Sale of Under-Construction Property is not Sale of Residential Property: Bombay High Court allows S. 54F Benefit [Read Judgment]
Read more at: http://www.taxscan.in/sale-construction-property-bombay-high-court/32790/
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# ICAI invites Suggestions from Members for Publication on Professional Opportunities at https://goo.gl/forms/y2fVBfA4o8PxKCN42 by 21st January, 2019.
# ICAI: AASB issues Guidance Note on Audit of Banks (2019 Edition) Section A - Statutory Central Audit.
# ICAI to conduct Advanced Integrated Course on Information Technology and Soft Skills (Advanced ICITSS) on 3 MAR 2019 (Sunday), 10.30 AM to 12.30 PM (IST).
# GST: Respondent has violated the provisions of Section-171 in as much as the prices have remained the same in spite of reduction in the tax rate. His plea that the base prices were drastically lowered when GST came in effect cannot absolve him from not passing on the benefit – Surya Prakash Loonker & DG-AF, CBIC Vs Excel Rasayan Pvt. Ltd. (2019 (1) TMI 807 - NAFA).
# IT: Short Deduction of TDS - placement fees / carriage fees paid to cable operators - the activities covered by Section 194C are more specific and the activities covered by Section 194J are more general in terms - TDS liability confirmed u/s 194C – CIT V Star India Pvt. Ltd. (2019 (1) TMI 806 - Bombay HC)
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Company Law Update
Highlights of
Companies (Amendment) Ordinance 2019
1. Commencement Certificate is mandatory now to be obtain within 6 months of Incorporation without which, it can not commence its business activity or borrow money.
2. The ROC can strike off a company if the address of Regd Office is bogus or incomplete/improper address.
3. Conversion of public Ltd to Pvt Ltd matters shifted from NCLT to Regional Directorate.
4. Company cannot issue shares at discount, - heavy penalty imposed on violation.
5. Alteration of Authorised Capital to be intimated within 30 days, default - penalty 1000 every day or 5 Lac whichever is less.
6. Creation of charge filing with ROC- time limit reduced from 300 days to 60 days.
7. Wrong statement/ information in filing Charge forms with ROC may lead to misrepresentation and jail.
8. Annual Return should be filed within 60 days from AGM, failure to this, penalty of 100 per day to Company + directors max 5 Lakh apart from ROC delay charges is applicable.
9. Penalty of 5 lakh to Company secretary certifying wrong Annual Return.
10. Explanatory statement to be given with Notice of General Meeting must contain all details as required by Law, if no detail/short detail/misleading - penalty for Company + Directors + KMP - 50K
11. filing of Resolutions with ROC- delay will be very costly now. Penalty for defaulter increased substantially. 500 every day max 25 Lakh
12. Filing of Balance sheet with ROC within time limit- failure is costly for Company + Directors both. Penalty of 100 per day + 1 lakh to Company + Director each.
13. Resignation of Auditor must be filed by the resigning Auditor within 30 days, failure to which the resigning Auditor is liable for penalty of 50,000 + 500 per day.
14. A director can not become director in more than 20 companies. If he continues, he becomes disqualified now.
15. Appointment of CS on payroll (Pvt Co having paid-up capital 5 cr & above) is mandatory. Default is now very costly- penalty increased substantially.
16. ROC may strike off a company if subscribers have not paid initial share capital after incorporation of a Company within 6 months.
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GST Updates💥
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JOBWORK - DETAILED ANALYSIS OF RULES AND PROCEDURES UNDER GST
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Section 2(68) of the CGST Act – 'JOB WORK' means any treatment or process undertaken by a person on goods belonging to another registered person (referred to as Principal) and the expression ‘job worker’ shall be construed accordingly
While the person sending the goods out for job work (i.e. Principal), has to be a registered person, the job worker may or may not be a registered person
Detailed analysis of meaning of JOBWORK
Manufacturer can send out
Inputs - either raw material or semi-finished material or
Capital goods to another party - job worker
- for further processing, testing, repair, reconditioning or for the manufacture of intermediate goods necessary for manufacture of final products or for any other purpose and receive back after processing the inputs or the products produced therefrom or the capital goods for use in further manufacture, without the manufacturer or the job worker having to pay any duty on the inputs or capital goods so sent out.
JOB WORK Its outsourced activity of working on the goods belonging to manufacturer ,
Any treatment or process undertaken by a person on goods belonging to another registered person.
NOTE : Treatment or process is undertaken by a job worker on goods belonging to an unregistered person will not be considered as job work .
JOB WORKER: The person who treats or processes the goods sent by the principal(registered person)
Job Work Procedure
Section 143 of CGST Act 2017: Job Work Procedure (CHAPTER XXI – MISCELLANEOUS)
(1) A registered person (principal) may send any inputs or capital goods (without payment of tax) to a job worker for job work and from there subsequently send to another job worker and likewise, and shall
INPUTS OR CAPITAL GOODS( other than moulds and dies, jigs and fixtures, or tools)
(a) bring back inputs, after completion of job work or otherwise, or capital goods, within one year and three years, respectively, of their being sent out, to any of his place of business, (without payment of tax);
INPUTS - 1 YEAR
CAPITAL GOODS - 3 YEARS
(b) supply such inputs, after completion of job work or otherwise, or capital goods, within one year and three years, respectively, of their being sent out from the place of business of a job worker on payment of tax within India (with or without payment of tax for export), as the case may be.
(c) Moulds and dies, jigs and fixtures, or tools- NO Time Limit
NOTE : Principal shall not supply the goods from the place of business of a job worker in accordance with the provisions of this clause unless the said principal declares the place of business of the job worker as his additional place of business
EXCEPT in a case - (in the below cases principal can supply goods directly from place of Job worker)
where the job worker is registered under section 25; or where the principal is engaged in the supply of such goods as may be notified by the Commissioner.
(2) The responsibility for keeping proper accounts for the inputs or capital goods shall lie with the principal.
(3) Where the INPUTS sent for job work are not received back by the principal after completion of job work within a period of one year of their being sent out, it shall be DEEMED that such inputs had been supplied by the principal to the job worker on the day when the said inputs were sent out ( Date of transaction) [ Refer Deemed supply as per section 19(3) of the CGST Act, 2017.]
(4) Where the CAPITAL GOODS, sent for job work are not received back by the principal within a period of three years of their being sent out, it shall be DEEMED that such capital goods had been supplied by the principal to the job worker on the day when the said capital goods were sent out ( Date of transaction) [ Refer Deemed supply as per section 19(3) of the CGST Act, 2017.]
(5) Any waste and scrap generated during the job work may be supplied by the job worker directly from his place of business on payment of tax, if such job worker is registered, or by the principal, if the job worker is not registered
Waste or scrap -> from job worker place by Job worker-> if Job worker is Registered
Waste or scrap -> from job worker place by Principal-> if Job worker is not Registered
Various Practical Provisions & rules affecting Jobworks are as below
NOTE : As per Rule 45 of the CGST Rules, 2017 Principal can send goods for job work purpose without payment of GST under the cover of delivery challan and it shall contain the details specified in rule 55 of the CGST Rules, 2017
NOTE : It is compulsory where principal and job worker are situated INTER-STATE, then in case of job work transactions, e-way bill must be generated for inter-state movement of goods without any monetary limit (As per third proviso to Rule 138 of the CGST Rules, 2017)
NOTE : The principal can also send goods directly to the place of job worker without receiving the said goods in his premises first and Input Tax Credit can also be availed in such cases though the principal has not received the goods (As per Sections 19(2) and 19(5) of CGST Act, 2017),
NOTE : The principal is required to file Form GST ITC-04 by the 25th day of the month succeeding the quarter. The said form will serve as intimation as envisaged under section 143 of the CGST Act, 2017.
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👉🏻IBBI is going to start Graduate Insolvency Programme
(The Insolvency and Bankruptcy Board of India will launch the Graduate Insolvency Programme, globally the first-of-its-kind course for bankruptcy professionals, in the coming academic session.
FAQs about Graduate Insolvency Programme)
👇🏻 👇🏻 👇🏻
https://goo.gl/P8MCaj
👉🏻Income Tax return processing time to reduce from 63 days to just 1 day
(Cabinet approved an integrated income-tax e-filing and centralised processing centre portal, which will reduce the return processing time from 63 days to just one day)
👇🏻 👇🏻 👇🏻
https://goo.gl/G8me2Y
👉🏻ICAI clarifies rumours on postponement of May 2019 CA Examinations
(Students and other stakeholders are requested to take note of the above clarification and not get misled by rumours which are floating in the social media - ICAI)
👇🏻 👇🏻 👇🏻
https://goo.gl/Js4mvX
👉🏻Internal Audit for Edcil India Ltd Corporate Office and Branch offices
(Appointment of Chartered Accountant Firm / Practicing Chartered Accountant to undertake work of Internal Audit for its Corporate Office at Noida and its Branch offices at Barakhamba Rd. New Delhi)
👇🏻 👇🏻 👇🏻
https://goo.gl/6TDjMT
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👉Union Cabinet clears a Rs 4,242-Crore Project to Infosys, for Integrated E-Filing and Centralised Processing that will reduce the Return Processing and Refund Time from the current average of 63 days to just one day (24 hours). The new system will make handling tax returns and refunds easier for Govt.
👉The GST Council constitutes an Eight-Member Group of Ministers which will suggest whether a Uniform Tax Rate should be imposed on Lotteries or the current differential tax rate system be continued. Currently, a State-Organised Lottery attracts 12% GST while a State-Authorised Lottery attracts 28% tax.
👉SEBI issues norms for Mutual Funds Investments in Derivatives & allows Mutual Funds to write Call Options subject to certain conditions. Currently, mutual fund schemes are permitted to undertake transactions in equity derivatives but cannot write options or purchase instruments with embedded written options.
👉SEBI issues Draft Norms for Allowing Futures in Commodity based Index. So far, only Individual Commodity Futures and Options on it were allowed.
👉NCLT orders for the liquidation of Bharati Defence & Infrastructure Ltd, rejecting a resolution plan of Edelweiss Asset Reconstruction Co. Ltd. Ordering the liquidation of Bharati Defence, NCLT Mumbai said Edelweiss did not give a practical and viable plan to manage the affairs of Bharati Defence
👉Shares of IDFC First Bank, combined entity formed after the merger of Capital First with IDFC Bank, got listed on the NSE & BSE yesterday.
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📒*9 Facts You Must Know about the New GST Limit of Rs40 lakh
⛳ Next Year:
🌴This limit is applicable from FY 2019-20 onward, i.e., for financial year starting from 1 April 2019.
⛳ Goods, Not Services:
🌴The limit is applicable only for sale of goods.
🌴For service providers limit continues to be Rs20 lakh for all states except for special states where it is Rs10 lakh.
⛳Not for Interstate Sales:
🌴The limit is not applicable if you are selling goods inter-state, i.e., from one state to another.
⛳Amendments:
🌴GST being a dual tax (Central and state), the limit for turnover will have to be changed in both the Acts.
🌴This will have to be done for each state in Central Goods and Services Act, 2017 as well.
⛳Registration:*
🌴Section 24 of GST Act makes it compulsory to register in certain circumstances, and this Section is not amended.
🌴Hence, if a small businessman is registered due to that, he will have to continue with the registration.
🌴Exporters and those selling on websites like Flipkart, Amazon, Snapdeal will have to continue with their registration.
⛳No Clarity on Service Income:*
🌴If a person, who is selling goods, has even small service income like rent for neon signs or product placements at his shop, it is not clear whether the limit of Rs. 20 lakh or Rs. 40 lakh will apply to him.
🌴For example, a person may have sales of Rs.25 lakh and rental income of Rs.5 lakh, will he be covered by the new exemption limit?
🌴Since increase in limit is for goods only and there no separate limit for goods and services for aggregate turnover, once registered, GST has to be charged on all outward supplies whether goods or service.
⛳Turnover Calculation:
🌴Section 22 of GST Act uses the word aggregate turnover (taxable goods plus taxable services plus exempt/nil rated goods plus exempt/nil rated services) while describing persons who are liable for registration.
🌴Hence, small shop-owners will have to see their turnover in totality before deciding.
🌴Even for as basic an issue as the limit for registration , what was the need to have so much complications.
⛳GST Paid Becomes Cost:
🌴All GST paid on purchases will become cost to the person and he cannot charge any GST on outward supplies, i.e., sales.
⛳Draconian Consequences:
🌴On top of all this, please remember Section 17(5)(i), which says that if you decide that tax is not payable but GST department asks for tax and you lose in appeal, you may not be eligible for input tax credit on purchases.
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ND AS- 116- Lease- A New Prospective of Reporting https://frwithakshay.blogspot.com/2019/01/ind-as-116-lease-new-prospective-of.html
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GST goes VAT way:- By doubling the goods and services tax (GST) eligibility limit, India’s version of GST has inched closer to the global format. India has kept finding ways to make things complicated, with the recent introduction of cess for Kerala taking things from bad to worse.
Although for a limited period, the move defeats the purpose of GST, because this mammoth tax change was introduced so that multiple cesses could be done away with.
Re-introduction of cess sets a bad precedent. It may be for a noble cause, but instead of levying cess, the Centre could have funded the cause directly. The council allowed flood-hit Kerala to levy a calamity cess of 1% on intra-state sales for a maximum period of two years.
A moot question is if this takes us back to the days of VAT, or value added tax which also started off with noble intentions before getting muddled. Drawing parallels with earlier tax regime,, “When VAT was introduced in 2004, its purpose just like GST was to have a unified tax system across the country. But after a while, states started drifting away. For example, some states like Haryana, Uttar Pradesh* and Gujarat had additional tax on certain items which others didn’t. My concern with bringing back cess is that, are we going back to where we started from?”
Another important decision taken at the GST Council’s 32nd meeting was the extension of composition scheme to services providers. Services providers with a turnover limit of up to ₹50 lakh are now allowed to avail of the composition scheme at a rate of 6%.
While the objective here is to encourage more businesses to come under the GST ambit, tax experts fear that introduction of a new tax rate makes the law more complex and could lead to non-compliance. Currently, businesses under the composition scheme are taxed under various slabs of 1% (manufacturers), 2% (traders) and 5% (restaurants).
“They have extended the composition scheme for service providers, aimed at widening the tax base, but at a new tax rate of 6%. Anyway, we had three different tax rates for goods providers who have opted for this scheme and this complicates the law even further. The more the complex law, more difficult it is to comply. A simple law leads to more compliance and increased revenue to the government—this is tried and tested globally in countries where GST/VAT is practised
At a time when GST revenues are falling behind the required target, there is increasing worry that the added complexity will act as a deterrent for taxpayers. Thanks to the half-hearted approach, India’s GST has miles to go before it becomes a good and simple tax.
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Applicability Of GST On Sale Of Goods And Services By Charitable Trust
1. Example of Such Goods are Like Various spiritual products such as books, audio CDs, DVDs, statutes, calendars etc. even if the Books, DVD, Are Based On teaching of Gurudev Of That Trust.
2. Entry No.10 of the Notification No.9/2017, dt. 28.06.2017 under IGST Act, exempts the services received by charitable trust registered u/s.12AA of the IT Act, 1961, from the provider of services located outside India and the trust is not liable to pay GST on import of such services under Reverse Charge Mechanism. Any fees or consideration charged from the participant for participating in religious program or Yoga meant for advancement of religion, spirituality or yoga is exempted.
3. Entry No.15 of Notification No.12/2017 dt. 28.06.2017- No GST is applicable on activities of public library including those run by charitable or religious trust.
4. What can be seen from the above notifications is that specific exemption from GST is given to charitable institutions registered u/s.12AA of the IT Act, 1961. It can be gathered from the above that the intention of the legislature is to tax all the activities of supply goods and services by charitable trust except those specifically exempted
Thus it Can Be Concluded From Above That charity do not lend themselves to any specific concession or exemption from the definition of ‘supply’ or ‘business’ or ‘taxable person’. The very fact that certain services have been carved out and given out a special treatment makes it clear that all trade and commerce transaction of selling books, statutes, CDs and DVDs etc. done commercially for consideration come within the broad ambit of ‘business’ under the CGST Act. So even the services of transportation of passengers, granting of advertisement rights, publication of the trust admission to event, all will be leviable to GST.
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Updates from Judiciary -
Supreme Court has observed that there is no evidentiary value to an involuntary confessional statement made under undue pressure and compulsion from the investigating officer, even when it leads to the recovery of material objects in relation to a crime.
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Supreme Court has banned the transportation of extracted coal lying at various sites in Meghalaya which has had no success in rescuing 15 miners trapped inside an illegal rat-hole coal mine for almost a month.
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Supreme Court has held that Section 7(4) provides that an arbitration agreement would be found in the circumstances mentioned in the three sub-clauses that make up Section 7(4). This does not mean that in all cases an arbitration agreement needs to be signed. The only prerequisite is that it be in writing, as has been pointed out in Section 7(3).
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Supreme Court has asked UPSC secretary to personally appear and inform the court if the commission prepares a panel of senior IPS officers for director general of police (DGP) appointments by state governments.
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Supreme Court has refused to give permission for BJP’s rath yatra in West Bengal and said that apprehension of the state government surrounding the possible law and order situation cannot be called "unfounded" but court allowed them to hold public meetings and rallies.
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Delhi High Court has expressed concern over pressure horns and modified silencers and asked traffic police about the steps taken to remove these from two-wheelers.
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NCLAT has held that Tribunal is not required to suo-moto go through all the issues if during the hearing the parties do not address rest of the issues.
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Bombay High Court has directed the police to take action in all complaints received against illegal animal slaughter and sale of such meat in the state.
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Patna High Court has upheld the order directing Tejashwi Prasad Yadav, ex- minister and present Leader of Opposition, to vacate the bungalow he had occupied while he was a minister.
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Madhya Pradesh High Court has held that Goods and Services Tax (GST) is payable on supply of indigenous goods to duty-free shops (DFSs) at international airports.
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ICAI Guidance Note on Audit of Banks 2019 edition: Section A - Statutory Central Audit issued by the Auditing and Assurance Standards Board - (17-01-2019)
https://resource.cdn.icai.org/53700icai-aasb-ssgna.pdf