ICAI Election 2015

ELECTION 2015ANNOUNCEMENT

For Attention of the Prospective Candidates and Members at large

Sub: Election - 2015 - Draft List of Voters as on 1.4.2015 - Views/Suggestions on proposed Polling Booths

I. Members may be aware that the next elections to the Council and Regional Councils are scheduled to be held on 4th and 5th December, 2015 in cities having 2500 or more members and on 5th December, 2015 at all other places having 25 or more members in a city or within a distance of 50 kilometres thereof. The eligibility of a member to vote at a polling booth or vote by post would be decided based on his/her professional address as published in the List of Members as on 1.4.2015. Based on the List of Voters as on 1.4.2015, the draft List of Voters for the aforesaid elections have been hosted on the website of the Institute and the link to reach the same ishttp://112.133.194.254/lov.asp. The draft List of Voters contains the professional address of the voters, his membership number and serial number in the List of Voters, his/her eligibility of vote i.e. whether he/she is eligible to vote at polling booth or by post and the Polling Centre. The list containing the Polling Centre and cities/towns attached with each polling centre has also been hosted separately on the website of the Institute. In the case of member abroad, his/her foreign address has been given and status has been indicated as Abroad and such members would be entitled to vote by post. Members are requested to kindly visit the website of the Institute and check their particulars as on the above date. If the particulars as published are not correct as on the date of 1.4.2015, the same may please be brought to the notice of the respective Decentralised Offices with a copy to election cell at e-mail - lov2015@icai.in along with the documentary evidence. It may please be noted that any change in the professional address or other particulars of a member that took place after 1.4.2015 would not be taken into account for the purpose of List of Voters.

II. The members whose professional addresses are falling within the cities/towns shown in the List of proposed Polling Booths would be eligible to vote by poll at the polling centre shown in the List. This list also contains the cities/towns attached with the Polling Centres and members in such cities would be required to visit the polling centre for voting. The members residing in the cities/towns not shown in the List of Proposed Polling Booths would be entitled to vote by post. The list of such cities/towns has also been given separately. The cities/towns attached with the proposed Polling Booths are the cities/towns which are within a distance of 50 kilometres from the respective Polling Centres. The List of proposed Polling Booths and cities/towns attached with Polling Centres and List of cities/towns not attached with any of the Polling Booths of the respective region have been hosted on the website of the Institute separately. The Link to reach the same is as under:-

• Western India Regional Constituency - Draft List of Voters
  
  • List of Proposed Polling Booths and Cities/Towns attached
    
  • List of cities/towns not attached with any of the Polling Centre
    
• Southern India Regional Constituency - Draft List of Voters
  
  • List of Proposed Polling Booths and Cities/Towns attached
    
  • List of cities/towns not attached with any of the Polling Centre
    
• Eastern India Regional Constituency - Draft List of Voters
  
  • List of Proposed Polling Booths and Cities/Towns attached
    
  • List of cities/towns not attached with any of the Polling Centre
    
• Central India Regional Constituency - Draft List of Voters
  
  • List of Proposed Polling Booths and Cities/Towns attached
    
  • List of cities/towns not attached with any of the Polling Centre
    
• Northern India Regional Constituency - Draft List of Voters
  
  • List of Proposed Polling Booths and Cities/Towns attached
    
  • List of cities/towns not attached with any of the Polling Centre
    

The aforesaid lists have been prepared based on the number of members in the List of Members as on 1.4.2015. The cities/towns attached with the polling centres are the cities/towns which are within a distance of 50 kilometres from the respective Polling Centres. The corresponding pin-codes numbers of these cities/towns as per our data base have also been given. 

Views/suggestions/comments of the prospective candidates and members at large are invited latest by 21st August, 2015 in respect of the following:- 

(i) Whether the list of proposed polling booths and cities/towns attached with each Polling Centres are in order and if not what changes you would like to suggest, together the reason(s) thereof. 

(ii) Whether any new polling booth/s can be set up out of the cities/towns shown in the list at (ii) above or taking one or more cities from List at (i) and one or more cities from the list at (ii) above specially in cities having 15 or more members 

(iii) Whether it is possible to attach any of the cities mentioned in the list at (ii) above with any of the polling booths proposed as per list at (i) above. 

V. Sagar
Secretary and Returning Officer

CBDT Circular on IT Staff

CBDT Hauls Up Officers & Staff For Leaving Early, Coming Late & Harassing Taxpayers

The CBDT has issued a stern Office Memorandum dated 07.08.2015 stating that officers/staff of the income Tax Department are leaving their stations/headquarters early on Fridays, during weekend and holidays and joining their duties late on next working day. It is further stated that many a times no permission is being taken from the superior controlling authorities before leaving location/headquarters as required under the rules. It is stated that apart from disturbing decorum and office discipline, this practise of leaving stations/headquarters by the officers /staff without prior permission and not observing the office timings, is causing inconvenience to the taxpayers and members of public who visit income tax offices in connection with their tax matters either by prior appointment or otherwise. This has been viewed adversely by the Chairperson, CBDT. The CBDT has warned that failure to obtain permission of competent authority before leaving station/headquarters is to be viewed seriously and may entail disciplinary action. It is also stated that Article 56 of the Civil Service Regulations also provides that no officer is entitled to pay and allowance for any time he may spend beyond the limits of his charge without authority

Placement Scheme for selection of Articled Assistants by CA Firms

The Board of Studies of the institute has great pleasure in introducing an optional Articles Placement Scheme for selection of Articled Assistants by CA Firms. The scheme has been evolved to provide an opportunity to the firms of Chartered Accountants having vacancies for Articled Assistants to interact with the candidates who have either (a) Passed Group-I or both Groups of the IPCC examination , or (b) have been admitted under the Direct Entry Scheme and are eligible for undergoing articled training for selection as articled assistants in the C A Firms. This scheme at the same time, assists eligible students to get placement in CA Firms for their articles training.

No Fee is to be Charged From the Participating CA Firms and Students registering on the Portal.

http://bosapp.icai.org

RBI Credit Policy (04 July 2015)

RBI Credit Policy (04 July 2015): RBI keeps rate unchanged with Repo Rate at 7.25%; Reverse Repo Rate stands at 6.25%; CRR unchanged at 4%. Estimated GDP growth for FY16 @7.60%.

Multipurpose Empanelment Form (MEF) for the year 2015-16.

ICAI Announcement (03-08-2015)

Multipurpose Empanelment Form (MEF) for the year 2015-16.

This is to inform that Multipurpose Empanelment Form (MEF) for the year 2015-16 has been made live at www.meficai.org. The Members/firms can apply the form showing the status as on 1st January 2015. After filling the form, they are required to generate an online Declaration and Acknowledgment letter. They are also required to submit hard copy of Declaration in support of their online application along with a print out of the acknowledgment letter generated online. The application which does not have Declaration would not be entertained as a valid application.

Last date for submission of online form is 31st August, 2015 and last date of submission of hard copy of "DECLARATION FOR MEF 2015-16" is 15th September, 2015.

It is suggested that before going directly to the MEF form, applicant should first go through the link http://www.meficai.org/Advisory_2015.pdf "Points which shall be carefully read and be taken care for MEF 2015-16".

New ITR Forms 3,4,5,6 & 7 Notified

Income-tax NOTIFICATION New Delhi, the 29th day of July, 2015 

S.O. 2070 (E).─ 

In exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:- 

1. (1) These rules may be called the Income-tax (Tenth Amendment) Rules, 2015. 

(2) They shall be deemed to have come into force with effect from the 1st day of April, 2015. 

2. In the Income-tax Rules, 1962, in Appendix-II, for FORM ITR-3, FORM ITR-4, FORM ITR-5, FORM ITR-6 and FORM ITR-7, the following FORMS shall respectively be substituted, namely:- 

Form No.:ITR-3

[For Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship (Please see rule 12 of the Income-tax Rules,1962

Form No.:ITR-4 PDF

For Individual having income from business and Profession 

Form No.:ITR-5

[For persons other than,- (i) individual, (ii) HUF, (iii) company and (iv) person filing Form ITR-7(Please see Rule 12 of the Income-tax Rules,1962 Is there any change in the name

Form No.:ITR-6

[For Companies other than companies claiming exemption (Please see rule 12 of the Income-tax Rules,1962 Is there any change in the company’s name If yes, please furnish the old name

Form No.:ITR-7

[For persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4E (Please see rule 12 of the Income-tax Rules,1962

Form No.:Acknowledgement ITR-V

[Notification No.61/2015, F.No.142/1/2015-TPL] (Gaurav Kanaujia) Director to the Government of India Note.- The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii) vide notification number S.O.969(E), dated the 26th March, 1962 and last amended vide notification number S.O.1683 (E), dated 24.06.2015.

CBDT extends due date of filing wealth-tax return

CBDT extends due date of filing wealth-tax return from July 31, 2015 to Aug. 31, 2015

July 27, 2015

SECTION 14 OF THE WEALTH-TAX ACT, 1957 - RETURN OF WEALTH - CLARIFICATION ON EXTENSION OF DUE DATE OF FILING RETURN OF WEALTH FOR A.Y. 2015-16

LETTER [F.NO.328/08/2015-WT], DATED 27-7-2015

In terms of Explanation to sub-section (1) of section 14 of the Wealth-tax Act, 1957, 'due date' of filing Return of wealth in relation to an assessee under the Wealth-tax Act shall be the same date as that applicable to an assessee under the Income-tax Act under the explanation to sub-section (1) of section 139 of the Income-tax Act.

2. Central Board of Direct Taxes vide order under section 119 of the Income-tax Act F.No.225/154/ 2015/ITA-II dated 10-6-2015 has extended the 'due date' for filing Return of Income for assessment year 2015-16 in respect of assessees falling under clause (c) of explanation 2 to sub-section (1) of section 139 of the Income-tax Act from 31-7-2015 to 31-8-2015. In view of the same, the 'due date' for filing Return of wealth by such assessees for assessment year 2015-16 also stands extended from 31st July 2015 to 31st August 2015.

3. This issues with the approval of Chairperson, CBDT.

Excise Notifications

Dear Professional Colleague,

Mystery of Confusing Notifications on applicability of Excise Duty on Textiles, Mobile phone, Note books, Spectacles, Calculators, Water filters, Sauces and ketchups, Bicycles, etc.

The Central Board of Excise and Customs ("the CBEC" or "the Board") has issued three Central Excise Notifications apparently to clarify when manufacturers can avail exemption or concessional rates of CE duty.

·         Notification No.34/2015-Central Excise, Dated: July 17, 2015, amending Notification 30/2004-CE, which provides for an exemption for certain textile articles

·         Notification No.35/2015-Central Excise, Dated: July 17, 2015, amending Notification 1/2011-CE, which prescribes an effective rate of 2% duty on certain goods

·         Notification No.36/2015-Central Excise, Dated: July 17, 2015, amending Notification 12/2012-CE:

-         Condition 16: Exemption for certain goods either wholly or partly – steel, Aluminium, Tablet Computer, Mobile handsets

-          Condition 20 Clause (a): Exemption for certain goods – Copper

-          Condition 25: Exemption for certain goods – fertilisers, goldsmith wares

-          Condition 52A: Exemption for certain goods – bunker fuels, solar water heater

Objective of these amendments are that the Manufacturer seeking to claim Nil rate of duty or 2% duty or any other Concessional rate of duty under the amended notifications:  

·         Procure Inputs/capital goods which are used for manufacture of excisable goods, on which "appropriate duty has been paid", be it Central Excise duty or the Additional duty of Customs;

·         Input services which are utilized for manufacture of excisable goods on which "appropriate service tax has been paid".

·         Manufacturers claiming the exemption should not avail CENVAT credit of duty/tax paid on inputs, capital goods, input services.

Issues arise because of these amendments: Whether the Manufacturer cannot claim Nil rate of duty or 2% duty or any other Concessional rate of duty under the amended notifications if:

·         Inputs/ capital goods is not liable to excise duty or where excise duty is nil, i.e. No excise duty is paid on Inputs/ capital goods which are used for manufacture of excisable goods.

·         Input Services is not liable to service tax or where service tax is exempted.

Because of the said amendments, there is hue and cry among the diverse section of manufacturers, manufacturing – Readymade garments, Mobile phone, Note books, Spectacles, Calculators, Water filters, Sauces and ketchups, Bicycles, etc.

Mystery resolved by the Board:

Now, the Board has issued three Notifications No. 37/2015-CE, 38/2015-CE, 39/2015-CE, dated July 21, 2015, to correct the mystery created by the Notification Nos. 34/2015-CE, 35/2015-CE and 36/2015-CE dated July 17, 2015 and issued a Circular No. 1005/12/2015-CX dated July 21, 2015, clarifying apprehensions have been raised about the use of the phrase of "appropriate duty". In this regard, an Explanation has been inserted in the  Notifications No. 30/2004-CE dated July 9, 2004, Notification No.1/2011-CE dated March 1, 2011 and Notification No. 12/2012-CE dated March 17, 2012 so as to clarify that the appropriate duty or appropriate additional duty or appropriate service tax for the purposes of the said notifications/entries includes NIL duty/ tax or Concessional duty/tax, whether or not read with any relevant exemption notification for the time being in force.

Hence, the domestically manufactured goods covered under these Notifications/Entries continue to be exempt from Excise duty or subject to Concessional rate of excise duty, as the case may be as they were prior to July 17, 2015.

Hope the information will assist you in your Professional endeavours. In case of any query/ information, please do not hesitate to write back to us.

Thanks & Best Regards.

Bimal Jain

FCA, FCS, LLB, B.Com (Hons)

GST Report of Rajya Sabha Panel

Highlights of Report of 'Rajya Sabha Panel' on GST Bill

Band for GST-rates

The Bill empowered GST Council to make recommendations for the rates of goods and service tax including floor rates with bands. The Committee recommended that the word 'band' may be defined in GST laws as following:

"Band": Range of GST rates over the floor rate within which Central Goods and Service Tax (CGST) or State Goods and Service Tax (SGST) may be levied on any specified goods or services or any specified class of gods or services by the Central or a particular State Government as the case may be.

In its report, The Committee mentioned that it was aware that while discharging the functions conferred upon the GST Council, it would be guided by the need for a harmonized structure of goods and services tax and for the development of a harmonized national market for goods and services.

It can be said that while construing above definition of 'Band' one has to ensure that harmonized structure of GST-rates must not be altered.

Voting pattern

The Committee found no merit in altering the voting pattern proposed in the Bill.

Dispute Settlement Authority

It also didn't recommend inclusion of provision for GST Dispute Settlement Authority having noted that GST Council shall decide only the 'modalities' to resolve disputes.

Definition of 'Supply'

The Bill proposed definition of 'goods and services tax' to mean any tax on supply of goods, or services or both. The Committee opined that the term 'supply' would be defined in the various GST laws relating to CGST and SGST, therefore, it would not be appropriate to define the term 'supply' in the Bill.

Definition of 'services'

The Bill proposed to define 'services' to mean anything other than goods. The Committee felt that term 'services' had been so defined in order to give it wide amplitude so that all supplies that are not goods can broadly be covered within the ambit of services and no activity remains outside the taxable net. It also opined that this would also minimize disputes. In view of the above, it proposed no change in the definition.

Additional Goods and Services Tax

The Bill proposed to levy non-Cenvatable additional tax at 1% on inter-State supply of goods. The Committee felt that the provision of 1% additional tax in its present form was likely to lead to cascading effect of taxes. Therefore, it strongly recommended that following Explanation should be added for word 'supply':

Supply: "All forms of supply made for a consideration."

Compensation to States

The Bill proposed that the Parliament 'may' compensate States for loss of revenue for a period which may be extended to five years. The Committee felt that there was no justification for substitution of the word 'may' with 'shall'. It, however, recommended that compensation should be provided for whole period of five years.

(Source: Taxmann)

Cost inflation index for 2015-16 is 1081.

Cost inflation index for 2015-16 is 1081.
Notified on 24-07-2015.

MECHANISM TO MONITOR TENDERING

ICAI ANNOUNCEMENT - MECHANISM TO MONITOR TENDERING (22-07-2015)

With a view to contain the tendering system for attest functions, the Council at its special (338th) meeting considered the report of the Group constituted under the convenorship of CA. Tarun Jamnadas Ghia, Member, Central Council and decided as under:

1.  Tendering has been prohibited in the exclusive areas of practice of chartered accountants like audit and attestation services. i.e. those areas where the assignments can be performed only by chartered accountants. In those areas, where alongwith chartered accountants, the other professionals can also apply for the tender, there is no restriction for the chartered accountants to respond to the tenders floated by authorities from time to time.

2.  Members are advised to adhere to the recommended scale of fees prescribed by ICAI in the context of various professional assignments. To ensure such adherence, a member responding to a tender should be required to furnish to ICAI at the designated e-mail address pdc.tender@icai.in with estimated hours to be devoted by the partner/proprietor, paid CAs, other staff and the fees quoted in the tender. Such details will be furnished by the member within a period of fifteen days of his responding to the tender. If the member is successful in securing the tendered assignment, then the member will also furnish the actual hours devoted by the partner/proprietor, paid CAs and the staff within two months of completion of the assignment.

3.  Members are required to maintain cost sheet in the given format while submitting any tender/bid. The format of the same can be viewed at http://220.227.161.86/38366pdc28039.pdf

4.  Members are required to maintain the cost sheet compulsorily and submit a soft copy of the bid submitted by them in response to any tender within 15 days to ICAI. The office can check whether recommended scale of fees has been followed or not in those bids, to ensure adherence to quality standards.

- CBDT releases Java Utility for e-filing Form 6 to declare black money

FYI - CBDT releases Java Utility for e-filing Form 6 to declare black money

The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 ('Black Money Act') has been enforced from July 1, 2015.

The Black Money Act provides for 30% tax on the value of undisclosed foreign income or assets and a penalty of three times of tax so computed. It further provides for prosecution up to 10 years in case of willful attempt to evade tax on foreign income or assets held outside India.

However, the Black Money Act allows one-time compliance window for the taxpayers to voluntarily disclose undisclosed foreign income or assets. The declaration can be made by September 30, 2015. Any person availing of benefit of compliance window is required to pay tax at the rate of 30% of value of undisclosed foreign income or asset and a penalty of 100% of tax. Such taxes and penalty are required to be paid by the declarant on or before December 31, 2015.

The Government has notified Form 6 to make declaration of undisclosed foreign income or asset under the compliance window. The taxpayer has an option to file the declaration either manually to CIT, Delhi or e-file it using the digital signature.

Therefore, for the purposes of e-filing of Form 6, the Board has released the Java utility. The taxpayer can now fill up Form 6 by downloading the Java utility from e-filing website.

After filling the relevant information in Form 6 through Java Utility, the taxpayer needs to generate the .xml file and submit it under e-filing option available after login at https://incometaxindiaefiling.gov.in. Declarant needs to attach relevant scanned documents (i.e., scanned copy of valuation report or FMV computation) in PDF or ZIP format along with XML file. The size of PDF/ZIP documents should not exceed 50MB.

Forwarded from whatsapp as received !!

Multipurpose Empanelment Form 2015-16 hosted

Multipurpose Empanelment Form for the year 2015-16 is an on line application. Members can fill up the application form directly on the site itself and Submit it.

Members can view the Application and can Edit the Application in different stages.

However after submission of the application form members will not be able to edit the application. They would be able to view the details submitted through the Application Form and take print out of declaration/ acknowledgement and of the whole application form.

Last date for submission of applications on the website www.meficai.org is 31st August, 2015

Validity of Sec 234E

G. Indhirani vs. DCIT (ITAT Chennai)

S. 234E: Prior to the amendment to s. 200A w.e.f. 01.06.2015, the fee for default in filing TDS statements cannot be recovered from the assessee-deductor while processing the s. 200A statement. However, the AO is entitled to pass a separate order u/s 234E to levy the fee within the limitation period
The Assessing Officer has exceeded his jurisdiction in levying fee under Section 234E while processing the statement and make adjustment under Section 200A of the Act. Therefore, the impugned intimation of the lower authorities levying fee under Section 234E of the Act cannot be sustained in law. However, it is made clear that it is open to the Assessing Officer to pass a separate order under Section 234E of the Act levying fee provided the limitation for such a levy has not expired

New Guidelines on Concurrent Audit of Banks

RBI Issues New Guidelines on Concurrent Auditing at Branches

 

 

The Reserve Bank on Thursday said the concurrent audit at bank branches should cover at least half of their advances and deposits.

The concurrent audit system is regarded as part of a bank's early warning system to ensure timely detection of irregularities and lapses.

"Concurrent audit at branches should cover at least 50 per cent of the advances and 50 per cent of deposits of a bank," RBI said in a notification.

It said branches rated as high risk or above in the last risk-based internal audit (RBIA) or serious deficiencies found in internal audit are subject to concurrent audit.

The audit will also be applicable on all specialized branches like large corporate, mid corporate, exceptionally large/very large branches, SMEs and all centralised processing units like loan processing units (LPUs).

Besides, it would include service branches, centralized account opening divisions, wealth and portfolio management services, card products divisions, data centres and treasury/ foreign exchange business, investment banking, among others.

The concurrent audit also helps in preventing fraudulent transactions at branches.

The main role of concurrent audit is to supplement the efforts of the bank in carrying out simultaneous internal check of the transactions and other verifications and compliance with the procedures laid down, the RBI said.

The scope of concurrent audit should be wide enough or focused to cover certain fraud-prone areas such as handling of cash, deposits, advances, foreign exchange business, off-balance sheet items, credit-card business, Internet banking, it added.

The regulator said appointment of an external audit firm for concurrent audit may be initially for one year and extended up to three years, after which an auditor could be shifted to another branch, subject to satisfactory performance.

CBDT introduces Electronic Verification Code (EVC) system

CBDT introduces Electronic Verification Code (EVC) system as an alternate mode of verification to manually signed ITR-V (acknowledgment).
CBDT Notification No. 2/2015 Dated 13-July-2015 regarding
--------------------------------------------------------------------------
EVC, a ten digit alpha-numeric code, to be provided using any of the 4 methods, namely –
a) internet banking ,
b) AADHAR authentication ,
c) Bank ATM card and
d) combination of registered email and mobile number (where income is below Rs 5 lakhs).

EVC to be generated from E-filing website, generation process may vary based on risk category of taxpayer.

EVC unique to an assessee's PAN, one EVC can be used to validate one return of the assessee irrespective of the AY or return types.

EVC to be stored against assessee’s PAN and shall be valid for 72 hours (except in case of Aadhaar authentication)

The Notification is available at
https://incometaxindiaefiling.gov.in/eFiling/Portal/StaticPDF/EVC_notification.pdf.

Further EVC would verify the identity of the person furnishing the return of income. The mode and process for generation and validation of EVC, a user manual was prepared which is available at
https://incometaxindiaefiling.gov.in/eFiling/Portal/StaticPDF/e-Verification_User_Manual.pdf. CA RAJIV SHUKLA

Notification No. 2/2015 regarding Electronic Verification Code (EVC)

Notification No. 2/2015 regarding Electronic Verification Code (EVC) for electronically filed Income Tax Return as an alternative mode of verification released. [Refer Notification No. 2/2015 dated 13/07/2015] https://incometaxindiaefiling.gov.in/eFiling/Portal/StaticPDF/EVC_notification.pdf
EVC would verify the identity of the person furnishing the return of income .To know more about the modes and process for generation and validation of EVC https://incometaxindiaefiling.gov.in/eFiling/Portal/StaticPDF/e-Verification_User_Manual.pdf

FATCA-USA

Press Information Bureau
Government of India
Ministry of Finance
09-July-2015 16:55 IST

India and United States Signs Inter Governmental Agreement (IGA) to Implement the Foreign Account Tax Compliance Act (FATCA) to Promote Transparency on Tax Matters

Mr. Shaktikanta Das, Revenue Secretary of India and Mr. Richard Verma, U.S. Ambassador to India signed here today , an Inter Governmental Agreement (IGA) to implement the Foreign Account Tax Compliance Act (FATCA) to promote transparency between the two nations on tax matters. The agreement underscores growing international co-operation to end tax evasion everywhere. The text of the signed agreement will be available on the website of the Indian Income Tax Department (www.incometaxindia.gov.in) and the website of U.S. Treasury (www.treasury.gov).

 

The United States (U.S.) and India have a long standing and close relationship. This friendship extends to mutual assistance in tax matters and includes a desire to improve international tax compliance. The signing of IGA is a re-affirmation of the shared commitment of India and USA towards tax transparency and the fight against offshore tax evasion and avoidance. 

 

Revenue Secretary, Shaktikanta Das stated, "Signing the IGA with U.S. to implement FATCA today, is a very important step for the Government of India, to tackle offshore tax evasion. It reaffirms the Government of India's commitment to fight the menace of black money. It is hoped that the exchange of information on automatic basis, regarding offshore accounts under FATCA would deter tax offenders, would enhance tax transparency and eventually bring in higher equity in to the direct tax regime which necessary for a healthy economy."

 

Ambassador Verma, who signed on behalf of the United States, stated, "The signing of this agreement is an important step forward in the collaboration between the United States and India to combat tax evasion. FATCA is an important part of the U.S. Government's effort to address that issue."

 

FATCA is rapidly becoming the global standard in the effort to curtail offshore tax evasion. To date, the United States has IGAs with more than 110 jurisdictions and is engaged in related discussions with many other jurisdictions.

 

The United States enacted FATCA in 2010 to obtain information on accounts held by U.S. taxpayers in other countries. It requires U.S. financial institutions to withhold a portion of payments made to foreign financial institutions (FFIs) who do not agree to identify and report information on U.S. account holders.  As per the IGA, FFIs in India will be required to report tax information about U.S. account holders directly to the Indian Government which will, in turn, relay that information to the IRS.  The IRS will provide similar information about Indian account holders in the United States. This automatic exchange of information is scheduled to begin on 30^th September, 2015.

 

Both the signing of the IGA with U.S. as well as India's decision to join the Multilateral Competent Authority Agreement (MCAA) on 3^rd June, 2015 are two important milestones in India's fight against the menace of black money as it would enable the Indian tax authorities to receive financial account information of Indians from foreign countries on an automatic basis. 

 

 

*****

 

MAM/

Electronic Records-DSC

Dear All,

 The CBEC has issued Notification for maintenance of electronic records and issuing invoices with Digital Signature.

Rule 10

The assessee can now maintain the records on daily basis in respect of goods produced or manufactured, opening balance, quantity removed etc. In the electronic format and can also be preserved in electronic format provided every page of the records maintained has digital signature.

Rule 11(8)

Invoice issued under this rule may be authenticated by means of digital signature provided the duplicate copy of the invoice meant for transporter is digitally signed and a hard copy of such transporter copy of the invoice duly self attested by the manufacturer is used for transport of goods.

Black Money Rules Notified

Black money: rules for valuation of foreign assets notified

Anyone having an undisclosed bank account abroad will now have to pay tax and a penalty on the sum of deposits made since opening the account, according to the rules notified for implementation of a one-time compliance window under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

The rules also prescribe valuation norms for bullion and jewellery (including precious stones), immovable property, archaeological collections and paintings, shares (both listed and unlisted), as well as bank accounts.

The compliance window gives the account holder an opportunity to declare undisclosed assets abroad by September 30 and a further three months to pay the tax and penalty. The rate of tax will be 30 per cent, with an equal amount payable as penalty.

Once the window closes, the rate of tax will remain at 30 per cent but the penalty will be three times the tax — or 90 per cent — besides possible criminal prosecution and jail term.

For valuation of bank accounts, some safeguards have been provided to avoid double counting. It has been made clear that only fresh deposits since the date of opening will be taken into account and not the "proceed of withdrawal". For bullion, jewellery and precious stones, the value will be higher than the cost of acquisition. It will be the price that the said article would fetch if sold in the open market on the valuation date. The assessee can get the valuation done by a recognised government agency abroad or in India.

The same principles will be followed for valuing immovable property as well as archaeological collections, drawings, paintings and sculptures or work of art.

Shares & securities

For valuing shares and securities of listed entities, the rules envisage that the fair market value will be the higher of the cost of acquisition or average of the lowest and highest price on the date of valuation. The rules also provide a formula for calculating the fair market value of unquoted equity shares and provided a methodology for calculating the interest of a person in a partnership firm, association of persons or limited liability partnership.

The Reserve Bank's reference rate on the date of valuation will be used for converting the value of foreign assets and income into rupees. The rules also prescribe the format of notices to be sent to persons holding undisclosed assets and the format of appeals to the Commissioner (Appeals) and the Appellate Tribunal.

New rules of the game

1  Declaration to be sent to Commissioner of Income Tax (International Tax)-2, New Delhi

2  Assessee to be intimated by October 31 if I-T Department has any information in respect of the asset(s) declared

3 Revision of declaration permissible within 15 days of intimation sent by I-T Department

4  Tax and penalty to be paid by Dec 31, followed by acknowledgement to declarant

FLA Return by 15th July,2015

ANNUAL RETURN ON FOREIGN LIABILITIES AND ASSETS

• Act: Annual return on Foreign Liabilities and Assets has been notified under FEMA 1999. Return to be filed under A.P. (DIR Series) Circular No.145 dated June 18, 2014 and submitted to the Department of Statistics and Information Management, RBI, Mumbai

• Applicability: It is required to be submitted directly by all the Indian companies which have received FDI (foreign direct investment) and/or made FDI abroad (i.e. overseas investment) in the previous year(s) including the current year i.e. who hold foreign Assets or Liabilities in their balance sheets

• Due Date: FLA Return is mandatory under FEMA 1999 and companies are required to submit the same based on audited/ unaudited account by July 15 every year through official email id of any authorized person of company like CFO, Director, Company Secretary at fla@rbi.org.in

• Format: The FLA Return has to be submitted in excel based format, which has inbuilt checks and validations. The latest format of FLA Return is available on RBI's web site at the following link:

https://www.rbi.org.in/Scripts/BS_ViewFemaForms.aspx

For detailed FAQs on FLA Return you may please read more on the following link:

https://rbi.org.in/Scripts/FAQView.aspx?Id=95

• Non-compliance: Non-filing of FLA Return before due date will be treated as a violation of FEMA and penalty clause may be invoked for violation of FEMA.

CA Business Relationship-Sec 288

CBDT notifies nature of business relationship which CA can have with client to ensure his independence

Change in the Definition of term "accountant" – Section 288 (Finance Act,2015)

The amended definition specifically excludes the following persons, for the purposes other than for representing the assessee-

viii) Any person who, whether directly or indirectly, has BUSINESS RELATIONSHIP with the assessee of such nature as may be prescribed.

Now CBDT notifies nature of Business Relationship  which CA can have with client.

Case Law on VAT transfer to Service Tax

Interesting Case:

Where VAT has been collected without authority of law and Service tax demand also has been raised for the same period then the VAT Assessing Authority is liable to transfer amount of VAT to Service Tax Department

Idea Cellular Ltd. Vs. Union of India [(2015) 57 taxmann.com 293 (Punjab & Haryana)]

Idea Cellular Limited (the Petitioner) is engaged in the business of cellular services and as a part of its business activated SIM cards. The Assessing Authority collected VAT on the premise that activation of SIM cards was a sale.

The Hon'ble Supreme Court in the case of Bharat Sanchar Nigam Ltd. Vs. Union of India [(2006) 3 STT 245] held that activation of SIM card was a service and not a sale. Accordingly, the Service Tax Department raised demand of Service tax for the period, VAT was already been paid. Thus, the Petitioner approached the Haryana VAT Department for refund of the amount of VAT.

The Hon'ble High Court of Punjab and Haryana held as follows:

·         In terms of the Article 265 of the Constitution where the levy and collection of tax is without authority of law, the State does not have right to receive or retain taxes or monies realised from the Assessee without authority of law;

·         The Service Tax Department has raised a demand for Service tax for the period for which the State of Haryana has levied and collected VAT. In order to avoid double taxation, Haryana Vat Department was directed to forward the amount of VAT collected on activation of SIM cards to the Service Tax Department.

Case Law on Section 234E

234E Fee deleted in the absent of the enabling provisions u/s 200A

The Hon'ble Amritsar bench has given a landmark judgement on the issue of 234E Fee levied prior to June,2015 in the case of Sibia Healthcare Private Limited v./s Dy. Commissioner of Income-tax (TDS), in I.T.A. No.90/Asr/2015 and has deleted the addition-

The Hon'ble Tribunal held as under:-

" in our considered view, the adjustment in respect  of  levy  of  fees  under  section  234E  was  indeed  beyond  the  scope  of permissible  adjustments  contemplated  under  section  200A.  This  intimation  is  an appealable order  under  section  246A(a),  and, therefore, the CIT(A) ought  to have examined  legality  of  the  adjustment  made  under  this intimation  in  the  light  of  the scope of the section 200A. Learned CIT(A) has not done so. He has justified the levy of fees on the basis of the provisions of Section 234E. That is not the issue here. The issue is whether such a levy could be effected in the course of intimation under section  200A.  The  answer  is  clearly  in  negative.  No other  provision  enabling  a demand in respect of this levy has been pointed outto us and it is thus an admitted position that in the absence of the enabling provision under section 200A, no such levy  could  be  effected.  As  intimation  under  section 200A,  raising  a  demand  or directing a refund to the tax deductor, can only bepassed within one year from the end of the financial year within which the related  TDS statement is filed, and as the related TDS statement was filed on 19th February 2014, such a levy could only have been made at best within 31st March 2015. That time has already elapsed and the defect is thus not curable even at this stage. In view of these discussions, as also bearing in mind entirety of the case, the impugned  levy of fees under section 234E is  unsustainable  in  law. We,  therefore,  uphold  the  grievance  of  the  assessee  and delete the impugned levy of fee under section 234E  of the Act. The assessee gets the relief accordingly."

CA Prarthana Jalan

Source: Taxguru

LFAR by Concurrent Auditors

Submission of Long Form Audit Report (LFAR) by Concurrent Auditors

RBI/2014-15/626 DBS.CO.ARS.BC.8/08.91.001/2014-15 June 4, 2015 CMD of Nationalized Banks Chairman SBI MD of Associate Banks of SBI Madam/Dear Sir, Submission of Long Form Audit Report (LFAR) by Concurrent Auditors In terms of enclosure 1 of RBI circular DBS.CO.PP.BC.11/11.01.005/2001-2002 dated April 17, 2002 all the banks were advised, inter alia, as under: LFAR in respect of branch should be addressed by the branch auditors to the Chairman of the bank, concerned with a copy thereof to the Central Statutory Auditors. 2. The above matter has been examined in light of Para B (1) (ii) of Guidelines for Appointment of Statutory Auditors in Public Sector Banks hosted on RBI web site (at link http://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=946#AN2) which is reproduced below: In respect of branches below the cut-off point, which are subject to concurrent audit by chartered accountants, henceforth, LFARs and other certifications done earlier by SBAs will now be submitted by the concurrent auditors and such branches may not generally be subject to statutory audit. 3. You are advised that henceforth Concurrent Auditors, who are chartered accountants, of branches below the cut-off point will submit LFAR only to the Chairman of the bank. The banks in turn will consolidate/compile all such LFARs submitted by the Concurrent Auditors and submit to Statutory Central Auditor as an internal document of the bank. 4. Please acknowledge receipt. Yours faithfully, (Prabhakar Jha) General Manager

CBDT Clarification on Prosecution of Tax Evaders

Press Information Bureau
Government of India
Ministry of Finance
08-June-2015 18:51 IST

CBDT Clarifies Regarding Prosecution of Tax Evaders;
Effective and Stringent Action only in known and big cases of Tax Evasion to Demonstrate to the Large Number of Compliant Tax Payers that the Tax Laws are just and Fair and to Encourage Voluntary Tax Compliance

It has been noticed that the certain section of media have referred to the Discussion Paper, circulated during the All India Conference of Chief Commissioners and Director Generals of Income Tax held on 25th-26th May 2015, out of context and stated that the Central Board of Direct Taxes (CBDT) has told its officers to go beyond raids and searches to target tax evaders. CBDT clarifies that this is factually not correct. It may be appreciated that the need of the hour is to provide effective deterrence since the soft action in extreme and big cases of tax evasion affects the behaviour of the compliant tax payers. This has been brought out in the latest study conducted by NIPFP. This is the very aspect that was covered by CBDT in the discussion during the All India Annual Conference of senior officers. Effective and stringent action only in known and big cases of tax evasion would go a long way in demonstrating to the large number of compliant tax payers that the tax laws are just and fair and also encourage voluntary tax compliance.

It may be worthwhile to mention here that one of the issues for discussion during the All India Conference of Chief Commissioners and Director Generals of Income Tax was 'Lack of Credible Deterrence through Penalty and Prosecution – Causes and Ways to Improve'. The discussion was within the limited context of cases where action under Section 132 of the IT Act 1961 for search and seizure had been undertaken by the Investigation Division of the Department. These are exceptional cases which are selected for intrusive action after detailed intelligence gathering and due diligence on the basis of credible evidence and are not the norm for routine cases. It may be noted that only 537 searches were conducted in Financial Year 2014-15 in which admitted undisclosed income was to the tune of Rs.10288.05 crore.

In such cases where after intensive fact assessment, the Department undertakes search and seizure action as permissible under the law, mere tax collection does not have deterrence value and these need to be taken to their logical conclusion in terms of levy of penalty and launching of prosecution as per the provisions of the Income Tax Act.

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DSM/KA

Chintan Patel ~Exemptions to Private Limited Companies as per recent MCA notification:

Exemptions to Private Limited Companies as per recent MCA notification:

1.       Holding, associate, subsidiary or fellow subsidiary will not be related party for the purpose of Section 188 (2(76)).

2.       Provision wrt Kind of share capital (Section 43) and voting rights (Section 47) will not apply if articles of private limited company so provides

3.       Number of companies in which auditors can be auditors (20 in number) will not be counted if paid up capital of private company is less than Rs.100 crores (Section 141)

4.       Section 101 to 107 and Section 109 will not apply (notice of general meeting, explanatory statement, proxies etc., which were exempt under Old Act also) if articles so provide

5.       Section 62 – minimum and maximum period for which rights issue should remain open will not be applicable if 90% of members give consent

6.       Section 62- ESOP can be given with Ordinary resolution instead of special resolution

7.       Board resolutions passed under Section 179 are not required to be filed with RoC in MGT 14

8.       Deposit of 1 lakh etc. is not required to be given (Section 160). Entire Section 160 is not applicable

9.       No need to have separate voting on the resolution for appointment of more than 1 director (Section 162)

10.   No approval of shareholders required for matters  under Section 180 (borrowing, security etc.)

11.   Interested director can participate if he/ she has disclosed his interest (Section 184)

12.   Section 185 (loan to director) will not apply if

·         no other body corporate has invested,

·         if borrowing from banks/ financial institution or any body corporate is less than twice paid-up capital or Rs.50 crores whichever is lower and

·         there is no default in repayment of such borrowing

13.   Related party can vote on the resolution (Section 188). Second Proviso will not be applicable

14.   No approval of shareholders etc. required for appointment of managerial personnel of private company and no return needs to be filed with RoC in this regard (Section 196 (4) and 196 (5) will not be applicable)

Non-deposit of Tax Deducted at Source

No. 275/29/2014-IT-(B)

New Delhi, the 1st June, 2015

To,

The CCsIT (CCA)

Subject: Non-deposit of Tax Deducted at Source – regarding. Sir/Madam,

Grievances have been received by the Board from many taxpayers that in their cases the deductor has deducted tax at source from payments made to them in accordance with the provisions of Chapter-XVII of the Income-tax Act, 1961 (hereafter ‘the Act’) but has failed to deposit the same into the Government account leading to denial of credit of such deduction of tax to these taxpayers and consequent raising of demand.

2. As per Section 199 of the Act credit of Tax Deducted at Source is given to the person only if it is paid to the Central Government Account. However, as per Section 205 of the Act the assessee shall not be called upon to pay the tax to the extent tax has been deducted from his income where the tax is deductible at source under the provisions of Chapter- XVII. Thus the Act puts a bar on direct demand against the assessee in such cases and the demand on account of tax credit mismatch cannot be enforced coercively.

3. This may be brought to the notice of all the assessing officers in your region so that if the facts of the case so justify, the assessees are not put at any inconvenience on account of default of deposit of tax into the Government account by the deductor.

4. This issues with the approval of Chairperson, CBDT.

Yours faithfully

(Sandeep Singh)

Under Secretary to the Govt. of India

GST-Formation of Two Committees

Press Information Bureau
Government of India
Ministry of Finance
17-June-2015 17:15 IST

Finance Minister approves the formation of 2 Committees for facilitating implementation of Goods and Services Tax from 1.4.2016.

Finance Minister has approved the formation of 2 Committees for facilitating implementation of Goods and Services Tax from 1.4.2016.

A Steering Committee been formed under the Co-Chairmanship of Additional Secretary, Department of Revenue and Member Secretary, Empowered Committee of State Finance Ministers. This Committee has Members from Department of Revenue, Central Board of Excise & Customs, Goods and Services Tax Network (GSTN) and representatives of State Governments. This Committee shall monitor the progress of IT preparedness of GSTN/CBEC/Tax authorities, finalisation of reports of all the Sub-Committees constituted on different aspects relating to the mechanics of GST and drafting of CGST, IGST and SGST laws/rules. The Committee shall also monitor the progress on consultations with various stakeholders like trade and industry and training of officers.

Another Committee has been formed under the Chairmanship of the Chief Economic Advisor, Ministry of Finance to recommend possible tax rates under GST that would be consistent with the present level of revenue collection of Centre and States. While making recommendations, this Committee would take into account expected levels of growth of economy, different levels of compliance and broadening of tax base under GST. The Committee would also analyse the Sector-wise and State-wise impact of GST on the economy. The Committee is expected to give its report within two months.

Meanwhile, progress is underway to finalise various aspects of GST design like business processes, payment systems, matters relating to dual control, threshold, exemptions, place of supply rules and also making of model GST, SGST and IGST laws and rules. This task is being undertaken through various Sub-Committees formed by the Empowered Committee which has officers from Government of India as well as State Governments as Members.

Goods and Services Tax Network (GSTN) is taking steps for preparing the IT infrastructure for roll out of GST. The IT infrastructure shall enable online registration, filing of returns and getting refunds. Various State Governments are also preparing the necessary back end IT infrastructure for implementation of GST which shall relate to aspects like assessments and audit.

Periodic reviews are being held in the Department of Revenue to monitor the progress of all the above activities.

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DSM/MAM