Upload
others
View
3
Download
0
Embed Size (px)
Citation preview
NEWS & VIEWSFOR MEMBERS / SUBSCRIBERS / VOL. 22 - NO. 9 - MAY - JUNE 2019
From President's Desk...Dear Professional Colleagues and Readers,
CA Sunil V. Dedhia
Thank you all..... Always in Gratitude
June 10, 2019.
C.V.O. CA'S
Follow us on , , LinkedIn@cvocain Join Yahoo group : [email protected]
From the President's Desk:-
This being my last communication as President of this esteem Association, I sign off with feeling of satisfaction and
fulfillment. I feel happy and privileged serving the august association. As part of team CVOCA we did performed our duty
with best of our ability and with responsibility and contributed to the glory of the association. As a President, the whole
year gave me good learning and made me wealthier in terms experience and wealthier in relationship.
Public Seminar on CSR for trustsstThe Public Seminar on how to make trust CSR compliant was organised on 1 June 2019 at Yogi Sabhagrah to guide and
educate the trustees and office bearers of trusts for making trusts CSR compliant, which was attended by more than 425 invitees from various trust of our community. Feedback received from the participants has reiterate the fact the contents and quality of the CVOCA's seminars are always par excellence. Association also announced CSR clinic for the benefit of the trust to guide and help them to become CSR compliant.
CVO Certified GST and Accountants Course Batch 1 The 1st batch of GST accountant course has been completed successfully in May 2019. In all 23 students have attended the course. This course practical training on GST is covered.
Direct Tax:
As there was dawn of new Financial Year 2019‐20 certain changes related to Direct Taxation have been made by the
Central Board of Direct Taxes (CBDT) through issuance of Notifications, changing the structure of Form 16 and TDS Forms
thereby reducing the bulk of unnecessary data and giving room to the useful data.
Along with the changes for the domestic assessee there has been also changes made in relation to the assessee having its
presence in the International Borders whereby the Treaty between Government of India and Republic of United States of
America on Country‐by‐ Country Reporting has been changed.
Indirect Taxes:
Since the advent of Goods and Service Tax (GST) there has been continuous amendment and clarifications in the form of
amendments and circulars have been issued and recommended by the GST Council, which includes changes in various
due dates for the filing of GST Returns and clarifications and judgements issued by the Judicial Body. Also the changes
related to E‐way Bill System and brief note on the consequences for not adhering to the procedures of E‐way Bill System.
Major changes in State VAT Law's (Maharashtra VAT) were made by the structuring the Amnesty Scheme 2019, which
would focus on fast redressal and transparent way to reduce the pre‐existing as well as the existing cases.
How Money Work's?
In order to accomplish with our tradition of providing social knowledge, here is the interesting topic on the functioning of
the money.
Also it is rightly said; “Success starts counting when your money starts working for you”.
It is now time to step down and pass the legacy to able and worthy successor and wish him for successful and eventful year ahead which enable to carry glory of the association at new height.
Thank you all..... Always in Gratitude
FROM THE DESK OF CHAIRMAN
NEWS BULLETINNEWS BULLETINCOMMITEECOMMITEE
PresidentCA Sunil Dedhia
Chairman CA Dinesh Shah Convenor CA Mehul Gala Jt. Convenor CA Parin Gala Sp. Invitees CA Rakesh Vora
Members CA Hitesh Pasad CA Paras Maru CA Virav Dedhia CA Viral Satra CA Deepesh Chheda CA Keval Satra CA Jinit Bheda CA Nisha Gala
CONTENTSCONTENTS
CA Dinesh Shah
ASSOCIATIONASSOCIATION
C.V.O. CA'S NEWS & VIEWS
Events in Retrospect .....................5
How money works ? .....................6
Maharashtra Amnesty Scheme,
2019..............................................9
Checklist for GSTR 9 ...................16
E‐Way Bill System........................20
GST : Recent Judicial
Pronouncements ........................25
Recent Compounding Orders Under
Fema ..................................29
Brief Update On SEBI &
Corporate Law.............................34
FEMA Updates............................36
Direct Taxes Law Update.............40
GST Updates ...............................42
VOL. 22 - NO. 9 - MAY - JUNE 2019
(Forgiveness, Humility, Straight forwardness and Contentment)
� Friends the key to achieving a higher lever of inner happiness is to get
rid of all Kasayas (Passions), The basic passions are attachment and hatred; we
can subdivide them into an ger, ego, deceit and greed. Nobody is free from
these; and, unless checked, they build up in the individual, leading him or her
to more and more destructive thoughts and behavior. It can be very hard to get
rid of these unpleasant passions. It might take lifetimes and require hard
spiritual effort. Even when the individual has controlled them, it is always
possible to slip back. The path is still difficult and the individual must be
prepared to avoid the most harmful activities: cheating, hurting others' feelings,
killing, lust for material things, and so on.
Kshamä (Forgiveness) Friends we discussed this in Last month's communicationVinay (Humility)
Humility is external and internal respect towards all living beings. In fact,
humility is an inherent virtue of the soul (Ätmä), with other virtues like
knowledge, faith, contentment, forgiveness, and so on.
Humility is the king of all spiritual characteristics. Humility denotes
humbleness, modesty, decency, politeness, courtesy, kindness, reverence,
admiration, honor, and respect. Many popular sayings such as “Ego is the
source of sin,” “One who bows is liked by all,” and “Even the pride of King Rävan
went to dust,” points out that pride is a vice while humility is a virtue. Pride
makes all our fame and great work useless. Without humility, the right
knowledge, the right faith, and the right conduct cannot be obtained; hence, one
cannot improve oneself and cannot achieve liberation.
Developing Humility
Bhagawän Mahävir has said, “Become victorious over ego by humility.”
Bhagawän was once asked, “What do we achieve by practicing humility?”
Bhagawän replied, “With humility, our inner feelings become purified and such
inner feelings eradicate the eight types of ego.”
The following is a brief description of eight types of ego:
Pride of Knowledge
Pride of Worship
2
FOUR : Virtues : Kshamä, Vinay, Saralatä and Santosh
C.V.O. CA'S NEWS & VIEWS
Pride of Family
Pride of Race
Pride of Power
Pride of Accomplishment
Pride of Austerity
Pride of Body
This Eightfold pride disturbs the social, intellectual and spiritual progress of the aspirant. One should
therefore know fully this Eight fold pride, abandon it in the daily routine of life and resort to humility. If this is
done, humility as a virtue will reveal itself in a short time. Humility is the ladder that leads to true
philosophical thinking and a happy life.
Types of Humility
There are numerous types of humility. A few important ones are:
1) Humility of right knowledge (Jnän Vinay);
a) treating knowledge and those who have acquired knowledge with devotion,
b) honoring them,
c) noble contemplation on what our Tirthankar has said,
d) putting in self effort to acquire knowledge and ) putting knowledge into practice.
2) Humility of right belief (Darshan Vinay); i.e. respect for the right faith, respect for
people who have the right faith and, the self_effort needed to acquire the right faith.
3) Humility of right conduct (Chäritra Vinay); respect for right conduct, respect for persons who have
the right conduct and, self effort to practice the right conduct.
4) Humility of right austerity (Tapa Vinay); respect for right austerity, respect for persons
who practice right austerity and, self effort to practice right austerity.
5) Humility towards the spiritual leaders and great people (Upachär Vinay), one must be
polite towards elders and spiritual superiors. One should behave him/herself in their presence,
with decency.
BENEFITS
There are many benefit of adopting humility in daily conduct. Some are as follows:
a) When one becomes considerate of other people's inconveniences, speech becomes softer and courteous, not authoritative, not aggressive, and without hidden intent.
b) A loving conduct and a spirit of tolerance are developed. We learn to apologize when a mistake is made.
c) Real greatness starts emerging, and boasting ends. We start seeing the positive side of others rather than the negative side. We learn to respect others as our equals. We give up the habit of comparing ourselves with others.
d) “I” is replaced by “WE”. There is no presumption about what is right and wrong.
VOL. 22 - NO. 9 - MAY - JUNE 2019
3
C.V.O. CA'S NEWS & VIEWS
e) Just as trees rich in fruits hang low, similarly, people with true humility always look humble.
f) Like sugar in milk, if humility is associated with knowledge, one attains real greatness. Humility is the
root of the process of purification. It is the necessity for social, professional, intellectual, mental, and
spiritual prosperity.
SUMMARY
Humility is the king of all characteristics. Ego destroys everything we work for.Vinay should be synchronized
in all three phases: in action, in speech, and in thinking.Without humility, one cannot have right
knowledge.Without right knowledge, one cannot have right faith.Without right faith, one cannot have right
conduct. Without the right conduct, one cannot achieve Moksha. Let us develop this great virtue.
Friends we will discuss the other Two in subsequent communication VIRTUES - SARALTA AND SANTOSH
VOL. 22 - NO. 9 - MAY - JUNE 2019
4
SE O UH L T I S. O. N Y . J O EU R N
TREAT OTHER THE WAY YOU WANT TO BE TREATED...
REMEMBER !!
C.V.O. CA'S NEWS & VIEWS
EVENTS IN RETROSPECT EVENTS IN RETROSPECT
Public Program on "How to make Trust CSR Compliant" organised by Program Committee of CVOCA
Association at Yogi Sabhagruh on 1st June 2019.
Various Trustees & Karobari Members of different Trusts & NGOs from Kutch, Vagad & Mumbai like KVOSS,
KVO Deravasi Mahajan, Wagad NGOs, Ahinsadhaam, Suvidha NGO, Matunga Boarding, etc. i.e. 400+ attended
the well managed program on topic of the hour i.e. Corporate CSR kitty's Usage. The program though was
planned for limited invitees, CVOCA was receiving calls till morning of 1st June for the entry passes. We were
quite lucky and our team efforts helped to accommodate all the dignitaries & philanthropists of our
community.
At start of the program, one the biggest philanthropist of our society, MD of Navneet Education Limited and
trustee at different NGOs, Shri Sunil Gala brought in both the sides of the coin i.e. what corporate expect from
NGO & what all NGO can & should do. With his rich experience, he presented to the audience the gap between
corporate requirements and the ground realities of the trusts presently operational in our community. He
clearly advocated for trusts to be professional, marketable and best governed in order to pitch projects to the
trusts. Also he had put in his thoughts on Do's & Don'ts for the trusts while approaching Corporates for CSR
Funding.
Then was the session from our own member of the association, past president of CVOCA, who is also a
technical expert of Corporate Law and Partner at Khimji Kunvarji & Co., CA Hasmukh Bhavanji Dedhia. He not
only addressed on CSR requirements under the law, but also connected to different projects already or being
undertaken or can be executed under the CSR regulations in very simplistic language providing apt examples to
the audience to connect with.
In the end, the last part where our trust needs to improve upon was addressed by the speaker from Delhi, Shri
Parul Soni, Global Managing Partner at TTC. He, with his 20 years experience in bridging gap between CSR
Funds from Corporate to Trusts, well informed the audience on philosophy of corporate, desired
presentations, reports, budgets for the trusts. He stressed upon the entire cycle of CSR funding & utilization
which would be required for corporate and trusts if they want to partner themselves.
Great thanks to the Chairman of program & our Past President CA Dinesh Devchand Ghalla for managing the
entire program effectively and ensuring right time period is provided to speakers making the justice to the topic
& their efforts put in.
Towards the Q&A session, CVOCA declared the launch of CVOCA CSR Clinic in order to help the trusts in their
subjective doubts & queries. This announcement became the feather on the cap of the program.
We would like to thank Bidada Sarvoday Trust for giving us wholehearted support in organizing this program.
Nevertheless the program would not be successful without the audience for whom this was thought through. We
thank all the trusts and their karobari members who made their presence on the day and hope we would have
achieved the objective of program. Once we crystallize the operational mechanism of CVOCA CSR Clinic, we
would approach you all and would like to work with you all for the betterment of our society at large.
VOL. 22 - NO. 9 - MAY - JUNE 2019
5
Compiled by:
C.V.O. CA'S NEWS & VIEWS
CA Henik Shah
“It is well enough that the people do not understand the
banking & monetary systems, for if they did, there may be [1]a revolution before tomorrow morning.” – Henry Ford
What is so complex about the banking & monetary
systems that can be intrusive enough to create a
revolution?
Well, it's all about money.
What is money?
“Money serves as a medium of exchange and a store
of value”.
In earlier phases of human civilization, “barter” was
the medium of exchange whereby goods and services
were exchanged for other goods/services of like value.
However, such transactions faced numerous
problems such as determination of value, the
perishable nature of majority of goods, the intangible
nature of services, etc.
Hence humans soon felt the need to have a
standardized medium of exchange, which unlike
perishables/ intangibles, can be stored for practically
infinite period with a value assigned to it.
Enter the coin-age, wherein the intrinsic value of the
metal involved (say silver) was equal to the value
imprinted on the coin, i.e. its extrinsic value. So, say
if I wanted 'X' priced at Rs. 5,000, I would have to give
coins totalling to Rs. 5,000, as consideration, in
which even the silver content should be worth of Rs.
5,000.
If the intrinsic value becomes less than the extrinsic,
the price of 'X' will rise.
However, if the intrinsic value is more, this is what
will happen:
“…an Indian clerk named Dhirubhai Ambani, then barely
into his twenties, had an open order out in the souk
(marketplace) of Aden for as many Rials as were
available. Ambani had noted that the value of the Rial's
silver content was higher than its exchange value
against the British pound and other foreign currencies.
So he began buying Rials, melting them down, and [2]selling the silver ingots to bullion dealers in London.”
And again for its various disadvantages, money in
such form was practically stopped from circulation
in almost all the economies around the world.
Here we are in today's world, having fiat (token)
money in our pockets, currency notes or digital
cards/wallets where the intrinsic value is an asset
backing from the nation's government.
“I promise to pay the bearer the sum of……” is
mentioned on every note to assert that the currency
note is a legal tender. “Guaranteed by the Central
Government” is also mentioned, as the value
imprinted is backed by the government through it's
central bank i.e. The RBI.
Now what is asset backing?
The money which we use to transact is just token,
while there are reserves held to provide for the
guarantee on the currency. This is asset backing.
Certain Statistics:
thIndia, as on 30 June 2018 has asset backing in gold
& bullion worth Rs 743.49 billion. The notes issued
and in circulation in the economy are of Rs [3]19,119.60 billion. This obviously does not include
the money created by commercial banks, to which we
shall come later.
India's GDP (at 2018-19 prices) is estimated to attain
a level of Rs 1,88,410 billion and Net National [4]Income (NNI) to be Rs 1,67,030 billion.
(NNI is the sum of net income taken from all sectors, [5]including personal, business and government.)
HOW MONEY WORKS ? HOW MONEY WORKS ?
ARE WE SLAVES TO THE SYSTEM ?ARE WE SLAVES TO THE SYSTEM ?
VOL. 22 - NO. 9 - MAY - JUNE 2019
6
C.V.O. CA'S NEWS & VIEWS
Basically, the value of only 0.45% of the Net Income of
our country has been backed by tangible assets. Yet,
there is no hyper-inflation situation like the one
which Zimbabwe experienced.
So, realistically, who is giving value to this money?
We, the people of this country. Our governments,
through the banking & monetary systems, bind us to
give value to this money.
How is value being given?
In two ways:
Time Value of Money, and
Taxation on Personal Income.
Time value of money:
Currency notes are papers on which some numbers
are imprinted by RBI, guaranteed by government.
Treasury bonds are also papers with some numbers
imprinted, payment of which is guaranteed by
government. If the government requires money
supply it will issue treasury bonds. Being the central
bank, RBI purchases treasury bonds issued by the
government and allows overdrawing by government.
Out of this transaction, money has just been
magically created!
Such money is then used for various purposes, say
public expenditure. When new inflow comes in the
economy, the markets as of that moment have not
adjusted their prices in correlation to the new inflow.
But by the time the inflow breaks down into the
smallest of the denominations, the markets would
have already adjusted its prices.
Although the RBI does consider various factors to
decide the quantum of notes to be printed, however,
every new inflow reduces the purchasing power of
money. The prices of goods and services rise, which
in return, call for proportionate increase in profits
and salaries. It's a never-ending cycle, any imbalance
can cause an economic fall.
Again coming back to treasury bonds, the
government got money only to the extent of principal
amount, as consideration. From where will the
government get money to pay for interest on those
bonds?
Enter the second way:
Taxation on personal income:
Commercial banks accept deposits and issue loans.
My net annual income is Rs. 1,00,000 in cash. After
Income tax @30% of Rs. 30,000, I deposit Rs. 70,000 [6]in the bank. Current CRR is 4% and SLR is 19.25%.
Let's assume the bank lends Rs. 50,000 out of my
deposits, to Mr. A, who buys plant and machinery
from Mr. B. Now Mr. B's income is Rs 50,000. Mr. B
will pay for his expenses. Now one man's expense is
another man's income. Further, say his net profit is
Rs. 10,000. He will have a tax liability of Rs 3,000 and
balance Rs. 7,000 is deposited in the bank, Rs. 5,000
of which can be lent further. Also assume that no
other party deposited any cash at bank.
Real cash deposit = Rs.70,000.
Bank generated assets due to lending
= Rs. 50,000 plant of Mr. A + Rs. 28,000 paid for
expenses by Mr. B (Rs 40,000-30%) + Rs. 7,000 in
hand of Mr. B
= Rs. 85,000, which is more than what the bank had
actually received as cash deposit.
Thus lending by commercial banks, magically
created money, again!
As per a 2016 Economic Times report, 92% of the [7]world's currency is digital. Imagine the amount of
money created by banks due to lending and also the
scope of generation of assets in future.
Further,
Income tax on real cash = Rs. 30,000.
Income tax due to lending
= tax on income of Mr. A + Rs 12,000 (30% of Rs
40,000) tax on money expended by Mr. B + Rs. 3,000
of Mr. B.
VOL. 22 - NO. 9 - MAY - JUNE 2019
7
C.V.O. CA'S NEWS & VIEWS
Even indirect taxes would be collected on these
transactions, ultimately taxing the end consumer.
The government now has the money to pay interest
on those bonds, through the taxes which we pay.
This is how money works. They magically create it,
and we are bound to give value. It is, quite literally
backed on our time and tax.
Why did Henry Ford say that there will be a
revolution?
Simply because in such banking and monetary
systems, those who create money, control the
country. In earlier times, rains and war majorly
affected specific provinces. Today, actions of
governments and banks can affect, not only that
specific province or country, but the entire world at
large (ex.: 2008 crisis). Hence, the ones influencing
this creation and supply reap the benefits and also
enjoy various exemptions, while the others have to
put efforts to earn the magically created money and
pay tax too. This results in sharp economic
inequality.
[8]As per 2018 and 2019 Oxfam reports:
Worldwide, the richest 26 own the same as [9]the 3.8 billion poor half of humanity.
In India, top 10% own 73% of country's [10]
wealth.
Also, share of bottom 90% in India's national [11]income has declined after 1990.
The total wealth of India's knowledge-based
sectors (ex.: IT and pharmaceuticals) is $55
billion, but for those businesses relying on
government contracts (i.e. rent-thick [11]sectors), it is $132 billion.
In 'Commitment to Reducing Inequality (CRI)
Index' India ranks 147th among 157 [12]countries.
Point to ponder:
We all acquire education and skill to be productive in
this society, which rewards in terms of money,
created by such banking and monetary systems.
Shouldn't everyone be made aware of the system?
Would they appreciate it? Or find ways to move out of
the system?
Think over it. Think different!
VOL. 22 - NO. 9 - MAY - JUNE 2019
8
C.V.O. CA'S NEWS & VIEWS
Compiled by:
CA Bharat K. Gosar
The Maharashtra State Government has announced Amnesty Scheme, 2019 vide Ordinance No. V of 2019 thdated 06/03/2019 and it is followed by Trade Circular No. 08T of 2019 dated 08 March, 2019 and Trade
thCircular No. 20T of 2019 dated 15 May, 2019.
This Amnesty Scheme is introduced to settle down tax disputes administered by the Sales Tax Department for thany period upto 30 June, 2017. This scheme aims to close pending cases on fast track mode and give
concession to the dealers in Government dues. This scheme will have two phases. First one is from
01.04.2019 to 30.06.2019 and second one is from 01.07.2019 to 31.07.2019.
The scheme covers all the Acts administered by the Sales Tax Department i.e.
(i)) The Maharashtra Value Added Tax Act, 2002;
(ii) The Central Sales Tax Act, 1956;
(iii) The Bombay Sales of Motor Spirit Taxation Act, 1958;
(iv) The Bombay Sales Tax Act, 1959;
(v) The Maharashtra Purchase Tax on Sugarcane Act, 1962;
(vi) The Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975;
(vii) The Maharashtra Sales Tax on the Transfer of Right to use any Goods for any Purpose Act, 1985;
(viii) The Maharashtra Tax on Entry of Motor Vehicles into Local Areas Act, 1987;
(ix) The Maharashtra Tax on Luxuries Act, 1987;
(x) The Maharashtra Sales Tax on the Transfer of Property in Goods involved in the Execution of Works
Contract (Re-enacted) Act, 1989;
(xi) The Maharashtra Tax on the Entry of Goods into Local Areas Act, 2002.
This scheme will have two phases. First one is from 01.04.2019 to 30.06.2019 and second one is from
01.07.2019 to 31.07.2019.
MAHARASHTRA AMNESTY SCHEME, 2019MAHARASHTRA AMNESTY SCHEME, 2019
Table-1
VOL. 22 - NO. 9 - MAY - JUNE 2019
9
C.V.O. CA'S NEWS & VIEWS
a) For the periods upto 31st March 2010.
Table-2
(b) For the periods from 1st April 2010 to 30th June 2017.
The State Government intends to clear all arrears of tax, interest, penalty and fees whether under dispute or
not. For this, we need to understand some important terms defined in the Ordinance.
VOL. 22 - NO. 9 - MAY - JUNE 2019
10
C.V.O. CA'S NEWS & VIEWS
Important Definitions:
Section 2 (1)(C): “arrears of tax, interest, penalty or late fee” means the amount of tax, interest, penalty or
late fee, as the case may be,—
(i) payable by an assessee as per any statutory order under the Relevant Act; or
(ii) admitted in the return or, as the case may be, the revised return filed under the Relevant Act and which
has not been paid either wholly or partly; or
(iii) determined and recommended to be payable by the auditor, in the audit report submitted as per section
61 of the Value Added Tax Act, and accepted by the assessee either wholly or partly, whether the notice
under section 32 or 32A of the Value Added Tax Act has been issued or not; or
(iv) in respect of which a notice has been issued, in relation to any proceeding under the Relevant Act; or
(v) determined to be payable by the assessee where no notice in relation to any proceeding under the
Relevant Act is issued,
and such arrears of tax, interest, penalty or late fee, pertains to specified period;
“Return dues” means the amount of tax, interest or late fee, admitted the return or the revised return filed
under the Relevant Act in respect of the specified period but which has remained unpaid either wholly or
partly, at any time on or before the 15th July, 2019;
“Disputed tax” means the tax other than the un-disputed tax
“Undisputed tax” means
(i) the taxes collected separately under the Relevant Act; or
(ii) The deductions allowed by the authorities in the statutory order for the taxes collected separately under
the Relevant Act like deduction under Rule 57 of MVAT Act or under Rule 46A of BST Act; or
(iii) The taxes shown payable in the return or the revised return under the Relevant Act; or
(iv) An amount claimed by the dealer as deductions or allowed by the designated authority as per rule 57 of
the Value Added Tax Rules or similar rules made under other Relevant Act; or
(v) An amount forfeited under the statutory order or excess tax collection shown in the return, revised
return or, Audit report, as the case may be, submitted under the Relevant Act; or
(vi) Any amount of tax, interest or late fee determined and recommended to be payable by the auditor, in the
audit report submitted as per section 61 of the Value Added Tax Act, and accepted by the assessee either
wholly or partly; or
vii) The tax deducted at source (TDS) by the employer under the Relevant Act; or
(viii) The tax collection made under section 31A of the Value Added Tax Act;
Adjustment of any payment already made before 1st April, 2019:
(1) Any amount of tax, interest, penalty or late fee payable as per statutory order pertaining to the period
ending on or before the 30th June 2017 and if any payment in that respect is made after the date of the
said statutory order and on or before the 31st March 2019, then such payment shall first be adjusted
against the tax and thereafter towards the interest and the balance amount remaining unadjusted shall
then be adjusted towards the penalty and late fee, sequentially,
VOL. 22 - NO. 9 - MAY - JUNE 2019
11
C.V.O. CA'S NEWS & VIEWS
(2) After adjustment of the amount paid on or before the 31st March 2019, the amount remaining as on the
1st April 2019 shall be considered as an arrears and the requisite amount for settlement of said
outstanding amount shall be determined depending upon the fact that whether the arrears pertains to the
period upto 31st March 2010 or pertains to the period starting from 1st April 2010 and ending on 30th
June 2017 and also whether the applicant has submitted the application for settlement and made the
payment of the requisite amount before the last date provided for the said payment and submission of
application under the First Phase or the Second Phase.
(3) Further the amount of arrears in respect of the specified period towards the return dues or the tax,
interest or late fee as recommended to be payable by the dealer, in the audit report, by the auditor and
accepted by the dealer wholly or partly, any amount paid towards the arrears on or before the 31st March
2019 shall be subjected to adjustment in the order of tax, interest and late fee. After such adjustment, the
amount outstanding as on 1st April 2019 shall be considered as the amount available for the settlement.
(4) It may be noted that arrears of tax, interest or late fee in respect of the returns or revised returns for the
specified period that are filed or arrears of tax, interest, penalty or late fee payable as per statutory orders
that are passed after the 15th July 2019 shall not be eligible for the settlement.
(5) Similar provisions shall also be applicable to the statutory orders including the order passed in appeal or
order passed by the Tribunal. In case such orders are passed after 15th July 2019, no settlement shall be
available against the arrears of tax, interest, penalty or, as the case may be, the late fee.
(6) Waiver from late fees in respect of the returns filed during the amnesty period shall be available for the
settlement.
(7) Subject to the other provisions of this Ordinance, an applicant whether registered or not under the
Relevant Act, shall be eligible to make an application for settlement of arrears of tax, interest, penalty or l
ate fee in respect of the specified period, whether such arrears are disputed in appeal or not.
(8) The applicant, who has availed benefits under earlier 2016 Amnesty will also be eligible to make an
application under this Ordinance.
Conditions for settlement of arrears:
(1) The applicant shall make a separate application for each class of arrears on or before the last date
provided for the period of Phases mentioned in Annexure-A or Annexure-B.
(2) The application is required to be uploaded online to the nodal officer in Form-I and Form-IA as the case
may be.
(3) Every such application shall be accompanied by the proof of payment of the requisite amount as
determined and the copy or order against which amnesty is preferred.
(4) Where any appellate authority including Tribunal or the Court has remanded case back to any authority
under the Relevant Act, for giving effect to the directions given therein and such order has not been passed
on or before the 15th July 2019, then such cases shall not be eligible for settlement under this Ordinance:
VOL. 22 - NO. 9 - MAY - JUNE 2019
12
C.V.O. CA'S NEWS & VIEWS
Provided that, the applicant can settle the amount of tax, interest, penalty or late fee as per the directions
given by the said authority or the Court and in case, no such specific directions are given then such tax,
interest, penalty or late fee can be determined by the applicant on his own and can upload application in
Form-IA.
(5) Under any circumstances, the applicant shall not be entitled to any waiver in respect of undisputed tax.
(6) No application under this Ordinance shall be entertained in respect of the applicant, who has taken the
credit of set off under the Relevant Act, in the Electronic Credit Ledger, provided under the Goods and
Services Tax Act, unless the credit equivalent to the amount for which the settlement application is filed is
reversed by debiting the Electronic Credit Ledger or the Electronic Cash Ledger, on or before the date of
submission of application for settlement.
Withdrawal of appeal:
(1) Where the applicant has filed the appeal, reference, Writ Petition, Special Leave Petition, then withdrawal
of such appeal, reference, Writ Petition, Special Leave Petition shall be condition precedent for availing
the benefits under the Ordinance. The acknowledgement shall be treated as sufficient proof towards the
withdrawal of appeal
(2) However, if in respect of any order, audit objections have been raised and an appeal is preferred against
that order, then the appeal shall not be allowed to be withdrawn. The appellate authorities shall dispose of
such appeals expeditiously. Similarly proceeding of revision/ reassessment/rectification initiated in
pursuance of audit objections shall be completed expeditiously so that dealer can avail the benefit of
settlement. The dealers are requested to approach and co-operate with the concerned authorities for
early disposal of such cases.
(3) Appellate authority including Tribunal is required to pass the order allowing the withdrawal of appeal
either fully or partly as desired by the appellant. This facility is provided so that the maximum cases and
arrears is settled under the Ordinance.
(4) Where, the applicant, desires to withdraw the appeal in respect of certain issues and desires to continue
the appeal for certain other issues, then, the said applicant shall specify details in the appeal withdrawal
application in Form-II about the issues against which the appeal is withdrawn and issues against which
the appeal is continued.
(7) The applicant shall specify, in the said appeal withdrawal application the amount of tax, interest, penalty
or the late fee corresponding to tax, interest, penalty or late fee vis-a-vis issues for which the appeal is
desired to be withdrawn and for which the settlement application is desired to be filed. Further, the
applicant shall also mention in the settlement application the amount of tax, interest, penalty or late fee
for which the settlement is desired.
Verification of correctness and completeness of application and issuance of defect notice:
1) The designated authority shall verify and confirm that the application is accompanied with documents
mentioned in the application form.
(2) On verification of the application, in case it is noticed that, the said application is incorrect or incomplete
or the requisite amount paid is deficient, then, the nodal officer shall issue defect notice, as far as possible
within fifteen days from the date of receipt of the application, and intimate the applicant about the defects
in the application along with the details of the requisite amount to be paid:
VOL. 22 - NO. 9 - MAY - JUNE 2019
13
C.V.O. CA'S NEWS & VIEWS
Provided that, the defect notice in respect of an application shall be issued only once.
(3) The applicant shall, within fifteen days of the receipt of the defect notice, correct the defects and make the
payment, if any, and submit such application to the designated authority:
Provided that, in no case, the applicant shall be permitted to make such payment, as specified in the
defect notice, after the 31st July 2019.
(4) In case the applicant fails to correct the defects so communicated including the additional payment, if any,
then, the nodal officer may, for reasons to be recorded in writing and after giving him an opportunity of
being heard, pass an appropriate order:
Provided that, the designated authority, subject to the provisions of the Ordinance shall not deny the
proportionate benefits as may be available to the said applicant considering the Phase in which the
requisite amount is paid.
Settlement of arrears and passing of order of settlement:
(1) If the designated authority is satisfied that the applicant has paid the requisite amount determined,
then the nodal officer shall pass an order and provide the copy of the said order to the applicant and
thereupon, notwithstanding anything contained in the Relevant Act, such applicant shall be
discharged of his liability to the extent of the amount of waiver specified in the order of the settlement.
(2) Where, the application for settlement of arrears of tax, interest, penalty or late fee is not in accordance
with the provisions of this Ordinance, then, the nodal officer may, by order, in writing, reject the
application, after giving an opportunity of being heard to the applicant.
(3) The nodal officer may, on his own motion or on application of the applicant, within six months from the
date of the receipt of the order of the settlement by the applicant, rectify any error apparent from the
record after giving an applicant an opportunity of hearing.
Appeal against Amnesty Order:
(1) An appeal against the amnesty shall lie to,—
(a) The Deputy Commissioner of Sales Tax, if the order is passed by the authority subordinate to him;
(b) The concerned Joint Commissioner of Sales tax, if the order is passed by the Deputy Commissioner of
Sales Tax, concerned.
(2) The appeal shall be filed within sixty days from the date of receipt of the amnesty order and no appeal filed
thereafter shall be entertained unless the delay is condoned appellate authority.
Credit of tax payment, if Amnesty rejected:
Under no circumstances, the applicant shall be entitled to get the refund of the amount paid under
Amnesty Scheme.
However, the amount paid by the applicant under Amnesty Scheme shall be treated to have been paid under
the respective Act.
VOL. 22 - NO. 9 - MAY - JUNE 2019
14
C.V.O. CA'S NEWS & VIEWS
List of Forms:
The list of Forms to be used under this Ordinance are given in the Table-4 below:
Table-4
VOL. 22 - NO. 9 - MAY - JUNE 2019
15
C.V.O. CA'S NEWS & VIEWS
Typically month of May in the calendar year is a relaxing month for a Chartered Accountant. There are no due
dates of various major compliances to be adhered to. However, this year GST Annual return and audit season
is upon us.
These compliances are being carried out for the first time. Hence, one needs to be extra cautious as to how to
efficiently comply with legal provisions and forms. The best way to commence any compliance related work is
to have some kind of a checklist or data template ready. All data / information is collected at one go and nothing
major is missed out.
Brief background
1. GSTR 9 is to be filed by all registered persons other than Input Service Distributor, a person paying tax
under section 51 or section 52, a casual taxable person and a non-resident taxable person.
2. It is to be furnished online before 30th June 2019 pertaining to FY 2017-18
3. GSTR 9 cannot be revised
4. FORM GSTR-1 & FORM GSTR-3B pertaining to FY 2017-18 are required to be filed before the filing of
return FORM GSTR-9
5. Supplies 'made during the year' needs to be reported instead of 'as declared in returns filed during the year'
courtesy of Notification No 74/2018 – Central Tax dated 31st December, 2018. Now additional liability, if
any, can be reported.
6. FORM GSTR 9 cannot be used to avail ITC. If taxpayer has failed to avail ITC pertaining to FY 2017-18
upto due date of filing GSTR 3B return of March 2019, then said ITC shall be lapsed.
7. Towards the end of the return, taxpayers shall be given an option to pay any additional liability declared in
this form, through FORM DRC-03. Taxpayers shall select ― Annual Return in the drop down provided in
FORM DRC-03. It may be noted that such liability can be paid through electronic cash ledger only.
8. HSN summary of inward supply are required to be declared only for those inward supplies which in value
independently account for 10 % or more of the total value of inward supplies.
9. Decent knowledge of GST legislation and provisions is a pre-requisite to carry out these assignments.
10. Understanding the nature of business of the taxpayer
11. Though persons to whom GST audit is not applicable (turnover below Rs. 2 crores), the information to be
reported has to be thoroughly verified as per books of accounts and Income tax return filed so that any
liability may not arise in future assessments.
Keeping in mind above facts and information, it is best practise to prepare a data sheet template in which
all the relevant details pertaining to GST annual return can be captured
Compiled by:
CA Chintan Rambhia
CHECKLIST FOR GSTR 9CHECKLIST FOR GSTR 9
KEY INFORMATION AND REPORTS REQUIRED TO COMMENCE FILING ANNUAL RETURN IN FORM GSTR- 9
VOL. 22 - NO. 9 - MAY - JUNE 2019
16
C.V.O. CA'S NEWS & VIEWS
Key information / reports that could be a part of the data template sheet.
State specific invoice wise detail Outward Supplies made during the year. Following information may be called for:
o Name of the Partyo GSTIN of Recipiento Invoice Numbero Invoice dateo Period which shown in GSTR 1o Total Invoice Valueo Place of Supplyo Invoice Typeo Taxable Valueo IGSTo CGSTo SGST / UGSTo Cess Amounto Exempt / NIL rated supplieso Non-GST supplies
State specific invoice wise detail Credit / Debit notes against sales invoices issued during the period 1 July
2017 to 31 March 2018. Following information may be called for:
o Name of the Partyo GSTIN of Recipiento Credit / debit note numbero Invoice dateo Original Sales Invoice numbero Original Sales Invoice dateo Period which shown in GSTR 1o Total Invoice Valueo Place of Supplyo Reason for issuanceo Document typeo Whether Pre GSTo GST Rateo Taxable Valueo IGSTo CGSTo SGST / UGSTo Cess Amounto Exempt / NIL rated supplieso Non-GST supplies
State specific invoice wise details of Advance received for outward supplies during the year. Following information may be called for:
o Name of the Partyo GSTIN of Recipiento Receipt voucher noo Receipt dateo Total Value received
VOL. 22 - NO. 9 - MAY - JUNE 2019
17
C.V.O. CA'S NEWS & VIEWS
o Place of Supplyo GST Rateo Taxable Valueo IGSTo CGSTo SGST / UGSTo Cess Amounto Exempt / NIL rated supplieso Non-GST supplieso Original invoice no adjustedo Original invoice date adjustedo Refund voucher noo Refund voucher date
Reconciliation of outward supplies reported in books of accounts, GSTR 3B and GSTR 1 and Income tax returns
State specific invoice wise details of RCM payable under Section 9 (3) and Section 9 (4) of CGST Act. Following information may be called for:
o Name of the Suppliero GSTIN of Recipiento Invoice Number / Self invoice numbero Invoice dateo Total Invoice Valueo Place of Supplyo Nature of expenseo Accounting ledger Nameo GST Rateo Taxable Valueo IGSTo CGSTo SGST / UGST
State specific invoice wise details of inward supplies and returns on which ITC is availed. Following information may be called for:
o Name of the Suppliero GSTIN of Suppliero Invoice Numbero Invoice dateo Total Invoice Valueo Place of Supplyo Supplier Typeo Whether Goods or Serviceo Account ledger (to verify eligibility of ITC)o GST Rateo Taxable Valueo IGSTo CGSTo SGST / UGSTo Cess Amounto Exempt / NIL rated supplieso Non-GST supplies
VOL. 22 - NO. 9 - MAY - JUNE 2019
18
C.V.O. CA'S NEWS & VIEWS
o Date of goods receivedo Date of paymento Year in which ITC claimed in GSTR 3Bo Reflected in GSTR 2A (Y/N)
State specific HSN summary of inward and outward supplies during the year
o Descriptiono HSNo Unit of measuremento Total Quantityo Total value o Total Taxable Valueo IGST o Central Tax o State Tax o Cess
State specific GST payable / paid reconciliation between books and GST returns for year ending 31 March 2018
State specific details of credits availed in GST FORM TRAN-1
State specific details of demands and refund claimed in following format
A working pertaining to reversal of ITC under Rule 42, 43 of CGST Rules 2017 can also be prepared if said provisions are attracted
Monthly and annual summary of figures reported in Form GSTR 3B and Form GSTR 1 and its comparison
Any other information as may be deemed fit
Details CGST SGST IGST Cess Interest Penalty Late Fees /
Other
Total Refund claimed
Total refund sanctioned
Total refund rejected
Total refund rejected
Total demand of taxes
Total taxes paid in respect of above demand
Total demands pending to be paid out of above demand
VOL. 22 - NO. 9 - MAY - JUNE 2019
19
C.V.O. CA'S NEWS & VIEWS
Compiled by:
E Way Bill System with the Forthcoming changes in E-Way bill system dated 25-03-2019 &
23-04-2019 and consequences of not adhering to E-Way Bill norms
The e Way Bill has been introduced as an anti-tax evasive mechanism that will help the government to plug in
the leakage in revenue. It has substituted the Way Bill of the earlier VAT-excise regime.
A consignor/consignee/transporter is obligated under GST law to generate the Electronic Way Bill. The Bill has
to be generated for the transportation of any consignment that is valued at over Rs. 50,000. However as per
Notification No 15E/2018- State Tax issued by Commissioner of State Tax, Maharashtra State, no e-way bill
shall be required to be generated for the intra-state movement in the state of Maharashtra, in respect of any
goods not exceeding RS 1 Lakh and in respect of Hank, Yarn, fabric and Garments if are transported for a
distance of up to fifty kilometers within the state of Maharashtra for the purpose of Job work of any value.
The GST law stipulates that designated field officers can intercept vehicles carrying goods. The officers can
check documents like invoices and e-Way Bills. The verification process can be conducted at any time and at
any place by mobile squads as check posts have been abolished under GST.
If any vehicle transports goods without the Digital e Way Bill, authorities can detain and seize the vehicle
containing the goods. The goods are only released when the appropriate tax and penalty are paid. If the
requisite tax and penalty are not paid within seven days of the detention, authorities can confiscate both the
goods and the vehicle.
The consequences
There are several consequences for not generating and carrying the e Way Bill:
a) It may so happen that tax has been paid on the basis of an invoice generated for the supply of goods but the e
Way Bill has not been generated. In such a case, there is no tax-related implication. However, if caught, the
authorities may levy a fine of Rs. 10,000.
Even if the appropriate taxes are paid, the authorities can allege that the e Way Bill was not generated as the
consignor wanted to evade paying the applicable tax. Therefore, the authorities will be in their limits to impose
a penalty that is equivalent to the tax amount being evaded.
b) Seizure of goods may result in disruption of routine operations of a business. Other businesses may not be
able to allow for the delay in delivery or receipt of goods due to confiscation during transit.
c) Any proceeding for non-compliance against any business is sufficient to put a dent in that business's
reputation. The authorities could take action on other GST assessments. Furthermore, there is always a
chance of future consignments being stopped and checked by authorities. This will lead to unnecessary
hassles.
CA Jinesh P. Gada,
B.Com, A.C.A, ISA, M.B.A., DIP (IFR), U.K.,
E-WAY BILL SYSTEME-WAY BILL SYSTEM
VOL. 22 - NO. 9 - MAY - JUNE 2019
20
C.V.O. CA'S NEWS & VIEWS
Central Board of Indirect Taxes and Customs has issued Notification No. 22/2019- Central Tax dated 23-04-
2019 and appointed 21-06-2019 as the date from which the provisions of the Central Goods and Service Tax st(Fourteenth) Amendment Rules, 2018 Rule 12 of (Notification No. 74/2018 – Central Tax dated 31 Dec 2018
shall come into force.
Rule 12 as mentioned above is reproduced as below
12. In the said rules, after rule 138D, from a date to be notified later (now notified date is 21-06-2019), the
following rule shall be inserted, namely:-
“138E. Restriction on furnishing of information in PART A of FORM GST EWB-01.- Notwithstanding anything
contained in sub-rule (1) of rule 138, no person (including a consignor, consignee, transporter, an e-
commerce operator or a courier agency) shall be allowed to furnish the information in PART A of FORM GST
EWB-01 in respect of a registered person, whether as a supplier or a recipient, who,— (a) being a person
paying tax under section 10 (paying tax under Composite scheme), has not furnished the returns for two
consecutive tax periods; or (b) being a person other than a person specified in clause (a), has not furnished
the returns for a consecutive period of two months: Provided that the Commissioner may, on sufficient cause
being shown and for reasons to be recorded in writing, by order, allow furnishing of the said information in
PART A of FORM GST EWB 01, subject to such conditions and restrictions as may be specified by him:
Provided further that no order rejecting the request of such person to furnish the information in PART A of
FORM GST EWB 01 under the first proviso shall be passed without affording the said person a reasonable
opportunity of being heard: Provided also that the permission granted or rejected by the Commissioner of
State tax or Commissioner of Union territory tax shall be deemed to be granted or, as the case may be, rejected
by the Commissioner. Explanation:– For the purposes of this rule, the expression ―Commissioner� shall
mean the jurisdictional Commissioner in respect of the persons specified in clauses (a) and (b).
My Comments:
So after 21-06-2019 if Supplier or receiver has not furnished the return of two consecutive tax periods then
Part 'A' of Form GST EWB-01 shall be disallowed to be furnished by any person including a consignor,
consignee, transporter, an e-commerce operator or a courier agency. So if Supplier or Receiver has not filed
April 2019 & May 2019 GST returns if they are supposed to file monthly return then from 21-06-2019, PART
'A 'of Form GST EWB-01 shall not be allowed to be filed by any person including a consignor, consignee,
transporter, an e-commerce operator or a courier agency.
However the jurisdictional Commissioner may, on sufficient cause being shown and for reasons to be
recorded in writing, by order, allow furnishing of the said information in PART 'A' of FORM GST EWB 01,
subject to such conditions and restrictions as may be specified by him. Commissioner may also reject the
request after affording the said person a reasonable opportunity of being heard.
So timely furnishing of GST Returns is a necessity if E-WAY Bill is to be generated.
Forthcoming changes in e-Waybill system Dated 25-03-2019
1. Auto calculation of route distance based on PIN code for generation of EWB. Now, E-waybill system is being
enabled to auto calculate the route distance for movement of goods, based on the Postal PIN codes of source
and destination locations. That is, the e-waybill system will calculate and display the actual distance between
the supplier and recipient addresses. User is allowed to enter the actual distance as per his movement of
goods. However, it will be limited to 10% more than the displayed distance for entry. That is, if the system has
displayed the distance between Place A and B, based on the PIN codes, as 655 KMs, then the user can enter the
actual distance up to 720KMs (655KMs + 65KMs). In case, the source PIN and destination PIN are same, the
VOL. 22 - NO. 9 - MAY - JUNE 2019
21
C.V.O. CA'S NEWS & VIEWS
user can enter up to a maximum of 100KMs only. If the PIN entered is incorrect, the system would alert the
user as INVALID PIN CODE. However, he can continue entering the distance. Further, these e-waybills having
INVALID PIN codes are flagged for review by the department.
Route distance calculation between source and destination uses the data from various electronic sources.
This data employs various attributes, for example: road class, direction of travel, average speed, traffic data
etc. These attributes are picked up from traffic that is on National highways, state highways, expressways,
district highways as well as main roads inside the cities. A proprietary logic is then used for approximating the
distance between two postal pin codes. The distance thus derived is then provided as the motorable distance
at that point of time.
My Comments:
As, many factors are considered in auto calculating distance so chances of more than 10% variation (which is
not allowed ) by user while entering the actual distance as per his movement of goods and auto calculation of
route distance by system will be remote. The said change is a welcome change & would like to stop entering
fake distance in km by user.
2. Blocking of generation of multiple E-Way Bills on one Invoice/document Based on the representation received by the transporters, the government has decided not to allow generation of multiple e-way bills based on one invoice, by any party – consignor, consignee and transporter. That is, once E-way Bill is generated with an invoice number, then none of the parties - consignor, consignee or transporter - can generate the E-Way Bill with the same invoice number. One Invoice, One E-way Bill policy is followed. The change will come in the next version.
My Comments:
One Invoice, One E-way bill is also a welcome change to find out correct consignment value per E-way bill per
Invoice no. So Government will get correct Management Information System (MIS). Also one has to decide
beforehand who will generate E – Way bill consignor, consignee or transporter.
3. Extension of E-Way Bill in case Consignment is in Transit the transporters had represented to incorporate
the provision to extend the E-way Bill, when the goods are in transit. The transit means the goods could be on
Road or in Warehouse. This facility is being incorporated in the next version for the extension of E-way Bill.
During the extension of the e-way bill, the user is prompted to answer whether the Consignment is in Transit
or in Movement. On selection of In Transit, the address details of the transit place need to be provided. On
selection of In Movement the system will prompt the user to enter the Place and Vehicle details from where the
extension is required. In both these scenarios, the destination PIN will be considered from the PART-A of the E-
way Bill for calculation of distance for movement and validity date. Route distance will be calculated as
explained above.
4. Blocking of Interstate Transactions for Composition dealers. As per the GST Act, the composition tax
payers are not supposed to do Interstate transactions. Hence next version will not allow generation of e-way
bill for inter-state movement, if the supplier is composition tax payer. Also, the supplies of composition tax
payers will not be allowed to enter any of the taxes under CGST or SGST for intrastate transactions. In case of
Composition tax payer, document type of Tax Invoice will not be enabled.
My Comments:
More system controls are introduced in E – way bill system for composition tax payers which are in line with
GST Act.
VOL. 22 - NO. 9 - MAY - JUNE 2019
22
C.V.O. CA'S NEWS & VIEWS
Below is the data of e-way bills for the year 2018-2019
One year of successful Journey (2018 - 19)
Few case laws on E-Way Bills
1) After the case of Madhya Pradesh High Court, bench at Indore, W.P. No 12399 of 2018, Kintetsu
Express Pvt Ltd V/S Commissioner, Commissioner Tax of MP & others, we will come to know the
importance of generation of correct e-way bill.
Treating the e-way bill as merely a 'procedural' requirement can have serious consequences, as the Madhya
Pradesh High Court's dismissal of a petition makes the same quiet clear. The petitioner is a Private Limited
Company engaged in the business of muti model transportation of shipments, supply chain management and
other allied services such as door to door pick-up and delivery of the shipments etc. Under the SGST Rules,
the petitioner was required to carry an e-way bill generated in Form GST EWB-01, with details filled in both
Part A and Part B of the form. The petitioner, however, had not filled details of conveyance in Part B of the e-way
bill. The vehicle was intercepted by the authorities and since Part B of the form was incomplete, the authorities
passed an order demanding tax on the value of the goods Rs 19,52,264 as well as a penalty equal to the tax
liability. The penalty was subsequently increased to the value of the goods (INR 1,12,61,419) as the owner of
the goods appears to have failed to present himself before the authorities.
Aggrieved by the order and the rejection of its appeal before the Appellate Authority, the petitioner filed a writ
petition before the Madhya Pradesh High Court. The High Court dismissed the writ petition against the order
of the Appellate Authority, observing that:
The judgment of VSL Alloys relied upon by the petitioner (a similar case in which the penalty was
withdrawn) was not applicable to the present case as VSL Alloys was not liable to fill up Part B. While
the distance was less than 50 km for VSL Alloys, it was 1,200-1,300 km in the given case. Thus, it was
mandatory for the petitioner to file Part B of the e-way bill.
The petitioner violated the provisions of GST Act and the penalty was appropriately levied.
The argument of a technical error could not be accepted by the authority because the portal of the
goods or service tax provides for an option of the grievance in case the petitioner was having any
problem in updating the Part B of the e-way bill. No such grievance has been raised by the petitioner
and has never given any written grievance so that the grievance with regard to the updating the
technical error could not have been considered.
2) In 'Vikram Solar Private Limited V. Union of India' – 2018 (4) TMI 1139 - ALLAHABAD HIGH COURT
(decided on 04.01.2018) the petitioner has challenged the seizure order dated 16.12.2017 passed
No. of e-way bills generated 5577 Lakhs
No. of inter-state e-way bills generated 2487 Lakhs
No. of intra-state e-way bills generated 3090 Lakhs
No. of Tax Payers Registered in EWB 28.89 Lakhs
No. of Transporters enrolled in EWB 0.41 Lakh
VOL. 22 - NO. 9 - MAY - JUNE 2019
23
C.V.O. CA'S NEWS & VIEWS
under section 129(1) of UPGST Act. A show cause notice was issued in this regard under section
129(3) of the Act. The goods have been carried from West Bengal to Ghaziabad. The ground for seizure
is that the E-way bill had not been downloaded. It has come on record that before seizure there was
some problem in downloading the E-way Bill. The High Court directed to release the vehicles and
goods subject to deposit of bank guarantee, equal to the value of the tax on goods.
3) In 'Abicor and Binzel Technoweld Pvt. Ltd. Versus The Union of India and Another' - 2018 (2) TMI 766 -
BOMBAY HIGH COURT, the petitioner says that the Electronic Way Bills Rules have yet to come into
force. Therefore, without access to the online profile, the petitioner cannot generate E-way bills.
Without such E-way bills, the petitioner will not be allowed to move the goods anywhere and that will
paralyze its business. Lack of access would mean that the petitioner is unable to file return or pay tax
or undertake any other compliance required by the statute. The High Court held that the special
sessions of Parliament or special or extraordinary meetings of Council would mean nothing to the
assessees unless they obtain easy access to the website and portals. The regime is not tax friendly. The
High Court hoped and trusted that those in charge of implementation and administration of this law
will at least now wake up and put in place the requisite mechanism.
4) In 'M/s Vinayaga Roofings V. Asst. State Tax Officer' - 2018 (5) TMI 368 - KERLA HIGH COURT (decided
on 27.04.2018) the petitioner challenges the detention of his vehicle ordered. He says that the primary
reason is that the consignment was not supported by e-way bill and though he concedes that this is a
violation of the statutory rules, he offers to furnish bank guarantee for the entire amount for releasing
the vehicle. The High Court ordered the petitioner to furnish a bank guarantee for an amount of Rs.
1,12,148/-, and on the petitioner executing a bond under Rule 140(1) of the CGST Rules. As soon as
the bank guarantee is furnished and the bond is executed, the vehicle will be released to the petitioner.
Conclusions:
1) The e Way Bill has been introduced as an anti-tax evasive mechanism that will help the
government to plug in the leakage in revenue.
2) Consequences of not generating E Way bill as per GST Acts & Rules are very high which is
explained by giving few case laws on E Way bills so one has to be careful while generating E Way
bills.
3) Whether consignor, consignee or transporter will generate e way bill is to be decided
beforehand as now One Invoice, One E Way Bill policy will be followed. One Invoice, One E-way
bill is also a welcome change to find out correct consignment value per E-way bill per Invoice
no. So Government will get correct Management Information System (MIS). 4) Now, E-waybill system is being enabled to auto calculate the route distance for movement of
goods, based on the Postal PIN codes of source and destination locations. User is allowed to
enter the actual distance as per his movement of goods. However, it will be limited to 10% more
than the displayed distance for entry.
5) After 21-06-2019 if Supplier or receiver has not furnished the return of two consecutive tax
periods then Part 'A' of Form GST EWB-01 shall be disallowed to be furnished by any
person including a consignor, consignee, transporter, an e-commerce operator or a courier
agency. So timely furnishing of GST Returns is a necessity if E-WAY Bill is to be generated.
VOL. 22 - NO. 9 - MAY - JUNE 2019
24
C.V.O. CA'S NEWS & VIEWS
Compiled by:
GST: RECENT JUDICIAL PRONOUNCEMENTS
SC stays Gujarat HC decision which held Section 140(3)(iv) ultra-vires
Details: Union of India V/s. Filco Trade Centre
Pvt. Ltd.
Appeal Number: Special Leave to Appeal (C)
No(s). 32709-32710/2018
Date of Judgement: 02/01/2019
View of Gujarat High Court: Gujarat High Court
held that one year restriction u/s. 140(3)(iv) of CGST
Act , 2017 to c la im t rans i t iona l c red i t i s
unconstitutional since duty paid on inputs is as
good as tax paid and creates a vested right, which
cannot be taken away by introducing a condition
with retrospective effect. Judgement was
delivered in Special Civil Application No. 18433
of 2017 dated 05/09/2018.
Decision: Bombay High Court had taken a
different view which was in favour of the
Government but the same was not followed by
the Gujarat High Court in the impugned
judgment. In view of difference of opinion
between the High Courts, operation of
Judgement of Gujarat High Court is stayed.
SC to clarify position of lawon power to arrest
under GST
Details: Union of India V/s. Sapna Jain & Others
(Supreme Court of India)
Appeal No.: SLP(Crl.) Nos. 4322-4324/2019
Date of Judgement : 29/05/2019
Fact: The petitions contest the power of the
Revenue to make arrests for contravention of the
provisions of the GST Act.
Outcome: As the different High Courts took
divergent views in this regard, the position of law
must be clarified by Supreme Court.
Remark cum interim decision by Supreme
Court: While entertaining any such requests in
future, the order of the Telangana High Court be
kept in mind, which has said that individuals
can't be given protection from arrest in such
cases. This order has earlier been upheld by the
apex court.
Decision: The present matters as well as
connected matters be listed before a three judge
Bench to decide the question of law on the power
of arrest.
No Stay on arrest for GST evasion; FIR
Maintainable: Allahabad HC
Details: Govind Enterprises V/s. State of U.P.
(Allahabad High Court)
Appeal No.: Criminal Misc. Writ Petition No. -
7303 of 2019
Date of Judgement: 30/05/2019
FIR Details: The dealer fraudulently, with a
dishonest intention, by submitting false
documents, with an intention to evade taxes,
obtained registration, thereafter, took inward
supply and passed on the goods to end users,
without generating outward supply bills, received
money in cash and deposited the same in bank
account which was not declared at the time of
seeking registration.
Assessee's Arguments: Except for offences
specified in 132(5), 132(4) of the U.P. Act renders
all offences under the U.P. Act non cognizable,
therefore no FIR can be lodged.
Decision: Court has observed that in a few
decisions of the Apex Court, it has been held that,
in suitable cases, to ensure that a person's liberty
is not jeopardized, on account of false
implication, protection from arrest, pending
investigation, may be granted by superior courts
but that power is not ordinarily to be exercised in
matters relating to economic fraud. As, in such
matters, stay on arrest may become a hurdle in
thorough investigation of the matter, particularly
in tracing out the money trail. Under the
VOL. 22 - NO. 9 - MAY - JUNE 2019
25
CA Nitin D. Kenia CA Bharat K. Gosar
C.V.O. CA'S NEWS & VIEWS
circumstances, High Court did not find this to be
a fit case where any relief should be granted.
HC denies bail in Wrongful availment of GST
input tax credit Madhya Pradesh HC :
Details: Jagdish Kanani V/s. Commissioner,
CGST & CE
Appeal No.: M. Cr. C. No. 3472/2019
Date of Judgement: 26/02/2019
Facts: Assesse along with main accused created
many bogus and fake firms and issued fake
invoices to get the input tax-credit through these
invoices and defrauded the Govt. Exchequer. In
his statement, he has admitted that he did not
receive any goods physically nor he sold any
goods and he did not submit any GST return.
Assesse's Arguments: His statement has already
been recorded and his custody is not required for
further investigation and he will cooperate in
further investigation, if any, and is ready to
appear before the respondent/prosecution as
and when his presence is required. The
investigation may take long time to conclude,
hence he deserves to be released on bail.
Department view: The statement recorded by
the petitioner is admissible in evidence and
which can be used against him in the trial as held
by this Court in the case of M/s. R.S. Company
V/s. Commissioner of Central Excise (CEA
No.24/2012) decided on 8/2/2017. The main
accused have not been arrested so far, hence the
bail application be rejected.
Decision: In view of the statement of the
petitioner recorded u/s. 70 of the GST Act and
the fact that the main accused have not been
arrested so far, in the considered opinion of this
Court, the petitioner is not entitled for grant of
bail.
Release of goods on furnishing security of immovable property Punjab and Haryana
High Court
Details: M/s. R.R. Enterprises And Another V/s.
State of Punjab
Appeal No.: CWP No. 28357 of 2018
Date of Judgement: 31/05/2019
Decision: The High Court has directed the department to release the goods and vehicle of
the petitioner after furnishing the immovable security within 2 days.
ITC (GST) denial for default of supplier-
Delhi HC issued notice to UOI
Details: Bharti Telemedia Ltd. V/s. Union of
India & Others
Appeal No.: W.P.(C) 6293/2019
Date of Judgement: 29/05/2019
Arguments: The provisions have been
challenged on the grounds that Section 16(2)(c),
proviso to Section 16(4) is violative to Article 14
of the Constitution of India. The Department has
been vested with all the powers to recover any
revenue lost owing to non-payment of taxes by
erring suppliers. The credit cannot be denied to
the recipient for the default on the part of
supplier. Decision: Delhi HC has issued a notice to Union
of India and the matter will be heard on 18/09
2019.
HC Stays recovery of interest demanded on
gross GST liability : Delhi HC
Details: M/s. Landmark Lifestyle V/s. Union of
India & Others (Delhi High Court)
Appeal No.: WP(C) No. 6055/2019
Date of Judgement: 27/05/2019
Arguments: The calculation of the interest
payable for delayed payment of GST as
determined by the department is erroneous.
According to him, interest has been calculated
even on the amount constituting the input tax
credit which is in fact to be adjusted against the
tax liability. He states that on the actual tax
liability, interest has been paid by the Petitioner.
He further states that against the total tax
liability of Rs. 3.31 crores the interest liability
works out to Rs. 8.19 crores which makes it
unreasonable and erroneous.
Interim relief: No coercive action be taken
against the assesse for non-payment of the
interest amount.
Hearing: The matter will be heard on
30/09/2019.
VOL. 22 - NO. 9 - MAY - JUNE 2019
26
C.V.O. CA'S NEWS & VIEWS
Interest on Gross amount without Allowing ITC : Telangana High Court
Deta i l s : M / s . M e g h a E n g i n e e r i n g & Infrastructures Ltd. V/s. The Commissioner of Central Tax
Appeal No.: Writ Petition No.44517 of 2018
Date of Judgement: 18/04/2019
Interpretation and decision: Until a return is
filed as self-assessed, no entitlement to credit
and no actual entry of credit in the electronic
credit ledger takes place. It is only after a claim is
made in the return that the same gets credited in
the electronic credit leger and it is only after a
credit is entered in the electronic ledger that a
payment could be made. The tax already paid on
the inputs of supplies of goods and services
available somewhere in the air should be tapped
and brought in the form of credit entry in the
electronic credit ledger and payment has to be
made from out of the same if no payment is made,
the mere availability of the same will not
tantamount to actual payment. Hence, the
liability to pay interest u/s 50(1) arises
automatically and the petitioner cannot escape
from this liability. Recommendations of the GST
Council in it's 31st meeting that interest should
be charged only on the net tax liability of the
taxpayer after taking into account the admissible
input tax credit as communicated in the Press
Release of the Ministry of Finance are still on
paper.
ITC allowed on inputs/services used for mall construction for letting out : Orissa High Court
Details: Safari Retreats Private Limited Vs Chief Commissioner of Central Goods & Service tax
Appeal No. W.P. (C) No. 20463 of 2018
�Date of Judgement: 17/04/2019
Arguments of Assesse: *The credit restriction
imposed u/s 17(5)(d) are meant or intended to be
sold post issuance of completion certificate.
Since such sale does attract GST, the tax chain
breaks. Since the mall would be rent out on
which GST will be levied, there is no distortion in
tax chain.
*Section 17(5)(d) does not restrict ITC on
inputs, where the buildings constructed are sold
before issuance of completion certificate. Thus,
it discriminates between the petitioner and other
assesses who are engaged into the business of
sale of immovable property, although both have
a continuous business. Such discrimination
shall be treated as violation of Article 14 of the
Constitution.
*Denial of ITC will tantamount to double-taxation which is against the principles of natural justice.
*Denial of credit is also violative of Article 19(1)(g) of the Constitution.
*Relied upon decision of the Apex Court Eicher
Motors. Ltd V/s. Union of India [(1999) 2 SCC
361] and Collector of Central Excise V/s. Dai
Ichi Karkaria [(1999) 7 SCC 448) to hold that
the credit of excise duty paid on inputs is
admissible if the raw material is to be used in the
production of excisable goods. That the right to
avail credit is indefeasible.
Defense by Revenue: Relied on IOCL V/s. State
of Bihar [TS–347-SC-2017-VAT] & Cellular
Operators Association of India and Others V/s.
UOI [2018-TIOL-310-HC-DEL-ST] further
Section 17(5) prescribes certain restrictions on
utilization of ITC, it would mean that the
legislature has decided in its wisdom the credit
of taxes which would not be allowed and
therefore such claim cannot be obtained
through judicial review.
Decision: The Hon'ble Court observed that the
narrow construction of interpretation put
forward by the department is frustrating the
very objective of the Act. The Hon'ble Court
relied upon Eicher Motors (Supra) and held
that the very purpose of credit is to give benefit
to the assesse, since the petitioner is liable to
pay GST on rental income, the corresponding
credit should not be restricted u/s 17(5)(d). The
provision cannot be held ultra-vires.
Do not levy Penalty for GST system problem due to design limitation: Delhi High Court
Details: Clix Capital Services (Pvt.) Ltd. V/s. Union of India (Delhi High Court)
Appeal No.: W.P. (C) No. 1486 of 2018
VOL. 22 - NO. 9 - MAY - JUNE 2019
27
C.V.O. CA'S NEWS & VIEWS
Date of Judgement: 27/03/2019
The problem in system arose on account of
design limitation. The High court directed
department not to raise any demand towards
penalty, interest or late filing fee. Late fee, if any
paid, shall be refunded to the petitioner.
HC allows filing of GSTR-3B without payment of GST : Gujarat High Court
Details: Octagon Communications Pvt. Ltd. V/s. Union of India
Appeal No.: Special Civil Application No. 5873 of 2019
� Date of Judgement: 18/04/2019
Arguments of assesse: There is no condition for
making payment of tax as a pre-condition for
filing return of Form GSTR-3B. It was submitted
that in the absence of any such provision, the on-
line system of the respondents which does not
allow filing of returns without payment of tax
liability admitted as per such returns is contrary
to legal provisions.
Interim relief: The petitioner is permitted to file
manual returns in for the Form GSTR-3Bmonths November, 2017 onwards, which would
be subject to final outcome of the petition.
Decision: The matter will be heard on
13/06/2019.
VOL. 22 - NO. 9 - MAY - JUNE 2019
28
C.V.O. CA'S NEWS & VIEWS
Compiled by:RECENT COMPOUNDING ORDERS RECENT COMPOUNDING ORDERS
1. Introduction:
Compound means to settle a matter by payment of penalty/fee. Compounding is a mechanism that
provides an opportunity to the party to accept the contravention and avoid further consequences after
paying off the monetary payment towards penalty for the contravention.
Under Foreign Exchange Management Act, 1999 (FEMA) the provisions of Section 15 permit
compounding of contraventions and, it empowers Reserve Bank of India (RBI) to compound any
contravention as defined under Section 13 of FEMA, except the contraventions under Section 3(a), on an
application made by the person committing such contravention.
2. Framework of Compounding under FEMA:
Compounding Proceeding Rules, 2000
Master Direction on Compounding of Contraventions
FAQs on Compounding of Contraventions
3. Compounding Process:
A contravention can be suo moto voluntarily admitted and disclosed to RBI or RBI can initiate on
becoming aware of the contravention. On receipt of application for compounding, RBI shall examine the
application based on documents and submissions made in the application and assess whether
contravention is quantifiable and, if so the amount of contravention. Following factors which are only
indicative are taken into consideration for the purpose of passing compounding order and adjudging the
quantum of sum on payment of which the contravention shall be compounded:
a. The amount of unfair advantage, wherever quantifiable.
b. Amount of loss caused to any authority/agency/exchequer as a result of the contravention.
c. Economic benefits accruing to the contravener from delayed compliance or compliance avoided.
d. Repetitive nature of contravention.
e. Track record and / or history of non compliance of contravener.
f. Contravener's conduct in undertaking the transaction and in disclosure of full facts in the application
and submissions made during the personal hearing.
Contraventions relating to any transaction where proper approvals or permission from the
Government or any statutory authority concerned, as the case may be, have not been obtained; such
29
UNDER FEMAUNDER FEMA CA Viral Satra
C.V.O. CA'S NEWS & VIEWS
contraventions would not be compounded unless the required approvals are obtained from the
concerned authorities. Cases of contravention, such as, those having serious contravention suspected
of money laundering, terror financing or affecting sovereignty and integrity of the nation or where the
contravener fails to pay the sum for which contravention was compounded within the specified period
in terms of the compounding order, shall be referred to the Directorate of Enforcement for further
investigation and necessary action under FEMA, 1999 or to the authority instituted for
implementation of the Prevention of Money Laundering Act 2002, or to any other agencies, for
necessary action as deemed fit. In case where adjudication has been done by the Directorate of
Enforcement and an appeal has been filed under section 17 or section 19 of FEMA, 1999, no
contravention can be compounded in terms of Rule 11 of Foreign Exchange (Compounding
Proceedings) Rules, 2000. The applicant shall confirm in the undertaking required to be furnished
along with the compounding application that they have not filed any appeal under section 17 or section
19 of FEMA, 1999. Format of undertaking is prescribed in Master Direction on Compounding of
Contraventions.
RBI has to compound the application within 180 days from the date of receipt of such application.
2. Discussing some of recent Compounding Orders passed by RBI:
a. Acquisition of Agricultural Land by NRI in India
Name of Applicant Sha Mathew
Compounding Application No. C.A. No. 87 /2019 dated 08/03/2019
Authority and Jurisdiction Deputy General Manager,
Reserve Bank of India, New Delhi
Period of Contravention and Period – 5 years 10 months and 4 days
Compounding Fees Compounding Fees – Rs. 24,53,590/-
Facts of Case Mr. Shaw Mathew, NRI has been working in Mexico
since 2007. Since then he has been in Mexico for more
than 182 days in most of financial years. Mr. Mathew
being NRI acquired two agricultural properties in
Kerala in 2012 without obtaining prior permission of
RBI. The cost of both the properties was Rs.
16,38,700/-.
Contravention sought to be Regulation 8 of Notification No. FEMA 21/2000-RB
compounded dated May 03, 2000 states that save as otherwise
provided in the Act or regulations, no person resident
outside India shall transfer any immovable property in
India.
VOL. 22 - NO. 9 - MAY - JUNE 2019
30
C.V.O. CA'S NEWS & VIEWS
Author's Comments In terms of Regulation 8 of FEMA 21, no person
resident outside India shall transfer any immovable
property in India. NRIs are not allowed to acquire
agricultural land in India. In the instant case, Mr.
Mathew being NRI had purchased two agricultural
lands for Rs. 16,38,700/- without prior RBI approval.
Since NRIs are not allowed to own agricultural land,
Mr. Mathew was asked to sale the agricultural land by
RBI and after sale of land RBI compounded the
contravention. Mr. Mathew received 40,30,000/-
towards sales consideration of both lands. He received
undue gain of Rs. 23,91,300/-. The undue gain of Rs.
23,91,300/- earned by Mr. Mathew was fully recovered
by RBI as compounding fees.
Name of Applicant Aricent Technologies (Holdings)
Compounding Application No. C.A. No. 4803/2018 dated 15/04/2019
Authority and Jurisdiction Chief General Manager,
Reserve Bank of India, Mumbai
Period of Contravention and Period – 3 years and 1 month
Compounding Fees Compounding Fees – Rs. 3,72,68,090/-
Facts of Case Aricent Technologies (Holdings) Limited was engaged in
business of providing all kinds of information technology
based and enabled services in India and abroad. With an
intent to expand its business, the company acquired
shares of Mauritius company from its existing
shareholders at USD 9,00,00,000 (Rs. 5,72,58,60,000/-)
. However, Mauritius company was already holding
investment in another Indian Company viz. Aricent
Technologies Private Limited. The resultant structure
amounted to making ODI in an entity with pre-existing
FDI.
Name of Applicant Aricent Technologies (Holdings)
Compounding Application No. C.A. No. 4803/2018 dated 15/04/2019
Authority and Jurisdiction Chief General Manager,
Reserve Bank of India, Mumbai
Period of Contravention and Period – 3 years and 1 month
Compounding Fees Compounding Fees – Rs. 3,72,68,090/-
Facts of Case Aricent Technologies (Holdings) Limited was engaged in
business of providing all kinds of information technology
based and enabled services in India and abroad. With an
intent to expand its business, the company acquired
shares of Mauritius company from its existing
shareholders at USD 9,00,00,000 (Rs. 5,72,58,60,000/-)
. However, Mauritius company was already holding
investment in another Indian Company viz. Aricent
Technologies Private Limited. The resultant structure
amounted to making ODI in an entity with pre-existing
FDI.
c. Making ODI Investment in an entity already having investment in India
(Round Tripping)
VOL. 22 - NO. 9 - MAY - JUNE 2019
31
C.V.O. CA'S NEWS & VIEWS
Contravention sought to be The resultant structure of ODI in an entity with
compounded pre existing FDI lead to contravention of Regulation 5(1)
of Notification No. FEMA 120/2004-RB. Such investment
is not allowed without prior RBI approval. Comments In
terms of Regulation 5(1) of FEMA 120, save as otherwise
provided in the Act, rules or regulations made or
directions issued or without prior approval of RBI, no
person resident in India shall make any direct investment
outside India. The transaction of making ODI in an entity
with pre-existing FDI without prior approval of RBI is
contravention of Regulation 5(1). ODI – FDI structure is
regularized by either unwinding FDI leg or unwinding
ODI leg of the transaction. RBI considers ODI-FDI
structure as round tripping and hence does not consider
the same as bonafide business activity for the purposes of
overseas investment even though overseas entity may be
an operating entity with permitted businesses. The act of
investing back to India is considered as 'non bonafide'
business activity.
d. Payables outstanding beyond three years considered as deemed ECB
Name of Applicant SNC Lavalin Engineering India Private Limited
Compounding Application No. C.A. No. 4802/2018 dated 01/03/2019
Authority and Jurisdiction Chief General Manager,
Reserve Bank of India, Mumbai
Period of Contravention and Rs. 9,20,373/-
Compounding Fees
Facts of Case SNC Lavalin Engineering Private Limited engaged in
business of financing and asset management, engineering,
procurement, construction, training, operations and
maintenance is wholly owned subsidiary of SNC Lavalin
Inc., Canada. SNC Lavalin India received amounts
towards parental support from its parent company. Due
to liquidity problems, SNC India did not repay the said
amounts.
VOL. 22 - NO. 9 - MAY - JUNE 2019
32
C.V.O. CA'S NEWS & VIEWS
Contravention sought to be Since the amounts remained outstanding for more than 3
compounded years, the same were regarded as deemed ECB.
Accordingly, SNC India was observed to be in
contravention of Regulation 6 of Notification No. FEMA
3/2000-RB dated May 03, 2000 read with para 1(i) – not
an eligible borrower, para 1(iv) – end use not permitted,
para 1(xi) – drawing advance without obtaining Loan
Registration Number, para 1(xii) – non reporting of ECB
transaction.
Comments Amounts payable to entity outside India outstanding for
more than 3 years are regarded as deemed ECB by RBI. In
the instant case, SNC Lavalin India could not repay the
amounts received from its parent company and the same
were outstanding for more than 3 years. Accordingly RBI
regarded the same as deemed ECB for SNC Lavalin India
thereby attracting provisions of ECB regulations. Since
outstanding dues for more than 3 years regarded as ECB,
it resulted in further contravention of borrowing by in
eligible borrower, end use not permitted, receiving
amount with obtaining Loan Registration Number and
non reporting of transaction to RBI.
4. Conclusion:
At times the contraventions occur due to in sufficient knowledge of prevalent laws. The party
undertaking transaction should see that all required compliances are done and in case of ambiguity it
is better to approach RBI prior to execution of transaction and seek approval so as to avoid occurrence
of any contravention.
VOL. 22 - NO. 9 - MAY - JUNE 2019
33
C.V.O. CA'S NEWS & VIEWS
BRIEF UPDATE ON BRIEF UPDATE ON SEBI AND CORPORATE LAW SEBI AND CORPORATE LAW SEBI
by CA IP Neha Gada and CA IP Rajen Gada
A. REGULATIONS:
1. Securities and Exchange Board of India
(Real Estate Investment Trusts)
(Amendment) Regulations, 2019
[Issued by the Securities and Exchange
Board of India vide Notification No.
SEBI/LAD-NRO/GN/2019/09 dated April
22, 2019]
The minimum subscription amount has been reduced to Rs. 50,000/- from Rs. 2,00,000/- in initial as well as follow-on public offer. Further, the trading lot has been revised to unit based lot (i.e. 100 units) in place of value based lot (i.e. Rs. 1,00,000/-).
2. Securities and Exchange Board of India
(Infrastructure Investment Trusts)
(Amendment) Regulations, 2019
[Issued by the Securities and Exchange
Board of India vide Notification No.
SEBI/LAD-NRO/GN/2019/09 dated April
22, 2019]
The minimum subscription amount has been reduced to Rs. 10,00,000/- from Rs. 1,00,000/- in initial as well as follow-on public offer. Further, the trading lot has been revised to unit based lot (i.e. 100 units) in place of value based lot (i.e. Rs. 5,00,000/-).
Among other amendments, another key amendment is that InvITs are now permitted to undertake private placement of InvIT units which are not listed.
3. Securities and Exchange Board of India
( M u t u a l Fu n d s ) ( A m e n d m e n t )
Regulations, 2019
[Issued by the Securities and Exchange
Board of India vide Notification No.
SEBI/LAD-NRO/GN/2019/09 dated April
26, 2019]
SEBI has amended various provision so as to enable Mutual Funds to invest in Exchange Traded Commodity Derivatives.
B. CIRCULARS
1. Guidelines for determination of bidding,
allotment and trading lot size for Real
Estate Investment Trusts (REITs) and
Infrastructure Investment Trusts
(InvITs)
[Issued by the Securities and Exchange Board of India vide Circular No. SEBI/HO/DDHS/DDHS/CIR/P/2019/59 dated April 23, 2019]
SEBI has laid the Manner of determining minimum allotment for publicly offered InvITs and REITs and the added disclosure requriements.
For further details, please refer SEBI
website at www.sebi.gov.in.
CORPORATE LAW
A. RULES
1. Companies (Incorporation) Fourth
Amendment Rules, 2019
[Issued by Ministry of Corporate Affairs
vide Notification no. GSR ….(E) dated
April 25, 2019]
The last date for filing of Form INC-22A
(ACTIVE) has been extended to June 15,
2019.
VOL. 22 - NO. 9 - MAY - JUNE 2019
34
C.V.O. CA'S NEWS & VIEWS
2. Companies ( Acceptance of Deposits )
Second Amendment Rules, 2019
[Issued by Ministry of Corporate Affairs
vide Notification no. GSR 341(E) dated
April 25, 2019]
The last date for filing of Form DTP-3 has
been extended till June 29, 2019.
3. Companies (Registration of Charges)
Amendment Rules, 2019
[Issued by Ministry of Corporate Affairs
vide Notification no. GSR …(E) dated
April 30, 2019]
With this amendment, companies will now
be able to create, modify or rectify the
charge subject to Central Government
approval and payment of prescribed fees,
additional fees or advalorem fees.
Amended Forms CHG-1, CHG-8 and CHG9
have been prescribed. These amended
forms with effect from August 1, 2019.
4. C o m p a n i e s ( A p p o i n t m e n t a n d
Qualification of Directors) Amendment
Rules, 2019
[Issued by Ministry of Corporate Affairs
vide Notification no. GSR 339(E) dated
April 30, 2019]
The last date for filing of Form DIR-3 KYC
has been extended till June 30, 2019.
5. Companies(Removal of Names of
Companies from the Register of
Companies) Amendment Rules, 2019
[Issued by Ministry of Corporate Affairs
vide Notification no. GSR …(E) dated
May 8, 2019]
Central Government has amended the fees
to be paid for strike off of companies to Rs.
10,000/- from Rs. 5,000/-. Further, it has
prescribed that the companies strike off
applications would be processed unless
Annual Returns (i.e. MGT-7 and AOC-4)
including certain other compliances are
filed.
6. Companies Incorporat ion Fi f th
Amendment Rules, 2019
[Issued by Ministry of Corporate Affairs
vide Notification no. GSR 357(E) dated
May 10, 2019]
Central Government has substituted
exiting Rule 8 with Rules 8, 8A & 8B so as
to bring in more clarity for name approval
and to remove the ambiguities in the
previous Rule.
B. CIRCULARS
1. Clarification for form ADT-I filed
through GNL-2 under the Companies
Act, 2013- reg.
[Issued by Ministry of Corporate Affairs
vide General Circular No. 05/2019
dated May 13, 2019]
Companies which had filed Form ADT-1
through GNL-2 as an attachment (by
selecting 'others') during the period from
01.04.2014 to 20.10.2014 may file E-form
ADT-1 for appointment of Auditor for the
period upto 31.03.2019 without fee, till
15.06.20l9 (since fee had been paid for
filing GNL-2 for the same purpose.
VOL. 22 - NO. 9 - MAY - JUNE 2019
35
CA Manoj Shah CA Viral Satra
Compiled by:
Export and Import of Indian Currency
FEMAFEMAUPDATESUPDATES
C.V.O. CA'S NEWS & VIEWS
A.P. (DIR Series) Circular No. 24 dated March 20, 2019
It has been decided that an individual travelling from India to Nepal or Bhutan may carry RBI notes in new series denomination of Rs. 200/- and Rs. 500/- subject to total limit of Rs. 25,000/-. Previously this limit applied to currency notes of Rs. 500/- and Rs. 1000/- denomination.
Investment by Foreign Portfolio Investors (FPI) in Government Securities – Medium Term Framework
A.P. (DIR Series) Circular No. 26 dated March 27, 2019
Revision of Limits for 2019-20:
a. The limit for FPI investment in Central Government securities (G-secs), State Development Loans (SDLs) and corporate bonds shall be 6%, 2%, and 9% of outstanding stocks of securities, respectively, in FY 2019-20.
b. The allocation of increase in G-sec limit over the two sub-categories – 'General' and 'Long-term' – has been set at 50:50 for the year 2019-20. The entire increase in limits for SDLs has been added to the 'General' sub-category of SDLs.
c. In terms of para 3 (g) of the circular dated April 06, 2018, the coupon reinvestment arrangement for G-secs shall be extended to SDLs.
Accordingly, the revised limits under various categories after rounding off would be as under:
Establishment of LO-BO-PO or any other place of business in Indian by foreign entities
A.P. (DIR Series) Circular No. 27 dated March 28, 2019
Prior Approval of RBI was required for opening Branch Office, Liaison Office, Project Office or any other place of business in India, where principal business of applicant was Defence, Telecom, Private Security and Information and Broadcasting Sector.
VOL. 22 - NO. 9 - MAY - JUNE 2019
36
Table 1 – Revised Limits for FPI Investment in Debt 2019-20 (Rupees in billion)
G-Sec G-Sec- SDL- SDL- Corporate Total General Long Term General Long Term Bonds
Current Limit 2233 923 381 71 2891 6499
Revised Limit for 2347 1037 497 71 3031 6983
HY Apr-Sep 2019
Revised Limit for HY 2461 1151 612 71 3170 7465
Oct 2019-Mar 2020
C.V.O. CA'S NEWS & VIEWS
It is advised that for opening of a BO/LO/PO or any other place of business in India, where the principal business of the applicant falls in the Defense Telecom, Private Security and Information and Broadcasting sector, no prior approval of the Reserve Bank of India shall be required, if Government approval or license/permission by the concerned Ministry/ Regulator has already been granted.
Further, in the case of proposal for opening a PO relating to Defense sector, no separate reference or approval of Government of India shall be required if the said non-resident applicant has been awarded a contract by/entered into an agreement with the Ministry of Defense or Service Headquarters or Defense Public Sector Undertakings. It is clarified that the term “permission” used in the Notification does not include general permission, if any, available under Foreign Direct Investment in the automatic route, in respect of the above four sectors.
Foreign Exchange Management (Deposit) Regulations 2016 – Opening of NRO accounts by Long Term Visa Holders (LTV), changes related to Special Non-Resident Rupee Account (SNRR), Escrow Account
A.P. (DIR Series) Circular No. 28 dated March 28, 2019
Following changes have been made:
a. Foreign Portfolio Investor (FPI) and a Foreign Venture Capital Investor (FVCI) registered with SEBI may open and maintain a non-interest bearing foreign currency account for purpose of making investment in terms of FEMA Notification No. 20R.
b. AD Banks may open only one NRO account for a citizen of Bangladesh or Pakistan belonging to minority communities in those countries viz. Hindus, Sikhs, Buddhists, Jains, Parsis and Christians residing in India and who has been granted Long Term Visa (LTV) by the Central Government. The account will be converted to resident account once such person becomes resident of India within meaning of Citizenship Act, 1955. This account can also be opened if such person has applied for LTV which is under consideration of the Central Government, in which case, the account will be opened for a period of six months and may be renewed at six monthly intervals subject to the condition that the individual holds a valid visa and valid residential permit issued by Foreigner Registration Office (FRO)/ Foreigner Regional Registration Office (FRRO) concerned.
The opening of such NRO accounts will be subject to reporting of the details of the accounts opened by the concerned Authorised bank, to the Ministry of Home Affairs (MHA) on a quarterly basis. The report shall contain details of –
(i) name/s of the individual/s;
(ii) date of arrival in India;
(iii) Passport No. and place/country of issue;
(iv) Residential Permit/Long Term Visa reference and date & place of issue;
(v) name of the FRO/FRRO concerned;
(vi) complete address and contact number of the branch where the bank account is being maintained.
The Head Office of the AD bank shall furnish the above details on a quarterly basis to the Under Secretary (Foreigners), Ministry of Home Affairs, NDCC-II Building, Jai Singh Road, New Delhi – 110 001. AD banks are advised to ensure strict compliance to these instructions.
c. As per extant provisions, SNRR accounts cannot be held for more than seven years. It has now been decided that SNRR accounts opened by person resident outside India may remain operative beyond stipulated period of seven years with RBI approval. The restriction of seven years will not be applicable to SNRR accounts opened by persons resident outside India who are registered with SEBI and wish to make investment in India in accordance with FEMA Notification No. 20R.
VOL. 22 - NO. 9 - MAY - JUNE 2019
37
C.V.O. CA'S NEWS & VIEWS
d. The extant Schedule 5 of the Foreign Exchange Management (Deposit Regulations) 2016 pertaining to Escrow Accounts has been replaced to align the same with the provisions of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017, in terms of which, Escrow Accounts can be opened by residents and non-residents for acquisition/transfer of capital instruments/convertible notes and can also be funded by guarantee(s).
List of some Compounding Orders passed by Reserve Bank of India
VOL. 22 - NO. 9 - MAY - JUNE 2019
38
C.V.O. CA'S NEWS & VIEWS
Investment by Foreign Portfolio Investors (FPI) in Debt – Review
A.P. (DIR Series) Circular No. 33 dated April 25, 2019As a measure to broaden access of non–resident investors to debt instruments in India, Foreign Portfolio Investors (FPI) are now permitted to invest in municipal bonds. FPI investment in municipal bonds shall be reckoned within the limits set for FPI investment in State Development Loans (SDLs). All other existing conditions for investment by FPIs in the debt market remain unchanged.
Gist of some Compounding Orders passed by Reserve Bank of India
VOL. 22 - NO. 9 - MAY - JUNE 2019
39
C.V.O. CA'S NEWS & VIEWS
Compiled by:
CA Haresh P. Kenia
DIRECT TAXES DIRECT TAXES
1. Income Tax Form No. 16 and Form No. 24Q Amended.
[262 Taxman (st.) 17]. The CBDT vide
notification No. GSR 304(E) [NO.36/2019
( F. N O . 3 7 0 1 4 2 / 4 / 2 0 1 9 - T P L ) ] ,
dated12.04.2019, in exercise of the power
conferred by section 200 and 203 read with
section 295 of the Income Tax Act, hereby
rdgives the Income tax (3 Amendment) Rules,
th2019. It came into force on 12 May, 2019. It
amends Form No. 16 and Form 24Q, in
Appendix II of the Income Tax Rule 1962.
A. Amendment in Form 16
Notes occurring after 'Part A' shall be omitted.
Part B (Annexure) is substituted. Readers
may refer to the above citation of the
Magazine for the changes made in new Part B
(Annexure).
B. Amendment in Form 24Q
Annexure – II' is substituted. Readers may
refer to the above citation of the Magazine for
the changes made in 'Annexure – II'.
2. Deduction of Tax at Source – Certificate for
Tax Deducted (TDS) - Procedure, format
and standards for issuance of certificate for
TDS in Part B of Form 16.
[263 Taxman (st.) 2].
In exercise of the powers delegated by the
CBDT under Rule 31(6A) of the Income Tax
Rule 1962, the Principle Director General of
Income Tax (System) hereby, vide notification
no. 9/2019, dated 06.05.2019 specifies the
procedure, formats and standards for the
purpose of generation and download of
certificates from “TDS Reconciliation
Analysis Correction Enabling System” or
( ) (hereafter called https://www.tdscpc.gov.in
TRACES portal) as below:
Issue of Part B of Form No. 16 for deduction
stof tax at source made on or after 1 day of
April, 2018:
All deductors (including Government
deductors who deposit TDS in the Central
Government Account through book entry)
shall be able to issue the TDS certificate in
part B of Form No. 16 (by generation and
download through TRACES portal) in
respect of all sums deducted on or after the
st1 day of April, 2018 under the provisions for
the fourth quarter i.e. Form 24Q is furnished
alongwith duly filled in Annexure II of Form
24Q as substituted vide Central Board of
Direct Taxes Notification No. 36/2019, dated
12.04.2019. To ensure generation of
accurate TDS certificate in Part B of Form No.
16, the Deductor(s) need to report correct
data in Annexure II of Form 24Q. The
TRACES generated Form No. 16 shall have a
unique TDS certificate number.
LAW UPDATELAW UPDATE
VOL. 22 - NO. 9 - MAY - JUNE 2019
40
C.V.O. CA'S NEWS & VIEWS
Authentication of TDS certificate in Form No.
16:
The deductor, issuing the TDS certificate in
Form No. 16 by downloading it from the
TRACES Portal, shall, before issuing to the
deductee authenticate the correctness of
contents mentioned therein and verify the
same either by signature or by using digital
signature in accordance with sub rule (6) of
rule 31.
Part B (Annexure)' of Form No. 16 item Nos.
2(f) and 10(k):
The item Nos. 2(f) and 10(k) in Part B
(Annexure) of Form 16 required to be filled-in
by the deductor manually shall be made
available at the bottom of the TRACES
generated Form 16 (Part B) and the deductor
shall duly fill details, where available, in item
numbers 2(f) and 10(k) appearing at the
bottom of the Form. The deductor shall duly
fill details, where applicable, in item
numbers 2(f) and 10(k) before furnishing of
Part B (Annexure) to the employee. The
deductors who opt to authenticate Part B of
Form No. 16 using Digital Signature
Certificates (DSC) will be provided with the
download of Part B of Form No. 16 without
item Nos. 2(f) and 10(k) and therefore these
details shall be required to be prepared by
the employer and issued to the employee,
where applicable, before furnishing of Part B
to the employee.
3. Section 286 – Furnishing of Report in
respect of International Group.
[262 Taxman (st.) 25].
The Central Government vide notification No.
S O 1 6 5 3 ( E ) [ N O. 3 7 / 2 0 1 9 ( F. N O.
500/15/2015-APA-I)], dated 25.04.2019, in
exercise of the powers u/s 286(9)(b)(ii) of the
Income Tax Act, hereby notifies the
agreement between the Government of the
Republic of India and the Government of the
United States of America on exchange of
country – by – country reports. Readers may
refer to the above citation for further details.
VOL. 22 - NO. 9 - MAY - JUNE 2019
41
C.V.O. CA'S NEWS & VIEWS
Compiled by:GST UPDATESGST UPDATES
NOTIFICATIONS - CENTRAL TAX:
Notification No 19/2019 -Central Tax ND
dated 22 April,2019
Due date of furnishing the return in FORM
GSTR-3B for month March, 2019 is extended
to 23/04/2019.
Notification No 20/2019 -Central Tax rd
dated 23 April,2019
Vide this notification following Rules are
amended in the Central Goods & Services
Tax Rules, 2017. Amendments are effective rdfrom 23 April, 2019.
Rule 23(1): By adding second proviso it is
provided that all returns from the date of the
order of cancellation of registration till the
date of the order of revocation of cancellation
of registration shall be furnished within 30
days from the date of order of revocation of
cancellation of registration.
And if registration is cancelled with
retrospective effect, the registered person
shall furnish all returns relating to period
from the effective date of cancellation of
registration till the date of order of revocation
of cancellation of registration within 30 days
from the date of order of revocation of
cancellation of registration.
Rule 62: Composition dealer and service
provider opting to pay @ 6% is now required
to furnish a quarterly statement containing
the details of payment of self-assessed tax in
FORM GST CMP08. Due date for such
payment is 18th day of the month succeeding
such quarter. Such person is require to
furnish a return for every financial year in
FORM GSTR-4. Due date for such return is th30 April following the end of financial year.
Notification No 21/2019 -Central Tax rddated 23 April,2019
The notification seeks to notify procedure for
quarterly tax payment and annual filing of
return for composition taxpayers and
taxpayers availing the benefit of Notification
No. 02/2019– Central Tax (Rate), dated the
7th March, 2019.
Notification No 22/2019 -Central Tax rd
dated 23 April,2019
No person will be allowed to furnish PART A
of E way bill if he is composition dealer and
has not furnished the returns for two
consecutive tax periods and for other
taxpayer if he has not furnished the returns
for a consecutive period of two months. Vide
this notification this amendment as per Rule
138E is made effective from 21/06/2019.
Notification No 23/2019 -Central Tax thdated 11 May,2019
Notification No 24/2019 -Central Tax thdated 11 May,2019
Due date for submission of return in FORM
GSTR-1 for April, 2019 for registered
persons whose principal place of business is
in the districts of Angul, Balasore, Bhadrak ,
C u t t a c k , D h e n k a n a l , G a n j a m ,
Jagatsinghpur, Jajpur, Kendrapara,
Keonjhar, Khordha, Mayurbhanj, Nayagarh
and Puri in the State of Odisha is extended to
10/06/2019. Due date for GSTR 3B for these
taxpayers is extended to 20/06/2019.
VOL. 22 - NO. 9 - MAY - JUNE 2019
42
CA Nitin D. Kenia CA Bharat K. Gosar
C.V.O. CA'S NEWS & VIEWS
NOTIFICATIONS - CENTRAL TAX-RATE:
Notification No 10/2019-Central Tax TH(Rate) dated 10 May, 2019.
Notification No 9/2019-Integrated Tax TH(Rate) dated 10 May, 2019.
The notification seeks to amend notification
No.11/ 2017- Central Tax (Rate) so as to
extend the last date for submission of
Annexure IV to 20/05/2019 for exercising the
option by builders, developers, promoters
for exercising option to pay tax at the old rates
of 12%/ 8% with Input Tax Credit.
CIRCULARS - CGST:
Circular No. 100/19/2019-GST-dated rd30 April, 2019.
It is clarified in circular that charges for issue
of seed certificates/tags by the Seed
Certification Agency of Tamil Nadu and
Uttarakhand to the seed producing
organization/ companies are collected for the
composite supply of seed testing and
certification, which is exempt under
Notification No. 12/2017-Central Tax (Rate)
Sl. No. 47 (services by Central/State
Governments by way of testing/certification
relating to safety of consumers and public at
large, required under any law). The
clarification would apply to supply of seed
tags by seed testing and certification agencies
of other states also following similar seed
testing and certification procedure.
Circular No. 101/20/2019-GST-dated rd30 April, 2019.
It is clarified that GST exemption on the
upfront amount (called as premium, salami,
cost, price, development charges or by any
other name) payable for long term lease (of
thirty years, or more) of industrial plots or
plots for development of infrastructure for
financial business under Entry No. 41 of
Exemption Notification 12/2017 – Central
Tax (R) dated 28.06.2017 is admissible
irrespective of whether such upfront amount
is payable or paid in one or more
instalments, provided the amount is
determined upfront.
VOL. 22 - NO. 9 - MAY - JUNE 2019
43
Disclaimer: The views / opinions expressed in the articles are purely of the writers. The readers are requested to take proper professional guidance before abiding the views expressed in the articles. The publisher, the editor and the association disclaim any liability in connection with the use of the information mentioned in the articles.
PRINTED AND PUBLISHED BY MANOJ SHAH ON BEHALF OF C.V.O. CHARTERED AND COST ACCOUNTANTS' ASSOCIATION - 304, JASMINE APARTMENT, DADA SAHEB PHALKE ROAD, DADAR (EAST), MUMBAI - 400014.TEL: 022-24105987. EDITOR: RAMESH CHHEDA