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Annual Return on Foreign Liabilities and Assets (FLA return) FAQs under FEMA 1999

FLA: The annual return on Foreign Liabilities and Assets (FLA) is required to be submitted directly by all the Indian companies which have received FDI (foreign direct investment) and/or made FDI abroad (i.e. overseas investment) in the previous year(s) including the current year i.e. who hold foreign Assets or Liabilities in their Balance Sheets.

If a company did not receive FDI or made overseas investment in any of the previous year(s) including the current year, is it required to submit the FLA Return?

Ans.: If the Indian company does not have any outstanding investment in respect of inward and outward FDI as on end-March of reporting year, the company need not submit the FLA Return.

If a company has only share application money, then is that company supposed to submit the FLA Return?

Ans.: If a company has received only share application money and does not have any foreign direct investment or overseas direct investment outstanding as on end-March of the reporting year, then that company is not required to fill up FLA return.

If the company has not received any inward FDI / made overseas investment in the latest year, does it need to submit the FLA Return?

Ans.: If the company has not ‘received any fresh FDI and/or ODI (overseas direct investment)’ in the latest year but the company has outstanding FDI and/or ODI, then that company is required to submit the FLA Return every year by July 15.

Whether FLA Return is required to be submitted by Registered Partnership Firms (Registered under Partnership Registration Act) or branches or trustees, who have made Overseas Direct Investment or it is mandatory only for Companies (Registered under Companies Act, 1956 / Companies Act 2013)?

Ans.: If  Partnership firms, Branches or Trustees have any outward FDI outstanding as on end-March of the reporting year, then they are required to send a request mail to RBI to get a dummy CIN number which will enable them to file the Excel based FLA Return. If any entity has already got the dummy CIN number from the previous survey, they should use the same CIN number in the current survey also.

It is also informed that these dummy CIN numbers are provided by RBI for filling the excel based FLA return only and not for any other purpose.

 Is it required to submit Annual Performance Report for ODI, if FLA Return being submitted?

Ans.: FLA Return and Annual Performance Report (APR) for ODI are two different returns and monitored by two different departments of RBI. So, one is required to submit both the returns if these are applicable to the company.

 If non-resident shareholders of a company have transferred their shares to the residents during the reporting period, then whether that company is required to submit the FLA Return?

Ans.: If all non-resident shareholders of a company have transferred their shares to the residents during the reporting period and the company does not have any outstanding investment in respect of inward and outward FDI as on end-March of reporting year, then the company need not submit the FLA Return.

If company issued the shares to non-resident on Non-Repatriable basis, whether that company is required to submit the FLA Return?

Ans.: Shares issued by reporting company to non-resident on Non-Repatriable basis should not be considered as foreign investment; therefore, companies which have issued the shares to non-resident only on Non-Repatriable basis, are not required to submit the FLA Return.

 What will be the consequences in case one does not file the said FLA Return by 15th July, as accounts are not audited as yet, and company does not wish to file it with unaudited figures. Will there be any imposition of penalty or prosecution initiated against the company by RBI or FEMA? Since nowhere it is mentioned either in the Circular No. 145 dated June 18, 2014 or in the Annex to AP (DIR Series) Circular No. 145 about the penalty or the prosecution, so, can it be assumed that company can file the same once the accounts are audited without any risk of penalty or other proceedings from the concerned authority in future?

Ans.: Annual return on Foreign Liabilities and Assets has been notified under FEMA 1999 and it is required to be submitted by all the India resident companies which have received FDI and/ or made overseas investment in any of the previous year(s), including current year by July 15 every year. Non-filing of the return before due date will be treated as a violation of FEMA and penalty clause may be invoked for violation of FEMA.

What information should be reported in FLA return, if balance sheet of the company is not audited before the due date of submission?

Ans.: If the company’s accounts are not audited before the due date of submission, i.e. July 15, then the FLA Return should be submitted based on unaudited (provisional) account. Once the accounts get audited and there are revisions from the provisional information submitted by the company, they are supposed to submit the revised FLA return based on audited accounts by end – September.

 In case where Account Closing Period of the company is different from reference period (end-March), can company report the information as per Account Closing Period?

Ans.: No. Information should be reported for all the reference period, i.e. Previous March and Latest March. If Account Closing Period of the company is different from the reference period, then information should be given for the reference period on internal assessment.

 

 

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TAX AUDIT

TAX AUDIT

 

  • What is tax audit?

​​The dictionary meaning of the term “audit” is check, review, inspection, etc. There are various types of audits prescribed under different laws like company law requires a company audit, cost accounting law requires a cost audit, etc. The Income-tax Law requires the taxpayer to get the audit of the accounts of his business/profession from the view point of Income-tax Law.

Section 44AB gives the provisions relating to the class of taxpayers who are required to get their accounts audited from a chartered accountant. The audit under section 44AB aims to ascertain the compliance of various provisions of the Income-tax Law and the fulfillment of other requirements of the Income-tax Law. The audit conducted by the chartered accountant of the accounts of the taxpayer in pursuance of the requirement of section 44AB​ is called tax audit.

The chartered accountant conducting the tax audit is required to give his findings, observation, etc., in the form of audit report. The report of tax audit is to be given by the chartered accountant in Form Nos. 3CA/3CB and 3CD. ​

  • As per section 44AB, who is compulsorily required to get his accounts audited, i.e., who is covered by tax audit?

​​​​

As per section 44AB, following persons are compulsorily required to get their accounts audited :

  • A person carrying on business, if his total sales, turnover or gross receipts (as the case may be) in business for the year exceeds Rs. 1 crore. This provision is not applicable to the person, who opts for presumptive taxation scheme under section 44AD​ and his total sales or turnover doesnot excceeds Rs. 2 crores.
  • A person carrying on profession, if his gross receipts in profession for the year exceed Rs. 50 lakhs.
  • A person who is eligible to opt for the presumptive taxation scheme of section 44ADbut claims the profits or gains for such business to be lower than the profits and gains computed as per the presumptive taxation scheme of section 44ADand his income exceeds the amount which is not chargeable to tax.
  • ​If an eligible assessee opts out of the presumptive taxation scheme, after specified period, he cannot choose to revert back to the presumptive taxation scheme for a period of five assessment years thereafter.
  • ​A person who is eligible to opt for the presumptive taxation scheme of section 44ADAbut he claims the profits or gains for such profession to be lower than the profit and gains computed as per the presumptive taxation scheme and his income exceeds the amount which is not chargeable to tax.

  • ​A This provision is not applicable to the person, who opts for presumptive taxation scheme under section 44AD​ and his total sales or turnover does not exceed Rs. 2 crores.
  • A person who is eligible to opt for the presumptive taxation scheme of sections 44AEbut he claims the profits or gains for such business to be lower than the profits and gains computed as per the presumptive taxation scheme of sections 44AE.
  • A person who is eligible to opt for the taxation scheme prescribed under section 44BB or section 44BBB but he claims the profits or gains for such business to be lower than the profits and gains computed as per the taxation scheme of these sections.

 

section 44BB is applicable to non-resident taxpayers engaged in the business of providing services or facilities in connection with, or supplying plant and machinery on hire basis to be used in exploration of mineral oils.

 

section 44BBB​ is applicable to foreign companies engaged in the business of civil construction or erection of plant or machinery or testing or commissioning thereof, in connection with a turnkey power project.

  • If a person is required by or under any other law to get his accounts audited, then is it compulsory for him to once again get his accounts audited to comply with the requirement of section 44AB?

​​​​​Persons like company or co-operative society are required to get their accounts audited under their respective law. S​ection 44AB provides that, if a person is required by or under any other law to get his accounts audited, then he need not again get his accounts audited to comply with the requirement of section 44AB. Is such a case, it shall be sufficient if such person gets the accounts of such business or profession audited under such law and obtains the report of the audit as required under such other law and also a report by the chartered accountant in the form prescribed under section 44AB, i.e., Form No. 3CA and Form 3CD ​

 

  • What is the due date by which a taxpayer should get his accounts audited?

​​​​​​​​

A person covered by section 44AB should get his accounts audited and should obtain the audit report on or before the due date of filing of the return of income, i.e., on or before 30th September (*) of the relevant assessment year, e.g., Tax audit report for the financial year 2017-18 corresponding to the assessment year 2018-19 should be obtained on or before 30th September, 2018.

(*) In case of a taxpayer who is required to furnish a report in Form No. 3CEB​​ under section 92​ in respect of any international transaction or specified domestic transaction, the due date of filing the return of income is 30th November of the relevant assessment year.

​The tax audit report is to be electronically filed by the chartered accountant to the Income-tax Department. After filing of report by the chartered accountant, the taxpayer has to approve the report from his e-fling account with Income-tax Department (i.e., at www.incometaxindiaefiling.gov.in).

  • What is the penalty for not getting the accounts audited as required by section 44AB?

​​​​

According to section 271B, if any person who is required to comply with section 44AB fails to get his accounts audited in respect of any year or years as required under section 44AB, the Assessing Officer may impose a penalty. The penalty shall be lower of the following amounts:

(a) 0.5% of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in profession, in such year or years.

(b) Rs. 1,50,000.

However, according to section 273B​, no penalty shall be imposed if reasonable cause for such failure is proved.

 

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ACQUISITION AND TRANSFER OF IMMOVABLE PROPERTY IN INDIA  by non- residents-FEMA REGULATIONS, 2000

ACQUISITION AND TRANSFER OF IMMOVABLE PROPERTY IN INDIA

 by

non- residents-FEMA REGULATIONS, 2000

 

1)Acquisition and Transfer of Property in India by an Indian Citizen resident outside India.

 

A person resident outside India who is a citizen of India may-

 (a) acquire immovable property in India other than an agricultural property, plantation, or a farm house.

(b) transfer any immovable property in India to a person resident in India, and

(c) transfer any immovable property other than agricultural or plantation property or farm house to a person resident outside India who is a citizen of India or to a person of Indian origin resident outside India.

Provided that in case of acquisition of immovable property, payment of purchase price, if any, shall be made out of

  • funds received in India through normal banking channels by way of inward remittance from any place outside India or
  • (ii)funds held in any non-resident account maintained in accordance with the provisions of the Act and the regulations made by the Reserve Bank :

Also no payment of purchase price for acquisition of immovable property shall be made either by traveller’s cheque or by foreign currency notes or by other mode other than those specifically permitted by this clause.

 

2)Acquisition and Transfer of Property in India by a person of Indian origin.

 

A person of Indian origin resident outside India may-

(a) acquire immovable property in India other than an agricultural property, plantation, or a farm house.

(b) acquire any immovable property in India other than agricultural land/farm house/plantation property, by way of gift from a person resident in India or from a person resident outside India who is a citizen of India or from a person of Indian origin resident outside India;

(c) acquire any immovable property in India by way of inheritance from a person resident outside India who had acquired such property in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of these Regulations or from a person resident in India;

(d) transfer any immovable property in India other than agricultural land/farm house/plantation property, by way of sale to a person resident in India;

(e) transfer agricultural land/farm house/plantation property in India, by way of gift or sale to a person resident in India who is a citizen of India;

(f) transfer residential or commercial property in India by way of gift to a person resident in India or to a person resident outside India who is a citizen of India or to a person of Indian origin resident outside India

 

Provided that in case of acquisition of immovable property, payment of purchase price, if any, shall be made out of

  • funds received in India through normal banking channels by way of inward remittance from any place outside India or
  • (ii)funds held in any non-resident account maintained in accordance with the provisions of the Act and the regulations made by the Reserve Bank:

Also no payment of purchase price for acquisition of immovable property shall be made either by traveller’s cheque or by currency notes of any foreign country or any mode other than those specifically permitted by this clause.

 

3)Acquisition of Immovable Property for carrying on a permitted activity.

 

A person resident outside India who has established in India in accordance with the Foreign Exchange Management (Establishment in India of Branch or Office or other Place of Business) Regulations, 2000, a branch, office or other place of business for carrying on in India any activity, excluding a liaison office, may-

(a) acquire any immovable property in India, which is necessary for or incidental to carrying on such activity:

Provided that

(i) all applicable laws, rules, regulations or directions for the time being in force are duly complied with; and

(ii) the person files with the Reserve Bank a declaration in the Form IPI , not later than ninety days from the date of such acquisition;

(b) transfer by way of mortgage to an authorized dealer as a security for any borrowing, the immovable property acquired in pursuance of clause (a).

 

3A)Purchase/Sale of Immovable Property by Foreign Embassies/Diplomats/Consulate Generals.

 

A Foreign Embassy/Diplomat/Consulate General may purchase/sell immovable property in India other than agricultural land/plantation property/farm house provided

  • clearance from Government of India, Ministry of External Affairs is obtained for such purchase/sale, and
  • the consideration for acquisition of immovable property in India is paid out of funds remitted from abroad through banking channel.

 

4) Repatriation of sale proceeds.

 

(a) A person resident outside India may hold, own or transfer any immovable property situated in India if such  property was acquired, held or owned by such person when he was resident in India or inherited from a person who was resident in India.

A person resident outside India, or his successor shall not, except with the prior permission of the Reserve Bank, repatriate outside India the sale proceeds of any immovable property.

 

(b) In the event of sale of immovable property other than agricultural land/farm house/plantation property in India by a person resident outside India who is a citizen of India or a person of Indian origin, the authorised dealer may allow repatriation of the sale proceeds outside India, provided the following conditions are satisfied, namely:

(i) the immovable property was acquired by the seller in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of these Regulations.

(ii) the amount to be repatriated does not exceed

(a) the amount paid for acquisition of the immovable property in foreign exchange received through normal banking channels or out of funds held in Foreign Currency Non-Resident Account, or

(b) the foreign currency equivalent, as on the date of payment, of the amount paid where such payment was made from the funds held in Non-Resident External account for acquisition of the property; and

(iii) in the case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties.

 

(c) In the event of failure in repayment of external commercial borrowing availed by a person resident in India under the provisions of the Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000 (Notification No. FEMA 3/2000-RB, dated 3-5-2000) a bank which is an authorised dealer may permit the overseas lender or the security trustee (in whose favour the charge on immovable property has been created to secure the ECB) to sell the immovable property on which the said loan has been secured only to a (by the) person resident in India and to repatriate the sale proceeds towards outstanding dues in respect of the said loan and not any other loan.

 

 

 

 

5)Prohibition on acquisition or transfer of immovable property in India by citizens of certain countries.

 

No person being a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan without prior permission of the Reserve Bank shall acquire or transfer immovable property in India, other than lease, not exceeding five years.

 

6)Prohibition on transfer of immovable property in India.

 

Except as allowed in the Act or Regulations, no person resident outside India shall transfer any immovable property in India :

Provided that the Reserve Bank may, for sufficient reasons, permit the transfer, subject to such conditions as may be considered necessary.

Also a bank which is an authorised dealer may, subject to the directions issued by the Reserve Bank in this behalf, permit a person resident in India or on behalf of such person to create a charge on his immovable property in India in favour of an overseas lender or security trustee, to secure an external commercial borrowing availed under the provisions of the Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000 (Notification No. FEMA 3/2000-RB, dated 3-5-2000).]

 

 

Definitions:

(a) ‘Act’ means the Foreign Exchange Management Act, 1999 (42 of 1999);

(b) ‘An authorised dealer’ means a person authorised as an authorised dealer under sub-section (1) of section 10 of the Act- The Reserve Bank may, on an application made to it in this behalf, authorise any person to be known as authorised person to deal in foreign exchange or in foreign securities, as an authorised dealer, money changer or off-shore banking unit or in any other manner as it deems fit.

(c) ‘a person of Indian origin’ means an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who

(i) at any time, held Indian passport or

(ii) who or either of whose father or mother or whose grandfather or grandmother was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955);]

(d) ‘repatriation outside India’ means the buying or drawing of foreign exchange from an authorised dealer in India and remitting it outside India through normal banking channels or crediting it to an account denominated in foreign currency or to an account in Indian currency maintained with an authorised dealer from which it can be converted in foreign currency;

(e) the words and expressions used but not defined in these Regulations shall have the same meanings respectively assigned to them in the Act.

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Income Charged to Tax in India in the hands of Resident/Non Resident taxpayer

 

  • Which incomes are charged to tax in India in the hands of a taxpayer

The following chart highlights the tax incidence in case of different persons:

Nature of income Residential status Residential status ​​ Residential status
ROR (*) RNOR (*) NR (*)
Income which accrues or arises in India Taxed Taxed Taxed
Income which is deemed to accrue or arise in India Taxed Taxed Taxed
Income which is received in India Taxed Taxed Taxed
Income which is deemed to be received in India Taxed Taxed Taxed
Income accruing outside India from a business controlled from India or from a profession set up in India Taxed Taxed Not taxed
Income other than above (i.e.,income which has no relation with India) Taxed Not taxed Not taxed

 

(*)  ROR means resident and ordinarily resident.

RNOR means resident but not ordinarily resident.

NR means non-resident.​

  • Which incomes are deemed to be received in India

​Following incomes are treated as incomes deemed to be received in India:

  • Interest credited to recognized provident fund account of an employee in excess of 9.5% per annum.
  • Employer’s contribution to recognized provident fund in excess of 12% of the salary of the employee.
  • Transferred balance in case of reorg​anisation of unrecognized provident fund.

Contribution by the Central Government or other employer to the account of the employee in case of notified pension scheme referred to in section 80CCD​​.​

  • What incomes are deemed to have accrue or arise in India

Following incomes are treated as incomes deemed to have accrued or arisen in India:

  • Capital gain arising on transfer of property situated in India.
  • Income from business connection in India.
  • Income from salary in respect of services rendered in India.
  • Salary received by an Indian national from Government of India in respect of service rendered outside India. However, allowances and perquisites are exempt in this case.
  • Income from any property, asset or other source of income located in India.
  • Dividend paid by an Indian company.
  • Interest received from Government of India.
  • Interest received from a resident is treated as income deemed to have accrued or arisen in India in all cases, except where such interest is earned in respect of funds borrowed by the resident and used by resident for carrying on business/profession outside India or is in respect of funds borrowed by the resident and is used for earning income from any source outside India.
  • Interest received from a non-resident is treated as income deemed to accrue or arise in India if such interest is in respect of funds borrowed by the non-resident for carrying on any business/profession in India.
  • Royalty/fees for technical services received from Government of India.
  • Royalty/fees for technical services received from resident is treated as income deemed to have accrued or arisen in India in all cases, except where such royalty/fees relates to business/profession/other source of income carried on by the payer outside India.

Royalty/fees for technical services received from non-resident is treated as income deemed to have accrued or arisen in India if such royalty/fees is for business/profession/other source of income carried by the payer in India.

 

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Three major Changes that came into effect from April 1st 2018

New Income Tax Rules

  • No change in the income tax slab for the individual tax payers.
  • The Budget 2018 proposals including the reintroduction of the tax on long-term capital gains (LTCG) exceeding 100,000 from the sale of shares from April 1.
  • Reduced corporate tax of 25 per cent on businesses on turnover of up to R250 crore.
  • Standard deduction of R40,000 in lieu of transport allowance and medical reimbursement.

GST e-way bill for inter-state movement of goods

  • The e-way (electronic way) bill system under GST (Goods and Services Tax) for inter-state movement of goods became effective from April 1.
  • The e-way bill applies to inter-state transportation of goods worth over R50,000 through road, railways, airways and vessels.

State Bank of India (SBI) chops charges for non-maintenance of minimum balance

  • SBI has reduced its penalties for non-maintenance of average monthly balance (AMB).
  • The charges for non-maintenance of AMB for customers in metro and urban centres are reduced from a maximum of R50 per month plus goods and services tax (GST), to Rs. 15 per month plus GST.
  • For semi-urban and rural centres, the charges are reduced from R40 per month plus GST to Rs. 12 per month and Rs. 10 per month plus GST respectively from April 1
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E-Way Bill under GST

E-Way Bill came into effect from April 1, 2018 for all inter-state movement of goods. One can register on the E-way bill portal ewaybillgst.gov.in by using the GSTIN. An E-Way bill is generated through the GST Common Portal for e-Way bill system – ewaybill.nic.in – by registered users or transporters who cause movement of goods of consignment. The E-way bill is required to be generated only where the value of the consignment exceeds Rs.50,000 which includes tax, but doesn’t include value of exempted goods. Validity of E-way bill is one day upto 100 km. For every 100 km or part thereafter, it is one additional day. Where the goods are transported by railways, or air or vessel, the e-way bill shall be generated by the registered supplier/ recipient only and not by the transporter. However, the bill has to be produced at the time of delivery of goods.

E-Way Bill FAQs

  • The consignor or consignee, as a registered person or a transporter of the goods, can generate the e-Way bill. The unregistered transporter can enroll on the common portal and generate the E-Way bill for movement of goods for his clients, according to the CBEC now CBIC.
  • The documents such as tax invoice or bill of sale or delivery challan and the transporter’s ID must be available with the person who is generating the e-Way bill.
  • The e-way bill is required to transport all the goods except exempted under the notifications or rules. The movement of handicraft goods or goods for job-work purposes under specified circumstances also requires E-Way bill even if the value of consignment is less than Rs. 50,000.
  • Once generated, e-Way bill cannot be edited or modified. Only Part-B can be updated. However, if e-way bill is generated with wrong information, it can be cancelled and generated afresh.
  • Any person can verify the authenticity or the correctness of the e-way bill by entering EWB No, EWB Date, Generator ID and Doc No in the search option on the EWB Portal.
  • If multiple invoices are issued by the supplier to recipient, that is, for movement of goods of more than one invoice of same consignor and consignee, multiple EWBs have to be generated. That is, for each invoice, one EWB has to be generated, irrespective of the fact whether same or different consignors or consignees are involved.
  • If validity of the E-Way bill expires, the goods are not supposed to be moved. However, one can extend the validity of the E-Way bill if the consignment is not reaching the destination within the validity period due to exceptional circumstances such as natural calamity, law and order issues, trans-shipment delay, accident of conveyance, etc.
  • One doesn’t require to generate E-way bill if the value of the goods in an individual consignment is less than Rs. 50,000 even if the total value of all such consignments is more than Rs. 50,000 in single conveyance.
  • Empty cargo containers are exempted from e-way bill.
  • The goods which are in transit to or from Nepal/ Bhutan don’t require E-way bill for movement.
  • One can even insert the temporary vehicle number for the purpose of E-way bill generation.
  • How to update the details: E-way bill system is dependent on GST common portal for tax payer’s registration like legal name/trade name, businesses addresses, mobile number and email id. The EWB system will not allow taxpayer to update these details in the EWB portal. If the taxpayer changes these details at GST common portal, it will be updated in the EWB system within a day automatically. Alternatively, the taxpayer can update the same instantaneously by selecting the option update my GSTIN in the E-way bill system and the details will be fetched from the GST common portal and updated in the E-way bill system.
  • The shipping charges charged by e-commerce companies need not be included in ‘consignment value’.
  • Sub-users: For every principal place of business, users can create a maximum of 3 sub-users. That is, if taxpayer has one principal place of business and 1 additional place, he can create 6 (3X2) sub-users.
  • In case of movement by railways, there is no requirement to carry E-way bill along with the goods, but the E-way bill generated must be produced at the time of delivery of the goods.
  • Consignment value is the value of the goods declared in invoice or a delivery challan issued in respect of the said consignment and also include central tax, state or union territory tax. This doesn’t include the value of exempt supply of goods and value of freight charges.
  • A transporter need not generate E-way bill for consignments having value less than Rs. 50,000, even if the value of the goods carried in single conveyance is more than Rs. 50,000, till the sub- rule 138 (7) is notified.
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Refund facility on GST Portal

1)Refund on Account of:

  • Export of Goods (With Payment of Tax)

Refund of Integrated Tax on account of Export of goods (with payment of tax) if the following conditions are met

  • Filed GSTR-1, providing Export details in Table 6A of GSTR-1 along with Shipping bill details having Integrated Tax levied AND
  • Filed GSTR-3B of the relevant tax period for which refund is to be paid

How it works:-

GST Portal shares the export data with ICEGATE, Custom system validates the data with their shipping bill and EGM and processes the refund

The shipping and invoice details can be added in subsequent month, if it was missed during current month and refund can be availed.

Refund to be credited in bank account maintained with the customs/ICEGATE.

 

  • Export of Services (With Payment of Tax)
  • GSTR-1 and GSTR-3B of the relevant tax period for which you want to file for refund on account   of Export of services with payment of Tax must be filed.
  • After filing GSTR-1 and GSTR- 3B, form RFD-01A to be filed at the GST Portal.
  • On submission of form RFD-01A, GST Portal will generate an ARN.
  • After generation of ARN, Taxpayer needs to take print of the submitted application and the Refund ARN Receipt generated at the portal, and handover the same along with supporting documents to the jurisdictional authority. Application will be processed and refund will be disbursed manually.

 

2) Refund of ITC paid on Exports of Goods and Services without payment of Integrated Tax

GSTR- 3B of the period for which Refund is sought has to be filed.

Refund application RFD – 1A to be filed at GST Portal.

Turnover of Zero-Related supplies and Adjusted Total Turnover in a State or UT for the period refund is sought for and the net ITC (the ITC availed during the period refund is sought for) to be mentioned.

In case of export of services, FIRC/BRC to be obtained from the concerned bank.

Once Application Reference Number (ARN) is generated, application print to be submitted to the Jurisdictional Authority manually along with other documents required under RFD-01

 

3) Refund of Excess Amount from the Electronic Cash Ledger

RFD- 01 A to be filed and print of ARN generated to be submitted manually to Jurisdictional Authority. There is no restriction on claiming refund amount from Cash Ledger. However, law specifies that the refund of excess amount in Cash Ledger can be permitted only if amount is greater than Rs. 1000/.

4) Refund on Account of Supplies made to SEZ Unit/ SEZ Developer (Without Payment of Tax)

The following conditions must be met

  • The Taxpayer is registered with GST Portal and holds an active GSTIN during the period for which refund is being applied for.
  • GSTR-3B must have been filed for the relevant tax period

 

How it works:-

 

RFD-01A to be filed for the amount that is lowest of the following:

  1. ITC Ledger balance as on date (Matched ITC)
  2. ITC availed for the selected tax period
  3. Formula value of refund amount, calculated as “(((Turnover of Zero Rated Supply of Goods and Services) x (Net Input Tax Credit)) ÷ Adjusted Total Turnover)
  4. Once the ARN is generated on submission of form RFD-01A, the Taxpayer needs to take print of the filed application and the Refund ARN Receipt generated at the portal, and submit the same along with supporting documents to the jurisdictional authority manually. The application will also be processed and refund will be disbursed manually.

 

5) Refund on Account of Supplies made to SEZ Unit/ SEZ Developer (With Payment of Tax)

The following conditions must be met for being eligible to file form RFD-01A to claim refund on account of supplies made to SEZ unit / SEZ developer (with payment of tax):

  • The taxpayer is registered with GST Portal and holds an active GSTIN during the period for which refund is being applied for.
  • Form GSTR-1 and a Valid GSTR-3B Return must have been filed for the relevant tax period.
  • In Table 6B of the GSTR-1 filed for the relevant period, the details of supplies made to SEZ units or SEZ developer should have been mentioned by the taxpayer.
  • It is to be declared by the refund claimant that the SEZ Unit /Developer has not availed input tax credit of the tax paid, which has been claimed as refund.
  • It is to be declared by refund claimant that such goods have been admitted in full in the SEZ for authorized operations / services have been received by SEZ for authorized operations.

 

The refund amount that one enters should not be more than the amount of IGST / CESS mentioned in Zero-rated supplies of GSTR-3B , filed for the selected period.

 

6) Refund of ITC accumulated due to Inverted Tax Structure

 

Inverted Tax Structure’ refers to a situation where the rate of tax on input received (i.e. Input tax credit received) is more than the rate of tax (i.e. the tax paid) on output supplies. As a result, the higher tax paid on input supplies gets accumulated in the Electronic Credit Ledger of the receiver Taxpayer. The Taxpayer can claim the refund of ITC accumulated on account of Inverted Tax structure by filing the refund application form RFD-01A.

Refund of IGST / CGST / SGST on account of ITC accumulated due to Inverted Tax Structure can be filed if  GSTR1 and GSTR-3B of the relevant tax period have been filed, for which refund is to be claimed.

However, in case registered persons having aggregate turnover of up to Rs1.5 crores in the preceding financial year or the current financial year are opting to file FORM GSTR-1 quarterly (notification No. 57/2017-Central Tax dated 15.11.2017 refers), such persons shall apply for refund on a quarterly basis. Please note that such refund on account of inverted tax structure is not available in case of exempted or nil rated supplies.

 

7) Refund on account of Refund by Recipient of Deemed Export

The following conditions must be met for being eligible to file form RFD-01A, for refund by recipient of deemed exports:

  • The Taxpayer is registered with GST Portal and holds an active GSTIN during the refund application period.
  • Balance in the Electronic Credit Ledger must be greater than or equal to the amount of refund to be claimed, since the same is required to be debited in case of Refund of ITC by recipient of deemed exports.
  • GSTR-3B must have been filed for the relevant tax period.

While filing form RFD-01A (Recipient of deemed exports), Taxpayers need to enter the amount that they want to get as refund. The lowest of the following three categories are eligible for refund:

  • Balance in Electronic Credit Ledger
  • ITC availed for the particular tax period
  • Amount entered by Taxpayer in Refund Claim Matrix.

 

8) Refund Application on Account of Assessment/Provisional assessment/ Appeal/ Any Other Order (under CGST Rule 97A/ and relevant Rules of SGST/IGST Acts) i.e. online filing and offline processing by the tax authority

Any person, including regular taxpayer, casual taxpayer, non-resident taxpayer or unregistered person, in whose favour an Assessment Order/Provisional Assessment Order/Appeal Order or any other Order entailing refund has been issued may file the application for refund.

 

Refund application can be filed by unregistered person using his temporary login.

Applicant has to file application on GST portal after login to the GST Portal with valid credentials. Navigate to Refund Menu > Click on Refund Application > Select reason of Refund as ‘On Account of Assessment/provisional assessment/ Appeal/ Any Other order’.

Scanned copy of following documents is mandatory to be uploaded.

Assessment/ Provisional Assessment/ Appeal/ / Any Other Order

The taxpayer after submitting the refund application form shall take out the print of the application form and ARN generated after submission. The tax official shall manually issue acknowledgement till the backend processing release. The tax official is allowed 15 days’ period for issuance of Acknowledgement RFD-02 after examining application for refund.

 

In case tax official manually conveys deficiencies to the applicant in FORM GST RFD-03, For the same applicant has to correct the deficiency at the jurisdictional Authority

 

Taxpayer will receive refund amount in account which has been selected by taxpayer while filing of the refund application

 

 

Note:

 

Only one Refund application (form RFD-01A) can be filed for each Refund type in a given tax period. For example, a Taxpayer may choose to file the refund on account of supplies made to SEZ unit / SEZ developer (without payment of tax), as well as on account of being a recipient of deemed exports for the single tax period. However, the Taxpayer cannot file two refund applications for supplies made to SEZ unit / SEZ developer (without payment of tax) during a single tax period.

 

After login to the GST portal, you can view your jurisdictional details in Profile Section. The same is also indicated in the GSTIN Certificate

 

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#Clock is ticking on #Income Tax Return Filing, the date is #31st March 2018

Please check if your Income Tax Return has been filed. The last date for Income Tax return u/s 139(4) for Financial Year 2015-2016 & 2016-2017 is March 31st 2018.

As per Finance Bill 2016,there is amendment of section 139.Amended Section 139(4):

Any person who has not furnished a return within the time allowed to him under sub-section (1), may furnish the return for any previous year at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.

This means that Income Tax return for FY 2016-17 can be filed before the end of relevant assessment year,2017-18. so latest by 31st March 2018.

Before amendment to section 139(4) the provision said:

A person who has not furnished a return within the time allowed to him under subsection (1), or within the time allowed under a notice issued under sub -section (1) of section 142 of the Income-tax Act, may furnish the return for any previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.

This means Income Tax return for FY 2015-16 can be filed before end of one year form the relevant assessment year(2016-17) that is before end of 2017-18 so its March 2018.

If this deadline is missed then the person will have to face the consequences for non filing of the IT return.

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Key features Budget 2018

Income Tax

  • No change in personal income tax slab rates.
  • Standard Deduction of Rs. 40,000 in place of present exemption for transport allowance and reimbursement of miscellaneous medical expenses. 2.5 crore salaried employees and pensioners to benefit.
  • To promote employment, the government will contribute 12 per cent of wages of new employees in employee provident fund for all sectors for the next three years
  • Reduction in the contribution that new women employees make to the provident fund, from 12% to 8%,for the first three years of their employment, to promote women’s participation in the labor force as well as increase their take-home pay.
  • Proposal to extend reduced rate of 25 percent currently available for companies with turnover of less than 50 crore (in Financial Year 2015-16), to companies reporting turnover up to 250 crore in Financial Year 2016-17, to benefit micro, small and medium enterprises
  • Relief to Senior Citizens
  • Exemption of interest income on deposits with banks and post offices to be increased from Rs. 10,000 to Rs. 50,000.
  • TDS not required to be deducted under section 194A. Benefit also available for interest from all fixed deposit schemes and recurring deposit schemes.
  • Hike in deduction limit for health insurance premium and/ or medical expenditure from Rs. 30,000 to Rs. 50,000 under section 80D.
  • Increase in deduction limit for medical expenditure for certain critical illness from Rs. 60,000 (in case of senior citizens) and from Rs. 80,000 (in case of very senior citizens) to Rs. 1 lakh for all senior citizens, under section 80DDB.
  • Pradhan Mantri Vaya Vandana Yojana up to be extended till March, 2020. Current investment limit proposed to be increased to Rs. 15 lakh from the existing limit of Rs. 7.5 lakh per senior citizen.
  • Tax on Long Term Capital Gains exceeding Rs. 1 lakh at the rate of 10%, without allowing any indexation benefit. However, all gains up to 31st January, 2018 will be grandfathered(exempted).
  • Short term capital tax remains at 15%
  • Cess on personal income tax and corporation tax to be increased to 4 % from present 3 %.
  • E-assessment to be rolled out across the country to almost eliminate person to person contact leading to greater efficiency and transparency in direct tax collection.

 

Customs Duties

 

  • Customs Duty on certain products, such as mobile phones and televisions has been increased, to boost more jobs creation and ‘Make in India’
  • Social welfare surcharge of 10% on imported goods.
  • Import of solar tempered glass for manufacture of solar cells exempted from customs duty.
  • Customs duty on crude edible vegetable oils like groundnut oil, safflower seed oil hiked from 12.5% to 30%; on refined edible vegetable oil from 20% to 35%
  • Customs duty on sunglasses, cigarette lighter, toys, bus and truck tyres, select furniture hiked.
  • Customs duty on imitation jewellery hiked from 15% to 20%; doubled on all watches to 20%.
  • Import duty on LCD/LED/OLED panels, parts of TVs hiked to 15%; duty on smart watches, wearable devices

 

Agriculture

 

  • MSP for all unannounced kharif crops will be one and half times of their production cost like majority of rabi crops: Institutional Farm Credit raised to 11 lakh crore in 2018-19 from 8.5 lakh crore in 2014-15.
  • 22,000 rural haats to be developed and upgraded into Gramin Agricultural Markets to protect the interests of 86% small and marginal farmers.
  • ‘Operation Greens’ launched to address price fluctuations in potato, tomato and onion for benefit of farmers and consumers.
  • Two New Funds of Rs10,000 crore announced for Fisheries and Animal Husbandary sectors; Re-structured National Bamboo Mission gets Rs.1290 crore.
  • 100 percent deduction proposed to companies registered as Farmer Producer Companies with an annual turnover upto Rs. 100 crore on profit derived from such activities, for five years from 2018-19.

 

Other Features

 

  • Loans to Women Self Help Groups will increase to Rs.75,000 crore in 2019 from 42,500 crore last year.
  • Higher targets for Ujjwala, Saubhagya and Swachh Mission to cater to lower and middle class in providing free LPG connections, electricity and toilets.
  • Outlay on health, education and social protection will be 1.38 lakh crore. Tribal students to get Ekalavya Residential School in each tribal block by 2022. Welfare fund for SCs gets a boost.
  • World’s largest Health Protection Scheme covering over 10 crore poor and vulnerable families launched with a family limit upto 5 lakh rupees for secondary and tertiary treatment.
  • Fiscal Deficit pegged at 3.5 %, projected at 3.3 % for 2018-19.
  • 5.97 lakh crore allocation for infrastructure
  • Ten prominent sites to be developed as Iconic tourist destinations
  • NITI Aayog to initiate a national programme on Artificial Intelligence(AI)
  • Centres of excellence to be set up on robotics, AI, Internet of things etc
  • Disinvestment crossed target of Rs 72,500 crore to reach Rs 1,00,000 crore Comprehensive Gold Policy on the anvil to develop yellow metal as an asset class
  • Deduction of 30 percent on emoluments paid to new employees Under Section 80-JJAA to be relaxed to 150 days for footwear and leather industry, to create more employment.
  • No adjustment in respect of transactions in immovable property where Circle Rate value does not exceed 5 percent of consideration.

 

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