CA. Atul Kumar Gupta, President, The Institute of Chartered Accountants of India (ICAI) has been elected as the Board Member of the International Federation of Accountants (IFAC) at the IFAC Council Meeting in November 2020. CA. Gupta has been elected for a period of three years from November 2020 to November 2023.
IFAC is a global organization for the accountancy profession, dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies.
Beginning with 63 founding members from 51 countries in 1977, IFAC now comprises 175 members and associates in 130 countries and jurisdictions worldwide, representing approximately 3 million accountants in public practice, education, government service, industry, and commerce.
IFAC’s mission is to serve the public interest by contributing to the development of high-quality standards & guidance; facilitating the adoption & implementation of these standards; contributing to the development of strong professional accountancy organizations & accounting firms and promoting the value of professional accountants worldwide and speaking out on public interest issues.
Internationally, CA. Atul Gupta is also serving on the Board of XBRL International and the South Asian Federation of Accountants (SAFA). He is also a member of the Public Sector Financial Management Committee of Confederation of Asian and Pacific Accountants (CAPA) and representing ICAI in International Integrated Reporting Council (IIRC). He, earlier, has been the Chairman of the Committee on Education, Training & CPD of SAFA.
Experience of CA. Gupta spans education, examination, CPD, research, I&D, and system development with a strong focus on IT architecture giving him adequate insight into the accountancy profession. He has adequate International exposure & hands-on experience in dealing with multi-lateral agencies & the capability to deal with multi-cultural teams including an understanding of the work program of IFAC & has contributed significantly to building a strong relationship between ICAI & IFAC.
On being elected on the Board of IFAC, CA. Atul Kumar Gupta said “Being associated with IFAC reflects the recognition of the pivotal role being played by ICAI for the profession both nationally as well as internationally. We at ICAI are truly excited to work with IFAC, which is a global voice for the accountancy profession. Being associated with IFAC would allow me to work towards re-skilling the skillsets, equip professional with changing technology paradigm, building trust and inspiring confidence amongst various stakeholders, supporting the development and implementation of high-quality international standards, improving public sector financial management, and working with member bodies to strengthen the profession globally”.
Describing his vision and priorities for the accountancy profession and IFAC activities, CA. Atul Kumar Gupta mentioned that “He would like to see that economic issues and challenges being faced by the developing Countries & SMPs are appropriately taken up at the global platform and suitable initiatives for professional accountants to enrich and equip them in new-age technology skills, acquire strategic managerial skills besides continuing their prowess in accountancy, finance, taxation, and business laws are undertaken.”
IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC’s vision is that the global accountancy profession is recognized as a valued leader in the development of strong and sustainable organizations, financial markets, and economies.
IFAC’s view is that a fundamental way to protect and serve the public interest is to develop, promote, and enforce high-quality, internationally recognized standards for auditing and assurance, education, ethics, and public sector accounting. These standards and related regulations are essential to ensuring the credibility of information upon which investors and other stakeholders depend and to achieving sustainable global economic development. As a result, IFAC supports the following independent standard-setting boards:
It promotes convergence to the standards issued by the boards as well as to the International Financial Reporting Standards (IFRSs) set by the International Accounting Standards Board.
IFAC also issues tools, guidance, and resources to support member bodies and their members who are professional accountants in business or employed in small and medium practices-both of these groups play a critical role in the global economy. In addition, it collaborates with member bodies and works with organizations throughout the world to support the growth and development of the accountancy profession in emerging economies.
The Calcutta High Court presided over the requirement to reverse accumulated credit by on-going real estate projects opting for a concessional rate of GST.
The petitioner has preferred a writ petition being aggrieved by Rule 42 (4)(c) introduced vide Notification No. 16/2019 Central Tax dated March 29, 2019, as also the second proviso of Column 5 and Paras 1(a) and 1(e) of Annexures I and II of Notification No.3/2019 – IT dated March 29, 2019.
The Petitioner submitted that directing to reverse accumulated credit is akin to directing to pay tax and such power could never have been exercised by a delegatee since direction to pay tax is a substantive aspect and is not delegable.
Mr. Sujit Ghosh, Counsel for the petitioner, relying upon the host of constitutional bench judgments, the Petitioner counters Revenue’s objection to the maintainability of the writ petition in absence of a show-cause notice stating that a writ petition under Article 226 is maintainable even without SCN issuance as there is the likelihood of an illegal tax assessment as also the exercise of legislative power beyond the legislative competence which has given rise to a cause of action.
The single-judge bench of Justice Shekhar B. Saraf allowed the parties to file affidavits and remarks that the point of maintainability of the writ petition shall be kept open.
The court also granted interim relief with liberty to file an application in this writ petition if any coercive step is taken against Petitioner.
The matter was listed in March, 2021.
The Karnataka Appellate Authority of Advance Ruling (AAAR) while upholding the AAR’s ruling dismissed the application as an investigation by the Directorate of Goods and Service Tax Intelligence (DGSTI) was already initiated.
The applicant, Tirumala Milk Products Pvt. Ltd. is engaged in processing and manufacturing of Milk & Milk products in the state of Andhra Pradesh. The Applicant processes various Milk and Milk products including flavoured milk. The applicant is carrying on the activity of selling the above said products in the State of Karnataka.
The applicant sought the advance ruling on the issue whether flavoured Milk is taxable at the rate of 5% under Schedule-IV of GST Act.
However, the Karnataka AAR rejected the application as “inadmissible” in terms of the first proviso to Section 98(2) of the CGST Act, 2017 in as much as an investigation had already been initiated by the Directorate of GST Intelligence, Bangalore Zonal Unit.
The Appellant was aggrieved by the grounds on which the lower Authority has refused to admit the application for advance ruling which is that, the question on which the ruling was sought is a matter that is being investigated by the Directorate of GST Intelligence and hence the application cannot be admitted in terms of the proviso to Section 98(2) of the CGST Act.
The Appellant argued that it is only when the same question is being investigated by the concerned officer that the provisions of the proviso to Section 98(2) will apply and investigations conducted by any other agency will not attract the said proviso.
The Appellant has gone into great length in analyzing the intention of the legislature in framing the provisions of Section 98 and has put forth the view that it is only proceedings which are pending before the “concemed/jurisdictional officer’ which qualify for rejection in terms of the proviso to Section 98(2).
The AAAR consisting of D.P.Nagendra Kumar and M.S.Srikar observed that the use of the phrase “any proceedings” in the first proviso to Section 98(2) encompasses within its fold proceedings pending either before the concerned/jurisdictional officer or before any investigative agency such as DGSTI. It was further noted that the statement recorded by the DGSTI pursuant to the summons issued, deals mainly with the classification and rate of tax of the product “Flavoured Milk”. Therefore, the Authority agreed with the decision taken by the lower Authority that the application for advance ruling is inadmissible in terms of the provisions of Section 98(2) of the CGST Act.
Subscribe Taxscan Premium to view the JudgmentThe Income Tax Department started a Search and Survey action on 22.12.2020 in the cases of three leading contractors of North-Eastern India. One of the groups is also into the Hospitality business. The Search and Survey actions are being carried out at 14 locations in Guwahati, Delhi, Silapathar, and Pathsala (Assam).
The main allegations against the three groups are that they have taken accommodation entries in the form of non genuine unsecured loans and also securities premium from dubious Kolkata based shell companies. The three groups have suppressed their net profits across the years and routed back into business the unaccounted income through entry operators based out of Guwahati and Kolkata.
During the course of Search actions, it has been established that the shell companies from which loans/ premium had been taken exist only on paper and have no real business and creditworthiness. The entry operators, on being questioned, have admitted that the unsecured loans/share premium from the shell companies to the groups are non-genuine and bogus. Evidences of the cash trail of routing of funds through Securities premium was unearthed during search. It has been established that amounts to the tune of about Rs. 65 crore were routed back into regular books involving Shell companies which actually represent unaccounted income of the group. Further investigation is on to detect the actual quantum involved in tax evasion using this modus operandi.
It has been gathered during the Search action that one of the groups engages in huge cash transactions in hospitality business of proportions as high as 50%, which is under examination. It has been further gathered that some of the entities of the groups engage in purchases of Jewellery in cash. The source of the cash purchases are under examination.
Till now, Jewellery to the tune of Rs. 9.79 lakh has been seized. The sources of acquisition of remaining Jewellery found exceeding Rs. 2 crore are under verification. Cash of Rs 2.95 crore has also been seized. Overall, undisclosed income to the tune of approximately Rs. 100 crore has been unearthed so far during the Search and Survey operation. One locker has been found, which is yet to be operated. Further investigations are under progress.
The Kerala High court ordered the GST department to clarify regarding the condition to apply for Refund after filing NIL refund claim in FORM GST RFD-01A/RFD-01.
The petitioner, Soura Natural Energy Solutions India Pvt. Ltd. challenged the Condition (b) in Para 3 of the Circular No.110/29/2019-GST dated October 3, 2019 issued in the context of GST refund on the grounds that the same being ultra vires Section 54 (3) of Central Goods and Service Tax Act 2017 and also being arbitrary, unreasonable and it defeats the very objective of issuing the said circular.
The petitioner prayed before the court that to direct the Respondents to make facility on the GST common portal to enable the petitioner to file a revised refund claim for the tax periods, in respect of which the petitioner had inadvertently filed a ‘NIL’ refund claim or to accept such revised refund claim manually.
Mr. Shameem Ahammed M.P, the counsel for the petitioner submitted that the application of the petitioner has been rejected vide order on the premise that the petitioner had applied for refund as nil for the month of 2019 on 30, December 2019 on the same applied for refund by taking the date and also applied for refund by taking the benefit of the circular but the same has been rejected by taking aid of sub-clause (b) of Clause 3 of the circular, on the premise that no claim should have been filed by the person under the same category for subsequent period.
However, Mr. Ahammed urged it had not envisaged the situation where a person had applied for nil and refund on the same date.
On the other hand, the respondents’ authority submitted that he had already submitted a request to the department for clarification as predicament as of such registered owners including that of the petitioner had not been envisaged.
The single-judge bench of Justice Amit Rawal prima facie found the substance in the submission of Mr. Shameem Ahammed and sanguine of the fact that the Department of Revenue would come out with certain clarification. Therefore, the court posted the matter after three weeks.
Subscribe Taxscan Premium to view the JudgmentThe Calcutta High Court presided on the plea challenging the validity of denial of accumulated credit for services under Inverted Duty Structure.
The Petitioner is engaged in manufacture of textile products which suffers an input tax at the rate of 12% or 18%, while the output tax rate is 5% has approached the Court assailing the Order-in-Original wherein refund claim under section 54 read with Rule 89(5) had been denied to the Petitioner to the extent of input services.
Mr. Sujit Ghosh, Counsel for the petitioner, challenged the validity of Explanation to Rule 89(5) which denies refund of accumulated credit on services in case of inverted duty structure (IDS).
Mr. Ghosh, further challenged the validity of proviso to Section 54(3) on grounds of being ultra-vires to Articles 14 and 19(1)(g) of the Constitution of India.
Section 54 of the CGST Act 2017 provides for claiming refund of tax and interest if any paid on such tax or any other amount. The refund may be claimed of any unutilized input tax credit also accumulated due to the rate of tax on inputs being higher than the rate of tax on outward supplies.
The single judge bench of Justice Shekhar B. Saraf allowed the respondent authority to file Affidavit-in-opposition by 3 weeks and granted a further period of 2 weeks thereof to the Petitioner to file its reply.
Additionally, the court also clarified that the point of maintainability of the writ petition shall be kept open and the writ petitioner shall also be at liberty to file an application in this writ petition if any coercive step is taken against it. The matter was listed for hearing on Lists the matter in March 2021.
The National Anti-Profiteering Authority (NAA) directed the DGAP to reinvestigate the alleged profiteering against the respondent, Supertech Ltd.
The Applicant has submitted that he had booked a 2-BHK flat in the Respondent’s project “Eco Village-2”, Greater Noida (West) and had alleged that the Respondent had not passed on the benefit of ITC to him by way of commensurate reduction in price.
The provision of the RERA Act, 2016 makes it mandatory for a real estate developer/promoter to maintain separate bank accounts for each of his projects registered separately under the RERA Act, 2016.
The NAA observed that in the case of the Respondent, the provision implies that he was required to maintain five separate escrow/bank accounts in respect of the Five Phases of the project “Eco Village-2”, however, the DGAP’s Report has no mention of this aspect.
“The compliance of the Respondent with the above-referred provisions of the RERA Act, 2016, becomes paramount and needs to be examined. Given this, there arises the need to revisit the investigation to ascertain if the Respondent has passed on the benefit of ITC to the homebuyers of the other 4 Phases of the impugned project by a commensurate reduction in the prices of the residential units supplied by him in terms of Section 171 of the CGST Act, 2017,” the NAA headed by the chairman, Dr. B.N.Sharma said.
Therefore, the NAA directed the DGAP to further investigate the present case under Rule 133 (4) of the CGST Rules, 2017 to ensure that the Respondent has passed on the benefit of ITC by way of a commensurate reduction in the prices in respect of all the residential units supplied by him. “The DGAP is directed to submit a fresh Report after a detailed investigation as per Rule 129 (6) of the above Rules, 2017,’ the NAA said.
Subscribe Taxscan Premium to view the JudgmentThe Customs, Excise, Service Taxes Appellate Tribunal (CESTAT), New Delhi Bench while granting the relief to Honda Cars India quashed the Service Tax demand on transaction concerning Termination Agreement.
The appellant, M/s Honda Cars India Ltd. a manufacturer of motor vehicles in India, entered into a “Technical Collaboration Agreement‟ dated April 1, 2010 with Honda Motor Co. Limited Japan for receiving technical and proprietary information for manufacturing new models of cars.
Subsequently, the parties entered into a “Model Agreement‟ for the launch of a new model of “Honda Civic‟ in India. This Model Agreement provided that the model fee and royalty fee would be determined as per the Technical Agreement.
The appellant claims that on account of unviability of high-end petrol cars due to increase in diesel cars, it decided not to launch the new model of Honda Civic car in India. For this reason, the Model Agreement was terminated on March 30, 2012 by a “Model Termination Agreement”. In terms of clause 3 of this Termination Agreement, the appellant paid an amount of Japanese Yen 130,000,000/- to Honda Japan to compensate all costs, expenses and non-cancellable commitments incurred by Honda Japan till then.
The issue raised was whether the amount paid by the appellant to Honda Japan can be subjected to service tax.
The department contended that in terms of Article 4.1 of the Technical Agreement, Honda Japan was required to furnish technical information to the appellant on a continuous basis or that the amount was paid for the commencement of the production.
On the other hand the appellant urged that the amount paid by the appellant to Honda Japan is actually in the nature of a cancellation fee and, therefore, neither any service was rendered by Honda Japan to the appellant nor any amount was paid for any service.
The Assessee’s contention is that the amount was paid by the appellant only to restitute Honda Japan for the cost incurred, once the Model Agreement to provide the service was terminated.
The CESTAT, in view of the specific provisions of the Termination Agreement, observed that no service, much less “consulting engineer‟ service, was provided to the appellant. The appellant, therefore, could not have been subjected to service tax on a reverse charge basis.
The Coram headed by the President, Justice Dilip Gupta held that the amount paid by the appellant to Honda Japan was not towards any consideration for a taxable service. It is, therefore, not possible to sustain the demand confirmed by the Commissioner (Appeals).
Subscribe Taxscan Premium to view the JudgmentThe National Anti-Profiteering Authority (NAA) found the respondent Elan Ltd. guilty of not passing the Input Tax Credit (ITC) benefits to the shop buyers.
The applicant filed the complaint alleging profiteering by the Respondent, Elan Ltd. in respect of purchase of Shop in the project “Mercado” situated in Gurugram.
The Applicant has alleged that the Respondent had not passed on the benefit of input tax credit to him by way of commensurate reduction in the price of the Shop and had also charged 12% GST on the installments paid by him.
The NAA headed by the chairman, Dr. B.N.Sharma noted that the respondent while contravening the provisions of Section 171 of the CGST Act, 2017, has benefited from the additional ITC to the extent of 5.91% of the turnover during the period from July, 2017 to June, 2019.
The Profiteering watchdog determined the profiteered amount as Rs.2,44,80,835 inclusive of 12% GST in terms of Section 171 (1) read with Rule 133 (1).
The Authority under Rule 133(3)(a) of the CGST Rules, 2017 ordered that the Respondent shall reduce the prices to be realized from the buyers of the shops of the above project commensurate with the benefit of ITC received by him as has been detailed above.
“Since the present investigation is only up to 30.06.2019 any benefit of ITC which accrues subsequently shall also be passed on to the buyers by the Respondent. The Commissioner CGST/SGST Haryana are directed to ensure that the Respondent passes on the benefit of ITC till the Completion Certificate is received by the Respondent,” the NAA added.
However, the NAA did not impose the penalty under Section 171 (3A) as it was not in operation during the period from July 1, 2017, to June 30, 2019, when the Respondent had committed the violation and hence, the penalty prescribed under Section 171 (3A) cannot be imposed on the Respondent retrospectively.
Subscribe Taxscan Premium to view the JudgmentThe Karnataka Authority of Advance Ruling ( AAR ) held that the Input Tax Credit (ITC) can be availed on the distribution of promotional products to distributors or franchisees free of cost as a promotional activity.
The applicant, M/s Paper Industries Ltd. is engaged in the manufacture, distribution marketing of Knitted and Woven Garments under the brand name of “Jockey”, Swimwears and Swimming Equipments under the brand name of “SPEEDO”. The applicant also gets the said garments manufactured from their job workers.
The applicant has sought the advance ruling on the issue whether the promotional products or Materials and Marketing Items used by the Applicant in promoting their brand and marketing their products can be considered as “inputs” as defined under section 2(59) of the CGST Act, 2017 and GST paid on the same can be availed as input tax credit in terms of section 16 of the CGST Act, 2017.
The coram consists of Dr. M.P. Ravi Prasad and Mashood Ur Rehman Farooqui ruled that the ITC on GST paid on the procurement of the “distributable” products which are distributed to the distributors, franchisees is allowed as the said distribution amount to supply to the related parties which is exigible to GST.
The AAR, further clarified that the distribution to the retailers for their use cannot be claimed as gifts to the retailers or to their customers free of cost and hence ITC of GST paid on such procurement is not allowed as per Section 17(5) of the GST Acts.
The Authority also said that the GST paid on the procurement of “non-distributable” products qualify as capital goods and not as “inputs” and the applicant is eligible to claim the input tax credit on their procurement, but in case if they are disposed of by writing off or destruction or lost, then the same needs to be reversed under Section 16 of the CGST Act, 2017 read with Rule 43 of the CGST Rules, 2017.
Subscribe Taxscan Premium to view the JudgmentThe National Anti-Profiteering (NAA) while agreeing to the DGAP’s report held that the respondent, Caroa Properties LLP is not guilty of profiteering.
The Profiteering watchdog directed the DGAP under rule 133(5) of the Central Goods and Services Tax Rules, 2017 to conduct investigation to find out whether the Respondent had availed the benefit of Input Tax Credit (ITC) which was required to be passed on to the eligible recipients as per the provisions of section 171(1) of the Central Goods & Service Tax (CGST) Act, 2017 in respect of two others projects namely “Golf meadows Godrej City Phase II” and “EWS”.
The DGAP reported that no profiteering was found in the case of the projects investigated in the instant investigation and therefore, Section 171(1) of the Central Goods and Services Tax Act, 2017 was not attracted against “Caroa Properties LLP” in the present case as all the events like the launch of projects, bookings and allotment of the flats had happened in the post GST era.
The NAA headed by the chairman, Dr. B.N.Sharma noted that the Respondent had launched the subject projects in the post-GST regime and there was not any demand raised by the Respondent in the pre-GST regime. The registration and approval of the project and receipt of the payments had taken place in the post-GST regime and hence, there was no pre-GST tax rate or ITC which could be compared with the post-GST tax rate and ITC.
On this basis, the DGAP has reported that the Respondent had neither benefited from additional ITC nor had there been a reduction in the tax rate in the post-GST period and therefore it did not qualify to be a case of profiteering. Therefore, the NAA held that the respondent has not contravened the provisions of Section 171 of the CGST Act 2017.
Subscribe Taxscan Premium to view the JudgmentIn a statement issued today, RBI has cautioned that legitimate public lending activities can be undertaken by Banks, Non-Banking Financial Companies (NBFCs) registered with RBI and other entities who are regulated by the State Governments under statutory provisions, such as the money lending acts of the concerned states.
Members of the public are hereby cautioned not to fall prey to such unscrupulous activities and verify the antecedents of the company/ firm offering loans online or through mobile apps. Moreover, consumers should never share copies of KYC documents with unidentified persons, unverified/unauthorized Apps. One should report such Apps/Bank Account information associated with the Apps to concerned law enforcement agencies or use the Sachet portal (https://sachet.rbi.org.in) to file an online complaint.
There have been reports about individuals/small businesses falling prey to the growing number of unauthorized digital lending platforms/Mobile Apps on promises of getting loans in a quick and hassle-free manner. These reports also refer to excessive rates of interest and additional hidden charges being demanded from borrowers; adoption of unacceptable and high-handed recovery methods; and misuse of agreements to access data on the mobile phones of the borrowers.
The Reserve Bank has also mandated that digital lending platforms that are used on behalf of Banks and NBFCs should disclose the name of the Bank(s) or NBFC(s) upfront to the customers. The names and addresses of the NBFCs registered with the Reserve Bank can be accessed here and the portal for filing complaints against the entities regulated by the RBI can be accessed through https://cms.rbi.org.in.
The Institute of Chartered Accountants of India ( ICAI ) has issued Frequently Asked Questions ( FAQs ) for Provisional Admission to Foundation Course.
Q-1: I am a Class XI student who passed class X recently. Am I eligible to register for the Foundation Course?
Ans: Yes. Students after passing Class 10th examination conducted by an examining body constituted by law in India or an examination recognised by the Central Government or the State Government as equivalent thereto, may provisionally register in Foundation Course of ICAI.
Q-2: I am a Class XII student. Am I eligible to register for the Foundation Course?
Ans: Yes. Students after passing Class 10th examination conducted by an examining body constituted by law in India or an examination recognised by the Central Government or the State Government as equivalent thereto may provisionally register in Foundation Course of ICAI. Such students are required to register latest by 1st January, 2021 so as to eligible to appear in May/June, 2021 Foundation Examination.
Q-3: I am a Class XII student who wish to become CA. When can I register for the Foundation course?
Ans: You can register with the Board of Studies of the Institute on or before 1st day of January or 1st day of July for the examination to be held in the months of May/June or November/December respectively. In other words, 4 months study period is required before appearing in Foundation Examination.
Q-4: I am a class XII student and if I register for the Foundation course now, will I be able to appear in the Foundation exams being held in May 2021?
Ans: Eligibility Criteria for appearing in Foundation Examination is as under:-
(a) Student has to register with the Board of Studies of the Institute on or before 1st day of January or 1st day of July for the examination to be held in the months of May/June or November/December respectively. In other words, 4 months study period is required before appearing in Foundation Examination.
(b) Student should have appeared in the Senior Secondary (10+2) Examination conducted by an examining body constituted by law in India or an examination recognised by the Central Government (or the State Government) as equivalent thereto (for the purpose of admission to graduation course)
Q-5: I am a Class XII student who will be appearing in class XII exams. in March/April 2021. Suppose I register and clear Foundation exams of May 2021 but I fail to clear class XII exams, will my Foundation result be valid?
Ans: Your provisional admission to Foundation course will be regularized only when you clear Class XII exams.
Q-6: Is there any change in the syllabus and fee of the Foundation Course?
Ans: Candidates may note that there is no change in the Syllabus and Registration Fee of the Foundation Course.
Q-7: Where can I register myself for the Foundation course?
Ans: For Registration, students may visit https://eservices.icai.org/
Q-8: How will I be able to get the Study Material?
Ans: After confirmation of registration in Foundation Course, student can place order at https://icai-cds.org/
Q-9: Whether any classes are conducted by ICAI for students appearing in Foundation Examination?
Ans: Free classes are conducted by ICAI for Foundation level. For details, students may regularly visit Institute’s BOS Knowledge Portal for announcements in this regard.
The Central Board of Indirect Taxes and Customs (CBIC) has today issued a clarification regarding GST fake invoices frauds. The move aims at curbing the GST frauds reported since the implementation of the new tax regime to the country. So far, the Board has booked about 12000 cases of ITC fraud and arrested 365 persons in such cases. During the last six weeks alone, more than 165 fraudsters have been arrested.
The recent clarification was released as per the recommendation of the GST Council’s Law Committee where the Government was directed to deal with the menace of fraudsters who avail and pass on ineligible ITC by fake or fly-by night firms.
There has been some misinformation on the recent rule changes on the Social Media causing confusion among the genuine taxpayers. Through the circular, the Board intends to clarify the real facts to the taxpayers.
The Board stated that it is wrong to say that no opportunity of being heard will be given to the taxpayers if the proper officer believes that registration is liable to be cancelled.
“The GST laws passed by the Parliament and state legislatures provide that GST registration is liable to be cancelled for those who have not filed 6 or more returns. It is therefore wrong to say that the cancellation will be done without reasons. To protect the interest of revenue, this provision has been put in the law so that fraudsters do not run away with GST collected from their customers,” the Board said.
It was further stated that no cancellation of registration would be done without giving proper opportunity of hearing to the taxpayer. “Immediate action for suspension is necessary in cases where unscrupulous operators seek to pass on huge fake credit by gaming the system. Such action will not affect genuine taxpayers and will provide them a level playing field. Moreover, suspension may be revoked by the officer based on the taxpayer’s representation.”
The clarification further stated that it is a myth that the GSTIN will be cancelled without allowing the assessee to correct the clerical errors.
“This is absolutely not true. Only in fraudulent cases where there are significant discrepancies based on data analytics and sound risk parameters, and not mere clerical errors, the action of suspension and cancellation will be taken up. An example of a fraudulent case and serious discrepancy is where one has passed on Crones of Rupees of Input Tax Credit and not tiled GSTR3B returns, nor has he filed Income Tax returns or disclosed very little liability in Income Tax returns etc, The GST ecosystem is very carefully working towards curbing the fake invoice frauds in the interests of bonafide taxpayers. GST system applies sophisticated tools like BIFA, data analytics and AI & ML to pinpoint and segregate these fraudsters only,” the Board said.
The Board further stated that the belief that the proposed change will impact the ease of doing business, is also a myth.
“Not True. Fraudsters are misusing the system to the detriment of the interest of genuine taxpayers. Consequently, data-driven targeting of the fraudsters is the need of the hour. The data is being collected from Income Tax, Banks, Customs and necessary matching are being done to identify fraudsters and take action of suspension and cancellation after following due process of law. Precise targeting of fraudsters is being done only in specific cases, after doing a comprehensive analysis, using advanced data analytics tools. Etc., the Board said. “Further, multiple risk indicators are checked and only then few high-risk entities are selected. Action against fraudsters will not impact the Ease of Doing Business which is achieved in GST through liberal registration, refund regime, and self-compliance system with little or no manual checks,” the Board added.
Subscribe Taxscan Premium to view the JudgmentThe Delhi High Court while ruling in favour of the assessee held that the ITAT is ought to set aside ex-parte order, irrespective of final order decided the appeal on merits.
The Petitioner, M/s Kalra Papers Private Limited filed its Return of Income. Based on the survey under Section 133A of the Income Tax Act, 1961 and other materials, an assessment order was framed under Section 143(3) of the Act, making additions to Petitioner’s income.
Aggrieved by the said order, the Petitioner filed an appeal before the Commissioner of Income Tax (Appeal), which was decided by the CIT(A) in favour of the Petitioner, and the additions made by the Assessing Officer were deleted.
The Revenue, thereafter, preferred an appeal before the ITAT wherein the ex-parte order was passed and finally allowed in favour of the Revenue.
The assessee being aggrieved with the ex-parte order filed the Miscellaneous Application before the ITAT, under Section 254(2) of the Act, read with Rule 25 of the Income Tax (Appellate Tribunal) Rules, 1963 seeking setting aside of the ex-parte order and restoration of the appeal.
Thereafter, the ITAT rejected the Miscellaneous Application vide the Impugned Order on the grounds that even if the order was ex parte, the same is well reasoned and has considered all the material available on record. As no factual error has been pointed out, and the ITAT did not find any reason to recall the order.
Mr. Salil Kapoor, the counsel for the Petitioner, submits that the impugned order is unjust, illegal, bad in law, and contrary to principles of natural justice.
Mr. Kapoor also strongly urges that the Petitioner is interested to take recourse to the amnesty scheme ‘Vivad Se Vishwas 2020’. He states that in the event the Court were to allow the present petition and restore the appeal to its original number, Petitioner undertakes to apply under the said scheme.
He submits that the entire endeavour is to put a quietus to the present dispute and that the Petitioner has every intention to settle the outstanding dues by taking benefit of the afore-noted scheme.
The division bench of Justice Manmohan and Justice Sanjeev Narula noted that the assessee was prevented by sufficient cause from appearing before the ITAT when the appeal was taken up for hearing. Further, the Tribunal has taken into consideration such reasons which were not germane for deciding the Miscellaneous Application. The sufficiency of the cause, which was the only factor to be examined, has been ignored by the Tribunal. If sufficient cause is shown, the Tribunal is obligated to consider the same and make an order setting aside the ex-parte order, irrespective of the fact that the final order decided the appeal on merits. “We are also persuaded to allow the petition, in view of the undertaking given by the Petitioner that it would apply under the ‘Vivad Se Vishwas’ Scheme in the event the appeal is restored to its original number. The Petitioner’s undertaking is taken on record and it shall be held bound by the same,” the court said.
Subscribe Taxscan Premium to view the JudgmentThe Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman chaired the pre-budget consultation meetings for budget 2021-22 held in virtual mode from 14th to 23rd December 2020.
More than 170 invitees representing 9 stakeholder groups participated in 15 meetings scheduled during this period. The stakeholder groups include, Financial and Capital Markets; Health, Education and Rural Development; Water and Sanitation; Trade Union and Labour Organization; Industry, Services and Trade; Infrastructure, Energy and Climate Change sector; Agriculture and Agro Processing Industry; Industrialists; and Economists.
Union Minister of State for Finance & Corporate Affairs Shri Anurag Singh Thakur, Finance Secretary Dr A.B. Pandey; Secretary, DIPAM, Shri Tuhin Kanta Pandey; Secretary, Expenditure, Shri T.V. Somanathan; Secretary, DEA, Shri Tarun Bajaj; Chief Economic Advisor Shri Krishnamurthy Subramanian and senior officers from Ministry of Finance and other Ministries also participated in the meeting.
The stakeholder groups made several suggestions on various subjects that included Fiscal Policy, including Taxation; Bond Markets; Insurance; Infrastructure Spending; Health and Education Budget; Social Protection; Skilling; Water Harvesting and Conservation; Sanitation; MGNREGA; Public Distribution System; Ease of Doing Business; Production Linked Investment scheme, Exports; Branding of ‘Made in India’ products, Public Sector Delivery Mechanisms; Innovation, Green Growth; Non-Polluting sources of Energy and Vehicles, among others.
The participants lauded government’s efforts to flatten the COVID-19 curve and a strong recovery in economic growth in the second quarter of 2020-21. They further stated that India is among very few countries whose economic activity has risen with declining pandemic induced fatalities.
Finance Minister Smt. Sitharaman thanked the participants for sharing their valuable suggestions assuring that all suggestions will be carefully considered while preparing the Budget 2021-22.
The Central Board of Direct Taxes (CBDT) refunded Rs.1,50,863 crore to more than 1.18 crore taxpayers since April.
“CBDT issues refunds of over Rs. 1,50,863 crore to more than 1.18 crore taxpayers between 1st April, 2020 to 20th December,2020. Income tax refunds of Rs.47,608 crore have been issued in 1,16,07,299 cases & corporate tax refunds of Rs. 1,03,255crore have been issued in 2,01,796 cases,” the Income Tax Department tweeted.
According to the Income Tax department, Income Tax refunds of Rs.47,608 crore have been issued in 1,16,07,299 cases and corporate tax refunds of Rs 1,03,255 crore have been issued in 2,01,796 cases. In the wake of the COVID-19 pandemic, the CBDT has also extended the last date for filing Income Tax Returns (ITR) for the financial year 2019-20 to December 31, and for those taxpayers whose accounts need to be audited, the ITR filing deadline has been extended by two months till January 31, 2021.
The Institute of Chartered Accountants of India (ICAI) decided to conduct the Advanced Integrated Course on Information Technology and Soft Skills (Advanced ICITSS), Advanced IT Test in Computer Based Mode (CBT) on Tuesday, the 12th January 2021 from 10.30 AM to 12.30 PM.
The computer based test will be held at 69 cities provided sufficient number of candidates offer themselves to appear in the test, from the cities.
Dubai and Kathmandu are notified to be the centres abroad.
“ICAI reserves the right to cancel the centre and allot the candidates to any centre / city other than the one he / she has opted for, in case the number of candidates who opt for appearing in that particular city / centre is not adequate,” the ICAI said.
The ICAI has announced that the CBT may be conducted at the centers in one or more shifts, depending upon the applications received for the center. Exam department will allot the shift on a first come first serve basis and as per applications received and seats available at the centre. No change in shift or center requests will be entertained.
“Candidates who have/would have undergone the Advanced ICITTS-Advanced Information Technology course on or before 11th January, 2021 and desirous of appearing in the test, will be required to apply online at http://advit.icaiexam.icai.org and also pay the applicable test fee online. No physical applications will be entertained. There is no concept of submission of applications with late fee. No change of centre will be permitted once opted,” the ICAI while elaborating on the On-line filling up of examination forms, said.
The ICAI notified that a candidate who is applying for the test for the first time will not be required to pay the test fee.
However, those who are applying for the test thereafter, i.e. from second time onwards will be required to pay a test fee of Rs. 500/- online through the payment gateway. For Dubai Centre, the test fee will be USD 150 and for Kathmandu, the same will be Rs.850/-.
The Commencement of submission of examination application forms will be from 24th December 2020 and the last date for submission of online examination application forms is 28th December 2020.
For more details Click here.
The Institute of Chartered Accountants of India ( ICAI ) has issued an Advisory to follow the ICAI Valuation Standards 2018 while conducting any type of Valuation Engagement to ensure uniformity and transparency.
With a vision to promote best practices in this niche area of practice, the Standards lay down a framework for the chartered accountants to ensure uniformity in approach and quality of valuation output.
The Valuation Standards have been issued by the Institute of Chartered Accountants of India to set up concepts, principles, and procedures which are generally accepted internationally having regard to legal framework and practices prevalent in India.Applicability of Valuation Standards:
The ICAI Valuation Standards are applicable for all valuation engagements on a mandatory basis for members undertaking valuation engagements under the Companies Act 2013. In respect of Valuation engagements under other Statutes like Income Tax, SEBI, FEMA, etc, it will be on a recommendatory basis for the members of the Institute. These Valuation Standards are effective for the valuation reports issued on or after 1st July, 2018.
These standards come as ICAI’s consistent drive to guide its members for ensuring high-quality work and standards. Accordingly, ICAI Valuation Standards, 2018 are applicable on a recommendatory basis for all the valuation engagements undertaken by members under various laws.
In this regard, all the members of the Institute are advised to follow the ICAI Valuation Standards 2018 while conducting any type of Valuation Engagement to ensure uniformity and transparency.
The Income Tax Appellate Tribunal (ITAT), Delhi bench held that the gifting shares to one company from another would not attract Capital Gains Tax.
The assessee, Manjula Finance Ltd. has made gifts of shares held as stock in trade of Jindal steel and Power Ltd, Jindal saw Ltd, Hexa Tradex Ltd, Nalwa Sons investments Ltd, JSW steel Ltd. The AO further found that the assessee has claimed gifting of the above shares whose market value is Rs.2,307,316,710 whereas the cost of purchase of these shares is Rs 11,17,87,701. The shares were gifted to 4 different companies.
The assessee contended that In support of the contention of the assessee, it is stated that there was a Memorandum of Understanding amongst the four sons of late O P Jindal specifically desiring to realign or rearrange the holding of listed equity shares of late O P Jindal group companies amongst various other group companies under the control of four brothers and their families.
The assessee being the absolute owner of the shares gifted , had full enjoyment rights including to alienate, discard and even demolish, unless prohibited by some statutory provisions, it is within the powers of the assessee to make a gift at its free will. Further the shares were credited in the books of account of the donor. The gift is also authorised by articles of association, approved by Board of Directors and Shareholders.
The issue raised was whether the assessee has produced said family settlement deed or a family memorandum of understanding or not does not make any difference and the transaction is required to be tested devoid of any consideration for a family arrangement. The coram consisting of H.S.Sidhu and Prashant Maharshi while reversing the orders of the lower authorities and hold that gift made by a corporate entity, appellant to 4 different corporate entities, in absence of any consideration, no business income can be charged to tax in the hands of Donor appellant.
Subscribe Taxscan Premium to view the JudgmentThe Institute of Companies Secretary of India (ICSI) announced that the CS Students may now avail Opt-Out facility from December 2020 to June 2021 Exam Session without mentioning any reason.
The Council of Institute at its 272nd meeting held on 19th December, 2020, has decided that the “Opt Out” facility has been extended to all students enrolled for the June, 2020 (merged with December, 2020) and December, 2020 session of examinations.
The ICSI has announced that the Students may avail “Opt Out” facility, if they so desire, without mentioning any specific reason.
A one-time option shall be given to the students to “opt out” from the December, 2020 sessions of examinations by carrying forward the credit of examination fee to June, 2021 examinations.
The last date for submitting a request to avail the “Opt Out” facility without citing any specific reason is 31st December, 2020.
“Notwithstanding the last date of 31st December, 2020 as mentioned above, if any student is availing “Opt Out” facility by submitting “Covid-19 Positive” certificate as per the earlier announcement dated 04.12.2020, the last date for submitting the request shall remain the same i.e. 15th January, 2021,” the ICSI said.
The Institute clarified that if any student submits a request for availing “Opt-out” facility after appearing in all papers of the Module(s) for which he/she is scheduled to appear during the December, 2020 session of examinations, such requests will be summarily rejected without notice. The Institute announced that on receipt of the Opt-Out request online form, student’s enrollment for December, 2020 session shall be treated as canceled and his/her candidature will be carried forward to June, 2021 session of examinations. Once the request is submitted, it will be treated as final and requests for its change/revocation will not be entertained under any circumstances.
For more details Click here.
