Month: August 2019

Seeing it to be a ‘Red Alert‘ in GST Regime, West Bengal Finance Minister Amit Mishra wrote to FM Nirmala Sitharaman about cases of GST Frauds and the urgent need to call for a thorough check on detecting any fraudulent tax transactions.

Mitra expressing his worries on GST frauds told in his letter that apart from Government’s endeavour to make GST an impeccable tax culture in India it is shocking to see such a massive GST fraud occurring on Indian grounds. In the letter, he justified his point by quoting the digits of tax evasion since GST roll-out i.e. Rs. 45,682 crore the amount cited in Rajya Sabha by Minister of States for Finance Anurag Thakur.

He further said that still, no complete data of frauds prevail under SGST and if the data is re-scrutinized to find out detected and undetected tax evasion cases of all the states then the tax evasion amount may surpass Rs 1 Lakh Crore.

Read Also: New GST Return Forms to Help Authorities Check Tax Evasion: Experts

According to Amit Mitra, the absence of a foolproof administrative framework like robust tax reporting system, from GST could prove to bring a calamity in tax governance. The fear and concern are now coming true.

To abolish tax evasion from the GST regime and to make it an unadulterated tax culture, FM West Bengal proposed some measures and urged Sitharaman to involve them in the agenda of the following 37th GST Council Meeting.

He stressed upon the need to hire an inspection force for detecting all the cases of tax evasion in the country and then take appropriate actions on the same. “Looking to the intensity of tax frauds task forces consisting of state and central GST must be hired,” said Mitra.

He said that the complete list of cancelled GSTIN’s with PAN and email should be provided to the task force operating in the case so that the same fraud is not investigated twice. He forces on the introduction of a full-fledged system of new GST return, with invoice matching for large taxpayers by October and all taxpayers by January.

The current three tax rate slabs of 0%, 5%, 20% and 30% are anticipated to be extended to five of  0%, 10%, 20%, 30% and 35%, on the recommendations of the exclusive task force which was appointed by the Government of India (GOI).

This special task force submitted its report on the new Direct Tax Code to the Finance Ministry on new Direct Tax Code, looking forward towards the replacement of the current Income Tax Act.

The government-appointed force wants some changes in the Income Tax Act which has its roots back in 1961. Although the demand has not been made for increasing the exemption limit beyond ₹2.5 lakh of the current but demands for the addition of tax brackets has been made by them.

Read Also: Revisit History of Income Tax Slabs (1944-45 to 2018-19) in India

The recommendations made by the task force include lesser income tax liability at 10% and 20% on annual income between ₹5 lakh to ₹10 lakh and ₹10 lakh to ₹20 lakh, respectively. Besides, the proposal for introducing a new 35% tax bracket for annual income more than ₹2 crore along with the surcharge has also been made.

According to the reports, no changes have been suggested for the 5% tax bracket or the current rebate of ₹12,500 and 30% Income tax slab rate will remain the same for annual income between ₹20 lakh to ₹2 crore.

Current Tax Slabs with Rate vs Recommended by the Task Force

Current IT Slabs	Current Applicable Rate	Task Force IT Slabs	Task Force IT Rates
Income up to INR 2.5 lakh	0%	Income up to INR 2.5 lakh	0%
Income from INR 2.5 lakh to INR 5 Lakh	5% (Rebate – INR 12,500)	Income from INR 2.5 lakh to INR 10 Lakh	10% (Rebate – INR 12,500 up to INR 5 Lakh)
Income from INR 5 lakh to INR 10 lakh	20%	Income from INR 10 lakh to INR 20 lakh	20%
Income more than INR 10 lakh	30%	Income from INR 20 lakh to INR 2 crore	30%
		Income Above INR 2 Crore	35%

In a recent ruling, the Authority for Advance Rulings (AAR-GST), Kerala, has announced that a GST registration can not be denied by those who are working from shared office spaces. However, the shared working spaces in which they are working should be demarcated with a different desk number.

This particular response has been given by AAR-GST, Kerala against one of the applications filed by a company in Kochi that was offering coworking spaces to other companies.

In the past, there were instances where startups working in coworking spaces have denied GST registration while running their business operations from a coworking space. The primary reason behind such denial by startups was that another company working alongside them at coworking space has already done GST registration before them with the same address.

In response to this AAR, Kerala Ruling, one of the indirect tax experts said, “The advance generally lay down the correct principles. This ruling will be most helpful if followed consistently by all officials across India.” Although, he also said that such advanced rulings applicability is mostly limited to the applicant and tax officer related to that particular case. Still, whatever the case may be, such rulings will strengthen the GST registration case against those operating from coworking spaces.

In India, startups prefer to operate from coworking spaces initially to cut down their operating costs and get advanced facilities like air-conditioning, high-speed internet, housekeeping services, pantry with drinking water, etc. already present at those spaces.

Read Also: Top Benefits of GST for Startups & Small Businesses in India

For instance, a freelance graphic designer residing in Delhi would love to work in a coworking space in India as he/she would not want his/her residential property/address to become public, be it in the invoice or otherwise, under various GST norms.

In the AAR ruling case, the applicant-Spacelance Office Solutions was offering sub-leased coworking spaces to its clients with required infrastructure facilities. A distinct, identifiable working space, such as table & chairs, was offered to its clients. Clients of the applicant were engaged in the services sector, and financial records were held by them in electronic form.

Hence, the company-Spacelance Office Solutions has sought an advanced ruling to check whether GST registration can be done for multiple service sector firms operating from the same address, given that they follow all GST rules related to the principal place of business. In response to this, the AAR, Kerala said that while applying for GST registration, the startups should provide mandatory documents like sub-lease or rental agreements as address proof for their principal place of business (along with respective desk number if operating in a coworking space). The companies should also provide documents like monthly utility bills for electricity or water facilities. The GST number given to each coworking space must be displayed at a prominent location.

One of the real estate experts, in response to this AAR ruling, said, “Some coworking spaces offer flexible-seating. They will have to change their model to ensure that a dedicated desk or space is available to each client,”

As per the association of auto LPG demand, the GST rate on auto LPG must be reduced to 5 per cent from 18 per cent which will further boost its retail demand and also help in the environment.

Indian Auto LPG Coalition (IAC) has clearly stated that the auto LPG is one such fuel just like CNG which will bring pollution in a control state and needs to be in the lower GST rate.

Auto LPG is just another alternative of clean fuel like CNG which is considered good in the view of petrol and diesel and is been used in over 70 countries.

The auto LPG uses a light cylinder and is totally convenient to use just like petrol and diesel. As per the statement of IAC, “We have written to Union Finance Minister Nirmala Sitharaman as well as all members of the GST Council for considering reducing GST tax on auto LPG to 5 per cent from 18 per cent currently.”

While the IAC also asked for the rate reduction on auto LPG kits from 5 per cent to 28 per cent. As per the statement, “Unlike CNG, auto LPG can be easily and successfully installed on 2-wheelers also. Emission from 2-wheelers rank right on top, in terms of its contribution to the urban air quality issues because of high particulate matter (PM) emissions.”

Due to the wider use of LPG in the metros, it is now required that the GST rate on LPG must be reduced for the betterment of the society as well as for the environment.

Taking into account the complaints regarding harassment by Income Tax officials, the Union Finance Ministry has decided that notices, summons and orders by the Income Tax Department will now be issued through a centralized computer from 1st October.

This means, now the Income Tax authorities will no longer be able to issue a notice or summons to anyone by their own will or choice and the information about the notice or summons issued will be available with everyone.

On Friday, Union Finance Minister Nirmala Sitharaman gave this information in a press conference, she said that the notices, summons or orders issued by the Income Tax Officer or Income Tax Department without a centralized computer will not be considered valid. Apart from this, the summons, notices or orders which have already been issued by the Income Tax Department or Income Tax Officer so far, will be reissued online from October 1.

Read Also: How to File a Complaint Against Income Tax Officer?

The Central Board of Direct Taxes (CBDT) has announced that from October 1, 2019, all letters and notices issued by the income tax department will come along with the Document Identification Number (DIN) which is a computer-generated number and will be verifiable on the e-filing portal of Income Tax department.
Besides, CBDT has come up with the facility on the e-filing portal which will enable the taxpayers to validate their income tax notices. The taxpayers will be able to authenticate their income tax notices either through Document number/ PAN, assessment year along with any other mandatory information as needed.

The Finance Minister also added that these notices, summons and orders will be disposed of within a period of three months and will not be procrastinated for so long. This means besides sending the notices online from 1st October, the government will resolve down all the income tax notices within three months. The notices that remain unsettled will be uploaded on the platform of the income tax department for monitoring purpose.

Recommended: Solved! How to Check Income Tax Notice Fake or Genuine?

The government aims to improve the liability & elevate the transparency in taxation system and has taken this step to completely knock off the fear of the Income Tax Department and Income Tax officials from the industry and individuals.

The taxpayers who received notice or order from the Income Tax Department are now able to check whether it is genuine or fake. It can easily be checked through the facility provided the Income Tax Department on its official website. Till now, in order to check the genuineness of the Income Tax Notice/Orders, the attributes such as ‘Document Number’ or ‘PAN, Assessment Year, Notice Section, Month and Year of Issue’ are used by the taxpayers.

However, as per the lately issued circular from the Central Board of Direct Taxes (CBDT), every notice/order issued by the IT department will contain a computer-generated document identification number (DIN). And these notices will be issued after October 1, 2019, according to the press release issued by the IT department on 14 August 2019. While it suggests the notices/orders issued before October 1, 2019, will be uploaded to the department’s website to check genuineness with the DIN number.

How to Check Income Tax Notice by the Govt. I-T Portal

• First and foremost, go to the Department’s official website at www.incometaxindiaefiling.gov.in
• Then proceed to the “Authenticate” tab under ‘Quick Links’ tab, there you will get the option of ‘Notice/order issue by ITD’ underneath.
• Click on ‘Notice / Order Issue by ITD’ option will redirect you to a new web page on your computer screen. There you will get two options which will let you check the veracity of the notices/orders you have received. To do so, you can use either document number or PAN assessment year, notice section, month and year of issue, whichever suits your taste.
• Enter valid captcha code and click on submit

Read Also: How To Revise A Defective Income Tax Return Notice?

If the issued notice/order is valid or authentic, the same document will appear on the website. Also, you will be notified with the message-‘Yes, notice is valid and issued by the income tax authority. Surely, this facility will avail you in finding veracity of the notices/ orders received from the IT Dept. According to a tax expert, “Notices from the Income Tax Department can be used to check the veracity of orders sent by the tax authorities with the tools provided by the e-filing portal.

Using this tool, the Income taxpayer can easily identify fake e-mails and fake letters sent in the name of Income Tax Department. Any documents or notices sent to e-mail to the income taxpayer are also uploaded on the e-filing portal by the department, so their authenticity can be easily checked through this tool.”

Recently the ministry of road transport asked finance ministry for a GST rate cut on all the hybrid vehicles in order to boost their sales and confidence in the customers of such vehicles.

It is to be seen that the said agenda will be in the next GST council 37th meeting to be held in Goa on September 20. However, the finance ministry has said they will analyze the impression of GST rate cut on the revenue department.

Currently, there is 28 per cent applicable to all the vehicles excluding electric vehicles, bicycles, rickshaw, etc. Recently the ministry decided to cut GST rate on electric vehicles from 12 per cent to 5 per cent.

As per the Maruti Suzuki chairmen, “Personally, we would like to see GST benefits linked to cleaner cars. The government gave tax cut on EVs but hybrid should be given duty cut. There should be tax cut on CNG vehicles as well.”

The union finance ministry said that they will see through the matter on GST rate cut for hybrid vehicles which will further relax the auto industry situation right now.

The demand for electric vehicles may see a boost after this finalisation of GST rate, therefore, it is to be seen whether the finance ministry will opt for the GST rate cut and make easy for both the customers and the auto industry.

What is AOC 4 Form in MCA?

Financial statements are the source on the basis of which the Board of Directors and shareholders can evaluate the performance of a company. E-Form AOC 4 is for filing the company’s financial statement for every financial year with the Registrar of Companies. The company is responsible for duly furnishing the form within 30 days of its Annual General Meeting.

What Documents are Needed with Form AOC 4?:

• Balance Sheet with its Notes
• Profit and Loss Statement with its Notes
• Cash Flow Statement.
• Statement of Change in Equity.
• Reports from the Auditor
• Reports from the Board
• Corporate Social Responsibility Report, if Any
• Statement of Subsidiaries in Form AOC-1, if Any
• Other Relevant Documents,if Any Required

For filing E-form AOC-4 approval of practicing professional is required i.e. practising Company Secretary (CS) or Chartered Accountant (CA).

Guidelines to Follow while Filing AOC 4 Forms

As per Company Act 2013, all the registered Companies in India need to furnish Form AOC 4 for every financial year. Any failure or delay in filling the form may attract fine/penalties on the company

Directions for filing company annual returns and annual account

• The company must appoint and authorize the auditors for the audit of the financial statements.
• As per the company act, the directors with the help of other key officials have to prepare a board report.
• In the Board Meeting, the Financial Statement and the Board report has to be approved.
• The financial statement shall be framed after conclusions of the Annual General Meeting (AGM). After all, shareholder’s approval is the ultimate requirement for accepting the financial statements.

Read Also: Know the Due Dates of ROC Return Filing Forms

Who Needs to File AOC 4?

There are certain parameters for the applicability of filing a financial statement in XBRL format. Here is the list of companies who are required to file AOC 4 XBRL for every financial year:

• The companies have paid capital of Rs. 5 Crores or more.
• Companies with an annual turnover of Rs 100 Crores or more.
• Companies listed with the stock exchange in India and its subsidiaries.

Filing Fees for AOC 4 Form

Fees Structure for Filing AOC 4 is based on the authorized capital of the company:-

• Less than 1,00,000- Rs 200 per document
• 1,00,000 to 4,99,999-Rs 300 per document
• 5,00,000 to 24,99,999- Rs 400 per document
• 25,00,000 to 99,99,999-Rs 500 per document
• 1,00,00,000 or more -Rs 600 per document

Similar: ADT-1 Form Due Date and E-Filing Documents

Penalties on Delay of E-Form AOC 4

From 01^st July 2018, the late filing of Form AOC-4 shall attract the penalty of Rs. 100 per day till the date of filing.

Earlier there was a penalty slab for late filing of E-form AOC-4:-

• Delay up to 30 Days – 2 times of normal filing fees
• More than 30 days and Up to 60 Days – 4 times of normal filing fees
• More than 60 days and Up to 90 Days – 6 times of normal filing fees
• More than 90 days and Up to 180 Days – 10 times of normal filing fees
• More than 180 days and Up to 270 Days – 12 times of normal filing fees

Apart from penalties, there are even worst consequences on delay, the Directors, Managing Director or Cheif Financial Officer of the company may get convicted and sent to jail or may get bound to pay the sum of fine as per the provision of Companies Act 2013.

Related to Approval and Certification

The data presented in the form needs approval from the director, manager, CFO and CEO. Given that the information is accurate and is in compliance with the law. The E-form AOC 4 shall be digitally signed by one of the following authorized people:

• Director
• Manager
• CFO
• CEO

A statement confirming the authenticity of the information entered in the form is required by a full time practising CA or CS. Such professional shall also digitally sign the document and affirm that the information is verified by him. The membership number and the Certificate of practising number have to be mentioned on the form.

In response to the demand of the trade industry and ongoing issues on the portal, the Finance Ministry has decided to extend the last date for filing GST annual returns to 30th November, 2019. The general date for annual GST return filing was December 31, 2018.

In the updated order, the union finance minister Nirmala Sitharaman has taken decision to extend the due dates of filing the Form GSTR 9, GSTR 9A and the GSTR 9C till 30th November 2019 (Check Order No. 7/2019-Central Tax).

In a order released by the Central Board of Indirect Taxes and Custom (CBIC) said, “The competent authority has decided to extend the due date for filing FORM GSTR-9, FORM GSTR-9A and FORM GSTR-9C till 30th November 2019.”

The deadline for annual GST return has been extended owing to the continuous demands of various trade bodies. According to them, the format for annual GST Return along with the filing option is not yet available on the GST portal which makes it difficult to speculate things. GST annual return is kind of important deal as it gives a once-in-a-year opportunity to taxpayers to review and rectify their mistakes in any of the returns filed in that particular year. Therefore, businesses must be given sufficient time and resources to analyze, understand and fill the form.

More than one petition was filed to the Finance Ministry, all of which put the focus on the complexity of the GST returns filing process. According to a petition, more time is spent on correcting the returns rather than filing them. In addition, annual returns require the mention of HSN code for inward supplies as well, which was not a mandate for GSTR-3B returns. This further adds to the hassle of the taxpayers.

Read Also: Comparison B/w GSTR 9 Annual & GSTR 9C Audit Return Forms

Taxpayers need time as they will have to review all their past returns and transactions to fill up details in the annual return form. It is going to be even more arduous and demanding for small businesses and traders who have no expertise in such tasks. Since the due dates for GSTR-3B filing have been extended multiple times for different months during the year, the calculation of penalty, interest and the late fee is now more time-consuming.

n a big relief to the taxpayers, there will be 2 more additional ITR forms to come pre-filled in the upcoming financial year i.e. FY 2020-21. This move will help those taxpayers who are looking for an easy way to file the ITR.

Currently, the ITR 1 SAHAJ is being pre-filled in this fiscal year. As per the statement from the income tax department, Revenue Secretary Ajay Bhushan, “ITR 2 and ITR 3 will be pre-filled from next year”.

There are a total of 7 ITR forms which is available for taxpayers which include ITR 1, ITR 2 and ITR 3 for individual taxpayers and for the Hindu Undivided Family (HUF).

As per the official, the pre-filing is linked with the details as per the interest earned through the bank capital gains from sale transaction of shares and mutual funds, along with the property transactions information.

All these data will be there pre-filled in the ITR form from now onwards, while the taxpayer can also rectify the pre-filled information which will be communicated to the banks and financial institutions directly.

However, it is to be known that the last date to file ITR 1 and ITR 2 for the assessment year 2019 is 31st August and for the ITR 3 is 30th September.

The union finance minister Nirmala Sitharaman approved some latest measures in the income tax compliance which includes faceless scrutiny. Also, there is the Document Identification Number (DIN) will be available to sort out the complaints.