March 2019, Vol 68

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Contents

GST (Goods &Service Tax)

by:

Santosh WankhadeAnuya Sawant

IncomeTaxby:

Manish Parekh

CompanyLaw

by:

Mayura NiphadkarPinkesh Jain

FEMAby:

Bhavesh Shah

ComplianceCalender

by:

Pinkesh Jain

by:

Bhavesh ShahInterna�onal

Taxa�on

IncomeTaxContributed by:

Manish Parekh manish.parekh@hscollp.in

1

Denial of exemp�on u/s 54F on belated

deposit of amount in Capital Gains scheme

account

In the case of Smt. Hansaben Pravinbhai Patel v/s. Income Tax Officer TAT Ahmedabad has held that:

Net considera�on arising on sale of original assets has to be deposited in Capital Gains Scheme Account, within

s�pulated �me, unless the same has been u�lized. Belated deposits in the scheme is not in terms with the

provisions of the Act. The mandate of Sec�on 54F (4) of the Act being crystal clear, it is quite difficult to depart

therefrom. In the absence of any ambiguity in the exemp�on provision for eligibility, we do not see any reason to

interfere with the order of the CIT (A) where the net considera�on has not been u�lized for the purposes of

deposit in the no�fied bank account in terms of Sec�on 54F (4) of the Act before due date specified u/s 139(1) of

the Act.

Do not harass Taxpayers or be High-

Handed with them: New CBDT Chief To Assessing Officers:

The newly appointed Chairman of the CBDT, Hon’ble P. C. Mody, has sent the clear message to all officials of the

income-tax department that while maximizing the revenue collec�on is the immediate priority, the same has to

be done “without any harassment or high handedness“

The learned Chairman has s�pulated that the conduct of the officials should be impeccable, friendly, yet

objec�ve –without fear or favour –as the Dept moves towards becoming a non-adversarial regime.

It is also emphasized that �mely delivery of quality Tax Payer Services should be another prime area of focus.

Con�nuous and concerted efforts should be made to address and redress all public grievances within the

prescribed �me- limit.

(Source : h�p://itatonline.org )

Capital Gains not be treated as bogus

In the case of Mukta Gupta vs. ITO, ITAT Delhi has held that :

Capital gains cannot be treated as bogus solely on the basis that the price of the shares has risen manifold and the

reason for astronomical rise is not related to any fundamentals of market. If the transac�ons are duly proved by

trading from stock exchange and the documenta�on is proper, the gains cannot be assessed as unexplained

credit or as unexplained money

(Source : h�p://itatonline.org )

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2

GST (Goods& Service Tax)

Anuya Sawant anuya.sawant@hscollp.in

Contributed by:

Santosh Wankhade gst@hscollp.in

Read More

Circulars Details of inter-state supplies to unregistered persons in Table 3.2 of GSTR 3B

It has been brought to the no�ce of the Board that a number of registered persons have not reported the details

of inter-State supplies made to unregistered persons in Table 3.2 of FORM GSTR-3B. However, the said details

have been men�oned in Table 7B of FORM GSTR-1.

It is instructed that the registered persons making inter-State supplies to unregistered persons shall report the

details of such supplies along with the place of supply in Table 3.2 of FORM GSTR- 3B and Table 7B of FORM

GSTR–1 as mandated by the law.

Contraven�on of any of the provisions of the Act or Rules would a�ract penalty which may extend to Rs.25,000/-.

[Circular No.89/08/2019 -GST dated 18-02-2019]

Men�oning place of supply in Tax Invoice

It has been brought to the no�ce of the Board that a number of registered persons (especially in the banking,

insurance and telecom sectors, etc.) are not men�oning the place of supply along with the name of the State in

case of a supply made in the course of inter-State trade or commerce.

It is instructed that all registered persons making supply of goods or services or both in the course of inter-state

trade or commerce shall specify the place of supply along with the name of the State in the tax invoice.

Contraven�on of any of the provisions of the Act or Rules would a�ract penalty which may extend to Rs.25,000/-.

[Circular No.90/08/2019 -GST dated 18-02-2019]

Supply of warehoused goods from customs bonded warehouse during the period July 2017 to March 2018

Supply of warehoused goods while being deposited in a customs bonded warehouse during the period July, 2017

to March, 2018 was exigible to IGST. Due to non-availability of the facility on the common portal to report

payment of IGST, such supplies were reported as intra-state supplies in GSTR 1 and accordingly Central GST

(‘CGST’) and State GST (‘SGST’) was paid on such supplies.

It is therefore clarified that suppliers shall be deemed to have complied with the provisions of law as long the

amount of CGST and SGST is equal to the amount of IGST due on such supplies.

[Circular No.91/08/2019 -GST dated 18-02-2019]

3

GST (Goods& Service Tax)

Anuya Sawant anuya.sawant@hscollp.in

Contributed by:

Santosh Wankhade gst@hscollp.in

Press Release Reduc�on in GST rates on real estate sector

In order to boost the residen�al segment of the real estate sector, following recommenda�ons were made by the

GST Council in its 33rd mee�ng held on Feb 24 th 2019:

GST rate:

i. GST shall be levied at effec�ve GST rate of 5% without ITC on residen�al proper�es outside affordable segment;

ii. GST shall be levied at effec�ve GST of 1% without ITC on affordable housing proper�es.

Effec�ve date: The new rate shall become applicable from 1st of April, 2019

GST exemp�on on TDR/ JDA, long term lease (premium), FSI:

Intermediate tax on development right, such as TDR, JDA, lease (premium), FSI shall be exempted only for such

residen�al property on which GST is payable.

Advance Ruling Denial of ITC on construc�on of warehouse using pre-fabricated technology which can be dismantled and

reconstructed at a different loca�on (i.e. movable)

Tewari Warehousing Company Pvt Ltd [TS-71-AAR-2019-NT]

Facts

• Applicant is construc�ng a warehouse on leasehold land using pre-fabricated technology.

• Warehouse can be dismantled and reconstructed at a different loca�on.

Ques�on

• Whether the input tax credit (‘ITC’) is admissible on the inward supplies for construc�on of the said warehouse?

Ruling

• Observes that inten�on of the Applicant is beneficial enjoyment of the warehouse for more than two decades

and thereby intended to be used as a permanent structure subject to usual business uncertain�es.

• Holds that the warehouse cannot be conceived without beneficial enjoyment of the civil structure embedded

on earth.

• Holds that the warehouse constructed by the Applicant cons�tutes immovable property, denies ITC on inward

supplies used for construc�on of the said warehouse in view of provisions of sec�on 17(5)(d) of the CGST Act.

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4

Investment by Foreign Por�olio Investors

(FPI) in Debt

In terms of exis�ng provisions, no FPI shall have an exposure of more than 20% of its corporate bond por�olio to a

single corporate (including exposure to en��es related to the corporate). As announced in the Statement on

Developmental and Regulatory Policies of the Sixth Bi-monthly Monetary Policy Statement for 2018-19 dated

February 07, 2019, in order to encourage a wider spectrum of investors to access the Indian corporate debt

market, it has been decided to withdraw this provision with immediate effect.

(RBI/2018-19/123 A.P. (DIR Series) Circular No. 19 dated February 15, 2019)

FEMAContributed by:

Bhavesh Shah bhavesh.shah@hscollp.in

Back

Establishment of Branch Office (BO) Liaison Office (LO)

Project Office (PO) or any other place of

business in India by foreign en��es

related

In terms of extant regula�ons for Establishment of Branch Office (BO) / Liaison Office (LO) / Project Office (PO) or

any other place of business in India by foreign en��es, applica�ons received from a Non-Government

Organiza�on, Non-Profit Organiza�on, Body/Agency/Department of a foreign Government for opening of a

branch office or a liaison office or a project office or any other place of business in India are to be forwarded to the

Reserve Bank for prior approval and be considered in consulta�on with the Government of India. This has since

been reviewed and it is advised that if such an en�ty is engaged, partly or wholly, in any of the ac�vi�es covered

under Foreign Contribu�on (Regula�on) Act, 2010 (FCRA), it shall obtain a cer�ficate of registra�on under FCRA

and shall not seek permission under the said regula�on.

Accordingly, the Form FNC has also been suitably modified and the following phrase is added under the heading

‘Declara�on’ in Part II clause (ii), at the end of the exis�ng sentence.

“We will not undertake either partly or fully, any ac�vity that is covered under Foreign Contribu�on Regula�on

Act, 2010 (FCRA) and we understand that any misrepresenta�on made or false informa�on furnished by us in this

behalf would render the approval granted under the Foreign Exchange Management (Establishment in India of a

branch office or liaison office or a project office or any other place of business) Regula�ons, 2016, automa�cally

as void ab ini�o and such approval by the Reserve Bank shall stand withdrawn without any further no�ce”.

All other provisions of the LO/BO/PO policy shall remain unchanged. AD Category - I banks may bring the

contents of this circular to the no�ce of their cons�tuents and customers.

(RBI/2018-19/132 A.P. (DIR Series) Circular No. 20 dated February 27, 2019)

5

Supply of certain engineering technical

design/drawings/plans is not taxable as FTS

because it does not sa�sfy ‘make

available’ test under the India–UK tax

treaty

Based on the facts and in the circumstances of the case, recently the Mumbai Bench of the Income-tax Appellate

Tribunal in the case of Buro Happold Limited (the taxpayer) held that the amount received by the taxpayer from

its affiliate towards consul�ng engineering services is not taxable as Fees for Technical Services under Ar�cle

13(4)(C) of India-U.K. tax treaty since the taxpayer did not ‘make available’ technical knowledge, experience, skill,

know-how, process to the service recipient, through the development and supply of a technical plan or a

technical design. The amount received by the taxpayer was business profits and in the absence of a Permanent

Establishment in India, it could not be taxed in India.

(Buro Happold Limited v. DCIT (ITA No. 1296/Mum/2017) – Taxsutra.com)

Interna�onalTaxa�on

Contributed by:

Bhavesh Shah bhavesh.shah@hscollp.in

Back

6

Company Law

The Companies (Significant Beneficial Owners) Amendment

Rules, 2019

Read More

Contributed by:

Mayura Niphadkar Corplaw@hscollp.in

Pinkesh Jain pinkesh.jain@hscollp.in

The Companies (Prospectus and

Allotment of Securi�es) Second

Amendment Rules,2019

• Original Rules- The Ministry of Corporate Affairs (MCA) introduced the Companies (Significant Beneficial

Owners) Rules, 2018 in June, 2018.

• Purpose- To find out the ul�mate holder of shares who is the natural person, in a Company.

• Amended Rules- The MCA no�fied the Companies (Significant Beneficial Owners) Amendment Rules, 2019, on

8 th February, 2019 to give conceptual clarity.

h�p://www.mca.gov.in/Ministry/pdf/CompaniesOwnersAmendmentRules_08020219.pdf

• Effec�ve Date- 19 th February, 2019

• Amendment- Form PAS-3 for Allotment of Securi�es amended.

• Effect- Checkbox in the Form pertaining to the Allotment of Securi�es in a Private Placement offer for an

applica�on size of less than Rs. 20,000/- has been removed.

h�p://www.mca.gov.in/Ministry/pdf/ProspectusAllotmentRule2019_20022019.pdf

Companies (Adjudica�on of

Penal�es) Amendment Rules,

2019

• Effec�ve date- 19 th February, 2019

• Amendment- Rule 3 of Companies (Adjudica�on of Penal�es) Amendment Rules, 2019 was amended.

• Effect- Appointment of the officer by the Central Government for adjudica�on proceedings for non –

compliance or default under the Companies Act commi�ed by a Company and / or officers of the Company.

h�p://www.mca.gov.in/Ministry/pdf/Adjudica�oPenal�es2019_20022019.pdf

The Companies (Incorpora�on)

Amendment Rules, 2019:

• Effec�ve Date- 25 th February, 2019

• Amendment- Introduc�on of E Form INC – 22A, also known as ACTIVE Form.

• Applicability- Every Company incorporated on or before 31 st December, 2017.

• Compliance- Filing of Form on or before 25 th April, 2019 without fees; and therea�er, with fees of Rs. 10,000/-.

• Basic informa�on sought: Details of the Registered Office and officers of the company.

• Purpose- To clean up shell companies.

h�p://www.mca.gov.in/Ministry/pdf/CompaniesIncorpora�onAmendmentRules_21022019.pdf

7

Company LawContributed by:

Mayura Niphadkar Corplaw@hscollp.in

Pinkesh Jain pinkesh.jain@hscollp.in

Extension for last date of filing ini�al

return in MSMEForm 1:

• Effec�ve Date- 21 st February, 2019,

• Effect- Extension of the last date of filing ini�al return in MSME Form 1.

• Compliance- To be filed within 30 days from the date of availability of the form on the website.

h�p://www.mca.gov.in/Ministry/pdf/Ini�alReturnInMSMEForm_21022019.pdf

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8

Due dates for the Month of April, 2019*

Compliance Calender Contributed by:

Pinkesh Jain pinkesh.jain@hscollp.in

Back

Regula�on Due Date Compliance

1-Apr-19 LUT Renewal of Le�er of Undertaking (LUT) for FY 2019-20

10-Apr-19 GSTR 7

10-Apr-19 GSTR 8 Summary of Tax Collected at Source (TCS) and deposited by E-Commerce Operator for the month of Mar, 2019

11-Apr-19 GSTR 1 (Monthly) Return of outward supplies of taxable goods and/or services for the Month of Mar, 2019 (for Assessees having turnover exceeding 1.5 Cr.)

13-Apr-19 GSTR 6 Return for Input Service Distributors for the month of Mar, 2019

18-Apr-19 GSTR 4 Simple GST return for the month ended Mar, 2019 for Composi�on Taxpayers

30-Apr-19 TDS/TCS Due date for e-filing of a declara�on in Form No. 61 containing par�culars of Form No. 60 received during the period October 1, 2018 to March 31, 2019.

15-Apr-19 ESIC Payment ESIC Payment for the month of Mar, 2019. Employees' State InsuranceAct, 1948 - (ESIC)

14-Apr-19 TDS/TCS Due date for issue of TDS Cer�ficate for tax deducted under sec�on 194-IA / 194-IB in the month of Feb, 2018

Income Tax Act, 1961

Goods andService Tax (GST)

Descrip�on

30-Apr-19 TDS/TCS Due date for deposit of Tax deducted by an assessee other than an office of the Government for the month of March, 2019.

30-Apr-19 TDS/TCS Due date for uploading declara�ons received from recipients in Form. 15G/15H during the quarter ending March, 2019

30-Apr-19 TDS/TCS Due date for furnishing of challan-cum-statement in respect of tax deducted under sec�on 194-IA/194-IB in the month of March, 2019

Summary of Tax Deducted at Source (TDS) and deposited for the month of Mar, 2019

20-Apr-19 GSTR 3B Summary Return for the month of Mar, 2019

30-Apr-19 GSTR -1 (Quarterly) Return of outward supplies of taxable goods and/or services for the Month of March, 2019 (for Assessees having turnover less than 1.5 Cr.)

20-Apr-19 DPT-3 Details of outstanding Loan / Receipt of Money as on 22.01.2019Companies Act, 2013

30-Apr-19 DIR-3 KYC of every Person holding DIN as on 31.03.2019

25-Apr-19 INC-22A (Ac�ve) KYC of every company incorporated before 31.12.2017

30 days fromavaiability of form MSME-1 Every outstanding to MSME more than 45 days as on 22.01.2019

30 days fromavaiability of form NFRA-1 Every Company to which Na�onal Financial Repor�ng Authority Rules,

2018 (NFRA Rules) are applicable

Employees' ProvidentFunds & MiscellaneousProvisions Act, 1952

15-Mar-19 PF Payment PF Payment for the month of Mar, 2019.

Monthly Return (covering salary paid for the preceding month) (Tax Rs. 50,000 or more)

Maharashtra ProfessionTax Act

31-Mar-19 PT

* The above due date calender contains compliances generally applicable to taxpayers and this calender has been compiled by HSCo on basis of data

available on various portals and other sources. One should always check applicable compliances based on their business needs and should also check

updated due dates, if any, on the government portal before making the compliance.

Disclaimer:

The material in this newsle�er is only for private circula�on and is not intended to cons�tute any advice. It may be noted that nothing contained in

this publica�on should be regarded as our opinion. HSCo makes no representa�ons or warran�es express or implied with respect to informa�on

provided in this newsle�er or for its completeness or accuracy. HSCo disclaims all responsibili�es and accepts no liability for consequences of any

person ac�ng or refraining from ac�ng on such informa�on.

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