Saturday, June 27, 2020

GST Due Date Chart (Announced 24-Jun-20)

Reference to Notifications 51 to 54/2020 dated 24.06.2020 and Circular No. 141/1/2020-GST dated 24th June, 2020.

1. Late Fee Waiver Due Dates for GSTR-3B

a) For Turnover above Rs. 5 crores in preceding financial year, the late fee is waived if return filed before the below-mentioned dates.

Feb 2020         24.06.2020
Mar 2020         24.06.2020
Apr 2020         24.06.2020
May 2020         27.06.2020

b) For Turnover up to Rs. 5 crores in preceding financial year, the late fee is waived if return filed before the below-mentioned dates.

States: Delhi, Haryana, Uttar Pradesh, Chandigarh, Punjab, Rajasthan, Himachal Pradesh, Uttarakhand, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand, Odisha, Jammu and Kashmir, Ladakh

Feb 2020         30.06.2020
Mar 2020         05.07.2020
Apr 2020         09.07.2020
May 2020         15.09.2020
Jun 2020         25.09.2020
Jul 2020         29.09.2020

States: Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, Daman & Diu and Dadra & Nagar Haveli, Puducherry, Andaman and Nicobar Islands, Lakshadweep

Feb 2020         30.06.2020
Mar 2020         03.07.2020
Apr 2020         06.07.2020
May 2020         12.09.2020
Jun 2020         23.09.2020
Jul 2020         27.09.2020

For such taxpayers who are yet to file GSTR-3B for any month(s) from Jul-2017 till Jan-2020 can now file them from 01-Jul-2020 till 30-Sep-2020, without any late fee, for those months in which they did not have any tax liability. However, for the months they had a tax liability, their late fee is capped at Rs 500 per return.

2. Late Fee Waiver Due Dates for GSTR-1

Mar 2020         10.07.2020
Apr 2020         24.07.2020
May 2020         28.07.2020
Jun 2020         05.08.2020

Quarterly GSTR-1 Jan to Mar 2020 17.07.2020
Quarterly GSTR-1 Apr to Jun 2020 03.08.2020

3. Interest Waiver for GSTR-3B

a) For Turnover above Rs. 5 crores in preceding financial year, the late fee is waived if return filed before the below-mentioned dates.

Tax Period Due Date No interest payable till Interest payable @ 9% from & till Interest payable @ 18% from
Feb-20 20.03.2020 04.04.2020 05.04.2020 to 24.06.2020 25.06.2020
Mar-20 20.04.2020 05.05.2020 06.05.2020 to 24.06.2020 25.06.2020
Apr-20 20.05.2020 04.06.2020 05.06.2020 to 24.06.2020 25.06.2020
May-20 27.06.2020 27.06.2020 NA 28.06.2020


b) For Turnover up to Rs. 5 crores in preceding financial year, the late fee is waived if return filed before the below-mentioned dates.

States: Delhi, Haryana, Uttar Pradesh, Chandigarh, Punjab, Rajasthan, Himachal Pradesh, Uttarakhand, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand, Odisha, Jammu and Kashmir, Ladakh

Tax Period Due Date No interest payable till Interest payable @ 9% from & till Interest payable @ 18% from
Feb-20 24.03.2020 30.06.2020 01.07.2020 to 30.09.2020 01.10.2020
Mar-20 24.04.2020 05.07.2020 06.07.2020 to 30.09.2020 01.10.2020
Apr-20 24.05.2020 09.07.2020 10.07.2020 to 30.09.2020 01.10.2020
May-20 14.07.2020 15.09.2020 16.09.2020 to 30.09.2020 01.10.2020
Jun-20 24.07.2020 25.09.2020 26.09.2020 to 30.09.2020 01.10.2020


States: Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, Daman & Diu and Dadra & Nagar Haveli, Puducherry, Andaman and Nicobar Islands, Lakshadweep

Tax Period Due Date No interest payable till Interest payable @ 9% from & till Interest payable @ 18% from
Feb-20 22.03.2020 30.06.2020 01.07.2020 to 30.09.2020 01.10.2020
Mar-20 22.04.2020 03.07.2020 04.07.2020 to 30.09.2020 01.10.2020
Apr-20 22.05.2020 06.07.2020 07.07.2020 to 30.09.2020 01.10.2020
May-20 12.07.2020 12.09.2020 13.09.2020 to 30.09.2020 01.10.2020
Jun-20 22.07.2020 23.09.2020 24.09.2020 to 30.09.2020 01.10.2020


Friday, June 26, 2020

Take New Udyam Registration for MSME w.e.f. 1st July 2020

On the 26th of June, 2020, the Government has announced a new procedure to obtain a fresh Udyam Registration for MSMEs w.e.f. 1st July, 2020. Here are the details.

MSME Classification

a) Micro: Investment in Plant & Machinery or Equipment does not exceed Rs. 1 Crore, and Turnover does not exceed Rs. 5 Crores

b) Small: Investment in Plant & Machinery or Equipment does not exceed Rs. 10 Crore, and Turnover does not exceed Rs. 50 Crores

c) Medium: Investment in Plant & Machinery or Equipment does not exceed Rs. 50 Crore, and Turnover does not exceed Rs. 250 Crores

Calculation of Investment in Plant & Machinery or Equipment

a) The calculation of investment in plant & machinery or equipment will be linked to the Income Tax Return (ITR) of the previous year filed.

b) The definition and classification of plant & machinery will be the same as taken under the Income Tax Rules and shall include all tangible assets other than land and building, furniture and fittings.

c) In case of a new enterprise where no prior ITR is available, the investment will be based on self-declaration of the promoter. The purchase value of a plant & machinery or equipment, whether new or second-hand, shall be taken into account excluding Goods and Services Tax (GST) for such an enterprise.

Calculation of Turnover

a) Exports of goods or services or both, shall be excluded while calculating the turnover for MSME classification

b) Information as regards turnover and exports turnover for an enterprise shall be linked to declarations in Income Tax and GST. 

c) All units with Goods and Services Tax Identification Number (GSTIN) listed against the same PAN shall be collectively treated as one enterprise and the aggregate turnover and investment figures for all of such entities shall be seen together.

Registration on Udyam Portal

a) All existing enterprises registered under Udyog Adhaar (MSME) shall register again on the Udyam Registration portal on or after 01-Jul-2020. An e-certificate named Udyam Registration Certificate shall be issued on completion of the registration process.

b) The existing enterprises registered prior to 30th June, 2020, shall continue to be valid only for
a period up to the 31-Mar-2021.

c) Registration shall be on the Udyam Registration Portal

d) Aadhaar number of the promoter is mandatory for registration

e) The organisation or its authorized signatory shall provide its GSTIN and PAN as well

f) No enterprise shall file more than one Udyam Registration and any number of activities including manufacturing or service or both may be specified or added in one Udyam Registration

g) Misrepresenting facts during registration shall be liable to penalty.

Updation of Information on the Portal

a) An enterprise having Udyam Registration Number shall update its information online in the Udyam Registration portal, including the details of the ITR and the GST Return for the previous financial year and such other additional information as may be required, on self-declaration basis.

b) Failure to update the information online on Udyam Registration portal will render the enterprise liable for suspension.

c) In case of an upward change in terms of investment in plant and machinery or equipment or turnover or both, and consequent re-classification, an enterprise will maintain its prevailing status till expiry of one year from the close of the year of registration.

d) In case of reverse-graduation, whether as a result of re-classification or due to actual changes in investment in plant and machinery or equipment or turnover or both, and whether the enterprise is registered under the Act or not, the enterprise will continue in its present category till the closure of the financial year and it will be given the benefit of the changed status only with effect from 1st April of the financial year following the year in which such change took place.

Wednesday, June 24, 2020

Extension of Tax Due Dates (Announced 24-Jun-2020)

The government has announced the extension of various statutory due dates on 24-Jun-2020. A brief summary of them all is as under.

Also summarizing a few date extensions announced previously for a quick view at one place.

1. ITR for FY 2018-19 (AY 2019-20): Due date for filing of original as well as revised ITRs has been extended to 31-Jul-2020.

2. ITR for FY 2019-20 (AY 2020-21): ITRs due to be filed by 31-Jul-2020 and 31-Oct-2020 can be filed up to 30-Nov-2020. The date for furnishing tax audit report is also extended to 31-Oct-2020.

3. Payment of Self Assessment Tax: Due date for payment of self-assessment tax in the case of a taxpayer whose self-assessment tax liability is up to Rs. 1 lakh has been extended to 30-Nov-2020. However, there is no extension of date for tax-payers having higher liability, and interest will be charged for delay in payment even if the ITR is filed up to 30-Nov-2020.

4. Tax Saving Investments: The due date for making various investments for claiming deduction under section 80C (LIC, PPF, NSC, etc.), 80D (Mediclaim), 80G (Donations), etc. has also been further extended to 31-Jul-2020 for FY 2019-20.

5. Purchase/Construction for Capital Gains Relief: The due date for construction/purchase of property/bonds for claiming rollover benefit/deduction in respect of capital gains under sections 54 to 54GB of the Income Tax Act has also been further extended to 30-Sep-2020.

6. TDS Returns for FY 2019-20: The due date for furnishing of TDS/TCS returns for FY 2019-20 has been extended to 31-Jul-2020, and the date for issuance of TDS/TCS certificates has been extended to 15-Aug-2020.

7. Income Tax Scrutiny Notices/Orders: The due date for passing of an order or issuance of a notice by Income Tax authorities which were required to be made by 31-Dec-2020 has been extended to 31-March-2021.

8. Expiry Date for Lower Interest Rate: The reduced rate of interest of 9% for delayed payments of taxes announced by the government earlier this year shall not be applicable for payments made after 30-Jun-2020.

9. Vivad Se Vishwas Scheme: The due date for making payment without additional amount under the “Vivad Se Vishwas” Scheme has been extended to 31-Dec-2020. The same has been clarified.

10. Registration of Charitable Organizations: The implementation of new procedure for approval/registration/notification of certain entities u/s 10(23C), 12AA, 35 and 80G of the Income Tax Act has been deferred to 01-Oct-2020.

The Press Release can be accessed here.

Tuesday, June 16, 2020

GST Reverse Charge on Payment to Directors

The CBIC has clarified that only payments made to non-employee Directors of a company will attract GST on the reverse charge basis.

Salary paid to full time employee directors will be subject to TDS u/s 192 of the Income Tax Act, and there shall be no requirement of payment of GST under reverse charge.

However, the part of employee director’s remuneration which is not ‘salary’ and is subject to TDS under Section 194J of the Income Tax Act as fees for professional or technical services will attract GST under reverse charge.

Saturday, June 13, 2020

How to Estimate Advance Tax for FY 2020-21 (AY 2021-22)

The first installment for Advance Tax for AY 2021-22 falls due on 15th June, 2020, by which 15% of the total tax liability for the year is to be paid after giving credit for expected TDS.

The estimation of taxable income may be very difficult for businesses in this financial year due to the spread of the pandemic. A more reasonable estimate may be possible by businesses as the year advances. However, the following factors may be considered while estimating your taxable income for the current year.

Factors to Consider for Estimating Taxable Incomes and Advance Tax

- Salary or pension incomes (if any) - partial reduction (TDS is mostly already deducted for employees)

- Rental incomes (may be same unless likely to be affected for vacation or default or discounts/rebates to tenants of commercial properties)

- Fall in rates of interest on interest incomes

Capital losses due to dips in stock markets and liquidation of securities at loss, or pre-mature redemption of deposits due to emergent liquidity needs

For Businesses

- Previous year's incomes with discount factors for sales and gross profits

- Budgeted fixed, semi-variable and variable expenses under present scenario

- Loss of perishable stocks and inventory due to sudden lockdown, quality issues, or reworking costs before sale. The loss of value of stocks may also be due to inability to transport or inability to deliver in time or season change or on account of cancellation of orders

- Increase in working capital interest costs due to lower recoveries from debtors, unsold stocks and working capital facilities' enhancements

- Increase in interest on term loans due to deferred EMIs

- Additional directly identifiable costs for Covid-19 prevention measures such as wages and salaries without work or for less work than normal, sanitizations, PPE kits, etc.

- Productivity losses due to shorter working hours, non-availability of skilled labour

- Hardware and software costs for Work-from-Home facilitation

- Brought forward losses from past years

- Additional medical expenses, mandatory medical insurance for employees

- Expected bad debts due to non-recovery/partial recovery possibilities from some debtors having lost their businesses

- Liquidity pressures due to advances to staff/workers against their retirement benefits/severance pay

Interest u/s 234C on Delayed Payment of Installment of Advance Tax - Unclear Situation

As per section 234C of the Income Tax Act, the liability of interest on shortfall of installment is at the rate of 1% per month for a period of three months on the amount of the shortfall. 

However, as per the relief package announced by the government, the rate of interest to be charged cannot exceed 0.75% per month for the period of delay on all taxes due between 20-Mar-2020 and 29-Jun-2020 subject to the condition that such amount has been paid on or before 30-Jun-2020.

Does this imply that the implied concession provided by the Government read with Section 234C of the Act is for the period of 3 months from 15-Jun-2020 to 15-Sep-2020 (being the due date of next installment of advance tax)? And will the interest be charged @0.75% per month for such delay, or @ 0.75% only for the period from 16-Jun-20 to 30-Jun-20 and @ normal 1% w.e.f. 01-Jul-2020.

Based on the above and the settled cases in various Tribunals, the interest under Sec  234C of the Act can be charged only for the period of default/ delay and not for the period of three months.

In these uncertainties one should carefully decide as per the composition of one’s incomes and conservative business estimates and the liquidity to pay now or to pay with interest (if any) and to gradually review the budgeted estimates in later quarters.

Friday, June 12, 2020

GST Interest & Late Fee Waiver

Reduction in Late Fees & Interest for All Tax Payers

1. GSTR-3B from July 2017 to Jan 2020
 
(i) NIL late fee in case of no tax liability

(ii) Maximum late fee of Rs. 500 per month in case of tax liability

(iii) This reduced rate will apply for all such returns filed between 01-Jul-2020 to 30-Sep-2020.


For Small Tax Payers having Annual Aggregate Turnover up to Rs. 5 crores only:

2. GSTR-3B for Feb, Mar, Apr 2020

(i) NIL interest for filing of return up to (staggered) specified dates (up to 06-Jul-2020).

(ii) If the returns are filed after the specified date, interest rate is reduced from 18% to 9% p.a. till 30-Sep-2020.

3. GSTR-3B for May, Jun, Jul 2020

Interest and late fee waived off if returns in GSTR-3B are filed for these months up to September 2020, as per staggered dates to be later announced.


Monday, June 8, 2020

How to File NIL GSTR-3B by SMS

The facility to file a NIL GST return in Form GSTR-3B through SMS has been announced by the government, and the functionality has been made available on the GST portal immediately.

The process to file a NIL return is as under.

Step 1: Initiate NIL Filing

a) Type the following in your SMS textbox: NIL<space>3B<space>GSTIN<space>Tax period
Example: NIL 3B 07XXXXXXXXXXXZX 052020 

b) Send to 14409

c) You will receive a code from VD-GSTIND:
123456 is the CODE for Nil filing of GSTR3B for 07XXXXXXXXXXXZX for period 052020. Code validity 30 min.

Step 2: Confirm NIL Filing

a) Type the following: CNF<space>3B<space>Code
Example: CNF 3B 123456

b) Send to 14409

c) You will receive the following from VD-GSTIND:
Your 07XXXXXXXXXXXZX GSTR3B for 052020 is filed successfully and acknowledged vide ARN is AA070219000384. Please use this ARN to track the status of your return.

For Assistance

a) Type HELP<space>3B
Example: HELP 3B

b) Send to 14409

c) You will receive the following from VD-GSTIND:
To file NIL return of GSTIN for May 2020: NIL 3B 07CQZCD1111I4Z7 052020. To confirm Nil filing: CNF 3B CODE. More details www.gst.gov.in

The status of the returns so filed can be tracked on the GST Portal by logging in to the GSTIN account and navigating to Services>Returns>Track Return Status.

Friday, June 5, 2020

Mandatory SOP for Workplaces to Prevent Spread of Covid-19

The Ministry of Health and Family Welfare, Government of India, has been releasing SOPs regularly to be followed by offices to contain the spread of the Covid-19 pandemic.

Here, we have summarized a few highlights of the norms to be maintained at all offices and work places on reopening to ensure proper compliance with MHA directives at all times.

Personal Measures by Employees
- Use of masks is mandatory at all times at the office
- Installation of Aarogya Setu app by all employees mandatory
- Ensure that a valid Medical Insurance is in place

Screening, Sanitization & Ventilation Measures
- Entrance to have mandatory thermal screening and hand sanitization
- Only asymptomatic staff/visitors to be allowed
- Any staff member from containment zone to immediately inform the management and not be allowed in the premises - should be allowed to work from home and not marked as on leave
- Proper sanitization of all surfaces that are touched to be carried out at frequent intervals with 1% sodium hypochlorite solution/spray
- Disinfection of interiors of cars including handles, steering, keys to be done 
- AC temperature to be maintained in the range of 24-30 degrees; relative humidity to be between 40-70%
- Cross ventilation should be adequate and fresh air intake to be as much as possible

Social Distancing Measures
- Individuals to maintain 6 feet gap between each other - seating arrangements, queues, etc.
- Staggering of lunch hours/coffee hours to be done
- Specific markings to be made at places for queues to maintain social distancing
- Proper crowd management at parking lots and assembly areas to be managed, ensuring 6 feet distance between all
- Elevators to not allow more than 1, 2 or 3 people depending on the size and keeping in mind social distancing norms

Other General Measures
- Posters, AV media on preventive measures for Covid-19 to be displayed clearly
- Prefer to carry out most meetings through video-conferencing
- Ensure running water, soap and sanitizer in washrooms, cafeterias, etc.
- Provide medical insurance to employees who do not have such policies in place

Wednesday, June 3, 2020

How to Move Your Accounts Department Completely Online

The Corona Virus outbreak has put a halt on a number of business activities.

It is possible that your accounting department may have gone into limbo for a few weeks too, especially if you are a small enterprise with heavy dependency on manual data entry on a software such as Tally that is installed on a local server at your office, and the accountant complains of not having access to data to complete compliance related filing.

Here is a step-by-step guide on the problems and the possible solutions to swiftly move your accounting department online so that they can work from home and no work is hampered.

Problems at Hand

1) Accounting software is installed on specific machines at the office and the data is stored locally, which is now inaccessible

2) Accountant's workings and folders/files are kept physically at the office and it would be a task to digitize all such records

3) Even if the above two issues are resolved by providing online access to accounting data, there may not be a simple mechanism to track the daily deliverables in accounts and get an overview of real-time pending tasks, and progress on them.

4) You are not aware of the best computer and web based tools available to set up this system at least possible cost

5) Accountant(s) are old and not tech-savvy, but are indispensable for personal or professional reasons, and may require training from the right persons

6) Your CA does not have full capacity in terms of manpower to deliver on your requirements and review your data timely

Main Objectives

1) Bring entire accounting function online
2) Set up a system of continuous monitoring of accounting and compliance function
3) Increase efficiency in accounts reporting and compliance filing

Bringing the Accounting Data Online - Tally & Other Software

Accounting Systems Popularly Used

- Tally ERP.9
- Busy
- FACT
- Quickbooks
- Zoho
- Xero
- SAP, Oracle, or any other ERP system

Moving Tally on the Cloud - Process & Costs

If you are like most businesses in India, you most probably use Tally as your accounting software.

Tally has the option of putting your data on the cloud for easy web access from any location. You may speak with your Tally operator for the same. If you do not know whom to contact, you can let us know and we'll connect you to one of the many Tally providers that we know of.

The cost for obtaining a 3-5 user Tally access on the cloud with adequate storage space should cost you not over Rs. 2000 per month.

This cost may increase if you do not have a valid Tally license. Purchasing a license normally involves a one time cost of about Rs. 50,000 and it gives you lifetime access to Tally. You may have to pay for a few advanced features if they are ever released by Tally. However, we've mostly seen the same version to work for clients continuously for years.

A number of such Tally on Cloud providers promise to offer you access to the software on their own purchased Tally license, on which a huge number of their clients maintain data. We wouldn't recommend such an arrangement as one, it's possibly unlawful, and two, it may bring with itself its own data integrity and safety risks.

The monthly cost of Rs. 2,000 for web access of Tally may increase marginally if you need to increase the number of users beyond 5 or increase the processing speed of the server your Tally Backup will be saved on.

Important Safeguards

1) Check if you have a valid Tally license or not. We'd recommend getting a valid license.

2) Take in writing details such as cloud space, RAM and processing speed from the Cloud provider.

3) Ask for minimum 7 days continuous off-site backup and the facility for the data to download twice a day on your local hard-disk at the business owner's home or office.

4) Ask about the data security and safety features to be aware of all methods of recovering your accounting data in case of an unforeseen event.

5) Make the Cloud service provider sign a Confidentiality Agreement which would make them liable to heavy damages and penalties in case of breach.

6) Make a list of all user credentials and ensure that the passwords for access remain with the admin and the respective user only.

7) Ask for special features such as restrictions on copying data to the local computer system of the accountant/remote user and on not being able to email the data to any unauthorized person from the remote user's computer.

Softwares Other than Tally

Most of the other softwares are also easily available on online mode and can be accessed from any location. A number of them such as Quickbooks, Zoho and Xero are web-based and can be logged into from any computer system.

We have mostly observed most accountants from small enterprises to be comfortable with Tally and Busy.

Quickbooks and Xero may look more user-friendly and may seem to have a more attractive UI/UX. However, from a long term perspective, in our opinion, Tally seems to be one of the most cost effective options and it is easier to find accountants who are comfortable with it.

We would recommend you take the same steps for your accounting software as these steps are mostly generic and may apply across the board.

In case of any concern, feel free to reach out to us for tech assistance.

Maintaining Invoices/Documents in Digital Copies

Keeping all Invoices and Vouchers Online

1) Generate a unique email ID for Accounts where all vendors would be instructed to send the various invoices for expenses and purchases. The same may also be communicated to your Departmental Heads, who receive such documents for onward submission to Accounts. Such email ID may be in the form of accounts@yourdomain.com or vouchers@yourdomain.com

2) The Accountant may classify the vouchers received in different folders - expense head wise (e.g. Marketing, Traveling & Conveyance, Business Development, Purchases, Electricity Expenses, etc.)

3) Within each such folder for expense, sub-folders may be made for each month. With this classification, they will be able to access each voucher based on the accounting entry as per head accounted under and month of recording.

4) A coding for folders may also be developed and the same code may be mentioned in the narration to that accounting transaction. For example, if the voucher is stored in Marketing expenses -> June, the code for such a folder could be MKT-06/2020.

5) This entire folder can be updated on a designated accounting ID on Google Drive. The accountant may download the file into a Google Drive shortcut created on his system, which automatically syncs and uploads such files to the Drive on web. Or it may be saved directly to Drive from the mailbox.

6) A regular backup of this Drive folder may be taken either on the same cloud account on which Tally is stored, or on a local portable hard-disk at the owner'f office/residence. Such back up can be automated at a predefined frequency.

7) If you have documents received in hard copy at the gate or otherwise, a designated person at such location should be instructed to scan it using a simple app such as CamScanner and share it on the defined accounting ID immediately.

8) For sharing of such documents, the staff may be instructed to add tags to the subject line at the time of sending. For example, Goods Receipt Notes while being scanned and sent from the gate may be tagged on email as <GRN>. Similarly, Purchase Invoices may be tagged as <PI>, and so on. Such a code list should be made part of the Accounting Manual that we shall discuss later.

Permanent Files

The following types of files may form permanent data, which should be scanned as a one time exercise and be kept in a separate folder on Google Drive or Cloud for quick access by the accounting team or the business owner.

1) Incorporation Documents - Partnership Deed, Certificate of Incorporation, MoA, AoA, etc.

2) Registrations - PAN, TAN, GST Certificate, MSME Registration, Shop & Establishment Registration, PF, ESI, etc.

3) Other Permanent Records, including:
- Registers under Companies Acts - Minutes Book, Fixed Assets Register, etc.
- Bank Sanction Letters and Communications
- Contracts and Agreements
- Specific Sanction Letters
- Prior Year's Tax Orders

Other Continuing Records - Excel Workings

These are mostly maintained in PDF and Excel formats at most organizations, and should be easy to copy on to the online record.

The Excel files, once uploaded on Drive, can be edited and worked on online itself from anywhere. Access and editing rights can be defined user wise. There is also a permanent log of all changes made by different users at different times, so the admin can track all changes to these workings in real-time.

1) GST Workings: GSTR-3B, GSTR-1, GSTR-2A Reconciliation with ITC Register, GSTR-9 Reconciliations

2) TDS Workings: 24Q, 26Q, 27EQ, etc with calculations and filing receipts

3) Payroll: Payroll sheets can be uploaded on Drive and continuously updated online on Google Sheets.

Important Safeguards

1) Keep a check on the access controls for the accounting data folder. The business owner should have admin rights, while the others may have restricted rights on Google Drive only to view a few folders and to edit a few others.

2) You may also define all the files which would remain locked for deletion and may not be deleted other than by the admin

3) You can also include 2-step verification in access of the Google Drive and keep a phone number only for such OTPs, which may remain either with the business owner or a trusted Executive Assistant, who will provide the OTP for access to Google Drive only to authorized persons.

4) An auto-sync and backup system can be easily put in place for such record to be saved at all times on a computer or portable hard disk that belongs to the business owner at home or office.

MIS, Work Tracker & Task Manager

The above steps will have to be synced together in a worksheet and on a task manager that show the progress of all such tasks in real-time.

Work Tracker

The Tracker is mostly easily built using Google Sheets within the same Drive folder. This may track and color code the various steps in routine compliance such as:
- GST returns
- TDS returns
- Advance Tax deposit
- Applying for refunds from GST, Income Tax
- Tax scrutiny matters
- Correspondence with banks for facilities and borrowing limits

MIS

An MIS can be designed to track data, which may be either filled in on a regular basis by the accountant in the Google Sheet, or a Tally patch can be purchased for automated export of data from Tally into a predefined MIS format with the click of a button.

Such automated patches can be made, starting at one-time costs of about Rs. 10,000/- by a number of small service providers.

There are also a few web-based and mobile apps being developed for this purpose that are currently in beta testing mode and should be out in the market for all to use within the next 2-3 months.

Job Tracking - Trello

Trello is a web-based app also available for mobile, which helps you get a real-time visual snapshot on the various pending tasks assigned to different team members.

It starts with a free version, which is powerful enough for you to start managing your team for free from the app itself. It has some paid upgrades of better features, but you may not need them for quite some time to begin with.

The app can send automatic reminders for pending tasks to team mates on their phones, add such tasks to their calendars, send them messages whenever a new task is assigned to them and also keeps a tab on delayed tasks requiring immediate attention.

We have designed Trello Boards for a number of organizations and it is extremely easy to use and adapt to, if your team is onboarded on it in the right manner.

Developing of Accounting Manual & Hiring a Virtual CFO

Setting up your Accounting software on web and to get your data online is easy for most.

You may require help at the steps of codifying these processes to ensure that everyone follows the new methods.

For continuous monitoring and ensuring that the Accounting System develops well enough to reach the stage of a functional MIS and a Job Tracker, you may need the professional help of a Chartered Accountant, who is tech-savvy and aware of all such tools.

Services of Virtual CFO are normally available in a range from Rs. 25000 per month to Rs. 1 lakh per month depending on the size of the accounting team, the scale of the organization and the time commitment required from such professional.

We've planned such systems and transitions for a number of organizations, and a bunch of them are now reaching out to us during the virus outbreak. Happy to help if you have any queries on the same.

POEM or PE Not Formed if Key Managerial Person is Stuck in India during Lockdown

The CBDT has promised a relief on case by case basis for individuals stuck in India during the Corona Virus outbreak, who are otherwise CEOs and Key Managerial Persons of foreign entities.

Such persons' stay in India may lead to a creation of Permanent Establishment (PE) or Place of Effective Management (POEM) of such foreign entities in India, which would've brought their foreign incomes to tax in India.

The government has exempted individuals by excluding their stay in India during the lockdown from days considered for tax residency calculation. With this announcement, the relief also comes to companies.

Tuesday, June 2, 2020

Validity of Scrips (MEIS/SEIS) Extended to 30-Sep-20

The DGFT has extended the validity of scrips or certificates, provided under export incentive schemes –MEIS and SEIS, which are expiring between 1st March to 30th June, till 30th September 2020.

The Public Notice No. 08/2015-20 dated 01-Jun-2020 notifies that “Relaxation has been provided for applicable late cuts for SEIS/MEIS applications and the validity of scrips issued under Chapter 3 of FTP which are expiring between March 1 and June 30 this year has been extended up to September 30 this year.”

Monday, June 1, 2020

New Definition for MSME

The definition of Micro, Small and Medium Enterprises has been proposed to be changed again with the following revised thresholds.

Micro Enterprise
(i) Investment in plant & machinery or equipment up to Rs. 1 crore; AND
(ii) Sales turnover of less than Rs. 5 crores in a financial year

Small Enterprise
(i) Investment in plant & machinery or equipment up to Rs. 5 crore; AND
(ii) Sales turnover up to Rs. 50 crores in a financial year

Medium Enterprise
(i) Investment in plant & machinery or equipment up to Rs. 50 crore; AND
(ii) Sales turnover up to Rs. 250 crores in a financial year

Notes:

- The difference in definition for Manufacturers and Service Providers has been done away with.

- Traders were earlier not considered in the category. As the distinction between manufacturers and service providers has been done away with, we shall find out with further clarifications if the benefits are also extended to traders

- These changes have been notified in the Official Gazette vide SO 1702(E) dated 01.06.2020 so as to change the definition in the Micro Small and Medium Enterprise (MSME) Development Act, 2006

- The Notification shall come into effect from 1st July, 2020

- Benefits of borrowing at lower interest rates and timely receipt of outstanding dues from customers may be extended to all entities falling under this definition

- Please speak with your bankers to avail lower interest rates as available to MSMEs under various schemes