Amended Direct Tax Vivad se Vishwas Bill, 2020.

Amended Direct Tax Vivad se Vishwas Bill, 2020. 

BACKGROUND

• Presently, a large number of Income-tax appeals are pending at various levels of adjudication namely, Commissioner (Appeals), Income Tax Appellate Tribunal (ITAT), High Courts, and Supreme Court. These appeals have been filed by taxpayers as well the Department.

 

• Due to the fact that every year more appeals are filed than are disposed, the pendency at the various levels of adjudication keeps on increasing.

 

• As on 30th November, 2019, there are about Four lakh Eighty-three thousand (4,83,000) appeals pending at various levels. Tax arrears to the tune of about Nine lakh Thirty-two thousand crore rupees (Rs. 9.32 lakh crore) are locked up in these appeals.

 

• The tax arrears will not translate into revenue for the Government till such time the taxpayer or the Department has exhausted all the options under the Income-tax Act to appeal. It can take years due to multiple levels available for appeal. Tax disputes consume a large part of resources both on the part of Government as well as taxpayers and also deprive the Government of the timely collection of revenue.

 

• It is felt that there is an urgent need to provide for resolution of pending Income-tax disputes. This will not only benefit the Government by generating timely revenue but also the taxpayers who will gain by deploying the savings on account of time and resources towards their business activities.

Direct Tax Vivad se Vishwas Bill, 2020 & Notice for amendments

• Direct Tax Vivad se Vishwas Bill, 2020 has been introduced in the parliament on 5th February, 2020. After introduction of the Bill, suggestions from various stakeholders have been received. Based on these representations, certain amendments to the provisions of the Bill have been approved by the Cabinet in its meeting dated 12th February, 2020. Notice for these amendments after obtaining the recommendation of the Hon'ble President has been given to the Parliament on 14th February, 2020.

 

 

SALIENT FEATURES OF THE BILL WITH THE AMENDMENTS PROPOSED IN NOTICE

KEY DATES

• Start date: Date on which the provisions of the Bill comes into force

• Last date: Date to be notified by the Government

• Pay by 31st March, 2020 to avoid higher payment

ELIGIBILITY

• Appeals/writs filed on or before 31.01.2020 are eligible

• Orders for which time for filing appeal has not expired on 31.01.2020

• Case pending before Dispute Resolution Panel (DRP) on 31.01.2020

• Cases where DRP issued direction on or before 31.01.2020 but no order has been passed

• Cases where assessee filed revision (Section 264) on or before 31.01.2020

• Search case if the disputed demand is less than Rs. 5 Crore

DISPUTES COVERED

• All disputes, subject to some exclusion, in relation to the -

(i)  Disputed tax

(ii)  Disputed penalty

(iii) Disputed interest

(iv) Disputed Fee

(iv) Disputed tax deducted at source (TDS) or tax collected at source (TCS)

• The appeals/writs filed by taxpayers or the department are eligible

• Disputes where the payment has already been made shall also be eligible

PAYMENT TERMS

A. If the appeal is filed by the taxpayer

• In case payment is made till 31st March, 2020 - Declarant will need to pay-

(i) 100% of the disputed tax (125% of disputed tax in case of search cases) – Penalty & interest shall be waived

(ii) 25% of the disputed penalty, interest or fee in case dispute relates to disputed penalty, interest or fee only – Balance 75% shall be waived.

 

 

• In case payment is made after 31st March, 2020 - Declarant will need to pay-

(i) 110% of the disputed tax (135% of disputed tax in case of search cases) – Penalty & interest shall be waived  

(ii) 30% of the disputed penalty, interest or fee in case dispute relates to disputed penalty, interest or fee only – Balance 70% shall be waived.

      B. If the appeal is filed by the Department or the department has lost on an issue

• In case payment is made till 31st March, 2020 - Declarant will need to pay-

(i) 50% of the disputed tax (62.5% of disputed tax in case of search cases) – Penalty & interest shall be waived

(ii) 12.5% of the disputed penalty, interest or fee in case of appeals related to disputed            penalty, interest or fee only – Balance 87.5% shall be waived

• In case payment is made after 31st March, 2020 - Declarant will need to pay-

(i) 55% of the disputed tax (67.5% of disputed tax in case of search cases) – Penalty & interest shall be waived  

(ii) 15% of the disputed penalty, interest or fee in case of appeals related to disputed penalty, interest or fee only– Balance 85% shall be waived.

EXCLUSIONS

The cases excluded from the Scheme are cases –

(i) Search case if disputed tax is more than Rs. 5 crore

(ii) Prosecution cases under the Income-tax Act or IPC filed by the Department

(iii) Cases relating to undisclosed foreign income and assets

(iv) Cases completed on the basis of information from foreign countries

(iv) Cases covered under Narcotic Drugs and Psychotropic Substances Act, Special Courts Act, the Unlawful Activities (Prevention) Act, 1967, the Prevention of Corruption Act, the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974, the Prevention of Money Laundering Act, 2002 or the Prohibition of Benami Property Transactions Act, 2016.

 

CONSEQUENCES

• Consequent to such declaration and fulfillment of conditions, appeals/writs/objections of taxpayers & department in respect of the disputed income, disputed interest or disputed penalty or disputed fee pending before the Commissioner (Appeals), DRP, ITAT, High Court or Supreme Court shall be withdrawn.

• Immunity will be granted from institution of any proceeding for prosecution for any offence under the Income-tax Act in respect of matters covered in the declaration and also provide immunity from imposition of penalty and levy of interest.

• Filing of declaration will not set any precedence and neither the Department nor the taxpayer can claim in any other proceedings that the taxpayer or the Department has conceded its tax position by settling the dispute.

 

REFUND OF EXCESS AMOUNT

• If the amount paid by taxpayer before filing declaration exceeds the amount payable under the Scheme, the taxpayer would be granted the refund for such excess amount.

 

REMOVAL OF DIFFICULTY

• If any difficulty arises in giving effect to the provisions of this Scheme, the Central Government may by order not inconsistent with the provisions of this Scheme remove the difficulty.

 

DELEGATED LEGISLATION

• The Central Government may notify rules for carrying out the provisions of this Scheme.

• The Central Board of Direct Taxes has been given powers to issue such orders, instructions and directions to the income-tax authorities for the proper administration of this Bill.

 

OTHERS

• The limit of disputed tax of Rs. 5 crore for filing declaration in a search case shall be computed year wise. Hence, in a search case where the aggregate disputed tax for two or more years exceeds Rs 5 crore, a person can file declaration for those years in which the disputed tax does not exceed Rs. 5 Crore.

• If there are more than one issues involved in the appeal, the taxpayer would be required to file declaration for all issues, he cannot file declaration for some issues and litigate the balance issues.

• In a case where the taxpayer has got a favourable decision on an issue at higher forum, he would be required to pay only 50% of disputed tax on that issue even in the cases in which he has filed appeal.

• The taxpayer would be required to submit the proof of withdrawal of appeal/writ with the intimation of payment i.e. before the issuance of final certificate for settling dispute and not with the declaration as originally proposed in the Bill. The department would also withdraw the appeal/writ before the issuance of final certificate for settling dispute.

• In case where the Assessing Officer has reduced the returned loss by making addition of income/disallowing expenditure, the taxpayer shall have an option to either pay the notional tax on amount by which the loss has been reduced and carry forward the claimed loss without reduction or by accepting the reduced carry forward of loss without making any payment under the Scheme. Same mechanism would apply for reduction in MAT credit.

• The settling of dispute regarding transfer pricing adjustment would not have any effect on the secondary adjustment, both being independent provisions, and the taxpayer would be required to repatriate fund to India in respect of settled transfer pricing adjustment.

     

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-Regards
CA.C.V.PAWAR
0253-2319641 MOBILE:9423961209

CA Nihar Jambusaria has been declared as VP of ICAI for 2020-21.

*ICAI News update*

CA Atul Gupta Ji has been declared as President of ICAI for 2020-21

CA Nihar Jambusaria has been declared as VP of ICAI for 2020-21.

-Regards
CA.C.V.PAWAR
0253-2319641 MOBILE:9423961209

GST Rate on Bags - HS 3923/6305

GST rate on Woven and Non-Woven Bags and sacks  of polyethylene or polypropylene strips or the like, whether or not laminated, of a kind used for packing of goods ( HS code 3923/6305) in view of the requests received post the changes recommended on such goods in last meeting and recommended to raise the GST to a uniform rate of 18% (from 12%) on all such bags falling under HS 3923/6305 including Flexible Intermediate Bulk Containers (FIBC). 

This change shall become effective from 1^st January, 2020.

Regards,

-------
CA.C.V.PAWAR
PATIL DAWARE GIRASE PAWAR & ASSOCIATES

CHARTERED ACCOUNTANTS

0253-2319641. M-9423961209

INDIAN CA - NURTURED IN INDIA, GROOMED FOR THE WORLD

For latest Updates visit Blogspot : http://canews1.blogspot.in

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New Utility for GSTR 9 & GSTR 9C would be available by 10.12.2019

GSTN: New Utility for GSTR 9 & GSTR 9C would be available by 10.12.2019 Annual Return (GSTR-9) and the Reconciliation Statement (GSTR-9C) 28/11/2019 "Government has made some changes in the forms of Annual Return (GSTR-9) and the Reconciliation Statement (GSTR-9C) vide Notification No. 56/2019 dated 14.11.2019. Accordingly, the changes in the application software and the offline tools are likely to be made available by 10th Dec. 2019."

Regards,

GST -Rcm - Rent a Cab

Dear All

 

RCM - Rent - Cab includes hiring of Buses:

 

• If rent a cab operator is a (proprietor/partnership firm) and he is billing to a (proprietor/partnership) or any other non-corporate entity, then  he would  continue to charge 5% GST in his bill. RCM provisions do not apply in this scenario.

 

• In case rent a cab operator (being proprietor or partnership firm) adds 5% GST in his bill to a (private limited company or public limited company), the company need not reimburse GST portion to the cab operator.  Instead the company should pay 5% GST on their own as RCM liability.

 

• In case  rent a cab operator is not registered in GST, the private limited company or public limited company in receipt of cab services should still pay 5% GST under RCM

Regards,
-------
CA.C.V.PAWAR
PATIL DAWARE GIRASE PAWAR & ASSOCIATES

CHARTERED ACCOUNTANTS

0253-2319641. M-9423961209

INDIAN CA - NURTURED IN INDIA, GROOMED FOR THE WORLD

What are some of the mistakes of Indians that are destroying their financial lives?

What are some of the mistakes of Indians that are destroying their financial lives?

(Sharing Excellent compilation of investment thoughts I've received on WhatsApp)

*Buying insurance policies for investment purpose*: Have you invested your money in insurance plan to get a return in future? Big mistake! Out of 100 people I have spoken, 95 have made this mistake.. Very few people understand the difference between term plan, endowment plan, etc.

*Not able to crack the credit card mystery:* Are you paying the minimum amout due on your credit card payment? If yes, you are trapped in credit card mystery. On the other side, very few people really enjoy the benefits like free lounge access, buy one get one movie ticket, etc.

*No idea about the power of compounding:* Everyone has come across the formula of compounding but very few people really understand its power. This is the reason people do not start saving early and hence lose out on the power of compounding. Albert Einstein said that power of compounding is the eighth wonder of the world.

*Buying stocks based on tips without any knowledge:* You will find every Tom, Dick and Harry giving stock tips over Facebook, Whatsapp and TV. Unfortunately, a lot of people fall in a trap of these people and invest money without any knowledge. What is the end result? They lose everything!

*Becoming a victim of lifestyle inflation*: Moving from 2bhk to 3bhk just because you have got a good hike, upgrading your car because you have got some bonus are some of the examples of lifestyle inflation destroying financial lives.

*Buying things just because they are on discount*: From Amazon's "Great Indian Sale" to Flipkart's "The Big Billion Days", everyone is encashing on the weakness of Indians buying things just because it is on discount. Funny thing is now you will find such sales every other month.

*Getting tempted to go for an exotic vacation* just because someone put a post on Facebook and Instagram: Instagram and Facebook are introduced as Social Media Platform but they are actually destroying the entire social fabric. Friends are jealous of each other. Most of them are just social media friends. Facebook and Instagram are more of a marketing platform where people post stuff just to get some likes and companies promote their product and services.

*Spending a bomb on weekend parties:* 5 days work and 2 days party: This is the new culture in India. Pubs are jam-packed on weekends where people would spend a bomb on drinks. By the end of the month, they are left with no money.

*No track of cash flow:* Very few people keep a track of their expenses. Most of them just don't know where the money is gone.

*No emergency budget:* Not having any extra money in the case of an emergency results in embarrassing situations of borrowing money from friends and relative. Some people even break their investments and make a big mistake.

*No medical insurance*: I have seen people losing out the lifetime savings just because they did not take medical insurance. One accident can shatter all financial dreams. Better be insured. Healthcare cost is rising and it is impossible to manage it without insurance.

*No financial plan:* People do not know why they need to save money because they don't know their financial goals.

*No diversification*: Some people would invest all their money in real estate, some would invest all the money in gold, some would just keep it in the locker, some would invest all the money in the stock market. Very few people understand the right way of diversifying the investments.

*Spending all the hard earned money on children marriage:* Thanks to our hypocritic society! People save their entire life just to spend all the money on random relatives who only bother about the food and arrangements. What is the topic of discussion at weddings? "Sharma ji ne to unki beti ko car gift kari. (Mr Sharma has gifted a car to his daughter)". "Mehta ji ne unki beti ko 50 tola sona diya" (Mr Mehta has gifted 500-gram gold to his daughter.)

*Buying excessive gold only to keep it in the locker:* Gold worth lakhs is kept in lockers only to be used once or twice a year. This is resulting in the money getting blocked and hence not getting any returns on it.

*An extremely conservative approach with investment:* Traditionally, people have been risk-averse. They would just have an FD and live on 6–7% annual interest. Some would just keep the cash at home.

*Lack of clarity between asset and liability:* Having a car is not an asset because it consumes fuel and has a maintenance cost. Its price will only depreciate in the future. Car is a necessity but people spend a lot of money and even take the loan to buy a luxury car over and above their budget.

*Considering frugal as cheap:* A lot of people confuse economic spending with being cheap. An economic spender does not compromise with quality but does his research well enough to buy the product or service at the lowest rate.

*Procrastinating investment decisions:* "I will invest from tomorrow". But the problem is that tomorrow never comes.

*Spending a lot of money on fancy stuff:* A fancy car, a fancy house, a fancy watch, a fancy vacation. People want fancy stuff and willing to pay a premium irrespective of the value it generates.

*Lack of patience:* "I can't wait for my wealth to grow. I want to double my investments in 6 months. I need to invest in the stock market." A lot of people lose their lifetime of savings because they don't have the patience to understand the investment option and would blindly trust anyone with their investment.

*Depending upon others for investment decisions:* "I don't know anything about investment. Please manage my money." Unfortunately, a lot of people are dependent upon others with their hard earned money. This is the reason we have a lot of self-proclaimed experts giving stock market tips.

*Not discussing the money matters in the family:* Discussions related to money are considered as a taboo in Indian families. Nobody really discusses money matters.

*Getting too greedy with investment:* People blindly invest their money in penny stocks, day trading, futures and options. They eventually lose all their hard earned money. What is the root cause? GREED

*Wasting time on unproductive things:* Rather than learning new stuff and growing the skillset, people end up wasting time on social media and YouTube.

*Lack of disciplined investment:* Instead of spending what is left after investing, people invest what is left after spending. This results in indisciplined investment.

*Root Cause:* Lack of knowledge about personal financial management!!

*Living Happily* 🙏Regards
CA.C.V.PAWAR
0253-2319641 MOBILE:9423961209

Important changes and clarifications issued by CBIC on 31 Dec & 1 Jan 2019

1. Vide Removal of Difficulty order No. 2/2018 dated 31.12.2018 the time limit for availing credit on invoices issued during the period July 2017 to March 2018 and rectification of any errors or omissions in outward supplies under Section 37 of the CGST Act, 2017 in the GSTR -1 returns filed during the period July 2017 to March 2018 is extended till 31.3.2019

 

2. Vide Removal of Difficulty order No. 3/2018 dated 31.12.2018 the time limit for filling Annual return under Section 44 of the CGST Act, 2017 is extended till 30.6.2019

 

3. Vide Notification 78/2018 C.T, due date for ITC – 04 for the period from July 17 to December 2018 has been extended till 31.03.2019

 

4. Vide Notification 74/2018 C.T, Rule 138E inserted in the CGST Rules, 2017 to specify that facility to generate e-way bill will not be available to taxpayers who have not furnished their returns (As per our understanding Returns here would include both returns i.e. GSTR-1 and GSTR-3B) for two consecutive tax periods

 

5. Vide Notification 74/2018 C.T, proviso inserted in Rule 46, 49 and 54 of the CGST Rules, 2017 to specify that signature or digital signature of the supplier or his authorised representative is not required in the case of issuance of a electronic invoice/Bill of supply/consolidated tax invoice etc. in accordance with the provisions of the Information Technology Act, 2000 (21 of 2000)

 

6. Vide Notification 75/2018 C.T, late fees for GSTR 1 for the period July 2017 to September 2018 is waived off, provided such returns are filed between the period 22.12.2018 to 31.3.2019

 

7. Vide Notification 76/2018 C.T, late fees for GSTR 3B for the period July 2017 to September 2018 is waived off, provided such returns are filed between the period 22.12.2018 to 31.3.2019

 

8. Vide Notification 24/2018 C.T (Rate) Explanation is inserted under Sr. No. 234 of schedule I to Notification 1/2017 Central Tax (Rate) specifying that value of Goods component of renewal energy devise such as (a) Bio-gas plant (b) Solar power based devices (c) Solar power generating system (d) Wind mills, Wind Operated Electricity Generator (WOEG) (e) Waste to energy plants/devices (f) Solar lantern/solar lamp (g) Ocean waves/tidal waves energy devices/plants, & parts for their manufacture will be taken as 70% of the gross consideration charged for all such supplies, and the remaining 30% of the gross consideration charged will be deemed as value of the taxable service portion of the said supply. We believe that the said explanation will be applicable with effect from 1 January 2019 9. Vide Notification 27/2018 C.T (Rate), the following important changes specified

 

10. Services of leasing or renting of goods will attract GST rate as applicable to supply of such goods.

 

11. Further sr. no. 38 inserted to specify GST rate of 18% (9% CGST + 9% SGST) on Service by way of construction or engineering or installation or other technical services, provided in relation of setting up of (a) Bio-gas plant (b) Solar power based devices (c) Solar

power generating system (d) Wind mills, Wind Operated Electricity Generator (WOEG) (e) Waste to energy plants/devices (f) Solar lantern/solar lamp (g) Ocean waves/tidal waves energy devices/plants. Further, an explanation is also inserted therein to specify that the

said entry to be read in conjunction with serial number 234 of Schedule I of the notification No. 1/2017- Central Tax (Rate). In terms of the said explanation 30% of the gross consideration charged for such turnkey projects will be deemed to value of the said taxable service and remaining 70% will be deemed to be value of the goods component.

 

12. Vide Notification 29/2018 C.T (Rate) tax on Security services provided by any person other than Body corporate (i.e. Proprietorship concern, Partnership concern etc.) to any registered person will be paid by such registered person on reverse charge basis

 

13. Vide Circular No. 76/50/2018-GST dated 31.12.2018 it is clarified that no penalty will be imposable under Section 73(11) of the CGST Act where the self-assessed tax or any amount collected as tax has not been paid within a period of thirty days from the due date of

payment of such tax. The circular clarifies that provisions of section 73 of the CGST Act are generally not invoked in case of the delayed filing of the return in FORM GSTR-3B because tax along with applicable interest has already been paid albeit after the due date for

payment of such tax. Accordingly, the penalty under the provisions of section 73(11) of the CGST Act is not payable in such cases.

However, it is clarified that since the tax has been paid late in contravention of the provisions of the CGST Act, a general penalty under section 125 of the CGST Act is imposable.

14. Vide Circular No. 78/52/2018-GST dated 31.12.2018 it is clarified that where the service exporter outsources a part of the entire contract to any person located outside India, the service exporter can treat such supply in entirety as export of services under provisions of Section 2(6) of the IGST Act, 2017 even if the full consideration for the services as per the contract value is not received in convertible foreign exchange in India due to the fact that the recipient of services located outside India directly pays to the supplier of services located outside India for the outsourced portion of the contract. In such a case the exporter of such services needs to pay tax on reverse charge basis on the outsourced portion of such contract treating such outsourced portion as import of service. He can avail ITC on the tax so paid under reverse charge basis. Further it is also mandatory that RBI by general instruction or by specific approval has allowed the part consideration pertaining to the outsourced portion of the contract to be retained outside India. The circular clarifies that if the said conditions are satisfied it will be deemed that the entire consideration is received in convertible foreign exchange for the purpose of Section 2(6) of the IGST Act, 2017.

 

15. Vide Circular No. 79/53/2018-GST dated 31.12.2018 the following issues are clarified.

 

16. Physical documents are not required to be submitted along with refund application in form RFD 01, instead all details are required to be uploaded online. However, the taxpayer can choose to submit the refund application along with documents physically also.

 

17. For the purpose of calculating refund on account of inverted duty structure, if multiple inputs are used and such multiple inputs attract different rates the same will also be considered for the purpose of claiming the refund even if some of such inputs attract rates which are lower than the output rates. It is clarified that in the formula provided in rule 89(5) of the CGST Rules, 2017, the term 'Net ITC' covers the ITC availed on all inputs in the relevant period, irrespective of their rate of tax.

 

18. ITC which is reversed in the relevant period cannot be treated as 'Net ITC availed' in the relevant period for the purpose of claiming refund. However if the said ITC reversed is re-claimed in subsequent period (subject to fulfilment of all the specified conditions under Section 16 and not covered under excluded category under Section 17(5) of the CGST Act, 2017) then such ITC can be included as part of the 'Net ITC availed' in the period in which it is reclaimed, for the purpose of claiming refund.

 

 

19. ITC availed in subsequent periods on any invoices issued in a particular month cannot be excluded in 'Net ITC availed' during the period in which credit is availed. The same is to be included in 'Net ITC availed' during the relevant period in which credit is availed for the purpose of computing refund amounts.

 

20. Input tax credit is allowed on coal used for generating electricity which is captively used in the manufactured and supply of dutiable goods. It is clarified that coal falls under the category of inputs since the same is used in the course or furtherance of business.

 

21. Vide Circular 80/54/2018-GST dated 31.12.2018 it is clarified that 5% GST rate specified under entry 234 of Notification 1/2017 C.T for renewable energy devices such as (a) Bio-gas plant (b) Solar power based devices (c) Solar power generating system (d) Wind mills, Wind Operated Electricity Generator (WOEG) (e) Waste to energy plants / devices (f) Solar lantern / solar lamp (g) Ocean waves/tidal waves energy devices/plant (h) Photovoltaic cells, whether or not assembled in modules or made up into panels, and parts for manufacture of such goods will apply only to such machinery, equipment etc., which fall under Chapter 84, 85 and 94 and used in the initial setting up of renewable energy plants and devices including WTEP

 

22. Vide circular No. 81/55/2018-GST dated 31.12.2018 it is clarified that the term "sprinklers", in the entry 195B of Notification 1/2017 C.T, covers sprinkler irrigation system and accordingly, sprinkler system consisting of nozzles, lateral and other components would attract GST at the rate of 12%