Non Linking of PAN with Aadhar – Partial relief granted by SC !!

CBDT vide press release has clarified that on or after July 01, 2017

(a) quoting of Aadhar Number / Enrollment ID of Aadhar is mandatory at the time of applying for PAN & filing ITR for every taxpayer

(b) every taxpayer in possession of PAN as on July 01, 2017 and who has Aadhar Number or is eligible to obtain Aadhar Number should link his PAN with Aadhar. Further, partial relief from invalidation of PAN has been provided to tax payers by the Supreme Court for the time being. Thus PAN of such taxpayers will not be cancelled for not liking the PAN with Aadhar.

FURNISH SFT (Statement of Financial Transactions) :- May 31, 2017 is the Deadline – Things You Need to Know!!

To keep a watch on high value transactions such as cash deposits, credit card payments, share sale etc. (‘specified transactions’) undertaken by businesses, financial institutions, professionals like doctors, CAs, lawyers etc. (‘specified persons’), the Income-tax Law had framed the new concept of furnishing of “Statement of financial Transactions” in Form No 61A (previously called as ‘Annual Information Return (AIR)’.

What our Law Says??

Section 285BA of Income Tax Act, 1961 (‘the Act’) requires specified reporting persons to furnish statement of financial transaction.

Rule 114E of the Income Tax Rules, 1962 (‘the Rules’) specifies that the statement of financial transaction required to be furnished shall be furnished in Form No. 61A.

The ‘specified persons’ and the ‘specified transactions’ are listed in new Rule 114E.

Who are required to file SFT?

• Any person who is liable for audit under section 44AB of the Act
• Banking Company
• Co-operative Bank
• Post Master General of Post office
• Nidhi referred to in sec 406 of the Companies Act 2013
• Non-banking Financial Company (NBFC)
• Any Institution issuing Credit Card
• Company or Institution issuing bonds or debentures
• Company issuing shares
• Trustee of a Mutual Fund
• Authorized Dealer, Money Changer, Off-shore Banking Unit or any other person defined in FEMA, 1999
• Inspector-General or Sub-Registrar appointed under Registration Act, 1908

Transactions that are covered – Period Covered

Above mentioned assesses have to report the transactions which are registered or recorded by him on or after 1-04-2016.

Transactions that are covered – Who has to report what?

What is the Due Date ???

The SFT (online return in Form No. 61A with digital signature) shall be furnished on or before the 31st May, immediately following the financial year in which the transaction is registered or recorded.

For example, transactions recorded for FY 2016-17 has to be furnished till 31st May, 2017.

What will happen if SFT not furnished within due date?

In such a case, the tax authorities can issue a notice to the person who had not filed the statement within prescribed time. requiring him to furnish the statement within a period not exceeding 30 days from the date of service of such notice and in such a case the person shall furnish the statement within the time as specified in the notice.

What is the Penalty for non filing of SFT??

Penalty when SFT not furnished upto 31st May : Penalty can be levied at Rs. 100 per day of default under section 271FA.

Penalty when SFT not furnished within the 30 days of communication of Notice: Penalty of Rs. 500 per day of default.

Can the filed SFT be revised or corrected?

Yes.

Reporting person within 10 days of filing SFT, has to inform the inaccuracy/incorrect information to the income tax authority and furnish the correct information in the prescribed manner.

On the other hand, the income-tax authorities shall intimate the defect to the person and give him an opportunity of rectifying the defect within a period of thirty days from the date of such intimation.

However, if a person fails to rectify the defect within the said period than such statement shall be treated as an invalid statement and penalties be levied as if such person had failed to furnish the statement.

Suggested Reads:

Rule 114E: Reportable Transactions & Guidelines for Preparation of SFT

Income Tax Department has made it easy for taxpayers to link their PAN with Aadhaar

The Income Tax Department has made it easy for taxpayers to link their PAN with Aadhaar.

It was reported that taxpayers were finding it difficult as their names did not match in both systems (Eg. Names with initials in one and expanded initials in another). Responding to such grievances,the Dept has come out with a simple solution now.

Just go to www.incometaxindiaefiling.gov.in and click on the link on the left pane -> Link Aadhaar. Provide PAN, Aadhaar no. and ENTER NAME EXACTLY AS GIVEN IN AADHAAR CARD (avoid spelling mistakes) and submit. After verification from UIDAI, the linking will be confirmed.

In case of any minor mismatch in Aadhaar name provided, Aadhaar OTP will be required. Please ensure that the date of birth and gender in PAN and Aadhaar are exactly same. There is no need to login or be registered on E-filing website. This facility can be used by anyone to link their Aadhaar with PAN.

In a rare case where Aadhaar name is completely different from name in PAN, then the linking will fail and taxpayer will be prompted to change the name in either Aadhaar or in PAN database.

This facility is also available after login. Go to Profile settings and choose Aadhaar linking. The details as per PAN are pre-populated. Enter Aadhaar no. and ENTER NAME EXACTLY AS GIVEN IN AADHAAR CARD (avoid spelling mistakes) and submit.

Please use the simplified process to complete the linking of Aadhaar with PAN asap. This will be useful for E-Verification of Income Tax returns using Aadhaar OTP.

GST TRANSITIONAL PROVISONS – SIMPLIFIED !! – PART IV

This is Part IV of a 4 part series on Transitional Provisions.

This part deals with various miscellaneous transitional provisions which i have tried to summarize in simple terms for easy understanding.

It includes treatment of duty paid goods returned, revision of prices, claim of pending refunds, pending assessments, appeals, adjudication, etc.

Hope this is helpful!! Link to Part I, II, III are provided at the end of this Article.

142(1): Treatment of duty paid goods returned after the appointed day

If duty paid goods were removed within 6 months prior to the appointed day i.e. July 01,2017 and these goods are returned to the place of business of the supplier the on or within 6 months from the appointed day, then the registered person shall be eligible for refund of the duty paid under the earlier law where such goods are returned by an unregistered person.

Where the said goods are returned by a registered person, the return of such goods shall be deemed to be a supply.

142(2): Revision in Prices

Price revision upwards

·          Contract for revision entered prior to the appointed day

·          Price revised upwards on or after the appointed day

·          Registered Person i.e. Supplier shall issue supplementary invoice/ debit note to the receipient

·          Within 30 days of such revision

·          Debit note shall be deemed to have been issued under this Act

Price Revision Downwards

·          Contract for revision prior to the appointed day

·           Price revised downwards on or after the appointed day

·          Registered Person i.e. Supplier shall issue supplementary invoice/ credit note to the recipient

·           Within 30 days of such revision

·          Credit note shall be deemed to have been issued under this Act

Supplier shall reduce his output tax liability on account of credit note only if the recipient reduces his corresponding ITC.

142(3): Claim for pending refunds

Every claim for refund

·          filed by any person before, on or after the appointed day

·          for refund of any amount of cenvat credit, duty, tax or interest

·          paid before the appointed day

·          shall be disposed of

·          in accordance with the provisions of earlier law

·          and such amount shall be paid in cash

Ø where any claim for refund of cenvat credit is rejected, theamount so rejected shall lapse

Ø no refund shall be allowed of any amount of cenvat credit where it is carried forward on the appointed day

142(4): Refund claims filed after the appointed day – Export of Goods/Services

Refund claims filed after the appointed day for duties or taxes paid under existing laws in respect of goods or services exported before or after the appointed day to be disposed of under earlier law

Ø where any claim for refund of cenvat credit is rejected, theamount so rejected shall lapse

Ø no refund shall be allowed of any amount of cenvat credit where it is carried forward on the appointed day.

142(5): Refund claims filed after the appointed day – Services Not Provided

Every claim filed after the appointed day for refund of tax deposited under the earlier law in respect of services not provided shall be disposed of in accordance with the provisions of the earlier law and such refund shall be paid in cash.

142(6): Proceedings in respect of Claim of CENVAT credit

Relating to claim of CENVAT credit

a.        Proceeding of appeal, review, reference relating to claim to CENVAT credit;

b.       Initiated under existing laws whether before, on or after the appointed day;

Ø Shall be disposed of in accordance with the provisions of existing law.

Ø Amount found admissible to claimant shall be refunded in cash.

Ø No refund shall be allowed of any amount of cenvat credit where it is carried forward on the appointed day

Relating to Recovery of CENVAT credit Claim

a.        Proceeding of appeal, review, reference relating to claim to CENVAT credit;

b.       Initiated under existing laws whether before, on or after the appointed day;

Ø Shall be disposed of in accordance with the provisions of existing law;

Ø And as a result of such proceeding, any amount which becomes recoverable shall be recovered, unless under the existing law, as an arrear of tax under this Act.

Ø The amount so recovered shall not be allowed as ITC under this Act.

142(7): Proceedings related to Output duty or taxes

a.        Proceeding of appeal, review, reference relating to claim to CENVAT credit;

b.       Initiated under existing laws whether before, on or after the appointed day;

c.        Shall be disposed of in accordance with the provisions of existing law.

Case 1: Recovery

Ø And as a result of such proceeding, any amount which becomes recoverable shall be recovered, unless under the existing law, as an arrear of tax under this Act.

Ø The amount so recovered shall not be allowed as ITC under this Act.

Case 2: Refund

Ø Amt found admissible to claimant shall be refunded in cash.

Ø Amount rejected shall not be admissible as ITC under this Act.

142(8): Treatment of the amount recovered or refunded in pursuance of assessment or adjudication proceedings

a.      Any assessment or adjudication proceedings initiated

b.     Initiated under existing laws whether before, on or after the appointed day;

c.      Shall be disposed of in accordance with the provisions of existing law.

Case 1: Recovery

Ø And as a result, if any amount becomes recoverable shall be recovered, unless under the existing law, as an arrear of tax under this Act.

Ø The amount so recovered shall not be allowed as ITC under this Act.

Case 2: Refund

Ø If any amount found admissible to claimant shall be refunded in cash.

Ø Amount rejected shall not be admissible as ITC under this Act.

142(9): Treatment of the Amount Recovered or Refunded pursuant To Revision of Returns

Return furnished under the existing law and revised after the appointed day and If Due to such Revision any amount:

Becomes, Recoverable or ITC found inadmissible : Then,

Ø it shall be, unless recovered under existing law, shall recovered as an arrear of tax under GST Act

Ø Not admissible as ITC

Becomes, Refundable or ITC found admissible :, Then

Ø Refund in cash shall be allowed only when return is revised within the time specified under earlier laws.

Ø Amount rejected shall not be admissible as ITC under this Act

142(10): Goods or Services or both supplied on or after the appointed day in pursuance of a contract entered before the appointed day shall be liable to tax under this Act.

142(11): Once VAT/Service Tax becomes leviable, no tax shall be payable on Goods/Services under this Act except under section 142(12) and 142(13).

142(12): Goods sent on Approval returned after the appointed day

Where any goods

·          sent on approval basis

·          not earlier than 6 months before the appointed day

·          either rejected or not approved by the buyer

·          and returned to the seller on or after the appointed day

·          no tax shall be payable, if such goods are returned within 6

·          months from the appointed day, else

·          tax shall be payable by the person returning the goods

·          also tax shall be payable by the person who sent the goods

142(13): Deduction of Tax at Source

Where a supplier

·          has made any sale of goods under the earlier law

·          which were subject to TDS

·          also issued an invoice on or before the appointed day

·           no TDS shall be deducted

·          where payment to the said supplier is made on or

·          after the appointed day

Read More on GST Transitional Provisions here

GST TRANSITIONAL PROVISONS – SIMPLIFIED !! – PART III

GST TRANSITIONAL PROVISIONS – SIMPLIFIED !! – PART II

GST TRANSITIONAL PROVISONS – SIMPLIFIED !! – PART I

 

 

GST TRANSITIONAL PROVISONS – SIMPLIFIED !! – PART III

This is the Part 3 of a 4 part series on Transitional Provisions.

Section 141: Transitional Provisions relating to Job Work.

This section basically deals with treatment of Inputs, Semi Finished Good and Excisable Goods that have been removed from place of business for various Job Works.

The provisions have been summarized in a tabular form for easy understanding and comparability.

Read More on Transitional Provisions:

GST TRANSITIONAL PROVISIONS – SIMPLIFIED !! – PART II

GST TRANSITIONAL PROVISONS – SIMPLIFIED !! – PART 1

GST TRANSITIONAL PROVISIONS – SIMPLIFIED !! – PART II

Section 140: – The objective of section 140 is to ensure smooth and seamless transition of all the ITC that were available to taxpayers in earlier law.

The provisions of the Section 140 are summarized as below:

140(1) – ITC CARRIED FORWARD IN RETURN

Registered person other than composition taxpayer allowed to take such credit in Electronic Credit Ledger.

However, no credit shall be allowed if –

1.    Such credit is inadmissible as ITC in GST Act; or

2.    Registered person fails to furnish all the returns of the last 6 months from the appointed day; or

3.    Such credit is related to goods manufactured & cleared under exemption notifications

140 (2) – UNAVAILED CENVAT CREDIT ON CAPITAL GOODS

Registered person other than composition taxpayer is allowed to take credit of Unavailed cenvat credit of capital goods, not carried forward in Return, in Electronic Credit Ledger.

However, no credit shall be allowed unless such credit was admissible under Existing laws as well under GST Act.

Unavailed Cenvat Credit on Capital Goods =

Total CENVAT Credit on capital goods allowed

less CENVAT credit on capital goods already availed

140(3) – Credit Of Eligible Taxes On Inputs Held In Stock – Allowed In Certain Cases

A ‘Registered person’-

a)    Who was not liable to be registered under the existing law, or

b)   Who was engaged in the manufacture of exempted goods or

c)    Providing exempted services, or

d)   Who was providing works contract services and was availing benefit under Notification No. 26/ 2012, or

e)    A first stage dealer, or

f)     A second stage dealer, or

g)    A registered importer

h)   A depot of a manufacturer

Is Eligible To Take Credits Of Eligible Duties And Taxes On Inputs Contained In –

a)    Stock

b)   Semi-finished goods

c)    Finished goods

Held in stock on appointed day

Eligible Duties and Taxes

a) BED

b) Other Addl Duties

c)  CVD

d) SAD

e)  Service Tax

Conditions to be fulfilled

1.   Such Inputs or Goods are used or intended to be used for making taxable supplies;

2.    Eligibility of credit on such inputs under this Act;

3.   Possession of invoice/ documentary evidence of duty paid under existing law;

4.   Such invoice/ documentary evidence was issued not earlier than 12 months immediately preceding the appointed day;

5.   The supplier of services is not eligible for any abatement under the GST law.

PROVIDED that where a registered person, other than a manufacturer or a supplier of services, not in possession of such invoice or any other documents subject to prescribed conditions, be allowed to take credit at the rate and in the manner prescribed.

140(4): CREDIT OF INPUTS HELD IN STOCK IN CERTAIN SITUATIONS

A registered person who was engaged in manufacture of taxable/ exempted goods or providing taxable/ exempted services, but which are liable to tax under current Act shall be entitled to take credit-

a) Cenvat credit c/f in his return [as per sec 140(1)]; and

b) Cenvat credit of eligible duty in respect of inputs-relating to exempted goods or services [as per Sec 140(3)]

140(5): CREDIT OF TAXES IN RESPECT OF INPUT/ INPUT SERVICES DURING TRANSIT

A registered person-

a)    shall be entitled to take credit of eligible duties and taxes

b)   in respect of inputs/ input services received on or after the appointed day

c)    the duty or tax is paid before the appointed day

d)   provided the invoice is recorded within 30 days from the appointed day, and

e)    a statement is also required be furnished in respect of such credit.

140(6): SWITCHING FROM COMPOSITION SCHEME TO GST

Credit of eligible duties and taxes on inputs held in stock to be allowed to a taxable person switching over from composition scheme

Registered taxable person who was earlier under composition scheme shall be eligible to take credits on:

a) Inputs

b) Semi-finished goods

c) Finished goods

Held in stock on appointed day

Conditions to be fulfilled

1.    Inputs/Goods used for making taxable supplies under GST Act;

2.    Registered Person is not paying tax under composition scheme of GST Act;

3.    Registered Person is Eligible for ITC under GST Act;

4.    Possession of invoices;

5.    Invoices were issued not earlier than 12 months immediately preceding the appointed day

140(7): ITC ON SERVICES RECEIVED BEFORE THE APPOINTED DATE BY ISD ALLOWED FOR DISTRIBUTION EVEN IF INVOICES ARE RECEIVED LATER ON.

140(8): REGISTERED PERSON HAVING CENTRALISED REGISTRATION UNDER EXISTING LAWS IS ALLOWED TO TAKE CREDIT OF CENVAT CREDIT.

Conditions:-

1.    Amt of Cenvat credit shall be amount carried forward in a return furnished for the period ending with day immediately preceding the appointed day.

2.    If such return is furnished within 3 months of the appointed day, then credit shall be allowed only if such return is an original or revised return where the credit has been reduced from that claimed earlier.

3.    Credit allowed only if admissible under GST Act.

4.    Such credit may be transferred to other registered persons having same PAN.

140(9): IF CENVAT CREDIT AVAILED FOR THE INPUT SERVICES PROVIDED UNDER EARLIER LAWS HAS BEEN REVERSED DUE TO NON PAYMENT OF CONSIDERATION WITHIN A PERIOD OF 3 MONTHS, THE SAME CAN BE RECLAIMED PROVIDED THE REGISTERED PERSON HAS PAID THE CONSIDERATION WITHIN 3 MONTHS FROM THE APPOINTED DATE.

GST TRANSITIONAL PROVISONS – SIMPLIFIED !! – PART 1

GST TRANSITIONAL PROVISONS – SIMPLIFIED !! – PART 1

This is Part A of a 4 part series on Transitional Provisions.

Overview

The transitional provisions  are contained under sections 139 to 142 provided under Central Goods and Services Tax Bill, 2017.

These sections deals with following:

Section 139:- Migration of existing taxpayers.

Section 140:- Transitional arrangements for input tax credit.

Section 141:- Transitional provisions relating to job work-

Section 142:- Miscellaneous transitional provisions

PART A of the series deals with Section 139 only.

SECTION 139 :- MIGRATION OF EXISTING TAXPAYERS

 

GUIDE ON GST REGISTRATION

Six Steps to GST. Are you ready?

Dear CFOs,

As a CFO, you should complete at least these SIX tasks, before GST is roll out:

1)Register your company

Determine the name of the states in which GST registration is required and get your company registered in all these states.

2)Do homework to raise invoice on your customers

You shall require
(i) various details from your customers and
(ii) classification and description of your product and services an
(iii) tax rates applicable on supply of these products and services, before your raise an invoice under GST regime.

Therefore, if you don’t possess these details or have not captured these details in your accounting systems appropriately, you may not be able to raise invoices on time. Do complete this homework.

3)Provide relevant details to vendors

Provide relevant details to your vendors in time so that they can appropriately raise invoice to enable you to claim the credit of GST on such invoice.

4)Upgrade your systems to record tax on the transactions

Upgrade your accounting systems so that
(i) invoices can be raised and tax payable can be captured.
(ii) tax credit on invoices received can appropriately be captured in order to determine tax payable in cash;
(iii) Sufficient data to file tax returns can be obtained.

5) Increase bandwidth of your team

You are ready to file numerous returns: A person shall be required to file at least 37 returns per registration in a year. Further, if you are liable to deduct tax or you are registered as ISD, you may be required to file additional returns. Increase the bandwidth of your team.

You are ready for tax credit reconciliations: Regular reconciliation of data shown by the customer or vendor and data by your system shall be required. Increase the bandwidth of your team.

You are ready to deal with queries from your vendors, customers and GST department in respect of mismatches.

6) Train your team

Introduction of concepts such as TDS under Indirect tax may be a new concept for your company. Similarly, reversal of credit on a service invoice, if such invoice is not paid within three months, may be a new concept. Therefore, train your team properly so that it does not miss any provisions applicable on your company.