GST Levy- 12% for Normal Bicycles, 5% for Electric Cycles!!

Differential Rates of Taxes:

With Organic, Electric & Renewables taking preference among users, its imperative that Govt promotes the same and incentivise for people @ Large to accomodate…

For Instance, Electric bicycles are charged @ 5% GST whereas Ordinary Cycles are @ 12% perhaps rate differentials are keeping future in mind. Alternatively the rationale is for Govt to  keep multiple rates keeping different market segments and usage therein..

One of the  argument for differential rates , is stemmed by the need to keep the rate lower for goods consumed by the masses and higher for those consumed by affluent sections of society .

 

CHARTERED ACCOUNTANTS , CA, INCOME TAX

India is majorly a service sector-driven economy and rapid growth  tax revenues from Serivces Business. Again most of the services are charged @ 18% slab and hence may be argued both ways.

Also for Interest rates on Delayed payments may again be differential based on time say 18% for first few months and 24% n more post the initial period.

Idea is to promote compliance , reward the Compliant & penalise the recurring errant

 

 

GST UPDATES

The Finance Ministry on wednesday said any mismatch in GST monthly sales return and outward supply details will have to be reported in annual return form and due taxes should be paid.

In a clarification on annual returns and reconciliation statement, the ministry said it has received queries from businesses asking whether the primary source of data for filing of the annual return and the reconciliation statement should be GSTR-1, GSTR-3B or books of accounts.

While form GSTR-1 is an account of details of outward supplies, GSTR-3B is where the summaries of all transactions are declared and payments are made.

The ministry said information in form GSTR-1, GSTR-3B and books of accounts should be synchronous and the values should match across different forms and the books of accounts.

If the same does not match, there can be broadly two scenarios, either tax was not paid to the government or tax was paid in excess.

“In the first case, the same shall be declared in the annual return and tax should be paid, and in the latter all information may be declared in the annual return and refund (if eligible) may be applied through Form GST RFD-01A,” the ministry said.

Further, no input tax credit can be reversed or availed through the annual return. If taxpayers find themselves liable for reversing any ITC, they may do the same through Form GST DRC-03 separately, it added.

It also said if a taxpayer has not paid, short paid or has erroneously obtained/ been granted refund or has wrongly availed or utilised ITC then before the service of a notice by any tax authority, the taxpayer may pay the amount of tax with interest. In such cases, no penalty will be levied on such tax payer.

“Therefore, in cases where some information has not been furnished in the statement of outward supplies in Form GSTR-1 or in the regular returns in Form GSTR-3B, such taxpayers may pay the tax with interest through Form GST DRC-03 at any time. In fact, the annual return provides an additional opportunity for such taxpayers to declare the summary of supply against which payment of tax is made,” it added.

GSTR-9 is the annual return form for normal taxpayers, GSTR-9A is for composition taxpayers, while GSTR-9C is a reconciliation statement. The last date for filing annual return in August-end.

Source- Business Standard.

Taxation Highlights from Budget 2019-20

Income-tax- Budget Provisions

  1.   The threshold limit for reduced tax rate of 25% in case of domestic companies has been increased from Rs. 250 crores to Rs. 400 crores. Thus, a domestic company whose total turnover or the gross receipt in the previous year 2017-2018 does not exceed Rs. 400 crore shall be taxable at the rate of 25%.
  2.   A new Section 80EEA has been inserted to provide for deduction of up to Rs. 1.50 lakhs for interest on loan taken from any financial institution for acquisition of a residential house property whose stamp duty value does not exceed Rs. 45 lakhs.
  1.   A new section 80EEB has been inserted to provide for a deduction of Rs. 1.5 lakhs in respect of interest on loan taken for purchase of an electric vehicle from any financial institution.
  1.   The new rate of surcharge for Individual, HUF, AOP, BOI and AJP shall be – 10% (for income of Rs. 50 lakhs to Rs. 1 crore), 15% (for income of Rs. 1 crore to Rs. 2 crores), 25% (for income of Rs. 2 crores to Rs. 5 crores) and 37% (for income exceeding 5 crores).
  1.   Any sum of money paid, or any property situated in India transferred, on or after July 5, 2019 by a person resident in India to a person outside India shall be deemed to accrue or arise in India under Section 9.
  1.   Furnishing of return of income shall be mandatory under Section 139 if an individual has deposited Rs. 1 crore or more in current account or he has incurred expenditure of Rs. 2 lakhs or more on foreign travel or he has incurred expenditure of Rs. 1 lakh or more on electricity consumption.
  1.   Income-tax return can be filed using Aadhaar Number, if person hasn’t been allotted PAN. If a person has linked his Aadhaar number with PAN, he may also furnish his Aadhaar number in place of PAN in the Income-tax return.
  1.   PAN allotted to a person shall be deemed to be invalid, if he failed to intimate the Aadhaar to the Dept.
  1.   A new Section 194N has been inserted to require deduction of tax at source at the rate of 2% if aggregate of cash withdrawn during the financial year from any account maintained with a banking company or cooperative bank or post office exceeds Rs. 1 crore.
  1. The sunset date for transfer of residential house property, for claiming exemption under Section 54GB in respect of investment made in eligible start-ups, has been extended from 31st March, 2019 to 31st March, 2021. Further, the conditions of minimum shareholding or voting rights has been relaxed from 50% to 25%.
  1. Application under Section 195(2) and 195(7) for lower or nil deduction of tax from sum paid or payable to non-residents person can be filed electronically.
  1. A new Section 194M has been inserted to require any individual or HUF (who is not required to deduct tax under Section 194C or 194J) to deduct tax at source from sum paid to a contractor or professional if aggregate payment during the year exceeds Rs. 50 lakh. The tax can be deposited under this provision without any requirement to obtain TAN.
  1. As per Section 194-IA, a buyer is required to deduct tax at source from the consideration paid to buy an immovable property. An explanation has been inserted that ‘consideration for immovable property’ shall include all charges paid towards club membership fee, car parking fee, electricity and water facility fees, maintenance fee, or any other charges of similar nature, which are incidental to transfer of the immovable property.
  1. In case of failure to file an Income-tax return, the prosecution proceedings are initiated under Section 276CC if the tax payable by the assessee is Rs. 3,000 or more. This threshold limit has been increased to Rs. 10,000.
  1. Constituent entity of an International group shall now be required to keep and maintain information and document under Section 92D and file required form even when there is no international transaction is undertaken by such constituent entity.
  1. There are various provisions in the Act which requires a person to make payment by account payee cheque/draft or ECS. In order to encourage other electronic modes of payment, the Government has proposed to amend relevant provisions to include other electronic modes of payment.
  1. Tax shall be deductible under Section 194DA at the rate of 5% only on the income component of life insurance pay-out. The existing rate of TDS was 1% on the gross amount.
  1. Relief under Section 89 shall be considered while computing the tax liability under Section 140A, section 143, section 234A, section 234B, and section 234C to avoid genuine hardships to the taxpayers who are claiming such relief.
  1. Every person, carrying on business, shall, provide facility for accepting payment through electronic modes if his turnover or gross receipts exceeds Rs. 50 crores. The Payment and Settlement Systems Act, 2007 is proposed to be amended to provide that no bank or system provider shall impose any charge upon anyone, either directly or indirectly, for using the electronic modes of payment.
  1. A taxpayer has been allowed to withdraw 60% of total amount from NPS as tax free. Currently, the exemption is allowed only up to 40% of the total corpus amount.
  1. Benefit of first proviso of Section 201(1) has been extended in case of failure to deduct tax at source from sum paid to non-residents. Thus, a deductor shall not be deemed to be an assessee in default even if he fails to deduct tax from sum paid to a non-resident, if such non-resident discloses such income in his return of income and pays tax due on such income and a certificate from a Chartered Accountant is furnished to this effect.
  1. Deduction of up to 10% of salary is allowed under Section 80CCD in respect of contribution made by an employer to NPS. The limit has been proposed to be increased to 14% of salary in case of Central Government’s employees.
  1. Section 12AA has been amended to provide that at the time of granting of registration to a trust or institution the Pr. CIT or CIT shall also satisfy himself that the applicant trust or institution also satisfy the requirements of any other law which is material for the purpose of achieving its objects.
  1. The Pr. CIT or CIT has been empowered to cancel the registration under Section 12AA, if after granting registration it has been noticed that the trust or institution has violated requirements of any other law which was material for the purpose of achieving its objects.
  1. Section 115QA which requires payment tax on distributed income in case of buy-back of shares has proposed to be extended to listed companies as well.
  1. ITR filing is mandatory, if total income of assessee before claiming the benefit of capital gain exemption under sections 54, 54B, 54EC, 54F, 54G, 54GA and 54GB, doesn’t exceeds the maximum amount not chargeable to tax.