23 Jun 2019

GST annual return due date extended till 31 August 2019 for FY 2017-18

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35th GST Council Meeting Highlights

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

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. Other Due date extensions
Form New due date
ITC-04 for July 2017- June 2019 31 August 2019
CMP-02 for opting into the composition scheme for service providers under Notification 2/2019-CT rate 31 July 2019
  1. 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.

14 May 2019

CBDT to share data with GST department to trap tax evaders

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Highlights
• This move will apply for all those assessees who have business income and file the returns specified for those with this income i.e. ITR 3 to ITR -7.
• Before sharing any information, the income tax authority shall determine that such information is necessary for the GSTN authority to perform its functions.

The government on Tuesday authorized the income tax department to share details including sales and profits that businesses have reported in their income tax returns with GSTN, the company that processes Goods and Services Tax (GST) returns, to scale up scrutiny and check tax evasion.

The move will allow direct and indirect tax authorities to zero in on discrepancies in the information that business have disclosed in their respective tax return forms and nail tax evaders. The move comes as part of tightening of anti-evasion measures after the GST Council gave several relaxations in recent months to ease the rigors of tax compliance to businesses, especially to small ones. A formal system of data sharing between direct and indirect tax authorities means businesses have to be extra careful while filling up their tax returns and avoid mismatches. The move is significant considering that businesses did not show enthusiasm in opting for a single window tax facility for corporate tax, service tax and central excise in 2006 under the name Large Taxpayer Unit as they apparently preferred to avoid simultaneous scrutiny by different tax authorities.

An office order issued by the Central Board of Direct Taxes (CBDT) on Tuesday authorized the Principal Director General of Income Tax (systems) or Director General of Income Tax (systems) to share specified data with an officer of GSTN. The designated officers from both sides will also decide ways of simultaneous exchange of information

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Order.  F. No. 225/105/2019/ITA.ll              Order Under Section 138(1)(a) of the Income Tax Act, 1961

F. No. 225/105/2019/ITA.ll
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

New Delhi, the 30th  April, 2019

Order In exercise of powers conferred under section 138(1)(a) of the Income tax Act, 1961 (‘Act’), for purposes of sub-clause (i) of section 138(1)(a) of the Act, the Central Board of Direct taxes (‘CBDT’) hereby directs that Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems), New Delhi shall be the specified income-tax authority for furnishing information respecting assessees to the Nodal Officer, Goods and Services Tax Network (‘GSTN’).

2.  The data/information to be furnished by the specified income-tax authority shall be: (a)  Request based exchange of data, wherein, important financial fields which are captured in the Income Tax Returns (ITRs) such as (i) status of filing of ITR; (ii) turnover; (iii) gross total income, (iv)turnover ratio; (v) GTI range; (vi) turnover range and (vii) any other field, the modalities of which shall be decided by the concerned specified authorities. (b)  Spontaneous exchange of data, the modalities of which shall be decided by the concerned specified authorities. (c)  Automatic exchange of data, the modalities of which shall be decided by the concerned specified authorities.

While furnishing the information, the specified income-tax authority shall form an opinion that sharing of such information is necessary for the purposes of enabling the specified authority in GSTN to perform its functions under the Goods and Services Tax.
3.  To facilitate the process of furnishing information, Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems) would enter into a Memorandum of Understanding (‘MoU’) with nodal officer, GSTN, which inter-alia would include modalities of exchange of data, maintenance of confidentiality, mechanism for safe preservation of data, weeding out after usage etc. The time line for furnishing information shall also be decided by Pr. Director General of Income-tax (Systems) or Director General of Income-tax (Systems) in consultation with concerned nodal officer and included in the said MoU.
4.  A copy of MoU shall be forwarded to this division for record purposes.
5.  This issues with the approval of Chairman, CBDT.
(Rajarajeswari R.) Under Secretary,
(ITA-Il), CBDT
13 Apr 2019

Income Tax Return Forms for Salaried Class, Professionals and self-employed individuals available for e-filing

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The Income Tax Department has informed that the tax return forms i.e, ITR-1 and ITR-4 for the salaried persons, Professionals, and self-employed individuals are available in the official portal for e-filing.

It also said that the other forms for Companies and other entities will be available in the portal shortly.

“ITR 1 & 4 for AY 2019-20 is available for e-Filing. Other ITRs will be available shortly,” the department said.

The department has enabled ITR-1 which is largely used the salaried class of taxpayers with income up to Rs 50 lakh from salary, one house property only and additional income such as interest earned from fixed deposits, recurring deposits among others.

ITR-4 for professionals and self-employed individuals who have opted for the presumptive income scheme was launched in the e-portal.

A few days ago, the Central Board of Direct Taxes (CBDT) had notified the income tax return forms for the year 2019-20.

Last year, the Government brought numerous reforms in the tax return forms.

Last year, the number of ITR Forms have been reduced from nine to seven forms.

The ITR Forms ITR-2, ITR-2A and ITR-3 have been rationalized and a single ITR-2 has been notified in place of these three forms.

All seven ITRs are to be filed electronically on the official web portal of the department -https://www.incometaxindiaefiling.gov.in – except for some category of taxpayers.

From this year onwards, the quoting of Aadhaar with the income tax return is mandatory for e-filing after the latest Supreme Court verdict wherein the Apex Court overruled the judgment of the Delhi Court allowing the manual filing of tax return without mentioning Aadhaar number.

 

31 Jan 2019

HIGHLIGHTS OF BUDGET 2019

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HIGHLIGHTS OF BUDGET 2019

1. Within 2 years, Tax assessment will be done electronically
2. IT returns processing in just 24 hours
3. Minimum 14% revenue of GST to states by Central Govt.
4. Custom duty has been abolished from 36 Capital Goods
5. Recommendations to GST council for reducing GST rates for home buyers
6. Full Tax rebate upto 5 lakh annual income after all deductions.
7. Standard deduction has been increased from Rs. 40,000 to Rs. 50,000
8. Exemption of tax on second self-occupied house
9. Ceiling Limit of TDS u/s 194A has increased from Rs.10,000 to Rs. 40,000
10. Ceiling Limit of TDS u/s 194I has increased from Rs. 1,80,000 to Rs. 2,40,000
11. Capital Gains Tax Benefit u/s 54 has increased from investment in one residential house to two residential houses.
12. Benefit u/s 80IB has increased to one more year i.e. 2020
13. Benefit has been given to unsold inventory has increased to one year to two years.

Other Areas

14. State share has increased to 42%
15. PCA restriction has abolished from 3 major banks
16. 2 lakhs seats will increase for the reservation of 10%
17. 60000 crores for MANREGA
18. 1.7 Lakh crore to ensure food for all
19. 22nd AIIMS has to be opened in Haryana
20. Approval has to be given to PM Kisan Yojana
21. Rs. 6,000 per annum to be given to every farmer having upto 2 hectare land. Applicable from Sept 2018. Amount will be transferred in 3 installments
22. National Kamdhenu Ayog for cows. Rs. 750 crores for National Gokul Mission
23. 2% interest subvention for farmers pursuing animal husbandry and also create separate department for fisheries.
24. 2% interest subvention for farmers affected by natural calamities and additional 3% interest subvention for timely payment.
25. Tax free Gratuity limit increase to Rs. 20 Lakhs from Rs. 10 Lakhs
26. Bonus will be applicable for workers earning Rs. 21,000 monthly
27. The scheme, called Pradhan Mantri Shram Yogi Mandhan, will provide assured monthly pension of Rs. 3,000 with contribution of Rs. 100 per month for workers in unorganized sector after 60 years of age.
28. Government delivered 6 crores free LPG connections under Ujjawala scheme
29. 2% interest relief for MSME GST registered person
30. 26 weeks of Maternity Leaves to empower the women
31. More than 3 Lakhs crores for defence
32. One lakh digital villages in next 5 years
33. Single window for approval of India film maker.

18 Jan 2019

Get income tax refund in one day from 2020

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Highlights
– The Cabinet on Wednesday cleared an ambitious Rs 4,242 crore project for e-filling and centralised processing of income tax return, which will allow taxpayers to get a refund in one day through a pre-filled tax return form, the Times of India reported.
– Currently, the average time taken for return processing and giving a refund is 63 days, which will get reduced to one day, Railway Minister Piyush Goyal, said.

By 2020 taxpayers will have their income tax filing system run not by “Sarkari” IT teams but by IT major Infosys. The union cabinet on Wednesday cleared a Rs 4240 crore worth proposal that promises to trim down processing of returns from the current average of 63 days to just one day.

In a post cabinet briefing, Railways Minister Piyush Goyal said that the “Integrated E-filing and Centralised Processing Centre 2.0 Project” of the Income Tax Department is likely to be completed in 18 months. He added that the system will be launched for operations after a three month testing period.

The minister said that Infosys was not handpicked but was selected after a bidding process was carried out.

They key element of the proposed system is that it cuts down the physical intervention by the Income Tax department in the return filing and refund process.

The government feels that smoother, transparent and accountable tax filing system with less official interface will go a far way in improving tax compliance.

The government handled an unprecedented volume of tax returns in the current fiscal. Goyal said a whopping amount of 1.83 lakh crore has been issued as tax refund. Refunds are issued after a cumbersome scrutiny process. The government is bound to pay interest in case of a delay. The new system will result in speedy refunds which will be credited directly to taxpayers’ bank account. The faster system will reduce refund time for taxpayers and cut down government’s outgo.

The taxpayer friendly.e-filing and Centralised Processing Centre (CPC) projects will have end-to-end automation of all processes within the I-T Department. Goyal said that the idea is to “promote voluntary compliance”.

The old system CPC-ITR 1.0 has been given an extension and sanction of Rs 1450 crore for the year 2018-2019. This system will be used till the new one becomes operational.

 

Source: Times of India

12 Jan 2019

Auditors barred from putting a value on companies they are auditing

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An income tax tribunal has barred auditors from issuing valuation certificates to the companies they are auditing. This is set to impact several tax disputes around valuations in companies including angel tax disputes involving start-ups.

The Bangalore Income Tax Appellate Tribunal (ITAT) said that auditors of a company cannot double up as accountants especially in situations while dealing with “share valuation for the purpose of excess share-premium taxability.”

In several cases the income tax department has disputed valuations of companies around the time of investments.

The ITAT ruling came in a case where the tax department had challenged valuation of a company by its auditor.

In most cases, valuations of startups were challenged by the tax department, leading to “angel tax.” The angel tax controversy surrounds the valuations during various rounds of startup funding. In several cases, the revenues at startups kept reducing or remained stagnant, but their valuations increased. The taxman is questioning the premiums paid by the investors and wants to categorise them as income that would be taxable at 30%. In most cases, the investments made by angel investors, venture capital funds or any other investor have been challenged by the taxman.

Many accountants and valuers are already facing heat from the tax department. ET had, on December 25, reported that the tax department has started issuing show-cause notices to valuation experts, questioning the premiums several startups fetched during their investments rounds.

Valuation experts, however, say that they merely projected and calculated future growth, using the facts and figures provided by the startups. Many tax experts point out that the tax department’s approach to the fair value as a benchmark for calculating premiums may not be accurate in the context of startups.

Income tax officers claim that the scrutiny on startups is mainly due to concerns that black money may have changed hands.

ITAT Ruling
12 Jan 2019

32nd GST Council Meeting – Key Takeaways

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32nd GST Council Meeting took decision with respect to GST turnover limit – Rs 40 lakhs (from Rs. 20 lakhs) and composition scheme limit raised to Rs. 1.5 crore – changes would be effective from 1st April 2019. The Government took steps provide compliance relief to small businesses.

Outcome of 32nd GST Council Meeting -The highlights of the reliefs announced by FM Arun Jaitley are as below:

1. Threshold limit for GST Registration increased to 40 Lakhs
Effective April 1, the GST exemption threshold has been raised from Rs 20 lakh to Rs 40 lakh. For hilly states and those in the North East, the threshold has been doubled to Rs 20 lakh.

Earlier in a press talk AP FM said increased to 50lakhs, but it is increased to 40lakhs only as said by FM

2. Power to states
Now states will be able to choose if they want to keep the GST exemption limit at Rs 20 lakh or Rs 40 lakh, Jaitley said.

3. Composition limit increased to 1.5Cr from the present 1 Cr

The existing Composition Scheme turnover threshold raised to Rs 1.5 crore.

GST turnover limit and composition scheme changes would be effective from 1st April 2019.

4 Quarterly payment and Annual Return
Now Composition tax payers will pay tax quarterly, but file returns annually.

5 New Composition scheme for Services providers
Those providing services or mixed supplies (goods and services) with a turnover up to Rs 50 lakhs will now be entitled to avail composition scheme.

6 Rate for services under comp scheme @ 6%
Compounding rate for services under composition scheme is fixed at 6 percent.

7 Real Estate
A committee has been set up to consider real estate GST rates, a consensus is yet to be achieved, says FM Arun Jaitley.

8 Consensus for Calamity cess in Kerela @1%
GST Council has given approval to  Kerala to levy Disaster / Calamity cess of 1%  on all intra-state supplies of goods and services within Kerala, for up to 2 years.