BBUDGETUDGETAANALYSISNALYSIS22020-020-2211

Taxation | Audit | Outsourcing | Regulatory | Transaction Advisory | Business Intelligence Services

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CONTENTS

1. Foreword 3

2. Economic Outlook 5

3. Budget at Glance 12

4. Direct Tax Proposals 14

a. Personal Tax 15

b. Corporate Tax 18

1. Startups 19

2. Tax Audit 20

3.DividendDistributionTax21 4. TDS/TCS 22

5.Taxationofnon-residents 25 6. Penalty 27

7. Vivad se Vishwash Bill, 2020 27

8. Other proposals 29

5.IndirectTax-GoodsandServiceTax,CustomandExcisechanges31

6. Regulatory Changes 44

7. Glossary 46

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FOREWORD

With Budget 2020 bringing in a lot of changes for all strata of business society, the Indian businesses arebusy analyzing the fine print ofthis budget. The government task is tightly cut out with the Indian econ-omy slowing down andpolitical landscapebecoming sticky, the fact that global cues are also not inmuch fa-vor, the budget presented is seemed to be a balance between fiscal responsibility and tax cuts. The budg-et is aimed to please the middle class,economically deprived, startups,corporates and foreign companies.

Indiaisthefifth-largesteconomyoftheworld.India’sforeigndirectinvestmentgotelevatedtothelevelofUS$284billionduring2014-19fromUS$190billionthatcameinduringtheyears2009-14.TheCentralGovernmentdebtthathasbeenthebaneofoureconomygotreduced,inMarch2019,to48.7%ofGDPfromalevelof52.2%inMarch2014.

ThebudgettalksaboutAspirationalIndia,EconomicdevelopmentandCaringSociety.

Budget proposals in aspirational India coverprogrammes and plans related to Agriculture Irrigation and Ruraldevelopment,Wellness,Water and Sanitation and Education and Skills, while economic development propos-als cover Industry,Commerceand Investment, infrastructureandaneweconomy.Caring societyproposals fo-cus on Women &Child, Social Welfare; Culture and Tourism and also on Environment and Climate Change.

In direct tax numerous changes inspired from draft direct tax code have been incorporated such as new in-cometaxslabs,availableonlytothosetaxpayerswhoarewillingtoforegocertainexemptionsanddeductions,change in definition of residential status, removal of DDT, lower TDS on technical services, increase in auditthreshold,making direct tax digital, ESOP tax relaxation, Startup eligibility extension, TCS on eCommerce, etc.

In the past, theGovernment has taken severalmeasures to reduce tax litigations. In the last budget, SabkaV-ishwasSchemewas brought in to reduce litigation in indirect taxes. It resulted in settling over 1,89,000 cases.

Currently,thereare4,83,000directtaxcasespendinginvariousappellateforums,i.e.,Commissioner(Appeals),ITAT,HighCourtandSupremeCourt.Thus,thisyear,theFinanceMinisterhasbroughtinaschemesimilartoindi-recttaxSabkaVishwasforreducinglitigationseveninthedirecttaxes.TheGovt.hasintroducedDirectTaxVivadseVishwasBill,2020intheLokSabhaonFebruary5,2020.Fortaxpayerswhoseappealswerependingbeforetheappellateforums[i.e.,CIT(A),ITAT,HighCourtandSupremeCourt]asonJanuary31st2020,theschemeprovidesforwaiverofinterest,penalty&prosecutionwherethedeclarationprovidedundertheSchemeisfiledbythede-clarantbeforethedesignatedauthority.

CertainchangeshavebeenbroughtinIndirecttax,suchasintheGSTpenaltyforbogusbillshavebeenintroduced,input credit has been linked with a debit note without required linkage with original bill date. Certain central excise andcustomrateshavebeenrationalized.

ExternalCommercialBorrowingsandFDIarebeingproposedtofinancetheeducationsystemsoas tobeabletodeliverhigherqualityeducationwiththemotivetoattracttalentedteachers, innovateandbuildbetterlabs.

TheGovernmenthascomeupwithfewpositivechangesintheareaofregulations,whichincludeamendmentsinstampactandMSME.

Thisfinalbudgetof2020-21hasbeenreleasedwithavisionforinclusivedevelopmentforallandputtingbackIndiaon growth path quickly.

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Please Note:

-Thisbudgethasbeenpreparedasaknowledgedocument,doesnotconstituteanadvertisementofanymannerandisforprivatecirculationonly.

-ContributionofJPChawla&Co.LLP’steammembers:Mr.J.P.Chawla,Mrs.RichaJunejaChawla,Mr.AnkitVyas,Mr.ManeetPuriandMrs.GarishmaAroraforpreparationofthiscomprehensivebudgetdocumentishighlyappreci-ated and acknowledged with thanks.

Hope you enjoy reading our analysis of Budget 2019-20.

Happy reading!!

Rajat ChawlaCEO & Managing PartnerJ P Chawla & Co. LLPE|rajatchawla@jpc.co.in

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ECONOMICECONOMIC

OUTLOOKOUTLOOK

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Overview of the Economy

Global headwinds and challenges in the domestic fi-

nancial sector moderated the growth of the Indian

economyin2019-20.TherealGDPgrowthmoderated

to5.0percentin2019-20ascomparedto6.8percentin

2018-19.DespiteatemporarymoderationintheGross

DomesticProduct(GDP)growthin2019-20,thefunda-

mentalsoftheIndianeconomyremainstrongandGDP

growth is expected to rebound from thefirstquarter

of2020-21.Thefiscalsituationremainedclosetothe

consolidation path and consumer price inflation was

within the targeted limits set by the monetary policy

committeeofReserveBankofIndia(RBI).Despitecon-

tinuingsluggishnessinglobaldemand,theCurrentAc-

countDeficit(CAD)narrowedto1.5percentofGDPin

thefirsthalf(H1)of2019-20from2.1percentin2018-

19.GlobalconfidenceintheIndianeconomyimproved

as reflected in growing inflows of net Foreign Direct

Investment(FDI)andanall-timehighaccumulationof

foreignexchangereservesofUS$457.5billionasinend

December 2019. India moving up by 14 positions to

63rdrankin2019WorldBank’sEaseofDoingBusiness

2020 Report, has among others, contributed to the in-

creaseinglobalconfidenceintheIndianeconomy.In-

dia has emerged as an important player in the world

onthebackofhighGDPgrowthandannouncement/

implementationofcriticalmeasuresinthecurrentyear

andlastfewyears.

The measures announced/implemented in 2019-20

include-hike inminimumsupportpriceofagricultural

cropsfor2019-20;reductionincorporatetaxrate;pol-

icyinitiativesfordevelopmentoftextiles&handicrafts

andelectricvehicles;outreachprogrammeforgrowth,

expansionandfacilitationofmicro,smallandmedium

enterprises; incentives for start-ups in India; schemetoprovideaone-timepartialcreditguaranteetopub-licsectorbanks(PSBs)forpurchaseofpooledassetsoffinanciallysoundnon-bankingfinancialcompanies(NBFCs);recapitalizationofpublicsectorbanks,relax-ationofexternalcommercialborrowingguidelinesforaffordablehousing; realty fundworth `25,000croreforstalledhousingprojects;additionaltaxdeductionofinterestforaffordablehousing;mergerof10pub-licsectorbanksintofourentities;revisedPrioritySec-torLending(PSL)normsforexports;andstreamliningofmanylabourlawsatthecentralgovernmentlevel.Apart from this, various steps were taken to boostmanufacturing; employmentgeneration; financial in-clusion; digital payments; improving ease of doingbusinessviaschemessuchasMake in India,Skill In-dia andDirectBenefitTransfer. Thegovernmenthasalso announced the National Infrastructure Pipeline(NIP)ofprojectsworth102lakhcrore,whichwillcom-menceinphasesfrom2020-21to2024-25.

Economic growth

Asperthefirstadvanceestimatesofannualnationalincome,therealGDPgrowthisestimatedat5.0per-centin2019-20,ascomparedtotheprovisionalesti-matesof6.8percentin2018-19.Correspondingly,therealgrowthofgrossvalueadded(GVA)isestimatedat4.9percentin2019-20ascomparedto6.6percentin2018-19.Thismoderation inGVAgrowth in2019-20(AE)ascomparedto2018-19isattributedtoallsectorsonthesupplysidesavepublicadministration,defenceandotherservices.Fromthedemandsideprivatefinalconsumption expenditure, public final consumptionexpenditure and net exports have driven the growth GDPin2019-20ascomparedto2018-19.Grossfixed

capitalformation,ontheotherhand,hasslowedthe

growthofGDP.

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ECONOMIC OUTLOOK

Prices

ConsumerPriceIndex(Combined)(CPI-C)inflationfor

2018-19 declined to 3.4 percent from 3.6 percentin

2017-18and4.5percent in2016-17. Itaveraged4.1

percentin2019-20(ApriltoDecember)andstoodat

7.3percent inDecember2019.Food inflationbased

ontheConsumerFoodPriceIndex(CFPI)for2018-19

declinedto0.1percent from1.8percent in2017-18

and4.2percent in2016-17. It averaged5.3percent

in2019-20(ApriltoDecember)andstoodat14.1per-

cent in December 2019.

InflationmeasuredintermsofWholesalePriceIndex

(WPI)stoodat4.3percentin2018-19ascomparedto

3.0percentin2017-18and1.7percentin2016-17.It

averaged1.5percentin2019-20(ApriltoDecember)

and stood at 2.6 percent in December 2019.

Government has taken variousmeasures from time

to time to stabilize prices of essential food items

through,inter-alia,tradeandfiscalpolicyinstruments

like import duty, minium export price, export restric-

tions,theimpositionofstocklimitsbesidesadvising

States for effective action against hoarders & black

marketerstoregulatedomesticavailabilityandmod-

erateprices.For increasingproductivityandproduc-

tion in key segments of agriculture towardsmoder-

ating prices, the government has been incentivizing

farmersbyannouncingminimumsupportpricesand

implementingschemessuchasMissionforIntegrated

Development of Horticulture (MIDH) and National

MissiononOilseeds andOil Palm (NMOOP), among

others.ThegovernmentisalsoimplementingthePrice

StabilizationFund(PSF)tohelpmoderatethevolatility

inpricesofagri-horticulturalcommoditieslikepulses,

onion, and potato.

Central Government Finances

Thefiscaldeficitandrevenuedeficitfor2019-20were

budgeted at 3.3 percent of GDP and 2.3 percent of

GDP respectively. The BE 2019-20 envisaged a tax

to GDP ratio of 11.7 percent and total expenditure

toGDP ratioof 13.2percent. Theenvisagedgrowth

for gross tax revenuewas9.5percentover2018-19

Revised Estimates (RE). The total expenditure in BE

2019-20was estimated to increase by 13.4 percent

over2018-19RE.

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As per the data on Union Government Finances re-

leasedbyControllerGeneralofAccountsforApril-No-

vember 2019, the gross tax revenue increased by 0.8

percentoverthecorrespondingperiodoftheprevious

year achieving 47.7 percent of the budget estimate.

The non-tax revenue increased by 67.8 percent dur-

ing (April- November 2019) over the corresponding

periodof thepreviousyearachieving74.3percentof

thebudgetestimate.AttheendofNovember2019,the

non-debtcapitalreceiptsstoodat24.2percentofthe

budgetestimate.

Major subsidies (food, nutrient based fertilizers, urea

andpetroleum)increasedby7.3percentduringApril-

November2019,ascomparedtoApril-November2018.

Ureasubsidyincreasedby52.7percentandpetroleum

subsidyincreasedby27.7percentduringApril-Novem-

ber 2019, as compared to the corresponding period in

2018-19.

DuringApril-November2019,fiscaldeficitreached114.8

percent of the budgeted amount in 2019-20. During

the corresponding period of the previous year, the

sameratiohadprevailedinrelationto2018-19budg-

etedamount.Therevenuedeficit forApril-November

2019is128.4percentofBEandislowerthanthecor-

respondingfigureof132.6percentinthepreviousyear.

TheRevisedEstimatesplacefiscalandrevenuedeficits

at3.8percentofGDPand2.4percentofGDPrespec-

tivelyin2019-20.

Monetary Management and Financial Intermediation

Monetary policy remained accommodative during

2019-20. Fivemeetings of theMonetary Policy Com-

mittee(MPC)havebeenheldsofarinthefinancialyear

2019-20.Inthefirstfourmeetings,theMPCdecidedto

cut the policy repo rate. The repo rate was reduced by

110basispoints(bps)from6.25percentinApril2019

to5.15percentinOctober2019.Initsfifthbi-month-

ly monetary policy statement in December 2019, the

MPCdecidedtokeepthereporateunchangedat5.15

percent.

ThegrowthofreservemoneyasonDecember27,2019

was 10.2 percent over 17.0 percent on December 27,

2018. The expansion in reserve money was led by Cur-

rency in Circulation (CIC). Broadmoney (M3) growth

has been on a declining trend since 2009. However,

since 2018-19 growth ofM3 has picked up and was

marginally, mainly driven by the growth in aggregate

deposits.ThegrowthofM3was10.4percentasonDe-

cember 20, 2019 over 10.2 on December 20, 2018. The

expansion inM3sofarduringtheyear isattributable

toaggregatedeposits,whichrecordedagrowthof10.1

percent as on December 20, 2019 over 9.2 percent on

December 20, 2018.

External Sector

Merchandiseexports (customsbasis)during2019-20

(April-December), were US$ 239.3 billion, which de-

clinedby2.0percentoverthelevelofUS$244.1billion

inthecorrespondingperiodofthepreviousyear.During

2019-20(April-December),merchandiseimportswere

US$357.4billion, registeringadeclineof8.9percent

overthelevelofUS$392.3billioninthecorresponding

periodofthepreviousyear.Oilimportsdeclinedfrom

US$108.5billionin2018-19(April-December)toUS$

95.7billionin2019-20(April-December).Merchandise

tradedeficitimprovedfromUS$148.2billionin2018-

19 (April-December) to US$118.1 billion in 2019-20

(April-December).

Followingariseinvulnerabilitiesin2018-19,India’sex-

ternalsectorhasregainedsomestabilityinthefirsthalf

of2019-20,withimprovementinBalanceofPayments

(BoP) position anchored in narrowing of current ac-

countdeficitfrom2.1in2018-19to1.5inH1of2019-

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20,growinginflowsofforeigndirectinvestment(FDI),

reboundingofportfolioflowsfromnetoutflowtonet

inflowandreceiptofrobustremittances,allshowingup

inhigheraccretionofforeignexchangereserves,which

asonendDecember2019stoodatUS$457.5billion.

NetFDIinflowshavecontinuedtobebuoyantin2019-

20 (April-November) attracting US$ 24.4 billion as

againstUS$21.2billion,whichisareflectionofaglobal

sentiment that increasingly believes in India’s growth

story and reformmeasures being undertaken by the

government.

Theaveragemonthlyexchangerateofrupee(RBI’sref-

erence rate)was Rs. 70.41 perUS dollar in 2019- 20

(April-December),ascomparedtoRs.69.92perUSdol-

larduring2018-19.ExternaldebtasattheendofSep-

tember2019remainslowat20.1percentofGDP.After

witnessing a significant decline since 2014-15, India’s

external liabilities (debt and equity) to GDP have in-

creasedattheendofJune2019primarilydrivenbyan

increaseinFDI,portfolioflowsandexternalcommercial

borrowings(ECBs).

Banking and Non-Banking Sector

During2019-20,grossnon-performingadvances(GNPA)

ratioofScheduledCommercialBanks(SCBs)remained

unchanged at 9.3 percent in September 2019 as com-

paredtoMarch2019.Similarly,therestructuredstand-

ardadvances(RSA)ratioofSCBsremainedunchanged

at 0.4 percent during the same period. The stressed ad-

vances(SA)ratioofSCBsfollowedsuitbyremainingflat

at9.7percent.GNPAratioofpublicsectorbanks(PSBs)

was alsounchanged at 12.3 percent in September 2019

whilestressedadvanceratiosincreasedfrom12.7per-

centinMarchto12.9percentinSeptember2019.

Thegrowthofnon-foodcreditwas7.2percentonNo-vember22,2019ascomparedto13.8percentonNo-vember23,2018.Themoderationincreditgrowthwaswitnessedacross all themajor segmentsofnon-foodcredit except personal loans, which grew at 16.4 per-cent as on November 22, 2019 as compared to 17.2percentasonNovember23,2018.

IncaseofNon-BankingFinancialSectoraftergrowingrapidly in 2017-18 and the first half of 2018-19, theNBFC sector has decelerated sharply since then. ThegrowthofloansfromNBFCsdeclinedto3.4percentatendSeptember2019 from14.6percent inDecember2018 and 31.9 percent in September 2018. The balance sheetof theNBFCsectorgrewby17.9percent from`26,17,790croreto`30,85,480croreduring2018-19.There isanobservableshift inthesourcesof fundingofNBFCs.Borrowingsfrombanksincreasedfrom`5.62lakh crore in October 2018 to 7.13 lakh crore in Octo-ber2019registeringagrowthof26.8percent.Howev-er,deploymentofcreditbyMutualfundstoNBFCshasbeencontractingsinceOctober2018.

Agriculture In2018-19,asperfourthadvanceestimates,foodgrainproductioninthecountrywasestimatedat285milliontonnes, the sameas in2017-18.However, foodgrainproductionwas19.2milliontonneshigherthantheav-erageproductionof thepreviousfiveyears.Ricepro-ductionduring2018-19wasestimatedat116.4milliontonnesascompared to112.8million tonnes in2017-18.Wheat production during 2018-19was estimatedat 102.2 million tonnes as compared to 99.9 million tonnesduring2017-18.ThegovernmenthasincreasedMinimumSupportPrices(MSP)forallmandatedkharif,rabi andother commercial crops.TheenhancedMSPensures a returnof 1.5timesover all Indiaweighted averagecostofproductionfortheseason2019-20.

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Indiacontinuestobethelargestproducerofmilkinthe

world. Themilk production in the countrywas 187.7

milliontonnesin2018-19growing6.5percentoverthe

previousyear.Theeggproduction inthecountryalso

increasedfrom95217millionin2017-18to103318mil-

lionin2018-19.FishproductioninIndiahasregistered

anaverageannualgrowthrateofmorethan7percent

in recent years. Total fish production in the country

stoodat13.4millionmetrictonnesduring2018-19.Of

this,themarinefisheriescontributed3.7millionmet-

ric tonnes and the inland fisheries 9.7millionmetric

tonnes.Underagriculturecredit,asumof`9,07,843.4

crore has been disbursed in 2019-20 as on 30thNo-

vember 2019.

Theagriculturecreditflowtargetfor2018-19wasfixed

at`11,00,000croreandagainstthistarget,asreported

byNABARD,thedisbursementbybankstillSeptember

2018is`6,45,205crore.

Industry

The Index of Industrial Production (IIP) grew at 0.6

percent during April-November 2019 as compared

to3.8percent in2018-19.Mining,manufacturingand

electricitysectorsinIIPgrewat(-)0.1percent,0.9per-

centand0.8percentrespectivelyduringApril-Novem-

ber2019.Thefullyeargrowthinthesethreesectorsin

2018-19was2.9percent,3.9percentand5.2percent

respectively. Under the use-based categories growth

inApril-Novemberof2019-20stoodforprimarygoods

at0.1percent,capitalgoodsat (-)11.6percent, inter-

mediategoodsat12.2percentandinfrastructure/con-

structiongoods at (-) 2.7percent. The corresponding

full year growth of these categories in 2018-19was

3.5 percent, 2.7 percent,0.9 percent and 7.3 percent

respectively.

Theeightcoreinfrastructuresupportiveindustries,viz.

coal,crudeoil,naturalgas,refineryproducts,fertilizers,

steel,cementandelectricitythathaveatotalweightof

nearly40percentintheIndexofIndustrialProduction

(IIP)remainedstagnantduringApril-November2019as

comparedtoagrowthof4.4percent in2018-19.The

productionoffertilizers,steel,andelectricityincreased

by 4.0 percent, 5.2 percent, 0.7 percent respectively

during April-November 2019while the production of

coal, crudeoil, natural gas, refineryproducts and ce-

ment contracted by 5.3 percent, 5.9 percent, 3.1 per-

cent,1.1percentand0.02percentrespectivelyduring

the same period.

Capital Market

The primary market resource mobilization through

85public and rights issueswas ` 73,896 croreduring

2019-20(uptoDecember31,2019)asagainst124is-

sueswhichhadraised`44,355croresduring2018-19

(uptoDecember31,2018).Fundsraisedthroughthe

privateplacementof1,520issuesamountedto`6.29

lakhcrores in2019-20 (up toDecember31,2019)as

compared to `5.3 lakh crores through2006 issues in

the2018-19.

India’s benchmark indices, namely, Nifty 50 and S&P

BSESensexindex,havecontinuedtogrowduring2019-

20.TheS&PBSESensex,thebenchmarkindexofBom-

bay Stock Exchange (BSE), reached an all-time high

closingof41,681onDecember20,2019,witnessingan

increaseof7.2percentfromthelevelof38,871onApril

1,2019.Nifty50indexgained5.3percentoverApril1,

2019tocloseat12,226onJanuary3,2020.Theaverage

annualgrowthofBSEandNifty50in2019-20(April-De-

cember)was8.9percentand5.7percentrespectively.

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Thepositiveprospectsfortheeconomyarethecontin-

uationofstructuralreformsthatwillrevivegrowthand

expected normalization of credit flow as investment

picks up induced by a cut in the corporate tax rate and

anticipated transmission of repo rate cuts earlier im-

plementedbytheMonetaryPolicyCommittee.Global

economic growth is expected to pick up in 2020 which

couldalsosupportIndia’sgrowth.Inviewofapositive

outlook on the economic rebound, the nominal growth

oftheeconomyisexpectedtobe10percentinthefi-

nancialyear2020-21.

Prospects

Thegrowthoftheeconomyappearstohavebottomed

outandisexpectedtopickupin2020-21.Theprospects

for the Indianeconomyfor theyear2020-21needto

beassessedinthelightofemergingglobalanddomes-

ticchallengesandopportunities.Majorchallengesfor

theeconomyarising fromtheexternal frontaregeo-

politicaltensionsintheMiddleEastandrisingcrudeoil

pricesduetosupplydisruptionwhichmaydecelerate

thegrowthandincreaseinflation.

Challenges inthedomesticfrontaretherevivalof in-

vestments and savings.

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Overview TheBudget2020-21hascomeatatimewhereglobalandIndianbusinesssentimentsareslowingdownandtheeconomyrequiresamajor impetus fromthegov-ernmenttosustaina5PlusGDPGrowth.AfterChina’sworld looks towards India as a sustainable growth en-gineandIndiaitselfhassetitseyestowardsafivetrillioneconomy.Toachievesuchambitiousgoals,thisbudgettriestofocusonareasthatcanleadthiscountrytobeaworldleader.Thebudgetreceiptsarelargelyfocusedtowards growth in direct and indirect tax revenue with disinvestmentreceipt(beingpartofNon-debtreceipts)beingthemainsourceforthisyearandexpenditureisfocusingonAgriculture, Social Sector,Defense, subsi-

dies,Interest,EducationandHealth.

Thisissubstantiatedbytheincreaseinexpenditureof`INR343,679croresoverRE(2019-20)whilekeepingthefiscaldeficitat3.5%ofGDP.

InBE2020-21,thetotalexpenditurehasbeenkeptatINR3,042,230croreand ismore thanRE2019-20byINR343,679crore.The increase in totalexpenditureisonaccountofincreasedsupporttotheagriculturalsector,interestpayments,Defenseetc.

ThetotalshareofresourcesgoingtoStatesforState’s

shareintaxesinBE(2020-21)isINR787,111crore.

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BUDGET AT A GLANCE

Amount in INR Crores (10 Milion)Particulars 2018-2019

Actuals2019-2020

Budget Estimates

2019-2020 Revised

Estimates

2020-2021Budget

Estimates1. Revenue Receipts 1,552,916 1,962,761 1,850,100 2,020,926

2. Tax Revenue (Net to Centre) 1,317,211 1,649,582 1,504,587 1,635,909

3. Non Tax Revenue 235,705 313,179 345,513 385,017

4. Capital Receipts 762,197 823,588 848,450 1,021,304

5. Recovery of Loans 18,052 14,828 16,604 14,967

6. Other Receipts 94,727 105,000 65,000 210,000

7. Borrowings and Other Liabilities 649,418 703,760 766,846 796,337

8. Total Receipts (1+4) 2,315,113 2,786,349 2,698,551 3,042,230

9. Total Expenditure (10+13) 2,315,113 2,786,349 2,698,551 3,042,230

10. On Revenue Account of which 2,007,399 2,447,780 2,349,645 2,630,145

11. Interest Payments 582,648 660,471 625,105 708,203

12. Grants in Aid for creation of Capital assests

191,781 207,333 191,737 206,500

13. On Capital Account 307,714 338,569 48,907 412,085

14. Revenue Deficit (10-1) 454,483 485,019 499,545 609,219

15. Effective Revenue Deficit (14-12) 262,702 277,686 307,808 402,719

16. Fiscal Deficit [9-(1+5+6)] 649,418 703,760 766,848 796,337

17. Primary Deficit (16-11) 66,770 43,289 141,743 88,134

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DIRECT TAXDIRECT TAX

PROPOSALSPROPOSALS

Direct Tax Indirecttaxnumerouschangesinspiredfromdirecttax

code have been incorporated such as new income tax

slabs,available only to those taxpayers who are willing

toforegocertainexemptionsanddeductions,changein

thedefinitionofresidentialstatus,removalofDDTand

many more such amendments. Changes introduced in

theFinanceBill2020-21arehighlightedasunder:-

Personal Tax TheUnionBudget2020-21hasintroducednewincome

taxslabswithlowertaxrates.However,thebenefitof

suchreducedincome-taxslabswouldbeavailableonly

tothosetaxpayerswhoarewillingtoforgocertainde-

ductions and exemptions. New income-tax slabs are

optionalandnowtaxpayershavetheoptiontochoose

betweentheoldtaxationregimeandthenewtaxation

regime. The old tax slabs and structure would remain

unchanged.

Tax rates for AY 2021-22 (Old taxation regime -

Option 1)

Rates of tax for individuals, Hindu Undivided Family,

or every association of persons or body of individuals,

whether incorporated or not or every artificial juridi-

cal person.

Amount of Net Income Tax Rates (AY 2020-21)

UptoRs2,50,000 Nil

Rs2,50,001-5,00,000 5%

Rs 5,00,001 – Rs 10,00,000 20%

Above Rs 10,00,000 30%

Tax rates in the case of every individual, being a resi-dent in India, who is of the age of 60 years or more but less than 80 years at any time during the previous year.

Amount of Net Income Tax Rates (AY 2020-21)

Upto3,00,000 Nil

3,00,010-5,00,000 5%

Rs 5,00,010 – Rs 10,00,000 20%

Above Rs 10,00,000 30%

Tax rates in the case of every individual, being a resi-dent in India, who is of the age of 80 years or more at any time during the previous year.

Amount of Net Income Tax Rates (AY 2020-21)

Upto5,00,000 Nil

Rs 5,00,010 – Rs 10,00,000 20%

Above Rs 10,00,000 30%

Surcharge/effective tax rate on Super Rich (other than capital gains on listed shares)

Amount of Net Income

Existing Surcharge

Proposed *Surcharge (AY 2020-21)

Proposed Surcharge (AY 2020-21)

50,00,001 – 1,00,00,000

10% 10% 34.32%

1,00,00,010– 2,00,00,000

15% 15% 35.88%

2,00,00,001 – 5,00,00,000

15% 25% 39%

Above 5,00,00,000

15% 37% 42.74%

*Subject to Marginal Relief

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DIRECT TAX PROPOSALS

Surcharge/effective tax rate on short-term and long-

term capital gains on listed shares covered u/s 111A

and 112A, respectively.

Amount of Net Income

Existing Surcharge

Proposed *Surcharge (AY 2021-22)

50,00,010 – 1,00,00,000

10% 10%

Above Rs 1,00,00,000 – 2,00,00,000

15% 15%

*Subject to Marginal Relief

Health & Education Cess:

Health andEducationCess at the rateof 4% shall be

levied on tax and applicable surcharge.

Tax rates for AY 2021-22-(New Regime -Option- 2)

Rates for individuals(including senior citizen and su-

per senior citizen), HUF, or every AOP or BOI, whether

incorporated or not, or every artificial juridical person

Amount of Net Income Tax Rates (A.Y.

2021-22)

UptoRs2,50,000 Nil

Rs 2,50,001 to Rs 5,00,000 5%

Rs 5,00,001 to Rs 7,50,000 10%

Rs 7,50,001 to Rs 10,00,000 15%

Rs 10,00,001 to Rs12,50,000 20%

Rs 12,50,001 to Rs 15,00,000 25%

Above Rs 15,00,000 30%

• Theaforesaidnewoptionshallbeexercisedforeve-ry previous yearwhere the individual or theHUFhas no business income.

• Whereany IndividualorHUFhasanybusiness in-comethisoptiononceexercisedforapreviousyearshallbevalidforthatpreviousyearandallsubse-quent years.

• However, such an optionwould be available onlywhen IndividualorHUFsatisfy certain conditions.Inotherwords,IndividualorHUFshallcomputeto-talincome:-

a. Withoutfollowingexemptions/deductions• Leavetravelconcession;• Houserentallowance;• Standarddeduction(i.e.Rs50,000)• DeductionofEntertainmentallowanceorpro- fessionaltax.• Interestonhousingloanu/s24(b);• Additionaldeprecation;• Deductionsundersection32AD,33AB,33ABA• Any deduction under chapter VI-A (viz, section

80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC, 80IA, 80-IAB,80-IAC,80-IB,80-IBA,etc). [Deductionu/s80CCD(2)canbeclaimed]

• Withoutset-offofunabsorbedbusinesslossorde-preciationifsuchlossordepreciationisattributabletoanyoftheaforesaiddeductions/exemptions.

• Without set-off of house property loss with anyotherheadofincome.

• by claiming the depreciation, if any, except addi-tional depreciation determined in suchmanner asmaybeprescribed;

• withoutanyexemptionordeductionforallowancesor perquisite, by whatever name called,provided

underanyotherlawforthetimebeinginforce.

www.jpc.co.in 16

• SuchoptionshallbecomeinvalidiftheIndividualor

HUFfailstosatisfyaforesaidconditionsinanyPY.In

sucha case,option/ tax slabsavailableunder the

old regime would be applicable.

• Where option II [taxation under new regime] is

chosenbytheIndividualorHUFhavingbusinessin-

come,suchoptioncanbewithdrawnonlyoncein

subsequentyearsandthereafter,the individualor

HUFshallneverbeeligibletoexerciseoptionunder

this section, exceptwhere such individual orHUF

ceases to have any business income.

Rationalization of the tax treatment of employer’s

contribution to recognized PF, superannuation funds

and NPS [Section 17] [Applicable from AY 2021-22]

UndertheexistingprovisionsoftheIncomeTaxAct,thecontributionbytheemployertotheaccountofanem-ployeeinanRPFexceeding12%ofsalaryistaxable.Further,theamountofanycontributiontoanapprovedsuperannuationfundbytheemployerexceedingRs1.5lakhs is treatedasperquisite in thehandsof theem-ployee. Similarly, the assessee is allowed a deduction underNPS for14%of the salary contributedby theCentralGovernmentand10%ofthesalarycontributedbyanyother employer.

However,thereisnocombinedupperlimitforthepur-poseofdeductionontheamountofcontributionmadeby the employer.This is giving undue benefits to em-ployees earning a high salary income.

Thus,thisportionofsalarydoesnotsuffertaxationatanypointoftime,sinceExempt-Exempt-Exempt(EEE)regimeisfollowedforthesethreefunds.Thus,nothav-ing a combined upper cap is iniquitous and hence, not

desirable.

Therefore,itisproposedtoprovideacombinedupper

limitofRs7.5lakhsinrespectofemployer’scontribu-

tioninayearto:-

• NPS,

• Superannuationfundand

• Recognisedprovidentfundand

anyexcesscontributionisproposedtobetaxable.

Consequently, it is also proposed that any annual accre-

tion(onamountinexcessofINR7,50,000)bywayofin-

terest,dividendoranyotheramountofsimilarnature

duringthepreviousyeartothebalanceatthecreditof

thefundorschememaybetreatedasperquisitetothe

extentitrelatestotheemployer’scontributionwhichis

included in total income.

Extending the time limit for sanctioning of loan for af-

fordable housing [Section 80EEA][Applicable from AY

2021-22]

• Theexistingprovisionsofsection80EEAprovidefor

adeductionofinterestonhousingloanuptoRs1.5

lakhs.Suchdeductionisoverandabovethededuc-

tionallowedu/s24.

• The said deduction is aimed to incentivise first

timebuyerstoinvestinresidentialhouseproperty

whose stamp duty does not exceed Rs 45 lakhs.

• It allows deduction subject to certain conditions.

Oneoftheconditionsisthatloanshouldbesanc-

tionedbythefinancialinstitutionduringtheperiod

from1stApril,2019to31stMarch,2020.

• Inordertocontinuepromotingpurchaseofafford-

ablehousing,theperiodofsanctioningof loanby

thefinancialinstitutionisproposedtobeextended

to31stMarch,2021.

www.jpc.co.in 17

Tax Rates (New Regime)

Particulars Rates of tax F.Y. 2019-20 (AY 2020-21)

DomesticCompanycoveredu/s115BAA(OtherthanManufacturing)

22%(plus10%sur-charge and 4%cess)

Newmanufacturingcompanies*covered u/s 115BAB

15%(plus10%sur-charge and 4%cess)

*Incaseofnewmanufacturingcompaniesu/s115BAB,thetaxratewouldbedifferentforfollowingtypeofin-comes:-

• Short-termcapitalgains incaseofthenon-depre-ciable asset would be taxable @ 22% instead of15%.

• Any incomeneitherderived fromnorincidental tomanufacturing/productionofanarticleorathingwouldbetaxable@22%insteadof15%.

The Taxation Laws Amendment Act, inserted section115BAAandsection115BABintheActtoprovidedo-mesticcompaniesanoptiontobetaxedatconcessionaltax rates provided they do not avail specified deduc-tionsandincentives.Someofthedeductionsprohibit-edaredeductionsunderanyprovisionsofChapterVI-Aundertheheading“C.Deductioninrespectofcertainincomes” other than theprovisions of section 80JJAA(NewEmployees).

Itisnowproposedtoamendtheprovisionsofsection115BAAandsection115BABtonotallowdeductionun-der anyprovisions of ChapterVI-A other than section80JJAAorsection80M,incaseofdomesticcompaniesoptingfortaxationunderthesesections.

Further, provisions of the Taxation Laws AmendmentAct, provides that following, businesses shall not beconsideredasmanufacturingorproductionofarticleor

www.jpc.co.in 18

Corporate Tax Changes 

Tax Rates (old regime)

All companies having annual turnover upto Rs 400

crore in the previous year 2018-19 is in the tax bracket

of 25%.

Companies

Particulars Rates of tax F.Y 2020-21 (AY 2021-22)

DomesticCompanywhosetotalturn-overorgrossreceiptsforPY2018-19doesnotexceedINR400Crores(INR4,000Million)

25%

DomesticCompanywhosetotalturnoverorgrossreceiptsforPY2018-19exceedsINR400Crores(INR4,000Million)

30%

IncaseofforeignCompany 40%

Sucharge

In the case of a domestic company:• 7% surcharge if the income is more than 1 crore

(INR 10 Million) but less than 10 crores (INR 100 Million)

• 12% surcharge if the income is more than 10 Crores (INR 100 Million)

In the case of a foreign company:

• 2% surcharge if the income is more than 1 crore (INR 10 Million) but less than 10 crores (INR 100 Million)

• 5% surcharge if the income is more than 10 crore. (INR 100 Million)

Note:

Health and Education Cess of 4% shall be levied over

and above taxes.

thinginordertoavailconcessionaltaxrateof15%-• Developmentofcomputersoftware,• Mining,• Conversion ofmarble blocks or similar items into

slabs, • Bottlingofgasintocylinder,• Printing of books or production of a cin-

ematograph film or any other business asmay be notified by the Central Government.

Ithasbeenproposedthatthemanufacturingorproduc-tionofanarticleorthingshallincludethegenerationofelectricity. Thus, now companies engaged in electricity generationscanalsoavailconcessionaltaxrateof15%subjecttosatisfactionofcertainconditions.

Firms & LLP’sNo changeswere proposed in the tax rates for firmsand LLPs.

FlatRateoftax@30%shallbeapplicableonthefirm.Surcharge@12%of incometaxshallbe levied ifnetincomeexceedsINR1Crore.(INR10Million).HealthandEducationCessshallbe levied@4%overand above taxes including surcharge.

Cooperative SocietiesNochangeswereproposedinthetaxratesforco-oper-ativesociety.

Particulars Rates of tax F.Y. 2019-20 (AY 2020-21)

Havingatotalincomeoflessthan10,001

10%

Havingatotalincomeofmorethan10,000 but less than 20,001

1,000 plus 20%oftotalincome in excessof10,000

Havingatotalincomeofmorethan20,000 to 1 crore

3,000 plus 30%oftotalincome in excessof20,000

Note:Surcharge@12%ofincometaxifnetincomeexceedsINR1Crore(INR10Million)andHealthandEducationCessof4%shall be leviedoverandabove theabovetaxes.

However,fromtheassessmentyear2021-22,residentco-operativesocietieshaveanoption toopt for taxa-tion@22%undernewlyproposedsection115BADofthe Act. Such new provision has been proposed on the linesofsection115BAA.

Start-ups

Rationalisation of provisions for start-ups [Section 80-IAC] [Applicable from AY 2021-22]

The existing provisions of section 80-IAC provide foradeductionof100%of theprofitsandgainsderivedfromaneligiblebusinessby aneligible start-up for 3consecutiveassessmentyearsoutof7sevenyears,attheoptionoftheassesses,subjecttotheconditionthattheeligiblestart-upisincorporatedonorafter1stApril,2016butbefore1stApril,2021andthetotalturnoverofitsbusinessdoesnotexceedRs25crores.

Inordertofurtherrationalisetheprovisionsrelatingtostart-ups, ithasbeenproposedtoamendsection80-IACoftheActsoastoprovidethat-

• thedeductionunder the said section80-IAC shallbeavailabletoaneligiblestart-upforaperiodof3consecutiveassessmentyearsoutof10yearsbe-ginningfromtheyearinwhichitisincorporated.

• thedeductionunderthesaidsectionshallbeavail-

abletoaneligiblestart-up,ifitstotalturnoverdoes

notexceedRs100croreinanyofthepreviousyears

beginningfromtheyearinwhichitisincorporated.

www.jpc.co.in 19

ESOPs [Section 192] [Applicable from April 1, 2020]

Currently,ESOPsaretaxedasperquisitesundersection

17(2)oftheActreadwithRule3(8)(iii)oftheRules.The

taxationofESOPsissplitintotwocomponents:

• Taxonperquisiteasincomefromsalaryatthetime

ofexerciseofESOP.

• Taxonincomefromcapitalgainatthetimeofsale

ofshares.

Thetaxonperquisiteisrequiredtobepaidatthetime

of exercising of option which may lead to cash flow

problemsasthisbenefitofESOPisinkind.

Inordertoeasetheburdenofpaymentoftaxesbythe

employeesoftheeligiblestart-upsorTDSbythestart-

upemployer,itisproposedtoamendsection192ofthe

Act,aperson,beinganeligiblestart-upresponsiblefor

paying any income to the assessee being ESOP perqui-

site shall deduct or pay, as the case may be, tax on such

incomewithinfourteendays:-

• aftertheexpiryof48monthsfromtheendofthe

relevantassessmentyear;or

• fromthedateofthesaleofsuchspecifiedsecurity

orsweatequitysharebytheassessee;or

• fromthedateofwhichtheassesseeceasestobe

theemployeeoftheperson;

whicheveristheearliest,onthebasisofratesinforce

ofthefinancialyearinwhichthesaidspecifiedsecurity

orsweatequityshareisallottedortransferred.

Similaramendmentshavebeencarriedout insection

191(forassesseetopaythetaxdirectincaseofnoTDS)

andinsection156(fornoticeofdemand)andinsection

140A(forcalculatingself-assessment).

Tax Audit

Increased threshold limit for applicability of audit [Section 44AB] [Applicable from AY 2020-21]

Inorder to reducethecomplianceburdenonSME, ithasbeenproposedtoincreasethethresholdlimitforapersoncarryingonbusinessfromonecrorerupeestofivecrorerupeesincaseswhere,-• aggregateofallcashreceiptsdoesnotexceed5%of

totalreceipts;and• aggregateofallcashpaymentsdoesnotexceed5%

oftotalpayments.

However, it may be noted here that no changes were proposed in the tax audit limit for professionals and it remained unchanged at Rs 50 lakhs.

Due date of filing of ITR and Tax Audit [Section 139] [Applicable from AY 2020-21]

Toenablepre-fillingofITRincaseofpersonshavingin-comefrombusinessorprofession,itisrequiredthatthetaxauditreportmaybefurnishedat leastonemonthpriortotheduedateoffilingofITR.

Thus,inorder toenablefilingof taxauditonemonthbefore thedueoffilingof ITR,all thesectionsof theAct which mandates the filing of audit report alongwiththereturnofincomeorbytheduedateoffilingofreturnof incomehavebeenproposedtobeamendedaccordingly.Thus,theduedateoffilingofTaxAudit inForm3CA-3CDandForm3CA-3CBwouldbe30thSeptemberofAssessment Year. Accordingly, the due date of filingoftransferpricingcertificateinForm3CEBandfor3CA/3CDfortransferpricingcaseswouldbe31stOctoberof

Assessment year.

www.jpc.co.in 20

Accordingly,theduedateforfilingreturnofincomehas

alsobeenproposedtobeamendedasunder:-

• DuedateoffilingofITRsbycompaniesandentities

liabletotaxauditwouldbe31stOctoberoftheas-

sessmentyearasagainst30thSeptember;

• Now the due date of filing of ITR would be 31st

OctoberofAYasagainst30thSeptemberforboth

workingandanon-workingpartnerofafirmthatis

liable to tax audit.

• Due date of filing of ITR by companies liable for

transferpricingaudit in Form3CEBwould remain

unchanged [i.e., 30th November of Assessment

Year].

Dividend Distribution Tax

Abolition of dividend distribution tax [Section 115-O]

[Applicable from AY 2021-22]

As per the existing provisions of Section 115-O, any

domesticcompanydistributeddividend isrequiredto

charge dividend distribution tax of 20.56%.However,

suchdividend isexempt inthehandsofshareholders

u/s10(35).

Similarly,undersection115R,specifiedcompaniesand

MutualFundsareliabletopayadditionalincome-taxat

thespecifiedrateonanyamountofincomedistributed

by them to its unit holders. Such income is then exempt

inthehandsofunitholdersunderclause(35)ofsection

10.

The incidenceof tax is, thus,on thepayer company/MutualFundandnotontherecipient,whereitshouldnormally be. The present system of taxation of divi-dendinthehandsofcompany/mutualfundswasrein-troducedbytheFinanceAct,2003(witheffectfromtheassessmentyear2004-05)sinceitwaseasiertocollecttax at asingle point and the new system was leading to increase in compliance burden. However, with the ad-ventoftechnologyandeasytrackingsystemavailable,thejustificationforcurrentsystemoftaxationofdivi-dendhasoutliveditself.

In viewof above, it is proposed to carry out amend-mentsso thatdividendor incomefromunitsare tax-ableinthehandsofshareholdersorunitholdersattheapplicablerateandthedomesticcompanyorspecifiedcompanyormutual fundsarenotrequiredtopayanyDDT.Itisalsoproposedtoprovidethatthedeductionforexpenseundersection57oftheActshallbemaximum20percentofthedividendor incomefromunits.

Nowdividendwouldbetaxableinthehandsofshare-holders, we need to consider its tax impact on various typeofshareholdersasunder:-

Type of shareholder Tax Rate

Resident Individual Slab rate

Resident corporate 22%/25%/30%

Non-residentshareholder 20%[subjecttotreatybenefit]

www.jpc.co.in 21

TDS on dividend distribution [Section 194, 196A,196C,

196D, etc ] [Applicable from April 1, 2020]

Therateofwithholdingtaxwouldbe10%forresident

shareholdersand20%fornon-residentshareholders.

Removal of cascading effect on inter-corporate divi-

dends [Section 80M] [Applicable from AY 2021-22]

A new section has been proposed to be inserted,

whereindividendreceivedbyanIndiancompanyfrom

an Indian company shall not be taxable to the extent it

is distributed by such company.

Itallowstheremovalofthecascadingeffect inmulti-

tiercorporate structures, irrespectiveof shareholding

in the Indian company.

Undertheexistingprovisions,movingfundsbywayof

dividendattractedDividendDistributionTaxandcredit

wasavailableonlyinholding-subsidiarysituations.

TDS/TCS

TDS on E-commerce transactions [Section 194-O] [Ap-

plicable from April 1, 2020]

In order to widen and deepen the tax net by bringing

participants of e-commerce within tax net, it is pro-

posedtoinsertanewsection194-OintheActsoasto

provideforanewlevyofTDSattherateof1%ongross

amountofsalesorservicesorboth.

The TDS is to be paid by e-commerceoperatorforsale

ofgoodsorprovisionofservicefacilitatedbyitthrough

itsdigitalorelectronicfacilityorplatform.

E-commerceoperatorisrequiredtodeducttaxatthe

timeofcreditoftheamountofsaleorserviceorboth

totheaccountofe-commerceparticipantoratthetime

ofpayment thereof tosuchparticipantbyanymode,

whichever is earlier.

Anypaymentmadebyapurchaserofgoodsorrecipi-

entof servicesdirectly toane-commerceparticipant

shall be deemed to be amount credited or paid by the

e-commerce operator to the e-commerce participant

andshallbeincludedinthegrossamountofsuchsales

orservicesforthepurposeofdeductionofincome-tax.

Atransactioninrespectofwhichtaxhasbeendeduct-

edbythee-commerceoperatorunderthissectionor

which isnot liabletodeductionundertheexemption

discussedinthepreviousbullet,thereshallnotbefur-

therliabilityonthattransactionforTDSunderanyother

provisionofChapterXVII-BoftheAct.Thisistoprovide

claritysothatthesametransactionisnotsubjectedto

TDSmorethanonce.However,ithasbeenclarifiedthat

this exemptionwillnot apply to any amount received

or receivableby ane-commerceoperator forhosting

advertisementsorprovidinganyotherserviceswhich

arenotinconnectionwiththesaleofgoodsorservices

referredtoinsub-section(1)oftheproposedsection.

Thus,nowe-commerceoperatorslikeOla,Uber,Ama-

zon, Flipkart, etc. would be liable to deduct TDS on sales

orservicesmadebyvendorsthroughtheirplatform.

Letusunderstandthisprovisionwiththehelpofanex-

ample.

Situation 1

Mr. A has bookedOla ride for travelling inDelhi and

paidRs1,000oncompletionoftherideviaOlawallet.

www.jpc.co.in 22

Inthiscase,OlawoulddeductTDS@1%[i.e.Rs10]and

depositthesamewithtaxauthoritieswherethedriver

hasprovidedhisPAN/AadhaarCard.

Situation 2

Mr. A has bookedOla ride for travelling inDelhi and

paidRs1,000oncompletionoftherideviaOlawallet.

Inthiscase,OlawoulddeductTDS@5%[i.e.Rs50]and

depositthesamewithtaxauthoritieswherethedriver

hasnotprovidedhisPAN/AadhaarCard.

Situation 3

Mr.AhasbookedOlaridefortravellinginDelhiandpaid

Rs1,000incashdirectlytothedriveroncompletionof

theride.Inthiscase,OlawouldpayTDS@1%[i.e.Rs

10] anddeposit the samewith tax authoritieswhere

thedriverhasnotprovidedhisPAN/AadhaarCard.

“E-commerceoperator”isdefinedtomeananyperson

whoowns,operatesormanagesdigitalorelectronicfa-

cilityorplatformforelectroniccommerceandisaper-

sonresponsibleforpayingtoe-commerceparticipants.

“E-commerceparticipant”isdefinedtomeanaperson

resident in India selling goods or providing services or

both,including digital products, through the digital or

electronicfacilityorplatformforelectroniccommerce.

This provision also covers non-resident E-commerce

operators. Thus, liability to deduct TDS could be fas-

tened on the non-resident or foreign company operat-

ing e-commerce platform where vendors selling goods

or providing services on their portal/platform are resi-

dents of India.

TCS on overseas remittance made under Liberalized Remittance Scheme [Sec. 206C][Applicable from April 1, 2020]

In order to widen and deepen the tax net, the Finance Bill,2020hasproposedtoamendsection206Ctolevy

TCSonoverseasremittancemadeunderLiberalizedRe-

mittanceScheme.

Under LiberalizedRemittanceScheme (‘LRS’) resident

individualsareallowedtoremituptoUSD2,50,000for-

• Sendingmoneytotheirchildrenstudyingabroad;

• Buyingpropertyabroad;

• Buying stocks listed in exchanges abroad, etc

As per the proposal, an authorised dealer receiving an

amountoranaggregateofamountsofRs7,00,000or

moreinafinancialyearforremittanceoutofIndiaun-

dertheLRSofRBI,shallbeliabletocollectTCS,ifhere-

ceivessuminexcessofsaidamountfromabuyerbeing

apersonremittingsuchamountoutofIndia,.

• attherateof5%.

• Innon-PAN/Aadhaarcasestherateshallbe10%.

TheaboveTCSprovisionshallnotapplyifthebuyeris-

• LiabletodeductTDSunderanyotherprovisionof

the Act and he has deducted such amount.

• The Central Government, a State Government, an

embassy,aHighCommission,legation,commission,

consulate, the trade representation of a foreign

State,alocalauthorityasdefinedinExplanationto

clause(20)ofsection10oranyotherpersonnoti-

fiedbytheCentralGovernmentintheOfficialGa-

zetteforthispurposesubjecttosuchconditionsas

specifiedinthatnotification.

TCS on sale of overseas tour package [Sec. 206C][Ap-

plicable from April 1, 2020]

Further, the Finance Bill, 2020 has also proposed

amendment in section 206C to levy TCS on sale of

overseas tour package.

www.jpc.co.in 23

Nowaspertheproposal,asellerofanoverseastourprogrampackagewho receivesanyamount fromanyperson who purchases such package, shall be liable to collectTCSattherateof–

• 5%.• Innon-PAN/Aadhaarcasestherateshallbe10%.

AsimilarexemptionisavailableinthiscaseasavailableincaseofremittanceunderLRSwhereTDShasalreadybeendeductedonsuchtransactionorwherethebuyeris State Govt. or Central Govt.

Overseas tour program package” is proposed to be de-finedtomeananytourpackagewhichoffersavisittoacountry or countries or territory or territories outside Indiaandincludesexpensesfortravelorhotelstayorboardingorlodgingoranyotherexpenseofsimilarna-tureorinrelationthereto.

Thus, people booking tour package for foreign coun-triesfromMakeMyTrip,ThomascookorviaanyagentwouldbeliabletoshelloutmoremoneyintheformofTCSfromApril1,2020.So,ifyouareplanningtogoforvacationinanyforeigncountry during summers, you can book tour packages tillMarch31,2020sinceprovisionsofTCSwouldtrig-gerfromApril1,2020.

TCS on sale of goods [Section 206C] [Applicable from April 1, 2020]

TheFinanceBill,2020hasproposedtoamendsection206CtolevyTCSonthesaleofgoods.

ItprovidesthatasellerofgoodsisliabletocollectTCSattherateof0.1%onconsiderationreceivedfromabuyer[Innon-PAN/Aadhaarcasestherateshallbe1%],subjecttosatisfactionoffollowingconditions-

• Consideration received from a buyer of goods inaprevious year exceeds Rs 50,00,000.

• Totalsales,grossreceiptsorturnoverofsellerex-ceedsRs10croreduringthefinancialyearimmedi-atelyprecedingthefinancialyear.

LiabilitytocollectTCSonsaleofgoodswouldnotarise

inthefollowingcases:-

• CentralGovernmenthasnotifiedsuchperson,who

shall not be liable to collect such TCS.

• Buyer is Central Govt., a State Govt. and an embas-

sy,aHighCommission,legation,commission,consu-

late,thetraderepresentationofaforeignState,a

localauthorityasdefinedinExplanationtosection

10(20)oranyotherpersonastheCentralGovern-

mentmaynotify.

• Where the seller is liable to collect TCS under other

provisionofsection206Cor thebuyer is liable to

deductTDSunderanyprovisionoftheActandhas

deducted such amount.

TDS on fees for technical services [Sec. 194J][Applica-

ble from April 1, 2020]

Generally, any payment made for contractual work

wouldfallundersection194Cunlesssuchservicescon-

sidered as technical services.

It isnoticedthatthereisalargenumberoflitigations

ontheissueofshortdeductionoftaxtreatingassessee

indefaultwheretheassesseedeductstaxundersection

194C,whilethetaxofficersclaimthattaxshouldhave

beendeductedundersection194JoftheAct.

Therefore,toreducelitigation,itisproposedtoreduce

therateforTDSinsection194Jincaseoffeesfortech-

nical services(other than professional services) to 2%

fromtheexisting10%.TheTDSrateinothercasesun-

dersection194Jwouldremainthesameat10%.

www.jpc.co.in 24

Definition of work widened[Applicable from April 1,

2020] [Sec.194C]:

Section 194C provides that anyperson responsible

forpayinganysumtoa resident forcarryingoutany

work (including the supply of labour for carryingout

anywork) inpursuanceofacontractshallat thetime

ofsuchcreditoratthetimeofpaymentwhicheveris

earlierdeduct1%/2%TDS.

Definitionofworkincludesmanufacturingorsupplying

aproductaccordingtotherequirementorspecification

ofacustomerbyusingmaterialpurchasedfromsuch

customer.

However, such definition excludes manufacturing or

supplying a product according to the requirement or

specificationofacustomerbyusingmaterialpurchased

fromaperson,otherthansuchcustomer.

It has been noted that some assessees are using the es-

capeclauseofthesectionbygettingthecontractman-

ufacturertoprocuretherawmaterialsuppliedthrough

itsrelatedparties.Asaresult,asubstantialamountof

income escapes the tax net.

Therefore, tobringclarity inthesectionandplugthe

leakage, it is proposed to amend the definition of

“work”undersection194Ctoprovidethatinacontract

manufacturing,therawmaterialprovidedbytheasses-

seeor itsassociateshall fallwithinthepurviewofthe

‘work’undersection194C.

.

Taxation of non-residents

Exemption to non-residents from filing income-tax re-

turn [Sec. 115A] [Applicable from AY 2020-21]

Sub-section (5) of Section 115A provides that a non-resident is not required to furnish itsreturnofincomeu/s139(1),ifitstotalincome,con-sistsonlyofcertaindividendorinterestincomeandtheTDS onsuch income has been deducted according to theprovisionsofChapterXVII-BoftheAct.

Whilethecurrentprovisionsofsection115AoftheActproviderelieftonon-residentsfromfilingofreturnofincomewherethenon-residentisnotliabletopaytaxother than the TDS which has been deducted on the dividend or interest income, thesame relief has notbeen extended to non-residents whose total incomeconsistsonlyoftheincomebywayofroyaltyorFTSofthenatureasmentionedabove.RepresentationshavebeenreceivedtoextendthisbenefittoroyaltyandFT-Sincome as well.

Therefore,itisproposedtoamendsection115AoftheActinordertoprovidethatanon-resident,shallnotberequiredtofilereturnofincomeundersub-section(1)ofsection139oftheActif,-

• hisoritstotal incomeconsistsofonlydividendorinterestincomeasreferredtoinclause(a)ofsub-section(1)ofsaidsection,orroyaltyorFTSincomeofthenaturespecifiedinclause(b)ofsub-section(1)ofsection115A;and

• the TDS on such income has been deducted under theprovisionsofChapterXVII-Bof theActat therates which are not lower than the prescribed rates undersub-section(1)ofsection115A.

Therefore, where aforesaid income has been paid tothe non-resident on the basis of tax rates providedunderthetaxtreaties,thebenefitofexemptionfrom

www.jpc.co.in 25

filing ITR is not available for AY 2020-21. Benefit ofexemptionfromfilingITRisavailabletonon-residentsonlywhenTDShasbeendeductedonaforesaidpassiveincome@10.4%asperSection115AoftheIncomeTaxAct.Modification of residency provisions [Sec. 6] [Applica-ble from AY 2021-22] However, aforesaid limit of 60 days is not applicableto an IndianCitizenor apersonof IndianoriginwhocomesonvisittoIndiaduringthePY.Insuchcases,hewould be treated as a resident in India only when his periodofstayis182daysormoreinthePY.

ThisprovisionprovidesrelaxationtoanIndiancitizenorapersonofIndianoriginallowingthemtovisitIndiaforalongerdurationwithoutbecomingresidentofIndia.

Instanceshavecometonoticewheretheperiodof182daysspecifiedinrespectofanIndiancitizenorpersonof Indianoriginvisiting Indiaduringtheyear, isbeingmisused. Individuals, who are actually carrying out sub-stantial economic activities fromIndia, manage theirperiodofstayinIndia,soastoremainanon-residentin perpetuity and not be required to declare theirglobal income in India.

Inthelightoftheabove,itisproposedthattheexcep-tionprovidedinsection6forvisitingIndiainthatyearbedecreasedto120daysfromtheexisting182days.

Thus,aspertheamendedprovision,anyIndiancitizenorpersonofIndianorigin,whocomesonavisittoIn-diaandstaysinIndiafor120daysormore,wouldbetreated as resident in India.

Section6(6)provides forsituations inwhichaperson

shall be “not ordinarily resident” in a previousyear.

Clause(a)thereofprovidesthatifthepersonisanin-

dividualwhohasbeennon-residentinnineoutofthe

ten previousyears preceding that year,or has during the

seven previous years preceding that year been in India

foranoverallperiodof729daysorless.Clause (b) thereof contains similar provision for theHUF.

Therewouldbeneedforrelaxation intheconditions.Inlightoftheabove,ithasbeenproposedthatanin-dividualoranHUFshallbe said tobe“notordinarilyresident”inIndiainapreviousyeariftheindividualorthemanageroftheHUFhasbeenanon-residentinIn-dia in sevenoutof tenpreviousyearspreceding thatyear.Thisnewconditionwouldreplacetheexistingcon-ditionsinclauses(a)and(b)ofsub-section(6)ofsec-tion6.

Deemed residentBudget2020-21hasproposedtotaxNRIsinIndia,whoare not paying tax anywhere in the world. According to the proposal, suchNRI taxpayersmaybe required topay tax in India.

ItprovidesthatanIndiancitizenwhoisnotliabletotaxin any other country or territory shall be deemed to be a resident in India.

This isananti-abuseprovisionsince it isnoticed thatsomeIndiancitizensshifttheirstayinlowornotaxju-risdictiontoavoidpaymentoftaxinIndia. However,insomesectionofthemedia,thenewprovi-sion is being interpreted to create an impression that thoseIndianswhoarebonafideworkersinothercoun-tries,includingMiddleEast,andwhoarenotliabletotax in these countries will be taxed in India on the in-come that they have earned there.

Now the CBDT vide press release dated, February 2,2020hasclarifiedthatincaseofanIndiancitizenwhobecomesdeemedresidentofIndiaunderthisproposedprovision,income earned outside India by him shall not betaxedinIndiaunlessitisderivedfromanIndianbusi-

nessorprofession.

www.jpc.co.in 26

Penalty

Provision for e-penalty [Section 274] [Applicable from

April 1, 2020]

Section274oftheIncomeTaxActprovidesforthepro-

cedureforimposingapenaltyunderChapterXXIofthe

Act.Inresponsetoashow-causenoticeissuedbythe

AO,assesseeorhisAR is still required tovisit theof-

fice of theAO.With the advent of the E-Assessment

Scheme-2019andinordertoensurethatthereforms

initiatedbytheDepartmenttoeliminatehumaninter-

face from the system reaches thenext level, it is im-

perativethatane-penaltyschemebelaunchedonthe

linesofE-assessmentScheme-2019.

Therefore, it is proposed to insert a new sub-section

(2A)inthesaidsectionsoastoprovidethattheCentral

Governmentmaynotifyane-schemeforthepurposes

ofimposingpenaltysoastoimpartgreaterefficiency,

transparency and accountability by,—

• eliminatingthe interfacebetweentheAOandthe

assessee

• optimising utilisation of the resources through

economiesofscaleandfunctionalspecialisation;

• introducingamechanismforimposingofthepen-

altywithdynamicjurisdictioninwhichpenaltyshall

beimposedbyoneormoreincome-taxauthorities

Penalty for fake invoices [Applicable from April 1,

2020]

IntherecentpastafterthelaunchofGoods&ServicesTax (GST), severalcasesof fraudulent input taxcredit(ITC)claimhavebeencaughtbytheGSTauthorities.

In these cases, fake invoices are obtained by suppli-ersregisteredunderGSTtofraudulentlyclaimITCand

reducetheirGST liability.These invoicesare foundto

be issued by racketeers who do not actually carry on

any business or profession. They only issue invoices

without actually supplying any goods or services.

The GST shown to have been charged on such invoices

isneitherpaidnorisintendedtobepaid.Suchfraud-

ulent arrangements deserve to be dealt with harsher

provisions under the Act.

Therefore,itisproposedtointroduceanewprovision

intheActtoprovideforalevyofpenaltyonaperson,

ifitisfoundduringanyproceedingundertheActthat

inthebooksofaccountsmaintainedbyhimthereisa-

• falseentryor• anyentryrelevantforcomputationoftotalincome

ofsuchpersonhasbeenomittedtoevadetaxliabil-ity.

The penalty payable by such person shall be equal to theaggregateamountoffalseentriesoromittedentry.It is also proposed to provide that any other person, who causes in any manner a person to make or cause tomakea falseentryoromitsor causes toomitanyentry,shallalsopaybywayofpenaltyasumwhichisequaltotheaggregateamountsofsuchfalseentriesoromittedentry.

Vivad se Vishwash Bill, 2020

In the past Government has taken several measures toreducetaxlitigations.Inthelastbudget,SabkaVish-wasSchemewasbroughtintoreducelitigationinindi-recttaxes.Itresultedinsettlingover1,89,000cases.

Currently, there are 4,83,000 direct tax cases pending in variousappellateforums,i.e.,Commissioner(Appeals),ITAT, High Court and SupremeCourt. Thus, this year, the Hon’bleFinanceMinisterbroughtaschemesimilartotheindirect tax SabkaVishwas for reducing litigationseven in the direct taxes.

The Govt. has introduced Direct Tax Vivad se Vishwas Bill, 2020 in the Lok Sabha on February 5, 2020. SalientfeaturesofVivadseVishwasBill,2020aregiven

www.jpc.co.in 27

• Taxpayerswhoseappealswerependingbeforethe

appellateforums[i.e.,CIT(A), ITAT,HighCourtand

SupremeCourt]ason January31st2020,canopt

forresolutionunderthisScheme;

• Theschemeprovidesforwaiverofinterest,penalty

&prosecutionwherethedeclarationprovidedun-

dertheSchemeisfiledbythedeclarantbeforethe

designated authority.

• the amountpayable by the declarant under this Act

shallbeasunder,namely:—

Nature of tax arrear The amount

payable be-fore March 31, 2020

The amount payable after March 31, 2020 but on or before the last date

Disputed tax, interest and penalty on such disputed tax.

100%ofdis-puted tax

10%

(completewaiverofpenaltyandinterest)

Entiredis-puted tax +10%*ofdisputed tax

15%

Disputed interest, disputed penalty and disputedfee

25%ofdis-puted inter-est, disputed penalty, disputedfee

30%ofdis-puted inter-est or disput-ed penalty or disputedfee

*where 10% of disputed tax exceeds the aggregate

amount of interest and penalty charged on disputed

tax, such excess shall be ignored.

• Wherethedeclaranthasfiledanyappealbeforethe

appellateforumoranywritpetitionbeforetheHigh

Court or the Supreme Court against any order in re-

spect of tax arrear,he shallwithdraw such appeal

orwritpetitionwiththe leaveof theCourtwher-

everrequiredandfurnishproofofsuchwithdrawal

alongwiththedeclaration.

• Any amount paid in pursuance of a declaration

madeundersuchschemeshallnotberefundableunderany circumstances

• TheprovisionsofthisActshallnotapply—inrespectoftaxarrear,—• relatingtoanassessmentyearinrespectofwhich

anassessmenthasbeenmadeundersection153Aorsection153CoftheIncome-taxAct,if itrelatestoanytaxarrear;

• relatingtoanassessmentyearinrespectofwhichprosecutionhas

• beeninstitutedonorbeforethedateoffilingofadeclaration;

• relating to anyundisclosed income froma sourcelocated outsideIndia or an undisclosed asset locat-edoutsideIndia;

• relatingtoanassessmentorreassessmentmadeonthebasisof

• informationreceivedunderanagreementreferredto in section 90 or section 90Aof the Income-taxAct,ifitrelatestoanytaxarrear;

• relatingtoanappealbeforetheCommissioner(Ap-peals) in respect ofwhich notice of enhancementundersection251oftheIncome-taxActhasbeenissuedonorbeforethespecifieddate;

a. toanypersoninrespectofwhomanorderofde-tentionhasbeenmadeundertheprovisionsoftheConservationof Foreign Exchange andPreventionof SmugglingActivitiesAct, 1974onor before thefilingofdeclaration[subject tosatisfactionofcer-tainconditions];

b. toanypersoninrespectofwhomprosecutionforanyoffencepunishableundertheprovisionsoftheIndianPenalCode,theUnlawfulActivities(Preven-tion)Act,1967,theNarcoticDrugsandPsychotropicSubstancesAct,1985,thePreventionofCorruptionAct,1988,thePreventionofMoneyLaunderingAct,2002,theProhibitionofBenamiPropertyTransac-tionsAct,1988orforthepurposeofenforcementofanycivilliabilityhasbeeninstitutedonorbeforethefilingofthedeclarationorsuchpersonhasbeenconvictedofanysuchoffencepunishableunderanyofthoseActs;

c. toanypersonnotifiedundersection3oftheSpe-cialCourt(TrialofOffencesRelatingtoTransactionsin Securities) Act, 1992 on or before the filing ofdeclaration.

www.jpc.co.in 28

Other proposals

Rationalisation of provisions relating to Form 26AS [Applicable from June 1, 2020]

Section203AAof theAct, inter-alia, requiresthepre-scribedincome-taxauthorityorthepersonauthorisedbysuchauthorityreferredtoinsub-section(3)ofsec-tion200, toprepareanddelivera statement inForm26AStoeverypersonfromwhoseincome,thetaxhasbeendeductedorinrespectofwhoseincomethetaxhasbeenpaidspecifyingtheamountoftaxdeductedor paid.

The Form 26AS as prescribed in the Rules, inter-alia,contains the information about tax collected or de-ducted at source. However, with the advancement in technology and enhancement in the capacity of thesystem, multiple information in respect of a personsuch as sale/purchase of immovable property, sharetransactions,etc.arebeingcapturedorproposedtobecaptured.Infuture,it isenvisagedthatinordertofa-cilitatecompliance,thisinformationwillbeprovidedtothe assessee by uploading the same in the registered accountoftheassesseeonthedesignatedportaloftheIncome-taxDepartment,sothatthesamecanbeusedbytheassesseeforfilingofthereturnof incomeandcalculatinghiscorrecttaxliability.

AsthemandateofForm26ASwouldberequiredtobeextendedbeyondtheinformationabouttaxdeducted,itisproposedtointroduceanewsection285BBintheAct regarding annual financial statements. This sec-tion proposes tomandate the prescribed income-taxauthority or the person authorised by such authority toupload in theregisteredaccountof theassesseeastatement insuchformandmannerandsettingforthsuch information,which is inthepossessionofan in-come-tax authority, andwithin suchtime, asmaybeprescribed.

Consequently,section203AAisproposedtobedeleted

clauses(1)and(23C)]shallnotbeallowed.

Ithasbeennoticedthatthereissomeanomalybypro-

vidingexclusiontoinstitutionsorfundregisteredunder

clause (23C) of section 10, but the same exclusion is

notavailabletoentitiesclaimingexemptionus/10(46)

whichareestablishedorconstitutedunderaCentralor

StateActorbyaCentralorStateGovernment.Suchenti-

tiesare,thus,notabletogetnotifiedu/ssection10(46)

iftheyareholdingregistrationundersection12A/12AA.

Accordingly,thefollowingchangeshavebeenproposed:-

• Similar toexemptionsunderclauses (1)and (23C),

exemption u/s10(46) shall be allowed to an entity

evenifitisregisteredu/s12AAsubjecttothecondi-

tionthattheregistrationshallbecomeinoperative.If

theentitywishestomakeitoperativeinthefuture,

itwillhavetofileanapplicationandthenitwould

not be entitled for deduction u/s10(46) from the

dateonwhichtheregistrationbecomesoperative.

• The registration u/s 12AA would also become in-

operativeincaseofanentityexemptunderclause

(23C)ofsection10aswell,tohaveuniformity.The

condition about making it operative again would

alsobesimilartowhatisproposedforclause(46)of

section10.

Rationalising the process of registration of trusts, insti-

tutions, funds, university, hospital, etc [Section 12AA]

[Applicable from June 1, 2020]

Following changes have been proposed in order to ra-

tionalizetheprocessofregistrationoftrusts,etc:-

• an entity approved, registered or notified u/s

10(23C),u/s12AAoru/s35shallberequiredtoap-

ply for approval or registrationor intimate regard-

ing it being approved and on doing so, the approval,

www.jpc.co.in 29

registrationornotificationinrespectoftheentityshall

bevalidforaperiodnotexceeding5previousyearsat

onetimecalculatedfrom1stApril,2020.

• Anentityalreadyapprovedu/s80Gshallalsobere-

quiredtoapplyforapprovalandondoingso,theap-

proval,registrationornotificationinrespectofthe

entityshallbevalidforaperiodnotexceedingfive

yearsatonetime.

• Applicationforapprovalu/s80Gshallbemadeto

Principal Commissioner or Commissioner.

• An entity making fresh application for approval

under clause (23C) of section 10, for registration

u/s12AA,forapprovalu/s80Gshallbeprovision-

allyapprovedorregisteredfor3yearsonthebasis

ofapplicationwithoutdetailedenquiryeveninthe

caseswhereactivitiesoftheentityareyettobegin

andthen ithastoapplyagain forapprovalor reg-

istrationwhich, if granted, shallbevalid fromthe

dateofsuchprovisionalregistration.

• Theapplicationof registrationsubsequent topro-

visional registration shouldbeat least sixmonths

prior.

• totheexpiryofprovisionalregistrationorwithinsix

monthsofthestartofactivities,whichever isear-

lier.

Filing of statement of donation by donee to cross-

check claim of donation by donor [Applicable from

June 1, 2020]

Atpresent,thereisnoreportingobligationbytheex-emptentityreceivingdonation/anysum in respectofsuch donation/ sum.With the advancement in tech-nology, it is now feasible to standardise the processthroughwhich one-to-one matching between what isreceivedbytheexemptentityandwhatisclaimedasadeductionbytheassessee.

Accordingly,ithasbeenproposedthatdeductionunder

section80G/80GGAtoadonorshallbeallowedonly

if a statement is furnishedby thedoneewhoshallbe

requiredtofurnishastatementinrespectofdonations

receivedandintheeventoffailuretodoso,feeand-

penalty shall be levied.

www.jpc.co.in 30

www.jpc.co.in 31

INDIRECT TAX INDIRECT TAX & &

GST CHANGESGST CHANGES

Definition

Amendment in Sec 2

The definition of “Union territory” in clause (114) of

section2oftheCGSTActisbeingamendedtoupdate

thedefinitionofUnion territory in viewof thebring-

ingintoforceoftheJammuandKashmirReorganization

Act,2019andtheDadraandNagarHaveliandDaman

andDiu(MergerofUnionTerritories),Act,2019.

Consequentialchangesarealsobeingmade inUTGST

Act, 2017.

Analysis

Theamendmentwasmadetogivetheeffectofmaking

DadraandNagarHaveli,DamanandDieandLadakha

UnionTerritory.

Composition Scheme

Amendment in Sec 10

Section10oftheCGSTActisbeingamended,soasto

excludefromtheambitoftheCompositionschemecer-

taincategoriesoftaxablepersons,engagedinmaking-

(i) supplyofservicesnotleviabletotaxunderthe

CGST Act, or

(ii) inter-Stateoutwardsupplyofservices,or

(iii) outward supplyof services throughane-com-

merce operator.

AnalysisEarlier,ifapersonwasengagedinmakinganyofthefol-lowingsupplies thenhewasnoteligible forcomposi-tionregistration:i. supplyofgoodswhicharenotleviabletotaxii. anyinter-stateoutwardsuppliesofgoodsiii. supplyofgoodsthroughane-commerceopera-tor.Itmaybenotedthattheaboverestrictionisimposedonthesupplyofgoodsonlyhoweverthroughthisamend-ment supplier of services are also coveredunder theabove eligibility criteria. Debit Note

Amendment in Sec 16Subsection (4)of section16of theCGSTAct is beingamendedtodelinkthedateof issuanceofdebitnotefromthedateofissuanceoftheunderlyinginvoiceforpurposesofavailinginputtaxcredit.

AnalysisEarlier the input tax credit against debit note shall not be allowed after the due date of the return for themonthofSeptemberfollowingtheendofthefinancialyear towhich invoicerelatingtosuchdebitnoteper-tains.Aftersuchamendment,ataxpayercanavail inputtaxcreditagainstdebitnoteaspertheabovetimeline ir-

respectiveofthedateoftheoriginalinvoice.

www.jpc.co.in 32

INDIRECT TAX & GST CHANGES

Indirect Tax Our Indirect tax analysis consists of analysis of Goods and Service Tax, Customs and Excise.

Goods and Service Tax Amendments

Cancellation of Registration

Amendment in Sec 29

Clause(c)ofsub-section(1)ofsection29oftheCGST

Act is being amended to provide for cancellation of

registrationwhichhasbeenobtainedvoluntarilyunder

sub-section(3)ofsection25.

Analysis

Earliertheproperofficercancanceltheregistrationof

a taxable person other then a person taking voluntary

registrationeitheronhisownmotionoranapplication

filedbysuchperson,ifsuchpersonisnolongerbeli-

able to be registered under the act.

Aftersuchamendmentapersoncantakevoluntaryreg-

istrationshallapplyforcancellationincasesuchperson

wishes to opt out and also gives power to the proper

officertocancelonhisownmotion.

Revocation of Registration

Amendment in Sec 30

Aproviso to sub-section 1 of section 30 of the CGST

Actisbeinginsertedtoempowerthejurisdictionaltax

authoritiestoextendthedateforapplicationofrevoca-

tionofcancellationof registration indeservingcases.

Analysis

Earlierataxpayercanapplyforrevocationofregistra-

tion within 30 days of service of cancellation order.

Through this amendment, powers have been given to

thetaxauthoritiestoextendsuchtimelimitforfurther

60 days on sufficient cause and reasons recorded in

writing.

Issuance of TDS Certificate

Amendment in Sec 51Section51oftheCGSTActisbeingamendedtoremovethe requirementof issuanceofTDScertificateby thedeductor and to omit the corresponding provision oflatefeesfordelayinissuanceofTDScertificate.

AnalysisThroughthisamendmentthe late feesofRs.200perday has been removed for non-furnishing of the TDScertificatetothedeductee.

Penalty

Amendment in Sec 122Section122of theCGSTAct isbeingamendedby in-serting anew sub-section tomake thebeneficiaryofthe transactions of passing on or availing fraudulentInputTaxCreditliableforpenaltysimilartothepenaltyleviableonthepersonwhocommitssuchspecifiedof-fences.Amendment in Sec 132Section132oftheCGSTActisbeingamendedtomaketheoffenceoffraudulentavailmentofinputtaxcreditwithout an invoice or bill a cognizable and non-bail-able offence; and tomake any personwho commits,or causes the commission and retains the benefit oftransactionsarisingoutofspecifiedoffencesliableforpunishment.

AnalysisEarlier the penalty/punishment has been imposed on thepersonwhohavecommittedtheoffencehoweverthrough this amendment such penalty/punishment has been extended to the person who retains the bene-fitsarisingoutofsuchoffence.Further,theoffenceoffraudulent availment of credit without invoice or bill

wouldnowbecognizableandnon-bailable.

www.jpc.co.in 33

Transitional Provision

Amendment in Sec 140Section140oftheCGSTActisbeingamendedwithef-fectfrom01.07.17,toprescribethemannerandtimelimitfortakingtransitionalcredit.

Removal of Difficulties Order

Amendment in Sec 172Section172oftheCGSTActisbeingamendedtomakeprovisionforenablingtheissuanceofremovalofdiffi-cultiesorderforanother2years,i.e.tillfiveyearsfromthedateofcommencementofthesaidAct.Similar changes are also being made in the IGST Act, 2017(section25),theUTGSTAct,2017section26)andthe GST (Compensation to States) Act, 2017 (section14).

AnalysisThe time limit of issuing Removal of difficulties hasbeenextendedforanother2yearsinordertoamend

orextendanytimelimitundertheAct.

Schedule II

Entriesat4(a)&4(b)inScheduleIIoftheCGSTActis

being amendedwith effect from01.07.2017 tomake

provisionfortheomissionofmadewithoutanyconsid-

erationfromScheduleIIofthesaidAct.

Analysis

Earlier Schedule II provides that the transfer of busi-

ness assets shall be considered as a supply of good

evenmadewithoutconsiderationhoweversuchprovi-

sionhasbeenamended so as toexcludes transferof

assetswithoutconsiderationfromtheambitofsupply

ofgoods.

www.jpc.co.in 34

Retrospective amendments to give effect to the recommendations of the GST Council

Central Excise

Few Amendment have been brought in the Seventh Schedule to the Finance Act 2001 (Clause [145] of the Finance Bill, 2020) in relation collect more excise from sin goods such as cigarette and tobacco products.

S. No. Tariff Item Description of goods Unit From To

1 2402 20 10 Otherthanfiltercigarettes,oflengthnotexceed-

ing 65 millimetres

Tu Rs. 90 per

thousand

Rs. 200 per

thousand

2 2402 20 20 Otherthanfiltercigarettes,oflengthexceeding

65 millimetres but not exceeding 70 millimetres

Tu Rs. 145 per

thousand

Rs. 250 per

thousand

3 2402 20 30 Filtercigarettesoflength(includingthelength

ofthefilter,thelengthoffilterbeing11millime-

tresoritsactuallength,whicheverismore)not

exceeding 65 millimetres

Tu Rs. 90 per

thousand

Rs. 440 per

thousand

S. No. Retrospective amendment in the Goods and Service Tax rate and refund provisions

1 ExemptionfromCentralTax,UnionTerritoryTaxandIntegratedTaxisbeinggivenonfishmeal[HS

2301],fortheperiod01.07.2017to30.09.2019.However,GSTpaidonthesupplyoffishmealduring

theperiodshallnotberefunded.2 Concessional12%rateofIntegratedTaxand6%CentralTaxand6%UnionTerritoryTaxduringthe

period01.07.2017to31.12.2018,onpulley,wheelsandotherparts(fallingunderheading8483)and

usedaspartsofagriculturalmachineryofheadings8432,8433,and8436.However,GSTpaidatany

otherrate(higherthan12%)shallnotberefunded.3 Therefundofaccumulatedcreditofcompensationcessontobaccoproductsarisingoutofinverted

dutystructureinCompensationCesshasbeendisallowedwitheffectfrom1.10.2019videnotification

No.3/2019-CompensationCess(Rate)dated30.9.2019.Thisnotificationisbeinggivenretrospective

effectfrom1.7.2017onwards.Accordingly,norefundonaccountofaninverteddutystructureshall

beadmissibleontobaccoproductsforanyperiod.

35

www.jpc.co.in 36

4 2402 20 40 Filtercigarettesoflength(includingthelengthof

thefilter,thelengthoffilterbeing11millimetres

oritsactuallength,whicheverismore)exceeding

65 millimetres but not exceeding 70 millimetres

Tu Rs. 90 per

thousand

Rs. 440 per

thousand

5 2402 20 50 Filtercigarettesoflength(includingthelengthof

thefilter,thelengthoffilterbeing11millimetres

oritsactuallength,whicheverismore)exceeding

70 millimetres but not exceeding 75 millimetres

Tu Rs. 145 per

thousand

Rs. 545 per

thousand

6 2402 20 90 Other Tu Rs. 235 per

thousand

Rs. 735 per

thousand7 2402 90 10 Cigarettesoftobaccosubstitutes Tu Rs. 150 per

thousand

Rs. 600 per

thousand8 2403 11 10 Hookah or gudaku tobacco Kg. 10% 25%

9 2403 19 10 Smokingmixturesforpipesandcigarettes Kg. 45% 60%

10 2403 19 90 Other Kg. 10% 25%

11 2403 91 00 “Homogenised”or“reconstituted”tobacco Kg. 10% 25%

12 2403 99 10 Chewing tobacco Kg. 10% 25%

13 2403 99 20 Preparationscontainingchewingtobacco Kg. 10% 25%

14 2403 99 30 Jardascentedtobacco Kg. 10% 25%

15 2403 99 40 Snuff Kg. 10% 25%16 2403 99 50 Preparations containing snuff Kg. 10% 25%17 2403 99 60 Tobacco extracts and essence Kg. 10% 25%

18 2403 99 90 Other Kg. 10% 25%

Custom

For improving compliance

AnewChapterVAA(anewsection28DA)isbeingincor-porated in the Customs Act to provide enabling provi-sionforadministeringthepreferentialtarifftreatmentregime under Trade Agreements. The proposed new section seeks to specifically provide for certain obli-gationsontheimporterandprescribefortimeboundverification from exporting country in case of doubt.Pending verificationpreferential tariff treatment shallbesuspendedandgoodsshallbeclearedonlyonfur-nishing security equal to differential duty. In certaincases,thepreferentialtarifftreatmentmaybedeniedwithoutfurtherverification.

AnalysisA new chapter has been inserted in order to provide theprocedureregardingtheclaimofapreferentialrateof dutyon goods importedunder a tradeagreemententeredwiththeGovernmentofforeigncountry.

For reducing litigation

Anexplanationisbeinginsertedinsection28toexplic-itlyclarifythatanynoticeissuedunderthesaidsection,priortotheenactmentoftheFinanceAct,2018,shallcontinuetobegovernedbythesection28asitexistedbeforethesaidenactment,notwithstand-ing theorderof anyAppellate Tribunal, Courtor anyother law to the contrary.

AnalysisAnalysisThisisaretrospectiveamendmentmadeforproviding29thMarch2018asthecutoffdateforthegovernanceof notice issued prior to Finance Bill 2018 till the date ofreceipt.

Other enabling provisions

Clause (f) of the section 11(2) empowers the CentralGovernment,forpreventionof injurytotheeconomyofthecountrybytheuncontrolledimportorexportofgold or silver, to prohibit their import or export. This clause is being amended to include “any other goods” (inadditiontogoldandsilver)initsambit.

AnalysisEarlier the provision restricts the uncontrolled import ofgoldorsilverforpreventionofinjurytotheeconomyhowever this amendment now includes other goods undersuchrestriction.

• A new section (section 51B) is being incorpor-ated to provide for the creation of an ElectronicDuty Credit Ledger in the customs system. This will enable duty credit in lieu of duty remissionto be given in respect of exports or other suchbenefit in electronic form for its usage, transferetc. In this regard, enabling provisions for issu-ance of suitable regulations are also being in-serted insection157(2)of theCustomsAct,1962.

The provisions for recovery of duties provided undersection28AAAofCustomsAct,1962arealsobeingex-pandedtoincludesuchelectroniccreditofduties.

Amendments to the Customs Tariff Act, 1975

Section8BoftheCustomsTariffAct,1975,whichpro-videdforimpositionofsafeguarddutyasatraderem-edyagainstsurgein importsofacommodity, isbeing

tomakeprovisions forapplicationofother safeguard

measures such as Tariff Rate Quota and other safe-

guard measure as the Central Government may deem

necessarytoprotectthedomesticindustryfrominjury

duetosignificantsurgeinimports.

www.jpc.co.in 37

Amendment in the First Schedule of the Customs Tariff

Act, 1975

FirstScheduletotheCustomsTariffAct,1975isbeing

amendedto:

(i) Create new tariff item 8414 51 50 for “Wall

fans”. The tariff rate for this item is20%andBCDon

wallfansisbeingincreasedfrom7.5%to20%.

(ii) Createnewtariffitem85299030for“OpenCell

of television set”. The tariff rate for this item is 15%.

However,theseitemswillcontinueat‘Nil’BCD.

(iii) Createtariff items85414011for“SolarCells,

notassembled”and tariff item85414012 for “Solar

Cells assembled in modules or made up into panels”.

Thetariffrateforthese items is20%.However,these

itemswillcontinueat‘Nil’BCD.

Amendment in Countervailing Duty Rules and Anti-

Dumping Duty Rules

S. No. Rules Amendment

1 Anti-

Dumping

Rules

Changes are being made in the

Rulestostrengthentheanti-cir-

cumventionmeasuresbymaking

them more comprehensive and

widerinscopetotakecareofall

typesofcircumventionsofanti-

dumping duty in line with best

internationalpractice.Certain

other changes are being made in

theseRulesforbringingclarityin

thescopeoftheserules.2 Counter-

vailing

Duty

Rules

At present, there is no provi-

sionforinvestigationincaseof

circumventionofcountervailing

duties.Aprovisionisbeingin-

corporated in the Countervailing

DutyRulestoenableinvestiga-

tionintocaseofcircumvention

ofcountervailingdutyforena-

blingimpositionofsuchduty.

Certain other changes are being

madeforbringingclarityinthe

Rules.

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Review of Customs duty exemption for certain imported goods

S.

No.

Rules Amendment

1 Agro and

animal based

products

Tuna bait,skimmed milk and certain milk products, sugar beet seeds, raw sugar, certain

alcoholicbeverages,wheyandisolatedsoyaprotein,soyafibre,etc.

2 Itemsof

Metal

a. Lead bars, rods and wire

b. Zinc tubes, pipes and tubes

c. Tin plates, sheets and strips

3 Machinery Machineryimportedforuseincertainprojectssuchasspecifiedelectricitygeneration

projects,specifiedMetroprojects,certainotherspecifiedpurposes;

Specifiedgoodsrequiredfortheconstructionofroads

4 Electronic

items

Copperandarticlesthereofusedinthemanufacturingofspecifiedelectronicitems;

Partsforthemanufactureofprinters,CDWriters,MP3orMP4orMPEG4players,pre-

recordedcassettes,audiocassettes,colourtelevisiontubes,etc.

5 Miscellane-

ous

a. Peanutbutter,preservedpotatoes

b. Instantprintfilm,exposedcinematographicfilms

c. Afewredundantandoutdatedcustomsdutyexemptionsarebeingwithdrawn.

Further,afewexemptionsarebeingre-alignedforconsistency.

Changes in Customs duty for creating a level playing field for MSME and promoting MAKE IN INDIA

S.

No.

Categoryofgoods Specificitems Rate of dutyFrom To

1. Household goods and appliances Tablewareandkitchenwareofporcelainor

china, ceramic, clay, iron, steel, copper and

aluminium, glassware, padlocks, brooms,

hand-sieves,combs,vacuumflasks,etc.

10% 20%

2. Electrical Appliances Fans,foodgrinders/mixers,shaversandhair

removing appliances, water heaters, hair/

hand drying apparatus, ovens, cookers, toast-

ers,coffee/teamakers,insectrepellents,

heaters, irons, etc.

10% 20%

3. Footwear a. Footwear

b. Partsoffootwear

25%

15%

35%

20%

4. Furniture goods Seats,articlesofbeddingincludingmat-

tresses,lamps,lighting,illuminatedsigns,and

otherarticlesoffurniture

20% 25%

5. Stationeryitems Filing cabinets, paper trays, binders, clips, sta-

ples,sign-plates,nameplates,numbersand

symbolsetc.madefrombasemetal

10% 20%

6. Toys Tricycles, scooters, scale models, dolls, etc. 20% 60%

7. Machinery a.Specifiedgoodsusedinhighvoltagepowertransmissionproject

5% 7.5%

b.Railwaycarriagefans 7.5% 10%c.Compressorsofrefrigeratorsandaircondi-

tioners

10% 12.5%

d.Commercialfreezers 7.5% 15%e.Weldingandplasmacuttingmachine 7.5% 10%f.Rotarytillers/weeder 2.5% 7.5%

8. Other miscellaneous items • Glass beads• Artificialflowers• Bells,gongs,statuettes,trophiesand

like,statuettes,ornaments,photograph,frames,mirrorsetc.ofbasemetal.

10% 20%

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Changes in Customs duty to promote MAKE IN INDIA under Phased Manufacturing Programme (PMP) for Electric Vehicles and Cellular Mobile Phones

A. ChangesincustomsdutyunderPhasedManufacturingProgrammefor

Electric Vehicles

Rate of dutyFrom To

1. CompletelyBuiltUnitsofBusandTrucks(witheffectfrom

01.04.2020)

25% 40%

2. SemiKnockedDown(SKD)unitsofbus,trucksandtwowheelers

(witheffectfrom01.04.2020)

15% 25%

3. SemiKnockedDown(SKD)unitsofpassengervehiclesandthree

wheelers(witheffectfrom01.04.2020)

15% 30%

4. CompletelyKnockedDown(CKD)unitsofpassengervehicles,

threewheelers,twowheelers,busandtrucks(witheffectfrom

01.04.2020)

10% 15%

B. ChangesincustomsdutyunderPhasedManufacturingProgrammeforCellularMobilePhones

1 PCBAofMobilephones(witheffectfrom01.04.2020) 10% 20%

2 Vibrator/RingerofMobilephones(witheffectfrom01.04.2020) Nil 10%

3 DisplayPanelandTouchAssembly(witheffectfrom01.10.2020) Nil 10%

Changes in Customs duty to promote MAKE IN INDIA in Electronics sector

A. ChangesincustomsdutyunderPhasedManufacturingProgrammefor

Electric Vehicles

Rate of dutyFrom To

1. MotorslikeSinglePhaseACmotors,Steppermotors,WiperMotors,

etc.

7.5% 10%

2. Specifiedchargersandpoweradapters Applicable

Rate

20%

3. Fingerprintreadersforuseincellularmobilephones Nil 15%

4. Earphones and headphones Applicable

Rate

15%

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Reduction in Customs duty on raw materials and inputs imported by Domestic Manufacturers

S.

No.

Categoryofgoods Specificitems Rate of dutyFrom To

1. Fuels,ChemicalsandPlastics VerylowsulphurfueloilmeetingISO

8217:2017RMG380Viscosityin220-400CST

standards/MarineFuel0.5%(FO)

10% Nil

Calcined Petroleum Coke

Calendaredplasticsheetsusedinthemanu-facturingofsmartcardsPolyesterLiquidCrystalPolymersforuseinthemanufactureofconnectors

2. PreciousMetals PlatinumorPalladiumusedinthemanufac-

tureof:

a)Colloidalpreciousmetals,inorganicor

organiccompoundsofpreciousmetal,amal-

gamsofpreciousmetals

b)Catalystwithpreciousmetalorprecious

metalcompoundsastheactivesubstance

12.5% 7.5%

Spent Catalyst or Ash containing precious metal,subjecttospecifiedconditions

3. MachineryandElectronicGoods FollowingpartsofMicrophoneforusein

manufactureofMicrophonenamely,

a) microphonecartridge

b) microphoneholder

c) microphonegrill

d) microphonebody

10% Nil

7.5% NilMicro-fusebase,sub-miniaturefusebase,

Micro-fuseCoverandsub-miniaturefuse

coverforuseinmanufactureofmicrofuse

andsub-miniaturefuse.4. Sports Goods Willowisbeingincludedinthelistofitemsal-

loweddutyfreeimportupto3%ofFOBvalue

ofsportsgoodsexportedinthepreceding

financialyear

Applica-

ble Rate

Nil

5. Stationeryitems Filing cabinets, paper trays, binders, clips, sta-

ples,sign-plates,nameplates,numbersand

symbolsetc.madefrombasemetal

20%

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S.

No.

Categoryofgoods Specificitems Rate of dutyFrom To

5. FNewsprint • Newsprint,whenimportedbyimporterregistered

withRegistrarofNewspapers,India.

• Uncoatedpaperusedforprintingnewspaper,when

importedbyimporterregisteredwithRegistrarof

Newspapers,India.

• Lightweightcoatedpaperusedforprintingmaga-

zinessubjecttoactualusercondition.

10% 5%

Other changes in Customs duty

S.

No.

Categoryofgoods Specificitems Rate of duty

From To

1. Food processing Walnuts, shelled 30% 100%

2. ChemicalsandPlastics Colloidal precious metals, inorganic or organic com-poundsofpreciousmetal,amalgamsofpreciousmetals

7.5% 10%

5% 7.5%Butyl Acrylate

10% 15%Otherpreparedbindersforfoundrymouldsorcores;Chemicalproductsandpreparationsofthechemicalorallied industries

3 Auto and auto parts Catalyticconverter 10% 15%

Noblemetalsolutionsandnoblemetalcompoundsusedinmanufactureofcatalyticconverteranditsparts

5% 10%

PlatinumorPalladiumusedinmanufacturingofcata-lyticconverteranditsparts

5% Applicable Rate

Partsandotherspecifiedinputsforthemanufactureofcatalyticconverters.

5% 7.5%

CompletelyBuiltUnits(CBUs)ofcommercialvehi-cles(otherthanelectricvehicles)(witheffectfrom01.04.2020)

30% 40%

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R E G U L A T O R Y R E G U L A T O R Y

CHANGESCHANGES

Regulatory Changes

The Modi Government has come up with few posi-tivechangesintheareaofregulations,which includesamendmentsinstampactandMSME,amendmentsareanalysedindetailbelow:

Indian Stamp Act, 1899

Withinsertionofprovisotosub-section(2)ofSection9AoftheAct,anexceptionhasbeenprovidedonpay-ment of duty for instruments oftransaction in stockexchanges and depositories established in any Interna-tionalFinancialServicesCentresetupundersection18oftheSpecialEconomicZonesAct,2005,theyaregivenspecial leverage with no duty.

Section73Bhasbeeninsertedforempoweringcentralgovernmenttoissuedirectionsandtoauthorisecertainauthoritiesviz.SEBIandRBItoissueinstructions,circu-larsandguidelines,retrospectively,forcarryingouttheprovisionsofPartAAofChapterIIofthisAct.

Benami Property transaction Act, 1988

Amendment to section 9 has been made to includeapersonwho is “qualified tobeappointedasdistrictjudge”asaqualificationtobeappointedaschairpersonandmemberoftheAdjudicatingAuthority.

Election Commission (Conditions of service of election commissioners and transaction of business) Act, 1991

The service conditions of the Chief Election Commis-sioner aswell as other Election Commissioners is re-duced by withdrawing certain perquisites such as ex-emptionfrompaymentof income-taxonthevalueofsuchrent-freeresidence,conveyancefacilities,sumptu-

aryallowance,medicalfacilities.

Other Proposals

• External Commercial Borrowings and FDI is being proposed to finance the education system so as-tobeable todeliverhigherqualityeducationwiththe motive to attract talented teachers, innovateandbuildbetterlabs.

• It is also been proposed that the Companies Act to besuitablyamendedtodemarcatethenatureoftheactionsascriminalorcivil,likewiseitisproposedtobring such changes in the other laws as well.

Proposed Amendment for MSMEs

MSMEsplayavital role inoureconomy.Governmenthas taken various measure for their upliftment andthroughthisbudget,governmentisproposingthefol-lowing:

• It isproposedtoamendtheFactorRegulationAct2011 so thatNBFCs are able to extend invoice fi-nancingtotheMSMEsthroughTReDS.

• TocatertheworkingcapitalcreditrequirementsofMSME, itproposedto introduceaschemetopro-videsubordinatedebtforentrepreneursofMSMEs.This subordinate debt to be will be provided by banksandwouldbequasi-equity,fullyguaranteedthroughtheCreditGuaranteeTrustforMediumandSmall Entrepreneurs (CGTMSE). Thecorpusof theCGTMSEwouldaccordinglybeboostedbythegov-ernment.

• Considering thebenefit thatMSMEshavederivedfromrestructuringofdebtpermittedbyRBIinthelast year. The restructuring window has to end on

March31,2020.GovernmenthasaskedRBItocon-

siderextendingthiswindowtillMarch31,2021.

• It is proposed to launch an app-based invoice fi-

nancing loans product to remove the problem re-

latingtodelayedpaymentsandconsequentialcash

flowsmismatchesfortheMSMEs.

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REGULATORY CHANGES

AOPAssociationofPersonsMSMEMediumsmallscaleenterprises

AYAssessmentYearNBFCNonBankingFinanceCompany

AOAssessingOfficerPEPermanentEstablishment

BOIBodyofIndividualsR&DResearch&Development

BEBudgetEstimatesRBIReserveBankofIndia

CADCurrentAccountDeficitSEBISecurityExchangeBoardofIndia

CBDTCentralBoardofDirectTaxesSEZSpecialEconomicZone

CPIConsumerPriceIndexRERevisedEstimates

CSOCentralStatisticsOrganisationSHESecondaryHigherEducationCess

DDTDividendDistributionTaxTDSTaxdeductedatsource

ECEducationCessUTsUnionTerritories

FIPBForeignInvestmentPromotionBoardWHTWithholdingTaxes

FDI Foreign Direct Investment WPI Whole sale Price Index

GDPGrossDomesticProductPFCEPrivateFinalConsumptionExpenditure

GSTGoods&ServiceTaxGFCEGovernmentFinalConsumption

HUFHinduUndividedFamilyExpenditure

GVAGrossValueAddedCroreOneCroreINRisequivalenttoINR

INRIndianRupee10Million/0.15MillionUSdollars

www.jpc.co.in 46

GLOSSARY

Dear Valuable Client / Colleague,

Incaseyourequireanyfurtherdetailedanalysisonabovementionedproposals,pleasedogetbacktousandwe

shall be happy to provide you the same.

With Best Regards,

Team JPC

About JPC.

JPCisaprofessionalservicesfirmbasedinNoida-NationalCapitalRegionandNewDelhi,India.Wewereestab-

lishedintheyear1974withtheaimtocreatevalueforourclientsbydeliveringquality,comprehensive,timely,

practicalandinnovativeservices.Weofferacomprehensiverangeofservices,includingtaxationservices,regulato-

ryservices,transactionadvisoryservices,financial&managementconsultancyservices,assurance&riskservices,

andoutsourcingservices.Overthepastseveraldecades,wehaveestablishedsignificantcompetitivepresencein

thecountry.OurvastanddiversifiedclientbaseincludesMultinationalenterprises,domesticcompanies,highnet

worthindividuals,governmentcompaniesandinstitutionsinallleadingindustryverticals.Weareateamofdistin-

guishedCharteredAccountants,ManagementAccountants,CorporateFinancialAdvisorsandTaxConsultants.Our

teamhastherequisiteskillsandexperiencetoprovidecomplexbusiness,financial,assurance,taxandregulatory

servicestoourclients.Ourstrengthliesinourtimelyperformance-based,industry-tailoredandtechnology-ena-

bledserviceswhicharedeliveredbysomeofthemosttalentedprofessionalsinthecountry.Formoreinformation

aboutJPC’sserviceofferings,visitwww.jpc.co.in

In this document, “JPC” refers to J P Chawla & Co. LLP Chartered Accountants (a limited liability partnership firm

regulated by the Institute of Chartered Accountants of India, FRN : 001875N/ N500025), formerly known as J.P.

Chawla & Company Chartered Accountants.

Disclaimer: This budget analysis and its content are provided on the basis of secondary research and

JPC does not make any representation or warranty of any kind with respect to its contents. JPC does

not warrant or represent that this budget analysis or its content are timely, complete or accurate.

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