CBIC Released Retrospective Amendment Notification in Section 140 of CGST Act.

The Central Board of Indirect taxes and Customs (CBIC) has recently released a notification regarding the retrospective amendment in Section 140 of the CGST Act 2017. This amendment shall come into action retrospectively from 1st July 2017. With it, the ministry finds its way to buy itself in to clear all the pending input tax credit. The said amendment will affect Section 140 of the CGST Act and it will empower itself to prescribe a time duration for availing transitioning credit. Transitioning credit represents the credit from the pre-GST Regime. The transitioning credit was merged into the GST as the input tax credit mechanism.

As per a notification released on Saturday states that “The Central Government hereby appoints the 18th day of May 2020, as the date on which the provisions of Section 128 of the Finance Act, 2020, shall come into force,”.

View Notification Here

IBC UPDATE

No fresh insolvency to be initiated for 1 year under IBC: FM Sitharaman

In a bid to give relief to companies defaulting on loans due to the Covid-19 stress, Finance Minister Nirmala Sitharaman on Sunday said no fresh insolvency will be initiated for one year under the Insolvency and Bankruptcy Code.

Highlights of the Announcement:

• coronavirus-related debt will be excluded from definition of default, she said.
• Minimum threshold to initiative insolvency proceeding has been raised to Rs 1 crore from Rs 1 lakh to benefit MSMEs, she said adding that an Ordinance will be promulgated to bring this change in IBC.
• Majority of the compoundable offences sections will be shifted to internal adjudication mechanism (IAM), she said adding that amendments will be brought through an Ordinance and will de-clog the criminal courts and NCLT.
• Seven compoundable offences under the Companies Act altogether dropped and five to be dealt with under alternative framework, the finance minister said.
• Private companies, which list non-convertible debentures on stock exchanges, would not to be regarded as listed companies, she added.

She also announced decriminalisation of the Companies Act in violations involving minor technical and procedural defaults including shortcoming in CSR reporting, inadequacies in board report, filing defaults and delay in holding AGM.Also, the government allowed companies to directly list securities in permissible foreign jurisdictions.

CBDT Notifies reduced TDS/TCS rates applicable from May 14,2020

The Central Board of Direct Taxes (CBDT) has notified the reduced rate of TDS and TCS for the period from 14-05-2020 to 31-03-2021. The board has clarified that the benefit of reduced rate shall not be available if tax is deducted/collected due to non-furnishing of PAN/Aadhaar.

View details:

Due Date of all Income Tax Returns Extended

Among other measures, the due date of all income-tax return for FY 2019-20 will be extended from 31st July, 2020 & 31st October, 2020 to 30th November, 2020 and Tax audit from 30th September, 2020 to 31st October, 2020.

Check out the detailed presentation made by Union Finance & Corporaate Affairs Minister under #AtmanirbharBharatAbhiyan to support Indian Economy in fight against Covid-19

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Review of Circular No. 17/2020 dated 03.04.2020 namely, 'Measures to facilitate trade during the lockdown period- section 143 AA of the Customs Act, 1962'

-The Central Board of Indirect Taxes and Customs (CBIC), on Monday, issued a review of Circular  No. 17/2020 dated April 03, 2020, on measures to facilitate trade during the lockdown period under Section 143AA of the Customs Act, 1962. Earlier, in furtherance of the pandemic, the board has relaxed the requirement to submit bonds prescribed under Section 18, Section 59 and Section 143, and under notifications issued in terms of section 25 of the Customs Act, 1962. This relaxation is on a temporary basis and it will continue on April 30, 2020.

-The board has now further decided to extend the facility of accepting the undertaking in lieu of bond for the period till May 30, 2020, and as a result, the date of submission of the bond is also temporarily extended till June 15, 2020.

-“In reference to MHA order 40-3/2020-DM-I(A) dated 01.05.2020, wherein the lockdown was further extended for two weeks with effect from 4 May 2020, and taking into consideration that it might take some time after the end of the lockdown for the situation to normalize and the activities to carry on, the Board has decided to further extend the facility of accepting undertaking in lieu of bond for the period till 30.05.2020. Consequently, the date for submission of a proper bond in lieu of which the undertaking is being temporarily accepted is extended till 15.06.2020. 

-The circular Clarifies,

• This relaxation will be reviewed by the Board at the end of the Lockdown period

• The Condition underlined in Circular No. 17/2020 dated 03.04.2020 stands as  they are.

• Suitable Trade Notice/Standing Order may be issued to guide the trade and Industry.Difficulty,if any,faced in implementation of this circular may be bought to the notice of the board immediately.

View the Circular

Controversial AAR Ruling Karnataka: GST

Director's salary exempt from GST: Karnataka AAR ruling

The salary of a director in a company is not liable to be taxed under Goods and Services Tax (GST), the Karnataka Authority of Advanced Rulings (AAR) has said. The ruling is set to stir up the controversial issue of taxing incomes of directors or partners in a firm, since the Rajasthan bench of AAR had ruled last month that the incomes were liable to be taxed. “The incomes received towards salary/remuneration as a non-executive director of a private limited company, renting of commercial property, residential property and the values of amounts extended as deposits/loans/advances out of which interest is being received are due to be included in the aggregate turnover for registration,” the Karnataka AAR said in its Ruling on May 4.

This will create a adequate confusion among the taxpayers having more than one Office in more than one states say for instance, Rajasthan and Karnataka and this will emerge out as a big dilemma as to which AAR Ruling need to be complied with.

In the absence of a Centralised AAR, there are contrary rulings and several others in the past issued by AARs of other states on levying GST on salary of directors is a reflection of the same.

“Such contrary rulings create confusion amongst the industry players and give more credence to the need of creation of a national appellate authority for advance ruling,” said Rajat Bose, partner at Shardul Amarchand Mangaldas & Co.