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GST : TRADERS WITHIN REVENUE THRESHOLD OF 1.5 CR WILL UNDER EXCLUSIVE CONTROL OF THE STATE

GST Council says states will get exclusive control over all dealers up to a revenue of Rs1.5 crore—addressing the issue of dual control over small traders In a big step towards the implementation of the goods and services tax (GST), the centre and the states on Friday reached a consensus on most contentious issues under the new indirect tax regime, raising hope that they would be able to agree on the last remaining issue, the tax rates, by next month. The GST council, at its first meeting, agreed on a revenue threshold of Rs20 lakh below which the traders will be exempted from GST. This limit will be Rs10 lakh for the north-eastern and hill states. The council also managed to reach middle ground on sharing of administrative powers between the centre and the states. It decided that states will get exclusive control over all dealers up to a revenue threshold of Rs1.5 crore—thus addressing the issue of dual control over small traders. Given the lack of expertise among states to l

Perks Gifts to Employees May Come Under GST

Cos could however claim input tax credit on intra-company transactions. India Inc may have to deal with another avatar of GST — the tax may be applicable on senior executives’ big-ticket perquisites over and above those mentioned in the employment contract and on gift items of over Rs 50,000. However, companies should be able to claim input tax credit on these intracompany ‘transactions’. Tax professionals ET spoke to said the rate may be in the 18% band, depending on the nature of the perk/gift. A finance ministry official, who did not wish to be identified, said an employer’s gifts to employees will be treated as supplies without any consideration and attract GST. However, companies are likely to be able to claim input tax credit on it. Keeping tabs on company perks and gifts will not be an additional enforcement cost to the government, tax experts said. All purchases by companies will be available on GSTN. Therefore, during audits these issues can be easily identified. G

GST: Directors face higher risks for tax default

The goods and services tax (GST), India’s new indirect tax regime, makes directors of private limited companies liable for recovery of unpaid taxes, interest or penalties pertaining to supply of goods or services. To complicate matters, the GST Acts do not provide a definition for the term ‘director’ or make any distinction between executive or non-executive directors. Further, the existing directors and officer’s liability insurance — that helps a company hedge against professional and functional risks emanating from managing and running a business – do not cover the additional risks under GST. Section 89 of the Central GST Act refers to recovery of tax, interest and penalties in case of private companies. “In such cases all directors will be held liable unless they prove it is not due to their neglect or breach of duty," says Shriram Subramanian, founder and managing director, InGovern Research Services. Legal experts say VAT Acts of some states put the onus on directors for su

Arun Jaitley: System geared up for GST from July 1

The government has notified the implementation of the central goods and services tax (C-GST) from July 1, making it clear that the roll out of the new indirect tax regime is on course. “I don’t see much of a problem. Small issues will always arise whenever you make a change of any kind. But I’m sure the system is fully geared up and the system will eventually smoothen itself out,” finance minister Arun Jaitley said after a Cabinet meeting on Wednesday. Asked about West Bengal chief minister Mamata Banerjee’s statement against the implementation of GST from July 1, Jaitley said the date had been decided by consensus by the GST Council, which meant by the Centre as well as all the states. “It [the date] has not been decided by the Centre. And more importantly, there is a constitutional mandate and that mandate is that on 16th of September, you will lose the right to collect existing taxes. So the alternate system has to come into pl ..“We have spent so much time in building c

MUST LISTEN: HOW GST WILL WORK ??? - BY SATHYA KUMAR M

TDS on Rent – Section 194-IB w.e.f 1st June 2017

Bare Act wordings [Payment of rent by certain individuals or Hindu undivided family. 194-IB.  (1) Any person, being an individual or a Hindu undivided family (other than those referred to in the second proviso to  section 194-I ), responsible for paying to a resident any income by way of rent exceeding fifty thousand rupees for a month or part of a month during the previous year, shall deduct an amount equal to five per cent of such income as income-tax thereon. (2) The income-tax referred to in sub-section (1) shall be deducted on such income at the time of credit of rent, for the last month of the previous year or the last month of tenancy, if the property is vacated during the year, as the case may be, to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier. (3) The provisions of section 203A shall not apply to a person required to deduct tax in accordance with the provisions o

Extension of Due Date of furnishing SFT from 31st May 2017 to 30th June 2017

CBDT has vide Press release dated 31st May, 2017 extended the due date for furnishing Statement of Financial Transaction (SFT). Section 285BA of the Income-tax Act, 1961 requires furnishing of a statement of financial transaction (SFT) for transactions prescribed under Rule 114E of the Income-tax Rules, 1962. The due date for filing such SFT in Form 61A in respect of specified financial transactions registered or recorded during Financial Year 2016-17 is 31st May 2017. Representations were received in the Central Board of Direct Taxes (CBDT) requesting for extension of the date of filing of the said SFT on account of the teething problems and the volume of data to be compiled. In view of these representations and in order to remove inconvenience and to facilitate ease of compliance, the CBDT, in exercise of powers conferred under section 119 of the Act, have extended the due date of furnishing of the SFT under Rule 114E (5) of the IT Rules, read with sub-section (1) of sect

Clarification regarding NIL SFT filling

Form 61A clarification about Audited Case u/s 44AB : If there is reportable transaction - ITDREIN registration is mandatory and Filling of Form 61A is mandatory, also SFT preliminary response is compulsory. If nil transaction - ITDREIN registration not mandatory, Form 61A not mandatory and SFT preliminary response in optional (not mandatory) But it is advisable to file SFT preliminary response in case of NIL transactions. One more thing, for filling NIL SFT preliminary response, generation of ITDREIN is not required at all, you can submit all the responses against all 14 SFT without selecting ITDREIN number column. If assessee is audited u/s 44AD then also provisions of audited case u/s 44AB is applicable because 44AD audit is also governed by Section 44AB only. You can also check this Press Release on the same issued by Income Tax Department :  26-05-2017-Press Release- Clarification-SFT

Filing of Statement of Financial Transaction SFT u/s 285BA - Form 61A

Statement of Financial Transactions (SFTs) . To keep a watch on high value transactions undertaken by the taxpayer, the Income-tax Law has framed the concept of ‘Annual Information Return (AIR)’ which now substituted by statement of financial transactions (SFTs). With the help of the statement the tax authorities will collect information on certain prescribed high value transactions undertaken by a person during the year. Statement of financial transaction or reportable account is to be filed by certain prescribed entities (discussed later), and in such statement, they are required to furnish the details of specified financial transactions or any reportable account registered/recorded/maintained (discussed later) by them during the year. Thus, based on the information provided by certain prescribed entities in statement of financial transaction or reportable account, the Income-tax Department keeps a track of specified financial transactions carried on by a person during the year