"12 May 2020" Archive

GST Series: Part 1 Section 3 to Section 6 of CGST Act 2017

The Part 1 of the series covers section  3 to section 6 of CGST Act 2017 which deals with appointment of the officers, power and authorization given to the officers under the GST Act....

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How to write a Reply to Show Cause Notice under GST?

Before resorting to the assessment, the GST authorities shall issue a show cause notice proposing the tax due to the department basing on the information submitted in compliance to the assessment notification. The GST authorities shall call for the objections, if any, and then the registered   person, in reply to the show cause notice h...

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GST- Employee Welfare Expenses– Higher ITC under COVID-19

In this period of economic difficulties, it is imperative for each business to evaluate possible measures to reduce the cost. One should closely look at all expenditure where input tax credit has not been taken in the past to evaluate if there exist possibilities of availing due to change in the law or judicial developments....

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Old Vs New GST Returns- New Return Forms and features

The New Return System proposed under Goods and Services Tax (GST) was implemented on trial basis from 1st July, 2019 with 1st October, 2019 being date when the same would be mandated for all taxpayers in phased manner. But, the GST Council in its 37th Meeting held on 20th September, 2019 in Goa decided to […]...

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Draft Engagement letter & Management representation on GST Audit

Article contains Draft Format of Engagement letter on GST Audit and Draft Format of_Management Representation on GST Audit. However the Auditor needs to understand the limitations of management representations as audit evidence....

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Input Tax Credit under GST – Real Estate Sector

For Real Estate Sector, one of the most important aspect after introduction of Goods and Services Tax Act, is to calculate 'Eligible Input Tax Credit'....

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ITC Reversal on supply of Capital Goods- Controversy between section & rule

On Supply of Capital Goods, ITC shall be reversed. The manner of calculation of amount of ITC to be reversed is prescribed in section and rules. But both do not coincide. Let us understand the nuances of section and rules to decide the method to be adopted....

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Composition Scheme For Service Provider Under GST Act

Composition Scheme under GST was earlier available to only the Suppliers of goods. However, in 32nd GST Council Meeting, it has been recommended that the scheme shall be made  available to service providers too. The scheme for service providers is available from  1 April 2019 . The composition scheme for service providers gives an opti...

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No GST On Whole Time Director’s Salary: AAR Karnataka

The very purpose of setting up the concept of Authority for Advance Ruling under GST is to provide clarity and to remove ambiguity in terms of the unanswered question in GST law. It is a kind of knowing the correct interpretation of GST Act from the Government (i.e.Authority) itself which will help reduce disputes and […]...

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GST on Director Remuneration – A Detailed Analysis

An Order of Rajasthan Authority for Advance Ruling (AAR) in case of M/s CLAY CRAFT INDIA PVT. LTD. (JAIPUR)(Order No. RAJ/AAR/2019-20/33 date 20th Feb,20) held that remuneration payable by company to its directors is taxable and attract GST under reverse charge. This order has left all the company taxpayer in dilemma whether to pay GST [&...

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Analysis of GST applicability on Directors Remuneration- Part I

Intention of the Government is not to charge GST on services rendered by employees to employer. On the same lines as per Schedule III, clause no 1, of Central Goods and Service tax Act, 2017  Services by an employee to the employer in the course of or in relation to his employment is covered in […]...

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An approach to Virtual Permanent Establishment (VPE) & Taxation of Electronic Commerce Transactions

According to thisVirtual Permanent Establishment (VPE) theory, it is proposed that the taxing nexus for electronic commerce should be “the continuous commercially significant conduit of business activity”, rather than the fixed place of business. The virtual PE approach applies to the jurisdictional criterion for source-based taxation...

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Applicability of Section 50C and Section 56(2)(x) / Section 56(2)(vii) of Income Tax Act, 1961 on Rural agricultural land

Applicability of Section 50C and Section 56(2)(x) / Section 56(2)(vii) of Income Tax Act, 1961 on Rural agricultural land Computation of Capital Gain is many times not free from ambiguity. Further, due care is required in cases of transactions of immovable property for a consideration, which is less than the stamp duty value of such [&hel...

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Tax Audit under Income Tax Act after amendments by Finance Act 2020

Section 44AB, contains provisions of the ‘TAX AUDIT’ under the Income Tax Act 1961. ‘TAX AUDIT’ is an examination of books of accounts of the assessee. The examination is conducted to ensure that the assessee has properly maintained the books of accounts and other records and the tax liability has been computed pr...

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Draft Format Engagement letter & Management representation on Tax Audit

Article contains Draft Format of Engagement letter on Tax Audit and Draft Format of Management Representation letter related to Tax Audit -...

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Income tax calculator FY 2020-2021 & FY 2019-2020

Best Income tax calculator FY 2020-2021 (Covering old & new regime) and FY 2019-2020 In India income tax calculated in accordance with the income tax act, 1961. We have further elaborated the calculation of the income is into the 7 steps are as follows: 1. To Know which income would be taxable in india 2. […]...

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Equalisation Levy- Services Covered, Rates, Payment, Due Date

Logic for the introduction of Equalisation Levy In India an assessee is taxed if that assessee has permanent establishment in India. If the assessee does not have a permanent establishment in India then he would not be taxable in India. Many companies provide digital services to resident of India without being having a permanent establish...

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How to choose between old and new tax regime for F.Y 2020-21

The union budget 2020 has introduced new income tax slabs for individual and HUF taxpayers and it came into effect from April 1, 2020. This gives the option to either continue with the existing tax regime or opt for the new tax regime sans 70 tax exemptions and deductions. Salaried employees, having no business income, […]...

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COVID-19 PANDEMIC: Relaxation on Residential Status under Income Tax Act, 1961

In this article, I have covered the need and relaxations provided by the Central Government on Residential Status in Circular no. 11 dated May 8, 2020. As per the provisions of section 6 of the Income-tax Act, 1961 ‘period of stay’ of an individual is used to determine the residential status of individual taxpayers. Ordinarily, [&hell...

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Computation of Income Tax – FAQs & Examples

Q.1 Under how many heads the income of a taxpayer is classified? ​​​Ans: S​ection 14​ of the Income-tax Act has classified the income of a taxpayer under five different heads of income, viz.:...

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Clubbing of Income under Income Tax Act, 1961 with FAQs

Clubbing of income means Income of other person included in assessees total income, for example: Income of husband which is shown to be the income of his wife is clubbed in the income of Husband and is taxable in the hands of the husband. Under the Income Tax Act a person has to pay taxes on his income....

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Taxation of Capital Gain in India – FAQs

What incomes are charged to tax under the head Capital Gains? Ans: Any profit or gain arising from transfer of a capital asset during the year is charged to tax under the head Capital Gains.​...

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Taxability of Gift received by an individual or HUF with FAQs

Sum of money:-As per the provisions of the I-T Act, 1961 (the Act), any sum of money received by an individual or a Hindu undivided family in a particular financial year, without consideration, the aggregate value of which exceeds Rs 50,000 is taxable....

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FAQs on Income from house property

Is rental income from sub-letting chargeable to tax under the head Income from house property? Ans: Rental income in the hands of owner is charged to tax under the head Income from house property. Rental income of a person other than the owner cannot be charged to tax under the head Income from house property....

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AGM via VC or OAVM by Companies required to provide E-Voting facility

Holding of Annual General Meeting (AGM) Through Video Conferencing (VC) or Other Audio Visual Means (OAVM) Companies Which Are Required To Provide The Facility of E-Voting Under The Act, or Any Other Company Which Has Opted For Such Facility Applicability of General Circular No. 20 /2020 dated May 05, 2020 General Circular No. 20/ 2020 [&...

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AGM through VC or OAVM by Companies not required to provide E-Voting facility

Holding of Annual General Meeting (AGM) Through Video Conferencing (VC) Or Other Audio Visual Means (OAVM) For Companies Which Are Not Required To Provide The Facility of E-‘Voting Under The Act AGM through VC Or OAVM by Companies Not Required To Provide Facility of E-‘Voting Applicability of General Circular No. 20/ 2020 date...

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Conversion from Public to Private Company under Companies Act, 2013

MCA has increases compliance requirement through various notifications which sometimes became hurdle to do business in smooth manner for the public Companies on other hand there are various exemptions available to the private companies under the Companies Act 2013....

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Conducting & Convening AGM During COVID-19 Crisis

MCA circular dated May 05, 2020 applies to all the Companies which are required to hold their Annual General Meeting (AGM) for Financial Year ended on December 31, 2019 and March 31, 2020, as the case may be, during calendar year 2020....

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Power of Boards (Section 179 of Companies Act, 2013)– Discussed!

The article provides the detailed analysis on Powers of Board pursuant to Section 179 read with Rule 8 of the Companies (Meeting of Board and its Powers) Rules, 2014. As we all know Company being an artificial person, while having unique feature of being separate legal entity, though cannot act by its own and thus […]...

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Draft Engagement letter & Management representation on Statutory Audit

Article contains Draft Format of Engagement letter on Statutory Audit and Draft Format of Management Representation letter on Statutory Audit-...

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Summary of IND AS 116 from lessee perception

Recently, I have wrote an article on ‘How to Identify that Contract Contains Lease Element as per Ind As 116 Continuing further, after reading the contract, if you came to know that the contract contains the lease, then it is very important to know about the accounting treatment of the same. As we all know, […]...

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COVID-19- Sustainability of Indian Economy Post Lockdown

The emergence of uncalled virus COVID-19 has already left a big hole in the economies all over the world including India. The virus has led to the worldwide shut in businesses and has become the matter of concern for the countries. The world is facing humanity’s biggest crisis since World War II. Almost every country […]...

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Decoding Basic Monetary Policy Terminologies

During this time of pandemic COVID-19, we have seen multiple times that Our Hon’ble Finance Minister Mrs. Nirmala Sitharaman and RBI Governor Mr. Shaktikant Das has come up with lots of economic measures to prevent the economy from going into a deep depression which most of the other developed countries have yet failed to do […]...

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Lawyers’ Fees: [SC wants CAP] [Litigation Funding is Legal] but [Percentage Fee is Illegal]

I personally of the view that in India, Legal Profession is too costly and in fact such is the fee charged that for MSME and Start-ups and individuals and middle class and poor people it is almost not possible to approach Court for any remedy and this is totally against the concept of legal services at least in India and hence there shall...

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Online Business- Start taking active role to stay relevant in market

Traditional Business/Retailers have long enjoyed their running of business in the same manner as there was no competition to them and infact one of the negative side of this is the way Traditional Business/Retailers long back avoided giving any importance to its customer or its grievances and infact by making Union / Association, it was [...

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Debt Recovery under MSME- Best in Business after IBC Law

There is no doubt that Delayed Payment has been and is the biggest problem majority of the business entities are facing and there are very less companies who pay to its vendors in time. This delay in payment to MSME creates a huge financial problem as due to this the money is stuck and the […]...

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Insider Trading: An Imperceptible Crime of Indian Securities Market

Insider Trading means buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security. One who has access to confidential information about company’s affair would have an unjust benefit over other investors....

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Recovery of Debt under MSME

MSME = Traders not MSME, Turnover will decide MSME soon, Recovery of Debt under MSME = [Be a Part of MSME Now] MSME stands for Micro, Small, and Medium Enterprises. In accordance with the Micro, Small, and Medium Enterprises Development (MSMED) Act in 2006, the enterprises are classified into two divisions. Manufacturing enterprises (enga...

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Real Estate future and opportunity

CA Prakash Suneja Amid Coronavirus pandemic a big challenge is for real estate sector. Real estate sector alone can change the economy of the country. After the lifting of lockdown it is a big challenge for the real estate sector for development and growth. If we see the opportunity side in the real estate sector […]...

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Real Test (Fedral Or Unitary) During Covid Crisis

While on one hand recently recovered from Covid – 19 virus, Mr Boris Jhonson, Prime Minister England finally published their 50-page 'road map' plotting a route through three stages to get the country up and running followed by guidance for health and safety in workplaces. All workers are being urged to return to duties in sectors such ...

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Taxability of Gift received by an individual or HUF

Gift is usually used to convert black money into white money. To stop practice of converting black money into white money a section 56(2)(Vii) introduced by Finance Act , 2009 and amended by Finance act , 2010. This section deals with law of taxation of gift. The term “Gift” implies – any sum of money […]...

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How Non-Compliant Company/LLP Will Get Benefit From CFSS Scheme & amended LLP Scheme

As a result of the receipt of multiple representations from various stakeholders for granting this time opportunity to make the default good, the Ministry of Corporate Affairs (MCA) vide circular no.12/20 has notified a scheme for the companies registered in India who have defaulted in filing necessary documents & returns in the pas...

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Right Issue Relaxations due to COVID-19

Relaxation with the Procedure of Right issue The right issue has always been a lucrative option for companies for raising funds for them. These days the whole nation has its eye on the next big upcoming right issue of the Reliance Industries Limited (RIL). The right issue has been set up to raise Rs. 53,125 […]...

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Corporate Social Responsibility in the times of Covid 19

The amount spent by a company towards CSR cannot be claimed as business expenditure. The Finance Act, 2014 provides that any expenditure incurred by an assessee on the activities relating to corporate social responsibility referred to in section 135 of the Companies Act, 2013 shall not be deemed to be an expenditure incurred by the assess...

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Cenvat Credit on goods purchased but not received is Bogus & not allowable

Exide Industries Ltd. Vs Commissioner of CGST (Bombay High Court)

Goods in question were never received by the assessee in its factory and therefore, the assessee's claim of having consumed the same was not genuine....

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Amendment by Finance Act, 2020 in Schedule II of CGST Act, 2017-

To start with an amendment made in Para 4 of Schedule II by Finance Act, 2020, let’s start discussing with Section 7 of CGST Act (Scope of Supply) . Schedule II of CGST Act, 2017 specifies Activities or Transactions to be treated as Supply of Goods or Services. Section 7 of CGST Act 2017– Scope […]...

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Reform Labour law of India needs & Can Modi do this

What is wrong with the labor law of India? What modifications does it require, Do you believe that Modi can do this? Indian Labor Law is one of the most controversial laws present today. The capitalist term it as the one which is discouraging industries to set up factories in India and favouring other countries […]...

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Problems to be Faced by Industries after Lock Down

After the lockdown, industries are going to face various issues related to production, finance, laborers, cost, sale etc. Few are common problems which are described in this article. 1. Migrated Labor Issue: We all know that millions of laborers work in various industries, far away from their home towns in states all across the country. [...

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Set off of unabsorbed depreciation allowed irrespective of continuity of business in next year

DCIT Vs Regency Property Investment Pvt. Ltd. (ITAT Mumbai)

The issue under consideration is whether set off of the ‘unabsorbed depreciation’ can be allowed irrespective of continuity of the business in next year?...

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Decoding of Composition Scheme under GST

1. Overview of Composition Scheme under GST? Composition scheme is mainly focused to benefit the MSMEs and small taxpayers. Composition scheme helps the MSMEs and small taxpayers to avoid complex monthly Formalities under GST Act and opt to discharge their GST liabilities at a predefined fixed rate. Further a dealer under composition sche...

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Remote Bank Audit: A Valuable Tool During Pandemic

What is Remote Auditing??? The remote audit also may be referred to as E Auditing is exactly same as an audit but in involves use of electronic means to collect Audit Evidence. Remote Auditing techniques involve sharing files via email, Google drive etc., providing documents by sharing its desktop screen or via video conferencing using [&...

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Importance of nutrition

Nutrition simply means nourishment. Its not just nourishing your body but mind too. Being a company secretary by profession and also a CPD certified nutritionist too, I believe this topic is of utmost important to let people understand the importance of nutrition in our life especially for the professionals as this platform is mostly soug...

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ICAI COVID-19 FAQs on Ind AS 2020

While the high quality Ind AS Framework has comprehensive and robust accounting principles, a need was felt to provide application guidance in certain areas of accounting in the form of Frequently Asked Questions (FAQs) in the context of contraction in economic activity, disruptions in financial markets and a series of actions by governme...

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Deduction u/s 80G cannot denied merely because such payment forms part of CSR

First American (India) Pvt. Ltd Vs ACIT (ITAT Bangalore)

The issue under consideration is that whether the expenditure incurred for CSR will also be qualified for deduction under section 80G?...

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SOP for utilising fake invoice Issuers dataset by SGST authorities

F.No. GST/INV/FAKE INVOICES/18-19 (12/09/2019)

Large number of GST fraud cases involving the use of fake invoices for wrong availment of input tax credit (ITC), which is further used to pay GST on outward supply have been detected since the rollout of GST by the Central GST authorities as well as State GST authorities....

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Additional relaxation from compliance with SEBI LODR Regulations

Circular No.: SEBI/HO/CFD/CMD1/CIR/P/2020/79 (12/05/2020)

SEBI vide Circular No. SEBI/HO/CFD/CMD1/CIR/P/2020/79 dated 12th May, 2020  provided Additional relaxation in relation to compliance with certain provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 – Covid-19 pandemic. Full text of the SEBI Circular is as follows:- Securities and Exchange Board of Indi...

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CIT(A) cannot dismiss an appeal in a summary manner

Kaushalkumar G Patel Vs ITO (ITAT Ahmedabad)

On perusal of the impugned orders would indicate that the ld.CIT(A) has simply concurred with the  AO  without formulating specific points and taking note of details available before the Id.CIT(A). In a way, the appeals were dismissed in summary manner. This act is amounting to miscarriage of justice. This exercise of power at the end o...

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Interest for Failure to Collect/Deduct & Delayed Payment of TDS/TCS

Article discusses about Basic provisions relating to due date of payment of TDS to the credit of Government, Interest for failure to deduct tax at source/delay in payment of TDS, Non filing of TDS statement without payment of interest, Basic provisions relating ...

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TDS U/s. 194A, 194J & 193 of Income Tax Act, 1961

For quick and efficient collection of taxes, the Income-tax Law has incorporated a system of deduction of tax at the point of generation of income. This system is called Tax Deducted at Source commonly known as TDS. Under this system, tax is deducted at the point of origination of income. Tax is deducted by the payer and the same is direc...

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Internal Audit of Treasury Management

Before we start any discussion about the topic, the first thing that we should be aware of - What is Treasury? In simple language treasury is a fund or revenue of an organisation. Thus, Treasury Management of an entity basically consists management of its cash flows, its banking,...

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GST Provisions relating to Corporate Insolvency Resolution Process (CIRP) to be complied with by IRP/RP

Section 39(1) mandatorily requires every registered person to furnish monthly return on or before 20th day of the next month. In most of the cases, when a company is undergoing Corporate Insolvency Resolution Process (CIRP in short), it becomes very difficult to for such companies to file their tax returns and pay off tax liabilities, obv...

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Corona Pandemic and Relief Measures

THE CORONA PANDEMIC, ITS IMPACT ON INDIAN ECONOMY AND RELIEFS GIVEN BY GOVERNMENT, RESERVE BANK OF INDIA AND RELAXATIONS IN INCOME TAX, GOODS AND SERVICE TAX AND CORPORATE AFFAIRS  THE CORONA PANDEMIC:...

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No Section 147 Assessment in absence of reasons for escapement of income

Kailash Kanhaiyalal Gidwani Vs ACIT (ITAT Pune)

Existence of reasons for escapement of income are sine qua non to embark upon the assessment or reassessment u/s 147 of the Act. Change or no change of opinion, as argued by the ld. DR, are the factors to be considered after fulfilling the jurisdictional condition of there being an escapement of income, in the absence of which no assessme...

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TDS u/s 194J not applicable on modeling services rendered by Katrina Kaif

DCIT (TDS) Vs Kodak India (P) Ltd. (ITAT Mumbai)

The issue under consideration is whether the services, the modeling, rendered by Ms. Katrina Kaif in this case constitutes professional service and the fee paid to her for modeling with the purpose of marketing of the camera products of the assessee liable for TDS u/s 194J?...

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Aseesee can have both Trading & Investment Portfolio for Business Income & Capital Gain

DCIT Vs Niketan Krishorchandra Patel (ITAT Ahmedabad)

The issue under consideration is that whether the assessee having business of land trading can show capital gains from arising out of transfer of land and claim exemption u/s 54F?...

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Entities permitted to undertake e-KYC Aadhaar Authentication service of UIDAI in Securities Market

Circular No. SEBI/HO/MIRSD/DOP/CIR/P/2020/80 (12/05/2020)

The above listed entities shall get registered with UIDAI as KYC user agency (“KUA”) and shall allow SEBI registered intermediaries / mutual fund distributors to undertake Aadhaar Authentication in respect of their clients for the purpose of KYC. The SEBI registered intermediaries / mutual fund distributor...

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Increase in duty of Refined Bleached Deodorized Palmolein and Refined Bleached Deodorized Palm Oil import from Malaysia

Notification No. 22/2020-Customs [G.S.R. 293(E)] (12/05/2020)

Seeks to confirm the provisional increase of 5% in the rate of duty of customs levied vide notification No. 29/2019-Cus dated 04.09.2019, for a period of 180 days, on imports of “Refined Bleached Deodorized Palmolein and Refined Bleached Deodorized Palm Oil”, falling under tariff item [1511 90 10] or tariff item [1511 90 20] of [&hell...

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Section 80IB deduction allowable only on Income having direct nexus with developing a housing project

Satern Griha Nirman Pvt. Limited Vs ITO (ITAT Kolkata)

The issue under consideration is that whether the disallowance made by the Assessing Officer on account of assessee’s claim for deduction under section 80IB(10) of the Income Tax Act, 1961 in respect of interest received amounting to Rs.11,10,810/- and other income amounting to Rs. 6,36,746/- is correct or not?...

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22 Key Highlights of Meeting of PM Modi with CM of Different States On 11th May, 2020

1. Prime Minister Narendra Modi, pointing out that out that it will take some time to get a vaccine, said: ‘I request you all to share with me by 15th May, a broad strategy on how each one of you would want to deal with the lockdown regime in your particular states. I want states […]...

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TMA claims to be made on per KG basis for shipments by air

Public Notice No. 05/2015-2020-DGFT (12/05/2020)

Assistance for products exported by air would be based or per kilogram basis instead of per ton. Annexure 3 to the Notification No. 17/312018-EP (Agri. IV) dated 27th February,2019 has been replaced indicating the differential rate of assistance on per kilogram basis for the products exported by air....

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NCLT not to accept new petitions without record of default U/s. 7 of IBC, 2016

Notification No. File No. 25/02/2020-NCLT (12/05/2020)

All concerned are directed to file default record from Information Utility alongwith the new petitions being filed under section 7 of Insolvency and Bankruptcy Code, 2016 positively. No new petition shall be entertained without record of default under section 7 of IBC, 2016...

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Incidence of NCCD for calculation of Brand Rate of duty drawback

Instruction No. 5/2020-Customs (12/05/2020)

Please refer to Board’s Instruction No. 4/2019- Customs dated 11.10.2019 clarifying the position regarding Education Cess, Secondary and Higher Education Cess, Social Welfare Surcharge, Clean Environment Cess (erstwhile Clean Energy Cess) and Stowage Excise Duty levied on inputs used in the manufacture of export goods with regard to the...

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ICAI Clarification on Fees from a single client

It may be clarified that there is NOT a bar in the revised Code of Ethics on acceptance of more than 15% fees from a single client. There is only requirement of disclosure , and taking safeguards prescribed therein, if the total gross annual professional fees from the audit client and its related entities represent more than 15% of the to...

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