Service Providers can opt for Composition Scheme till July 31: CBIC

The Central Board of Indirect Taxes and Customs ( CBIC ) has extended by three months till July 31 the deadline for service providers with a turnover of up to Rs 50 lakh to opt for the composition scheme and pay six per cent Goods and Services Tax (GST). The Circular said that, “a registered person who wants to opt for payment of central tax @ 3% by availing the benefit of the said notification, may do so by filing intimation in the manner specified in sub-rule 3 of rule 3 of the said rules in FORM GST CMP-02 by selecting the category of registered person as “Any other supplier eligible for composition levy” as listed at Sl. No. 5(iii) of the said form, latest by 31st July, 2019. Such person shall also furnish a statement in FORM GST ITC-03 in accordance with the provisions of sub-rule (3) of rule 3 of the said rules.” Earlier, CBIC had issued a circular said suppliers who want to opt for composition scheme would have to file Form GST CMP-02 by selecting ‘Any other supplier eligible for composition levy’ latest by 30 April, 2019. The service providers and suppliers of both goods and services with a turnover of up to Rs 50 lakh would be eligible to opt for the GST composition scheme and pay a tax of 6 percent from 1st Aprill. Earlier, the GST Council had recommended that the Composition Scheme, under which small traders and businesses pay a 1 percent tax based on turnover, can be availed by businesses with a turnover of Rs 1.5 crores.

Budget Highlights (Taxation)

Budget Highlights (Taxation) 🌴FM Nirmala Sitharaman has thanked taxpayers for their valuable contribution through taxes for all-round development of the country. 🌴She quotes a verse in Tamil -- 'Just a few mounds of rice cooked from a small piece of land is enough for the elephant. But if the same elephant enters a paddy field it will end up trampling more than it would consume'. 🌴Explaining the verse, she says the government does not intend to 'trample' anybody like the elephant. 🌴Direct tax revenue has grown 78 percent from 2014 to 2019. 🌴Currently, 25 percent corporate tax rate is applicable to companies with an annual turnover of up to Rs 250 crore. This has been extended to companies with turnover of up to Rs 400 crore. Only 0.7 percent companies will remain outside of this 25 percent rate. 🌴Additional income tax deduction of Rs 1.5 lakh on interest paid on loans taken to buy electric vehicles. This leads to a benefit of Rs 2.5 lakh crore over the tax period of the loan for the loan payer. 🌴To resolve the issue of Angel Tax the startups and investors who file requisite declarations will not be subjected to any kind of scrutiny in respect of valuation of share premium. A mechanism of e-verification will be put in place and with this, the funds raised by startups will not require any tax scrutiny. 🌴FM Nirmala Sitharaman proposes measures to carry forward and set off losses for startups and increase in period of exemption of capital gains from the sale of residential house for investment in startups up to March 2021. 🌴An additional deduction of Rs 150000 on interest on loans borrowed under affordable housing until 2020 (upto 45 Lakhs) 🌴Interchangeability of PAN and Aadhaar - More than 120 crore Indians now have Aadhaar. Sitharaman proposes to make the two documents interchangeable so that Aadhaar can be used for verification with no requirement for PAN. 🌴The Securities Transaction Tax or STT is proposed to be restricted to the difference between settlement and strike price of options. 🌴Our government has taken number of initiatives to promote digital payments. FM says to discourage the practice of making business payments in cash the government proposes to levy TDS of 2% on cash withdrawal exceeding Rs 1 crore in a year from a bank account, she says. 🌴BHIM, UPI, Aadhaar Pay, NEFT, RTGS can be used to promote less cash economy. Business establishments with annual turnover of Rs 50 crore will have to use these modes of payments with no charges or merchant discount rates will be imposed on customers or merchants. RBI and banks will absorb these costs, she says. 🌴##Direct Taxes - In view of rising income levels, a surcharge will be levied on individuals with taxable income of Rs 2 to 5 crore, and Rs 5 cr and above. The effective tax rate for these categories will increase by around 3% and 7%, respectively. GST rates have been eased with a relief of Rs 92,000 crore provided during the year. Further measures are being worked out to ease filing returns and tax compliance. A simplified single monthly return is now being ruled out. Taxpayers with an annual turnover of less than Rs 5 crooe will have to file only quarterly returns, she says. 🙏 #shrikhand

Clarification regarding Annual Returns and Reconciliation Statement via Press Release, Ministry of Finance , 03rd July 2019

Clarification regarding Annual Returns and Reconciliation Statement via Press Release, Ministry of Finance , 03rd July 2019 Key points:- 📍Role of CA is made clear. It is confined only to reconciliation of GSTR 9 and books and nothing beyond books. 📍Expenses reco - Details of expenses on which ITC has been availed need to be given. 📍Turnover for audit is to be reckoned from July 2017 to March 2018 and not for full financial year. 📍Table 8 is only for settlement purpose and will not be reckoned adversely. 📍Table 16A (Information on supplies from composite suppliers) and 18 (HSN summary of inward supplies) also for informative purpose only. Clarification in detail The Government of India has been receiving a number of representations regarding Annual Return (FORM GSTR-9 / FORM GSTR-9A) and Reconciliation Statement (FORM GSTR-9C). In this regard the following clarifications are issued for information of all stakeholders: - 👉a) Payment of any unpaid tax: Section 73 of the CGST Act provides a unique opportunity of self – correction to all taxpayers i.e. if a taxpayer has not paid, short paid or has erroneously obtained/been granted refund or has wrongly availed or utilized input tax credit then before the service of a notice by any tax authority, the taxpayer may pay the amount of tax with interest. In such cases, no penalty shall be leviable on such tax payer. Therefore, in cases where some information has not been furnished in the statement of outward supplies in FORM GSTR-1 or in the regular returns in FORM GSTR-3B, such taxpayers may pay the tax with interest through FORM GST DRC-03 at any time. In fact, the annual return provides an additional opportunity for such taxpayers to declare the summary of supply against which payment of tax is made 👉b) Primary data source for declaration in annual return: Time and again taxpayers have been requesting as to what should be the primary source of data for filing of the annual return and the reconciliation statement. There has been some confusion over using FORM GSTR-1, FORM GSTR-3B or books of accounts as the primary source of information. It is important to note that both FORM GSTR-1 and FORM GSTR-3B serve different purposes. While, FORM GSTR-1 is an account of details of outward supplies, FORM GSTR-3B is where the summaries of all transactions are declared and payments are made. Ideally, information in FORM GSTR-1, FORM GSTR-3B and books of accounts should be synchronous and the values should match across different forms and the books of accounts. If the same does not match, there can be broadly two scenarios, either tax was not paid to the Government or tax was paid in excess. In the first case, the same shall be declared in the annual return and tax should be paid and in the latter all information may be declared in the annual return and refund (if eligible) may be applied through FORM GST RFD-01A. Further, no input tax credit can be reversed or availed through the annual return. If taxpayers find themselves liable for reversing any input tax credit, they may do the same through FORM GST DRC-03 separately. 👉c) Premise of Table 8D of Annual Return: There appears to be some confusion regarding declaration of input tax credit in Table 8 of the annual return. The input tax credit which is declared / computed in Table 8D is basically credit that was available to a taxpayer in his FORM GSTR-2A but was not availed by him between July 2017 to March 2019. The deadline has already passed and the taxpayer cannot avail such credit now. There is no question of lapsing of any such credit, since this credit never entered the electronic credit ledger of any taxpayer. Therefore, taxpayers need not be concerned about the values reflected in this table. This is merely an information that the Government needs for settlement purposes. Figures in Table 8A of FORM GSTR-9 are auto-populated only for those FORM GSTR-1 which were furnished by the corresponding suppliers by the due date. Thus, ITC on supplies made during the financial year 2017-18, if reported beyond the said date by the corresponding supplier, will not get auto-populated in said Table 8A. It may also be noted that FORM GSTR-2A continues to be auto-populated on the basis of the corresponding FORM GSTR-1 furnished by suppliers even after the due date. In such cases there would be a mis-match between the updated FORM GSTR-2A and the auto-populated information in Table 8A. It is important to note that Table 8A of the annual returns is auto- populated from FORM GSTR-2A as on 1st May, 2019. 👉d) Premise of Table 8J of Annual Return: In the press release on annual return issued earlier on 4th June 2019, it has already been clarified that all credit of IGST paid at the time of imports between July 2017 to March 2019 may be declared in Table 6E. If the same is done properly by a taxpayer, then Table 8I and 8J shall contain information on credit which was available to the taxpayer and the taxpayer chose not to avail the same. The deadline has already passed and the taxpayer cannot avail such credit now. There is no question of lapsing of any such credit, since this credit never entered the electronic credit ledger of any taxpayer. Therefore, taxpayers need not be concerned about the values reflected in this table. This is information that the Government needs for settlement purposes. 👉e) Difficulty in reporting of information not reported in regular returns: There have been a number of representations regarding non-availability of information in Table16A or 18 of Annual return in FORM GSTR-9. It has been observed that smaller taxpayers are facing a lot of challenge in reporting information that was not being explicitly reported in their regular statement/returns (FORM GSTR-1 and FORM GSTR-3B). Therefore, taxpayers are advised to declare all such data / details (which are not part of their regular statement/returns) to the best of their knowledge and records. This data is only for information purposes and reasonable/explainable variations in the information reported in these tables will not be viewed adversely. 👉f) Information in Table5D(Exempted), Table 5E (Nil Rated) and Table 5F (Non-GST Supply): It has been represented by various trade bodies/associations that there appears to be some confusion over what values are to be entered in Table 5D,5E and 5F of FORM GSTR-9. Since, there is some overlap between supplies that are classifiable as exempted and nil rated and since there is no tax payable on such supplies, if there is a reasonable/explainable overlap of information reported across these tables, such overlap will not be viewed adversely. The other concern raised by taxpayers is the inclusion of no supply in the category of Non-GST supplies in Table 5F. For the purposes of reporting, non-GST supplies includes supply of alcoholic liquor for human consumption, motor spirit (commonly known as petrol), high speed diesel, aviation turbine fuel, petroleum crude and natural gas and transactions specified in Schedule III of the CGST Act. 👉g) Reverse charge in respect of Financial Year 2017-18 paid during Financial Year 2018- 19: Many taxpayers have requested for clarification on the appropriate column or table in which tax which was to be paid on reverse charge basis for the FY 2017-18 but was paid during FY 2018- 19. It may be noted that since the payment was made during FY 2018-19, the input tax credit on such payment of tax would have been availed in FY 2018-19 only. Therefore, such details will not be declared in the annual return for the FY 2017-18 and will be declared in the annual return for FY 2018-19. If there are any variations in the calculation of turnover on account of this adjustment, the same may be reported with reasons in the reconciliation statement (FORM GSTR-9C). 👉h) Role of chartered accountant or a cost accountant in certifying reconciliation statement: There are apprehensions that the chartered accountant or cost accountant may go beyond the books of account in their recommendations under FORM GSTR-9C. The GST Act is clear in this regard. With respect to the reconciliation statement, their role is limited to reconciling the values declared in annual return (FORM GSTR-9) with the audited annual accounts of the taxpayer. 👉i) Turnover for eligibility of filing of reconciliation statement: It may be noted that the aggregate turnover i.e. the turnover of all the registrations having the same Permanent Account Number is to be used for determining the requirement of filing of reconciliation statement. Therefore, if there are two registrations in two different States on the same PAN, say State A (with turnover of Rs. 1.2 Crore) and State B (with turnover of Rs. 1 Crore) they are both required to file reconciliation statements individually for their registrations since their aggregate turnover is greater than Rs. 2 Crore. The aggregate turnover for this purpose shall be reckoned for the period July, 2017 to March, 2018. 👉j) Treatment of Credit Notes / Debit Notes issued during FY 2018-19 for FY 2017-18: It may be noted that no credit note which has a tax implication can be issued after the month of September 2018 for any supply pertaining to FY 2017-18; a financial/commercial credit note can, however, be issued. If the credit or debit note for any supply was issued and declared in returns of FY 2018-19 and the provision for the same has been made in the books of accounts for FY 2017-18, the same shall be declared in Pt. V of the annual return. Many taxpayers have also represented that there is no provision in Pt. II of the reconciliation statement for adjustment in turnover in lieu of debit notes issued during FY 2018-19 although provision for the same was made in the books of accounts for FY 2017-18. In such cases, they may adjust the same in Table 5O of the reconciliation statement in FORM GSTR-9C. 👉k) Duplication of information in Table 6B and 6H: Many taxpayers have represented about duplication of information in Table 6B and 6H of the annual return. It may be noted that the label in Table 6H clearly states that information declared in Table 6H is exclusive of Table 6B. Therefore, information of such input tax credit is to be declared in one of the rows only. 👉l) Reconciliation of input tax credit availed on expenses: Table 14 of the reconciliation statement calls for reconciliation of input tax credit availed on expenses with input tax credit declared in the annual return. It may be noted that only those expenses are to be reconciled where input tax credit has been availed. Further, the list of expenses given in Table 14 is a representative list of heads under which input tax credit may have been availed. The taxpayer has the option to add any head of expenses. All the taxpayers are requested to file their Annual Return (FORM GSTR-9 / FORM GSTR-9A) and Reconciliation Statement (FORM GSTR-9C) well before the last date of filing, i.e. 31st August, 2019. Shrikhand Business Solution Pvt Ltd KANKARBAGH | 943 105 6152

Aadhar-enabled GST Registration

The GST Council, which is headed by the Union Finance Minister Nirmala Sitharam has made major relief to the taxable person. From the very beginning of the GST regime it was a compulsion to have PAN number for GST registration. However, one of the major changes made by the council is enabling the Aadhar based registration for the ease of GST registration. Traders can now use their Aadhaar numbers for registration with the GST Network and obtain GST registration number. In its 35th meeting on Friday, the GST Council approved the changes in GST law to this end for the sake of improving ease of business. In the earlier system, people had to submit proof of identity, proof of address and several other documents. The applicant can now go online and can register on the GSTN portal obtain the GST registration number using his Aadhaar number and OTP authentication as assured by AB Pandey, the Revenue Secretary. The GST Council meeting chaired by the new Finance Minister, Nirmala Sitharaman authorised Aadhaar as a valid proof for GSTN portal. However, required changes are not yet made on the GST Common Portal. It is expected to have amendments in GST Common Portal soon. Aadhar has become a necessary document in Income tax and is mandatory for: In September 2018, the Supreme Court had upheld that every person who is eligible to obtain Aadhaar number will quote it while applying for PAN card as well as while filing ITR. “Thus, returns being filed either electronically or manually cannot be filed without quoting the Aadhaar number,” the March 31 circular said. The order, however, provides relief to all those who filed ITR before April 1 without quoting Aadhaar number. The deadline for linking of Aadhar with PAN is 30th September, 2019.

IT DEPARTMENT PRE-FILLS YOUR ITR1 / ITR4 NOW.

IT DEPARTMENT PRE-FILLS YOUR ITR1 / ITR4 NOW. Department has now introduced a facility in their e-filing site wherein ITR1 / ITR4 forms are pre-filled by them based on the information available with them through 26AS . This facility will be a boon for a salaried person / pensioner earning interest on deposits also. The following details will be pre-filled by the Income Tax Department . 1. PAN Number , Name and date of Birth 2. Address . AAdhaar number , Mobile Number and e-mail address 3. Tax Paid , TDS and TCS Details ( From FORM 26AS ) 4. Salary Income , Allowance and Deductions ( From Form 24Q ) 5. House Property Details ( From ITR of Previous Year ) 6. Interest Income & TDS ( From 26AS ) 7. Tax relief under Sec 89 8. Bank account Details ( From ITR of previous year ) 9 . verification Details . However IT Department advises you to verify the pre-filled data carefully and add any other taxable income which is not pre-filled. . Further Last date for filing of TDS statement and issue of TDS certificate by Deductor is 30th June, 2019 and 10th July, 2019 respectively. In case the TDS data or any other data is yet to be submitted by the Deductor , taxpayers are expected to fill these details themselves. How to Get Pre-filled Forms ? 1. Login in to the website https://www.incometaxindiaefiling.gov.in/home 2. Go to Dropdown Meny of “‘ MY ACCOUNT “ 3. Chose ” Download Pre-filled XML “ 4. Select Assessment year 2019-20 and Form no ITR1 / ITR4 5. Once you press continue button , you will get DOWNLOAD XML . BEFORE SUBMITTING , CHECK YOURSELF WHETHER YOU ARE ELIGIBLE TO SUBMIT ITR1 / ITR 4 AND WHETHER THE DETAILS FILLED ARE CORRECT AS PER THE RECORDS YOU ARE HAVING . IN CASE OF ANY DISCREPANCY , TAKE UP WITH YOUR TAX DEDUCTOR FOR CORRECTION AND RECTIFY ALREADY FILLED UP FORM AND ADD ANY MISSING ITEM BEFORE SUBMISSION.