The Taxation Laws (Amendment) Bill, 2017

Amongst the significant errors made by government for roll out of Goods and Service Tax (GST), The Taxation Laws (Amendment) Bill, 2017 was introduced in Lok Sabha on March 31, 2017. The main purpose for the Bill was to introduce suitable amendments in the Customs Act, 1962, the Customs Tariff Act, 1975, the Central Excise Act, 1944, the Finance Act, 2001, the Finance Act, 2005, and repeal provisions of few Acts to ensure smoother GST roll out. Below are some key features mentioned in The Taxation Laws (Amendment) Bill, 2017:
Amendments to the Central Excise Act, 1944
Currently, Central Excise Duty is levied on various excisable goods such as tobacco, petroleum products, rubber, oils, vehicles, etc.  This is proposed to be changed to levy duty only on certain kind of petroleum products such as motor spirit, high speed diesel, aviation turbine fuel and tobacco products. These goods on which the excise duty was levied were mentioned in the Central Excise Tariff Act, 1985.  These will be moved to the Fourth Schedule of the 1944 Act.  Note that the 1985 Act is proposed to be repealed under the Central Goods and Services Tax Bill, 2017.Currently, under the Central Excise Tariff Act, 1985, the central government has powers to change excise rates through notification in emergency circumstances.  The Bill inserts a similar provision in the 1944 Act.  Further, it also inserts a provision to allow the central government to amend the newly inserted Fourth Schedule through notification.
Amendments to Finance Act, 2001
The Finance Act, 2001 levies the National Calamity Contingent Duty on a variety of goods such as pan masala, tobacco products, telephones, motor vehicles, crude oil, and petroleum products. The Bill seeks to limit the levy only to tobacco products and crude oil.
Amendments to Customs Act, 1962
Below mentioned are the key amendments proposed in the Bill:

• Currently, under the Customs Act, 1962 imported goods remain in the customs area until they are cleared by customs authorities. Customs area includes ports, airports, etc.  The Bill extends the customs area to include warehouses.

• The Bill adds to a provision to the Act which requires several persons to furnish information to a proper officer under the Act (customs officer). Such persons and entities include: (i) income tax and state GST authorities, (ii) Reserve Bank of India, (iii) banks and financial institutions, (iv) stock exchanges and depositories (v) state electricity boards, (vi) Registrar of Companies, (vii) Registrar and Sub-registrar under the Registrar Act, 1908,(viii) registration authority under the Motor Vehicles Act, 1988, and (ix) Post Master General. The manner in which the information will have to be furnished will be notified by the government. The proper officer may serve a notice if the information is not furnished within the specified time.  Further, the officer may impose a fine after 30 days of serving the notice.  The fine will be of INR 100/day, until the information is furnished.

Amendments to Customs Tariff Act, 1975
Below mentioned are the key amendments proposed in the Bill:

• Goods imported will be liable to pay the Integrated Good and Service Tax (IGST). IGST will be levied on the aggregate of value of the imported goods, Customs Duty levied under the Act, and any other amount chargeable under any law.
  

• Goods imported will be liable to the GST Compensation Cess. The Cess will be levied on the aggregate of value of the imported goods, Customs Duty levied under the Act, and any other amount chargeable under any law.
  

Amendments to Finance Act, 2005
The Finance Act, 2005 levies an Additional Excise Duty on several items such as pan masala and tobacco products.  The Bill removes petroleum oils, crude and other related products from this list.
Repeal of several laws
The Bill seeks to repeal four laws which include the Sugar Cess Act, 1982 and the Jute Manufacturers Cess Act, 1983.  It also repeals certain provisions of 10 laws which include the Rubber Act, 1947, the Industries (Development and Regulation) Act, 1951, and the Coal Mines (Conservation and Development) Act, 1953.  Any un-collected duties (arrears) under the above Acts shall be collected by the respective collecting agencies and remitted to the Consolidate Fund of India.
If you have any questions or would like to discuss more about the taxation laws, our experts can ensure right business insights and best practices for you.
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Introduction of e-assessment

In the era of age-old beliefs, online assessment is a step towards an advanced tomorrow. While the transformation from conventional practices is inevitable, introduction of e-assessment concept will impact the entire procedure and make assessments more taxpayer-friendly and transparent.

Concept of e-assessment was introduced earlier in 2016 on a pilot basis and further extended it to 102 cities in 2017. With the experience gained so far as per the statistics Finance Minister Arun Jaitley mentioned in his Budget speech for 2018-19 to extend the domain of e-assessment across the country. Greater efficiency and transparency can be achieved by widening the scope of e-assessment to reduce interface between the Income Tax Department (“Department”) and tax payers. Requisite amendments in the Income Tax Act (“Act”) to be made by the government thereby, facilitating the process of systematic and lucid online assessment.

E-assessment will revolutionize the age-old assessment procedure of the Department and the approach which they interface with taxpayers and other stakeholders. As per experts, lack of interaction between taxpayer and tax officer would lead to reduced chances of alleged corruption.
Presently, processing of income tax returns (“IT returns”) takes at least a few months. But the path breaking and technology-intensive project approved by the government will transform the Department into a more assessee friendly zone. IT returns will be processed in 24 hours and refunds furnished concurrently. Previously, 99.54% of IT returns were accepted as they were filed.
Resulting in the introduction of such a system direct tax collection for current fiscal exceeded the budgeted target by INR 50,000 crores to INR 12 lakh crores, while the mop-up has been pegged at INR 13.80 lakh crores for the financial year 2019-20. The government had originally budgeted to collect INR 11.50 lakh crores in current financial year from direct taxes, which include corporate tax and personal income tax.

As per the 2019-20 budget estimates, out of the INR 13.80 lakh crores of direct taxes, the government aims to raise INR 7.60 lakh crores from corporate tax as well as INR 6.20 lakh crores from income tax. This is higher than INR 6.71 lakh crores estimated to be collected from corporate tax and INR 5.29 lakh crores from income tax in the current fiscal ending March 2019.

Undertaking online assessments saves taxpayers a lot of time as well as money. Frequently the assessments can be executed in less time; multiple personnel can complete the assessment online within the same stipulated time. No need for specialized human resources, thereby cutting expenses of the taxpayers.

Nobody can judge the idea about whose time has come. In our opinion, the era for e-assessments is here and will stay. While the metamorphosis from age-old archaic practices is inevitable, this change cannot be at the periphery and needs to impact the entire process and make assessments more taxpayer-friendly and transparent. As long as this determination and commitment stays with both the government and taxpayers, the Indian tax ecosystem will be cruising ahead in its journey to autonomous success.

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Step By Step Guide To File GST Return-3B

GSTR-3B filling is under progress and the last date for GSTR-3B filling is 20 August 2017. Please find below the step by step guide on how to file GST Return-3B.

Step by step guide on how to file GST Return-3B
1. After login, select Return Dashboard
2. Select Financial Year 2017-18 and Month July. Click Search and Select GSTR-3B
3. Declare your liabilities and ITC claims in Section 3.1 and 4 respectively by clicking on the tiles and furnishing the required information. Transitional ITC cannot be claimed in GSTR 3B. It can be claimed only through TRANS 1 and TRANS 2.
4. Enter details of interest, if payable, in Section 5.1. Late fee will be computed by the system
5. Click on Save GSTR-3B After you save the data, Submit button will get enabled. Please note that after submit, no modification is possible. Hence ensure that details are filled correctly before clicking on Submit button.
6. On clicking Submit GSTR-3B button, System will post (debit) the self-assessed liabilities including system generated late fee in Liability Register and credit the claimed ITC into ITC ledger.
7. After this the Payment of Tax tile will be enabled, please click it and declare your payment details to pay the taxes and offset the liability.
8. Click CHECK BALANCE button to view the balance available for credit under Integrated Tax, Central Tax, State Tax and Cess. (This includes transitional credit also, if TRAN-1 and 2 are submitted). This will enable you to check the balance before making the payment for the respective minor heads. The balance is also displayed when the mouse is hovered on the applicable data entry field in payment section.
9. Please fill out the section that specifies how you wants to set-off your liabilities using a combination of Cash and ITC.
System checks if you have sufficient Cash/ITC balance.
It also checks if the Reverse charge liabilities are set-off only through CASH.
System also checks if all liabilities are set-off. Part payment is not allowed in GSTR-3B.        Hence, ensure sufficient balance in Cash and ITC Ledger to Offset liability
In case of ITC utilisations, the system checks the prioritization rules viz. IGST Credit has to be first utilised for paying IGST liability and remaining for CGST liability and thereafter SGST liability; SGST credit has to be first used for paying SGST liability and then IGST liability; CGST Credit has to be first used for CGST liability and the remaining for IGST Liability; SGST credit cannot be used for paying CGST liability and CGST credit cannot be used for paying SGST liability
Transition ITC, if available in ITC ledger, can be used for payment of liabilities of GSTR 3B
10. Click the OFFSET LIABILITY button to pay off the liabilities
11. Click on declaration statement
12. Select Authorized Signatory filing the Form
13. Click on File GSTR-3B button with DSC or EVC
14. Message for successful filing will appear and Acknowledgement will get generated

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Private Ltd, LLP or public Ltd which to choose when going for new company registration in India

 

Fortunately, the new rules and regulations are easier when it comes to start-up a new business in India. Also, there are hassle free new company registration service providers available in India who take care of A to Z of forming and registration of the company. In this post, we will touch upon various forms of new company registration In delhi presently available and which is best suited for your business.

Related : Registration in company in India

To start with, below mentioned is explanation for new company registration in gurgaon that are done in India:

Sole Proprietorship: The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts.

When to incorporate: However, after the introduction of the concept of One Person Company. It is not recommended to form a proprietorship in India.

Limited Liability Partnership: Partnerships when given the feature of limited liability, the LIMITED LIABILITY PARTNERSHIPS came into picture. LLP is a separate legal entity and which can be formed in India by minimum of two persons with a motive of earning profit.

When to incorporate: LLP enjoys the benefits of private limited company and traditional partnerships, therefore, because of increasing compliance in private limited company, it is recommended for start-ups to incorporate LLP if they are not planning to raise investments in future.

Partnership: A business organization in which two or more individuals manage and operate the business. Both owners are equally and personally liable for the debts from the business. Partnerships are easy to form. There is no minimum capital requirement. Only two people are needed to incorporate the partnership.

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How GST Works in India

 GST is a type of value added tax and a proposed comprehensive indirect tax levy on manufacture, sale and consumption of goods as well as services at the national level. It will replace all indirect taxes levied on goods and services by the Indian central and state governments. Further, the Goods and Service Tax (GST) is considered to be one of the biggest reforms in India’s indirect tax structure.

THE NEED FOR GST

Suppose Mr. A sells goods to Mr. B and charges sales tax; then Mr. B re-sells those goods to Mr. C after charging sales tax. While Mr. B was computing his sales tax liability, he also included the sales tax paid on previous purchase, which is how it becomes a tax on tax.

This was the case with the sales tax few years ago. At that time, VAT was introduced whereby every next stage person gets credit of the tax paid at earlier stage. This means that when Mr. B pays tax of Rs. 11, he deducts Rs. 10 paid earlier.

Similar concept came in Excise Duty and Service Tax also, which is called Cenvat credit scheme. To a huge extent, the problem of cascading effect of taxes is resolved by these measures.However, there are still problems with the system that have not been solved till date.

GST will solve this problem. Let us see how.

• Sale in one state, resale in the same state

In the example illustrated below, goods are moving from Mumbai to Pune. Since it is a sale within a state, CGST and SGST will be levied. The collection goes to the Central Government and the State Government as pointed out in the diagram. Then the goods are resold from Pune to Nagpur. This is again a sale within a state, so CGST and SGST will be levied. Sale price is increased so tax liability will also increase. In the case of resale, the credit of input CGST and input SGST (Rs. 8) is claimed as shown; and the remaining taxes go to the respective governments.

 
•  Sale in one state, resale in another state

In this case, goods are moving from Indore to Bhopal. Since it is a sale within a state, CGST and SGST will be levied. The collection goes to the Central Government and the State Government as pointed out in the diagram. Later the goods are resold from Bhopal to Lucknow (outside the state). Therefore, IGST will be levied. Whole IGST goes to the central government.

• Sale outside the state, resale in that state

In this case, goods are moving from Delhi to Jaipur. Since it is an interstate sale, IGST will be levied. The collection goes to the Central Government. Later the goods are resold from Jaipur to Jodhpur (within the state). Therefore, CGST and SGST will be levied.

Online Services May Face Google Tax

The digital space has grown rapidly in the past few years and is expected to grow substantially in next few years too. The biggest beneficiaries of this rapid growth in the digital space are companies earning through digital ads like Google,Facebook,Twitter,LinkedIn etc.
Tax adviser in India

Moreover, these companies are located outside India, and hence they are not even subject to any taxes in India. These new business models have created new tax challenges by challenging the current manner of levy of tax which are based on the presence based on permanent establishment rules..
The ‘Google Tax’ or ‘Facebook Tax’ which was first announced in the FY17 budget statement by Finance Minister Arun Jaitley will be levied from June 1. Here’s all you need to know about it — what Google Tax is, who will pay it, and its implications —

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As the name suggests, it’s got something to do with e-commerce companies.

The Google Tax was announced to introduce a tax on the income as accrue to a foreign e-commerce company outside of India. Google Tax or ‘equalisation levy’ as it’s called in India, is expected to impact the bottomlines of giants like Google, Facebook, and others.

Why has the tax been introduced?

The tax has been aimed at technology companies that make money via online advertisements. Their revenue is mostly routed to a tax haven country. This tax will help bring the said companies under the tax radar in India. With this new tax, India has also joined the list of other Organisation for Economic Cooperation and Development (OECD) and European countries where a similar tax is already in place.

The government has earned Rs.100 crore in revenue on account of the equalisation levy so far. Companies like Facebook, Yahoo, Twitter and Google earn significant revenues from India from local advertisers. A committee set up by the Central Board of Direct Taxes to examine indirect taxation in India of e-commerce had recommended an equalisation levy of 6-8 per cent on 13 broad services based on the OECD’s Base Erosion and Profit Shifting guidelines.

VAT Registration in India

Value Added Tax or VAT is a mandatory requirement for all kinds of business. Proprietorships, partnerships, private limited companies, manufacturing firms and even traders of any kind of products need VAT registration. VAT is similar to Central Service Tax (CST) and Taxpayer Identification Number (TIN). They use the same 11 digit number.

What is VAT?
VAT is an indirect tax levied on goods and services when they are sold to the ultimate customer. VAT is paid by the producers to the government. The producers then collect the tax amount from the consumer, by adding it to the price.
A registered business may also apply for the Input Tax Credit (ITC) and apply it on future sales. This will relieve the company of paying VAT themselves. With ITC registration, the VAT amount is added to the retail invoice and the customer makes the payment.

When is VAT Registration Compulsory?
Businesses with an annual turnover of more than Rs.5 lakhs (in some states it is Rs.10 lakhs), must acquire a registered VAT id. The VAT rates vary from state to state, business categories and the type of goods delivered. The amount of VAT charged is controlled by the state governments. This is why it varies from place to place.
The tax is based on value addition to manufactured goods. VAT id owners having an annual turnover of Rs. 50 lakhs are entitle to the Composition Scheme. Under this scheme the business must pay only a small percentage of tax on its gross turnover. However, it requires the said business to compromise its ITC agreement and forgo its benefit.

Acquiring a VAT id
To obtain a VAT id you need to go through the process of VAT id registration. The procedure involves 6 basic steps.

Step – 1 Locate Central Tax Office
Identify the Central Tax Office within the city your business is based. The tax office should house the VAT registration department as well.

Step – 2 Obtain Registration Form
Request for a VAT id registration form from the VAT office.

Step – 3 Attach Valid Documents
Fill out the application form with the correct details and attach the following documents to it:
– Central Sales Tax registration certificate (Form A)
– Professional Tax registration certificate
– Proof of address and ID of the proprietor, partner or director
– Four passport size photographs of the proprietor, partner or director
– Bank account number and PAN card number of the proprietor, partner or director
– Documents stating the details of your business activities
– In case of a partnership, a copy of the Partnership deed
– Incase of a private limited company, a copy of the memorandum of association and articles of association
– A copy of the rental agreement of the business

Step – 4 Verification
At this step, the local VAT authorities will inspect your business premises at a time scheduled by them.

Step – 5 Collect Registration Certificate
The last step after verification and fee payment requires you to collect the Taxpayer Identification Number (TIN) provided immediately. The VAT registration certificate will be issued either the next day or within a week via post.

Why is VAT Registration Important?
VAT is a primary tax that adds to the nation’s revenue and economy. As a result it is a mandatory tax for all business establishments. The registration process is very easy. The fees are fixed and the verification process is simple.

Source : http://www.ajsh.in/blog