Questionable Policies of Government.

The Ministry of Finance has multiple objectives.  One of these objectives is to simplify the compliance process for the taxpayer. While ostensibly attempting to do so, policymakers sometimes at times end up achieving the contrary and add to the complexities that already burden the hapless taxpayer.  A case in point are the new rules aimed to curb tax evasion.  These guidelines have only resulted in creating further hardship for all taxpayers of the country.   

Understanding Composite Supply

 

Under GST law, the concept of “composite supply” is still an area of interpretation even though the government has issued clarifications and FAQs as unique underlying facts of each case needs to be examined. One such scenario relates to the Reagent Rental Contract (“RRC”) which is commonly entered into by the medical device companies with hospitals, laboratories etc.

GST Liability on Volume Discount

Introduction :-             Discount is one kind of incentive being offered by the seller to the buyer through reduction in the usual price of goods to enhance volume of business and generate profit. Tax liability has to be discharged by the seller by deducting the amount of discount from the total price of goods. There are various kinds of discounts provided by the seller to the buyer as incentive to meet his business target. There are certain discounts are pre- sale discounts and some discounts are post-sale discounts. The pre-sale discount are predetermined and disclose to the customer beforehand of sales but post sale-discounts are related to quantity discounts, year-end discounts, cash discounts and prompt payment discounts.

Woes of EOUs with regard to DTA clearances after implantation of GST

In the pre-GST era, an EOU was required to pay the excise duty on the higher side in respect of the goods cleared in DTA for the reason that the EOU has availed the benefit of exemption from custom duty on the inputs imported by it. Normally, there was no difficulty in calculating the excise duty payable on the goods removed in DTA in terms of Notification No. 23/2003-CE dated 31.03.2003 because the excise duty was payable on the transaction value of the goods cleared in DTA at the rate applicable on the date of clearance. There was no question of interest as well for such clearances of goods in DTA in the pre-GST era.

Impact of GST on Real Estate

The Real Estate industry is one of the largest sectors in the country and is a major contributor in the growth of Indian economy. This industry is one of the rapidly growing sectors in India since the factors such as accelerated urbanization, migration, increasing population, emerging nuclear families have increased the requirement of residential houses. Due to such increasing demand of  residential houses, demand of commercial places such as offices, malls, factories have also increased. Moreover, after the introduction of “Housing for all” and other similar schemes by the Govt., the real estate sector is expected to grow multifold.

  Further, as far as indirect taxes are concerned, prior to 01.07.2017, the builders/contractors were required to comply with the provisions of Finance Act, 1994 (i.e. Service Tax) and relevant VAT Acts while providing the construction services. However, w.e.f. 01.07.2017, such taxes have been substituted with one single tax namely GST wherein

Presumptive taxation / estimation of profit by applying rate :- separate addition

:- whether each entry need to explain :- creditors part of business income :- creditor representing other then business income

Once under special provision of section 44AD, exemption from maintenance of books of account has been provided and presumptive tax at rate of 8 per cent of gross receipt itself is basis for determining taxable income, assessee is not under any obligation to explain individual entry of cash deposit in bank unless such entry has no nexus with gross receipts.

CIT v. Surinder Pal Anand [2010] 192 TAXMAN 264 (PUNJ. & HAR.)

All about GST E Invoice

What is GST E-Invoice System?

GST e-invoice is the introduction of the digital invoice for goods and services provided by the business firm generated at the government GST portal. The concept of GST e-invoice generation system has been taken into consideration for the reduction in GST evasion.

The GST officers have come to a conclusion by providing the businesses with a system through which it will become mandatory for them to generate ‘e-invoice’ for every sale on the government GST portal. This system will only be applicable to those whose turnover threshold is above the determined limit i.e. the government will set a threshold limit for them.

An official said that the businesses that will fall under a certain threshold will be given a unique number whenever an e-invoice will be generated. The businesses can match this number with the invoices which are written in the sales return and paid taxes for verification.

Applicability of GST E-Invoice System

Bangalore Tribunal denies capital gains exemption on share buyback from 99.99% paren

• Conditions under section 47(iv) not legally impossible to satisfy under Indian company law
• For the purposes of section 46A, there is no requirement to demonstrate that there had been a transfer of a capital asset
• Parent – subsidiary exemption under section 47 (iv) not applicable where capital gains are chargeable to income-tax under a special charging provision

TP adjustment in case of 100 % incentive business

In Doshi Accounting Services vs. DCIT, the Special Bench of the ITAT has held that the transfer pricing provisions are applicable even to a case in which the income of the assessee is eligible for 100% tax exemption and is not chargeable to tax in India.

FAQs: Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019

SABKA VISHWAS (LEGACY DISPUTE RESOLUTION) SCHEME, 2019

Objectives: One time measure for liquidation of past disputes of Central Excise and Service Tax and To provide an opportunity of voluntary disclosure to non-compliant taxpayers.

Government prescribes mandatory electronic modes of receiving payments for large businesses

This Tax Alert explains Notification No. 105/2019 (Notification) and Circular No. 32/2019 (Circular) both dated 30 December 2019 issued by the Government of India (GOI), through the Central Board of Direct Taxes^[1] (CBDT) prescribing electronic modes of payment under the newly inserted Section (S.) 269SU of the Income Tax Act (ITA), which came into effect from 1 November 2019^[2].  ^.

The Notification notifies three electronic modes of payments viz. 

(i) Debit Card powered by RuPay^[3] 

(ii) Unified Payments Interface (UPI) (BHIM^[4] -UPI) and 

(iii) Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code) 

as mandatory modes of electronic payments with effect from 1 January 2020 for every person carrying on business if his total sales, turnover or gross receipts in business (turnover) exceeds INR500m during the immediately preceding tax year (specified person). These modes are in addition to any other electronic modes being provided by such person.

The Circular clarifies that, from 1 January 2020, the specified person must provide the facilities for accepting payment through the above referred prescribed electronic modes. Further, in view of a new provision in the Payment and Settlement Systems Act, 2007 (PSSA), any charge including the Merchant Discount Rate (MDR) shall not be applicable on or after 1 January 2020 on payment made through above referred prescribed electronic modes.

The Circular also clarifies that a penalty of INR5,000 per day is applicable in case of failure by specified person to comply with S.269SU. However, in order to allow sufficient time to the specified person to install and operationalize the facility for accepting payments through prescribed electronic modes, no penalty shall be levied if the specified person installs and operationalizes the facilities on or before 31 January 2020. However, if the specified person fails to do so, he shall be liable to pay a penalty of INR5,000 per day from 1 February 2020 for such failure.