Some common transactions which can invite trouble from the I-T department are:
1) Accepting or repaying loan in cash in excess of Rs 20,000. Penalty of an equal amount can be levied. 2) Cash payment in excess of Rs 10,000 for any business expenditure. The entire amount is disallowable. 3) Cash donations in excess of Rs 2,000 to any political party or a registered trust. No deduction u/s 80G would be allowed. 4) Not depositing TDS with the government. Interest, penalty and even disallowance of expenditure. 5) Filing ITR without payment of tax. Interest and penalty may be levied.
Declining tax revenues have prompted officials to examine the eligibility of input tax credit used to set off tax liabilities. The issue of high ITC was flagged at the meeting of the Group of Ministers (GoM) to discuss the reasons for the revenue shortfall. According to sources, availing ITC would not lead to loss of revenue but the possibility of misuse of input credit by generating fake invoices was not ruled out. During the meeting, it was pointed out that 80% of the total GST liability is being settled by ITC and only 20% is deposited as cash.
Coffee Day Enterprises has said it would take required action in the next few days to get a portion of IT firm Mindtree shares, owned by the company and its promoter V G Siddhartha -- released by the Income Tax Department. The I-T department has attached a portion of shares held by Siddhartha and Coffee Day Enterprises Ltd in Mindtree over a potential tax demand. The company clarified that it has discharged all the tax liabilities payable by the company and its subsidiaries along with the revised returns filed.
Café Coffee Day founder VG Siddhartha will offer alternative security to the income tax department which had attached some portion of his holding in Mindtree. This could include shares of other companies, bank guarantees or a bond, sources said. Siddhartha and his associates hold a 21% stake in Mindtree. The I-T department had provisionally attached shares held by Siddhartha and Cafe Coffee Day Enterprises in Mindtree over a potential tax demand. Siddhartha is said to be in advanced talks with L&T Infotech and private equity firms KKR and Baring to sell his stake in the Bengaluru-based company.
The Income-Tax Department has provisionally attached some of the shares held by V.G. Siddhartha and Coffee Day Enterprises Ltd in IT firm Mindtree over a potential tax demand. Siddhartha, who owns around 21% stake in Mindtree, is said to be in advanced discussions with various entities to sell his shares in the IT company. Siddhartha is also the founder of Café Coffee Day. Mindtree in a BSE filing informed that the I-T department has attached 22.2 lakh equity shares of Coffee Day Enterprises Ltd, and 52.7 lakh shares held by Siddhartha u/s 281B of Income Tax Act.
The income tax department has sent notices to people who have done high-value transactions in FY 2017-18 but not yet filed the income tax return for FY 2017-18. These people have been asked to reply or file their ITR within 21 days, as per a recent government release. If the reply received is satisfactory, then the case would be closed else necessary action would be taken if ITR is also not filed. The I-T department has facilitated an online filing of the response to submit the reply or file the ITR. There is no need to visit income tax office.
In a move to ensure uniformity in the interpretation of laws, the government today approved the setting up of the National Bench of the Goods and Services Tax Appellate Tribunal (GSTAT). Union Law Minister Ravi Shankar Prasad said the National Bench will be presided over by a President and shall consist of one Technical Member (Centre) and one Technical Member (State). GST Appellate Tribunal will ensure that there is uniformity in redressal of disputes arising under the GST. The tribunal, which will be the second appellatte authority, will be located in Delhi.
Maruti Suzuki India MD and CEO, Kenichi Ayukawa has called for a lower tax rate on automobiles. Currently, automobiles attract peak GST rate of 28% along with additional cess ranging from 1%-15% depending on length, engine size and type. "Compared to other countries, tax is a bit high (here in India). In order to develop the industry, we have to ask the government to reduce taxes, which we understand is not easy," Ayukawa told PTI. Sale of domestic passenger vehicles (PV) sales dropped in December 2018 for the fifth time in the past six months.
The income tax department has discovered several cases where taxpayers have taken credit for payment of "self-assessment tax" without actually making the payment. Such tax arrears are pegged at around Rs 5,000 crore. The non-payment of dues has resulted in the department not being able to process income tax returns (ITRs) for the last financial year. Tax authorities are now approaching the assessees to pay up the tax dues immediately. Sources in the department said that several of these taxpayers had assured to pay the arrears but have not yet deposited the tax money.
I-T Department's Delhi division has begun scrutiny of real estate transactions where cash payments exceeding Rs 20,000 have been made. I-T Department had visited the office of Sub-registrar to scan all the registries for property purchases made from June 1, 2015, to December 2018 where cash payment above Rs 20,000 was made, a senior I-T Department official said. Section 269SS of the Income Tax Act was amended to prohibit cash payments above Rs 20,000 for purchase of any property including agriculture land. A penalty of an equal amount is imposed on the seller for violation of the law u/s 271D.
Stringent norms related to e-way bill are affecting the Rs 22,000 crore express delivery operators in the country. The sector employs over 16 lakh people directly and indirectly. Vijay Kumar, COO, Express Industry Council of India (EICI) said the processes followed by express operators are complex than normal transporters. EICI has made representations to the government to address the sector’s concerns. EICI represents 30-40 organised express operators including Fedex, DTDC and Blue Dart.
The Supreme Court on Friday agreed to hear Vodafone's plea seeking income tax refund of Rs 4,800 crore. The top court has issued a notice to the taxman and has sought its reply within four weeks. Vodafone had challenged the Delhi High Court's December order which struck down the group's demand for I-T refund. Vodafone had filed a plea before the high court seeking directions to the I-T Department to expeditiously process its refund claim of over Rs 4,800 crore for the assessment years (AYs) 2014-15 to 2017-18.