R.C. JAIN & ASSOCIATES LLP
Head Office:
622-624, The Corporate Centre, Nirmal Lifestyles, L.B.S. Marg, Mulund (W), Mumbai – 400080. Email: [email protected]
Phone: 25628290/91, 67700107
Website: www. rcjainca.com
NEWSLETTER
R. C. Jain and Associates LLP
INDEX
1. Income Tax ____________________________________________ 1
2. GST___________________________________________________ 10
3. RBI & FEMA ___________________________________________ 18
4. Corporate Law_________________________________________ 20
EDITORIAL TEAM
EDITOR
CA R. C. Jain
MEMBERS SUPPORT TEAM
CA Devangi Thosani Khusbhoo Khatwani Ulhas Jain
Supriya Shelatkar Shivani Thakkar Rohini Veer
Shilka Santhosh Sharadha Hariharan Mangesh Kolekar
Heena Kausar Khan Ekta Pamnani
Ruchika Ravi Hitesh Motwani
The contents provided in this newsletter are for information purpose only and are
intended, but not promised or guaranteed, to be correct, complete and up-to-date. The firm
hereby disclaims any and all liability to any person for any loss or damage caused by errors
or omissions, whether such errors or omissions result from negligence, accident or any
other cause.
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Income Tax
1. Updating contact details in e-Filing Portal.
Income-Tax Department uses the registered contact details (Mobile number &
E-mail ID) for all communications related to e-Filing. It is mandatory that all
tax payers must have a valid contact details registered in e-Filing portal.
It is noticed that many registered users are not having authenticated contact
details in eFiling or may have provided details of other persons for
convenience. This prevents the Department from interacting directly with
taxpayers on their personal email and Mobile. Further, it has been observed
that in many cases taxpayers are not able to reset their password since the
email communication from the Department may be sent to their registered
email or Mobile which may be different from the taxpayer‟s personal email or
mobile.
Hence, it is requested that all the e-Filing users may immediately update and
authenticate their correct contact details so that the communication can be
sent to the valid Mobile number and E-mail ID
The process of updating and authenticating the contact
New User
Provide the correct Mobile Number and Email ID during the Registration in
the e-Filing portal, Activation link would be sent to the registered E-mail ID
and a One Time Password (OTP also called PIN) is sent to the registered
Mobile Number. User needs to Click on the Link provided in the E-mail and
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enter the OTP received in the mobile number for Successful activation of the
registered user in e-Filing portal.
Registered User
After the user logs in to the e-filing account, the user is requested to update
the current Mobile number and E-mail ID. The user should update their
personal Mobile number and Email so that the updated contact particulars are
registered with the Department or confirm that the Mobile number and email
ID already registered is their valid personal contacts. Upon submitting the
details, Department would immediately send OTPs (PIN1 & PIN2) to new
mobile number and Email ID. The respective PINsPIN1 and PIN2 received
through Mobile number and E-mail ID should be entered by them in the
respective input fields to authenticate that the email ID and mobile are correct.
Upon successful validation the Mobile numberand email ID would be
updated in the taxpayer‟s profile and the process would be complete. If the
PINs are not received within specified time (say 2 minutes), the taxpayer may
opt for “Resend PINs” option. The PINs once received will be valid for 24
hours. The taxpayers are advised to validate the contact details using the PINs
received within 24 hours. If PINs are not validated within 24 hours, the
taxpayer has to login and follow the same procedure as above again.
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Note:
One mobile number or email ID can be used for a maximum of 10 user
accounts as the Primary Contact- Mobile Number and Email ID in e-Filing.
This is to ensure that family members (not exceeding 10 separate users) not
having personal email or mobile can be covered under a common email or
mobile, but in general taxpayers should have their own unique email ID and
Mobile registered with the Department.
The taxpayer can enter any other person‟s email or mobile number in addition
as a Secondary Contact (without any restriction on the number of user
accounts linked as a Secondary Contact). Using “Profile Settings - My Profile”
the taxpayer can select to include the Secondary Contact to also receive
emails, alerts etc. Include the emails and SMS from the Income tax
Department in the „safe list‟ or „white list‟ to prevent the communications
from the Department from being blocked or rejected or sent to Spam folder.
As a best practice, please update and authenticate the current contact and
address details under “Profile Settings - My Profile” after login to eFiling
portal.
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2. I-T Dept to Appoint 7,600 More Experts to Assist Small
Taxpayers in Filing Returns.
Every district of the country will soon have at least one trained personnel to
assist small taxpayers in filing ITRs, with the Income Tax Department
proposing to appoint 7,600 additional experts whose services will also be
available on mobile application.
The Central Board of Direct Taxes (CBDT), the apex policy-making body of
the tax department, has decided to enlarge the ambit of the 2006 Tax Return
Preparer Scheme (TRPS) by making the service "digital" and covering all the
708 districts of the country."
It is proposed to provide sufficient number of Tax Return Preparers (TRPs) in
every district by scaling up of number of TRPs from a total 5,400 to 13,000 in
the country," according to an I-T department blueprint, accessed by PTI. "It is
proposed that every district in the country should have at least three TRPs," it
added.
A senior official working on the project said the aim was to ensure hassle-free
and 'from home' tax filing service to assessees without they taking pains to go
to a Chartered Accountant or a person who has expertise in filing tax
returns.“Filing an ITR is still not easy for many people. The TRP Scheme was
launched about a decade ago with this fact in mind and the view that such
services should be available at a low cost to tax payers,” an officer said.
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"At present, not every district in the country has a TRP. With the expansion of
the tax base over the years and government's directive to enhance tax payer
services, the new plan has been envisaged," the officer added. He said, "7,600
new TRPs will be trained and appointed by the tax department."
Under the new digital plan for the scheme, he said, a taxpayer will be able to
find his nearest TRP by logging on to the soon-to-be-launched 'Aaykar Mitra'
mobile app, much like the prevalent cab rental apps offered for commuters by
taxi aggregators such as Uber and Ola.
“The taxpayers will be able to send their documents to the TRP in an online
mode and even rate the services of the preparer, much like what is available to
commuters to rate their service providing drivers in the rental cab apps,” he
said.
As per official data, there are 5,400 TRPs in the country at present who have
been trained and appointed by the I-T department over the years. A TRP, as
per official rates, can charge a maximum of Rs 250 for filing one ITR.
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Case Laws:
1. Issue Involved: Deemed Dividend.
Ravindra R. Fotedar v. Asst. Commissioner of Income-Tax – (ITAT
Mumbai) – (In favour of Assessee)
Section 2(22)(e) of the Income Tax Act, 1961
Gist of the Case:
1) The Assessee is a shareholder of three companies with shareholding of
more than 10% and one of the three companies had granted loans to
remaining two companies.
2) The Assessee contended that such loans were temporary in nature and
asked the Ld. A.O. to consider that these were not loans but were
current accounts of all companies with each other.
3) However, the Ld. A.O. rejected the plea of the Assessee and added the
entire loan to the income of the assessee as deemed dividend.
4) During the course of Tribunal Proceedings, the assessee established the
commercial expediency for granting of temporary loans by the
companies to each other
5) After establishing such expediency, the tribunal deleted the said
additions as deemed dividend from the income of the Assessee.
The entire judicial pronouncement bears Citation No.: [2017] 85
taxmann.com 314 (Mumbai – Trib.) and can be referred accordingly.
.
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2. Issue Involved: No deduction of TDS on reimbursement of
various charges paid by the Assessee.
Kuloday Technopark (P.) Ltd. v. Income-Tax Officer – (ITAT Mumbai) –
(In favour of Assessee)
Section 194C, 195 and 40(a)(ia) of the Income Tax Act, 1961
Gist of the Case:
1) The Assessee had paid various charges such as Ocean Freight,
Demurrage Charges, Handling Charges and such other charges to
Indian Agents or Authorized Representative of non-resident shipping
company.
2) As no TDS is deducted on the above transactions the same needs to be
disallowed u/s 40(a)(ia). Apart from the stated no exemption certificate
of such party had been submitted by the Assessee so the expenditure
was disallowed.
3) During the course of Assessment Proceedings, the Assessee Company
had relied on CBDT Circular No. 723 dated 19.09.1995 r.w.s. 172 of the
Income Tax Act, 1961.
During the course of First Appeal Proceedings, copies of invoices and
debit notes relating to reimbursement of expenses were provided by the
Assessee for the first time and so the Ld. A.O. objected to the admission
of additional evidences. However, Ld. CIT-(A) considered the claim of
the Assessee and admitted the additional evidences produced by the
Assessee and gave part relief to the Assessee Company.
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4) The Tribunal remanded back the matter to Ld. A.O. to examine all the
facts freshly and directed the Ld. A.O. to grant reasonable opportunity
to the Assessee to produce all the relevant details before the Ld. A.O.
The entire judicial pronouncement bears Citation No.: [2017] 86 taxmann.com
74 and can be referred accordingly.
3. Issue Involved: Interest free advances and TDS on sales
incentives
Bombay Sales Corporation v. Joint Commissioner of Income Tax – (ITAT
Ahmedabad) – (Partly in favour of Assessee)
Section 36(1)(iii), 40(a)(ia) and 194H of the Income Tax Act, 1961
Gist of the Case:
1) The Assessee is a partnership which had a policy of paying interest on
capital balances of the partners however it had granted interest free
loans to the relatives of the partners and so Ld. A.O. disallowed interest
on capital balances paid by the Assessee Firm. Apart from that the
Assessee firm had also given sales incentives to its dealers and so the
Ld. A.O. contended that the same is in the form of commission to
dealers so TDS u/s 194H of the Income Tax Act, 1961 must be deducted
on said payments and disallowed the expenditure of the assessee firm
u/s 40(a)(ia) of the Income Tax Act, 1961.
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2) The Ld. CIT-(A) allowed the issue pertaining to interest expenditure in
the favour of Revenue and issue pertaining to non-deduction of TDS in
the favour of Assessee and the order of Ld. CIT-(A) was upheld by the
Tribunal.
The entire judicial pronouncement bears Citation No.: [2017] 86taxmann.com
9 and can be referred accordingly.
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INDIRECT TAX
GST
1. Extension of Time Limit for filing details in Form Trans-1 for
the month of July 2017
The Central Government vide Order No-03/2017-GST, dated. 21st September,
2017 has extended the time limit for filing of details in form TRANS 1 under
Rule 117 for the month of July 2017 up to 31st October 2017. Prior to this
notification, such details were required to be furnished within 90 days from
the appointed date i.e 28th September
2. Substitution in description of service and tax rates
Central Government vide Notification No. 24/2017-Central Tax (Rate) dated
21st September,2017 and Notification No. 24/2017-Integrated Tax (Rate) dated
21st September,2017 has amended the rates and description of the service
specified in Notification No.11/2017 - Central Tax (Rate) dated the 28th June,
2017 and Notification No. 8/2017- Integrated Tax (Rate), dated the 28th June,
2017 respectively by the following description of service:
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Decription of Service CGST and
UTGST/
SGST in %
IGST in
%
vi) Services provided to the Central Government, State Government, Union Territory, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of – (a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession; (b) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment; or (c) a residential complex predominantly meant for self-use or the use of their employees or other persons specified in paragraph 3 of the Schedule III of the Central Goods and Services Tax Act, 2017.
6 12
(vii) Construction services other than (i), (ii), (iii),
(iv), (v) and (vi) above.
9 18
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3. Amendment to list of exempted services
Central Government vide Notification No.12/2017- Central Tax (Rate), dated
the 28th June 2017 and Notification No.9/2017- Integrated Tax (Rate), dated
the 28th June, 2017 provided the list of services exempted under GST regime.
In this regard, Central Government vide Notification No. 25/2017- Central
Tax (Rate) dated 21st September, 2017 and Notification No. 25/2017
Integrated Tax (Rate) dated 21st September, 2017 has amended the aforesaid
notification to provide exemption from GST to the following service:
Chapter, Section, Heading, Group or
Service Code (Tariff)
Description of Services Rate %
Chapter 9996
Services by way of right to admission to the events organized under FIFA U-17 World Cup 2017.
Nil
4. Job workers making Inter-State supply of service to a
registered person exempted from obtaining registration.
Central Government vide Notification No. 07/2017-Integrated Tax, dt. 14-09-
2017 has provided that the job workers engaged in making inter-State supply
of services to a registered person are exempted from obtaining registration.
However, said exemption is not available to a job-worker –
(a) who is liable to be registered under sub-section (1) of section 22 or who
opts to take registration voluntarily under sub-section (3) of section 25
of the said Act; or
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(b) who is involved in making supply of services in relation to the goods
mentioned against serial number 151 in the Annexure to rule 138 of the
Central Goods and Services Tax Rules, 2017. This means that this
exemption will not be available to job work in relation to jewellery,
goldsmiths‟ and silversmiths‟ wares as covered under Chapter 71
which do not require e-way bill
5. Last date for filing Form GSTR 3B extended for the months
From August 2017 top December 2017
Central Government vide Notification No. 35/2017-Central Tax, dt. 15-09-
2017 has extended the due date of filing FORM GSTR 3B electronically
through the common portal as provided below:
Sr
No
Month Last Date for filing of return
in FORM GSTR-3B
1 August 2017 20th September 2017
2 September 2017 20th October 2017
3 October 2017 20th November 2017
4 November 2017 20th December 2017
5 December 2017 20th January 2018
Every registered person furnishing the return in FORM GSTR-3B will be
required, subject to the provisions of section 49 of CGST Act, to discharge his
liability towards tax, interest, penalty, fees or any other amount payable by
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debiting the electronic cash ledger or electronic credit ledger, as the case may
be, not later than the last date on which he is required to furnish the said
return.
6. Extension of time limit for filing Return for the month of July,
2017
Central Government vide Notification No. 31/2017- Central Tax dated 11-09-
2017 has extended the time limit for filing the details in form GSTR-1, GSTR-2
and GSTR-3 for the month of July 2017 till the time period as follows:
Sr
No
Details/Returns Class of taxable/registered
persons
Time period for
furnishing of
details/Return
1 Form GSTR 1 Having turnover of more than
one hundred crore rupees
Upto 3rd October,
2017
Having turnover of upto one
hundred crore rupees
Upto 10th October,
2017
2 Form GSTR 2 All Upto 31th October,
2017
3 Form GSTR 3 All Upto 10th
November, 2017
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Further, Central Government vide Notification No. 30/2017-Central Tax
dated 11-09-2017 has extended the time limit for furnishing the return by an
Input Service Distributor undersubsection (4) of section 39 of the said Act read
with rule 65 of the Central Goods and Services Tax Rules, 2017, for the month
of July, 2017 upto the 13th October, 2017. However, the extension of the time
limit for furnishing the details or return, as the case may be, for the month of
August, 2017 shall be subsequently notifiedin the Official Gazette.
16 R. C. Jain and Associates LLP
RBI
1. RBI/2017-18/55
DGBA.GBD.No.505/31.02.007/2017-18 Dated 07th September, 2017.
Reimbursement of Merchant Discount Rate (MDR) Charges for
Government transactions up to Rs.1 lakh through debit cards.
i. It is again clarified that the full amount paid to the Government by
the customers / through debit /credit cards should be remitted to the
concerned Government Ministry/Department. The reimbursement of
MDR charges on debit card use (up to Rs.one lakh) can be claimed from
RBI separately as per extant guidelines. Deduction of MDR charges from
the receipts of government is not permissible at all.
ii. MDR charges on debit card transactions above Rs. 1 lakh and on any
credit card transaction are not being absorbed by Government of India
and hence will not be reimbursed by RBI. Accordingly, agency banks
should not deduct MDR charges from the receipts of the government in
these cases also.
iii. It may please be noted that as directed by the O/o the CGA vide its OM
No.S-11012/1(12)/MDR/2017/RBD/824-894 dated May 11, 2017,
agency banks which have remitted the net amount of Government
receipts after deduction of MDR charges to the Ministries/Departments
in contravention of the guidelines referred to above are required to
remit the MDR charges so deducted immediately to the concerned
Ministry/Department under intimation to Reserve bank of India.
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RBI
2. RBI/2017-18/55
DGBA.GBD.No.505/31.02.007/2017-18 Dated 07th September, 2017
Formation of new districts in the State of West Bengal -
Assignment of Lead Bank Responsibility
The Government of West Bengal vide Gazette Notification dated March 20,
2017 had notified the creation of a new district “Jhargram” with effect from
April 4, 2017 and by Gazette Notification dated March 24, 2017 created a new
district “Paschim Bardhaman” with effect from April 7, 2017 in the State of
West Bengal. It has been decided to assign the lead bank responsibility of the
new districts as detailed below:-
Sr
No
Newly
carved
district
Erstwhile
District
Sub Divisions of newly
created districts
Lead Bank
Responsibility
assigned to
District
Working
Code
allotted
to new
district
1 Paschim
Medinipur
Paschim
Medinipur
Medinipur Sadar,
Kharagpur, Ghatal
United Bank of
India
112
2 Jhargram Paschim
Medinipur
Jhargram Sadar United Bank of
India
398
3 Purba
Bardhaman
Purba
Bardhaman
Bardhaman Sadar North,
Bardhaman Sadar South,
Katwa, Kalna
UCO Bank 399
4 Paschim
Bardhaman
Purba
Bardhaman
Asansol Sadar, Durgapur State Bank of
India
403
The District Working Code of the new districts have been allotted for the purpose of BSR
reporting by banks. There is no change in the lead bank responsibilities of the other
districts in the State of West Bengal.
18 R. C. Jain and Associates LLP
FEMA
RBI/2017-18/64
A.P. (DIR Series) Circular No. 05 Dated 22nd September, 2017.
Investment by Foreign Portfolio Investors in Corporate Debt Securities
Currently, the limit for investment by Foreign Portfolio Investors (FPIs) in
corporate bonds is Rs. 2,44,323 crore. This includes issuance of Rupee
denominated bonds overseas (Masala Bonds) by resident entities of Rs.
44,001 crore (including pipeline). The Masala Bonds are presently reckoned
both under Combined Corporate Debt Limit (CCDL) for FPI and External
Commercial Borrowings (ECBs).
On a review, and to further harmonize norms for Masala Bonds issuance
with the ECB guidelines, the following changes are made:
i. With effect from October 3, 2017, Masala bonds will no longer form a
part of the limit for FPI investments in corporate bonds. They will
form a part of the ECBs and will be monitored accordingly.
ii. The amount of Rs. 44,001 crore arising from shifting of Masala bonds
will be released for FPI investment in corporate bonds over the next
two quarters.
iii. An amount of Rs. 9,500 crore in each quarter will be available only for
investment in infrastructure sector by long term FPIs (i.e., Sovereign
Wealth Funds, Multilateral Agencies, Endowment Funds, Insurance
Funds, Pension Funds and Foreign Central Banks).
19 R. C. Jain and Associates LLP
CORPORATE LAW
1. (Acceptance of Deposits) Second Amendment Rules, 2017.
Notification G.S.R. 1172(E)
A Specified IFSC Public company and a private company may accept from its
members monies not exceeding one hundred percent of aggregate of the paid
up share capital, free reserves and securities premium account and such
company shall file the details of monies so accepted to the Registrar in Form
DPT-3.
A Specified IFSC Public company means an unlisted public company which is
licensed to operate by the Reserve Bank of India or the Securities and
Exchange Board of India or the Insurance Regulatory and Development
Authority of India from the International Financial Services Centre located in
an approved multi services Special Economic Zone set-up under the Special
Economic Zones Act, 2005 (28 of 2005) read with the Special Economic Zones
Rules, 2006:
http://www.mca.gov.in/Ministry/pdf/CompaniesAcceptanceofDepositSeco
ndAmendmentRule_22092017.pdf
2. Restriction on number of layers for certain classes of holding
companies:
On and from the date of commencement of these rules, no company, other
than a company belonging to a class specified in Section 2 clause (87) sub-rule
(2), shall have more than two layers of subsidiaries:
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CORPORATE LAW
http://www.mca.gov.in/Ministry/pdf/CompaniesRestrictionOnNumberofL
ayersRule_22092017.pdf
http://www.mca.gov.in/Ministry/pdf/CommencementNotification_2209201
7.pdf
3. Exemption given to certain Unlisted Public Companies under the
Companies (Appointment & Qualification of Director) Rules, 2014 from the
appointment of independent directors- reg
The said amended Rule 4 inter-alia provides that an unlisted public company
which is a joint venture, a wholly owned subsidiary or a dormant company
will not be required to appoint Independent Directors.
http://www.mca.gov.in/Ministry/pdf/GeneralCircular_05092017.pdf
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R.C. JAIN & ASSOCIATES LLP Chartered Accountants Website: www.rcjainca.com Head Office: Mumbai - 622-624, The Corporate Centre,
Nirmal Lifestyles, L.B.S. Marg, Mulund (W), Mumbai – 400080. Email: [email protected] Phone: 25628290/91, 67700107
Branch Offices: Bhopal - 302, Plot No. 75 B, First Floor,
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Phone: 0240-2357556