Thursday, June 29, 2017

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 consensus and fortunately, we were able to build consensus. Therefore that spirit of consensus should be maintained by all. Even the function we are organising symbolises that larger national consensus,” he said.

When asked about Trinamool and some other Opposition parties planning to boycott the midnight launch function. States will now notify their respective GST Acts and other provisions including the roll out date.

The Centre has also notified some For purchases from unregistered vendors, a limit of Rs 5,000 a day has been prescribed for payment of tax under reverse charge, which provides relief from cumbersome compliances in case of small and petty expenses.

Further, for purchases exceeding this value, instead of self-invoicing for every transaction, a facility of doing this on a monthly basis has been provided for. A simple summary format for the first two months has also been prescribed (GSTR- 3B) in line with the announcement made in the last GST Council meeting.

It has notified the number of Harmonised System of Nomenclature digits required to be printed on a tax invoice. A registered person with an annual turnover of up to Rs 1.5 crore in the preceding financial year will not be required to mention the digits.

Those with turnover between Rs 1.5 crore and Rs 2 crore will mention two digits and those above Rs 5 crore will mention four digits.Centre has also notified the rate of interest of 18% for delayed payments, 24% for excess claim of input tax credit or undue or excess reduction in output liability, 6% in case of withheld refund and 9% for delayed refund after an order of adjudicating authority of appellate tribunal.

The government would also unveil a new simplified procedure on Thursday for exporters to ensure a smooth transition to GST.“The new procedures will be in line with the GST,” a government official told ET. Customs has already started testing new forms on its systems. Central Board of Excise and Customs has also issued a set of guidance for importers and exporters to help them transition  to GST changes in GST to give relief to small vendors.

The Economic Times New Delhi, 29th June 2017



Wednesday, June 14, 2017

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 of this section.
(4) In a case where the tax is required to be deducted as per the provisions of section 206AA, such deduction shall not exceed the amount of rent payable for the last month of the previous year or the last month of the tenancy, as the case may be.
Explanation.—For the purposes of this section, "rent" means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of any land or building or both.]

Persons required to deduct TDS under Section 194IB

  1. Individual and HUF who are not required to get his accounts audited under section 44AB.
  2. Individual and HUF who are required to get his accounts audited under Points (c), (d) or (e) of section 44AB.
In other words  only individuals and huf who are required to get his accounts audited due to turnover or gross receipts higher than specified limits are not covered under this section, all other individuals are covered in this section.
Individuals and HUF not covered under this section (as mentioned above), company, partnership firm, AOP and  BOI are required to deducted TDS from rent under section 194I.

Payment Covered

Payment of rent to a resident for land or building exceeding Rs. 50,000 per month is liable for tax deduction. Payment of rent paid or payable after 1st June 2017 are covered  only.

TDS Rate

TDS is deductible at the rate of 5% of the rent paid or payable. If the person receiving rent doesn’t furnish his PAN then TDS is deductible at the rate of 20% subject to maximum limit of amount of rent payable for the month of march or last month of tenancy as the case may be.

Time of Deduction

TDS is to be deducted only one time in a year and not in every month. TDS is to be deducted at earlier from the following
  1. Time of credit of rent to the account of payee for the month of march or the last month of tenancy, if property is vacated during the year as the case may be.
  2. Time of payment of rent to payee for the month of march or the last month of tenancy , if property is vacated during the year as the case may be.

TAN number Not required

TAN number is not required by such person to deduct and deposit TDS.

Flow Chart on Section 194-IB



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Saturday, June 3, 2017

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 section 285BA of the Income Tax Act, 1961 in respect of Specified Financial Transactions registered or recorded during Financial Year 2016-17, from 31st May 2017 to 30th June 2017. 

Please find attached Press Release for your information.

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 ove...