The Additional Chief Metropolitan Magistrate of Tis Hazari Court, Delhi has convicted a Company Director for holding directorship of more than 20 companies under Section 165 of the Companies Act, 2013.
The facts of the case are that accused has been Director in more than the maximum number of companies as laid down in Section 165 of the Companies Act, 2013 as on 01.04.2015. It is further stated that according to the records available with the office, the accused in spite of holding directorship in excess of the limit specified in Section 165 of the Companies Act 2013 continued to hold such directorship even after one year from commencement of the Companies Act, 2013 and therefore, knowingly and willfully guilty of the contravention of Section 165(3) which is punishable under 165(6) of the Companies Act, 2013.
Section 165 of the Companies Act reads as, No person, after the commencement of this Act, shall hold office as a director, including any alternate directorship, in more than twenty companies at the same time:
Provided that the maximum number of public companies in which a person can be appointed as a director shall not exceed ten.
While convicting the Accused, the Additional Chief Metropolitan Magistrate, Pawan Singh Rajawat observed that, “Under the Rule 16, the accused has the responsibility being Director to forward to the Registrar copy of resignation along with the applicable fees in Form DIR-11 within 30 days of such resignation. The claim of accused that the company had not filed form DIR-12 and therefore, he was not liable is rejected. It is admitted position that the accused has not filed the said Form DIR-11. No reason has been adduced for such non-filing which may save the accused from the present prosecution. It has come on record that accused was the Director in more than 20 companies as reflected”.
Subscribe Taxscan Premium to view the JudgmentThe Central GST Delhi-West Commissionerate has unearthed racket of issuance of fake invoices without actual supply of goods and services by M/s Royal Sales India and 27 other dummy companies. Today, two persons have been arrested in this matter and remanded to judicial custody for 14 days by Duty Magistrate, Patiala House Courts, New Delhi.
The accused were found to be operating 28 fake companies to facilitate fraudulent Input Tax Credit (ITC), thus defrauding the exchequer. Prima facie, fraudulent ITC of about Rs 108 Crores has been passed on using invoices involving the amount of Rs 900 Crores. Final duty is subject to the outcome of the investigation.
On basis of search at various suppliers 86 recipients of goods of the said firms, it was revealed that Modus operandi of these 28 bogus firms involved obtaining GST registration of fake firms all across Delhi using KYC documents of lowly paid individuals and generating good-less invoices and a-way bills of these firms. On preliminary scrutiny, it was seen that the inward supplies of the said firm were not in correlation with outward supplies. All these firms have resorted to selling or cause-effect of sale of goods, by issuing good-less invoices and on the collection of the payment by cheque, payback in cash to the party in question. This is done in order to facilitate these firms under investigation to avail Input Tax Credit for offsetting any likely tax liability and in some cases availing IGST refund etc.
Till now, 15 buyer firms have already admitted their liability vide their Voluntary Statement and further deposited voluntarily Approx Rs.1.30 Crores towards ITC wrongly availed, Interest and Penalty under Section 74(5) of CGST Act, 2017 till date. Further, approx. Rs 1.58 Cr has been frozen in Bank Accounts of these fake firms.
Therefore, both accused have committed offence under the provisions of Section 132(1)(b) and (c) of CGST Act 2017, which are cognizable and non-bailable under section 132(5) being punishable under Section 132(1)(i) of the said Act and have been remanded to judicial custody for 14 days on 15.11.2019. Investigations are underway to identify key beneficiaries of this fraud and to further recover GST involved.
The Central Board of Indirect Taxes & Customs (CBIC) today clarified that salaries are not subject to GST and no GST has been demanded on salaries paid to CEOs or employees.
The CBIC said that the media report in this regard alleging that tax authorities want to impose GST on salaries paid to employees is factually incorrect and misrepresents tax authorities.
The Board emphasised the GST law position which clearly states under Section 7(2) read with Schedule III of the Central Goods and Services Act, 2017 (CGST Act) that the salaried services by an employee to the employer shall be treated neither as a supply of goods nor as a supply of services. So, salaries as such cannot be subject to GST. CBIC said that in this regard no notice has been issued to any companies demanding GST on salaries whatsoever.
The CBIC further clarified that it has already been made amply clear vide its press release dated 10′ July, 2017 that the services by an employee to the employer in the course of or in relation to his employment is outside the scope of GST (neither supply of goods nor supply of services).
The CBIC also said that the GST charged on the prices/charges by any supplier of goods or services from his consumers does comprise all costs including the cost of raw material, capital goods, input services and employee costs, etc. But this does not mean that salaries paid to the employees by the employer are being taxed under GST.
It must also be made clear that offices of an organisation in different States are regarded as distinct persons under Section 25 of CGST Act. Hence, what is taxable under GST is the supply of goods and services by the head office to its branch office/s and vice versa. Any tax charged on such supplies is available to the recipient as an input tax credit. This is not any additional cost to the organisation. Also, it is a worldwide practice under GST laws.
The Gujarat High Court has observed that, Goods and Services Tax ( GST ) department cannot detain goods on the ground that the transport receipt was a photocopy and the details filled in the transport receipt were handwritten.
The petitioner is a proprietary concern and is duly registered under the provisions of the relevant GST Act. The petitioner received an order from one M/s. Riya Enterprise, who is a registered person in the State of Maharashtra under the GST Acts for the supply of TMT bars and angles. Pursuant to such order, the petitioner was transporting the goods and the driver of the truck duly had with him the tax invoice as well as the transport receipt in respect of such goods. Before commencement of movement of goods, the petitioner had duly generated the e-way bill in respect of the transaction on the online GST portal. The details of the invoice, as well as details of the buyer, were duly entered in the online e-way bill.
The truck along with the goods came to be detained on the highway by the State Tax Officer, Mobile Squad, Sagbara. The driver of the truck duly produced all documents relating to the goods including invoice, transport receipt and e-way bill. However, despite the fact that the petitioner had complied with the procedure for movement of goods as stipulated under the GST Acts, by the impugned order, the truck with the goods came to be detained/seized under section 129 of the GST Acts on the ground that the transport receipt was a photocopy and the details filled in the transport receipt were handwritten.
The petitioner submitted that section 129 of the GST Acts is a drastic measure and hence, there has to be a serious and grave error for which the authorities can have an apprehension of evasion of tax and that the powers thereunder, should not be exercised lightly as the consequences are grave and that the detention has to be duly justified.
The division bench comprising of Justice Harsha Devani and Justice Sangeeta K. Vishen said that, “though the person in charge of the conveyance had produced the documents which were statutorily required to be kept with him during the course of transportation of the goods, the vehicle in question was detained on extraneous grounds namely that the lorry receipt issued by the transporter was a photocopy without computerised serial number and contact number details”.
The Court also said that, “the conveyance in question has been detained on the ground of discrepancy in transport certificate which is not a requirement prescribed under the statute. Under the circumstances, the second respondent was not justified in passing the order of detention under section 129(1) of the CGST Act”.
Subscribe Taxscan Premium to view the JudgmentThe Institute of Chartered Accountants of India ( ICAI ) has announced Change of Venue in Lucknow City (Uttar Pradesh), in respect of November 2019 Exams.
It is hereby informed that due to unavoidable circumstances, the venue of Foundation Examination scheduled on 19th November 2019 (Tuesday) in respect of some candidates at Lucknow City (Uttar Pradesh) is being shifted.
Details are as follows:
| Shifted from (Existing Venue) | Shifted to (New Venue) | Roll Numbers |
| Lucknow Christian Degree College (Reid Hall) Inayat Bagh, Jagat Narayan Road, Near Balrampur Hospital, Golaganj, Qaiserbagh LUCKNOW – 226018 UTTAR PRADESH | Sri Jai Narain PG College (KKC), Station Road Charbagh LUCKNOW – 226001 UTTAR PRADESH | From 155213 to 155512 (All Candidates) |
Accordingly, candidates of CA Foundation Examination – November 2019, who are scheduled to appear in the said examination on 19th November 2019 (Tuesday) at the above mentioned examination centre in Lucknow City (Uttar Pradesh) are requested to take note of the above mentioned change in venue and appear in their examination/s, at the new venue as mentioned above.
Such candidates may note that admit cards already issued for November 2019 examination will remain valid for the new venue also. All other details remain unchanged.
The ICAI also said that, this arrangement is only for 19th November 2019.
The Central GST Delhi North Commissionerate has unearthed a racket of issuance of fake invoices without actual supply of goods and services. Shri Naveen Mutreja and Shri Keshav Ram have been arrested in this matter and remanded to judicial custody for 14 days by the Chief Metropolitan Magistrate (CMM), New Delhi at Patiala House Courts.
The accused were found to be operating 42 fake firms created to facilitate fraudulent Input Tax Credit (ITC), thus defrauding the Exchequer. Prima facie fraudulent ITC of about Rs 22 crores has been passed on using invoices involving an amount of Rs 150 crores.
The modus operandi of the two accused, inter alia, involved obtaining GST registration of fake firms across Delhi NCR, Haryana, Rajasthan and Uttar Pradesh using documents of unsuspecting individuals and generating good-less invoices and e-way bills of these firms from a premise in Karol Bagh, Delhi. On preliminary scrutiny it appears that there is no nexus between inward and outward supplies of the errant firms. Further, the said firms have passed on fraudulent ITC to a range of buyers who have availed the same to discharge their GST liability on outward supplies, thus defrauding the Exchequer.
Therefore, the two accused have committed offences under the provisions of Section 132(1)(b) and (c) of the CGST Act 2017, which are cognizable and non-bailable under Section 132(5) being punishable under Section 132(1)(i) of the said Act. Accordingly, Shri Naveen Mutreja and Shri Keshav Ram were arrested on 14.11.19 and have been remanded to judicial custody for 14 days on 15.11.2019 by the CMM, New Delhi at Patiala House Courts. Investigations are underway to identify the key beneficiaries of this racket and to recover GST involved.
The Ministry of Corporate Affairs (MCA) has notified the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 (Rules) today to provide a generic framework for insolvency and liquidation proceedings of systemically important Financial Service Providers (FSPs) other than banks.
The Rules shall apply to such FSPs or categories of FSPs, as will be notified by the Central Government under section 227 from time to time in consultation with appropriate regulators, for the purpose of their insolvency and liquidation proceedings.
The Insolvency and Bankruptcy Code, 2016 (Code) provides a consolidated framework for reorganisation, insolvency resolution and liquidation of corporate persons, limited liability partnerships, partnership firms and individuals in a time-bound manner. Section 227 of the Code enables the Central Government to notify, in consultation with the financial sector regulators, financial service providers (FSPs) or categories of FSPs for the purpose of insolvency and liquidation proceedings, in such manner as may be prescribed.
Shri Injeti Srinivas, Secretary, Corporate Affairs, stated that the special framework provided under Section 227 of the Code for financial service providers is essentially aimed at serving as an interim mechanism to deal with any exigency pending introduction of a full-fledged enactment to deal with the financial resolution of Banks and other systemically important financial service providers. The special framework under Section 227 of the Code shall not apply to Banks. Separately, however, the government will notify specific categories of FSPs that do not fall under the systemically important category and shall be resolved under the normal provisions of the Code as ordinarily applicable to corporate debtors.
The Rules provide that the provisions of the Code relating to the Corporate Insolvency Resolution Process (CIRP), Liquidation Process and Voluntary Liquidation Process for a corporate debtor shall, mutatis mutandis, apply to a process for an FSP, subject to modifications, as under:
These Rules shall come into force on the date of their publication on the official gazette.
Subscribe Taxscan Premium to view the JudgmentThe Authority of Advance Ruling ( AAR ) in Madhya Pradesh has ruled that, Goods and Services Tax ( GST ) is not applicable to Transportation of Students and Staff to institute under contract carriage by Non-AC buses.
The applicant, Mrs.Bhavika Bhatia, Proprietor of Bhavika Travels, is in the business of providing services of hiring of vehicles under Contract Carriage. The applicant has entered into an agreement with Chameli Devi Institute of Technology and Management, Indore for transportation of their students and staff under contract carriage by Non-A/c buses.
The AAR bench comprising of Rajiv Agrawal, Member and Manoj Kumar Choubey, Member has observed that, “Services provided by the applicant for transportation of students and staff of the contracee’s Institute under contract carriage by non-air conditioned buses is exempt from GST as per clause (b) of S1. No. 15 of Notification No. 12/2017-Central Tax (Rate), dated 28.6.2017. However, the exemption will be valid only till the time the contract carriage fulfils the conditions laid down in the said notification”.
The AAR also clarified that, the ruling is valid subject to the provisions under section 103(2) until and unless declared void under Section 104( 1 ) of the GST Act.
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The Ministry of Finance has notified the simplified GST Annual Return ( GSTR-9) and Reconciliation Statement (GSTR-9C). The Government has also decided to simplify these forms by making various fields of these forms is optional.
The Central Board of Indirect Taxes & Customs ( CBIC ) has notified the amendments regarding the simplification of GSTR-9 (Annual Return) and GSTR-9C (Reconciliation Statement) which inter-alia allow the taxpayers to not to provide split of input tax credit availed on inputs, input services and capital goods and to not to provide HSN level information of outputs or inputs, etc. for the financial year 2017-18 and 2018-19.
The CBIC expects that with these changes and the extension of deadlines, all the GST taxpayers would be able to file their Annual Returns along with Reconciliation Statement for the financial years 2017-18 and 2018-19 in time.
Various representations regarding challenges faced by taxpayers in the filing of GSTR-9 and GSTR-9C were received on which by the Government has acted in a very responsive manner.
Subscribe Taxscan Premium to view the JudgmentThe Central Board of Indirect Taxes and Customs ( CBIC ) has issued notifications dated November 14, 2019, regarding the due dates for filing GSTR-1, GSTR-3B and GSTR-7 under GST for the registered persons whose principal place of business is in the State of Jammu and Kashmir.
The due date for furnishing FORM GSTR-1 for registered persons in Jammu and Kashmir having an aggregate turnover of up to 1.5 crore rupees for the quarter July, 2019 to September, 2019 is 30th November, 2019.
The Notification also said that, the registered persons whose principal place of business is in the State of Jammu and Kashmir, the time limit for furnishing the details of outward supplies in FORM GSTR-1 of Central Goods and Services Tax Rules, 2017, by such class of registered persons having aggregate turnover of more than 1.5 crore rupees in the preceding financial year or current financial year, for each of the months from July, 2019 to September, 2019 till 15th November, 2019”.
The CBIC also said that, the return by a registered person, required to deduct tax at source under the provisions of section 51 of the said Act in FORM GSTR-7 of the Central Goods and Services Tax Rules, 2017 under sub-section (3) of section 39 of the said Act read with rule 66 of the Central Goods and Services Tax Rules, 2017, for the months of July, 2019 to September, 2019, whose principal place of business is in the State of Jammu and Kashmir shall be furnished electronically through the common portal, on or before the 15th November, 2019.
The GST Return in FORM GSTR-3B of the said rules for the months of July to September, 2019 for registered persons whose principal place of business is in the State of Jammu and Kashmir, shall be furnished electronically through the common portal, on or before the 20th November, 2019”.
Subscribe Taxscan Premium to view the JudgmentThe Central Board of Direct Taxes ( CBDT ) Chairman PC Mody on Thursday expressed hope that the body will able to achieve the target of tax collection given to them at the beginning of this year.
“At the beginning of this year, we were given a target of 13.35 lakh crore, out of which we have already collected six lakh crore. With that, we have also refunded 20 per cent more as compared to last year. I am hopeful that we will reach the set target,” he said while speaking to ANI.
Stressing that there is a clear policy of the government to give more and more comfort to the taxpayer, Mody said a new process of assessment has been envisaged — faceless assessment.
“Under this process, there is the provision of your process scrutiny being done in a randomised and anonymous manner so that there is no contact between taxpayer and tax officer and whatever are the issues before he is investigated fairly,” he said adding that infrastructure for this has already been provided.
“As of now, it has just begun. By the end of this week, the responses from taxpayers will be sent to assessment units and after that, the process will begin,” he said.
Recently the Central Government has launched the Faceless E-Assessment Scheme. In the first phase, the Income Tax Department has selected 58,322 cases for scrutiny under the faceless e-Assessment Scheme 2019 and the e-notices have been served before 30th of September 2019 for the cases of Assessment Year 2018-19. The taxpayers have been advised to check their registered e-filing accounts/ email ids and have been requested to furnish a reply within 15 days. The Department hopes that with the ease of compliance for taxpayers, the cases would be disposed of expeditiously.
The new initiative of faceless assessment is expected to increase ease of compliance for taxpayers as the cost and anxiety of taxpayers are likely to be greatly reduced. No human interface with the Department would be a game-changer. This is another initiative by CBDT in the field of ease of compliance for our taxpayers.
The Institute of Chartered Accountants of India ( ICAI ) has announced dates of postponed CA exams due to unavoidable circumstances.
In partial modification of the Institute’s Notification No. 13-CA(Exam)/N/2019 dated 16th August, 2019, it is notified that the Foundation, Paper 1, Final Examination {Old as well as New Scheme}, Paper 5, IRM, Paper 1, INTT – AT, Paper 1, Intermediate / Intermediate (IPC), Paper – 5 which were postponed from the extant notified dates of 9th November 2019 and 11th November 2019, the said examinations in the said paper(s) shall now be held on 19th November 2019 (for earlier scheduled papers on 9th November 2019) and 20th November 2019 (for earlier scheduled papers on 11th November 2019) and as detailed below.
The ICAI also clarified that the schedule of other examinations notified vide Notification No. 13-CA(Exam)/N/2019 dated 16th August, 2019 in respect of all other papers shall remain the same as per ICAI’s notification of 16th August, 2019 and as already notified in ICAI’s announcement of 10-11-2019 as available at www.icai.org.
The examinations shall be carried out at the same examination centres and at the same timing(s) i.e. 2 PM to 5 PM (IST). The admit card already issued shall be valid for appearance in the examinations on new dates.
The Delhi High Court has observed that, presence of a lawyer cannot be allowed to the petitioner at the time of questioning or examination by the GST officers.
The Petitioner moved to the Court under article 226 of the constitution of India read with section 482 of the code of criminal procedure, 1973 for writ of mandamus directing the respondents to not cause any physical, mental or verbal harassment to the petitioner during the pendency of the investigation.
The Petitioner submitted that, he apprehended that the respondent would cause physical, mental and/or verbal harassment to the petitioner as heard by him from various people who were recently summoned and detained by the respondent agency.
While relying on the case, Sudhir Gulati vs. UOI, 1998 (100) E.LT. 344 (Del), Justice Brijesh Sethi observed that, “the presence of a lawyer cannot be allowed at the time of examination of a person under the Customs Office. The petitioner in the present case has been summoned by the Officers under GST Act who are not Police Officers and who have been conferred with the power to summon any person whose attendance they consider necessary to give evidence or to produce a document. The presence of the lawyer, therefore, is not required during the examination of the petitioner as per the law laid down by Hon’ble Supreme Court in Pool Pandi‟s case”.
Disposing of the Petition, the Court also said that, the apprehension of petitioner that he may be physically assaulted or manhandled is concerned, this Court is of the opinion that it is a well-settled law now that no inquiry/ investigating officer has a right to use any method which is not approved by law to extract information from a witness/ suspect during examination and in case it is so done, no one can be allowed to break the law with impunity and has to face the consequences of his action.
Subscribe Taxscan Premium to view the JudgmentThe Income Tax Department has conducted the search at 37 premises of Brihanmumbai Municipal Corporation (BMC) in Mumbai and Surat, of civil contractors who were allegedly involved in corrupt practices.
The department stated that incriminating evidence collected during raids, carried out on November 6, clearly shows “large scale tax evasion and money laundering”.
Sources said that the income tax sleuths also carried out surveys at a few BMC officials” premises.
The department said that raids were also conducted on entry operators in Mumbai and Surat after which the probing sleuths found evidence of bogus entries and fake expenditure to the tune of Rs 735 crore.
“Raids were carried out on entry providers and beneficiaries who have been engaged in the execution of civil contracts mainly in Brihanmumbai Municipal Corporation (BMC),” said Income Tax department in a statement.
A total of 37 premises were covered under search action and seven premises were covered under the survey.
“There were reports that certain contractors had taken entries in the form of loans, etc. from entry providers and also inflated expenses in the books of accounts to suppress income,” said the department.
“In the case of the contractor groups, several instances about the inflation of expenses by bogus purchases/sub-contracts and taking of loans from entry providers have been identified,” it stated.
No doubt, the persons dealing with GST, be the taxpayers or the practitioners would loose around 10 years of their life due to the pressure which they undergo in keeping track of all notifications, circulars and instructions from time to time; filing of returns after return; reconciliations; and to top it all, the portal glitches. The latest addition to their woes is the introduction of sub-rule (4) to Rule 36 of the CGST Rules, 2017 with effect from 09.10.2019. The said sub-rule (4) of Rule 36 is reproduced below.
(4) Input tax credit to be availed by a registered person in respect of invoices or debit notes, the details of which have not been uploaded by the suppliers under sub-section (1) of section 37, shall not exceed 20 per cent. of the eligible credit available in respect of invoices or debit notes the details of which have been uploaded by the suppliers under sub-section (1) of section 37.
Section 42 of the CGST Act, 2017 deals with “Matching, reversal and reclaim of reduction in output tax liability”. It may be noted that every taxpayer shall furnish details of outward supplies in form GSTR 1; based on such GSTR 1 filed by the suppliers, all recipients would be informed about the ITC available to them, through GSTR 2A; based on such GSTR-2 A, communicated to them, every taxpayer shall file the return GSTR 2 (now suspended). It may be further noted that even if any ITC is not reflecting in GSTR 2 A, the taxpayer can claim ITC on the basis of the invoices available with him, which are not reflected in GSTR 2 A. Such credits would remain unmatched with the corresponding GSTR 1s filed by the suppliers.
Such mismatch would be communicated to both the supplier and recipient and they shall strive to rectify the same to ensure matching. If the ITC remains unmatched, such ITC would be liable to be repaid, by way of addition to output tax liability. Such addition to output tax liability can be reclaimed, if subsequently the supplier rectifies the error and the credit is made to reflect in 2 A. The following points may be noted from Section 42:
Vide GST (Amendment) Act, 2018 a new section 43 A is sought to be introduced in the CGST Act, 2019. Though various provisions of the GST (Amendment) Act, 2018 have come into force from 01.02.2019, Section 18 of the said Act, which introduced Section 43 A is yet to be notified.
For ready reference, Section 43 A is reproduced below.
SECTION 43A. Procedure for furnishing return and availing input tax credit. — (1) Notwithstanding anything contained in sub-section (2) of section 16, section 37 or section 38, every registered person shall in the returns furnished under sub-section (1) of section 39 verify, validate, modify or delete the details of supplies furnished by the suppliers.
(2) Notwithstanding anything contained in section 41, section 42 or section 43, the procedure for availing of the input tax credit by the recipient and verification thereof shall be such as may be prescribed.
(3) The procedure for furnishing the details of outward supplies by the supplier on the common portal, for the purposes of availing input tax credit by the recipient shall be such as may be prescribed.
(4) The procedure for availing input tax credit in respect of outward supplies not furnished under sub-section (3) shall be such as may be prescribed and such procedure may include the maximum amount of the input tax credit which can be so availed, not exceeding twenty per cent. of the input tax credit available, on the basis of details furnished by the suppliers under the said sub-section.
(5) The amount of tax specified in the outward supplies for which the details have been furnished by the supplier under sub-section (3) shall be deemed to be the tax payable by him under the provisions of the Act.
(6) The supplier and the recipient of a supply shall be jointly and severally liable to pay tax or to pay the input tax credit availed, as the case may be, in relation to outward supplies for which the details have been furnished under sub-section (3) or sub-section (4) but return thereof has not been furnished.
(7) For the purposes of sub-section (6), the recovery shall be made in such manner as may be prescribed and such procedure may provide for non-recovery of an amount of tax or input tax credit wrongly availed not exceeding one thousand rupees.
(8) The procedure, safeguards and threshold of the tax amount in relation to outward supplies, the details of which can be furnished under sub-section (3) by a registered person, —
(i) within six months of taking registration;
(ii) who has defaulted in payment of tax and where such default has continued for more than two months from the due date of payment of such defaulted amount, shall be such as may be prescribed.
The rationale for introducing this new Section 43 A is explained as
A new section is being introduced in order to enable the new return filing procedure as proposed by the Returns Committee and approved by GST Council.
The new return filing procedure has been set in motion on a trial basis, where the erstwhile GSTR 1 / GSTR 2 / GSTR 2 A / GSTR 3 / GSTR 3 B would be replaced by one main return GST RET 1 with two Annexures– ANX-1 and ANX-2. The main departure in the new return procedure from the old return procedure is “matching”. It may be noted that under the new return filing procedure, suppliers would upload the invoices on real-time basis and the recipients would be entitled to avail ITC only to the extent of credit which is uploaded in ANX-2, based on ANX-1 filed by the suppliers. It may be noted that return ANX-2 has provision to avail unreported credits, to the extent allowed by rules.
It may also be noted that Section 43 A inter alia excludes the application of Section 42 and once Section 43 A comes into force, Section 42 and the requirement of matching would not be applicable. Matching becomes redundant under the new return procedure under Section 43 A, as credit is allowed only to the extent auto-populated in ANX-2.
This absence of facility to claim missing ITC may pose a genuine problem to the taxpayers. Those small suppliers, who file quarterly returns may not upload their invoices on a real-time basis and thus the recipient would not be able to claim ITC. In order to redress such grievance, sub section (4) of Section 43 A provides for allowing ITC to a certain extent, even if the supplier has not filed his return – ANX-1.
But it should be remembered that Section 43 A is yet to come into effect.
It may be observed that sub-rule (4) of Rule 36 now introduced is in line with Section 43A (4) of the Act. It derives its authority apparently from Section 43 A (4). Further, it may be noted, Section 42 and the requirement of matching is still in force, so long as section 43 A is not notified. But contrary to such requirement of matching prescribed under Section 42, Rule 36 (4) extends ITC benefit up to 20 % of the ITC which matches and thus runs counter to the mandate of Section 42 and hence ultra vires Section 42. If a taxpayer now claims additional ITC to an extent of 20 % of matched credit, is the department precluded from insisting on matching for this 20 % ITC? Not at all. Still, the department could proceed to deny such credit. So, what is the purpose of Rule 36 (4)?
Hence, it is honestly felt that sub-rule (4) of Rule 36 should have been brought into force simultaneously along with the coming into effect of Section 43 A and its premature introduction is ultra vires section 42 of the Act.
Leaving this bigger issue aside, let us now try to understand this sub-rule (4) of Rule 36. CBIC has also issued a circular bearing No. 123/42/2019 Dt. 11.11.2019 explaining the operation of this sub-rule.
The following practical issues would make compliance with this sub-rule, a nightmare.
The sanest advice one can give is –
“Take only what comes to thee,
The balance is not going to flee”.
Do not bother about Rule 36 (4). Take only the credit reflecting in GSTR 2 A, even it may lead to working capital blockades.
G. Natarajan, Advocate, Swamy Associates.
The Ministry of Finance has eased norms of Aadhaar KYC for Opening the Bank Account.
Norms of Aadhaar KYC are eased for opening of bank account and not for the change of address in it, said the Department of Revenue (DoR), Ministry of Finance today while clarifying on Aadhaar KYC use with reference to its notification dated 13.11.2019 on amendment to the Prevention of Money-laundering (Maintenance of Records) Rules, 2005. The DoR said in a categorical statement that its notification is with regard to easing of KYC use for opening of the bank account for the convenience of people who often migrate from place to place for jobs or any other reason and it is not regarding the change of address in Aadhaar card, as has been misreported in various media.
Revenue Secretary, Dr Ajay Bhushan Pandey said, “The amended PMLR purposes for the opening of bank account and not for the change of address in Aadhaar card. If a person has moved residence for purposes of work and needs to use Aadhaar KYC for opening a new bank account or change his bank branch, etc., he can give a self-declaration of new address while retaining the original address on his Aadhaar card”.
Dr Pandey said that the PML Rules amendment makes opening bank account easier for individuals who are living in an address different from their address in Aadhaar. People who submitted the Aadhaar card with a different address as KYC at banks can now submit local address by providing a self-declaration.
He said that with this amendment, giving a self-declaration about a local address or any address other than the one on Aadhaar card will be sufficient as address proof to open a bank account with Aadhaar KYC. This amendment brings inconvenience, especially for the migrant people. For example, if a migrant worker comes from Jharkhand to Mumbai and his/her Aadhaar has Jharkhand’s address, then to open a bank account a self-declaration about his/her local address in Mumbai will be sufficient for Aadhaar KYC.”
DoR sources said that the change has been made through an amendment in the PML Rules and not by way of amending Aadhaar Act/Regulations. So, it does not apply to change of address in Aadhaar card. This amendment has been issued to allow people who have used Aadhaar KYC to open a bank account and want to give an address different from the address in Aadhaar as the current address on a self-declaration basis.
The Government has decided today to extend the due dates of filing of Form GSTR-9 (Annual Return) and Form GSTR-9C (Reconciliation Statement) for Financial Year 2017-18 to 31 st December 2019 and for Financial Year 2018-19 to 31 st March 2020. The Government has also decided to simplify these forms by making various fields of these forms is optional.
The Central Board of Indirect Taxes & Customs (CBIC) today notified the amendments regarding the simplification of GSTR-9 (Annual Return) and GSTR-9C (Reconciliation Statement) which inter-alia allow the taxpayers to not to provide split of input tax credit availed on inputs, input services and capital goods and to not to provide HSN level information of outputs or inputs, etc. for the financial year 2017-18 and 2018-19.
CBIC expects that with these changes and the extension of deadlines, all the GST taxpayers would be able to file their Annual Returns along with Reconciliation Statement for the financial years 2017-18 and 2018-19 in time. Various representations regarding challenges faced by taxpayers in filing of GSTR-9 and GSTR-9C were received on which by the Government has acted in a very responsive manner.
It may be noted that earlier the last date for filing of GSTR-9 and GSTR-9C for Financial Year 2017-18 was 30 th November 2019 while that for Financial Year 2018-19 was 31 st December 2019. Notifications implementing the decisions as above have been issued today.
The Institute of Chartered Accountants of India ( ICAI ) has notified the revised date for the ISA Eligibility Test to be held on 24th November 2019.
Information Systems Eligibility Test scheduled to be held on 09th Nov 2019, which was postponed due to the unavoidable circumstance will now be held on 24th November (Sunday) 2019 from 10:00 AM to 12:30 PM at various exam centres across India.
Candidates will be able to download Admit card from 21st, November 2019, from your login under Exam and Results from tab at https://pqc.icai.org
One thing that comes to mind when someone says the word business is ‘buyers & sellers’. Keeping the nature & scale of business aside, business is always about buying and selling e.g. an e-commerce company sells products to its customers, a barbershop owner offers hair-cutting services to its customers, and so on. What if the customer is not properly billed? If the customer is under-billed, the cost has to be borne by the company and if the customer is over-billed, it can tarnish the reputation of the company.
These problems can be solved if the business owner chooses the right billing software for the business. As the name suggests, billing software is used for invoicing customers for the services/products that are offered by them. If you running a small kirana shop with 2~3 employees, you can still do away with a non-scalable billing software but the situation will be different if you own & manage multiple kirana shops.
Billing software is not only used for invoicing but it is also used for keeping a track of the expenses incurred on employees, office infrastructure, or any other kind of expense. Business accounting software with a core focus on the accounting system can be instrumental in keeping a tab on accounting transactions, generating GST compliant invoices, generating balance sheets, and also managing outstanding ledger-wise & bill-wise.
Many business owners whose turnover is not very large still believe that manual transactions work like a charm for their business. The downside is that the entire process is error-prone and any wrong entry can hurt the earnings from the business. Whether your business is small or big, you should refrain from using manual data entry and invest in the robust yet simple billing software.
Apart from the reason listed above, we share some more promising reasons to opt for billing software:
Whether you are in the business of selling tea or offering business services to large multi-nationals, customer invoice is a must. You do not want to invest in stand-alone billing software that only enables you to print customized bills (with your company’s logo) but does not have any intelligence.
Good billing software not only eases the task of invoice creation but also provides features to extract vital information about projects, customer records, etc.
If you are a large-scale retailer with a growing customer base, you might want to offer discounts to your loyal customer base as they are the evangelists for your brand. Billing software should have the facility to add customer information to the back-end database so that the data can be fetched when billing to the customer.
The billing software should also have integration with the POS (Point of Sale) so that billing can be done accordingly. The features should be customizable so that the business owner can add details about specific customer loyalty programs.
The billing software that only works when connected to the internet can become a nightmare when internet services are down. The ideal billing software should have a fallback mechanism if there is no/minimal network connectivity.
Goods & Services Tax (GST) is still a black-box for many business owners. The billing software should be GST compliant so that you can do accurate GST billing, GST returns, error corrections in GST reports, etc. using the software itself.
It should also have ‘importing & exporting’ of data in .xls or .JSON format since it can ease the process of GST filing.
Most business owners have a look at their business financials on a regular basis. This is just to check the health of the business and whether any corrective actions have to be taken in dire circumstances.
The design of the billing software should be modular so that there is loose integration with the other services in the accounting system.
Billing software integrated with financial accounting software enables access to this information in a seamless manner. It also eliminates the requirement of any other software for tax reporting, setting payment reminders, etc. since all these facilities are available in the billing software itself.
Apart from these features, the billing software should have pre-defined invoicing templates and should be able to handle multiple currencies.
Conclusion
If you are a business owner, you should invest in good billing software since it would ease the job of billing & invoicing. This helps you focus on the core areas through which you can expand your business offerings.
The Central Board of Direct Taxes ( CBDT ) has agreed to refund the late fee if it is wrongly charged.
In a tweet from Income Tax Department’s Official handle said that, “In a few cases, the fee under section 234F has been charged inadvertently in ITRs of Partners due to linkage of filing of Partner’s ITR with the filing of ITR of Firm. The same is being rectified suo moto to remove the late fee charged u/s 234F. The inconvenience caused is regretted”.
The clarification came in after several chartered accountants flagged the issue on social media.
In a few cases, fee under section 234F has been charged inadvertently in ITRs of Partners due to linkage of filing of Partner's ITR with the filing of ITR of Firm. The same is being rectified suo moto to remove the late fee charged u/s 234F. The inconvenience caused is regretted!
— Income Tax India (@IncomeTaxIndia) November 10, 2019
Reversal of the late fee charged under section 234F shall be considered in the computation of amount payable or refund due, as the case may be, on account of processing of the return.
As per the changed rules notified under section 234F of the Income Tax Act which came into effect from 1 April 2017, filing your ITR post the deadline, can make you liable to pay a maximum penalty of Rs 10,000.
To break this down; if you file post 31 August but before December of this year (i.e. 2019), a penalty of Rs 5000 will be levied. For returns filed after December 2019, the penalty limit will be increased to Rs 10,000. However, as a relief to small taxpayers, the IT department has stated that if your total income is not more than Rs 5 lakh, the maximum penalty levied for delay will only be Rs 1000.
For the Assessment year 2019-20, all working partner of a firm whose accounts are required to be audited were supposed to file their ITR by September 30, 2019 which was later extended to October 31. For those living in Jammu & Kashmir and Ladakh, the last date has been further extended to November 30.
For other individual ITR filers, the last date was July 31 but was extended to August 31. All persons including Individual, HUF, company, partnership firms, etc are liable to pay late filing fees under Section 234F, if the ITR is filed after their respective due dates. For those filing ITR after the due date but within 31 December are charged ₹5,000 and the penalty increases to ₹10,000 January onwards.
