Unhappy with the present revenue collections, Shri Sushil Chandra, the Chairman of the apex direct tax body, the Central Board of Direct Taxes ( CBDT ) has asked the income tax officers to “maximize” their efforts and conduct targeted surveys and file court cases against the tax evaders.
The CBDT Chief has written a letter to the higher officials of the department asking them to pull up their socks as only three months are left for the current financial year to close on March 31.
“On review of the trends of growth under different minor heads, it is noted that the growth in the collection under regular assessment tax (recovery from arrear and current demand) is extremely low at 1.1 percent as compared to 15.6 percent growth during the corresponding period last year.
“Most of the regions are, in fact, showing negative growth under regular assessment tax. This is a matter of serious concern and concerted efforts are now required to be made to drive up recovery from arrear and current demand,” the CBDT Chief said.
Talking about direct tax collections, Chandra said that by the end of December 2018 the growth rate has been 13.6 percent as against the target of 14.7 percent.
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“The position of growth in gross collections is marginally better at 14.1 percent but still below achieving the budget estimates of Rs 11,50,000 crore,” he said.
The CBDT chief also suggested some “strategies” to be adopted and implemented to achieve the targets.
He asked the officers to conduct “targeted recovery surveys in potential cases where a high amount of recovery is likely”.
“Sale of attached properties in appropriate cases by tax recovery officers to recover confirmed demand where normal measures of recovery have not yielded results” to be deployed, undertaking action to recover outstanding dues from companies and filing prosecution complaints in courts against those people who are willfully evading payment of outstanding taxes.
In the letter, the CBDT chief further directed the officers to train their scanner on tax deducted at source (TDS) collections and launch prosecution against those who are at “substantial default”. They were also directed to “verify advance tax payment” by those who sell properties and monitoring of dividend distribution tax.
The taxman has also been asked to timely complete regular assessments (non-time-barring) in cases where demand is likely to be raised and collected during the current fiscal.
“Other strategies depending upon the specific characteristics of the region should also be adopted so as to increase collections and ultimately achieve the budget target,” Chandra directed.
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The Central Government is planning to collect the Know Your Customer ( KYC ) details of the companies, Chartered Accountants, Cost Accountants and Company Secretaries, reported new Indian Express.
Recently, Government has introduced an initiative for directors of companies last year.
A senior Corporate Affairs Ministry official said that the exercise would help in having a “sanitised list” of companies and professionals.\
Last year, the government had initiated KYC against directors of companies. However, against 3.3 million individuals who had Director Identification Numbers (DINs), only little over 1.6 million have complied with the KYC requirement — almost half the number. DIN is a unique number allotted to individuals eligible to have directorship on the Boards of registered companies. The form should be filed by every Director using his own DSC and should be duly certified by a practising professional (CA/CS/CMA). Filing of DIR-3 KYC would be mandatory for Disqualified Directors also.
Ever since the GST regime was rolled out in India, there has been a sense of relief among the taxpayers. Not only has the implementation of GST helped remove the cascading effect of various taxes, it has also aided the Government in adding numerous taxpayers across the nation and reducing tax evasion. But what has been the most significant impact is the fact that it has created opportunities – opportunities in the form of ease of doing business, cross-border trade, added employment prospects, and many more. No wonder India’s GDP growth rate is expected to be 7.36% in 2018 and the further rise in the years to come while the global GDP growth rate is hovering between 3% – 4%.
Recent developments with regards to GST implementation have now made it easier for companies to establish themselves in the growing Indian economy. The start-up ecosystem is also expected to benefit a lot from the ease of GST registration, tax filing, and compliance.
5 ways Start-ups will benefit under GST:
Transparent taxation system
Everything from GST registration to tax payments happens on the official online portal, GSTN (GST Network). Thus, there is no unnecessary human interference and scrutiny involved. It was challenging earlier on to explain the intricacies of a transaction to various tax officials from the VAT, Excise, CST and other departments. Also, there was a scope for corruption resulting in frustration for the business owners. GST is entirely paperless and transparent helping businesses stay away from these issues. Furthermore, the Government has recognized numerous GSPs (GST Suvidha Providers) across the country to help taxpayers register for GST, file taxes, and be GST compliant.
Reduced cost of compliance
With the subsuming of various taxes into one single tax – GST – there is less complexity in terms of the number of taxes to file. Hence, there is no need for start-up organizations to assign a separate department to take care of the taxation requirements. Of course, understanding GST and its dynamic rules seems like a tough task at this moment, but being compliant will cease to be a gigantic task once the tide settles in.
Provision for availing tax credit
In the pre-GST era, setting up a manufacturing facility was a capital and tax-intensive activity. Acquiring machinery, furniture, and office equipment required substantial capital and taxes to be paid in advance. While the need for capital still remains, start-ups have the option of availing input tax credit on the taxes paid. This comes as a relief for companies that are just starting up and have limited budget for their operations. The input tax credited can be put back into their working capital.
Reduced logistics cost
Long queues of logistic vehicles at state borders have been very common in the past. With all the state governments having different tax structures in terms of Octroi and CST for inter-state transportation of goods, implementation of GST comes as a much welcome move. The requirements for Octroi and CST have been done away with, and GST has taken over all the predominant tax requirements, whether it be on intra-state or inter-state transportation. Further, reduced taxes on transportation also reduces the overall cost of the goods. This makes it easier for start-ups to begin providing products across state boundaries right from the word GO.
Better expansion prospects
Most start-ups used to restrict their offices and operations to one particular state in order to save on the taxes and complexities arising out of setting up and operating multi-state offices. This limited their expansion capability giving them access to a much smaller customer-base and fiercer competition. While GST registration is still required in all the states they have offices in, there is no need to register for GST if they just sell their products in other states of the country. This enables them to reach a wider audience and offer their products/services across the nation, allowing them to compete better with the other established companies.
While GST implementation is bringing in a plethora of advantages, there is a fair share of disadvantages too that the start-ups will face. The multi-tier GST slabs, complexities in claiming input tax credit, and increased frequency of filing taxes will deter their operational efficiency until an equilibrium is reached. Access to ample start-up and working capital has always been a cause of concern for them. While the banks may continue to mitigate risks by asking for enhanced collateral or traditional equity, several trade finance organizations and Fintech companies are giving them easy, low-cost access to funds, helping them concentrate better on their core competence.
Amit Parmar is a Senior Vice President, Vayana Network, GST Platform.
The provisional figures of Direct Tax collections up to December, 2018 show that gross collections are at Rs. 8.74 lakh crore which is 14.1% higher than the gross collections for the corresponding period of last year.
Refunds amounting to Rs.1.30 lakh crore have been issued during April, 2018 to December, 2018, which is 17.0% higher than refunds issued during the same period in the preceding year. Net collections (after adjusting for refunds) have increased by 13.6% to Rs. 7.43 lakh crore during April – December, 2018. The net Direct Tax collections represent 64.7% of the total Budget Estimates of Direct Taxes for F.Y. 2018-19 (Rs. 11.50 lakh crore).
So far as the growth rate for Corporate Income Tax (CIT) and Personal Income Tax (PIT) is concerned, the growth rate of gross collections for CIT is 14.8% while that for PIT (including STT) is 17.2%. After adjustment of refunds, the net growth in CIT collections is 16.0% and that in PIT collections is 14.8%. It is pertinent to mention that collections of the corresponding period of F.Y. 2017-18 also included extraordinary collections under the Income Declaration Scheme (IDS), 2016 amounting to Rs.10,844 crore (Third and last instalment of IDS), which do not form part of the current year’s collections.
An amount of Rs. 3.64 lakh crore has been collected as Advance Tax, which is 14.5% higher than the Advance Tax collections during the corresponding period of last year. The growth rate of Corporate Advance Tax is 12.5% and that of PIT Advance Tax is 23.8%.
The Bombay High Court in the case of Ricoh India Ltd. v. State of Maharashtra held that the rate of tax applicable on the sale/lease of the multi-functional printers would be 12.5% as opposed to 4% claimed by the appellant.
The appellant is engaged in the business of importing and selling the electronic and Information Technology products such as printers, computers, projectors, etc. and is a registered dealer under the MVAT Act. The Commissioner of State Tax in its order held that the rate of tax applicable on the sale/lease of the multi-functional printers would be 12.5% as opposed to 4% claimed by the appellant. Furthermore, it was held that the rate of tax on parts, drums, etc. would be 12.5%. The appellant aggrieved by the order appealed before the Maharashtra State Tax Tribunal which has upheld the earlier order.
The issue before the High Court was whether the multifunction printers are classifiable as “input units” or “output units” or “automatic data processing machine” or units thereof or as other units of the automatic data processing machine.
The appellant contended that the products in question are multi-functional printers sold and marked as printers with additional capacities such as copying, fax and scanning. Any person, while making a purchase of this article, understands it to be a printer with some incidental and additional capacity. The buyer, instead of requiring to invest in four separate machines, viz. printer, scanner, fax and copier, can obtain all these capabilities by purchasing a multi-functional printer which according to the appellant is classifiable under Entry 84.71 of the Notification dated April 1st, 2005 as input or output unit. Relying upon the definition of terms ‘input unit’ and ‘output unit’ under the dictionaries of science and technology, it was submitted that the terms would have to be interpreted in their ordinary sense.
Furthermore, it is submitted that the product is an “automatic data processing machine” or units thereof or as other units of automatic data processing units. Reliance was placed on Note 1 of the IT Products Notification to interpret the meaning of the above phrases in the light of the explanatory notes issued by the Customs Co-operation Council, Brussels. It was predominantly submitted that in accordance with the dominant nature test, these products must be classified under the Entry satisfying their primary character which in this case is printing. Also, that specific entry must prevail over the residuary entry.
The Court after considering the submissions of both the parties, relying upon the earlier decisions, citing relevant paragraphs was of the view that the multi-functional machines or printers can be termed as computer peripheral if its principal or sole purpose is to be attached and function as a computer ancillary. A multi-functional machine will be and qualify as a computer peripheral when its main/predominant purpose is to scan documents, load data or work as an input device of the computer or work as an output device to take printouts from the computer. This would require elucidation and examination of the factual matrix in each case and the machine in question on the case to case basis.
The Court distinguished the facts of the case relied upon by the appellant where the issue If Xerox machines are multi-functional machines performing the functions of printer/fax machines, copier and/or scanner and therefore required to be classified as printers in automatic inter-processing machines under Chapter heading 8471.60, then, the issue is materially different than the one falling for our consideration.
Hence, the division bench comprising of Justices S.C. Dharmadhikari and B.P. Colabawalla answered the questions in favor of the revenue attracting a rate of duty at 12.5%.
Subscribe Taxscan Premium to view the JudgmentThe Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that no income tax deduction can be given to the law firm, Luthra and Luthra for the expenses incurred by it for the pleasure tour by the counsels and their family members.
The Assessing Officer traveling expenses of Rs. 1,99,18,038/- claimed by the firm for foreign traveling expenses. It was claimed that the assessee firm provides services worldwide and for that purpose, it is needed to visit various places for client meetings, rendering services outside India, client development etc. the Assessing Officer noted that there is a personal element involved. He held that the assessee failed to establish that traveling expenses were incurred exclusively for the purpose of business and accordingly he disallowed 10% of the foreign traveling expenses, which was worked out to Rs. 19, 91, 803/-.
On the first appeal, the CIT(A) observed that the assessee claimed Rs. 30 lakhs for an advance made to M/s Tomas Cook for traveling by the Counsels of the firm and their family members to Beijing in the month of April 2010 which is not allowable under the IT Act.
Before the Tribunal, the assessee claimed that expenses are incurred for annual day event of the firm, but no documentary evidence of any kind has been produced before us, which could establish that the trip to Beijing was in relation to the business activity of the assessee.
Dismissing the claim, the Tribunal noted that the expenses have been incurred in relation to the extension of the stay, cancellation of the air ticket, bar party, photographers, smoothies ordered by Mrs. Gayathri Luthera in hard rock etc.
“Thus, in our opinion, the tour was for the entertainment of the counsels and their family members and it has not served any business purpose of the assessee firm. In the case law relied upon by the Ld. Counsel, disallowance was in relation to staff welfare expenses and for arranging a get-together of the employees along with the training session. In the instant case nothing has been brought on record that the trip was in relation to any business activity of the assessee firm, and thus ratio of the case law relied upon by the Ld. counsel is not applicable over the facts of the instant case. The assessee has failed to establish that the expenses were incurred wholly and exclusively for the Section 37(1) of the Income Tax Act, purpose of the business and thus same is not allowable under ” the Tribunal said.
Subscribe Taxscan Premium to view the JudgmentThe Income Tax Appellate Tribunal ( ITAT ), Bengaluru bench has held that the benefit of Section 54F of the Income Tax Act is not available in respect of the purchase of land after the period of one year of the sale of the old capital asset.
The assessee claimed deduction under section 54F of the Income Tax Act by claiming that the assessee’s case falls within the purview of Section 54F(1) as the assessee has carried out the construction which includes the purchase of land. However, the claim was rejected by the Assessing Officer by finding that the said land was acquired by the assessee before one year of sale of the capital asset i.e. 01.04.2012.
On appeal, the first appellate authority confirmed the said order. Aggrieved by the order. The assessee approached the Tribunal on the second appeal.
Dismissing the appeal, the Tribunal noted that the claim under the last clause of 54F would only fall if the assessee within a period of three years after the date of transfer had constructed one residential house in India.
“Admittedly land was purchased on 17.04.2010 and hence this clause would also not be applicable for the purposes of claiming the benefit of section 54F as the land was purchased prior to one year whereas land required the construction of residential house after 3 years of the sale of the capital asset. In our understanding, the construction or acquisition of the residential house should have taken place within a period of three years after the transfer of the capital asset. The capital asset was transferred on 01.04.2012 and the land was purchased on 17.04.2010 ie., one year prior to the date of transfer and hence for the purposes of availing the benefit u/s.54F (3rd exemption), as mentioned hereinabove, it is necessary that the house should have been constructed within a period of three years from the date of transfer of the capital asset. Purchase of the land was prior to one year hence the case of the assessee does not fall under any of the three exemptions available to the assessee u/s.54F,” the Tribunal said.
“In view of the above, we dismiss the appeal of the assessee and hold that the assessee is not entitled to the benefit of Section 54F in respect of the investment made by the assessee in purchasing the capital asset (land) prior to the period of one year from the sale of capital asset, as the said purchase of the land was not within a period of one year prior to the sale of the capital asset or falling in any of the categories in which the assessee was entitled to claim exemption u/s.54F under various categories,” the Tribunal added.
Subscribe Taxscan Premium to view the JudgmentThe Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) has held that mere non-production of directors of the Company is not a ground to made addition under section 68 of the Income Tax Act, 1961.
The assessee was aggrieved with the order of the Assessing Officer who added Rs. 1,85,00,000/- on account of accommodation entries under section 68 of the Income Tax Act. The assessee contended that the addition made u/s 68 of the Act is for mere reason of non-production of directors in person of shareholder companies same cannot be a justified ground to draw adverse inference u/s 68 of the Act where those shareholders are found to be existing and identified in detail as summons has been duly served on them.
On the second appeal, the Tribunal noted that the assessee has filed all evidence like share application form, board resolution confirming investment made, confirmation of share capital raised, Share certificate, income tax particulars of shareholders, bank statement of shareholders and form 2 for allotment of shares along with their audited final a/c in support of share capital received to establish its case.
The Tribunal further finds that nowhere any shareholder company was found to be fictitious or non-existing rather all shareholder companies are duly found to be existing as summons have been served on them. It was noted that no cogent material is brought on records in assessment order by Ld AO to demolish the copious evidence furnished by the assessee.
“We find that Ld AO nowhere made any independent enquiry from concerned and competent AO of shareholder companies etc. We find that only on basis of investigation wing report (unconfronted to assessee) acting purely on borrowed satisfaction without any independent application of mind addition has been made u/s 68 by Ld AO. We find that nowhere in entire assessment order Ld AO framed his own independent objective and rational “opinion” on basis of material placed on record within the meaning of the provision of section 68 of the Act. Further Ld CIT-A has also simply and easily endorsed finding of Ld AO without making any independent efforts on inquiry on his part, which finding of Ld CIT-A also do not objectively consider the various submissions and arguments of the assessee. So, we have no hesitation in accepting Ld AR’s argument that for the mere reason of non-production of directors in the person of shareholder companies same cannot be a justified ground to draw adverse inference u/s 68 of the Act. We are supported by decisions relied on Ld AR as mentioned above,” the Tribunal said.
Subscribe Taxscan Premium to view the JudgmentThe Kolkata bench of the Income Tax Appellate Tribunal (ITAT) has held that the capital gain exemption under Section 54F of the Income Tax Act, 1961 is allowable in case of possession handed over as part performance of the Contract.
The assessee was the owner of a 1/4th share in a residential house in Gurgaon. The assessee transferred the above asset by way of registering a general power of attorney supported by a possession affidavit of even date in favor of the purchaser. The registration of the sale of the said property had not taken place.
The Assessing Officer denied benefit of section 54F of the Act to the assessee by relying on the Apex Court decision in the case of Suraj Lamp & Industries Ltd. vs. State of Haryana wherein it was held that the registration of general power of attorney cannot convey the title nor does it tantamount to a valid mode of transfer of immovable property.
The issue before the Tribunal was whether at the time of claim of exemption u/s 54F of the Act was already in possession of two residential properties i.e., a house in Gurgaon and a penthouse.
The Tribunal allowed the contentions of the assessee and held that the judgment of the Supreme Court is prospective and does not affect transactions that have already taken place.
“As this transaction was executed in the year 2003 and possession was handed over, the judgment in the case of Suraj Lamp & Industries Pvt. Ltd. (supra) will not apply as the judgment has come in the year 2012,” the Tribunal said.
Adding that the assessee is eligible for section 54F benefit, the Tribunal said that “Even otherwise, Section 2(47) of the Act, lays down that transfer would include a transaction allowing possession of an immovable property in part performance of a contract of a nature referred to in Section 53A of the transfer of Property Act. In the case on hand, part performance of a contract has taken place and possession has been handed over. Under these circumstances, the claim of the assessee that her 1/4th share in the house property in Gurgaon has been transferred has to be accepted. Hence we hold that the assessee has only one house property as on the date of sale of the plots of land giving rise to long-term capital gain. Hence this issue is decided in favor of the assessee.”
Subscribe Taxscan Premium to view the JudgmentThe Jaipur bench of the Income Tax Appellate Tribunal (ITAT) has held that no tax is deductible under Section 194H of the Income Tax Act, 1961.
The assessee is deriving income from distributorship of Idea Cellular Limited for sale of SIM cards and mobile recharge coupons. During the course of assessment proceedings, the Assessing Officer noted that in the P&L account, the assessee has shown commission income of Rs. 16,03,103/- which has been received from the principal, Idea Cellular Limited. The officer invoked the provisions of Section 40(a)(ia) of the Act and disallowed the claim of deduction of Rs. 07,04,430/- on the ground that the payment of commissioner of the retailers/dealers was liable to TDS U/s 194H of the Income Tax Act, 1961.
On the second appeal, the Tribunal noted that the commission of Rs. 16,03,103/- received from Idea Cellular Limited after deducting TDS.
It was also noted that the assessee has shared the said commission with the dealers/retailers to the tune of Rs. 7,04,430/-, thus the Assessing Officer has not disputed the fact of commission received by the assessee was shared with the dealers/retailers as per the agreement between the Idea Cellular Limited and the assessee as well as the dealers/retailers.
“It is also not in dispute that the amount of total commission of Rs. 16,03,103/- has already suffered TDS at the time of payment. Thus, it is not a commission paid by the assessee in the capacity of principal to the retailers/dealers as an agent of the assessee but the commission is originally paid by the Idea Cellular Limited who is acting as a principal and all other parties being distributor, dealers and retailers are receiving the commission from Idea Cellular Limited. It is only for the sake of completeness of the entries in the books, the commission is rooted through the assessee’s books of account. We further note that the ld. CIT(A) for the A.Y. 2012-13 and 2013-14 has considered an identical issue and decided the same in favor of the assessee,” the Tribunal said.
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The Disciplinary Committee of the Institute of Company Secretaries of India (ICSI) has found a Company Secretary guilty for professional misconduct since he suppressed the details of his enrollment as Advocate with the Bar Council of Punjab & Haryana.
The allegations against the Company Secretary were that he simultaneously being enrolled as an Advocate on the Rolls of the Bar Council of Punjab & Haryana while holding Certificate of Practice of the ICSI. It was alleged that he furnished false declaration to the institute in Form D for obtaining the Certificate of Practice of the institute by suppressing the material fact of his having been enrolled as an Advocate on the Rolls of any Bar Council, and wrongfully obtaining Certificate of Practice on the basis of false declaration, and thereby committing the fraud.
The respondent admitted that he was enrolled as an Advocate with the Bar Council of Punjab and Haryana. However, he contended that he had never been in practice as an Advocate during his entire career so far. He has further contended that the membership of the Bar Council of Punjab & Haryana was for the purpose of accessing the library and basic facilities and then he applied for suspension before seeking the aforesaid certificate does not mean that the person is in active practice. The Respondent stated that he has made an application dated 05-08-1997 for suspension of his name from the rolls of Advocates to the Bar Council of Punjab & Haryana.
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The Disciplinary Committee, after hearing both the sides, found that a false declaration was made by the Respondent in Form-D for the purpose of obtaining the Certificate of Practice of the ICSI and the Respondent evidently had made a false declaration in the said Form D.
The order further said that “the provisions of the Company Secretaries Act, 1980, the Regulations and Rules made thereunder; the legal opinions sought in the after, the prima-facie opinion, Further investigation reports of the Director (Discipline) and totality of the facts and circumstances of the matter, held that Respondent has failed to establish that he was not enrolled as an Advocate on the Bar Council of Punjab and Haryana on 26th August, 1997 i.e. the date on which he made the declaration in Form D. Further, the Respondent has failed to establish that his declaration in Form D about non-enrolment as an Advocate is true and correct.”
Accordingly, the Disciplinary Committee held that the Respondent is guilty of Professional Misconduct under clause (1) and clause (3) of Part II of the Second Schedule to the Company Secretaries Act, 1980 for making false declaration in his application in Form ‘D’ and violation of the Regulation 168 of the Company Secretaries Regulations, l982.
Subscribe Taxscan Premium to view the JudgmentShri Shiv Pratap Shukla, Minister of State for Finance in a written reply to a question in Lok Sabha last day said that the total net indirect tax collection (inclusive of CGST, IGST, and GST-Compensation Cess) in the current financial year during April-November, 2018-19 is Rs. 6,12,653.47 crore .
The revenue target is set for the full financial year, the actual indirect tax collection for 2018-19 will be known after completion of the current financial year. The Budget Estimate(BE) for indirect taxes revenue (inclusive of CGST, IGST, and GST-Compensation Cess) for FY 2018-19 has been fixed at Rs. 11,16,000 crore.
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Various administrative steps have been taken by the Government to achieve the set target for this financial year like; GST rate rationalization to improve the tax compliance, mandatory e-filing, and e-payment of taxes, penalty for delayed payment, extensive use of third party sources such as State VAT Department, Income Tax etc. for compliance verification, regular enforcement & compliance verification of tax returns, taxpayer education and media campaign etc.
The Bombay High Court has held that when the settlement of shares was done by the settler of Trust by way of employee stock option plan and not a direct purchase from the market, then income generated therefrom cannot be construed as ‘business income’ of trust.
The assessee-Trust sold certain settlement shares and earned an income of Rs.14,69,09,814/- therefrom. The AO taxed the same as Assessee’s business income, rejecting Assessee’s contention that the sale of settlement shares would give rise to capital gains.
On the second appeal, the Tribunal held that the settler of the Trust had transferred 6 lacs equity shares of one M/s. Tech Mahindra to the Trust. 96% of these shares were allotted to the settler by way of Employees Stock Option Plan. Remaining 4% or 26,600 shares were purchased by him. It was noticed that the bulk of shares i.e. 96% were allotted by way of Employee Stock Option Plan and such shares were settled in the Trust only after holding shares for nearly three years. The Tribunal thus noted that, a majority of the shares were not purchased by the settler from the market and whether the shares received by way of Employee Stock Option Plan or purchased from the market, were held by the settler for a long period of time.
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The Tribunal refused to treat the amount as business income for the reason that the Department did not question the existence of the Trust, as being sham or bogus and the principal object of the Trust was to ensure an effective succession planning mechanism and intergenerational transfer of Trust corpus and income.
The bench comprising Justices Akil Kureshi and M S Sanklecha noted that the question of whether the sale of shares by Assessee would invite capital gain or would be business income is a mixed question of law and facts.
“Whether the Assessee is engaged in the business of buying and selling of shares or is a mere investor, would depend on the range of factors. In the present case, the Tribunal has noted the relevant facts and analyzed such facts in proper perspective. To reiterate, the shares in question were not purchased by the Trust at all. They were settled by the settler of the Trust. The Settler himself had not purchased the majority of these shares but had received by way of Employee Stock Option Plan. The shares so received, as well as small numbers of shares purchased by the settler, were held by himself for over two years before settling them in the Trust. No question of law therefore arises,” the bench said.
Subscribe Taxscan Premium to view the JudgmentThe Central Government has approved the new initiative, i.e., GST Account Assistant Scheme in partnership with the Institute of Chartered Accountants of India ( ICAI ), said ICAI chief, CA Naveen N D Gupta.
“Accountancy and Finance services, one among 12 Champion Services Sectors, have been the core of ICAI’s profile and its contribution to the nation. To enhance the availability of trained manpower in every corner of the country and facilitate GST implementation at an affordable cost, Government of India has recently approved the scheme of creating the cadre of GST Account Assistant under the Proposal of Ministry of Corporate Affairs for ‘Accounting and Finance Services. This scheme will be administered by the ICAI-ARF.”
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The Ministry of Corporate Affairs (MCA) has launched a GST Account Assistant Scheme with a view to enhance the availability of trained manpower in every nook and corner of the country and facilitate compliance with GST Statute to the small and medium enterprises and small and medium practitioners at an affordable cost.
He earlier said that the MCA had discussed with Accounting Research Foundation (ARF) of ICAI seeking its support in its initiative to create a cadre of GST Account Assistant at the ground level. ARF of ICAI had submitted the proposal in this regard for consideration of the Ministry.
The Income Tax Appellate Tribunal (ITAT), Delhi bench has held that the Oil and Natural Gas Corporation ( ONGC ) is not liable to deduct tax on making payments to a US Company towards third-party certification of Reserves as the same cannot be deemed as Fee for technical services.
The assessee- Company credited a sum of USD 5,62,500/-to the account of DeGolyer and MacNaughton, USA (non-resident) towards third-party certification of Ultimate Reserves and Reserves of 68 fields of ONGC. When the assessee applied for an order under section 195(2) of the Act to the Assessing Officer for allowing it to release payments to the non-resident i.e. DeGolyer and MacNaughton, the USA without deduction of tax at source, the Officer directed them to deduct 15 percent tax on the gross contractual payment as per the India-USA Double Tax Voidance Agreement (DTAA).
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Before the appellate authorities, the assessee claimed that the services availed were not in the nature of technical services as defined under the India-USA DTAA.
According to the assessee, no technical knowledge was made available by way of the services and therefore, the conditions of article 12(4)(b) of the Indian USA DTAA are not fulfilled.
On the second appeal, the Tribunal relied on the orders of the Tribunal in the case of the assessee itself for the assessment year 2012-13 and assessment year 2011-12 on the issue of deduction of tax at source in the case of the same non-resident.
Relying on the above orders, the Tribunal held that no technical knowledge, skill, know-how etc was made available to the assessee and thus the payment in question cannot be termed as a fee for included services under India USA DTAA.
Subscribe Taxscan Premium to view the JudgmentThe National Anti-profiteering Authority (NAA) has dropped the anti-profiteering charges against Car manufacturers, Maruti Suzuki.
The Kerala Screening committee on anti-profiteering had referred the case to the NAA alleging that the respondent-Company had not passed the GST rate cut benefit on the sale of the Wagon R, Swift, and Alto cars.
After the investigation, the DGAP stated that the company had changed the net base price (after discount) and charged effective rate of tax post GST rollout. It was further observed that the increase in the net base price was very negligible and the same was due to the reduction in discount.
“We have carefully considered the DGAP’s Report and the documents placed on record to examine whether there was any reduction in the rate of tax during the implementation of the GST and whether the benefit of the reduction in the rate of tax was passed on or not to the recipient as provided under Section 171 of the CGST Act, 2017. First of all, it is observed that the rate of tax was 15.63% in the pre-GST era which was increased to 29% in the post-GST era, as could be seen from the tabulation shown in Table-B above. Secondly, from the invoices referred above, it is evident that before discount base prices of all the products had remained the same. These facts have also not been disputed by the representative of the Applicant No.1. Hence the provisions of Section 171 of the CGST Act 2017 are not attracted. 8. Based on the above facts it is clear that the Respondent has not contravened the provisions of Section 171 of the CGST Act, 2017 and hence there is no merit in the application filed by the above Applicant and the same is accordingly dismissed.”
Subscribe Taxscan Premium to view the JudgmentShri Shiv Pratap Shukla, Minister of State for Finance in a written reply to a question in Lok Sabha last day said that the GST Council has met 31 times so far. Till the 30th GST Council Meeting, a total of 918 decisions have been taken and 294 notifications have been issued by the Central Government. In the 31st GST Council Meeting held on 22nd December 2018, a total of 29 decisions were taken which have been implemented through the issuance of the requisite notifications and Circulars.
Also Read: GST Council Meeting to be held on 10th January 2019 in New Delhi
Based on the representations received from various stakeholders, including trade and industry, certain amendments were recommended by the GST Council. Consequently, the Central Goods and Services Tax (Amendment) Act, 2018, the Union Territory Goods and Services Tax (Amendment) Act, 2018, the Goods and Services Tax (Compensation to States) Amendment Act, 2018 and the Integrated Goods and Services Tax (Amendment) Act, 2018 received the assent of the Hon’ble President of India on 29.08.2018. The GST Council in its 31st meeting held on 22nd December 2018 decided that the said amendment Acts would be brought into force with effect from 1st February 2019.
The Institute of the Chartered Accountants of India ( ICAI ) has sent a notice to two news media, one for publishing a cartoon mocking the Chartered Accountants and second for publishing an article disreputing the CA profession.
In the first instance, the media company published a cartoon under the category ‘iToons’, which according to the Institute, made a mockery of the CA Profession.
“It is extremely unfair and unjust to portray the Chartered Accountants in poor light which will create a negative impact on the minds of the general public towards the profession of the Chartered Accountants. Such publication has caused irreparable loss to the prestige of this great institution which is carefully built by illustrious visionaries by this profession.”
Also Read: Chartered Accountants Act won’t be Repealed due to NFRA, says Official
In the second case, a leading newspaper published an article stating that the Chartered Accountants prefers to directly meet the tax officials and conspiracy with them demand huge amounts from the taxpayers.
“The aforesaid publication has brought disrepute to the profession and tarnished the image of the profession of Chartered Accountants.”
“The aforesaid news item is far from the truth. It is extremely unfair and unjust to state that Chartered Accountants are in conspiracy with tax officials to demand huge amounts from the taxpayers. The statement that the State tax anti-corruption bureau has caught chartered accountants and tax officials in the scam is not based on facts and evidence. This news item is, therefore, baseless and incorrect.”
The CA Institute also directed the two media to publish an unconditional apology.
The Central Board of Direct Taxes ( CBDT ) has issued a circular on the applicability of Tax Deduction at Source (TDS) from salaries.
The Board had issued a Circular on 5th December 20 whereby the rates of deduction of income-tax from the payment of income under the head “Salaries” under Section 192 of the Income-tax Act, 1961, during the financial year 2017-18, were intimated.
Also Read: Court cannot direct State to amend Tax Laws for giving Deductions
The present Circular contains the rates of deduction of income-tax from the payment of income chargeable under the head “Salaries” during the financial year 2018-19 and explains certain related provisions of the Act and Income-tax Rules, 1962. The relevant Acts, Rules, Forms, and Notifications are available at the website of the Income Tax Department- www.incometaxindia.gov.in.
According to the circular, where the total income does not exceed Rs. 2,50,000/-, the nil tax rate is applicable. For income from 2,50,000/- to Rs. 5,00,000/-, 5% tax rate would be payable. If the income from 5,00,000/- to Rs. 10,00,000/-, the rate would be Rs. 12,500/- plus 20 percent of the amount by which the total income exceeds Rs. 5,00,000/-. For income exceeding 10 lakhs, Rs. 1,12,500/- plus 30 percent of the amount by which the total income exceeds Rs. 10,00,000/- is payable.
Subscribe Taxscan Premium to view the JudgmentThe Central Bureau of Investigation has arrested an Income Tax Officer(ITO), Income Tax Department, Fatehabad (Haryana) and two private persons in a bribery case of Rs.50,000/-.
A case was registered against the Income Tax Officer and a CA(Private person) on a complaint alleging that the ITO, Income Tax Department, Fatehabad has demanded bribe of Rs.75,000/- from the complainant in a matter of non filing of Income Tax Return for the money deposited in his HDFC Bank account during the financial year 2010-11. It was also alleged that the demand was to be fulfilled through a CA(Private person).
During investigation, CBI laid a trap and caught the accused while accepting the bribe of Rs.50,000/- from the complainant. Thereafter, all the accused were arrested.
Searches were conducted at the residential & office premises of the accused. Documents of properties worth Rs.2 crore (approx) belonging to the Income Tax Officer, and incriminating files were recovered.
The arrested accused will be produced today before the Competent Court at Panchkula (Haryana).
The Goods and Services Tax ( GST ) department has unearthed a racket issuing fake GST invoices for fraudulently availing input tax credit under the new tax regime.
The CGST Ahmedabad-South Commissionerate officials arrested a 38-year-old city-based businessman for issuing bogus invoices worth Rs 175 crore for availing ITC worth Rs 32 crore fraudulently. He allegedly opened over 20 firms using personal details and documents of various individuals to avail benefits under GST fraudulently.
The Preventive Wings officials have confirmed that the arrest was made after incriminating documents and evidence were gathered during searches conducted at various locations based on intelligence and information gathered.
The arrested person has been sent for judicial custody till January 16, 2019, by the Additional Chief Metropolitan Magistrate, Ahmedabad.
Also Read: GST Council Meeting to be held on 10th January 2019 in New Delhi
Mishawala’s modus operandi involved payment of lump-sum amounts to individuals every month in return for using their documents and running firms in their names. After obtaining the documents from such individuals, he took office space on rent for GST registration and also opened bank accounts in the name of such individuals.
“After acquiring the KYC documents, a bank account was opened and rent agreement was completed, and subsequently, GST registration was obtained. Once the GST registration was obtained, he used the GSTIN numbers to generate invoices and pass on GST credit without any actual movement of goods or any financial transactions. All regulatory filings were done by Mithawala who knew all details of the business,” the commissioner stated.
“It also came to light that the accused had issued invoices for outward supplies to enable various purchasers, who were duly registered in GST to claim input tax credit without receipt of goods and thus facilitated to claim ITC fraudulently. This quantum of evasion and the gravity of the offense is cognizable and non-bailable under the CGST Act, 2017 under the provisions of Section 132,” the commissionerate further stated while adding that investigations were still on since involvement of other individuals operating similar fraudulent firms could not be ruled out.
