The Prime Minister's Office (PMO) has reportedly asked the Finance Ministry to quickly review the tax proposal on FPIs and come out with a solution that reduces the impact of new taxation on the these institutional investors. A proposal to grandfather all income generated by FPIs till the presentation of the Union Budget on July 5 is being considered that will reduce the impact of the new taxation by almost 33%. The ministry may announce the changes this week after the monetary policy review by RBI on August 7.
Tax authorities are planning to move ahead and complete the income tax assessment of V G Siddhartha, the Cafe Coffee Day founder who committed suicide, on the basis of his sworn statement in which he had allegedly admitted to “unaccounted income” of over Rs 658 crore. While dismissing any suggestions of putting pressure on Siddhartha, tax officers said the tax liability will devolve on companies and heirs of the stock broker who set up India’s most visible coffee chain.
Gross GST collections stood at Rs 1.02 lakh crore in July, marginally up from the previous month, official data showed on Thursday. The July 2019 mop-up was, however, 5.8% higher than the Rs 96,483 crore collected in the same month last year. Central GST collections stood at Rs 17,912 crore, State GST Rs 25,008 crore, and Integrated GST Rs 50,612 crore (including Rs 24,246 crore collected on imports) during July. The number of GSTR 3B Returns (summary of self-assessed return) filed for the month of June up to end-July totalled 75.79 lakh.
The government has failed to put in place a simplified tax compliance regime even after two years of the GSTroll-out, according to Comptroller and Auditor General of India (CAG). “The complexity of return mechanism and the technical glitches resulted in roll back of invoice-matching, rendering the system prone to ITC frauds. Thus, on the whole, the envisaged GST tax compliance system is non-functional," the CAG said a report submitted in Parliament. The CAG said that one significant area where the full potential of GST roll out has not been achieved is the roll out of the simplified tax compliance regime.
The Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 was introduced in the Budget 2019 with an aim to resolve pending litigation under Central Excise, Service Tax and specified Cesses including Education Cess, Krishi Kalyan Cess and Swachh Bharat Cess etc. The scheme waives of up to 70% of the tax dues and 100% of interest and penalty. This scheme is different from past various schemes such as Voluntary Compliance Encouragement Scheme (VCES) since earlier only interest and penalty was waived, LDS is, however, offering waiver of the tax itself along with interest, penalty and prosecution.
The government is set to review the taxation of employee stock ownership plans (ESOPs) to address issues that curb their effectiveness as a compensation tool. A key issue is whether stock options should be taxed only when an employee sells them and not again at the time of vesting. There are also issues with the valuation of the benefit in the case of unlisted companies. Stock options and other such instruments are a popular compensation tool for the industry, particularly startups. Companies also use them to retain talent.
Chandigarh’s Excise and Taxation Department’s three-member team seized all records in connection with the exorbitant GST rates charged by the JW Marriott hotel in the city. This came after actor Rahul Bose expressed his displeasure over being overcharged for two bananas in a tweet. Excise officials said it was a case of “illegal and exorbitant charge of GST”. Fresh fruits are tax-free items, while 'fruit platter' is a taxable item. The actor was served fresh fruits and tax has been charged on it.
The Hindu Undivided Family (HUF) has long been a preferred entity for its provision of various tax-saving tools for assesses under income tax (I-T). It has however lost popularity after the courts ruled that daughters are entitled to inheritance. Wealthy families and middle-class ones don’t prefer to form HUFs now as the courts have ruled that daughters continue to be an equal partner of their father’s HUF even after marriage. They fear that when a daughter continues to be a member, it can lead to legal complications such as the rights of her children in her father’s HUF.
The CBDT on Friday said that it has extended the deadline by another two months till September to complete the final assessment of about 87,000 entities across the country who made suspicious deposits post-demonetisation. The CBDT said the extension of time is being granted after considering "various difficulties being faced by assessing officers related to completion of assessments in Operation Clean Money (OCM) cases" by July end. CBDT had asked the assessing officers to use the 'best judgement assessment' procedure as stipulated under Section 144 of the I-T Act to finalise these 87,000 cases.
The Hon’ble Gujarat High Court in the matter of M/s. Saraf Natural Stone vs Union of India held that the Department is liable to pay simple interest on the delayed payment of IGST refund paid on export, at the rate of 9% per annum. The said interest is payable from the date of filing of GSTR-3B till date of actual receipt of refund. Section 54 read with Rule 91 provides that the provisional refund of 90% is to be granted within sixty days from the date of receipt of application complete in all respects.
The government said select BPO services will qualify as exports and therefore won’t be subject to GST. The AAAR in Maharashtra held that back-office support services didn’t qualify as “export of service” and were in the nature of arranging or facilitating supply of goods or services between overseas companies and customers. It said these fell in the category of intermediary services and were liable to 18% GST. The CBIC circular clarified that unless there is a clear facilitation of services, BPO services will not be considered intermediary as long as the provision of service is on its own account.
Flat owners will have to pay GST at 18% if their monthly contribution to resident welfare association (RWA) exceeds Rs 7,500, the Finance Ministry said. RWAs are required to collect GST on monthly subscription/contribution charged from its members if such payment is more than Rs 7,500 per flat per month and the annual turnover of RWA by way of supply of services and goods exceeds Rs 20 lakhs. Where a person owns two or more flats in the housing society or residential complex, the ceiling of Rs 7500 per month per member shall be applied separately for each residential apartment.