode of filing returns as it meets at Guwahati on November 10. The composition scheme — that allows businesses to pay taxes as a small percentage of turnover annually — is set to be made available to units with turnover up to Rs 1.5 crore, in what could effectively exclude 90% of the taxpayers from being part of the multi-point destination-based tax chain.
GST Network, which is the IT backbone of GST, estimates that about 80 crore invoices would be uploaded on to the system every month. A tax official said that even if 2-3 crore of the invoices don’t match, it will lead to numerous disputes, which would be arduous to resolve. “Besides, tax evasion takes place when transactions are off-book which will never be captured through invoices. The government needs precise and visible enforcement to minimise tax evasion,” the official said. To begin with, GST Council should have implemented matching at the GST level where sale and purchase are matched on the basis of the unique GST registration number of each taxpayer. Invoice matching should ideally have been brought in a few months later after the system stabilised. Now that some taxpayers are allowed to file returns only quarterly, the matching should also be harmonised with it and not be carried out every month.
These steps alone will make the process smoother,” Rahul Renavikar, managing director of Acuris Advisors said. Aditya Singhania, of Taxmann, said: “The matching concept is a much appreciated step for allowing input tax credit which is regulated by the GSTR 1, 2 and 3 mechanism. But with the brilliant concept, the IT platform of GST i.e. www.gst.gov.in should equally work in same wavelength for achieving the objective. Due to certain bugs and frictions, coupled with totally new forms of returns, taxpayers were unable to file the (returns) on time.” While industrialised states like Maharashtra, Gujarat and Karnataka among others had invoice-matching systems prior to GST, although these were not granular-level matching. A Maharashtra tax official, who requested anonymity, said that matching at the level of VAT number –much simpler than invoice-level matching – had enabled identification of 80% mismatches, which enabled the tax department to take action against hawala operations.
However, some tax officials have doubted the efficacy of invoice-matching, saying this wasn’t much of a success in any country with GST-type tax. “The first two month would pose immense challenges on how to deal with invoice mismatches and the provision may eventually have to be done away with,” a revenue department officials told FE on the condition of anonymity. The tax department is also worried that about 40% of taxpayers who filed the returns for July have claimed nil-tax liability. “It is indeed a large number. If enforcement is required, we will carry it out, though not in the nature of search and seizure. We may opt for discreet inquiries and meetings with such groups of taxpayers, to find out the reasons for the trend,” revenue secretary Hasmukh Adhia had told FE earlier.
Of the total Rs 95,000 crore GST collected in July, about Rs 65,000 crore was claimed in refunds or transitional credit.
The tax department has sought explanations from banks and financial institutions, including multinationals, on transitional credit claimed by them in July under the goods and services tax (GST) regime, two people with direct knowledge of the matter said. Deputy commissioners and assistant commissioners (central tax) have issued ‘information summons’ in the last seven days seeking data in five specific areas “by e-mail/hard copy”.
These include past sales tax records; summary of closing balance of tax (as of June); description of the nature of credits; details of vendor invoices prior to July 1; and details of payments made to vendors and service providers after July 1. Transitional credit refers to tax credits on sales tax, excise and valued-added tax accumulated before July 1 on pre-GST stock.
Such credit can be set off against liabilities of the July-started GST.
Taxmen suspect some companies are misusing the provision and have filed fake returns to claim high transitional credits. Of the total Rs 95,000 crore GST collected in July, about Rs 65,000 crore was claimed in refunds or transitional credit. The move comes about two weeks after tax officers questioned manufacturing companies on transitional credit claimed by them.
ET was the first to report on September 21that about 5,000 such companies had been questioned by the taxman over transitional credit claims. For now, tax officers are only scrutinising transition credit for sales tax and excise. The data obtained from the banks and financial institutions will be examined for any discrepancies.
The firms said they haven’t been given much time to provide the information. “We had received the notice few days back and haven’t been able to submit it due to the enormity of information sought,” said the finance head of a major multinational bank. “A tax officer called me today (on Friday) and asked me to submit the required documents by Saturday.”
The finance head cited the tax officer as saying the transitional credit claimed by the bank was high. “I tried to explain that transitional credit has to be viewed in the context of our monthly tax outgo. But we will be submitting the required information nevertheless by Saturday,” he said. Experts said many companies are yet to submit transitional credit details, which has to be done through the Transform.
“Since the date for filing the Tran-1 form has been extended to October 31, it would be prudent to commence any enquiries thereafter,” said MS Mani, partner, Deloitte India. “It is advisable to consider the data submitted in the Tran-1 form and then enquire into those cases where any anomalies are detected instead of subjecting the entire data submitted by erstwhile service tax payers to any form of scrutiny.”
The pressure on tax officials increased after a letter by a senior member of the Central Board of Excise and Customs (CBEC) was sent on Wednesday to all tax commissioners. ET has seen the letter. “In view of the urgency of the matter kindly have the verification of transitional credit completed on priority (in respect of list of taxpayers forwarded on 11/9/2017) and a report on the same to be sent on this office not later than 15/10/2017,” the letter read. The letter also asked tax officers to submit a detailed analysis of transitional credit claims. This is expected to be submitted by November 3.
The Central Board of Excise and Customs had in September sent a list to all commissioners and joint commissioners that included state-wise details of companies, the GST number and transition credit amount. Tax officers had started calling all the companies whose transitional credit numbers seemed high to them.
