Tax due date - April 2019

Sr No	Due Date	Related to	Compliance to be made
1	11.04.2019	GST	Filing of GSTR 1 for the month of February, 2019

3

20.04.2019

GST

Payment of GST for the month of March, 2019 Filing of GSTR 3B for the month of March, 2019

4

30.04.2019

TDS/TCS (Income Tax)

· Deposit TDS for payments of Salary, Interest, Commission or Brokerage, Rent, Professional fee, payment to Contractors, etc. during the month of March 2019. · Deposit TDS from Salaries deducted during the month of March 2019 • Deposit TCS for collections made under section 206C including sale of scrap during the month of March 2019, if any

Business Connection new development

In order to align the domestic laws with the modifications being done by Organisation for Economic Co-operation and Development (OECD) through Base Erosion and Profit Shifting (BEPS) and the Multilateral Instruments (MLI) some very significant amendments have been done in international taxation  

Green Shoe Option

Public issue of shares (also knows as IPO) is a very common way of raising funds
by a corporate entity. However many a times it has been seen that after public
issue of shares the listed price of securities falls below issue price which creates panic
in the market and discourages the investors to put their hard earned money in IPO
market.

Growing story of GST in India - Few points.

01.   Multiple rate going to be exist

02.   Dispute going to be raise much for input ta credit.

03.   Multiple state registration

04.   FOC Supply (Free of Cost) is taxable 

05.   TDS & TCS applicability on E Commerce

06.   Employee Recovery   is most  debatable.

07.   Anti –profiting going to be stay.

08.   No clarity on Columbia – Asia cross charge

09.     New Litigations  

(i)                  Use of brand name by associate companies.

(ii)                Liquidated damage.  Further no input 

(iii)               Verification of Trans-1.  No input credit of CESS.    Already challenged in High Court.

10.    Follow the ISD mechanism while doing cross charge.

GST COUNCIL UPDATE

Decisions taken by the GST Council in the 34^thmeeting held on 19^thMarch, 2019 regarding GST rate on real estate sector

GST Council in the 34^th meeting held on 19^th March, 2019 at New Delhi discussed the operational details for implementation of the recommendations made by the council in its 33^rd meeting for lower effective GST rate of 1% in case of affordable houses and 5% on construction of houses other than affordable house. The council decided the modalities of the transition as follows.

GST RULES EFFECTIVE FROM APRIL 1, 2019

Article discusses changes in 

1. GST Provisions related to Threshold Limit for Registration in case of goods , Services and Both Goods & Services 

2. Changes in GST Composition Scheme 

3. Supply with or without consideration – treated as supply under GST, Changes in TCS Provisions and 

4. Proposed New GST Return Formats.

Circular clarifying various doubts related to treatment of sales promotion scheme under GST

Circular No. 92/11/2019-GST

F. No. 20/16/04/2018-GST

New Delhi, Dated the 7th March, 2019

Subject: Clarification on various doubts related to treatment of sales promotion schemes under GST - Reg.

Various representations have been received seeking clarification on issues raised with respect to tax treatment of sales promotion schemes under GST. To ensure uniformity in the implementation of the law across the field formations, the Board, in exercise of its powers conferred under section 168(1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “the said Act”) hereby clarifies the issues in succeeding paragraphs.

2. It has been noticed that there are several promotional schemes which are offered by taxable persons to increase sales volume and to attract new customers for their products. Some of these schemes have been examined and clarification on the aspects of taxability, valuation, availability or otherwise of Input Tax Credit in the hands of the supplier (hereinafter referred to as the “ITC”) in relation to the said schemes are detailed hereunder:

New Functionalities enabled on GST portal

This is to update you on certain new functionalities enabled on the GSTN portal.

·         Monthly comparison statement of liability declared and statement of ITC claimed: Government has come up with the credit and liability comparison statement which captures monthly comparison of output liability declared in returns (between GSTR-3B and GSTR-1) and ITC availed (between GSTR-3B and GSTR-2A). Further, taxpayers can also download detailed reports capturing the comparison of output liability and shortfall/ excess thereof. Some of the reports available on the GST portal  are mentioned below:

Ø  Comparison of output liability other than export/ reverse charge

Ø  Comparison of output liability due to reverse charge

Ø  Comparison of output liability due to exports and SEZ supplies

Ø  Comparison of ITC availed with GSTR-2A

·         Facility of filing of annual return (GSTR-9): Government has enabled filing of GSTR-9 on GST portal. We have provided hereunder the salient features for ease of reference:

Ø  GSTR-9 can be filed using ‘Prepare Online’ or ‘Prepare Offline’. However, ‘Prepare Offline’ option has not been activated on the GST portal as of now.

Ø  Annual return in Form GSTR-9 once filed cannot be revised.

Ø  Option to download annual summary of GSTR-1 and GSTR-3B has been enabled. Further, computation of ITC based on GSTR-2A is being auto-populated on the portal basis the GSTR-1 filed by the corresponding supplies.

Apart from the above functionalities, Government has also released the proposed return formats. 

Three Imp Judgements On Core Issues

CIT vs. Tasgaon Taluka S.S.K. Ltd (Supreme Court)

S. 37(1)/40A(2) Business expenditure vs. sharing of profit: The AO has to take into account the manner in which the business works, the modalities and manner in which SAP/additional purchase price/final price are decided and determine what amount forms part of the profit. Whatever is the profit component is sharing of profit/distribution of profit and the rest is deductible as expenditure

Merely because the higher price is paid to both, members and non-members, qua the members, still the question would remain with respect to the distribution of profit/sharing of the profit. So far as the non-members are concerned, the same can be dealt with and/or considered applying Section 40A (2) of the Act, i.e., the assessing officer on the material on record has to determine whether the amount paid is excessive or unreasonable or not

Procedure for endorsement of invoices for receipts of goods or services to be followed by SEZ developers/ units

This is to update you on procedure prescribed by the Office of the Development Commissioner, Karnataka Sub Zone (the “Office”) to be followed by Special Economic Zone (“SEZ”) developers/ units for endorsement of invoices across Karnataka SEZ Zone. In this regard, please find below the summary of instructions:

·                Background:

–        As per Rule 89 of CGST Rules, 2017, the invoices for supply of goods or services or both by the supplier to SEZ developers/ units are required to endorsed by Specified Officer in the SEZ for the purpose of claiming refund by such supplier.

–        The procedure for endorsement of invoices in respect of goods has been prescribed under Rule 30(4) of SEZ Rules, 2006. However, there is no prescribed procedure to be followed for endorsement of invoices in respect of services.

–        In order to ascertain the receipt of services, different sets of documents/ details are being called for by the Specified Officers.

–        Therefore, the Office has prescribed the procedure to bring uniformity for endorsement of invoices in respect of services.

·                Prescribed procedure for services:

–        Original invoice to be produced before Specified Officer along with request letter for the purpose of endorsement.

–        The invoice should have endorsement by the authorized signatory to the effect that “the service is received and utilized for the authorized operations of the SEZ”

–        SEZ developer/ unit to produce relevant ledger to prove that invoice for supply of service is duly accounted in books of accounts

o   In case of any change in accounting of invoice, SEZ developer/ unit to inform the Specified Officer

–        Details of payments may not be insisted upon except in rare cases as same is verified by GST officers

o   If required, then SEZ developer/ unit to furnish the same in writing

–         The Specified Officer to endorse only one copy of the invoice for which SEZ units may approach the respective Specified Officers

·                Prescribed procedure for goods [Rule 30(4) of SEZ Rules, 2006]:

–        The invoices containing the seal of the security gate entry can be produced before authorized officer for endorsement after entry of particulars on online portal “sezonline-ndml.co.in”

Procedure for endorsement of invoices for receipts of goods or services to be followed by SEZ developers/ units

This is to update you on procedure prescribed by the Office of the Development Commissioner, Karnataka Sub Zone (the “Office”) to be followed by Special Economic Zone (“SEZ”) developers/ units for endorsement of invoices across Karnataka SEZ Zone. In this regard, please find below the summary of instructions:

·                Background:

–        As per Rule 89 of CGST Rules, 2017, the invoices for supply of goods or services or both by the supplier to SEZ developers/ units are required to endorsed by Specified Officer in the SEZ for the purpose of claiming refund by such supplier.

–        The procedure for endorsement of invoices in respect of goods has been prescribed under Rule 30(4) of SEZ Rules, 2006. However, there is no prescribed procedure to be followed for endorsement of invoices in respect of services.

–        In order to ascertain the receipt of services, different sets of documents/ details are being called for by the Specified Officers.

–        Therefore, the Office has prescribed the procedure to bring uniformity for endorsement of invoices in respect of services.

·                Prescribed procedure for services:

–        Original invoice to be produced before Specified Officer along with request letter for the purpose of endorsement.

–        The invoice should have endorsement by the authorized signatory to the effect that “the service is received and utilized for the authorized operations of the SEZ”

–        SEZ developer/ unit to produce relevant ledger to prove that invoice for supply of service is duly accounted in books of accounts

o   In case of any change in accounting of invoice, SEZ developer/ unit to inform the Specified Officer

–        Details of payments may not be insisted upon except in rare cases as same is verified by GST officers

o   If required, then SEZ developer/ unit to furnish the same in writing

–         The Specified Officer to endorse only one copy of the invoice for which SEZ units may approach the respective Specified Officers

·                Prescribed procedure for goods [Rule 30(4) of SEZ Rules, 2006]:

–        The invoices containing the seal of the security gate entry can be produced before authorized officer for endorsement after entry of particulars on online portal “sezonline-ndml.co.in”

Circular issued for clarifying - treatment of various sales promotion schemes under GST

This is to update you that CBIC has issued a circular 92/2019 dated 07 March 2019 clarifying taxability, valuation, availability or otherwise of Input Tax Credit (‘ITC’) in the hands of the supplier with regards to the sales promotion schemes under GST.  We have tabulated below the scenarios/schemes on which such clarification has been issued by the Government for your ready reference –

S.No.	Sales promotion scheme	Reference to provisions / basis of clarifications issued	Clarification on ITC availability
1	Free samples and gifts	- In such scenarios, suppliers supplies free samples etc. to their stockists, dealers, distributors etc. without charging any consideration. - Reference is made to sec. 7(1)(a) of CGST Act 2017, where 'supply' has been defined to include all forms of supply of goods or services or both agreed to be made for a consideration by in the course or furtherance of business. - Therefore, the goods or services or both which are supplied free of cost (without any consideration) shall not be treated as "supply" under GST (except in case of activities mentioned in Schedule I of the said Act) - Accordingly, it is clarified that samples which are supplied free of cost, without any consideration, do not qualify as supply under GST, except where the activity falls within the ambit of Schedule I of the said Act.	-It has been clarified that ITC shall not be available to the supplier on the inputs, input services and capital goods to the extent they are used in relation to the gifts or free samples distributed without any consideration. - However, where the activity of distribution of gifts or free samples falls within the scope of "supply" on account of the provisions contained in Schedule I of the said Act, the supplier would be eligible to avail of the ITC.
2	Buy one get one free offer	- In such scenarios, suppliers are supplying goods under "Buy One, Get One free" schemes For example, 'buy one soap and get one soap free' or 'Get one tooth brush free along with the purchase of tooth paste' and it may so appear that the free commodity has been supplied as free of cost without any consideration and hence not a supply under GST. -  The above scenario has been interpreted in a way that it is not an individual supply of free goods but a case of two or more individual supplies where a single price is being charged for the entire supply i.e. supplying two goods for the price of one	ITC shall be available to the supplier for the inputs, input services and capital goods used in relation to supply of goods or services or both as part of such offers.
3	Discounts including ‘Buy more, save more’ offers:	- In such scenarios, suppliers are offering to - a) customers with a scheme where discount is linked to the purchasing value say 10 % discount for purchases above Rs. 5000/-, 20% discount for purchases above Rs. 10,000/ etc and b) stockists, dealers and distributors with a scheme which may be purchase linked say, discount of 1% if they purchase 10000 pieces in a year, additional discount of 2% on purchase of 15000 pcs. and so on. - Discounts given to customers are required to be shown on invoice while the discounts offered to dealers and distributors are required to established in terms of an agreement entered into at or before the time of supply. - Further, such discounts gets determined after the supply has been effected and generally at the year end and are known as “volume discounts”. Such discounts are passed on by the supplier through credit notes. - It has been clarified that such discounts shall be excluded to determine the value of supply provided they satisfy the parameters laid down in section 15(3) of the CGST Act, including the reversal of ITC by the recipient of the supply as is attributable to the discount.	Supplier shall be entitled to avail the ITC for such inputs, input services and capital goods used in relation to the supply of goods or services or both on such discounts
4	Secondary Discounts	Such discounts are offered by suppliers post the supply has been made and where the terms of the discounts were not pre agreed.  In other words, the conditions laid down in sec. 15(3) of CGST Act are not satisfied in this case. In such cases, it has been clarified that credit note prescribed u/s 34 of CGST Act cannot be issued and the transaction may be settled by issuance of a commercial credit note / financial credit note. In other words, value of supply shall not include any discount by way of issuance of credit note(s) as explained above or by any other means, except in cases where the provisions contained in 15(3)(b) of CGST Act 2017 are satisfied.	No impact on availability or otherwise of ITC in the hands of supplier in this case

TBM  Comments

• Above mentioned promotional schemes are offered by suppliers to increase sales volume and to attract new customers for their products and is very common in industry practice.
• This circular provides clarity on the availability of ITC on various schemes which may help the suppliers to plan the schemes accordingly keeping in mind the credit availability in each of the scenarios.
• It may be important for the suppliers to revisit the terms of the agreements with the dealers and distributors to evaluate such scheme offerings made in course of their business.

Due-dates for GSTR 1 and GSTR 3B (Apr 2019 to Jun 2019) notified

This is to update you that government has notified the due dates of filing of GSTR 1 and GSTR 3B returns for the tax periods April 2019 to June 2019.

The notified due dates are as under –

• GSTR 1 (for taxpayers having aggregate turnover of more than 1.5 Crores in current or preceding financial year) – vide notification 12/2019– Central Tax dated 07 March 2019;

Tax period	Due-dates
April-19	11th May-19
May-19	11th June-19
June-19	11th July-19

• GSTR 3B (for all types of taxpayers)- vide notification 13/2019– Central Tax dated 07 March 2019 – to be filed on or before 20^th of succeeding month.

• GSTR-1 (for taxpayers having aggregate turnover of less than 1.5 Crores in current or preceding financial year) – vide notification 11/2019– Central Tax dated 07 March 2019 - to be filed for quarter (April 2019 to June 2019) on or before 31 July 2019