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31st July 2019 is the deadline for filing your income tax return. Tax return forms requires extensive disclosure of foreign assets, Indian assets and liabilities etc. which must be properly disclosed to avoid various undue rigours from tax department.

Recently CBDT has notified revised ITR Forms for AY 2019-20 (pertaining to FY 2018-19) wherein significant amendments have been made in disclosure requirements on foreign assets. Moreover, for the first time CDBT has sought extensive disclosure with respect to investments in unlisted companies and details of residential status outside India if any person claims to be Non Resident in India. Where applicable, proper care must be taken in making such disclosures.

  1. Amendment in disclosure of Foreign Assets:

Under Schedule FA related to disclosure of foreign assets, earlier category of “Foreign bank accounts held” have been replaced with 4 new categories of accounts as stated below:

  1. Foreign Depository Account held;
  2. Foreign Custodial Account held;
  3. Foreign Equity and Debt Interest held;
  4. Foreign Cash Value Insurance contract or Annuity contract held

Full Schedule FA is enclosed herewith for your ready reference.

  1. Extensive disclosure of Investments in unlisted companies:

As per the new forms, If an individual is a shareholder in any unlisted company, he is required to report in his ITR, complete details of shareholding in such unlisted company. Refer table below.

(j) Whether you have held unlisted equity shares at any time during the previous year? (Tick) Yes/No
If yes, please furnish following information in respect of equity shares
Name of
company
PAN Opening balance Shares acquired during the year Opening balance Closing balance
No. of shares Cost of acquisition No. of shares Date of subscription

/ purchase

Face value per share Issue price per share (in case of fresh issue)

Purchase price per share (in case of purchase from existing

shareholder)

No. of shares Sale consideration No. of shares Cost of acquisition
1 2 3 4 5 6 7 8 9 10 11 12 13

It would be a challenge to gather and report all these information in ITR for individual assessees. Further such information maybe cross verified with information reported by unlisted companies;

3. Residential status:

Extensive information and disclosure is sought related to residential status for the first time. In case the residential status of an individual is claimed to be Non – Resident, then he is required to inform jurisdiction and taxpayer identification number of his resident country. Please refer table below:

(d) Residential Status in India (for individuals)

(Tick applicable option)

A.ResidentB.Resident but not Ordinarily Resident o You were in India for 182 days or more during the previous year [section 6(1)(a)]
o You were in India for 60 days or more during the previous year, and have been in India for 365 days or more within the 4 preceding years [section (6)(1)(c)] [where Explanation 1 is not applicable]
B.Resident but not Ordinarily Resident You have been a non- resident in India in 9 out of 10 preceding years [section 6(6)(A)]
You have been in India for 729 days or less during the 7 preceding years [section 6(6)(a)]
C.Non-resident o You were a non-resident during the previous year.

(i) Please specify the jurisdiction(s) of residence during the previous year –

S.No. Jurisdiction of residence Taxpayer Identification Number
1
2
(ii) In case you are a Citizen of India or a Person of Indian Origin (POI), please specify –
Total period of stay in India during the previous year (in days) Total period of stay in India during the 4 preceding years (in days)
Residential Status in India (for HUF) (Tick applicable option) o Resident               o  Resident but not Ordinarily Resident                        o  Non-resident 

Apart from the above there are existing requirements of disclosure of Indian Assets and liabilities in Schedule AL where total income of the assessee exceed Rs. 50 lakhs. Refer Schedule AL attached.

The above mentioned disclosure requirements assume greater significance due to increased verification by tax department of the disclosures made in ITR with various independent information sought by it from various agencies within and outside India under “Exchange of Information” provisions. Discrepancy in the said information may lead to undue tax liabilities and other rigours under Income Tax Act.

Thus, it is suggested to take a proper professional advice on such reporting requirements and disclosure while filing ITR to avoid any hassle in future.

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In the 35th Council Meeting held on 21.06.2019, the following recommendations were made:

  • GST Council approved the introduction of new return filing system and the same shall be rolled out for taxpayers having an aggregate turnover of INR 5 Cr. in the previous Financial Year from October 2019 while small taxpayers to file their first quarterly return for the period Oct’19 to Dec’19 from January 2020 onwards.
  • GST Council approved the use of Aadhar for GST Registration.
  • GST Council approved the extension of tenure of National Anti-profiteering Authority by 2 years.
  • GST Council approved the penalty for not paying profiteering charges. There will be a penalty of 10% if one does not pay the profiteering sum till 30 days of the order.
  • GST Council approved the mechanism of e-invoicing in principle.
  • E-ticketing for multiplexes made mandatory.
  • Fitment Committee to take a relook at rate reduction on Electronic Vehicles (EVs) and valuation of goods and services in a Solar power generating system and Wind turbines in the next Council Meeting.
  • The due date for filing ITC-04 has been extended from 30.06.2019 to 31.08.2019.
  • The last date of filing GSTR-9/9A and GSTR-9C has been extended to 31.08.2019.
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More than a year long journey of this landmark reform GST was no less than a roller coaster ride. However, the government has been making its constant efforts to pave out ways to make compliance under this law easier. And one such step was to release an Amendment Act leading to clarification for a number of anomalies under the law earlier. The GST Amendment Act 2018 had received presidential assent on 29 Aug, 2018 and was made effective from 01 Feb, 2019. The attempt was to plug in the loopholes in the framework.

Some of the major amendments are as mentioned below-

Inclusion of new paras in Schedule III- Effective from July 01,2017

The scope of activities or transactions referred in Schedule III has been widened by inclusion of following activities:-

  • International or merchant trading.
  • Bond-to-bond transfer.
  • High seas sales transaction

Reverse Charge Mechanism u/s9(4)

  • The purview of levy of tax on inward supplies under section 9(4) has been restricted. It has been provided that only specified classes of registered person as notified by the Government shall be liable to pay GST on reverse charge basis in respect of specified goods and services.

Restrictions on Availment of Input Tax Credit 

S.No. Ineligible Input Exception (if any)
1. Motor-vehicles for transportation of persons having approved seating capacity of not more than 13 persons (including the driver)*no restrictions on ITC in respect of motor vehicles for transportation of person having approved seating capacity of more than 13 Further, no restrictions on ITC in respect of vehicle other than motor vehicles for transportation of the person IT can be availed if they are used for:-
  • Further supply of motor vehicles
  • Transportation of passengers
  • Imparting training on driving of motor vehicles
2. Vessels & aircrafts IT can be availed if they are used for:-
  • Further supply of such vessels & aircraft. Transportation of passengers
  • Imparting training on navigating/flying such vessels/aircraft.·
  • For the transportation of goods
3. Services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels or aircraft as referred above IT can be availed if such services are used
  • For purposes specified above
  • In manufacture of motor- vehicles, vessels, aircraft
  • In the supply of general insurance services in respect of such motor vehicles, vessels or aircraft insured by supplier
4. Food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, leasing, renting or hiring of motor vehicle, vessels or aircraft as referred above, life insurance and health insurance, membership of a club, health and fitness center, travel benefits extended to employees on vacation such as leave or home travel concession Credit shall be available in respect of supply of these goods or services where-
  • Same category of outward supply or as an element of taxable composite or mixed supply is made by the recipient
  • Motor vehicle etc., are used for specified purposes
  • It is obligatory on the employer to provide such services to its employees under any law for the time being in force

Place of supply

  • For the goods that have been temporarily imported in India for job – work or any treatment or process and then exported without putting them to any other use in India other than that which is required for such repairs or treatment or process, the place of supply shall be outside India.
  • The place of supply of services by way of transportation of goods from a place in India to a place outside India by a transporter located in India, shall be the destination of goods i.e. outside India.

Supply without consideration

  • Person who is not registered, but is otherwise engaged in business activities shall be liable to tax when such services are received from any of its establishments or related party outside India.

Credit utilization for the payment of output tax

  • The taxpayer shall now be able to utilize credit on account of CGST, SGST/UTGST, only after using all the credits on account of IGST available to him. The manner of utilization of GST credit shall be as under;
  1. Credit of IGST to be utilized first for the liability of IGST-CGST-SGST/UT GST
  2. Then, credit of CGST to be utilized for liability of CGST-IGST (if any)
  3. Then, credit of SGST/UT GST to be utilized for liability of SGST/UT GST-IGST(if any)
  4. Cross utilization of credit between CGST and SGST/UT GST shall not be

The GST Amendment Act has been released after looking into various issues raised by different industries. Many procedural changes have also taken place. The expectations are high, now let’s see how implementation will add cherry on the cake by smoothening things out.

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The year 2017 has been a remarkable year for the businesses since the nation’s biggest tax reform ONE NATION ONE TAX- GOODS AND SERVICE TAX has been implemented. The journey of this reform has its own ups & downs but still a milestone needs to be crossed named as GST Audit.

As per Section 35(5) of CGST Act, 2017,“Every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant Accounts and other records and shall submit a copy of the audited annual accounts, the reconciliation statement under sub-section (2) of section 44 and such other documents in such form and manner as may be prescribed.”

Further, as per Rule 80(3) of CGST Rules, 2017,“Every registered person whose aggregate turnover during a financial year exceeds two crore rupees shall get his accounts audited as specified under sub-section (5) of section 35 and he shall furnish a copy of audited annual accounts and a reconciliation statement, duly certified, in FORM GSTR-9C, electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner.”

Further, the Government vide Notification No. 49/2018-CT dated 04/09/2019 has notified FORM GSTR-9C (Reconciliation Statement cum Certification by CA/CMA) which has been amended vide Notification No. 74/2018–CT dated 31/12/2018.

The Government vide Removal of Difficulty Order No. 01/2018-Central Tax dated 11th December,2018extended the due date for furnishing of FORM GSTR-9C for the FY 2017-2018 till 31st March 2019 which was further extended vide Removal of Difficulty Order No. 03/2018-Central Tax dated 31st December,2018 till 30th June 2019.

Since the arrival of the form, it has remain a debatable topic for various stakeholders. From the point of view of Government authorities this form inter-alia serves the purpose of reconciling the turnover of financial statements with the turnover declared in GST returns. This will help the government to know the reasons of variances and whether GST has been fully discharged by the businesses on their turnover. Moreover, this summarized statement opens up the routes for Government departments to send notices to the business which sooner or later will bring litigations in GST.

But if seen from the point of view of businesses there are mixed responses. Considering the quantum of information demanded in FORM GST-9C, some taxpayers see this as a deep trouble since they find it a cumbersome task as they have to devote more time for being compliant rather than focusing on improving their business. On the other hand, some businesses feels that it is necessary as the review of their books of accounts by a practicing Chartered Accountant/ Cost Accountant will help them in being more compliant and detection of mistakes/errors at earlier stage will help in safeguarding their businesses from penalty and interest at higher rate which could have been levied at the time of assessment by the GST department.

The information to be furnished in FORM GSTR-9C is required to be declared in two broad parts namely Part A and Part B which are as below:-

PART A:-

The Part A is reconciliation statement, reconciling the turnover declared in the audited financial statement with turnover declared in the annual return. The reason for difference and the tax if any payable on such difference is also required to be declared.

PART-B:-

The Part B is a certification required to be given by a Chartered Accountant or Cost Accountant appointed by the registered person. Two form of certificates have been provided. The first form of certificate is applicable where the reconciliation statement is drawn up by the person who has conducted the audit like statutory auditor appointed under The Companies Act, 1956 who has drawn the reconciliation statement, the second form of certificate is applicable when the reconciliation statement is drawn by the person other than a person who has conducted the audit.

The GST Audit Certificate needs to be obtained for each GSTN number of the taxpayers. Taxpayers would hence need to identify the figures appearing in the audited financial statements, at each GSTIN level. This may be challenging task and even if such data is identified, its correctness needs to be verified with audited financial statements.

Further, instruction number 9 in the annual return in FORM GSTR-9 provides that the differential amount of tax, if any, noticed by the registered person can be paid at the time of preparing the annual return. The payment shall be made through form GST DRC-03. The said information about the payment shall also be provided by taxable person in the reconciliation statement.

Also, instruction number 2 to Form GSTR-9C makes it mandatory that the audit report can only be filed by the person who has filed form GSTR-1, form GSTR-3B and form GSTR-9. If these forms are not filed, the audit report cannot be uploaded on the portal.

The Government has recently provided the offline utility for filing of FORM GSTR-9C.  Now, it needs to be seen that how successful the GSTN portal and government authorities will be in making the necessary arrangements for taxpayers for filing of smooth GSTR-9C.

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Manufacturing & allied activities were restricted in LLPs vide OM No. CRC/LLP/e-Forms dated 06.03.2019.

This OM invoking the restriction regarding manufacturing & allied activities has been withdrawn with immediate effect.

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The Accounting Standard Board has issued an exposure draft on Ind AS 116, Leases, with a proposed effective date of 1st April, 2019, subject to notification by Ministry of Corporate Affairs and Ind AS 116 supersedes Ind AS 17 ‘Leases’.

Ind AS 116, “ Leases” will be applicable on the companies which are preparing their financial statements as per Ind AS. As per the IFRS convergence status dated December 19, 2018 issued by the ICAI, its already cleared by the NACAS and submitted to MCA for Notification.
Read in details about Ind AS 116, “ Leases”.

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CBDT has issued Standard Operating Procedure (SOP) to senior IRS officers for handling of cases related to substantial cash deposit during demonetisation period in which Sec.142(1) notices have remained non-complied.

In this regard, CBDT has laid down 7 pointer guidance, directs AO to proceed with completion of ‘best judgement assessment’ u/s.144 of the IT Act; Also stresses on invocation of Sec. 133(6) for gathering information; CBDT requires that wherever possible, the assessments covered in this SOP may be completed by March 31, 2019 and in any case by the first quarter of the next financial year i.e. by June 30,2019.
To know more about cases related to substantial cash deposit –  click here

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Online utility for filing Annual Return has been made operational by the GSTN for the F.Y 2017-18. The due date for filing Annual Return in Form GSTR-9 is June 30, 2019 for the F.Y 2017-18.

To file the annual return, user has to login at GST portal and click on the Annual Return Tab for filing Form GSTR-9 for the Financial Year 2017-18.

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India is one of the fastest growing economies in the world and is home to millions of aspiring entrepreneurs. The majority of these aspirants want to incorporate a registered company that has a separate legal identity. While there are multiple options like a public company, one person company, limited liability partnership and private limited, most people choose to go for a private limited company due to the associated benefits of this business structure. Before you hire an experienced CA for company registration in Delhi, it’s important to acknowledge the key features of a private limited company.

Key features of a private limited company

  • Separate legal identity
  • Limit on members’ liability
  • Perpetual succession
  • Only 2 directors are required to form the company

Steps of the process

Step 1

DSC (Digital Signature Certificate): DSC is a digital equivalent of a handwritten signature which is used to digitally sign documents on the internet. A Certifying Authority (CA) such as nic, Safescrypt, TCS, e-Mudhra, and (n)code Solutions can issue this license, and an experienced consultant can help you get through this step without the hassle. Each proposed director needs to have his or her own digital certificate signature, issuing which generally takes around 2 to 7 working days. Here are the documents required for this process.

  • A self-attested colour photograph
  • ID proof (A copy of PAN card, attested by a Gazetted Officer, Banker or Post Master is mandatory)
  • Address proof (voter ID, passport or recent electricity bill)

Step 2

DIN (Director Identification Number): It is mandatory for the directors of the proposed company to have an allotted DIN as it keeps a complete database of the directors of the incorporated companies. DIN is a unique identification number that is provided to an active or a proposed director of the incorporating company. A skilled CA can help you obtain a DIN in just one working day.

Step 3

Name Registration: A name for your company will help you have a trademark of the company. You are required to submit form INC – 1 for the approval of the name of your company. While the process takes around 10 to 15 days, you need to provide the registrar at least 6 different names in order of preference. A qualified CA, offering services for company registration in Delhi, can help you register a name for your company without struggling much.

Step 4

Drafting and filing of the constitution of the company: This step involves defining the purpose of the company through the documents Memorandum of Association (MOA) and Articles of Association (AOA). While MOA defines the company’s relationship with shareholders, AOA contains the purpose of the company, as well as the responsibilities and duties of its members clearly.

Step 5

Incorporation: This is the final stage of registering a company where the Registrar of Companies issues a certificate of incorporation. The authorised person also issues a Corporate Identity Number (CIN) after examining all the required documents.

While the professional fee of different consultants will be different, it’s important to choose the services of a consultant who has a good record of serving clients in past.

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To give boost to the real estate sector as was being envisaged earlier, following recommendations were made by the GST Council in its 33rd meeting held on 24th February, 2019:

  1. With effect from 1st April, 2019, GST @5% on residential properties outside affordable segment; and GST @ 1% on affordable housing properties, without benefit of any input tax credit.
  2. A residential house/flat of carpet area of upto 90 sqm in non-metropolitan cities/towns and 60 sqm in metropolitan cities having value uptoRs. 45 lacs (both for metropolitan and non-metropolitan cities), shall be considered as ‘affordable’.
  3. Further, Intermediate tax on development right, such as TDR, JDA, lease (premium), FSI shall be exempted only for such residential property on which GST is payable.

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