Latest Updates

Latest Business Update

1. Income tax department makes it mandatory to link your PAN with Aadhaar by 30th June 2021. If not linked, the PAN will become invalid. This will attract a higher TDS rate and may impact your financial transaction. Link your PAN with Aadhaar.

2. Apart from the above, by virtue of Section 139AA(2) of the Act linking of Aadhar with PAN within the prescribed timelines is mandatory. In case of non-linking the existing PAN issued shall be considered as inoperative and TDS shall be deducted at the higher rate as applicable in case of a person who does not have PAN i.e. @ 20%.

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3. The Finance Minister on 1 February 2021 has introduced a new Section 206AB vide Finance Act 2021. This Section is applicable for FY 2021-22 w.e.f. 1 July 2021. This amendment has been introduced to ensure filing of return of income by those persons who are required to file the return of income but are willfully not filing return of income.

What is the date of Effective Voluntary Cancellation of Registration under the IT ACT? 

4. Sebi came out with fresh guidelines on reporting formats for mutual funds. The formats for the reports to be submitted by asset management companies (AMCs) to trustees, by AMCs to Sebi and by trustees to the regulator have been revised on the basis of consultation from the industry.

5. Mandatory Registrations for NGOs after 01.04.2021 – Form CSR-1, Section 80G and Section 12AB of Income Tax Act. As per the notification issued by the Ministry of Corporate Affairs dated 22nd January 2021, it is mandatory for all NGO’s which wants to raise CSR Funding to enrol with MCA w.e.f 01/04/2021 to get CSR funding. And Filing of Form CSR-1 has been started on the MCA portal and a huge number of NGOs has already enrolled with MCA.

Managing StartUps with Regular Compliance – Virtual CFO

We have many inspiring stories that have given birth to budding entrepreneurs and in turn, have inspired a generation of young minds to solve complex practical issues of life and thus create a living for self and also employment for society.

Startup India is also a govt initiative to promote and nurture entrepreneurship across the country. As per Startup India Program, the main focus is to promote bank financing and encourage startups with newer business ideas and thus help the Govt in the moto of job creation.

Therefore Start-ups not only cross new horizons on their business but also need to keep the requirements of other stakeholders like Govt. Compliance, Banks, FI’s, Auditors, Investors like HNI, PE or VC’S.

Again, Finance is often ignored in most of the start-ups as the focus is always on getting business, model validation & tech enablement.
Its often seen that there is a huge chunk of money remaining either unutilized or being spent on unwanted penalties which are often overlooked within the given due dates and compliance calendar.

Common Asks:-

Basic Requirements mainly stems around say accounting, finance & compliance on a day to day basis
Other growing organizations may have constant requirements for Cash Flow Management & Project Management
Again some established setups may require a complete control on Inventory Management or a constant watch on Working Capital Requirements

Again, Start-ups go through the cycles of their own, in terms of starting high and growing multiple times and again a few of them ending with no salaries to pay, failing on compliances.
Often the business managers depend on excels and all calculations are done with no focus on actual tax filings, regulations or cash management.
Therefore, no matter whatever it is, Budding entrepreneurs are always on their toes to keep up the pace with compliance n certification.
Hence the Finance function should be taken perhaps a bit on individual perspective

Model:-

Idea is to start small and simple with minimal compliance and then build big as per customer profile, business operations, nature of transactions, etc.
Sometimes projects are it with Govt or some large corporate (domestic or global )drives the registration process or other times it is decided by the Investors and their involvement including entry-exit criteria.
We @ Certicom suggest starting lean with minimal compliance & then build as per Growth path as the transition is handhold-ed to the Directors and partners with end to end support.

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Discounts under GST Regime!

Sec.15 of the CGST Act, 2017, reproduced below

The value of the supply shall not include any discount which is given –

  • Before or at the time of the supply if such discount has been duly recorded in the invoice issued in respect of such supply
  • After the supply has been affected, if –

    # – Such discount is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices, and
    # –  Input tax credit as is attributable to the discount on the basis of the document issued by the supplier has been reversed by the recipient of the supply.”

Summary:

The logical inference which could be drawn from the plain reading of above provision is:

  • Discount, if mentioned on the face of the invoice, can be reduced from the taxable value of the supply of goods.
  • Discount, even if not mentioned on the face of the invoice can be reduced from the taxable value, if following conditions are satisfied:

i) Discount is established in terms of an agreement before supply. In simple words, both supplier and recipient are aware and have agreed about the discount before the supply.

ii) Discount is linked to a specific supply invoice.

iii) ITC attributable to the discount is required to be reversed by the buyer or recipient of the supply.

tax audit, refund, notice, assessmentGST liability of the supplier would be reduced if both supplier and receiver of the goods or services are aware of the discount before supply.

There will be no differentiation in GST between trade and cash discounts.

In fact, GST segregates the discounts allowed into two categories:

  • Those given before or at the time of supply, and
  • Those given after the time of supply.

Discount allowed before or at the time of supply, and it has been mentioned in the invoice separately, it will not be added in the value of supply.

Example: Company offers a 10 % discount on the sale of goods worth Rs. 200. If the company mentions the discount amount (Rs. 20) separately in the invoice, the value of the taxable supply will be Rs.180 (200–20).

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