Budget 2021: Direct Tax & other Proposals Highlights

Budget 2021: Direct Tax Proposals Highlights

FM Nirmala Sitaraman has furnished Finance Budget 2021. Below are the Highlights of Direct Tax Proposals.

1. Relief given to the senior citizen, having only pension and interest income. The exemption is given to them from filing ITR. Paying banks will do still deduct TDS if applicable.

2. Income Tax Reassessment Limit has been Decreased from 6 years to 3 years. But in the case of Serious tax evasion, where evasion evidence is Rs. 50 lakh or more then reopening can be done within 10 years with approval.

3. Dispute resolution committee will be faceless. Anyone with a total income less than 50 lacs and disputed income less than 10 Lacs can approach this committee.

4. Faceless ITAT center will be set up. In this case, personal hearings will be conducted through VC.

5. Tax Audits limit enhanced to Rs. 10 Cr in case of digital transactions (up to 95% Digital Transactions). Earlier this limit was Rs. 5 cr.

6. Advance tax liability on dividends will arise only after the declaration of dividends.

7. Affordable housing Rs, 1.5 lac deduction will now be even available for a loan taken till 31.3.2022.

8. 80IBA deduction extended to 31.3.2022.

9. Pre-filled income tax return (ITR) scope enhanced. ITR will have pre-filled data regarding Dividends, post office interest income, salary, etc.

10. Trusts: educational and hospitals: limit increased from Rs. 1 Cr to Rs. 5 crores (10(23C))

11. Late deposit of employee contribution of PF will now be not allowed as deduction.

12. LLP decriminalization will be made available soon

13. LIC IPO will come soon in 2022

14. MCA version 3 expected soon

15. Infusion of Rs. 20000 cr. For public sector banks

16. FDI in the insurance sector hiked to 74% from 49%

17. Director Residence criteria reduced to 120 days from earlier 182 days

18. OPC proposed to be incorporated by foreigners as well

19. Policy for disinvestment in all nonstrategic and strategic sectors

20. Separate administration structure proposed to promote ease of doing business

21. Custom duty changes made to support domestic manufacturing

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Budget 2021, New Definition for Small Companies proposed

Budget 2021, New Definition for Small Companies proposed

The FM has proposed to revise the definition under the Companies Act, 2013 for small companies by increasing their threshold for capitalization.

New Threshold is as follows:

Threshold Limit

• Old – Not exceeding 50 Lakhs
• New- Not exceeding 2 crores

Turnover

• Old- Not exceeding 2 crores
• New- Not exceeding 20 crores

For Live Budget Updates: Click here

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Due Date of Vivad se Vishwas Act has been extended to 28th Feb 2021

Due Date of Vivad se Vishwas Act has been extended to 28th Feb 2021:

The Central Board of Direct Taxes has further extended the due date for filing declaration under Vivad Se Vishwas Scheme till February 28, 2021.

Central Government Extended the Vivad se Vishwas Date from 31st day of January, 2021 to 28th Febuary 2021. New Due date for VSV scheme is 28th Feb 2021.

Below is the Official Notification:

 

MINISTRY OF FINANCE

(Department of Revenue)

CENTRAL BOARD OF DIRECT TAXES

NOTIFICATION

New Delhi, the 31st January, 2021

S.O. 471(E).— In exercise of the powers conferred by section 3 of the Direct Tax Vivad se Vishwas Act, 2020 (3 of 2020), the Central Government hereby makes the following amendment in the notification of the Government of India, Ministry of Finance (Department of Revenue), number 85/2020, dated the 27th October, 2020, published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii), vide number S.O. 3847(E), dated 27th October, 2020, namely:––

In clause (a), for the words, figures and letters “31st day of January, 2021” the words, figures and letters “28th day of February, 2021” shall be substituted.

[Notification No. 04/2021/ F.No. IT(A)/01/2020-TPL]
SHEFALI SINGH, Under Secy., Tax Policy & Legislation Division

Note: The principal notification was published in the Gazette of India, Extraordinary, Part-II Section-3, Sub-section (ii) dated the 27th October, 2020 vide number S.O. 3847(E), dated 27th October, 2020 and was subsequently amended by notification number S.O. 4804(E), dated 31st December, 2020 published in the Gazette of India, Extraordinary, Part-II Section 3, Sub-section (ii) dated the 31st December, 2020.

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Live Updates Union Budget 2021

Live Updates Union Budget 2021

Union Budge 2021 is all set to provide relief to the pandemic hit Indian Economy. One hour go for the Budget, Hon’able Finance Minister Mrs. Nirmala Sitaraman reaches parliament.

As Finance Minister @nsitharaman presents the Union Budget for a very crucial year for the domestic & global economy, stay tuned to #studycafe to catch LIVE updates https://t.co/TsydGdDUyN

— Studycafe (@castudycafe) February 1, 2021

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GST PMT-06 35% Option Challan Enabled on GST Portal

GST PMT-06 35% Option Challan Enabled on GST Portal

The reason for challan can be selected from the Reason for Challan page (Services -> Payments -> Create Challan). This page displays reason as Monthly payment for quarterly return and Any other payment.

• For taxpayer filing GSTR-3B on quarterly basis and intending to make payment for first and second months of the quarter, please select reason as Monthly Payment for quarterly return.
• Please select the Financial year and period from the dropdown and select challan type as 35%challan or Challan on self-assessment basis.

35% Challan

• 35% of the tax liability paid from cash ledger in GSTR-3B for the preceding quarter where the return is furnished quarterly shall be auto-populated which needs to be paid.
• 100% of the tax liability paid from cash ledger in GSTR-3B return for the preceding month where the return is furnished monthly shall be auto-populated which needs to be paid.
• Please note that when taxpayer exercises 35%challan option, No interest shall be levied for the selected month if payment is made by 25th of the next month.

Challan on Self-Assessment Basis

• Taxpayer can self-assess his current month’s liability (net of Input Tax credit) and shall generate challan for the same.
• Interest will be levied on payment made through ‘Challan on self-assessment basis’ (other than 35% challan) in case of delayed payment (after due date of 25th of next month) or short payment.

Note: For taxpayers whose AATO is greater than ₹5Cr., the filing preference shall be monthly only, and they will not be able to generate challan with ‘Monthly payment for quarterly return’ reason.

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Join Free Webinar on Union Budget 2021

Join Free Webinar on Union Budget 2021

Studycafe is Organising Free Webinar on Union Budget 2021. We are happy to Invite you for Free Webinar on Union Budget 2021 on 02nd February 2021 from 03:00 PM to 06:00 PM.

Zoom Link to Register:

 

 

https://us02web.zoom.us/webinar/register/3816121194771/WN_9yX7GpViSieer1AAwP24ng

Session 1: 

 

Time:  03.00 to 05.00 

 

Direct Tax Proposals in Union Finance Budget 2021 and Latest Amendments in Income Tax Act

 

Speakers: CA Nitin Kanwar & CA Jaikumar Tejwani

 

Session 2:

 

Time:  05.00 to 06.00 

 

Indirect Tax Proposals in Union Finance Budget 2021 

 

Speakers: Dr. Adv. CA. IP. Avinash Poddar & CA Dr. Arpit Haldia

 

Zoom Link to Register:

 

 

https://us02web.zoom.us/webinar/register/3816121194771/WN_9yX7GpViSieer1AAwP24ng

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GST Revenue collection for January 2021 almost touches Rs. 1.20 lakh crore

GST Revenue collection for January 2021 almost touches Rs. 1.20 lakh crore

The gross GST revenue collected in the month of January 2021 till 6 PM on 31.01.2021 is Rs. 1,19,847 crore of which CGST is Rs. 21,923 crores, SGST is Rs. 29,014 crores, IGST is Rs. 60,288 crores (including Rs. 27,424 crores collected on import of goods) and Cess is Rs. 8,622 crores (including Rs. 883 crores collected on import of goods). The total number of GSTR-3B Returns filed for the month of December up to 31st January 2021 is 90 lakhs.

The government has settled Rs. 24,531 crore to CGST and Rs. 19,371 crore to SGST from IGST as regular settlement. The total revenue earned by the Central Government and the State Governments after regular settlement in the month of January 2021 is Rs. 46,454 crores for CGST and Rs. 48,385 crore for the SGST.

In line with the trend of recovery in the GST revenues over the past five months, the revenues for the month of January 2021 are 8% higher than the GST revenues in the same month last year, which in itself was more than Rs. 1.1 lakh crore. During the month, revenues from import of goods were 16% higher and the revenues from the domestic transactions (including import of services) are 6% higher than the revenues from these sources during the same month last year.

The GST revenues during January 2021 are the highest since the introduction of GST and have almost touched the Rs. 1.2 lakh crore mark, exceeding the last month’s record collection of Rs. 1.15 lakh crore. GST revenues above Rs. 1 lakh crore for a stretch of last four months and a steep increasing trend over this period are clear indicators of rapid economic recovery post-pandemic. Closer monitoring against fake-billing, deep data analytics using data from multiple sources including GST, Income-tax, and Customs IT systems, and effective tax administration has also contributed to the steady increase in tax revenue over the last few months.

The average YoY growth in GST revenue over the first four months in the second half of the financial year has been 8% as compared to (-) 24% during the first half of the year.

The chart below shows trends in monthly gross GST revenues during the current year.

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ICAI Extended Condonation Scheme to regularize UDIN

ICAI Extended Condonation Scheme to regularize UDIN

Condonation Scheme to regularize UDINs between the period 1st Feb. 2019 to 31st Jan. 2021 can now be generated upto 28th Feb. 2021. ICAI has extended the regularize UDINs till 28th Feb 2021.

This has reference to the Condonation Scheme to regularize UDINs announced by the ICAI vide its announcement dated 28th December 2020. As per the scheme, the documents signed between 1st Feb.2019 till 31st Dec. 2020 the UDINs can be generated during 1st Jan. 2021 to 31st Jan. 2021.

The requests have been received from Practicing Chartered Accountants from different parts of the country for extension of the time limit for compliance with the UDIN requirement under Condonation Scheme as they could not take advantage of the scheme due to various statutory compliances. Further many members were in the impression that the UDINs can be generated till 31st Jan. 2021 for the documents issued from 1st Jan. 2021 till 16th Jan. 2021 also.

In view of above, it is being informed to the members that all the missed UDINs between the period 1st Feb. 2019 to 31st Jan. 2021 can now be generated upto 28th Feb. 2021 and this be taken as extension of the Condonation Scheme announced previously.

However, it may be noted that for all the documents signed from 1st Feb. 2021 onwards, the original guidance for generation of UDIN i.e on the same day or within 15 days will have to be followed.

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CA Final Nov 2020 Exam Result likely to be declared on 1st Feb (evening) or 2nd Feb 2021:ICAI

CA Final Nov 2020 Exam Result likely to be declared on 1st Feb (evening) or 2nd Feb 2021:ICAI

Finally, ICAI has announced the Result date for Chartered Accountants Final Examination(Old course & New Course) held in November 2020. As per the ICAI Announcement result for CA Final Examination(Old Course & New Course) held in November 2020 likely to be declared on Monday, the 1st February 2021(evening)/Tuesday, the 2nd February 2021.

Below is an Extract of the ICAI Official Notification.

The results of the Chartered Accountants Final Examination(Old course & New Course) held in November 2020 are likely to be declared on Monday, the 1st February 2021(evening)/Tuesday, the 2nd February 2021 and the same as well as the All India merit (upto the 50th Rank) can also be accessed by candidates on the following websites:

1. icaiexam.icai.org
2. caresults.icai.org
3. icai.nic.in

Arrangements have also been made for the candidates of Final Examination (Old course & New Course), desirous of having results on their e-mail addresses to register their requests at the website i.e. icaiexam.icai.org from 31st January 2021. All those registering their requests will be provided their results through e-mail on the e-mail addresses registered as above immediately after the declaration of
the result.

In addition to above, it may be noted that for accessing the result at the above mentioned websites the candidate shall have to enter his/her registration no. or PIN no. along with his/her roll number.

Further facilities have been made for candidates of Final Examination (Old course & New Course) held in November 2020 desirous of knowing their results with marks on SMS. The service will be available through India Times.

For getting results through SMS candidates should type:
For Final Examination result the following:-
Final Examination (Old Course)
CAFNLOLD (space) XXXXXX (Where XXXXXX is the six digit Final examination roll number of the candidate), e.g. CAFNLOLD 000128
Final Examination (New Course)
CAFNLNEW (space)XXXXXX (Where XXXXXX is the six digit Final examination roll number of the candidate), e.g. CAFNLNEW 000128
and send the message to: 57575 – for all mobile services
(S. K. GARG)
ADDITIONAL SECRETARY (EXAMS)

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Gujarat HC Directed Revenue to unblock ex-Director’s ITC to recover Company’s VAT dues

Gujarat HC Directed Revenue to unblock ex-Director’s ITC to recover Company’s VAT dues

The Hon’ble Gujarat High Court in Nipun A. Bhagat v. State of Gujarat [R/Special Civil Application No. 14931 of 2020, dated January 4, 2021] directed the Revenue (“Respondent”) to unblock the ITC lying in the electronic credit ledger of Nipun A. Bhagat (“Petitioner”), ex-director of the public company. The Respondent had firstly sent notice to the bank for attaching bank account of the company whose current director is Petitioner, but the bank refused to act. Thereafter, the Respondent had blocked the Petitioner’s ITC in the electronic credit ledger under Rule 86A of the Central Goods and Services Tax Rules, 2017 (“CGST Rules”) in order to recover the VAT dues of the public company where the Petitioner was previously a director.

Facts:-

The Petitioner is engaged in the business of manufacturing of brand kitchenware and home appliances and is registered under the provisions of the Central Goods and Services Tax Act, 2017 (“CGST Act”). The Petitioner was previously a director in public limited company named Dolphin Metals (India) Ltd. (“Dolphin Metals”) and is also a Director in one another company named Bhagat Marketing Private Limited since March 21, 1994.

The Respondent sent a Notice dated September 05, 2020 under Section 44 of the Gujarat Value Added Tax Act, 2003 (“GVAT Act”) to the Union Bank of India (“Bank“) proposing to attach the bank account maintained by Bhagat Marketing Private Limited, wherein the Petitioner was the Director, seeking recovery of the amount of outstanding tax and interest for the years 2006-07 to 2013-14 in the case of Dolphin Metals wherein the Petitioner was also a Director for some period of time but the Bank refused to act as per the notice.

Therefore, the Respondent blocked the ITC of amount Rs. 17,94,723/- available in electronic credit ledger of the Petitioner by exercising power under Rule 86A of the CGST Rules, so as to recover pending dues of tax and interest of Dolphin Metals under the GVAT Act for the period during which the Petitioner was not even a director.

The Petitioner submitted:

• That Articles 14 and 19(1)(g) of the Constitution, blocking ITC was patently bad, illegal and there is gross violation of the fundamental rights of the Petitioner. The directors of Dolphin Metals could not be held personally liable for the for the dues of Dolphin Metals and the same cannot be recovered from them as per the provisions of GVAT Act.
• That the dues can be recovered towards the liability incurred by Dolphin Metals from its directors after following the due process of the law as per the provisions of Section 179 of Income Tax Act, 1961 (“IT Act”) and Section 89 of the CGST Act. The GVAT Act does not empower the Respondent to do so.
• That Dolphin Metals was a public limited company and outstanding dues cannot be recovered from its director.
• That Rule 86A of the CGST Rules empowers the Commissioner or officer authorized to restrict the use of ITC from electronic credit ledger if the Commissioner has reasons to believe that the ITC has been fraudulently availed or is ineligible on the grounds stated in Rule 86A (1)(a) to (d) of the CGST Rules. Thus, blocking on the account of discharge of liability towards any other law is not permissible under Rule 86A of the CGST Rules.

The Respondent contented that:

• As per Section 18 of Central Sales Tax Act, 1956 (“CST Act”), every person who was a director of the private limited company at any time during the period for which the tax is due would be jointly and severally liable for payment of such tax. Hence, they could recover the amount of tax of Dolphin Metals by blocking ITC of the Petitioner.
• It was further highlighted that as per the provisions of Section 49(3) of the CGST Act, that the amount available in electronic credit ledger can be used for making any payment of tax, interest, penalty, fees or any other amount payable under the provisions of the CGST Act. Hence, in pursuance of an assessment or adjudication proceedings instituted, if any amount of tax becomes recoverable from the person, then the same is permissible to be recovered as an arrear of tax under the CGST Act.

Issue:-

Whether Petitioner’s challenge that action of the Respondent in blocking ITC in exercise of power under Rule 86A of the CGST Rules is patently bad and illegal.

Held:-

The Hon’ble Gujarat High Court in R/Special Civil Application No. 14931 of 2020, decided on January 4, 2021 held as under:

• Rejected the Respondent contention regarding Section 18 of the CST Act to state that Section 18 ibid specifically talks about private company and Dolphin Metals as per the facts of the case is indisputably a Public Company. Hence, the provisions of Section 18 of CST Act will not be applicable to the case.
• Held that Rule 86A of the CGST Rules can only be invoked if the Commissioner or the officer authorized by him has reasons to believe ITC available in the electronic credit ledger has been fraudulently availed or is ineligible on the grounds stated in Rule 86A(1)(a) to (d) of the CGST Rules. There is no reason for invoking Rule 86A of the CGST Act in the present matter.
• Relied on following cases to hold that unlike Section 179 of the IT Act there is no provision in the Sales Tax Act fastening the liability of Dolphin Metals to pay its sales tax dues on its directors:
  • Mr. Choksi v. State of Gujarat [R/Special Civil Application No. 243, 3103,7578 of 1991 decided on March 21, 2012]
  • Different Solution Marketing Private Ltd. v. State of Gujarat [R/Special Civil Application No. 19949 of 2015 decided on June 30, 2016]
  • Paras Shantilal Savla v. State of Gujarat [R/Special Civil Application No. 7801 of 2019 decided on June 27, 2019]
• Allowed writ application in favour of the Petitioner and directed the Respondent to unblock the ITC in the electronic credit ledger of the Petitioner.
• Clarified that the order would not preclude the department from recovering the dues of Dolphin Metals by any other mode of recovery permissible in law.

Our Comments:-

It is to be noted that recently, Rule 86A was challenged in Hon’ble Gujarat HC in the case of Kalpsutra Gujarat v. Union of India [R/Special Civil Application 10562 of 2020 decided on September 4, 2020] in so far as it gives power to block ITC at no fault of registered recipient and to declare it ultra vires of Section 16 of the CGST Act. The above-mentioned case is now listed for hearing on February 18, 2021.

Similarly, Rule 86A ibid was also challenged in the case of Surat Mercantile Association v. Union of India [R/Special Civil Application 15381 of 2020 dated December 4, 2020] for allowing blocking the electronic credit ledger unilaterally without issue of Show Cause Notice and without giving an opportunity of fair hearing. The above-mentioned case is also now listed for hearing on February 22, 2021.

Relevant Provisions:-

Rule 86A of the CGST Rules:

“Conditions of use of amount available in electronic credit ledger.-

(1) The Commissioner or an officer authorized by him in this behalf, not below the rank of an Assistant Commissioner, having reasons to believe that credit of input tax available in the electronic credit ledger has been fraudulently availed or is ineligible in as much as

a) the credit of input tax has been availed on the strength of tax invoices or debit notes or any other document prescribed under rule 36-

i. issued by a registered person who has been found non-existent or not to be conducting any business from any place for which registration has been obtained;

or

ii. without receipt of goods or services or both; or

b) the credit of input tax has been availed on the strength of tax invoices or debit notes or any other document prescribed under rule 36 in respect of any supply, the tax charged in respect of which has not been paid to the Government; or

c) the registered person availing the credit of input tax has been found non-existent or not to be conducting any business from any place for which registration has been obtained; or

d) the registered person availing any credit of input tax is not in possession of a tax invoice or debit note or any other document prescribed under rule 36,

may, for reasons to be recorded in writing, not allow debit of an amount equivalent to such credit in electronic credit ledger for discharge of any liability under section 49 or for claim of any refund of any unutilised amount.”

DISCLAIMER: The views expressed are strictly of the author and A2Z Taxcorp LLP. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.

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Last Chance to Join 2 Days Certification Course on GSTR-9 & GSTR-9C

Last Chance to Join 2 Days Certification Course on GSTR-9 & GSTR-9C

After receiving an overwhelming response on 6 Days Advance Excel, Online GST Crash Course on GST Annual Return & GST Audit by Studycafe, Online GST Certification Course for Beginners, 5 Days Online Stock Market Certification Course, 5 Days Certification Course on TDS & TCS Under Income Tax Act we are coming up with Another Batch of 2 Days Refresher Certification Course on GSTR-9 & GSTR-9C.

For ease of Students and professionals, we are coming up with 2 Days Certification Course on GSTR-9 & GSTR-9C which will start from 30th Jan 2021. There will be 2 classes of 2 hrs each where complete understanding of GSTR-9 & GSTR-9C will be provided.

COURSE DETAILS ARE GIVEN BELOW:

Outline for the Course

Following are the outline for the Course:

• Certificate by Studycafe after successful Completion of Course.
• Time : 03:00 PM to 05:00 PM
• Days : January 30, 2021 to January 31, 2021
• Recording of All the Session will be provided
• Certificate to be provided to all the participants. Certificates will be sent on your email id.
• Speaker: CA Pratibha Goyal
• Language: Hindi English Mix

Faculty For 2 Days Certification Course on GSTR-9 & GSTR-9C

• CA Pratibha Goyal

Click Here To Register for 2 Days Certification Course on GSTR-9 & GSTR-9C

Below mentioned persons can Join 2 Days Certification Course on GSTR-9 & GSTR-9C

• Commerce Graduates/CA/CS/CMA/Law students
• Tax professionals whether in JOB or Practice
• Qualified CA/CS/CMA/LLB
• Semi-qualified CA/CS/CMA working in CA Firms or in Industry

Any other person not covered above can join the course if interested.

Language of the 2 Days Certification Course on GSTR-9 & GSTR-9C

Online Course on GSTR-9 & GSTR-9c Provisions will be in Hindi English Mixed Language.

Date for 2 Days Certification Course on GSTR-9 & GSTR-9C

• Batch Start Date 30th Jan 2021 to 31st Jan 2021

Online Course on GSTR-9 & GSTR-9C Duration & Schedule

2 Classes for 2 hours Each. Total 4 Hours of Online  Course on GSTR-9 & GSTR-9C Provisions.

• Date: 30th Jan 2021 to 31st Jan 2021.
• Time: 03.00 pm to 5.00 pm.
• Recording for the sessions will also be shared with the participants.

Online Course on GSTR-9 & GSTR-9C content & Syllabus

Discussion on Applicability of GST Annual Return & GST Audit
Provisions related to GST Annual Return & GST Audit
Discussion on issues related with Supply – Inter branch supply, Deemed Exports, RCM, Export, Export under LUT, Exempt, Nil Rated, Non-GST and No Supply.
Issues related with ITC, GSTR-2A v/s 2B.
Discussion on Form GSTR-9 & GSTR-9C, including presentation of Data in GSTR-9 & GSTR-9C.
Optional Reporting Requirements in Form GSTR-9 & GSTR-9C
Spill over-effects of 2018-19.
Live discussion with lots of Examples..

Fees For Online Course on GSTR-9 & GSTR-9C

Rs. 300 only

Book your Online Course on GSTR-9 & GSTR9C

Click here for Registration and online payment

For any query/assistance mail us at contact@studycafe.in or Call on +91 96250 80264

Please also note that Online Course on GSTR-9 & GSTR9C will be conducted through Zoom and link of webinar will be shared once payment will be done.

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Govt to amend Laws for effective Disciplinary points for ICAI, ICWAI, ICSI

Govt to amend Laws for effective Disciplinary points for ICAI, ICWAI, ICSI

The government is set to amend laws to streamline the functioning, especially the disciplinary aspects, of three professional institutes of Chartered Accountants of India (ICAI), Institute of Cost and Works Accountants of India (ICWAI) and Institute of Company Secretaries of India (ICSI).

An invoice to amend related provisions of laws governing the three bodies is anticipated to be launched through the second half of the finances session of Parliament. The thought is to step up oversight on the three bodies after a committee instructed a number of adjustments nearly three years in the past. In truth, some of the proposals have been accepted, the authorized adjustments are being undertaken in session with the institutes.

As per a part of adjustments, the government will have the final say to appoint secretaries of institutions and directors responsible for disciplining professionals. At one time, the Ministry of Corporate Affairs which is behind the bill was thinking about appointing government officers for these roles.

ICAI itself has been open to changes in recent months and has sought to simplify the process in cases such as those where the Quality Review Board suggests disciplinary action against its members, who are chartered accountants.

However, Meenakshi Dutta Ghosh, heading the committee and a former civil servant, had suggested that The disciplinary platform must be independent of the institution while indicating that the current mechanism needs to be revived.

Additionally, there are several reasons why the laws of the three statutory bodies need to be amended.

• To step up oversight on all three bodies considering several changes suggested by a committee almost three years back.
• Some proposals have been already accepted and legal changes are being made in consultation with institutions.
• The ICAI seems ready to make changes in the past few months and also tried to simplify the process in cases where the Quality Review Board suggested disciplinary action against its members (chartered accountants).
• The disciplinary track record of ICAI had come under question a few years ago, even, Prime Minister Narendra Modi flagged it at the time of the introduction of GST.

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SAE for Assurance Engagements on Greenhouse Gas Statements released by ICAI

SAE for Assurance Engagements on Greenhouse Gas Statements released by ICAI

ICAI has released Standard on Assurance Engagements (SAE) 3410: Assurance Engagements on Greenhouse Gas Statements.

Global climate change (GHG) is one of world’s most significant long-term policy challenges. Project to develop a standard for assurance engagements on greenhouse gas (GHG) statements was started by the IAASB in 2007.

Given the link between greenhouse gas (GHG) emissions and climate change, many entities are quantifying their GHG emissions for internal management purposes, and many are also preparing a GHG statement:

(a) As part of a regulatory disclosure regime;

(b) As part of an emissions trading scheme; or

(c) To inform investors and others on a voluntary basis. Voluntary disclosures may be, for example, published as a stand-alone document; included as part of a broader sustainability report or in an entity’s annual report; or made to support inclusion in a “carbon register”.

The Institute of Chartered Accountants of India (ICAI) has issued Assurance Engagements on Greenhouse Gas Statements to deal with assurance engagements to report on an entity’s GHG statement.

Accordingly SAE 3410 deals with assurance engagements to report on an entity’s GHG statement.

The practitioner’s conclusion in an assurance engagement may cover information in addition to a GHG statement, for example, when the practitioner is engaged to report on a sustainability report of which a GHG statement is only one part. In such cases:

(a) SAE 3410 applies to assurance procedures performed with respect to the GHG statement other than when the GHG statement is a relatively minor part of the overall information subject to assurance; and

(b) The Guidance Note on Reports or Certificates for Special Purposes (hereinafter referred as “the Guidance Note”) (or another SAE dealing with a specific underlying subject matter) applies to assurance procedures performed with respect to the remainder of the information covered by the practitioner’s conclusion.

(c) Instruments, processes or mechanisms, such as offset projects, used by other entities as emissions deductions. However, where an entity’s GHG statement includes emissions deductions that are subject to assurance, the requirements of this SAE apply in relation to those emissions deductions as appropriate (see paragraph 76(f)).

The practitioner is required to comply with the Guidance Note and this SAE when performing an assurance engagement to report on an entity’s GHG statement. This SAE supplements, but does not replace, the Guidance Note, and expands on how the Guidance Note is to be applied in an assurance engagement to report on an entity’s GHG statement.

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Startup India Seed Fund Scheme, the corpus of Rs. 945 Crores notified

Startup India Seed Fund Scheme, the corpus of Rs. 945 Crores notified

The government has approved the Startup India Seed Fund Scheme (SISFS) with a corpus of Rs 945 crore to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry and commercialization.

The SISFS shall provide financial assistance to startups via corpus of Rs. 945 Crore that will be disbursed through selected incubators across India in 2021-25, the Department for Promotion of Industry and Internal Trade (DPIIT) said in a notification.

“An Experts Advisory Committee (EAC) will be constituted by DPIIT, which will be responsible for the overall execution and monitoring of the Startup India Seed Fund Scheme,” the department said.

To be chaired by an individual of eminence, the committee will evaluate and select incubators for allotment of Seed Funds, monitor progress, and take all necessary measures for efficient utilization of funds.

The eligibility criteria for the financial assistance under this scheme is that the a startup, recognized by DPIIT, incorporated not more than 2 years ago at the time of application, startup must have a business idea to develop a product or a service with market fit, viable commercialization, and scope of scaling; Startup should be using technology in its core product or service, or business model, or distribution model, or methodology to solve the problem being targeted.

A National Seed Fund was announced in Budget 2020-21 to support ideation and development of early-stage startups whereas the credit guarantee scheme will enable startups to raise loans for their business purposes.

As per the notification, the eligible startups should not have received more than Rs 10 lakh of monetary support under any other central or state government scheme. However, this does not include prize money from competitions and grand challenges, subsidised working space, founder monthly allowance, access to labs, or access to prototyping facility.

MINISTRY OF COMMERCE AND INDUSTRY

(Department for Promotion of Industry and Internal Trade)

(STARTUP INDIA SECTION)

NOTIFICATION

New Delhi, the 21st January, 2021

S.O. 414(E).— The Central Government has approved the ‘Startup India Seed Fund Scheme (SISFS)’ to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry and commercialization. SISFS shall provide financial assistance to startups via corpus of Rs. 945 Crore that will be disbursed through selected incubators across India in 2021-25.

2. The scheme is sector-agnostic and will support startups across all sectors. The scheme shall have a central common application on Startup India portal for startups and incubators on an ongoing basis.

3. SISFS will be implemented by the Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry, Government of India.

4. The Guidelines of the above-mentioned scheme is available on the website of Startup India at https://ift.tt/2tFYAQr.

5. Eligibility Criteria for Startups: The eligibility criteria for a startup to apply under the Startup India Seed Fund Scheme shall be as follows:

1. A startup, recognized by DPIIT, incorporated not more than 2 years ago at the time of application

2. Startup must have a business idea to develop a product or a service with market fit, viable commercialization, and scope of scaling

3. Startup should be using technology in its core product or service, or business model, or distribution model, or methodology to solve the problem being targeted

4. Preference would be given to startups creating innovative solutions in sectors such as social impact, waste management, water management, financial inclusion, education, agriculture, food processing, biotechnology, healthcare, energy, mobility, defence, space, railways, oil and gas, textiles, etc.

5. Startup should not have received more than Rs 10 lakh of monetary support under any other Central or State Government scheme. This does not include prize money from competitions and grand challenges, subsidized working space, founder monthly allowance, access to labs, or access to prototyping facility

6. Shareholding by Indian promoters in the startup should be at least 51% at the time of application to incubator for the scheme, as per Companies Act, 2013 and SEBI (ICDR) Regulations, 2018

7. Any startup will not receive seed support more than once each as per provisions of guidelines.

6. Eligibility Criteria for Incubators: The eligibility criteria for an incubator to apply in the Startup India Seed Fund scheme are as follows:

1. Incubator must be a legal entity:

a) A society registered under the Societies Registration Act 1860, or

b) A Trust registered under the Indian Trusts Act 1882, or

c) A Private Limited company registered under the Companies Act 1956 or the Companies Act 2013,
or

d) A statutory body created through an Act of legislature

2. Incubator should be operational for at least two years on the date of application to the scheme

3. Incubator must have facilities to seat at least 25 individuals

4. Incubator must have at least 5 startups undergoing incubation physically on the date of application

5. Incubator must have a full-time Chief Executive Officer, experienced in business development and entrepreneurship, supported by a capable team responsible for mentoring startups in testing and validating ideas, as well as in finance, legal and human resources functions.

6. Incubator should not be disbursing seed fund to incubatees using funding from any third-party private entity.

7. Incubator must have been assisted by Central/State Government(s)

8. In case the incubator has not been assisted by Central or State Government(s):

a) Incubator must be operational for at least three years

b) Must have at least 10 separate startups undergoing incubation in the incubator physically on the date of application

c) Must present audited annual reports for the last 2 years

9. Any additional criteria as may be decided by the Experts Advisory Committee (EAC).

7. Assistance to Incubators: Experts Advisory Committee (EAC) shall evaluate incubators for grant assistance. A Grant of up to Rs. 5 (five) crore would be provided to a selected incubator in milestone-based three (or) more installments. The exact quantum of grant and instalments for each incubator will be decided by the Experts Advisory Committee (EAC) based on its evaluation.

8. Disbursement of Seed Fund to Startups by Incubators: Seed Fund to an eligible startup by the incubator shall be disbursed as follows:

1. Up to Rs. 20 Lakhs as grant for validation of Proof of Concept, or prototype development, or product trials. The grant shall be disbursed in milestone-based installments. These milestones can be related to development of prototype, product testing, building a product ready for market launch, etc.

2. Up to Rs. 50 Lakhs of investment for market entry, commercialization, or scaling up through convertible debentures or debt or debt-linked instruments

3. Seed fund shall strictly not be used by startups for creation of any facilities and shall be utilized for the purpose it has been granted for

9. Constitution of Experts Advisory Committee: An Experts Advisory Committee (EAC) will be constituted by DPIIT, which will be responsible for the overall execution and monitoring of the Startup India Seed Fund Scheme. The EAC will evaluate and select incubators for allotment of Seed Funds, monitor progress, and take all necessary measures for efficient utilization of funds towards fulfilment of objectives of Startup India Seed Fund Scheme. The Experts Advisory Committee (EAC) will comprise of the following members:

1. Chairman, an individual of eminence

2. Financial Advisor, DPIIT or his representative

3. Additional Secretary/ Joint Secretary/ Director/ Deputy Secretary, DPIIT (Convener)

4. Representative of Department of Biotechnology (DBT)

5. Representative of Department of Science & Technology (DST)

6. Representative of Ministry of Electronics and Information Technology (MeiTY)

7. Representative of Indian Council of Agricultural Research (ICAR)

8. Representative of NITI Aayog

9. At least three expert members nominated by Secretary, DPIIT from the startup ecosystem, investors, experts in the domain of R&D, technology development and commercialization, entrepreneurship and other relevant domains.

10. Selection of Incubators:

10.1 Online Applications will be invited from incubators across India to participate in the scheme on https://ift.tt/2tFYAQr or any other platform specifically designated for the purpose.

Incubators shall be selected on the basis of the following parameters:

a. Fulfillment of eligibility criteria

b. Quality of the team of Incubator

c. Available infrastructure, testing labs etc.

d. Composition of ISMC (as defined in para 7)

e. Incubation support provided by incubator in last three years:

i. No. of startups incubated

ii. No. of startups graduated, i.e. progressed from one stage of business development cycle to the next

iii. No. of startups that raised follow on investments

iv. No. of startups that crossed a revenue of Rs 1 Cr in last 1 year

v. 2-year survival rate of startups from the date of joining incubator

f. Funding support extended to incubatees in last three years:

i. Investment agreements signed between incubator and startups

ii. No. of startups invested in

iii. Total corpus allocated to incubatees

iv. Total investments raised by incubatees from external sources

g. Mentoring provided to incubatees in last three years:

i. No. of mentors hired

ii. Average mentoring hours allocated per startup per month

iii. No. of IP (patents, copyrights, designs, and trademarks) registered by incubatees

h. Other support extended to incubatees in last three years:

i. Industry/Corporate connects

ii. Events held for stakeholder engagements

iii. Participation in other events

i. Number of startups that the incubator intends to support

j. Quantum of funds applied for, along with fund deployment plan with timelines

k. Any other relevant parameters that decided by the EAC

10.2 The Call for Applications for incubators will be open online throughout the year

10.3 Experts Advisory Committee (EAC) will convene at least quarterly to:

1. Evaluate the applications received during the period

2. Select incubators for funds under the Scheme

3. Decide the total amount of fund and number of installments in which it is to be allocated to each incubator

4. Specify milestones to be achieved by each incubator for release of installments

10.4 EAC shall also monitor progress of incubators against sanctioned funds under the Scheme and take further actions as may be required

10.5 EAC may lay down improved guidelines for selection of incubators under the scheme from time to time

11. Selection of Startups

11.1 Each of the incubators applying for the Startup India Seed Fund Scheme will constitute a committee called the Incubator Seed Management Committee (ISMC), consisting of experts who can evaluate and select startups for seed support. The composition of ISMC would be as follows:

i. Nominee of Incubator (Chairman)

ii. Representative from State Government’s Startup Nodal Team

iii. Representative of a Venture Capital Fund or Angel Network

iv. A domain expert from Industry

v. A domain expert from academia

vi. Two successful Entrepreneurs

vii. Any other relevant Stakeholder

The final composition and members of ISMC of each incubator shall be approved by EAC and will be a critical parameter in selection of incubators.

11.2 The startups shall be selected through an open, transparent and fair process, comprising, inter-alia:

i. An online call for applications shall be hosted on an ongoing basis on the Startup India portal

ii. Applicants can apply for seed fund to any three incubators selected as disbursing partners for this scheme in order of their preference

iii. All applications received will be shared online with respective incubators for further evaluation

iv. The applicant may be asked to submit details on team profile, problem statement, product/service overview, business model, customer profile, market size, quantum of funds needed, projected utilization plan for funds, etc.

v. The incubators shall shortlist applicants as per eligibility criteria given in the guidelines.

vi. Eligible applications will be evaluated by ISMC using the following criteria:

image

vii. Incubator may shortlist applicants based on their evaluation for a presentation before ISMC

viii. ISMC shall evaluate applicants based on their submissions and presentations and select startups for Seed Fund within 45 days of receipt of application

ix. All incubators shall provide information about progress of evaluation of startups real-time to Startup India portal

x. Selected startups shall receive seed funding under the respective incubator that selects them as beneficiaries as per their preference shared during application (for example, if incubators at Preference 1 and Preference 2 both select a startup, the funding shall be given by Preference 1 incubator. If Preference 1 incubator rejects and Preference 2 incubator selects, the funding shall be given by incubator at Preference 2, and so on.)

xi. All applicants will be able to track the progress of their application on the Startup India portal on a real-time basis

xii. Applicants who are rejected will also be notified through email

xiii. An applicant, if rejected once, may apply afresh

11.3 EAC may lay down improved guidelines for selection of startups under the scheme from time to time

12. The Department shall evaluate the outcome of the scheme by the end of 2024-25, especially with reference to financial, social and economic returns.

[F. No. P-38015/5/2020-STARTUP INDIA]
ANIL AGRAWAL, Jt. Secy.

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Relaxation on levy of additional Fees on e-forms AOC-4 for FY 2019-20

Relaxation on levy of additional Fees on e-forms AOC-4 for FY 2019-20

Keeping in view of various request received from stakeholders regarding relaxation on levy of additional fees for annual financial statement filings required to be done for the financial year ended on 31.03.2020, it has been decided that no additional fees shall be levied up to 15.02.2021 for the filing of e-forms AOC-4, AOC-4 (CFS), AOC-4 XBRL and AOC-4 Non-XBRL in respect of the financial year ended on 31.03.2020. During the said period, only normal fees shall be payable for the filing of the aforementioned e-forms.

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Join 2 Days Certification Course on GSTR-9 & GSTR-9C

Join 2 Days Certification Course on GSTR-9 & GSTR-9C

After receiving an overwhelming response on 6 Days Advance Excel, Online GST Crash Course on GST Annual Return & GST Audit by Studycafe, Online GST Certification Course for Beginners, 5 Days Online Stock Market Certification Course, 5 Days Certification Course on TDS & TCS Under Income Tax Act we are coming up with Another Batch of 2 Days Refresher Certification Course on GSTR-9 & GSTR-9C.

For ease of Students and professionals, we are coming up with 2 Days Certification Course on GSTR-9 & GSTR-9C which will start from 30th Jan 2021. There will be 2 classes of 2 hrs each where complete understanding of GSTR-9 & GSTR-9C will be provided.

COURSE DETAILS ARE GIVEN BELOW:

Outline for the Course

Following are the outline for the Course:

• Certificate by Studycafe after successful Completion of Course.
• Time : 03:00 PM to 05:00 PM
• Days : January 30, 2021 to January 31, 2021
• Recording of All the Session will be provided
• Certificate to be provided to all the participants. Certificates will be sent on your email id.
• Speaker: CA Pratibha Goyal
• Language: Hindi English Mix

Faculty For 2 Days Certification Course on GSTR-9 & GSTR-9C

• CA Pratibha Goyal

Click Here To Register for 2 Days Certification Course on GSTR-9 & GSTR-9C

Below mentioned persons can Join 2 Days Certification Course on GSTR-9 & GSTR-9C

• Commerce Graduates/CA/CS/CMA/Law students
• Tax professionals whether in JOB or Practice
• Qualified CA/CS/CMA/LLB
• Semi-qualified CA/CS/CMA working in CA Firms or in Industry

Any other person not covered above can join the course if interested.

Language of the 2 Days Certification Course on GSTR-9 & GSTR-9C

Online Course on GSTR-9 & GSTR-9c Provisions will be in Hindi English Mixed Language.

Date for 2 Days Certification Course on GSTR-9 & GSTR-9C

• Batch Start Date 30th Jan 2021 to 31st Jan 2021

Online Course on GSTR-9 & GSTR-9C Duration & Schedule

2 Classes for 2 hours Each. Total 4 Hours of Online  Course on GSTR-9 & GSTR-9C Provisions.

• Date: 30th Jan 2021 to 31st Jan 2021.
• Time: 03.00 pm to 5.00 pm.
• Recording for the sessions will also be shared with the participants.

Online Course on GSTR-9 & GSTR-9C content & Syllabus

Discussion on Applicability of GST Annual Return & GST Audit
Provisions related to GST Annual Return & GST Audit
Discussion on issues related with Supply – Inter branch supply, Deemed Exports, RCM, Export, Export under LUT, Exempt, Nil Rated, Non-GST and No Supply.
Issues related with ITC, GSTR-2A v/s 2B.
Discussion on Form GSTR-9 & GSTR-9C, including presentation of Data in GSTR-9 & GSTR-9C.
Optional Reporting Requirements in Form GSTR-9 & GSTR-9C
Spill over-effects of 2018-19.
Live discussion with lots of Examples..

Fees For Online Course on GSTR-9 & GSTR-9C

Rs. 300 only

Book your Online Course on GSTR-9 & GSTR9C

Click here for Registration and online payment

For any query/assistance mail us at contact@studycafe.in or Call on +91 96250 80264

Please also note that Online Course on GSTR-9 & GSTR9C will be conducted through Zoom and link of webinar will be shared once payment will be done.

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ICAI initiates disciplinary proceedings on 8 arrested CAs for fake GST invoice fraud

ICAI initiates disciplinary proceedings on 8 arrested CAs for fake GST invoice fraud

The Institute of Chartered Accountants of India (ICAI) has initiated disciplinary proceedings against 8 Chartered Accountants (CAs) who were arrested in the nationwide drive against fake GST invoice frauds since November 2020.

Confirming this move, Atul Kumar Gupta, President, Institute of Chartered Accountants of India (ICAI), told BusinessLine that the Revenue Department’s letter formed the basis for initiation of disciplinary proceedings against these eight Chartered Accountants.

The eighth Chartered Accountant was arrested on Saturday last along with his four business accomplices in Jaipur for operating 25 fake firms to fraudulently avail and pass on Input Tax Credit (ITC) through bogus invoices without actual supplies of goods/services.

ICAI on the implementation of the strict note for these events Gupta comments “in the last 2 financial years (2019-20 and 2020-21) we have disposed of more than 650 cases through disciplinary mechanism wherein prime endeavour, in consonance with the amendments proposed, is to conclude the case within 1 year as against the current period of 2 years.”

From the 650 cases, as many as 400 were held guilty and punishments ranged from a ‘reprimand’ to ‘removal of names’. Hundreds of them have been removed from the register of members, Gupta said.

Going forward also, the endeavour of ICAI would be to conclude the case within one year, he added.

Source: BusinessLine

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Income Tax Return rectification enabled on the portal for the AY 2020-21

Income Tax Return rectification enabled on the portal for the AY 2020-21

The Income Tax Department has enabled the Income Tax Return (ITR) Rectification on the portal for the Assessment Year 2020-21.

A rectification request under section 154(1) is allowed by the Income Tax Department for correcting mistakes when there is an apparent mistake in your Income Tax Return.

The errors can be taken care of by filing a rectification namely an error of fact, an arithmetic mistake, a small clerical error and an error due to overlooking compulsory provisions of law.

The rectification can be filed under section 154(1) by Logging in to Income Tax Website, then Go to ‘e-File’. In the drop-down select ‘Rectification’. Select the ‘Assessment Year’ for which rectification is to be filed and ‘Latest Communication Reference Number’ (as mentioned in the CPC Order). In case you have received more than 2 orders use the latest order number. Click on ‘Validate’. Select the ‘Rectification Request Type’ based on the reason for filing rectification.

Select the reason for seeking rectification and the Schedules in the return being changed. Next, you need to upload XML. You can select a maximum of 4 reasons. If you select “Reprocess the case” then this option if there is a Tax Credit mismatch or Tax/ Interest mismatch. You may select the checkbox for which reprocessing is required. No upload of an Income Tax Return is required.

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Inflation Expectations and the Conduct of Monetary Policy

Inflation Expectations and the Conduct of Monetary Policy

RESERVE BANK OF INDIA

PRESS RELEASE

January 25, 2021

RBI Working Paper No.03/2021: Monetary Policy Transparency and Anchoring of Inflation Expectations in India

Today the Reserve Bank of India placed on its website a Working Paper titled “Monetary Policy Transparency and Anchoring of Inflation Expectations in India” under the Reserve Bank of India Working Paper Series.∗ The Paper is authored by G.P. Samanta and Shweta Kumari.

This paper constructs an index of monetary policy transparency for India and examines the role of transparency in anchoring inflation expectations. Empirical results show that the degree of policy transparency has indeed increased substantially since the adoption of Flexible Inflation Targeting (FIT) in 2016. Further, empirical evidence suggests that inflation expectations of professional forecasters and households were anchored, in weak-form, in the post-FIT period, though households’ expectations did not necessarily lie within the inflation tolerance band. During the transition period (between the self-imposed disinflationary glide-path since 2014 and adoption of the FIT), both realised inflation and expectations followed a declining path, which resulted in a positive association between them. During the pre-transition period, when explicit inflation target was absent, expectations were also reasonably anchored, albeit, at a higher level.

Press Release: 2020-2021/995

(Yogesh Dayal)
Chief General Manager

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RBI releases framework for strengthening the grievance redress mechanism in banks

RBI releases framework for strengthening the grievance redress mechanism in banks

RESERVE BANK OF INDIA

PRESS RELEASE

January 27, 2021

RBI releases framework for strengthening the grievance redress mechanism in banks

RBI had announced in the ‘Statement on Developmental and Regulatory Policies’ issued as part of the Monetary Policy statement dated December 4, 2020 that with a view to strengthen and improve the efficacy of the grievance redress mechanism of banks, a comprehensive framework will be put in place during January 2021.

Accordingly, a framework comprising of i) enhanced disclosures on complaints to be made by the banks; ii) recovery of the cost of redress of maintainable complaints from the banks against whom the number of complaints received in the Offices of Banking Ombudsman (OBOs) are in excess of their peer group averages; and iii) intensive review by RBI of the grievance redress mechanism of banks having persisting issues in their redress mechanism has been issued today.

The redress of complaints will continue to be cost-free for the customers of banks and members of public.

The framework intends to, inter-alia, provide greater insight into the volume and nature of complaints received by the banks as also the quality and turnaround time of redressal, promote satisfactory customer outcomes and improved customer confidence, and identify remedial steps to be taken by the banks having persisting issues in grievance redress mechanism.

The framework will come into effect from the date of the circular.

Press Release: 2020-2021/1002

(Yogesh Dayal)
Chief General Manager

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NPS changes government needs to bring in Budget 2021

NPS changes government needs to bring in Budget 2021

Balwant Jain

The government needs to make the NPS fair for all categories of subscribers

The union budget will be presented on 1st February so I thought of making some suggestions to remove some anomalies and r inequalities in the Income Tax Act provisions to make the NPS system fair and little better for everyone. Here are my suggestions.

Uniformities of tax treatment of retirement corpus of Tier I of NPS with employee provident fund (EPS)

Employee Provident Fund (EPF) schemes was introduced for all the employees in the organized sector to help them accumulate funds for retirement. Another system National Pension System (NPS) was introduced in 2004, initially for government employees and then extended for all the Indian citizens. Under the EPF scheme the subscriber gets whole of the accumulated funds to his credit as tax-free at his retirement with full freedom to invest the it the way he wants whereas the NPS subscriber gets only upto 60% of the accumulated balance in his NPS account at the time of retirement as tax free and for the balance 40% he has to mandatorily buy an annuity from any life insurance company registered with IRDA.

In my opinion why should the government dictate the subscribers of one scheme as to where he should invest his retirement corpus and let him get full liberty to use the way he wishes in the other scheme. This becomes important specially looking at the fact that the annuities of insurance companies generally do not give you returns which are able to beat the inflation and moreover it is fully taxable in the hands of the annuitant.

Investments in mutual funds have become safer with evolution of mutual fund as an industry and strict monitoring by the regulator. The government should give the freedom to the NPS subscriber to invest in any product of their choice including a restriction on complete withdrawal of the money so as to ensure that the whole of the corpus is not put to risk. This should apply to subscribers of both the schemes.

Suggestion as Regards tax provisions for Tier II

The withdrawals from Tier I are tax-free upto 60% and the balance 40% has to be used for buying an annuity. But there is no clear cut provision in the Income Tax Act about how withdrawals from Tier II account should be taxed. Since these are not the mutual fund products, for which there exist exact rules, there is confusion about taxation of Tier II withdrawals. There is no clarify as to whether the same can be treated as equity product and thus entitled to concessional rate of taxes in case the subscriber has opted for 75% or more equity component. Complete clarity will go a long way in clearing the clouds around tier II account taxation. The government should immediately bring in clarity about taxation of withdrawals from Tier II account of NPS. Some expert opine that the full value should be taxed which my opinion is absurd but then clear cut provisions will help us bring in clarify about it.

Presently only the Central Government employees are allowed to claim deduction under Section 80 C for contribution made towards tier II account with a lock in of three years. The same option is not available to other subscribers. Why such a step motherly treatment is given to other subscribers is beyond my comprehension. Is it because the people who draft the tax laws happen to be the central government employee? All the eligible subscribers should be allowed tax benefit for contribution towards Tier II account specially when with Tier II account offers you less risky products as compared with other product of same tenure i. ELSS in case the subscriber opts for predominantly debt portion in Tier II account.

Uniformity of ceiling for employer’s contribution

Tax benefits for contribution towards tier I account, for employer’s contribution for central government employees, is available upto 14% but when it comes to other employees it is capped at 10% which is eligible for deduction under Section 80CCD(2). This again shows that the scheme is framed to favor central government employee as compared to all the other category of employee. I do not find any apparent reason for this partiality. The government should make employer’s contribution upto 14% tax eligible for all category of the employees.

I feel that the government should introduce amendments to take care of these anomalies to make the scheme just and fair for each category of subscribers.

The writer is a tax and investment expert and can be reached at jainbalwant@gmail.com or @jainbalwant his twitter handle.

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Constitutional Validity of Rule 36(4) Challenged – Gujarat HC issues Notice

Constitutional Validity of Rule 36(4) Challenged – Gujarat HC issues Notice

IN THE HIGH COURT OF GUJARAT
AT AHMEDABAD

The Text of the Order as follows :

1. We have heard Mr. Vinay Shah, the learned counsel appearing with Mr. Parth Shah, the learned counsel for the writ applicants.

2. The writ applicants seek to challenge the validity of Sub-rule (4) of the Rule 36 of the GST Rules on the ground that, the same is violative of Article 14 of the Constitution. It is argued that the Subrule (4) of the Rule 36 of the Rules speaks to restrict the ITC to a buyer of goods of services on the basis of the details of the outward supply furnished by the supplier of the services of goods or on the basis of the common portal. According to the learned counsel for the writ applicants, the same is unconstitutional being contrary to the scheme of the Act. It is further argued that the Rule in question puts an onerous and impossible burden on the buyer of the goods and service to ensure that the supplier of goods or services does in fact upload the details of the outward supplier on the common portal and if the supplier fails to do so, it has to face the risk of the benefit of the ITC big cap being blocked or is kept in suspension. It is argued that the rule in question is arbitrary, irrational and theref ore, violative of Article 14 of the Constitution. The learned counsel for the writ applicants has also placed reliance on the few decisions of the Supreme Court.

3. Let Notice be issued to the respondents, returnable on 12.02.2021. The respondents shall be served by email over and above the regular service through the Court.

4. In view of the order passed today, connected civil application stands disposed of.

 

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Sale of Software with no right to use copy right in software is business Income

Sale of Software with no right to use copy right in software is business Income

IN THE INCOME TAX APPELLATE TRIBUNAL

The Relevant Text of the Order as follows :

15. On going through the above clauses of the Distributor Agreement, it becomes immensely clear that the Distributors have been appointed by the assessee in India to serve a link with Resellers. The Distributors simply acquire the Symantec Products which they specifically sell to the Resellers. Trademarks, Trade Name and Copyrights in Symantec Products remain with the assessee and the Distributor cannot make any deviation in the Symantec products in any manner. Thus, it is overt that the assessee has appointed Distributors in India to facilitate sale of Symantec Products. The Symantec products sold as such to the Distributors do not confer any right on them to copy the software license. The Distributors, except for passing over the Symantec products as acquired by them from the assessee company, do not acquire any right or title in the intellectual property used in the software which always remains with the assessee.

16. The above discussion boils down that be it a case of sale to the Resellers or the Distributors, the assessee only transfers Symantec Products to them. It is not as if the Distributors or the Resellers acquire any right from the assessee to copy the software and then exploit it commercially. Their transactions are confined to purchasing specific Symantec Products from the assessee and then eventually selling the same to the end customers in India. There is no qualitative difference between the direct sales made by the assessee to its customers in India, which have already passed the scrutiny by the Tribunal in assessee’s own case for earlier year and the sales made by the assessee through the Distributors or the Resellers. In both the sets of circumstances, it is only one-to-one sale of the Symantec Products by the assessee and at no stage the right to use the copyright in the software is licensed either to the Distributor or the Reseller. Thus, the decision taken by the Tribunal in the context of direct sales made by the assessee to end customers in India applies with full force insofar as the sales through Distributors and Resellers are concerned. That being the position, we hold that the income earned by the assessee from sale of software, either directly to the customers in India or through Distributors or Resellers constitutes its business income and not the Royalty income. As admittedly the assessee did not have any Permanent Establishment in
India, such income will not magnetize Indian taxation. We,
therefore, overturn the impugned order.

17. In the result, the appeal is allowed.

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ICAI CA Nov Exams 2020 results to be announced on February 2021

ICAI CA Nov Exams 2020 results to be announced on February 2021

The Institute of Chartered Accountants of India (ICAI) likely to announce the result of the ICAI CA November exam 2020 will be declared on February 1st week. The results will be released on the official website of ICAI in the first week of February.

Dhiraj Kumar Khandelwal, who is the CCM of ICAI, Chairman, Public and Govt financial management, Vice Chairman : Valuation Standard Board tweeted that “Dear students; CA results will be announced in the 1st week of February and that should Start with CA final on 1st February.”

The Candidates can check their results by visiting the official website of ICAI and logging in using their credentials. Candidates who appeared for the ICAI CA November exams 2020 can also follow the steps mentioned below to check their results.

The Institute of Chartered Accountants of India (ICAI) conducted the CA November 2020 examinations from November 21, 2020, onwards in multiple centres across the country.

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CGST+SGST would be levied on intermediary services provided to foreign principal

CGST+SGST would be levied on intermediary services provided to foreign principal

The Hon’ble AAR Gujarat in the matter of M/s. Sagar Powertex Private Limited [Advance Ruling No. GUJ/GAAR/R/98/2020, dated October 14, 2020] held that, ‘Central Goods and Services Tax (“CGST”) + State Goods and Services Tax (“SGST”)’ would be applicable and not Integrated Goods and Services Tax (“IGST”), on intermediary services provided by an Indian agent to its Korean principal, where the agent is earning commissions on sale of machinery, in territory of India, in the capacity of an intermediary.

Facts:

M/s. Sagar Powertex Pvt. Ltd. (“Applicant”) is engaged in the agency business of weaving machineries. The Applicant has have entered into an agreement with UKIL Machinery Co. Ltd. (“the Company”), a corporation organized under the laws of Republic of Korea to sell their machinery in the Indian Territory, wherein, the Applicant is appointed as its exclusive sales agent for the sizing/warping machinery and/or components and supplies for the territory of India.

For the same, the Applicant is getting certain amount as commission in the capacity of Agent/ intermediary from the foreign entities for the Supply of their machinery. The Company pays a commission of 7.5% for all capital equipment sold in the allotted territory and 10% for all spare parts ‘sold in the territory’, on the FOB Busan, Korea and selling price of all such orders are placed through the applicant. The applicant against the said service received commission income from Korea in foreign currency.

Issue:

Whether the services provided by the Applicant as an intermediary are liable to Central Goods and Services Tax (“CGST”) + State Goods and Services Tax (“SGST”) or Integrated Goods and Services Tax (“IGST”)?

Held:

The Hon’ble AAR Gujarat in Advance Ruling No. GUJ/GAAR/R/98/2020, dated October 14, 2020 held as under:

• Noted that, the services provided by the Applicant are in the nature of services of commission agents or commodity brokers who negotiate between buyers and sellers as a facilitator for the supply of goods for which they are paid a fee or commission. The said service can also be called as ‘intermediary services’.
• Observed that, an intermediary can be a broker, an agent or any other person who arranges and facilitates the supply of goods and/or services between two or more persons and who cannot change the nature of supply as provided by the principal. The Applicant is covered by the definition of an ‘intermediary’ under Section 2(13) of Integrated Goods and Services Tax Act, 2017 (“IGST Act”), as they are acting as an agent and facilitating the process for sale of machinery by their foreign principals to the Indian parties and for providing such service to the foreign principal the Applicant is receiving the commission. It is very clear from the facts of transaction that the Applicant is acting as an “agent” of the foreign company and neither providing services nor supplying the goods on their own account.
• Analyzed Section 13 of the IGST Act to find out the type of Goods and Service Tax i.e. ‘CGST + SGST’ or ‘IGST’ is to be levied on the Applicant, and stated that the same is dependent on type of supply of goods or services provided i.e. intra-state or interstate or imports/exports and also on the place of supply of goods or services. The Hon’ble AAR found that, the supplier of service is the Applicant and the service recipient is the Company and observed that the intermediary services provided by the Applicant, appears at sub-section (8)(b) of Section 13 of the IGST Act. Further, stated that, Section 13(8) of the IGST Act, clearly mentions that the place of supply in respect of the services described under the said sub-section shall be the location of the supplier of services. Hence, the supplier in the instant case is the Applicant and the location of the said supplier is in Gujarat.
• Held that, since the location of both the supplier of service i.e., the Applicant as well as the place of supply of service is in Gujarat, the supply of services would be considered as intra-state supply of services and would be liable to CGST and SGST as per the provisions of Section 9(1) of the Central Goods and Services Tax Act, 2017 (“CGST Act”) on the services provided by them as an intermediary.

Comments:

Section 7 and Section 8 of the IGST Act, contains provisions to determine whether the supply by intermediary shall be regarded as an inter-state supply or as an intra-state supply. Further, Section 13(8) of the states that the place of supply in case of intermediary services becomes the location of the supplier. This leads to the situation where location of supplier and the place of supply are in the same state, which means that the transaction between the intermediary service provider and a recipient outside India becomes intra-state supply.

Similar issue was dealt in Q25 of the FAQs on Banking, Insurance and Stock Brokers Sector released by the CBIC, where the query before department was whether the intermediary services provided by a banking company to its offshore account holders be treated as an intra-state supply or an inter-state supply for payment of GST?

The department answered citing Section 13(8)(b) of IGST Act and responded that “the place of supply of such services is the location of the provider of services. As the location of supplier and place of supply are in same state, such supplies will be treated as intra-state supply and Central tax and State tax or Union territory tax, as the case may be, will be payable.”

The clarification of the department induces one to think that the intermediary services provided to an offshore account holder shall be treated to be intra-state supply where the place of supply shall be location of the service provider. Now, the question is whether the said answer as given for this FAQ is correct?

A contrasting and opposite view is reflected for the determination of place of supply whether intra-state or inter-state when Section 7(5)(c) and Section 8(2) of the IGST Act are interpreted together. For Section 12 of the IGST Act to be applicable, location of supplier as well recipient must be in India. This means that Section 8(2) of the IGST Act cannot be applied to the supply of intermediary services as the recipient is situated outside the taxable territory of India, hence, taking the transaction of providing intermediary services outside the purview of intra-state supply or services.

Therefore, it may be concluded with conjoint reading of Section 8(2) of the IGST Act and Section 7(5)(c) of the IGST Act that intermediary services given to the recipient outside India by an intermediary in India is an inter-state supply on which CGST and SGST is leviable, but it might not create any problem even when IGST is charged, because, in such case, the other state code is made as 00000000000. In such scenario, SGST portion will accrue to a state where location of supplier is, and place of supply be mentioned as same state.

Relevant Provisions:

Section 2(13) of the IGST Act:

“13) “intermediary” means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account;”

Section 13(8) of the IGST Act:

“Place of supply of services where location of supplier or location of recipient is outside India-

(8) The place of supply of the following services shall be the location of the supplier of services, namely:––

(a) services supplied by a banking company, or a financial institution, or a non-banking financial company, to account holders;

(b) intermediary services;

(c) services consisting of hiring of means of transport, including yachts but excluding aircrafts and vessels, up to a period of one month.”

Section 9(1) of the CGST Act:

“Levy and collection-

9. (1) Subject to the provisions of sub-section (2), there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 and at such rates, not exceeding twenty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person.”

DISCLAIMER: The views expressed are strictly of the author and A2Z Taxcorp LLP. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.

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