⚫The India’s industrial activity touched an eight month high in October, posting growth for a second straight month, led by significant expansion in consumer goods, electricity & infrastructure goods.The IIP grew by 3.6% in Oct on a YoY basis compared to a 0.4% expansion in the previous month.
⚫In its drive to check fake firms & circular trading entities, the GST field formations have cancelled 1,63,042 registrations in the month of October and November this year due to non-filing of GSTR-3B returns for more than six months. The Directorate General of GST Intelligence and CGST Commissionerates have so far arrested 132 persons including four CA's and a woman for availing or passing on ineligible ITC fraudulently and have filed 1,430 cases against more than 4,586 fake GSTIN entities identified across the country.
⚫The Govt has prepared a five phase road map to ease the regulatory & compliance burden faced by co's, and has identified at least eight sectors, including retail, hospitality, entertainment, cement, leather, and food processing, which have to comply with hundreds of legislative and regulatory requirements at present.
⚫Govt likely to drop proposals to cap bids for airport privatisation. A panel for PPP projects had recommended restricting airport projects to 2 to check monopoly.
⚫The Govt directed Delhi Police to file cases against protesting farmers for violating Covid-19 norms, the farmers too upped the ante and filed a petition in the Supreme Court, seeking its intervention in ending the deadlock over the new farm laws.The farmer groups will take their protests up one notch by picketing all toll plazas on the outskirts of Delhi and blocking railway tracks.On Dec 14, they will launch an agitation against private procurement by announcing a boycott of goods produced by some corporate houses.
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Picks of the week
AUTHORED ARTICLES
☑️ Income Tax Search and Seizure - Application of seized assets during the course of an Income Tax search towards the self assessment tax liability of an assessee - whether permissible
Read more http://taxknowledge.in/income-tax/5fd1b1ed04462f452c0ef959
☑️ RBI-approved abbreviations used in bank transactions must follow a standard list
Read more http://taxknowledge.in/nbfc-rbi/5fd0c8ac04462f452c0ef957
CASE LAWS
☑️ Profit on sale of shares is business income as against the claim of income from Capital Gains: ITAT Pune
Read more http://taxknowledge.in/income-tax/5fd32cdc04462f452c0ef960
☑️ Madras HC: Interest on bank deposits earned entitled to 100% deduction under Section 10-A of Income Tax
_Read more_ http://taxknowledge.in/income-tax/5fd05e7004462f452c0ef953
☑️ Madras High Court ruled that business loss suffered on assets sale must be allowed
_Read more_ http://taxknowledge.in/income-tax/5fcf7acf04462f452c0ef951
☑️ Capital cannot be treated for claims and compensation if bad debt not written off says Madras High Court
_Read more_ http://taxknowledge.in/income-tax/5fd0b55b04462f452c0ef956
☑️ Punjab and Haryana HC states Income Tax refund of assesse under scrutiny assessment cannot be withheld
_Read more_ http://taxknowledge.in/income-tax/5fce1ad404462f452c0ef94c
☑️ Madras HC: Interest on bank deposits earned entitled to 100% deduction under Section 10-A of Income Tax
_Read more_ http://taxknowledge.in/income-tax/5fd05e7004462f452c0ef953
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⚫PM said India has reduced emission intensity by 21% over 2005 levels and it isn't just on track to achieve its Paris Agreement targets.The solar capacity has grown from 2.63GW in 2014 to 36 GW in 2020. Our renewable energy capacity is the fourth largest in the world. It will reach 175GW before 2022.
⚫The Centre's production linked incentive scheme for key sectors has the potential to add $520 billion worth of manufacturing in the next five years.
⚫The Finance Ministry approved Rs 9,879.61 crore worth capital expenditure proposals of 27 states. Of this, Rs 4,939.81 crore has been released as the first instalment.
⚫External Affairs Minister said India was being tested in the seven month long border standoff with China in eastern Ladakh and expressed confidence that the country will meet the national security challenge.
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HC allows grant of refund held back without proper grounds:
Let us study the Punjab and Haryana HC decision in the case of Huawei Telecommunications (India) Company (P.) Ltd. v. Union of India – [2020] (Punjab & Haryana).
1. Writ petition was filed seeking quashing of order dated 08.11.2019 passed under Section 241A of the Income Tax Act, 1961 (for short, ‘the Act’) withholding refund for the assessment years 2017-18 and 2018-19.
2. On account of a demand of Rs 5 crores, a refund of more than Rs 300 crores was withheld as per the note of approval of the Principal Commissioner.
The Hon. HC held that:
1. As per Sec 241A the refund due under Section 143(1) can be withheld till assessment is made if:-
(i) There is a notice under Section 143 (2).
(ii) The Assessing Officer is of the opinion that revenue would be adversely affected in case of grant of refund.
(iii) TheAssessing Officer has to get previous approval of the Principal Commissioner or Commissioner.
(iv) The reasons are to be recorded in writing.
2. In the present case, from the impugned order and the record, it is evident that there is no reason recorded for coming to the conclusion that grant of refund is likely to adversely affect the revenue, as such the order is unsustainable.
3. So the respondents (IT authorities) were directed to issue refund for the assessment year 2017-18 and 2018-19 along with statutory interest not later than within four weeks from receipt of certified copy.
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👉 Note on how to use Java based software utility available for download, where taxpayer does not have MS Excel versions 2010 or later Click here
https://www.incometaxindiaefiling.gov.in/eFiling/Portal/StaticPDF_News/Instruction_for_using_Java_utilities.pdf
👉 Important Announcement - January / February 2021 Examinations - (11-12-2020)
https://resource.cdn.icai.org/62409exam50495.pdf
👉 RBI Announces Special Open Market Operations (OMO) Simultaneous Purchase and Sale of Government of India Securities
https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=50787
👉 On Tap Targeted Long-Term Repo Operations – Extension of Specific Sectors
https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=50790
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3B ITV auto fill 10% over 2B file with red if ITC claim by you more than it and submit so reconciled it's with 2B and your valid ITC invoice and contact variance your supplier and also reconciled GSTR-1 again with you supply outward supply valid invoice,credit /debit note and lastly reversal non eligible ITC inwards supply
https://youtu.be/03bwNOeQq94
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e-Invoicing has implemented and is applicable to mostly B2B Invoices for large enterprises as of now.
However, e-Invoicing & reporting of documents, is not limited to B2B invoices but is also applicable to documents like B2G Invoices, Export invoices, RCM Invoices, Credit Notes & Debit Notes.
Soon e-Invoicing will also cover the reporting of B2C Invoices to the IRP as well.
In this article we have explained the working of e-Invoices on Reverse Charge Transactions where the recipient of goods is liable to pay the taxes directly to the Government.
How & who is required to generate e-Invoices and how will the entire e-Invoice compliance work for RCM transactions is what we have discussed in this article.
Towards the end of the article you will discover which is the best e invoicing software, so read till the end!
Introduction to e-Invoicing under GST
e-Invoicing or Electronic Invoicing under rule 48 of the CGST Act is an electronic method of generating & operating B2B invoices& other relevant documents.
e-Invoicing under GSTis applicable to all businesses having an annual aggregated turnover of INR 500 Crores & above for now but will soon apply to all the businesses as per the Government’s plan & notifications that have rolled out indicating the same.
Under e-Invoicing, businesses are required to generate their invoices in the specified SCHEMA Format through their ERPs & upload them on the IRP for validation.
The IRP will validate the e-Invoices for errors & duplications of any sort & will revert an error file incase of errors.
However, upon successful validation, the IRP will generate a unique IRN & QR Code for the e-Invoice that will be used as its identity.
The user can then download the e-Invoice from their & put it to further use. This process must happen in real-time that is, on or before the actual time of the transaction.
The IRP will also share the e-Invoice data with the e-Way Bill & the GST Portal, as well as with the recipient of the e-Invoice in real-time, reducing a lot of your work.
A walk through the Reverse Charge Mechanism Lane
Reverse Charge Mechanism or RCM is not a new term in GST.
It may not be new but RCM still remains to be one of the most complex yet essential branches of GST.
Reverse Charge Mechanism under GST.
Reverse Charge Mechanism is a mechanism that has been put in place to deal with special cases where the supplier of the goods is a non-registered person.
A non-registered person does not file his GST returns & thus cannot release the tax liabilities, in this case the responsibility shifts to the recipient of the goods, who must be a registered person under GST.
The supplier will generate a bill of supply &will collect the payment amount exclusive of GST from the recipient.
The recipient will then have to generate self-invoices & release the (GST) taxes on behalf of the supplier under Reverse Charge Mechanism, directly to the Government via form GSTR-1 & GSTR-3B.
Although, RCM is also applicable on certain goods & services that are specified by the Government. Click here to know everything about RCM & its applicability.
Note- The recipient of the goods is eligible to claim the ITC on RCM transactions, through form GSTR-3B.
Note- You cannot utilize ITC to pay the taxes under RCM, you will have to pay the taxes through the Cash ledger & later you can claim the ITC on the same.
Reverse Charge Mechanism & e-Invoicing
e-Invoicing will apply to transactions that fall under Reverse Charge Mechanism under GST.
The supplier of the goods & services will be required to generate the IRN for the invoices.
But how is the same possible when the supplier is an unregistered person?
Here is the drill, RCM is not only applicable to the case where the supplier is an unregistered person, it applies to other cases as well. Let us see what these are-
When the Supplier is an unregistered person
List of goods & Services specified by the government to mandatorily fall under RCMunder section 9(3) of CGST Act, 2017
Services through e-Commerce Operators
The applicability of e-Invoicing to these three cases is different, here is a breakdown of the application of e-Invoicing on the cases-
When the Supplier is an unregistered person- If the supplier is an unregistered person under there is no way they can register on the IRP & generate an e-Invoice as the same required a GSTN. Additionally only the supplier can generate the IRN. So in this case, e-Invoicing will not be applicable & there is no requirement to generate an IRN.
List of goods & Services specified by the government to mandatorily fall under RCM under section 9(3) of CGST Act, 2017-In this case if the supplier of such goods & services is eligible to e-Invoicing then they will have to generate IRNs for the RCM Invoices. In other words when businesses having an annual aggregated turnover of INR 500 Crores & above supply the goods & services liable to RCM then they will have to generate an IRN for their invoices.
Services through e-Commerce Operators-As e-Commerce Operators pay taxes as if they( are the suppliers, they are required to generate IRN for their invoices. Meaning e-Commerce Operators are liable to e-Invoicing & generating IRNs.
There are mandatory & optional field in the schema for declaring the RCM invoice details & to generate an RCM e-Invoice, click here to see the SCHEMA Format.
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The provision is a bit complex but the same has been mandated by the government & all businesses must understand & comply with the same.
So, we know that e-Invoicing compliance is of high priority for all businesses that are liable to it irrespective of its impact as it is mandatory, but is also complex.
It can sometimes be a little bit difficult than it seems considering the complex SCHEMA Format, Real-time Validation, Bulk operations & more.
The Government also recommends the use of external e-Invoicing solution such as GSPs to comply better with e-Invoicing,
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