Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include statutory audit, internal audit, direct tax, transfer pricing, GST, bank audit, propriety audit, cost accounting, internal financial controls and risk advisory.

Tuesday, November 22, 2016

New Version for TDS Returns and New Features added

New versions of e-TDS/TCS Return Preparation Utility (RPU) and File Validation Utilities (FVUs) will be made available at TIN website applicable from November 26, 2016 at the following URL
ttps://www.tin-nsdl.com/etds-etcs/eTDS-download-regular.php.

1.       RPU Version 1.8 (Java based):
This is used for preparing and validating e-TDS/TCS Statement(s) and also contains inbuilt FVUs.
2.       FVU Version 5.3:
Applicable for quarterly e-TDS/TCS Statement(s) pertaining to FY 2010-11 onwards.
3.       FVU Version 2.149:
Applicable for quarterly e-TDS/TCS Statement(s) from FY 2007-08 up-to FY 2009-10.
Key features of new version of RPU and FVUs are as given below:-  
Newly added fields for Form 27Q
1.       Email ID of deductee
2.       Contact number of deductee
3.       Address of deductee in country of residence & ‘Tax Identification Number /Unique identification number of deductee

The above Particulars  are applicable only for below mentioned nature of remittances
1.        Interest payment
2.       Royalty
3.        Fees for technical services/ fees for included services
4.        Short term capital gains
5.       Long term capital gains  
Change in the encryption certificate present in the FVUs.

 Since existing encryption certificate present in FVUs is expiring on November 30, newly procured encryption certificate by NSDL e-Gov. will be incorporated in FVUs.

Monday, November 21, 2016

DVAT last date further extended to 28.11.16 for filing of DVAT return for second Quarter of Fin Year 16-17 & Other Updates

DVAT
DVAT has further extended the last date of filing of return of Second Quarter for the Financial Year 2016-17 in DVAT Form -16, DVAT-17, DVAT 48 with all annexures to 28.11.2016.

Demonetisation

Withdrawal limit Rs.50000/- per week extended to Overdraft and cash credit accounts. Such extension is not made available to personal Overdraft Accounts

Thursday, November 17, 2016

Steps by Govt on demonetization to ease the process for public

Withdrawal of  Rs 2.50 lakh permitted from banks for weddings but bank account should be  KYC compliant and in the name of Bride, Grooom or their parents.

Registered mandi traders are allowed withdrawal upto Rs 50,000 per week

Farmers are allowed to withdraw against Crop loans upto Rs 25,000 per week 

Govt has Extended the due date of  payment of crop insurance premium by 15 days

Govt employees up to C Category can draw salary advance up to Rs 10,000 in cash and the same will be adjusted against their Nov salaries


The Government has extended the time limit for submission of Annual Life Certificates up to 15.01.2017. Now Pensioners and  family pensioners are required to submit their Annual Life Certificates on or before 15.01.2017 which was due to be filed in November and December 2016. This has been done to ease the pensioners from rush at banks due to demonetization of Rs.500/- and Rs. 1000/ – currency notes.

ON 21.11.2016
RBI has extended the withdrawal limit per week Rs.50000/- to OD and CC accounts but this limit will not be applicable on personal Overdraft Account.


 

Wednesday, November 16, 2016

DVAT date extended for filing of DVAT return for Quarter ended 30.09.16 and other updates

DVAT

DVAT has further extended the last date for submission of DVAT return in DVAT Form -16, DVAT Form-17 and DVAT Form -48 for the quarter ended on 30.09.2016 from 14.11.16 to 21.11.16

MCA – Submission of Financial Statements

MCA has revised Form AOC-4, AOC -4 Addendum, AOC-4 CFS today on 16.11.16

Cash Deposits with Banks and PAN of Account Holders

Ø  On Income Tax site one more key is added to show  cash deposits in accounts of PAN holders.
Ø  Rule 114B of Income Tax amended for compulsory quoting of PAN in case of Cash deposit exceeding 50,000/- in a single day and/or total more than Rs.2.5 lacs during the period from 09.11.16 to 30.12.16
Ø  Rule 114E amended for filing of AIR report by banking companies and  co-operative banks. The banks are required to inform Income Tax Department for all cash deposits in one or more current accounts in excess of Rs.12.5 lacs or in excess of Rs.2.5 lac in one or more accounts of a person during 09.11.16 to 30.12.16

Tuesday, November 15, 2016

Demonetisation framework, updates, effects & public reviews

I. Demonetisation of High Value Currency Notes
Govt. of India announced on 8 th November 2016 that Legal tender character of High Denomination Currency notes of Rs. 1000 & Rs. 500 has been cancelled through a press release dated 8th November 2016.Thereby, making the currency notes of Rs. 500 &  1000 useless unless deposited in a bank account or exchanged with new currency notes.
II. Size & Volume of Shadow Economy of which Fake currency notes are a major contributor:
As per the estimates of The World Bank in July, 2010  the size of the shadow economy for India was determined at  20.7% of the GDP in 1999 which has risen  to 23.2% in 2007. Shadow economy generates inflation, which adversely affects the poor and the middle classes more than others. As a result, Government is also deprived of its legitimate revenues, which could have been otherwise used for public welfare and development activities.
III. New Currency Notes
Therefore to counter this menace of Fake Indian Currency Notes, New Series bank notes of Rs.500/- and Rs.2,000/- denominations will be introduced for circulation from 10th November, 2016.  Introduction of new series of banknotes, which will be distinctly different from the current ones in terms of look, design, size and color has been planned & issued in market.
IV. Political Force
 The BJP Govt. has taken a no. of steps for curbing the menace of Black money in India as compared to previous Governments. Some of the major steps taken by current Govt in this direction are:
·         Implementing the Income Declaration Scheme 2016.
·         Encouraging the use of non-cash and digital payments.
·         Setting up of a Special Investigation Team (SIT)
·         Enacting a law regarding undisclosed foreign income and assets
·         Understanding with Switzerland for getting information on Bank accounts held by Indians with HSBC.
·         Amending the Benami Transactions Act; 
However, the top leadership of BJP somehow felt that public was still not satisfied with their efforts to curb black money as evident from the blunt offensive from opposition parties. Therefore, to win the trust of people & remind them about the commitment of current Govt. toward Black money, Policy for demonetisation of Rs. 500 & Rs. 1000 bank notes has been introduced.


V. Major Highlights of Currency Demonetization Policy
1.       Last Date for Currency Exchange: Old Rs. 1000/ 500 may be deposited or exchanged on or before 30th December 2016.
2.       Maximum Limit on Currency Exchange for A week per Person: However, Currency can be exchanged for a maximum sum of Rs. 4000 which has been revised to Rs. 4500 at any Bank Branch, any of the 19 Issue Offices of RBI & post offices & such limit will be reviewed after 15 days i.e. after 25th November.
3.       No Maximum Limit for Deposits: There is no maximum limit on amount that can be deposit in a bank account. However, only a maximum amount of Rs. 50,000 can be deposited  if KYC requirements of such account are not complete.
4.       Specific Authorization: For depositing Old Rs. 1000/ Rs 500 notes in bank account of a 3rd person, a letter from the depositee authorizing the depositor to deposit old Rs. 1000/ Rs. 500 notes shall be produced before bank officials.  
5.       Cash Withdrawl From Over the Counter:
i. For Savings Bank Account: Cash withdrawal from over the counter is restricted to Rs. 24,000 for a week which may be withdrawn either once or in installments.
ii. For Current Bank Account: For Current bank accounts, cash withdrawal limited to Rs. 50,000 per week.
6.       Deposit of Cash by persons who are not present in the country: Any third person can deposit cash on behalf   of such persons provided such third person is authorized in writing by the depositee by following the standard banking procedures.
7.       Exchange Facilities for Arriving & Departing Passengers at International Airports: In such cases, exchange of old currency notes of Rs. 500/Rs.1000 is allowed subject to a maximum limit of Rs.5000.
8.       Cash Deposit in Any Branch of Bank with which depositee holds an account: Cash can be deposited at any of the branch of bank with which depositee has an account.
9.       Cash deposit With a Bank with which depositee does not hold any account: Cash can be deposited with a bank with which depositee does not hold any Bank Account subject to furnishing  valid identity proof and bank account details will be required for electronic fund transfer .
VI. Penalty Provisions for Deposit of Excess Cash than Declared in Income Tax Return.
Special Provision in Finance Act, 2016: The Finance Act 2016 has replaced Section 271 (1) (c) of Income Tax Act,1961 with Section 270A of Finance Act,1961 i.e. Penalty @ 200% for Underreporting & Misreporting of Income for AY on or after 1st day of April,2017 & subsequent assessment years.
Thus, keeping our discussion strictly limited to penalty under currency demonetisation, Penalty @ 200% of underreported income shall be levied  if:
ITR is Filed: Cash deposited in Bank account is not proportionate with the cash or income declared in Income tax return.
ITR is not Filed: Where Assessee could not explain the amount of cash deposited by him/her in bank account & such amount exceeds the basic exemption limit of Rs. 2,50,000.
In other words, following cases will attract penalty @ 200% u/s 270A for disproportionate cash deposited in Bank Account.
·         Failure to record Investments in the books of accounts.
·         Claim of expenditure not substantiated by any evidence.
·         Recording of false entry in the books of Accounts.
·         Failure to record any receipt having a bearing on total income.
VI. Conclusion:
Demonetization of High Value currency notes of Rs. 500/1000 is a significant step towards curbing the menace of black money.  This move has multiple benefits for the country such as:                         
·         Destruction of Arms Funding mechanisms for terrorists & separatist organisatons.
·         Incremental revenue for the Government.
·         Move Purchasing power in the hands of common man.
However, Demonetization scheme only focusses on the problem of Black money hoarded in the form of cash. Black money that is hoarded in form of Gold & other assets remains unaffected from this scheme. Assets other than cash remains an area that need to be brought under scanner of taxman for curbing the menace of Black Money.
Ineffective Monitoring of Cash Exchange of Rs. 4,000: A person can exchange money more than once in a fortnight since there is no centralized server for all the banks. As a result, one person can exchange Rs. 4000 more than once in a fortnight from different banks, which is used as a means to convert Black Money on a very large scale.
Distortion of Objective of Demonetization through Exemptions for Public Conveniences: Exemptions to Chemists for cash deposits of high denomination notes with banks has opened a window for Black Money holders to convert their cash through chemists. Similarly, Donations to NGO's & Religious trusts should be strictly scrutinized, as they are presenting an opportunity to the Black Money holders to convert their black money by way of colluding with the management of these installations in lieu of some consideration.   
Open Offers for Conversion of Cash: It has been observed that many of Black Buck holders have started colluding with Small shopkeepers, Auto rickshaw drivers & others who receive small denomination currency for their daily work to exchange their High denomination currency notes for small denomination notes in lieu of 20% or 40% commission for the money exchanged.    
Further, Marginalised sections of society like, daily wagers, labourers etc. who do not have any reserves of money except cash for their daily expense are facing harrassment in the form of long queues for exchange of money, black marketing of small denomination currency notes & so on. These people do not have any option but to opt for discounting of Rs. 500/1000 currency notes.
Payments In High Denomination Notes Only: Further, Rich people with big hoards' of High denomination currency notes are paying their employees only in Rs. 500/1000 currency notes, thereby forcing them to get exploited in the market & face harassment.
In a nutshell, it can be said that Govt. does not have any control over such alternate means of conversion of Black money & prima facie, it appears to be another scheme that creates much louder noise than the tangible benefits provided by it. In view of above observations, it is quiet evident that Govt. does no have any plans to curb such alternate means of conversion leading  the  purpose of entire  Demonetization exercise futile.

Therefore, it needs to be thought whether, incremental gain from such currency demonetisation is higher than the harassment 80%  of population is facing. Government could have prepared a better plan than to make people wait in long queues & frustrated.
Contributed by : Tanveer Alam CA Finalist

Monday, November 14, 2016

Withdrawl of Service Tax Exemption on Cross Border B2C Online Information & database access or retrieval services (OIDAR Services) w.e.f. December 1, 2016.

Currently, Online/ electronic B2C service Providers located outside the taxable territory providing such services in taxable territory to  Govt. , Local Auth., Govt. Auth., or an Individual in relation to any purpose other than commerce, industry or any other business or profession are exempted.
I. EXEMPTION WITHDRAWN - Cross Border Online/ Electronic B2C Services Shall Be Taxable w.e.f. December 1, 2016.
With the objective of enhancing, the competitiveness of Indian Service Providers providing taxable B2C Services (OIDAR Services) including electronic/online services in India, the earlier exemption to Foreign Service providers vide "Entry No. 34(a) of the Mega Exemption Notification" located in foreign territory & providing such services in India has been withdrawn w.e.f. 1st December 2016 as per the following notifications.
As per Notification No. 46/2016-ST, 47/2016-ST, 48/2016-ST, 49/2016-ST, all dated 9th November 2016, Service Tax shall be charged on:
i. B2C Services provided by any person located in non taxable territory, &
ii. Received by Government, Local Authority, Governmental Authority or an Individual for any purpose   other than Commerce, Industry or any other Business & Profession w.e.f. December 1st, 2016.
II. Amendments in Point Of Provision Rules, 2012:
   i. Earlier Provisions: As per POP Rules 2012, for OIDAR Services, the place of supply of such         services shall be the location of service provider, if Location of service receiver is not available in            ordinary course of business.
   Thus, as per current provisions, B2C services provided by a Foreign Service provider in India        shall be deemed to be provided at the place at which Service Provider is located.         Therefore, these services were outside the purview of Service Tax.
   ii. Amended Provisions:   Now, the POP Rules, 2012 has been amended vice notification no.       46/2016-ST to provide that " in case of services other than "Online Information & Database        Access or Retrieval / B2B Services" , where the location of service receiver is not available in   ordinary course of business, the place of provision shall be the location of provider of service,              thereby bringing the Online B2C services under the purview of Service Tax.  
III. Service Provider Liable to Pay Service Tax: As per Notification No. 48/2016-ST dated November 9, 2016, Service provider located in non-taxable territory providing online/electronically B2C services to "non assessee online recipient", only such service provider shall be liable to pay Service Tax under Reverse Charge Mechanism in the following cases:
   Case I: Intermediary Liable to Pay Service Tax - Where the service provider located in        Foreign Territory provides services through an Intermediary, then such intermediary shall be           deemed to be receiving such services from such Foreign Service Provider & providing such         services to " Non Assessee Online Recipient", then such Intermediary shall be shall be deemed           to be the person liable to pay Service Tax.
   Case II: Authorized Representative - Where the Foreign Service Provider is represented in                India by any person for any purpose, then such person shall be liable to pay service Tax.    
   Case III: Appointment of Authorized Representative - If a service provider in non-taxable    territory does not have any physical presence or does not have a representative in Taxable                 territory, then the Service Provider may appoint a person in taxable territory for the purpose                of Paying Service Tax & such person shall be liable for paying Service Tax.  
   Meaning of Non-Assessee Online Recipient: A recipient of OIDAR Services shall be deemed to                 be  a non-assessee online recipient if such person does not have Service Tax Registration    under Service Tax Rules.              
IV. Forms For Registration under Service Tax for Persons Liable to Pay Service Tax in case of OIDAR Services:
   i.   FORM ST-1A: Application for registration under Service Tax.
   ii.  FORM ST-2A: Certificate of registration under Section 69 of Finance Act.
   iii. FORM ST-3C: Return u/s 70 of Finance Act, read with Rule 7 of Service Tax Rules,
    W.r.t. OIDAR Services provided or agreed to be provided by a person located in non-taxable     territory to a person located in taxable territory.
Further, a new Proviso has been inserted in rule 4A (1) of Service Tax Rules prescribing invoicing details for Foreign Service Providers.
V. Amendment in Reverse Charge Notification: The reverse Charge Notification has been amended vide Notification No. 49/2016-ST dated November 9, 2016 prescribing the Service Tax Payment & Procedure thereunder on the service provider located in Non-Taxable Territory with respect to OIDAR Services provided or agreed to be provided in taxable territory to " Non-Assessee Online Recipient w.e.f. December 1, 2016"
VI. Meaning of Online Information & Database Access or Retrieval Services:
OIDAR/ B2C Services means those services whose delivery is mediated over:
   i) Internet or Electronic Network, which renders them essentially automated with minimum human   intervention
   &  whose supply is impossible in the absence of Information Technology.
OIDAR/ B2C services includes the following:
   i) Advertising on the internet.
   ii) Cloud Services/ Digital Data Storage.
   iii) E-Books, E-Movies, E-Music, softwares

   iv) Online gaming.

Compiled by Tanveer Alam

Combined Annual Return of Service Tax & Excise for Fin. Year 2015-16 is not required

CBEC has issued a Circular 1050/38/2016 on 08.11.2016 where as now combined annual return of Service Tax and Excise for Fin Year 2015-16 which was due to be filed on or before 30.11.2016  is not required to be filed. This Circular has been issued due to impending implementation of Goods and Service Tax CBEC could not notify the format of such annual return.

Earlier vide Notification No.8/2016 and 13/2016 dated 01.03.2016 were issued for replacement of annual return in place of ER-4 to ER -7 of excise and making Annual Return of Service Tax mandatory and due to be filed on or before 30.11.16 in a format to be specified by CBEC.


After implementation of GST, Annual return for Non-GST goods may be required.

Tuesday, November 8, 2016

GST Registration for Existing VAT Dealers started today i.e 08.11.2016

Registration process of GST has commenced today. Good Start is half done and now we can expect the GST from 01.04.2017. To welcome GST and be prepared for the same, we should start GST registration. At the very first stage it has been commenced through dealers registered under VAT.
1.   GST Registration started today on 8.11.2016 at www.gst.gov.in.
 Assesses with a valid PAN shall be allowed to fill details & submit proofs.

2.   All the taxpayers registered under any of the indirect taxes as specified are expected to visit the GST Portal and register themselves.

3.   Before registration with GST System Portal, Ensure to have the following information/ documents available:-
Ø  Provisional ID & Password received from State/Central Authorities
Ø  Procedure for receiving Provisional ID & Password:
For Dealers registered under VAT: All registered Dealers under VAT or their Authorized Representatives should visit their respective Ward offices between 09/11/2016 to 11/11/2016 and collect sealed envelope containing their provisional ID and Password for use in completing online pre-registration under GST.
Ø  After receiving the Provisional ID & Password, the dealer shall keep ready the following details:
a.    Valid E-mail ID.
b.    Valid Mobile Number
c.    Bank Account Number
d.    Bank IFSC

4.   Following Documents are required to be uploaded at the time of registration under GST @ www.gst.gov.in.

e.    In case of Partnership firm: Partnership Deed (PDF and JPEG format; Maximum size : 1 MB)
  1. In case of Others: Registration Certificate of the Business Entity (PDF and JPEG format ; Maximum size : 1 MB)
  2. Photographs: of Promoters of the Company/ Partners/Karta of HUF (JPEG format ; Maximum size : 100 KB)
  3. Proof of Appointment of Authorized Signatory (PDF and JPEG format ; Maximum size : 1 MB)
  4. Photograph of Authorized Signatory (JPEG format ;Maximum size : 100 KB)
  5. Opening page of Bank Passbook / Statement containing:
                 (i).        Bank Account Number,
               (ii).        Address of Branch,
              (iii).        Address of Account holder and
              (iv).        Few transaction details (PDF and JPEG format ; Maximum Size : 1 MB)

5.    Procedure for enrollment of existing VAT Dealers on the GST                   System Portal:

Apart from abovementioned required documents, following process need to be followed by VAT dealers for registration under GST Regime.
a.    Visit Website "goacomtax.in": Dealer has to visit "goacomtax.gov.in" Portal and click on the Link “Provisional Registration for GSTIN” and follow instructions by using provisional ID and Password Collected from Ward Office.

b.    To be Completed Till 29th November 2016: The online provisional registration on GST System Portal should be completed by all existing Dealers between 14/11/2016 to 29/11/2016.

c.    Save & Continue: For completing provisional registration, the Dealer needs to save every page after filling all the details by clicking on “Save and Continue” button at the bottom of each Page.

d.    Helpdesk at Respective Ward Offices: In case of any difficulties faced in completing online provisional registration, please contact Helpdesk at respective Ward Offices.

6.  Technology Platform for GST-GSTN.

As we know that a SPV was formed by previous Govt. called GSTN which is responsible for all IT related tasks and procedures under GST. This is one of the largest IT network in the history of Indian taxation system which will process 50000 entries per second and 3 billion vouchers per month.
DRAFT INVOICE FORMATS UNDER GOODS AND SERVICES TAX
Government of India/State Department of………………
Form GST INV – 1 (See Rule……………. -)
Application for Electronic Reference Number of an Invoice
1.   GSTIN
2.   Name
3.   Address
4.   Serial No. of Invoice
5.   Date of Invoice
Details of Consignee (Shipped to)
Name         Address     State
xxxx            xxxx            xxxx
State Code:
GSTIN/Unique ID:
Sr
No
Description of Goods
HSN
Qty.
Unit
Rate
per unit
Total
Discount
Taxable
Value
CGST
S SGST
IGST
Rate
 Amt.
  Rate
Amt
Rate
Amt


Freight
Insurance
Packing and Forwarding Charges
Total

    Total Invoice Value (In figure) Total Invoice Value (In Words)

    Amount of Tax subject to Reverse Charges

     Declaration:
   Signatory
Signature
Name of the Signatory
Designation / Status