Govt has proposed a staggered filing of GSTR 3B, to reduce the load on GST Portal on due date. Govt vide press release dated 22.01.2020 has proposed the following due dates for various tax filers based on the State of the Tax filers and their turnover. Notification to give effect to this change is expected soon.
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MCA vide notification dated Jan 3, 2020 has made following amendment to Companies(Appointment and Remuneration of Managerial Personnel) Rules,2014 as to requirement of appointment of whole-time company Secretary and Secretarial Audit effective from April 1st2020. As per the amended provisions, ln case of private companies paid-up capital limit has been increased from five crores to 10 crores, for mandatory appointment of company Secretary. Secondly, the secretarial audit has been made applicable to every company having a loan or borrowing from the bank or financial institutions of Rs 100 crores or more.
Appointment of whole-time company secretary:
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Current provision |
Provision with effect from April 1st 2020 |
or
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or
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Requirement of Secretarial Audit Report:
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Current provision |
Provision with effect from April 1st 2020 |
Or
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Or
Or
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Explanation:
For the purpose of this sub-rule, it is clarified that the paid up-share capital, turnover, or outstanding loans or borrowings as the case may be, existing on the last date of the latest audited financial statement shall be taken into account.
Prime Minister Narendra Modi proclaimed the Startup India campaign in 2016 to boost the entrepreneurship spirit in India. This aims at promoting bank financing for startups, simplifying the incorporation of the startup process and grant of various tax exemptions and other benefits to startups. The start up India tax benefits and exemptions are available to the startups only if they come under the criteria of an ‘Eligible Startup’.
As per the Startup India Action plan, the followings conditions must be fulfilled in order to be eligible as a Startup :
Being incorporated or registered in India for less than 7 years and for biotechnology startups up to 10 years from its date of incorporation.
Annual turnover not exceeding Rs 25 crores in any of the preceding financial years.
Aims to work towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.
It is not formed by splitting up or reconstruction of a business already in existence.
It must obtain certification from the Inter-Ministerial Board set up for such a purpose.
It can be incorporated as a private limited company, registered partnership firm or a limited liability partnership.
1. 3 year Tax holiday for startups in a block of seven years
The Startup incorporated after April 1, 2016, is eligible for getting 100% tax rebate on profit for a period of three years in a block of seven years provided that annual turnover does not exceed Rs 25 crores in any financial year.This will help the startups to meet their working capital requirements during their initial years of operation.
2. Exemption from tax on Long-term capital gains:
A new section 54 EE has been inserted in the Income Tax Act for startups who are eligible to exempt their tax on a long-term capital gain if such a long-term capital gain or a part thereof is invested in a fund notified by the Central Government within a period of six months from the date of transfer of the asset. The maximum amount that can be invested in the long-term specified asset is Rs 50 lakh. Such amount shall be remain invested in the specified fund for a period of 3 years. If withdrawn before 3 years, then the exemption will be revoked in the year in which money is withdrawn.
3. Tax exemption on investments above the fair market value
The government has exempted the tax on startups that are eligible. The tax is levied on investments above the fair market value. Such investments include investments made by resident angel investors, families or funds which are not registered as venture capital funds. Also, the investments made by incubators above fair market value are exempt.
4. Tax exemption to Individual/HUF on investment of long-term capital gain in equity shares of Eligible Startups u/s 54GB.
The existing provisions u/s 54GB allows the exemption from tax on long-term capital gains on the sale of a residential property if such gains are invested in the small or medium enterprises as defined under the Micro, Small and Medium Enterprises Act, 2006. But now this section has been amended to include exemption on capital gains invested in eligible start-ups also.
Thus, if an individual or HUF sells a residential property and invests the capital gains to subscribe the 50% or more equity shares of the eligible startups, then tax on long term capital will be exempt provided that such shares are not sold or transferred within 5 years from the date of its acquisition. The startups shall also use the amount invested to purchase assets and should not transfer the asset purchased within 5 years from the date of its purchase.
The start up tax exemption will boost the investment in eligible startups and will promote their growth and expansion.
5. Set off of carrying forward losses and capital gains allowed in case of a change in Shareholding pattern.
The carryforward of losses in respect of eligible start-ups is allowed if all the shareholders of such company who held shares carrying voting power on the last day of the year in which the loss was incurred continue to hold shares on the last day of the previous year in which such loss is to be carried forward. The restriction of holding of 51 percent of voting rights to be remaining unchanged u/s 79 has been relaxed in case of eligible startups.
Also read about How To Register A Startup In India.
Do you have any questions about start up India eligibility or you need help with the finances?
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Finance Minister Nirmala Sitharaman on Saturday directed the Goods & Services Tax (GST) organization to hold a special filing demonstration session for new return framework. This activity is expected to get the input before the new documenting system becomes effective from April 1, 2020.
As per the law it is mandatory to file return either on monthly or quarterly basis, based on their turnover.
The Finance Minister met tax assesses in five group to discuss and find ways to further simplify GST forms and make the existing filling process (GSTR 1, GSTR 3B, GSTR 9, GSTR 9c etc) more user friendly. Five bodies demonstrated in real time before the Finance Minister and Senior GST and GSTN officials, the various issues encountered during filling GST forms.
However, there are issues related to certain entries where some amendments have been made, issue of credit note or debit note, matching of input tax credit (ITC) for buyer filing monthly return and seller filing quarterly return and demand to produce physical invoice by tax officials even details mentioned in GST Return Form 2A. There was also a suggestion to further ease co-relation of various forms.
The activities would assist organizations with getting ITC benefits with no problems.
70.22 per cent of the assessees, having an annual turnover of less than ?5 crore and engaged in B2C (business to consumer), B2B (business to business) as well as reverse charge mechanism-based supply activities can opt for quarterly filing of return. This form is called ‘SUGAM’ (RET-3). This is according to the turnover-wise distribution based on GSTR 3B (existing return form) filed during 2018-19.
About 28 per cent of the assessees, with an annual turnover of less than ?5 crore and are engaged in B2C as well as reverse charge-based supply activities. They can opt for ‘SAHAJ’ form (RET-2). All other assessees (engaged in foreign trade or SEZ-based activities) will have to file RET-1. They will be required to file the returns on a quarterly basis but payment of tax dues on monthly basis through a form called PMT-08.
Over 7 per cent assessees with annual turnover of more than ?5 crore. They will have to file the return on a monthly basis through RET-1. These assessees are a small in number, but in terms of overall tax payment they contribute nearly 85 per cent. Under the new system, these assessees will have to file their returns by the 20th of the next month, which means a majority of the collection will be with the Government by that date. For other assessees, the filing date is the 25th of next month.
Under the present framework, one can display two unique figures in GSTR 1 (showing liability) and GSTR 3 B (showing tax payment) as they are not linked automatically. Thus, one could show higher liability,claim higher input tax credit and pay less tax. In any case, this will be not be possible under new system.Through the RET-1/2/3, the taxpayer pays the auto-populated risk (from ANX-1) by using money and ITC (auto-populated through ANX-2) both. Additionally, only the creator of the form will be able to amend the details.
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The role of the Company Secretaries as governance enablers in the Indian corporate scenario has been well acknowledged, both by the corporates and the Regulators. Company Secretaries, both in employment and in practice have distinct roles to play as far as the governance framework of the Indian corporate arena is concerned.
The ICSI has been upfront about bringing about good governance and strengthening the existing framework. In an attempt to imbibe and to reinstate our commitment towards our vision and mission and to bring about a culture of transparency and accountability amongst our members, the Institute has brought forth the ICSI UDIN and eCSIN Guidelines.
UDIN - Unique Document Identification Number (UDIN), as the name suggests, is an identification number that is generated for every document certified/attested by a Practicing Chartered Accountants.
eCSin - The Employee Company Secretary Identification Number as governed by the eCSin Guidelines shall enable the Institute to identify the appointments and cessations of Company Secretaries. eCSin is a system-generated unique number for identification of the Company Secretaries employed in a particular company which shall be generated by the Company Secretary at the time of employment as a Company Secretary (KMP or otherwise), as well as at the time of demitting office in any manner.
Queries regarding eCSin may be sent to info@adca.in
Both the Guidelines have been made mandatory by the Council of ICSI w.e.f. 1st October, 2019 and we are confident that the same shall undeniably provide the benefit of verification of the authenticity of both documents and the professionals to the Regulatory Bodies and other stakeholders as well.
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Section 194N is applicable in case of cash withdrawals of more than Rs 1 crore during a financial year. This section will apply to all the sum of money or an aggregate of sums withdrawn from a particular payer in a financial year.
The section will apply to withdrawals made by any taxpayer including:
An Individual
A Hindu Undivided Family (HUF)
A Company
A partnership firm or an LLP
A local authority
An Association of Person (AOPs) or Body of Individuals (BOIs)
The following payers are covered under this section:
Any bank (private or public sector)
A co-operative bank
A post office
The tax will be deducted by the payer while making payment to any individual in cash from a taxpayer’s bank account on the amount in excess of Rs 1 crore.
The limit of Rs 1 crore will be applicable to the cash payments/withdrawals made during the FY 2019-20. The provisions of Section 194N will be applied to the payments made on or after 1 September 2019.
The person (payer) making the cash payment will have to deduct TDS under Section 194N. Here is the list of such persons:
Any bank (private or public sector)
A co-operative bank
A post office
There are certain categories of person (payee) to whom the provision of this section will not apply. They are listed below:
Any government body
Any bank including co-operative banks
Any business correspondent of a banking company
Any white label ATM operator of any bank
TDS will be deducted by the payer while making the cash payment over and above Rs 1 crore in a financial year to the payee. If the payee withdraws a sum of money on regular intervals, the payer will have to deduct TDS from the amount, once the total sum withdrawn exceeds Rs 1 crore in a financial year. Further, the TDS will be done on the amount exceeding Rs 1 crore. For example, if a person withdraws Rs 99 lakh in the aggregate in the financial year and in the next withdrawal, an amount of Rs 1,50,000 is withdrawn, the TDS liability is only on the excess amount of Rs 50,000.
The payer will have to deduct TDS at the rate of 2% on the cash payments/withdrawals of more than Rs 1 crore in a financial year under Section 194N. Thus, in the above example, TDS would be on Rs 50,000 at 2% i.e. Rs 1,000.
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Table of Contents
1. What is form 15G?
2. Who can submit form 15G?
3. Conditions to fulfill before submitting Form 15G
4. Instructions to fill out Form 15G
5. What if I forget to submit Form 15G?
6. Penalty for Submitting False Declaration using Form 15G
Form 15G or 15H has to be submitted by fixed deposit holders at the start of a financial year to the relevant financial entity like a bank. This is done to avoid on the interest income earned.
Banks usually deduct TDS from the interest income on FDs if it crosses the threshold limit.
Form 15G is submitted by a resident individual whose age is below 60 years of age during the year as mentioned in the form.
Form 15H is submitted by a resident individual whose age is 60 years and above, that is, senior citizens and super senior citizens.
One must fulfill the following eligibility criteria to submit Form 15G:
You are an individual or a person (other than a company or a firm).
You must be a resident Indian for the applicable FY
Your age should not be more than 60 years
Tax liability calculated on the total taxable income for the FY is zero
Your total interest income for the financial year is less than the basic exemption limit.
Form 15G has two sections. First part is for the individual who wants to claim no-deduction of TDS on certain incomes. The following are the key details you need to know for you 15 G form fill up:
Name as mentioned on your PAN Card.
Permanent Account Number. Valid PAN card is mandatory to file Form 15G. If you fail to furnish valid PAN details, your declaration will be treated as invalid.
Declaration in Form 15G can be furnished by an individual but not by a firm or company.
The previous year has to be selected as the financial year for which you are claiming non-deduction of TDS.
Mention your residential status as a resident individual because NRI are not allowed to submit Form 15G.
Mention your communication address correctly along with PIN code.
Provide valid email ID and contact number for further communications.
Tick mark ‘’Yes’’, if you were assessed to tax under the provisions of Income Tax Act, 1961 for any of the previous assessment years.
Mention the latest assessment year for which your returns were assessed.
Estimated income for which you are making declaration needs to be mentioned
Total estimated income for the financial year (which includes all the income)
If you have already filed Form 15G anytime during the financial year, then the details of the previous declaration along with an aggregate amount of income need to be mentioned in the present declaration.
Last part of section 1 talks about the investment details for which you are filing declaration. You need to furnish the investment account number (term deposit/ life insurance policy number/ employee code etc)
After filling the entire field, re-check all the details to ensure there is no error. The second part of Form 15G is to be filled out by the deductor i.e. the person who is going to deposit the tax deducted at source to the government on behalf of the tax assessee.
Form 15G is valid for one financial year. You can submit the form 15G at the beginning of the financial year. This ensures that the bank does not deduct any TDS on your interest income.
In case you forget to submit Form 15G on time and TDS has already been deducted, here’s what you can do:
Option 1: Claim your TDS refund by filing income tax return.
Option 2: Immediately submit Form 15G to avoid further deductions for the current financial year.
Providing a false declaration in Form 15G just to avoid TDS can lead to fine and even imprisonment under Section 277 of the Income Tax Act, 1961. The following are the details of punishments u/s 277 of the IT Act, 1961.
Imprisonment for a period of 6 months to 7 years if the wrong declaration was provided to evade tax of more than Rs. 1 lakh
For all other cases, imprisonment is between 3 months to 3 years.
1. Introduction
Seamless flow of input tax credit was the core purpose of the GST law after subsuming all the indirect taxes. Here, the admissibility of credit on motor vehicles has emerged as the burning issue and still in infant stage §ng there is diversity in the provision of the law and the decision being given by Authority for Advance Rulings.
The relevant provision related to the issue under consideration is as under
"Section 17 - Apportionment of credit and blocked credits.
(5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be Unavailable in respect of the following, namely:
[(a) motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when they are used for making the following taxable supplies, namely
1. further supply of such motor vehicles; or
2. transportation of passengers; or
3. imparting training on driving such motor vehicles
(aa) vessels and aircraft, except when they are used -
1. for making the following taxable supplies, namely
further supply of such vessels or aircraft; or
transportation of passengers; or
imparting training on navigating such vessels; or
imparting training on flying such aircraft;
2. for transportation of goods;
(ab) services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa):
Provided that the input tax credit in respect of such services shall be available --
(i) where the motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) are used for the purposes specified therein;
(ii) where received by a taxable person engaged —
in the manufacture of such motor vehicles, vessels or aircraft; or
in the supply of general insurance services in respect of such motor vehicles, vessels or aircraft insured by him;"
The assessee was engaged in supplying cabs on rental basis for the purpose of transportation of passengers. It was further submitted that as people take the car on rent for the transportation of
passengers, therefore, the services though claimed as "rent-a-cab" services but it is closely and essentially associated with transportation of passengers and hence, on reading of the provision as cited above the credit of tax paid on the purchase of motor vehicles is admissible to it
While discussing the matter, it was stated by the Authority for Advance Rulings that the GST Act has been amended with effect from 1-2- 2019 and before amendment the provisions of section 17(5)(b)(iii) of the Act did not allow credit of GST paid on inputs for supply of rent-a-cab service, except under certain specific conditions that are not applicable in the this case. It ruled out credit of input tax paid on the purchase of motor vehicles used for supply of rent-a-cab service if the transaction was effected before 1-2-2019
It further stated that the amended provisions of section 17(5)(b)(iii) of the GST Act do not contain reference to the rent-a-cab service. However, post-amendment, input tax credit shall not be available in respect of supply of the service of renting or hiring of motor vehicles in terms of section 17(5)(b)(i) of the GST Act, unless the inward and the outward supplies are of the same category, standalone or as an element of a taxable composite or mixed supply. Further, section 17(5)(a) of the Act provides that input tax credit shall not be available on inward supply of motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when they are used for making the following taxable supplies, namely -
1. a further supply of such motor vehicles; or
2. transportation of passengers: or
3. imparting training on driving such motor vehicles.
It was further discussed that "rent-a-cab" is not defined in the GST Act and therefore, the nature of services has to be identified from the invoices and the related facts. The assessee provides cab rental service to various institutions and in no case such services provided to institutions can fall under "passenger transportation services". From the facts, it was further’ inferred that the service receiver has to pay the assessee a certain amount per month as consideration, irrespective of what distance the cab travels in a particular month. Additional amount has to be paid if the cab is retained for extra hours or requisitioned on holidays. For the purpose of covering the cost of fuel, the distance travelled needs to be brought into play, but only if it crosses a certain threshold.
It is, therefore, clear from the above discussion that the nature of the service the assessee provides is classifiable under SAC 9966 as renting of a motor vehicle.
In view of-the facts and the legal provisions stated above, it was held by the Authority for Advance Rulings that the credit of GST paid on purchase of motor vehicles or other inputs for the supply of the "rent-a- cab" service is not admissible.
6.Author's views
With due respect, the author of this article differs with the decision passed by the Authority for Advance Rulings in the above-mentioned case. The author wishes to throw light on the provision mentioned in section 17(5)(a)(A) of the CGST Act, 2017, wherein it was said that the credit of tax paid on motor vehicles is admissible where it is used for further supply of such motor vehicle. As the words highlight, it is very clear that the credit of tax paid on motor vehicle is admissible if the same is used in further supply. It is worthwhile to note that the term "supply" has its significance and from reading the meaning of supply as given to it in section 7 of the CGST Act, 2017, it is very widely interpreted to include all sorts of supply, service or sale including renting, leasing, etc.
Thus, where "rent-a-cab" is included in the meaning of the term "supply", and renting of motor vehicles is the further supply of such motor vehicles, hence, the conditions mentioned in section 17 are fulfilled in favour of admissibility of input tax credit to the assessee of tax paid on such motor vehicles. Hence, the above decision needs reconsideration in light of the provisions cited above.
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