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C.V.O. CA'S NEWS & VIEWS
FOR MEMBERS / SUBSCRIBERS / VOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
Follow us on , , LinkedIn@cvocain Join Yahoo group : [email protected]
From President's Desk...
Mumbai, 15th October, 2018
Dear Professional Colleagues and Readers,
Asian Games and CA profession
In the history of Asian games Indian athletes have given their best performance by winning 69 medals in
various games in Jakarta–Palembang 2018 . Uniqueness of this medal tally in these games was that Indian athletes
won medals in sports where Indians were not performing well like Badminton ,Equestrian , Squash, table tennis,
Kurash, Wushu... and Indian athletes have not performed well in their core games like Kabbadi, Hockey and boxing.
We can relate these new sports with new opportunities and challenges available in our profession like GST,
forensic audits, Risk assessment, and many more opportunities. We should think beyond our core area of practice
and start developing ourselves in to new area of practice where competition is comparatively less.
Goods and Service Tax
Goods and Service tax is still settling. We at CVO CA for the benefits of member's are coming up with various
articles on GST and changes in the law in every news letter. In current issue articles on GST annual return, GST audit,
TDS and TCS provisions under GST and recent changes in GST are included.
Government is trying to make GST more simpler but same is creating more hurdle for professionals like matching data
of input credit with GSTR-2A and that delays finalisation of books of account and completion of audits, we hope
government come up with more simpler mechanism in GST for the benefit of the business community and more for
professionals.
Income tax
In last budget long term capital gain on shares is reintroduced and market has taken it in negative manner.
Market corrected majorly after introduction of LTCG on stock. Article on mechanism of LTCG on shares is included in
current issue for the benefit of the members.
Member's family picnic is planned at City of Nawab , Hydrabad between 31st January and 3rd February 2019
So those who are interested are requested to kindly enrol at earliest .
Jeevdaya Paramo Dharma
Frequency of drought in Kutch is after every 2.5 years, this year also Kutch is witnessing drought as there is no
rain throughout the year resulting in prolonged shortage of water and fodder . I appeal to help in cash or kind for the
fodder of animals.
Deepavali and New Samvat Year
Deepavali is the biggest and most prominent festival celebareted across India and the Globe. It is mark of
victory of good over evil. It is Nirvana day of Thirthankar Mahaveera.
In Sanskrit Deepavali means Rows of Lights. May this Deepavali light up new dreams, Fresh hopes, everything bright &
beautiful and fill your days with surprises.Happy Deepavali of Samavat 2074 and Prosperous New 2075 Samvat Year!
Program at CVO CA
After the busy schedule of working season next few months will be
very hectic in terms of activities of CVO CA like Public program, Study
circles, RRC, Students programs, Sports, and meetings for the benefit of
members, students, public at large. I request all members and students to
extend whole hearted support and take active participation in all the
activities of the association. CA Sunil V. Dedhia
Thank you all..... Always in Gratitude
Continuing our discussion , We all have observed and celebrated the th thParyushan Parva from 6 Sept to 13 Sept 2018 The fragrance and cream
of Paryushan Parva is Samvatsari Pratikraman,, Confession /Forgiveness a
tradition of seeking forgiveness once a year from everyone whom one has
wronged, be it in thought, word or action, as well as being forgiving. The
tradition of seeking forgiveness is very wide in scope to include family, friends
and all living beings. The culmination of confession is in receiving forgiveness
from all living beings and also forgiving everyone, including oneself. The
tradition of forgiveness is sometimes called the rite of universal friendship. It
is a process for cleaning/healing which really lightens the burden of one's
heart. It frees the mind of the guilt, which troubles us throughout our lives.
Unlike what people think it means when they say it, Michhami
Dukkadam does not mean (at least literally), “I seek your forgiveness & I
forgive you”. Michhami comes from two words - Michha and Mi - meaning
futile/useless and my/mine. Dukkadam means bad deeds. So the meaning of
the complete phrase is “May my bad deeds (faults) become futile”. In other
words “please forgive me”. Old quarrels are forgotten and friendships and
relationships renewed, as we fold our hands and ask for “Michhami
Dukkadam” or forgiveness.
Forgiveness asked for has to be with a true feeling of repentance and not a
mere formality of superfluously saying Sorry or MICHHAMI DUKKADAM.
Sincerity is the essence of asking for forgiveness and it has to come from the
heart.
We all like to believe that we are right, howsoever wrong we may be. This
makes seeking forgiveness a difficult task. The first and foremost difficult
step is to accept and realize that we have been wrong. Even when we realise
that we have been wrong, we hesitate, we shudder to admit our mistake. Yes,
Sorry is the hardest word! It looks like losing one's face and involves
overcoming one's ego. Even a small child does not like to admit that he is
wrong; and discovers a hundred excuses to defend his action. The question
is: Is this correct? I believe that when one admits that one is wrong, one does
not shrink but instead grows taller in the eyes of others. Even their self-
esteem increases. Everyone makes mistake; only a few have the courage to
admit their mistakes.
It is said that forgiving is a quality of the brave. One can also say that
FROM THE DESK OF CHAIRMAN
PRAYER PRAYER (PRARTHANA) (PRARTHANA) III
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
2
CA DINESH SHAH
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
KÉ©ÉÉ ´ÉÒù»«É §ÉÚºÉiÉ©ÉÃ
Association news ................................4
Annual activity plan .............................7
First things first....................................8
Superstition .......................................10
Comeback of Long term capital -
Gains.................................................12
Recent Amendments in GST ............14
The issues around place of-
removal .............................................19
GST audit an overview......................21
Annual returns under GST ................26
TDS and TCS provisions -
under GST ........................................36
GST on Special-
Economic zone .................................39
Sebi and Corporate law updates.......45
FEMA updates ..................................47
Direct Tax updates ............................49
GST updates.....................................52
...CONT’D FROM PG. 1
asking for forgiveness is equally a quality of the brave. If one
realises that one has wronged someone, asking for forgiveness has
to be prompt. It is no use waiting for days and weeks to apologize.
Just as justice delayed is justice denied, asking for belated
forgiveness is meaningless. The charm of spontaneity is lost, and
the action becomes formal, instead of being heartfelt. We must treat others the way we want to be treated.
Asking for forgiveness does not merely end with conveying one's apology. It must be accompanied by possible
remedial action and redressal of the wrong. It must also go along with a resolve not to repeat such an action, and
also convey this in clear terms to the person whom one has wronged. Let us then, pick up courage, and whenever
we wrong someone, recognize and admit our mistake, ask for forgiveness and redress the wrong done.
“To err, even grievously, is human. But it is human only if there is determination to mend the error and not
to repeat it. The error will be forgotten if the promise is fully redeemed.”
- Mahatma Gandhi
Even more difficult than asking for forgiveness, is forgiving others, who, we believe, have wronged us and
against whom we hold a grudge. We never heal until we forgive. However, we seldom let go of the feeling of
anger, which, many a time, drives people to do all sorts of vengeful acts. We tend to cling to those hurts, real or
imaginary, as if our life depends on them. Many a time, small acts or even a few words, spoken with no
intention of harming, create hurts which are carried along lifelong and sometimes even to the grave. There are
known cases where family feuds have gone on for generations.
Many of us carry the feeling of guilt for any wrong deeds which we may have committed, but there is no one
in the world who has not done a wrong step. Accepting our mistake, sincerely repenting for the same, trying to
undo the damage, asking for forgiveness from the wronged one and resolving not to falter again is the only way
to get rid of the guilt. Having shed the burden of guilt, having dropped that baggage of negative emotion, our
journey would be easier, smoother and faster.
May we then resolve to clean our slate, ask for forgiveness of everyone whom we have wronged, forgive
everyone who we believe has wronged us, and even forgive ourselves for all the wrong deeds committed by us in
the past, resolve not to deviate and travel on the right path.
3
SE O UH L T I S. O. N Y . J O EU R N
TREAT OTHER THE WAY YOU WANT TO BE...
REMEMBER !!
Khamemi savve jeeva (I grant forgiveness to all)
Savve jeeva khamantu me (May all living beings grant me forgiveness)
Mitti me savva bhuesu (My friendship is with all living beings)
Vairam majham na kenai (My enemy is totally non-existent)
Michchami Dukkadam (May all my faults be dissolved)
Universal Forgiveness and Friendship Prayer / Kshamapan Sutra:
FROM THE DESK OF CHAIRMAN
PRAYER PRAYER (PRARTHANA)(PRARTHANA)
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
CA PARIN GALACA MEHUL GALA
ASSOCIATION NEWSASSOCIATION NEWS Compiled by:
4
ASSOCIATION NEWSASSOCIATION NEWSEVENTS IN EVENTS IN RETROSPECTRETROSPECT
SHREYA CHETAN NAGDAVillage: RamaniyaResiding: Malad (E)Mobile: 9920480221Email: [email protected]
VRUSHALI DINESH DEDHIAVillage: GhadsisaResiding: Borivali (W)Mobile: 9833783931Email: [email protected]
HARSH MANOJ DEDHIAVillage: BhujpurResiding: BorivaliMobile: 9773865215Email: [email protected]
RUSHABH KANTILAL DEDHIAVillage: PragpurResiding: Kandivali (W)Mobile: 9699466335Email: [email protected]
KINJAL MEHUL HARIAVillage: HalapurResiding: MulundEmail: [email protected]: [email protected]
KENIL VIJAY DHARODVillage: ChhassaraResiding: Bhandup WestMobile: 8082701226Email: [email protected]
JIGAR NAVIN BHEDAVillage: MokhaResiding: ThaneMobile: 9664286624Email: [email protected]
PARAS MANOJ MARUVillage: BidadaResiding: Curry RoadMobile: 9870767660Email: [email protected]
HET DHANJI BHEDAVillage: KAPAYAResiding: Mulund WestMobile: 8433634400Email: [email protected]
AKSHAY MUKESH GALAVillage: SadauResiding: ChinchpokliMobile: 8169212566Email: [email protected]
NEW MEMBERS ENROLLED
Session was well conducted by CA Jeel Gosar, giving detailed analysis of what needs to be reported under various clauses of Tax Audit. It was an interactive session along with practical issues raised by the faculty. Students were amazed with the presentation made by the faculty. In all around 111 students attended the Seminar.
STUDENTS COMMITTEE
Seminar on Provisions of Tax Audit
Speaker : CA Jeel Gosar
Date : 13th August 2018
Venue: Chincpokhli Mahajan Wadi
Seminar was well conducted by CA Punit Mehta, wherein he has dealt with how to use tally for generating various reports and use the same for the Audit purpose. It was a very lively session, wherein various issues were raised by the students and were answered by faculty. CA Punit Mehta also explained how you can generate various reports for various clauses to be reported under Form 3CD, thereby saving time for doing audits. In all around 38 students took the benefit of the seminar.
STUDENTS COMMITTEE
Seminar on Use of Tally as an AUDIT TOOL
Speaker : CA Punit Mehta
Date : 23rd August 2018
Venue : D R Ghalla Hall, Jasmine Apartments, Dadar
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
5
Often referred to as the "Pearl City of India" Hyderabad reflects the charm of Nizam's era at every nook
and corner. Encompassing of historically rich and culturally rooted tourist attractions, the city turns out to be
quite a charmer. Veritable melting pot of the old and the new, Hyderabad, also known as the City of the
Nawabs, is a city that exudes an old-world charm of its own while still coexisting with the rapidly growing
onslaught of commercialization in perfect harmony. Steeped in history, Hyderabad is home to old mosques
and bazaars lined parallelly alongside swanky new office buildings and malls, and it is these very contrasts -
these glimpses into the city's rich past with inherent promises of an even better future - this is what exactly
makes Hyderabad a city worth visiting. Maybe even more than once.
The most iconic landmark of Hyderabad is the Charminar, which is a distinguished monument that
clearly exhibits the Indo-Islamic architecture of its times. Charminar, which literally translates to four
minarets, is built entirely out of limestone and granite, with four minarets on four sides, each of them facing a
different street. The Charminar is the oldest mosque in Hyderabad, and it has stairs leading to the second
level, which is open for devotees to come and pray in. The entire stretch outside the monument is lined with
little stalls selling pearls, bangles, and other jewellery, and this bazaar is bustling with both tourists and locals
at any given hour of the day.
Another impressive tourist attraction in Hyderabad is the Golconda Fort, which was considered as
nothing less than an architectural marvel during its times. The entire fort is bordered by a 10-kilometre long
wall, and with over 80 bastions, four drawbridges, and several mosques, halls and royal residences, the fort is
FORTHCOMING EVENTSFORTHCOMING EVENTSJoin us for the fun filled trip to Hyderabad.Join us for the fun filled trip to Hyderabad.
Hyderabad ki VishestaHyderabad ki Vishesta
Dinner and a movie, forget that, I'd rather have a picnic and a waterfall
- Amanda Grace.
After working so hard, it's time to travel harder with
CVOCA????.
Join us for a trip to city that can make you smile with
only its unique language, a city that takes you back
to the pages of history, a city that can tickle your
taste buds with its delicious cuisines! ????
Let's visit the iconic 'City of Nawabs' & explore the
extraordinary Ramoji Film City* which gives a
glimpse of the magical world of cinema??
Date: Wed 30-Jan-19 (night) to
Sun 03-Feb-19 (evening)
Venue: Leonia Hol ist ic Dest inat ion,
Hyderabad
Charges: Rs. 17,500/pax double
occupancy
extra pax @ Rs.14,200 (> 12 yrs),
Rs.12,500 (6 - 12 yrs), Rs.6,500 (< 6 yrs)
Incl. Stay, Food, Sightseeing & 3AC Train
travel to Hyderabad (excl. flights to
Mumbai)
Registration @ https://goo.gl/Qb87ip
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
6
DAY-NIGHT BOX CRICKET LEAGUEDAY-NIGHT BOX CRICKET LEAGUE
For team registration or any clarification, please contact -
CA Harsh Soni: 9664263564 CA Umang Soni: 9773533468CA Harsh Soni: 9664263564 CA Umang Soni: 9773533468
All work and no play makes Jack a dull boy. Let's all get together to play & have fun.
CVOCA organising Day-Night Box Cricket League 2.0 for emerging Kohlis, Sharmas, Dhonis, Bumrahs, Yadavs on
Saturday, 01-December-18
12.30 p.m. onwards at
Dr Antonio D'Silva Turf, Dadar (W)
CVOCA Members, their relatives (Parents, Kids & Spouse only) with age more than 12 years
Tournament will be played in an "Ownership Structure", whereby CVOCA Member will own team/(s) with maximum 4 own players. Other players would be allotted by the committee.
Register online @ https://goo.gl/vVZAjn Registration closure date: 21-Nov & Team formation date: 23-Nov
Charges:Male team ownership: Rs. 4,000
Female team ownership: Rs. 2,000Individual registration: Rs. 200 / person
Snacks & Dinner
nothing short of imperial. Today, while most of the fort is in ruins, hints of its regal ambience and its past
grandiose still linger on.
Hyderabad is very famous for being home to the Ramoji Film City, which is the largest film studio complex
in the entire world. Built across a sprawling 2000 acres, the Ramoji Film City has seen a huge number of
regional language, Hindi, and even some international films being shot here. Apart from offering studio tours,
it even provides options for quite a number of sports and adventure activities, making it a very popular
hangout for the younger generation. Who knows, you might even get to meet an actor there!
An oasis in the midst of an otherwise landlocked city, Hussain Sagar Lake in Hyderabad is an entirely
manmade lake which boasts of a 450-tonne statue of Buddha in the middle of the lake. Carved entirely out of
white granite, the monolith shines brightly under the moonlight and is a beautiful place to sit and spend an
evening under the stars.
Hyderabad is famous for its food, and be it street food to casual dining to high-class fancy dining - you
name it, and Hyderabad has it. Old City is teeming with dozens of roadside eateries where you can have your
fill of lip-smacking biryani and kebabs.
Join us for the fun filled trip to Hyderabad.
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
7
ANNUAL ACTIVITY PLAN ANNUAL ACTIVITY PLAN
PROGRAM COMMITTEE
To organise programs on the following ·topics: How to ensure organisations
working for social cause are CSR
compliant
Managing wealth considering Indian ·economy in an organised way
Surveys and Search· Capital Markets and Indian Economy·
NEWS BULLETIN COMMITTEE
To publish monthly Bulletin on articles of ·professional and non- professional
interest. To publish special issues on
current topics and specific topics like
GST, Capital Market, FEMA, and
Corporate Laws.
Recent updates under various laws along ·with unreported decisions under various
laws.
N e w M e m b e r ' s p h o t o s a n d ·congratulations column to be given as
and when it happens.
STUDY CIRCLE COMMITTEE
Study circle meetings on various topics· Study courses on different areas of ·
profession
To conduct Workshops · To increase membership of study circle·
RRC & PD COMMITTEE
One RRC for 3 days· Lectures on practice development, how ·
to read big data, etc.
STUDENTS COMMITTEE
Orientation on How to Prepare for Exams· Study circle on various topics relating to ·
practice
Two days NRRC· Educational Assistance Activities· To increase the membership of students·
YIMEC COMMITTEE
Trekking· Board games / Treasure hunt, Moonlight ·
cycling, Yoga sessions
Youth RRC·CAPITAL MARKET COMMITTEE
2 days RRC· Industrial visit· Lectures on SME, current scenario on ·
capital market
PUBLICATION AND TRAINING COMMITTEE
Karvera Na Atapatta in Patrika· Reference books on various topics· Conducting CCA course· Providing books at discounts·
MEMBERSHIP COMMITTEE
Picnic for members· Sports day· Career Guidance Seminar for newly ·
passed Ca's
Felicitation of Newly Passed Ca's· Special membership drive·
- Compiled by CA Mehul Gala and CA Parin Gala
CA PARIN GALACA MEHUL GALA
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
- By CA Nisha Gala
W hen we were younger, getting up on a Sunday morning and
finishing that unfinished puzzle or jigsaw of last night was the top priority. We would instantly get on to the act, until, weheard our mother call out, "finish your breakfast first"!
Who cared about breakfast? Whose priority was it, our's or our mother's?
Even, as we have grown up, our everyday routine and the things we do, are more than often driven by other people or external circumstances, unless ofcourse, there is a conscious effort to not allow them to do so!
E.g. We get on to our work desk, we have a list of the things to do for the day. We check our e-mails and receive an unexpected mail from a client and our immediate action is to respond to the client. This may probably eat away an hour to a day, depending upon the subject matter. So, shouldn't we respond, isn't it important? Well, it's these kind of everyday situations whenwe decide, what comes first! Put First Things First is one of the habits described in the book "The Seven Habits of Highly Effective People", by Stephen Covey.
Ironically, deciding what to be done first, is one of the toughest challenges a lot of us face!
The reason - We seldom CONSCIOUSLY DECIDE. We often are just driven or dragged by the things and the work that confront us or are apparently before us, and tend to act like the Ninja warrior, battling through! Here are some possible reasons for not being able to do the things we ought to do first (with no particular order of relevance) :-
Procrastination: P r o c r a s t i n a t i o n i s d e f i n e d a s t h e
habitual/intentional delay of starting or finishing a task despite its negative consequences. This habit can get very serious and deeply rooted.
e.g. A day before the exam , you may observe a teenage student feeling a lot
more hungrier, taking frequent breaks , wanting to take a walk for some fresh air, wanting to speak to a friend to solve queries and even cleaning up his otherwise messed up room . All these could be signs of anxiety or fear which make him delay going back to books, which he ought to. For him everything e l s e b e c o m e s a p r i o r i t y. H e
procrastinates to de-stress. Visiting the Social media, is again, a sign of
procrastination. In the middle of something important that we are working on, there is a strong urge to take a break and go to the social media sites and before we even realise, the break becomes longer than we envisaged.
The reasons could be varied. But, the way to get rid of procrastination is to be aware of it, accept that you need to get rid of it and then work on it.
(Here is a link to one of the videos by Mel Robbins, an author and motivational speaker, on the topic https://www.youtube.com/watch?v=CFu_58AnT0g)
Multiple Priorities Choosing one thing over the
other, is always a challenge, be it work or relations, clothes or even our favourite food.
We are juggling with multiple priorities all the time, and the reason we juggle, is that we don't want to let go of either one.
Ever noticed a Juggler, juggling balls or bottles? Even the expert, starts with the minimum he can handle, stabilises and then keeps adding further balls or tricks.
That precisely is the trick. While dealing with priorities, we must try and take in as much we can handle. Emotions, social responsibility, mental blocks, physical limitations, all play a crucial role are helping us fix them. And being aware of how much wecan handle, can come only through personal introspection.
Lack of Organising capabilities. Doing and then re-doing, keeping and then keep
finding, deciding and re-visiting the decision, planning and then diverting from the plan, these are all a part and parcel of our work and the activities
FIRST THINGS FIRST FIRST THINGS FIRST
8
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
9
that we do. Being organised, helps reduce the stress and the
frustrations that may arise in doing the above. e.g. Always having a stock of passport size
photographs and even a soft copy in the email.
A pre-decided path and process to save everyday files and documents and retrieve them
A pre-determined process to deal with e-mails, acting, forwarding, storing , deleting etc.
Preparing flowcharts , checklists , summary notes , minutes , agenda , etc.
All the above are examples of organising, while at work.
From small everyday routine to handling big projects , an organised approach always helps in delivering the best. Some have an inborn ability of organising, while others have to make conscious and continuous efforts to seek the desired results. The Time to Find the Time
In a hurdle race , on the word go ,an athlete runs fast and then crosses a hurdle and then runs and another hurdle and so on till he reaches the finishing line. Unfortunately for a lot of us , the hurdle race we are in , has no finishing line. One deadline after the other, one challenge after the other, one event after
the other. Even on a holiday, we have an itinerary and a list of things to do and places to visit. Literally, no time to stand and stare !
So when should we find the time to make the'to -do list' or 'work plan' or 'organised time table', because we always have something to finish, before we start something else.
The answer could be RIGHT NOW, if it is really very crucial.
Here is a sample Eisenhower Matrix or the Urgent -Important matrix.
The "Eisenhower Method" stems from a quote attributed to former U.S. President Dwight D. Eisenhower: "I have two kinds of problems, the urgent and the important. The urgent are not important, and the important are never urgent."
An ideal situation could be to :- Manage Quadrant 1 FOCUS on Quadrant 2 Minimise Quadrant 3 Eliminate Quadrant 4
(Read more about the Urgent I m p o r t a n t M a t r i x o n https://www.eisenhower.me/eisenhower-matrix/)
There are many such tools and techniques available for Planning, Prioritisation, Time Management, Achieving Goals.The To do lists , Monthly Plan , Weekly plan , Daily plan , Urgent -Important Matrix , Goal Sheets, Targets , Calender ,ABC analysis all are various tools and techniques , we can adopt and practice. We have a lot of time management apps also, to our rescue.
But these are only Indicative, they provide direction. There are no thumb rules.
W e c a n u s e o u r o w n combination of the various theories and practices to decide what works best for us.
However, what sure is needed, is
Desire,
Discipline,
Determination !
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
10
uman mind is always having some thoughts of Hpast, present or future. Some have creative
thoughts, some have religious thoughts, some have
social thoughts and some have superstitious
thoughts. Some are rationalists whereas there are
many who believe in miracles. Superstition is
creation of mind, because there is nothing like magic
or miracles but everything is result of scientific
reasons. It is only when we do not understand or
know the scientific reason; we believe that there is
miracle or magic. Many a time, it is art also by the
performers of miracles or magic. This equally applies
to blind faith in religions. Due to blind faith many
people fear of unforeseen incidents which creates
superstitious mind and it becomes difficult for such
people to come out of such fear. It is said that there is
no medicine for SUPERSTITION. Mostly ladies are
victims of such fear. The pity is that many educated
people do not understand the scientific reasons
behind anything magical or miraculous and have
blind faith in such activities.
It is said that “there is nothing like fear, it is only
to be understood.” To pray God is of course an act of
faith. It may be any God, Jain, Hindu, Islamic,
Christian or Gurudwara. One has to understand
that there is very thin line of dividing meaning
between faith and blind faith. The prayer is subject of
belief in God. It comes from within one's soul. It has
continuous flow. There is nothing to fear even if no
prayer is performed. Prayer is just for the calmness
of mind. Many people go to Shirdi, Tirupatti, or to
Darshan yatras at various places. These Darshan
yatras are not blind faith, but is for calmness of mind
to satisfy one's inner conscious. Unfortunately now
these places have also become places for enjoyment
during vacations and due to that all types of activities
like drinking alcohol & gambling etc. are being
carried out there. This is not new for so called
developed countries nor for city people.
We know that many of our community people
visit native place for Darshan of Kuldevies etc. So far
it is okay till it relates to Darshan as there is faith in
our Kuldevis. But unfortunately we find the people
exhibiting blind faith in performing poojas &
Darshan in Bhuvas and other Sadhus who play tricks
with such devotees and take undue advantage of their
weakness or fear. They extract money by hook or
crook and make them fools. These type of activities
are rally speaking show our civilized community's
backwardness and blind faith which shows how
much superstitious our people are? One would
question whether it is Darshan or show business or
fear ? Only the answer can be given by such people's
inner soul.
It is said “If mind is clean you have Ganges water
in your pot.”(Mann changa to kathrotme ganga) So it
is due to blind faith if some one directs you to have
Darshan at some fixed time or on fixed day. Faith
never wants evidences for performance of poojas.
Faith needs confidence in oneself. If fear enters in
faith it invites blind faith which is nothing but mental
weakness. Mostly people who have less financial
sources or suffering from lasting sicknesses or suffer
from family disturbances are mainly becoming
superstitious. But really speaking such activities
spoil more the position. It is positive self efforts
which if supports faith, then the positive result is
sure. The activities carried with blind faith normally
create mental sickness.
The science has proved that there is nothing like
miracles. Fear or blind faith are instruments in the
hands of crook people to extract money from people
of weak mind or of straight forward nature by playing
tricks with them and keeping them in blank mind.
Incidents of doubling of money or ornaments by
tricks are common and many ladies or greedy people
are the victims of such looters.
The intention of this write up is mainly to make
educated people understand the science behind every
such incident where the people understand it as
miracle. It is possible that one may not have scientific
solution on the spot, but one thing is sure that
SUPERSTITIONSUPERSTITION
CA Shanti Rambhia
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
everything is scientific and should try to find out
the solution at later stage. We, the educated people
should not be believer of wrong doings to make
people fool but should educate our nearest and
dearest not to be greedy and fearful of anything but
weigh the situation to come out with positive solution.
It is seen that since a few years many educated people
have become blind followers of activities like VANSA(
dhoon) in PEDIES of our devi-devtas or Jyotises,
Bhoovas Daklias and Bavas , Vastushtris and so on.
The community should come out of these fearful
situations of beliefs in miracles and magic. This is
equally true for Rashi Milap in the matters related to
engagements.
Reki, Vastushashtra, fangsoi etc. are all related
activities carried on by professionals in this line.
They put attractive ads for their business in
performance of miracles which is nothing but
robbery of different kind. They try to brainwash the
weak minded peaple who become the victims of such
professional magicians. Rashi Bhavishyas in
newspapers is nothing but to fill the pages of papers.
It is fact that mind's weakness is nothing but
one's unfaith in God. Gunvant Shah a welknown
writer of Gujarati has said that “To pray idol without
bringing in stoniness of idol is Darshan.”
Unfortunately, our educational institutions do
not teach “not to fear and not to have blind faith” and
in fact, they should impart lessons of courage.
Lastly, “INGENUITY PLUS COURAGE PLUS
WORK EQUALS MIRACLES" said by Olympic gold
medalist Bob Richards. So do not be superstitious
and do not believe in miracles just use your
intelligence and work hard with courage.
11
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
12
CA Harsh Soni
Before Budget 2018, LTCG arising on transfer of equity shares or units of equity oriented mutual fund or units of a business trust (hereinafter collectively referred as 'equity securities') was exempt from the Income Tax subject to following conditions
* except genuine cases specified in notification no. 43/2017, Dated 5th June 2017
Post amendment in the Finance Act 2018, Long Term Capital Gainson 'equity securities' exceeding Rs. 1 lakh is taxed at rate of 10% without indexation.(Section 112A)
Long-term capital gains arising from transfer of specified assetLTCG from transfer of any listed security orany unit of UTI or mutual fund (whether listed or not),not being
covered under Section112A,and Zero coupon bonds shall have the following options:a. Capital gains taxed at 20% with benefit of indexationb. Capital gains taxed at 10% without benefit of indexationThe selection of the option is available to the assesse based on lower tax liability.In the case of an individual or a HUF, being a resident, if total income, excluding such long-term capital
gains is below the maximum amount not chargeable to income-tax, then the long-term capital gains shall be reduced by difference between total income and maximum amount which is not chargeable to income-tax.
As per section 48, cost of acquisition of such assets will be higher of:a. Actual Cost of Acquisition ANDb. Lower of: Fair Market Value (FMV)* of such asset as on 31st January 2018 OR Sale value of such asset*FMV, in case of listed shares or units will be the highest value ofsuch share or unit on recognised stock
exchange on 31st January 2018. If there is no trading on 31st January 2018, then FMV will be the highest value on day immediately preceding31st January 2018whensuch asset was tradedon recognised stock exchange. In case of unlisted unit, FMV will be the net asset value of such unit on 31st January 2018.
The FMV of the bonus shares and right shares as on 31st January 2018 will be taken as cost of acquisition and hence, the gains accrued upto 31st January 2018 will continue to be exempt.
Let us understand the above with examples:
COMEBACK OF LONG TERM CAPITAL GAIN (LTCG) COMEBACK OF LONG TERM CAPITAL GAIN (LTCG)
TAX IN STOCK MARKET FROM FY 2018-19TAX IN STOCK MARKET FROM FY 2018-19
Particulars Equity share in a
company
Unit of an equity oriented mutual fund or unit
of a business trust Securities
Transaction Tax
paid on acquisition * and
transfer
paid on transfer
Actual Cost on 1st April 2016 A 100 100 100 100
FMV as on 31stJanuary 2018 B 200 200 50 200
Sale Value on 1st April 2018 C 250 150 150 50
Cost of Acquisition as per above method
[Max of {A and Min of (B&C)}] D 200 150 100 100
Capital Gain / (Loss) (C-D) 50 0 50 (50)
Particulars Case 1 Case 2 Case 3 Case 4
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13
Summary of Taxability on Long Term Capital Gains on sale of equity shares or units:
Widening the definition of 'equity oriented fund' i.e. fund set up under a scheme specified in section 10 (23D) with inclusion of -
1. Fund of Funds (FOF) which are traded on a recognised stock exchange& asset allocation of FOF should have at east 90% in such other underlying fund which in turn invests minimum 90% of proceeds in the equity shares of listed domestic companies
2. Any Fund which invest minimum 65% of the total proceeds in the equity shares of listed domestic companies
The above % of equity shareholding or unit held in respect of the fund, as the case may be, shall be computed with reference to the annual average of the monthly averages of the opening and closing shareholding pattern.
Long Term Capital Loss Sale between 1st February 2018 and 31st March 2018 -Since the exemption under section 10(38) will be available for sale executed up to 31st March 2018, loss
arising during above said period will not be allowed to be set off or carried forward. Sale after 1st April 2018 -Loss arising from sale can be set-off against any other long term capital gains and balance loss can be
carried forward to subsequent eight years for set-off against long term capital gains.
SR. NO. PURCHASE SALE TAX IMPLICATION
1 Before 31st January 2018 Before 31st January 2018 LTCGis exempt under section 10(38)
2 Before 31st January 2018 After 31st January 2018
but before 1st April 2018
3 Before 31st January 2018 On or after 1st April 2018 " LTCGis taxable.
" Capital gains to be computed
4 After 31st January 2018 After 1st April 2018 in the manner stated above.
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Goods and Service Tax (GST) has been the pet project of the Central Government since the time of UPA-I and groundwork for the same was laid with the introduction of Cenvat Credit Rules, 2004. The present Government of NDA has been able to implement the biggest tax reform of independent India with infamous glitches and difficulties faced by trade and industry on a daily basis.
Sensing a need for making certain changes in the new law to address the issues faced by the assessees, amendments have been brought in by way of Central Goods and Service Tax (Amendment) Act, 2018. Since similar amendments will have to be made by all the State Legislatures, most of the provisions of this Amendment Act will be effective once CBIC notifies of the same.
At the outset I would like to Thank our President - CA Sunil Dedhia, Vice President - CA Sanjay Chheda, Managing Committee Member - CA Chintan Rambhia and Publication and Training Committee to provide this opportunity to me to write for this magazine. It must be noted that this article deals with amendments to CGST Act, 2017 other than those related to Input Tax Credit. Some of the major changes introduced by the Amendment Act are as follows:
1. Changes in Registration Provisions under GST.
1.1 As per Section 25(2) of CGST Act, 2017 any person seeking registration under the Act shall be granted a single registration in the same State or Union Territory. However, separate/multiple registrations can be obtained in the same State/UT in case of separate business verticals. This condition has been done away with, and assessees shall be eligible to obtain multiple registrations in the same State/UT for the same business vertical. In doing so, definition of 'business vertical' as given in Section 2(18) of CGST Act, 2017 has been deleted from the Act.
Say for e.g. Mr. A is in the business of manufacturing clothes having factories in Mumbai and Yavatmal in Maharashtra. Under the current provisions, he was
eligible to obtain only one GSTIN for both the premises. However, under the new law, he will be able to obtain separate registrations for Mumbai and Yavatmal premises.
It must be noted that rules, procedures and guidelines to do so have not been notified and various questions like transfer of ITC etc. remain unanswered and can be addressed only once these rules/guidelines are issued by the Government.
1.2 Under the current provisions, assessee having a unit in DTA and another unit in SEZ was allowed to register the premises separately treating SEZ unit as a separate 'business vertical'. But, with the concept of 'business vertical' being done away with, the Act has now been amended to allow separate registration for SEZ and for DTA unit similar to the one discussed above in 1.1.
1.3 As per Section 22(1) of CGST Act, 2017, any person located in special category state having a turnover upto Rs. 10 Lakhs is liable to get registered under GST. After the amendment, for the purpose ofprovisions of registration, the States of Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand will be excluded from the list of special category states for the purpose of registration thereby increasing the limit for registration to Rs. 20 Lakhs from current Rs. 10 Lakhs.
1.4 Under the current law, under Section 24, an e-commerce operator (ECO) is compulsorily required to take registration under GST irrespective of the turnover of such ECO. However, these provisions have been amended to provide that compulsory registration is applicable only to those ECOs who are liable to Collect Tax at Source (TCS). An ECO who is not required to collect tax at source will not be required to obtain registrations under GST if his turnover does not cross the threshold limit.
1.5 Under Section 29 of the CGST Act, 2017 any person who has either discontinued the business, sold the business, or there is a change in the constitution of the business or any other reason as covered therein shall apply for cancellation of the
RECENT AMENDMENTS IN RECENT AMENDMENTS IN G S TG S T
- Law Update
CA Deep R. Chheda
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
15
registration which shall be subsequently approved by the proper officer. However, till the time such approval is received, the assessee is required to comply with all the provisions of the GST Law like filing of returns etc. However, the amendment has introduced the concept of suspension of registration. Once the assessee applies for cancellation of registration, the GSTIN stands suspended till the proper officer approves the cancellation. Benefit of the cancellation is that the assessee is not required to comply with any provisions of the GST law. This move is likely to reduce the burden of compliance on the common man. It must be noted that procedures and Rules in this regard have not yet been issued by the Department and practical hurdles will be clear only once the same is issued.
2. Changes in Reverse Charge Mechanism (RCM).
Under the current law, tax is payable under reverse charge mechanism under Section 9(3) of CGST Act for notified supplies like sponsorship service, GTA service, advocate services, etc. and under Section 9(4) of the Act on inward supplies received from unregistered suppliers. While payment of tax under Section 9(3) is ongoing, payment of tax under Section 9(4) has been exempted vide Notification No. 22/2018 – CT (Rate) dated 06.08.2018 till 30.09.2019.
Now, Section 9(4) has been amended to provide that tax under reverse charge on supplies received from unregistered suppliers must be paid only by notified class of persons on notified types of supplies. Since the requirement to pay such tax under RCM has been exempted till 30.09.2019, the class of persons liable to pay tax on specified services is not expected to be notified anytime soon.
Therefore, upto 30.09.2019 tax under RCM needs to be paid only those services which have been notified in Notification No. 13/2017 – CT (Rate) dated 28.06.2017 and for payment of tax under RCM under Section 9(4), we will have to wait for government to notify the 'specified class of persons' and 'specified types of services.'
3. Changes in Composition levy.
3.1 Under Section 10(1) of CGST Act, 2017 any registered person having an aggregate turnover in the preceding financial year upto Rs. 50 Lakhs from supply of only goods was eligible to opt for composition scheme. Further, the Government had been empowered to increase this limit upto Rs. 1
Crores. This section has now been amended to allow the Government to increase the maximum ceiling upto Rs. 1.5 crores. This move is widely anticipated to provide relief to thousands of MSMEs who will now be able to opt for composition scheme and save a lot of money and manpower on GST compliances.
3.2 A supplier of only goods was allowed to opt for composition scheme. Any person who supplied services or both goods and services was not allowed to opt for composition scheme under Section 10(2) of the Act. The said condition has been tweaked to allow composition suppliers to also supply services upto 10% of their turnover of the preceding FY or Rs. 5 Lakhs, whichever is higher.
Say for e.g. Mr. A is trading in electronics and in addition to that also undertakes annual maintenance contracts of such electronics as a value additional service and charges to his customers separately for such AMC. Under the current law, he would be ineligible to opt for composition scheme. However, after the amendment, he will be able to opt for composition scheme, provided turnover from supply of service does not cross the threshold limit mentioned therein.
4. Credit Note and Debit Note.
Whenever there is an increase or decrease in the value of supply made during a financial year for which an invoice has been issued needs to be given impact by issuance of Credit Note [for reduction in value under Section 34(1) of CGST Act, 2017] and Debit Note / supplementary invoice [for increase in value under Section 34(3) of CGST Act, 2017].
Format of Credit note and Debit note has been given in Rule 53 of CGST Rules. As per these rules, no. of invoice against which such credit note or debit note has been raised needs to be mentioned. On the GST portal, only one invoice no. can be input in one credit/debit note. Thereby implying that one separate credit / debit note needs to be made for each invoice separately. Due to this several practical difficulties have been faced by the Trade and Industry where year end discounts based on performance of the recipient are passed on to the recipient as per the agreement between supplier and recipient.
According to the amendment, assessee will be allowed to issue single consolidated credit / debit note against more than one invoices issued to a single recipient. This amendment can reduce the unwanted duplication of work of issuing multiple credit / debit notes. This will help suppliers to issue a single credit /
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debit note to pass on discount benefits earned by the recipients across multiple invoices. How the portal allows the assessee to upload these credit / debit note needs to be seen.
5. Order of utilization of Input tax credit.
Under the current GST law, the credit of State tax shall first be utilized towards payment ofState tax and the amount remaining, if any, may be utilized towards payment ofintegrated tax and similar sequence is applicable for unutilized credit balance of central tax. There is no restriction under law as to whether central tax must be first used to pay integrated tax or state tax must be used to pay integrated tax.
However, on GST common portal the credit of State tax/ Union territorytax can be utilized for payment of integrated tax only when the balance of the input taxcredit on account of central tax is not available for payment of integrated tax. There isrestriction placed by GST common portal in the utilization of input tax credit of Statetax/Union territory tax towards payment of integrated tax which is not there in the law.
It is proposed to amend order of cross utilisation to make GST provisions in line withGST common portal and as per proposed amendment the credit of State tax/ Unionterritory tax can be utilized for payment of integrated tax only when the balance of theinput tax credit on account of central tax is not available for payment of integrated tax.
Further, credit of Central Tax/ state tax/ union territory tax shall be utilised towardspayment of integrated tax, Central Tax/ state tax/ union territory tax (as allowed) onlyafter credit of integrated tax has been first utilised fully towards payment of integratedtax.
6. Changes in provisions for exports and refund on exports.
6.1 The principle of unjust enrichment was not applicable in case of refund claim made by suppliers for supply made to SEZ developer/unit. Which means even if the incidence of tax has been passed on to the SEZ unit/developer, the supplier (exporter) supplying goods to the SEZ Unit / developer was eligible to avail refund of tax paid on such export or of unutilised ITC in case of export under LUT. However, after the amendment, the Principal of Unjust Enrichment will apply in case of refund claim arising out of supplies of goods or services made to SEZ
developer/unit and accordingly declaration and certificate from CA/cost accountants stating that incidence of tax or any other amount claimed as refund has not been passed on to any other person will be required in case where person claiming refund in case of supplies made to SEZ unit or developers.
6.2 Section 2(6) of IGST Act defines which supply can be defined as an 'Export of Service'. One of the conditions placed in the said definition is that consideration for such supply needs to be received by the supplier in freely convertible foreign currency. However, in the case of exports to Nepal and Bhutan, the payment is received in Indian rupees as per RBI Regulations. In this respect, various provisions of CGST & IGST Act have been amended to provide that services shall qualify as exports even if the payment for the services supplied is received in Indian rupees as per RBI regulations.
6.3 Under the GST regime, assesses have been allowed to take refund of accumulated ITC on account of inverted duty structure (where rate of tax on outward supply is less than rate of tax on inward supply). Under the current laws, refund application needs to be made within two years of the end of the financial year to which the supply pertains to. After the amendment the relevant date in case of claiming refund of unutilized input tax credit on account of inverted duty structure shall be due date of filing of GSTR 3/ 3B (instead of end of financial year) for the period for which claim for such refund arises. And accordingly, due date for filing of return shall be two years from date of filing of such return.
7. Recovery Provisions.
Business premises of a registered person in more than one State/UT shall be deemed to be distinct persons from each other for the purpose of GST Law. However, when any recovery is to be made from any one GSTIN of a state, recovery can be made from other GSTINs of the same person across other States/UTs.
8. Amendments in Transitional Provisions.
8.1 Under the current law, there is an ambiguity with respect to carry forward of various cess such as KKC, EC, SHEC to GST. The transitional provis ionsare proposed to be amended retrospectively w.e.f. 01.07.2017 to remove such ambiguity andrestrict carry forward of such cess to GST law. In case company has carried forward creditof KKC, ED cess or SHE cess in GST law, the
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same needs to be reversed. The assessee may apply for refund of such cess once it has been reversed if the amount of the same is substantial. It is a litigative area and clarity can be achieved only once the matter reaches the higher courts.
8.2 Also, additional duty of excise leviable under the Additional Duties of Excise (Textile and Textile Articles) Act, 1978 and any cess which is collected as additional duty of Customs under Customs Tariff Act is not to be considered as eligible duties and taxes for carry forward under GST.
9. Changes in Provisions related to Job Worker
Presently, inputs or capital goods provided to job worker should be returned back to manufacturer within a period of 1 year or 3 years respectively otherwise the same will be subject to GST. As per proposed amendment, Commissioner will be empowered to extend such time limit for a further period up to 1 year or 2 years respectively if sufficient cause shown to him.
10. When any service is received by a registered person in the course or furtherance of his business from any related person or his own establishment situated outside India then the same is deemed to be a supply. But when such services are received by an unregistered person, they are not deemed to be a supply under the current law and therefore, such person is not liable to pay tax on such supply under Reverse charge for import of services. However, the amendment has made it compulsory for an unregistered person receiving services from related person or his own establishment outside India in the course or furtherance of his business shall be liable to be registered under GST and must pay tax under RCM on import of such services.
11. Addition of entries to Schedule III of CGST Act.
The schedule III contains list of transactions which are considered neither as supply ofgoods nor as supply of services. The proposed amendment will bring followingtransaction under ambit of schedule III and accordingly the same will not be considered assupply under GST law:
11.1 Supply of goods purchased from Non-Taxable Territory to another Non-taxable Territory without such goods entering into India. For e.g. Goods are purchased from China and directly transported to Indonesia. In this case the goods have not entered into India and therefore, GST law is not applicable to
these goods. Therefore, the same will not be considered to be a supply under GST.
11.2 Supply of warehoused goods before clearance for home consumption. However, IGST along with BCD will have to be paid by the person getting the goods cleared from the warehouse for home consumption. Only when goods are sold by the importer / subsequent purchaser while the goods are still in warehouse and have not been cleared for home consumption shall not be considered as supply under GST.
11.3 High Seas Sales. Same as 12.1 above, when goods are sold by the importer even before they have entered the Indian territorial waters is not considered as a supply under GST since GST law is not applicable to it. However, similar to 12.2 above once the goods have entered the territorial waters and cleared for home consumption, the person clearing these goods will be liable for payment of BCD and IGST.
It must be noted that these supplies will be considered as 'exempt supplies' for reversal of common ITC as required in Section 17(2) CGST Act, 2017 read with Rule 42 of CGST Rules.
12. Place of supply in case of transportation of Goods service.
In case of goods transportation service, where both the service recipient and supplier are located in India place of supply of such service as per Section 12(8) of IGST Act was the place where the service recipient is located, which would by default be somewhere in India and therefore, tax was payable on such service. Due to this, in case of goods destined for export outside India, exporter being the service recipient had to pay tax on such transportation of service leading to blockage of capital since export of goods is a zero-rated supply.
This anomaly has been rectified by the government and therefore, Section 12(8) has been amended and after the amendment, place of supply of such service shall be the destination of the goods. Therefore, if goods are destined to be exported outside India, place of supply of service of transportation of goods will be such country where the goods have been exported and not the location of service recipient.
13. Other miscellaneous changes:
13.1 The definition of business under GST is being amended to specify that the activities of aRace Club
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by way of totalizers will be treated as a business under GST.
13.2 The definition of local authority under the GST law will also include the DevelopmentBoard established in the State of Karnataka under the Article 371J of the Constitution.
13.3 The government had issued FAQ in respect of banking and financial services wherein ithad been clarified that all charges like; documentation fees, charges levied in connectionwith the transaction supply of securities will also be subject to GST. In order to removeambiguity and bring more clarity in this respect an appropriate Explanation has beenadded under the definition of the term “Service”. The tax will continue to be paid onvarious types of charges recovered for facilitating or arranging the transactions insecurities.
13.4 The Schedule II of the GST Act specifies certain transaction as supply of goods or supplyof service. The necessary amendments are being made in Section 7 of the GST Act tospecify that Schedule II is only for the purpose of classification of transaction between theservices and goods. Therefore, the transaction stated in Schedule II will not amount tosupply if not made in the course or furtherance of business.
13.5 The amount of VAT on goods like alcoholic liquor etc. levied under entry 92A of list I ofschedule 7 of constitution will be excluded from the value of turnover for distribution ofISD credit.
13.6 Any department of the Central or State Government / local authority whose books ofaccounts are audited by CAG need not get their books of account audited by anyChartered Accountant or Cost Accountant.
13.7 The new formats of GST returns have been approved by GST council. The new provisionsand procedures for furnishing GST returns and availing input tax credit will be provided.
13.8 In the amendments it is proposed to increase the maximum limit of pre-deposit to be made at the time of filing appeal with the Appellate Authority and Appellate tribunal. The same can be seen from the following table:
13.9 The time limit to pay tax & penalty for releasing of goods, conveyance, documents seizedwill be increased to 14 days from existing 7 days.
13.10 The reference to Panchayat under article 243G is sought to be added in the definition ofGovernmental authority.
13.11 The GST will not be payable on supply of service in relation to goods which aretemporarily imported in India for treatment, process, repair works on it and are exportedback after such treatment, process, repair works without being used in India. Presentlythe said transaction is limited to goods imported temporarily for repairs work.
Overall, these amendments are a step taken towards plugging some the loop holes in the system and to address the problems faced by the trade and industry. However, as has been the experience in the past, any good change which has been brought into the system has been hastily implemented and therefore, has increased the problems of the taxpayers rather than reducing the same. Only time can tell whether these amendments will work in favour of the taxpayers or not. Irrespective of the same, role of Chartered Accountants in this ever-dynamic atmosphere becomes more and more important with each passing day.
I hope this article has been of help to each and everyone reading this. Best efforts have been taken to keep the article accurate, concise and free from any bias. However, mistakes are what make us human and rectifying them can only help us become better human beings. Any kind of constructive criticism will be welcomes with open arms and acknowledged with gratitude. On this note, I would like to conclude this article and once again thank CVOCA Association and its members for providing me with this wonderful opportunity.
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
Particulars
%
of
demand to be deposited
Maximum amount to be deposited
IGST CGST SGST
Appellate Authority
10%
Rs. 50 Crores
Rs. 25 Crores Rs. 25 Crores
Appellate Tribunal 20% Rs. 100 Crores Rs. 50 Crores Rs. 50 Crores
he Central Board of Indirect Taxes and T Customs ('CBIC') has recently issued a Circular No. 1065/4/2018-CX dtd. 8 June 2018. The said circular clarifies the meaning of 'Place of Removal' under the Central Excise Act, 1944 ('CEA') and the CENVAT Credit Rules, 2004 ('CCR').
The term 'place of removal' has a legacy of interpretation and litigation around it for valuation of excisable goods and eligibility of CENVAT Credit on input services. It is in this regards that the Circular tries to clarify the term and settle the litigations.Background:
The term 'Place of Removal' has been defined u/s. 4 of the CEA, which provides for valuation of excisable goods. As per explanation VI to Section 4 of the CEA,
“Place of removal means –i. a factory or any other place or premises of
production or manufacture of the excisable goods;ii. a warehouse or any other place or premises
wherein the excisable goods have been permitted to be deposited without payment of duty;
iii. a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory;
from where such goods are removed;”Earlier, the above definition of place of removal
was not present in the CCR. Rule 2(t) of the CCR provided for assignment of the definitions of words (used but not defined in CCR) from the CEA or Finance Act, 1944.
The Hon'ble Supreme Court (SC) analysed the definition of place of removal in the case of Escorts JCB Ltd. [2002 (146) ELT 31 (SC)]. The Apex Court held that as per Section 39 of the Sale of Goods Act, 1930, the delivery of goods to the carrier is prima facie delivery of goods to the buyer. Even though the transit insurance was in the name of the manufacturer, the risk and rewards of the goods were on the buyer from the time goods left the factory. Thus, the ownership of goods being transferred to the buyer at the factory gate, the factory gate would be the place of removal.
This principle was further upheld in the Apex Court's decision in the case of Prabhat Zarda Factory Ltd. [2002 (146) ELT 497 (SC)].
Consequently, the CBEC issued Section 37B Order No. 59/1/2003-CX dated 3 March 2003 to clarify that the place of removal would have to be determined based on this principle for the purpose of valuation of goods.
Subsequently, the CBEC issued Circular No. 97/8/2007-ST dtd. 23 August 2007 to provide clarity on eligibility of CENVAT Credit on outward transportation of goods. This circular also followed the above mentioned principle to determine place of removal – thus the eligibility of credit up to the place of removal.
The definition of 'place of removal' was inserted in the CCR vide Notification No. 21/2014-CE (NT) dtd. 11 July 2014. In light of the amendment, the CBEC issued Circular No. 988/12/2014-CX dtd. 20 October 2014 and stated that place of removal has to be ascertained in terms of provisions of Central Excise Act r.w. the Sale of Goods Act, 1930.
In the meanwhile, the Hon'ble SC too laid down the principles for determining the place of removal for couple of the valuation cases.
In the case of Accurate Meters Limited [2009 (235) ELT 581 (SC)], it has held that since the delivery of goods to the transporter is delivery to the buyer, sale takes place at the factory gate. Thus, factory gate being the place of removal, transportation and insurance though charged separately cannot be included in the valuation of excisable goods.
Further, the Hon'ble SC also analysed the term 'place of removal' in case of FOR sales in the case of Roofit Industries Limited [2015 (319) ELT 221 (SC) ] and Emco Limited [2015 (332) ELT 394 (SC)]. In these decisions, the Apex Court held that in case of FOR sales – since the responsibility (i.e. transit damage/risk) of the goods was of the manufacturer till delivery to the buyer's premises, the transfer of property in goods to the buyer happens at the buyer's premises and not the factory gate (refers Section 19 of the Sale of Goods Act). Thus, the place of removal would be the buyer's premises.
The above settled principle received a serious blow in the case of Ispat Industries [2015 (324) ELT 670], wherein the Hon'ble SC held that the place of removal has to be referred with reference to the manufacturer of the goods and not the buyer. Thus, the Apex Court held that the buyer's premises can
19
THE ISSUE AROUND THE ISSUE AROUND “PLACE OF REMOVAL”“PLACE OF REMOVAL”
- CA NIHAR S. DHAROD
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never be the place of removal for a manufacturer.In Ispat's judgement the Hon'ble SC has
distinguished its earlier decisions of Roofit and Emco on the basis of facts. However, the ratio laid down in Ispat's case remains clearly in contrast to the ratio laid down in all its earlier decisions.
In February 2018, the Hon'ble SC pronounced its decision in the case of Ultratech Cement Limited [2018-TIOL-42-SC-CX] on eligibility of input tax credit on outward transportation.
The Apex Court has held that w.e.f. 01 April 2008, CENVAT credit of outward transportation of goods from the place of removal to the buyer's premises would not be eligible. It stated that CBEC's Circular issued in 2007 on eligibility of such credit was in relation to the definition of input services up to 01 April 2008 (prior to its amendment) and thus cannot be relied up on for the period w.e.f. 01 April 2008 (i.e. post amendment).
However, the Hon'ble SC did not analyse the definition of 'place of removal', for which contradictory decisions have been pronounced in the past.Circular No. 1065/4/2018-CX dtd. 8 June 2018:
In light of the aforementioned sequence of events, CBIC has issued this Circular. It is an attempt to put an end to the pending litigation around the term 'place of removal' and its implication on valuation and the CENVAT Credit.
In order to put the issues at rest, this Circular has rescinded Circular no. 988/12/2014-CX dtd. 20 October 2014 and clause (c) of para 8.1 and para 8.2 of the Circular no. 97/8/2007-CX dtd. 23 August 2007.
The Circular has clarified that the general principle for determination of 'place of removal' would be as laid down by the Hon'ble SC in the case of Ispat Limited i.e. place of removal would be with reference to the manufacturer's premises only.
Interestingly, the Circular has created exceptions to the above for Contract for FOR Sales (relying on the Hon'ble SC decisions in the case of Roofit Industries Limited and Emco Limited) and for Export Clearances (relying on its Circular issued in 2015).
Thus, in case of FOR sales (similar to the aforementioned decisions) place of removal would be buyer's premises and in case of exports would be the Port/ICD/CFS.
However, the Circular has explicitly stated that
CENVAT Credit on outward transportation would be
allowed only 'up to the place of removal' (relying on
the recent decision of the Hon'ble SC in the case of
Ultra Tech Cement).Further, the Circular has acknowledged that the
issue is in the nature of interpretation of law but has
surprisingly restricted the scope for invoking
extended period of limitation to the extent of new
show cause notices only.Conclusion:
In case of ex-works sales, the matter seems to ·be settled i.e. place of removal would be
manufacturer's premises only and hence CENVAT
Credit of outward transportation beyond place of
removal would not be allowed; In case of FOR sales, CENVAT Credit would be ·
eligible on the fact that the buyer's premises is the
place of removal (as per the ratio laid in the case of
Roofit Industries and Emco). This view has also been
confirmed by the exception created in the Circular
and would be binding on the Revenue. However, risk
of matter being referred to the Larger Bench ought to
be kept in mind considering the inconsistencies in
the principle laid down in the SC decisions; In case of exports, the benefit of the Circular of ·
2015 and this Circular may be claimed as the same
are binding on the Revenue. However, this seems to
be contradictory to the ratio laid down in the case of
Ispat Industries and may pose some risk; The issue being in the nature of interpretation ·
of law, the exposure (if any) would be limited to tax
and interest only. The Revenue would not be in a
position to invoke extended period of limitation in the
new as well as old matters. Suitable submissions
ought to be made against penal proceedings initiated
or extended period invoked by the Revenue.
Bob R
ichard
s A
merica
n A
thle
te
INGENUITYINGENUITY COURAGE COURAGEWORKWORK MIRACLES=+
+
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
21
Like the erstwhile Indirect Tax Laws, Good and Service Tax Law ('GST Law')1is also based on the model of self-assessment. A registered person is required to assess his value of taxable supply, applicable tax rates on the same and amount of input tax credit available. A taxpayer has to compute the tax payablethereon and to discharge the computed tax liability.In order to ensure correct and effective compliance of GST laws, audit provisions are incorporated under GST Law.On the auspicious day of Ganesh Chaturthi i.e., 13th of September 2018, Central Board of Indirect Taxes& Customs ('CBIC'), has issued the notification no. 49/2018- Central Tax, to notify Form GSTR 9C to be uploaded electronically along with Annual returns in Form GSTR - 9 on or before 31st December 2018.
¢ Brief Background:In the earlier indirect tax regime, there was no provision for compulsory audit on crossing of the specified turnover threshold under taxes administered by Centre i.e Service Taxor Central Excise. However in the state wise VAT laws provision relating to audit of the books of accounts on crossing of the turnover threshold was there.Under CGST Act 2017, 'audit' has been defined under section 2(13) of the said Act.
"audit" means the examination of records, returns and other documents maintained or furnished by the registered person under this Act or the rules made thereunder or under any other law for the time being in force to verify the correctness of turnover declared, taxes paid, refund claimed and input tax credit availed, and to assess his compliance with the provisions of this Act or the rules made thereunder;
On quick glance of Form GSTR 9C it appears that the form is essentially a reconciliation statements which reconciles the figures reported in the audited financial statements and Annual return of a taxpayer. However, above definition of the 'audit' indicates that the GST lawmakers had envisaged very wide coverage for audit and our professional brothers may have to think about the scope and coverage of this GST Audit.
CA Mihir Shah
GST AUDIT GST AUDIT - Law Update
AN OVERVIEWAN OVERVIEW
Particulars GST Audit by Registered Persons.
GST Audit by Tax Authorities
Special Audits
Applicable to Compulsory for every registered person on crossing the threshold limit
Applicable only in cases where the tax authorities finds it necessary
Applicable only in the cases where the tax officials finds it necessary based on the complexity of the cases
Governed by Governed by sec 35(5) of the CGST Act.
Governed by sec 65 of the CGST Act.
Governed by sec 66 of the CGST Act.
Auditor appointed by
Auditor is appointed by the Registered Person himself to be conducted by Chartered Accountant or Cost Accountant
Records are Audited by Tax officials themselves
Auditor is appointed by the Tax officials (akin to special audits conducted under Service Tax and Excise regime)
1. GST Law includes, Acts passed by names such as central Goods and Service Tax Act 2017, Integrated Goods and Service Tax Act 2017, State GST Acts, Union Territory GST Acts and rules thereunder
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
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Legislative Coverage and its applicability.
Sec 35 (5) of the CGST Act 2017, prescribes "Every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy of the audited annual accounts, the reconciliation statement under sub-section (2) of section 44 and such other documents in such form and manner as may be prescribed".
Sec 44(2) of the CGST Act 2017, prescribes "Every registered person who is required to get his accounts audited in accordance with the provisions of sub-section (5) of section 35 shall furnish, electronically, the annual return under sub-section (1) along with a copy of the audited annual accounts and a reconciliation statement, reconciling the value of supplies declared in the return furnished for the financial year with the audited annual financial statement, and such other particulars as may be prescribed".
Rule 80(3) of the CGST Rules prescribes "Every registered person whose aggregate turnover during a financial year exceeds two crore rupees shall get his accounts audited as specified under sub-section (5) of section 35 and he shall furnish a copy of audited annual accounts and a reconciliation statement, duly certified, in FORM GSTR-9C, electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner".
On perusal of the above provisions it can be observed that every registered person whose aggregate turnover during the financial year exceeds Rs. 2 crore has to get their accounts audited by Chartered Accountants or Cost Accountants and shall submit the prescribed documents.
Section 35(5) of the Act uses the term as 'turnover' and not' aggregate turnover'.However, when read with rule 80(3) of CGST Rules, it appears that turnover limit to get the accounts audited by taxpayer should be 'Aggregate Turnover'.
Aggregate turnover is defined u/s 2(6) as per which following amounts are to be included / excluded from the calculation of the turnover value to determine applicability of Audit u/s 35(5):
Inclusions Exclusions
Value of All Taxable Supplies Value of inward supplies on which tax is paid by a person on reverse charges basis
Exempt supplies (Including outward supplies where tax is to be paid by person receiving such supplies under RCM)
Value of State Tax, Central Tax, Union Territory Tax, Integrated tax and Cess under GST tax Laws.
Value of Export of Goods or Services both
The said Values are to be calculated on PAN India Basis.
Some of the examples for calculation of the Aggregate Turnover for the threshold of Audit are as follows:
Particulars
Example 1 (Rs.)
Example 2
(Rs.)
Example 3
(Rs.)
Maharashtra
Taxable
1.25 crores
0.8 crores
1.25 crores
Exempt
0.8 crores
0.25 crores
0.25 crores
Gujarat Export Supplies 1.6 crores - -
Exempt Supplies 1.2 crores 0.2 crores 0.75 crores
Total Sales 4.85 crores 1.25 crores 2.25 crores
Applicability for Audit Audit Applicable in both the state
of Maharashtra & Gujarat
Audit is not applicable in either of the state.
Audit Applicable in both the state
of Maharashtra & Gujarat
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As can be observed in Example 3 above, even though the turnover in the state of Gujarat is less than specified turnover of Rs. 2 crores, still GST Audit under section 35(5) of CGST Act has to be conducted since its aggregate turnover (PAN India) is crossing the specified threshold of Rs. 2 crores.Please note, it can be argued that a Rule (Rule 80(3) from which 'aggregate turnover' word is specified) cannot override Section (section 35(5) where only the word 'turnover' has been mentioned). The word 'turnover' is not defined anywhere in the GST Law. The words 'aggregate turnover' or 'turnover in state' are the closest definitions. Since 'turnover' has not been defined, one can interpret section 35(5) threshold by considering these two definitions.A conservative view would be what we have followed in Example 3 above.
Snapshot of FORM GSTR 9C:Below chart briefly explains the flow of the Form GSTR 9C in two major parts that is Reconciliation Statement and Certificate to be issued by the GST Auditor.
Form GSTR 9C
Part A: Reconciliation Statement
Part B: Certification
Reconciliation to be done for amounts as submitted in Annual return and that as per financial statements
Case where reconciliation statement is drawn by the person who had conducted the audit.
Case where reconciliation statement is drawn by any other person other than who has conducted the audit.
Brief comments onPart A of Form GSTR-9C:
Table reference
Particulars Remarks
1-4
Basic Details
In this tab, basic details of the person under audit are to be entered (most likely shall be auto populated).
5A to 8C
Reconciliation of Turnover declared in Annual Financial Statement with turnover declared in Annual Return (GSTR 9)
Following points should be considered while filling these fields:
Statewise revenue as entered in the audited financial statement
to be considered.
Due verification to be undertaken to ensure correct turnover is reported.
The method of revenue recognition may be
different in the financial
statement as compared to recognition of time of supply for GST. (For eg. cash system of accounting followed,revenue recognition for Construction sector etc.)
Turnover not forming part of operating income such as sale of Scrap, Sale of Fixed Assets etc.
Additional requirement for this year will be that the turnover in the financial statement will be for entire year from April 17 to March 2018, however in Annual return it will be for July 2017 to March 2018.
All such adjustments are listed in the reconciliation statement are to be explained in the reconciliation statement from points given in from rows 5A to 5N, and also an additional space is given for the items not fitting under cell 5A to 5N, as 5O.
Once the reconciliation of Gross turnover is done we have to provide reconciliation of the taxable turnover also.
Any un-reconciled
figure at the Gross level or taxable turnover level is to be explained with appropriate reason for the same.
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Table reference
Particulars
Remarks
Any un-reconciled figure at the Gross level or taxable turnover level is
to be explained with appropriate reason for the same.
9A
to 11
Reconciliation of Tax Paid
In this column, tax rate wise liability is to be given for outward supplies and also for inward supplies liable to reverse charge. If any amount which remains payable shall be shown as un-reconciled payment and the same is
to be explained with appropriate reasons.
12A to 16 Reconciliation of Input Tax Credit (ITC)
Reconciliation is to be done for the ITC availed (net of reversals) as mentioned in the Financial Statement vis -à-vis to the ITC availed as given in the GST Annual Returns.
Also the credit is to be bifurcated expense wise as per the list given inTable 14, along with its value, Total ITC and eligible ITC respectively.
Any difference of such eligible ITC with the amount of ITC as per the annual return is to be explained with appropriate reasons.
Tax Payable if any , due to difference in the eligible ITC and ITC claimed as per Annual Return has to be disclosed.
Point V Auditor’s recommendation on additional liability
The auditor is required to disclose the additional amount payable, due to reconciliation difference as mentioned in the Table 8, Table 10 and Table 16.
Verification
Auditor has to solemnly affirm and declarethe following:
1. True and correct information provided in above tables
2. No concealment of information provided in above tables
One has to be absolutely certain of information provided in Form GSTR 9C while signing the same along with Firm’s stamp
Brief comments on Part B of Form GSTR 9C:
Particulars
FORMAT 1
FORMAT 2
Applicability
Certification by Person who has conducted the audit under any other law
Certification by person other than the person who has conducted the audit under any other law
Examination of Financial Statement
To certify the examination of Balance Sh eet, Profit & Loss Account and Cash Flow Statement
To report that audit was conducted by another person and to annex the Balance Sheet, Profit and Loss Account and Cash Flow Statement.
Certification on the books of Accounts/ records maintained(please refer note below)
To certify whether all the books of accounts, records required as per the GST law are properly maintained and also to confirm the accounting treatment given for the same in the books of accounts
Certification for Form 9C
To certify whether all the information provided in form 9C are true and correct.
Additional observations to Qualification(s) to be provided here.
report
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Note: Following records needed to be verified while issuing the GST Audit report:
(a) production or manufacture of goods;
(b) inward and outward supply of goods or services or both;
(c) stock of goods;
(d) input tax credit availed;
(e) output tax payable and paid; and
(f) records / documents as prescribed under Rule 56, Rule 57 and Rule 58 of CGST Rules.
Therefore, on examining Form GSTR 9C closely, it can be observed that though major part of the said form is
about reconciliation between financial statement and annual returns filed in form GSTR 9, there is a bigger
onus on a Chartered Accountant to certify Form GSTR 9C which should be considered before starting to
conduct such audits.
Note: The above views of the author are personal and are based on the laws prevailing as on the date of article.
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ANNUAL RETURNS UNDERANNUAL RETURNS UNDERGSTGST
Compiled by:
CLAUSE BY CLAUSE ANALYSIS OF ANNUAL RETURNS UNDER GST (FORM GSTR – 9)
The hectic audit season is almost on the verge of completion. The extended deadlines shall ensure that all the work in hand shall be completed in a timely manner. However, as our professional community has now experienced, if one deadline is over, then next is already a part of the TO-DO list. One such item in TO-DO list amongst many other items is that of filing Annual return under GST to be filed by 31 December 2018.
BRIEF BACKGROUNDCentral Board of Indirect Taxes & Customs ('CBIC') on 4 September 2018 vide notification no 39/2018 – Central Tax has notified the format of Annual return to be filed by registered dealers (regular) in FORM GSTR – 9 ('Annual return') and by composition dealers under section 10 of CGST Act 2017 in FORM GSTR – 9A.
After detailed analysis of the format, the notified form is not what was expected by most dealers. A closer look of the form along with the instructions annexed with the form, it becomes certain that the annual return to be filed by all the regular registered dealers is nothing but the consolidated summary of returns / statements filed by them during July 2017 to March 2018 in FORM GSTR 3B and FORM GSTR 1. Any additional liability that remained to be reported in such returns / statements, shall not form part of Annual return. The dealers were expecting that inadvertent mistakes could be rectified while filing Annual return.
How to file Annual return form, how to rectify mistakes like additional sales to be reported, additional credit to be claimed etc., forms part of this article. Before answering such questions, let us have a look at the legislative coverage / applicability of Annual return.
LEGISLATIVE COVERAGEAs per Section 44(1) of CGST Act, 2017 read with Rule 80 of CGST Rules 2017, every registered person other than an Input service distributor, a person paying tax under section 51 or 52 (TDS / TCS), a casual taxable person and a non-resident taxable person, shall furnish an annual return in FORM GSTR – 9 electronically on or before 31 December following the end of a financial year (for FY 2017-18, the due date is 31 December 2018).
SNAPSHOT OF FORM GSTR 9
Annual return has been divided in six sections. Following table shall provide the details of the same.
Sr No
Section
Information required
1 Part-I
Basic details of the taxpayer. This detail will be auto -populated.
2 Part-II Details of Outward and Inward supplies declared during the financial year. This detail must be picked up by consolidating summary from all GSTR-1 returns filed in previous FY.
3 Part-III Details of ITC declared in returns filed during the FY. This will be summarised values picked up from all the GSTR 3B returns filed in previous FY.
4 Part-IV Details of tax paid as declared in returns filed during the FY.
5 Part-V
Particulars of the transactions for the previous FY declared in returns of April 2018 to September 2018 of current FY or up to the date of filing of annual return of previous FY whichever is earlier.
6 Part-VI
Other Information comprising details including HSN wise summary information of the
quantity of goods supplied and received with its corresponding Tax details
CA Chintan Rambhia
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CLAUSE BY CLAUSE ANALYSIS OF ANNUAL RETURN FORM GSTR - 9The notified form has been reproduced along with comments. It is pertinent to note that the comments provided are combination of instructions annexed with the notified form along with comments of the author. The important comments have been highlighted in RED for ease of reference.
“FORM GSTR - 9
(See rule 80)
Annual Return
Pt. I
Basic Details
1
Financial Year
<<Relevant Financial Year for which the form is being filled>>
2
GSTIN
<<GSTIN of the dealer>> This means Annual return needs to be filed for each GSTIN
3A
Legal Name
<<Name as per PAN of the entity>>
3B
Trade Name (if any)
<<Trade name to be entered here>>
Pt. II
Details of Outward and inward supplies declared during the financial year
(Amount i n ₹
in all tables)
Nature of Supplies Taxable Value Central Tax
State Tax / UT
Tax
Integrated Tax
Cess
1 2 3 4 5 6
4 Details of advances, inward and outward supplies on which tax is payable as declared in returns filed during the financial year
A Supplies made to un-registered persons (B2C)
a) This table consists of supply on which GST is applicable / payable. B) Fields shall be filled from relevant tables of GSTR 1 filed during the period July 2017 to March 2018. c) B2C supplies shall be reported net of credit and debit notes.
B Supplies made to registered persons (B2B)
C Zero rated supply (Export) on payment of tax (except supplies to SEZs)
D Supply to SEZs on payment of tax
E Deemed Exports
F Advances on which tax has been paid but invoice has not been issued (not covered under (A) to (E) above)
G Inward supplies on which tax is to be paid on reverse charge basis
To be filled from Table 3.1 (d) of GSTR 3B for the period July 2017 to March 2018
H Sub-total (A to G above) I Credit Notes issued in respect of
transactions specified in (B) to (E) above (-)
Credit notes issued for B2B supplies, Exports, SEZ supplies, Deemed exports as per table 9B of GSTR 1 for July 2017 to March 2018 to be used for filling these details. The original supply must contain GST element
J Debit Notes issued in respect of transactions specified in (B) to (E) above (+)
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K
Supplies / tax declared through Amendments (+)
Amendments made to B2B supplies, exports, supplies to SEZ and deemed exports, credit notes, debit notes and refund vouchers shall be declared here. Table 9A and Table 9C of FORM GSTR-1
for July 2017 to March 2018
may be
used for filling up these details. The original supply must contain GST element
L Supplies / tax reduced through Amendments
(-)
M
Sub-total (I to L above)
N
Supplies and advances on which tax is to be paid (H + M) above
5 Details of Outward supplies on which tax is not payable as declared in returns filed during the financial year
A Zero rated supply (Export) without payment of tax
a) This table consists of supply on which GST is not applicable / payable. b) Fields shall be filled from relevant tables of GSTR 1 filed during the period July 2017 to March 2018. c) The value of “no supply” (Schedule III supply)
shall also be declared here .
B Supply to SEZs without payment of tax
C Supplies on which tax is to be paid by the recipient on reverse charge basis
D Exempted
E Nil Rated
F Non-GST supply
G Sub-total (A to F above)
H Credit Notes issued in respect of transactions specified
in A to F above (-) Credit notes issued for Exports, SEZ supplies, Deemed exports, Exempted, Nil Rated, Non-GST supply as per table 9B of GSTR 1 of July 2017 to March 2018 to be used for filling these details. The original supply should not contain GST element.
I Debit Notes issued in respect of transactions specified
in A to F above (+)
J Supplies declared through Amendments (+)
Amendments made to B2B supplies, exports, supplies to SEZ and deemed exports, credit notes, debit notes and refund vouchers shall be declared here. Table 9A and Table 9C of FORM GSTR -1 from July 2017 to March 2018
may be used for filling up
these details. The original supply should not contain GST element.
K
Supplies reduced through Amendments (-)
L Sub-Total (H to K above)
M
Turnover on which tax is not to be paid (G + L above)
N
Total Turnover (including advances) (4N + 5M -
4G above)
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Pt. III
Details of ITC as declared in returns filed during the finan cial year
Description Type Central Tax
State Tax /
Integrated Tax
Cess
UT
Tax
1 2 3 4 5 6
6 Details of ITC availed as declared in returns filed during the financial year
A Total amount of input tax credit availed through FORM GSTR-3B (sum total of Table 4A of FORM GSTR-3B)
Total input tax credit availed in Table 4A of FORM GSTR-3B would be auto-populated here.
B
Inward supplies (other than imports and inward supplies liable to reverse charge but includes services received from SEZs)
Inputs Aggregate value of input tax credit availed on all inward supplies including on which tax is payable on reverse charge, supply of services received from SEZs shall be declared here.
It may be noted that the total ITC availed is to be classified as ITC on inputs, capital goods and input services
(Such details were not to be provided in any of the already filed returns). Table 4(A)(5) of FORM GSTR-3B for July 2017 to March 2018 shall be used for filling up these details.
Capital Goods
Input Services
C
Inward supplies received from unregistered persons liable to reverse charge (other than B above) on which tax is paid & ITC availed
Inputs
Capital Goods
Input Services
D
Inward supplies received from registered persons liable to reverse charge (other than B above) on which tax is paid and ITC availed
Inputs
Capital Goods
Input Services
E
Import of goods (including supplies from SEZs)
Inputs Details of input tax credit availed on import of goods including supply of goods received from SEZs, import of services shall be declared here. It may be noted that the total ITC availed is to be classified as ITC on inputs and capital goods. Refer table 4A(1) and 4A (2) of GSTR 3B for July 2017 to March 2018
Capital Goods
F Import of services (excluding inward supplies from SEZs)
G Input Tax credit received from ISD Aggregate value of input tax credit received from input service distributor shall be declared here. Table 4(A)(4) of FORM GSTR-3B for July 2017 to March 2018 may be used for filling up these details.
H Amount of ITC reclaimed (other than B above) under the provisions of the Act
Example of this could be ITC availed but payment not made to vendor within stipulated time. However, credit reclaimed once the payment has been made to the vendor
I Sub-total (B to H above)
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J Difference (I -
A above)
K Transition Credit through TRAN -I (including revisions if any)
Details of transition credit received in the electronic credit ledger on filing of FORM GST TRAN-I including revision of TRAN-I (net of revision) and from FORM GST TRAN-2
L Transition Credit through TRAN -II
M Any other ITC availed but not specified above Details of ITC availed through FORM ITC01
and FORM ITC-02 during the financial year 2017-18 shall be declared here
N Sub-total (K to M above)
O Total ITC availed (I + N above)
7 Details of ITC Reversed and Ineligible ITC as declared in returns filed during the financial year
A As per Rule 37 Reversal of credit if payment not made to vendor within stipulated timelines
B As per Rule 39 Distribution of ITC by input service distributor
C As per Rule 42 Reversal of credit on inputs and input services claimed against taxable supply and exempt supply
D As per Rule 43 Reversal of credit on capital goods claimed against taxable supply and exempt supply
E As per section 17(5) Blocked credits F Reversal of TRAN-I credit Reversal of credits claimed in GST TRAN-1
(example: input credit claimed on Krishi Kalyan Cess)
G Reversal of TRAN-II credit Reversal of credits claimed in GST TRAN-2
H Other reversals (pl. specify) Example: Reversal of credits claimed by filing GST FORM ITC 03 (regular dealer opting for composition scheme)
I Total ITC Reversed (A to H above) J Net ITC Available for Utilization (6O - 7I) 8 Other ITC related information A ITC as per GSTR-2A (Table 3 & 5 thereof) This field is Auto populated. This field shall
report aggregate value of all input tax credit reported by corresponding vendors in their GSTR 1
B ITC as per sum total of 6(B) and 6(H) above
<Auto>
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C ITC on inward supplies (other than imports and inward supplies liable to reverse charge but includes services received from SEZs) received during 2017-18 but availed during April to September, 2018
Input credit pertaining to FY 2017-18 but availed in GSTR 3B return of April 2018 to September 2018 to be declared here.
D
Difference [A-(B+C)]
If the difference is negative, it could mean that the suppliers have not paid taxes & GSTR 1 has not been filed by them. Need to check the actual implementation of this till Annual return is practically
rolled out. There is a distinct possibility that such additional input credit already claimed by taxpayer shall be denied while filing Annual return.
If the difference is positive then provide explanation in 8E & 8F
E
ITC available but not availed (out of D)
Aggregate value of the input tax credit which was available in GSTR2A but not availed in any of the GSTR-3B returns or ineligible credit shall be declared here.
Any
input tax credit pertaining to FY 2017-18 which has not been availed upto the due date of September 2018 GSTR 3B return, will lapse.
F ITC available but ineligible (out of D)
G IGST paid on import of goods (including supplies from SEZ)
Details of IGST paid on import of goods including supplies by SEZ
H IGST credit availed on import of goods (as per 6(E) above)
<Auto>
I Difference (G-H) Shall be NIL in most cases
J ITC available but not availed on import of goods (Equal to I)
K
Total ITC to be lapse d in current financial year (E + F + J)
This field is Auto populated. All the prudent taxpayers shall ensure that no ITC
pertaining to FY 2017-18
shall lapse.
Pt. IV
Details of tax paid as declared in returns filed during the financial year
9
Description
Tax Payable
Paid through cash
Paid through ITC
Central Tax
State Tax / UT
Tax
Integrated Tax
Cess
1
2
3
4
5
6
7
Integrated Tax
Table 6 of GSTR 3B to be used for filling these details
Central Tax
State/UT Tax
Cess
Interest
Late fee
Penalty
Other
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Pt. V Particulars of the transactions for the previous FY declared in returns of April to September of current FY or upto date of filing of annual return of previous FY whichever is earlier
Description Taxable Value Central Tax
State Tax / UT
Tax
Integrated Tax
Cess
1 2 3 4 5 6
10 Supplies / tax declared through Amendments (+) (net of debit notes)
a) Include the details of amendments to any of the supplies already declared in the returns of the previous financial year.
b) Also include the details of any outward supplies not declared in GSTR 1 of the previous financial year.
c) To be declared as net of credit notes or debit notes issued 11 Supplies / tax reduced through
Amendments (-) (net of credit notes)
12 Reversal of ITC availed during previous financial year To be filled as per Table 4B of GSTR 3B
13 ITC availed for the previous financial year
a) this should be equal to Table 8E.
b) should include the details of ITC for goods or services received in the previous financial year but ITC for the same was availed in the current financial year
14 Differential tax paid on account of declaration in 10 & 11 above
Description Payable Paid
1 2 3
Integrated Tax Differential tax payable & paid on account of declaration in 10 & 11 above. Central Tax
State/UT Tax
Cess
Interest
Pt. VI
Other Information
15 Particulars of Demands and Refunds
Details Central Tax
State Tax / UT Tax
Integrated Tax Cess Interest Penalty Late Fee / Others
1 2 3 4 5
A Total Refund claimed
Particulars of the following to be provided:
1. Refund claimed, sanctioned, rejected and pending
2. Demand raised, paid, pending
B Total Refund sanctioned
C Total Refund Rejected
D Total Refund Pending
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
33
E Total demand of taxes
F
Total taxes paid in respect of E above
G
Total demands pending out of E above
16
Information on supplies received from composition taxpayers, deemed supply under section 143 and goods sent on approval basis
Details Taxable Value Central Tax
State Tax / UT Tax
Integrated Tax
Cess
1 2 3 4 5 6
A
Supplies received from Composition taxpayers
Aggregate value of purchases made from composition suppliers to be declared here
B Deemed supply under Section 143
This column shall remain NIL as the time limit for return of inputs & capital goods is 1 year & 3 years of being sent respectively
C
Goods sent on approval basis but not returned
If the goods are not returned to the principal supplier within 180 days of such supply then it shall treated as deemed supply on completion of 180 days
17 HSN Wise Summary of outward supplies
HSN
Code UQC Total
Quantity Taxable Value
Rate of Tax Central Tax
State Tax / UT
Tax
Integrated Tax
Cess
1 2 3 4 5 6 7 8 9
HSN wise summary of outward supplies
to be provided here. Reference can be made of
GSTR 1. HSN code is compulsory to be put for dealers having annual turnover of more than 1.5 crores (2 digits up
to 5 crores, else 4 digits)
18 HSN Wise Summary of Inward supplies
HSN
Code UQC
Total Quantity
Taxable Value
Rate of Tax
Central Tax
State Tax / UT
Tax
Integrated Tax Cess
1
2
3
4
5
6
7
8
9
HSN wise summary of inward supplies
to be provided here. HSN code is compulsory to be
put for dealers having annual turnover of more than 1.5 crores (2 digits up
to 5 crores, else 4 digits). Such details have not been reported in any of the returns filed up
to date.
However, these details have to be filed while uploading annual return.
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
34
19
Late fee payable and paid
Description Payable Paid
1 2 3
A Central Tax Late fee will be payable if annual return is filed after the due date.
B
State Tax
CORRECTIVE ACTION THAT COULD BE TAKEN BY 20 OCTOEBR 2018
CBIC has issued a circular dated 29 December 2017 wherein the department had suggested how to
take corrective actions in case of error committed while filing GST returns. The following table
provides a brief snapshot as to what corrective action to be taken. In order to undertake such
corrective actions, it is advisable that relevant reconciliations are also in place.
Sr No
Common errors
Change in GSTR 3B
Change in GSTR 1
1
Tax liability was under reported
Additional liability in the return of next month and pay tax with interest.
If such liability was not reported in FORM GSTR-1 of the month/quarter, then such liability may be declared in the subs e quent
month’s/quarter’s
FORM GSTR - 1 in which
payment was made.
2
Tax liability was over reported
Reduce this liability in
the return of subsequent months or claim refund of the same.
Where the liability was over reported in the month’s / quarter’s FORM GSTR-1 also, then such liability may be amended
through amendments under Table 9 of FORM GSTR-1
3
Tax liability was wrongly reported
The inter State supply in their next month's liability and adjust their wrongly paid intra-State
liability in the subsequent months returns or claim refund of the same.
Such taxpayers will have to file for amendments by filling Table 9 of the subsequent month’s / quarter’s FORM GSTR-1.
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
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4 Input tax credit was under reported Add such Input tax credit in their return for subsequent month(s)
No Action
5 Input tax credit was over reported
Pay (through cash) / Reverse such over reported utilized input tax credit with interest.
No Action
6 Input tax credit of wrong tax was taken Adjust such error in subsequent month's return
No Action
CONCLUSIONAs discussed, it can be derived that outward supplies related details, one has to refer GSTR – 1 filed by the dealer, while inward supplies related details GSTR 3B has to be referred. Hence it is of paramount importance that corrective measure if any, that needs to be taken, should be taken by 20 October 2018 (due date of filing GSTR 3B for September 2018 return). Annual return is nothing but the collective summary of returns that have already been filed by the dealer.
Further, the reconciliation statement that needs to be filed by specified dealers (having aggregate turnover of Rs. 2 crore or above) also has a reference point at annual return to be filed. Hence, one will have to be very careful in finalising / uploading the said Annual return.
The states GST laws are substantially similar to the CGST Act. The core concepts such as levy, value and credit of the state GST Acts are identical to the CGST Act. Hence, for the purposes of the present article, we refer to the provisions of the CGST Act and/ or the IGST Act where applicable
The provisions discussed above are as on the date of writing this article and author's personal views.
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
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Background and Introduction:
The concept of Tax Deduction at Source(TDS) and
Tax Collection at Source (TCS) is very familiar in the
direct tax laws. While tax deduction is made by a
person from the amounts paid/payable by him to
another person which is in the nature of Income for
such another person, tax collection is made by a
supplier of certain goods over and above the amount
the receivable by him from the recipient for such
supply of goods. TDS under income tax are deducted
on incomes such as rent, salary, professional fees,
works contract etc. TCS is collected on sale of luxury
goods such as jewelley, cars above Rs. 10 lacs etc.
In the erstwhile VAT laws, TDS was applicable on the
works contract activities and TCS was applicable on
sale of Scrap. The concept of TDS as well as TCS is
carried forward in Goods and Services tax laws with
some modifications. Wherein, the concept of TDS is
applicable on the contractual supplies, while TCS is
applicable on E-commerce activities.
TDS under GST:
The provisions with respect to the deduction of TDS
is laid down under Section 51 of the CGST/SGST
Act. The applicability of section 51 was deferred by
the Government initially till 30th September, 2017
than till 31st March, 2018 and further till 30th
September, 2018. Finally, the provisions were made
applicable from 1st October, 2018.
Transactions liable for deduction:
Section 51 of the CGST/SGST Act lays down that any
supplies of goods or services or both made under a
contract the aggregate value of which exceeds Rs.
250000 to a specified person is liable for the
deduction of TDS at rate of 1% each under both
CGST and SGST Act. It is worthwhile to note that
supplies have to be made under a contract. If
supplies are not made under a contract no TDS is
required to be deducted. Further, the limit of Rs.
250000 is to be considered separately for each
contract. For example, if value of Contract A is
Rs.200000 and Value of Contract B is Rs. 100000,
the basic limit is to be applied to each contract
separately.
TDS shall not be liable to be deducted on the contracts
where the location of the supplier and the place of supply
is in some other state than in the state of the recipient.
Value of Contract:
Explanation to Section 51(1) of the CGST/SGST Act
provides the "Value of Supply" for the purpose of deducting
TDS. It states that Value of supply shall be taken excluding
the amount of Tax whether CGST, SGST, IGST or Cess
wherever it is mentioned separately under the
corresponding invoice raised for the supply. Thus, it is
pertinent to note that wherever, tax is not indicated
separately in the invoice, TDS will be deducted on the
entire amount indicated in the invoice.
Persons liable to deduct tax:
According to Section 51(1) read with notification
no.50/2018-Central Tax dated 13th September, 2018
mandates the following person to deduct tax at source
namely:
a) a department of establishment of Central
Government or State Government; or
b) local authority;
c) Governmental agencies;
d) an authority or board or any other body,-
i. set up by an act of the parliament or state
legislature; or
ii. established by any Government,
with fifty-one percent or more participation by way of
equity or control, to carry out any function;
e) Society established by the Central Government or
the State Government or a Local Authority under the
Societies Registration Act, 1860 (21 of 1860);
f) Public sector undertaking
The deductors of TDS whether or not registered under the
GST Act are required to obtain mandatorily a separate
registration for the purpose of deducting TDS irrespective of
the threshold limits. Normally, all the registrations under GST
are based on the PAN. However, in the absence of PAN,
registrations under GST can be obtained on the basis of TAN.
TDS AND TCSTDS AND TCSPROVISIONS UNDER GSTPROVISIONS UNDER GST
Compiled by:
CA Poojan M. Dedhia CA Aditya Khandelwal
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
37
Deductions and payment of TDS:
Every person liable to deduct TDS shall deduct it from
the value of supply under a contract and amount equal
to 2% (1% CGST and 1% SGST or 2% IGST). The
amount of TDS so deducted shall be liable to be paid to
the credits of the Government by 10th day of the month
succeeding the month in which TDS is deducted.
Moreover, the deductor of TDS shall also file a return
GSTR-7 on the due date same as that of date of
payment.
Once the payment of TDS is made and return is filed by
the deductor, he shall furnish a TDS certificate in form
GSTR-7A within 5 days of the date of payment of TDS
containing therein the following particulars:
i. Value of contract;
ii. Rate of deduction;
iii. Amount deducted;
iv. Amount paid to the government;
v. Such other prescribed particulars
Claim of TDS Credit:
The claim of TDS credits under GST shall be made
available to the deductee to his electronic cash ledger on
the basis of return in GSTR-7 furnished by the
deductor.
Consequences of Non-compliances:
Any failure to comply with the provisions for deduction
and payment of TDS will be liable to interest, fees and
penalties, as the case maybe as follows:
1. In the event of failure to deposit the amount of
TDS deducted, interest shall be liable to be paid at the
rate of 18% in addition to amount of tax deducted.
2. In case of non-filing of GSTR-7 or non-
furnishing of GSTR-7A within the prescribed period,
late fee of Rs. 200 per day (Rs.100 CGST and Rs.100
SGST) shall be levied subject to the maximum of
Rs.10000 (Rs.5000 CGST and Rs.5000 SGST).
Demands and Refunds
The demands for the amounts of TDS shall be made in
accordance with the provisions of Section 73 or Section
74 which deals with bona-fide or mala-fide cases
respectively. The cases with mala-fide intensions shall
attract penal provisions of the act.
The refund of excess/erroneous deductions shall be
made in accordance with the provisions of section 54 of
CGST Act. However, refund of excess/erroneous
deductions shall not be given to the deductor if the
amount so deducted is credit to the cash ledger of the
deductee.
TCS under GST:
The provisions of TCS under GST act are made
applicable on the transactions carried through an
electronic commerce operator (ECO) by a supplier vide
section 52 of the GST Act. The liability to deduct TCS
has been casted upon the electronic commerce
operators like Fipkart, Amazon, Snapdeal etc.
Who is an Electronic Commerce Operator?
According to definition laid down in Section 2(45) of the
CGST Act, an 'electronic commerce operator' means a
person who owns, operates or manages digital or
electronic facility or platform for electronic commerce.
Further, 'electronic commerce' is defined in Section
2(44) as supply of goods or services or both including
digital products over digital or electronic network.
Thus, for the purpose of Section 52, a person acting as
electronic commerce operators has to deduct TCS of a
person who supplies goods or services or both through
the ECO. Therefore, no TCS is required to be deducted
if goods are supplied by an ECO on his own account.
Further, no TCS is required to be deducted where ECO
acts as an agent for the supplier.
Rate of TCS:
According to notification no. 2/2018- Integrated tax and
notification no.52/2018-Central tax, the rate of TCS
required to be collected by the ECOs are 1% on all intra-
state and inter-state supplies of goods and services
through the electronic facility/platform of the ECO.
Value on which TCS is collected:
TCS is to be made on the "Net Value of Taxable
Supplies". The net value of taxable supplies means the
aggregate value of goods or services or both made
during the month by all the registered persons through
the ECO as reduced by the aggregate value of taxable
supplies returned to the suppliers during the same
month. It is to be noted that no TCS is required to be
made on the value of services where the burden of
payment of tax is casted upon the ECO as per section
9(5).
Registration:
As per the requirements of Section 24(x), every ECO is
required to register itself as a collector of TCS
irrespective of the threshold limits. Accordingly, even in
cases where ECO was supplying goods or services or
both on electronic platform only on his own account
and thus, not liable to collect TCS shall also be required
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
38
to be registered as collector of TCS. In GST
(Amendment) Act, 2018 which is yet to be notified,
government has made changes in requirements
whereby it has specified that only ECOs who are
required to collect the tax are required to get themselves
mandatorily.
Payment of TCS and returns:
Every ECO who are liable to collect TCS and have
collected the same are required to deposit in the
government treasury by 10th of the month succeeding
the month in which the TCS is collected. Further, the
ECO is required to furnish a monthly statement in form
GSTR-8 by 10th of the succeeding month containing
details of outward supplies made through it including
goods or services returned through it along-with the
amount of TCS collected. Furthermore, ECOs are also
required to furnish an Annual return in form GSTR-9B
by 31st December of the succeeding financial year. Any
rectification in the statements furnished by it can be
made before the statement for the succeeding month is
furnished by it.
Credit of TCS:
The credits of TCS collected by the ECO shall be
credited to the electronic cash ledger of the supplier
who has supplied goods or services or both through the
ECO.
Matching of Data:
The details furnished by the ECO shall be matched with
the outward supplies furnished by the supplier through
ECO. In case of discrepancies, it shall be communicated
both to the supplier and the ECO. Where discrepancies
communicated are not rectified either by the supplier or
the ECO, and such discrepancies leads to the increase
in liabilities of the supplier, it shall be added to the
output tax liabilities of the supplier. The amount of tax
so added to the output tax liability of the supplier shall
be required to be paid along with interest.
Other responsibilities of ECOs:
The ECOs will be required to submit to the any
authority not below the rank of Deputy Commissioner
upon receipt of the notice from such office details
relating to supplies of goods or services made through it
and details of stock held by a supplier/s in the godowns
or warehouses provided and managed by it. In the event
of failure to furnish such information, the ECO shall be
chargeable to penalty upto Rs.25000
Conclusion:
Looking at the tedious provisions relating to TDS and
TCS, it can be construed that the implementation of the
same and preparing a system strong enough to deal
with the matching mechanism could have led to the
delayed implementation of these provisions. However,
success of the system can only be judged in the times to
come when the actual implementation is done, returns
are filed and credit matching are performed.
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
39
Some Important Definitions in relation to the
Special Economic Zone:
Section 2 (19) of Integrated Goods and Services Tax
Act, 2017 “Special Economic Zone” shall have the
same meaning as assigned to it in clause (za) of
section 2 of the Special Economic Zones Act, 2005;
Section 2 (20) of Integrated Goods and Services Tax
Act, 2017 “Special Economic Zone developer” shall
have the same meaning as assigned to it in clause (g)
of section 2 of the Special Economic Zones Act, 2005
and includes an Authority as defined in clause (d) and
a Co-Developer as defined in clause (f) of section 2 of
the said Act;
As per Section 2 ( za) of the Special Economic Zones
Act, 2005 "Special Economic Zone" means each
Special Economic Zone notified under the proviso to
sub-section (4) of section 3 and sub-section (1) of
section 4 (including Free Trade and Warehousing
Zone) and includes an existing Special Economic
Zone;
As per Section 2 (g) of the Special Economic Zones
Act, 2005 “Developer” means a person who, or a
State Government which, has been granted by the
Central Government a letter of approval under sub-
section (10) of section 3 and includes an Authority
and a Co-Developer;
As per Section 2 (d) of the Special Economic Zones
Act, 2005 “Authority” means a Special Economic
Zone Authority constituted under sub-section (1) of
section 31;
As per Section 2 (f) of the Special Economic Zones
Act, 2005 "Co-Developer" means a person who, or
a State Government which, has been granted by the
Central Government a letter of approval under sub-
section (12) of section 3
As per Section 16 (b) of IGST Act supply of goods or
services or both to a Special Economic Zone
developer or a Special Economic Zone unit is
considered as “Zero rated Supply”.
As per section 16 (2) of IGST Act , credit of input tax
may be availed for making zero-rated supplies,
notwithstanding that such supply may be an exempt
supply subject to Section 17 (5) of Central Goods and
Service Act.
Section 17 (5) of Central Goods and Service Act deals
with certain credits which are not allowed or certain
credits are allowed but if certain conditions are
fulfilled.
As per Section 16 (3) of IGST Act,
A registered person making zero rated supply shall
be eligible to claim refund under either of the
following options, namely:–– (a) he may supply goods
or services or both under bond or Letter of
Undertaking, subject to such conditions, safeguards
and procedure as may be prescribed, without
payment of integrated tax and claim refund of
unutilized input tax credit; or
(b) He may supply goods or services or both, subject
to such conditions, safeguards and procedure as may
be prescribed, on payment of integrated tax and
claim refund of such tax paid on goods or services or
both supplied, in accordance with the provisions of
section 54 of the Central Goods and Services Tax Act
or the rules made thereunder.
So under Option 1 which is available under section
16 (3) (a) of IGST Act that a registered person may
supply such goods or services or both under bond or
Letter of undertaking to SEZ Developer or SEZ Co-
Developer or SEZ Units without payment of
integrated tax and also claim refund of unutilized
input tax credit.
So on one hand no funds will be blocked and another
hand a registered person making zero rated supply
can claim refund of unutilized input tax credit.
Further, under Option 2 under section 16 (3) (b) of
IGST Act a registered person may supply such goods
or services or both to SEZ Developer or SEZ Co-
Developer or SEZ Units on payment of integrated tax
and claim refund of such tax paid on goods or
services or both supplied in accordance with Section
54 of Central Goods and Service Tax Act or rules
made thereunder.
GSTGSTON SPECIAL ECONOMIC ZONEON SPECIAL ECONOMIC ZONE
Compiled by:
CA Jinesh P. Gada
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
40
So under this option First IGST is to be paid and then
one can claim refund. Therefore, under this option
working capital will be blocked. Getting refund from
department has always been a challenge and the said
process will take time & efforts too.
But in GST regime as per section 54 (6) of the CGST
Act, the proper officer may in case of any refund on
account of zero-rated supply of goods or services or
both made by registered person refund on a
provisional basis, ninety per cent of the total amount
so claimed, excluding the amount of input tax credit
provisionally accepted, in such manner and subject
to such conditions, limitations and safeguards as
may be prescribed and thereafter make an order
under Section 54 (5) for final settlement of the
refund claim after due verification of documents
furnished by the applicant.
Therefore in case of refund is relating to supplies
made to SEZ Developer/Co-Developer or SEZ Unit
than in GST regime now provisional refund of 90%
will be given immediately. This provision is a big relief
to the registered person claiming such refund. But
theoretically, 90% of refund is to be granted on
provisional basis but practically the department is
asking for relevant proofs from the registered
persons for verification before granting any refund.
As per Section 8(1) of IGST Act, Subject to the
provisions of section 10 (PLACE OF SUPPLY OF
GOODS OR SERVICES OR BOTH), supply of goods
where the location of the supplier and the place of
supply of goods are in the same State or same Union
territory shall be treated as intra-State supply:
Provided that the following supply of goods shall not
be treated as intra-State supply, namely:–– (i) supply
of goods to or by a Special Economic Zone developer
or a Special Economic Zone unit;
So even if supply of goods to or by a Special Economic
Zone developer or a Special Economic Zone unit is
made within the state then also it is treated as
interstate supply as per IGST Act.
As per Notification NO 15/2017- Integrated Tax
(Rate) dated 30-06-2017 In exercise of the powers
conferred by sub-section (1) of section 6 of the
Integrated Goods and Service Tax Act, 2017 , the
Central Government, on being satisfied that it is
necessary in the public interest so to do, hereby
exempts all goods or services or both imported by a
unit or a developer in the Special Economic Zone,
from the whole of the integrated tax leviable thereon
under sub-section (7) of section 3 of the Customs
Tariff Act, 1975 (51 of 1975) for authorized
operations.
Above notification exempts all goods or services or
both imported by a unit or a developer in the SEZ
from the whole of the integrated tax for authorized
operations.
As per Section 2 (c) of SEZ Act 2005 "authorized
operations" means operations which may be
authorized under sub-section (2) of section 4 and
sub-section (9) of section 15;
As per Section 15 (9) of SEZ Act 2005 The
Development Commissioner may, after approval of
the proposal referred to in sub-section (3), grant a
letter of approval to the person concerned to set up a
Unit and undertake such operations which the
Development Commissioner may authorize and
every such operation so authorized shall be
mentioned in the letter of approval.
Notification No. 18/2017 -Integrated Tax (Rate)
exempts services imported by a unit or a developer in
the Special Economic Zone for authorized
operations, from the whole of the integrated tax
leviable thereon under section 5 of the Integrated
Goods and Service Tax Act, 2017
Asper F.No. D.12/19/2013-SEZ dated 02-01-2018
Government of India, Ministry of Commerce &
Industry, Department of Commerce (SEZ Section) a
list of 66 Services which may be permitted by all Unit
Approval Committees (UACs) as default authorized
services for IGST exemption. The Board of Approval,
after deliberation, approved the reiteration of the
default authorized operations as approved earlier.
Default List of Services approved by Department of
Commerce includes Architect services, Asset
Management services, Banking and other financial
services, Business Exhibition expenses, commercial
or industrial construction services,Consulting
Engineers service, Interior decorator service,
Legal consultancy services, Management,
maintenance or repair services, renting of
immovable property services, site formation &
clearance, excavation earth moving, Works
contract services,Construction services, SEZ
Online services , Business Support service,
Accommodation service etc.
Clarification on issues related to furnishing of
Bond/Letter of Undertaking for Exports is mentioned
in Circular No. 5/5/2017- GST dated 11-08-2017.
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41
Eligibility to export under LUT
Notification No. 16/2017- Central Tax dated 07-07-
2017 specifies conditions to be fulfilled for export
under letter of undertaking (LUT) in place of Bond. It
is clarified that any registered person who has
received a minimum foreign inward remittance of
10% of export turnover in the preceding financial
year is eligible for availing the facility of LUT
provided, that the amount received as foreign inward
remittance is not less that Rs 1 Crore.
It may however be noted that a status holder as
specified in paragraphs 3.20 and 3.21 of the Foreign
Trade Policy 2015-2020 is eligible for LUT facility
regardless of whether he satisfies the above
conditions.
Paragraphs 3.20 and 3.21 of the Foreign Trade Policy
2015-2020 is as mentioned below:
3.20 Status Holder
(a) Status Holders are business leaders who have
excelled in international trade and have successfully
contributed to country's foreign trade. Status
Holders are expected to not only contribute towards
India's exports but also provide guidance and
h a n d h o l d i n g t o n e w e n t r e p r e n e u r s .
(b) All exporters of goods, services and technology
having an import-export code (IEC) number shall be
eligible for recognition as a status holder. Status
recognition depends upon export performance. An
applicant shall be categorized as status holder upon
achieving export performance during current and
previous two financial years, as indicated in
paragraph 3.21 Of Foreign Trade Policy. The export
performance will be counted on the basis of FOB
value of export earnings in free foreign exchange.
(c) For deemed export, FOR value of exports in Indian
Rupees shall be converted in US$ at the exchange rate
notified by CBEC, as applicable on 1st April of each
F i n a n c i a l Y e a r .
(d) For granting status, export performance is
necessary in at least two out of three years.
3.21 Status Category
Status Category Export Performance
FOB / FOR (as converted) Value
(in US $ million)
One Star Export House 3
Two Star Export House 25
Three Star Export House 100
Four Star Export House 500
Five Star Export House 2000
Form for LUT: Bonds are furnished on non-judicial
stamp paper, while LUTs are generally submitted on
the letterhead containing signature and seal of the
person or the person authorized in this behalf.
Time for acceptance of LUT/Bond: As LUT/bond is a
priori requirement for export, including supplies to a
SEZ developer or a SEZ unit, the LUT/bond should
be processed on top most priority and should be
accepted within a period of three working days from
the date of submission of LUT/bond along with
complete documents by the exporter.
Purchases from manufacturer and form CT-1:
There is lack of clarity about treatment of CT-1 form
which was earlier used for purchase of goods by a
merchant exporter from a manufacturer without
payment of central excise duty. The scheme holds no
relevance under GST since transaction between a
manufacturer and a merchant exporter is in the
nature of supply and the same has not been exempted
under GST even on submission of LUT/bond.
Therefore, such supplies would be subject to GST.
The zero rating of exports, including supplies to SEZ,
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
42
is allowed only with respect to supply by the actual
exporter under LUT/bond or payment of IGST.
Transactions with EOUs: Zero rating is not
applicable to supplies to EOUs and there is no special
dispensation for them. Therefore, supplies to EOUs
are taxable under GST just like any other taxable
supplies. The EOUs, to the extent of exports, are
eligible for zero rating like any other exporter.
Forward inward remittance in Indian Rupee
It is clarified that acceptance of LUT instead of a bond
for supplies of goods to Nepal or Bhutan or SEZ
developer or SEZ unit will be permissible
irrespective of whether the payments are made in
Indian currency or convertible foreign exchange as
long as they are in accordance with applicable RBI
guidelines. It may also be noted that supply of
services to SEZ developer or SEZ unit will also be
permissible on the same lines. The supply of
services, however, to Nepal or Bhutan will be deemed
to be export of services only if the payment for such
services is received by the supplier in convertible
foreign exchange.
Jurisdictional officer: It has been clarified in
Circular Nos. 2/2/2017 – GST dated 4th July, 2017
and 4/4/2017 – GST dated 7th July, 2017 that
Bond/LUT shall be accepted by the jurisdictional
Deputy/Assistant Commissioner having jurisdiction
over the principal place of business of the exporter.
The exporter is at liberty to furnish the bond/LUT
before Central Tax Authority or State Tax Authority
till the administrative mechanism for assigning of
taxpayers to respective authority is implemented. It
is reiterated that the Central Tax officers shall
facilitate all exporters whether or not the exporter
was registered with the Central Government in the
earlier regime.
Applicability of circulars on Bond/LUTs: It is learnt
that some field officers have inferred that the
instructions given by the said circulars are effective in
respect of exports made only from the date of its issue
despite the fact that it has been categorically clarified
specifically in the said circular (dated 7th July, 2017)
that the instructions shall be applicable for exports
on or after 1st July, 2017. It is reiterated that the
instructions issued vide said circular and this
circular are applicable to any export made on or after
the 1st July 2017.
Service tax on SEZ in earlier Service tax regime
Central Board of Excise and Customs, Ministry of
Finance has rescinded Notification No. 40/2012-ST
dated 20thJune 2012 and introduced new
Notification No. 12/2013-ST dated 01-07-2013.
1. As per this Notification where the specified
services received by the SEZ unit or the Developer are
used exclusively for the authorized operations, the
person liable to pay service tax has the option not to
pay the service tax ab-initio, subject to the following
conditions and procedure as stated below:
a) The SEZ Unit or the Developer shall get an
approval by The Approval Committee of the list of the
services as are required for the authorized
operations (referred to as the specified services) on
which the SEZ Unit or Developer wish to claim
exemption from service tax.
b) The SEZ Unit or the Developer shall furnish a
declaration in Form A-1, verified by the Specified
Officer of the SEZ, along with the list of specified
services in terms of abovementioned condition a);
c) On the basis of declaration made in Form A-1, an
authorization shall be issued by the jurisdictional
Deputy Commissioner of Central Excise or Assistant
Commissioner of Central Excise, as the case may be
to the SEZ unit or the Developer in Form A-2;
The SEZ Unit or the Developer shall provide a copy of
said authorization to the provider of specified
services. On the basis of the said authorization, the
service provider shall provide the specified services
to the SEZ unit or the Developer without payment of
service tax;
Now in New regime of GST condition for filing
declaration in Form A-1 by the SEZ Unit or Developer
verified by the Specified Officer of the SEZ and on the
basis of declaration made in Form A-1, an
authorization shall be issued by the jurisdictional
Deputy Commissioner of Central Excise or Assistant
Commissioner of Central Excise, as the case may be
to the SEZ unit or the Developer in Form A-2 is done
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43
away with.
So under the new GST regime for saving of GST, now
efforts have been sifted from SEZ Unit or SEZ
Developer to a registered person supplying such
goods or services or both to SEZ Developer or SEZ
Co-Developer or SEZ Units, so the same is a
beneficial for SEZ Developer / SEZ Co-Developer or
SEZ Units .
Case Study on SEZ
SEZ developer is having lease right of Land for 99
years obtained from say GIDC would like to Sub-Sub
lease land of processing zone to SEZ unit after
creating infrastructure required by SEZ Unit. So now
query is SEZ unit will pay one time salami payment to
SEZ Developer for acquiring Leasehold rights of 99
years. So whether GST payable on Renting of
Leasehold rights of land (on one time salami
payment) will be taxable or exempt.
Possible Solution on the said case study of SEZ
In the IGST Act or notification, it is mentioned that
what is to be done if services are provided by a
registered person to SEZ Developer/ Co-Developer or
SEZ Units but it is nowhere mentioned that what is to
be done if services are provided by SEZ Developer to
SEZ Units.
As per F.No. D.12/19/2013-SEZ dated 02-01-2018
Government of India, Ministry of Commerce &
Industry, Department of Commerce (SEZ Section) a
list of 66 Services which may be permitted by all Unit
Approval Committees (UACs) as default authorized
services for IGST exemption. The Board of Approval,
after deliberation, approved the reiteration of the
default authorized operations as approved earlier.
Renting of immovable property services is mentioned
in the above default list of authorized services for
IGST exemption.
The said services is in the processing zone & the said
service is also for the authorized operation but as
mentioned earlier in the IGST Act or notification
what is to be done if services are provided by a
registered person to SEZ Developer/ Co-Developer or
SEZ Units but it is nowhere mentioned that what is to
be done if services are provided by SEZ Developer to
SEZ Units.
I have found out one clarification in respect of GST on
points raised by SGJMA, F NO. Seepz- SEZ/GST
Legislation/62/2017-18 Dated 30-06-2017 issued by
Office of the Development Commissioner, SEEPZ
Special Economic Zone, Ministry of Commerce &
Industry, Government of India, Andheri (East),
Mumbai – 400096 dated 30-06-2017 issued to the
Secretary, SEEPZ Gems &Jewellery Manufacturer's rdAssociation, Business- facilitation center, 3 floor,
Office no 2, behind SEEPZ service centre, Seepz –
SEZ, Andheri (East) – Mumbai – 96
I am reproducing Question no 5 & Answer for the
same
Question no 5) Supply of Goods to SEZ Units will be
zero rated. Will this hold good for Inter Unit Transfer
(IUT) among units within the same SEZ as also
between two SEZ. We understand that it is for the
supplier of such goods to SEZ to make supplies
under Bond or LUT without payment of IGST and
claim credit of ITCs or supply on payment of IGST
and claim refund of taxes paid.
Answer NO 5) Supply will remain zero rated within
SEZ (IUT) and also between SEZs. Bond/LUT will
remain same for goods and services for supply to
SEZ.
So above clarification also considered case of Supply
of Goods or Services between SEZ Units or between
two SEZs but our case study is not answered which is
relating to Supply of Services between SEZ Developer
to SEZ Unit.
Even though our case study's answer is not given
under IGST Act or any notification and the same is
also not covered in the said clarification but I am of
the view that based on above cited clarification one
can take the stand that Supply of services provided
by SEZ Developer to SEZ Unit which is covered
under default list of authorized services for IGST
exemption & also keeping in mind the said service is
provided in processing zone and also the same is
towards authorized operation so Supply will remain
zero rated subject to that a SEZ Developer may
supply such goods or services or both under bond or
Letter of undertaking without payment of IGST to
SEZ Units and also claim refund of unutilized input
tax credit or
Supply on payment of IGST and claim refund of taxes
paid.
Conclusions:
1) Under GST regime formality of Form A1 &
Form A2 etc. for services provided to SEZ
developer or SEZ Units are done away with.
2) Under Option 1 which is available under
section 16 (3) (a) of IGST Act that a registered
person may supply such goods or services or
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44
both under bond or Letter of undertaking to
SEZ Developer or SEZ Co-Developer or SEZ
Units without payment of integrated tax and
also claim refund of unutilized input tax
credit. So on one hand no funds will be
blocked and another hand a registered
person making zero rated supply can claim
refund of unutilized input tax credit.
3) Under Option 2 under section 16 (3) (b) of
IGST Act a registered person may supply
such goods or services or both to SEZ
Developer or SEZ Co-Developer or SEZ Units
on payment of integrated tax and claim
refund of such tax paid on goods or services
or both supplied in accordance with Section
54 of Central Goods and Service Tax Act or
rules made thereunder.
So under this option First IGST is to be paid and then
claim refund. Therefore, under this option working
capital will be blocked and not only getting refund
from department is always a challenge but the said
process will also take time & efforts
4) Supply will remain zero rated in case of SEZ
subject to following option 1 or option 2 as
mentioned above in all cases of Supply of
Goods or services by a registered person to
SEZ Developer/Co-Developer or SEZ Units
or supply of goods or services between Two
SEZ developers or between Two SEZ Units or
between SEZ Developer and SEZ Units and
also subject to compliance of other
conditions as mentioned in this article.
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45
A. REGULATIONS:
1. Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)(Fifth Amendment) Regulations, 2018[Issued by the Securities and Exchange Board of India vide Notification No. SEBI/LAD-NRO/GN/2018/307 dated September 06, 2018]
SEBI has amended various regulations to provide for matters pertaining to listing of Security Receipts.
B. CIRCULARS
1. Streamlining the process of public issue under the SEBI (Issue and Listing of Debt Securities) Regulations, 2008, SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013, SEBI (Public Offer and Listing of Securitised Debt Instruments) Regulations, 2008 and SEBI (Issue and Listing of Debt S e c u r i t i e s b y M u n i c i p a l i t i e s ) Regulations, 2015[Issued by the Securities and Exchange Board of India vide Circular No. CIR/DDHS/P/ 121/2018 dated August 16, 2018]
SEBI has decided and amended the processes to reduce the time taken for listing of Non-Convertible Redeemable Preference Shares and Securitised Debt Instruments from 12 days to 6 days. It elaborated matters relating to ASBA, Roles of Intermediaries, Stock Exchanges, Other Requirements and Timelines.
2. Electronic book mechanism for issuance of securities on private placement basis - Clarifications "
[Issued by the Securities and Exchange Board of India vide Circular No. SEBI/HO/DDHS/CIR/P/2018/122 dated August 16, 2018]
SEBI had mandated use of Electronic Book Provider (EBP) Platform for private placement of securit ies. Various functionalities have been added such as closing bidding, multiple yield allotment, multiple bids by an investor, allotment on yield time priority basis, pay-in of funds through escrow bank account of issuer and depositories to act as EBP.
3. Amendment to SEBI Circular No. CIR/IMD/FPIC/CIR/P/2018/64 dated April 10, 2018 on Know Your Client Requirements for Foreign Portfolio Investors (FPIs) [Issued by the Securities and Exchange Board of India vide Circular No. IMD/FPIC/CIR/P/2018/124 dated August 21, 2018]
SEBI has provided certain relaxations with regard to KYC compliance to be done by FPIs it had mandated earlier in April 10, 2018.
4. Extension of Trading hours of Securities Lending and Borrowing (SLB) Segment[Issued by the Securities and Exchange Board of India vide Circular No. SEBI/CIR/MRD/DoP-1/P/125/2018 dated August 24, 2018]
SEBI has, in order to facilitate the physical settlement of equity derivative contracts, extended the trading hours from 9.00 am to 5.00 pm.
For further details, please refer SEBI website at www.sebi.gov.in.
BRIEF UPDATE ONBRIEF UPDATE ONSEBI AND CORPORATE LAW SEBI AND CORPORATE LAW
SEBISEBIby CA IP Neha Gada and CA IP Rajen Gada
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
46
A. NOTIFICATIONS
1. Commencement Notification dated
July27, 2018
[Issued by Ministry of Corporate Affairs
vide notification no. S.O. 3684 (E) dated
July 27, 2018]
Section 5 (Articles) and Section 6 (Act to
Override Memorandum, Articles, etc.)
shall come into force from July 27, 2018.
B. RULES
Companies (Prospectus and allotment of
securities) 3rd Amendment Rules 2018
1. Issued by Ministry of Corporate Affairs
vide notification no. G.S.R. __(E) dated
September 10, 2018]
Ministry of Company Affairs has
introduced new Rule 9A with regard to
“Issue of Securities in Dematerialised
form by Unlisted Public Companies” with
effect from October 2, 2018.
As a result, all new issues as well as
transfers undertaken on or after October
2, 2018 will have to be undertaken in
dematerialised form.
C. CIRCULARS
1. Relaxation of additional fees and
extension of last date of filing of
FormBEN-2 under the Companies Act.
20I3- regarding.
[Issued by Ministry of Corporate Affairs
vide General Circular 07/2018 dated
September 06, 2018]
MCA has decided that the time limit for
filing of BEN-2 form shall be 30 days from
deployment of the of BEN-2 eform on the
MCA portal and there shall be no
additional fee payable if the said form is
filed within 30 days of deployment of the
said e-form.
CORPORATE LAWCORPORATE LAW
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
FEMAFEMAUPDATESUPDATES
(Matter on FEMA has been contributed by:
CA VIRAL SATRACA MANOJ SHAH
47
Sr. No.
Subject Matter
Contraventions Compounded
1. Foreign Direct
Investment - FEMA Notification No. 20
The applicant company was engaged in business of other information technology and computer service activities.
There was transaction of transfer of shares of company from resident holder to non-resident.
The company contravened the prov isions of Regulation 4 of FEMA 20 by taking on record the said transfer without certified FC-TRS.
(Indian entity shall not record in its books any transfer of security provided that RBI may on an application made to it and for sufficient reasons, permit an entity to issue any security to a person resident outside India or to record in its books transfer of security. Thus, only after receipt of confirmation of RBI, company can take transfer of shares from resident to non-resident in its records.)
Gist of some Compounding Orders passed by Reserve Bank of India
Implementation of Single Master Form – User Manual on Foreign Investment Reporting and
Management System:
For the companies who could not update data of foreign investment in Entity Master Form, RBI has stallowed for registering such entities with effect from 1 September 2018 along with reasons for not making
registration within the time period allowed by RBI.stFurther, with effect from 1 September 2018, Single Master Form (SMF) has been implemented by RBI and
revised user manual has been issued giving process of registration and filing of Forms prescribed to be uploaded in SMF.
The revised user manual can be reached at –
http://rbidocs.rbi.org.in/rdocs/FEMAMASTER/PDFs/SMF-FIRMS347E34AF5938415DAD0904E0584FB5A1.PDF
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48
Gist of some Compounding Orders passed by Reserve Bank of India
Sr. No.
Subject Matter
Contraventions Compounded
1. Overseas Direct The applicant company made investment in overseas company at the time when it was under investigation of was Directorate of Revenue Intelligence. Investigation w as concluded in July 2014 however the applicant company filed an appeal against the show cause notice which was still pending.
Thus, applicant was not eligible to undertake ODI under automatic route resulting in contravention of Regulation 6(2)(iii) of F EMA 120.
2. Overseas Direct Investment – FEMA Notification No. 120
The applicant company set up a Special Purpose Vehicle in Italy. The initial share capital was contributed by another subsidiary of Applicant Company.
This resulted in contravention in nat ure of funding of overseas investment by mode other than that permitted under regulation 6(3) of FEMA 120.
3. Foreign Direct Investment – FEMA Notification No. 20
Applicant being a resident Indian transferred shares of an Indian company to a NRI.
The cons ideration was paid on deferred basis and entire consideration was received from third parties leading to contravention of FEMA provisions.
Investment – FEMA
Notification No. 120
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
DIRECTDIRECTTAXES LAW UPDATETAXES LAW UPDATE
- Law Update
CA HARESH P. KENIA
1. Income Tax Return-Extension of Due Date of filling Income Tax Return for A.Y. 2018-19 (256 Taxman (st) 23)
The Central Board of Direct Taxes vide order no. 225/242/2018-ITA.II] dated:- 26.07.2018 extends the due date of filling Income Tax Return as prescribed in sec 139(1) of the Act from 31/07/2018 To 31/08/2018.
2. Speculative Transactions u/s 43(5) of the Income Tax Act – Notified Recognised Stock Exchange Sec 43(5) – Explanation 1 proviso (d) of the Income Tax Act. (257 Taxman (st) 1)
The Central Government vide notification no. 35/2018 [F.No.225/111/2018-ITA-11] dated 31.07.2018 notifies India International Exchange (IFSC) Limited, Gandhinagar, Gujarat (PAN: AAGCB8819B) as a recognised Stock Exchange for the purpose of 43(5) Explanation 1 Proviso (d) w.e.f. the date of publication of this notification subject to fulfilment of certain conditions in respect of trading in derivaties. Please refer to the above notification for conditions specified.
3. Speculative Transactions u/s 43(5) of the Income Tax Act – Notified Recognised Stock Exchange Sec 43(5) – Explanation 1 proviso (d) of the Income Tax Act. (257 Taxman (st) 2)
The Central Government vide notification no. 35/2018 [F.No.225/111/2018-ITA-11] dated 31.07.2018 noti f ies NSE IFSC Limited, Gandhinagar, Gujarat (PAN:AAFCN4161P) as a recognised Stock Exchange for the purpose of 43(5) Explanation 1 Proviso (d) w.e.f. the date of publication of this notification subject to fulfilment of certain conditions in respect of trading in derivaties. Please refer to the above notification for conditions specified.
4. Tax Audit – sec 44AB – Deferment of Clauses 30C (GAAR) and 44 (GST) of Form 3CD (257 taxman (st) 3)
The Board has clarified that Section 44AB of the Income Tax Act, 1961 read with rule 6G of the Income Tax rules, 1962 requires prescribed persons to furnish the Tax Audit Report along with the prescribed particulars in Form No. 3CD. The existing Form No. 3CD was amended vide notification No.
GSR 666(E), dated 20th July, 2018 with effect from 20th August, 2018.
The matter has been examined and it has been decided by the Board vide circular no. 6/2018 [F.No. 370142/9/2018-TPL] dated 17/08/2018 that reporting under the proposed clause 30C and proposed clause 44 of the Tax Audit Report shall be kept in abeyance till 31st March, 2019. Therefore, for Tax Audit Reports to be furnished on or after 20th August, 2018 but before 1st April, 2019, the tax auditors will not be required to furnish details called for under the said clause 30C and clause 44 of the Tax Audit Report.
5. Section 270AA, read with section 271(1) (c), of the Income-tax Act, 1961- Under-reporting and Mis-reporting-penalty for – Clarification on immunity provided under section 270AA (257 taxman (st) 3)
Section 270AA of the Income-tax Act, 1961 (the Act) inter alia provides that w.e.f 1st April, 2017, the Assessing Officer, on an application made by an assessee, may grant immunity from imposition of penalty under section 270A (not being penalty for misreporting) and initiation of proceedings under section 276C or section 276CC, subject to the conditions specified therein.
It has been clarified by CBDT vide circular no 5/2018 [ F.No.370149/155/2018-TPL] dated 16/08/2018 that where an assessee makes an application seeking immunity under section 270AA of the Act, it shall not preclude such assessee from contesting the same issue in any earlier assessment year.
This clarification is issued on the apprehensions that where an assessee makes the application have seeking immunity under section 270AA of the Act, and in the earlier year(s) penalty under section 271(1) (c) of the Act has been initiated on the same issue, the Income-tax Authority may contend that the assessee has acquiesced on the issue in such earlier year(s), by seeking immunity under section 270AA of the Act and therefore, take an adverse view in the proceedings for penalty under section 271 (1) (c) of the Act.
Further, the CBDT has clarified that Income Tax Authority shall not taken an adverse view in the proceedings for penalty under section 271 (1) (c) of the
49
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Act in earlier assessment years merely on the ground that the assessee has acquiesced on the issue in any later assessment year by preferring an immunity on such issue under section 270AA of the Act.
6. Section 10A of the Income-tax Act, 1961 – Free Trade Zone – Computation of admissible deduction under section 10A (257 taxman (st) 4)
The CBDT vide circular No.4/2018 [F.No. 279/MISC./140/2015/ITJ], dated 14/08/2018 clarifies as under:-
It is clarified that freight, telecommunication ·charges & Insurance expenses are to be excluded from “Export Turnover” & “Total Turnover” while working out deduction admissible u/s 10A of the Act to the extent their attributable to the deliver of the articles or things or computer software outside India.
It is further clarified that expenses incurred in ·foreign exchange for providing technical services outside India are to be excluded from both ”Export Turnover” & “Total Turnover” while computing deduction admissible u/s 1 0 A o f t h e A c t . T h e r e f o r e , a l l charges /expenses speci f ied in 10A explanation 2(IV) of the Income Tax Act are liable to be excluded from total turnover also for the purpose of computation of deduction u/s 10A of the Act.
It is further directed that no further appeals ·may be filled by the department on the above settled issue & those already filled may be withdrawn/not pressed upon.
The CBDT sought to issue clarification on the issue whether freight, telecommunication charges and insurance expenses are to be excluded from both” Export turnover” and “total turnover” while working out deduction admissible under section 10A of the Act on the ground that they are attributable to delivery of articles or things or computer software outside India has been highly contentious.Similarly, the issue whether charges for providing technical services outside India are to be excluded both from “Export Turnover” and “Total Turnover” while computing deduction admissible under section 10A of the Act on the ground that such charges are relatable towards expenses incurred inconvertible foreign exchange in providing technical services outside India has also been highly contentious.
The controversy has been finally settled by the Hon'ble Supreme Court vide its judgment dated 24/04/2018 in the case of CIT, central-III v. M/s. HCL Technologies Ltd. [2018] 93 taxmann.com 33(SC). Please refer to the above citation for the extract of the judgement held.
7. SECTION 139 OF THE INCOME-TAX ACT,
1961 - RETURN OF INCOME - CBDT FURTHER EXTENDS DATE FOR FILING INCOME-TAX RETURNS AND AUDIT REPORTS FOR ASSESSMENT YEAR 2018-19.
ORDER [F.NO.225/358/2018/ITA-II], DATED 8-10-2018The due date for filing of Income Tax Returns and Audit Reports for Assessment Year 2018-19 was 30th September, 2018 for certain categories of taxpayers. Central Board of Direct Taxes (CBDT) had earlier extended the date for filing of Income Tax Returns and various reports of Audit to 15th October, 2018. Upon consideration of representations from various stakeholders, CBDT further extends the 'due date' for filing of Income Tax Returns as well as reports of Audit (which were required to be filed by the said specified date) from 15th October, 2018 to 31st October, 2018 in respect of the said categories of taxpayers. However, as specified in earlier order dated 24.09.2018, assessees filing their return of income within the extended due date shall be liable for levy of interest as per provisions of section 234A of the Income-tax Act, 1961
8. SECTION 112A OF THE INCOME-TAX ACT, 1961 - LONG TERM CAPITAL GAINS - N O T I F I E D T R A N S A C T I O N S O F ACQUISITION OF EQUITY SHARES - CHARGEABILITY TO STT SHALL NOT APPLYNOTIFICATION NO. SO 5054(E) [F.NO. 60/2018 (F.No.370142/9/2017-TPL)], DATED 1-10-2018In exercise of the powers conferred by sub-section (4) of section 112A of the Income-tax Act, 1961 (43 of 1961) hereinafter referred to as the Income-tax Act, the Central Government, with a view to specify the nature of acquisition in respect of which the provision of sub-clause (a) of clause (iii) of sub-section (1) of section 112A of the Income-tax Act shall not apply, hereby notifies the transactions of acquisition of equity share entered into—(I) before the 1st day of October, 2004; or(II) on or after the 1st day of October, 2004 which are not chargeable to securities transaction tax under Chapter VII of the Finance (No. 2) Act, 2004 (23 of 2004), other than the following, namely:—(a) where acquisition of existing listed equity share in a company whose equity shares are not frequently traded in a recognised stock exchange of India is made t h r o u g h a p r e f e r e n t i a l i s s u e : Provided that nothing contained in this clause shall apply to acquisition of listed equity shares in a company;—(i) which has
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been approved by the Supreme Court, High Court, National Company Law Tribunal, Securities and Exchange Board of India or Reserve Bank of India in this behalf;(ii) by any non-resident in accordance with foreign direct investment guidelines issued by the Government of India;(iii) by an investment fund referred to in clause (a) of Explanation 1 to section 115UB of the Income-tax Act or a venture capital fund referred to in clause (23FB) of section 10 of the Income-tax Act or a Qualified Institutional Buyer; and(iv) through preferential issue to which the provisions of chapter VII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 does not apply.(b) where transaction for acquisition of existing listed equity share in a company is not entered through a recognised s t o c k e x c h a n g e i n I n d i a : Provided that nothing contained in this clause shall apply to the acquisition of listed equity shares in a company which has been made in accordance with the provisions of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), and is—(i) through an issue of share by a company other than the issue referred to in clause (a);(ii) by scheduled banks, reconstruction or securitisation companies or public financial institutions during their ordinary course of business;(iii) approved by the Supreme Court, High Courts, National Company Law Tribunal, Securities and Exchange Board of India or Reserve Bank of India in this behalf;(iv) under employee stock option scheme or employee stock purchase scheme framed under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999;(v) by any non-resident in accordance with foreign direct investment guidelines of the Government of India;(vi) in accordance with Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulation, 2011;(vii) from the Government;(viii) by an investment fund referred to in clause (a) to Explanation 1 to section 115UB of the Income-tax Act or a venture capital fund referred to in clause (23FB) of section 10 of the income-tax Act or a Qualified Institutional Buyer; and(ix) by mode of transfer referred to in section 47 or section 50B or sub-section (3) of section 45 or sub-section (4) of section 45 of the Income-tax Act, if the previous owner or the transferor, as the case may be, of such shares has not acquired them by any mode referred
to in clause (a) or clause (b) or clause (c) [other than the transactions referred to in the proviso to clause (a) or clause (b)].(c) acquisition of equity share of a company during the period beginning from the date on which the company is delisted from a recognised stock exchange and ending on the date immediately preceding the date on which the company is again listed on a recognised stock exchange in accordance with the Securities Contracts (Regulation) Act, 1956 read with Securities and Exchange Board of India Act, 1992 (15 of 1992) and the rules made thereunder;Explanation.— For the purposes of this notification,—(a) "frequently traded shares" means shares of a company, in which the traded turnover on a recognised stock exchange during the twelve calendar months preceding the calendar month in which the acquisition and transfer is made, is at least ten per cent. of the total number of shares of such class of the company: Provided that where the share capital of a particular class of shares of the company is not identical throughout such period, the weighted average number of total shares of such class of the company shall represent the total number of shares;(b) 'listed' means listed in a recognised stock exchange in India in accordance with the Securities Contracts (Regulation) Act, 1956 and the rules made thereunder;(c) "preferential issue" and "Qualified Institutional Buyer" shall have the meanings respectively assigned to them in sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;(d) "public financial institution" and "scheduled bank" shall have the meanings respectively assigned to them in Explanation to clause (viia) of sub-section (1) of section 36 of Income-tax Act;(e) "recognised stock exchange" shall have the same meaning assigned to it in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956; and(f) "reconstruction company" and "securitisation company" shall have the meanings respectively assigned to them in sub-section (1) of section 2 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002).This notification shall come into force with effect from the 1st day of April, 2019 and shall accordingly apply in relation to the assessment year 2019-20 and subsequent assessment years.
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NOTIFICATIONS - CENTRAL TAX:
Notification No 35/2018 -Central Tax dated th21 August,2018
The due date of furnishing return in FORM
GSTR-3B for month of July, 2018 is extended
from 20/08/2018 to 24/08/2018.
Notification No 36/2018 -Central Tax dated th24 August,2018
Notification No 37/2018 -Central Tax dated th24 August,2018
Notification No 38/2018 -Central Tax dated th24 August,2018
The due date of furnishing return in FORM
GSTR-3B & GSTR-1 for months of July, 2018 &
August, 2018 for registered persons in the State
of Kerala, whose principal place of business is
in Kodagu district in the State of Karnataka, and
whose principal place of business is in Mahe in
the Union territory of Puducherry is extended to
05/10/2018 and 10/10/2018 respectively. The
due date of furnishing return in FORM GSTR-1
for the quarter from July, 2018 to September,
2018 is extended for such registered persons
upto 15/11/2018.
Notification No 39/2018 -Central Tax dated th4 September,2018
Vide this notification following Rules are
amended in The Central Goods and Services
Tax Rules, 2017. Amendments are effective thfrom 4 September 2018 unless specified
otherwise.
Proviso added to Rule 22(4): A person to who
notice for cancellation of his registration is
issued in form GST REG-17 is compulsorily
required to file reply to the said notice. Now as
per amendment an option is given to file the
pending GST returns along with full payment of
tax, applicable interest and late fee. The filing of
pending returns would result in closure of
proceedings initiated by the department for
cancellation of registration. The Officer is
required to issue order in Form GST REG-20 to
drop said proceedings.
Proviso added to Rule 36(2): The provision of
this sub rule leads to denial of ITC on account of
non mentioning all the particulars on invoice
that are specified under invoice Rule. Now an
amendment is made to allow ITC as long as the
following mandatory details are given in
invoice: GST amount, description of goods or
services, total value of supply, GSTIN of the
supplier and recipient and place of supply in
case of inter-State supply.
Rule 55(5): Rule 55 allows transportation of
goods on delivery challan in certain situations.
Now this facility to issue delivery challan is also
made available for transpiration of goods in
batches or lots. This is subject to other
conditions as contained in Rule. E way bill is
also modified for this.
Rule 89(4) (E): Clause E is newly substituted. “Turnover
of Zero rated supply of services” in the denominator
was not calculated in the same manner as per
numerator hence resulting in adoption of different
value for the same zero rated supply in numerator and
denominator. The definition of adjusted total turnover
has been amended in order to adopt the same turnover
of zero rated supply of service for numerator and
denominator.
Rule 96(10): The sub Rule is substituted with
retrospective effect from 23/10/2017. The Sub
rule is substituted to clearly bring out that the
refund of IGST paid on export of goods or
services will not be admissible if the supplier
claiming refund avails the benefit of any
notifications specified in sub rule.
GST UPDATEGST UPDATE
CA Nitin D. Kenia and CA Bharat K. Gosar
Compiled by:
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
53
Rule 138A: Second proviso is added. The
person in charge of conveyance or transporter
is required to carry the copy of Bill of entry in
addition to invoice/ Bill of supply / delivery
challan and copy of E way bill while
transporting imported goods. The number and
date of Bill of Entry is required to be specified in
part A of E way Bill in GST EWB-01.
Notification No 40/2018 -Central Tax dated th4 September,2018
Vide this notification time limit for making
declaration for all periods from July 2017 to
June 2018 in form GST-ITC-04 in respect of
goods sent to job worker or received from Job
worker or sent from one Job worker to another
is extended till 30/09/2018.
Notification No 41/2018 -Central Tax dated th4 September,2018
The Central Government has waived the late fee
paid u/s 47 of the CGST Act, 2017 by the
following classes of taxpayers (i) The registered
persons whose return in FORM GSTR-3B for
October, 2017 was submitted but not filed on
the common portal, after generation of the ARN
number, (ii) The registered persons who have
filed the return in FORM GSTR-4 for the period
October to December, 2017 by the due date but
late fee was erroneously levied, (iii) The Input
Service Distributors who have paid the late fee
for filing or submission FORM GSTR-6 for any
tax period between the 01/01/2018 and
23/01/2018.
Notification No 42/2018 -Central Tax dated th4 September,2018
The Commissioner hereby extends the time
limit for making the declaration in FORM GST
ITC-01 by registered persons who have filed the
application in FORM GST-CMP-04 between
02/03/2018 and 31/03/2018, upto 04/10/2018.
Notification No 43/2018 -Central Tax dated th10 September,2018
The registered person having aggregate
turnover of up to Rs.1.5 Crores in the preceding
financial year or the current financial year are
required to furnish return Form GSTR-1 for
outward supply on quarterly basis. Last date of
nd rd thfurnishing such GSTR -1 for 2 , 3 , 4 Quarter st ndof FY 2017-18 and 1 and 2 quarter of FY
rd2018-19 shall be 31/10/2018, due date of 3 thquarter & 4 Quarter of FY 2018-19 will be
31/01/2019 & 30/04/2019 respectively.
In terms of notification No 31/2018 -Central tax thdated 6 August,2018, the persons, who did not
file the complete FORM GST REG26 of the
Central Goods and Services Tax Rules, 2017
but received only a Provisional Identification
Number (PID) till the 31st December, 2017 were
allowed to apply for Goods and Services Tax
Identification Number (GSTIN). Due date for
such person for furnishing FORM GSTR-1 for
the quarters from July, 2017 to September,
2018 shall be 31/12/2018.
Time limit for furnishing return Form GSTR-2
& GSTR-3 for April to Jun'18 shall be notified
subsequently.
Notification No 44/2018 -Central Tax dated th10 September,2018
The registered persons having aggregate
turnover of more than Rs.1.5 Crores in the
proceeding financial year or the current financial
year are required to furnish return Form GSTR-1 for
outward supply on monthly basis. Last date of
furnishing such GSTR-1 for July to September 2018
months will be 31/10/2018 & for the months from thOctober, 2018 to Mrach, 2019 will be 11 day of next
month. Due date for the months from July,2017 to
November, 2018 for Persons who have obtained GSTIN
in terms of notification No 31/2018 -Central tax dated th6 August,2018 shall be 31/12/2018.
Time limit for furnishing return Form GSTR-2 & GSTR-3
for the period July 17 to March 18 shall be notified
subsequently.th Notification No 45/2018 -Central Tax dated 10
September,2018th Notification No 46/2018 -Central Tax dated 10
September,2018th Notification No 47/2018 -Central Tax dated 10
September,2018
Due date for furnishing the return in GSTR-3B for the
periods from July,2017 to November, 2018 for
taxpayers who have obtained GSTIN in terms of thnotification No 31/2018 -Central tax dated 6
C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
August,2018 shall be 31/12/2018. th Notification No 48/2018 -Central Tax dated 10
September,2018
Vide this notification following Rules are amended in
The Central Goods and Services Tax Rules, 2017. thAmendments are effective from 10 September 2018.
Rule 117(1A) : By adding this sub rule now powers are
given to the Commissioner to extend the date for
submitting the declaration electronically in FORM GST
TRAN-1 by a further period not beyond 31st March,
2019, in respect of registered persons who could not
submit the said declaration by the due date on account
of technical difficulties.
Rule 117(4) (b) (iii): The registered persons who are
allowed to file the declaration in FORM GST TRAN-1 due
to technical glitches can submit the statement in FORM
GST TRAN-2 by 30/04/2019.
Rule 142(5): By amending this sub rule now Penalty
Order u/s 125 will also be required to be uploaded
electronically in FORM GST DRC-07 specifying penalty
amount payable by the person.
NOTIFICATIONS - CENTRAL TAX-RATE:th Notification No. 22/2018-Central Tax (Rate) dated 6
August, 2018.
Exemption from the whole of the CGST leviable u/s 9(4)
of the CGST Act, 2017 was made available for intra-State
supplies of goods or services or both received by a
registered person from unregistered person. The said
exemption was available where the aggregate value of
such supplies of goods or service or both received by a
registered person from any or all the unregistered
suppliers was upto Rs. 5000/-. The exemption was
available for such supplies received upto 30/09/2018.
Now the date is extended and exemption will continue
till 30/09/2019.
CIRCULARS - CGST:th Circular No. 55/29/2018-GST-dated 10 August, 2018.
It is clarified that services provided by private ITI in
respect of designated trades notified under
Apprenticeship Act, 1961 are exempt from GST under
serial number 66 of notification no. 12/2017(CT (Rate).
Service provided by a private ITI in respect of other
than designated trade would be liable to GST. It is
further clarified that in case of designated trades,
Services provided by a private ITI by way of conduct of
entrance examination against fees will be exempt from
GST under serial number 66(aa) whereas service
relating to admission to or conduct of examination will
be exempt under serial number 66- both of
notification 12/2017-CT(Rate).th Circular No. 56/30/2018-GST-dated 24
August, 2018.
The Government has in details clarified
provision related to lapsing of input tax credit
accumulated on account of inverted duty
structure on fabrics for the period upto
31/07/2018.
Circular No. 57/31/2018-GST-th dated 4 September, 2018.
The Government has in details clarified scope
of principal – agent relationship in the context of
schedule 1 of the CGST Act.
Circular No. 58/32/2018-GST-th dated 4 September, 2018.
It is clarified that taxpayers may reverse the wrongly
availed CENVAT credit under the existing law and
inadmissible transitional credit through Table 4(B) (2) of
FORM GSTR-3B. The applicable interest and penalty
shall be paid all such reversals through entry in column
9 of Table 6.1 of FORM GSTR-3B.
Circular No. 59/33/2018-GST-th dated 4 September, 2018.
In the Circular, clarification is given in details for refund
related issues
Circular No. 60/34/2018-GST-th dated 4 September, 2018.
The Government has clarified as regards processing of
refund applications filed by Canteen Stores Department
(CSD).
Circular No. 61/35/2018-GST-th dated 4 September, 2018.
The Government has clarified as regards procedure and
requirements with respect to E-way bill in case of
storing of goods in godown of transporter.
ORDERS: CGST: TH Order No. 3 /2018 – GST- dated 16 August, 2018.
Vide this order, the Government has constituted
Standing Committee under sub-rule (4) of rule 97 of
Central Goods and Services Tax Rules, 2017.
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C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018
NOTIFICATIONS - CENTRAL TAX:
· Notification No 49/2018 -Central Tax dated th13 September, 2018
As per Rule 80(3) of CGST Rules, 2017 every
registered person whose aggregate turnover
during a financial year exceeds Rs. 2 crore
shall get his accounts audited as specified u/s
35(5) and he shall furnish a copy of audited
annual accounts and a reconciliation
statement, duly certified in FORM GSTR-9C.
Vide this notification Government has
introduced FORM GSTR-9C W.E.F.
13/09/2018.
· Notification No 50/2018 -Central Tax dated th13 September, 2018
With effect from 01/10/2018, provisions of
section 51 related to tax deduction at source
@ 2 % (1%+1%) from the payment made or
credited to the supplier of taxable goods or
services or both of total value under a
contract, exceeding Rs. 2,50,000/- by a
department or establishment of the Central
Government or State Government, local
authority, Governmental agencies, an
authority /a board /any other body set up by
an Act of Parliament or a State Legislature or
established by any Government with 51 % or
more participation by way of equity or control
to carry out any function, Society established
by the Central Government or the State
Government or a Local Authority under the
Societies Registration Act, 1860 (21 of 1860)
or public sector undertakings.
· Notification No 51/2018 -Central Tax dated th13 September, 2018
· Notification No 52/2018 -Central Tax dated th20 September, 2018
· Notification No 02/2018 –Integrated Tax thdated 20 September, 2018
With effect from 01/10/2018, provisions of
section 52 related to tax collection at source
by every electronic commerce operator, not
being an agent, shall collect an amount
calculated @1% of the net value of taxable
supplies made through it. Rate of TCS shall
be 1 % (0.5 % CGST + 0.5 % SGST) in case of
intra state supplies and 1 % IGST in case of
interstate supplies.
· Notification No 53/2018 -Central Tax dated th9 October, 2018
The Government has substituted Rule 96(10)
with retrospective effect from 23/10/2017
pertaining to IGST refund to exporters. By
substituting this sub Rule Government has
restored the original version as inserted on
23/01/2018 WEF 23/10/2017.
· Notification No 54/2018 -Central Tax dated th9 October, 2018
This notification amends rule 96(10) to allow
exporters who have received capital goods
under the EPCG scheme to claim refund of
the IGST paid on exports and align rule
89(4B) to make it consistent with rule 96(10)
NOTIFICATIONS - CENTRAL TAX-RATE:
· Notification No 23/2018-Central Tax (Rate) thdated 20 September, 2018.
This notification seeks to insert explanation
in serial number 41 in notification No.
12/2017 – Central Tax (Rate). Explanation is
added to clarify that the Central
Government, State Government or Union
territory shall have 50 per cent or more
ownership in the entity directly or through an
entity which is wholly owned by the Central
Government, State Government or Union
territory.
CIRCULARS - CGST:
h Circular No. 62/36/2018-GST dated 12
September, 2018.It is clarified that GST on Priority Sector Lending Certificate (PSLC) for the period 1.7.2017 to 27.05.2018 will be paid by the seller bank on forward charge basis and GST rate of 12% will be applicable on the supply.
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REGN. NO. MCE / 167 / 2018-20 / RNI NO. : 67578 / 97
h· Circular No. 63/37/2018-GST dated 14
September, 2018.
Vide this Circular Government has clarified
in details regarding processing of refund
claims filed by UIN entitles.
h· Circular No. 64/38/2018-GST dated 14
September, 2018.
It is clarified that where consignment of
goods is accompanied with an invoice or
specified document and also an e-way bill,
proceedings under section 129 of the CGST
Act may not be initiated in the following
specified situations : Spelling mistakes in the
name of the consignor or the consignee but
the GSTIN is correct; Error in the pin-code
but the address of the consignor and the
consignee mentioned is correct; Error in the
address of the consignee; Error in 1/2 digits
of the document number mentioned in the e-
way bill; Error in 4/ 6 digit of HSN where the
first 2 digits of HSN and rate of tax are
correct; Error in 1/2 digits/characters of the
vehicle number. It is further clarified that in
such cases penalty of Rs. 500/- +Rs. 500
(CGST/SGST) should be imposed (Rs.1000/-
under the IGST Act).
h· Circular No. 65/39/2018-DOR dated 14
September, 2018.h· Circular No. 67/41/2018-DOR dated 28
September, 2018.
Under Section 51 of the CGST Act 2017 the
Government Agencies (Deductor) or any
other person to be notified in this regard is
required to deduct tax at source (TDS) from
the payment made or credited to the supplier
(Deductee) of taxable goods or services or
both where the total value of such supply,
under a contract, exceeds Rs. 2.5 lacs. Vide
this circular Guidelines in details is issued
for Deductions and Deposits of TDS.
h· Circular No. 66/40/2018-GST dated 26
September, 2018.
In this circular Government has clarified
regarding GST applicability on Residential
programmes or camps meant for
advancement of religion, spirituality or yoga
where the fee charged includes the cost of
boarding and lodging by religious and
charitable trusts.
th· Circular No. 68/42/2018-GST-dated 5
October, 2018.
It is clarified that UN and specified
international organizations, foreign
diplomatic missions or consular posts in
India, or diplomatic agents or career
consular officers posted therein as specified
U/S 55 of the CGST Act, 2017, are entitled to
refund of Compensation Cess payable on
intra-State and inter-State supply of goods or
services or both received by them.
ORDERS: CGST: th · Order No. 4 /2018 – GST- dated 17
September, 2018.
The Commissioner has extended due date for
submitting the declaration in FORM GST
TRAN-1 till 31st January, 2019, for the class
of registered persons who could not submit
the said declaration by the due date on
account of technical difficulties on the
common portal and whose cases have been
recommended by the Council.
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.
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C.V.O. CA'S NEWS & VIEWSVOL. 22 - NO. 3 & 4 - SEPTEMBER - OCTOBER 2018