Clarification on the effective date of explanation inserted in notification No. 11/2017- CTR dated 28.06.2017, Sr. No. 3(vi)
Clarification on applicability of GST exemption to the DG Shipping approved maritime courses conducted by Maritime Training Institutes of India
- As per GST Council decision, it was decided to continue with the existing system of filing GSTR 3B till March 2020. Notification 44/2019 prescribes the due dates for filing GSTR 3B Returns for the period from Oct’2019 to Mar’2020. GSTR 3B for these months shall be furnished on or before 20th of the month succeeding such month. The tax,penalty,Interest , if applicable shall be paid before filing the return.
- As per Notification No 45/2019, in respect of tax payers whose aggregate turnover is less than 1.50 Crores shall file GSTR 1 return on quarterly basis, as follows :-
- For the Quarter Oct-Dec 2019 – On or before 31st Jan 2020
- For the Quarter Jan-Mar 2020 – On or before 30th April 2020
- As per Notification No 46/2019, in respect of tax payers whose aggregate turnover is more than 1.50 crores shall file GSTR 1 on a monthly basis , for the period Oct’19 to Mar’20 on or before 11th of the succeeding month.
- As per the GST council decision, tax payers with aggregate turnover of less than 2 crores can file the Annual Return optionally. Notification No 47/2019 has notified that in respect of those taxpayers, if the Annual return (for 2017-18 & 2018-19) is not filed on or before due date, the same is deemed to be filed on or before the due date.
In our view, In the absence of clarity and to avoid future complications (Department Audt/Assessment), we suggest that the Annual return for 2017-18 & 2018-19 shall be filed voluntarily, even though it is not mandatory.
- To put an end to the problem of unmatched Input Tax credits, it has been proposed that the GST Credit shall be claimed as per the invoices uploaded by the suppliers. If you are claiming those credit even if it is not uploaded by your supplier, the difference cannot exceed 20% of the Total of the invoices uploaded.
Effectively, you can claim Input Tax Credit only if it appears in GSTR-2A. In case if you are claiming in excess of the credits appearing in GSTR 2A, the same cannot exceed 20% of the credits as appearning in GSTR 2A
- GSTR 3B has been notified as a Return , RETROSPECTIVELY. (i.e.,) w.e.f. 1st July 2017. Hence GSTR 3B is also considered as return now. In a recent Gujarat High Court case (AAP & Co.,) judgement was given with a decision that GSTR 3B is not a return and hence a view was taken that Input Tax Credit can be claimed at the time of filing the Annual return even though the statutory deadline has expired. Now, with this retrospective amendment, the application of the judgement stands nullified
- A new Form DRC-01A has been notified for intimation by the tax authority regarding the tax,penalty,interest etc., A reply to this intimation shall be filed by the taxpayers in Form DRC-01A Part B. The Voluntary payment of taxes shall continue to be paid by using DRC-03.
The relevant notifications are attached herewith.
The announcement of the finance minister regarding the reduction of rate of Income-tax in respect of Domestic Companies to 22% has created lot of interest amongst all entrepreneurs to go into corporate form of business considering the tax benefits. The below table is a comparison of tax liability for various types of Organisations for different types of Income :-
|Net Income||Individual |
-Income-tax at New rates
The turnover is assumed to be less than 400 Crores
The income as specified here for Individuals is after considering the 80C,80D and other eligible deductions.
The above table shows the tax payable by various types of organisations for different income levels. But wait, please consider the following also before taking a decision on moving to Corporate form of organisation (Domestic companies) :-
Profit withdrawl from Business
In case of Proprietorship/Partnership/LLP firm, withdrawl of Profits from the business is easy. Just write a Cheque/Transfer the funds. But in case of domestic company, its not easy like that and also involves additional cost. If you want to withdraw as a Director Remuneration, TDS as applicable has to be deducted and declared as Income in your personal hands. On the other hand, if you want to take the profits as Dividends, Dividend Distribution tax (around 18%) has to be paid and also dividend is taxable in personal hands if it exceeds Rs. 10 Lakhs.
Withdrawl of money as a Temporary/Long term Loan
In respect of Proprietorship/Partnership firms, there is no restriction in Proprietor/Partner taking a loan from the firm. Its very simple. But when it is a Corporate entity, Directors / their relatives /interested people cannot take loan from the Company.
Borrowing of Money required for the Company from outsiders
If the business is in need of funds, the Proprietors/partnership firms can borrow amount either temporarily or for a long term from the outsiders/friends. But in case of Corporate entities, borrowing from outsiders if not allowed. The directors/relatives of directors/Shareholders can lend to the company but with some restrictions on the same.
Privacy of Financial Information
In case of Proprietorship/Partnership firm (Not LLPs) , your financial statements (Balance sheet/ Profit & Loss account, Share holder/director information) are a private one. Unless approved/provided by the Proprietors/Partners, it will not be available to public/outsiders. But in case of corporate entities, your financial statements and other information will be available in the Public portal , which will be accessible by all without any control from your side.
Borrowing/Lending within Group companies
If you have more than one business entity, borrowing/lending between the entities is very easy and no major restriction is imposed on the same, if it is either Proprietorship or Partnership firm. But in case of a corporate entity, lending to other group companies Inter corporate loans is subject to restrictions , conditions and Compliance.
Meetings and Documentation
In case of Corporate entities, you need to conduct Annual General Meetings and Board meetings at periodic intervals. The proceedings in the meeting are to be maintained in a Minutes book mandatorily. In case of Proprietorship/Partnership firms, there is no such requirement.
Ease of Changes in organisation
There might be situations where you may change your main place of business (registered office) or change your partners or change in the profit sharing ratio or increase your Capital in your company, etc…,. In case of Proprietorship/Partnership firms, these are very easy and does not require any approval. But in case of corporate entities, all the changes require approval from Registrar of Companies and involves compliance cost for the same.
Basic Exemption & Differential tax slabs
In respect of Proprietorship firms, the Income is chargeable @ 5%,20% or 30% as applicable with basic exemption. The final effective rate in case of Proprietorship firms (say Income upto Rs.23 Lakhs) may be beneficial compared to Fixed Corporate tax rates.
Audit of accounts
In case of Proprietorship/Partnership firms, only if your turnover exceeds certain limit, you are required to get your books of accounts audited. But in case of corporate entities, irrespective of your turnover, you need to get your books of accounts audited every year.
In case of Corporate companies, some of the additional compliances to be done on a regular basis are :-
- Annual return filing with ROC
- Financial statements filing with ROC
- DIR KYC Compliance – KYC for directors
- TDS applicability irrespective of your Turnover/Income
- Digital signature for directors
- Certification/Report from professionals like CA/CS
These compliances will involve time & additional cost.
Cost of Compliance
In case of Proprietorship/Partnership firms, the cost of Compliance is very less compared to Corporate entities, where cost of Compliance is relatively high. Cost of compliance includes, filing fees, Interest/Penalties, Professional fees for compliance , etc.,
The corporate form of entity comes with a lower taxation compared to others but with the above
restrictions/requirements. If you can skilfully navigate through these hardships, the destination (Lower tax rate) is enjoyable.
The Income-tax Department had recently made linking of Aadhaar & PAN madatory for assessees. A facility for the same was also introduced in the income tax efiling website www.incometaxindiaefiling.gov.in.
Now the Income-tax Department vide its Notification No S O 1513(E) dtd 11th May 2017 has exempted the following assessees :-
- Persons residing in the States of Assam, Jammu and Kashmir and Meghalaya;
- A person who is a non-resident as per the Income-tax Act, 1961;
- persons of the age of eighty years or more at any time during the previous year;
- a person who is not a citizen of India.
The relevant notification is attached below :-
|Know Your Customer Guidelines|
Source :- www.rbi.org.in
The Central Board of Excise and Customs vide its press release dtd 5th Dec 2015 has extended the due date for payment of Central Excise duty & Service tax for the month of Nov 2015, to 20th December 2015. This will be applicable in respect of Central Excise and Service Tax assessees in the State of Tamilnadu.
Apart from the above, the due date for filing the Central Excise return for the month of Nov 2015 has also been extended upto 31st December 2015.
The relevant press release of the CBEC is reproduced below:-
Swachh Bharat Cess (SBC) is effective from today (Nov 15, 2015).
Please Note the following :-
- SBC to be shown and charged Separately in the Service Invoice.
- Service Tax will be @ 14% & SBC will @ 0.5%. Both needs to be shown separately in the Invoice. Do not show the Service Tax as 14.5%.
- As of now, there is no amendment passed in the CENVAT Credit rules. Hence, SBC Cannot be taken credit for payment of Service tax using CENVAT Credit.
- The Accounting Codes Notified are are follows in respect of SBC
i) Swacch Bharat Cess – 0044-00-506 (Minor Head)
ii) Tax Collection – 00441493
iii) Other Receipts – 00441494
iv) Penalties – 00441496
As per the Budget Proposals, Swacch Bharat Cess is leviable on Value of Services from the date of notification.
The Central Government vide its Notification No 22/2015 dtd 6th Nov 2015 has notified that Swacch Bharat cess will be leviable on taxable value of all services @ 0.5%.
This is w.e.f 15.11.2015.
It has to be noted that unlike the earlier cess (ie.,) Educational Cess & Secondary Higher Educational Cess , which were leviable on Service Tax, Swacch Bharat Cess is leviable on Value of Taxable Services.
Hence effectively, the Service Tax Payable on Services w.e.f. 15th Nov 2015 will be 14.5%
The relevant notification is reproduced below :-
[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
New Delhi, the 6th November, 2015
Notification No. 22/2015-Service Tax
G.S.R. —(E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) read with sub-section (5) of section 119 of the Finance Act, 2015 (20 of 2015), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts all taxable services from payment of such amount of the Swachh Bharat Cess leviable under sub-section (2) of section 119 of the said Act, which is in excess of Swachh Bharat Cess calculated at the rate of 0.5 percent. of the value of taxable services:
Provided that Swachh Bharat Cess shall not be leviable on services which are exempt from service tax by a notification issued under sub-section (1) of section 93 of the Finance Act, 1994 or otherwise not leviable to service tax under section 66B of the Finance Act, 1994.
This notification shall come into force from the 15th day of November, 2015.
[F.No. 354/129/2015 – TRU]
Under Secretary to the Government of India
The Reserve Bank of India (RBI) in consultation with Government of India (GOI) has announced about the issue of “Sovereign Gold Bonds” .
The highlights and features of this Sovereign Gold bonds (2015-16) is as follows :-
|1||Date of Issue of Bonds||These bonds will be issued on Nov 26 2015|
|2||Application Period||Application will be accepted from 5th Nov 2015 to 20th Nov 2015|
|3||Place of Sales||These bonds will be sold through banks and designated post offices, as may be notified|
|4||Name of the Bond||Sovereign Gold Bond|
|5||Issuance||To be issued by Reserve Bank India on behalf of the Government of India|
|6||Who can apply?||Resident Indian entities including Individuals, HUFs, Trusts, Universities, Charitable Institutions|
|7||Denomination||Multiples of Grams of Gold. Minimum 2 Grams and maximum 500 grams per person per financial year|
|8||Tenor of the Bond||The Tenor of the bond will be 8 years, but there will be an exit option at the end of 5 years.|
|9||Issue Price||The present issue is priced at 2684/- at present and the further issues to be priced at rates to be notified based on the prevailing market rate.|
|10||Payment option||Fund Transfer/Cash/Cheque/Demand Draft.|
|11||Form of Certificate||The investors will be issued a Stock/Holding Certificate. These can be converted into demat form also.|
|12||Redemption Price||The redemption price will be in Indian Rupees based on previous week’s (Monday-Friday) simple average of closing price of gold of 999 purity published by IBJA.|
|13||Rate of Interest||The investors will be compensated at a fixed rate of 2.75 per cent per annum payable semi-annually on the initial value of investment.|
|14||Collateral||Bonds can be used as collateral for loans. The loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time.|
|15||KYC Requirements||Know-your-customer (KYC) norms will be the same as that for purchase of physical gold. KYC documents such as Voter ID, Aadhaar card/PAN or TAN /Passport will be required.|
|16||Tax Treatment||The interest on Gold Bonds shall be taxable as per the provision of Income Tax Act, 1961 (43 of 1961) and the capital gains tax shall also remain same as in the case of physical gold.|
|17||Tradeability||Bonds will be tradable on exchanges/NDS-OM from a date to be notified by RBI.
Source :- www.rbi.org.in