Tax Due Date - December 2021.

 

S No	Due Date	Related to	Compliance to be made
1	11.12.2021	GSTR – 1	Filing of GSTR – 1 for the month of November 2021
2	20.12.2021	GST	Payment of GST for the month of November 2021 Filing of GSTR 3B for the month of November 2021
3	07.12.2021	TDS/TCS (Income Tax)	· Deposit TDS for payments of Salary, Interest, Commission or Brokerage, Rent, Professional fees, payment to Contractors, etc. during the month of November 2021. · Deposit TDS from Salaries deducted during the month of November 2021 • Deposit TCS for collections made under section 206C including the sale of scrap during the month of November 2021, if any • Deliver a copy of Form 15G/15H, if any to CCIT or CIT for declarations received in the month of November 2021, if any
4	15.12.2021	Income tax	Payment of Advance Tax for the Corporate and Non Corporate assesses –Amount not less than 75% and 60% of advance tax respectively.
5.	31.12.2021	Income Tax	Filing of Tax Audit & other report and filing of ITR for non audit cases.

India and the US agree on transitional approach for India’s 2% Equalisation Levy pursuant to Pillar One solution

 

This Tax Alert discusses the recent Press Release dated 24 November 2021 issued by Government of India on the compromise reached between India and the United States of America (US) on a transitional approach to the treatment of existing e-commerce Equalisation Levy (EL) during the interim period before new Pillar One rules come into effect.

CBDT issues further guidelines on withholding of taxes for sale and purchase of goods and e-commerce platforms

Circular No. 20/2021 dated 25 November 2021 (Circular) issued by the Central Board of Direct Taxes (CBDT), provides guidelines for removing certain difficulties in the application of provisions regarding withholding tax @ 0.1% on purchase of goods [Section (S.) 194Q of the Income Tax Laws (ITL)] (tax deducted at source (TDS) on purchases), collection of tax at source at 0.1% on the sale of goods (S. 206C(1H) of the ITL) (tax collected at source (TCS) on sales) and withholding tax @ 0.1% on transactions carried out by e-commerce operators (S. 194-O of the ITL) [TDS on e-commerce operators (EOP)].

Forfeiture of deposit is not leviable to service tax as toleration of an act

 Tribunal in the case of Tirupati Balaji Furnaces Pvt Ltd., 2021 (11) TMI 600, held that Service Tax (‘ST’) would not be levied on forfeiture of earnest money and retention of compensation / liquidation damage for non-delivery of purchased goods by the supplier.    

Important clarification by CBIC on refunds related issues

 

Circular No. 166/22/2021-GST dated November 17, 2021 issued by the Central Board of Indirect Taxes (‘CBIC’) providing clarification on certain refund related issues.  Given below the summary of circular with our comments.

S. No.	Issue	Clarification	Comments
1	Whether limitation period of 2 years applicable for filing refund application of excess balance in e-cash ledger?	Limitation period is not applicable	Balance in e-cash ledger is as good as cash for a taxpayer and does not partake form of a ‘tax’
2	Whether declaration/certification of unjust enrichment required in case of refund of excess balance in e-cash ledger?	Not required, as unjust enrichment clause is not applicable in such cases	Balance in e-cash ledger is taxpayer’s own money and hence, no point of unjust enrichment
3	Whether refund of TDS/TCS deposited in e-cash ledger under GST can be refunded as excess balance in cash ledger?	TDS/ TCS credited to e-cash ledger is equivalent to cash deposited in the ledger. Therefore, said amount can be refunded as excess balance in e-cash ledger	Practically, once a taxpayer files a refund application, Department is denying the same on the ground either of difference in GSTR-2A v. GSTR-3B or some other ground which has no relation with the e-cash refund. Realising this especially from TCS/TDS perspective, recently, GST Council has decided to allow taxpayers to transfer such balance from one GSTIN to another. Portal functionality is yet to come.
4	What is the ‘relevant date’ for filing refund claim under Deemed Exports by the recipient?	The date of filing of return (covering the deemed exports supplies) by the supplier	It is, therefore, important for the recipient not to delay in claiming the ITC because the limitation period of 2 years shall start from the date of supplier’s return.

Directors can’t be booked just because the firm violated the law: SC

 

The Supreme Court has asked investigating and prosecuting agencies not to proceed mechanically against directors of errant companies merely because of the post held and said such avoidable prosecution leads to humiliation and loss of reputation in society.

Understand Proposed Digital tax.

All through the past few months, the finance dailies have been talking about the introduction of a new regime of taxing digital transactions and the abolition of the Equalization Levy. The article is an attempt to simplify digital taxation and address some of the key points of the proposal. What is the whole discussion about?

What is the difference between FDI and FPI?

 

Each Country needs money for its profitable widening also the funds can’t be elevated from just its domestic sources only. In this fast-developing world, The two main and well-needed kinds of foreign capital are Foreign Portfolio Investment (FPI) and Foreign Direct Investment (FDI).

FDI relates to the foreign investment where the investor gets a lasting interest in an enterprise in another country. It involves establishing a direct business interest in a foreign country, such as buying or establishing a manufacturing business, building warehouses, or buying buildings. Also, it tends to involve creating more of a substantial, long-term interest in the economy of a foreign country. FDI can also be made through different methods like creating a joint venture, through merger and acquisition, etc.
Foreign Portfolio Investments (FPI) refers to investing in the financial assets of a foreign country, such as stocks or bonds available on an exchange. It includes the buying of securities that can be easily bought or marketed. Hoping to generate a fast return the main motive of FPI is to invest money into a foreign country’s stock market.

Revolutionary Changes are made in GST for the Real Estate Sector.

 ITC has been abolished for the residential segment with no option to pay GST at a higher rate and claim ITC. The revised scheme applies to residential and commercial apartments which are covered under RERA. The provisions do not apply to the construction of single houses or works contracts not covered under RERA. 

 

Understand best judgment assessment under section 144.

§  This is an assessment carried out as per the best judgment of the Assessing Officer on the basis of all relevant material he has gathered. This assessment is carried out in cases where the taxpayer fails to comply with the requirements specified in section 144.

Whether intimation U/S 143(1) can be revised U/S 264 by the commissioner?

 Ø  

·         From the various judicial pronouncements, it is settled that the powers conferred under section 264 of the Act are very wide. 

·         Under this section, the Principal Commissioner is mandated not to revise any order in two situations: first where an appeal that lies to the Commissioner (Appeals) but has not been made and the time within which such appeal may be made has not expired or second, where the assessee has not waived his right of appeal.

·         Bombay HC in the case of Aafreen Fatima Fazal Abbas Sayed v. ACIT AND PCIT (WRIT PETITION (L) NO. 6096 OF 2021) has held that since section 264 uses the expression “any order”, it would imply that the section does not limit the power to correct errors committed by the subordinate authorities but could even be exercised where errors are committed by assessees.

·         Article 265 of the Constitution of India imposes an embargo on imposition and collection of tax if the same is without authority of law.

·         Thus, The powers given to Commissioner of Income Tax under section 264 are very wide and he can revise any order including intimation under section 143(1)

CBDT notifies e-settlement scheme, 2021- Overview

The Board of Direct Taxes (Income Tax Department) vide Notification No. 129/2021/ F.No. 370142/52/2021-TPL (Part IV) dated 01.11.2021, in exercise of its power under section 245D (11) & 245D (12) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) has issued a Scheme may be called the e-Settlement Scheme, 2021 to settle pending income-tax settlement applications transferred to a settlement commission.

TYPES OF AUDIT AND THEIR LEGAL REQUIREMENT

 

 

 

 

PARTICULARS	LEGAL REQUIREMENT
FORENSIC AUDIT
By banks on loans and advances	1)     The RBI has mandated forensic audits for loan accounts above a particular exposure which have turned non- performing by issuing Master Directions on Frauds – Classification and Reporting by commercial banks and select FIs via Circular No. DBS.CO.CFMC.BC.No.1/23.04.001/2016-17 Dated July 01, 2016.   2)     SEBI in Schedule III, in Part A, under the Clause A, sub- clause 17 of SEBI LODR Regulations] has now mandated the following disclosures shall be made to the stock exchanges by listed entities: a)     The fact of initiation of forensic audit along-with name of entity initiating the audit and reasons for the same, if available; b)     Final forensic audit report (other than for forensic audit initiated by regulatory / enforcement agencies) on receipt by the listed entity along with comments of the management, if any.”
STATUTARY AUDIT/ EXTERNAL  AUDIT
For Private/Public Company	Section 139 to 147 of Companies Act, 2013 along with Companies (Audit & Auditors) Rules, 2014.   Mandatory: Irrespective of Turnover, profits etc., even in case of losses.
For LLP	Section 34(4) of LLP Act, 2008 and Rule 24(8) of LLP Rules, 2009.   LLP audit is mandatory where the turnover exceeds ₹40 lakhs in a F.Y. OR where the contribution exceeds ₹25 lakhs in a F.Y.

INTERNAL AUDIT
For listed company	Section 138 of Companies Act, 2013 and Rule 13 of Companies (Accounts) Rules, 2014: Mandatory
For Unlisted public company	Section 138 of Companies Act, 2013 and Rule 13 of Companies (Accounts) Rules, 2014.   If during the preceding F.Y. : (i)    paid up share capital – Rs. 50 crore or more, OR (ii)    turnover – Rs. 200 crore or more, OR (iii)    O/s loans or borrowings from banks or public financial institutions exceeding Rs. 100 crore or more at any point of time; OR (iv)     O/s deposits – Rs. 25 crore or more at any point of time.
For Every Private company	If during the preceding F.Y.: (i)    Turnover – Rs. 200 crore or more OR (ii)    O/s loans or borrowings from banks or public financial institutions exceeding Rs. 100 crore or more at any point of time.
TAX AUDIT
For Individual, HUF, Firm, Company, AOP & BOI, Local authority etc.	Section 44 AB of Income Tax Act, 1961.   Tax audit is mandatory where the turnover or gross receipts exceeds ₹1 crore (10 crores) in a P.Y. in case of business OR where the Gross receipts exceeds ₹50 lakhs in the P.Y. in case of profession.
COST AUDIT
For Companies	Section 148 of Companies Act, 2013 and Rule 3 & Rule 4 of Companies (Cost Records and Audit) Rules, 2014   Every company whose turnover exceeds 50 crores for regulated Sectors & 100 crores for Non-regulated sector during immediately preceding financial year.