CBIC bars Tax Officers from attending any Webinars organised by non Govt entities [Read Circular]

The Central Board of Indirect Taxes and Customs ( CBIC ) has barred Tax Officers from attending any webinars organized by non-Government entities.

In a circular issued by CBIC said that, No officer may be allowed to attend conferences/ seminars/webinars organized by non-government entities as resource person without the prior permission of the Secretary, Department of Revenue, Ministry of Finance, unless it is organized by Government agencies.

The CBIC also said that, the instruction may be brought to the notice of all officers for strict compliance, without any exception.

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Petition in Gujarat High Court challenges the implementation of Rule 96B of the CGST Rules, 2017 [Read Petition]

The Gujarat High Court to hear the special leave application requesting to stay the implementation of rule 96B of the CGST Rules, 2017.

The Petitioner, M/s Bhawani Textile challenged the validity of impugned Rule 96B of the Central Goods and Services Rules, 2017 and the Gujarat Goods and Services Rules, 2017 inserted by the Central Board of Indirect Taxes and Customs (CBIC) by way of a Notification no. 16/2020 dated March 23, 2020, on the ground that it has specified a condition of receipt of export proceeds post refund of unutilized input tax credit (ITC) or integrated tax on export of goods which is completely arbitrary, illegal and without the authority of law and further violates Article 14 and Article 19 of Constitution of India.

The petitioner stated that section 54 of the CGST Act, 2017 which deals with a refund of tax, through its sub-section (3) allows a registered person to claim a refund of the unutilized input tax credit at the end of a tax period. It is further stated that as per the provisions of the statute, on satisfying the only criteria for export of goods, a registered person can claim the refund on such export of goods under section 54 of the CGST Act, 2017 which is made without payment of tax under bond or LUT.

No condition has been prescribed in the statute which needs to be fulfilled post receipt of claim for refund under section 54 of the CGST Act, 2017.

The petitioner prayed before the court to issue an appropriate writ, order, or direction and declare the insertion of Rule 96B vide Notification No. 16/2020 – Central Tax dated 23.03.2020 as illegal, ultra vires and without the authority of law. It was further prayed that pending admission, hearing and till final disposal of the petition requested the court to stay the implementation of rule 96B of the CGST Rules, 2017; and to direct the Respondents to not take any coercive action if the proceeds of the export of goods are not received in compliance with the rule 96B of the CGST Rules, 2017.

Advocate Dr. Avinash Poddar appeared for the petitioner.

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CBDT launches E-Portal for filing complaints regarding Tax Evasion/Benami Properties/Foreign Undisclosed Assets

The Central Board of Direct Taxes ( CBDT ) has launched E-Portal for filing complaints regarding Tax Evasion/Benami Properties/Foreign Undisclosed Assets.

Taking another step towards e-governance and encouraging participation of citizen as stakeholders in curbing tax evasion, the Central Board of Direct Taxes has launched an automated dedicated e-portal on the e-filing website of the Department to receive and process complaints of tax evasion, foreign undisclosed assets as well as complaints regarding benami properties.

The public can now file a Tax Evasion Petition through a link on the e-filing website of the Department https://www.incometaxindiaefiling.gov.in/ under the head “File complaint of tax evasion/undisclosed foreign asset/ benami property”. The facility allows for filing of complaints by persons who are existing PAN/Aadhaar holders as well as for persons having no PAN /Aadhaar.

After an OTP based validation process (mobile and/or email), the complainant can file complaints in respect of violations of the Income- tax Act, 1961, Black Money (Undisclosed Foreign Assets and Income) Imposition of Tax Act, 1961 and Prevention of Benami Transactions Act (as amended) in three separate forms designed for the purpose.

Upon the successful filing of the complaint, the Department will allow a unique number to each complaint and the complainant would be able to view the status of the complaint on the Department’s website. This e-portal is yet another initiative of the Income Tax Department to bring about enhanced ease of interaction with the Department while strengthening its resolve towards e-governance.

[BREAKING] No further Extension for due dates of Tax Audit Reports: CBDT passes detailed order [Read Order]

The Central Board of Direct Taxes (CBDT) passed the detailed order regarding no further Extensions for Tax Audit Reports due dates.

The Gujarat High Court in the case of The All India Gujarat Federation of Tax Consultants Vs. Union of India, has directed the Ministry of Finance to look into the issue of extension of due dates for filing of Audit Report under section 44AB of the Income tax Act more particularly the representation and take an appropriate decision in accordance with law.

In the wake of the global pandemic due to COVID-19 the due dates for filing of income tax returns for Assessment Year 2020-21 was extended vide the Taxation and Other laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (which was enacted on 29th September, 2020) to 30th November, 2020. Subsequently, vide notification S.O. 3906(E) dated 29th October, 2020 the due dates for filing of returns were further extended to 31 January, 2021 for cases in which tax audit report under section 44AB of the Income tax Act is required to be filed and 31 December, 2020 for all other cases.

Further vide notification S.O. 4805 (E) dated 31 December, 2020 the above due dates were further extended to 15th February, 2021 and 10th January, 2021 respectively.

The CBDT while comparing the statistical data of AY 2019-20 and AY 2020-21 stated that the Government has not only considered representations of various stakeholders but also has been proactive in providing relaxation to the taxpayers by extending due dates regularly.

The CBDT urged that the government has been proactive in analyzing the situation and providing relief to assessee. However, it should also be appreciated that filing of tax returns/audit reports are essential part of the obligations of assessee and cannot be delayed indefinitely.

Many functions of the Income tax Department start only after the filing of the returns by the assessee. Filing of tax returns by assessee also results in collections of taxes either through payment of self-assessment tax by the assessee or by the subsequent collection by the department post processing or assessment of the tax returns.

The tax collections assume increased significance in these difficult times and the Government of India needs revenue to carry out relief work for poor and other responsibilities. Any delay in filing returns affects collection of taxes and other welfare functions of the state for the vulnerable and weaker sections of society which is funded through the revenue collected.

“Sufficient time has already been given to taxpayers to file their tax returns and a large number of taxpayers have already filed their returns of income,” the CBDT, while refusing to further extend the Tax Audit Reports due dates said.

The CBDT urged that the due dates for filing of return/tax audit have already been extended on 3 occasions.

Internationally, the extension provided by India is more generous as compared to other countries. The return filing statistics of the current year indicates that returns filed in this financial year already far exceeds the returns filed which were due on the last date of filing of returns, CBDT added.

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Delhi Govt. notifies Schema for E-Invoices under GST [Read Notification]

The Delhi Government prescribed the schema for e-invoices under GST by notifying Delhi Goods and Services Tax (Amendment) Rules, 2020.

In case of registered persons who could not submit the said declaration by the due date on account of technical difficulties on the common portal and in respect of whom the Council has made a recommendation for such extension.

The Government has notified that the Commissioner may, on the recommendations of the Council, extend the date for submitting the declaration electronically in FORM GST TRAN-1 by a further period, not beyond 31st March 2020.

In the Delhi Goods and Services Tax Rules, 2017 (hereinafter referred to as the said rules), in rule 117, in sub-rule (1A), with effect from the 31st December 2019, for the figures, letters and word “31st December, 2019”, the figures, letters and word “31st March, 2020” shall be substituted.

It is notified that Statement in Form GST TRAN 2, may be submitted by 30th April, 2020.

In sub-rule (4), in clause (b), in sub-clause (iii), in the proviso, for the figures, letters and word “31st January, 2020”, the figures, letters and word “30th April, 2020” shall be substituted.

In FORM GSTR-3A in Serial No. 2 the return to be furnished within 15 days failing which the tax liability may be will be assessed under section 62 of the Act, based on the relevant material available with this office.

It is noteworthy that in addition to tax so assessed, interest and penalty will be payable as per provisions of the Act.

The government inserted Serial number 5, “this is a system-generated notice and does not require a signature.”

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NAA finds Inox Leisure guilty of not passing GST rate cut to consumers [Read Order]

The National Anti-Profiteering Authority (NAA) found Inox Leisure guilty of not passing Goods and Service Tax (GST) rate cut to consumers.

The Applicant filed the complaint against the respondent, M/s  Inox Leisure Pvt. Ltd.  alleging profiteering in respect of the supply of restaurant service despite a reduction in the rate of GST from 18% to 5% with effect from November 15, 2017 and also increased the base prices of his items.

The Respondent has contended that the incorrect addition of 5% GST to the alleged profiteering amount has been done.

However, the NAA while rejecting the contention of the applicant noted that the provisions of Section 171 (1) and (2) of the CGST Act, 2017 require that the benefit of reduction in the tax rate is to be passed on to the recipients/ customers by way of commensurate reduction in price, which includes both the base price and the tax.

The Authority headed by Dr. B.N. Sharma while holding the respondent guilty of profiteering directed  the Respondent to reduce his prices commensurately in terms of Rule 133 (3) (a) of the above Rules.

The NAA further said that since the recipients of the benefit, as determined above are not identifiable, the Respondent is directed to deposit an amount of Rs. 3,10,56,939 in two equal parts of Rs. 1,55,28,470 each in the Central Consumer Welfare Fund and the State Consumer Welfare Funds along with  18% interest within a period of 3 months from the date of passing of this order failing which it shall be recovered by the concerned CGST/SGST Commissioner. However, the Authority did not impose the penalty as no penalty provisions were in existence when the Respondent had violated the provisions of Section 171 (1), the penalty prescribed under Section 171 (3A) cannot be imposed on the Respondent retrospectively.

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GST Portal enables Aadhaar Authentication / e-KYC for existing Taxpayers

The Goods and Services Tax ( GST ) Portal has enabled the Aadhaar Authentication / e-KYC for Existing Taxpayers on GST Portal.

Functionality for Aadhaar Authentication and e-KYC where Aadhaar is not available, has been deployed on GST Common Portal w.e.f. 6th January, 2021, for existing taxpayers. All taxpayers registered as Regular Taxpayers (including Casual Taxable person, SEZ Units/Developers), ISD and Composition taxpayers can do their Aadhaar Authentication or e-KYC on GST Portal. This is not applicable for Government Departments, Public Sector Undertakings, Local Authorities and Statutory Bodies.

What is Aadhaar Authentication or e-KYC

a)If Aadhaar is available, the Primary Authorized signatory and 1 person who is Proprietor/Partner/Director /Managing Partner/ Karta of the entity registered can go for the Aadhaar Authentication.

b)In absence of Aadhaar, they can upload any of the following documents to undergo e-KYC:


•Aadhaar Enrolment Number
•Passport
•EPIC (Voter ID Card)
•KYC Form
•Certificate issued by Competent Authority
•Others

How to do Aadhar Authentication/ e-KYC on Portal
a)When an existing registered taxpayer would login, a pop-up with Question will be shown “Would you like to authenticate Aadhaar of the Partner/Promotor and Primary Authorized Signatory “ with the two options “Yes, navigate to My Profile” and “Remind me later”.

b)If taxpayer clicks on “Remind me later” pop up will be closed and user can navigate anywhere on the GST portal.

c)If the taxpayer clicks on “Yes, Navigate to My Profile”, the system will navigate to My Profile. In MY PROFILE, a new tab “Aadhaar Authentication status” has been shown from where the link for Aadhaar Authentication to the Primary Authorized Signatory and one of promoters/partners as selected by him will be sent.

Note: If the same person is Primary Authorized Signatory and Partner/Promoter, Aadhaar authentication is only required to be done for that person.

d)On the My profile page, in addition, to SEND AADHAAR AUTHENTICATION LINK, the UPLOAD E-KYC DOCUMENTS option would also be displayed to taxpayer from where they can upload the e-KYC documents on Portal. In this case, the process of e-KYC authentication would be subject to the approval of uploaded e-KYC documents by the Tax Official.

For more details Click here and here.

Allahabad High Court allows inquiry by GST Authorities collaterally with the Proceedings [Read Judgment]

The Allahabad High Court while dismissing the petition allowed the collateral inquiry proceedings by GST Authorities under Section 70 of CGST Act, 2017 collaterally with the proceedings under section 6(2)(b).

The petitioner, M/S G.K.Trading Company submitted that the Deputy Commissioner (SIB), Ghaziabad, has conducted a survey of the business premises of the petitioner and is investigating in the matter pursuant to the survey, no inquiry can be initiated or summon can be issued by the respondent authority under Section 70 of the CGST Act against the petitioner even if basis of material of inquiry/ investigation may be different.

In other words, the State Authority may investigate/ inquire in all the matters pertaining to the business of the petitioner and, therefore, the summons in the matter of inquiry issued by the officer is barred by the provisions of Section 6(2)(b) of the CGST Act.

The Section 6(2)(b) prohibits initiation of proceedings by the proper officer under UPGST Act on the same subject-matter where a proper officer under the CGST Act has initiated any proceedings on the same subject-matter subject to the conditions specified in the notification issued under sub-Section (1).

The Section 70 of the UPGST Act or CGST Act empowers the proper officer under the Act to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry.

The division bench of Justice Surya Prakash Kesarwani and Justice Dr. Yogendra Kumar Srivastava clarified that the process of inquiry under Section 70 is specific and unified by the very purpose for which provisions of Chapter XIV of the Act confer power upon the proper officer to hold an inquiry. The word “inquiry” in Section 70 is not synonymous with the word “proceedings”, in Section 6(2)(b) of the UPGST Act/ CGST Act.

Therefore, the court held that there is no proceeding by a proper officer against the petitioner on the same subject-matter referable to Section 6(2)(b) of the UPGST Act. It is merely an inquiry by a proper officer under Section 70 of the CGST Act.

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GST: Patiala House Court refuses to grant Bail to person accused of Fraudulently availing ITC to tune of Rs.7 Cr [Read Order]

The Patiala House Court refused to grant bail to the person accused of fraudulently availing Input Tax Credit ( ITC ) to the tune of Rs.7 Crore.

The applicant-accused, Abhit Manohar is proprietor of M/s Siddhivinayak Venture being used by one of his close friend Deepak Mittal for clothing business who did not pay the requisite GST amount, got arrested and was later released on bail.

The applicant submitted that applicant/accused has been falsely arrested in the present case and he has been languishing in judicial custody since December 23, 2020.

It was further submitted that applicant/accused is neither a supplier/purchaser nor a registered dealer under the GST Act nor has he rendered any service nor issued any invoice. It is submitted that investigation qua the applicant-accused is already complete and his custodial interrogation is not required in the present case.

The accused submitted that his father has already expired and since then, his mother is suffering from multiple ailments. It is thus prayed that the applicant/accused may be released on bail.

On the other hand, the department vehemently opposed the bail application arguing that the applicant/accused is the proprietor of the firm M/s Sri Siddhivinayak Venture and during the course of the investigation, it was revealed that the applicant/accused knowingly participated in receipt of only paper invoices to the tune of Rs.150 crores without any movement of goods and has fraudulently availed/passed input tax credit of approximately Rs. 7 crores to Government exchequer. The Roster Judge Dharmender Rana after considering the seriousness of allegations, enormity of charge, and the fact that the investigation is at a crucial stage, refused to release the applicant/accused on bail.

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MCA Portal Crashed: Social Media flooded with #Extend_CFSS to avoid Catastrophic consequences of non-extension of CFSS

The Social Media has witnessed a huge outrage demanding the extension of the Companies Fresh Start Scheme, 2020 (CFSS).

The Institute of Company Secretaries of India (ICSI) has made a representation to the Ministry of Corporate Affairs (MCA) and requested for extension of due dates of CFSS.

Most of the people urged that a large number of Companies and particularly in MSME Sector which is the backbone of  Aatama Nirbhar Bharat will collapse under the unbearable burden of compliance cost.

“One of my #OPC client who is IT (Software) professional wanted to continue his business & to set up in #Uttarakhand Skill India. But he refused to continue his business now & planning to lay off his employees. Perfect eg. #EODB #Extend_Due_Dates #Extend_CFSS#Extend_MCA_Schemes,” one of the CS tweeted.

It is highlighted that Directors, KMPs and Officers in default will be flooded with Show Cause Notices and will face prosecution as compliance cost will be very exorbitant and beyond the paying capacity of Companies.

“MCA portal is crashed and not responding at all. Challan not generating. Instead of extension to CFSS scheme & settlement Scheme, govt has imposed a 40k fine,” one of the tweets said.

It was pointed out that Section 252 will remain on Statute Book only  but will hardly be applied as companies will not afford to file back years forms due to high cost.

Compliance of Directions given in Revival Orders already passed by NCLT Benches across country will become impossible to meet with leading to serious consequences

As Accounts for Financial Year 2019-20  of a large number of companies have not yet been finalised due to the long spell of COVID Pandemic situation, there will be multiple violations of provisions of Companies Act unless the accounts are dated which will be unethical practice . However this too will be possible only for a limited period.

There will be acute mistrust between clients and practising company secretaries as revival applications were filed in anticipation of availing benefit of CFSS . It will have serious impact on their practice .

Formation of new Companies and LLPs will slow down as penalties for non compliances are very stiff which will deter them to opt for corporate structure. This will severely impact practice of PCS who are not doing specialised practice or do not have Listed Companies as their clients. “Professional should boycott filing of forms until the #Extension CFSS NOT done by the government,” one of the tweets said while raising the concern.

Financial Deadlines in 2021: Know about 16 Important Last Dates, Extension details

It is always good to be well-prepared, especially when it comes to matters of money. The Government has extended most of the important dates in the wake of the COVID-19 pandemic.

To make sure that you have a smooth 2021, money-wise at least, here are sixteen important financial deadlines you must be aware of. 

Firstly, the CBDT has extended the last date for filing an income tax return (ITR) for Financial Year 2019-20 to January 10, 2021, in view of the pandemic, from the earlier deadline of December 31, 2020.

Generally, the taxpayers are supposed to file ITR by July 31 but an exception was made this year due to the pandemic. This is the third time the tax return filing deadline for Financial Year 2019-20 has been extended. So, if you’re running late, you still have roughly 10 more days to sort it out.

Secondly, in view of the continued challenges faced by taxpayers in meeting statutory compliances due to the outbreak of COVID-19, the Government further extended the dates for filing Tax Audit and TP Audit Report extended till January 15, 2021, from the current deadline of December 31, 2020.

Thirdly, the government extended the due date for making declaration under Vivad se Vishwas scheme till January 31, 2021 from the earlier deadline of December 31, 2020, in view of the difficulties faced by taxpayers due to the COVID-19 pandemic.

Fourthly, the due date for furnishing of ITRs for the taxpayers who are required to furnish a report in respect of international/specified domestic transactions under section 92E of the Income-tax Act has been extended to February 15, 2021.

Prior to the amendment, the tax audit report was required to be filed on or before the due date specified in section 139(1) which is 30th November of the assessment year.

Fifthly, the EPFO extended the deadline for submission of Jeevan Pramaan Patra till February 28, 2021, for pensioners. The move will benefit 35 lakh pensioners, at present, a pensioner can submit the Jeevan Pramaan Patra anytime during the year up to November 30.

Sixthly, if you have received substantial dividend income in Financial Year 2020-21, it is likely that you are liable to make advance tax payments as well. Advance tax liability arises if the estimated total tax liability (net of TDS) exceeds Rs 10,000 in the relevant financial year. If the advance tax payments are not made on or before March 15, 2021, then penal interest will be applicable. 

Seventhly, the government extended Aadhaar-PAN linking date from 31st March, 2020 till 31st March, 2021.

If in case the PAN is not linked with Aadhaar by 31st March, 2021, then PAN will become inoperative which will result in failure to quote the PAN for financial transactions.

Eightly, to encourage individuals to use their unclaimed Leave Travel Allowance (LTA) amounts and to boost consumer demand, the government came up with relaxed guidelines.

These relaxed guidelines allowed the payment of cash allowance, it will be equal to LTC given to central government employees in exchange for LTA after launching the LTC Cash Voucher Scheme on October 12, 2020.

On October 29, 2020, the scheme was further extended and also included non-central government employees in it, followed by several sets of frequently asked questions offering a similar income tax exemption, which also brought relief to private-sector employees. March 31, 2021, is the last date to avail the tax benefit under the LTC Cash Voucher Scheme.

Ninthly, if the due date for filing the original return of income is missed, one can file a return later after the due date called a belated return for the Financial Year 2019-20 on or before 31 March 2021.   

Thenthly, the taxpayer must complete a tax-saving exercise for the financial year Financial Year 2020-21 by the deadline, i.e., March 31, 2021, failure to comply with the deadline would mean missing the opportunity to reduce your tax liability for Financial Year 2020-21.

Eleventhly, the last date to make payment under Vivad se Vishwas Scheme is extended from January 31, 2021 till March 31, 2021.

Twelthly, the last date for availing the benefit under the Emergency Credit Line Guarantee Scheme  is March 31, 2021.

Thirteenth, in addition to the LTC Cash Voucher Scheme, the government also announced an interest-free advance of Rs 10,000 to government employees, which will be recoverable in a maximum of 10 instalments. The last date to avail the Special Festival Advance is March 31, 2021.

Fourteenth, the benefit of credit subsidy under Pradhan Mantri Awas Yojana is March 31, 2021; which provides for credit-linked subsidies, subject to terms and conditions, on home loans to middle-income groups having annual income between Rs 6 lakh and Rs 18 lakh.

Fifteenth, the last date to avail tax sop on purchase of new house is June 30, 2021.

Lastly, July 31, 2021, is the last date of filing ITR for individual taxpayers. While filing ITR for FY 2020-21, taxpayers have the option of choosing between the existing tax regime and the new concessional tax regime.

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Finance Ministry extends benefits of Tax Refund Scheme to all Export Goods

Taking a major step to boost exports, the Government has decided to extend the benefit of the Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) to all export goods with effect from 1st January 2021.

The RoDTEP scheme would refund to exporters the embedded Central, State, and local duties/taxes that were so far not being rebated/refunded and were, therefore, placing our exports at a disadvantage.  The refund would be credited in an exporter’s ledger account with Customs and used to pay Basic Customs duty on imported goods.

The credits can also be transferred to other importers. The RoDTEP rates would be notified shortly by the Department of Commerce, based on the recommendation of a committee chaired by Dr. G.K. Pillai, former Commerce, and Home Secretary. The final report of the Committee is expected shortly. An exporter desirous of availing the benefit of the RoDTEP scheme shall be required to declare his intention for each export item in the shipping bill or bill of export.

The RoDTEP shall be allowed, subject to specified conditions, and exclusions.  The notified rates, irrespective of the date of notification, shall apply with effect from 1st January 2021 to all eligible exports of goods.

Finance Ministry extends deadline for making a declaration under Vivad Se Vishwas Scheme [Read Notification]

The Ministry of Finance has extended the deadline for making a declaration under Vivad Se Vishwas Scheme till 31′ January, 2021 from 31st December, 2020.

The date for passing of orders under Vivad Se Vishwas Scheme, which are required to be passed by 30th January, 2021 has been extended to 31st January, 2021.

The date for the passing of order or issuance of notice by the authorities under the Direct Taxes & Benami Acts which are required to be passed/ issued/ made by 30th March 2021 has also been extended to 31st March 2021.

The Vivad se Vishwas scheme was announced by Union Finance Minister Nirmala Sitharaman during her budget speech on February 1, 2020. Given below are all the aspects you have to know about this amnesty scheme: Under this scheme, taxpayers whose tax demands are locked in dispute in multiple forums, can pay due to taxes by March 31, 2020, and get a complete waiver of interest and penalty. If a taxpayer is not able to pay within the deadline, he gets a further time till June 30, but in that case, he would have to pay 10% more on the tax.

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[BREAKING] CBIC extends deadline for filing GST Annual Returns [Read Notification]

The Central Board of Indirect Taxes and Customs ( CBIC ) has extended the filing of GST Annual Returns ( GSTR-9 ) for the Financial Year 2019-2020 till February 28th, 2021.

Earlier, the due date was December 31. There have been demands to extend the date for two reasons: first, the pandemic, and second, the due date for annual returns for FY19-20 is December 31.

GSTR-9 is an annual return to be filed yearly by taxpayers registered under GST. It consists of details regarding the outward and inward supplies made/received during the relevant previous year under different tax heads i.e. CGST, SGST & IGST and HSN codes. Basically, it is a consolidation of all the monthly/quarterly returns (GSTR-1, GSTR-2A, GSTR-3B) filed in that year. Though complex, this return helps in extensive reconciliation of data for 100% transparent disclosures. The late fees for not filing the GSTR 9 within the due date is Rs 100 per day, per act. That means late fees of Rs 100 under CGST & Rs 100 under SGST will be applicable in case of delay. Thus, the total liability is Rs 200 per day of default. This is subject to a maximum of 0.25% of the taxpayer’s turnover in the relevant state or union territory. However, there is no late fee on IGST yet.

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Quality Review Board Report on Audit Quality Review 2019-20 [Read Report]

The Quality Review Board (QRB) reviewed all aspects of how an audit was performed in entities selected on a risk-based approach and came up with the Audit Quality Review 2019-20.

Dr. Parvinder Sohi Behuria, Chairperson of the QRB said that with closed businesses and organisations and restrictions on access to people and information, auditors across the world faced unprecedented practical challenges in performing audits during the COVID-19 pandemic.

Dr. Behuria further added that auditors had to adjust obtaining sufficient appropriate audit evidence, revise identification and assessment of certain risks of material misstatements and change planned audit procedures by performing alternative audit procedures.

It was reported that during the financial year 2019-20, QRB completed 87 reviews of audit quality of 69 entities in India. Out of these 87 completed reviews, QRB issued advisories to concerned Audit firms for further improvement in 71 cases and 3 cases were recommended to the Council of the ICAI for referring them to the Disciplinary Directorate of the ICAI for further necessary action.

The present report highlights the key findings observed in the audit quality reviews conducted during financial year 2019-20 indicating our approach for review, key trends, our expectations and other focus areas. I hope the concerned stakeholders will find this Report useful. Now, it is incumbent on the concerned Audit firms to take remedial actions for the deficiencies highlighted by the QRB, identify the root causes thereof and improve their audit quality.

Dr. Behuria informed that QRB has decided to conduct Thematic Review of Audit Firms’ Quality Control Procedures which would supplement the normal programme of reviews of Audit firms by the Quality Review Board. In this thematic review, QRB would look at firms’ quality control policies and procedures in respect of audits of entities other than those specified in Rule 3(1) of NFRA Rules, 2018 to make comparisons between firms with a view to identifying both good practices and areas of common weaknesses.

The Board will subsequently target such vulnerable areas for further insightful education and has decided to initially conduct these reviews for Audit firms having 10 or more partners.

Such reviews, which would be conducted through on-line Questionnaire mode, would be deeply focused on the selected aspect of the audit firm’s quality control procedures in much greater depth than is generally possible in a normal quality review.

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Auditors no longer just watchdog, Stop taking shelter under this misconception says NFRA Chief [Read Speech]

The National Financial Reporting Authority (NFRA) has urged the audit fraternity to refrain from taking shelter under the much-venerated description of the auditor “being only a watchdog and not a bloodhound”.

The NFRA Chairman R Sridharan in a speech that was to have been delivered to an ICAI event of Western India Regional Council (WIRC) but now published on the NFRA website, describing this as a “serious misconception” and said that it needs to be “exorcised from our minds”.

“This misconception has very far-reaching consequences. The law on the fraud related responsibilities of the auditor has moved far ahead of what it was in the 1890s. We need to forget the watchdog and not the bloodhound description,” Sridharan said.

“If this is not taken care of, any talk of nuanced professional judgments in arcane business and financial matters would have to be regarded only as smokescreens meant to mislead. The foundation of good audit quality is independence,” he said.

Sridharan also highlighted that India has already built into law the separation of audit and non-audit services that other countries are only now attempting to achieve. The separation of audit and non-audit services being undertaken in developed countries is expected to boost auditor independence around the world.

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ITR 2020-21: SBI customers can now file Income Tax Return for free

The State Bank of India (SBI) is providing a new service to its customers that enables them to file through the YONO app an income tax return (ITR) for free.

This new service could help customers as the due date for filing ITR ends on December 31, 2020.

If a SBI customer has not yet filed the ITR, then you can use this service to file your income tax returns.

“File your Income Tax Return with Tax2win on YONO for free,” the SBI tweeted.

However, to avail the chartered accountant-assisted tax filing facility, customers should be ready to shell out at least Rs.199.

The SBI customers can log in to the YONO app on the mobile phone; proceed to shop ‘Shop and Order’ and click on ‘tax and investment’; click on  Tax2Win for more details; then the customer has to pay a minimum of Rs.199 for the CA-assisted service.

In case if face any issue while availing the facility can send an email to support@tax2win.in.

Taxpayers can also file income tax directly on the Income Tax Department’s website. Taxpayers will have to visit the website and enter basic information like user ID, PAN, password, date of birth, and captcha code to log in for the e-filing process.

18% GST applicable on Construction of Directors Bungalow and Construction of Staff or Faculty Quarters in IIT, Bhubaneswar: AAR [Read Order]

The Odisha Authority of Advance Ruling (AAR) ruled that 18% GST applicable on the construction of the Director’s Bungalow and the construction of staff or faculty quarters in IIT, Bhubaneswar.

The applicant, M/s NBCC (India) Limited has been awarded construction of Directors Bungalow, staff Quarters, Faculty Quarters in the IIT Campus, Bhubaneswar.

The advance ruling was sought on the issue which was related to the issue of construction of Directors Bungalow and construction of staff or faculty quarters.

The Coram consisting of G.K.Pati and H.K.Mishra said that the intention of the Legislature has been to allow concessional rate to such work which has been entrusted to a Government entity for public interest in general, but extrapolating and extending this concessional rate to any or all activities of IIT, Bhubaneswar will not only be unwarranted but also defeat the very purpose of concessional rate.

The AAR ruled that construction of Directors Bungalow and construction of staff/faculty quarters is out of purview of exemption provided under Notification No. 11/2017 C.T. (Rate), dated June 28, 2017 and would attract 18% GST.

The AAR ruled that the works entrusted to the Applicant by IIT, Bhubaneswar under contract/agreement dated May 2, 2016, cannot be termed as composite supply and thus entire work under the said contract shall not be entitled to concessional rate in terms of Notification No. 11/2017-C.T. (R), dated June 28, 2017. However, the AAR also held that the supply of goods and/or services or both which squarely fall within the ambit of the scope of work entrusted to HT, Bhubaneswar by Government of India shall be entitled to a concessional rate under Sr. No. 3(vi) to Notification No. 11/2017-C.T. (R). Accordingly, each and every supply under the subject contract shall be treated separately for determining the rate of tax under the CGST Act, 2017 read with the provisions of the GST Tariff and respective exemption notifications.

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No GST on Reverse Charge basis applicable on Supply of Service to Odisha Power Transmission Corporation Ltd: AAR [Read Order]

The Odisha Authority of Advance Ruling (AAR) ruled that no Goods and Service Tax (GST) on a reverse charge basis is applicable on Supply of service to Odisha Power Transmission Corporation Limited.

The applicant M/s Tokyo Electric Power Company Service Limited (TEPSCO), a Japan based company, in association with Tokyo Electric Power Company, Holding Inc., a Japan based Company has entered into an agreement dated 13 April 2018 with an Indian entity Odisha Power Transmission Corporation Limited (OPTCL), whereby consultants have agreed to provide consultancy services to M/s Odisha Transmission System Improvement Project, Odisha, India.

The applicant has sought for a ruling as to whether the Applicant is required to be registered under Odisha Goods and Services Act, 2017 and Central Goods and Services Act, 2017 for the consultancy services provided to Odisha Power Transmission Corporation Limited (OPTCL).

The Coram consisting of G.K.Pati and H.K.Mishra said that supply of service to OPTCL is not an import of service in terms section 2(11) of the IGST Act . The recipient is not, therefore, liable to pay GST on a reverse charge basis in terms of Notification No. 10/2017 – integrated Tax (Rate) dated 28.06.2017.

The applicant, being the supplier of service in India, is liable to pay tax and therefore, required to take GST registration under Odisha Goods and Services Act, 2017 and Central Goods and Services Act, 2017 for the consultancy services provided to Odisha Power Transmission Corporation Limited.

However, the AAR 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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MCA amends Form No. SH-7 regarding notice to Registrar of any alteration of Share Capital [Read Notification]

The Ministry of Corporate Affairs (MCA) notified the Companies (Share Capital and Debentures) Second Amendment Rules, 2020 which seeks to amend the Companies (Share Capital and Debentures) Rules, 2014.

The government amended Form No. SH-7 which pertains to the notice to the registrar of any alteration of share capital.

The Form is notified Pursuant to section 64(1) of the Companies Act, 2013 and pursuant to rule 15 of the Companies (Share Capital and Debentures) Rules, 2014.

The notification will come into force from 24 December, 2020.

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1% Cash Payment under Rule 86B of GST liability to affect only 0.5% Taxpayers, says CBIC

The Central Board of Indirect Taxes and Customs (CBIC) while clearing the misconceptions, in a series of tweets, has said the rule will be applicable to only 0.5% of the total taxpayers base of 1.2 crores.

The CBIC has introduced Rule 86B in GST Rules, to be applicable from January 1, 2021, which restricts use of input tax credit for discharging GST liability to 99%.

The Board  has observed that  earlier various objections were raised that Rule 86B in respect of the Mandatory 1% Cash Payment will affect a large number of taxpayers.

The CBIC said that the new rule will help control those who issue fake invoices and show high turnovers but have no financial credibility.

The Traders’ body the Confederation of All India Traders (CAIT) also urged Finance Minister Nirmala Sitharaman to defer the implementation of Rule 86B in GST, terming it a “counter-productive” measure that will increase the traders’ compliance burden.

The CBIC said it has booked about 12,000 cases of input tax credit (ITC) fraud and arrested 365 persons in such cases so far. During the last six weeks alone, more than 165 fraudsters have been arrested.