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Impact of Goods & Services Tax on Gifts and Free Samples

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The GST law has introduced the concept of ‘supply’ as a taxable event and done away with the erstwhile taxable events of manufacture, sale, service. The taxability and availability of Input Tax Credit (ITC) on gifts have always been a subject matter of discussion. The gifts are provided by the taxpayer for the purpose of advancement of its business or for sales promotion. The term gift is not defined under the GST law; thus, reliance could be placed on the definition provided under the Gift Tax Act, 1858. As per Section 2(xii), the term ‘gift’ means the transfer by one person to another of any existing movable or immovable property voluntarily and without consideration in money or money’s worth. The incidence of tax, under GST law, is on ‘supply’. The term ‘supply’, as defined under Sectio...

Interest on delayed GST payment whether payable on gross or net tax liability?

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Traditionally, under the erstwhile Indirect Tax Laws viz. Service Tax, VAT, etc. interest is payable on the amount of tax due after adjustment of the Input Tax Credit (ITC), which remains unpaid by the due date. However, under the GST law, the said practice got destroyed under the concepts of ‘Electronic Cash Ledger’, ‘Electronic Credit Ledger’, etc. and offsetting the liabilities with amounts in cash and credit ledgers through return in Form GSTR-3B. Section 50 of the CGST Act prescribes for payment of interest when there is a delay in payment of tax. It does not expressly provide that interest is payable even on the tax liability that was offset with accumulated ITC. In February 2019, the Principal Commissioner (Hyderabad) had issued a Standing Order No. 01/2019 to clarify that interest ...

India Extends Tax Compliance Deadlines to Offset COVID-19 Impact

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The rapidly escalating novel Coronavirus has claimed over 15,000 victims and infected close to 400,000 people across 132 countries. India saw its first positive case in the first week of March, and in less than four weeks, this number has crossed 500. Vowing not to follow in the lines of the heavily infected countries, India has imposed a 21-day lockdown period starting March 25, 2020. While this is an excellent move and should hopefully flatten the curve for India, it does raise concerns among taxpayers who are expected to file their tax returns – March being the tax month. The lockdown will prove to be particularly tricky for tax practitioners, chartered accountants and company secretaries as organizations have started to work from home and these professionals have minimal access t...

Highlights of the 39th GST Council Meeting

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The 39th GST Council meeting held on Saturday, March 14, 2020, at New Delhi and chaired by the Union Finance Minister Nirmala Sitharaman took decisions on several crucial issues under GST, including deferment of e-invoice and new returns. The due date of filing an annual return and reconciliation statement for Financial Year (‘FY’) 2018-2019 has been extended to June 30, 2020. The Council also recommended amendments in the CGST Rules 2017 and issuance of circulars to clarify specific issues. Given below are the highlights of the recommendations made by the GST Council for changes in the law, procedure, and GST rates: Changes related to law and procedure: 1. Interest on delayed payment of GST The proviso to Section 50(1) of the CGST Act 2017 concerning interest for delay in payment of GST, ...

Income Tax Filing; Old and New Tax Slabs, Due Date, Income Heads Etc

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Income tax is the undeniable charge that is levied by the government on every registered taxpayer resident of the country. Income tax is directly levied on the annual salary of the taxpayer and therefore is termed as “Direct Tax”. The Income Tax Act The list of norms was initially composed in 1961 and was first implemented in 1962. Income Tax as defined under section 4 of the Income Tax Act 1961, is the tax leviable on the aggregate value of the income earned by any individual, Hindu Undivided Family (HUFs) Association of Persons (AOP), Body of Individuals (BOI), a firm, a company, etc. in the preceding Financial Year. Income Heads (under which income is segregated) Salary – consisting of salaries, pension, annuity, gratuity, fees, commission, profits, leave encashment, P...

It’s A Golden Age For Tax And Accounting Professionals That Keep Up With Technology

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But to survive competition and reap the benefits, these professionals will need to embrace technology as their best tool, whether they are serving large or small business clients The Goods and Services Tax (GST) has been a game changer for businesses since its introduction on July 1, 2017. It has brought scores of both opportunities and challenges for business professionals across India. For one group in particular, chartered accountants and other tax professionals, opportunities abound since the introduction of the GST. In fact, there has been a significant increase in demand for tax preparation services. More businesses than ever are reaching out for help with GST registration, accounting, return filing, and tax payments. This has led to surge in revenue for chartered accountants and oth...

Next Generation Payments Landscape

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The Payments industry is one of the most dynamic segments in financial services. Several technological and operational innovations such as e-wallets, new payment options, in-app purchasing, P2P lending and payments are creating a revolutionary breakthrough in the payments landscape. In order to respond to the market trends, the Payments industry must incorporate suitable business models and proactive strategies to build their capability and achieve the desired future in the segment. Here are a few key aspects that needs focus – Revamping the Payments framework with increased collaboration Real time/faster payments continue to revolutionize. This will have a significant impact on payment firms through operational and service transformations – It requires reorganizing or upskilling tea...

Digital transformation: More than a buzz word

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The digital transformation had become a buzz word but today it is a way of life. Look at almost any organization, and you will see that it is a boardroom conversation. It is a top priority for CXOs today. What exactly is a digital transformation? Most simply put, digital transformation (DX) is the incorporation of digital expertise into all areas of a business. This means a fundamental change in how businesses operate, and customers served. Not limited to that, it also brings in a change in the overall culture.  Services like online banking or ordering your favorite food using an app or booking tickets for movies or travel, shopping or for that matter even paying taxes. While this brings in possible every service to your fingertips, nothing comes without its own set of challenges. When all...

Goods and Services Tax-What’s in store for 2020

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It is a significant time for everyone as the year comes to a close – not only 2019 is ending, with it ends the decade that has witnessed radical tax reforms under the Indian economy. These reforms established the regime of the biggest indirect tax under the notion of one nation, one market and one tax system. Seven GST council meetings were conducted this year, each with the agenda to correctly levy GST, modify GST tax rates and ensure efficient payment of tax. Each of these meetings resulted in significant amendments to GST laws, the widening of the GST net as more goods and services were brought under the GST radar, changes in tax slabs and finally, measures to ease tax payment and curb tax fraud. In this article, we throw light over some of the crucial amendments and updates around GST ...

Demystifying the working of Goods and Service Tax in India

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The new tax regime Goods and service tax rolled out from 1st-July-2017 while subsuming multiple indirect taxes into uniting tax and paved the way for a common national market for the Indian taxation system. Although the tax official tried all efforts to make it simple but still laymen and small businesses find it difficult to comprehend. Since its implementation, GST has benefitted the Indian economy in many ways whether by keeping a free flow of goods and services or eliminating the cascading effects of taxes. Experts and professionals have estimated that GST can boost up GDP rates in the long term. Our ex-Finance Minister Arun Jaitley also claimed several benefits of GST such as it would create a national market, improve tax compliance and, enhance the ease of doing business. And for con...