Income Tax manual /Compulsory scrutiny criteria F.Y. 2016-2017

Instruction No. 4/2016
Government of India
Ministry of Finance
Department of Revenue (CBDT)
North-Block, New Delhi

Date: 13th of July, 2016

To

All Pr. Chief-Commissioners of Income-tax/Chief-Commissioners of Income-tax

All Pr. Directors-General of Income-tax/Directors-General of Income-tax

Sir/Madam

Subject: Compulsory manual selection of cases for scrutiny during the Financial Year 2016-2017- regd:-

1. In supersession of earlier Instructions on the above subject, the Board hereby lays down the following procedure and criteria for manual selection of returns/cases for compulsory scrutiny during the financial-year 2016-2017:-

(i) Cases involving addition on a substantial and recurring question of law or fact in earlier assessment year(s), in excess of Rs. 25 lakhs in metro charges at Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata, Mumbai and Pune, while for other charges, quantum of such addition should exceed Rs. 10 lakhs (for transfer pricing cases, quantum of such addition should exceed Rs. 10 crore) and where:

a. such an addition in assessment has become final as no further appeal was/has been filed; or

b. such an addition has been confirmed at any stage of appellate process in favour of revenue and assessee has not filed further appeal; or

c. such an addition has been confirmed at 1st appeal stage in favour of revenue or subsequently and further appeal of assessee is pending before any Authority in the appellate process.

(ii) All assessments pertaining to Survey under section 133A of the Act excluding those cases where books of accounts, documents etc. were not impounded and returned income (excluding any disclosure made during the Survey) is not less than returned income of preceding assessment year. However, where assessee retracts the disclosure made during the Survey, such cases will not be covered by this exclusion.

(iii) Assessments in search and seizure cases to be made under section(s) 158B, 158BC, 158BD, 153A & 153C read with section 143(3) of the Act and also for the returns filed for the assessment year relevant to the previous year in which authorization for search and seizure was executed u/s 132 or 132A of the Act.

(iv) Return filed in response to notice under section 148 of the Act.

(v) Cases where registration u/s 12AA of the IT Act has not been granted or has been cancelled by the CIT/DIT concerned, yet the assessee has been found to be claiming tax-exemption under section 11 of the Act. However, where such orders of the CIT/DIT have been reversed/set-aside in appellate proceedings, those cases will not be selected under this clause.

(vi) Cases of entities, being ‘scientific research association’ or ‘university, college or other institution’, having approval under section(s) 35(1)(ii)/35(1)(iii) of the Act.

(vii) Cases in respect of which specific and verifiable information pointing out tax-evasion is given by any Government Department/Authority. However, before selecting a case for scrutiny under this criterion, Assessing Officer shall be required to take prior administrative approval from the concerned jurisdictional Pr. CIT/Pr.DIT/CIT.

2. Computer Aided Scrutiny Selection (CASS): Cases are also being selected under CASS-2016 on the basis of broad based selection filters. List of such cases has been/is being separately intimated by the Pr.DGIT(Systems) to the jurisdictional authorities concerned.

3. As a taxpayer friendly measure, to reduce the departmental interface with the assessee and reduce the compliance burden of tax payers in scrutiny assessment proceedings, the scheme of Assessment through e-mail is being extended to all scrutiny cases including the cases selected under above parameters in seven cities of Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata and Mumbai. However, assessees in these seven cities can exercise the option of not being scrutinized under the e-mail based paperless assessment proceedings after informing the Assessing Officer concerned in writing in the beginning or subsequently during the course of assessment proceedings. Further, in cases which require submission of voluminous documents and it is not practicable to submit the scanned copies thereof through e-mail, in such instances; the Assessing Officer may decide to receive such documents in physical form after recording reasons for the same.

4. It is reiterated that the targets for completion of scrutiny assessments and strategy of framing quality assessments as contained in Central Action Plan document for Financial-Year 2016-2017 have to be complied with and it must be ensured that all scrutiny assessment orders including the cases selected under the manual criterion are completed through the AST system software only. It should be the endeavour of the Assessing Officers and his supervisory authorities to ensure that scrutiny assessment cases are disposed in a well planned manner without dragging the assessment proceedings till the last date of limitation. Further, Pr. CCsIT/CCIT(Central)/Pr. CCIT(International tax)/CCIT(Exemption)/DsGIT should evolve a suitable monitoring mechanism in their respective charges in order to ensure quality of assessments being framed during the financial year. In this regard, by 31st January, 2017, such authorities shall send a report to the respective Zonal Member with a copy to Member (IT) containing details of at least 25 quality assessment orders from their respective charges. It may further be the endeavour that cases selected for publication in ‘Let us Share’ are picked up only from the quality assessments as reported.

5. These instructions may be brought to the notice of all concerned for necessary compliance.

6. Hindi version to follow.

(Rohit Garg)

Deputy-Secretary to the Government of India

CBDT: Debunks 31% IDS tax rate theory, fourth set of FAQs to follow

Jul 14,2016
CBDT sets at rest controversy over 31% effective tax rate under IDS; Addressing queries received from stakeholders on whether the payment under IDS can be made out of undisclosed income without including the same in the income declared, thereby whittling down the effective tax rate to 31%, CBDT clarifies that the scheme in "no way intends to modify or alter the rate of tax."

http://www.taxsutra.com/news/15904/CBDT%3A_Debunks_31%25_IDS_tax_rate_theory%2C_fourth_set_of_FAQs_to_follow

Centralized Registration under Central Excise

New functionality of Single/ Centralised Registration in Central Excise for Jewellery and other specified Manufacturers is now available in ACES

Assessees can now opt for centralized registration and capture additional premises through A1 form, as a new functionality is now available at ACES for single/centralised excise registration for certain specified manufacturers, including for new registration, amendments, etc.

A. New Registration as well as amendment of registration to capture additional premises for the first time in ACES

A new facility has been provided in Central Excise Registration form A1 for certain category of assessees to opt for Centralised registration/ Single registration and correspondingly, capture the list of premises covered under Centralised registration/Single registration.

The following categories of assessees are covered under this implementation:

1) Jewellery

2) Mines

3) Aluminium Roofing Panels

4) Recorded Smart Cards

5) Single registration for CNG

6) Single registration for interlinked units

A new checkbox is provided for selection if the assessee intends to opt for Centralised registration/Single registration. If the option is checked, LOV listing all the above categories is enabled for selection. In case the assessee selects (1) or (2) above, the selection of business category should also correspond to Jewellery or Mines respectively.

In all other cases, the business category shall be Manufacturer. Once the assessee clicks on NEXT after filling up all the fields in the first screen, a new screen to capture list of all additional premises is opened up, if he opts for centralized registration/single registration. The additional premises can be captured online through SAVE and ADD NEW option. Alternatively, if the number of premises are very huge, the assessee can follow the procedure mentioned below:

a) Download the sample XLS file provided in the screen

b) Please read the instructions for filling up the excel worksheet in the README document provided along with the sample XLS file

c) Fill up the excel worksheet as per the instructions and upload the same using the option provided in the screen.

d) The list of premises uploaded will be displayed in the screen and the assessee can further add or delete any of the premises, already uploaded

e) Fill up the remaining particulars in the registration form and save the form

f) The confirmation screen will be opened displaying the A1 form along with the list of premises added/uploaded and the assessee can submit the application.

The above procedure can be adopted by first-time applicant as well as applicant already registered in the above business category, but without capture of additional premises.

The list of premises after generation of RC can be downloaded from the link provided in the VIEW RC screen.

B. Amendment of registration for the above categories, where additional premises have already been captured

For any assessee amending his registration for change of details of additional premises ( where additional premises have already been captured).

1) Click on Amend Registration button in the form.

2) There will be a link for "Download additional premises" which will list out the premises already added for the registration

3) The assessee can add or delete the details in the downloaded list and then upload the XLS again afresh.

4) Make any other changes, if necessary, and then SAVE and SUBMIT the form for approval of the Amendment by AC.

The revised list of premises can be downloaded from the link in the VIEW RC screen as soon as the amendment is approved by AC (if no PV is assigned) and as soon as PV report is approved by AC (if PV is assigned). In case of manufacturers of jewellery, there will not be any PV.

Assessee cannot be asked to reverse input tax credit due to non-payment of taxes by the selling dealers

PATH BREAKING JUDGEMENT

Assessee cannot be asked to reverse input tax credit due to non-payment of taxes by the selling dealers

Sri Lakshmi Textiles Vs. the Commissioner of Commercial Taxes and Others [2016 (1) TMI 329 – MADRAS HIGH COURT]

Facts:

Sri Lakshmi Textiles(“the Petitioner”) is a partnership firm engaged in the business of inner garments and textiles registered under Tamil Nadu Value Added Tax Act, 2006 (“TN Vat Act”). The Petitioner was regularly filing the VAT return and paying the VAT liability after adjusting the corresponding input tax credit. For the Assessment Year 2013-2014, the Petitioner had reported total turnover and taxable turnover of Rs. 2,02,88,151/- and Rs. 15,98,693/- respectively in his return.

The Department alleged that because some of the selling dealer of the Petitioner had not paid the tax, the Petitioner is required to reverse the corresponding input tax credit and further sought to levy penalty under Section 27(3) of the TN VAT Act on the Petitioner.

Held:

The Hon’ble High Court of Madras relied upon the decision in the case of Sri Vinayaga Agencies Vs. the Assistant Commissioner (Ct), Chennai and another [(2013) 60 VST 283 (Mad)] and held that when the fact of Petitioner paying the taxes to his supplier is not under dispute, the Petitioner cannot be compelled to reverse the input tax Credit due to non-payment of VAT liability by the selling dealership

Feasibility of having a new financial year

Government of India
Ministry of Finance

*Government today constituted a Committee headed by Dr. Shankar Acharya (former Chief Economic Adviser) to examine the desirability and feasibility of having ‘a new financial year’*; The Committee to submit its Report by 31st December, 2016. 

                    The Government of India today constituted a Committee to examine the desirability and feasibility of having ‘a new financial year’. The Committee headed by Dr. Shankar Acharya (former Chief Economic Adviser) has Shri K.M. Chandrasekhar (former Cabinet Secretary), Shri P.V. Rajaraman (former Finance Secretary, Tamil Nadu) and Dr. Rajiv Kumar (Senior Fellow, Centre for Policy Research) as other Members. The Committee will examine the merits and demerits of various dates for the commencement of the financial year including the existing date (April to March), taking into account the various relevant factors.

                                        The details on the Composition and the Terms of Reference of the Committee are uploaded on the website of Ministry of Finance (www.finmin.nic.in). The Committee has been given time till 31st December, 2016 to submit its Report.

CBEC on Construction Site

CBEC Clarification on Scope of 'Construction Site' for availing Excise Exemption as appearing in Notification No. 12/2012-Central Excise, dated 17.03.2012

The CBEC has clarified the scope of word construction 'site' for availing of benefit of exemption applicable to goods manufactured at the site of construction for use in construction work at such site. The CBEC has advised to consider circumstances of each case instead of using restrictive approach for the purpose, specially for projects involving sites at long distances, as under:

CBEC Circular No. 1036/24/2016-CX dt. 6th July. 2016

1. Representations have been received from the trade regarding difficulties being faced in availing of benefit of exemption applicable to goods manufactured at the site of construction for use in construction work at such site vide S. No. 186 of Notification No. 12/2012-Central Excise, dated 17.03.2012, as amended. The issue is, how should the expression "site" used and defined in the aforesaid notification be interpreted, particularly for projects which run long distances, such as construction of road, laying of pipelines or laying of railway tracks etc.

2.1 The issue has been examined in the Board. The expression site has been defined in the notification (ibid) as "any premises made available for the manufacture of goods by way of a specific mention in the contract or agreement for such construction work, provided that the goods manufactured at such premises are solely used in the said construction work only".

2.2 It is clear from the definition that the expression "site" cannot be given a restrictive meaning while interpreting the same so long as the premises under consideration for availing benefit of exemption under S.No. 186 of Notification No. 12/2012-Central Excise, dated 17.03.2012 fulfils following conditions:-

i. The said premises are made available to the manufacturer of goods by way of a specific mention in the contract/agreement for such construction work.

ii. The goods under Chapter 68 (except 6804, 6805, 6811, 6812 and 6813), for which exemption is claimed are manufactured at the said premises; and

iii. Such goods manufactured at the said premises are exclusively used for the construction work, as per the relevant contract or agreement.

3. It appears that in some field formations, the distance at which goods manufactured at site is used in the project, has been considered as criteria for examining the eligibility of goods for exemption. This is an extraneous criteria not flowing from the language used in the notification, particularly when the expression "site" stands explained in the notification. As explained in para 2.2 above, the eligibility criteria must flow from the plain reading of the explanation of the expression "site" in the notification.

4. In view of the above, it is hereby directed that each case may be decided taking into consideration the facts of the individual case, examined in light of the clarification given above. Circular No. 456/22/99-CX, dated 18.05.1999 is hereby rescinded.

CBEC on Construction Site

CBEC Clarification on Scope of 'Construction Site' for availing Excise Exemption as appearing in Notification No. 12/2012-Central Excise, dated 17.03.2012

The CBEC has clarified the scope of word construction 'site' for availing of benefit of exemption applicable to goods manufactured at the site of construction for use in construction work at such site. The CBEC has advised to consider circumstances of each case instead of using restrictive approach for the purpose, specially for projects involving sites at long distances, as under:

CBEC Circular No. 1036/24/2016-CX dt. 6th July. 2016

1. Representations have been received from the trade regarding difficulties being faced in availing of benefit of exemption applicable to goods manufactured at the site of construction for use in construction work at such site vide S. No. 186 of Notification No. 12/2012-Central Excise, dated 17.03.2012, as amended. The issue is, how should the expression "site" used and defined in the aforesaid notification be interpreted, particularly for projects which run long distances, such as construction of road, laying of pipelines or laying of railway tracks etc.

2.1 The issue has been examined in the Board. The expression site has been defined in the notification (ibid) as "any premises made available for the manufacture of goods by way of a specific mention in the contract or agreement for such construction work, provided that the goods manufactured at such premises are solely used in the said construction work only".

2.2 It is clear from the definition that the expression "site" cannot be given a restrictive meaning while interpreting the same so long as the premises under consideration for availing benefit of exemption under S.No. 186 of Notification No. 12/2012-Central Excise, dated 17.03.2012 fulfils following conditions:-

i. The said premises are made available to the manufacturer of goods by way of a specific mention in the contract/agreement for such construction work.

ii. The goods under Chapter 68 (except 6804, 6805, 6811, 6812 and 6813), for which exemption is claimed are manufactured at the said premises; and

iii. Such goods manufactured at the said premises are exclusively used for the construction work, as per the relevant contract or agreement.

3. It appears that in some field formations, the distance at which goods manufactured at site is used in the project, has been considered as criteria for examining the eligibility of goods for exemption. This is an extraneous criteria not flowing from the language used in the notification, particularly when the expression "site" stands explained in the notification. As explained in para 2.2 above, the eligibility criteria must flow from the plain reading of the explanation of the expression "site" in the notification.

4. In view of the above, it is hereby directed that each case may be decided taking into consideration the facts of the individual case, examined in light of the clarification given above. Circular No. 456/22/99-CX, dated 18.05.1999 is hereby rescinded.

Result of CA Final Exam and CPT on 18th July 2016

Result of CA Final Exam held in May 2016 and CPT held in June 2016 are likely to be declared on 18th July 2016

Income Computation and Disclosure Standards (ICDS) notified under Section 145 (2) of the Income -tax Act, 1961 to be applicable from 1stApril, 2016

Vide Notification No. SO 892 (E) dated 31st March, 2015, the Central Government notified 10 Income Computation and Disclosure Standards (ICDS). These ICDS are applicable from 1.4.2015 i.e. previous year 2015-16 (Assessment Year 2016-17). Subsequent to notification of the ICDS, a number of representations were received which were examined by an Expert Committee. The Committee has recommended amendments to the notified ICDS and also issuance of clarification in respect of certain points raised by the stakeholders. 

The revision of ICDS/issue of clarifications as recommended by the Committee, is under consideration. The revision of the Tax Audit Report is also being made for ensuring the compliance with the provisions of ICDS and for capturing the disclosures mandated by the ICDS. 

Some of the tax payers might have filed their return of income and obtained Tax Audit Report without incorporating the compliance with the ICDS and related disclosures in the absence of the revised Tax Audit Report. Considering these facts, it has been decided that the ICDS shall be applicable from 1.4.2016 i.e. previous year 2016-17 (Assessment Year 2017-18). The notification to this effect will be issued shortly.

http://pib.nic.in/newsite/erelease.aspx?relid=146874  

SC scanner over PwC, KPMG, Deloitte, E&Y, others over Bengaluru man’s complaint

SC scanner over PwC, KPMG, Deloitte, E&Y, others over Bengaluru man’s complaint
By: FE Bureau | New Delhi | Published: July 5, 2016 6:36 AM

According to the PIL filed by CPIL, PwC and its network firms indulged in activities in breach of various statutes and policies. (PTI)
The Supreme Court on Monday asked the Institute of Chartered Accountants of India (ICAI), the regulatory body for chartered accountants in India, to file a status report as to what action it has taken against top foreign multinational accounting firms which, in the guise of providing management consultancy services, have expanded to other fields such as accounting, auditing, book-keeping and taxation. Such operations cannot be undertaken by non-Indian entities.
A bench headed by Justice Dipak Misra also sought response from the Centre on an appeal filed by Bengaluru-based tax consultant S Sukumar, alleging violation by various accounting firms like PricewaterhouseCoopers, KPMG, Deloitte, Haskins & Sells, and Ernst and Young.
While lawyers representing the top firms denied any wrongdoing, counsel Prashant Bhushan alleged that some MNCs are providing auditing services in India through “surrogate companies”, thus violating the Chartered Accountants Act.
The ICAI told the court that it has already initiated action against 170 entities in India. Sukumar has sought direction to the ICAI to probe the functioning of these Indian firms that have tie-ups with foreign firms for breach of Code of Professional Conduct prescribed in the Chartered Accountants Act, 1949.
Referring to the 2009 Satyam scam, Bhushan pointed out that PwC has been found guilty of fabricating the accounts of Satyam and the same firm is the auditor for Kingfisher Airlines. He demanded an inquiry into the firm’s alleged financial malpractices and fudging of accounts.
According to the PIL filed by CPIL, PwC and its network firms indulged in activities in breach of various statutes and policies.

CBEC Clarification on Recovery of Demands

CBEC Clarification reg. Recovery of Confirmed Demands during the pendency of Stay Application

To bring uniformity in practice and to ensure that the assessee gets adequate opportunity to appeal before recovery proceedings are started in recovery of confirmed demands of indirect taxes, the CBEC has issued Clarification Circular No. 1035/23/2016-CX dt. 4th July, 2016, on the following lines:

In cases where stay application is pending before Commissioner (Appeals) or CESTAT for periods prior to 06.08.2014, no recovery shall be made during the pendency of the stay application. It may be noted that the law on the issue was amended on 06.08.2014, where after filing of appeal requires payment of 7.5 or 10 per cent of tax demand, depending on stage of appeal, obviating the need for appellate authority to hear any stay application.

However in the cases where demand is confirmed by Hon'ble CESTAT or Hon'ble High Court recovery proceeding may be initiated after a period of sixty days from the date of the order provided that no stay is in operation.

CBEC Circular No. 1035/23/2016-CX dt. 4th July, 2016

1. Kind attention is invited to Board Circular No. 967/1/2013-CX dated 01.01.2013 on the issue of recovery of confirmed demands during the pendency of stay application filed by the assessee. Since then important changes in Law have been made and important judgments have come on the subject. Accordingly, it has been decided to review the Circular.

Part I: When stay application is pending before Commissioner (Appeals) or CESTAT :

2. The circular dated 01.01,20.13 was examined by Hon'ble High Courts in situations where stay applications was pending before Commissioner (Appeals) or CESTAT. In this regard some of the important judgments are L&T vs. UOI (2013-TIOL-99-HC-CX) and Karnavati Club ltd. Vs. UOI (SCA No 2422/2013), wherein the Courts held that recovery could be made only in cases where delay in deciding the stay could be attributed to the conduct of the assessee. No appeal was filed against these judgments of the Hon'ble High Courts by the Department and thus these judgments attained finality.

3.1 However Hon'ble High Court of Punjab and Haryana judgment in case of M/s PML industries Ltd. Vs Commissioner of Central Excise (2013-TIOL-201-HC-P&H-CX) pronounced that during the pendency of stay, irrespective of the conduct of the assessee, no recovery could be made. In para 46, Hon'ble Court observed that:

"…we are of the opinion that right of consideration in appeal on an application for waiver of pre-deposit is a right conferred by the Statute and such right cannot be defeated on the basis of Circular…"

3,2 SLP filed by the Department [SLP (Civil) 765/2014] against the judgment of Hon'ble High Court of Punjab and Haryana, has been dismissed by the Hon'ble Supreme Court, thus upholding the decision of the Hon'ble High Court, The relevant observation of the Hon'ble Supreme Court while dismissing the SLP, is reproduced below:-

"In view of the judgment and order passed by this Court in Commissioner of Customs & Central Excise, Ahmedabad vs. Kumar Cotton Mills Pvt. Ltd [2005 (180) ELT 434 (SC)/2005-TIOL-42-SC-CX) we find no reason to interfere with the impugned order passed by the High Court. The special leave petitions are dismissed."

4.1 In light of the above judgments, the Circular No. 967/1/2013-CX dt. 01.01.2013 is hereby rescinded and following fresh instructions are given on the subject. It is also clarified that seven circulars which had been rescinded vide Circular No, 967/1/2013-CX dated 01.01.2013 shall continue to remain rescinded.

4.2 In cases where stay application is pending before Commissioner (Appeals) or CESTAT for periods prior to 06.08.2014, no recovery shall be made during the pendency of the stay application.

4.3 For subsequent period i.e. from 06.08.2014 onwards, instructions contained in Circular No. 984/08/2014-CX dated 16.09.2014 shall continue to be followed. Section 129E of the Customs Act, 1962 and Section 35F of the Central Excise Act, 1944, as made applicable to Service Tax vide Section 83 of the Finance Act, 1994, was amended vide Finance Act, 2014 with effect from 06.08.2014.

Part II: When demand is confirmed by Hon'ble CESTAT or Hon'ble High Court & stay is pending before Hon'ble High Court or Hon'ble Supreme Court:

5.1 Attention is invited Sl. No. 11 of the Circular No. 967/1 /2013-CX dated 01.01.2013 providing that when a demand is confirmed by a Hon'ble CESTAT or a Hon'ble High Court, recovery may be initiated immediately on the issue of order by the Hon'ble Tribunal or the High Court, if no stay is in operation. Hon'ble High Court of Gujarat in case of Karnavati Club Ltd. (SCA No. 2422/2013) examined the entire Circular dated 01.01.2013 and in relation to Sl. No 11, in para 29 of the judgment, upheld the direction contained in the circular, without any modification.

5.2 As a measure of liberalization and to ensure uniformity of practice, it is hereby directed that, recovery proceeding in relation to an order of Hon'ble High Court or Tribunal confirming demand of duty, may be initiated only after a period of sixty days from the date of Order of the Hon'ble Tribunal or Hon'ble High Court, as the case may be, where no stay has been granted by Hon'ble High Court or Hon'ble Supreme Court against the order of Hon'ble Tribunal or Hon'ble High Court, respectively.

SEBI has issued a fresh guidelines comprising Revised Formats for Financial Results

SEBI has issued a fresh guidelines comprising Revised Formats for Financial Results, reporting timeline and other guidance for Implementation of Ind-AS by Listed Entities.

http://www.sebi.gov.in/cms/sebi_data/attachdocs/1467712561526.pdf

EXTRACT For the quarter ending June 30, 2016 and September 30, 2016:

(i) The timeline for submitting the financial results in compliance with the provisions of this Circular is extended by one month. The results for the quarter ending June 30, 2016 and September 30, 2016 may be submitted by September 14, 2016 and December 14, 2016 respectively.

(ii) For the quarter ending June 30, 2016, Ind-AS compliant financial results for the corresponding quarter ended June 30, 2015shall be provided. For the quarter ending September 30, 2016, Ind-AS compliant financial results for the corresponding year to date / quarter ended September 30, 2015 shall be provided. However, in such cases, limited review or audit of the same is not mandatory.

(iii) For the quarter ending June 30, 2016, submission of Ind-AS compliant financial results for the preceding quarter and previous year ended March 31, 2016is not mandatory. For the quarter ending September 30, 2016, submission of Ind-AScompliant financial results and Balance Sheet for the previous year ended March 31, 2016 is not mandatory. However, in case the entities intend to submit these results, the same may be without limited review or audit.

(iv) In such cases, the listed entities shall disclose with due prominence that the Ind-AS compliant financial results, pertaining to the relevant periods of the previous year as mentioned in (ii) and (iii) above, as applicable, have not been subjected to limited review or audit. However, the management has exercised necessary due diligence to ensure that the financial results provide a true and fair view of its affairs.

(v) The format of Balance Sheet for the Half-Yearly ended September 30, 2016 shall be as per the format for Balance Sheet (excluding notes and detailed sub-classifications) as prescribed in Schedule III to the Companies Act, 2013.

Bank of Baroda Concurrent Auditors

Bank of Baroda Request for Proposal for appointment of Concurrent Auditors of the bank for 545 Branches/ 13 RBOs/ 22 CBOs/ 3 Other Units. Last Date 21.07.2016. Follow the link http://goo.gl/9kqlMr

PPF Account Premature Closure : Latest Rules & Eligibility Amount Calculation

June 22, 2016 | by Sreekanth Reddy

Public Provident Fund (PPF) is one of the best Debt oriented Saving options that are available in India. It is also one of the most tax-efficient financial instruments.

PPF Account has a lock-in period of 15 years.  A Public Provident Fund (PPF) account gets matured after the completion of 15 years only.

There are certain options for an account holder to make partial withdrawals from PPF. But, a PPF account can be closed prematurely only in the event of the death of the Account holder.

The government has recently issued a notification announcing the latest PPF Account premature closure norms or rules. You can now close your PPF account before the maturity date.

When can I close my PPF Account prematurely?

As per the latest rules, a subscriber of PPF Account shall be allowed premature closure of his/her account (or) account of a minor of whom he/she is the guardian on the below mentioned reasons;

*.A PPF Account can be closed in the event of the death of the Account holder.

*.PPF Account Premature Closure is accepted when the amount is required for the treatment of serious ailments (or) life threatening diseases of the Account holder (self), Spouse, dependent children or parents of the Account holder.

*.PPF Account Premature Closure is also allowed when the amount is required for highereducation of the Account Holder(subscriber/self)or minor account holder.

*.Kindly note that you can close PPF account prematurely only if your account has completed FIVE Financial Years.(This rule is not applicable in case of‘death’ of the account holder.)

*.If the reason for Premature closure of PPF account is ‘medical treatment’, you have to produce supporting documents from competent medical authority.

*.If the reason for premature closure of PPF a/c is ‘higher education’, you have to produce fee bills and documents confirming admission in a recognized institute of higher education in India or abroad(foreign country).

*.Another important point is,a penalty of 1%is deducted from the applicable interest rates on the deposits held in the PPF account. This is applicable on the deposits from the date of opening of the PPF account till the date of premature closure of PPF account.

CBDT CLARIFICATION ON TCS PROVISION

The CBDT vide Circular No. 23/2016 dt. 24 June 2016 has clarified on FAQs of stakeholders reg. scope of the provisions and the procedure to be followed in case of the amended provisions of Section 206C of the Income Tax Act, as under:

CBDT Circular No. 23/2016 dt. 24 June 2016

In order to curb the cash economy, Finance Act 2016 has amended section 206C of the Income-tax Act to provide that the seller shall collect tax at the rate of one per cent from the purchaser on sale in cash of certain goods or provision of services exceeding two lakh rupees. Subsequent to the amendment, a number of representations were received from various stakeholders with regard to the scope of the provisions and the procedure to be followed in case of the amended provisions of Section 206C of the Act. The Board, after examining the representations of the stakeholders, issued FAQs vide circular.No.22/2016 dated 8th June, 2016. The Board has further decided to clarify the issue as regards applicability of the provisions relating to levy of TCS where the sale consideration received is partly in cash and partly in cheque by issue of an addendum to the above circular in the form of question and answer as under:

Question 1: Whether tax collection at source under section 206C(1D) at the rate of 1% will apply in cases where the sale consideration received is partly in cash and partly in cheque and the cash receipt is less than two lakh rupees.

Answer : No. Tax collection at source will not be levied if the cash receipt does not exceed two lakh rupees even if the sale consideration exceeds two lakh rupees.

Illustration: Goods worth Rs. 5 lakhs is sold for which the consideration amounting to Rs.4 lakhs has been received in cheque and Rs.1 lakh has been received in cash. As the cash receipt does not exceed Rs.2 lakh, no tax is required to be collected at source as per section 206C (1D).

Question 2: Whether tax collection at source under section 206C (1D) will apply only to cash component or in respect of whole of sales consideration.

Answer: Under section 206C (1D), the tax is required to be collected at source on cash component of the sales consideration and not on the whole of sales consideration.

Illustration: Goods worth Rs. 5 lakhs is sold for which the consideration amounting to Rs.2 lakhs has been received in cheque and Rs.3 lakh has been received in cash. Tax is required to be collected under section 206C (1 D) only on cash receipt of Rs.3 lakhs and not on the whole of sales consideration of Rs.5 lakh.

HUF cannot be a partner but its karta or any individual of HUF can be a partner in a partnership firm in its individual capacity and not the HUF

ICAI - Clarification that HUF cannot be a partner but its karta or any individual of HUF can be a partner in a partnership firm in its individual capacity and not the HUF - (23-06-2016) -


 http://resource.cdn.icai.org/42465clcgc32221.pdf

Krishi Kalyan Cess exemption

NOTIFICATION

No. 35/2016-Service Tax



New Delhi, the 23rd June, 2016



G.S.R. ---(E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), read with sub-section (5) of section 161 of the Finance Act, 2016 (28 of 2016), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts taxable services with respect to which the invoice for the service has been issued on or before the 31st May, 2016, from the whole of Krishi Kalyan Cess leviable thereon, subject to condition that the provision of service has been completed on or before the 31st May, 2016.



[F.No. B-1/21/2016 - TRU]

(Mohit Tiwari)

Under Secretary

FAQ-Company Name Reservation and Incorporation at Central Registration Centre (CRC)-MCA

FAQ-Company Name Reservation and Incorporation at Central Registration Centre (CRC)-MCA

1. What is Central Registration Centre (CRC)?

The Central Registration Centre (CRC) is an initiative of Ministry of Corporate Affairs (MCA) in Government Process Re-engineering (GPR) with the specific objective of providing speedy incorporation related services in line with global best practices.

2. What services are offered by the CRC presently?

CRC is presently tasked to process applications for name availability (INC-1) and forms related to new companies incorporations (INC-2/INC-7/INC-29/INC-22 and DIR-12.

3. How do I apply for a name for a company?

You can use the services of check name availability for first-hand information on whether the proposed name is available and then apply for it in form INC-1 with six alternative names with deferent prefix word or INC-29 (composite Incorporation Form).

4. What do I do if the name applied for is put under resubmission due to the following reasons :

SIMILAR NAME ALREADY EXISTS :

You are requested to read the mail carefully and follow the query. Before resubmitting please recheck the name from name availability option available at MCA website www.mca.gov.in under ‘services’ tab and the Companies Incorporation rules 2014 with six alternative names .

TRADE MARK EXISTS :

You are requested to read the mail carefully and follow the query. Before resubmitting please recheck the details of Trade Marks are available at MCA website www.mca.gov.in

5. How Can I apply for names which includes words like Insurance, Bank, Stock Exchange, Venture Capital, Asset Management, Nidhi, Mutual Fund, Finance, Chits, Investment, Leasing, Hire purchase etc. or any combination thereof?
Please select ‘yes’ in field 14a of INC-1 (Whether the proposed name includes the words such as Insurance, Bank, Stock exchange, Venture Capital, Asset Management, Nidhi, or Mutual Fund etc.) if name has finance or any other indication of finance activity.

In case of INC-29 (Integrated Incorporation Form), if proposed name includes combination of above words, please select ‘yes’ in field 5 (b) (iv).

In respect of section 8 companies, declaration is required to be attached confirming that after Incorporation, all the mandated requirements of the respective Act/regulator, such as IRDA, RBI, SEBI, MCA etc will be complied with.

The above declarations are required to be given in compliance of rule 8 (2) (b) (iii) and (xiii) of the Companies (Incorporation) Rules 2014(as amended).

6. How can I apply for a name if the name of a Trade Mark is included in its proposed name?

Prescribed particulars in E-form INC-1 are required to be filled in field 11 & 12 duly supported by NOC from the Trade Mark owner.

In case of INC-29, Trade Mark details are required to be filled up in field 5(c) of duly supported by NOC from trade mark owner.

The details of Trade Marks are available at MCA Website www.mca.gov.in under Trade Mark link.

7. How can I apply for a name if combination of the proposed name contains only one word of difference with similar prefix of an existing company?
NOC by way of Board resolution from existing company is required to be attached with e-form.

8. How can I apply for a name if prefix of the proposed name is same to the existing company and activity is not mentioned?
This type of name may be allowed when accompanied with NOC by way of board resolution from the existing companies whose name is same.

9. Can I apply for a name which has the word ‘company’ though the proposed company does not fall under the category of a producer company?
Yes. However, an off-line application has to be made to the Joint Secretary, Ministry of Corporate Affairs, Shastri Bhawan, Dr Rajendra Prasad Road, New Delhi-110 001. MCA will process the application on case to case basis for necessary approval. On approval of the application a pre-formatted INC-1 or INC-29 (enabling therein the word company in its name) will be forwarded to the applicant through the jurisdictional RoC for filing purposes.

10. Can I apply for a name in INC-1 to incorporate a Section 8 company with the words ‘micro-finance’ in its name?
Yes for this type of name, you can apply along with declaration as per rule 12 of the Companies (Incorporation) Rule, 2014 if, license is issued under section 8. However, Finance activity is under regulatory control of RBI. Hence at the time of filing incorporation documents promoters/director of proposed company are required to give undertaking as per rule 12 of the Companies (Incorporation) Rules, 2014.

11. What are the steps for incorporating a Section 8 Company?

(i) To incorporate a Section 8 company the promoter/applicant has to first submit an application in INC-1 for reserving a name for a section 8 company (Select radio button of “section 8 Company”).

(ii) On the approval of this application for name, he has to file INC-12 with Jurisdictional RoC for obtaining a License. While making an application for License in INC-12, the approved SRN of INC-1 is a pre-requisite. Please refer the field 3 (* Indicate Registrar of companies (ROC) reference number for name approval (Service Request Number (SRN) of Form INC-1) of INC-12.

(iii) On obtaining the License, he may file INC-7 for incorporating the company. While filling INC-7 the relevant approved SRN of INC-1 and License Number obtained through INC-12 has to be filled in relevant fields.

Note: While INC-1/INC-2/INC-7 along with relevant linked forms viz. INC-22 and DIR-12 and INC-29 are processed by the CRC, application for License (INC-12) is processed by the jurisdictional RoC.

12. How many times ‘Resubmission/Pending for User Clarification (PUCL)’ is allowed in INC-1/INC-2/INC-7 and INC-29?

Resubmission/PUCL is allowed only ‘once’ (in aggregate) in respect of INC-1/INC-2 and INC-7. However, Resubmission/PUCL is allowed ‘thrice’ (in aggregate

CBDT abolishes tax on start ups issuing shares above market value

Cheering news for start ups – 
CBDT abolishes tax on start ups issuing shares above market value  
 Closely held companies used to issues shares at substantial premium to convert black money into white money without providing any valuation justifying the premium. Thus, the Finance Act, 2012 inserted Section 56(2)(viib) to impose tax on closely held companies receiving consideration for shares in excess of fair market value.   Valuations of start ups have fallen sharply, recently, on worries over profitability, growth and intense competition. The Income-Tax Dept. discussed a controversial move to impose tax on those startups under the garb of Section 56(2)(viib) on the ground that their last round of valuation was lower than the first round. This move was likely to upset startups who were already worried over funding issue and falling valuations. Thus, there had been a long standing demand of the industry that the Govt. should either do away such tax on startups or provide a threshold exemption limit.   Now the CBDT has abolished such tax on start ups. Any consideration received by start ups from resident persons in excess of fair value of shares shall not be charged to tax as income from other sources under Section 56(2)(viib).   Editor's Note : However, this benefit is not available for all startups. Tax exemption is available for only those startups which fulfill the conditions specified in notification of Govt. of India, dated 17-02-2016.

Radical changes in FDI policy regime

Major impetus to job creation and infrastructure: Radical changes in FDI policy regime; Most sectors on automatic route for FDI

The Union Government has radically liberalized the FDI regime today, with the objective of providing major impetus to employment and job creation in India. The decision was taken at a high-level meeting chaired by Prime Minister Narendra Modi today. This is the second major reform after the last radical changes announced in November 2015.  Now most of the sectors would be under automatic approval route, except a small negative list. With these changes, India is now the most open economy in the world for FDI.

In last two years, Government has brought major FDI policy reforms in a number of sectors viz. Defence, Construction Development, Insurance, Pension Sector, Broadcasting Sector, Tea, Coffee, Rubber, Cardamom, Palm Oil Tree and Olive Oil Tree Plantations, Single Brand Retail Trading, Manufacturing Sector, Limited Liability Partnerships, Civil Aviation, Credit Information Companies, Satellites- establishment/operation and Asset Reconstruction Companies. Measures undertaken by the Government have resulted in increased FDI inflows at US$ 55.46 billion in financial year 2015-16, as against US$ 36.04 billion during the financial year 2013-14. This is the highest ever FDI inflow for a particular financial year. However, it is felt that the country has potential to attract far more foreign investment which can be achieved by further liberalizing and simplifying the FDI regime.  India today has been rated as Number 1 FDI Investment Destination by several International Agencies. 

Accordingly the Government has decided to introduce a number of amendments in the FDI Policy. Changes introduced in the FDI policy include increase in sectoral caps, bringing more activities under automatic route and easing of conditionalities for foreign investment. These amendments seek to further simplify the regulations governing FDI in the country and make India an attractive destination for foreign investors.  Details of these changes are given in the following paragraphs:

1. Radical Changes for promoting Food Products manufactured/produced in India

It has now been decided to permit 100% FDI under government approval route for trading, including through e-commerce, in respect of food products manufactured or produced in India.

2. Foreign Investment in Defence Sector up to 100%

Present FDI regime permits 49% FDI participation in the equity of a company under automatic route.  FDI above 49% is permitted through Government approval on case to case basis, wherever it is likely to result in access to modern and 'state-of-art' technology in the country. In this regard, the following changes have inter-alia been brought in the FDI policy on this sector:

i) Foreign investment beyond 49% has now been permitted through government approval route, in cases resulting in access to modern technology in the country or for other reasons to be recorded.  The condition of access to 'state-of-art' technology in the country has been done away with.

ii) FDI limit for defence sector has also been made applicable to Manufacturing of Small Arms and Ammunitions covered under Arms Act 1959.

3. Review of Entry Routes in Broadcasting Carriage Services

FDI policy on Broadcasting carriage services has also been amended. New sectoral caps and entry routes are as under:

Sector/Activity	New Cap and Route
5.2.7.1.1 (1)Teleports(setting up of up-linking HUBs/Teleports); (2)Direct to Home (DTH); (3)Cable Networks (Multi System operators (MSOs) operating at National or State or District level and undertaking upgradation of networks towards digitalization and addressability); (4)Mobile TV; (5)Headend-in-the Sky Broadcasting Service(HITS) 5.2.7.1.2 Cable Networks (Other MSOs not undertaking upgradation of networks towards digitalization and addressability and Local Cable Operators (LCOs))	100%  Automatic
Infusion of fresh foreign investment, beyond 49% in a company not seeking license/permission from sectoral Ministry, resulting in change in the ownership pattern or transfer of stake by existing investor to new foreign investor, will require FIPB approval

4. Pharmaceutical

The extant FDI policy on pharmaceutical sector provides for 100% FDI under automatic route in greenfield pharma and FDI up to 100% under government approval in brownfield pharma. With the objective of promoting the development of this sector, it has been decided to permit up to 74% FDI under automatic route in brownfield pharmaceuticals and government approval route beyond 74% will continue.  

5. Civil Aviation Sector

(i)  The extant FDI policy on Airports permits 100% FDI under automatic route in Greenfield Projects and 74% FDI in Brownfield Projects under automatic route. FDI beyond 74% for Brownfield Projects is under government route.

(ii)   With a view to aid in modernization of the existing airports to establish a high standard and help ease the pressure on the existing airports, it has been decided to permit 100% FDI under automatic route in Brownfield Airport projects.

(iii) As per the present FDI policy, foreign investment up to 49% is allowed under automatic route in Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline and regional Air Transport Service. It has now been decided to raise this limit to 100%, with FDI up to 49% permitted under automatic route and FDI beyond 49% through Government approval. For NRIs, 100% FDI will continue to be allowed under automatic route. However, foreign airlines would continue to be allowed to invest in capital of Indian companies operating scheduled and  non-scheduled air-transport services up to the limit of 49% of their paid up capital and subject to the laid down conditions in the existing policy.

6. Private Security Agencies

The extant policy permits 49% FDI under government approval route in Private Security Agencies. FDI up to 49% is now permitted under automatic route in this sector and FDI beyond 49% and up to 74% would be permitted with government approval route.

7. Establishment of branch office, liaison office or project office

For establishment of branch office, liaison office or project office or any other place of business in India if the principal business of the applicant is Defence, Telecom, Private Security or Information and Broadcasting, it has been decided that approval of Reserve Bank of India or separate security clearance would not be required in cases where FIPB approval or license/permission by the concerned Ministry/Regulator has already been granted.

8. Animal Husbandry

As per FDI Policy 2016, FDI in Animal Husbandry (including breeding of dogs), Pisciculture, Aquaculture and Apiculture is allowed 100% under Automatic Route under controlled conditions. It has been decided to do away with this requirement of 'controlled conditions' for FDI in these activities.

9. Single Brand Retail Trading

It has now been decided to relax local sourcing norms up to three years and a relaxed sourcing regime for another five years for entities undertaking Single Brand Retail Trading of products having 'state-of-art' and 'cutting edge' technology.

Today's amendments to the FDI Policy are meant to liberalise and simplify the FDI policy so as to provide ease of doing business in the country leading to larger FDI inflows contributing to growth of investment, incomes and employment. PIB

The Income Tax Central Action Plan 2016-17 talks of blocking of PAN

The Income Tax Central Action Plan 2016-17 talks of blocking of PAN. The important highlights of the suggestions are as under:

1. Pan Blocking shall be after due notice
PAN to be block after due notice to the tax defaulters.

2. PAN blocking shall deprive defaulters from filing their income tax returns
PAN of tax defaulters shall be be blocked in the system, in a such a way that these defaulters would not be allowed to file their Return of Income.

3. PAN blocking to deprive defaulters benefit of carry forward of losses
Blocking of PAN would mean that defaulters cannot avail the benefit of carry forward of Business Loss and Losses under other heads where filing of Return of Income u/s. 139(1) is mandatory.

4. Blocked PAN to be shared with CIBIL
List of such Blocked PANs can be shared with credit rating agency like CIBIL & Banks, so that these defaulters are not sanctioned any loans or overdraft facility by Public Sector Banks, as the same would become NPAs.

5. Withdraw of facility like LPG etc.
Ministry of Finance can be suggested to withdraw facility like LPG Subsidy etc. which are directly credited in to the Bank A/cs, for the said defaulters i.e. Disincentive to be a tax defaulter.

6. Blocking registration of immovable properties
List of blocked PANs can be circulated to Registrar of Properties with a request for not allowing any registration of immovable properties

CBDT notifies tax exemption on investments above fair market rate for startups

*CBDT notifies tax exemption on investments above fair market rate for startups*

In a major incentive, startups can now issue shares to investors at higher than fair value without worrying about tax consequences.

In a major incentive, startups can now issue shares to investors at higher than fair value without worrying about tax consequences. 

The Central Board of Direct Taxes (CBDT) has notified the much awaited tax exemption on investments above fair market rate for startups. 

"The exemption provided to startups from the 'rigour' of section 56(2)(viib) of Income Tax Act has been long awaited," Amit Maheshwari, Partner Ashok Maheshwaryand Associates LLP, said. 

The effect of the CBDT's notification is that in case a startup gets investment from resident angel investors, family offices or funds which were not registered as venture capital funds, it will not be taxed even if the investment is made in excess to the fair value. 

"It has been a long standing industry demand to abolish this Angel tax," Maheshwari said. 

A startup is a company in which the public are not "substantially interested" and conforms to certain conditions as prescribed by the Department of Industrial Policy and Promotion (DIPP) in February this year. 

Under Indian tax law, if an Indian company receives share subscription amount from an Indian resident which exceeds the fair value of shares, then the excess amount is taxed as income of the Indian company, said Rajesh H Gandhi, Partner, Deloitte Haskins and Sells LLP. 

"The notification now exempts startups from this rigorous provision. This is a welcome relaxation and would ensure that startups can issue shares to investors at higher than fair value without worrying about any tax consequences," Gandhi said. 

A similar exemption already exists for Venture Capital Funds (VCFs). 

Maheshwari said this Angel tax still poses threat to earlier investments which could be perceived as being overvalued in light of the declining valuations globally and in India. 

Last week, the DIPP has launched a portal and mobile app through which startups can gather all latest updates on various notifications, circulars issued by various departments and different funding agencies. 

In January, Prime Minister Narendra Modihad unveiled a slew of incentives to boost startup businesses, offering them a tax holiday and inspector raj-free regime for three years, capital gains tax exemption and Rs 10,000 crore corpus to fund them.

Source: ET

Sectoral impact of likely passage of GST Bill

*Automobile*  

*2w,Small Cars, CVs – Hero, Bajaj, TVS, Eicher, AL, Maruti*

Currently, the total tax outgo is ~27% (Excise + VAT + CST). A Standard rate of 18% would lead to a ~9% reduction in vehicle prices thereby stimulating demand. OEMs would benefit largely from savings on logistics and warehousing related costs and a simplified tax maintenance structure.

*Large Cars – M&M*

Currently, M&M’s total tax outgo in the UV segment is ~45% (excise + VAT + CST). Luxury cars are recommended to be taxed at higher/demerit tax rate of 40%. UV prices are therefore, likely to reduce by ~5%. We see very little possibility of the SUV segment taxed at a standard rate of 18%, which if happens, can reduce prices by ~27%. Large carmakers would again benefit largely from  savings on logistics and warehousing related costs and a simplified tax maintenance structure.

 
*Tractors – M&M, Escorts*

Tractors is completely exempted from excise and pays an exempted rate of 4% on VAT. As such total tax outgo (including CST) would be ~6%. Note that as tractors is exempt from excise, OEMs currently receive no MODVAT benefit, leading to an indirect excise duty of ~7% and hence a total tax outgo of ~13%. Tractors are likely to be taxed at the ‘Low’ GST rate of 12%, thereby keeping product prices unchanged.

 
*Auto Ancillaries*

*Batteries – Exide, Amara Raja*

Other players with vast unorganized segments in the replacement market

GST implementation is expected to bring the unorganized players in the tax net – this should reduce the price gap between organized and unorganized players. Battery industry, with ~40% of the replacement market still unorganized, and is likely to benefit from the same and we expect organized players to gain market share. Other smaller auto ancs, catering to replacement market and competing with the unorganized segment are likely to similarly benefit.
 

*Building materials*

*Tiles – Kajaria*

Currently unorganised sector (~50% of the industry) benefits from tax evasion and lower tax rates at 18% vs current duty of 25-27% paid by the organised players 25-27% will reduce the gap between organised and organized

 

*Plywood – Centuryply*

Currently, unorganised sector (~75% of the industry) imports raw material without paying duty and final goods are sold without any duty.

 

*Cement*

Though, 18% tax rate will be lower than what the companies are paying currently (~24.5% excise and VAT), we believe that the companies will pass on the benefits to consumers as demand continues to remain weak. The sector will benefit only when the pricing power is strong in the hands of manufacturers.

*Consumer Durables*

*Symphony*

Large unorganised sector in the air cooler industry (~85% of total market).  

The unorganized segment of the consumer durables segment have been evading the indirect taxes for the past many years.  The introduction of GST will bring them within the ambit of indirect taxes and would most likely impact their competitive advantage in terms of pricing.  The narrowing of the price differential between the organised and unorganised players would help the organised players increase their market share.

 

*Consumer and Retail Sector*

*FMCG Staples*

*HUL, Colgate, Britannia, GSK Consumer, Nestle, Dabur, Emami, Marico, Godrej Cons*

*Building Products*

*Asian Paints, Berger, Havells, Pidilite, HSIL*

 

§ All consumer companies will stand to gain with respect to supply chain and logistic.

§ Indirect tax rate will come down to (as per recommendations to possibly 18%) which would lead to higher purchasing power. 

§ More players to come under tax net. Thus, competitiveness of organized players to further improve.

§ In Categories, which have high pricing power, reduction might not be as much and hence, the benefits will flow down.

 

*Fashion Retail*

*Shoppers Stop*

 

Retailers will benefit from reduced logistics related costs

 

*Jewellery Retail*

*PC Jeweller, Titan*

·         Jewelry retailers too, will benefit from reduced logistics costs

·         However, a higher rate on precious metals and gold could impact demand

 

*Infrastructure*

 

*Sadbhav Engineering*

*IL &FS Transportation*

 

Implementation of e-permit/e-tolling systems, post GST, will help manufacturers save on logistics costs by reducing travel time, reducing the need for warehouses in multiple states and the need for buffer inventory

 

*Media*

 

*Dish Tv & PVR*

 

§ Dish TV: The company currently pays ~22% tax on revenues (assuming E-tax rate of 7.5% of revenue) and 4% as special additional duty (SAD). With GST implementation, total tax outgo will reduce depending on the final GST rate (we have done scenario analysis in table below). Further, SAD will also get subsumed with GST implementation. At 18% GST rate, Dish TV would have margin expansion 400bps. We have not assumed 1% additional inter-state movement surcharge as there is no clarity on the same.

§ PVR: The company currently pays    22% E-Tax on gross ticket sales, 7-8% VAT on F&B sales, service tax on inputs (rentals, maintenance and others). With GST implementation total tax outgo will reduce depending on the final GST rate (we have done scenario analysis in table below). Primary benefit to PVR would be offset of service tax paid on inputs (~Rs600-650mn in FY16), this amount will further increase as service tax rate will also increase from 14.5% to 18% (in GST regime). At 18% GST rate, PVR would see EBITDA upgrade of 22% on our current assumption Rs4010mn for FY17E, implying 400-500bps margin expansion.

Ten Features that distinguish the NCLT from CLB

The constitution of these Tribunals marks the dissolution of the Company Law Board (CLB).

Fourteen years after its introduction in the Companies (Second Amendment) Act, 2002, and after several rounds of litigation, the Government has finally constituted these tribunals. The primary objective of these tribunals is to provide simpler, speedier and more accessible dispute resolution mechanism for company related disputes, by unburdening the courts.

Provided hereunder is a brief summary of the differences between the CLB and the NCLT.

*1. Number of Benches*

While the CLB was functioning with only five benches, the NCLT will commence action with eleven benches. It is expected to eventually have benches across each state in India.

*2. Jurisdiction*

While provisions relating to mergers, restructuring and winding-up have not been notified yet, the NCLT, once fully functional, will consolidate the corporate jurisdiction of the

CLB;
Board of Industrial and Financial Reconstruction;
Appellate Authority for Industrial and Financial Reconstruction and;
Jurisdiction and powers relating to winding up, restructuring and other such provisions, currently vested in the High Courts.
Once notified, the provisions relating to mergers, restructuring and winding up will no longer be under the jurisdiction of the High Court.

*3. Amicus curiae*

The Draft National Company Law Tribunal Rules, 2013 (Draft Rules)  enable the NCLT to appoint Amicus Curiae for opinion on various specialised legal issues.

*4. Other professionals allowed to represent*

Until now, Company Secretaries, Chartered Accountants, Cost Accountants could represent their clients only before the CLB, the scope of which was limited. The Draft Rules enable other professionals to represent their clients in matters pertaining to mergers/ winding-up before the NCLT.

*5. Class action suits*

With the constitution of the NCLT, shareholders and creditors can now file class action suits against the company for breaching the provisions of the Act.

While shareholders have always been allowed to protest against the wrong doings of the management, class action suits takes this a step further. The key difference between oppression, mismanagement (Sections 241-244) and class action suits (Section 245) can be summed up in the following points:

Under Section 245, members as well as deposit holders can file an application as opposed to only member;
Application can be filed, in addition to company and its statutory appointees, against audit firms and any other independent consultants;
Application can be filed for future activities as well in addition to current or past activities.

*6. Dedicated online portal*

The Draft Rules introduce a ‘dedicated online portal’ through which all the parties or central or state government agencies and local government bodies may electronically send and receive documents to or from the NCLT and make required payments.

*7. Electronic filing*

As per the Draft Rules, electronic filing and serving of Tribunal documents shall be mandatory except as provided otherwise, with effect from the date to be notified in the official gazette

*8. Members of the Technical Committee and Selection Committee*

In the NCLT, only officers holding ranks of Secretaries or Additional Secretaries can be considered for appointment as technical members. While the CLB did not have a selection committee, the selection committee for the NCLT comprises of four members including the Chief Justice of India, who will have a casting vote.

*9. Appeals*

Appeals from the NCLT will go the NCLAT, and thereafter with the Supreme Court. The High Courts have been eliminated from the chain of appeals.

*10. Ousting of Civil Court jurisdiction*

Under the old regime, there was no express provision ousting the jurisdiction of the Civil Courts, and various judicial pronouncements have time and again reiterated the requirement of an express provision for ousting Civil Court jurisdiction.

Putting an end to the debate, Section 430 the Act expressly ousts the jurisdiction of Civil Courts.

Simplified Procedure-Form 15G-H

Simplification of Procedure for Form No. 15G & 15H — CBDT Clarifications

The CBDT vide Notification No. 9/2016 dt. 7th June, 2016 has clarified about the due date for quarterly uploading of 15G/H declarations by payers on e-filing portal & the manner for dealing with Form 15G/15H received by payer during the period from 1.10.2015 to 31.3.2016, as under:

The existing provisions of section 197A of the Income-tax Act, 1961('the Act') inter alia provide that tax shall not be deducted, if the recipient of certain payment on which tax is deductible furnishes to the payer a self-declaration in Form No.15G/15H in accordance with provisions of the said section. The manner of filing such declarations and the particulars have been laid down in Rule 29C of the Income-tax Rules, 1962 (`the Rules') w.e.f 1.10.2015 vide Notification No.76/2015 dated 29.09.2015.

2. As per sub-rule (7) and (8) of rule 29C of the Rules notified vide aforesaid notification, the Principal Director General of Income-tax (Systems) is required to specify the procedures, formats and standards for the purposes of furnishing and verification of the declaration and allotment of unique identification number. In pursuance of the same, Principal Director General of Income-tax (Systems) has issued Notification No. 4/2015 dated 1st December, 2015 to notify the procedure, formats and standards.

3. Representations have been received for clarification on the following issues:

(a) Due date for quarterly uploading of 15G/H declarations by payers on e-filing portal,

(b) The manner for dealing with Form 15G/15H received by payer during the period from 1.10.2015 to 31.3.2016.

4. In this regard, it is hereby specified that:

a) The due date for quarterly furnishing of 15G/15H declarations received by the payer from 1.4.2016 onwards shall be as given below:

SI. No	Date of ending of the quarter of the financial year	Due Date
1.	30th  June	15th  July of the financial year
2.	30th  September	15th  October of the financial year
3.	31st  December	15th  January of the financial year
4.	31st March	30th  April of   the   financial  year immediately following the financial year in which declaration is made.

(b) The payer shall furnish 15G/15H declarations received during the period from 1.10.2015 to 31.3.2016 on e-filing portal (http://incometaxindiaefiling.gov.in) in the  given format on or before 30^th June, 2016.

15 things you should know about Model GST Law

On June 14, 2016 the Finance Ministry has released the 'Model GST Law'. It outlines the structure of the GST regime. Further, the draft of 'Integrated GST Bill, 2016' is also released along with such Model GST laws. It also provides the framework for levy and collection of CGST and SGST. "CGST" is the tax levied under the Central Goods and Services Tax Bill, 2016. "IGST" is the tax levied under the Integrated Goods and Services Tax Bill, 2016.

Key takeaways from Model GST law are given hereunder:

1) Threshold limit for registration

The dealer is required to take registration under this law if his aggregate turnover in a financial year exceeds Rs.9 lakhs. However, dealers conducting business in any North Eastern State are required to take registration if their turnover exceeds Rs.4 lakhs.

2) Place of registration

The dealer has to take registration in the State from where taxable goods or services are supplied.

3) Migration of existing taxpayers to GST

Every person already registered under extant law will be issued a certificate of registration on a provisional basis. This certificate shall be valid for period of 6 months. Such person will have to furnish the requisite information within 6 months and on furnishing of such information, final registration certificate shall be granted by the Central/State Government.

4) GST compliance rating score

Every taxable person shall be assigned a GST compliance rating score based on his record of compliance with the provisions of this Act. The GST compliance rating score shall be updated at periodic intervals and intimated to the taxable person and also placed in the public domain.

5) Levy of Tax

The person registered under this law is liable to pay tax if his aggregate turnover in a financial year exceeds Rs 10 lakhs. However, a dealer conducting business in any of the North Eastern is required to pay tax if his aggregate turnover exceeds Rs. 5 lakhs.

A negative list has also been prescribed for transactions and activities of Government and Local Authorities which shall be exempt from GST levy, like activities of issuance of passport, visa, driving license, birth certificate or death certificate, etc.

6) Taxable Event

The taxable event under GST regime will be supply of goods or services. Supply includes all forms of supply of goods and/or services such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration. It also includes importation of service, whether or not for a consideration.

7) Point of taxation

CGST/SGST shall be payable at the earliest of the following dates, namely:

  (i) Date on which the goods are removed for supply to the recipient (in case of movable goods).

 (ii) Date on which the goods are made available to the recipient (in case of immovable goods).

(iii) Date of issuing invoice by supplier; or

(iv) Date of receipt of payment by supplier; or

 (v) Date on which recipient shows the receipt of the goods in his books of account.

8) TCS on online sales of goods or service

Every E-commerce operator engaged in facilitating the supply of any goods and/or services (like Amazon, Flipkart, etc.) shall collect tax at source at the time of credit or at the time of payment whichever is earlier.

9) Valuation Rules

Such Rules shall apply to the supply of goods and/or services under the IGST/CGST/SGST Bill. Some of the methods prescribed for valuation are given hereunder:

  a) Transaction Value: As per this method the value of goods and/or services shall be the transaction value.

  b) Transaction value of goods or services of like kind: Where value of supply cannot be determined under previous method [i.e. point a], the value shall be determined on the basis of transaction value of goods and/or services of like kind and quality supplied at or about the same time to customers.

  c) Computed Value Method: Where value cannot be determined under previous method [i.e., point b], it shall be based on computed value which shall include cost of production, manufacture or processing of the goods or, the cost of the provision of services, the charges, if any, for design and brand and amount towards profit and general expenses.

  d) Residual Method: Where the value cannot be determined under the computed value method, the value shall be determined using reasonable means consistent with the principles and general provisions of these Rules.

10) Utilization of credit:

Utilization of IGST: The amount of input tax credit on account of IGST available in the electronic credit ledger of dealer shall first be utilized towards payment of IGST and the amount remaining, if any, may be utilized towards the payment of CGST and SGST, in that order.

Utilization of SGST: The amount of input tax credit on account of SGST available in the electronic credit ledger shall first be utilized towards payment of SGST and the amount remaining, if any, may be utilized towards the payment of IGST.

Utilization of CGST: The amount of input tax credit on account of CGST available in the electronic credit ledger shall first be utilized towards payment of CGST and the amount remaining, if any, may be utilized towards the payment of IGST.

Note: The input tax credit on account of CGST shall not be available for payment of SGST.

11) Payment

Any tax, interest, penalty, fee, etc., shall be paid via internet banking or by using credit/debit cards or NEFT or RTGS. This amount shall be credited to the electronic cash ledger of dealer.

12) TDS

The Central or a State Government may mandate certain departments (viz, local authority, Govt. agencies) to deduct tax at the rate of one percent on notified goods or services, where the total value of such supply, under a contract, exceeds Rs 10 lakhs.

13) Refund

A person can claim refund of any tax and interest by making an application in that regard to the prescribed officer of IGST/CGST/SGST. The application can be made before the expiry of two years from the relevant date as may be prescribed. It has been provided that the limitation of two years shall not apply where such tax or interest or the amount has been paid under protest.

14) Returns

Dealers shall be required to furnish following returns

  a) Monthly Return: Every registered taxable person shall have to e-file a monthly return for inward and outward supplies of goods and/or services, input tax credit availed, tax payable, tax paid and other particulars within 20 days after the end of such month.

  b) Return for Composition Scheme: Dealers paying tax under composition scheme shall have to furnish a return for each quarter or part thereof, electronically within 18 days after the end of such quarter.

  c) TDS Return: Every dealer who is required to deduct tax at source shall furnish a return electronically within 10 days after the end of month in which deduction is made.

  d) Return for Input Service Distributor: Every Input Service Distributor shall file e-return for every calendar month or part thereof, within 13 days after the end of such month.

  e) First Return: Every registered taxable person paying CGST/SGST on all intra-State supplies of goods and/or services shall have to furnish the first return from the date on which he became liable to registration till the end of the month in which the registration has been granted.

  f) Annual return: Every registered taxable person shall have to furnish an annual return for every financial year electronically on or before the 31st day of December following the end of such financial year.

  g) Final return: Every registered taxable person who applies for cancellation of registration shall have to furnish a final return within three months of the date of cancellation or date of cancellation order, whichever is later, in a prescribed form.

15) Transitional Provisions

  a. Under the Model GST Law, a registered taxable person will be entitled to take credit of the amount of cenvat credit/ Value Added Tax carried forward in a return furnished by him in respect of the period ending with the day immediately preceeding the appointed day.

  b. As per Model GST Law, a registered taxable person shall be entitled to take in his electronic credit ledger/credit of the unavailed cenvat credit/ unavailed input tax credit in respect of capital goods not carried forward in a return furnished by him for the period ending with the day immediately preceding the appointed day.

  c. If a person registered under GST was not liable to be registered under the earlier law or if he was manufacturing exempted goods under the earlier law which are not taxable, then he will be allowed to take credit of eligible duties and taxes in respect of inputs held in stocks or semi-finished/finished goods.

  d. Every claim for refund of any duty/tax and interest, if any, paid on such duty/tax or any other amount, filed by any person before the appointed day, shall be disposed of in accordance with the provisions of earlier law and any amount eventually accruing to him shall be paid in cash. However, where any claim for refund is fully or partially rejected, the amount so rejected shall lapse

Source:taxmann

Don't stress about the future, it hasn't arrived yet

Don't stress about the future, it hasn't arrived yet.

Separate date for furnishing 15G/15H

Separate date for furnishing 15G/15H announced by CBDT vide Notification dated 09-06-2016

Earlier, TDS return for June was required to be filed by 31st July, for Sep by 31st October, for December by 31st January, for March by 31st May as per N/N 30/2012 dtd. 29-04-2016.

No separate date was prescribed for 15G/15H.However now, separate dates for uploading 15G/15H have been provided vide Notification dated 09-06-2016.

Due Date for QE 30 June shall be 15th July, for 30th Sep shall be 15th October, for 31st December shall be 15th January and for 31st March it shall be 30th April

It means for first three quarters 15G/15H to be filed 16 days ahead of due date for TDS return and for last quarter a month ahead for TDS return, thus maintaining a time distance between the TDS return and 15G/15H so that information regarding 15G/15H may be timely submitted in TDS return.