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Connection Volume VI, Issue 7
October 2017
V O L U M E
LLB & CO.
Oct 20 - Form GSTR - 3B for September
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Oct 31 GSTR - 2 for July
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Based on the decisions taken in the 9th Meeting of the GST Council held on 16 January, 2017 and 21st Meeting of the GST Council held on 9 September, 2017, the following criteria should be followed for the division of taxpayer base between the Center and the States to ensure single interface:
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Oct 31 - EAudit Report and Return Filing Oct 31 - TDS Returns for September Quarter
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INSIDE THIS ISSUE: MSGT Rules
Direct Tax Update
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IEPF Author- 5 ity Sovereign Gold Bond Scheme
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Guidelines for division of GST taxpayer between Central &
filing Tax
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Of the total number of taxpayers below Rs. 1.5 crore turnover, all administrative control over 90% of the taxpayers shall vest with the State tax administration and 10% with the Central tax administration; In respect of the total number of taxpayers above Rs. 1.5 crore turnover, all administrative control shall be divided equally in the ratio of 50% each for the Central and the State tax administration; The division of taxpayers in each State shall be done by computer at the State level based on stratified random sampling and could also take into account the geographical location and type of the taxpayers, as may be mutually agreed;
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i. For taxpayers registered only under VAT, the total annual State turnover under VAT (including interState sales, exports and exempt goods) shall be taken as the basis for division;
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ii. For taxpayers registered under both VAT and Central Excise, the annual State turnover under VAT shall be taken as the basis for division as State-level Central Excise turnover is already included in it;
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iii. For taxpayers registered only under Central Excise (and not under VAT), the total annual turnover declared in Central Excise returns shall be taken as the basis for division;
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iv. For taxpayers registered only under Service Tax in a State on a stand-alone basis, the annual turnover of the Services declared in the Service Tax returns shall be taken as the basis for division;
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v. For taxpayers registered only under Service Tax having centralized registration, the annual all-India turnover of the Services declared in the Service Tax returns shall be taken as the basis for division.
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2. Further, the broad guidelines for the purposes of computation of “Turnover” as approved by the GST Implementation Committee in its meeting held on 31 August and 1 September 2017 and subsequently by the GST Council in its 21St Meeting held on 9 September 2017 are as follows:
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vi. For taxpayers registered under both VAT and Service Tax, the total nonoverlapping turnover (total of VAT and Service Tax, excluding any turnover which is included in both)
shall be calculated and used as the basis for division. The Service Tax turnover shall be on the basis of clauses (iv) and (v) as the case may be. 3. The State Level Committees comprising Chief Commissioner/Commissioner Commercial Taxes of respective States and jurisdictional Central Tax Chief Commissioners/ Commissioners are already in place for effective coordination between the Center and the States. The said Committees may now take necessary steps for division of taxpayers in each State keeping in view the principles stated above. Supplementary decisions, if any, may be taken by the said Committees to implement the decision of the GST Council, keeping in view the broad principles stated herein above. 4. Suitable notifications regarding cross-empowerment of State and Central Tax officers under CGST/IGST and SGST Acts respectively are being issued separately.
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Maharashtra Goods and Service Tax Rules, 2017 The Maharashtra Goods and Service Tax Act, 2017 came into effect from 1st July, 2017. As per the provisions of this Act, the Goods and Service Tax Identification Number (hereinafter, referred to as GSTIN) has been allotted to the persons who has applied for registration under the Maharashtra Goods and Services Tax Act(hereinafter, referred to as MGST Act). The department has already issued instructions related to process of registration and issues related to GST migration and new registration. This circular is being issued to appraise the Trade with the particulars to be displayed on the Board by a registered person and penalty leviable under the Act for noncompliance of those provisions. 2. Legal Provision The person registered under the GST Act is expected to follow certain rules with respect to display of GSTIN as prescribed under the law. Rule 18 of the Maharashtra Goods and Service Tax Rules, 2017 reads as: ..”Rule 18- Display of registration certificate and Goods and Service Tax Identification Number on the name board” –
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Every registered person shall display his certificate of registration in a prominent location at his principal place of business and that every additional place or places of business. Every registered person
shall display his Goods and Services Tax Identification Number on the name board exhibited at the entry of his principal place of business and at every additional place or places of business. 3. Expected Compliance The above rule clearly says that every registered person shall display his certificate of registration at his principal place of business and at every additional place or places of business. It is also required to display his GSTIN on the name board which should be exhibited at the entry of his principal place of business and at every additional place or places of business. The GSTIN should be prominently displayed in bold letters so as to be easily visible to visitors especially to the customers/vendees. 4. Provisions for Composition Taxable Persons a) Rule 5(1)(f) of the MGST Rules says that every registered person exercising the option to pay tax s.10 of the MGST Act i.e. every registered person opting under the composition scheme shall mention the words “Composition taxable person not eligible to collect tax on supplies” at the top of the bill of supply issued by him. b) Also, as per Rule 5(1) (g) of the Maharashtra Goods and Service Tax Rules, 2017, he shall mention the words “Composition Taxable Person” on every notice
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or sign board display at a prominent location at his principal place of business and at every additional place or places of business. Needless to say, the provision laid down in rule 18 referred to above shall also apply to a ‘Composition Taxable Person’ e. he also shall be required to display his GSTIN at the entry of his principal place of business and at every additional place or places of business as well as display his certificate of registration at the prominent location at his principal place of business and at every additional place or places of business. 5. Penalty provisions for issuance of incorrect Tax Invoice and contravention of Rule 18 and 5(1)(f) Attention of the trade is also invited to,1) Section 122(1)(i) of the Maharashtra Goods and Service Tax Act, 2017, which says that any taxable person who issues an incorrect or false invoice with regard to any supply made by him shall be liable to pay a penalty of Rs. 10,000/- and therefore, non- compliance of Rule 5 (1) (f) shall invite the aforesaid penalty. 2) Section 125 of the Maharashtra Goods and Service Tax Act, 2017, prescribes a general penalty for contravention of any of the provisions of the Act or the Rules made there under. Therefore, a registered taxable person who does not follow the provisions contained in Rule 18 and Rules 5(1)(g) will be li-
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able for penalty which may extent to Rs. 25,000/-. 6. Particulars on a Tax invoice Rule 46(b) of the MGST Rules 2017, refers to the particulars to be contained in a Tax invoice. Rule 46 (b) reads as: – …(b) a consecutive serial number not exceeding sixteen characters, in one or multiple series, containing alphabets or numerals or special characters- hyphen or dash and slash symbolized as ” ” and “/ ” r e s p e c t i v e l y , and any combination thereof,
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unique for a financial year. 7. Penalty for non-issuance of proper invoice The above Rule clearly says that the invoice has to be have a consecutive serial number. However, many a times, it is seen that the invoices are not numbered in a serial manner but are randomly numbered or not numbered at all. It is to be noted that the same is against the provision of the Act and not following the provisions will attract penalty u/s 122(1)(i) of the MGST Act, 2017. It is also to be noted that any deviation from
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the provisions will be taken seriously. 8. This circular cannot be made use for legal interpretation of provisions of law, as it is clarificatory
Procedure for filing Statement of income and Foreign Tax Credit An assessee, being a resident shall be allowed a credit for the amount of any foreign tax paid by him in a country or specified territory outside India, by way of deduction or otherwise, in the year in which the income corresponding to such tax has been offered to tax or assessed to tax in India, in the manner and to the extent as specified in rule 128 of the Income tax (18th amendment) rules, 2016. As per sub-rule 9 of rule 128the statement in Form No. 67 referred to in clause (i) of sub-rule (8) and the certificate or the statement referred to in clause (ii) of sub-rule (8) shall be furnished on or before the due date specified for furnishing the return of income under sub-section (1) of section 139, in the manner specified for furnishing such return of income. In exercise of the powers delegated by Central Board of Direct Taxes (Board’) under rule 12(4) of the Income tax Rules 1962, the Principal Director General of Income-tax (Systems) hereby lays
down the following procedures: 1. Online filing of Form 67: All assessee’s who are required to file return of income electronically under section 139(1) as per rule 12(3) of the income tax rules 1962, are required to prepare and submit form 67online along with the return of income if credit for the amount of any foreign tax paid by the assessee in a country or specified territory outside India, by way of deduction or otherwise, in the year in which the income corresponding to such tax has been offered to tax or assessed to tax in India. 2. Preparation and Submission of Form 67: Form 67sha11 be available to all the assessee’s login. The assesseeis required to login into the e-filing portal using their valid credentials. A link for filing the Form has been provided under “eFile -› Prepare and Submit Online Forms (Other than ITR)”. Select form 67 and assessment year from the drop down. Instructions
to fill the form are enclosed along with the form. The completed Form 67can be submitted by clicking on “Submit” button. Digital Signature Certificate or Electronic Verification Code is mandatory to submit Form 67. 3. Submission of Form 67 shall precede filing of return of income.
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TDS on interest under Capital Gains Accounts Scheme of deceased depositor It has been brought to the notice of CBDT that in cases of deceased depositor who has made deposits under the Capital Gains Accounts Scheme, 1988; the banks are deducting TDS on the interest earned on such deposits in the hand of the deceased depositor and issuing TDS certificates in the name of the deceased depositor, which is not in accordance with the law. Ideally in such type of situations, the TDS certificate on the interest income for and up to the period of death of the depositor is required to be issued on the PAN of the deceased depositor and for the, period after death of the depositor is required to be issued on the PAN of the legal heir. 2. Under sub-rule (5) of Rule
31A of the Income-tax Rules, 1962, the Director General of Income-tax (Systems) is authorized to specify the procedures, formats and standards for the purposes of furnishing and verification of the statements or claim for refund in Form 26B and Shall be responsible for the day-to-day administration in relation to furnishing and verification of the statements or claim for refund in Form 26B in the manner so specified. 3. In -exercise of the powers delegated by the Central Board of Direct Taxes (Board) under sub-rule (5) of Rule 31A of the Income-tax Rules, 1962, the Principal Director General of Income-tax (Systems) hereby specifies that in case of deposits under the Capital Gains Accounts
Scheme, 1988 where the depositor has deceased: (i) TDS oh the interest income accrued for and upto the period of death of the depositor is required to be deducted and reported against PAN of the depositor, and (ii) TDS on the interest income accrued for the period after death of the depositor is required to be deducted and reported against PAN of the legal heir, unless a declaration is filed under sub-rule(2) of Rule 37BA of the Income-tax Rules, 1962 to that effect.
IEPF Authority (Accounting, Audit, Transfer and Refund) Second Amendment Rules, 2017 In exercise of the powers conferred by sub-sections (1), (2), (3), (4), (8), (9), (10) and (11) of section 125, subsection (6) of section 124 read with section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, namely:-
(a) for the second proviso, the following proviso shall be substituted, namely:-
1. (1) These rules may be called the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer
“’Provided further that in cases where the period of seven years provided under sub-section (5) of section
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and Refund) Second Amendment Rules, 2017. (2) They shall come into force from the 13th October, 2017. 2. In the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, (hereinafter referred to as the principle rules), in rule 6 – (I) in sub-rule (1),-
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124 has been completed or being completed during the period from 7th September, 2016 to 31 st October, 2017, the due date of transfer of such shares shall be deemed to be 31st October, 2017.”; (b) after the second proviso, the following proviso shall be inserted, namely:“Provided further that transfer of shares by the companies to the Fund shall be deemed to be transmission of shares and the procedure to be followed for transmission of shares shall be followed by the companies while transferring the shares to the fund.”
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(II) in sub-rule(3), for clause (d), the following clause shall be substituted, namely;‘(d) For the purposes of effecting the transfer shares held in physical form(i) the Company Secretary or the person authorised by the Board shall make an application, on behalf of the concerned shareholder, to the company, for issue of a new share certificate; (ii) on receipt of the application under clause (a), a new share certificate for each such shareholder shall be issued and it shall be stated on the face of the certificate that “Issued in lieu of share certificate No….. for the purpose of transfer to IEPF” and the same be recorded in the register maintained for the purpose; (iii) particulars of every share certificate shall be in Form No. SH -I as specified in the Companies (Share Capital and Debentures) Rules, 2014; (iv) after issue of a new share certificate, the company shall inform the depository by way of corporate action to convert the share certificates into DEMAT form and transfer in favour of the Authority. ‘ , (III) after sub-rule (12), the follow-
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ing sub-rules shall be inserted, namely:‘(13) Any amount required to be credited by the companies to the Fund as provided under sub-rules (10), (11) and sub-rule (12) shall be remitted into the specified account of the IEPF Authority maintained in the Punjab National Bank. (14) Authority shall furnish its report to the Central Government as and when noncompliance of the rules by companies came to its knowledge.’ 3. In the principle rules, in rule 7(a) after sub-rule (2), the following sub-rule shall be inserted, namely: “(2A) Every company which has deposited the amount to the Fund shall nominate a Nodal Officer for the purpose of coordination with IEPF Authority and communicate the contact details of the Nodal Officer duly indicating his or her designation, postal address, telephone and mobile number and company authorized e-mail ID to the IEPF Authority, within fifteen days from the date of publication of these rules and the company shall display the name of Nodal Officer and his e-mail ID on its website.”;
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(b) after sub-rule (3), the following proviso shall be inserted, namely:“Provided that in case of non receipt of documents by the Authority after the expiry of ninety days from the date of filing of Form IEPF-5, the Authority may reject Form IEPF5, after giving an opportunity to the claimant to furnish response within a period of thirty days.” (c) after sub-rule (7), the following proviso shall be inserted, namely:“Provided that in case of non receipt of rectified documents by the Authority after the expiry of ninety days from the date of such communication, the Authority may reject Form IEPF-5, after giving an opportunity to the claimant to furnish response within a period of thirty days.”.
Main Features of Sovereign Gold Bond Scheme 2017-18 Series-III In terms of GoI notification F. No. 4(25) – B/(W&M)/2017 and RBI c i r c u l a r IDMD.CDD.No.929/14.04.050/2 017-18 dated October 06, 2017, the Sovereign Gold Bond Scheme will be open for subscription from Monday to Wednesday of every week starting from October 09, 2017 until December 27, 2017. The settlement will be made on
the first business day of the next week for the applications received during a given week. For the subscription period from October 09, 2017 to October 11, 2017 with settlement on October 16, 2017, the nominal value of the bond based on the simple average closing price [published by the India Bullion and Jewelers Association Ltd (IBJA)] for gold of
999 purity of the last three business days of the week preceding the subscription period, i.e. October 0406, 2017 works out to 2956/(Rupees Two thousand Nine Hundred and Fifty Six)- per gram. Government of India, in consulta-
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tion with the Reserve Bank of India, has decided to offer discount of 50 per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode. For such investors, the issue price of Gold Bond will be 2906/- (Rupees Two Thousand Nine Hundred and Six only) per gram of gold. The Bonds will be issued on the succeeding Monday after each subscription period. The Bonds will be sold through banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange. The features of the Bond are given below:
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Product name - Sovereign Gold Bond 201718 – Series-III
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Minimum sizeMinimum permissible investment will be 1 gram of gold.
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Maximum limit - The maximum limit of subscribed shall be 4 KG for individual, 4 Kg for HUF and 20 Kg for trusts and similar entities per fiscal (April-March) notified by the Government from time to time. A selfdeclaration to this effect will be obtained. The annual ceiling will include bonds subscribed under different tranches during initial issuance by Government and those purchase from the Secondary Market.
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Joint holder - In case of joint holding, the investment limit of 4 KG will be applied to the first applicant only.
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Issue price - Price of Bond will be fixed in Indian Rupees on the basis of simple average of closing price of gold of 999 purity published by the India Bullion and Jewellers Association Limited for the last 3 business days of the week preceding the subscription period. The issue price of the Gold Bonds will be ` 50 per gram less for those who subscribe online and pay through digital mode.
Issuance - To be issued by Reserve Bank India on behalf of the Government of India. Eligibility The Bonds will be restricted for sale to resident Indian entities including individuals, HUFs, Trusts, Universities and Charitable Institutions. Denomination The B o n d s w i l l be denominated in multiples of gram(s) of gold with a basic unit of 1 gram. Tenor The tenor of the Bond will be for a period of 8 years with exit option from 5th year to be exercised on the interest payment dates.
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Payment option - Payment for the Bonds will be through cash payment (upto a maximum of ` 20,000) or demand draft or cheque or electronic banking.
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Issuance form
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Gold Bonds will be issued as Government of India Stocks under GS Act, 2006. The investors will be issued a Holding Certificate for the same. The Bonds are eligible for conversion into demat form.
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Redemption price The redemption price will be in Indian Rupees based on simple average of closing price of gold of 999 purity of previous 3 business days published by IBJA.
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Sales channel - Bonds will be sold through banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices as may be notified and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange, either directly or through agents.
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Interest rate - The investors will be compensated at a fixed rate of 2.50 per cent per annum payable semi-annually on the nominal value.
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Collateral - Bonds can be used as collateral for loans. The loan-tovalue (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time.
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KYC Documentation Know-your-customer (KYC) norms will be the same as that for purchase of physical gold. KYC documents such as Voter ID, Aadhaar card/PAN or TAN /
The
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Passport will be required.
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Tax treatment - The interest on Gold Bonds shall be taxable as per the provision of Income Tax Act, 1961 (43 of 1961). The capital gains tax arising on redemption of SGB to an individual has been exempted. The indexation benefits will be provided to long term capital gains arising to any person on transfer of bond
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SLR eligibility The Bonds will be eligible for Statutory Liquidity Ratio purposes.
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Commission Commission for distribution of the bond shall be paid at the rate of 1% of the total subscription received by the receiving offices and receiving offices shall share at least 50% of the commission so received with the agents or sub agents for the business procured through them.
Tradability - Bonds will be tradable on stock exchanges within a fortnight of the issuance on a date as notified by the RBI.
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SEBI: Submission of report of Committee on Corporate Governance SEBI formed a Committee on Corporate Governance in June 2017 under the Chairmanship of Mr. Uday Kotak with a view to enhancing the standards of corporate governance of listed entities in India. The committee consisted of officials from the government, industry, professional bodies, stock exchanges, academicians, lawyers, proxy advisors, etc. The committee was requested to submit its report within four months. The terms of reference of the committee were to make recommendations to SEBI on the following issues:
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Ensuring independence in spirit of Independent Directors and their active participation in functioning of the company; Improving safeguards and disclosures pertaining to Related Party Transactions;
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Issues in accounting and auditing practices by listed companies;
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Improving effectiveness of Board Evaluation practices;
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Addressing issues faced by investors on voting and participation in general meetings;
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Disclosure and transparency related issues, if any;
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Any other matter, as the Committee deems fit pertaining to corporate governance in India.
Comments may be sent by email to Shri Pradeep Ramakrishnan, DGM at
[email protected] and Ms. Nila Khanolkar, AGM at
[email protected] no later than November 4, 2017.
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LLB & Co. 525, The Summit Business Bay, Behind Gurunanak Petrol Pump, Near W.E. Highway Metro and Cinemax, Andheri (East), Mumbai - 400 093 Office No.: 5, Barsana, Salasar Brij Bhoomi, Near Maxus Mall, Bhayandar (West), Thane - 401101 Phone: +91 - 22 - 26831036 +91 - 22 - 49242456 +91 - 22 - 28040048 INNOVATE
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Disclaimer: This newsletter is prepared strictly for private circulation and personal use only. This newsletter is for general guidance on matters of interest only and does not constitute any professional advice from us. One should not act upon the information contained in this newsletter without obtaining specific professional advice. Further no representation or warranty (expressed or implied) is given as to the accuracy or completeness of the information contained in this newsletter.
