BUDGET 2020: Sectors across industry share a wish-list from tax rebates, incentives for digital payments to lowering of GST slabs
Scroll to the bottom for wishlist on Personal Tax by Dr Suresh Surana, founder,RSM India
The corporate tax rate for a domestic company doing business in India ranges from 26% to 34.944% for Financial Year 2019-2020. Taxation Laws (Amendment) Ordinance 2019 (‘Taxation Ordinance’) has made certain path breaking amendments in relation to taxation of domestic companies.
The Government has amended Central GST Rules, 2017 by inserting conditions with respect to availment of Input Tax Credit and also released Standard Operating Procedure (SOP) to be followed in case of non-filers of return.
The key changes have been discussed in the newsflash enclosed herewith and we would be pleased to clarify any pertinent aspects.
The Finance (No. 2) Act, 2019 had introduced Section 269SU which required every person with a business turnover, sales or gross receipts exceeding Rs. 50 crores to mandatorily provide facilities for accepting payments through prescribed electronic modes. The CBDT vide its Notification [No.105/2019/F. No.
Newsflash on the Taxation Laws (Amendment) Ordinance 2019 promulgated by the President of India on 20th September 2019. The said ordinance has made certain amendments in the Income-tax Act 1961 (‘IT Act’) and the Finance (No. 2) Act 2019. Some salient features include:
The Finance Bill (No. 2) of 2019 (“the Bill”) was tabled in the Lok Sabha by the newly elected government on 5July 2019 along with the Union budget/ full budget. The Lok Sabha passed the Bill with certain amendments.
The Indian Union Cabinet has approved ratification of Multilateral Convention to implement Tax Treaty related measures to prevent base erosion and profit shifting (‘Multilateral Convention’ or ‘MLI’ or ‘the Convention’). In this regard, Press Information Bureau had issued a Press release dated 12 June 2019.
GST Council in its 31st meeting decided that a new GST return system will be introduced to facilitate taxpayers from October 2019 onwards.
The GST Council has issued a Press Release on 11 June 2019 regarding the same. We have attached the press release for your reference.
The gist of Press release is as follows:-
Post approval of ratification of MLI by India, the instrument of ratification along with the list of reservations to the MLI provisions and list of covered tax agreements was deposited with OECD on 25th June, 2019. So far, 89 jurisdictions have signed the MLI, out of which 28 countries including India have already ratified this convention.
Government of Maharashtra has passed an Ordinance to provide for settlement of arrears under various Acts which were in existence during pre- GST regime. Salient features of the same are mentioned below:
Newsflash in respect of clarification issued by the Central Board of Indirect Taxes and Customs (CBIC) wherein procedure to be followed in respect of goods sent/ taken out of India for exhibition or on consignment basis for export promotion has been clarified.
The major points covered in the clarification issued are as follows:
Newsflash on the press release issued by the Central Board of Indirect Taxes and Customs, wherein certain issues being faced by the taxpayers regarding Annual Return (FORM GSTR-9 / FORM GSTR-9A) and Reconciliation Statement (FORM GSTR-9C) have been clarified in view of numerous representations made.
The Central Board of Indirect Taxes and Customs issued a press release, wherein certain issues being faced by the taxpayers regarding Annual Return (FORM GSTR-9 / FORM GSTR-9A) and Reconciliation Statement (FORM GSTR-9C) have been clarified in view of numerous representations made.
Non-Banking Finance Companies (NBFCs) are companies which are, as per RBI guidelines, allowed to lend money but cannot accept deposits from the public. NBFCs are subject to several guidelines issued by the Reserve Bank of India and are a highly regulated industry.
GST was introduced on 1 July 2017 replacing multiple Indirect Taxes with a single tax. However, lot of concepts from the erstwhile law have also been carried forward in GST. Input Service Distributor “ISD” is one such concept. Further, with GST in place, a new concept of cross charge was also introduced.
We are pleased to release our GST newsflash, highlighting certain clarifications provided by the Central Government in relation to Banking Sector, as under:
· Clarifications on time of supply and place of supply in different scenarios.
The implementation of GST with effect from 1 July 2017 covering almost 1 crore tax filers, (with an estimated annual tax collection of Rs. 10 lakh crores) has been undoubtedly the most prolific indirect tax reform in India.
We are pleased to attach our Newsflash on “The US Tax Cuts & Jobs Law - Certain Key Aspects” for your reference and perusal. The US economy is the largest economy in the world and India’s largest trade partner.
Government of India has introduced certain measures to toughen its stance on the anti-profiteering provisions by introducing certain measures. We are pleased to release newsflash on the captioned subject.
The key highlights are
Due to the non-availability of the refund module on the common GST portal, the GST Council has recommended the applications/documents/forms pertaining to refund claims on account of zero-rated supplies to be filed and processed manually till further orders are issued. In this regard, notification no.
Section 143 (1) of the Income Tax Act, 1961 (‘the Act’) provides for prima facie adjustments to a return of income filed by the assessee, while processing the return of income. The ambit of prima facie adjustment was expanded by the Finance Act, 2016.
The 23rd GST council meeting was held on 10 November 2017 at Guwahati. The following are the key highlights of said meeting:
- Proposed revised GST rates for certain goods
- Proposed revised GST rate for restaurants.
- Relaxation in GST return filing
- Certain other aspects
In a path breaking judgment, the Hon’ble Delhi High Court on 8 November 2017 has ruled that certain clauses of various Income Computation and Disclosure Standards (ICDS) are unconstitutional and also suffers from the vice of excessive delegation.
We are pleased to release our newsflash on the captioned subject.
The 22ND GST council meeting was held on 6 October 2017 at New Delhi. The following are the key highlights of said meeting:
- Proposed revised GST rates for certain services
The Prevention of Money-laundering Act, 2002 (PMLA) aimed at combating money laundering in India came into force with effect from 1st July 2005.
Under the PMLA, the reporting entities inter-alia, included dealer in precious metals, precious stones and other high value goods, as may be notified by the Central Government.
Under the Finance Act 2016, the Central Board of Direct Taxes (CBDT) had inserted section 286 in the Income Tax Act, 1961 to implement the recommendation of 2015 Final Report on Action 13, titled “Transfer Pricing Documentation and Country-by-Country Reporting”, identified under the OECD Base Erosion and Profit Shifting (BEPS) Project.
A Resident taxpayer (Individual, Companies, Partnership firms, etc.) who have already paid tax in another country on amounts of foreign income and gains, may claim Foreign Tax Credit Relief in India to avoid being taxed twice on the same income.
In one of the recent developments, it is proposed by the Central Board of Direct Taxes (CBDT) (released for public comments) to create a mechanism for self-reporting of estimates of current income, tax payments and advance tax liability by certain taxpayers viz. companies and tax audit cases, on voluntary compliance basis.
The Prevention of Money-laundering Act, 2002 (PMLA) aimed at combating money laundering in India with three main objectives – to prevent and control money laundering, to confiscate and seize the property obtained from laundered money, and to deal with any other issue connected with money laundering in India, came into force with effect from 1st July, 2005.
The Government of India has further extended the due date of furnishing GST return for the month of July and August 2017. In said regards please find attached our newsflash.
We trust you will find the same useful.
The Government of India has extended the due date of furnishing GSTR 3B return for the month of July 2017 from 20 August 2017 to 25 August 2017. In said regards please find attached our newsflash.
We trust you will find the same useful.
The Government of India has issued clarification regarding availability of Transitional credit in relation to GST.
We are pleased to release our newsflash on the captioned subject and trust you will find the same useful.
We are pleased to release our newsflash on the captioned subject. The Government has notified the extended due date for furnishing the Goods and Services Tax (GST) returns for July 2017 and August 2017 under GST.
We trust you will find the same useful.
We are delighted to enclose our latest GST publication viz. ‘GST – The Journey Begins (Updated 7 July 2017)’. This publication comprises of all the enacted & updated GST regulations up to 7 July 2017 and analysis of significant regulations.
The Finance Act, 2017 introduced tax provisions under Minimum Alternate Tax (MAT) provisions for Indian Accounting Standards (Ind AS) compliant companies. The provisions resulted in most Ind AS adjustments, including transition impact, being taxed under MAT provisions.
In October 2015, the Organization for Economic Co-operation and Development (‘OECD’) had issued the final Base Erosion and Profit Shifting (BEPS) reports and released multilateral instrument (MLI) in November 2016 to swiftly implement treaty measures on hybrid mismatch arrangements, treaty abuse, permanent establishment, and mutual agreement procedures by modifyin
Recently, the Central Board of Direct Taxes (CBDT) has issued rules to support the implementation of Secondary Adjustments in Transfer Pricing by prescribing the time limit for repatriation and method for computing interest on excess money.
Section 40(a)(ia) of the Income-tax Act, 1961 provides that any specified payment (interest, commission, etc.) to a resident from which tax is deductible at source will not be allowable as a deduction if (a) the tax had not been deducted or (b) after deduction, had not been paid in time as provided therein.
The object of the Finance Bill (‘the Bill’), as you know, is to give effect to the financial proposals of the Central Government for the financial year 2017-18. The Bill was introduced in the Lok Sabha on 1 February 2017 and it was passed by the Lok Sabha recently on 22 March 2017 .
Union cabinet has approved four crucial GST bills.
1. The Central Goods and Services Tax Bill 2017 (The CGST Bill)
2. The Integrated Goods and Services Tax Bill 2017 (The IGST Bill)
3. The Union Territory Goods and Services Tax Bill 2017 (The UTGST Bill)
The Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016 (Scheme) provides an opportunity to persons having undisclosed income in the form of cash or deposit in an account maintained with a specified entity to declare such income and pay tax, surcharge and penalty totaling in all to 49.9 per cent.
With the revision to the India-Mauritius tax treaty to phase out capital gains tax exemption, it was only a matter of time before the Government turned its attention to the India- Singapore tax treaty. On 30th December 2016, India and Singapore signed a Third Protocol to amend their bilateral tax treaty.
Two changes which stand out are:
The Direct Tax Dispute Resolution Scheme, 2016, (‘Scheme’) which provides an opportunity for dispute settlement, can be availed up to 31st December, 2016. The Central Board of Direct Taxes (CBDT) issued its first set of clarification with regards to the Scheme on 12 September 2016 ( vide Circular no. 33 of 2016)
The Supreme Court (SC) has finally cleared the air about the true effect of the
provisions of section 10A of the Income Tax Act, 1961. Earlier there was a lot of
confusion as to whether amended section 10A is a deduction section or an exemption
Post demonetization of the currency on 8 November 2016, a scheme namely, ‘Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016’ (‘the Scheme) was introduced by the Taxation Laws (Second Amendment) Act, 2016 which came into force on 15 December, 2016.
With effect from 9th November, 2016, bank notes of existing series of denomination of the value of Rs. 500 and Rs. 1000 ceased to be legal tender as part of the monetization plan of the government directed to curb black money in the economy.
The Central Government has amended Service Tax regulations to make foreign entities without presence in India providing B2C OIDAR services in India liable to Service Tax and comply with Service Tax regulations. This appears to be a first time that Central Government has made a non-resident person as a person liable to pay Service Tax.
Recently, the CBDT has made changes in the Income Tax Rules to restrict the rate of depreciation maximum up to 40% for block of assets which are currently eligible for depreciation at a higher rate ( 50%, 60%, 80%, 100%).
The Central Government had notified 10 Income Computation and Disclosure Standards (‘ICDS”) to be applicable to all assessees following mercantile system of accounting for computing business income and income from other sources from AY 2016-17 and onwards.
On 25th February 2016 the Maharashtra Sales Tax Department (hereinafter referred to as "MSTD") had issued Trade Circular No 7 T of 2016 which explains the new automation process of filing of returns for the periods from April 2016.
The Maharashtra Sales Tax Department (MSTD) is in the process of implementing SAP based New Automation System.
Retums for periods after 1 April 2016, under Maharashtra Value Added Tax Act (MVAT) and Central Sales Tax Act (CST) will be started in the new automation system in due course.
The Income Declaration Scheme, 2016 came into effect on 1st June, 2016. So far the Central Board of Direct Taxes has issued three sets of FAQs vide Circular Nos. 17, 24, 25 & 27 of 2016. In order to address further queries received from the public relating to the Scheme, CBDT has further issued fourth set of clarifications on 18 August 2016.
Rising tax dispute has been a matter of serious concern for taxpayers. The Direct Tax Dispute Resolution Scheme (‘the Scheme’) which has been introduced as a part of the Finance Act, 2016 provides an opportunity to taxpayers to settle their pending tax disputes at the level of the First Appellate Authority i.e.
Presently, any capital gains arising to a non-resident on Indirect transfer of shares is deemed to accrue or arise in India on account of ‘retrospective amendment’ carried out through Finance Act, 2012.
The CBDT has since received further queries from stakeholders seeking clarifications about various provisions of the Income Declaration Scheme. The issues raised have been examined and the third set of 11 FAQs have been issued on 30 June 2016 vide Circular No.25 of 2016.
Recently, the CBDT vide its Notification No. 54 of 2016 dated 27.06.2016 notified final foreign tax credit rules by introducing new Income Tax Rule 128 and new Form 67.
In this newsflash, we have provided an overview of the final Foreign Tax Credit rules for your ready reference and perusal.
Recently, the Central Board of Direct Taxes (CBDT) vide its Notification dated 24 June 2016 introduced a new rule 37BC to the Income Tax Rules, 1962 requiring a non-resident to furnish alternative documents to PAN so that the higher withholding tax under section 206AA shall not be applicable.
The Income Declaration Scheme, 2016 (the Scheme’) incorporated as Chapter IX of the Finance Act, 2016 provides an opportunity to persons who have not paid full taxes in the past to come forward and declare the undisclosed income and pay tax, surcharge and penalty totaling in all 45% of such undisclosed income declared.
CBEC vide Notification No. 35/2016- Service Tax dated 23 June 2016 has granted exemption from levy of KKC on the invoices which were issued before 1 June 2016, subject to condition that the provision of service has been completed before the 1 June 2016.
The indirect taxes comprising of additional countervailing customs duty, excise duty, service tax, state level VAT laws and CST which are proposed to be subsumed within the GST account for 15% to 25% of the turnover for most businesses.
Recently, the Central Board of Direct Taxes (CBDT) vide official gazette dated 2 June 2016 notified the amendment made to Rule 8D of the Income Tax Rules 1962 (IT Rules). One of the most litigative issues in direct taxation faced by business entities pertains to disallowances made under section14A of the Income Tax Act 1961 (IT Act) read with
Post the retrospective amendment introduced by the Finance Act, 2012, India taxes the capital gains arising to a non-resident on transfer of shares of a foreign company if such shares derives its value substantially from the assets located in India ( i.e. the fair market value (FMV) of assets located in India exceeds Rs.
The Protocol for amendment of the Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains between India and Mauritius was signed by both countries today at Port Louis, Mauritius. The key features of the Protocol are summarized in this newsflash.
The Finance Bill, 2016 was introduced in the Lok Sabha on 29 February 2016 and it was passed by the Lok Sabha recently on 5th May 2016.
We are pleased to release our newsflash which covers some of the significant amendments made during the passage of the Finance Bill in the Lok Sabha
For companies and other business entities having cross-border transactions, wherein they are eligible to claim credit of foreign tax against their taxable income in India, there did not exist a mechanism for availment of such credit.
One of the major proposals in the Finance Bill 2016 pertain to amendment to be brought in the Foreign Contribution Regulations Act, 2010 (‘FCRA’) by amending the definition of ‘foreign source.’ Pursuant to the proposed change, which if legislated would facilitate smoother movement of funds by the Indian companies (which are foreign owned), which are required to man
The publication 'The New Axis of Financial Reporting - Ind AS and ICDS' is prepared by RSM Astute Consulting Pvt. Ltd. (the Indian member of RSM) to provide readers a broad understanding of applicability of Ind AS and Income Computation and Disclosure Standards (ICDS) and some key differences with IFRS and Indian Standards.
Through its Finance Budget, 2016, the Government of India has re-introduced Excise Duty on articles of jewellery with effect from 1 March 2016. This newsflash attempts to summarise some of the significant implications, on account of the said levy on the manufacture and sale of Jewellery.
On 18 March 2016 Maharashtra Finance Minister has presented the State budget for the year 2016-17. The changes effected in various regulations shall be effective from a date to be notified unless otherwise specified . This newsflash brings to you certain key aspects of the Maharashtra State Budget 2016-17.
Various States have issued VAT notifications and during the period February and March 2016. This newsflash summarises certain relevant circulars / notifications issued by various States in respect of their VAT laws, for the period 1 February 2016 till 8 March 2016.
Views of Dr. Suresh Surana (Founder, RSM Astute Consulting)
Government is committed to reducing litigation and has recently taken certain measures, such as setting up of tax simplification committee and acceptance of the judicial rulings in the case of Vodafone/Shell, etc.
With the end of financial year just around the corner, it is time to save certain amount of taxes by investing in prescribed instruments which are eligible for deductions. Chapter VI-A of the Income-tax Act primarily provides for deduction on certain payments and deduction on certain incomes.
On 27 October, 2015, the Government of India had constituted a 10-member Committee under the Chairmanship of Justice R.V Easwar, former Judge of the Delhi High Court with a view to simplify the provisions of the Income Tax Act, 1961.
The income-tax department, recently, changed the regulations that require individuals to quote their permanent account number (PAN) for certain high value transactions. The rules, applicable from 1 January 2016, rationalises the earlier law and benefits taxpayers in many ways. This write-up includes Dr. Suresh Surana’s views on the same.
The Finance Act, 2015, amended the provisions of the provisions of income tax act relating to determination of residence of a company. According to the amended provisions, a company would be said to be resident in India in any previous year, if it is an Indian company, or its Place of Effective Management (POEM) in that year is in India.
From the wealth tax perspective, it is important to note that the clubbing provisions shall still be applicable and the parent shall be subject to wealth tax in case where the asset has been transferred to a minor child without any consideration.
There is a myth that there is no Gift Tax in India. Although there is no separate Gift Tax Act prevailing in India, the receiver of the gift may be subject to tax on the amount of the gift received under the Income Tax Act, 1961. However, there are certain exemptions by which the receiver shall be exempt from the applicable tax without any upper limit.
Employees are asked to submit the investment proofs towards the end of the financial year by the employers to verify and calculate the actual income tax liability. Submission of timely accurate details of investment to the employer makes sure that no heavy TDS is made in the later part of the financial year
In taxation parlance, pursuant to the recent Finance Act 2015 which has been legislated, 2 per cent additional surcharge has been proposed on individuals having a taxable income of Rs 1 crore (Rs 10 million) and above. Therefore, the individuals falling under this category of tax payers, can be perceived as the high net worth investors, or HNIs, class.
Draft guiding principles for determination of place of effective management of a company; place of effective management, foreign company will be treated as resident in India if its place of effective management; Location of Head Office; Use of modern technology in conducting meeting.
Maharashtra VAT Department has issued the Notification No VAT. 1515/ CR-81/Taxation-1 dated 5 November 2015 for increase in Interest Rate for delay of VAT payment with effect from 1 December 2015. Further, Maharashtra VAT Department has issued Trade Circular No.
Indians nowadays are increasingly buying properties overseas, particularly in London, New York, Singapore and Dubai. It is critical for them to study foreign exchange regulations and tax provisions of the relevant country as well as India before they make buying decisions.