29/05/2023
The Delhi High Court upholds RBI clarification as well as SBI notification that no identification is required for exchange of Rs 2,000 currency notes and has dismissed the Public Interest Litigation (PIL) filed against the Reserve Bank of India (RBI) and State Bank of India (SBI) notifications allowing exchange of 2000 Rupee Currency notes without proof of identity, upholding the impugned notifications. Lawyer Ashwini Kumar Upadhyay had challenged the notifications issued by the Reserve Bank of India and State Bank of India regarding the exchange of Rs. 2000 banknotes without requiring a request slip or identification evidence in a Public Interest Litigation (PIL)
Thereafter the State Bank of India had issued a notice to all branches, stating that no request slip or identification proof is necessary for exchanges up to the limit of Rs. 20,000.
Mr Upadhya , the petitioner argued in the plea that this decision of State Bank of India is arbitrary and contravenes Article 14 of the Indian Constitution. Additionally, it was suggested that to prevent the deposit of money into other individuals’ bank accounts and facilitate the identification of those involved in illicit activities such as holding black money or disproportionate assets, the RBI and SBI should ensure that only Rs. 2000 banknotes are deposited into their respective accounts.
In the hearing last week, Mr Parag P Tripathi, the Senior Advocate representing the RBI, strongly opposed the plea and recommended dismissal of the PIL along with imposition of significant costs. He emphasized that the current situation should not be equated with demonetization, clarifying that it is a statutory exercise. Furthermore, he asserted that the points raised by the opposing counsel, Mr. Upadhyay, do not have any impact on public concerns whatsoever. The Division Bench of Chief Justice Satish Chandra Varma and Justice Subramonium Prasad today dismissed the Public Interest Litigation (PIL), upholding the notifications of RBI and State Bank of India (SBI) allowing the public to exchange/deposit 2000 rupee notes as per existing deposit norms. With RBI taking a stand in the High court court that no identification is required for exchange of Rs 2,000 currency notes, now the doubts about requirement of identification should stand settled.
The CESTAT Kolkata in the matter of KANHAIYA SINGH VISION CLASSES PRIVATE LIMITED VERSUS COMMISSIONER OF CGST & CX, PATNA-I COMMISSIONERATE - 2023 (5) TMI 769 - CESTAT KOLKATA has held that the amount collected by selling study material is not a taxable service under the Finance Act, 1994, hence, no service tax leviable on sale of coaching material.
Facts:
M/s. Kanhaiya Singh Vision Classes Pvt. Ltd. (“the Appellant”) is engaged in providing coaching services to the aspiring students for qualifying the competitive entrance examinations into the engineering/medical institutes and also sells study material.
The Appellant was issued with a Show Cause Notice dated September 24, 2018 (“the SCN”) alleging short payment of service tax on coaching services by artificially bifurcating the consideration received towards coaching services in other categories such as Income from sale of bag, sale of Identity card, sale of prospectus and sale of books.
The Appellant had replied to the SCN by stating that the value of sale of books cannot be included in the value of coaching services as the same is sale of goods and cannot be taxed as per the Notification No. 12/2003-ST dated June 20, 2003.
The Adjudicating authority vide an Order dated March 17, 2021 confirmed the demand of Service tax with equivalent penalty.
Issue:
Whether income from sale of books must be added in the consideration for coaching services?
Held:
The CESTAT, Kolkata in KANHAIYA SINGH VISION CLASSES PRIVATE LIMITED VERSUS COMMISSIONER OF CGST & CX, PATNA-I COMMISSIONERATE - 2023 (5) TMI 769 - CESTAT KOLKATA held as under are:
The Tribunal in various decisions held that the value of books cannot be included in the consideration for coaching services.
Relied upon the judgement of CHATE COACHING CLASSES PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, AURANGABAD - 2012 (6) TMI 721 - CESTAT, MUMBAI “the amount collected by the Appellant selling of study material is not taxable service under the Finance Act, 1994”.
The value of book sales is separately identifiable from the Appellant audited financial statements, and there are documents to show that such sales were made not only to students but also to third parties.
28/05/2023
According to a report in the BBC, a lawyer based out of New York is facing a court hearing after a colleague at his firm used ChatGPT for legal research. The court found out that several legal cases referenced by the lawyer and his firm in an on-going case never existed. The judge termed the incident as an "unprecedented circumstance." Peter LoDuca is the lawyer facing a court hearing and his colleague, who used ChatGPT for the research, is Steven A Schwartz. The BBC report reveals that Mr Schwartz has been an advocate for over 30 years and used OpenAI's tool to look for similar cases in the past. When Mr Schwartz was questioned about the same, he said that he was not aware of the possibility of the AI tool giving out false information. The senior lawyer also expressed regret for relying on the AI chatbot and promised to 'never use AI to supplement his legal research in future without absolute verification of its authenticity.
The government has now made it mandatory for those investing over Rs 10 lakh in post office schemes to provide proof of source of funds. It has also brought all investments in post office schemes under stricter KYC/PMLA compliance rules to prevent misuse for terrorist financing/money laundering activities.
The Department of Posts has directed post office officials to collect income proofs from certain categories of small savings schemes’ investors. The department made this announcement via a circular issued on May 25, 2023. The circular has been issued due to the revision of Know Your Customer (KYC)/Anti Money Laundering (AML)/Combating the Financing of Terrorism (CFT) norms, the department stated.
As per the circular issued, customers are being categorised with the perspective of risk involved. High-risk customers are required to provide proof of money that is being invested apart from the commonly followed KYC norms.
The circular has divided customers on the basis of risk perception as follows:
Low risk– Where the customer opens an account or applies for purchase of certificates or applies for credit of maturity/prematurity value of any existing savings instruments with an amount of up to Rs 50,000 and balances in all accounts and savings certificates does not exceed Rs 50,000.
Medium risk – Where the customer opens account or applies for purchase of certificates or applies for credit of maturity/prematurity value of any existing savings instrument with an amount exceeding Rs 50,000 but up to Rs 10 lakh and balances in all accounts and savings certificates does not exceed Rs 10 lakh
High risk – Where the customer opens an account or applies for purchase of certificates or applies for credit of maturity/prematurity value of any existing savings instrument with an amount exceeding Rs 10 lakh and balance in all accounts and certificates does not exceed Rs 10 lakh.
The accounts relating to Politically Exposed Persons (PEPs) residing outside India shall fall under High-Risk Category. PEPs are those individuals who are or have been entrusted with prominent public functions by a foreign country, including the Heads of States/Governments, senior politicians, senior government or judicial or military officers, senior executives of state-owned corporations and important political party officials.
As per the circular, the customer has to submit a copy of a document showing the source of receipts of funds for making investments. Any of the following documents can be submitted as proof of the source of funds:
Bank/Post Office Account statement, which reflects the source of funds
Any one of the income tax returns filed during the last three financial years, which co-relates the investment in the gross income
Sale deed/Gift deed/Will/Letter of Administration/succession certificate
Any other document which reflects the income/source of fund
Apart from asking for proof of money source for certain investors, all categories of customers/investors (irrespective of their risk categories) are required to produce the following documents to do the investment:
Photograph: Two recent passport size photographs, three in the case of BO. In the case of joint account, photograph of all joint holders should be given
ID proof: Aadhaar and PAN
Address proof: Any one of the following – Aadhaar number or PAN. If these two documents do not mention the present address and any officially valid document such as passport, driving license, Voter’s ID Card, Utility bills (not older than two months) etc.
Do note that the documents must be self-attested by the investor. In the case of a joint account, ID and address proof of all joint depositors are required. For basic savings accounts, the document proving that the depositor is a beneficiary of any government scheme is mandatory.
The circular further specifies that re-KYC must be done depending on the risk of the customer. For high-risk, medium risk and low-risk customers, the re-KYC must be done every two, five and seven years, respectively.
27/05/2023
Gst— Errors & Omissions by Taxpayers to be sanitized:
1. Physical and Documentary Existence at Place of Business -
A. There is No concept of VPOB (Virtual Place of Business) under GST Law. Hence one table space in a business centre should not be used for multiple registrations.
B. If office is shifted permanently please make sure to surrender PPOB (Principal Place of Business) /APOB (Additional Place of Business). If office is shifted temporarily please make sure to add APOB (Additional Place of Business) as well as display requisite information in the earlier POB.
C. Documents u/r 56 of CGST Rules to exist at each PPOB/APOB as per the transactions taking place from there.
D. Ensure to appoint an Authorized Representative for each state and ensure that he/she is present at PPOB/APOB as required.
E. Loading/unloading of vehicles to only happen at PPOB/APOB. They should not happen in an open area which is not registered.
2. “Invoicing without Supply” is an offence under GST even even incase all compliances are done. Especially “Service Providers” need to beware.
3. Both inward as well as outward movement require E-Waybill. Hence E-Waybill reconciliation is to be done with inward as well as outward supplies.
4. Incase Authorised Signatory has changed, please change it on GST Portal.
5. Dos & Don'ts for Stock Keeping under GST – GST proceedings, may result in stock taking at the premises. Regarding stocks, taxpayers make some general mistakes due to which they have to face the wrath of the GST Departments when they invoke Proceedings of accessing the place of business or investigations. It has to be understood that incase a shortage or excess is found by the department at the time of stock taking, then in both these cases GST would be applicable on the value of mismatched stock. Hence the following points are important to note –
A. For All - Do not store stock at a place which is not added in the GST Registration APOB/PPOB.
B. For Manufacturers - Do have a record of not only purchase of Raw Material and closing Stock, but also have records of WIP.
C. For Downstream Products like Scrap - Do not load vehicles on the road or any unauthorized place other than APOB/PPOB.
D. For All - Generate E-Waybill Part-B only after the vehicle is ready for movement.
E. For All - Try to stock lots of material as per your ERP. For example incase one is stocking the same material at different place in different lots, then it is better incase the ERP Stock is also maintained in lots.
F. Ensure Sales Orders are serial numbered - It is seen that many small businesses maintain Customer/Sales Orders on pieces of paper and have no record of serial numbers or orders cancelled or a linking to final invoices made.
S- TMI
26/05/2023
SOP for Scrutiny of Returns for 2019-20 [Instruction 2/2023 dated 26-05-2023
1. SOP for scrutiny of returns for 2017-18 and 2018-19 was interim measure till the development of online scrutiny module made available on ACES-GST application.
2. DG System has developed online module for scrutiny of returns.
3. Selection of returns for scrutiny shall be done by DGRAM who will select GSTIN registered with Central Tax authorities based on identified risk parameters.
4. GSTINs selected for scrutiny for 2019-20 have been made available on the dashboard of proper officer of Central Tax on ACES-GST application. Also following information has been made available for convenience of proper officer:
i.Details of risk parameters involving risk/discrepancies in respect of GSTIN
ii.Amount of tax/discrepancy involved for each risk parameter
5. Risk Parameters: All risk parameters taken into consideration shall be made available on the dashboard. [Indicative List of Parameters has been provided in Annexure B of Instruction 2/2022 dated 22-03-2022]
6. Additional risk parameters may also be considered by proper officer in addition to parameters indicated in Dash board
7. Proper officer shall finalize month wise scrutiny schedule with approval of divisional assistant/deputy commissioner, prioritizing riskier GSTINs having higher risk implications.
8. Principal Commissioner will monitor that schedule identified in Scrutiny Module is adhered by officers under his jurisdiction.
9. Minimum 4 GSTINs to be scrutinized every month involving scrutiny of all the returns pertaining to FY. [Para 4.2]
10. For scrutiny of returns following data to be checked:
i. Various returns and statements furnished by registered person
ii. Data made available through
a.DGRAM
b.ADVAIT
c.GSTN
d.E way Bill Portal
[Para 5.1]
11. No documents/records to be sought from taxpayer for the purpose of scrutiny and proper officer is expected to rely upon only information available on records. [Para 5.3]
12. Minimal Interface between taxpayer and officer is expected for scrutiny. [Para 5.3]
13. Payments made through DRC-03 also to be considered while communicating discrepancy [Para 5.4]
14. ASMT-10 to be communicated on portal only without making any manual communication of ASMT-10 [Para 5.4]
15. Quantification of tax, Interest and other amount payable to be done in ASMT-10, as far as possible [Para 5.4]
16. Specific discrepancy to be communicated and not vague and general {para 5.4]
17. Worksheets and supporting documents of ASMT-10 to be uploaded on portal {Para 5.4]
18. Timelines:
i. Reply of Notice by registered person : With in 30 days or further period permitted by proper officer
ii. Satisfactory Disposal of Notice ASMT-12’ With in 30 days from receipt of reply
iii. Where no reply is furnished, appropriate action u/s 73/74/65/66/67 to be taken in 15 days from expiry of 30 days provided for reply.
iv. Where reply submitted is not satisfactory, appropriate action u/s 73/74/65/66/67 to be taken with in 30 days from receipt of reply.
19. MIS Reports: Monthly Scrutiny progress reports (Summary information on scrutiny for a month) and Scrutiny register providing GSTIN wise details of action taken in respect of scrutiny of returns of allotted GSTINs have been made available on Scrutiny dashboard and requirement of compiling and sending Monthly Scrutiny progress report by CGST zones to DGGST is here by dispensed.
25/05/2023
CBDT notifies enhanced limit of Rs.25 Lac for leave encashment exemption under Sec.10(10AA). The Finance Minister while presenting Budget 2023 has proposed to increase the exemption from Rs 3.00 lacs to Rs 25.00 lacs for employees in private sector. The Notification No. 31/2023 dt. May 24, 2023 comes into effect from Apr 1, 2023.
All trusts approved/ registered under section 10(23C)(iv)/(v)/(vi)/(via) or section 12A/12AA as on 01.04.2021 were required to apply for re-approval by 25.11.2022. Those who failed were covered by the Finance Act, 2023 from 1-4-2023 under the clutches of section 115TD (Dealing with exit tax).
1. Where form no. 10A was not filed by the extended date of 25.11.2022 by the trusts approved/ registered as above then they can now file the same by 30.09.2023. Further, such trusts have furnished form no. 10A after above date seeking provisional registration/approval, the relevant
functionality on the e-filing portal may be used for surrendering the Form No. 10A seeking
provisional registration/approval and such trusts can make a new application in Form No. 10A for registration/ approval within the extended period up to 30.09.2023.
2. Where the new trusts who were provisionally approved/ registered and were required to file form no. 10AB for final approval but failed to file such form by specified period of 6 months from date of commencement of activities and such date has expired then they can file form no. 10AB within the extended period up to 30.09.2023.
3. Where such application is made by the said date and registration/approval is granted then exit tax as per section 115TD as amended by the Finance Act, 2023 from 1-4-2023 will not apply.
4. In cases where the trust had already made an application in Form No. 10AB, and where the Principal Commissioner or Commissioner has passed an order rejecting such application, on or before the issuance of this Circular, solely on account of the fact that the application was furnished after the due date, the trust may furnish a fresh application in Form No. 10AB within the extended time.
5. The due date for furnishing of statement of donation in Form No. 10BD and the certificate of donation in Form No. 10BE in respect of the donations received during the financial year 2022-23 has been extended to 30.06.2023.
6. In case of trusts, funds or institutions seeking provisional approval or provisional registration as referred to above, the said provisional approval or provisional registration shall be effective from the assessment year relevant to the previous year in which the application is made and shall be valid for a period of three assessment years.
7. From the assessment year 2023-24 statement of accumulation in Form No. 10 and Form No. 9A is required to be furnished at least two months prior to the due date of furnishing return of income so that it may be taken into account while auditing the books of account. However, the accumulation/deemed application shall not be denied to a trust as long as the statement of accumulation/deemed application is furnished on or before the due date of furnishing the return as provided in sub-section ( 1) of section 139 of the Act.
8. Form No. 10B and Form No. 10BB (Audit report in case of charitable trusts) requires the auditor to bifurcate certain payments or application in electronic modes and non-electronic modes.
It is clarified that for the purposes of Form No. 10B and Form No. 10BB electronic modes are in addition to the account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account.
In the Public Interest Litigation (PIL) filed before the Delhi High Court regarding the exchange or deposit of Rs. 2000 notes without identity proofs, a Division Bench including the Chief Justice reserved the judgement on May 23rd 2023. The plea has been filed by the Advocate Ashwani Kumar Upadhyay against the notifications issued on 19th May 2023.
The Reserve Bank of India (RBI) has withdrawn Rs 2000 notes from circulation. Individuals holding Rs 2000 notes can now either exchange them for other denomination notes from a bank or deposit the same into their bank accounts. However, if you deposit more than Rs 50,000 in a single transaction, then you have to mandatorily quote your PAN as per income tax rules. Rule 114B of the income tax rules makes it mandatory for an individual to quote his/her PAN if the cash deposit in a single day either with a bank or post office exceeds Rs 50,000 in a single day. However, quoting PAN is not mandatory if the amount deposited does not exceed Rs 50,000 in a single day. Here is an example to understand this. Suppose, you make a cash deposit of Rs 30,000 in Rs 2000 banknotes into your bank account. And 15 days later, you make another cash deposit of Rs 40,000 in Rs 2000 banknotes into that same bank account. As the single transaction in a day does not cross Rs 50,000, you will have to quote PAN while making a cash deposit of Rs 2000 notes. However, if you had made a single cash deposit of Rs 70,000 (Rs 30,000 + Rs 40,000) in a single day, then the bank will ask you to quote your PAN mandatorily at the time of making the cash deposit. The government has made the quoting of PAN or Aadhaar mandatory if the cash deposits or withdrawals in a financial year exceed Rs 20 lakh. The notification was issued by the Central Board of Direct Taxes (CBDT) on May 10, 2022, and the new rules became effective from May 26, 2022. Along with depositing, an individual also has the option to exchange Rs 2,000 notes. However, the RBI has put a limit on the number of notes that can be exchanged. As per the RBI notification, an individual can exchange a maximum of 10 notes or Rs 20,000 at a time. In a media interaction on May 22, 2023, the RBI governor said that banks will follow their own process and rules in case of an exchange of Rs 2,000 notes. However, there is no limit on the amount of deposits that can be made in the bank account. The KYC rules will be applicable in case of deposits. The last date to deposit or exchange Rs 2000 note is September 30, 2023.
24/05/2023
Six important points to ponder over the Rationale behind withdrawal of 2000 Rs currency notes::
On 21 May, MyGovIndia, a citizen engagement platform of the government, clarified that the 2,000 note will continue to be legal tender post-30 September. Indeed, the move to withdraw the 2,000 note brings several issues to the fore.
1. if these notes will continue to be legal tender after the deadline, then why withdraw them? RBI in its 19 May press release had said that the 2000 note was introduced "to meet the currency requirement of the economy in an expeditious manner after the withdrawal of legal tender status of all rs 500 and rs 1000 banknotes." Now more than six-and-a-half years later, the objective of introducing the 2,000 note has been met. This again takes us back to the question: Why replace 500 and 1,000 notes with a 2,000 note? With some planning, new notes of 500 could have been printed in adequate quantities before demonetization and used to replace demonetized ones.
2. as of March 2017, 2,000 notes formed a little over 50% of the total currency in circulation in value terms. This had come down to just 10.8% by March 2023. Over the years, RBI has issued more new currency notes of other denominations and it has gradually withdrawn 2,000 notes from circulation. That led to the total value of 2,000 notes in circulation falling from 6.57 trillion in March 2017 to 3.62 trillion in March 2023. This could have easily continued, and over the next few years, the value of the 2,000 note as a proportion of our total currency would have fallen below an insignificant 5%.
3. the logic offered by those in support of the move is that it will help curb black money on the assumption that people store their unaccounted wealth in currency form. The 2012 White Paper on Black Money had offered some data on this front for a period of six years based on search and seizure operations carried out by the investigative wing of the Central Board of Direct Taxes. On average, currency typically formed less than 5% of the total undisclosed wealth identified. So, very little black wealth is held as currency.
4. such moves damage India's long-term ambition of making the rupee an international reserve currency.
5. currency is still a very important part of India's economic system. As of March 2023, it stood at around 12.3% of our gross domestic product (GDP), around the same level it was before demonetization. Hence, any attempt to take currency out of the economy in one shot is a bad idea.
6. there is this great belief that cash facilitates corruption. It might facilitate petty corruption and some large corruption, but corruption at larger levels doesn't always need cash to be paid domestically. Take the case of Nigeria, which is one of the most corrupt countries in the world. It also has one of the lowest ratios of currency in circulation. Or take the case of the Eurozone, the countries which are members of the EU and use the euro as their currency. Their currency-in-circulation to GDP ratio as of December stood at 12.1%, very similar to India's.
So, why did RBI decide to withdraw the 2,000 note? There is clearly no rational answer for this. (S-Mint)
Advisory’s on display of registration certificates, proper display, maintenance of books of accounts, maintenance of proper records::
Rule 18 of CGST Rules 2017 requires : a Display of Registration Certificate at Prominent Place in
• Principal Place of Business and
• Every additional Place of Business
Display of Registration Number (GSTIN) on name board exhibited at the entry of
• Principal Place of Business and
• Every additional Place of Business
In case of Taxpayer has taken GST Registration for the State (Single Registration):
All places of business in the State should be cover in the Registration either as Principal Place of Business or Additional
Place of Business.
Place of Business includes:
(a) from where the business is ordinarily carried on, and includes a warehouse, a godown or any other place where a taxable person stores his goods, supplies or receives goods or services or both; or
(b) a place where a taxable person maintains his books of account; or
(c) a place where a taxable person is engaged in business through an agent, by whatever name called.
[As defined in section 2(85) of CGST Act'2017]
Every registered person shall keep and maintain true and correct account relating to each place of business and shall be kept at such places of business as specified in the certificate of registration-
• Principal Place of Business and
• Every additional Place of Business.
Every registered person shall keep and maintain a true and correct account of -
(a) production or manufacture of goods..
(b) inward and outward supply of goods or services or both
(c) stock of goods
(d) input tax credit availed
(e) output tax payable and paid.
[Abstract of Sec 35 of CGST Act 2017]
23/05/2023
In a significant development in the GST department’s campaign to combat suspicious and fake registrations, approximately 4,000 firms from Ludhiana have been identified as doubtful by the online system of the Goods and Services Tax Network (GSTN). This number is expected to rise. The campaign was initiated on May 16. Considering the large number of assessees in the Ludhiana district, it will take some time to thoroughly examine all these cases and determine the extent of suspicious registrations, sources said. According to sources, it has been revealed that over 88,000 dealers are currently registered in Ludhiana under GST as per data with the Ludhiana division of the state GST (SGST) department. These dealers are distributed across five different ranges, with range-1 and range-2 accounting for the majority of the total registrations. Sources also said under the ongoing campaign, SGST officials are also been empowered to take action in case of suspicious and fake registration. SGST’s ranges have also started preparing their teams for the physical verification of the dealers tagged as suspicious.
RBI had included GSTN as a financial information provider under the account aggregator framework to facilitate a cash flow-based lending to MSMEs. GST'N and Account Aggregator Linking before July1 2023:
1. To ease credit disbursement friction by helping small firms to authorise lenders to access fin info.
2. It will help lenders use GST returns as financial statement to consider loan eligibility.
3. To help in seamless sharing of account information of taxpayers.
4. The AA system started off with eight of India’s largest banks including the State Bank of India, ICICI Bank, HDFC Bank among others joining the network.
5. Currently, the taxpayer has to physically provide the GST details which is a longer process. Using the account aggregator with a single click and an OTP onboarding, all his GST details are directly downloaded to the lending institution, which means there is total transparency and is straight from the source.
3 months jail for TV Producers for not depositing TDS on time
1. TV production company and its directors Yash Patnaik and Mamta Patnaik have been sentenced to three months imprisonment for delay in depositing Tax Deducted at Source (TDS) of Rs 8.37 crore.
2. The Magistrate Court has held that If the payment is made at a belated stage, then it will be treated as default and appropriate action can be taken under the Income Tax Act. It is also clear that depositing TDS with delay does not absolve criminal liability.
3. In its defence, the firm and its directors had pleaded that when the department issued notice they had responded to the same. It was contended that the firm did not deposit the money due to financial difficulties which was explained to the officer.
4. The Court however held that the accused failed to deduct TDS amount within the stipulated time. The accused might have paid the tax with interest and penalty but after a stipulated period. The sanctioning authority also granted sanction after considering the documents and applying its mind. However, for want of defence of the accused about the reasonable cause, it can safely gather that the accused have defaulted to pay the TDS within the stipulated time.
22/05/2023
A thief cannot be deemed to be an owner and so Sec 69A is not applicable to him: SC : M/s.D.N. SINGH (CIVIL APPEAL NO(S).3738-3739 OF 2023)
Facts:
1. Section 69A of the Income Tax Act provides that where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article which is not recorded in its books of account, it may be deemed to be the income of the assessee for such financial year.
2. The assessee, carries the business of a carriage contractor. The assessee lifted bitumen loaded from various oil companies which were delivered to various divisions of the Road Construction Department of the Government of Bihar.
3. Thereafter, a scam was reported in the media, alleging that the transporters of bitumen were misappropriating the bitumen and were not delivering the whole quantity lifted from oil companies.
4. The AO found that the appellant-assessee had not delivered the entire quantity of bitumen lifted by it from the oil companies. The AO thus passed an order making additions to the assessee’s income by invoking Section 69A.
Hon SC held as below:
1. The bailee, who is a common carrier, is necessarily entrusted with the possession of the goods and it is not an owner of the said goods and so Sec 69A which applies only to the owner cannot be attracted.
2. Recognising a thief as the owner of the property would also mean that the owner of the property would cease to be recognised as the owner, which would indeed be the most startling result.
3. Under Section 69A, the term ‘valuable’ cannot be understood as anything which has any value. Noting that Bitumen was ordinarily sold in bulk and that the price of one kilogram of bitumen was only Rs.5 in the relevant Financial Year under consideration, ‘bitumen’ as such cannot be treated as a ‘valuable article’.
Angle Tax Rules 11UA Update; CBDT proposes changes to Rule 11UA in respect of ANGEL TAX- Also proposes to notify Excluded Entities:
In the Finance Act, 2023, an amendment has been introduced to bring the consideration received from non-residents for issue of shares within the ambit of section 56(2)(viib) of the Income-tax Act, 1961 (the Act), which provides that if such consideration for issue of shares exceeds the Fair Market Value (FMV) of the shares, it shall be chargeable to income-tax under the head ‘Income from other sources’. Subsequent to this amendment, detailed interactions have been held with stakeholders. Based on the inputs, Rule 11UA for valuation of shares for the purposes of section 56(2)(viib) of the Act is proposed to be modified and notification of entities to which the said provision shall not apply is also being issued separately.
Proposed changes in Rule 11 UA:
1. Rule 11UA currently prescribes two valuation methods with respect to valuation of shares namely, Discounted Cash Flow (DCF) and Net Asset Value (NAV) method for resident investors. It is proposed to include 5 more valuation methods, available for non-resident investors, in addition to the DCF and NAV methods of valuation.
2. Further, where any consideration is received by a company for issue of shares, from any non-resident entity notified by the Central Govt, the price of the equity shares corresponding to such consideration may be taken as the FMV of the equity shares for resident and non-resident investors subject to the following:
To the extent the consideration from such FMV does not exceed the aggregate consideration that is received from the notified entity and
The consideration has been received by the company from the notified entity within a period of ninety days of the date of issue of shares which are the subject matter of valuation.
3. On similar lines, price matching for resident and non-resident investors would be available with reference to investment by Venture Capital Funds or Specified Funds.
It is proposed that the valuation report by the Merchant Banker for the purposes of this rule would be acceptable, if it is of a date not more than ninety days prior to the date of issue of shares which are subject matter of valuation.
4. Further, to account for forex fluctuations, bidding processes and variations in other economic indicators, etc. which may affect the valuation of the unquoted equity shares during multiple rounds of investment, it is proposed to provide a safe harbor of 10 % variation in value.
5. The draft Rules on the above lines will be shared for public comments for 10 days, after which these will be notified.
6. Notification for Excluded entities:
It is also proposed to notify certain classes of persons being non-resident investors to whom clause (viib) of sub-section (2) of section 56 of the Act shall not be applicable. This includes :
I) Government and Government related investors such as central banks, sovereign wealth funds, international or multilateral organizations or agencies including entities controlled by the Government or where direct or indirect ownership of the Government is 75% or more.
ii) Banks or Entities involved in Insurance Business where such entity is subject to applicable regulations in the country where it is established or incorporated or is a resident.
iii) Any of the following entities, which is a resident of a certain countries or specified territories having robust regulatory framework:-
a) Entities registered with Securities and Exchange Board of India as Category-I Foreign Portfolio Investors.
b) Endowment Funds associated with a university, hospitals or charities,
c) Pension Funds created or established under the law of the foreign country or specified territory,
d) Broad Based Pooled Investment Vehicle or Fund where the number of investors in such a vehicle or fund is more than 50 and such fund is not a hedge fund or a fund which employs diverse or complex trading strategies.
7. For Investment in Start-ups: It is also proposed to modify Notification No. S.O 1131(E) dated March 05, 2019 so as to provide that the provisions section 56(2)(viib) of the Act shall not apply to consideration received from any person by start-ups covered in para 4 & 5 of Notification dated February 19, 2019 issued by the Ministry of Commerce and Industry in the Department for Promotion of Industry and Internal Trade (DPIIT).
To download latest ICAI Edition Complete GST Bare Act 2023 from the IDTC ICAI Website link is given below https://idtc.icai.org/publications.php
21/05/2023
Madras HC Judgement – The earlier order passed will not stand in the way of the assessing officer making an assessment or curtailing his powers in any way.
Citation - 2023-VIL-279-MAD: Date of Order – 11-04-2023: HIGH COURT OF MADRAS
The petitioner’s bank account was unblocked by the officer (R1) after considering all documents produced by the petitioner. After some time for the same period the notice was received from the officer (R3) on the basis of information received that the suppliers were non-existed or were not conducting business from the place in which registration had been obtained. The petitioner responded to the show cause notice relying on proceedings held before the officer (R1). The submissions made before R1 were reiterated before R3. The officer R3 disagreed with submissions of the petitioner and passed order against the petitioner. The petitioner would strenuously putforth the argument that while R1 has accepted the explanation of the petitioner with regard to the same transactions, it was incorrect for R3 to have arrived at a contrary conclusion holding that the transactions had been conducted with fictitious dealers. The respondents, for their part, would putforth the argument that the petitioner had not established before R3 movement of goods which is a critical and vital ingredient for claim of ITC.
The Hon’ble Court dismissed the writ on following grounds-
True, R3 ought to have made reference to order of R1 dated 16.07.2021 and undoubtedly, this is a flaw in the assessment order. However, in my considered view, it is not a fatal flaw. The power of an assessing officer under Section 73/74 is wide and proceedings for assessment may be initiated in any circumstance where it appears to the proper officer that the claim of ITC by an assessee is incorrect.
The mere fact that an order has been passed under Rule 86A(2) will not stand in the way of the assessing officer making an assessment or curtailing his powers in any way, in such an exercise.
Since the question of 'movement of goods' is one of the fact and the impugned order proceeds on the basis that the facts required to adjudicate this aspect were not provided by the petitioner, I am not inclined to intervene in the impugned order, which is confirmed. This writ petition is dismissed.
20/05/2023
Will Rs 2000 note be a namesake legal tender after 30th September?
1. The Rs.2,000 denomination banknote was introduced in November 2016 under Section 24(1) of RBI Act, 1934
2. The Reserve Bank of India has now advised banks to stop issuing Rs.2,000 denomination banknotes with immediate effect.
3. The RBI has asked people to deposit the Rs 2,000 banknotes into their accounts and/or exchange them into banknotes of other denominations at any bank branch. Exchange facility for Rs 2,000 bank notes up to Rs 20,000 at a time would be available from May 23.
4. The RBI has asked banks and designated RBI offices to provide deposit and/or exchange facility for Rs 2,000 notes until September 30, 2023.
5. Thus banks will not accept Rs 2000 notes from 1st October, 2023. The RBI says that the notes would remain legal tender. However, without banks accepting the notes, public too will not accept them.
6. So, unlike 2016 demonetisation which made keeping old Rs 500 and Rs 1000 notes illegal, keeping Rs 2000 notes shall not be illegal. However without public accepting it as a means of payment, the notes are expected to be namesake legal tender.
19/05/2023
The finance ministry clarified on Thursday that for employees who are using their credit cards while on business-related trips abroad, the spending will be outside the $250.000 annual limit under the Liberalised Remittance Scheme (LRS), in an effort to clear up any confusion regarding tax collected at source (TCS) on overseas spending, including through credit cards. Additionally, purchases done while in India from international e-commerce sites or transactions made on platforms like Netflix would not be counted. A day after notifying the public that LRS will include credit card transactions, a decision that was made by finance minister Nirmala Sitharaman after the passing of the budget in Parliament, the ministry released two sets of comprehensive FAQs. The new laws will become effective in July.
Understanding 20% TCS on International Credit Cards:
1. The Finance Ministry on 16th May, notified the Foreign Exchange Management (Current Account Transactions) (Amendment) Rules, 2023, to include international credit card payments in the LRS. Effectively, any remittance beyond $2.5 lakh or its equivalent in foreign currency would require approval from the RBI.
2. According to the notification, the Finance Ministry, in consultation with the RBI, has omitted Rule 7 of the Foreign Exchange Management (Current Account Transactions) Rules, 2000, thus effectively including Forex spending through international credit cards under the LRS.
3. Earlier, the usage of international credit cards (ICCs) for making payments for fulfilling expenses during travel outside India was not included in the LRS limit.
4. As per Section 206C of the Income Tax Act, 1961 tax collection at source (TCS) is applicable on foreign remittance under LRS. Finance Act 2023 increased the TCS Rate to 20% with effect from 1st July 2023.
5. This effectively means that TCS will be applicable on usage of international credit cards with effect from 16th May 2023. Upto 30th June 2023, the TCS rate shall be 5% and from 1st July, 2023, the TCS rate shall be 20%.
Will GAAR stand the test of the Constitutional scrutiny:
1. General Anti-avoidance Rule (GAAR) is a concept which generally empowers the Revenue Authority in a country to deny tax benefit of transactions or arrangements which do not have any commercial substance and the only purpose of such a transaction is achieving the tax benefit.
2. The GAAR will not apply to the transactions when the taxpayer has one or more bona fide ways of doing a transaction and he selects the manner he wants.
3. The provisions are based on the doctrine of “substance over form” which means the authorities will look into its actual substance. This doctrine is highly subjective and uncertain. The Bombay High Court in Provident Investment Co. Ltd. (1953 SCC OnLine Bom 35) has observed that: To look to the substance of the matter and ignore the legal position is to substitute the “uncertain and crooked cord of discretion” for the “golden and straight mete wand of the law”.
4. GAAR is a well-established law that, as stated in Section 90(2) of the Income Tax Act and upheld by the most recent landmark decision of the Supreme Court in Engg. Analysis Centre of Excellence (P) Ltd. v. CIT, the more advantageous provisions or articles of the DTAAs will prevail over the inconsistent provisions contained in the Income Tax Act.
5. To overcome Section 90(2) the legislature has inserted another sub-section (2-A) in the said section which states, “Notwithstanding anything contained in sub-section (2), the provisions of GAAR shall apply to the assessee even if such provisions are not beneficial to him.
6. Article 253 of the Constitution of India, “gives power to Parliament to make any law for the whole or any part of the territory of India for implementing any treaty, agreement, or convention with any other country or countries or any decision made at any international conference, association, or other body. DTAA have been enacted by exercising powers under Article 253.
7. GAAR is an instance of the exercise of powers under Article 246. The High Court of Andhra Pradesh, in Sanofi Pasteur Holding SA v. Deptt. of Revenue and held that: Once a law has been enacted under Article 253, every other law is subject to that law and a law made under Article 253 cannot be amended by a subsequent statute, which has been ordinarily made under the powers conferred under Article 246.
8. It is upon the Courts to interpret the provisions and test them on constitutional parameters but till then adequate safeguards and guidelines must be provided.
The Interior Ministry of Iraq issued a ban on U.S. dollar transactions across the country. Iraq is one among the 24 countries that have shown interest to join the BRICS alliance and accept the new currency for global trade. The Iraqi government banned entities from initiating business transactions with the U.S. dollar early this week. Iraq aims to control the fluctuating black market exchange rate, that has been plaguing the country for long enough. The development is also designed to strengthen the usage of the Iraqi Dinar in the nations’ Forex markets. The ministry aims to lower the difference between the official exchange rate offered by the government and the exchange rate that’s thriving in the black markets. The move will reduce dependency on the U.S. dollar and bolster its native currency the Iraqi Dinar. According to the latest report, 25 countries are ready to join BRICS and accept the new currency for international trade. The countries that have shown interest to join the BRICS alliance are Afghanistan, Algeria, Argentina, Bahrain, Bangladesh, Belarus, Egypt, Indonesia, Iran, Kazakhstan, Mexico, Nicaragua, Nigeria, Pakistan, Saudi Arabia, Senegal, Sudan, Syria, the United Arab Emirates, Thailand, Tunisia, Turkey, Uruguay, Venezuela, and Zimbabwe. BRICS comprises five countries Brazil, Russia, India, China, and South Africa. Therefore, a total of 30 countries are now participating to dethrone the U.S. dollar from its global reserve status. If these many countries ditch the dollar and begin cross-border transactions with a new currency, the USD could be hit. The dollar could weaken on a global scale and find no means to fund its deficit. The soon-to-be-released BRICS currency could have the power to eliminate the dollar’s dominance internationally.
The countries that are interested to join BRICS are also oil-rich nations. Therefore, the alliance could force European countries to pay with the new currency for oil and not the dollar.
18/05/2023
A handful of countries around the world are buying massive amounts of gold to end reliance on the U.S. dollar. Several nations are coordinating with each other and finding new ways to settle transactions without paying with the USD. Saudi Arabia and China are talking directly and determining whether to settle cross-border payments with their native currency. China has convinced many nations to pay with the Chinese Yuan instead of the U.S. dollar. In addition, developing nations are diversifying their reserves with gold along with the U.S. dollar and other foreign currencies. However, gold accumulation has spiked since 2022 and most Central Banks are welcoming the move. Central Banks of India, China, Russia, and Brazil, among other countries, are on a gold-buying spree. The World Gold Council published a report saying that China purchased 102 tonnes of gold, while Russia purchased 31.1 tonnes. India added 2.8 tonnes to its gold reserves in 2023 alone. India accumulated gold for several months and might add more by the end of the year. Therefore, if BRICS launches a new currency in August, there is a high chance that the reserves could be backed by gold.
UAE personal taxation update:
1. The UAE Ministry of Finance has announced the issuance of UAE Cabinet Decision No. (49) of 2023 on the treatment of resident and non-resident individuals undertaking a business or business activity, for the Corporate Tax Law purposes.
2. His Excellency Younis Haji Al Khouri, Undersecretary of the Ministry of Finance, said: "The new Cabinet Decision demonstrates the UAE's commitment to maintaining a clear and competitive tax framework for both local and foreign individual investors. By simplifying the Corporate Tax system, the UAE continues to foster an attractive business environment that supports the growth of small businesses, startups, and the overall economy."
3. The decision aims to clarify the application of the Corporate Tax regime for natural persons ('individuals' in this context) and ensure that only business or business-related activity income is taxed, if the turnover form business activity is more than AED 1 M.
4. Personal income notably from employment, investments and real-estate (without licensing requirements) shall not be subject to Corporate tax.
European Union states on Tuesday gave the final nod to the world's first comprehensive set of rules to regulate cryptoassets on Tuesday, piling pressure on countries such as Britain and the United States to play catch up. An EU finance minister meeting in Brussels approved rules that were thrashed out with the European Parliament, which gave its approval in April. The rules are expected to be rolled out from 2024. The rules require firms that want to issue, trade and safeguard cryptoassets, tokenised assets and stablecoins in the 27 country bloc to obtain a licence. They agreed on a requirement that from January 2026 service providers obtain the name of senders and beneficiaries in cryptoassets, regardless of the amount being transferred. There was also agreement on amending rules on how member countries cooperate with each other in taxation to cover transactions in crypto-assets, and on exchanging information on advance tax rulings for the wealthiest individuals.
17/05/2023
Hon'ble Karnataka High Court has given definition to what is game of skill and what is game of chance. Gameskraft Technologies (P.) Ltd.
Vs. Directorate General of Goods Services Tax Intelligence - [2023]
Judgement ::
The main question for consideration in the petition was, whether offline/online games such as Rummy would tantamount to ‘gambling or betting’ as contemplated in Entry 6 of Schedule III of the Goods and Services Act, 2017.
The Honorable High Court noted that there is a distinct difference between games of skill and games of chance. The Court noted that a game of skill whether played with stakes or without stakes is not gambling and games such as rummy, etc. whether played online or physical, with or without stakes would be games of skill and test of predominance would apply. The taxation of games of skill is outside the scope of the term “supply” in view of Section 7(2) of the CGST Act, 2017 read with Schedule III of the Act. Therefore, it was held that Online/Electronic/Digital Rummy game and other Online/Electronic played on the petitioner’s platform would not be taxable as ‘Betting’ and ‘Gambling’ and the Court also set aside the levy.
Payment by BCCI for termination of agreement with CSA is not taxable in India: ITAT Mumbai
ITA no.5492/Mum./2017
(Assessment Year : 2016–17)
ITA no.5493/Mum./2017
(Assessment Year : 2016–17)
The Board of Control for Cricket in India
Facts:
1. In the year 2008, the assessee commenced the conduct of a cricket tournament, namely, the Champions League T20 (CLT20).
2. The participants in the CLT20 Tournament included the winners and/or runners-up of the domestic 20-over leagues in India, Australia, South Africa, etc.
3. The entire CLT20 Tournament was conducted by the assessee, and all the agreements, including the media/broadcasting rights agreement, in this regard were entered into by the assessee.
4. The assessee entered into an arrangement with CSA to ensure that its winning or runner-up teams involved in domestic Twenty-20 Cricket competition administered by CSA participate in the CLT20 Tournament organized by the assessee each year. The assessee paid annual participation fees to CSA and deducted the TDS.
5. The assessee entered into an agreement to revoke (terminate) the agreement with CSA and paid the necessary termination fees. The assessee was of the view that the payment is not taxable in India and hence no TDS needs to be deducted.
ITAT Mumbai held as under:
1. Payment to CSA is not just for premature termination of arrangement with the assessee, but also for non compete clause in the termination agreement.
2. Payment to CSA is not arising from any operations carried out in India and thus Sec 9(1) of the Income Tax Act is not applicable.
3. The revenue also has not been able to prove that the assessee was the agent of CSA, as required by Article 5(5).
4. The payment to CSA is for the termination of the arrangement, which was a profit-making apparatus, and thus is in the nature of a capital receipt and hence not taxable.
Importance of Rule 25 during All India GST drive.
Read@ https://taxonation.com/show-detail-article/87792/importance-of-rule-25-during-all-india-gst-drive
16/05/2023
Netflix under I-T scanner, facing tax liability in India for streaming services income:
1. India is taking steps to impose a tax on the income generated by Netflix in the country, according to an Economic Times report.
2. The tax authorities have reportedly attributed an income of approximately Rs 55.25 crore ($6.73 million) to Netflix's permanent establishment in India in the assessment year 2021-22, citing a draft order.
3. This is the first instance in which India will tax foreign digital companies that provide electronic commerce services to customers.
4. The reasoning behind this move by tax officials is that Netflix has stationed some of its employees and infrastructure from the parent entity in India to provide support for its streaming services.
5. This has led to the establishment of a permanent presence in India, which in turn creates a liability for taxes.
6. The move is part of India's efforts to regulate the digital economy and ensure that foreign companies pay taxes on the revenue they earn in the country.
7. The Indian government has been discussing the introduction of a digital tax for some time now, and this action against Netflix could be seen as a test case for future taxation of other foreign digital companies.
Banks to launch 100 days campaign to trace, settle unclaimed deposits: RBI
1. RBI has announced the setting up of a centralised web portal for public to search unclaimed deposits across multiple banks.
2. A special 100 days campaign will be launched under which banks can trace and settle their top 100 deposits in every district of the country.
3. The banks will commence the campaign from June 1, 2023.
4. Balances in savings/current accounts which are not operated for 10 years, or term deposits not claimed within 10 years from date of maturity are classified as "unclaimed deposits".
5. These amounts are transferred by banks to "Depositor Education and Awareness" (DEA) Fund maintained by the Reserve Bank of India.
6. The issues related to unclaimed deposits were also discussed during the meeting of the high-powered Financial Stability and Development Council (FSDC) headed by the finance minister.
15/05/2023
Fraudulent A/cs: Supreme Court rejects SBI plea on ruling applicability : Rejecting the State Bank of India's (SBI) plea, the Supreme Court on Friday refused to clarify that its judgement, which makes it mandatory for banks to accord an opportunity of personal hearing to a borrower before classifying his loan account as fraudulent, will apply prospectively. The bank wanted the apex court to clarify that the March 27 judgment will apply only prospectively so that it does not impact its past decisions. However, the apex court clarified that borrowers should be heard by banks before such classification as per the Reserve Bank of India's July 2016 circular did not mean that they should be personally heard. - S-et
Urban co-op banks want RBI to permit them to undertake one-time settlement of bad loans : Urban co-operative banks (UCBs) have requested the Reserve Bank of India to allow them to do one-time settlement (OTS) of bad loans along the lines of OTS available for commercial banks. UCBs emphasised that since the 2020 amendment to the Banking Regulation (BR) Act has addressed the vexing issue of dual regulatory control, the Central bank is empowered to permit them to undertake OTS for recovery from non-performing assets (NPAs), said Jyotindra Mehta, President, National Federation of Urban Co-operative Banks and Credit Societies (NAFCUB). Under dual regulatory control, the Registrar of Co-operative Societies/Central Registrar of Co-operative Societies were empowered to look after UCBs’ incorporation, registration, management, recovery, audit, supersession of the Board of Directors and liquidation. - S-bl
Star Health to open 1,000 sales offices in Rural India this fiscal: MD & CEO Anand Roy : Star Health and Allied Insurance Company Ltd (Star Health), a leading standalone private health insurer, plans to set up 1,000 new sales offices this fiscal as part of its overall efforts to deepen its penetration in rural India, Anand Roy, Chief Executive Officer and Managing Director said. This company has also now decided to ramp up its “wellness” related offerings in the coming days and treat it as a focus area. “By integrating wellness into our insurance offerings, Star Health will empower our policyholders to take charge of their health and proactively manage their well-being”, Roy told businessline in an interview in the capital. - S-bl
Microfin lenders mull dedicated special-purpose funding body : Microfinance lenders are contemplating forming a dedicated funding institution in quest of long term and steady flow of funds to the sector, which often faces gaps in funding especially at difficult times when it needs them the most. The small and medium-sized microfinance lenders more than often struggle to mobilise funds while banks are generally more liberal in opening their purse strings for the bigger NBFC-MFIs.The dedicated special-purpose funding body can address this gap, sector leaders said. S-et
14/05/2023
Exim Bank to raise up to $4 billion this year : Export lender Exim Bank plans to raise $3.5 billion to $4 billion this year to fund its government-supported business, managing director Harsha Bangari said. The bank reported a 110% jump in net profit at ?1,556 crore for 2022-23."Our foreign currency resources are mainly used to fund policy business (issuing lines of credit through government). We are looking at raising $3.5 to $4 billion this year," Bangari said in a statement announcing the bank's annual results. The bank raised aggregate resources of ?52,156 crore, including foreign currency resources of $3.47 billion during FY23. It opened international markets for Indian issuers with a benchmark-sized sustainability bond of $1 billion in January 2023 under its ESG (environmental, social and governance) framework, Bangari said. - S-et
NPCI plans more tie-ups to strengthen global acceptability of RuPay debit cards : National Payments Corporation of India (NPCI) is exploring options for further tie-ups to strengthen the global acceptability of RuPay debit cards. Currently, RuPay cards are accepted at the points of sale (PoS) machine powered by Discover of the US, Diners Club, JCB of Japan, Pulse and Union Pay of China.This needs to be strengthened, and NPCI is working in this direction so that users of RuPay cards are at par with those using Visa or Mastercard, sources said. In March 2012, RuPay went global by tying up with Discover Financial Services to bring international services to Indians. - S-et
Mcap of 8 of top 10 valued firms soars ?1.26 lakh crore; Reliance, Hindustan Unilever shine : Eight of the top 10 valued firms together added ?1,26,579.48 crore in market valuation last week, with Reliance Industries and Hindustan Unilever emerging as the biggest gainers. Last week, the BSE benchmark jumped 973.61 points or 1.59 per cent.Only ITC and Infosys faced erosion in their valuation, while Reliance Industries, Tata Consultancy Services (TCS), HDFC Bank, ICICI Bank, Hindustan Unilever, State Bank of India, HDFC and Bharti Airtel were the gainers.The market valuation of Reliance Industries jumped ?28,956.79 crore to ?16,80,644.12 crore. Hindustan Unilever's valuation rallied ?28,759 crore to ?6,16,391.77 crore. The market capitalisation (mcap) of HDFC Bank climbed ?23,590.05 crore to ?9,31,095.12 crore and that of TCS zoomed ?15,697.33 crore to ?11,97,881.94 crore.The mcap of HDFC surged ?13,893.03 crore to ?5,09,434.44 crore and that of ICICI Bank soared ?11,946.89 crore to ?6,59,479.70 crore. Bharti Airtel's valuation moved up by ?2,174.58 crore to ?4,41,327.80 crore and that of State Bank of India gained ?1,561.81 crore to ?5,15,931.82 crore. - S-bl
13/05/2023
The registered persons to take following precautions for the Gst special drive against fake registrations and fraudulent Input claims etc :
1. Kindly ensure that on one premise there should not be more than one registration unless it is clearly demarcated place for each of the registrations.
2. Documents required for demonstrating registration eligibility at the time of inspection- As applicable: – Latest electricity Bill Consent Letter/NOC Municipal Khata Receipt or Property Tax Receipt, Rent agreement should be valid, if expired then renew the agreement Aadhar Card and PAN. All above documents should be available in original.
3. Authorized signatory as updated on GST portal should be signing the Invoices.
4. The stock and sale/purchase invoices alongwith other documents if found at the registered place of business, then it is assumed that it pertains to registered person and accordingly it shall be dealt with.
5. Display of RC and GSTIN: Every registered person shall display his certificate of registration in a prominent location at his principal place of business and at every additional place or places of business.
6. Also, every registered person shall display his GSTIN on the name board exhibited at the entry of his principal place of business and at every additional place or places of business. If not followed, penalty of Rs. 50,000/- may be imposed.
7. Books of Accounts: Every registered person shall keep the books of account as specified in Section 35 read with Rule 56 at the principal place of business and books of account relating to additional place of business mentioned in his certificate of registration and such books of account shall include any electronic form of data stored on any electronic device. For details about Generation and maintenance of electronic records, refer Rule 57. Every registered person required to keep and maintain books of account or other records in accordance with the provisions of sub-section (1) of section 35 shall retain them until the expiry of seventy two months from the due date of furnishing of annual return for the year pertaining to such accounts and records.
Attention All Gst registered dealers : Gst Department All India special checking drive spanning two months :
If you have GST Number, then you just need to make sure that you have done all these things:
1. Sign Board: Name, Address and GSTIN must be displayed on sign board
2. GST RC: You must have GST Registration Certificate displayed in your premises.
3. Place of Business: Address of business must be same as in your GST RC.
4. Proof of Business: You must have valid ownership of business place. If your place is rented then you must have valid Rent Agreement.
5. Invoices: You must have all relevant purchase, sales invoice on your premises.
E Invoice will impact you even if your turnover is less than Rs. 5 Crores— The penal impact for not generating E Invoice on sellers is as follows :
1. Section 122(1): Rs.20,000 per invoice Penalty for issuing invoice in violation to provisions of act
2. Section 122(3): Rs.50,000 penalty per invoice in violation to provisions of act
3. Section 129: 200% of tax charged; If goods are transported without e-invoice
The above penalties are prescribed for sellers who are liable to issue E Invoice but are not issuing E Invoice. With effect from 01st August 2023, any person who purchases from a supplier whose turnover exceeds Rs.5 Crores in any financial year, must make sure that the supplier issues E Invoice for the purchases made from him.
If the supplier issues any invoice other than E invoice then such invoice is not an invoice as per Rule 48(s) of the CGST Rules, 2017.
Section 16(z) (a) mandates possession oftax invoice for availing input tax credit.
"If any invoice other than E Invoice is received from a supplier, who has to generate E-Invoice, the input tax credit on such supply cannot be availed."
Precaution to be taken :
Whether a supplier is liable to generate E invoice or not can be checked in ‘’https://einvoicer.gst.gov.in/Others/GSTINsGeneratingIRN"
If your supplier's GSTIN is covered in the list in the link mentioned above, make sure he gives E Invoices for all the supplies, Else the Input tax credit on such supplies cannot be availed.
The above list contains list of GSTINs whose aggregate turnover exceeds Rs.10 Crores. From 01st August 2023 the list will be updated to include tax payers whose turnover exceeds 5 Crores.
The Karnataka High Court on Thursday quashed a show cause notice issued by the Directorate General of GST Intelligence (DGGI) to online gaming platform Gameskraft Technologies despite a court stay on a previous tax demand of ?21,000 crore. The GST authorities had made the tax demand on September 8 last year. The company challenged it before the court which stayed the demand notice on September 23, observing that the case involved several contentious issues. The company again approached the court after the DGGI sent a show-cause notice on the same day the court issued the interim stay to the tax demand intimation. The company, in its petition before Justice SR Krishna Kumar, argued that the claims made by the GST authorities in the show-cause notice were exactly the same as those in the earlier tax demand intimation notice that Shad been stayed. The petition also argued that the taxability of online gaming was a subject the GST Council had been seized of for the past three years. The company claimed that the entire case of the GST authorities had been built on the “erroneous surmise that the activities undertaken by Gameskraft were an actionable claim and not a service”. Gameskraft group general counsel Joyjyoti Misra called the judgement a “clear vindication” of the company’s business model.
12/05/2023
RBI has informed all financial institutions including banks and NBFCs to treat informal micro enterprises (IMEs) not covered under the GST regime or exempted from the CGST Act, 2017, but having the Udyam Assist Certificate (UAC) as micro-enterprises for classification under the priority sector lending (PSL) norms.
The Ministry of corporate affairs has introduced fresh conditions for companies that wish to de-register with the RoC. According to the changes, a firm cannot file for removal of names unless it has filed overdue financial statements and overdue annual returns up to the end of the financial year in which it ceased to carry out its business operations. Further, in case a company intends to file the application after the action has been initiated by the Registrar, it will have to file all pending financial statements and all pending annual returns prior to this.
11/05/2023
GST Department is starting a Special All-India Drive against fake GST registrations. Summary of this is as follows:
1. Duration: 16th May - 15th July 2023
2. Target: Suspicious GSTINs identified through software like BIFA, ADVAIT, etc.
3. Action: Physical verification by tax authorities
4. Home preparation:
Keep documents like GST registration, invoices, purchase bills, e-way bills, and stock records ready, Maintain accurate records, Be transparent in your transactions, Cooperate with tax authorities during verification.
The special drive by the Central Board of Indirect Taxes and Customs (CBIC) is aimed at weeding out fake ITC claims by using forged GST registration. The exercise will be conducted by all central and state tax administrations and will continue till July 15.
1. The list of suspected entities has been prepared based on the CBIC’s data analytics, along with information and data from intelligence agencies and the income-tax department, the official said.
2. Suspicious GSTINs are being shared with the tax administration concerned for initiating a verification drive and taking necessary action subsequently.
3. The systems analysed various risk parameters, including corporate tax returns filed by businesses with the I-T department and GST registration data, to identify businesses and traders and even masterminds who are expected to take GST registration but have not done so, the official explained.
4. Currently, there are 13.9 million taxpayers registered under the Goods and Services Tax (GST) regime. The National Coordination Meeting of the State and Central GST officers on April 24 discussed the issue of unscrupulous elements misusing the identity of other persons to obtain fake/bogus registration under GST.
5. If, after detailed verification, it is found that the taxpayer is non-existent and fictitious, then the tax officer may immediately initiate action for suspension and cancellation of the registration. Those who are end-beneficiaries, their assets could be seized as part of the recovery process under the CGST Act.
The DGGI has imposed a tax liability of Rs 497 crore on Piyush Jain and his three firms. Jain was arrested in December 2021 after Rs 207 crore was recovered following a 120-hour raid on his premises. Piyush Jain came under the scanner after over Rs 200 crore in cash was seized from his premises during raids by central agencies in 2021. The DGGI has now imposed a tax liability of Rs 497 crore on Piyush Jain and his three firms, including M/s Odocham Industries, M/s Flora Naturale, and M/s Odosanth Inc.
It is mandatory to link PPF account holders with Aadhaar:
1. The Finance Ministry has made it mandatory for all types of small savings schemes and post office scheme investors to link Aadhaar. According to the ministry, if the PPF investor has opened the account before March 31, 2023 and has not submitted his Aadhaar number to the accounts office, he shall submit the Aadhaar within a period of six months with effect from April 1, 2023. The period of six months will end on 30 September 2023. Investors can also submit PAN along with Aadhaar.
2 What if PPF account is not linked with Aadhaar?
According to the instructions of the Ministry of Finance, if the Aadhaar number is not submitted to the post office where the PPF account is opened and the PPF account is not linked, then the account will be frozen. In such a situation, the investor may have to face many problems like-
The amount of interest payable will not be credited to the PPF account holder’s account.
Investor will not be able to deposit money in his PPF accounts.
The maturity amount will not be transferred to the bank account specified by the investor
10/05/2023
ED raids Mannapuram Finance in Kerala on allegations of flouting RBI rules. The Enforcement Directorate (ED) is conducting raids at Kerala's Mannapuram Finance in connection with allegations that the non-banking financial company (NBFC) collected funds from the public without the Reserve Bank of India's approval.
Tax teams at large companies spend around 70 per cent time on an average on tax compliance and wants cross-utilisation of data collected by various government agencies to cut down on reporting requirements, a Deloitte survey said on Tuesday. A big challenge faced by organisations includes TDS compliance, the survey said, adding simplifying reporting under tax regulations would make reconciliations quicker and more efficient. The disproportionate amount of time spent by tax teams on tax compliance, more so in larger organisations, is an area of concern and needs to be addressed by way of discussion between the tax administration and taxpayers,” said the Deloitte survey on ‘Income-tax digitalisation in India’. Sixty-four per cent of respondents from companies with a turnover of less than Rs500 crore suggested streamlining TDS/TCS compliance with the help of technology, the survey said. There is a big burden of compliance and reporting that takes away most of their time.
More than 500 million cyberattacks were blocked in India out of 1 billion global attacks, representing a sharp increase of over 29 per cent in the number of cyberattacks in Q1, 2023, compared to Q4, 2022, (829 million attacks), globally, a new report showed on Wednesday. According to the application security SaaS firm Indusface, on average the BFSI (Banking, Financial Services & Insurance) sector faced 38 per cent more attacks per application compared to the industry average, with over 9,73,000 attacks per website.
09/05/2023
Foreign Tax & Tax Research Division has issued a Clarification on FAQ issued by US IRS for FATCA Reportable Accounts:
1. The Indian Reporting Financial Institutions (RFIs) should ensure that the U.S. TIN is reported in respect of all U.S. Reportable accounts.
2. However, if the U.S. TIN is not obtained, the RFI may populate the TIN field with specified codes in scenarios mentioned in the FAQ 6 (reporting) of U.S. IRS.
3. It is to be noted that in all such cases where TIN has not been obtained, the U.S. IRS system will still generate an error notification to indicate that the entry is invalid when one of the above-mentioned codes are used.
4. Further, reporting for calendar year 2022 (due by September 30, 2023) is considered to be a transition year, and to be eligible for relief, RFIs must either use the TIN codes specified in the clarification issued in reference to the above subject on 31 January 2022 or the updated TIN Preexisting entity account held by a passive NFFE with one or more codes mentioned in the FAQ6 above.
5. For subsequent years, RFIs will have to follow the updated TIN codes referred in FAQ6.
Circular No: F. No. 500/107/2015-FT&TR-III
Russian FM says that it has billions of Rupees in Indian Banks, it cannot use:
1. Russian foreign minister Sergei Lavrov, while answering a reporter’s question during his press conference in Goa on Friday, May 5, 2023, bluntly implied that in its dealings with Russia, India wants to eat the cake and have it too.
2. India, which has been lapping up cheap Russian oil for domestic consumption as well as export as refined commodities, hasn’t been compensating Russia for its oil imports.
3. Lavrov pointed out that Russia has accumulated billions of rupees in Indian banks that Russia cannot use
4. India and Russia have been exploring options for settling their trade in rupees or rubles since the start of the Russian Special Operation (SMO) in Ukraine in February 2022, but they have made little headway even after more than a year.
5. India’s imports from Russia far exceed its exports. As a result, Indian rupee payments to Russian bank Vostro accounts in Indian banks are of no use to Russia.
6. The obvious solution is for India to step up its exports to Russia. Unfortunately, Indian exports are severely constrained by the lackluster quality of Indian goods. Also, Russia is a resource-rich country, so India doesn’t have the option to export commodities to Russia.
7. India could pay the accumulated billions of rupees to Russia by converting them to a currency like the Chinese Yuan, however, that would entail bearing the cost of conversion. China’s massive trade surplus with India makes the rupee particularly weak against the Yuan.
The department of Goa state tax is working to increase the tax base in Goa to boost tax collections and plug leakages, reports Newton Sequeira. The department is focused on data gathering, enforcement, and surprise inspections to achieve the goals. Goa’s monthly tax mopup has increased by 20% over the past few months due to higher economic output and better tax compliance. The department has done a lot of data collection from other departments. We have increased enforcement and our officers are conducting surprise inspections,” said GST commissioner Sarpreet Singh Gill. Goa raked in Rs 515 crore and Rs 620 crore in March and April respectively in GST collections, recording on average a 32% year-on-year increase in tax collections. Gill said that the “positive steps” taken by the department to encourage tax payment have helped improve revenue collection, pushing Goa to outpace other states in GST growth in percentage terms. Most of Goa’s tax collection comes from the tourism industry and the services sector. Fuel and alcohol remain out of the GST regime.
07/05/2023
Taxation of Crypto:
1. Section 2(47A) has been inserted in the Income Tax Act, 1961 which refers the cryptocurrency and NFTs as Virtual Digital Assets (VDAs).
2. VDA means any information or code or number or token, other than any fiat currency, generated through any cryptographic means. In short, it means all types of crypto assets, including NFTs, tokens, and cryptocurrencies but it doesn’t not include gift cards or vouchers.
3. As per Sec 115BBH, Profits earned by trading in cryptocurrency is taxable at 30%.
4. As per Section 194S, TDS shall be deducted at 1% if the value of transactions exceeds Rs. 50,000 in a financial year.
5. The buyer shall be responsible to deduct TDS and deposit it with the Government or the trading platform shall be responsible to collect the TDS.
6. No setoff of losses is available in case of trading in VDAs. There’s no provision of deduction of costs or expenditure.
7. Amendment has been made in the Schedule III of the Companies Act. Now, every company has to disclose its gains and losses in virtual currencies. Also, the value of VDAs as on the date of Balance Sheet shall be disclosed.
UAE New Tax Residency Rules:
1. On September 2nd, 2022, the UAE government issued the Cabinet Decision No. 85 of 2022, determining tax residency in the country.
2. Definition of a Juristic Person: A juristic person is a non-human legal entity which is capable of suing and being sued. Examples of juristic persons in the UAE include Limited Liability Companies, public joint stock companies, foundations etc.
3. Clarification on personal and economic interests: UAE shall be the state where the personal and economic interests are the closest or of the greatest significance to the individual.
4. As per Article 3 of the Cabinet Decision, a legal or juristic person is to be considered a tax resident if:
It is established, formed or recognized according to the legislation in force in the country (does not apply to a branch registered by a foreign juristic person), or It is a tax resident as under the prevailing tax law in the country
5. A natural person will be considered a tax resident under Article 4 if:
They have their usual or primary place of residence and the center of financial and personal interests in the UAE, or They were physically present in the UAE for 183 days or more during a consecutive 12-month period, or
They were physically present in the UAE for 90 days or more during a consecutive 12-month period, and they are either a UAE national, or have a valid residence permit in the UAE, or are a GCC national, as well as
Having permanent residence in the country
Carrying out employment or business in the country
6. The new Corporate Tax regime: Juristic persons falling under the ambit of UAE Tax Residency may be liable to the new Corporate Tax to be introduced from June 1, 2023 onwards, i.e., under Federal Decree Law No. 47 of 2022 on the Taxation of Corporations and Businesses.
7. International Agreements: Under a special case where an international agreement, i.e. a tax treaty determines tax residency conditions for a tax resident in the UAE, the provisions of such treaty will continue to apply, following Article 6 of the Cabinet Decision. Thus for example, where Article 4 of the India- UAE Double Taxation Avoidance Agreement provides that an individual shall be regarded as a resident of UAE, if he is present in UAE for atleast 183 days in a calendar year, such a condition, shall take overrule the cabinet decision mentioned above.
U.S. Could Run Out of Cash by June 1, Yellen Warns:
1. Treasury Secretary Janet L. Yellen said on Monday that the United States could run out of money to pay its bills by June 1 if Congress does not raise or suspend the debt ceiling.
2. What is the debt ceiling? The debt ceiling, also called the debt limit, is a cap on the total amount of money that the federal government is authorized to borrow via U.S. Treasury securities, such as bills and savings bonds, to fulfill its financial obligations.
3. The US hit its technical debt limit on Jan. 19. The Treasury Department will now begin using “extraordinary measures” to continue paying the government’s obligations. These measures are essentially fiscal accounting tools that curb certain government investments so that the bills continue to be paid. Those options could be exhausted by June.
4. The Congressional Budget Office also warned that time was running out more quickly than previously thought. The budget office said tax receipts from income payments that were processed in April were smaller than it had anticipated and that future tax payments were unlikely to have much impact.
Gst:: Deferment of Implementation of Time Limit on Reporting Old e-Invoices: It is to inform you that it has been decided by the competent authority to defer the imposition of time limit of 7 days on reporting old e-invoices on the e-invoice IP portals for taxpayers with aggregate turnover greater than or equal to 100 crores by three months.
06/05/2023
Why did Axis Bank declare a loss in Q4 2023?
1. Private sector lender, Axis Bank reported a net loss of Rs 5,728. 42 crore in Q4FY23 compared to a profit of Rs 4,117.77 crore a year ago same quarter, owing to the purchasing cost of Citi Bank's India consumer division during the quarter.
2. The huge loss came in on account of one-time non-recurring items aggregating to Rs 12,490 crore comprising full amortisation ie write off of intangibles and goodwill, which was equal to the value of purchase consideration paid on the acquisition of Citibank India consumer business.
3. The exceptional items amounting to Rs 12,490 comprised of (i) Full amortisation of intangibles and goodwill which is equal to the value of purchase consideration paid/payable on the acquisition of Citibank India Consumer Business; (ii) The impact of policy harmonization on operating expenses and provisions; and (iii) One-time stamp duty on the acquisition.
4. The bank said that it has made prudent accounting choices in amortising the intangibles and goodwill on account of Citibank acquisition.
5. The profit excluding the impact of exceptional items would have been Rs 6,625.29 crore for the quarter, a massive 61 percent growth against the reported profit of Rs 4,117.77 crore in the corresponding period last fiscal.
For e- filing of Form 10F, PAN would be required to be obtained by Non Residents
1. Form 10F is required to be ?le by a non-resident taxpayer as per section 90(5) and section 90A (5) of Income Tax Act 1961, to claim the relief under applicable double taxation avoidance agreement.
2. As per noti?cation No. 3/2022 dated 16 July 2022 it is mandatory for all the non-residents to ?le the form 10F electronically who want to avail the bene?t double taxation avoidance agreement.
3. To address genuine hardship, the CBDT had allowed non-residents who are not required to have a PAN under the Income-tax Act, 1961 to manually file Form 10F till 30-09-2023.
4. An important requirement for e- filing of Form 10F is PAN number. Non-residents not having a PAN in India, would need to obtain a PAN number, thus increasing the compliances.
5. The Income Tax department shall be able to trace all the payments to non-residents through their PAN number. In case of non-compliance by non-residents with respect to the taxable income earned from India, the Tax department may send notices to such non-residents and compel them to do compliance in India.
05/05/2023
CBIC Gst instructions on nailing on fake registrations, fraudulent Input tax credits, fake supplies of goods and services :
Instruction No. 01/2023-GST, F. No. CBIC- 20/16/05/2023-GST, Dated 04th May, 2023
Government of India, Ministry of Finance, Department of Revenue, Central Board Indirect Taxes & Customs, GST Policy Wing
To,
All the Principal Chief Commissioners / Chief Commissioners / Principal Commissioners /Commissioners of Central Tax
All the Principal Directors General/ Directors General of Central Tax
Subject: Guidelines for Special All-India Drive against fake registrations-regarding
1. During the National Co-ordination Meeting of the State and Central GST officers held at New Delhi on 24th April 2023, the issue of unscrupulous elements misusing the identity of other persons to obtain fake/ bogus registration under GST, with an intention to defraud the Government exchequer, was deliberated. Such fake/ non-genuine registrations are being used to fraudulently pass on input tax credit to unscrupulous recipients by issuing invoices without any underlying supply of goods or services or both. This menace of fake registrations and issuance of bogus invoices for passing of fake ITC has become a serious problem, wherein fraudulent people engage in dubious and complex transactions, causing revenue loss to the government.
2. Various modus operandi of obtaining such fake registrations have been detected by Central and State Tax administrations. In some cases, forged documents, such as forged electricity bills, property tax receipts, rent agreements, etc. are being used as proof of principal place of business to obtain GST registration. In one of such recent cases detected by Gujarat State Tax authorities, it has been found that a few fraudsters have obtained fake GST registrations on the basis of PAN and Aadhaar number of persons from economically weaker sections without their knowledge. It was revealed that phone number on the Aadhaar cards of these persons were got fraudulently modified at the nearest Aadhaar Seva Centre, by taking these persons to the said Aadhaar Seva Centre by giving a nominal cash amount under guise of a government scheme and getting their Aadhaar Cards linked to a dummy mobile number by using their thumb impression.
3. In the National Co-ordination Meeting on 24th April 2023, it was discussed that while various system based and policy measures are being taken to address this problem of fake registration and fake input tax credit, there is a need of concerted and coordinated action on a mission mode by Central and State tax authorities to tackle this menace in a more systematic manner. It was agreed that a nation-wide effort in the form of a Special Drive should be launched on All-India basis to detect such suspicious/ fake registrations and to conduct requisite verification for timely remedial action to prevent any further revenue loss to the Government. It was decided that common guidelines may be issued to ensure uniformity in the action by the field formations and for effective coordination and monitoring of the action taken during this Special Drive. Accordingly, the following guidelines are issued for such concerted action on fake dealers/ fake billers in a mission mode:-^
(i) Period of Special Drive: A Special All-India Drive may be launched by all Central and State Tax administrations during the period 16th May 2023 to 15th July 2023 to detect suspicious / fake GSTINs and to conduct requisite verification and further remedial action to weed out these fake billers from the GST eco-system and to safeguard Government revenue.
(ii) Identification of fraudulent GSTINs: Based on detailed data analytics and risk parameters, GSTN will identify such fraudulent GSTINs for State and Central Tax authorities. GSTN will share the details of such identified suspicious GSTINs, jurisdiction wise, with the concerned State/ Central Tax administration (through DGARM in case of Central Tax authorities) for initiating verification drive and conducting necessary action subsequently.
Besides, field formations may also supplement this list by data analysis at their own end using various available analytical tools like BIFA, ADVAIT, NIC Prime, E-Way analytics, etc, as well as through human intelligence, Aadhar database, other local learnings and the experience gained through the past detections and modus operandi alerts. GSTN may separately provide a note to the field formations, regarding the tools available in BIFA which may be useful during this drive.
(iii) Information Sharing Mechanism: Successful implementation of the Special Drive would require close coordination amongst the State Tax administrations, and between State and Central tax administrations. For this purpose, a nodal officer shall be appointed immediately by each of the Zonal CGST Zone and State to ensure seamless flow of data and for coordination with GSTN/ DGARM and other Tax administrations. The name, designation, phone number/ mobile number and E-mail Id of such Nodal officer(s) appointed by CGST Zones and States must be shared by the concerned tax authority with GST Council Secretariat within three days of issuance of this letter. GST Council Secretariat will compile the list of the Nodal officers after procuring the details from all the tax administrations and will make the compiled list available to all the tax administrations, as well as GSTN and DGARM immediately.
The Nodal officer of the State/ CGST Zone will ensure that the data received from GSTN/ DGARM/ other tax administrations is made available to the concerned jurisdictional formation within two days positively. The Nodal officer shall also ensure that any cooperation required by other jurisdictions under his control is promptly provided.
(iv) Action to be taken by field formations: On receipt of data from GSTN/DGARM through the Nodal Officer, a time bound exercise of verification of the suspicious GSTINs shall be undertaken by the concerned jurisdictional tax officer(s). If, after detailed verification, it is found that the taxpayer is non-existent and fictitious, then the tax officer may immediately initiate action for suspension and cancellation of the registration of the said taxpayer in accordance with the provisions of section 29 of CGST Act, read with the rules thereof.
Further, the matter may also be examined for blocking of input tax credit in Electronic Credit Ledger as per the provisions of Rule 86A of CGST Rules without any delay. Additionally, the details of the recipients to whom the input tax credit has been passed by such non-existing taxpayer may be identified through the details furnished in FORM GSTR-1 by the said taxpayer. Where the recipient GSTIN pertains to the jurisdiction of the said tax authority itself, suitable action may be initiated for demand and recovery of the input tax credit wrongly availed by such recipient on the basis of invoice issued by the said non-existing supplier, without underlying supply of goods or services or both. In cases, where the recipient GSTIN pertains to a different tax jurisdiction, the details of the case along with the relevant documents/ evidences, may be sent to the concerned tax authority, as early as possible, in the format enclosed as Annexure-B, through the Nodal Officer referred in para (ii) above.
Action may also be taken to identify the masterminds/ beneficiaries behind such fake GSTIN for further action, where ever required, and also for recovery of Government dues and/ or provisional attachment of property/ bank accounts, etc. as per provisions of section 83 of CGST Act. Further, during the investigation/ verification, if any linked suspicious GSTIN is detected, similar action may be taken/ initiated in respect of the same.
(v) Feedback and Reporting Mechanism: An action taken report will be provided by each of the State as well as CGST Zones to GST Council Secretariat on weekly basis on the first working day after completion of the week in the format enclosed as Annexure-A. If any novel modus operandi is detected during the verification/ investigation, the same may also be indicated in the said action taken report. On conclusion of the drive, GSTIN-wise feedback on the result of verification of the shared suspicious GSTINs, will be provided by the field formations to GSTN/ DGARM, as per the format enclosed in Annexure-C.
(vi) National Coordination Committee: A National Coordination Committee headed by Member [GST], CBIC and including Principal Chief Commissioners/ Chief Commissioners Delhi and Bhopal CGST Zones and Chief Commissioners/ Commissioners of State Tax of Gujarat, West Bengal and Telangana shall monitor the progress of this special drive. National Coordination Committee will meet periodically for this purpose. GST Council Secretariat will act as the secretariat of this National Coordination Committee. The Committee will also be assisted by GSTN and Principal Commissioner, GST Policy Wing, CBIC.
4. GST Council Secretariat will compile the reports received from various formations and make it available to the National Coordination Committee immediately. The unique modus operandi found during this special drive will be compiled by GST Council Secretariat and presented before National Coordination Committee, which will be subsequently shared with Central and State Tax administrations across the country.
5. These guidelines are being issued as per the decision of the National Coordination Committee.
6. Difficulties, if any, in implementation of these instructions may be informed to the Board (gst-cbec@gov.in).
Sanjay Mangal
Principal Commissioner (GST)
04/05/2023
Amnesty Scheme in GST 2023
1- RP fails to file GSTR-4 for the period FY 2017-18 to 2021-22 but furnish in 01-04-2023 to 30-06-2023 late fees max to Rs. 250/- CGST and Rs. 250/- SGST.
2- RP, whose registration has been cancelled on or before 31-12-2022 and failed to apply for revocation of cancellation within time period may apply for revocation upto 30-06-2023 after filing of all returns.
3- RP, who failed to furnish return within 30 days of order u/s 62. The order shall be withdrawn if furnish the return by 30-06-2023 and taxes and interest paid.
4- RP fails to file GSTR-9 for the period FY 2017-18 to 2021-22 but furnish in 01-04-2023 to 30-06-2023 late fees max to Rs. 10,000/- per act.
5- Late fee for filling of Final Return GSTR 10 is capped at ?1,000/- if filled before 30/06/2023.
Government launches Vivad se Vishwas scheme for relief to MSMEs for COVID-19 period, as announced in the Union Budget 2023-24
In cases of failure by MSMEs to execute contracts during the COVID period, 95% of the forfeited amount relating to Bid Security or Performance Security or Liquidated Damages deducted or Risk Purchase amount realized shall be returned to MSMEs by Government and Government undertakings. This will provide relief to MSMEs”.
The last date for submission of claims is 30.06.2023.
The Government of India has introduced a new rule for businesses with turnover above 100 crores from May 1st 2023. The Goods and Services Tax Network (GSTN) has stated businesses have to upload their electronic invoices on Invoice Registration Portal (IRP) within 7 days of the issue of such invoices.
03/05/2023
Goods and Services Tax (GST) officers are harnessing the power of data analytics to ascertain if GST is being paid through the entire eupply chain in any given sector, an official privy to the development told PTI.
The Centre had reported that it has detected GST evasion of more than Rs 1 lakh crore in the previous fiscal, prompting the Directorate General of GST Intelligence (DGGI) to step up efforts to nip evasive measures in the bud in a bid to improve tax compliance.
The official told PTI: ”We are using ’end-to-end’ analytics for a sector and ’gap analysis’ of the taxes paid in a supply chain to ascertain if the entire value chain is paying adequate GST or if there is a missing link.”
As per the PTI report, the data analysis includes comparisons of the tax payment profile of a particular sector vis-à-vis the erstwhile excise and service tax regime.
”Now that GST system has stabilised, the effort is to further streamline it. We want to ascertain if all the sectors which are covered under GST are paying their due share of taxes,” an official was quoted as saying.
After the analysis, if the department finds that some changes are required in law or tariffs to check evasion by increasing compliance, then it would be presented before the Council for approval.
If a sub-part of any sector is not paying taxes in the value chain and there is a case of evasion, enforcement action could be taken, the official said.
”Data analytics is a time taking process, but this is required to check GST evasion at the manufacturing stage itself. It will help increase revenue collection while ensuring that compliance improves,” the official added.
GST evasion detection by tax officers almost doubled year-on-year to over Rs 1.01 lakh crore in FY23, while Rs 21,000 crore was recovered by the DGGI.
The total number of GST evasion cases too had gone up — 14,000 cases were detected in 2022-23, up from 12,574 in 2021-22 and 12,596 in 2020-21.
As per the PTI report, the defaulters adopt various tactics such as short payment of tax by undervaluing taxable goods and services, wrong availment of exemption notifications, wrong availment of the input tax credit, non-payment of tax on supply of taxable goods and services (clandestine removal), and fraudulent availment of the input tax credit on the basis of invoices from fake firms.
In a reply to the Lok Sabha last month, the Finance Ministry had said said total GST evasion detected between July 2017 to February 2023 was close to Rs 3.08 lakh crore, of which over Rs 1.03 lakh crore was recovered. GST authorities arrested 1,402 persons for evading taxes in the last five-and-a-half years till February 2023.
02/05/2023
The government plans to introduce a national retail trade policy and an accident insurance scheme in the near future aimed at providing support to domestic traders who are registered under GST, an official said. As per a report by PTI, the official said the proposed policy would help provide better infrastructure and more credit to the traders. The proposed national retail trade policy in India may include measures such as ensuring convenient and prompt access to reasonably-priced credit, promoting the modernization and digitization of retail trade, providing modern infrastructure support for distribution chains, encouraging skill development and enhancing labour productivity. Additionally, the policy could establish an effective mechanism for consultation and grievance redressal.
India ranks as the fifth-largest global destination for retail, and both the Commerce and Industry Ministry and the Department of Financial Services are collaborating to create an insurance scheme for all retail traders registered under the Goods and Services Tax (GST) system. The government is trying to do policy changes not only in e-commerce but is also bringing a national retail trade policy for physical traders which will be introducing ease of doing business, providing better infrastructural facilities, providing more credit and all sorts of benefits to traders,” the official added. As part of the proposed national retail trade policy, a streamlined single window clearance mechanism for traders could be established, along with the implementation of a centralized computerized inspection management system.
30/04/2023
Calcutta HC order on inordinate delay to approach writ court.
The writ petition suffers from gross and inordinate delay which is made even more stark by the lack of reasons for explaining the delay.
The effect of delay in a discretionary jurisdiction exercised by this Court under Article 226 of the Constitution of India was dealt with by the Supreme Court in State of Maharashtra vs. Digambar; (1995) 4 SCC 683 and Express Publications (Madurai) Limited vs. Union of India; (2004) 11 SCC 526.
The above can be useful in other laws like gst, custom laws etc
Read More
https://taxguru.in/income-tax/calcutta-hc-order-inordinate-delay-approach-writ-court.html
28/04/2023
The Ministry of Consumer Affairs (MCA) has set up a committee to come up with a Right to Repair framework. The framework is significant as it will give consumers a chance to repair their products at an optimal cost instead of buying new products altogether. The good news is that the Indian government has implemented the "Right to Repair" law.
1. Under this law, it is mandatory for manufacturers to share their product details with customers so that they can either repair them by themselves or by third parties, rather than depending on the original manufacturers.
2. The important sectors for the initial focus of the framework are farming equipment, mobile phones & tablets, consumer durables, automobiles & automobile equipment.
3. This portal has consolidated list of consumer care contact details of all major consumer products manufacturers for your quick viewing.
https://righttorepairindia.gov.in/
4. India generated an estimated 16,01,155.36 tonnes of e-waste in FY22, as per a response to the Rajya Sabha in February by the Ministry of Environment, Forest and Climate Change. According to the response, only 527,131.57 tonnes (or about 33 percent) was collected, dismantled and recycled, which means 67 percent e-waste that is dumped in the country remains unprocessed.
5. A large portion of India’s e-waste is handled by the unorganised sector, and the country produces the most amount of e-waste in the world, following China and the US.
6. The website shows that there are 15 companies that have come on board as of April 26. These include Samsung India, Hero MotoCorp, boAt, Havells, HP, Microtek, LG, Oppo, Luminous, Panasonic and TAFE Motors and Tractors.
7. For companies, Right to Repair would mean that they have to adapt to new standards of both manufacturing and design. It would mean that they have to share repair information and manuals, and make diagnostic tools and service parts more accessible to consumers and third-party repairers. They would also have to redesign their products in order to make them more repair-friendly.
8. With the rise of electronic waste in India, the right to repair is becoming more crucial than ever. The unified portal has already onboarded leading brands, and the government is taking measures to encourage more companies to join.
9. The right to repair will not only benefit consumers but also contribute to a circular economy and reduce e-waste.
Singapore raised levies on private property purchases in a surprise move late on Wednesday night to cool the market, including a doubling of stamp duties for foreigners to an eye-watering 60%. A foreign buyer pulled out of a purchase of a S$10 million ($7.50 million) luxury condominium along Singapore's Orchard Road shopping belt, while another interested buyer who already transferred funds into Singapore is also holding off. The door is now closed (to foreign buyers)," It could mean a few million dollars more in duties for some buyers." Ever since a run on purchases in 2018, the government has timed announcements of any tightening moves closer to midnight. The new rates came into effect on Thursday. The hike in duties is one of the harshest tightening moves in the market in a long time and comes after a rush of foreigners back into Singapore's property market in recent years. Policymakers are growing concerned that foreign investors increasingly see Singapore property as a hot asset class, squeezing out locals.
National development minister Desmond Lee said without "early pre-emptive measures, we may see investment numbers, both by locals and by foreigners grow, and that will add stress to Singaporeans who are looking to buy residential property". While taxes were also increased for local buyers of second and subsequent properties, analysts expect the largest impact to be felt by foreign buyers of luxury properties. The government said the new rates would impact about 10% of private property transactions.
Christine Sun, the senior vice president of research & analytics at OrangeTee & Tie, called it a "freezing measure" for foreign buyers. Stamp duties for foreigners were last raised to 30% from 20% in December 2021, causing a dip of 16.5% in condominiums bought by foreigners in 2022.
With the new Foreign Trade Policy, which was announced on March 31, the government is attempting to address the issues faced by MSMEs and help them access the global market. The government strives to increase MSMEs’ export contribution to $2 trillion by 2030.
Salient features:
1. The government plans to take forward the Districts as Export Hubs initiative under which each district will become a unique export hub.
2. The policy aims to decentralise export promotion and give states the freedom to build institutional processes at both the state and the district levels.
3. District-level promotional events, such as buyer-seller meets, trade fairs, and workshops, will be held to considerably boost the discoverability of products.
4. Focus on logistics Under Foreign Trade Policy 2023, the government plans to focus on eliminating constraints in infrastructure and logistics, which are hindering exports. DGFT's regional authorities will be responsible for identifying logistical requirements in districts across every stage of the value chain—from the producer to the export destination. The focus will be on developing logistics, export connectivity, and other export-oriented ecosystems at the district level.
5. Consignment value The new trade policy proposes to increase the per-consignment value limit for exports made using courier services, from Rs 5 lakh to Rs 10 lakh.
6. Collaboration with foreign post offices - This is expected to enhance cross-border ecommerce and help MSMEs in the hinterland and land-locked regions reach worldwide markets. Under this collaboration, an exporter can drop off shipments at any nearby post office. The Department of Post will then transport the export parcels to a foreign post office for customs clearance.
27/04/2023
The Finance Minister chaired a periodic review meeting with CBDT to review the impact of various initiatives. Introducing new data sources in SFT has led to an 1118% increase in reported information. Further, FM was also apprised of the fact that the Personal Income Tax to GDP ratio has been steadily increasing from 2.11 in F.Y. 2014-15 to 2.94 in F.Y. 2021-22. Introduction of new data sources in Statement of Financial Transactions (SFT) has resulted in addition of information of about 30 million persons. CBDT apprised the finance minister of the development as part of a review meeting. The Income Tax Department is working on the guidelines for applicability of the "angel tax" provisions which were extended to foreign investors effective April 1. The idea is to provide clarity on valuation and the exemption norms.
According to sources, GST collection in the month of April 2023 are expected to break all previous records. More than 9 crore E-way bill generation has been registered in the month of March, which is the highest ever. Also, due to strictness in compliance and being the last month of the financial year, the expectation of bumper collection has increased. Record 1.67 lakh crore collection recorded in April last year and at that time around 7.81 crore E-way bills were generated in March. The Indian government had seen a collection of Rs 1,60,122 crore as gross GST (goods and services tax) revenue for the month of March 2023. Sales of passenger vehicles in India grew 26.7 per cent in 2022-23, the auto industry body data has showed. In 2022-23, sales of cars from manufacturers to dealers were 38,90,114 units as against 30,69,523 units in the previous financial year.
World military spending reaches all-time high of $2.24 trillion:
1. World military spending reached an all-time high of $2.24 trillion in 2022, according to a leading defence think tank, Stockholm International Peace Research Institute (SIPRI). Global spending rose for the eighth consecutive year.
2. The United States remained the world’s largest military spender — up 0.7 percent to $877bn in 2022 — which was 39 percent of total global military spending.
3. China remained the world’s second-largest military spender, allocating an estimated $292bn in 2022. This was 4.2 percent more than in 2021 and represents the 28th consecutive annual increase.
4. Russian military spending grew by an estimated 9.2 per cent in 2022, to about $86.4bn, according to SIPRI. It is the third largest military spender. Spending is equivalent to 4.1 per cent of Russia’s 2022 GDP, up from 3.7 percent in 2021.
5. India’s military spending of $81.4 billion was the fourth highest in the world. It was 6% more than in 2021 and up by 47% from 2013. The increase in India’s spending shows the effects of its border tensions with China and Pakistan.
6. Saudi Arabia was in fifth place. The five countries accounted for 63% of the world’s military spending.
7. The outbreak of war in Ukraine has triggered the steepest increase in military expenditure in Europe in three decades. The spending by central and western European states reached $345bn in 2022, a sum that in real terms surpasses that of 1989, the last year of the cold war. Their defence expenditure is 30% higher than a decade ago.
8. Many former Eastern bloc states in Europe have more than doubled their military spending since 2014, the year when Russia annexed Crimea.
9. The think tank lamented that countries across the world except for some African countries are bolstering military strength in response to a deteriorating security environment, which they do not foresee improving in the near future.
Source: SIPRI
The Goods and Services Tax Network (“GSTN”) has added 2 new banks Induslnd Bank Limited and South Indian Bank Limited, bringing the total number of banks accepting GST payments to 23. Here is the list of all the Banks:
Axis Bank
Bank of Baroda
Bank of India
Bank of Maharashtra
Canara Bank
Central Bank of India
City Union Bank
Federal Bank
HDFC Bank
ICICI Bank Limited
IDBI Bank
Indian Bank
Indian Overseas Bank
Induslnd Bank Limited
Jammu and Kashmir Bank Limited
Karur Vysya Bank
Kotak Mahindra Bank Limited
Punjab and Sind Bank
Punjab National Bank
State Bank of India
South Indian Bank Limited
UCO Bank
Union Bank of India
The Supreme Court held that the income tax authorities cannot add to a taxpayer's income under Section 153A of the Income Tax Act if no incriminating evidence is found during a search. The court, however, left the scope for the authorities to re-open the cases of tax violation if any incriminating evidence emerges later. Section 153A of the I-T Act specifies a process to determine the income of the searched individual. It aims to bring undisclosed income under the tax. The cases can be reopened under Section 147/148. According to the report, a division bench of justices MR Shah and Sudhanshu Dhulia said that if no incriminating evidence is found during the search, the Assessing Officer (AO) cannot assess other material which relates to already completed assessments.
Assessments cannot be made U/S 153A in case no incriminating evidence is found during search:
PCIT Vs. Abhisar Buildwell P. Ltd. (Supreme Court); Civil Appeal No. 6580 Of 2021
Introduction:
Core issue involved in the appeals is the scope of assessment u/s 153A. question posed for consideration is, as to whether in respect of completed assessments/unabated assessments, whether the jurisdiction of AO to make assessment is confined to incriminating material found during the course of search u/s 132 or requisition u/s 132A or not
Observations of the Hon Supreme Court on the issue:
1. In case of search u/s 132 or requisition u/s 132A, the AO assumes the jurisdiction for block assessment u/s 153A.
2. All pending assessments/reassessments shall stand abated.
3. In case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the ‘total income’ taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns.
4. In case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments.
5. In respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search u/s 132 or requisition under Section 132A.
6. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers u/s 147/148, subject to fulfilment of the conditions as envisaged/mentioned u/s 147/148 and those powers are saved.
26/04/2023
Confiscated goods cannot be claimed as a trading loss incidental to business: SC
The Commissioner of Income Tax Jaipur Versus Prakash Chand Lunia (D) Thr.Lrs. & Anr.
(Civil Appeal Nos. 7689-90 of 2023)
Facts:
1. The Director of Revenue Intelligence set out a search at the business premises of the Respondent/assessee. The recovery yielded silver slabs/silver ingots. The assessee was in the business of making jewellery.
2. The Collector of Customs vide order dated 18.12.1990 ordered confiscation of goods and imposed penalty. It was done on the premise that the goods were smuggled by the assessee.
3. A claim was made by the assessee that the loss on account of confiscation would be allowable as trading loss being incidental to the business, and hence, deductible. This argument was duly rejected by the AO as he did not own the silver. The AO made the addition U/S 69A.
4. The plea of ownership was given up by the Respondent/assessee before the High Court, and therefore, the decision of the assessing officer in bringing the loss suffered under Section 69A of the Income Tax Act, 1961.
Hon SC held as below:
1. The word ‘any expenditure’ mentioned in Section 37 of the Income Tax Act (deals with allowability of expenses) takes in its sweep loss occasioned in the course of business, being incidental to it.
2. As a consequence, any loss incurred by way of an expenditure by an assessee for any purpose which is an offence or which is prohibited by law is not deductible in terms of Explanation 1 to Section 37 of the Act.
3. A penalty or a confiscation is a proceeding in rem, and therefore, a loss in pursuance to the same is not available for deduction regardless of the nature of business, as a penalty or confiscation cannot be said to be incidental to any business.
4. So the loss on account of confiscation of undisclosed silver cannot be allowed as a deduction.
https://taxonation.com/show-detail-news/1036602/sc-order-on-any-loss-incurred-by-way-of-an-expenditure-by-an-assessee-for-any-purpose-which-is-an-offence-or-which-is-prohibited-by-law-is-not-deductible-in-terms-of-explanation-1-to-section-37-of-the-act
In a significant ruling, Calcutta High Court has said that ‘recipient of service’ is entitled to file Advance Ruling application under GST. Many Authority for Advance Rulings (AARs) have so far ruled that only the service provider can seek advance ruling. The appellants clearly fall within the definition of “applicant” as defined under Section 95(c) of the (GST) Act, therefore, we are of the view that the application filed by the appellants before the AAR has to be decided on merits,” a division bench of the High Court comprising Acting Chief Justice TS Sivagnanam and Justice Hiranmay Bhattacharyya said in an order pronounced on April 21. The appellant Anmol Industries entered into a 30-year leasing agreement with the Shyama PrasadMookerjee Port, Kolkata (SMPK) for a piece of land which will be used for setting up commercial office complex. It has been agreed that the Anmol Industries will pay over ?39 crore SMPK as upfront lease premium. It was also said that the allotment letter further seeks to charge GST at 18 per cent on the payment. As the appellant was of the view that upfront lease premium is exempt from GST, it moved to West Bengal AAR to seek advance ruling on whether exemption would be available.
Goods and Services Tax Network (“GSTN”) has issued an Advisory dated April 24, 2023, on Bank Account Validation. It is informed that the functionality for bank account validation is now integrated with the GST System.
25/04/2023
In an ongoing scam, scammers are taking advantage of the ongoing Income Tax Return completion process and are targeting Indian account holders through tax-time smishing campaigns. They are sending fraudulent text messages to bank account holders that appear to be from popular Indian banks, with the aim of tricking users into giving away their personal information. According to a report of Sophos, cited by TOI, scammers are sending fake text messages claiming that the recipient’s bank account will be blocked and are asking them to update their PAN and AADHAR card information on their accounts. These Text messages also include a link to download an Android Package (APK) file. If installed with the app linked with an APK file, the app looks similar to the real bank application and users are then tricked to enter their banking details in the fake app to steal money. This not only abuses recipients but the bank brands. The APK then tries to acquire the recipient’s login, password, debit card number, and ATM pin,” the report reveals. While fake bank SMS scams have happened before, it is important to be cautious this time as people may mistake them for real SMS while checking their account details through online banking or banking apps during the income tax return filing period.
What is tax-time smishing scam::
In cases of tax time smishing scams, scammers targets people during the income tax return filing period. Scammers send fake text messages claiming to be from the recipient’s bank and include a link to download a malicious Android Package (APK) file. Once installed, the APK opens fake bank login pages that look like real ones. If the recipient enters any personal information on these pages, the data is sent to a remote server owned by the attackers instead of the bank. The malicious APK also has the ability to read incoming SMS texts, possibly to extract OTP codes issued by the bank.
So how to prevent falling for these fake SMSs? How to be safe from tax-time smishing scam::
Be cautious of text messages claiming to be from your bank and asking for personal or financial information. The banks will never contact you through text messages, messaging apps, or social media to share details.
Be vigilant when receiving unsolicited text messages or attachments and verify the sender’s identity before opening or downloading any files.
If you receive an unexpected message “from your bank” or other service provider, reach out directly to the bank officials by phone or through the provider’s legitimate, secured website or apps or by visiting the nearest branch.
If you have received such SMS, you can report the scams by sending the email or a copy of the text/SMS as an attachment to phishing@irs.gov.
The government is expected to announce a national retail trade policy and an accident insurance scheme soon with a view to supporting GST- registered domestic traders, an official said. The official said the proposed policy would help provide better infrastructure and more credit to the traders. It may include provisions related to ensuring easy and quick access to affordable credit, facilitating modernization and digitisation of retail trade; modern infrastructural support for subjects like distribution chain; promotion of skill development and improving labour productivity, and providing an effective consultative and grievance redressal mechanism. India is the world’s fifth largest global destination in the retail space. The commerce and industry ministry along with the department of financial services is also working on framing an insurance scheme for all the GST-registered retail traders. “The government is trying to do policy changes not only in ecommerce but is also bringing a national retail trade policy for physical traders which will be introducing ease of doing business, providing better infrastructural facilities, providing more credit and all sorts of benefits to traders,” the official added. Under the proposed policy, a single window clearance mechanism for traders may be developed, besides a centralised and computerized inspection management system. Commenting on the development, Confederation of All India Traders (CAIT) said the retail trade policy will certainly help the sector widen their business as it will have definite parameters and fundamentals within which the retail trade would be conducted. S-ET
SBI opens exclusive branch for start-ups : State Bank of India (SBI) on Monday opened a specialised branch for start-ups at Bandra Kurla Complex in Mumbai. The branch will provide all banking services required by start-ups under one roof.With the opening of this specialised branch, India’s largest bank now has four such branches. The other three branches are located at Bengaluru, Chennai and Gurugram.Mumbai houses the second highest number of unicorns in the nation after Bengaluru, SBI said in a statement. Dinesh Kumar Khara, Chairman, said the primary aim of this branch is to provide end-to-end support to start-ups at every stage of their journey, starting from the formation of the entity till their IPOs and FPOs. - Business Line
RBI imposes Rs 44 lakh penalty on 4 co-op banks : The Reserve Bank has imposed penalties totalling Rs 44 lakh on four cooperative banks, including a Rs 16 lakh penalty on Chennai-based The Tamil Nadu State Apex Co-operative Bank, for contravention of various norms. A penalty of Rs 13 lakh has been imposed on Bombay Mercantile Co-operative Bank as it failed to transfer eligible amount to Depositor Education and Awareness Fund (DEAF) within the prescribed period and transferred the same with delay, RBI said in a release on Monday. In a separate release, the central bank said a penalty of Rs 13 crore has been imposed on Janata Sahakari Bank, Pune for non-compliance with directions on 'Interest Rate on Deposits'. - Economic Times
RBI imposes monetary penalty on Baran Nagrik Sahkari Bank for rule violations : The Reserve Bank of India (RBI) on April 24 said that it has imposed a monetary penalty of Rs 2 lakh on Baran Nagrik Sahkari Bank for rule violations. The inspection report showed that the bank was not in compliance with RBI directions prohibiting the grant of loans/advances/any other financial accommodation to relatives of its directors and not reporting the same in the OSS-6 return to RBI, the release said. - moneycontrol.
24/04/2023
MAS clears merger of HDFC Investments with HDFC Bank : HDFC Bank on Monday said Monetary Authority of Singapore (MAS) has given an approval for merger of HDFC Investments and HDFC Holdings with parent HDFC Ltd. As part of a composite scheme of amalgamation, Griha Pte, a wholly-owned subsidiary of HDFC Investments and a foreign step-down subsidiary of HDFC Ltd, received approval for the merger with HDFC Bank. MAS vide its e-mail dated April 24, 2023 to Griha Pte, granted its approval for acquisition of shares in Griha Pte by HDFC Bank, which would result in the bank acquiring 20 per cent or more of the issued share capital of Griha Pte. The proposed amalgamation is subject to receipt of final approvals from the Securities and Exchange Board of India (Sebi) in respect of change in control of certain subsidiaries of HDFC Ltd. - economic time
IndusInd Bank posts highest ever quarterly consolidated PAT of ?2,043 crore : IndusInd Bank’s quarterly net profit crossed the ?2,000 crore mark for the first time in Q4, with the private sector lender posting a profit after tax of Rs 2,043 crore, higher by 46 per cent YoY and 4 per cent QoQ. The consolidated results include the earnings of wholly-owned subsidiary Bharat Financial. Net interest income (NII) grew 17 per cent YoY to ?4,669 crore. The NIM for the quarter was 4.3 per cent, flat from the previous quarter and slightly higher than 4.2 per cent a year ago. NII for FY23 was Rs 17,592 crore, up 17 per cent from the previous year. Net profit for FY23 was ?7,443 crore, up 55 per cent on year. Advances as of March 31, 2023 were ?2.9 lakh crore, an increase of 21 per cent YoY. - Business Line
IndusInd Bank to apply for insurance licence : IndusInd Bank is set to approach the IRDAI to seek licence to operate in the insurance industry. In a press conference held to discuss March FY23 quarter results, Sumant Kathpalia, MD & CEO, IndusInd Bank, said the bank will apply for the licence. “I think it’s a process which may take one–two years,” he said. When asked what sort of synergies he envisages with insurance operation, Kathpalia sounded optimistic about the non-life business. “We have CV business where we are among the top three players in any category which you talk. (So) it makes immense sense for us to get into non-life business. We love these businesses because they complement our core businesses in the banking sector,” he explained. - Business Line
IndusInd Bank to re-appoint Sumant Kathpalia as MD & CEO effective March 24 : IndusInd Bank on April 24 informed the stock exchanges that its board has decided to re-appoint Sumant Kathpalia as the lender's managing director and chief executive officer for two more years. The second tenure of Kathpalia will come into effect from March 24, 2023, contingent to the approval of shareholders, the bank said in a regulatory filing. "...the Board of Directors of the bank, at its meeting held today has decided to seek approval of shareholders of the bank by means of an ordinary resolution through postal ballot for re-appointment of Mr. Sumant Kathpalia as a managing director and chief executive officer (MD & CEO) of IndusInd Bank Limited for a period of two years with effect from March 24, 2023 upto March 23, 2025," the filing stated. - moneycontrol.
Credit growth likely to moderate to 10 pc in FY24: Report : The credit growth momentum is waning in the country and the crucial non-food loans growth is expected to slip to 10 per cent in FY24 from more than 15 per cent in FY23, a Japanese brokerage said on Monday. Ebbing inflationary pressures, especially on the wholesale side which tends to lower working capital needs, and a likely moderation in GDP growth to 5.3 per cent in FY24 were cited as the primary reasons for the lower bank credit growth expectation by Nomura. - financial express
23/04/2023
US bank deposits fall $76.2 billion, led by large institutions : US bank deposits fell last week, indicating the financial system remains fragile after a string of bank failures. Deposits decreased by $76.2 billion in the week ended April 12, according to seasonally adjusted data from the Federal Reserve out Friday. The drop was mostly at large and foreign institutions, but they also fell at small banks. Meantime, commercial bank lending rose $13.8 billion in the period after increasing $10.2 billion in the prior week on a seasonally adjusted basis. On an unadjusted basis, loans and leases fell $9.3 billion. - Live Mint
Alphabet-backed fintech Aye Finance logs 56% growth in AUM in 2022-23 : Aye Finance, a new age non banking finance company, has said that its loan book grew 56 per cent in 2022-23 to touch ?2,700 crore as of March 31 this year. This fintech lender, which is focused on providing unsecured small-ticket business loans to micro enterprises segment, has recorded net profit of ?60 crore on revenue of ?630 crore for the fiscal year ended March 31, 2023. It has added 1 lakh active customers for the fiscal year to take the overall customer base to 3 lakh micro enterprises. - Business Line
22/04/2023
Delhi Tribunal Order dated 19/04/2023 in the case of M/s. Rohan Tooling Solutions Pvt Ltd. Total Bogus Purchase can not be held as income only the Gross Profit shall be held as income.
The Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2023
The Ministry of Corporate Affairs (MCA) vide its notification dated 17th April, 2023 has notified the “Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2023” which shall come into force with effect from 1st May, 2023. The amendments inter alia provide below mentioned changes:
1. An application for removal of name of company under section 248(2) shall be made to Registrar, Center for processing Accelerated Corporate Exit in Form No. STK-2 along with fee of Rupees 10,000. [Substituted rule 4(1)]
2. According to the amendment now the application in Form STK-2 shall not be accompanied by a copy of the special resolution duly certified by each of the directors of the company or consent of seventy-five per cent of the members of the company in terms of paid-up share capital as on the date of application. [Omitted clause iv of rule 4(3)]
3. The Registrar, Center for Processing Accelerated Corporate Exit established under section 396(1) shall be the Registrar of Companies for the purpose of exercising functional jurisdiction of processing and disposal of applications made in Form no. STK-2 and all matters related thereto under section 248 having territorial jurisdiction all over India. (Inserted sub-rule 3A to rule 4)
4. Further, Form No. STK-2, STK-6 and STK-7 are substituted.
RBI Working Paper No.05/2023: Reading Consumers’ Minds - An ATnalysis of Inflation Expectations
he Reserve Bank of India placed on its website a Working Paper titled, “Reading Consumers’ Minds: An Analysis of Inflation Expectations” under the Reserve Bank of India Working Paper Series. A novel approach is proposed in this paper to verify
this by simulating heterogeneous population consumption baskets and estimating the mean inflation by sampling the baskets. The estimated mean inflation using a random approach fails to display closeness with the survey numbers. Therefore, the paper proposes alternative logical methods for designing basket compositions and identifies the most suited method using which the estimated expectations are found to be close to and well-correlated with the survey numbers.
The Income Tax Department has notified that Form 10 pertaining to the statement which is required to be furnished for the purposes of exercising option under Explanation 3 to the third proviso to clause (23C) of section 10 or section 11 of the Income Tax Act, as was notified vide Income-tax (25th Amendment) Rules, 2022, is now available for filing: vide notification dated 21.4.2023
The Labour Department of Delhi has issued a notification for revision of rates in minimum wages in the specified Scheduled Employments for the following category of workers with effect from April 2023, namely:
1. Un-skilled
2. Semi-skilled
3. Skilled
4. Clerical and Supervisory Staff.
Vide notification dated 20.4.2023 vide Notification No: (142)/02/MW/VII/Part file/429-443
The Employees' Provident Fund Organisation (EPFO) has issued a circular for extension of mandatory seeding of Aadhar for filing of ECR till March 2024, with respect to certain establishments i.e. Beedi making, Building and Construction and Plantation Industries (Tea, Coffee, Cardamom, Pepper, Jute, Rubber, Cinchona, Cashewnuts, etc.) and for North Eastern Region comprising of State of Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland & Tripura vide notification dated 18.4.2023 vide Notification No: BKG-27/5/2021-BKG/E-38791
The Employees' State Insurance Corporation (ESIC) has issued a circular with respect to the seeding and authentication of Aadhar of newly Insured Persons(IP), wherein the employer can seed an Aadhaar Number while registering an Employee. After authentication of Aadhaar, the personal details of the employee will get auto-populated in the system vide notification dated 17.4.2023 vide Labour
Rule ACT: ESI Act
21/04/2023
Handbook on statement of Donations Received: https://drive.google.com/file/d/1ysY0AFaHciZPF_OXPKCWTDpLcpbV3iYy/view?usp=share_link
Handbook on Disallowance of Expenses under the Head Income from Business and Profession:
https://drive.google.com/file/d/1VTy-j0hEdnmMcO0oCoGK18OuGkom1kKa/view?usp=share_link
Handbook on Estimated Income Scheme under Income Tax Act, 1961:
https://drive.google.com/file/d/1zB6ZSgYxvQmwT4lDiORuT3lYe1LK76rc/view?usp=share_link
Handbook on FAQ's on House Property under Income-tax Act, 1961:
https://drive.google.com/file/d/1g7RwCCT3NHpokmHn5wpuRB46g_izIkQv/view?usp=share_link
Guidance Note on Tax Audit under Section 44AB of the Income-tax Act, 1961 AY 2022-23:
https://drive.google.com/file/d/1RFturAyJA86t57quv831D3Xt4oz2liYT/view?usp=share_link
Handbook on Taxation of Virtual Digital Assets:
https://drive.google.com/file/d/1nud6FT4JIph2bdfc4xnwvwSdr5001Q_n/view?usp=share_link
Handbook on Taxation of Private Trust of Income-tax Act, 1961:
https://drive.google.com/file/d/10df-yThCb2WsMWM7j3q132nK6ixVGo4J/view?usp=share_link
Handbook on Income Tax - Tax Collection at Source:
https://drive.google.com/file/d/1Qpz9j7HmmVcQ6jgb1IRc4u1CoKhJToEc/view?usp=share_link
Technical Guide on Audit of Charitable Institutions under Section 12A of the Income Tax Act, 1961:
https://drive.google.com/file/d/15dBS1eFgoAho-3KYAtO1WrhotsOTkg3v/view?usp=share_link
Treatise on Report on Income Tax Dues:
https://drive.google.com/file/d/1dv-GYBGBDTN5WHREx5AI05DPdai2j9Xp/view?usp=share_link
Treatise on Section 194-R under Income-tax Act, 1961:
https://drive.google.com/file/d/1ag7eqG_CckYtS4IYGLjLXzCQF58mje6k/view?usp=share_link
20/04/2023
Sonia Verma v.ITO [2023] 149 taxmann.com 21 (Chandigarh - Trib.)
9. Before..... Considering the predicament of the present assessee and noticing near similar difficulties experienced by a sizeable number of marginal taxpayers lacking proper advice, appropriate exposure I believe that I would be failing in my duty in not highlighting again the urgent need and requirement for the Tax Administration to take necessary steps on a war-footing in disseminating relevant information to the public at large i.e. inform them on acceptable ways of transacting and the need to maintain financial trail of your documents etc. I find that it is necessary to address this urgent need of the times emphasizing that still more efforts need to be made by the tax authorities to disseminate this information. It is necessary to create awareness in the public domain of the various legal requirements which even small taxpayers need to be aware of. The tax authorities have sufficient funds for disseminating information to the public in order to ensure tax compliances. Not limiting these efforts to the population attending Conferences and mega events in 5 Star Hotels the efforts could also be focused on disseminating relevant information to the fringe taxpayers also who constitute a sizeable population of the Indian economy. Due to possible sudden spurt in their small businesses enabled by the developmental economic forces in the country or one-time event of sale of agricultural/ancestral property etc., the consequent sudden deposits in their bank accounts necessarily triggers attention of the tax administration. This event should not be the start of problems in interactions with the tax administration. Since the importance of maintaining financial trail of documents is not understood and for want of proper information, I have seen this population often left flailing like fish out of water, it needs to be addressed. The relevance and importance of maintaining a financial trail of documents etc. it is my opinion needs to be urgently publicized to the affected population. The receipt of money catapults them in unknown territories of tax administration. The Assessing Officer too busy to meet his own targets may not be sufficiently equipped alone to help these hapless people to be tax compliant. It is my humble opinion that the mindset of the entire tax administration has to change. The journey from colonial times tax collectors as authoritarian figures to people friendly tax administration must start. As an economy India is moving as a juggernaut towards 7 trillion dollars. For achieving this laudable aim, we necessarily need to financially empower and enable all citizens to be ready for this change. The drag on the system by ill equipped vulnerable citizens needs to be addressed on a priority as in the absence of any support, they can fall prey to alienating and divisive forces and could tragically wrongly trust the dubious manipulators of the system instead of placing reliance on the good advice and offices of systematic supportive tax administration of the country. Hence, in my opinion disseminating financial literacy information for ensuring compliances to the citizens cannot be postponed any further as in the absence of relevant information, the public at large comprising of small taxpayers are left floundering hopelessly in the sea of confusion due to administrative obduracy which fails to provide these people sound helpful advice/assistance and thus by default creating in them a sense of alienation with the Indian polity on account of the administrative apathy. The risks of resultant push of this population inadvertently towards dishonest means of only being seen to be compliant in sheer numbers and percentages should not be overlooked. This population in terms of total financial contribution to the financial kitty of the country may not be contributing much, however, the impact on the socio-economic system of the country by this human population in sheer numbers as they constitute a sizeable part of the fabric of the country should not be taken lightly and can no longer be ignored. A country moving towards 7 trillion aspirations cannot afford to ignore the foundational bedrock requirements of these ambitions. The needs of the changing times have to be met. The preparations for the change cannot be postponed. The necessity of creating and enabling the creation within the country high ethical standards with the highest possible compliances and an environment of fair functioning of the country cannot be ignored. This ground work needs to be done now. These marginal taxpayers providing the impetus to the Indian economic juggernaut need also to be taken on board and cannot be ignored. Their one and only exposure to the bureaucracy should not be one of pain and alienation. In fact, sound advice and help should be made available to them to ensure that they stay within the bounds of law.
10. Accordingly, highlighting the suggestions in para 9 Registry is directed to forward a copy of this order to the Chairman, CBDT for information and appropriate action, if deemed fit.
19/04/2023
Conditions for Section 74 of Gst act :: DIAMOND STEEL ALLAHABAD HIGH COURT
15. For taking recourse to Section 74, it is essential that along with search and seizure report, certain specific averment is made with regard to the supply of goods and the non-payment of tax coupled with the fact that the same should be by reasons of fraud, willful misstatement or suppression of facts and an intent to evade the tax. The adjudicating authority clearly erred in assessing and quantifying the demand and levying the penalty by taking recourse to some guidelines issued by the Income Tax Authorities which is impermissible while determining the tax liability under Section 74. The order of the appellate authority is even further bad in law as it discloses no reason, whatsoever for assessing the tax and quantifying the liability. While on the one hand, the appellate authority disapproved the manner in which the adjudicating authority had assessed and quantified the demand of tax and penalty, in the same breath, he proceeds to quantify the tax and imposed penalty without disclosing any reasons whatsoever.
16. On the perusal of the adjudicating authority’s order as well as the appellate order, the manner in which the demand has been raised and quantified is not in consonance with the mandate of Section 74 and thus on the ground alone, impugned appellate orders as well as the adjudicating authority’s orders are liable to be quashed.
Condition need to be fulfilled by Revenue before issue SCN U/s 74
1) reason for invoking Section 74 should be clear in SCN itself
2) Provision of IT Act for the profit etc should be considered in case of any evasion allegation
3) relied upon docs should be supplied to the taxpayer with SCN
17/04/2023
New TDS rules from 1st April, 2023: Union Budget 2023 proposed several changes in Tax Deducted at Source (TDS) rules that will come into effect from the new financial year starting 1st April, 2023. In its “Highlights of Finance Bill, 2023”, the Income Tax Department recently shared the list of such TDS rules that were proposed to change in Budget 2023.
1. TDS on winning from online gaming has been proposed without any threshold benefit. The tax will be deducted either upon withdrawal or at the end of the financial year.
2. The exemption from TDS available on interest payments on listed debenture has been proposed to be removed.
3. If the recipient of EPF withdrawal does not provide his PAN, then TDS on the withdrawal will be 20%, instead of the maximum marginal rate.
4. Sections 206AB and 206CCA have been amended to exclude certain persons from the scope who are not required to file a return of income and are notified by the government.
5. For certain income paid to non-residents or foreign companies, TDS will be deducted at a rate of 20% or the rate specified in a tax treaty, whichever is lower. This relief will be available if the payee provides a tax residency certificate.
6. Section 155 has been amended to solve a TDS mismatch problem. “When a taxpayer reports income using the accrual method, it may be taxed before the TDS is deducted. It causes a TDS mismatch and prevents the taxpayer from claiming TDS credit. The amendment in section 155 allows taxpayers to apply to the assessing Officer within two years of the financial year in which the tax was withheld,” the Income Tax Department says.
Some Important Points about Old and New Tax Slabs: One has to choose old or new tax slab while filing Income Tax return form but plan accordingly beforehand(if you want to save). From Apr 1 2023, Default tax regime is the New Tax Regime. Before that default regime used to be the is old Tax Regime.
1. You can choose between the new and old tax regime in every financial year provided you do not have business income.
2. Form 10IE is a declaration for choosing the ‘New Tax Regime’ (till AY 2023-24) After that this is default. The taxpayers must furnish Form 10IE before filing the income tax return of the relevant assessment year.
3. old tax slabs are linked to the age of the taxpayers. There is relaxation available to senior (>=60 years) and very senior citizens (>=80 years). The new tax slabs are the same for everyone, irrespective of the taxpayer age.
4. A taxpayer opting for the new tax regime will have to forgo all the commonly available tax-breaks such as those available under sections 80C, 80D etc except for section 80CCD (2), i.e., employer’s contribution to NPS.
5. you can choose between the new and old tax regime in every financial year provided you do not have business income. You have to choose this while filing Income Tax return form.
6. cess at the rate of 4 per cent and surcharge, applicable as per your income level, is still payable in the new tax regime.
7. The around 5.8 crore people who filed returns for fiscal year 2018-19, 5.3 crore claimed I-T deductions of less than Rs 2 lakh, including deduction under section 80C of the I-T Act (for PF, PPF, life insurance premium), section 80D (mediclaim insurance), section 80CCD(1B) (additional deduction for NPS), deduction for housing loan interest and standard deduction.
Only 3.77 lakh taxpayers have claimed deductions exceeding Rs 4 lakh.
This may result in loss of ?40,000cr for Govt.
Pension is not a bounty. It is a measure of socio-economic justice. The [reason] behind granting of pension is the inability to provide for oneself due to old age. This can be withheld, curtailed or taken away only in accordance with law:: The Karnataka high court has slapped a fine of Rs 1 lakh on some central and state government officials for withholding a 102-year-old freedom fighter's pension and forcing him to litigate over the matter thrice. Along with the fine, the court has ordered a payment of Rs 3,71,280 in arrears, with a 6% interest. The dues will have to be paid within two weeks, the court ruled.
Freedom fighter H Nagabhushana Rao's pension under the Gaurava Dhana scheme was withheld from November 1, 2017, to December 24, 2018, over non-production of a mandatory Life Certificate. He was 97 then. Even after the pension was restored, the arrears were not paid despite two HC orders to release the dues. Justice M Nagaprasanna castigated the officials for apathy and holding the bank concerned responsible for dereliction of duty towards the petitioner. The officers have displayed apathy towards the petitioner by not taking the Life Certificate from him as, by then, the petitioner was 97 years old and was already a recipient of the pension for a long time. The bank ought to have visited the petitioner and collected the Life Certificate and regulated pension." The court clarified that in cases where pensioners are unable to visit the bank for documentation, it is the duty of the bank officials to visit them, obtain their Life Certificates and update the details in the bank's system.
16/04/2023
The Union Finance Minister has announced the revamping of Credit Guarantee Scheme for Micro & Small Enterprises with effect from 01.04.2023, with an infusion of Rs. 9,000 crore to the corpus to enable additional collateral-free guaranteed credit of Rs. 2 lakh crore and the reduction in the cost of the credit by about 1 per cent. The below-stated significant steps have been undertaken to this effect:
1. The corpus of Credit Guarantee Fund Trust for Micro & Small Enterprises (CGTMSE) has been infused with a sum of Rs. 8,000 crore on 30.03.2023
2. CGTMSE has issued guidelines regarding reduction of annual guarantee fee for loans upto Rs. 1 crore from a peak rate of 2% per annum to as low as 0.37% per annum. This will reduce the overall cost of credit to the Micro & Small Enterprises to a great extent
3. The limit on ceiling for guarantees has been enhanced from Rs. 2 crore to Rs. 5 crore
4. For settlement of claims in respect of guarantees for loan outstanding upto Rs. 10 lakh, initiation of legal proceedings will no longer be required
5. CGTMSE created a new landmark by touching the milestone figure of approving guarantees worth Rs. 1 lakh crore during FY 2022 - 23.
Highest direct tax buoyancy in 15 years recorded in FY22 : CBDT
1. The CBDT has said that direct tax buoyancy was at a record high of 2.52 in FY22, the highest in the last 15 years.
2. Tax buoyancy refers to the responsiveness of tax revenue receipts to changes in national income. A tax buoyancy greater than 1 signifies that tax revenues grow at a faster rate than the growth in national income.
3. The net direct tax collections have risen by an impressive 121% from Rs. 6.38 trillion in FY14 to Rs. 14 trillion in the 2021-22 fiscal year. The growth is 160% if the period between FY14 to FY23 is taken into account.
4. The gross direct tax collections also showed an impressive growth of over 126.73% in FY 2021-22, reaching Rs. 16 trillion from Gross Direct Tax Collections of Rs. 7 trillion in FY 2013-14.
5. Moreover, the gross direct tax collections have increased by over 172.83% in FY 2022-23, reaching Rs. 19 trillion (provisional) from Gross Direct Tax Collections of Rs. 7 trillion in FY 2013-14.
6. The direct tax to GDP ratio rose from 5.62% in FY 2013-14 to 5.97% in FY 2021-22. Furthermore, the cost of collection has decreased from 0.57% of total collection in FY 2013-14 to 0.53% of total collection in FY 2021-22.
Maharashtra continues to report the highest GST collection in the country, accounting for almost 15% of the national figure in 2022-23. Its GST kitty is also growing the fastest, with its compound annual growth rate (CAGR) between 2018-19 and 2022-23, outstripping all other states. The latest data shows that Maharashtra’s GST collection for the financial year 2022-23 was Rs 2.7 lakh crore. This is more than twice the collection of Karnataka which reported 1.2 lakh crore, the second highest GST collection in the country. Gujarat was placed third with Rs 1.1 lakh crore while Tamil Nadu reported Rs 1 lakh crore. The state CAGR between 2018-19 and 2022-23 was 12.3%, which is higher than that of Karnataka which is at 11.8% and Gujarat at 11.7%. The state’s growth rate was much higher than the national CAGR which stood 11.3%. The state’s e-way bill generations are also the highest in the country. The state’s e-away bills for 2022-23 amounted to 15 crore, which was a 27% rise from the previous year. By comparison, e-way bills for Gujarat amounted to 11.2 crore, which was a 19% rise from the previous year.
15/04/2023
Notices being sent to those who have claimed deduction in respect of donation to political parties:
1. Donation to political parties is fully tax deductible u/s 80GGB/80GGC of the Income Tax Act. Recognised political parties do not pay any tax on donations, since it is exempt u/s 13A of the Act.
2. The Income Tax Department conducted search operations under section 132 of the Act on September 7, 2022. In this search, a total of 23 Registered Unrecognized Political Parties, 35 bogus intermediary entities and 3 major exit providers were covered which was combinedly called as RUPP group of Ahmedabad.
3. During the course of search action, large number of incriminating documents related to bogus donation receipts, diaries containing details of commission charged, loose papers containing vital information and WhatsApp chats in the mobile phones of the office bearers of the RUPPs and their key handlers confirming the allegations, were found.
4. The modus operandi detected in the course of the ongoing search operation revealed that the donation is received through cheque/RTGS/NEFT in the RUPP’s bank account. This money is then re-routed through various layers, and returned to the original donors, primarily in the form of cash, in lieu of some commission that ranges from 3.5% to 5%.
5. So now, in the last 2 weeks of March 2023, the Income Tax department has issued several notices to taxpayers who have claimed deduction under section 80GGB and 80GGC.
Tip- The taxpayers who have received notices should raise the validity of cash movement and also examine the evidences extracted from political parties.
Summary of the adverse order passed by NFRA regarding statutory audit performed by the auditors of CCD:
Pursuant to Securities and Exchange Board of India sharing in April 2022 its investigation regarding diversion of funds worth Rs 3,535 crores from seven subsidiary companies of Coffee Day Enterprises Limited (CDEL), a listed company, to Mysore Amalgamated Coffee Estate Limited (MACEL), an entity owned and controlled by the promoters ofCDEL, National Financial Reporting Authority (NFRA) initiated investigations into the professional conduct ofthe statutory auditors under Section 132(4) ofthe Companies Act 2013. Following is the summary of the order passed by the NFRA:
1. NFRA's investigations inter-alia revealed that the CDGL's Auditors for the FY 2018-19 failed to meet the relevant requirements ofthe Standards on Auditing ('SA' hereafter) and provisions ofthe Companies Act 2013 and also demonstrated a serious lack of competence.
2. The auditors failed to evaluate their potential conflict of interest and failed to maintain their independence from CDGL by having audit and non-audit relationships with a large number of Coffee Day Group companies and the promoters' family members.
3. The auditors made an attempt to deceive NFRA by adding more documents to as well as altering the documents in their audit file which amounted to tampering with the Audit File. Objection was also raised about editable excel files.
4. The auditors failed to exercise professional judgement & skepticism during audit of the transactions of Rs 6,958.91 crores entered fraudulently with MACEL, which were also not disclosed in the Related Party Disclosures in their entirety.
5. The auditors failed to report understatement of loan by Rs 222.50 crores fraudulently given to MACEL and evergreening ofloans through structured circulation offunds among group companies; failed to report fraudulent diversion ofRs 130.55 crores to a related party M/s Classic Coffee Curing Works.
6. The auditors performed audit in a perfunctory manner resulting in non-reporting of misstatement of Rs 132.37 crores in the consolidated financial statements.
7. The auditors failed to perform appropriate audit procedure to identify misstatement ofRs 69.77 crores in related party disclosure relating to purchase ofcoffee beans from MACEL. Thus, total material and pervasive misstatements amounted to Rs 7514.10 crores and in spite of that they falsely reported that the Financial Statements of CDGL for the FY 2018-19 gave a true and fair view.
8. They also falsely reported that CDGL had an effective Internal Financial Control over Financial Reporting despite the complete absence ofthe same in CDGL.
A court in Dubai has ordered KPMG Lower Gulf to pay more than $231mn to a group of investors who claim they lost money because of poor-quality audit work by the firm on a fund they were invested in. The judgment, issued late last month, found that the Big Four firm breached international auditing standards by approving the financial statements of an infrastructure fund managed by collapsed private equity firm Abraaj Group. The award is one of the largest ever against an accounting firm and exceeds KPMG Lower Gulf’s revenues of $210mn in its most recent financial year. KPMG Lower Gulf said in a statement that it believed it had strong grounds to appeal and had taken the case to the court of cassation, or supreme court. KPMG has not disclosed whether the award would be covered by insurance or if its international network would step in to help with the costs. S- ft.com
13/04/2023
CBDT clarification on TDS on Salaries in light of new default tax regime introduced in Finance Act 2023:
1. The new tax regime U/S 115 BAC of Income Tax Act is the default tax regime. However, under sub-section (6) of section 115BAC of the Act, a person may exercise an option to opt out ofthis tax regime. A person not having income from business or profession can exercise this option every year.
2. In order to avoid the genuine hardship in such cases, the Board, in exercise of powers conferred under section 119 of the Act, hereby directs that a deductor, being an employer, shall seek information from each of its employees having income under section 192 of the Act regarding their intended tax regime and each such employee shall intimate the same to the deductor, being his employer, regarding his intended tax regime for each year and upon intimation, the deductor shall compute his total income, and deduct tax at source thereon according to the option exercised.
3. If intimation is not made by the employee, it shall be presumed that the employee continues to be in the default tax regime and has not exercised the option to opt out of the new tax regime.
4. Accordingly, in such a case, the employer shall deduct tax at source, on income under section 192 of the Act, in accordance with the rates provided under sub-section (lA) of section 115BAC of the Act.
5. It is also clarified that the intimation would not amount to exercising option in terms of sub-section (6) of section 115BAC of the Act and the person shall be required to do so separately in accordance with the provisions ofthe sub-section.
CBDT Circular: 04 of 2023
Gstn Advisory on 12.4.2023:: Time limit for Reporting Invoices on the IRP Portal
1. It is to inform you that it has been decided by the Government to impose a time limit on reporting old invoices on the e-invoice IRP portals for taxpayers with AATO greater than or equal to 100 crores.
2. To ensure timely compliance, taxpayers in this category will not be allowed to report invoices older than 7 days on the date of reporting.
3. Please note that this restriction will only apply to the document type invoice, and there will be no time restriction on reporting debit/credit notes.
4. For example, if an invoice has a date of April 1, 2023, it cannot be reported after April 8, 2023. The validation system built into the invoice registration portal will disallow the user from reporting the invoice after the 7-day window. Hence, it is essential for taxpayers to ensure that they report the invoice within the 7-day window provided by the new time limit.
5. It is further to clarify that there will be no such reporting restriction on taxpayers with AATO less than 100 crores, as of now.
6. In order to provide sufficient time for taxpayers to comply with this requirement, which may require changes to your systems, we propose to implement it from 01.05.2023 onwards.
Documents for which E-Invoice is required to be generated:
1. Invoices
2. Credit Notes
3. Debit Notes
Supplies for which e invoice need to be generated::
1. B2B Supplies
2. Supplies to SEZs (with/without payment)
3. Exports (with/without payment)
4. Deemed Exports
5. Not applicable for B2C Supplies
12/04/2023
Most important amendments made in the Competition Act:
1. The amendment seeks to reduce the maximum time limit for approval of combinations from 210 days to 150 days.As a result, Competition Commission of India (CCI) would have a maximum of 150 days from the date of notice of the combination to approve the combination or to pass an order.
2. The amendment states that the value of any transaction involving the acquisition of control, shares, voting rights, or assets of an enterprise, merger, or amalgamation that exceeds Rs. 2000 crore requires CCI approval.
3. The Bill amends the definition of "turnover" to include global turnover derived from all products and services by a person or an enterprise. The amendment allows for the imposition of penalties for competition law violations based on a company's global turnover, rather than just its turnover in India.
4. A Green Channel route will be introduced for certain combinations which shall be eligible for deemed approval in a trust-based framework, upon the filing of a combination notice.
5. The amendment has introduced a Settlement and Commitments framework so that in cases of abuse of dominance and anti-competitive agreements (except for horizontal agreements), third parties can claim compensation, if aggrieved.
CBDT notified the Cost Inflation Index for Financial Year 2023-24 is 348.
The Goods and Services Tax (GST) are set to issue show cause notices to insurance companies, banks, lenders ..etc. According to the reports 29 insurance companies, 5 Non-Banking Financial Companies (NBFCs) and more than 100 vendors were included by the authorities. The entities were involved in paying for fraudulent services to allow the insurers to pay a bank commission that was higher than what was allowed by law, which is why the notice was issued. The GST official claimed that it was discovered that no personnel hired at banks or NBFCs were given any employment by insurance companies. They, however, offered ITC for the personnel that were deployed and employed by other businesses. The insurance companies willingly refunded Rs 800 crore of the ITC that had been falsely claimed during the probe, although the GST authorities are still looking into the matter because it is anticipated that there may be many thousand crores at stake.
11/04/2023
SC order- no penalty u/s 271C on belated tds payment where only intt is charged u/s 201(1A): an important SC ruling
US Technology International Pvt ltd Vs Commissioner of Income-tax (Supreme Court)
Date-10th April 2023
Civil Appeal No. 7934 of 2011
Sub- Whether penalty can be levied u/s 271C for mere delayed payment of TDS when interest is dis-charged u/s 201(1A)?
The Supreme Court in this case was considering whether the appellant was liable for penalty u/s 271C even though there was mere delay in payment as the provisions of Section 271C dealt with penalty for failure to deduct the tax and not delayed payment of tax.
The court accepting the arguments of the Appellant’s AR that the penal provisions are to be construed strictly and have to be read as they are.
The court also noted that the consequences of non payment/belated remittances/payment of the TDS are specially provided in Section 201(1A) of the Act. It was also noted that prosecution is provided in case of failure to pay the tds u/s 276B.
Finally taking note of CBDT Circular NO 551 dated 23-1-1998, the court allowed the SLP by holding that in case where there was only delayed payment of tax, there was no question of levy of any penalty.
It is specifically observed and held that on mere belated remitting the TDS after deducting the same by the concerned person/assessee, no penalty shall be leviable under Section 271C of the Income Tax Act.
On true interpretation of Section 271C, there shall not be any penalty leviable under Section 271C on mere delay in remittance of the TDS after deducting the same by the concerned assessee.
As observed hereinabove, the consequences on non payment/belated remittance of the TDS would be under Section 201(1A) and Section 276B of the Act, 1961.
This judgement is a welcome judgement in relation to TDS.
SC ruling on determining management and control for residency of a company. Control and management’ signifies, in the present context, the controlling and directive power, ‘the head and brain’ as it is sometimes called, and ‘situated’ implies the functioning of such power at a particular place with some degree of permanence…
This judgement of other academic in nature but will be important from the following angles:-
1. Determination of the residence of a Company based on the test of situation of control and management of a company.
2. Jurisdiction to issue notice u/s 148 of the Income-tax Act, 1961
3. The functions that a Professional is expected to perform in discharge of his professional services.
Read More
https://taxguru.in/income-tax/sc-ruling-determining-management-control-residency-company.html
The Ministry of MSME: GoI has enhanced the ceiling of coverage from Rs 200 lakh to Rs 500 lakh per borrower for availing credit guarantee for CGTMSE for Micro and Small Enterprises (MSEs) on 31 March 2023. The extent of coverage is for MSEs including trading activity.
Micro Enterprise : Max extent of Guarantee Coverage: 85% (upto ? 5 lakh), 75% (? 5 lakh to ? 500 lakh),
MSEs located in NER 75% (incl. Sikkim, UT of Jammu & Kashmir & UT of Ladakh) : 80% (upto ? 50 lakh), 75% (? 50 lakh to ? 500 lakh),
Women entrepreneurs / SC/ST entrepreneurs / Person with Disability (PwD)/ MSE promoted by Agniveers / MSEs situated in Aspirational District/ ZED certified MSEs: 85% (upto ? 500 lakh), All other category of borrowers 75% (upto ? 500 lakh),
CGTMSE Charges (in addition to the interest by the bank)
Slab Standard Rate (pa)
0-10 lakh 0.37
10-50 lakh 0.55
Above 50-1 crore 0.60
Above 1-2 crore 1.20
Above 2-5 crore 1.35
Almost all Public Sector banks, Private banks provide CGTMSE as MLIs (Member lending Institutions).
10/04/2023
The government is building a ChatGPT-like chatbot helpline that can be used to manage grievances of disgruntled consumers, according to people aware of the developments. Moreover, the aim is to construct the tool in such a manner that consumers could converse with it through audio messages in multiple Indian languages. To be sure, this chatbot being built is separate from another one launched last month for consumer complaints last which is not really conversational. This is because it doesn’t allow the user to just put in details like a usual conversation, but rather asks him to select from a list of options in a step-by-step manner, starting with state, city, industry, brand, issue, product value etc. Sources say that while the language translation part of the new tool being built will be taken care of by the government’s Bhashini platform, the challenge is to find a large language model (LLM) that can efficiently understand issues related to consumer grievances. When you interact with a conversational AI chatbot, LLMs help process your prompts. They help the AI understand your text, break down the meanings of your words, and establish context to generate a response.
Union Bank becomes first to open special vostro account for India-Malaysia trade settlement in rupee : Public sector lender, Union Bank of India becomes the first bank in the country to open a Special Rupee Vostro Account through its corresponding bank in Malaysia i.e. India International Bank of Malaysia. This means that trade between India and Malaysia can now be settled in the Indian rupee, in addition to the current modes of settlement in other currencies. Union Bank's this move is in line with RBI's direction in July last year to allow the settlement of international trade in Indian Rupees - Live Mint
Bank of India (BOI) hikes FD rates, non-senior citizens can get up to 7.15% on this tenor : The public sector lender Bank of India (BOI) has hiked interest rates on fixed deposits (FDs) of less than ?2 Cr. The bank presently offers interest rates ranging from 3.00% to 6.00% on deposits that mature in 7 days to 10 years. After the modification, the bank raised interest rates on "Shubh Arambh Deposits," special term deposits with a duration of 501 days, for deposits under ?2 crore. The new rates will take effect on April 1, 2023, according to a press statement from the Bank of India. When it comes to the "Shubh Arambh Deposits" programme, BOI gives an interest rate of 7.65% for additional senior citizen customers, 7.15% for regular customers, and 7.8% under a special, time-limited programme for super senior citizen customers. - Live Mint:
09/04/2023
Reducing high-cost bulk deposits paid off: BoM MD : From a bank identified by RBI for prompt corrective action as losses touched Rs 5,800 crore to emerging as the top PSU bank in terms of credit growth, Bank of Maharashtra has scripted a successful turnaround story. MD and CEO AS Rajeev, who has led the bank’s turnaround, says its total business grew by 15.77% in the nine months of FY23 to reach Rs 3.65 trillion. The target now is to reach the Rs five-trillion- mark in FY24, he tells Geeta Nair. After exiting prompt corrective action, our main goal was to calibrate our business mix, that is, improving the RAM-to-corporate credit ratio. Since then we have been constantly improving the same and aim to make it to 60:40. The share of RAM advances had touched 63.15% in March 2020 and in December 2022 it was at 57.65%. In retail loans, we are offering bottomed-out pricing with innovative products catering to new-age customers. We made structural changes to add fillip to RAM, set up housing finance branches, gold loan vertical at the head office along with Gold Loan Points at branches. We are setting up local central processing cells for quick disposal of RAM proposals. - financial express
RBI may allow HDFC Ltd to carry forward pre-merger bonds : India’s largest mortgager, HDFC Limited, has started work on yet another round of massive bond sale. Highly placed sources tell businessline that the housing financier may raise up to ?50,000 crore by way of bonds in what could be the last tranche of bond issuance ahead of the merger. The issue is likely to conclude by May and with this, the lender would have concluded ?1.32-lakh crore of bond issuances ahead of the merger. In February, it had raised ?25,000 crore of 10-year bonds and on March 27, the boards approved ?57,000 crore of bond issuance. - Business Line
RBL Bank revises interest rates on savings accounts, get up to 7% effective from April 5 : RBL Bank has announced an interest rate revision on savings bank deposits. After the modification, the bank is now permitting savings accounts to earn up to 7.00% in interest. According to the bank's official website, the new savings account interest rates will take effect on April 5, 2023. The bank now offers an interest rate of 4.25% on savings accounts with a daily balance of up to Rs. 1 lakh, and RBL Bank now offers an interest rate of 5.50% on savings accounts with a daily balance of over Rs. 1 lakh and up to Rs. 10 lakh. For savings accounts having a daily balance of more than Rs. 10 lakh but less than Rs. 25 lakh, RBL Bank is giving an interest rate of 6.00%, and for accounts with a daily balance of more than Rs. 25 lakh but less than Rs. 7.5 Crore, it is offering an interest rate of 7.00%. - Live Mint
07/04/2023
Govt may consider 0.3% fee to maintain UPI payment system & ensure financial viability: Report : The government may consider a 0.3 per cent uniform digital payment facilitation fee to fund the infrastructure required for such transactions and also to ensure financial viability of the UPI payment system, suggested a study by IIT Bombay. The facilitation fee of 0.3 per cent can generate around Rs 5,000 crore in 2023-24, said the study titled ‘Charges for PPI-based UPI payments–The Deception’.The study, which analyses the impact of the decision of the National Payments Corporation of India (NPCI) to introduce interchange fee on payments through mobile wallets, argued that the payments received by merchants should remain ‘unpolluted’ whether they are from UPI directly or through prepaid e-wallets. - fnancial express
UPI trades up 82% in FY23, March transactions at record high of 870 crore : Payments transactions via the UPI (Unified Payments Interface) network surged 82.2 per cent in FY23 to a total of 8,376 crore transactions aggregating ?139 lakh crore, 65.3 per cent higher compared with FY22, according to data by the National Payments Corporation of India (NPCI). In comparison, FY22 had seen a total of 4,597 crore UPI transactions aggregating ?84 lakh crore. During the calendar year 2022, the platform had processed around 7,404 crore transactions worth ?126 lakh crore. UPI transactions also ended FY23 at a record high with the number of transactions in March rising 60 per cent YoY to 870 crore and the transaction value rising 46 per cent to ?14.05 lakh crore. In March 2022, the platform had processed 5,406 transactions worth ?9.6 lakh crore. - Business Line
MPC may hike policy rate by 25 bps in first meet of FY24 : Against the global balancing act between hiking interest rates, withdrawing systemic liquidity and the series of recent bank failures, the Reserve Bank of India’s Monetary Policy Committee (MPC) is likely to raise the policy rate by another 25 bps in its first bi-monthly monetary policy for FY24, taking cognizance of the contagion impact on the Indian economy. Weaker-than-expected global growth, supply side shocks to global commodity and domestic food prices, consistently high CPI inflation and tightening of financial conditions warrant the need for another hike be - Business Line
06/04/2023
IRDAI approves two new life insurance companies : The Insurance Regulatory and Development Authority of India (IRDAI) has approved two new life insurance companies.. “In the 121st meeting of Insurance Regulatory and Development Authority of India two new entities namely Acko Life Insurance Ltd. and Credit Access Life Insurance Ltd. were granted certificate of registration to commence life insurance business,” the regulator said in a release. With these two additions, the total number of life insurers operating in India have gone up to 25, which had remained stagnant since 2011, when the certificate of registration was last granted to a life insurer “This comes after the grant of registration to a general insurer in the Authority’s 120th meeting held in November 2022; marking addition of a total three new insurers in the financial year 2022-23,” IRDAI said. - Busines Line
IRDAI names LIC, GIC Re and New India Assurance as domestic systemically important insurers : The Life Insurance Corporation (LIC), GIC Re. and New India Assurance continue to be identified as Domestic Systemically Important Insurers (D-SIIs), the insurance regulator said. D-SIIs are being subjected to enhanced regulatory supervision, the.Insurance Regulatory and Development Authority of India (IRDAI) said in a statement on Friday. Domestic Systemically Important Insurers (D-SIIs) refer to insurers of such size, market importance, and domestic and global interconnectedness, whose distress or failure would cause a significant dislocation in the domestic financial system. “Therefore, the continued functioning of D-SIIs is critical for the uninterrupted availability of insurance services to the national economy,” the regulator said. - Business Line
04/04/2023
GST collections in March jump 13% to Rs 1.6 lakh crore : India’s monthly goods and services tax (GST) collections hit the second highest ever in March, rising 13% from a year earlier to `1.6 lakh crore, suggesting economic strength despite several headwinds. The total gross collection for FY23 was Rs 18.10 lakh crore, an average Rs 1.51 lakh a month and up 22% from FY22, data released on Saturday showed. “Monthly GST collections for the month of March being the second highest of all time, coupled with 22% higher GST collections for FY22-23 over last year point towards the growing trajectory of the Indian economy,” said Abhishek Jain, partner, indirect tax, KPMG in India. GST collections hit a record Rs 1.68 lakh crore in April last year. - economic times
NCLT approves Adani Ports and SEZ’s takeover of Karaikal Port : National company law tribunal has approved Adani Ports and Special Economic Zone Limited’s Rs. 1485 crore offer for Karaikal Port Limited which was made under the insolvency and bankruptcy code (IBC) process as per a court order the contents of which ET has reviewed. Adani Ports and Special Economic Zone was pitted against Vedanta Limited, JSW Infra, a consortium of RKG Fund and Sagacious Capital and Jindal Power all of whom had submitted expressions of interest to acquire Karaikal Port. - economic times
03/04/2023
Mcap of nine of 10 most valued firms jumps Rs 2.34 lakh cr last week : Nine of the top 10 valued firms together added Rs 2,34,097.42 crore in market valuation amid a positive trend in equities last week, with Reliance Industries emerging as the biggest gainer. The 30-share BSE benchmark jumped 1,464.42 points or 2.54 per cent in a holiday-shortened last week. Equity markets were closed on Thursday on account of 'Ram Navami'. The market valuation of Reliance Industries zoomed Rs 86,317.26 crore to Rs 15,77,092.66 crore, the most among the top-10 firms. Tata Consultancy Services (TCS) added Rs 30,864.1 crore, taking its valuation to Rs 11,73,018.69 crore. HDFC Bank's market valuation rallied Rs 26,782.76 crore to Rs 8,98,199.09 crore and that of Infosys surged Rs 19,601.95 crore to Rs 5,92,289.92 crore. The market capitalisation (mcap) of Hindustan Unilever climbed Rs 18,385.55 crore to Rs 6,01,201.66 crore and that of ICICI Bank advanced Rs 17,644.35 crore to Rs 6,12,532.60 crore. - economic times
MFI loan collections improve in October-December qtr : The loan collections of microfinance companies has improved across most loan buckets in October-December, a recent report by CRIF High Mark showed. ortfolio at risk for 30 days past due bucket improved to 3.8% as on December 31 from 9.2% a year ago. Portfolio at risk for 90 days past due improved to 2% as on December 31 from 3.7% a year ago. However, portfolio at risk in the 180 days past due segment deteriorated to 10% as on December 31 from 9.3% a year ago. - Finanial Express
01/04/2023
Highlights of Gst revenue collection for March 2023; Rs.1,60,122 crore gross GST revenue collected for March 2023.
1. It is for the fourth time, in the current financial year that the gross GST collection has crossed rs. 1.5 lakh crore mark registering second highest collection since implementation of GST.
2. This month witnessed the highest IGST collection ever.
3. Second highest collection ever, next only to the collection in April 2022
4. Monthly GST revenues more than rs 1.4 lakh crore for 12 months in a row, with rs 1.6 lakh crore crossed for the 2nd time since inception of GST
5. GST revenues clock 13% growth Year-on-Year
6. Total gross collection for 2022-23 stands at rs 18.10 lakh crore; average gross monthly collection for the full year is rs 1.51 lakh crore
7. Gross revenues in 2022-23 were 22% higher than that last year.
Summary of GST Central Tax Notifications issued on 31st March’ 2023.
Notification No. 02/2023–CENTRAL TAX:
1. Late fees for belatedly filing of GSTR-4 for for the quarters from July, 2017 to March 2019 or for the Financial years from 2019-20 to 2021-22 has been capped to Rs.500/
2. Also, shall stand completely waived where the central tax payable in the said return is nil.
Notification No. 03/2023–CENTRAL TAX:
1. Special procedure for revocation of cancellation of registration.
2. If Cancelled on or before the 31/12/2022 - To be applied within 30/06/2023.
3. Revocation to be filed only after filing all returns along with payment of tax along with any amount payable towards interest, penalty and late fees in respect of such returns,
up to the effective date of cancellation of registration.
4. No further extension of time period for filing application.
5. Also, an opportunity for persons whose appeal against the order of cancellation of
registration or the order rejecting application for revocation of cancellation of registration has been rejected on the ground of failure to adhere to the time limit specified under the law for application of revocation.
Notification No. 04/2023–CENTRAL TAX:
1 . CGST (Amendment) Rules, 2023 - Effective from 26/12/2022.
2. Sub-rule (4A) - Explains Authentication of Aadhaar during registration and the date of application in such cases would be the date of authentication of the Aadhaar number, or fifteen days from the submission of the application in Part B of FORM GST REG-01 under sub-rule (4), whichever is earlier.
3. Biometric-based Aadhaar authentication and taking photograph of the applicant is amended and inserted as a proviso to the said rule.
Notification No. 05/2023–CENTRAL TAX:
1. Sub-rule (4B) amended giving effect to Sub-rule (4A) Proviso
2. for and words – “provisions of “, the words – “proviso to”, shall be substituted”
3. As of now, Biometric-based Aadhaar authentication and taking photograph of the
applicant along with the verification of the original copy of the documents to be uploaded with the application in FORM GST REG-01 through one of the notified Facilitation Centres is applicable only to the state of Gujarat. (As explained in No. 27/2022-Central Tax).
Notification No. 06/2023–CENTRAL TAX:
1. Order under section 62 - Best Judgement assessment by the proper officer passed on or before 28th February’ 2023, the said order shall be withdrawn if the registered person –
furnishes the said return on or before the 30/6/2023;
and after payment of interest due under sub-section (1) of section 50 of the said Act
and the late fee payable under section 47 of the said Act.
2. Irrespective of whether or not an appeal had been filed against such assessment order
or whether or not the appeal, if any, filed against the said assessment order has been decided.
Notification No. 07/2023–CENTRAL TAX:
1. The late fees under section 47 has been capped at Rs.20,000/- for belated filing of
Annual returns (GSTR-9) for Financial years 2017-2018 to 2021-2022, provided filed
during the period 1st April' 2023 to 30th June' 2023.
2. Late fee revision for F.Y 2022-23 onwards has been made to –
Agg. Annual T/O
Up to 5 Cr.: Rs.50/- per day up to maximum of 0.04% of T/o in State or UT
More than 5 Cr. Up to 20 Cr. : Rs.100/- per day up to maximum of 0.04% of T/o in State or UT.
More than 20 Cr. : Rs.200/- per day up to maximum of 0.5% of T/o in State or UT.
Notification No 09/2023 CT:
TIME LIMITS FOR ISSUANCE OF ORDER U/S 73 of CGST ACT EXTENDED
Year 2017-18 upto 31.12.2023
Year 2018-19 upto 31.03.2024
Year 2019-20 upto 30.06.2024
So, due date for issuance of SCN u/s 73
2017-18 -30.09.2023
2018-19- 31.12.2023
2019-20-31.03.2024
From changes in the income tax slabs to no long-term capital gains (LTCG) benefits on debt mutual funds, here are some of the major changes coming into effect from April 1, 2023:
1. Changes in income tax slabs
Finance Minister Sitharaman, while presenting the Union Budget, announced that the tax rebate limit under the new tax regime has been increased from Rs 5 lakh to Rs 7 lakh. She also said that the new regime will become the default regime if the taxpayer does not state under which regime they will submit their income tax returns. From April 1, new income tax rates will come into effect which ranges from 0 to 30 per cent.
For individuals earning a yearly salary up to Rs 3 lakh, tax is nil;
for a salary between Rs 3 lakh and Rs 6 lakh, tax is 5 per cent;
for Rs 6 lakh and Rs 9 lakh, 10 per cent;
for Rs 9 lakh to Rs 12 lakh, tax is 15 per cent;
Rs 12 lakh to Rs 15 lakh, tax is 20 per cent,
while for individuals earning above 15 lakh, tax is 30 per cent.
The standard deduction limit of Rs 50,000 under the old regime has been kept unchanged and extended to the new regime.
2. Encashment limit of leave travel allowance:
From April 1, the encashment of leave travel allowance (LTA) for non-government employees has been increased to Rs 25 lakh per annum. The limit for the same was Rs 3 lakh since 2002.
3. No LTCG tax benefits on debt mutual funds:
The indexation benefits on LTCG on debt mutual funds will be gone from April 1, 2023. From the new financial year, debt mutual funds (MFs) will be taxed at income tax rates as per an individual’s income. The changes were introduced by the government in the Finance Bill 2023 which has been passed earlier this week. From April 1, all gains from debt MFs, which have less than 35 per cent exposure to equity, would be treated as short-term capital gains and taxed as per the investor’s income tax slab.
4. Market Linked Debentures:
Investments in Market Linked Debentures (MLDs) from April 1 will be considered as short term capital assets.
5. Changes in proceeds from life insurance premium:
From April 1, proceeds from life insurance premiums over the annual premium of Rs 5 lakh will be taxable. The rule does not apply to ULIP (Unit Linked Insurance Plan).
6. Changes in Senior Citizen Savings Scheme:
The government has raised the maximum deposit limit for the Senior Citizen Savings Scheme (SCSS) to Rs 30 lakh from Rs 15 lakh. Under the new rules, the monthly income scheme’s maximum deposit limit for single accounts has also been raised to Rs 9 lakh from Rs 4.5 lakh. For combined accounts, the limit has been increased from Rs 7.5 lakh to 15 lakh.
7. No capital gain tax on physical gold conversion to e-gold receipt:
Sitharaman, while presenting the Budget, also announced that from April 1, the conversion of physical gold to an Electronic Gold Receipt (EGR) and vice versa, will attract no capital tax.
Key Highlights of Foreign Trade Policy 2023
1. It is Foreign Trade Policy 2023 (and not 2023-28). There is no end date for the policy.
2. The FTP would be dynamic and would be changed on need based
3. No Incentive (MEIS/SEIS) but only remission (like RoDTEP) would continue (which is WTO compliant)
4. Advance Authorization/DFIA/EPCG would continue
5. 1 day approval for approval (AA, EPCG), revalidation and extension of export obligations. (instead of 3 days to 1 months time).
6. Lower fees for MSME for application for some scheme.
7. Lower Threshold limits for Star Exports house
8. INR Trading to continue
9. Focus on Merchant Trading (buying from third country and selling to third country without touching the boarders). (However, RBI FEMA regulations should be relaxed. This needs to be seen).
10. 4 additional towns of excellence (apart from earlier 39 towns of excellence)
11. Sectors like Textile/Dairy/Green sectors is focused.
12. Special Advance authorization for certain sectors.
13. Self-ratification for 2 star export house for input output norms.
14. Boost to E-commerce. Courier exports limits increase from Rs. 5 lakhs to Rs. 10 lakhs.
15. There should be E-commerce Export hub and training for small E-commerce exporters. Tech support for E-commerce to linking with Banks for financing
16. District Export Promotions committee to facilitate exports headed by DC of the district coordinated by the Regional Office of DGFT.
17. Amnesty scheme for default of Advance authorization/EPCG. Interest limited to 100% of Basic Customs Duty and No interest on Additional Customs Duty and SAD
31/03/2023
With the recent passing of the Finance Bill, 2023, certain categories of non-equity mutual funds, including debt funds and exchange-traded funds, international funds, gold funds, and hybrid funds, are now going to be taxed at your income-tax rates starting from April 1, 2023.
1 That means long-term capital gains tax benefits, along with indexation benefits, are gone !
2. In other words, say goodbye to any tax advantages debt funds once had.
3. The three-year holding period previously allowed for a flat 20% tax rate (with indexation) is no longer applicable, and any capital gains will now be taxed at an individual’s income tax slab rate.
4. It looks like bank FDs and good-quality bonds might be making a comeback as some investors may begin to see debt mutual funds as less attractive.
5. However, there is a silver lining: any investments made until March 31, 2023, will be grand-fathered.
An advisory has been issued on March 22nd, 2023 that defines the reporting of HSN codes in e-Invoice on IRPs portal in GST. It states that every entity having Annual Aggregate Turnover of more than 5 crores in any previous financial year needs to ensure that they report a minimum of six-digit valid HSN code for their outward supplies. They have also suggested that in cases where a valid 6-digit code is not available, a valid 8-digit code should be used instead of artificially creating a 6-digit code. The requirement has already been implemented in the GST system and it is currently in the phase of getting implemented at IRPs portal.
30/03/2023
The Companies (Audit and Auditor) Rules, 2014 (Audit Rules) have been correspondingly amended wherein auditors are now required to report, as part of the auditors report (in the section Report on Other Legal and Regulatory Requirements, as to whether,
(a) the accounting software used by the company being audited has the feature of recording audit trail (edit logs),
(b) the audit trail feature was operational throughout the financial year and had not been tampered with and
(c) such audit trails have been retained for the period as statutorily prescribed.
The MCA has notified that the aforesaid amendments will be effective from April 1, 2023, which implies that the accounting software employed by companies will need to be compliant with the Accounts Rules from FY 2023-24 onwards. The requirement was initially made applicable for the financial year commencing on or after the 1st day of April 2021, however the applicability was deferred to the financial year commencing on or after April 1, 2022 and thereafter to April 1, 2023.
These are applicable to all the companies registered under the Companies Act, 2013. The reporting requirements for the auditors have been prescribed for the audit of financial statements prepared under the Act. Accordingly, auditors of all classes of companies including section 8 companies would be required to report on these matters. As per Companies (Registration of Foreign Companies) Rules, 2014 the provisions of Audit and Auditors (i.e., Chapter X of the 2013 Act) and Rules made there under apply, mutatis mutandis, to a foreign company as defined in Companies Act, 2013.
The term audit trail can be defined as a chronological sequence of the history of a particular transaction, tracking who created/changed a record, what record, what time etc. Audit trails amongst others may help in investigating frauds, system breaches etc. and can be considered an essential tool of monitoring for organisations.
The companies would need to ensure that the audit trail captures changes to each and every transaction; changes that need to be captured may include the following: when changes were made, who made those changes, what data was changed.
The management will be responsible for compliance with the requirement of the rules including to:
1. identify the records and transactions that constitute books of account under section 2(13) of the Act;
2. identify the software i.e., IT environment (including applications, web portals, databases; Interfaces, or any other IT component used for processing and or storing data for the creation and maintenance books of accounts
3. ensure such software have the audit trail feature;
4. ensure that the audit trail captures changes to each and every transaction recorded in the books of account;
5. ensure that the audit trail feature is always enabled (not disabled);
ensure that the audit trail is appropriately protected from any modification;
6. ensure that the audit trail is retained as per statutory record retention requirements.
7. ensure that controls over maintenance and monitoring of the audit trail and its feature are designed and operating effectively throughout the period of reporting.
Considering the amendment has been made to the Rules, the non-compliance with the mandatory provisions would imply contravention with the provisions of the Companies Act, 2013. Further, based on procedures performed the auditor may evaluate the reporting implications in case of non-compliance and consider the requirements specified in Standards on Auditing 250, Consideration of Laws, and Regulations in an Audit of Financial Statements. In respect of the audit trail following could be the expected scenarios:
1. Management may maintain an adequate audit trail as required by the law.
2. Management may not have identified all records/transactions for which an audit trail should be maintained.
3. The accounting software does not have the feature to maintain an audit trail, or it was not enabled throughout the audit period.
Section 128(5) of the Act requires books of accounts to be preserved by the companies for a minimum period of eight years.
The auditor will be required to obtain written representations from management acknowledging managements responsibility for establishing and maintaining adequate controls for identifying, maintaining, controlling, and monitoring of audit trails as per the requirements on a consistent basis.
companies are required to keep back-up of books of account and other relevant books and papers maintained in electronic mode (including at a place outside India) in servers physically located in India on daily basis, instead of periodic basis.
IT-Department provides an exemption for non-residents without PAN to use electronic Form 10F filing: The income tax department has given non-residents who do not have PANs and are not required to have them under the requirements of the Income-tax Act, 1961, a partial reprieve from having to manually file Form 10F until the end of March 2023. The same has now been extended till September 30, 2023. Due to the practical difficulties in enforcing compliance with the aforementioned notification, the competent authority exempted non-resident (NR) taxpayers who did not have a PAN and were not required to have one under the applicable provisions of the Income-tax Act of 1961 read with the Income-tax Rules of 1962 from the requirement to electronically file Form 10F until the end of March 2023.
Nomination for Mutual Fund Unit Holders – Extension of timelines: SEBI vide Circular no. SEBI/HO/IMD/IMD-I POD1/P/CIR/2023/47 dated 28th March, 2023 extended deadline for mutual funds investors to specify nominee details to 30th September, 2023. Earlier the deadline was 31st March, 2023. It is now compulsory for the new mutual fund unit holders to submit either the nomination form or declare that they are opting out of the nomination.
29/03/2023
Govt extends deadline for linking of Aadhaar to Voter ID to March 31 2024 vide Notification dated :21.03.2023.
The Finance Bill, 2023, was passed in Parliament on 24 March, with 64 additional amendments. Of these, 34 pertain to the Income Tax Act and the remaining to indirect tax laws like the customs and goods and services tax (GST).
1. The first important amendment is in respect of taxability of any gains or profits arising on transfer, redemption or maturity of debt mutual funds. The Finance Bill initially introduced on 1 February, proposed to insert a new section 50AA providing for the taxability of any gain on transfer, redemption or maturity of market linked debenture (MLD) on or after 1 April, as a short-term capital gain, irrespective of the period of holding.
2. Now, the coverage of section 50AA has been further expanded to include the units of specified mutual funds, wherein not more than 35% of the total proceeds are invested in equity shares of domestic companies or, in other words, debt mutual funds, acquired on or after 1 April. Thus, any gain or income arising on transfer, redemption or maturity of a unit of debt mutual funds, acquired on or after 1 April, will also be considered as short-term capital gains, and taxable at the applicable slab rate of the investor, irrespective of the period of holding. Indexation benefit is also not available in case of short-term capital gain.
Presently, the units of debt mutual funds held for more than three years are taxable as long-term capital gains and are taxable at 20% plus applicable surcharge and cess, along with the indexation benefit.
3. provision of ‘marginal relief’ in the new personal tax regime. The marginal relief in respect of taxpayers having their annual gross total incomes of ?7,00,005 and up to ?7,29,000, and opting for the new tax regime, has now been provided such that, at the income levels between ?7,00,005 and upto ?7,29,000, the income tax payable will get restricted to the amount of income which exceeds ?7,00,000 only, and not higher than that.
4. The initial Finance Bill 2023 has inserted a new section 56(2)(xii) to tax the distribution of the ‘specified sum’ in the form of interest, dividend and rental income and repayment of debt by InvITs and reits to the unit holders, as income from other sources, at their respective tax slab rates. further clarity on the taxability of distribution of income by Reit (real estate investment trust) and InvIT (infrastructure investment trust) to unit holders. Now, a specific formula has also been prescribed to compute the ‘specified sum’, wherein the specified sum = A-B-C.
A is the cumulative distributions made to the unit holders, other than distributions covered under the provisions of section 10(23FC)/ 10(23FCA) and not chargeable to tax under Section 115UA(2); B is the Issue price (cost of acquisition) and C is the amount already taxed in any of the previous years.
Further, it has also been provided that if B+C is greater than A, then the specified sum will be nil.
5. On the indirect tax front, the existing section 109 of the Central GST, or CGST, Act has been substituted to provide for the Constitution of GST appellate tribunals with establishment of the principal bench in New Delhi and various state benches.
28/03/2023
AMENDMENTS W.R.T. GST IN THE FINANCE BILL, 2023 PASSED BY LOK SABHA
1. No need to take registration for the Specified category of persons exempted from obtaining GST registration.
2. Time limit of 30 days withdrawn for moving application for Revocation of Cancellation of GST Registration.
3. Period to furnish Form GSTR 3B or Form GSTR 10 (Final Return) increased from 30 days to 60 days under Best
Judgment Assessment.
4. Constitution of GST Appellate Tribunal (GSTAT) and
Benches thereof.
5. Place of supply of services of transportation of goods, other than by way of mail or courier to be the location of the recipient of services.
6. Maximum rate at which GST Compensation Cess may be collected.
Finance Bill cleared in Lok Sabha with 60 amendments, including taxation of mutual fund gains.
1. Angel tax deferred to 1st April 2024: No, in the original proposal as well it was to come into effect from 1st April 2024, ie For Assessment year 2024-25 (FY 2023- 24). There is no change in it. However, all concerns raised by stakeholders in implementation of this proposal would be addressed. The draft rules related to valuation shall be shared with the stakeholders for their inputs in the next month itself, viz April. Exclusions, as already provided to domestic Venture Capital Funds etc, shall also be considered for similar overseas entities.
2. Taxation on debt mutual funds: It is proposed to tax the income from debt mutual funds at an applicable rate since it is of the nature of interest income. An arbitrage is being created right now where interest income from debt mutual funds (where not more than 35% invested in shares in a domestic company) is not distributed and converted into long term capital gains of 20% (with indexation). In some cases it comes to even less than 10% due to indexation. Thus many taxpayers are able to reduce their tax liability through this arbitrage. This is sought to be addressed.
3. Changes in REIT/InvIT: Finance Bill proposed to tax distribution from business trust which has income from other sources at applicable rate. This is now proposed to be treated as return of capital i.e. reduction from cost of acquisition, till the cost at which the unit was issued. However, any amount in excess of the issue price would be taxable as income. Thus, the change would benefit the unit holders vis a vis the earlier proposal.
4. Any change to the 7L limit: No there is no change. Only marginal relief is proposed to be provided. Currently if a taxpayer has income of 7 L s/he pays no tax but if s/he has income of 7,00,100 s/he pays tax of 25,010. Thus additional income of Rs 100 leads to tax of Rs 25,010. Hence, marginal relief is proposed that the tax that one pays should not be more than the income that exceeds 7L (Rs 100 in this case).
5. LRS 20% TCS (applicability to IFSC): At present there is TCS on LRS if it is remitted out of India. Hence, when money is remitted by residents to Gift City there is no TCS. To bring parity in treatment it is proposed that TCS shall apply to all LRS even if within India.
6. In a relief to REITs and InVITs, the Finance Bill on Friday proposed to treat distribution from business as return of capital. While presenting the Union Budget on February 1, the government had proposed to tax income distributed by business trusts like REITs and InVITs in the form of debt repayments at the hands of unitholders.
7. Government has doubled the withholding tax rate on royalties and fees for technical services earned by non-resident companies to 20% from 10%. The change has been brought about through the amendments made to the Finance Bill, 2023 by the finance minister.
27/03/2023
Circular No. 191/03/2023-GST Dated 27.03.2023: Clarification regarding GST rate and classification of ‘Rab’ Based on the recommendation of the GST council in its 49th meeting, held on 18th February, 2023, with effect from the 1st March, 2023, 5% GST rate has been notified on Rab, when sold in pre- packaged and labelled, and Nil GST, when sold in other than pre- packaged and labelled. Further, as per the recommendation of the GST Council in the above-said meeting, in view of the prevailing divergent interpretations and genuine doubts regarding the applicability of GST rate on Rab, the issue for past period is hereby regularized on “as is” basis.
India's International Financial Services Centre (IFSC) at GIFT City could become more attractive to investors with a slew of tax incentives brought in through the amendments to the Finance Bill, 2023 including extending a 100% tax holiday available to non-residents for income from portfolio of securities in accounts in offshore banking units for a full 10-year period.
Long term capital gains in international mutual funds to be taxed as per the investor tax slabs. Presently, international mutual funds, for the purpose of taxation are treated as debt funds. Now, as the taxation of debt fund is going to change, so will the taxation of international fund as per the Finance Bill, 2023 tabled by Union Finance Minister Nirmala Sitharaman and later passed by the Lok Sabha on Friday.
In an international mutual fund, the short-term gains arising within three years are taxed at the investor’s applicable tax slab while long-term gains are taxed at 20 per cent after indexation benefits, or at 10% without indexation.
India, which has the third-largest startup ecosystem in the world, is home to 6 of the world's top 100 unicorns list includes BYJU’s, Swiggy, OYO Rooms, Dream11, Razorpay, and Ola Cabs.
26/03/2023
The MSME ministry currently doesn't have any proposal to implement a rating system for monitoring MSMEs. In a written reply to a question on whether the government has any proposal for the MSME rating system, the minister of state in the MSME ministry Bhanu Pratap Singh Verma informed Lok Sabha.
GST Network has issued an advisory for the taxpayer wishing to register as “One Person Company” in GST dated March 21, 2023. Some issues have been raised by the persons registering as ‘One Person Company’ while they take GST registration. Upon analysis, it has been noticed that the option of choosing One Person Company is not there in form notified by CGST/SGST Acts and hence not available on the GSTN portal also. As a workaround, it is advised that in the ‘Part B’ of GST Registration Form ‘REG-01’, applicant may select (Constitution of Business under ‘Business Details’ tab using dropdown list) option “Others”, if the taxpayer wants to register for GST as “One Person Company”. After selecting the option as “Others”, the applicant shall also mention “One Person Company” in the text field and follow the steps for a normal registration application to complete the process.
Important things from GST Aspect to remember this March 2023 ending: 1) Billing Series: New billing series for FY 23-24 w.e.f. 1st April 2023 should be started.
2) E-Invoicing: Businesses with an annual aggregate turnover of more than Rs.10 crore, as calculated in any preceding financial year from 2017-18 up to 2022-23, must begin generating e-invoices from 1st April 2023.
3) Letter of Undertaking (LUT): All the exporters or who supplies goods or services to SEZ without payment of GST should apply for LUT in form GST RFD 11 for FY 2023-24.
4) Composition Scheme: Small taxpayer having turnover less than 1.5 crore should calculate tax liability under composition scheme and normal option, and accordingly may opt for the option which is beneficial to them considering all the conditions.
5) Quarterly Return Monthly Payment (QRMP) Scheme: Taxpayers having Turnover below Rs 5 Crores shall have an option to select the frequency of GST return i.e., QRMP Scheme filing for FY 2023-24 till 30th April 2023.
6) Reconciliation of turnover between GSTR1 and GSTR 3B and books: Prepare and reconcile the turnover as reported in GSTR 1/GSTR 3B with books of accounts for FY 2022-23.
7) Reconciliation of Outward liability between GSTR 1 and GSTR 3B and books: Compile and reconcile the amount of taxes paid in GSTR 1 and GSTR 3B filed during the FY 2022-23 with books of accounts and pay the tax if there is any shortfall vide filing DRC 03 to avoid the litigation and penalty.
8) Reconciliation of ITC between books and GSTR 3B and GSTR 2B: Prepare the yearly reconciliation of ITC accounted in books and ITC availed in GSTR 3B during the FY 2022-23 and reconcile the same with GSTR 2B. If transactions are not populated in GSTR 2B, the taxpayer should follow up with suppliers to furnish/report transactions in their GSTR 1 with payment of taxes in GSTR 3B. Further if ITC has been availed and the transactions not reflected in GSTR 2B then ITC should be reversed.
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9) Reversal of ineligible ITC: Identify the ineligible ITC u/r 42,43, etc. (Blocked credit/ ITC on exempt supplies) already availed in GSTR 3B of the FY 2022-23 and reverse/pay the same along with interest thereon to avoid the litigation and demand of interest & penalty in future. Further, note that no interest leviable on reversal of wrongly availed credit but not utilized.
10) Reversal of ITC if Payment not done to suppliers within 180 days: Prepare and Review that any payment to suppliers is not pending beyond 180 days from the date of issuance of supplier's invoice to avoid reversal of ITC u/s 16(2).
11) Payment of RCM: Taxpayer should check and rework RCM liability as per books of accounts with RCM paid in GSTR 3B. Further, RCM as per GSTR 2B should be checked.
25/03/2023
Negative Values in Table 4 of GSTR-3B:
1- NN 14/2022 – CT has notified few changes in Table 4 of Form GSTR-3B for enabling taxpayers to report correct information regarding ITC availed, ITC reversal and ineligible ITC in Table 4 of GSTR-3B.
2- The net ITC is to be reported in Table 4(A) and ITC reversal, if any, is to be reported in Table 4(B) of GSTR-3B.
3- Currently in GSTR-3B, CN is being auto-populated in Table 4B(2), as ITC reversal. Now in view of the said changes, the impact of credit notes are also to be accounted on net off basis in Table 4(A) of GSTR-3B only.
4- The impact of credit note & their amendments will now be auto-populated in Table 4(A) instead of Table 4(B) of GSTR-3B .
5- In case the value of credit notes becomes higher than sum of invoices and debit notes put together, then the net ITC would become negative and the taxpayers will be allowed to report negative values in Table-4A.
6- Taxpayer can now enter negative values in Table 4D(2) of GSTR-3B.
24/03/2023
FY 24 Budget amendment Is proposing that any capital gain made on investments made after April 1, 2023 in Non Equity MFs ( Funds which have more than 36 % investment in debt ) will not be eligible for Long Term Capital Gains benefits. Gains from Debt MFs on investments made after April 1,2023 will only have Short Term Capital Gains taxable at slab rates as applicable irrespective of the holding period. Please note all investments made before March 31,2023 will continue to enjoy LTCG and Indexation benefits. We recommend clients to fill Fixed Income Investment allocation before March 31,2023 to take advantage of LTCG and Indexation. Existing Investments in fixed income fund should be continued as Long as possible as it will attract concessional LTCG tax rate. This proposal will need to be approved by the Parliament today 24th March 2023 for becoming law. This is our initial impression based on the draft amendments circulated. We will keep you informed as more details will be available.
The Central Government has given the extension by declaring the services of the industry engaged in food stuffs to be a public utility service for a further period of six months with effect from 28th February, 2023.
The Central Government had earlier declared the Food stuffs industry to be public utility service for the purposes of the Industrial Disputes Act, 1947 for a period of six months with effect from 28th August, 2022 vide notification of the Government of India in the Ministry of Labour and Employment number S.O. 4050(E), dated the 30th August, 2022.
RBI asks banks to keep branches open till March 31 for annual closing : The Reserve Bank of India (RBI) on Tuesday directed banks to keep their branches open till working hours of March 31, 2023, a press release stated. With the financial year 2022-23 ending, the annual closing of accounts is scheduled for March 31. In a note to all agency banks, the RBI said that all government transactions done by agency banks for 2022-23 must be accounted for within the same financial year. "Accordingly, all agency banks should keep their designated branches open for over the counter transactions related to government transactions upto the normal working hours on March 31, 2023," stated the RBI notification. - economic times.
Bank of Baroda-backed IndiaFirst Life Insurance gets Sebi green light to IPO : Bank of Baroda-promoted IndiaFirst Life Insurance Company has received the approval from capital market regulator Sebi to float a public issue. The IPO will comprise fresh issuance of shares worth Rs 500 crore, and an offer-for-sale of 14.12 crore equity shares by selling shareholders. Promoters Bank of Baroda and Carmel Point Investments India are going to offload 8.9 crore equity shares and 3.92 crore shares, respectively, through an offer-for-sale. Public shareholder Union Bank of India is also going to sell 1.3 crore shares through the OFS. The life insurance company is expected to raise Rs 100 crore from the pre-IPO placement, before the filing of red herring prospectus with the ROC. If the said pre-IPO placement is undertaken, then accordingly the issue size may get reduced. - moneycontrol.
23/03/2023
IDFC to complete merger with IDFC First Bank by March-end : IDFC Limited said that it has completed all stages of ‘Corporate Simplifications.’ The next step is the amalgamation with IDFC First Bank, which is expected to be completed by the end of FY23. “We propose to complete aforesaid Amalgamation during the financial year barring unforeseen circumstances,” IDFC informed the exchanges. Towards this step, the board of IDFC and IDFC Financial Holding, at their respective meetings on March 18, approved the appointment of Chartered Accountant SSPA & Co. as a registered valuer for recommendation of fair share exchange ratio. - business line
IDFC hires Axis Capital for fair opinion on share exchange ratio for merger with IDFC First : IDFC Ltd and IDFC Financial Holding Company Ltd on March 21 said they have appointed Axis Capital Ltd for the fairness opinion on share exchange ratio for merger with the bank. They have completed all stages of corporate simplifications. “The next step is the amalgamation with IDFC First Bank Limited,” the company said in an exchange filing. "We propose to complete the amalgamation in this financial year, barring unforeseen circumstances." - moneycontrol.
Indian banks can endure global banking turmoil fallout-S&P : Indian lenders are capable of enduring any potential contagion effects emanating from the U.S. banking turmoil and UBS's recent takeover of embattled Swiss lender Credit Suisse given their manageable exposures to their global counterparts, S&P Global Ratings said on Tuesday. "Strong funding profiles, a high savings rate, and government support are among the factors that bolster the financial institutions we rate," the rating agency said. S&P also said Indian banks had sufficient buffers to withstand losses on their sizable government securities portfolio due to rising interest rates. The Reserve Bank of India has increased the policy repo rate by 250 basis points since May last year.Analysts have said that Indian banks are now in a better position to withstand stress given their current capital levels and healthy asset quality. - economic times
Outward remittances under RBI's LRS in April-January surpass FY22 : Aided by international travel, outward remittances under the Reserve Bank of India’s (RBI’s) liberalised remittance scheme (LRS) during the April-January period of FY23 has already surpassed the FY22 figure, which was the highest ever in any financial year. According to data released by the Reserve Bank of India (RBI), in its monthly bulletin for March, outward remittances under the scheme stood at $22.08 billion during the April–January period.In January 2023 alone, the amount remitted overseas totalled $2.72 billion. This is the highest amount remitted under the scheme in a month during the current financial year. In FY22, Indians had remitted a little over $19.61 billion overseas under RBI’s LRS scheme, which is an all-time high. - Business Standard.
22/03/2023
Credit Suisse's discounted sale a signal for all bankers: Kotak : Asia's richest banker Uday Kotak Monday pointed to Credit Suisse's garage-sale valuations - a $3-billion takeover of a $600-billion balance sheet - to warn his counterparts about building size without rigorous risk assessment, underscoring the enduring salience of prudence in the global lending industry that has seen rates climb 5 percentage points in the US in about a year. "Credit Suisse sold to UBS for $3 billion, (a) 60% discount to stock value at Friday closing," Uday Kotak tweeted. "(About) $600-bn balance sheet sold for $3-bn equity value. (About) $17 bn of AT1 bonds written off. A signal for all bankers and stakeholders - when risk-return matrix is overtaken by obsession with size." - economic times.
Increase in banknotes in circulation: Union finance minister Nirmala Sitharaman stated:“ As per Annual Reports of the Reserve Bank of India (RBI), the total value of ?500 and ?2000 denomination banknotes in circulation as on end-March 2017 and as on end-March 2022 was ?9.512 lakh crore and ?27.057 lakh crore.” She further said that “no instructions have been given to banks for not filling ?2000 notes in Automated Teller Machines (ATMs)” and added that “banks make their own assessment of amount and denominational requirement for ATMs on the basis of past usage, consumer requirement, seasonal trend, etc. The minister further said that “as per RBI Annual Reports, the indent for supply of ?2000 denomination banknotes has not been placed from 2019-20 onwards.”
Increase in Smuggling: The total number of cases were 4,784 in 2019-20. They then dipped to 2,032 in 2020-21 before inching up to 2,236 in 2021-22. In 2022-23 (up to February 2023), the number has already reached 4,151. The data indicated that most gold smuggling is detected at the airports. The statement said that while smuggling of gold has increased, that of silver has dropped sharply. silver.”The minister further said, “The involvement of cabin crew/ airport staff has been noticed in some cases of attempted smuggling of gold” and that “action is taken against such persons in accordance with law.”The data provided by the finance ministry revealed that when it came to “the sources where gold smuggling was identified”, there has been a marked increase in both the number of cases and the quantity of gold that has been seized.
Overseas Citizen of India (OCI) Card holders can also get Aadhaar provided they have stayed for 182 days or more in the last 12 months from the date of application.
21/03/2023
Restaurants can levy GST on service charges if supplier charges & customer pays voluntarily:Replied by Govt in Loksabha Question Hour 20.3.23
Question
(a) whether restaurants are entitled to charge GST on service charge voluntarily paid by the customer and if so, the details thereof and the provision and the slab under which GST is charged; and
(b) whether GST Council or the Government has given any permission to levy GST on service charge voluntarily paid by the customer and if so, the details thereof?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)
(a) & (b): As per section 9 of the CGST Act, 2017, GST is levied on supply of goods or services on the value as determined under section 15 of the CGST Act, 2017. According to section 15 of the CGST Act, 2017, any amount charged by the supplier for anything done by the supplier in respect of supply of goods or services forms part of the value of service.
Supply of restaurant service other than at hotels/premises having room tariff above Rs 7500, is taxed at the rate of 5% without Input Tax Credit (ITC) and supply of restaurant service at hotels having room tariff above Rs 7500 per day is taxed at 18% with Input Tax Credit (ITC).
Demat accounts to be frozen if nominee not added by 31st March, 2023: The last date for nomination with regard to demat accounts is March 31, 2023 and investors not meeting the deadline will see trading and demat accounts frozen for debits. The deadline for making nominations was supposed to be March 2022, but SEBI (Securities and Exchange Board of India) had extended the date by a year. The decision to extend the deadline was taken after representations and feedback from various stakeholders. In July 2021, SEBI had asked all existing eligible trading and demat account holders to provide a choice of nomination.
SEBI issued Circular No.: SEBI/HO/MIRSD/RTAMB/CIR/P/2021/601 dated 23rd July, 2021.
For existing investors who have already provided the nomination details prior to the circular issued in July 2021, re-submission of nomination details is optional. Further, existing investors who have not submitted nomination details to date and intend to submit their nomination or opt out of nomination will be allowed to do so by way of two-factor authentication login on trading platforms for stock brokers or depository participants providing such service.
The details previously required, like mobile number, e-mail ID and identification details of the nominee/guardian of the minor nominee, have been made optional.
Here are the steps to add nominee to demat account:
Step 1: Login to your demat account
Step 2: Navigate to 'My nominees' under the profile segment and you will be redirected to the nominee details page
Step 3: You can choose 'add nominee' or 'opt-out'.
Step 4: Fill the nominee details and upload ID proof of the nominee. After uploading the documents, enter the nominee share in 'percentage' you would like to assign to the nominee
Step 5: E-sign the document with Aadhaar OTP
Step 6: The details of the nominee will be then processed for verification and added to the demat account within 24-48 hours.
PENALTY IMPOSED FOR NOT NUMBERING BOARD MEETING & PAGES IN MINUTE BOOK: Kudos Finance And Investments Private Limited.
In terms provisions of section 118 (10) Companies Act, 2013, “Every company shall observe secretarial standards with respect to general and Board meetings specified by the Institute of Company Secretaries of India constituted under section 3 of the Company Secretaries Act, 1980 (56 of 1980), and approved as such by the Central Government;
b) In terms of the provisions of section 118(11) of the Act, If any default is made in complying with the provisions of this section in respect of any meeting, the company shall be liable to a penalty of twenty-five thousand rupees and every officer of the company who is in default shall be liable to a penalty of five thousand rupees; in the instance case, as per examination of records it is seen that the company has not numbered Board Meeting and the pages in the minute book of the company and Minutes book are not signed by the Chairman, further, the minute book of the Company is not paginated at all.
GST Department to scrutinize IT, MCA data to identify entities not paying taxes: The GST department will soon begin analysing ITRs filed by businesses and professionals and also MCA filings to ascertain if the entities are adequately discharging their GST liability and widening the taxpayer base. The data analysis will focus on those entities which are not exempt and are required to register under the GST and file returns, either monthly or quarterly. They will be doing data triangulation based on the information available with the I-T department.
20/03/2023
Gst ADVISORY for banquet halls, marriage gardens and hotels:
It has come to the notice of the Department that several banquet halls, farm houses, marriage gardens, and hotels registered under Delhi GST are not reporting or under reporting their business transactions/turnover and hence not paying due
GST thereon. Moreover, many of such entities are running business activities without having registration under GST despite liable to obtain the same.
Therefore, it is advised that all such banquet halls, farm houses, marriage gardens and hotels must take registration under GST and report their turnover in a correct and transparent manner and pay GST due thereon as per law. Non-compliance shall attract penal action in accordance with the relevant provisions of DGST Act, 2017 and Rules made there under.
The Minister of State for Finance Pankaj Chaudhary in Rajya Sabha dated March 14, 2023, has clarified that there is no restriction on Professionals for obtaining GST Registration if they are operating from residential premises.
Questions:
(a) whether it is a fact that Management consultants, Architects and other professionals operating from their homes are not allowed to get GST numbers for working from the residential premises;
(b) if so, the details thereof;
(c) whether it is a fact that post COVID-19 pandemic, most of senior professionals and consultants have started their professional activities under the Work from Home (WFH) concept; and
(d) if so, the steps Government is contemplating to allow all Professionals and Management Consultants to work from home and allot GST numbers?
Answers:
(a) to (c) The Central Goods & Services Tax Act, 2017 does not restrict GST registration of Management consultants, Architects and other professionals operating from residential premises, due to covid-19 pandemic or otherwise.
(d) Does not arise in view of above.
19/03/2023
Centralises processing of striking of names of certain companies wef 01.04.2023 vide Mca notification dated 17.3.2023; the move is to crunch timeline for exits. MCA has now established a dedicated unit — Centre for Processing Accelerated Corporate Exit (C-PACE) in Indian Institute of Corporate Affairs, IMT Manesar, Gurugram. The government is planning to ease the winding-up rules for start-ups by facilitating exits in 100 days, sources in the Ministry of Corporate Affairs told TNIE. At present, corporate exits take anywhere between one-two years, the aim is to make it 6 months for all corporates and 100 days for start-ups. As per information released by the insolvency regulator, 34% of the ongoing voluntary liquidation processes have taken more than two years and 52% have taken more than one year.
Key changes in income tax act/ rules effective in financial year 2023-24:
1. The new tax regime is now the standard system.
2. New Tax Regime to Result in TDS Reduction for Taxpayers with Salary Income.
3. TDS on EPF Withdrawal Without PAN is to be charged at 20%.
4. Tax exemption on life insurance proceeds limited to premiums below Rs 5 lakh.
5. Taxpayers to See Higher Capital Gains on Sale of Property from this Financial Year.
6. Exemption Limit for Capital Gains Reduced to Rs. 10 Crore.
7. No Capital Gains Tax on Conversion of Physical Gold into
EGR by SEBI-Registered Vault Managers Starting April.
8. Tax Implications of Gift Received by RNOR from Resident.
9. New Reduced Income Tax Rates for Manufacturing Co-operatives and Non-Manufacturing Income.
10. New Limit for Cash Transactions by Agricultural Credit
Societies and Rural Development Banks.
11. TDS on lottery and horse race winnings to apply to annual amounts over Rs 10,000, not transaction-wise.
12. Co-operative Societies get TDS Relief.
13. TDS relief for non-residents.
14. Amendments to Section 206AB and 206CCA exclude certain non-filers from higher TDS deductions.
15. Exemption of TDS on interest payments for listed securities to be withdrawn from April.
Delhi High Court allows Assessee’s writ petition, quashes the demand arising from TDS by Kingfisher Airlines (Assessee's employer) which was not duly deposited; Holds that the Assessee cannot be called upon to pay the tax which has been deducted at source from his income, even though not deposited by his employer, under Section 205 read with CBDT Instruction dated 01.06.2015; Further holds that the said demand cannot be adjusted against the future refund payable to the Assessee, as it will amount to indirect recovery of tax and grants Assessee the refund of Rs. 1.94 Lacs due to him for Assessment year 2015-16; - [Sanjay Sudan v. ACIT [TS-93-HC-2023(DEL)] – Date of Judgement : 17.02.2023 (Del.)]
Why has Credit Suisse reached the crisis point?
1. Credit Suisse ranks among the world's largest wealth managers and crucially it is one of 30 global systemically important banks, whose failure would cause ripples through the entire financial system.
2. The sell-off in Credit Suisse's shares began in 2021, triggered by losses associated with the collapse of investment fund Archegos and Greensill Capital.
3. In January 2022, Antonio Horta-Osorio resigned as chairman for breaching COVID-19 rules, just eight months after he was hired to fix the ailing bank.
4. In July, new CEO and restructuring expert Ulrich Koerner unveiled a strategic review - but failed to win over investors. An unsubstantiated rumour on an impending failure of the bank in the autumn sent customers fleeing.
5. Credit Suisse confirmed in February that clients had pulled 110 billion Swiss francs ($119 billion) of funds in the fourth quarter while the bank suffered its biggest annual loss of 7.29 billion Swiss francs since the financial crisis.
6. On Wednesday, Saudi National Bank, the bank's top backer, told reporters it could not give more money to the bank as it was constrained by regulatory hurdles, while saying it was happy with the bank's turnaround plan.
7. Credit Suisse was thrown a $54 billion lifeline by the Swiss central bank on Thursday to shore up liquidity after a slump in its shares and bonds intensified fears about a global banking crisis
The way forward: The Swiss National Bank and Swiss regulator FINMA have told their international counterparts they regard a deal with UBS Group as the only way to prevent a collapse in confidence in Credit Suisse Group.
A new report has found that 186 banks in the US are at risk of failure due to rising interest rates and a high proportion of uninsured deposits. The research, posted on the Social Science Research Network titled 'Monetary Tightening and US Bank Fragility in 2023: Mark-to-Market Losses and Uninsured Depositor Runs?' estimated the market value loss of individual banks' assets during the Federal Reserve's rate-increasing campaign. Assets such as Treasury notes and mortgage loans can decrease in value when new bonds have higher rates. The study also examined the proportion of banks' funding that comes from uninsured depositors with accounts worth over $250,000. If half of the uninsured depositors quickly withdrew their funds from these 186 banks, even insured depositors may face impairments as the banks would not have enough assets to make all depositors whole. This could potentially force the FDIC to step in, according to the paper. However, it is important to note that the research does not consider hedging, which may protect many banks against rising interest rates. S-BT
18/03/2023
Recent Messages sent by the Income Tax Department:
Income Tax Department has received information about certain significant financial transactions relating to FY 2022-23 (AY 2023-24). Please view transactions under e-Campaign tab on Compliance Portal and remember to pay appropriate Advance Tax.
How do we address this message?
1. The authorities are reminding us to pay appropriate Advance Tax by 15th March keeping in mind the income earned and taxable keeping in view the transactions entered into.
2. We are also advised to reconcile the transactions shown in Annual Information Statement (AIS) with the advance tax payment.
3. In the e campaign homepage on the compliance portal, we can see the significant transactions will be seen. We can provide feedback in AIS and generate acknowledgement for the same.
Government has amended rules under the anti-money law, making it mandatory for banks and financial institutions to record financial transactions of politically exposed persons (PEP). Also, financial institutions or reporting agencies will be required to collect information about the financial transactions of non-profit organisations or NGOs under the provisions of the Prevention of Money Laundering Act (PMLA).
Taxpayers will get relief from recovery if they file a declaration of their intent to appeal against the order of lower authorities, even as the GST Appellate Tribunal is yet to be constituted, ruled the Bombay High Court. Once the declaration is put on record, there would be no recovery, the court ordered.
Companies continue to face technical challenges in using the MCA upgraded Version 3 portal for corporate filings, despite the government's efforts to address such problems. Industry associations may seek physical filings of more forms until the portal is fully functional.
16/03/2023
The Ministry of Corporate Affairs (MCA) through three notifications had notified that every company using accounting software must use software that records an audit trail of each and every transaction and creates an edit log of each change made in the books of account. The software must also ensure that the audit trail cannot be disabled. By the notification dated March 31, 2022, in the proviso to sub-rule (1) of rule 3, for the figures, letters and words “1st day of April, 2022”, the figures, letters and words “1st day of April, 2023” was substituted. In short, moving the effective date of implementation of the same to 1st April of this year. According to the notifications, every company using accounting software must use software that records an audit trail of each and every transaction and creates an edit log of each change made in the books of account. The software must also ensure that the audit trail cannot be disabled. The provisions make a major amendment to the Companies (Accounts) Rules, 2014. The stakeholders are requested to migrate to or ensure that the accounting software used by the company meets the above requirements with effect from April 1, 2023.
The Unique Identification Authority of India (UIDAI) has decided to allow residents to update documents in their Aadhaar online free of cost, a people-centric move that will benefit millions of residents. As part of Digital India initiative, the UIDAI took the decision and is urging residents to get the benefit of free document update facility on myAadhaar portal. The free service is available for the next three months, i.e., March 15 to June 14, 2023. It is important to note that this service is free only on myAadhaar portal and will continue to attract a fee of Rs 50 at physical Aadhaar centres, as in the case earlier.
The UIDAI has been encouraging residents to upload Proof of Identity and Proof of Address (Pol/Pod) documents to revalidate their demographic details, especially if Aadhaar was issued 10 years back and never got updated. This will help in improved ease of living, better service delivery and enhances authentication. If there is a need to change demographic details (Name, Date of Birth, Address, etc), the residents can use regular online update service, or may visit nearest Aadhaar centre. In such cases normal charges will apply. As per Aadhaar Enrolment and Update Regulations, 2016; Aadhaar number holders may, on completion of every 10 years from the date of enrolment for Aadhaar, update their supporting documents in Aadhaar, at least once, by submitting POI and POA documents, so as to ensure continued accuracy of their information.
Residents may login on https://myaadhaar.uidai.gov.in/ using their Aadhaar number.
Consequence of not linking PAN with Aadhar by 31st March 2023: if a taxpayer having PAN and who is eligible to obtain Aadhaar, does not link his PAN with Aadhaar on the Income Tax portal, within 31.03.2023 he/ she shall be liable to all the consequences under the Act, in addition to PAN remaining inoperative as per Sec 139AA of the Income Tax Act. Rule 114AAA of the Income-tax Rules provides that if PAN of a person has become inoperative, he will not be able to furnish, intimate or quote his PAN and shall be liable to all the consequences under the Act for such failure.
Following are the possible consequences:
1. The person shall not be able to file return using the inoperative PAN.
2. Pending returns will not be processed.
3. Pending refunds cannot be issued to inoperative PANs.
4. Pending proceedings as in the case of defective returns cannot be completed once the PAN is inoperative.
5. Tax will be required to be deducted at a higher rate as PAN becomes inoperative
Checking GST Registration on Official Website:
To check the validity of the GST number, visit the official GST website at https://services.gst.gov.in/services/searchtp.
Enter the 15-digit GST number and fill out the captcha. If the number is valid, you can view information about the restaurant. But there are a few things you need to look out for.
When you view information about the restaurant, check the “GST/UIN Status.” If it says “Active,” then it’s okay to pay the GST fee.
If it says “Suspended,” do not pay the fee.
Also, check the “taxpayer type.” If it’s “Regular,” you can pay the fee, but if it’s “Composition,” then do not pay the fee.
If the restaurant is charging you GST fees without a valid GST registration, then you do not need to pay that amount. If you see the charges on your bill but cannot see the 15-digit GST number, you should not pay the fee.
What to Do if You’re Forced to Pay:
If the restaurant insists that you pay the GST fees, call the GST helpline customer care number at 18001200232 and register a complaint regarding the restaurant.
Remember, if the GST registration is invalid or suspended, or if the restaurant has a “Composition” taxpayer type, you should not pay the fee.
15/03/2023
Clarification about applicability of Plastic Waste Management
Rules, 2016, as amended from time to time, on imported goods.
1. The importers of plastic packaging, the importers of various items such as primary products, chemicals, machinery, textiles, articles etc. which are not plastic packaging but are coming packed in plastic packaging are also required to take said EPR registration.
2. Importers of goods, which are not directly associated with plastic packaging but their goods are coming wrapped or packed in plastic packaging such as machinery, textile, etc., are required to upload the PR registration in e-sanchit at the time of filing of the Bills of Entry to avoid any query on this issue.
3. Goods shall not be kept on hold by the Customs Authorities and the consignment shall be released and the officer giving Out of Charge shall maintain the record of such consignments in the format attached to this Standing Order, to enable monitoring of the Importer having eventually obtained the EPR registration or otherwise.
4. The Deputy/Assistant Commissioner (Appraising General Unit) shall forward the complete list of consignments cleared by Kolkata Customs (Port) in the previous month, where PR registration was not available with the Importer at the time of clearance of goods but application had been filed on the CPCB Portal, to the CPCB. This shall be completed by the Deputy/Assistant Commissioner (Appraising General Unit) by 20th of every month.
Credit Suisse Group has been suspended from trading after shares plummeted 20% to a record low on Wednesday.
Shares fell below two Swiss francs (180p) amid market contagion fears following SVB’s collapse.
Saudi National Bank’s chairman (Credit Suisse’s largest investor) Ammar Al Khudairy ruled out injecting further funds into Credit Suisse (SIX:CSGN) if there was another call for additional liquidity. The U.S. Treasury Department is actively reviewing the U.S. financial sector's exposure to Credit Suisse (SIX:CSGN) Group AG after the bank's shares fell to a record low.
Indian banks including Axis Bank, Kotak Mahindra Bank, ICICI Bank, and HSBC have set up crack teams to help startups move their funds from collapsed SVB accounts to their branches in GIFT City, Gujarat.
Extending help:
1. The banks have set up their International Financial Services Center Banking Unit (IBU) in GIFT City to cater to non-residents and foreign entities.
2. Axis Bank exec Ganesh Sankaran said B2B ecommerce entities, large online car marketplaces, and agri/foodtech startups have expressed interest in moving funds to GIFT City.
3. Several fintechs including Razorpay, GetVantage, Kluband Recur Club, Salt.Pe etc have also offered a line of credit to manage expenses.
14/03/2023
The collapse of the SVB would've been an "extinction-level event" for Indian SaaS companies with SVB accounts had US authorities not helped save around Rs 20,000 crore of their deposits. Founders and investors YourStory spoke to suggested there was widespread panic in the ecosystem.
The panic:
1. At least 600 SaaS startups headquartered in the US with roots in India, or India-based, had bank accounts with the SVB.
2. Some of them have either their entire chunk of money lying in SVB accounts or a significant portion tied up at the shuttered bank.
Advisory: Investors and founders across the board advised not to put all eggs in one basket and add controls to assess financial risks.
The income tax department has identified around 68,000 cases for e-verification due to underreporting of income in tax returns in comparison with the Annual Information Statement for the fiscal year 2019-20, according to sources. The e-verification process involves notifying taxpayers about the mismatch in the Annual Information Statement (AIS) of their financial transactions and the Income Tax Returns filed. About 56% of the cases or 35,000 cases have already been resolved satisfactorily by the taxpayers by either filing an updated tax return or replying to the notice. The remaining 33,000 cases have not yet received any response. Taxpayers have until March 31, 2023, to file updated tax returns for income earned in the 2019-20 fiscal year.
13/03/2023
The FDIC created a new bank, the National Bank of Santa Clara, to hold the deposits and other assets of the failed one. On Friday, Silicon Valley Bank, a lender to some of the biggest names in the technology world, became the largest bank to fail since the 2008 financial crisis. The move put nearly $175 billion in customer deposits under the control of the Federal Deposit Insurance Corp. Here’s what we know so far about this developing story. Regulators take over the bank. The California Department of Financial Protection and Innovation shut down Silicon Valley Bank on Friday, less than two days after the bank tried to persuade clients not to pull their money over concerns it was running low on available cash. The regulator appointed the Federal Deposit Insurance Corp. as the receiver. Flush with cash from high-flying startups, Silicon Valley Bank bought huge amounts of bonds more than a year ago. Like other banks, Silicon Valley Bank kept a small amount of the deposits on hand and invested the rest with the hope of earning a return.
That had worked well until the Federal Reserve began raising interest rates last year to cool inflation. At the same time, startup funding started to dry up, putting pressure on many the bank’s clients — who then began to withdraw their money. To pay those requests, Silicon Valley Bank was forced to sell off some of its investments at a time when their value had declined. In its surprise disclosure on Wednesday, the bank said it had lost nearly $2 billion.
Canadian banks erase $19.7 billion in value from Canada’s top banks in the last four days on SVB contagion. Some of the nation’s biggest banks, including Bank of Nova Scotia, Bank of Montreal and Toronto-Dominion Bank fell more than 2 per cent on Friday. With banking equities far and away the largest sector by weighting of the S&P/Toronto Stock Exchange Composite Index, Canada’s main stock benchmark slumped more than the S&P 500 as the biggest U.S. bank failure in more than a decade roils the market. Large Canadian banks have acquired regional U.S. banks in recent years, increasing their exposure to the banking fallout from the failure of Silicon Valley bank, which entered receivership Friday. SVB Financial Group had opened a Canadian office in 2019 and listed e-commerce darling Shopify Inc. as a client. Shopify was among the biggest decliners in Toronto on Friday.
Signature Bank's closure marks the third-largest U.S. bank failure. New York state regulators on Sunday shut down Signature Bank
, a big lender in the crypto industry, in a bid to prevent the spreading banking crisis. We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority,” the Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. said in a joint statement Sunday evening. Signature is one of the main banks to the cryptocurrency industry, the biggest one next to Silvergate, which announced its impending liquidation last week. It had a market value of $4.4 billion as of Friday after a 40% sell-off this year, according to FactSet. As of Dec. 31, Signature had $110.4 billion in total assets and $88.6 billion in total deposits, according to a securities filing. The FDIC’s deposit insurance fund will be used to cover depositors, many of whom were uninsured due to the $250,000 cap on guaranteed deposits. While depositors will have access to their money, equity and bondholders at both banks are being wiped out, a senior Treasury official said.
Financial regulators said Sunday night depositors of the failed Silicon Valley Bank will have access to all of their money starting Monday, March 13, while announcing new facilities to backstop deposit withdrawals across the banking system amid fears of contagion following SVB's shock failure last week. Depositors will have access to all of their money starting Monday, March 13," the statement added. "No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer." The Fed is not purchasing securities at banks only lending against their book value. Fed officials stressed no bank is being bailed out, but banks are instead receiving longer-term liquidity at a higher valuation and lower risk.
HSBC has agreed to buy Silicon Valley Bank’s subsidiary in the United Kingdom for 1 pound — just over $1 — under a deal facilitated by the British government and the Bank of England following the U.S. lender’s collapse. Under the terms of the agreement, HSBC’s U.K. subsidiary will finance the acquisition of Silicon Valley Bank UK Limited, which is expected to be completed immediately. The deal excludes all assets and liabilities of the parent company, SVB.
The U.K. deal comes after the Biden administration moved to protect SVB customers from losses, announcing Sunday night that depositors would have access to all their money on Monday morning, approving an extraordinary intervention aimed at averting a crisis in the financial system.
12/03/2023
Last date for Final instalment of advance tax for the financial year 2022-23 is 15th March 2023. Advance tax, also called pay-as-you-earn tax, is tax that is paid in advance, in instalments, on certain dates that are fixed by the Income Tax Department. The taxpayers are expected to deposit the advance tax in 4 instalments, the timeline states 15th June for 15%, 15 September for 45% of the advance tax, 75% by 15 December while 100% of the advance tax is to be deposited till 15 March. The tax can be paid through the e-payment method via a net banking facility in the authorized banks. In case the tax not paid on time, the penalty will be charged under section 234B and 234C of income tax.
Singapore has announced an increase in the minimum investment amount required for individuals seeking permanent residency through the Global Investor Programme (GIP). The new rules will come into effect from 15th March, 2023, and require applicants to invest at least S$10 million in a business or S$25 million in an approved fund. Those who wish to establish family offices must deploy and maintain at least S$50 million in any of the four investment categories.
1. The GIP programme enables eligible global investors to obtain permanent residency status in Singapore through three investment options. Each of these options has additional requirements for PR holders to get their re-entry permit (REP) renewed after five years.
2. Option A is to invest in a new or existing business in Singapore, with the new minimum investment amount being S$10 million, inclusive of existing paid-up capital.
3. Option B is to invest in a GIP-select fund, shortlisted by EDB, with a minimum investment amount of S$25 million.
4. Option C is to establish a Singapore-based single family office with Asset Under Management (AUM) of at least S$200 million, of which at least S$50 million must be deployed in any of the four categories, within 12 months of final approval.
5. Additionally, certain other conditions apply for renewals after five years in terms of hiring of employees.
6. According to the Singapore Economic Development Board (EDB), the aim is to selectively appeal to those who can make a greater economic impact and “be more rooted to Singapore” amidst competition from other jurisdictions seeking to attract high-calibre business owners and owners of capital.
The West Bengal government has decided that farmers will not have to pay income tax on any agricultural product for the next two fiscal years, Finance Minister Chandrima Bhattacharya said Monday. The state government has also announced the withdrawal of two types of cess on raw tea leaves for the period. Presenting the Finance Bill in the assembly, Bhattacharya said the current exemption period for agricultural income tax ends on March 31.
11/03/2023
The Silicon Valley Bank crisis has taken a new turn. On Friday, the California Department of Financial Protection and Innovation issued a closure order for the bank, appointing the Federal Deposit Insurance Corporation (FDIC) as receiver. This move has served a body blow to the many Indian startups that had hoped to withdraw their funds from the bank ahead of a potential crash.
1. Trouble began on Wednesday when the bank’s parent company SVB Financial Group announced the sale of $21 billion of securities, adding that it was preparing to sell $1.75 billion worth of shares to bolster its finances. Widespread panic and questions around its insolvency resulted in several investors advising portfolio companies to move their money out of SVB accounts.
2. Now, things look bleak. Ahead of the closure, the FDIC created the Deposit Insurance National Bank of Santa Clara (DINB) in order to take control of all insured deposits of SVB. In a statement, it said insured deposits will be accessible to customers on Monday, March 13, while ‘uninsured depositors’ will get a ‘receivership certificate’ for amounts higher than $250,000.
3. The sudden collapse of SVB has thousands of tech startups wondering what happens now to their millions of dollars in deposits, money market investments and outstanding loans. Most importantly, they’re trying to figure out how to pay their employees.
4. The Bank of London is considering a rescue bid for the UK arm of collapsed Silicon Valley Bank. The British bank has appointed investment bank Perella Weinberg Partners to advise it on its interest in SVB UK.
The Hon’ble Allahabad High Court in Vriddhi Infratech India Pvt. Ltd v. Commissioner, Commercial Tax and Ors. [Writ Tax No. – 4 of 2022 dated February 23, 2023] has set aside the order passed by the Revenue Department, on the grounds, that the Revenue Department and the Appellate Authority have committed the misreading of FORM GSTR-09 filed by the assessee. Directed the Revenue Department to adjust the GST amount deposited by the Petitioner.
Facts:
Vriddhi Infratech India Pvt. Ltd. (“the Petitioner”) was issued a Notice (“the Notice”) dated June 23, 2020 as per Section 61 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) claiming that the Petitioner’s annual return, filed in the FORM GSTR-09 dated January 30, 2020, showed a turnover of INR 129.52 lakhs, which did not match its bank statement.
The Petitioner has challenged the Order-in-Original dated June 4, 2021 (“the OIO”) passed, as per Section 61 of the CGST Act and Section 74 of the CGST Act and the Order-in-Appeal (“the OIA”) dated October 26, 2021 on the grounds, that the GST amount which could not be deposited in the Financial Year (“F.Y.”) 2017-18, but in June, 2018, to be adjusted in the F.Y. 2018-19.
The Petitioner contended that, the very basis of the Notice is wrong, as its FORM GSTR-09 shows the turnover amount of INR 129.52 lakhs with regard to supply made to unregistered persons under the B2C Category and the Revenue Department (“the Respondent”) did not consider the entire form, which at its end shows the total turnover of INR 20,37,13,502.00 lakhs through FORM GSTR-09 in the F.Y. 2017-18.
10/03/2023
Exchange between virtual digital assets and fiat currencies, exchange between one or more forms of virtual digital assets, and the transfer of digital assets will be covered under money laundering laws, the notification said. In the latest step to tighten oversight of digital assets, the Indian government has imposed anti-money laundering provisions on the cryptocurrency sector.
Regulatory steps:
On Tuesday, a Finance Ministry notice revealed that crypto businesses—exchanges, custodians, wallet providers, and others—will come under the Prevention of Money-laundering Act, 2002 (PMLA).
The laws will apply to any exchange between virtual digital assets and fiat currencies; an exchange between one or more forms of virtual digital assets; and the transfer of digital assets.
This move aligns with the global trend of requiring digital-asset platforms “to follow anti-money laundering standards” like banks or stock brokers, Jaideep Reddy, counsel at law firm Trilegal, told Bloomberg.
Cryptocurrency Exchanges are reporting entities under PMLA: Notification. As per the Ministry of Finance Notification dated 7th March, 2023, cryptocurrency exchanges will be “persons carrying on designated businesses or professions” within the meaning of Section 2(1)(sa) of the Prevention of Money Laundering Act.
The crypto exchanges will come within the definition of "reporting entity" within the meaning of Section 2(wa) of the PMLA. As a consequence, crypto exchanges should follow the norms and obligations of other reporting entities likes banks and financial institutions in relation to verification of identities of clients, maintenance of records etc.
The obligations of "reporting entities" are specified in Chapter IV of the PMLA.
The notification issued by the Ministry of Finance brought the following activities under Section 2(1)(sa) of the PMLA :
(i) exchange between virtual digital assets and fiat currencies;
(ii) exchange between one or more forms of virtual digital assets;
(iii) transfer of virtual digital assets;
(iv) safekeeping or administration of virtual digital assets or instruments enabling control over virtual digital assets; and
(v) participation in and provision of financial services related to an issuer’s offer and sale of a virtual digital asset.
Operational Guidance -Amendment to Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018. Securities and Exchange Board of India (Buy-Back of Securities) (Amendment) Regulations,2023 were notified on February 07, 2023. They shall come into force on 30th day of the date of notification i.e 9th March, 2023. That means all buy-back offers where the Board of Directors of the company approve resolution with respect to Buy-back on or after 9th March, 2023 the above mentioned Regulations shall be applicable.
Following restrictions have been set-out for the companies undertaking buy-back through stock exchange route:
1. The company shall not purchase more than 25% of the average daily trading volume (in value) of its shares or other specified securities in the ten trading days preceding the day in which such purchases are made.
2. The company shall not place bids in the pre-open market, first thirty minutes and the last thirty minutes of the regular trading session.
3. The company’s purchase order price should be within the range of ±1%from the last traded price.
4. Margin Requirement for deposits in Escrow Account the escrow account shall consist of cash and/or other than the cash.
The e-Invoice System of Goods and Services Tax (GST) is set to undergo a major change in the following weeks, after the recent developments of including more IRPs. In a few weeks time, the e-invoice portal will stop accepting 4-digit Harmonic Nomenclature System (HSN) Code and accept only 6-digit HSN Codes. The e-invoice System is for GST registered persons for uploading all the B2B invoices to the Invoice Registration Portal (IRP). The IRP generates and returns a unique Invoice Reference Number (IRN), digitally signed e-invoice and QR code to the user.
After a few weeks of time , the e-invoice System will not accept 4-digit HSN codes. The date for blocking e-invoice generation having HSN code as 4-digits will be intimated shortly in this portal. The Portal further instructed the stakeholders to make necessary changes in your system to report 6-digit HSN codes to e-Invoice Portal and comply with the notification No.78/2020 — Central Tax dated 15th October, 2020
09/03/2023
Maharashtra State Budget: HIGHLIGHTS OF THE BUDGET SPEECH DATED 9TH MARCH, 2023
A. Amnesty Scheme, 2023 for GST
Dept (For Pre-GST Laws):—
1. Complete waiver of the arrears in cases where arrears are
Rs. 2,00,000/- or less per year.
2. Dealers having arrears up to Rs. 50 lakhs or less per statutory order will pay only 20% amount and balance 80% will be waived.
B. Professional Tax
1. Female employees drawing monthly salary up to 25000/-
will be exempted from Profession Tax.
2. The definition of Person with Disability in the Profession Tax Act is proposed to be amended.
C. VAT Rate Changes
Reduction of VAT rate on ATF from 25% to 18% in Mumbai, Pune and Raigad districts.
D. Benefits to the Farmers
1. Farmers to get Rs 12,000 honorarium per year.
2. Only INR 1/- would be required to pay for Peek Vima instead of existing 2% of the premium amount.
3. Free accommodation, lunch and other related facilities provided at Krushi Markets.
4. E-punchanama through mobiles, Drones etc. can be done.
E. Health Insurance Coverage
The coverage of the Mahatma Phule Jan Arogya scheme, a health insurance scheme of the government, has been raised from Rs 1.5 lakh to Rs 5 lakh.
F. Students Scholarship
Rs 1,000 to Rs 5,000 for students of Class 5 to Class 7 Rs 1,500 to Rs 7,500 for students of Class 8 to Class 10 Uniforms will be provided free of charge to students of all categories up to Class 8 in local body and government schools.
G. Unorganised Workers
Social security benefits and welfare schemes will be provided. Maharashtra State Auto Rickshaw Taxi Driver-Owner Welfare Corporation will be established.
H. Gems and Jewellery
State government will soon announce new gems and jewellery policy. State to set up plan in Navi Mumbai.
I. Ration Kit benefits to Poor Citizens
Poor citizens to be provided with Anand Shida (free ration kit) on the occasion of Gudi Padwa and Dr Bhimrao Ambedkar's birth anniversary.
J. Financial Aid for Girl Child - INR 1,00,000/-
Families having yellow and orange ration cards to get Rs 5,000 after birth of child, Rs 4,000 after Class 4, Rs 6,000 after Class 6 and Rs 8,000 after Class 11. Rs 75,000 will be given to the beneficiary girl after she attains the age of 18 years.
K. Benefits for women's
1. Women to get 50% discount in state transport buses.
2. 1% discount on stamp duty.
3. Shakti Sadan', a new scheme to provide shelter to women in distress, liberated from sexual exploitation or facing domestic violence.
L. Hospitals - APLA DHAWAKHANA
700 Apla Dawakhana dispensaries will be started in the entire state in the name of late Balasaheb Thackeray.
Layoffs by US companies over Jan and Feb touched the highest since 2009, with the tech sector accounting for more than a third of the over 180,000 job cuts announced. In Feb alone, layoffs in the US stood at 77,770, over five times higher than the 15,245 job cuts in the previous year.
08/03/2023
Why should you care about unpaid care work? Happy Women’s Day!! Some points to ponder on the occasion of Women’s day:
1. The Organisation for Economic Cooperation and Development (OECD) estimates the value of time spent on unpaid work to be approximately 15% of GDP on average across available OECD countries.
2. Based on time-use survey data in 64 countries that was done by the International Labour Organisation (ILO), estimates show that 16.4 billion hours are spent on unpaid care work every day—this is equivalent to 2 billion people working 8 hours per day with no remuneration.
3. If that care work was valued on the basis of an hourly minimum wage, they would amount to 9% of global GDP, which corresponds to USD 11 trillion.
4. 80 percent of the world’s 67 million domestic workers are women — 90 percent don’t have access to social security, and more than half have no limits on their weekly working hours.
5. A 2017 analysis by the Women’s Budget Group in India has found that if an additional 2 percent of the GDP were invested in the Indian health and care sector, the country could generate 11 million additional jobs, nearly one-third of which would go to women.
6. Central and state governments must actively invest in building care infrastructure and the provision of care services to reduce the burden of unpaid care work on women, enabling their economic participation.
07/03/2023
Bullet points on meeting held on 02.02.2023 under the Chairmanship of Chief Secretary, GNCT of Delhi.
1. Target of Revenue Collection for FY 2022-23 to be Rs. 33,200 Cr. Total VAT collection target to be revised from Rs.5,200 Cr. to Rs. 5,500 Cr.
2. Study of Income Tax Model t o be undertaken to make Department of Trade & Taxes faceless.
3. department to work out integration of RFID Data in consultation with NHAI.
4. Recovery of pending VAT demand to be initiated in coordination with the concerned district authorities (DM/SDM/Tehsildar).
5. Field verification for pending VAT refunds to be done by concerned Tehsildars.
6. Officials to visit states like Karnataka and Maharashtra etc. to study the best practices and their implementation.
7. Informer Scheme be devised and implemented.
8. Disposal of all Pending cases of VAT with Objection Hearing Authority (OHA) be cleared within 03 months.
Sale of gold jewellery and gold artefacts hallmarked with only a six-digit alphanumeric HUID — union identification number — will be permitted from April 1, the government said on Saturday. This means the sale of old hallmarked jewellery with four logos without HUID (Hallmark Identification) number will not be allowed after March 31. Gold hallmarking was voluntary in nature til June 16, 2021. The six-digit HUID number was introduced from July 1, 2021. 256 districts were covered under Mandatory Hallmarking w.e.f 23 June 2021 and 32 more districts covered under Mandatory Hallmarking since June 1, 2022, increasing the number of total districts to 288. Additional 51 new districts with AHCs/OSCs established, whereby total districts covered would increase to 339.
It may be noted that prior to the implementation of the six-digit HUID number, hallmarking of gold jewellery consisted of four marks — BIS logo, purity of the article as well as the logo of the jeweller and Assaying and Hallmarking Centre. Till now, the old hallmarked jewellery with four marks without HUID was also permitted to be sold by the jewellers along with the six-digit HUID mark. More than a year and nine months were given to jewellers to clear their stock of their four mark hallmarked articles. Jewellers who violate the rule could face a penalty of five times the price of the jewellery or one year imprisonment or both.
Saudi Arabia said on Monday (March 6) that it was depositing USD 5 billion in Turkey's central bank. This could be a major boost to Turkey which is attempting to contain inflation and aftereffects of the devastating earthquake. Presidential elections are around the corner in Turkey. The decision, which will shore up Turkey's foreign reserves and help it combat inflation, was made on the order of King Salman and Crown Prince Mohammed bin Salman, it said.
Elon Musk acquired the social media company for $44 billion and became its CEO on 27 October last year. Turkish competition board to fine Elon Musk 0.1% of Twitter's gross income in Turkey. In a statement on Monday, the Turkish Competition Board said that it will impose a fine on Musk as the takeover of the company was made without the board's permission in Turkey. It added that the fine on billionaire Elon Musk will be 0.1 per cent of Twitter's gross income in Turkey in 2022.
06/03/2023
Delhi Airport Customs on rummaging an aircraft utilized for Intl. flight on completion of its subsequent domestic trips at Terminal 2, recovered 4 gold bars affixed below the sink in the washroom valued at Rs 1.95 crore. Gold seized under Section 110 of the Customs Act, 1962.
GSTN has launched the e-invoice registration services through multiple private IRPs at the recommendation of the GST Council. Four private companies viz. ClearTax, Cygnet, E&Y and IRIS Business Ltd were empaneled by GSTN for providing these e-invoice registration services.
India's fiscal deficit for April to January of the current fiscal year came in at ?11.91 lakh crore or 67.8 percent of revised annual estimates.The Centre made an upward revision in its fiscal deficit target for 2022-23 in the 2023 Budget to ?17.55 lakh crore from ?16.61 lakh crore.
Delhi High Court in a case has held that the revision powers conferred under section 264 of the Income-tax Act, 1961, on the CIT were very wide and could give relief to the taxpayer in a case where the taxpayer detected mistakes due to which he was over-assessed. Further, it held that when a substantive law confers a benefit on the taxpayer under a statute, it could not be taken away by the adjudicatory authority on mere technicalities. Furthermore, it held that the Tax Officer should not take advantage of any error or mistake that a taxpayer committed. – [TS-163-HC-2016(Delhi)]
Government plans to rope in more industry partners to increase the pace of training under its flagship SAMARTH scheme for skill development in the textile sector. The government aims to make the country's textile sector worth USD 250 billion by 2030 from USD 150-155 billion at present.
05/03/2023
GSTN has onboarded four new IRPs (Invoice Reporting Portals) for reporting e-invoices in addition to NIC-IRP. As a result, the beta launch of a new e-Invoice portal (www.e invoice.gst.gov.in), has been done where taxpayers can find comprehensive information on e-invoice compliance in a user-friendly format, such as check your enablement status, self-enable themselves for invoicing, search for IRNs, web links to all IRP portals – all the relevant links/information in one convenient location. Taxpayers can log in to the new e-invoice portal using their GSTN credentials for select services pertaining to their GSTIN profiles.
CBIC issued Circular No. 214/1/2023-Service Tax dated February 28, 2023 regarding Leviability of Service Tax on the declared service “Agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act" under clause (e) of section 66E of the Finance Act, 1994.
Social sector spending by rich drops despite increase in wealth: BCG Report
1. The ultra high networth individuals' (UHNIs) social sector spending declined by 5 per cent in FY22, despite a 9.2 per cent increase in their wealth and the persisting inequities in India, a report said on Thursday.
2. Giving by the UHNI segment declined to Rs 4,230 crore in FY22, if one were to exclude the contributions of Wipro's Azim Premji, the report said.
3. Amid the clampdown on foreign funding of non-profits, the report by consulting firm BCG and Dasra said international funding also declined in FY22.
4. Private foreign giving dipped by about 3 per cent to Rs 15,000 crore in FY22 as compared to the contributions in the year-ago period, the report said, adding that their contribution to overall giving reduced further to 14 per cent as compared to 15 per cent in FY21 and 21 per cent in FY17.
5. Overall, the private giving remained flat in FY22 at Rs 1.05 lakh crore compared to FY21, the report said, adding that the corporate social responsibility spends grew during the fiscal year on the back of the government mandate for top countries to donate towards social causes.
04/03/2023
Delhi Gst deptt issues SOP dtd 1.3.2023 for dealing with fake dealer/ suspicious transactions.. Information is received from various sources such as CGST, DGGI, DGARM, Other States, Economic Offence Wing (EOW) etc. which shows involvement of the concerned taxpayers…
Gst notices, withholding of refunds, cancellation of registrations will be issued in case of fake dealers, in genuine supplies….
Read More
http://cajatinminocha.com/Image/SOP_for_Cancellation_of_Registration_and_Respository_of_Non-genuine_Tax_Payers.pdf
High Pitched Income Tax demand of Rs 1140 crores on Oyo: Delhi HC directs CIT to grant a personal hearing: Oyo Hotels and Homes Pvt Ltd ( W.P.(C) 2085/2023)
Facts:
1. OYO (petitioner), had challenged the order denying the stay on the recovery of the complete tax demand. The petitioner asked the department not to treat the company as an assessee in default under Section 220(6) of the Income-tax Act, 1961, for the entire outstanding demand of Rs. 11,39,93,05,320 until the Commissioner of Income-tax (Appeals) decided the appeal.
2. The grievance of the petitioner, which is also obvious, is that the Commissioner of Income Tax (CIT) has not dealt with its application, preferred before him, in respect of the order dated 01.02.2023 passed by the Assessing Officer (AO) under Section 220(6).
3. The petitioner has preferred an application dated 01.02.2023 which, it appears, has not been disposed of by the CIT.
Hon Delhi HC held as below:
1. The CIT is directed to dispose of the application at the earliest, though not later than four weeks from the date of the receipt of a copy of the order passed.
2. The CIT will accord a personal hearing to the authorized representative of the petitioner, and also allow filing of written submissions.
3. It is also made clear, that in case an order is passed by the CIT, which is adverse to the interests of the petitioner, the order of the CIT will not be given effect to, for a period of two weeks from the date when the order is received by the petitioner.
03/03/2023
The income tax (I-T) department Thursday carried out searches on premises linked to the Edelweiss group in Mumbai over suspected tax evasion, sources in the know told ET. Along with Edelweiss group, premises of certain entry operators were also se- arched, these sources added. Another source told ET that the searches are in connection with the I-T’s larger action on asset reconstruction companies. (ARCs). Both the Mumbai and the Delhi investigations wing of the I-T department have been probing ARCS for alleged tax evasion. There are certain unsecured loans linked to entry operators which the company requires to explain,” said a source privy to the development The I-T spokesperson confirmed the search operations. An email sent to Edelweiss didn’t elicit a response. Edelweiss Asset Reconstruction Company (EARC) is sponsored by Edelweiss and CDPQ Private Equity Asia Pte Limited. It is in the business of acquiring non performing assets (NPAs) both wholesale and retail from banks and financial institutions and resolving them.
02/03/2023
The United Arab Emirates (UAE) Ministry of Finance has published Federal Decree-Law No. 47 of 2022 providing the legislative framework for corporate tax on business profits in the UAE.
A. UAE Corporate Tax (UAE CT) will become effective for financial years starting on or after 1 June 2023. It shall apply to:
1. Individuals who are engaged in a business or business activity in UAE through an unincorporated partnership or sole proprietorship;
2. Juridical persons incorporated in the UAE;
3. Juridical persons effectively managed and controlled in the UAE; and
4. Foreign juridical persons that have a permanent establishment in the UAE.
B. The decree provides that the financial statements of businesses should be prepared in accordance with accounting standards accepted in the UAE.
C. Taxpayers should prepare financial statements on an accrual basis unless they are permitted to use the cash basis of accounting instead.
D. Further, in determining Taxable Income, transactions and arrangements between Related Parties must meet the arm’s length standard. The arm’s length result of a transaction must be determined by applying one or a combination of the prescribed transfer pricing methods.
E. The corporate tax shall be imposed on the Taxable income at the following rates:
1. The announced UAE CT regime introduces a tier system with 3 rates.
2. All annual taxable profits that fall under AED 375,000 shall be subject to zero rate.
3. All annual taxable profits above AED 375,000 shall be subject to 9% rate.
4. ALL MNEs that fall under the scope of Pillar 2 of the BEPS 2.0 framework (i.e. consolidated global revenues in excess of AED 3.15 billion) shall be subject to different rates as per OECD Base Erosion and Profit-Sharing rules.
F. Taxable profits are the accounting profits subject to certain adjustments. .
G. Despite this tax increase, UAE will still be one of the most attractive worldwide locations to conduct businesses for the following reasons:
1. No other country has a lower rate on corporate tax with only Hungary and Montenegro sharing the same 9% corporate tax rate.
2. There will be a tax exemption for the first AED 375,000 of taxable profits.
3. UAE holding companies will be completely exempt from paying corporate tax on capital gains and dividends received from qualifying shareholdings.
4. The UAE will continue to comply with international standards for tax transparency.
5. The UAE has an extensive network of double tax treaties, with 107 in-force double tax treaties and a further 30 in various stages of signature or ratification (as of 31 January 2022).
H. The UAE’s infrastructure and lifestyle make it a much more attractive proposition for start-ups and small businesses than most other low tax jurisdictions.
The Income Tax Department, in a final warning to taxpayers and PAN Card-holders, recently tweeted in its Official Twitter handle that, “As per Income-tax Act, 1961, it is mandatory for all PAN holders, who do not come under the exempt category, to link their PAN with Aadhaar before 31.3.2023.” The tweet also said that, “From 1.04.2023, the unlinked PAN shall become inoperative.”
According to the Chairman of the Central Board of Direct Taxes (CBDT), out of the 61 crore PANs issued to individuals, about 48 crore have already been linked to Aadhaar. The Chairman has clarified that individuals who do not link their Aadhaar with PAN will not be eligible for any tax or business-related benefits.
Request you to share your details (along with PAN & mobile number) with us at orm@cpc.incometax.gov.in for our team to get in touch with you for assistance, in case of any technical error.
01/03/2023
The gross GST revenue collection for the month of February 2023 stood at rs 149,577 crore, up around 12 percent on a yearly basis. Of the total revenue collected, CGST was rs 27,662 crore, SGST was rs 34,915 crore, IGST was rs 75,069 crore (including rs 35,689 crore collected on import of goods) while cess was rs 11,931 crore (including rs 792 crore collected on import of goods).
Advisory on opting for payment of tax under the forward charge mechanism by a Goods Transport Agency (GTA). In compliance of Notification No. 03/2022-Central Tax (Rate), dated 13th July, 2022, an option is being provided on the portal to all the existing taxpayers providing Goods Transport Agencies Services, desirous of opting to pay tax under the forward charge mechanism to exercise their option.
GSTIN portal issued advisory dated February 24, 2023, regarding Geocoding of Address of Principal Place of Business.Functionality for geocoding the principal place of business address (i.e. the process of converting an address or description of a location into geographic coordinates) is now available on the GST Portal. This feature is introduced to ensure the accuracy of address details in GSTN records and streamline the address location and verification process. This functionality can be accessed under the Services/Registration tab in the FO portal. The system-generated geocoded address will be displayed, and taxpayers can either accept it or update it as per the requirements of their case. This is a one-time activity, and once submitted, revision in the address is not allowed and the functionality will not be visible to the taxpayers who have already geocoded their address through new registration or core amendment. This functionality is available for normal, composition, SEZ units, SEZ developers, ISD, and casual taxpayers who are active, cancelled, and suspended. This functionality is currently being made available for taxpayers registered in Delhi and Haryana only.
The proposed Entity DigiLocker is also likely to be used to improve the audit quality of top-tier and large companies, with the National Financial Reporting Authority (NFRA) planning to ask auditors of these firms to use the facility to store client records and audit files.
28/02/2023
CBIC issued notification giving effect to changes as per recommendation of 49th Council Meeting
01/2023-
Exemption for any authority, board or body set up by the Central Government or State Government including National Testing Agency for conduct of entrance examination for admission to educational institutions shall be treated as educational institution for the limited purpose of providing services by way of conduct of entrance examination for admission to educational institutions.”.
02/2023-
03/2023-
5% for Jaggery of all types including Cane Jaggery (gur), Palmyra Jaggery, Khandsari Sugar,Rab if sold pre-packaged and labelled.
12% for Pencil Sharpener.
04/2023-
GST will not levy when Rab sold otherwise (other than pre-packaged and labelled)
Communique of the G20 meeting of the Finance Ministers and Central Bank Governors: At the conclusion of the two-day meeting in Bengaluru, the "G20 Chair's Summary and Outcome Document" stated the following:
1. The global economic outlook had modestly improved since their last meeting in October 2022.
2. However, global growth remains slow, and downside risks to the outlook persist, including elevated inflation, a resurgence of the pandemic and tighter financing conditions that could worsen debt vulnerabilities in many Emerging Market and Developing Economies (EMDEs).
3. We will continue to enhance macro policy cooperation and support the progress towards the 2030 Agenda for Sustainable Development.
4. We will use macroprudential policies, where required, to safeguard against downside risks.
5. We will prioritize temporary and targeted fiscal support to vulnerable groups while maintaining medium-term fiscal sustainability.
6. Central banks remain strongly committed to achieving price stability and will ensure inflation expectations remain well-anchored.
7. The ministers and governors look forward to the mapping exercises on food insecurity currently being undertaken by the Food and Agriculture Organization and the World Bank.
8. While maintaining the focus on poverty reduction and all other Sustainable Development Goals, they will work to strengthen the key role of Multilateral Development Banks in development financing.
9. Commitment should be made by developed countries to mobilize $100 billion in climate finance annually through 2025 for poorer countries.
26/02/2023
SBI allows Bhim-based real-time payment with Singapore : A day after a real-time payments system linkage was established between India and Singapore using the UPI platform, State Bank of India on Wednesday announced a partnership with PayNow, the online payment system of the city state, for cross-border payments. The facility is offered through SBI's Bhim SBIPay mobile application and the linkage will allow fund transfers from India to Singapore through registered mobile numbers, and from Singapore to India using the UPI ID, the bank said in a statement. The UPI-PayNow linkage is a significant milestone towards developing an infrastructure for cross-border payments between the two countries and the initiative closely aligns with the G20's priorities of driving faster, cheaper, and more transparent cross-border payments. -S ET
HDFC Bank, Lulu Exchange ink deal to enhance cross-border payments between India-Gulf region : HDFC Bank, a major private sector bank, and UAE-based Lulu Exchange have signed an MoU to strengthen cross-border payments between India and the Gulf Cooperation Council (GCC) region. In the first phase of the partnership, Lulu Exchange's expertise and regulatory framework would be utilised to launch a digital inward remittance service titled 'RemitNow2India'. That will allow resident individuals of UAE to send money to any bank account in India via IMPS and NEFT through HDFC's digital banking channels, a release issued by the bank on Tuesday said. - S ET
In a recent development, the Goods and Services Tax Network (GSTN) has introduced a new functionality on the GST Portal that enables taxpayers to geocode their principal place of business address. The move is aimed at enhancing the accuracy of address details in GSTN records and streamlining the address location and verification process. According to an advisory issued by the GSTN on February 24, 2023, the system-generated geocoded address can be accessed under the Services/Registration tab in the FO portal. Taxpayers can either accept it or update it as per their case’s requirements. In cases where the system-generated geocoded address is not available, taxpayers can directly update it. The geocoded address details will be saved separately under the “Principal Geocoded” tab on the portal, which can be viewed under My profile>>Place of Business tab.
Stage set to lower the E invoicing turnover limit wef 01.04.2023. The e-invoice portal so far has been run by state-owned NIC. In addition, GSTN has empaneled few more companies for setting up Invoice Registration Portals (IRPs) such as - Cygnet InfoPath, IRIS Business Services, Cleartax.
GSTN advisory on new e-Invoice Portals.
Dear Valued Taxpayers,
1. We would like to inform you that GSTN has onboarded four new IRPs (Invoice Reporting Portals) for reporting e-invoices in addition to NIC-IRP. As a result, the beta launch of a new e-Invoice portal (www.einvoice.gst.gov.in), has been done where taxpayers can find comprehensive information on e-invoice compliance in a user-friendly format, such as check your enablement status, self-enable themselves for invoicing, search for IRNs, web links to all IRP portals – all the relevant links/information in one convenient location. Taxpayers can log in to the new e-invoice portal using their GSTN credentials for select services pertaining to their GSTIN profiles.
2. Taxpayers may note that the portal is reference site for all masters (data), news and updates, latest releases etc. For registering e-invoices and to access APIs, you still need to go to sites. The urls of IRPs sites authorised to generate IRNs as on date are as follows:
einvoice1.gst.gov.in is
Active URL
einvoice3.gst.gov.in
einvoice4.gst.gov.in
einvoice6.gst.gov.in
Shall be available soon
Also, at the helpdesk for e-invoice issues, for supporting the taxpayers vis-a-vis IRP issues is available at our Grievance Redressal Portal where the relevant IRP can be selected using the dropdown created for each of the private IRP.
3. Please note that taxpayers can continue to report e-invoices on the NIC IRP portal as previously.
4. GSTN is committed to making your compliance journey as smooth as possible. If you have any questions or concerns, please do not hesitate to contact us.
Thank you for your cooperation.
Thanking You,
Team GSTN
25/02/2023
Allahabad HC holds that the reassessment proceedings cannot be conducted by giving benefit of relaxation/extension under the Taxation and Other Laws (Relaxation And Amendment of Certain Provisions) Act, 2020 (TOLA) upto Mar 30, 2021, and the time limit prescribed in Section 149 (1)(b) (as substituted w.e.f. Apr 1, 2021) cannot be counted by giving such relaxation from Mar 30, 20 |